Opinion
DOCKET NO. A-3792-12T2
08-25-2014
MICHAEL POVIDLO, Plaintiff, v. ROBERT T. INGINO, JR., and MANAHAWKIN MOOSE LODGE a/k/a BEACH HAVEN MOOSE LODGE #1575 a/k/a LOYAL ORDER OF MOOSE, and SLEEPY HOLLOW, Defendants.
Judy M. Lansing argued the cause for pro se appellant Lansing & Hannum, LLC. Neil D. Honschke argued the cause for pro se respondent Silvi, Fedele & Honschke, LLC.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Sapp-Peterson, Maven and Hoffman. On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-4070-07. Judy M. Lansing argued the cause for pro se appellant Lansing & Hannum, LLC. Neil D. Honschke argued the cause for pro se respondent Silvi, Fedele & Honschke, LLC. PER CURIAM
Appellant, Lansing & Hannum, L.L.C. (LH), appeals from a March 4, 2013 order denying its motion to set aside a fee agreement with respondent, Silvi, Fedele & Honschke, L.L.C. (SFH). On appeal, LH argues the trial judge erred in denying its motion because the fee agreement violates public policy and the Rules of Professional Conduct (RPC), and because New Jersey law supports only a nominal quantum meruit award in this situation. Additionally, LH argues the trial judge erred in failing to address contract and fiduciary law issues raised below and in failing to hold a plenary hearing to resolve conflicting certifications. We disagree and, therefore, affirm.
The record reveals that plaintiff, Michael Povidlo, retained SFH to represent him in a personal injury action arising out of a 2005 motor vehicle accident. He filed a complaint in 2007 alleging defendant's negligence caused him to "suffer and sustain severe, disabling[,] and permanent injuries." In particular, Povidlo claimed he sustained a traumatic brain injury (TBI) from the accident.
In 2009, Neil Honschke, who was the attorney of record from SFH representing plaintiff, filed a motion to be relieved as counsel, claiming a conflict. Plaintiff retained new counsel, Judy Lansing from LH, who contacted Honschke and asked to review the file. There is a factual dispute as to whether she actually reviewed the file. She claims she did not do so because of attorney-client privilege, while Honschke claims he left her alone in an office to do exactly that. In any event, Lansing claims that based upon her review of the complaint, she determined plaintiff had a good case and agreed to represent him. She executed an agreement with Honshcke in which she agreed that "[b]y assuming this file [she] agree[d] to reimburse [Honschke's] firm with 1/3 of the net attorney's fee, if any, earned on this matter and reimbursement of costs in the amount of $2,449.01 expended by this firm."
In 2011, Lansing settled with one defendant for $35,000. Then, in 2012, she settled with the remaining defendant for $850,000. Honschke sought to enforce their agreement, and it was at that time Lansing objected. LH filed a motion seeking a declaration that Honschke was not entitled to share in the legal fees and to set aside the fee arrangement. SFH opposed the motion. Lansing claimed Honschke never told her he had a pending motion to withdraw as counsel when she went to pick up the Povidlo files and he never told her he had ethical reasons for withdrawing. She certified that it was her understanding Honschke's withdrawal was merely because Povidlo "lost confidence" in Honschke. Lansing further certified that Honschke should have indicated, in his certification of counsel submitted in support of his motion to withdraw, that he was withdrawing as counsel for ethical reasons. She further argued that Honschke should not have misrepresented his true motives. She urged that at most he would only be entitled to quantum meruit recovery.
The motion judge conducted oral argument, during which LH argued that Honshcke made material misrepresentations, namely, that he had engaged in significant work on the file while representing plaintiff. LH indicated that was certainly not the case after Lansing took over the file and became familiar with it. Citing Dinter v. Sears, Roebuck & Co., 278 N.J. Super. 521 (App Div.), certif. denied, 140 N.J. 329 (1995), LH urged that Honschke was not entitled to recover any portion of the counsel fees because he had voluntarily withdrawn as counsel.
Following oral argument, Judge Mark Troncone denied Lansing's motion. He issued a written decision and accompanying order denying LH's application to set aside the fee agreement and gave LH twenty days to turn over the funds due to SMH.
In his decision, the judge determined that Lansing's reliance on RPC 1.5(e) was misplaced. He found that RPC 1.5(e) only applied in a "situation where two or more attorneys from different firms co-represent a client simultaneously and not, as is the case here, where there is successive representation." He observed the cases cited by Lansing in her brief were not applicable, as they dealt primarily with a situation in which there was no written agreement between successive attorneys. He reasoned the "only instance in this regard where those cases would be applicable would be if this court were to void the written agreement and then had to determine an equitable division of the earned legal fee based upon the principles of quantum meruit."
Next, acknowledging duress is an actionable offense that can result in the destruction of a contract, the judge noted the "controlling factor is the condition of the mind of the person subjected to . . . coercive measures at the time the contract is entered into." In that vein, from the record, Judge Troncone determined none of Honschke's actions amounted to duress and that Honschke's "actions were accommodating and gave . . . Lansing every opportunity to review the file so she could make her own judgment as to whether to assume legal representation of . . . Povidlo." Furthermore, he determined that even if there had been duress, Lansing's subsequent action over a period of three years amounted to a confirmation of the contract.
Next, Judge Troncone ruled Lansing had failed to prove, by clear and convincing evidence, that Honschke committed fraud. He determined again that Lansing had every opportunity to review the file when she met with Honschke. In fact, Judge Troncone noted that Lansing's sole reason for traveling to Honschke's office was to do just that. Because Lansing had the ability to review the file, the judge concluded she could have known exactly how much work Honschke had done and that there was a pending motion to withdraw. Therefore, the judge found that Lansing's claim of fraud was without merit.
Addressing the merits of Honschke's withdrawal, the judge found Lansing's reliance upon Dinter, was "not applicable . . . because . . . Honschke withdrew from the case for good cause. Moreover, unlike the situation in Dinter, the attorneys prepared and executed a written agreement on the fee split."
Finally, Judge Troncone ruled that the fee agreement entered into by Lansing and Honschke should be enforced. Judge Troncone noted the agreement was clear and concise, and that Lansing "entered into the agreement with a full awareness as to the work that had been done by . . . Honschke and his firm." Judge Troncone then recognized that although an inexact science, "attorneys must use their best collective judgment in arriving at fair fee split[,] recognizing the past work done by the withdrawing attorney, the work needed to be done by the superseding attorney . . . [and] the 'rainmaking' efforts of the withdrawing attorney and the prospects for an early settlement . . . ." The judge reasoned that agreements are to be enforced unless a compelling reason deems otherwise. Finding no such compelling reason, he ordered that the agreement should be enforced. The present appeal followed.
On appeal, LH raises the following points for our consideration:
POINT I
THE TRIAL COURT'S ENFORCEMENT OF THE FEE DIVISION NOTWITHSTANDING ATTORNEY HONSCHKE'S PRIOR WITHDRAWAL IS CONTRARY TO PUBLIC POLICY (NOT ARGUED BELOW).
POINT II
THE TRIAL COURT ERRED BY FAILING TO TREAT THE CONTRACT AND FIDUCIARY LAW ISSUES RAISED BELOW AS QUESTIONS OF FIRST IMPRESSION IN NEW JERSEY (NOT ARGUED BELOW).
POINT III
NEW JERSEY SUPPORTS A NOMINAL QUANTUM MERUIT AWARD WHERE AN ATTORNEY WITHDRAWS PRIOR TO RECOVERY.
POINT IV
THE TRIAL COURT DID NOT PROPERLY APPLY RPC 1.5(E).
POINT V
THE TRIAL COURT ERRED WHEN IT DID NOT HOLD A PLENARY HEARING AND FORMED ITS OPINION BASED ON CONFLICTING CERTIFICATIONS (NOT ARGUED BELOW).
POINT VI
AN ORDER OF RESTITUTION IS WARRANTED UPON REMAND RETURNING ALL FUNDS PREVIOUSLY PAID UNDER THE JUDGMENT TO APPELLANT (NOT ARGUED BELOW).
We have considered the points raised in light of the record, the arguments advanced and the applicable legal principles. We affirm substantially for the reasons expressed by Judge Trancone in his cogent and well-reasoned March 4, 2013 written opinion. We add the following comments.
In reaching his decision, Judge Troncone did not take testimony. Rather, the hearing consisted of submissions from the attorneys and their arguments. A key dispute between the parties was whether Lansing went to Honschke's firm once or twice and whether she reviewed plaintiff's file. SFH claimed Lansing visited its office twice to review the file. LH claimed Lansing only visited SFH's office once to review the file. The court did not resolve how many times Lansing visited the office but noted there was no dispute she was there at least once and had the opportunity to review the file, and because Lansing had the ability to review the file, she could have known exactly how much work Honschke had done and that there was a pending motion to withdraw.
Judge Troncone's findings on this issue are considered binding on appeal because the findings are supported by undisputed and adequate evidence. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). Under this limited standard of review, we will "not disturb the factual findings and legal conclusions of the trial judge unless we are convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant[,] and reasonably credible evidence as to offend the interests of justice." Ibid. Measured under this standard, we find no basis to disturb this finding.
LH relies upon Glick v. Barclays De Zoete Wedd, Inc., 300 N.J. Super. 299 (App. Div. 1997), to maintain that "enforcement of the fee agreement at bar ignores [Honschke's] inducement via the undisclosed withdrawal and vitiates the New Jersey's RPC in contravention of public policy." In Glick, which involved a contingent fee arrangement between the attorney and the attorney's client, we were charged with determining whether a contingent fee agreement existed between the injured plaintiffs and their attorneys. Id. at 307 (emphasis added). Although the trial court found no such agreement existed, we recognized the possibility of recovery under quantum meruit. Ibid.
The present scenario is categorically dissimilar. The fee agreement at issue does not concern a contingent fee arrangement between Povidlo and his counsel, but an agreement between a predecessor and successor attorney. Furthermore, Judge Troncone found below that a valid agreement existed, which finding is supported by substantial, credible evidence in the record.
LH's claim that the agreement violated RPC 1:39-6(d), governing the division of fees between referring attorneys, because she is not a certified civil trial attorney is without merit. It is undisputed that Honschke did not refer plaintiff's case to the SFH.
The remaining points raised and not specifically addressed in this opinion are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELATE DIVISION