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Fox v. Drozd

A-1753-08T3 (N.J. Super. App. Div. 2010) (Unpublished)

ATTORNEYS FEES — An attorney’s bill for services must be reasonable both as to the hourly rate and as to the services performed, and the practice of estimating billable hours long after the fact calls into question the validity of an attorney’s bill.

A client executed a retainer agreement for legal services. The client refused to pay certain bills that were sent to her. She was upset that the attorney did not give her requested information and , without informing her, allowed a filed appeal to be dismissed while he was still the attorney of record. The attorney sued to recover his legal fees and included the client’s social security number in the complaint’s caption.

The lower court held in favor of the client after finding that the attorney’s bills included only estimated hours, prepared without notes, months after providing the services. In addition, the attorney admitted to double-billing on one occasion. The client also testified that she was not credited for two payments and that she was represented by a public attorney in a matter where this attorney claimed he represented her. She testified that she was frustrated with the attorney’s failure to provide her with requested information, and also claimed that she did not speak with her attorney with the frequency reflected by the attorney’s bills. The lower court found the client to be more credible than the attorney and concluded that the attorney had failed to establish his contract breach claim. The Appellate Division also held that the inclusion of the social security number in the complaint was self-serving, unnecessary, and in violation of the attorney’s fiduciary duty to the client. It found that the attorney permitted his client’s appeal to be dismissed simply because the client did not pay. The Court ruled it would have been a more appropriate course of action to ask the lower court to be relieved from the underlying case as opposed to ignoring the client because the client ignored him. Finally, the Court rejected the attorney’s contention that he was entitled to additional legal fees under a quantum meruit theory. In fact, after discounting amounts billed for services not identified by date, omitting duplicative entries, reducing amounts that appeared to be excessive, and crediting the client with two unrecorded payments, it concluded that the attorney was entitled to less than the amount previously paid him. The attorney appealed.

The Appellate Division affirmed, agreeing with the lower court that the attorney had failed to establish that his client owned fees under the terms of the retainer agreement. Further, the Court ruled that the lower court’s scrutiny of the attorney’s billing records was not improper as courts are expected to scrutinize contracts between attorneys and clients to ensure that they are fair. According to the Court, “a lawyer’s bill for services must be reasonable both as to the hourly rate and as to the services performed.” The attorney’s practice of estimating billable hours long after the fact, his apparent duplicative billings, and a billing for services not rendered called the validity of the attorney’s bills into question. It stated that the attorney, not the client, had the obligation to establish the fee’s reasonableness. Without such a showing, a client has no obligation to come forward to rebut the bill’s reasonableness. Finally, the attorney’s billing record deficiencies and other evidence relevant to hours of service rendered were found to be equally fatal to the attorney’s efforts to establish his quantum meruit claim.

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