David M. Cohen, P.A. v. Davis, Saperstein & Salomon, P.C.
| Docket Number | A-1323-20 |
| Decision Date | 24 March 2022 |
| Parties | DAVID M. COHEN, P.A., L.L.C., Plaintiff-Respondent, v. DAVIS, SAPERSTEIN & SALOMON, P.C., Defendant-Appellant. |
| Court | New Jersey Superior Court — Appellate Division |
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 28, 2022
On appeal from the Superior Court of New Jersey, Law Division Essex County, Docket No. L-1807-19.
Davis Saperstein & Salomon, PC, attorneys for appellant (David A. Drescher, on the briefs).
Noel E. Schablik, attorney for respondent.
Before Judges Sabatino and Natali.
In this dispute over the apportionment of attorney fees among two law firms, defendant, Davis, Saperstein & Salomon, P.C. appeals from a July 29 2020 Law Division order granting summary judgment to plaintiff, David M. Cohen, P.A., LLC. The operative fee sharing agreement at issue required defendant to pay plaintiff twenty percent of those attorneys' fees realized from defendant's representation of Jorge Angamarca (Angamarca) in an underlying personal injury suit against, among other defendants, Jefferson Townhouses, LLC (Jefferson), the owner of the property where Angamarca was injured.
While that case was being litigated, defendant entered a separate agreement with Jefferson's counsel, Bruce Yukelson, Esq., under which Yukelson assigned Jefferson's potential bad faith action against its insurance carrier to Angamarca in exchange for a portion of any fees collected with respect to that claim. Defendant later settled all claims on Angamarca's behalf but disputed its obligation to pay Yukelson a fee.
Yukelson then sued defendant in New York for a portion of the related attorneys' fees. Yukelson was successful in his action against defendant. Defendant ultimately paid plaintiff a portion of the realized fees under their agreement, however, it calculated plaintiff's share based on a reduced total of attorneys' fees after deducting Yukelson's share and related expenses.
Plaintiff filed the present suit contending that by calculating his share after deducting amounts expended related to the Yukelson matter, defendant wrongfully withheld funds due to him. After the close of discovery, the parties cross-moved for summary judgment. In granting summary judgment to plaintiff, the court found the fee sharing agreement unambiguous and rejected defendant's arguments that plaintiff's suit should be barred by various equitable doctrines. Defendant appeals contending that the court erred in finding the agreement unambiguous and declining to apply the doctrines of res judicata, waiver, laches, and the entire controversy doctrine. We disagree and affirm.
We derive the following facts from the competent evidence in the summary judgment motion record, viewed in a light most favorable to defendant. Brill v. Guardian Life Ins. of Am., 142 N.J. 520, 540 (1995).
On October 30, 2003, Angamarca suffered severe personal injuries when he fell while working on a construction site. Plaintiff, a sole practitioner in New Jersey, was retained to represent Angamarca. As plaintiff began to prepare a workers' compensation action on Angamarca's behalf, he concluded that Angamarca also had "a viable [third-party] liability personal injury action, based upon the negligence of the parties responsible for maintaining a safe workplace." Because plaintiff was not licensed to practice in New York, where the incident occurred, he referred the matter to Kenneth Sacks, Esq., of Sacks & Sacks, LLP, a New York-based law firm. Plaintiff and Sacks further agreed that they "would jointly represent Angamarca, and if the matter was resolved without a trial [Sacks] would receive [sixty percent] of the attorneys' fees and [plaintiff] would receive [forty percent]." Sacks thereafter filed suit on Angamarca's behalf in New York.
Less than a year later, Angamarca retained defendant and executed an attorney termination letter, which defendant sent to Sacks. Sacks initially refused to cease representing Angamarca, resulting in defendant filing an order to show cause to resolve the dispute. Before a hearing was held on defendant's application, defendant and Sacks entered an agreement, which defendant memorialized in a September 12, 2005 letter. The letter provided that defendant "agreed that [Sacks] will receive . . . twenty percent (20%) of our attorney's fees from the proceeds of any settlement or judgment in this case." (Emphasis added). It also required Sacks to execute a substitution of counsel and transfer the case file to defendant. Neither plaintiff nor Sacks performed any services on Angamarca's personal injury case after the fall of 2005.
On November 6, 2008, a New York trial court granted Angamarca summary judgment against all direct defendants in his New York personal injury action. The case proceeded to trial solely on the issue of damages, resulting in a judgment against Jefferson. Jefferson filed a notice of appeal and defendant filed a cross-appeal for additur on Angamarca's behalf.
Thereafter, defendant discussed with Yukelson the possibility of pursuing a bad faith action against Jefferson's insurance carrier. Defendant and Yukelson agreed that they could not pursue the bad faith action at that time due to the pending appeal, but agreed in principle that Jefferson would assign its claim to Angamarca, and that defendant would retain Yukelson to assist in pursuing that claim.
On November 23, 2009, defendant sent Yukelson a letter memorializing their separate agreement. It specified that defendant "agree[d] to pay for the legal services [Yukelson] perform[ed] at the rate of $500 per billable hour or a total fee of ten per cent of any recovery of legal fees . . . whatever is greater." It stated further that Yukelson's fee was "based on the recovery by . . . Angamarca [as subrogee of] Jefferson . . . of money damages from [the insurance company] and/or its representatives . . . in excess of the underlying policy limits of [s]ix [m]illion [d]ollars." The letter also included that "[t]he legal fee to [Yukelson] shall be paid at the conclusion of any settlement or judgment regardless of whether a lawsuit has been file[d]." In the interim, on November 11, 2009, Sacks wrote to defendant directing that plaintiff "will be receiving the entire fee from [defendant] based upon [Sacks's] attorney's lien."[1]
On June 21, 2011, the New York Appellate Division granted Angamarca's cross-appeal for additur, vacated a portion of the judgment, and remanded for a new trial on the issue of damages. In November 2011, defendant settled the matter on Angamarca's behalf by way of a confidential settlement agreement.[2]
During the settlement conference, representatives of Jefferson's insurance company allegedly indicated that they would not be making any payment toward a putative bad faith claim, and that their decision to settle was based on the significant amount of interest that would be accruing on any judgment. On January 17, 2012, defendant provided Angamarca with a "personal injury settlement statement" detailing the allocation of the settlement funds. The statement indicated that "attorney's fees" were calculated as one-third of the settlement amount, after ordinary disbursements.
On January 25, 2012, Yukelson's counsel wrote to defendant demanding payment pursuant to their fee sharing agreement. Defendant took the position that Yukelson was not entitled to any share of the attorneys' fees because no portion of the settlement was allocated to the bad faith claim but instead was based on the insurer's decision to avoid the accrual of interest on any judgment. Nevertheless, in anticipation of litigation, defendant withheld disbursing "approximately [ten percent] of the attorney[s'] fee."
On February 1, 2012, a partner at defendant's firm, Marc C. Saperstein, Esq., met with plaintiff and tendered him a check. The parties agree that Saperstein alerted plaintiff that ten percent of his fee was being withheld. They disagree, however, regarding the content of Saperstein's explanation for that decision.
Saperstein claimed that he "explicitly explained" that Yukelson was challenging ten percent of defendant's gross fee and that "in the event Yukelson prevailed in the . . . [d]ispute, [plaintiff's] ultimate fee would be less than [plaintiff] initially thought it would have been - as it would be [twenty percent] of a reduced net number following payment to Yukelson and reduction of [defendant's] litigation costs in defending the action." He also asserts that plaintiff "fully understood the implications of the . . . [f]ee [d]ispute[, ] . . . fully assented" to defendant's withholding while the dispute was litigated, and "never disagreed with [Saperstein's] reasoning."
Plaintiff disputed the defendant's version of that conversation. Plaintiff claims Saperstein "briefly explained that the balance of the money had to be withheld because of some collateral claim by another lawyer" and that he "did not know what [Saperstein] was talking about." As a result, plaintiff emailed Saperstein later that day requesting "a letter indicating the amount of [his] fee that was held back and why." Saperstein responded stating "we held back [ten percent] of [plaintiff's] fee due to a fee dispute with personal counsel for Jefferson."
On July 12, 2012, plaintiff wrote to Yukelson's counsel, explained his interest in the matter, and maintained he never consented to, nor had knowledge of, the fee sharing agreement between defendant and Yukelson and requested that Yukelson consent to the release of the balance of his fee. The record contains no evidence of a response from Yukelson, or his counsel.
Yukelson filed suit in October 2012 against defendant in New York seeking to enforce his agreement with defendan...
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