Giarusso v. Giarusso (In re Carella, Byrne, Cecchi, Olstein, Brody & Agnello, PC)

• Citation: 455 N.J.Super. 42,187 A.3d 194
• Decision Date: 29 May 2018
• Docket Number: DOCKET NO. A–1063–15T4
• Parties: Valerie GIARUSSO, Plaintiff–Respondent, v. William G. GIARUSSO, Sr., Defendant–Respondent. In the Matter of Carella, Byrne, Cecchi, Olstein, Brody & Agnello, PC, Petitioner–Appellant.
• Court: New Jersey Superior Court – Appellate Division

455 N.J.Super. 42

187 A.3d 194

Valerie GIARUSSO, Plaintiff–Respondent,

v. William G. GIARUSSO, Sr., Defendant–Respondent.In the Matter of Carella, Byrne, Cecchi, Olstein, Brody & Agnello, PC, Petitioner–Appellant.

DOCKET NO. A–1063–15T4

Superior Court of New Jersey, Appellate Division.

Argued May 2, 2018

Decided May 29, 2018

Christopher J. Buggy argued the cause for appellant (Carella, Byrne, Cecchi, Olstein, Brody & Agnello, PC, attorneys; Jan Alan Brody and Christopher J. Buggy, Roseland, of counsel and on the briefs).

Joseph V. Maceri argued the cause for respondent Valerie Giarusso (Snyder, Sarno, D'Aniello, Maceri & DaCosta, LLC, attorneys; Joseph V. Maceri, Hackensack, and Ruth Kim, Roseland, of counsel and on the brief).

William G. Giarusso, Sr., respondent pro se, joins in the brief of respondent Valerie Giarusso.

Before Judges Alvarez, Currier, and Geiger.

The opinion of the court was delivered by

GEIGER, J.S.C. (temporarily assigned).

Plaintiff Valerie Giarusso retained petitioner-appellant Carella, Byrne, Cecchi, Olstein, Brody & Agnello, PC to represent her in certain post-judgment proceedings arising out of her divorce action against defendant William G. Giarusso. Pursuant to the written retainer agreement plaintiff signed, she agreed to pay petitioner an initial $5000 retainer and subsequent monthly invoices for services rendered. Although plaintiff paid the initial retainer, she did not remit any further payments to petitioner. Petitioner claims that plaintiff owes an unpaid balance of $99,356.10 plus interest.

Petitioner rendered the legal services to collect the alimony arrears, child support arrears, and equitable distribution owed to plaintiff by her ex-husband. After petitioner's representation of plaintiff ended, petitioner filed a post-judgment application in the divorce proceeding to: 1) determine and enforce an attorney's charging lien against plaintiff in the amount of $99,356.10 plus interest pursuant to N.J.S.A. 2A:13–5 ; and 2) enter judgment against plaintiff in the amount of the fee award. Petitioner sought to impose the lien against the alimony and child support arrears owed to plaintiff and plaintiff's equitable distribution share of various marital assets.

Plaintiff opposed the petition on several grounds including that she disputed the amount owed, claiming the services performed could not justify the amount billed given the amount of the retainer paid. She also contended she never received notice of the right to seek fee arbitration of petitioner's bill.

Petitioner responded it had provided the fee arbitration pre-action notice required by Rule 1:20A–6 and copies of each of the monthly invoices to plaintiff on March 7, 2013, some eighty-five days before filing the petition. The notice and invoices were sent by certified mail, return receipt requested, and simultaneously by ordinary mail. The certified mail was returned unclaimed, but the ordinary mail was not returned as undeliverable.

After initially imposing an interim charging lien, the trial court conducted a plenary hearing. Relying on two unpublished appellate decisions, the trial court issued a June 18, 2015 order and written decision discharging the interim charging lien, denying entry of a final charging lien, and denying entry of judgment against plaintiff. The trial court issued a subsequent September 29, 2015 order with an attached statement of reasons awarding petitioner attorney's fees in the amount of $50,000. Petitioner appeals from each of those rulings. We affirm the denial of a charging lien, reverse the denial of the entry of a judgment in favor of petitioner, and vacate and remand the issue of determining the appropriate amount of the award of petitioner's attorney's fees to the Family Part.

I.

Petitioner contends the trial court erred in ruling that the Attorney's Lien Act, N.J.S.A. 2A:13–5, (the Act) does not apply to legal services performed entirely post-judgment. We are unpersuaded by this argument.

Charging liens are governed by the Act, which provides:

After the filing of a complaint or third-party complaint or the service of a pleading containing a counterclaim or cross-claim, the attorney or counsellor at law, who shall appear in the cause for the party instituting the action or maintaining the third-party claim or counterclaim or cross-claim, shall have a lien for compensation, upon his client's action, cause of action, claim or counterclaim or cross-claim, which shall contain and attach to a verdict, report, decision, award, judgment or final order in his client's favor, and the proceeds thereof in whose hands they may come. The lien shall not be affected by any settlement between the parties before or after judgment or final order, nor by the entry of satisfaction or cancellation of a judgment on the record. The court in which the action or other proceeding is pending, upon the petition of the attorney or counsellor at law, may determine and enforce the lien.

[ N.J.S.A. 2A:13–5.]

A charging lien is an active lien "which an attorney may have for services rendered in a particular cause of action and which attaches to the judgment in the cause for which the services were rendered." Brauer v. Hotel Assocs., Inc., 40 N.J. 415, 420, 192 A.2d 831 (1963) (citing Visconti v. M.E.M. Machinery Corp., 7 N.J. Super. 271, 73 A.2d 74 (App. 1950) ).

The facts in this matter are similar to those in Panarello v. Panarello, in which a law firm sought a charging lien against a former client for legal services rendered exclusively post-judgment in a divorce action. 245 N.J. Super. 318, 585 A.2d 428 (Ch. Div. 1990). After noting the scope of common-law charging liens were enlarged by the Act, the court cautioned that the "statute clearly has limits." Id. at 321, 585 A.2d 428. The court explained an "attorney's lien protected the fee for services rendered in securing the judgment, final order or verdict on behalf of a client." Id. at 322, 585 A.2d 428 (citing McCarthy v. McCarthy, 117 N.J. Eq. 22, 174 A. 751 (E. & A. 1934) ). The court then found that "there is no provision in this legislation to allow an attorney's lien to be asserted for post-judgment legal services." Ibid. Based on the clear and unambiguous language of the statute, the court denied the application for a charging lien, holding the Act does not apply to post-judgment legal services. Id. at 323, 585 A.2d 428.

In Musikoff v. Jay Parrino's the Mint, LLC, the Court was called upon to answer a question of law certified and submitted by the United States Court of Appeals for the Third Circuit pursuant to Rule 2:12A. 172 N.J. 133, 796 A.2d 866 (2002). The issue was whether an attorney seeking to enforce a lien under the Act must file a petition to enforce the lien prior to any settlement or final judgment in the underlying matter. Id. at 136, 796 A.2d 866. The Court held "the Act does not require an attorney to file a petition to acknowledge and enforce an attorney's lien prior to settlement or judgment in the matter that has given rise to the lien itself." Ibid. In reaching that conclusion, the Court explained the limited reach of the statute and discussed its non-applicability to post-judgment legal services, citing Panarello with approval:

The statute not only codifies the common-law special or charging lien, "but it also expands the common law lien which had attached only to a judgment." Martin v. Martin, 335 N.J. Super. 212, 222, 762 A.2d 246 (App. Div. 2000) (citing Norrell v. Chasan, 125 N.J. Eq. 230, 236–37, 4 A.2d 88 (E. & A. 1939) ). An attorney's statutory lien attaches broadly to any "verdict, report, decision, award, judgment or final order in his [or her] client's favor, and the proceeds thereof in whosesoever hands they may come." N.J.S.A. 2A:13–5 ; see also [Kevin H. Michels, N.J. Attorney Ethics § 37:2–2b(2) at 833 (2002) ] (describing expansive character of lien). The statute's reach, however, is not unlimited. For example, there is no authorization for "an attorney's lien to be asserted for post-judgment legal services." Panarello v. Panarello, 245 N.J. Super. 318, 322, 585 A.2d 428 (Ch. Div. 1990) ; cf.Steiger v. Armellino, 315 N.J. Super. 176, 180, 716 A.2d 1216 (Ch. Div. 1998) (holding that Act did not prevent lien from attaching to subsequent matter that stemmed from original pleadings).

[ Id. at 139 (alteration in original).]

While its pronouncement that the statute does not apply to post-judgment legal services statement may be dicta, we find the Court's carefully considered statement to be persuasive authority. See Barreiro v. Morais, 318 N.J. Super. 461, 468–69, 723 A.2d 1244 (App. Div. 1999).

We concur with the holding in Panarello. "An attorney's lien is merely a right in the attorney to a lien on any judgment recovered for the attorney's client." Cole, Schotz, Bernstein, Meisel & Forman, PA v. Owens, 292 N.J. Super. 453, 460, 679 A.2d 155 (App. Div. 1996) (citation omitted). "It is an attorney's ‘claim of right to ask for intervention of the court for the attorney's protection, when having obtained judgment for his [or her] client, there is a probability of the client depriving him [or her] of his [or her] costs ....’ " Ibid. (second and third alterations in original) (quoting Republic Factors, Inc. v. Carteret Work Uniforms, 24 N.J. 525, 534, 133 A.2d 6 (1957) ). "Where there is no recovery, there is nothing to which the attorney's lien can attach." Ibid. We find no legal basis for imposing a charging lien under the Act on a judgment recovered by a client before the attorney seeking the lien first became involved.

Here, petitioner did not represent plaintiff during the pendency of the underlying divorce action or its resolution. Instead, plaintiff retained petitioner to enforce the previously entered judgment. The services rendered by petitioner were limited to post-judgment enforcement of previously awarded relief obtained through the efforts of prior counsel. Thus, petitioner is not entitled to a charging lien for unpaid legal services...