SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
A-344-94T1
NINA ROSENBERG,
Plaintiff,
v.
IRA ROSENBERG,
Defendant,
ROSE & DeFUCCIO, ESQS.,
Plaintiff-Appellant,
v.
NINA ROSENBERG,
Defendant-Respondent.
Submitted October 18, 1995 - Decided
December 15, 1995
Before Judges King, Landau and Kleiner.
On appeal from the Superior Court of
New Jersey, Chancery Division, Family Part,
Essex County.
Rose & DeFuccio, attorneys for appellant
(Lorraine R. Breitman, on the letter brief).
Respondent Nina Rosenberg filed a pro se
brief.
The opinion of the court was delivered by
KLEINER, J.A.D.
In this appeal brought by plaintiff Rose & DeFuccio, Esqs.
(Rose)See footnote 1, a Bergen County law firm, we shall review the
relationship of R. 4:42-9(a)(1) and N.J.S.A. 2A:34-23, which
permit an award of counsel fees in a family action, to the
independent right of attorneys to sue a former client for breach
of the client's contractual obligations delineated within a fee
retainer agreement. Although the issue raised by this appeal was
discussed in Cohen v. Cohen,
146 N.J. Super. 330 (App. Div.
1977), our decision expands Cohen and limits the scope of our
subsequent decision in Argila v. Argila,
256 N.J. Super. 484
(App. Div. 1992).
On February 22, 1990, Nina Rosenberg, a resident of Essex
County, retained Rose to represent her in a matrimonial action
against her husband defendant Ira Rosenberg, an attorney and
partner in a prominent Essex County law firm. The terms of that
attorney-client relationship were delineated in a written
retainer agreement. It is undisputed that the matrimonial
litigation was acrimonious, encompassing five contested pretrial
motions and four cross-motions that required four separate court
appearances. Counsel appeared before the Early Settlement Panel
of Essex County and thereafter the matter was scheduled for
trial. The trial lasted thirteen days and upon its conclusion
the trial judge requested written summations. After the trial
judge issued his written opinion, Nina Rosenberg requested that
Rose file a post-judgment motion for reconsideration.
As a component of the trial judge's initial opinion, Nina
Rosenberg was deemed entitled to an award of counsel fees
pursuant to R. 4:42-9(a)(1). Rose submitted a certification of
services rendered and sought an award of $130,957.77,
representing both services actually rendered by it computed on a
time basis and costs expended in pursuing the litigation. The
trial court, after reviewing Rose's certification of legal
services and the opposing certification filed by defendant Ira
Rosenberg, concluded that the reasonable fees incurred by Nina
Rosenberg were $60,000. The trial judge then concluded that
defendant Ira Rosenberg would be responsible to reimburse his
former wife $54,000. That sum was in fact paid. Rose then
billed Nina Rosenberg $76,957.77, the amount of the total bill
less the amount paid by Ira Rosenberg. Rose contends that the
bill was ignored. On June 10, 1993, Rose again requested payment
from its former client and advised her that she had the right to
fee arbitration. The firm further advised Rosenberg that if she
did not choose arbitration within the time allotted by R. 1:20A-3, it would commence legal action.
On July 21, 1993, Rose commenced suit in the Law Division of
Bergen County, docket number BER-L-7264-93, to recover the unpaid
legal fees. Nina Rosenberg filed an answer and counterclaim and
a demand for trial by jury. In her counterclaim, Rosenberg
asserted that she had paid $11,100 in fees to Rose, resulting in
an overpayment to Rose of $5,100. Rosenberg insisted that she
owed Rose only $6,000, the trial court's assessment of reasonable
fees less the amount paid by Ira Rosenberg. Rosenberg
simultaneously (October 26, 1993) filed a motion in Bergen County
to consolidate the Law Division contract action with the
matrimonial action that had previously been heard in Essex
County.See footnote 2
On November 19, 1993, while the motion to consolidate and/or
change venue was still pending in Bergen County, Rosenberg filed
a motion in Essex County which sought: (1) consolidation of the
contract action with the matrimonial action; (2) a restraining
order prohibiting Rose from further litigating the issue of
counsel fees; and (3) a declaration that the issue of counsel
fees had been fully adjudicated in the written opinion of the
judge of the family part in the matrimonial litigation.
On December 7, 1993, the Bergen County Assignment Judge
transferred venue of the Bergen County Law Division contract
action to Essex County and directed that the matter be assigned
to the same judge who presided over the matrimonial action. See
Salch v. Salch,
240 N.J. Super. 441, 443-44 (App. Div. 1990).
The order memorializing that decision specifically excluded
Rosenberg's request for consolidation with the matrimonial
litigation. Upon receipt of the Law Division pleadings, an
appropriate Essex County Law Division docket number was assigned.
On February 2, 1994, Rose requested the assigned Essex County
judge to schedule a hearing on the Law Division complaint.
On May 24, 1994, without affording a hearing, the judge
assigned in Essex County rendered a written opinion declaring
that Rosenberg was not responsible for any additional counsel
fees as claimed by Rose and further determining that Rose had in
fact been overpaid in the amount of $5,100. A judgment in favor
of Rosenberg on her counterclaim was ordered.See footnote 3
In this appeal, Rose contends that the trial judge erred by
summarily concluding that the prior determination of the
reasonableness of Rose's fee application as it pertained to Ira
Rosenberg was determinative of Rose's contractual claim asserted
against his former client. We agree and reverse.
R. 4:42-9(a)(1) provides:
In a family action, the court in its
discretion may make an allowance [for
attorney's fees] both pendente lite and on
final determination to be paid by any party
to the action, including if deemed to be just
any party successful in the action, on any
claim for divorce . . . .
The commentary to this rule states: "Note that this rule
was not intended to provide a mechanism whereby an attorney could
obtain an allowance of counsel fees as against his own client in
a matrimonial action." Pressler, Current N.J. Court Rules,
comment 2 on R. 4:42-9(a) (1995) (citing Cohen v. Cohen,
146 N.J.
Super. 330 (App. Div. 1977)).
The rationale of the rule and its interpretation is
explained as follows:
As a general rule, counsel fees like
costs are awarded to litigants and not to
counsel themselves. Process to enforce the
award must issue in the name of a party; only
a party can appeal from an order granting or
denying counsel fees. Presumably counsel,
when he accepts employment in a case, makes a
satisfactory arrangement with his client for
compensation, and to his client he looks for
his fee. The purpose of the court in
allowing counsel fees is to reimburse or
indemnify the party for some of the expense
of the litigation. When such an application
is made to the court, the question is not
whether counsel should be paid but whether
his client should be permitted to charge the
expense against some other party to the suit
or against some fund under the control of the
court.
[Eufemio v. McKeown,
10 N.J. Misc. 549, 550
(Ch. 1932).]
See also Morrison v. Morrison,
93 N.J. Super. 96, 106 (Ch. Div.
1966).
In Cohen, we stated, "Indeed, the whole purpose of R. 4:42-9
was to regulate the allowance of counsel fees among parties - not
as between litigants and their attorneys." 146 N.J. Super. at
337. Cohen involved an appeal by a law firm which formerly
represented plaintiff wife in a matrimonial action. The firm
sought a judgment for its entire bill but credited its former
client with all monies paid by the defendant husband pursuant to
the judgment of divorce which granted plaintiff a partial
allowance on her application for fees, "when and if same are
collected." Id. at 332. We affirmed the trial court's denial of
the law firm's application. Id. at 337.
The trial court in this matter explained in its May 24, 1994
ruling that implicit in an award of counsel fees in a matrimonial
action is the conclusion that the services outlined in an
attorney's certification of services were necessary and that the
fees charged by the attorney were reasonable. However, the trial
court noted that in reviewing Rose's certification of services in
the matrimonial litigation, it had concluded that "[t]he legal
fees set forth by plaintiff's attorney were not reasonable and
were in fact found to be excessive and unreasonable for a
matrimonial case of such limited assets and of such uncomplicated
nature."
This observation by the trial court is consistent with
N.J.S.A. 2A:34-23 which provides:
The court may order one party to pay a
retainer on behalf of the other for expert
and legal services when the respective
financial circumstances of the parties make
the award reasonable and just. In
considering an application, the court shall
review the financial capacity of each party
to conduct the litigation and the criteria
for award of counsel fees that are then
pertinent as set forth by court rule.
Whenever any other application is made to a
court which includes an application for
pendente lite or final award of counsel fees,
the court shall determine the appropriate
award for counsel fees, if any, at the same
time that a decision is rendered on the other
issue then before the court and shall
consider the factors set forth in the court
rule on counsel fees, the financial
circumstances of the parties, and the good or
bad faith of either party.
A court should consider need, financial ability to pay, and
the recipient's good faith when awarding attorney's fees.
Williams v. Williams,
59 N.J. 229, 233 (1971). The judge must
also determine the extent of the award. Argila v. Argila,
256 N.J. Super. 484, 490 (App. Div. 1992). In making that
determination, "it is necessarily implicit that there may be
allowed only such fees as represent reasonable compensation for
such legal services performed as were reasonably necessary in the
prosecution or defense of the litigation." Ibid. (quoting Mayer
v. Mayer,
180 N.J. Super. 164 (App. Div.), certif. denied,
88 N.J. 494 (1981)). In Mayer, we wrote:
The fee should not be fixed by simply taking
the total time assertedly expended by
counsel, without critical review and
examination of the nature and extent of the
services, and multiplying the total number of
hours by the charges fixed in a retainer
agreement made between the wife and her
attorney -- to which charges the husband
never consented or agreed.
[180 N.J. Super. at 169.]
"In determining the reasonableness of any fee award, `[t]he
initial focus in the calculus is appropriately directed to the
time expended in pursuing the litigation.'" Argila, 256 N.J.
Super. at 492 (quoting Singer v. State,
95 N.J. 487, 499, cert.
denied,
469 U.S. 832,
105 S. Ct. 121,
83 L.Ed.2d 64 (1984)). But
the time expended is only one of the factors to be considered.
Ibid. R. 4:42-9(b) provides that "all applications for the
allowance of fees shall be supported by an affidavit of services
addressing the factors enumerated by RPC 1.5(a)." Those factors
are:
(1) the time and labor required, the
novelty and difficulty of the questions
involved, and the skill requisite to perform
the legal service properly;
(2) the likelihood, if apparent to the
client, that the acceptance of the particular
employment will preclude other employment by
the lawyer;
(3) the fee customarily charged in the
locality for similar legal services;
(4) the amount involved and the results
obtained;
(5) the time limitations imposed by the
client or by the circumstances;
(6) the nature and length of the
professional relationship with the client;
(7) the experience, reputation, and
ability of the lawyer of lawyers performing
the services;
(8) whether the fee is fixed or
contingent.
[R.P.C. 1.5(a).]
However, the trial judge then concluded:
The court ruled on March 19, 1993 that under
all the circumstances a reasonable counsel
fee to be charged the plaintiff by the firm
of Rose & DeFuccio, rather than the charges
set forth in their certification, was
$60,000.00, including costs, of which
defendant was to pay $54,000.00 with the
balance of $6,000.00 to be paid by the
plaintiff. Defendant Ira Rosenberg has paid
his share of the court determined reasonable
fees. Plaintiff Nina Rosenberg has paid more
than her said share. The issue of counsel
fees in this matter has been adjudicated and
is therefore moot.
The trial judge cited Argila in support of his decision. Argila
involved an appeal by a defendant husband from a trial court
decision directing him to pay $55,250 as counsel fees. Plaintiff
wife's counsel had filed a certification of services requesting
$121.378.56 in counsel fees and an additional $10,819.65 in
expert appraisal fees. Argila, 256 N.J. Super. at 487.
Thereafter by additional certification the fee requests were
increased, for a total of $149,183.14. Id. at 488. The trial
judge determined:
After an in-depth and extensive review
of the certifications supplied, it is
apparent to this court that plaintiff's
charge of more than $149,000.00 is not a
reasonable amount.
Due, in part, to the number of
conference, the large number of personnel
involved in this matter and the apparent
overuse of certain staff members this court
finds the plaintiff's counsel fee request to
be inflated. Therefore, this court sets
plaintiff's counsel fees at $85,000.00.
. . . .
In conclusion, this court directs the
defendant to share in the plaintiff's counsel
fees in the amount of $55.250.00 which
represents a sixty-five percent (65") share
of the total $85,000.00 set by this court.
[Id. at 488-89.]
Both parties in Argila appealed the trial court ruling on
counsel fees. We affirmed both aspects of the trial court's
determination. Id. at 490. In reviewing Argila, we note that
the trial judge did not conclude that his determination on the
reasonableness of plaintiff's counsel's certification would be
binding upon plaintiff's counsel in litigation seeking to recover
the balance of the fees and expert fees presumably billed to
plaintiff. On appeal, we were not requested to address that
issue.
Clearly, when an attorney for a plaintiff appears before the
Family Part with a certification of fees he does so on behalf of
plaintiff who will benefit from any award of fees directed
against defendant. At that juncture of the matrimonial
proceeding a plaintiff is not routinely requested to offer an
opinion as to whether the requested fee is merited. Although the
trial court may ultimately consider some aspect of counsel's
certification as unreasonable as to a defendant, that same fee
request may be totally reasonable when measured against the terms
of the retainer agreement between counsel and the client.
This disparity of focus is best illustrated in one aspect of
the trial judge's decision. On the first day of the divorce
trial, RoseSee footnote 4 appeared as trial counsel and was accompanied by an
associate in counsel's firm who had performed many services for
plaintiff during the pretrial discovery proceedings, including
one court appearance on a contested motion. The trial judge
advised Rose that he would not require defendant to pay for a
second attorney to appear at the trial on plaintiff's behalf.
Rose has certified that plaintiff specifically requested that the
associate continue to appear with Rose during the entire trial.
We may conclude based upon our discussion in Argila, that the
trial court was entitled to deduct from counsel's certification
of services all charges attributable to the associate's services
at trial when considering an award of counsel fees payable by
defendant husband. However, the trial judge's ruling as to the
reasonableness of Rose's certification of services rendered would
not have been binding upon Rose, even if the contract action had
been consolidated with the matrimonial action, without affording
Rose an opportunity to establish that those fees were otherwise
reasonable and necessary within the parameters of his retainer
agreement with his own client. The summary disposition of the
contract action deprived Rose of the opportunity to be heard and
of his right to cross-examine his former client as to the
attorney-client relationship during the pendency of the
matrimonial litigation.
As noted, the trial judge rendered his written opinion on
May 24, 1994, after receiving Rosenberg's motion that sought, in
part, an order "declaring that the issue of counsel fees had been
fully adjudicated in the written opinion of the judge in the
family part in the matrimonial litigation." Rosenberg filed a
certification in support of her motion quoting the matrimonial
judge's decision as to the unreasonableness of Rose's
certification of services. In response, Rose filed a
certification detailing the numerous conversations that had
transpired between himself and Rosenberg respecting Rosenberg's
responsibility for fees incurred which might not be paid by court
order by her then husband. That certification specifically
referenced Rose's conversation with Rosenberg following the first
day of trial, in which Rosenberg allegedly insisted that Rose
continue to utilize the services of the firm's associate during
the remainder of the trial. Clearly the certification of Rose
raised a material issue of fact respecting the nature of the
retainer agreement that had been negotiated between Rose and
Rosenberg.
Although defendant had not filed a motion for summary
judgment, her request for a declaratory judgment sought summary
relief. We are mindful of the recent decision of the Supreme
Court in Brill v. The Guardian Life Ins. Co. of America,
N.J. (1995) that:
when deciding a motion for summary judgment
under Rule 4:46-2, the determination whether
there exists a genuine issue with respect to
a material fact challenged requires the
motion judge to consider whether competent
evidential materials presented, when viewed
in the light most favorable to the non-moving
party in consideration of the applicable
evidentiary standard, are sufficient to
permit a rational factfinder to resolve the
alleged disputed issue in favor of the non-moving party. This assessment of the
evidence is to be conducted in the same
manner as that required under Rule 4:37-2(b).
[ N.J. at (slip op. at 2).]
Rosenberg did not file a response to Rose's certification filed in opposition to Rosenberg's motion. The trial judge was obviously aware that Rose's certification of services presented in the Family Part had been presented at a time when Rose represented Rosenberg. Rosenberg was not asked in the Family Part whether she considered her counsel's certification as reasonable or unreasonable. Similarly, Rose was not asked to
justify each aspect of the certification of the services which
had been rendered at the request of Rosenberg or with her silent
assent. Clearly the trial judge erred by concluding in his
letter opinion of May 24, 1994, that: "The issue of counsel fees
in this matter has been adjudicated and is therefore moot."
Although there may have been an adjudication as to the
responsibility of Ira Rosenberg for a portion of Rose's legal
fees and costs, there clearly was no adjudication of Nina
Rosenberg's responsibility to fulfill her contractual obligation
encompassed within the fee agreement with her former counsel.
A lawyer's fee must be reasonable. See RPC 1.5(a). Whether
fees are reasonable is subject to judicial review. See Cohen v.
Radio-Electronics Officers Union,
275 N.J. Super. 241, 251-52
(App. Div. 1994). Although transactions between an attorney and
the attorney's client are subject to close judicial scrutiny,
id. at 251, the relationship between attorney and client is
"highly fiduciary on the part of counsel." See id. at 254
(citing Dwyer v. Jung,
133 N.J. Super. 343, 347 (Ch. Div.),
aff'd,
137 N.J. Super. 135 (App. Div. 1975)). The nature and
extent of that fiduciary relationship was not an issue
appropriate for summary disposition. See Brill, N.J. at
(slip op. at 2).
The order dismissing plaintiff's complaint and awarding
defendant judgment on her counterclaim is reversed and the entire
controversy is remanded to the Law Division for further
proceedings consistent with this opinion.
Footnote: 1 Arthur Rose, Esq. appeared as trial counsel for defendant Nina Rosenberg. We shall use the name "Rose" as a reference to plaintiff law firm "Rose & DeFuccio" and with reference, where appropriate, to that firm's partner, Arthur Rose. Footnote: 2 Rosenberg's motion was entitled "Motion to Consolidate and/or Change Venue." Footnote: 3 Rose perceived that the trial court had misstated facts in his written opinion. Rose informed the trial court of the alleged error. The trial judge reaffirmed his May 24, 1994 opinion in a subsequent letter opinion dated June 8, 1994. The opinions of the trial judge were memorialized in an order dated August 8, 1994. Footnote: 4 Reference to "Rose" hereafter is a reference to Arthur Rose, Esq., on behalf of "Rose & DeFuccio, Esqs."