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Keywords

contractlawsuitlitigationattorneygood faith

contractdefendantlitigationattorneylawyertrialwillgood faith

Related Cases

Starkey, Kelly, Blaney & White v. Estate of Nicolaysen, 172 N.J. 60, 796 A.2d 238

Facts

Sigurd A. and Nancy Nicolaysen entered into a contract to sell their farm, which was contingent on certain approvals. After dissatisfaction with the contract, they hired attorney Charles E. Starkey on a contingent fee basis. Although the fee agreement was not reduced to writing until 33 months later, Starkey successfully terminated the original contract and defended against lawsuits. Following the Nicolaysens' deaths, Starkey sought compensation for his services, leading to litigation against their heirs.

After making several unsuccessful attempts to confirm the contingent fee agreement with the two Nicolaysens children, Sigurd Jr. and Lisa Gelburd, Starkey initiated the present litigation on June 3, 1996.

Issue

Whether an attorney, who enters into an oral contingency-fee agreement that is later deemed unenforceable, is entitled to collect a fee or an award based on quantum meruit for services rendered before the contingency has occurred.

The trial court and the Appellate Division held that the attorney is entitled to payment based on quantum meruit notwithstanding the fact that the contingency has not been satisfied.

Rule

An attorney may recover under quantum meruit for services rendered even if a contingent fee agreement is unenforceable due to failure to comply with the Rules of Professional Conduct regarding written agreements.

RPC 1.5(b) states that a lawyer, who has not regularly represented a client, must communicate to the client in writing the basis or rate of his or her fee 'before or within a reasonable time after commencing the representation.'

Analysis

The court found that Starkey's services were performed in good faith and accepted by the Nicolaysens, establishing an expectation of compensation. The court applied the quantum meruit principles, concluding that Starkey's efforts conferred a benefit on the heirs, justifying the award despite the unenforceability of the original fee agreement.

It is clear that the four-part test has been satisfied in this case because: (1) Starkey provided valuable legal services in good faith by first nullifying the Melcer–Opatut contract, then by successfully canceling the Newman contract and retaining the $200,000 deposit, and later by assisting the Nicolaysens in contracting with other potential buyers; (2) the Nicolaysens accepted his services; (3) there was an expectation of payment and receipt of compensation as demonstrated by both the oral and written fee agreements; and (4) the reasonable value of his services has been established in a trial.

Conclusion

The court affirmed the award of $115,712.50 to Starkey, concluding that it was not more than what would have been contemplated under the written agreement had it been enforceable.

The judgment of the Appellate Division is affirmed as modified.

Who won?

Starkey, Kelly, Blaney & White prevailed in the case because the court recognized the reasonable value of the legal services provided, despite the unenforceability of the contingent fee agreement.

The court reasoned that given the 'uncertainty of a sale of the property … [and the fact that the heirs] plainly benefited from Mr. Starkey's efforts, … the amount will be awarded as a judgment … against all defendants, jointly and severally, rather than to be recorded as a lien solely against the property.'

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