Court Awards Attorney Almost $100,000 Less Than He Requested In New Jersey Consumer Fraud Act Case

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

I recently wrote about Garmeaux v. DNV Consepts, Inc., a case in which the Appellate Division held that, under New Jersey's Consumer Fraud Act, successful plaintiffs can, in certain circumstances, recover legal fees they incurred in connection with both the prosecution of their affirmative claims and the defense against any counterclaims. If the facts relevant to a counterclaim are "inextricably caught up with," and related to the common core of, the facts relevant to an affirmative CFA claim, then legal fees can be awarded for both claims. In another recent decision, Riccardi v. Bruno, the Appellate Division addressed a similar issue but arrived at a result that was less favorable to plaintiff than the result in Garmeaux.

In Riccardi, plaintiff purchased a home from one of the defendants. The home had been damaged in a fire and required "extensive renovations" before being put on the market. (Although it was not listed as having been fire damaged, the certificate of occupancy issued by the township at the closing noted "rehab after fire.") After the closing, plaintiff allegedly discovered numerous problems with the house, including mold, burnt and fractured joists, and damaged foundation walls. He sued the seller and several related entities (architect, contractor, home inspector, etc.), alleging breach of contract and a violation of the CFA.

Default was entered against several defendants for failing to answer the complaint, and the claims against several others were dismissed either by summary judgment or at the close of plaintiff's case in chief. The jury then determined that the two remaining defendants — the prior owners of the property — violated the CFA. The jury's verdict was based on a "knowing concealment, suppression, or omission of a material fact with the intent that other would rely upon that fact." (The decision does not identify the fact that was omitted.) The jury found no cause of action under the CFA based on an unconscionable commercial practice, fraud, false pretense, false promise , or misrepresentation. And, it awarded plaintiff only $4,500, which was "attributable to the cost to repair a damaged window frame and to dispose of buried construction litter."

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Refer(ral) Madness: Court Nixes Fee Sharing For Lawyer Who Referred Case To Lawyer Who Referred Case To Lawyer Who Handled Case

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Under New Jersey law, lawyers can, in some instances, share fees with lawyers at a different firm to whom they refer a case. But what happens when Lawyer A refers a case to Lawyer B who then refers the case to Lawyer C? Can Lawyers A and B share in the recovery that Lawyer C achieves for the client? This was the question the Appellate Division faced in Weiner & Mazzei, P.C. v. The Sattiraju Law Firm, PC. The answer, in that case, was "no," but there are instances where this type of three-way sharing would be appropriate.

In Weiner & Mazzei, a lawyer was contacted by a family friend in need of advice on a possible workplace injury/change of employment case. The lawyer advised the family friend that he appeared to have a valid claim and referred the family friend to an attorney who specialized in that area of law. The first lawyer claimed that he told the family friend that the second lawyer would take the case on contingency and that the first lawyer would be paid a referral fee. The family friend denied ever being told about the referral fee.

After speaking with the first lawyer, however, the second lawyer also refused the case but agreed to refer it to defendant, a law firm with at least one certified civil trial attorney. The second lawyer had a standing referral agreement with defendant and defendant agreed to abide by the usual one-third referral fee contained in that agreement.

Defendant prosecuted the client's employment case and eventually reached a confidential settlement with the client's former employer. Plaintiffs — the first and second lawyers — sued, claiming they were jointly entitled to one-third of defendant's fee. Defendant moved for summary judgment, which was originally denied, but was later granted upon reconsideration. Plaintiffs appealed.

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New Jersey Supreme Court To Hear Appeal In Case Involving Defense Counsel That “Friended” Plaintiff On Facebook

by: Peter J. Gallagher (@pjsgallagher)

Earlier this year, I posted about an ethics grievance that was filed against a defense attorney whose paralegal "friended" a plaintiff on Facebook, which allowed the defense to gain access to information that could be used to impeach the plaintiff at trial. (Click here for my original post.) The Appellate Division decision that was the subject of that post had less to do with the substance of the grievance — whether it was unethical to do what the paralegal did — and more about the strange procedural history of the grievance.

The Secretary of the local Ethics Committee originally refused to docket the grievance (which the Secretary is allowed to do if the Secretary, in consultation with a public member of the Ethics Committee, makes an initial determination that no ethics rules were violated), but plaintiff then went to the Director of the Office of Attorney Ethics ("OAE") with more information and convinced the OAE to investigate. Defense counsel argued that this violated the so-called “no appeal” portion of the New Jersey Court Rules, which prohibits appeals from decisions declining to docket ethics grievances. Defense counsel made this argument in a complaint that he filed in the Chancery Division, but the complaint was dismissed for lack of jurisdiction because, according to the trial court and the Appellate Division, the New Jersey Supreme Court has exclusive jurisdiction over matters involving the disciplining of attorneys.

Now the New Jersey Supreme Court has agreed to hear the case to resolve the following question:

Does the Director of the Office of Attorney Ethics have the authority to proceed with a grievance after a District Ethics Committee Secretary (with concurrence by a designated public member) has declined a grievance, pursuant to Rule 1:20-3(e)(3)?

As I mentioned in my prior post, it seems like the more interesting question is whether defense counsel's conduct was unethical, but we will not get an answer to this question until the New Jersey Supreme Court clears up this procedural issue.And, we will not get an answer at all if the New Jersey Supreme Court agrees with defense counsel and finds that it was improper for the OAE to investigate the grievance after the Secretary of the Ethics Committee refused to docket it.

Stay tuned for more on this case.

Ethics Grievance Against Defense Lawyer Who “Friended” Plaintiff Will Continue

by: Peter J. Gallagher (@pjsgallagher)

Recent reports have suggested that Facebook is no longer seen as “cool” among teens and other millennials because, among other things, their parents are on Facebook, so how can it possibly be “cool”? Well, with all apologies to Mark Zuckerberg, this post may be the death knell for Facebook’s coolness because this is the second time in the past few months that I am writing about Facebook. (The other article, which discussed the implications of judges being “friends” with attorneys, can be found here.) If parents being on Facebook is reason enough for it not to be “cool,” a lawyer blogging about it somewhat regularly probably removes any last vestiges of coolness.

With that being said . . . A recent Appellate Division decision, Robertelli v. The New Jersey Office of Attorney Ethics, will allow an ethics investigation involving a law firm employee’s use of Facebook to obtain information about a plaintiff in a pending personal injury lawsuit to continue. The issue faced by the Appellate Division – which is discussed below – did not involve the question of whether using Facebook to investigate another party in a pending lawsuit is unethical. But, since the case will now continue, we might get a decision on this underlying issue soon, so this case is worth watching. Other jurisdictions have dealt with similar issues and have usually found the conduct to be violative of the Rules of Professional Conduct. For example, the Philadelphia Bar Association found, in a similar situation, that the attorney’s conduct violated RPC 8.4 (conduct involving dishonesty, fraud, deceit and misrepresentation) and RPC 4.1 (truthfulness in statements to others). Similarly, the San Diego Bar Association found that an attorney’s use of Facebook to “friend” potentially dissatisfied high-ranking employees at an employer that his client was suing violated RPC 4.2 (communicating with a person represented by counsel). With the grievance in Robertelli, New Jersey’s Disciplinary Review Board and Supreme Court may soon weigh in on the issue as well.

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