DEXTER & KILCOYNE, ESQS. VS. ANTHONY X. ARTURI, JR.,ESQ.(L-10660-15, BERGEN COUNTY AND STATEWIDE), A-4862-15T1

Background

Client retained Dexter & Kilcoyne (first firm) on a contingency retainer after swallowing a metal fragment in a french fry; agreement provided contingent fee per Rule 1:21-7 and reimbursement of disbursements if no recovery.
First firm performed pre-suit work (obtained medical records, consulted experts, prepared complaint form, secured the metal fragment and sent it for analysis) and billed 29.05 hours and $245.75 in disbursements.
Client discharged the first firm in March 2011 and retained Arturi, D'Argenio, Guaglardi & Meliti (second firm); first firm sent the client file, invoice, and requested reimbursement and preservation of its claim to future fees; second firm did not respond or pay disbursements.
Second firm filed suit in federal court, litigated for years, and obtained a confidential settlement in 2013, collecting a one-third contingent fee after disbursements.
First firm sued second firm in state court seeking a lien and/or quantum meruit recovery for the reasonable value of pre-suit services; the trial court granted summary judgment for the second firm.
Appellate division vacated summary judgment as to quantum meruit, holding that a fact-intensive inquiry is required; however, it affirmed that no statutory lien existed because the first firm had not filed pleadings before discharge.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether first firm has a lien on client recovery	First firm: entitled to lien on settlement proceeds for services performed pre-suit	Second firm: no lien because first firm never filed a pleading; lien statute requires filing	Held: No lien under N.J.S.A. 2A:13-5 because first firm had not filed a complaint or other pleading before discharge
Whether first firm may recover on quantum meruit from second firm	First firm: entitled to reasonable value for pre-suit services (including obtaining critical physical evidence) against successor firm	Second firm: should not be guarantor of first firm’s fee; prior work was incidental; client already paid max fee under Rule 1:21-7 so remedy is against client	Held: Quantum meruit claim survives; summary judgment improper because factual issues govern valuation and allocation; remanded for plenary determination
Whether summary judgment was appropriate	First firm: disputed material facts (value of work, importance of evidence) preclude summary judgment	Second firm: argued law bars recovery against successor and facts show work was incidental	Held: Summary judgment vacated; case remanded for trial-court factfinding per LaMantia factors
Whether client should be joined/allowed defenses	First firm: implied that client may be necessary party for equitable fee division	Second firm: client already paid fee and might assert defenses	Held: Trial court may allow motion to add client as direct or third-party defendant; client may assert defenses (e.g., laches, refusal to reduce her net recovery further)

Key Cases Cited

LaMantia v. Durst, 234 N.J. Super. 534 (App. Div.) (sets factors for quantum meruit allocation between successor and predecessor counsel)
Cohen v. Radio-Electronics Officers, 146 N.J. 140 (1996) (recognizes modern rule allowing dismissed attorney to recover fair value of pre-discharge services)
Straubinger v. Schmitt, 348 N.J. Super. 494 (App. Div.) (discusses application of LaMantia principles when attorneys disagree on fee division)
Goldberger & Shinrod v. Baumgarten, 378 N.J. Super. 244 (App. Div.) (applies quantum meruit principles to fee disputes between unrelated firms)
Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (1995) (summary judgment standard: avoid deciding genuine factual disputes on summary disposition)