A recent New Jersey Law Journal story by Michael Booth, “Lawyer Fee Claim Need Not Come in Separate Suit, Court Rules in $99K Fee Dispute,” that ruling in a fee dispute between New Jersey firm Carella, Byrne, Cecchi, Olstein, Brody & Agnello and its client, a state appeals court has streamlined rules for attorneys seeking to recover fees from their clients.
In a published opinion released Tuesday in the $99,000 fee dispute, a three-judge Appellate Division panel said attorneys involved in fee disputes do not have to file separate actions in the Law Division.
Appellate Division Judge Richard Geiger, writing for the panel, said an aggrieved attorney instead should file a petition in the underlying action, to be adjudicated in the Chancery Division as necessary.
“We hold that a petitioning attorney may obtain a judgment against his or her client for the reasonable amount of unpaid legal fees in the underlying action without filing a separate action in the Law Division,” Geiger said, joined by Judges Carmen Alvarez and Heidi Currier.
“The petition should be filed in the underlying action but it is to be tried as a separate and distinct plenary action in the Chancery Division with the right to conduct discovery, and the holding of pre-trial conferences,” Geiger added.
“Petitioner need not file a separate action in the Law Division to obtain a judgment against his or her client for attorney’s fees,” he said.
The ruling comes in a dispute between Roseland’s Carella Byrne and one of its clients, Valerie Giarusso.
Giarusso retained a lawyer at the firm, who was not identified by the court, to represent her in her postdivorce actions against her ex-husband, William Giarusso, according to the decision.
Carella Byrne is seeking $99,356 in unpaid counsel fees.
According to the ruling, Carella Byrne said it expended extensive efforts on obtaining alimony, child support and equitable distribution, and was never fully compensated beyond the initial $5,000 retainer.
After the matrimonial action was ended, Carella Byrne lodged an attorney charges lien against Giarusso for the amount the firm said it was owed. Giarusso disputed the claim, saying the fees sought did not reflect the services rendered, the court said.
A Bergen County trial judge vacated the lien, but awarded Carella Byrne $50,000 in fees. The firm appealed.
In ruling Monday, the appeals court said further hearings must be held to determine what fees Carella Byrne is entitled to.
“A lawyer’s fee must be reasonable,” Geiger said, quoting the Appellate Division’s 1995 ruling in Rosenberg v. Rosenberg. “Attorneys have never had the right to enforce contractual provisions for more than a reasonable and fair fee.
“They are not businessmen entitled to charge what the traffic will bear,” Geiger added.
“Petitioner [Carella Byrne] bears the burden of proving the reasonableness of the fees by a preponderance of the evidence,” he said.
Giarusso’s attorney, Joseph Maceri, welcomed the ruling. There was no reason to place a lien on his client because of a fee dispute, said Maceri, of Snyder, Sarno, D’Aniello, Maceri & DaCosta.