A recent New Jersey Law Journal story, “Court Upends $52K Fee Award, Citing Retainer Dispute,” reports that a $52,000 award in a New Jersey firm’s fee-recovery suit was tossed out by an appeals court, in part because the judge below didn’t determine whether performing work outside the retainer’s parameters was reasonable.
The Appellate Division on May 29 remanded the case for another hearing on the sum, allegedly owed to Schiffman Abraham Kaufman & Ritter of Hackensack.
A “full explanation of decisions in cases involving the scope of representation and the reasonableness of attorneys’ fees is important in light of the judiciary’s ‘exclusive responsibility to regulate the conduct of attorneys, ... [which] extends to every aspect of the attorney-client relationship, including agreements for fees,’” the panel said, citing the New Jersey Constitution and case law.
According to the opinion, Meredith Fisher hired the firm in November 2012 to represent her in connection with a guardianship issue concerning her mother. The firm, according to its website, has since changed its name to Schiffman, Ambrose, Davis, Goldman & Quinn.
The retainer agreement provided that the firm would represent her through the mediation stage, with replacement counsel to be hired if mediation failed. Fisher made an initial payment of $10,000, and was to receive monthly invoices once that amount dropped to $2,500. The contract also provided that partner Lorraine Abraham was to be Fisher’s lead attorney at an hourly rate of $450, according to the opinion.
About three months into the engagement, by which time the firm had racked up about $29,000 in fees, Fisher allegedly concluded that mediation would not yield a resolution. She allegedly raised concerns that the representation had gone beyond the mediation, while Abraham contended that the judge handling the guardianship matter had required the firm to stay on the case into the litigation stage, the opinion said.
Fisher and the firm executed a substitution of attorney the following month, and the firm was directed by the court to move for withdrawal. The firm filed a motion, accompanied by a certification stating that it had handled several post-mediation tasks—including amending Fisher’s complaint, preparing discovery requests and representing her at conferences—and had only limited contact with Fisher after March 5. The firm claimed it was owed $52,236, and alleged that Fisher failed to pay any of the invoices she was sent, the opinion said.
Schiffman Abraham, meanwhile, sought fee arbitration and, when that failed, filed a complaint in Superior Court seeking the unpaid fees from Fisher. Abraham contended that the firm sent Fisher monthly invoices, and she never took issue with the fees owed or the quality of the representation. Abraham also claimed her $450 hourly rate was reasonable given her significant experience in probate cases, the opinion said.
Fisher claimed the legal work was deficient and beyond the scope of the retainer. She claimed she attempted to terminate the firm in February 2013, but was told that she had no choice but to continue the representation until a substitution hearing could be held. Fisher alleged her requests for a quick substitution were ignored, and the firm, before finally coming off the case in late April, billed $21,000 during that interim period, according to the opinion.