Court Opinion

ID: 9908630
Source: CourtListenerOpinion
Date Created: 2023-12-11 15:05:40.754633+00
Date Added: 2024-06-11T12:49:21.847308
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-0271-22

THE LAW OFFICE OF
RAJEH A. SAADEH, LLC,

          Plaintiff-Appellant,

v.

ZBIGNIEW LANKAMER,

     Defendant-Respondent.
___________________________

                   Argued October 11, 2023 – Decided December 11, 2023

                   Before Judges DeAlmeida and Bishop-Thompson.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Somerset County, Docket No. L-0749-22.

                   Lindsay A. McKillop argued the cause for appellant
                   (The Law Office of Rajeh A. Saadeh, LLC, attorneys;
                   Rajeh A. Saadeh and Lindsay A. McKillop, on the
                   brief).

                   Respondent has not filed a brief.

PER CURIAM
      Plaintiff The Law Office of Rajeh A. Saadeh, LLC (Saadeh, LLC) appeals

from the August 24, 2022 judgment of the Law Division to the extent it awarded

Saadeh, LLC $125 in costs of collection and attorney's fees incurred collecting

unpaid fees for legal services. We reverse the portion of the judgment under

appeal and remand for further proceedings.

                                       I.

      The material facts are not in dispute.      In February 2018, defendant

Zbigniew Lankamer signed a retainer agreement hiring Saadeh, LLC in

connection with an appeal of a judgment of divorce entered after a trial at which

Lankamer represented himself. The fees to be charged Lankamer for Saadeh,

LLC's services are explained in the agreement. The agreement also detail s the

steps Saadeh, LLC may take to collect unpaid fees and provides: "Should it be

necessary to utilize the legal process to collect any amount outstanding, I will

be entitled to recover the costs of collection including a reasonable allowance

for professional time expended by attorneys in my firm and reasonable

expenses."1

1
  "I" in this provision apparently refers to Rajeh A. Saadeh, who we surmise is
a principal of Saadeh, LLC. Our review of the record reveals that the parties
have operated with the understanding that the agreement permits Saadeh, LLC
to recover the costs of collection and attorney's fees incurred for unpaid fees.
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      Although Saadeh, LLC filed a notice of appeal of the judgment of divorce

and related documents, after a review of the trial record, it advised Lankamer

that the appeal was not likely to be successful. Lankamer accepted the advice

and authorized withdrawal of the appeal. He did not, however, pay the entire

amount the firm billed for its services.

      In February 2019, Saadeh, LLC sent Lankamer a fee arbitration pre-action

notice stating that he had outstanding invoices for legal services in the amount

of $462.25. The notice informed Lankamer that he had the right to pursue fee

arbitration. Lankamer subsequently entered into fee arbitration.

      In October 2019, the district fee arbitration committee issued an

arbitration determination requiring Lankamer to pay Saadeh, LLC $462.25

within thirty days. Lankamer did not appeal the arbitration determination nor

pay the outstanding fee.

      In July 2022, Saadeh, LLC filed a verified complaint and order to show

cause in the Law Division seeking: (1) reduction of the arbitration award to

judgment against Lankamer; and (2) a judgment against Lankamer for "the costs

of collection including a reasonable allowance for professional time expended

by attorneys in" Saadeh, LLC "and reasonable expenses . . . ."

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      On the return date of the order to show cause, the trial court issued an oral

opinion. The court granted Saadeh, LLC's request to reduce the arbitration

determination to a judgment against Lankamer for $462.25. With respect to

Saadeh, LLC's request for costs of collection and attorney's fees, the court 's

decision in its entirety was: "[a]nd pursuant to the retainer agreement, the [c]ourt

will enter fees and costs in the amount of $125." An August 24, 2022 judgment

memorializes the court's decision.

      This appeal follows. Saadeh, LLC argues that the trial court arbitrarily

awarded $125 in collection costs and attorney's fees without giving the firm the

opportunity to submit a certification of services and costs and without issuing

findings of facts and conclusions of law supporting its decision.

                                        II.

      We are guided in our analysis of Saadeh, LLC's arguments by our holding

in Hrycak v. Kiernan, 367 N.J. Super. 237 (App. Div. 2004). In that matter,

Hrycak, an attorney, represented Kiernan in an action before the Chancery

Division. Id. at 238-39. The parties' retainer agreement provided that should

Hrycak

            bring suit against [Kiernan] for fees due under this
            agreement, and after the requisite pre-action notice
            required by Rules Governing the Courts of New Jersey,
            [Kiernan] shall be responsible for all fees and

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                                         4
              attorney['s] fees with a minimum of $450.00 attorney's
              fees for the filing of same.

              [Id. at 239 (third alteration in original).]

        After Hrycak sent Kiernan a bill for services rendered, Kiernan paid only

a portion of the amount due, claiming Hrycak guaranteed there would be a cap

on the cost of his services. Ibid. The dispute was brought before a fee arbitration

committee, which determined what fee would be reasonable for Hrycak's

service. Ibid. The arbitration determination resulted in an outstanding unpaid

balance of $2,231.57 owed by Kiernan. Ibid. Kiernan did not appeal the

arbitration determination, but also did not pay the amount due within thirty days.

Ibid.

        Hrycak thereafter filed a complaint in the Law Division seeking to reduce

the arbitration determination to a judgment against Kiernan, and for the award

of $450 in attorney's fees in accord with the parties' retainer agreement. Ibid.

The application was accompanied by a detailed account of the work Hrycak

performed in filing the complaint. Ibid. The trial court entered judgment in the

amount of the arbitration determination but denied the request for attorney's

fees. Id. at 239.

        We reversed. We noted that agreements between attorneys and their

clients generally are enforceable as long as they are fair and reasonable. Id. at

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                                           5
240. In addition, we observed that the court rules do not prohibit the award of

attorney's fees that are provided for in the parties' retainer agreement. Ibid. We

held:

              [i]n accordance with these authorities, we are not
              presented with any reasons why Hrycak should be
              denied fees incurred in collecting an arbitration award.
              Subject to review of reasonableness by the court, the
              collection fee with a minimum of $450 was based upon
              the express terms of the retainer agreement.

              [Ibid.]

        We noted that "the retainer [does not] penalize[] the client for a fixed

percentage of the fees owed if the attorney is forced to file suit to collect." Ibid.

(citing Gruber & Colabella, P.A. v. Erickson, 345 N.J. Super. 248 (Law Div.

2001) (holding unenforceable a provision in a retainer agreement which added

one-third of the outstanding legal fees to the client's bill if the attorney is forced

to collect)). "Under those agreements," we noted, "there is the potential for an

attorney to receive an unreasonable fee if little work was necessary to enforce

the additional fee claim." Ibid. We continued,

              [a]n arbitration committee has already determined the
              reasonable value of Hrycak's services and that he was
              owed money. After arbitration, when Kiernan still
              refused to honor his obligation, Hrycak was forced [to]
              take the matter to the Law Division to perfect his rights.
              For Hrycak's reasonable time and effort in seeking his
              fee, especially where the balance awarded was

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                                          6
             unjustifiably withheld, we see no reason why he should
             be denied compensation for additional work required in
             enforcing the award as covered by the retainer
             agreement.

             [Id. at 241.]

      We see no reason to depart from the holding in Hrycak. Lankamer

executed a retainer agreement providing that he would be responsible for the

costs of collection and a reasonable attorney's fee in the event Saadeh, LLC was

forced to take legal action to collect unpaid fees. After Saadeh, LLC filed suit,

Lankamer took advantage of fee arbitration, but refused to pay the arbitration

determination. He is liable under the retainer agreement for the reasonable costs

and attorney's fees incurred by Saadeh, LLC to collect its outstanding fees.

      The trial court's award of $125 in collection costs and attorney's fees is

not supported by an evidentiary record. The court did not afford Saadeh, LLC

an opportunity to submit a certification detailing the collections costs it incurred,

including reasonable fees for the hours expended by attorneys who represented

the firm in the fee collection action. In addition, the trial court provided no

findings of fact or legal conclusions explaining how it determined that Saadeh,

LLC was entitled to $125 in costs and fees. See R. 1:7-4 (requiring trial court

to "find the facts and state its conclusions of law . . . on every motion decided

by a written order that is appealable as of right . . . ."); Schwarz v. Schwarz, 328

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                                         7
N.J. Super. 275, 282 (App. Div. 2000) ("[A]n articulation of reasons is essential

to the fair resolution of a case.").

      The August 24, 2022 judgment is reversed to the extent that it awarded

Saadeh, LLC $125 in collection costs and attorney's fees.         The matter is

remanded for the entry of an order awarding reasonable collection costs and

attorney's fees incurred by Saadeh, LLC. We leave to the trial court in the first

instance to review a certification of services and costs to be submitted by

Saadeh, LLC on remand and determine what amounts constitute reasonable

compensation to Saadeh, LLC under the fee collection provision of the contract.

We do not retain jurisdiction.

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