Court Opinion

ID: 4022759
Source: CourtListenerOpinion
Date Created: 2016-08-09 14:06:45.304806+00
Date Added: 2024-06-11T14:44:53.970852
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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,
                                        APPROVED FOR PUBLICATION
         Plaintiff-Appellant,
                                             August 9, 2016

v.                                        APPELLATE DIVISION

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,
and

ROTENBERG, MERIL, SOLOMON, BERTIGER &
GUTILLA, P.C.; GOURVITZ & GOURVITZ,
LLC,

          Intervenors-Respondents.
_____________________________________________________

         Argued June 1, 2016 – Decided August 9, 2016

         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.

                               2                        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

                                 3                          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

                                4                            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

                                  5                          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.

                                  6                          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

                                  7                         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.

                                8                          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.

                                9                          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.

                                 10                          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

                                11                         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)

                                  12                          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.

                                13                          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 one-

third 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

                                  14                        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,

                                 15                          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

                                 16                         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

                                 17                          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 previously-
         entered 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,

                                18                        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.

                                  19                           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:

                               20                          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

                                  21                           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.

                                22                           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

                                23                         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.

                                24                           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).

                                  25                        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.

                                26                          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

                                 27                          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,

                                28                        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

                                29                          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

                               30                          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

                                 31                         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

                                 32                         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."

                               33                          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

                                 34                        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).

                                  35                        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.

                               36                           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

                                37                          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

                                  38                        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.

                                 39                         A-2928-14T2