NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2928-14T2

 A-3036-14T2

JOHN GIOVANNI GRANATA,

Plaintiff-Appellant,

v.

EDWARD F. BRODERICK, JR., ESQ., an

Attorney at Law of the State of New

Jersey; BRODERICK, NEWMARK & GRATHER,

Defendants-Respondents.

_____________________________________

ROTENBERG, MERIL, SOLOMON, BERTIGER &

GUTILLA, P.C.; GOURVITZ & GOURVITZ,

LLC,

Intervenors-Respondents.

_____________________________________

JOHN GIOVANNI GRANATA,

Plaintiff-Respondent,

v.

EDWARD F. BRODERICK, JR., ESQ., an

Attorney at Law of the State of New

Jersey; BRODERICK, NEWMARK & GRATHER,

Defendants-Respondents.

____________________________________

OKS REALTY,

Intervenor-Appellant,

APPROVED FOR PUBLICATION

August 9, 2016

APPELLATE DIVISION
2 A-2928-14T2

and

ROTENBERG, MERIL, SOLOMON, BERTIGER &

GUTILLA, P.C.; GOURVITZ & GOURVITZ,

LLC,

Intervenors-Respondents.

_____________________________________________________

Argued June 1, 2016 – Decided

Before Judges Yannotti, St. John, and 

Guadagno.

On appeal from the Superior Court of New 

Jersey, Law Division, Passaic County, Docket 

No. L-3278-07.

Kenneth S. Thyne argued the cause for John 

Giovanni Granata (appellant in A-2928-14 and 

respondent in A-3036-14) (Roper & Thyne, 

LLC, attorneys; Mr. Thyne, on the brief).

Robyne D. LaGrotta argued the cause for 

appellant OKS Realty in A-3036-14 (LaGrotta 

Law, LLC, attorneys; Ms. LaGrotta, of 

counsel and on the brief).

Robert L. Podvey and Michael J.P. Schewe 

argued the cause for respondents Rotenberg, 

Meril, Solomon, Bertiger & Gutilla, P.C. 

(Podvey, Meanor, Catenacci, Hildner, 

Cocoziello & Chattman, P.C., attorneys; Mr. 

Podvey, of counsel; Robert K. Scheinbaum and 

Mr. Schewe, on the brief).

Ari H. Gourvitz argued the cause for 

respondent Elliot H. Gourvitz (Gourvitz & 

Gourvitz, LLC, attorneys; Mr. Gourvitz, on 

the brief).

Dominic V. Caruso, attorney for respondent 

Diane Marie Acciavatti, joins in the brief 

of respondent Elliot H. Gourvitz.

August 9, 2016
3 A-2928-14T2

The opinion of the court was delivered by

GUADAGNO, J.A.D.

In these appeals, calendared back-to-back and consolidated 

for purposes of our opinion, plaintiff John Giovanni Granata 

appeals from Law Division orders dated January 15, 2015 and 

January 26, 2015. The first order granted $279,720 in 

attorney's fees to Granata's former attorney, Diane Marie 

Acciavatti, for her services in a legal malpractice action 

against defendants Edward F. Broderick, Jr., and Broderick, 

Newmark, & Grather. The second order denied Granata's motion 

for reconsideration.

Additionally, Granata and appellant OKS Realty (OKS), a 

creditor of Acciavatti, appeal from portions of a separate 

January 26, 2015 order determining distribution priorities of 

the attorney's fee award. The trial judge placed OKS behind 

three other creditors and rejected its claim of priority, which 

was based on a 2010 promissory note executed by Acciavatti and 

secured by her anticipated legal fees in the malpractice action.

Whether an attorney's pledge of anticipated counsel fees 

can be considered a security interest under Article 9 of the 

Uniform Commercial Code (UCC) is an issue of first impression in 

New Jersey. For the reasons that follow, we hold that it can,

and affirm the order granting Acciavatti attorney's fees, but 
4 A-2928-14T2

reverse the distribution order and remand with instructions to 

recognize OKS's priority over the other creditors.

I.

We have previously considered issues related to these

appeals in Granata v. Broderick, No. A-5272-10 (App. Div. July 

8, 2013), certif. denied, 216 N.J. 7 (2013); Gourvitz v. Colfax, 

No. A-4887-10 (App. Div. May 24, 2013); and Granata v. 

Prudential Insurance Co. of America, No. A-7052-97 (App. Div. 

Dec. 28, 1998), certif. denied, 160 N.J. 88 (1999).

Granata began working for Prudential Insurance Company of 

America (Prudential) in 1986, selling property and casualty, 

life, and automobile insurance. Granata v. Prudential Ins. Co. 

of Am., supra, slip op. at 2. Granata became licensed by the 

National Association of Securities Dealers (NASD) to sell 

securities and investments for Pruco, a wholly owned subsidiary 

of Prudential. Ibid. Prudential terminated Granata for 

violating company policy by signing a client's signature in an 

attempt to authorize a transfer of the client's money from a 

money market account to a bond mutual fund. Id. at 3. Granata 

admitted that he signed the form to transfer the funds, but 

claimed that the client requested the transfer. Ibid.

Granata filed a complaint for retaliatory discharge under 

the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to 
5 A-2928-14T2

-8, claiming that Prudential fired him in retaliation for 

complaining about discriminatory practices. Id. at 1, 4. 

Prudential moved to compel arbitration before the NASD. Id. at 

2. The trial judge denied the motion, but we reversed, holding 

that Prudential's reason for termination "deals solely and 

specifically with securities issues, namely proper authorization 

to transfer client funds, which is within the expertise of NASD 

arbitrators." Id. at 14-15.

Defendants represented Granata before the NASD arbitration 

panel in 2001. Granata sought three million dollars in 

compensatory and punitive damages, but the NASD panel awarded 

him $28,000 in compensatory damages and assessed $12,530.50 in 

costs and fees against him.

In 2007, Granata retained Diane Acciavatti to bring a legal 

malpractice complaint against defendants. Acciavatti accepted a 

$10,000 retainer and agreed to a contingent fee arrangement.

A jury trial was held in July and August 2010. The jury 

found for Granata and awarded $525,000 for pre-termination 

damages and $385,000 for post-termination loss of renewal 

commissions. The judge awarded interest, bringing the judgment 

to $1,597,193.

Acciavatti filed a motion for counsel fees, litigation 

costs, and pre-judgment interest. Defendants opposed the motion 
6 A-2928-14T2

and moved for judgment notwithstanding the verdict (JNOV) and a 

new trial. After oral argument on November 5, 2010, the trial 

judge granted Acciavatti's motion for fees and costs, denied 

defendants' motions for JNOV and a new trial, and reserved on 

the motion for pre-judgment interest.1 In April 2011, the judge 

granted the motion for pre-judgment interest in the amount of 

$208,000.

Defendants appealed, and Granata filed a cross-appeal. 

Acciavatti had an oral agreement with Granata to represent him 

at $350 per hour, and told him she would seek counsel fees from 

defendants "when we prevail in the Appellate Court." We 

reversed and remanded for a new trial based on the judge's 

failure to give the jury an "exercise of judgment charge," and 

for the improper admission of a net opinion. Granata v. 

Broderick, supra, slip op. at 29-30.

In March 2013, while the appeal was pending, Acciavatti 

withdrew from the practice of law. In April 2013, Dominic 

Caruso was appointed attorney-trustee for Acciavatti's practice. 

On March 28, 2013, the firm of Roper & Twardowsky, LLC (the 

Roper firm)2 filed a substitution of counsel form for Acciavatti.

 

1 OKS failed to include the November 5, 2010 transcript and the 

order entered thereafter in its appendix.

2 The firm is now known as Roper & Thyne, LLC.
7 A-2928-14T2

On July 15, 2013, Granata executed a retainer agreement 

with the Roper firm to bring a petition for certification to the 

Supreme Court. Acciavatti assisted the Roper firm in preparing 

the petition, which was denied on October 1, 2013. Granata v. 

Broderick, 216 N.J. 7 (2013). After remand, the Roper firm 

continued to represent Granata on a contingency basis.

In January 2014, following a two-day mediation, this case 

settled for $840,000. After settlement, three of Acciavatti's 

creditors claimed liens upon any legal fees owed to her from her 

work on the case.

The Gourvitz Lien

Gourvitz & Gourvitz, LLC and Elliot H. Gourvitz 

(collectively Gourvitz) represented Donna Day Colfax in her

matrimonial litigation. A judgment of divorce (JOD) was entered 

in June 2006. Colfax discharged Gourvitz and appealed the JOD 

utilizing a different attorney.

Gourvitz sued Colfax for unpaid counsel fees, and Colfax 

filed a third-party complaint asserting malpractice claims 

against Gourvitz. Colfax discharged her attorney and retained 

Acciavatti in May 2009.

In January 2010, Colfax's malpractice claims were dismissed 

for her failure to answer interrogatories. On March 5, 2010, 

the court granted Gourvitz's motion for summary judgment, and on 
8 A-2928-14T2

March 17, 2010, a judgment for $368,209.30 was entered against 

Colfax. The judge denied Colfax's motion to vacate the 

dismissal of her malpractice claims.

Colfax retained new counsel and appealed the dismissal of 

her malpractice claims against Gourvitz. On May 24, 2013, we 

reversed, finding that the court failed to comply with Rule

4:23-5(a)(2), and abused its discretion when it denied Colfax's 

motion to vacate the dismissal order. Gourvitz v. Colfax, supra, 

slip op. at 25, 31-32. Although Acciavatti neglected several 

issues in the case, we found that the court "should have 

shielded the blameless client from the ultimate sanction of the 

dismissal of her malpractice claim." Id. at 31.

For reasons that are not clear in the record before us, 

Acciavatti agreed to pay Gourvitz $82,500 from fees she expected 

to receive in the Granata v. Broderick matter. On August 19, 

2011, the trial judge in this matter entered an order affixing 

an attorney's lien on fees awarded to Acciavatti. The order 

declared that a "lien is placed on the file in the Granata v. 

Broderick matter in favor of [Gourvitz] for the sum of $82,500" 

and that there would be no disbursements of attorney's fees to 

Acciavatti in Granata v. Broderick until the fees were paid to 

Gourvitz.
9 A-2928-14T2

Gourvitz's claim against Colfax was then resolved by a 

consent judgment entered on September 9, 2011. The judgment 

indicated that Gourvitz recovered $259,944.53 from Colfax in 

April 2010 and was paid $25,000 by Acciavatti in October 2010. 

Acciavatti assumed responsibility for the remaining portion of 

the judgment against Colfax and agreed to pay Gourvitz $82,500 

within 82 months at a rate of $1000 per month.3

On October 6, 2011, Acciavatti defaulted on the consent 

judgment, and a $98,638.65 judgment was entered against her. On 

November 4, 2011, the judgment was recorded as a lien. On 

August 19, 2013, Gourvitz filed a writ of execution, seeking to 

satisfy the consent judgment through a levy on Acciavatti's 

assets and seizure of her property.

The Rotenberg Lien

The accounting firm of Rotenberg, Meril, Solomon, Bertiger 

& Guttilla, P.C. (Rotenberg) provided Colfax with accounting 

services in September 2003, and later filed suit for unpaid 

accounting fees. The action was consolidated and litigated as a 

third-party claim before the trial court in Gourvitz v. Colfax, 

 

3 It is unclear why Acciavatti assumed responsibility for the 

Colfax judgment or why the judge affixed an attorney's lien 

before she assumed that responsibility. 
10 A-2928-14T2

supra, slip op. at 2.4 Although not part of the appeal in 

Gourvitz v. Colfax, Colfax brought a third-party complaint 

against Rotenberg, asserting claims relating to Rotenberg's 

performance of accounting services.

On August 27, 2010, the trial court granted summary 

judgment in favor of Rotenberg and ordered Colfax to pay a 

$151,652.42 judgment to Rotenberg. On February 4, 2011, the 

judgment was recorded as a lien.

On March 21, 2011, Acciavatti signed a settlement agreement 

with Rotenberg in which she assumed Colfax's debt to Rotenberg. 

Acciavatti agreed to pay Rotenberg $75,000 as part of the 

settlement agreement, in lieu of Colfax having to pay the full 

$151,652.42 judgment. Acciavatti entered into a consent 

judgment with Rotenberg and signed an affidavit of judgment by 

confession.

Under the March 21, 2011 settlement agreement, Acciavatti 

agreed to assign a lien of $75,000 to Rotenberg on recovery of 

any attorney's fees due in Granata v. Broderick. Acciavatti 

also agreed that she would not assign, convey, transfer, sell, 

or otherwise dispose of her interest in attorney's fees in this 

case without Rotenberg's prior written consent. Acciavatti 

 

4 We referred to Rotenberg as the "Solomon defendants" in 

Gourvitz v. Colfax, supra, slip op. at 2.
11 A-2928-14T2

agreed to pay $5000 to Rotenberg at the time of the agreement 

and an additional $1000 per month until the $75,000 was paid in 

full. The agreement provided that if Acciavatti defaulted on 

her obligation, the amount due would increase to the original 

$151,652.42, less any payments Acciavatti made toward the debt.

On April 14, 2011, Rotenberg and Colfax entered into a 

stipulation of dismissal in the Gourvitz v. Colfax litigation, 

ending Rotenberg's involvement in that case. Gourvitz v. Colfax, 

supra, slip op. at 12.

Acciavatti then defaulted under the Rotenberg settlement 

agreement and, on December 28, 2012, a final judgment of default 

was entered against Acciavatti in the amount of $133,652.42. 

The judgment was recorded as a lien on January 24, 2013.

In January 2014, a writ of execution was filed seeking to 

satisfy the Rotenberg settlement agreement through a levy on 

Acciavatti's assets. The writ was sent to the Passaic County 

Sheriff's Office on February 26, 2014. On March 19, 2014, 

Rotenberg served the writ upon defendants' counsel, who notified 

the court of the lien on March 25, 2014.

The OKS Lien

On October 27, 2010, OKS loaned Diane Marie Acciavatti, LLC 

(Acciavatti, LLC) $125,000. On that date, a security agreement, 

a promissory note, and a guaranty of payment were all executed 
12 A-2928-14T2

and signed by Acciavatti on behalf of Acciavatti, LLC. The 

security agreement identified as "collateral" the legal fees 

owed to Acciavatti in the Granata v. Broderick matter. The 

promissory note indicated that monthly payments would begin on 

December 1, 2010, and required Acciavatti to pay the full amount 

on the loan either when she received legal fees from this case 

or on November 1, 2013, whichever came earlier.

On December 2, 2010, OKS filed a UCC-1 financing statement 

with the Department of Treasury, which listed as debtors both 

Acciavatti, LLC and Acciavatti individually as guarantor of the 

loan. The statement listed as collateral the attorney's fees 

due to Acciavatti in the litigation captioned Granata v. 

Broderick. 

Granata's motion seeking declaratory relief

After Granata and defendants settled, Acciavatti wrote to 

the Roper firm to remind Granata of Gourvitz's lien on any 

attorney's fees awarded to her. Gourvitz previously made 

Granata aware of the lien through correspondence to the Roper 

firm in 2013.5 On February 6, 2014, trustee Caruso sent a notice 

of attorney's lien to the Roper firm.

 

5 The record contains several letters from Gourvitz to the Roper 

firm informing Granata of Gourvitz's lien on the attorney's fees 

awarded in this case. The Roper firm responded to Gourvitz's 

inquiries and indicated that it would keep Gourvitz informed of 

(continued)
13 A-2928-14T2

On February 12, 2014, Granata, through the Roper firm, 

initiated this current action by filing a motion seeking "an 

order declaring that no attorney's lien attaches to any 

settlement proceeds payable to [Granata]." The motion was 

noticed to Acciavatti, Gourvitz, trustee Caruso, and defendants' 

counsel. Acciavatti's other two creditors, OKS and Rotenberg, 

were not noticed.

In a certification attached to the motion, Granata opposed 

"any application by attorneys other than my present counsel for 

an attorney's lien or an award of attorney's fees in this case," 

and sought an order declaring that Granata's "settlement is not 

subject to any claim for an attorney's lien or attorney's fees 

by [Acciavatti, trustee Caruso, or Gourvitz]." Granata asserted 

that, during Acciavatti's representation of him, he loaned her

$28,000, which included a $3000 payment for an automobile.

Gourvitz filed a cross-motion seeking to enforce the August 

19, 2011 attorney's lien. Trustee Caruso responded to Granata's 

motion with a certification that explained his involvement as a 

court-appointed trustee for Acciavatti's law practice and 

asserted that any award "for the work [Acciavatti] performed in 

the representation of [Granata] will be payable to me, as the 

 

(continued)

any attorney's fees awarded to Acciavatti, but would not share 

information about the status of the case on remand.
14 A-2928-14T2

attorney-trustee," and "[a]ny distribution will then be made by 

me to [Acciavatti's] creditors, i.e., [Gourvitz], who has a 

judgment against [Acciavatti]."

Acciavatti submitted a certification detailing the work she 

performed in this case and estimating that she worked 828 hours 

until she withdrew. Acciavatti admitted to borrowing $28,000 

from Granata, but stated that she advised Granata to seek 

independent counsel, that she represented Granata pro bono in 

return in an unrelated legal matter, and that she anticipated 

repaying Granata from any attorney's fees awarded in this case.

On March 14, 2014, the judge who had presided over the 

original trial heard argument on Granata's motion. The judge 

found that Acciavatti's withdrawal from this case was 

involuntary and that she was entitled to a fee based upon 

quantum meruit. The judge determined that Granata was entitled 

to two-thirds of the settlement amount and ordered Broderick to 

issue a check for the full settlement amount of $840,000 to the 

Roper firm, with two-thirds to be released to Granata and onethird to be held in escrow in the Roper firm's trust account for 

any subsequent award of attorney's fees.

The judge then ordered the Roper firm to provide trustee 

Caruso with a breakdown of the hours it spent on this case, and 

reserved ruling on an attorney's fee award to either Acciavatti 
15 A-2928-14T2

or the Roper firm subject to further briefing from Acciavatti's 

creditors.

Rotenberg, who was the only creditor not present for the 

hearing, then served its writ of execution upon defendants'

counsel, who informed the court of Rotenberg's lien on any 

attorney's fee award.

On March 17, 2014, Acciavatti filed for bankruptcy, which 

temporarily stayed the proceedings. Acciavatti, LLC did not 

file for bankruptcy. In June 2014, a notice of proposed 

abandonment was executed in the bankruptcy proceedings, whereby 

Acciavatti agreed to abandon the potential attorney's fee award 

from this case. Acciavatti acknowledged that any fee award was 

first "subject to allocation between [her] and [the Roper 

firm]." Acciavatti recognized that any attorney's fee award to 

her would then be distributed among her creditors, listing OKS's 

lien of approximately $119,000, Gourvitz's lien of approximately 

$90,000, and Rotenberg's lien of approximately $135,000. On 

June 20, 2014, a bankruptcy discharge was granted and the stay 

on proceedings was subsequently lifted.

On July 7, 2014, the Roper firm wrote to trustee Caruso and 

informed him that the Roper firm and Granata agreed to a flat 

fee of $40,000. At a conference on August 8, 2014, the judge 

indicated that, of the $279,720 available for distribution, 
16 A-2928-14T2

$40,000 would go to the Roper firm. The Roper firm withdrew 

that amount from the escrowed funds, but the judge sought 

additional briefing as to how to disburse the remaining funds.

On August 27, 2014, while the issue of the distribution of 

Acciavatti's fees was still being litigated, Granata filed a 

legal malpractice complaint against Acciavatti and Acciavatti, 

LLC. The complaint alleged that Acciavatti failed to serve 

interrogatories or obtain appropriate expert reports for 

Granata; demanded $28,000 in personal loans from Granata before 

and during trial; failed to disclose to Granata that she pledged 

attorney's fees in this case to her creditors; and failed to 

request oral argument before the Appellate Division. Granata 

claimed that these deficiencies caused him to settle for a 

"compromised amount." The complaint asserted that the $1.5 

million jury verdict that Acciavatti received on Granata's

behalf was "a lesser amount than [what would have been awarded] 

had [Granata's] case been prepared properly." As a result of 

the alleged malpractice, Granata argued that Acciavatti should 

be equitably estopped from receiving attorney's fees for her 

work in this case.

After the filing of this complaint, Granata retreated from 

his earlier position that Acciavatti should receive some fees 

for her work, and argued that any consideration of claims by the 
17 A-2928-14T2

creditors or trustee Caruso should await the outcome of the 

legal malpractice case. Granata conceded that trustee Caruso 

successfully opposed his motion for a declaration that there is 

no attorney's lien, but argued that the failure of Caruso and 

Acciavatti to file a petition for a lien was a procedural 

barrier precluding any lien for Acciavatti's attorney's fees.

On January 9, 2015, the judge found that neither Granata's 

malpractice complaint nor trustee Caruso's failure to file a 

petition for an attorney lien procedurally barred an award of

attorney's fees to Acciavatti. The judge then addressed 

distribution of Acciavatti's attorney's fee award to her 

creditors.

The judge determined that OKS was last in priority because 

the $840,000 settlement was not finalized until January 2014, 

and before that, OKS had "done nothing but filed a UCC back in 

2010 . . . on an asset that didn't exist until four years 

later." He reasoned that OKS had "a security interest in 

something that didn't even exist," while Rotenberg and Gourvitz 

both had judgments and issued writs of execution.

The judge also noted that OKS made its loan to Acciavatti, 

LLC, and that Acciavatti was the guarantor of the loan. He 

reasoned that because Acciavatti resigned from practicing law 

and filed for bankruptcy, OKS's loan was made to an LLC which is 
18 A-2928-14T2

no longer in existence. The judge concluded that "[OKS] has 

done absolutely nothing beyond getting a UCC on something that 

is going to become due and payable to a [non-existent] 

entity . . . and the guarantor has gone through bankruptcy."

The judge did not rule on an argument raised by Gourvitz 

that OKS was not entitled to distribution because it was a 

foreign bank. Relying on the September 9, 2011 consent judgment 

issued in Gourvitz v. Colfax, the judge declared that Gourvitz 

had priority on any attorney's fees issued to Acciavatti because 

Rotenberg was a party in Gourvitz v. Colfax and was aware of 

Gourvitz's lien.

The judge determined that the attorney's fee award would be 

one-third of the settlement amount held in escrow, or $279,720,

and would be distributed as follows:

(1) $40,000 to Granata's attorneys, the 

Roper firm, pursuant to the previouslyentered flat fee agreement; 

(2) $9597.56 to trustee, Dominic Caruso; 

(3) $82,045.24 to Gourvitz; 

(4) $133,652.42 to Rotenberg; and 

(5) the remaining $14,424.78 to OKS.

The judge denied Granata's motion for a stay and ordered 

the funds be released by the Roper firm to trustee Caruso for 

distribution. On January 12, 2015, and again on January 14, 
19 A-2928-14T2

2015, the Roper firm refused to transmit the escrowed funds to 

trustee Caruso, indicating its intent to seek a stay in the 

Appellate Division and to move for reconsideration. On January 

15, 2015, the judge issued an order memorializing Acciavatti's 

fee award and ordering the transfer of funds. That day, trustee 

Caruso filed an order to show cause to hold the Roper firm in 

contempt for failure to comply with the court's directive.

On January 22, 2015, the judge entered an order holding the 

Roper firm in contempt and sanctioning it $200. On January 26, 

2015, the judge entered an order memorializing the court's 

January 9, 2015 decision, setting the amounts to be distributed 

and the order of priority of Acciavatti's creditors: (1) 

$83,284.97 to Gourvitz;6 (2) $133,652.42 to Rotenberg; and (3) 

$13,185.05 to OKS. Finally, the judge ordered the Roper firm to 

pay counsel fees associated with the order to show cause to 

trustee Caruso and counsel for each creditor.

On January 26, 2015, the judge denied a motion by Granata

for reconsideration. On January 30, 2015, we denied Granata's

motion for a stay.

Granata now appeals from both the January 15, 2015 order 

awarding counsel fees to Acciavatti and the January 26, 2015 

 

6 It is not clear why the amounts to Gourvitz and OKS contained 

in this order differ slightly from the amounts contained in the 

judge's January 9, 2015 decision.
20 A-2928-14T2

order denying his motion for reconsideration. OKS appeals from 

the court's January 26, 2015 order relegating it to last in the 

priority of Acciavatti's creditors.

II.

Granata first argues that the judge erred in granting 

Acciavatti an attorney's fee award without the filing of a 

petition for an attorney's lien. Gourvitz and Rotenberg argue 

that a filing of a petition was not required.

N.J.S.A. 2A:13-5, commonly known as the Attorney's Lien Act

(Act), provides, in pertinent part:

After the filing of a complaint . . . the 

attorney or counsellor at law, who shall 

appear in the cause for the party 

instituting the action . . . shall have a 

lien for compensation, upon his client’s 

action, . . . which shall contain and attach 

to a verdict, report, decision, award, 

judgment or final order in his client’s 

favor, and the proceeds thereof in 

whosesoever hands they may come. The lien 

shall not be affected by any settlement 

between the parties before or after judgment 

or final order, nor by the entry of 

satisfaction or cancellation of a judgment 

on the record. The court in which the 

action or other proceeding is pending, upon 

the petition of the attorney or counsellor 

at law, may determine and enforce the lien.

In H. & H. Ranch Homes, Inc. v. Smith, we established a 

specific procedure for determining and enforcing an attorney's 

lien:
21 A-2928-14T2

The attorney should make application to the 

court, as a step in the proceeding of the 

main cause, by way of petition, which shall 

set forth the facts upon which he relies for 

the determination and enforcement of his 

alleged lien. The petition shall as well 

request the court to establish a schedule 

for further proceedings which shall include 

time limitations for the filing of an answer 

by defendants, the completion of pretrial 

discovery proceedings, the holding of a 

pretrial conference, and the trial. The 

court shall, by order, set a short day upon 

which it will consider the application for 

the establishment of a schedule. A copy of 

such order, together with a copy of the 

petition, shall be served upon defendants as 

directed by the court. The matter should 

thereafter proceed as a plenary suit and be 

tried either with or without a jury, in the 

Law Division[.]

[54 N.J. Super. 347, 353-54 (App. Div. 

1959).] 

Granata argues that the failure of Acciavatti or trustee 

Caruso to file a petition consistent with this procedure 

requires reversal of the order granting Acciavatti an attorney's 

lien. We disagree.

In Musikoff v. Jay Parrino's the Mint, L.L.C., the Court 

held that "the Act is grounded in equitable principles and was 

designed to protect attorneys who have represented their former 

clients competently and with diligence, but have gone unpaid."

172 N.J. 133, 146 (2002).

Here, Granata initiated this action by filing a motion 

seeking an order declaring that no attorney's lien attaches to 
22 A-2928-14T2

any settlement proceeds payable to Granata. Gourvitz responded 

with a cross-motion to enforce the court's August 19, 2011

order, which affixed an attorney's lien in his favor for $82,500 

to be paid from the fees awarded to Acciavatti in this matter. 

Acciavatti and trustee Caruso then provided certifications 

detailing the amount of work that Acciavatti performed in 

preparing this case. Acciavatti's certification provided 

specific detail of the 828 hours of work she performed, and 

acknowledged that she borrowed $28,000 from Granata to be paid 

back from her anticipated counsel fees. A hearing was held on 

Granata's motion on March 14, 2014.

While Granata objected to compensating Acciavatti on a 

quantum meruit basis for the work she performed, he did not 

dispute the number of hours worked7 or the loan repayment 

arrangement as alleged by Acciavatti. When pressed by the 

judge, counsel for Granata conceded that he could not say "in 

candor as an officer of the court" that giving nothing to 

Acciavatti "for the work she did on the Granata case would be a 

fair result."

 

7 The Roper firm's certification in support of Granata's motion 

was critical of certain aspects of Acciavatti's performance, 

such as her failure to obtain updated expert reports and failure 

to prepare summaries of the transcripts she reviewed; however, 

there was no challenge to the number of hours she claimed to 

have worked on the case.
23 A-2928-14T2

On July 7, 2014, counsel for Granata wrote to Caruso,

indicating that her firm agreed to accept a flat fee settlement 

of $40,000, and requesting that Caruso consent to the release of 

that sum from the monies being held by her firm.

We employ a deferential standard of review and will affirm 

the factual determinations of the trial judge, provided they are 

supported by adequate, substantial, and credible evidence. Rova 

Farms Resort, Inc. v. Inv'rs Ins. Co. of Am., 65 N.J. 474, 484 

(1974). However, questions of law and the legal consequences 

that flow from the established facts are reviewed de novo. 

Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 

378 (1995).

Given our narrow scope of review, we are satisfied that the 

motion judge was presented with abundant, unchallenged evidence 

to support his quantum meruit findings, and Granata has failed 

to demonstrate any procedural irregularities that would require

reversal of the order granting attorney's fees to Acciavatti.

We review the court's denial of Granata's motion for 

reconsideration under an abuse of discretion standard. Fusco v. 

Bd. of Educ., 349 N.J. Super. 455, 462 (App. Div.), certif. 

denied, 174 N.J. 544 (2002). "Motions for reconsideration are 

granted only under very narrow circumstances[.]" Ibid. 

"Reconsideration should be used only for those cases which fall 
24 A-2928-14T2

into that narrow corridor in which either (1) the Court has 

expressed its decision based upon a palpably incorrect or 

irrational basis, or (2) it is obvious that the Court either did 

not consider, or failed to appreciate the significance of 

probative, competent evidence." Ibid. (quoting D'Atria v. 

D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)).

Granata argues there were "numerous factual disputes" that 

the court "summarily determined" without holding a plenary 

hearing, but does not identify any of these disputes. During 

oral argument on Granata's motion for reconsideration, the judge 

questioned Granata's counsel as to what factual disputes were 

not resolved. Counsel responded that the court awarded 

Acciavatti an "enhanced fee" under Rule 1:21-7(f) that was 

"ordinarily done on application." This is not a contested fact,

but a challenge to the procedure employed by the judge. 

Although Rule 1:21-7(f) directs an attorney to make an 

application if a permitted fee is deemed inadequate, the rule's 

intent is only to require that the application complies with the 

procedural requirements of notice and a hearing. In re Estate of 

F.W., 398 N.J. Super. 344, 356 (App. Div. 2008). Here, those 

procedural requirements were met as a result of the hearing held 

after Granata made the initial motion seeking declaratory 

relief.
25 A-2928-14T2

Granata next argues that the judge erred in disregarding 

his malpractice complaint against Acciavatti. The judge 

followed the procedure established in Saffer v. Willoughby, 

which required him to determine whether there was a "substantial 

basis" to the malpractice action before determining Acciavatti's 

attorney's fee award. 143 N.J. 256, 268 (1996).

Saffer involved a fee dispute between an attorney and 

former client. Id. at 260. The client filed a request for fee 

arbitration and, before a decision was reached, the client 

discovered evidence that led him to file a legal malpractice 

claim in the Law Division against his former attorney. Ibid.

The Court held that where a "substantial basis" for a 

malpractice claim is discovered after a fee is awarded, a client 

may seek a stay of the award either before or after the award 

has been confirmed. Id. at 268.

The granting of a stay is discretionary with the trial 

court and "limited only by special equities showing abuse of 

discretion in that injustice would be perpetrated on the one 

seeking the stay, and no hardship, prejudice or inconvenience 

would result to the one against whom it is sought." Gosschalk v. 

Gosschalk, 48 N.J. Super. 566, 579 (App. Div.), aff'd, 28 N.J.

73 (1958).
26 A-2928-14T2

At the January 9, 2015 proceeding, the judge determined 

that Granata did not make out a substantial claim of 

malpractice, primarily because Acciavatti received a $1.5 

million jury verdict for Granata, which ultimately resulted in 

an $840,000 settlement award. As the judge astutely observed, 

"if that's malpractice . . . lawyers are held to a very high 

standard."

The elements of a legal malpractice claim "are (1) the 

existence of an attorney-client relationship creating a duty of 

care by the defendant attorney, (2) the breach of that duty by 

the defendant, and (3) proximate causation of the damages 

claimed by the plaintiff." McGrogan v. Till, 167 N.J. 414, 425 

(2001).

Granata's malpractice complaint fails to sufficiently 

assert a substantial basis for causation and damages. "The 

general rule in this State is that an attorney is only 

responsible for a client's loss if that loss is proximately 

caused by the attorney's legal malpractice." 2175 Lemoine Ave. 

Corp. v. Finco, Inc., 272 N.J. Super. 478, 487 (App. Div.), 

certif. denied, 137 N.J. 311 (1994). "The test of proximate 

cause is satisfied where the negligent conduct is a substantial 

contributing factor in causing the loss." Ibid.
27 A-2928-14T2

The allegations contained in Granata's malpractice 

complaint relate to actions taken by Acciavatti before our 

remand of the $1.5 million jury award she obtained. Following 

our remand, it is undisputed that Acciavatti did not participate 

in any aspect of this case. Granata was free to again proceed 

to trial or settle the suit; he chose to settle after mediation 

for $840,000.

Granata does not claim that, in settling the case, he 

relied to his detriment on any advice or action by Acciavatti, 

who no longer represented him. See Grunwald v. Bronkesh, 131 

N.J. 483, 495 (1993) ("Legally-cognizable damages occur when a 

plaintiff detrimentally relies on the negligent advice of an 

attorney."). Yet, Granata nonetheless surmises that his 

settlement on remand was for less than what he would have 

obtained had Acciavatti represented him more competently. This 

conjecture is insufficient to demonstrate proximate cause. 

Lemoine, supra, 272 N.J. Super. at 488 (client's burden to show 

proximate cause must be sustained by preponderance of competent, 

credible evidence, and is not satisfied by mere conjecture, 

surmise or suspicion).

Contrary to Granata's assertions, it is not clear that 

Acciavatti violated any rule of professional conduct where, as 

here, Acciavatti advised Granata to seek independent advice of 
28 A-2928-14T2

counsel before Granata loaned her $28,000. See In re Youmans, 

118 N.J. 622, 633 (1990) ("[A]n attorney is ethically required 

to advise clients to obtain independent counsel before making a 

loan to that attorney."). Even if Acciavatti did not advise 

Granata to seek independent counsel, Granata must still 

establish proximate cause. Petrillo v. Bachenberg, 263 N.J. 

Super. 472, 483 (App. Div. 1993) (violation of rule of 

professional conduct does not per se give rise to malpractice), 

aff'd, 139 N.J. 472 (1995); Albright v. Burns, 206 N.J. Super.

625, 634-35 (App. Div. 1986) (even when plaintiff establishes 

rule violation, she must establish proximate cause).

We are satisfied that it was not an abuse of discretion for 

the judge to deny Granata's request for a stay pending the 

outcome of his malpractice claim, as there was ample support in 

the record for the conclusion that there was not a substantial 

basis to the claim.

Finally, Granata contends that the court erred in awarding 

Acciavatti fees in excess of what she was entitled to under her 

retainer agreement. Acciavatti was originally retained by 

Granata on a contingent fee basis, with a $10,000 retainer. 

"An attorney hired on a contingent fee basis and later 

discharged before completion of the services is not entitled to 

recover fees on the basis of such contingent agreement; instead, 
29 A-2928-14T2

he or she may be entitled to recover on a quantum meruit basis 

for the reasonable value of the services rendered." Glick v. 

Barclays De Zoete Wedd, Inc., 300 N.J. Super. 299, 310 (App. 

Div. 1997). The equitable doctrine of quantum meruit means "as 

much as he deserves." La Mantia v. Durst, 234 N.J. Super. 534, 

537 (App. Div.), certif. denied, 118 N.J. 181 (1989). We have 

identified several factors that courts should consider in 

applying the doctrine: (1) the amount of time an individual 

attorney spent on the case in relation to the total amount of 

professional hours spent to resolve it; (2) the quality of 

representation provided; (3) the results achieved by each 

lawyer's efforts; (4) the reason the client switched 

representation; (5) the viability of the client's claims at the 

time of transfer; and (6) the amount of recovery ultimately 

realized. Id. at 540-41. "[T]he crucial factor in determining 

the amount of recovery is the contribution which the lawyer made 

to advancing the client's cause." Glick, supra, 300 N.J. Super.

at 311.

We note that the judge who made the quantum meruit fee 

determination presided over the jury trial, which resulted in a 

$1.5 million verdict in Granata's favor, and approved the 

$840,000 mediated settlement. The judge was presented with 

well-documented proof of the extensive work Acciavatti performed 
30 A-2928-14T2

during each phase of litigation. We are satisfied that this 

evidence provided ample support for the judge's decision to 

award an attorney's fee to Acciavatti based on quantum meruit.

III.

OKS claims that the trial judge erred in placing it last in 

priority among Acciavatti's creditors and argues that it had a 

perfected security interest in any legal fees owed to both 

Acciavatti and Acciavatti, LLC on December 2, 2010, before the

Gourvitz or Rotenberg liens were filed.

Gourvitz and Rotenberg argue that OKS should be barred from 

challenging the priority order, as it failed to file any motions 

or pleadings, and never intervened as a party. They also argue 

that OKS's UCC-1 financing statement did not perfect its 

security interest and did not attach; that Acciavatti's debt to 

OKS was discharged in bankruptcy; that OKS's interest was in 

Acciavatti, LLC, which ceased to exist when Acciavatti was 

awarded attorney's fees; that OKS is a foreign bank; and that 

OKS's interest was not perfected until attorney's fees were 

awarded in 2015, making it a junior creditor. 

As an initial matter, we note that none of the creditors in 

this action formally intervened under Rule 4:33-1. Gourvitz 

filed a cross-motion in response to Granata's motion to preclude 

attorney's fees, and all three creditors filed letter briefs 
31 A-2928-14T2

espousing their positions as to the distribution of the escrowed 

funds. Rule 4:33-1 is clear that intervention as of right is 

afforded to parties who claim "an interest relating to the 

property or transaction which is the subject of the action and 

is so situated that the disposition of the action may as a 

practical matter impair or impede the ability to protect that 

interest." We are satisfied that each of the creditors was 

entitled to intervene as of right. Therefore, procedurally,

each of their opposition letters are deemed to be motions to 

intervene as of right pursuant to Rule 4:33-1. See DNI Nevada, 

Inc. v. Medi-Peth Med. Lab, Inc., 337 N.J. Super. 313, 313 n.1 

(App. Div. 2001) (bank's opposition to motion for turnover of 

funds deemed motion to intervene as of right pursuant to Rule

4:33-1).

On October 27, 2010, following the $1.5 million jury 

verdict, but before our decision vacating that verdict, 

Acciavatti, LLC obtained a loan from OKS which Acciavatti 

guaranteed. On that date, a security agreement, a promissory 

note, and a guaranty of payment were all executed and signed by 

Acciavatti on behalf of Acciavatti, LLC. On December 2, 2010, 

OKS filed a UCC-1 financing statement, listing as debtors both 

Acciavatti, LLC and Acciavatti as guarantor of the loan. The 

statement identified the collateral as legal fees due to 
32 A-2928-14T2

Acciavatti in the litigation, Granata v. Broderick, and noted 

that judgment was entered on August 23, 2010.

Gourvitz is a lien creditor. On September 9, 2011, a 

consent judgment was entered in Gourvitz v. Colfax, whereby 

Acciavatti assumed responsibility for a debt obligation to 

Gourvitz as a result of a March 5, 2010 summary judgment order 

entered against Acciavatti's client, Colfax, for collection of 

unpaid legal fees. On August 19, 2011, even though Acciavatti 

had not yet assumed responsibility for the debt, the trial judge 

entered an order declaring that Gourvitz had a lien on any 

attorney's fees awarded to Acciavatti in this case. On November 

4, 2011, Gourvitz's judgment was recorded as a lien, and a writ 

of execution was filed on August 19, 2013.

Rotenberg is also a lien creditor. Acciavatti assumed a 

debt obligation to Rotenberg pursuant to a March 21, 2011 

settlement agreement. On that same day, Acciavatti entered into 

a consent judgment with Rotenberg, which was recorded as a lien 

on January 24, 2013. A writ of execution was filed in January 

2014.

The trial judge placed OKS behind Gourvitz and Rotenberg in 

priority because OKS filed its UCC financing statement in 2010 

"on an asset that didn't exist until four years later." The 

judge held that OKS had a security interest in Acciavatti's 
33 A-2928-14T2

claim to attorney's fees, but that, at the time of the UCC 

filing, the interest did not exist.

We must determine whether Acciavatti possessed an interest 

in her anticipated legal fees in 2010, and whether OKS's UCC 

filing granted it a perfected interest in those fees. If both 

questions are answered in the affirmative, OKS, as a perfected 

secured creditor, would enjoy priority over Gourvitz and 

Rotenberg, who are subsequent lien creditors seeking to levy on 

the same collateral. See Shaw Mudge & Co. v. Sher-Mart Mfg. Co., 

132 N.J. Super. 517, 521 (App. Div. 1975) (perfected security 

interest has priority over lien creditor whether or not lien 

creditor has knowledge of the security interest).

N.J.S.A. 12A:9-203(a) provides that a "security interest 

attaches to collateral when it becomes enforceable against the 

debtor with respect to the collateral, unless an agreement 

expressly postpones the time of attachment." N.J.S.A. 12A:9-

203(b) provides, in pertinent part, that a security interest 

attaches to collateral as soon as: (1) "value has been given"; 

(2) "the debtor has rights in the collateral or the power to 

transfer rights in the collateral to a secured party"; and (3) 

"the debtor has authenticated a security agreement that provides 

a description of the collateral."
34 A-2928-14T2

To perfect a security interest under N.J.S.A. 12A:9-310(a),

a financing statement must be filed. Under N.J.S.A. 12A:9-

502(d), that financing statement may be filed before a security 

agreement is made or a security interest otherwise attaches. 

Under N.J.S.A. 12A:9-315(a)(2), "a security interest attaches to 

any identifiable proceeds of collateral."

In Shaw Mudge, supra, a manufacturing company, Sher-Mart,

borrowed $50,000 from a bank, secured by a promissory note and 

an agreement granting the bank a first security interest in 

collateral, including Sher-Mart's accounts receivable "now 

owned, held and/or hereafter to be created." 132 N.J. Super. at 

519. A financing statement was filed simultaneously. Ibid. 

Shaw Mudge sued Sher-Mart to recover on a book account. Ibid. 

Judgment, including interest and costs, was entered in favor of 

Shaw Mudge. Ibid. Shaw Mudge then levied on a Sher-Mart account 

receivable and sought an order directing the obligor to pay the 

amount of its judgment. Ibid. Sher-Mart opposed the motion and 

the matter was scheduled for hearing. Ibid.

Prior to the hearing, the bank assigned its rights in the 

Sher-Mart security agreement to the Small Business 

Administration (SBA) and filed a financing statement covering 

the assignment. Ibid. At the time, Sher-Mart owed the SBA in 

excess of $48,000. Ibid. When Sher-Mart failed to make an 
35 A-2928-14T2

installment payment on its note, the SBA declared Sher-Mart in 

default and demanded payment in full. Id. at 519-20. The SBA 

moved to vacate the levy and sought the amount due on the 

account receivable. Id. at 520. The motion judge upheld the 

levy. Ibid.

The SBA appealed, and we reversed, holding that a secured 

creditor who has filed a financing statement is entitled to 

priority over a subsequent lien creditor seeking to levy on or 

otherwise claim the same collateral. Id. at 520-21. We also 

noted that the rule applies to after-acquired collateral covered 

by the agreement, provided that attachment has occurred. Id. at 

522. We explained that the fact that there had not yet been a 

default on the secured bank loan at the time of the Shaw-Mudge 

levy was not determinative, as "[t]he rights of the parties were 

fixed, not when the levy was made . . . but rather when the 

security interest attached." Ibid.

Under N.J.S.A. 12A:9-102(a)(2), an "account" includes a 

right to payment of a monetary obligation, whether or not earned 

by performance, for services rendered or to be rendered. A 

"secured party" is defined as "a person in whose favor a 

security interest is created or provided for under a security 

agreement, whether or not any obligation to be secured is 

outstanding." N.J.S.A. 12A:9-102(a)(72)(A).
36 A-2928-14T2

Although no reported New Jersey case has considered whether 

an attorney's pledge of an anticipated counsel fee can be 

considered a receivable under UCC Article 9, other courts have 

uniformly held that contracts for legal fees, including fees in 

pending contingency fee cases, are accounts for Article 9 

purposes. See Cadle Co. v. Schlichtmann, 267 F.3d 14, 18-19 (1st 

Cir. 2001) (amounts to be paid under contingent fee agreements 

are accounts under Article 9), cert. denied, 535 U.S. 1018, 122 

S. Ct. 1607, 152 L. Ed. 2d 622 (2002); In re Holstein Mack & 

Klein, 232 F.3d 611, 614-15 (7th Cir. 2000) (fees to be earned 

from personal injury and class action suits by law firm 

considered receivables); U.S. Claims, Inc. v. Yehuda Smolar, 

P.C., 602 F.Supp. 2d 590, 597 (E.D. Pa. 2009) (assignment of 

amounts owed under contingent fee agreement governed by Article 

9); U.S. Claims, Inc. v. Flomenhaft & Cannata, LLC, 519 F. Supp.

2d 515, 521 (E.D. Pa. 2006) (fee contracts created rights to 

receive payment for services to be rendered by law firm on 

behalf of clients and thus fell squarely within definition of 

account).

We agree with these decisions and hold that, under certain 

circumstances, an attorney's pledge of anticipated counsel fees 

can be considered an account receivable and secured under 

Article 9.
37 A-2928-14T2

OKS met the requirements of N.J.S.A. 12A:9-203 for its 

security interest to attach to Acciavatti's counsel fees. The 

OKS security agreement described the collateral as Acciavatti's 

attorney's fees in this case and Acciavatti had a transferrable 

interest to the collateral, as the anticipated attorney's fees 

qualified as an account under N.J.S.A. 12A:9-102(a)(2).

OKS also complied with the requirements to perfect its 

security interest under N.J.S.A. 12A:9-310(a) and -315(a)(2) by 

filing a financing statement covering the collateral of 

Acciavatti's anticipated counsel fees. When OKS filed its 

financing statement on December 2, 2010, it perfected its 

security interest in Acciavatti's anticipated legal fees, 

whether owed to Acciavatti or Acciavatti, LLC. As such, OKS's 

security interest was perfected before Gourvitz or Rotenberg 

obtained their liens and, therefore, OKS enjoyed priority over 

both.

The judge's conclusion that OKS had a security interest in 

an asset that did not exist until four years later ignored the 

clear language of the security agreement, which identified the 

collateral for the loan to Acciavatti as the legal fees she 

anticipated receiving for her work in this case. The agreement 

was executed after the jury had returned a $1.5 million verdict 

in Granata's favor. Our subsequent decision vacating the jury 
38 A-2928-14T2

verdict had no effect on Acciavatti's claim for fees for work 

she had already performed on the case. Her claim was validated 

with the judge's quantum meruit award, at which time OKS's prior 

recorded lien attached. See Cont’l Fin., Inc. v. Cambridge Lee 

Metal Co., 56 N.J. 148, 152 (1970) (value of company's accounts 

receivable could not have been fixed or ascertained at time of 

recording of lien, but when they did materialize, they became 

property of party to which prior recorded lien immediately 

attached).

Although the exact amount of Acciavatti's fee was unknown 

at the time of the OKS filing, its lien was sufficiently 

specific and perfected, as the identity of the lienor, the 

property subject to the lien, and the amount of the lien were 

all established. Id. at 151 (citing United States v. Equitable 

Life Assurance Soc'y, 384 U.S. 323, 327-28, 86 S. Ct. 1561, 

1564, 16 L. Ed. 2d 593, 597 (1966)).

The additional arguments made by Gourvitz and Rotenberg 

lack sufficient merit to warrant discussion in our opinion 

beyond the following brief comment. R. 2:11-3(e)(1)(E). 

Gourvitz has provided no proof in support of the claim that OKS 

is a foreign bank, which is presented "upon information and 

belief." OKS responds that it is a partnership formed in New 
39 A-2928-14T2

Jersey, and is not required to file formation or authorization 

documents for the public record in New Jersey.

IV.

The January 15, 2015 order granting $279,720 in attorney's 

fees to Acciavatti and the January 26, 2015 order denying 

Granata's motion for reconsideration are affirmed. The January 

26, 2015 order setting distribution priorities is vacated and 

the matter remanded for proceedings consistent with our opinion. 

We do not retain jurisdiction.