GALLUCCIO et al v. PRIDE INDUSTRIES, INC. et al
Filing
165
OPINION. Signed by Judge Noel L. Hillman on 4/8/2021. (tf, n.m.)
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
_________________________________
MARIO GALLUCCIO, et al.,
Plaintiffs,
v.
PRIDE INDUSTRIES, INC., and
INTERNATIONAL UNION OF OPERATING
ENGINEERS AFL-CIO,
1:15-cv-03423-NLH-AMD
OPINION
Defendants.
RESNICK LAW GROUP, P.C.,
Petitioner.
__________________________________
APPEARANCES:
THOMAS ASTON MCKINNEY
CASTRONOVO & MCKINNEY, LLC
71 MAPLE AVENUE
MORRISTOWN, NJ 07960
On behalf of Plaintiffs
GERALD JAY RESNICK
RESNICK LAW GROUP
5 BECKER FARM ROAD
SUITE 410
ROSELAND, NJ 07068
On behalf of Petitioner Resnick Law Group, P.C.
HILLMAN, District Judge
Currently before the Court is the Notice of Attorney’s Fees
Lien Petition filed by Petitioner Resnick Law Group, P.C.
(“Resnick”).
(Docket No. 141, 148.)
Resnick served as
Plaintiffs’ original counsel in this matter. 1
According to
Resnick, on November 20, 2017, Plaintiffs’ current counsel,
Castronovo & McKinney, LLC (“McKinney”), informed Resnick of its
intent to substitute as counsel for Plaintiffs, and on November
27, 2017, Resnick informed McKinney of the amount of its
attorney’s fees lien pursuant to N.J.S.A. 2A:13-5 prior to
McKinney formally taking the case. 2
The action between Plaintiffs and Defendants concerned claims
by eight disabled Plaintiffs that their employer and union
discriminated against them by their classification in the
collective bargaining agreement which affected their pay and
benefits, while non-disabled employees were not so classified or
affected. Those claims ultimately settled, and final settlement
proceeds were distributed as of November 5, 2019. This Court
exercises ancillary jurisdiction over the attorney lien dispute.
(See Docket No. 159 at n.1.)
1
2
N.J.S.A. 2A:13-5 - Lien for services, provides:
After the filing of a complaint or third-party complaint or
the service of a pleading containing a counterclaim or
cross-claim, the attorney or counsellor at law, who shall
appear in the cause for the party instituting the action or
maintaining the third-party claim or counterclaim or crossclaim, shall have a lien for compensation, upon his
client's action, cause of action, claim or counterclaim or
cross-claim, 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.
2
Resnick states that when it learned of the March 2019
settlement, on April 15, 2019, Resnick sent each of the
Plaintiffs, as well as McKinney, pre-action notices regarding
its attorney’s lien.
The notices provided:
You retained our firm in February 2015 in connection
with claims against Pride Industries. After extensive
discovery and three (3) mediation sessions we were able to
secure a settlement offer of $XXX,XXX which was declined by
the group. As a result, we advised you and the other
plaintiffs that unfortunately due to the amount of
additional time we anticipated it would take to continue
with the case, we were not financially able to continue as
your counsel without each of the plaintiffs posting an
appropriate retainer. In this regard, we wrote you and the
other plaintiffs on or about October 31, 2017 that up to
that point we had incurred thousands of dollars in
expenses, without reimbursement, and that the time we had
expended on the file exceeded well over $100,000.
Therefore, after you secured new counsel we advised
him that we were asserting an attorneys lien in the amount
of $XX,XXX, $11,138 for expenses, and $XX,XXX, which
represents one third of the prior settlement offer of
$XXX,XXX which was obtained through our efforts.
Therefore, pursuant to Court Rule 1:20A-6, you are
hereby advised that our firm intends to file a lawsuit
against you to recover the balance due to this office.
Further, pursuant to that Rule, you have the right to
request Fee Arbitration. If you wish to do so, you should
immediately call Peter J. Kurshan, Esq., Secretary,
District VC Fee Arbitration Committee, Chase Kurshan
Herzfeld & Rubin, LLC, 354 Eisenhower Parkway, Suite 1100,
Livingston, NJ 07039-1022 - 973-422-6577 and request the
appropriate forms.
You are further advised that if you do not promptly
communicate with the Fee Committee Secretary and file the
approved form of request for fee arbitration within thirty
(30) days of receiving this letter, you will lose your
right to initiate fee arbitration.
3
(Docket No. 141-1 at 18.) 3
On April 29, 2019, McKinney informed Resnick that
Plaintiffs would not be seeking fee arbitration because the
matter was not yet closed, and Plaintiffs intended to address
the issue with the Court.
(Docket No. 141-1 at 21.)
Plaintiffs challenged the attorney’s lien for three
reasons:
(1) Resnick’s retainer agreement with Plaintiffs was
unethical and unenforceable; (2) Resnick violated the Rules of
Professional Conduct by abandoning Plaintiffs without good cause
because the case became more expensive than anticipated and
Plaintiffs refused to settle – even though any added time and
expense were directly caused by Resnick’s errors; and (3) the
principles of quantum meruit dictated that Resnick should not be
permitted to reap the rewards of McKinney’s salvaging of this
case because Resnick did not “advance” Plaintiffs’ case, and its
contribution was nil.
Resnick vigorously denied all of
McKinney’s contentions.
In the Court’s prior Opinion, the Court granted Plaintiffs’
motion to seal those portions of their filing that referred to
the first settlement amount and any calculation derived from
that settlement amount. (Docket No. 159 at 5 n.3.) The Court
also noted that because the exact amount of the first settlement
was not necessary to the Court’s analysis, the Court would
similarly redact the references to the amount of the first
settlement and any relevant calculations based on that
settlement. (Id.)
3
4
In the Court’s June 29, 2020 Opinion, the Court found as a
matter of law that the retainer agreement was not improper at
the time it was entered into.
(Docket No. 159 at 6-19.)
The
Court next found that even though Resnick had a valid retainer
agreement with Plaintiffs pursuant to which it may be entitled
to fees, Resnick’s calculation of its fees was invalid because
it sought fees in the form of a contingency on the original
settlement offer prior to Resnick being relieved as counsel,
instead of on a quantum meruit basis for the reasonable value of
the services rendered.
(Id. at 19.)
The Court directed that Resnick was to issue a revised lien
demand to Plaintiffs, consistent with N.J. Ct. R. 1:20A-6 (Preaction Notice to Client), which set forth the reasonable value
of Resnick’s services rendered.
(Id. at 20.)
The Court further
directed that after Resnick had done so, and if Plaintiffs
objected to the new lien, Plaintiffs could avail themselves of
the fee dispute arbitration provided by N.J. Ct. R. 1:20A-3
(Arbitration).
(Id. at 21.)
The Court additionally directed
that if the state fee arbitration was not available to
Plaintiffs, or if Plaintiffs do not wish to pursue that path,
the Court would direct the parties to private mediation in
accordance with Local Civil Rule 301.1(d) (“Each Judge and
Magistrate Judge may, without the consent of the parties, refer
5
any civil action to mediation.”).
(Id.)
Finally, the Court
found that if mediation was unsuccessful, the Court would direct
the parties to contact the magistrate judge to undertake
discovery and proceed to trial in due course.
(Id. at 21.)
After the Court issued its Opinion, Resnick sent Plaintiffs
a revised lien petition.
In response, Resnick informed the
Court that it wished to pursue mediation, and if that was
unsuccessful, then they wished to proceed with discovery and
trial.
Resnick responded to the Court that even though
Plaintiffs wished to pursue mediation, the issue of costs had
been unchallenged by Plaintiffs, and Resnick was entitled to its
demand for $11,128 in costs immediately.
Plaintiffs responded,
stating that they had not stipulated or consented to the payment
of Resnick’s costs.
(See Docket Nos. 161-163.)
The Court finds, as set forth in its prior Opinion, that
Resnick’s attorney lien petition, including the amount of costs, 4
must be sent to private mediation in accordance with Local Civil
Rule 301.1.
The parties are directed to select a Court-
certified mediator.
See https://www.njd.uscourts.gov/mediation.
Although the Court had noted in its Opinion, “Plaintiffs do not
challenge Resnick’s entitlement to its costs,” (Docket No. 159
at 6 n.4), the Court did not intend to suggest that Plaintiffs
affirmatively consented to pay the amount of costs asserted in
the lien. Because costs are part of the lien, and the total
amount of the lien is challenged by Plaintiffs, the mediator
must address both attorney’s fees and costs at mediation.
4
6
The action will be administratively terminated for 90 days from
today, with any application for an extension of the
administrative termination to be made jointly by the parties and
the mediator to this Court.
See L. Civ. R. 301.1(e)(6).
An appropriate Order will be entered.
Date: _ April 8, 2021__
At Camden, New Jersey
__ s/ Noel L. Hillman ___
NOEL L. HILLMAN, U.S.D.J.
7
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