Balducci v. Cige
192 A.3d 1064
N.J. Super. Ct. App. Div.2018Background
- Lisa Balducci retained attorney Brian Cige in 2012 to pursue New Jersey Law Against Discrimination (LAD) claims for her and her minor child under a written retainer requiring the client to pay the greater of: (1) Cige’s hourly rate, (2) 37.5% of net recovery, or (3) statutory attorneys’ fees; costs and many discrete charges (e.g., $1 per email) were also payable by client.
- Balducci terminated Cige in 2015 after disputes over billing, alleged lack of preparation, and large invoices; Cige billed roughly $286,746.67 and asserted a charging lien that impeded settlement.
- Balducci filed a declaratory judgment action asking the court to declare the retainer unenforceable; Cige counterclaimed for fees. A plenary hearing was held without prior discovery.
- The trial court found Balducci and her child credible that Cige (1) failed to explain the Agreement’s material terms or alternatives, (2) represented she would not be charged hourly if the case lost, and (3) did not adequately disclose likely litigation costs; the court voided the agreement and dismissed Cige’s counterclaim but allowed quantum meruit recovery for services rendered.
- On appeal, the Appellate Division affirmed, holding the record supported the factual findings and that in fee-shifting statutory cases (like LAD) an attorney must explain the ramifications of including an hourly component, alternatives (contingent-only counsel), and likely costs so the client can make an informed decision.
Issues
| Issue | Balducci’s Argument | Cige’s Argument | Held |
|---|---|---|---|
| Enforceability of retainer | Agreement unenforceable because Cige failed to explain material terms, costs, and alternatives; client relied on misrepresentations | Agreement is written and signed; Cige adequately explained terms and complied with RPCs | Agreement voided: trial record supports finding Cige did not adequately inform client and made misrepresentations |
| Ethical duties when fee includes hourly component in LAD statutory cases | Attorney must disclose that hourly fees can approach/exceed recovery, available contingent-only counsel, and estimate likely costs | No special disclosure required beyond written agreement and billing | Appellate court: in LAD/statutory fee-shifting cases attorney ethically must disclose ramifications of hourly component, alternatives, and expected costs |
| Adequacy of discovery and plenary hearing procedure | Plenary hearing sufficient; discovery not necessary given record and no contemporaneous objection | Trial court erred by holding plenary without discovery; procedural unfairness | No reversible error; defendant did not object to plenary hearing scheduling and record was adequate |
| Were billing practices and specific cost charges (e.g., $1/email) sufficiently disclosed | Failure to identify and explain such charges made agreement misleading and hindered informed consent | Terms were in agreement; client had duty to read and question | Court found charges were not adequately disclosed and were problematic; supported voiding agreement |
Key Cases Cited
- Rendine v. Pantzer, 661 A.2d 1202 (N.J. 1995) (lodestar method and guidance on contingency enhancements)
- Cesare v. Cesare, 713 A.2d 390 (N.J. 1998) (appellate deference to trial court’s factual findings)
- Seidman v. Clifton Sav. Bank, 14 A.3d 36 (N.J. 2011) (standard for reviewing non-jury final determinations)
- Pinto v. Spectrum Chem. & Lab. Prods., 985 A.2d 1239 (N.J. 2010) (policy goals of fee-shifting statutes to attract competent counsel)
- Alpert, Goldberg, Butler, Norton & Weiss, PC v. Quinn, 983 A.2d 604 (N.J. Super. App. Div.) (lawyer’s ethical obligations limit freedom to contract and require disclosure of charges)