Alpert, Goldberg, Butler, Norton & Weiss P.C. v. Quinn, 410 N.J. Super. 510 (N.J. Super., App. Div. 2009) is an important case because of the way the analysis contextualizes the attorney-client relationship. The background of the case is not as ...
Alpert, Goldberg, Butler, Norton & Weiss P.C. v. Quinn, 410 N.J. Super. 510 (N.J. Super., App. Div. 2009) is an important case because of the way the analysis contextualizes the attorney-client relationship. The background of the case is not as important but will be given to help understand the reasoning of the judges. Originally, Alpert (the firm) sued Quinn (the client) as part of a fee dispute. The client then countersued based on legal malpractice and a breach of duty by the firm. The Quinns first consulted the firm based on a relationship with a different attorney, as well as ongoing litigation. In relation to that first consultation, the firm insisted that a retainer agreement be signed before any advice given. The client signed the letter, and seemingly had a good relationship.
Months after the firm began representing the client a dispute began during which the client asked for a copy of the master retainer agreement. The agreement provided several terms analyzed by the court including "if the firm withdrew from a client's matter and is further entangled with the client, its time will be billable to and payable by the client, together with expenses; the initial advance retainer would be placed in the firm's general operating account rather than its trust account "because of the ongoing cash flow drain this file will engender"; "balances owed and unpaid beyond thirty days would bear interest at the rate of twelve percent per annum"; "if there was a fee dispute or any proceedings relating to or arising from the firm's fees and expenses, the client would continue to pay the hourly fees and expenses for any time and expense that continued to be incurred by the firm by virtue of any fee dispute or related proceedings; the client would pay fees for any time and expense incurred by the firm in seeking to be relieved of counsel and dealing with any successor firm; photocopying charges were to be billed at twenty-five cents per page; and "extraordinary secretarial overtime" would be billed at $50 an hour. Another significant provision in the agreement was that no bills were to be discounted unless the client agrees not to challenge any of the items billed in the "traditional" manner.
The firm and the Quinns exchanged numerous legal blows over the course of 3 years. Eventually, in 2008, a trial court issued a judgment against the client in the amount of $163,745.93. This was the alleged fees which the clients challenged, and the firm believed they were entitled to. TheNew JerseySuperior court then heard this appeal on that judgment.
In construing retainer agreements, the court noted the different relationship between attorneys and clients. Thus, the usual principles of contracts must give way to the higher ethical and professional standards enunciated by theNew Jerseysupreme court in governing retainer agreements. Transactions between attorneys and clients are subject to a higher level of scrutiny, thus when the fairness of a contract is examined between the parties, the burden of proving equity falls upon the attorney. This reflects the unequal bargaining positions as well as the ethical obligations of counsel. An agreement which conforms to contract law, but not attorney professional responsibility rules will be held invalid. An attorney, when contracting must act as a fiduciary, meaning she must satisfy her fiduciary obligations to the client. This requires explaining the basis and fee rate that the lawyer intends to charge from the outset. The requirement, according to the court was laid out inNew Jerseyrule of professional conduct 1.6 which states ""[w]hen the lawyer has not regularly represented the client, the basis or rate of the fee shall be communicated in writing to the client before or within a reasonable time after commencing the representation." The firm's argument in this case was they literally complied with this requirement, but the court disagreed with that assessment.
This was based partly on anABAopinion which requires an attorney explain charges based both on professional time and any other charges. Thus, the explanation of charges must go far beyond the professional time, and include all other charges such as copying, and filing. The writing requirement is intended to avoid misunderstandings as well as fraud. According to the court, Rule of Professional conduct 1.4 also required "[a] lawyer [to] explain a matter to the extent reasonably necessary to permit the client to make informed decisions regarding the representation." The court asserted that a client could not make an informed decision regarding representation without full knowledge of the charges which would accompany such representation. The firm's direction in the retainer agreement directing a client to request another document did not comply with this rule. The master agreement contained terms that the client in this case could not have known. The reference to the document was thus useless. The court also implicated rule 7.1 regarding misleading statements as preventing a law firm from simply referring to additional cost obligations as details in a standard contract, as the firm did here.
The court ruled that a new client must be told of all costs in the retention letter. A retainer agreement like the one used by the firm which merely directed a client to a different agreement did not suffice for this case. The firm argued that the contracts signed by the clients in this case actually incorporated the master agreement as well, thus they did comply with the rules the Court laid down.
The court was not receptive to this argument because of what contract incorporation requires. Incorporation of one document by reference into a contract is possible. However, inNew Jersey, the judges stated that incorporation by reference required explicit assent to the terms of the contract by both parties. In this case, the agreement signed by the clients did not specify that the master agreement controlled. It merely mentioned that the clients would be bound by the "standard billing practices and firm policies." The reference to standard policies was not specific enough to put the clients on notice that another agreement contained the terms of representation. In fact, the clients did not see the document until fall, 2006. This necessitated finding against the incorporation argument by the firm.
Ultimately in issuing a decision regarding what charges the clients could be held accountable for, the court believed the firm could only point to one agreement as outlining fees. Thus, the agreement which explicitly set forth terms would supply the amount the firm could collect in this action. This necessitated striking much of the award.
This case is important because it shows that clients need to look at their bills, and attorneys can not act as other commercial actors. While in a practical sense, the attorney-client relationship may seem casual, the court here acknowledged, that regardless of the relationship at the beginning. An attorney always has an ethical responsibility. Whether it is to pursue a case zealously, or act as a fiduciary, the attorney-client relationship is one courts put a large amount of stock in.