Nostrame v. Santiago

• Decision Date: 11 March 2013
• Citation: 61 A.3d 893,213 N.J. 109
• Parties: Frank J. NOSTRAME, Plaintiff–Appellant, v. Natividad SANTIAGO, Betsy Santiago and Mazie, Slater, Katz and Freeman, LLC, Defendants–Respondents.
• Court: New Jersey Supreme Court

213 N.J. 109

61 A.3d 893

Frank J. NOSTRAME, Plaintiff–Appellant,

v.Natividad SANTIAGO, Betsy Santiago and Mazie, Slater, Katz and Freeman, LLC, Defendants–Respondents.

Supreme Court of New Jersey.

Argued Jan. 2, 2013.

Decided March 11, 2013.

Frank J. Nostrame argued the cause pro se.

Adam M. Slater, Roseland, argued the cause for respondents (Mazie Slater Katz & Freeman, attorneys).

Shalom D. Stone, Roseland, argued the cause for amicus curiae New Jersey State Bar Association (Kevin P. McCann, President, attorney; Susan A. Feeney, Immediate Past President, of counsel; Mr. Stone, Ms. Feeney, and Stacie L. Powers, Roseland, on the brief).

Justice HOENS delivered the opinion of the Court.

This appeal arises from a dispute between two attorneys over their successive representation of a client. Plaintiff Frank J. Nostrame, Esq., alleges that defendant Mazie Slater Katz & Freeman, LLC (Mazie Slater), along with another unidentified person, wrongfully induced his client, defendant Natividad Santiago, to discharge him and to be substituted in his place as her counsel. Plaintiff asserts that defendant Mazie Slater thereby engaged in tortious interference with his contractual relationship with his client, making the law firm liable to him in tort. Plaintiff further argues that because his retainer agreement with Santiago was for a contingent fee, defendant's tortious behavior caused him to sustain a substantial loss that he should be entitled to recover from the law firm.

Defendant Mazie Slater contends that because the client always retained the right to be represented by counsel of her choosing, the law firm was free to discuss her case with her and to undertake her representation in plaintiff's place. Mazie Slater further asserts that plaintiff was fully compensated for his representation because he was reimbursed for the expenses he incurred and was paid a fee, based on quantum meruit, for the services he performed prior to his discharge.

The factual and procedural context of this dispute presents us with three interrelated questions. First, we consider whether, and under what circumstances, an attorney might have a cause of action against a successor attorney for tortious interference. Second, we address the factual and procedural predicates required for assertion of and prosecution of a claim against a successor attorney sounding in tortious interference. Finally, we address whether, in the circumstances presented in this record, plaintiff should have been afforded the opportunity to file an amended complaint or to pursue discovery to uncover evidence of wrongdoing needed to pursue his claim.

Our review of the applicable precedents and the ethical constraints that govern the behavior of attorneys leads us to the following conclusions. First, because the right of the client to be represented by counsel of his or her choosing is of paramount importance, there should be no interference with a client's free choice to retain and to discharge any attorney. Second, the ethical rules we have established that govern attorneys in the practice of law include limits on their behavior when seeking to attract clients with which, in all circumstances, they must comply. Third, although an attorney who uses wrongful means, including fraud, misrepresentation, or a violation of these generally applicable ethical rules, in his or her efforts to attract a client has engaged in behavior that would constitute a form of tortious interference, those circumstances will be both rare and so readily apparent that they can and must be specifically pleaded. Finally, the record before this Court falls far short of the rare or unusual circumstances in which such a claim might be cognizable and the pleading lacks any of the specificity that must be included in order to proceed. In light of plaintiff's concession that he has no evidence that could support a tortious interference claim, we reject his application to be permitted to engage in discovery in the hope of finding the requisite factual basis for his claim as both unnecessary and unwarranted.

I.

This dispute arises in the context of a motion to dismiss plaintiff's complaint for failure to state a claim upon which relief may be granted. See R. 4:6–2(e). As a result, we derive the facts from plaintiff's complaint and the exchange of correspondence between counsel in connection with the motion to dismiss, and we recite them in the light most favorable to plaintiff. Printing Mart–Morristown v. Sharp Elec. Corp., 116 N.J. 739, 746, 563 A.2d 31 (1989).

In October 2006, defendant Natividad Santiago underwent cataract surgery that resulted in a significant injury to her eye. On January 18, 2007, she met with plaintiff to consult with him about the possibility of pursuing a medical malpractice claim that would compensate her for her injuries. Santiago signed a contingent fee agreement in which she retained plaintiff to represent her and she signed authorizations to permit him to obtain copies of her medical records. Plaintiff secured the needed records, engaged in research, and consulted with one or more medical experts. He filed a complaint on Santiago's behalf on May 23, 2007. During this time, Santiago moved to Florida to live with her daughter, Betsy, and plaintiff asserts that he communicated with both of them by telephone to monitor Santiago's medical condition and to keep her apprised of his efforts on her behalf. According to plaintiff, Santiago scheduled an appointment to discuss her case with him on June 1, 2007, and when she failed to appear, he called and spoke with her daughter who could not explain her absence.

That same day, however, plaintiff received a letter from Santiago, dated May 31, 2007, discharging him as her counsel. The letter further instructed plaintiff to turn over Santiago's file to Mazie Slater and requested that plaintiff not contact her because her decision was final. Plaintiff asserts that the letter, which Santiago signed, was drafted by Mazie Slater.

In spite of the direction that he not contact Santiago, plaintiff called and wrote to her, trying to determine why he had been discharged. In a letter, dated June 6, 2007, plaintiff defended his handling of the litigation in response to what he described as Santiago's complaint that he “had done nothing to further [her] case.” Santiago forwarded the letter to her new attorney at the Mazie Slater firm, Adam Slater, who directed plaintiff in writing to cease all further contact with Santiago and who demanded that he turn over his file.

Plaintiff and defendant Mazie Slater thereafter engaged in litigation relating to the release of the file and plaintiff's assertion of a lien. That litigation is germane to the issues before this Court only to the extent that it resulted in an order directing Mazie Slater to pay plaintiff's expenses in the amount of $1,654.06 and preserving plaintiff's lien pending resolution of the underlying malpractice litigation.

Thereafter, Mazie Slater settled Santiago's malpractice suit and filed its motion to discharge plaintiff's lien. Adam Slater certified that a $1,200,000 settlement had been reached which, after payment of expenses, resulted in $358,396.31 in attorneys' fees. The law firm asserted that plaintiff was not entitled to any portion of that fee because he had filed the complaint prematurely and had done little to advance the litigation prior to being discharged. Plaintiff countered with a certification of services describing the work he had performed and asserted that he was entitled to be compensated at an hourly rate equivalent to the one that Slater had used in an earlier filing with the court. At about the same time, plaintiff filed his complaint in this matter, seeking an additional award of damages in the nature of a contingent fee based on his claim that Mazie Slater had tortiously interfered with his contract with defendant Natividad Santiago by inducing her to discharge him.

Faced with these competing and interrelated claims, the trial court concluded that an attorney who is discharged is not entitled to a contingent fee, but instead is permitted to recover a quantum meruit award based on the value of services performed before his discharge. See Glick v. Barclays De Zoete Wedd, Inc., 300 N.J.Super. 299, 309–10, 692 A.2d 1004 (App.Div.1997)(citing Cohen v. Radio–Elecs. Officers Union, 146 N.J. 140, 679 A.2d 1188 (1996)). Applying that framework, the trial court valued plaintiff's lien based on plaintiff's claimed hourly rate and the number of hours he certified he had worked on the file, and awarded him $11,623.75 as his fee. Notwithstanding that reasoning, because of plaintiff's tortious interference complaint, the trial court directed that the balance of the attorneys' fee as calculated in accordance with the contingent fee derived from the settlement reached in the malpractice action be held in escrow pending resolution of this dispute.

Plaintiff's amended complaint in this matter, filed on February 16, 2010, named Santiago, her daughter Betsy, the Mazie Slater law firm, and ten fictitious John Doe defendants. Plaintiff alleged that Santiago was “induced to discharge plaintiff and dissolve the contingent fee contract between them by defendants, Mazie [Slater], [Betsy] Santiago and another person whose identity is unknown to plaintiff at this time.” Mazie Slater moved on behalf of all of the named defendants in lieu of an answer, seeking to dismiss the complaint for failure to state a claim upon which relief can be granted. R. 4:6–2(e). In response, plaintiff asserted that because there had been no discovery and therefore no opportunity to develop the facts, defendants' motion should be denied as premature.

Following argument, the trial court denied defendants' motion without prejudice, setting forth its reasons in an oral opinion. The court found that the complaint alleged facts which, if proven, would establish that Santiago was induced to discharge ...