Starkey, Kelly, Blaney & White v. Estate of Nicolaysen

773 A.2d 1176, 340 N.J. Super. 104
CourtNew Jersey Superior Court Appellate Division
DecidedApril 30, 2001
StatusPublished
Cited by3 cases

This text of 773 A.2d 1176 (Starkey, Kelly, Blaney & White v. Estate of Nicolaysen) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Starkey, Kelly, Blaney & White v. Estate of Nicolaysen, 773 A.2d 1176, 340 N.J. Super. 104 (N.J. Ct. App. 2001).

Opinion

773 A.2d 1176 (2001)
340 N.J. Super. 104

STARKEY, KELLY, BLANEY & WHITE, Plaintiff-Respondent/Cross-Appellant,
v.
ESTATE OF Nancy NICOLAYSEN, Lisa Gelburd and Sigurd Nicolaysen, Jr., Defendants-Appellants/Cross-Respondents.

Superior Court of New Jersey, Appellate Division.

Argued March 14, 2001.
Decided April 30, 2001.

*1177 Joseph E. Murray, Berkeley Heights, argued the cause for appellants/cross-respondents (Jay B. Bohn, on the brief).

Scott W. Kenneally, Toms River, argued the cause for pro se respondent/cross-appellant (Charles E. Starkey, of counsel; Mr. Kenneally, on the brief).

Before Judges BAIME, CARCHMAN and LINTNER.

The opinion of the court was delivered by CARCHMAN, J.A.D.

This appeal requires us to consider whether an attorney who has failed to secure a timely written contingent fee agreement may recover either a contingent fee or an award based on quantum meruit, or is barred from any fee recovery. Here, plaintiff law firm Starkey, Kelly, Blaney & White and its clients, Nancy and Sigurd Nicolaysen (decedents), agreed on a contingent fee but did not reduce their agreement to writing for a period exceeding two years after the commencement of representation. Judge Arnold concluded that the belated execution of the contingent fee agreement was a violation of RPC 1.5(b) which barred recovery of a contingent fee, but reserved plaintiff's right to seek quantum meruit relief. Following a subsequent trial on that issue, Judge Hoens concluded that quantum meruit relief was warranted and granted an award. Decedents' heirs, defendants Lisa Gelburd and Sigurd Nicolaysen, Jr. (Sandy), and the Estate of Nancy Nicolaysen appealed, and plaintiff cross-appealed. We hold that *1178 under the circumstances presented here, plaintiff was barred from a contingent fee award but was entitled to quantum meruit relief. We affirm the award and dismiss the cross-appeal.

I

These are the undisputed facts. On April 5, 1984, in contemplation of their retirement and their children's futures, decedents entered into a contract to sell their 113 acre Montgomery Township farm to Chaim Melcer for the sum of $870,000, at $7,700 per acre, contingent upon Melcer's ability to obtain preliminary subdivision approval and access to all required utilities within twelve months (Melcer contract). Eight months later, on January 30, 1985, Melcer assigned the contract to a builder, Henry Opatut (Opatut contract), who sought to extend the time frame for required utilities approvals.

Decedents were worried by and dissatisfied with the price terms, Opatut's proposed performance extension, and their then-attorney's recent poor press. So, in early 1985, on the recommendation of a mutual acquaintance, decedents retained Charles E. Starkey, a partner in plaintiff, to represent them in the matter and advise them on the farm sale. Starkey believed that decedents had not received a fair price from Melcer, advised them to terminate the sale agreement upon Opatut's failure to meet his performance contingencies, and over the course of nine more years and during the remainder of their lifetime provided extensive legal services to decedents with respect to the farm. As decedents lacked the resources to pay for Starkey's services on an hourly basis, they agreed over the course of several subsequent meetings that Starkey would represent them on a contingent fee basis for one-third of the difference between the Melcer/Opatut contract sale price of $870,000 and any sale price should he succeed in extricating them from the contract:

Now, from the beginning of my personal meeting with [decedents], they were concerned about how they would pay the fee because they didn't have any money. That was the reason they were trying to sell the property in the first place. Early on, I don't know whether it was the—I doubt whether it was the first meeting, the first meeting I probably said we'll work that out, but certainly within the next month or so we discussed how they could pay the fee.
They flat out told me they couldn't afford an hourly basis. I said that's okay. What we would do is handle it on a contingent fee basis. I told them that the closest thing on a contingent fee basis that I was familiar with would be a condemnation action, and I told them that the normal approach in a condemnation action if you represent the condemnee is that you get a percentage, usually one-third, of the excess over what the offer in condemnation was.

Starkey thereafter not only successfully represented decedents in terminating the Mercer/Opatut contract by defending against consolidated suits for specific performance at a three-day trial and on subsequent appeal, but also simultaneously represented decedents in their continued negotiations with other developers for the sale of their land.

On December 23, 1986, while the Melcer/Opatut litigation was still pending before this court, decedents entered into a contract of sale with Newman and Newman Builders and Developers, Inc. in the amount of $3,996,000, at the rate of $36,000 per acre, contingent upon decedents' success on the Melcer/Opatut appeal (Newman contract). Pursuant to the Newman contract, decedents received a $50,000 deposit from Newman within four months of *1179 its signing, and additional incremental deposits of $10,000 per month thereafter, for a sum total of $200,000. This sum was determined to be non-refundable.

Due to Mrs. Nicolaysen's concern over the prospect of continuing litigation, Mr. Nicolaysen's failing health, and "that so much time had gone by before any money was paid," she wanted to formalize "some method of paying" Starkey for his services, and Starkey obliged on November 10, 1987, not only by reducing their oral contingent fee agreement to writing, but also by unilaterally reducing his typical percentage fee to 20% of the sale price differential. This adjustment was made in light of the Newman contract, which would have yielded a fee of $625,200 at that rate upon closing. That letter agreement, which decedents signed and returned to plaintiff on November 13, 1987, over two and one-half years after commencement of Starkey's representation, provided:

While our case before the Appellate Division is still awaiting final decision, I thought that we should make an effort to reduce to writing our arrangement for establishing legal fees for our past and future services.
During our initial meetings you will recall that I discussed handling this case on a basis similar to a real estate condemnation matter. In those types of cases, the normal approach is to base a legal fee on the spread between the amount offered by the condemning authority and the amount finally obtained for the client as a result of the negotiations and/or litigation. Typically, that type of contingent fee is in the amount of one-third of the monies obtained for the client.
In your situation and because of what I have always regarded as the great disparity between your contract price with Opatut and what I thought would be the real worth of your property, I indicated to you that one-third would be an excessive fee. Accordingly, our fee proposal is to perform all services, including a Supreme Court Appeal if that becomes necessary, for a fee based on twenty percent of the difference between the present acre price in the Opatut contract and the present acre price realized by you from the Newman contract or any other contract which is ultimately closed by you.

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Related

Starkey v. Estate of Nicolaysen
796 A.2d 238 (Supreme Court of New Jersey, 2002)
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792 A.2d 481 (New Jersey Superior Court App Division, 2002)
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166 F. Supp. 2d 72 (D. New Jersey, 2001)

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Bluebook (online)
773 A.2d 1176, 340 N.J. Super. 104, Counsel Stack Legal Research, https://law.counselstack.com/opinion/starkey-kelly-blaney-white-v-estate-of-nicolaysen-njsuperctappdiv-2001.