Dinter v. Sears, Roebuck & Co.

• Decision Date: 10 January 1995
• Citation: 278 N.J.Super. 521,651 A.2d 1033
• Parties: Riki DINTER and Elliott Dinter, Plaintiffs-Appellants, v. SEARS, ROEBUCK & COMPANY, Defendant, and Bertram Siegel, and Siegel & Siegel, Intervenors-Respondents.
• Court: New Jersey Superior Court — Appellate Division

Page 521

278 N.J.Super. 521

651 A.2d 1033

Riki DINTER and Elliott Dinter, Plaintiffs-Appellants, v. SEARS, ROEBUCK & COMPANY, Defendant, and Bertram Siegel, and Siegel & Siegel, Intervenors-Respondents.

Superior Court of New Jersey,

Appellate Division.

Argued Nov. 28, 1994.

Decided Jan. 10, 1995.

Bennett J. Wasserman, Hackensack, argued the cause for appellants.

Bertram Siegel, Teaneck, argued the cause for respondents Bertram Siegel and Siegel & Siegel (Bertram Siegel, of counsel; Todd Siegel, on the brief).

Frank P. Addas, Jersey City, appeared on behalf of defendant Sears, Roebuck & Co. (Addas & Potenza, attorneys; Mr. Addas, on the briefs).

Before Judges PETRELLA, HAVEY and BROCHIN.

The opinion of the court was delivered by

PETRELLA, P.J.A.D.

On this appeal we decide what is in essence a fee dispute between successive trial attorneys, arising from an order of the trial court allocating fees following disposition of a negligence case. After a no cause of action in the first trial, and a reversal and remand following an appeal, the second trial attorney settled the underlying negligence action. The trial judge, over objection, awarded intervenor-respondent Bertram Siegel and his law firm of Siegel & Siegel a $45,000 quantum meruit fee, and $7,656.68 as reimbursement of costs and disbursements made by the Siegel firm prior to and during the trial on behalf of plaintiffs Riki and Elliott Dinter.

This appeal has its origins in a slip and fall negligence case which Siegel tried to a no cause of action before a jury in 1990. ¹ The Dinters desired to appeal but Siegel would not proceed unless they forwarded the costs for appeal, particularly transcript costs despite Siegel's previous practice under the parties' contingent fee agreement of advancing costs at the trial level. The Dinters retained alternate counsel, appealed, and we reversed and remanded the case for another trial. ² The Dinters thereafter retained Bennett J. Wasserman as their trial attorney under a new contingent fee agreement with him. Sears settled with the Dinters for $850,000 before trial. Siegel then claimed entitlement to a portion of the $218,226.79 due Wasserman as fees under his contingent fee agreement with the Dinters. ³

The Dinters argue the Siegel firm is not entitled to a fee or any portion of Wasserman's fee. They assert that their contingent fee agreement with Siegel ended upon entry of the adverse judgment or by mutual agreement when the Siegel firm refused to advance the funds for transcripts for an appeal and instructed the Dinters to obtain new attorneys. The Dinters essentially argue that a quantum meruit award cannot be sustained here, particularly when there was a valid contingent fee agreement in effect. In the alternative, they argue that the Siegel firm breached the retainer agreement and terminated it by refusing to proceed with the appeal, except on new terms, and by refusing to file a notice of appeal. Finally, they argue that the award of quantum meruit fees is contrary to public policy and New Jersey Court Rules.

I.

The Dinters retained the Siegel firm in connection with Riki Dinter's slip and fall on November 30, 1987. Riki Dinter and Siegel signed a pre-printed form contingent fee agreement ⁴ containing the following language:

* * * * * *

2. Legal Services. The Law Firm will protect your legal rights and do all necessary legal work to properly represent you in this matter.

3. Cost and Expenses. In addition to legal fees, you may be required to pay for expenses in connection with the institution and prosecution of your claim. Such expenses may include, among other things, experts' fees and expenses for other testimony or evidence, court costs, accountants' fees, appraisers' fees, service fees, investigators' fees, deposition costs, costs of briefs, transcripts on appeal and extraordinary photocopying, long-distance telephone and postage expenses. You will not be required to pay for usual and customary law office overhead expenses, such as local telephone charges, routine photocopying and postage costs and expenses associated with legal research.

4. Legal Fees. If the Law Firm recovers money for you, which is greater than your costs and expenses (see paragraph 3), you will pay the Law Firm a legal fee. The fee will be based on a percentage of the net recovery. Net recovery is the total recovered on your behalf, minus your costs and expenses, and minus any interest included in a judgment pursuant to R. 4:42-11(b). The fee will be as follows:

33 1/3% of the first $250,000 net recovery; 25% of the next $250,000 net recovery; 20% of the next $500,000 net recovery.

Fees on net recoveries exceeding $1,000,000.00 will be determined by the court.

* * * * * *

Significantly, the contingent fee agreement here did not require Siegel to undertake an appeal on behalf of the Dinters. See R. 1:21-7(d). ⁵

It is undisputed that from the inception of this slip and fall negligence case the Siegel firm had advanced the costs and expenses of litigation. By the end of the first trial those expenses exceeded $7,000. After the adverse jury verdict, Siegel informed the Dinters that he would not initiate an appeal unless they advanced approximately $8,000 to cover the costs of transcripts for the appeal. The Dinters refused to pay for the transcripts and in a June 22, 1990 letter Siegel informed them that he would not handle the appeal. In that letter Siegel stated:

In accordance with rules of court, this law firm and myself are not required to take an appeal. We have determined that we will not take an appeal. If you wish to do so, it will require that you make appropriate arrangements to retain a law firm to represent both of you on an appeal. As I already said to you, the Notice of Appeal must be filed within the 45 days. We will, of course, cooperate with any counsel that you select for the taking of any appeal that you may file. [Emphasis supplied.]

Plaintiffs then sought to obtain another attorney to take the appeal. Despite Siegel's pledge to cooperate, he did not turn over the file to the Dinters' new attorney. He apparently also told that attorney that he would not file an appeal. One attorney wrote Siegel requesting that he file a notice of appeal to preserve the Dinters' right to appeal, but Siegel advised that he would not do so, perhaps because of the necessity to pay a filing fee and concomitantly advance a deposit for costs and order transcripts. See R. 2:5-3.

The Dinters ultimately retained Mark J. Friedman of the offices of Howard C. Truger to prosecute the appeal that resulted in our opinion in Dinter v. Sears, Roebuck & Co., 252 N.J.Super. 84, 599 A.2d 528 (App.Div.1991), where we reversed and remanded the case because of the trial judge's ruling denying the Dinters' attorney access during the trial to written statements taken by an insurance investigator from Sears' employees. Those statements had not been requested in discovery ⁶ and Sears objected to producing them in response to an oral demand by Siegel at trial on the ground that they constituted attorney work product.

Our decision reversing the jury verdict in the first appeal was based on a statement that was produced by Sears' attorney in accordance with our September 23, 1991 request at oral argument. That statement was promptly made available to the Dinters' attorney before our November 14, 1991 decision in that appeal. See Dinter, supra (252 N.J.Super. at 89 n. 2, 599 A.2d 528). Siegel obtained a copy of the statement, and over Friedman's protestations, and prior to our resolution of the appeal, filed a motion with the trial judge for a new trial based on a claim that the written statement by the Sears employee was newly-discovered evidence. Aside from any question of whether the statement could constitute newly-discovered evidence, procedurally, that motion was improper since the matter was pending in this court. See R. 2:9-1. The trial judge recognized that he was without jurisdiction, absent a remand, and rejected the motion on that basis.

After our November 14, 1991 reversal of the jury verdict, the Dinters retained Wasserman and entered into a new contingent fee retainer agreement with him. On November 31, 1991, the Dinters wrote Siegel and requested that he send the entire file to their new attorney. They again wrote Siegel on December 11, 1991, requesting the file ⁷ and reminding Siegel that they had retained other attorneys and that Siegel was to take no further steps on their behalf. Specifically they said:

You are no longer authorized to hold yourself out as our attorney or to make Court appearances as our attorney. You may not engage in any discussions with the representatives of Sears Roebuck regarding our case, including their attorney, Mr. Addas. Specifically, you are not authorized to make any settlement demands or receive any settlement offers on our behalf.

Siegel still did not send the file to the Dinters' new attorney as requested. On January 24, 1992, the trial judge signed an order compelling Siegel to turn over the file, and postponing Siegel's claim for services and disbursements to a later date. When Siegel did not comply, the trial judge entered another order on February 13, 1992 again ordering Siegel to turn over the case file and to deliver other discovery in his possession.

The new trial attorney, Wasserman, conducted additional discovery and obtained various court orders to compel Sears to provide certain additional discovery items. Eventually, the case was settled before trial for $850,000. On July 23, 1993, the trial judge entered an order directing Sears to pay the settlement, but to retain $218,226.79, the amount due for fees and disbursements under Wasserman's contingent fee agreement, in an interest-bearing account, for potential apportionment between Wasserman and Siegel. The trial judge subsequently entered the disputed January 3, 1994 order which granted Siegel a quantum meruit fee and...