ARNOLD G. SHURKIN ESQ v. TONY GANDOLFO

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

ARNOLD G. SHURKIN, ESQ.,

Plaintiff-Appellant,

v.

TONY GANDOLFO,

Defendant-Respondent.

___________________________

January 31, 2014

Before Judges Fuentes, Simonelli and Fasciale.

On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-4517-10.

Arnold G. Shurkin, appellant pro se.

Richard S. Mazawey, attorney for respondent.

PER CURIAM

Plaintiff appeals from a May 27, 2011 order vacating default judgment, a February 3, 2012 order awarding plaintiff counsel fees for legal services that he rendered to defendant, and a March 16, 2012 order denying plaintiff's motion for reconsideration. We affirm for the reasons expressed by Judge Garry S. Rothstadt in his well-reasoned written opinions.1

In January 2008, plaintiff began representing defendant in a complicated corporate dissolution matter (the Esposito Matter). Plaintiff orally agreed to investigate the dispute, but defendant did not sign a retainer agreement. In January 2009, plaintiff filed a complaint on defendant's behalf. In April 2009, after plaintiff had performed a substantial amount of work on the Esposito Matter, the parties executed a retainer agreement. The agreement was limited in scope to work related to the Esposito Matter. It provided that, in the event plaintiff had to file suit to collect his counsel fees, defendant would pay "an amount equal to twenty-five . . . percent of the amount due for [plaintiff's] attorneys' fees and costs."

Plaintiff also represented defendant in several unrelated matters. On June 1, 2010, defendant terminated plaintiff on all matters except the Esposito Matter. Later that month, defendant executed a supplemental fee agreement for plaintiff's services indicating that plaintiff would continue to work on the Esposito Matter and unrelated matters provided defendant paid for legal services that plaintiff had rendered. But, defendant refused to pay plaintiff pursuant to the agreement. Approximately one week later, plaintiff filed a motion in Essex County, seeking to withdraw as counsel in the Esposito Matter and to obtain a lien for his counsel fees. The judge granted plaintiff's motion to withdraw, and entered an order regarding the lien.2

In September 2010, plaintiff filed a parallel fee collection action in Passaic County, seeking payment of five unpaid bills totaling $35,669.43, fees for services that plaintiff was continuing to perform, and the twenty-five percent collection fee provided for in the retainer agreement. Judge Rothstadt entered a default judgment against defendant for reasonable fees for the services plaintiff rendered, but did not award plaintiff the twenty-five percent collection fee.

Defendant moved to vacate the default judgment, contending that he was confused by the parallel action in Essex County, and challenging plaintiff's billing system. Judge Rothstadt found that defendant established excusable neglect justifying relief under Rule 4:50-1(a). The judge also found that defendant established a meritorious defense and stated that "the court is willing to give the defendant an opportunity to air his dispute in more detail with the plaintiff through an expedited trial." The judge then entered an order vacating the default judgment.

In November 2011, Judge Rothstadt conducted a five-day trial and subsequently issued a twenty-seven page written opinion. The judge held that plaintiff's failure to obtain a written retainer agreement before he began representing defendant, or within a reasonable time thereafter, violated RPC 1.5(b), and that the April 2009 agreement was unenforceable. But the judge found that plaintiff was entitled to reasonable fees under the quantum meruit theory:

It is clear that the four-part [quantum meruit] test has been satisfied in this case because: (1) [plaintiff] provided valuable legal services in good faith[,] investigating and pursuing [defendant's] claims against the Espositos and performing services for the other matters at [defendant's] request[;] (2) [defendant] accepted those services without question and, in fact, made substantial payments towards these services; (3) there was an expectation of payment and receipt of compensation as demonstrated by the parties['] initial discussions and, later, the written retainer agreement; and (4) [defendant] did not challenge the reasonable value of [plaintiff's] services in the trial.

. . . . [Defendant], an experienced businessman of considerable means, did not challenge the reasonableness of the hourly rates he agreed to, and there is no evidence suggesting that they were unreasonable.

The court, after considering all of the evidence in the case, was satisfied that [plaintiff's] hourly rates were entirely reasonable and consistent with prevailing standards in the legal community. [Plaintiff] has been practicing in [N]orthern New Jersey for almost fifty years. He is knowledgeable in all matters relating to real estate and other general areas, including basic estate planning and administration. His hourly rate is below that which the court believes is charged by other attorneys in the area for similar work. There is nothing apparent about his billing that leads the court to believe it was unreasonable or that the time spent was unnecessary.

Significantly[,] [defendant] never questioned [plaintiff's] fee nor the time he spent on [defendant's] matters. Even when [defendant] terminated [plaintiff], he wanted [plaintiff] to continue to represent him in the Esposito [M]atter as he was satisfied with the work being performed, albeit he became impatient with its progress.

[(Citations omitted).]

The award included fees for services plaintiff rendered after defendant allegedly terminated him in June 2010 because, as Judge Rothstadt noted, defendant verbally authorized and participated in the continued representation.

The judge then determined that plaintiff was not entitled to counsel fees under the retainer agreement:

In order for an attorney to enforce a counsel fee provision of a retainer agreement, the attorney must have disclosed the attorney's right to seek recovery of counsel fees in writing to the client at the time of retention. There is no dispute in this case that [plaintiff] did not disclose in writing a counsel fee provision with [defendant] at the time of his retention in January 2008. The fact that [plaintiff] incorporated the provision in the April 2009 retainer agreement, after [defendant] incurred substantial fees and costs, did not give [defendant] the freedom of choice to contract with other attorneys at that time in the same manner that existed at the inception of the relationship. Specifically, in April 2009[,] when [defendant] signed the retainer agreement, he had already invested a year in working with [plaintiff] on various matters. If he rejected the retainer agreement at that time because of the counsel fee provision, [defendant] would have to find a new lawyer and start the process all over again. Under these circumstances, as a matter of public policy, the provision cannot be enforced.

[(Citations omitted).]

The judge also held that plaintiff was not entitled to a sanction for pro se attorney fees because he did not actually incur an expense, and stated that "[i]f reasonable attorneys' fees are not actually incurred by a litigant as a direct result of a frivolous claim, they are not compensable under the rule [providing for sanctions, R. 1:4-8]."

Plaintiff then filed a motion for reconsideration, but failed to supplement the motion with a certification or brief. Judge Rothstadt indicated that, pursuant to Rule 4:42-9, a motion must specify the basis on which it is made when it is filed, and plaintiff failed to sufficiently establish a basis for his motion for reconsideration.

Plaintiff argues that (1) he is entitled to counsel fees to oppose defendant's motion to vacate default judgment; (2) the judge erred by failing to enforce the parties' fee agreement; (3) defendant asserted a frivolous defense; and (4) plaintiff's counsel fees are reasonable.

After a thorough review of the record and consideration of the controlling legal principles, we conclude that plaintiff's arguments are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We therefore affirm substantially for the reasons set forth in Judge Rothstadt's thorough written May 27, 2011 and February 3, 2012 opinions, and those reasons that he expressed in his March 16, 2012 order denying plaintiff's motion for reconsideration.

1 The judge issued a May 27, 2011 opinion (finding excusable neglect and a meritorious defense), and February 3, 2012 opinion (rendering findings of fact and conclusions of law after a lengthy bench trial).

2 The order provided that "any fee dispute between [plaintiff] and [defendant] shall be resolved by decision of the Fee Arbitration Committee, if [defendant] so chooses, or alternatively by decision of this [c]ourt," and scheduled a case management conference for September 8, 2010.