THORNER et al v. SONY COMPUTER ENTERTAINMENT AMERICA LLC et al

Filing 237

MEMORANDUM OPINION. Signed by Judge Mary L. Cooper on 3/19/2014. (gxh)

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
CRAIG THORNER, et al.,

CIVIL ACTION NO. 09-1894 (MLC)

Plaintiffs,

MEMORANDUM OPINION

v.
SONY COMPUTER ENTERTAINMENT
AMERICA LLC, et al.,
Defendants.

THE MOVANT, Budd Larner, P.C. (“Budd Larner”), now moves to
enforce its attorney fee lien pursuant to N.J.S.A. 2A:13-5 against
its former clients, Craig Thorner and Virtual Reality Feedback
Corporation (“Thorner”).

(See dkt. entry no. 221, Budd Larner

Mot.)
BUDD LARNER was initially engaged by Thorner to act as local
counsel on his behalf against the defendants.

(See id. at ¶ 2;

dkt. entry no. 234-1, Affidavit of Allen L. Harris, Ex. A, 1-5-10
Fee Agreement Letter.)

Thorner and the defendants had entered into

a settlement agreement, which Thorner contended was void because it
was negotiated by his attorneys from the firm Niro, Haller & Niro
(“Niro”), and they lacked authority to accept unilaterally the
settlement on his behalf.

(See dkt. entry no. 203, 3-18-13 Mem.

Op. at 1-3, 17.)
relationship.

Thorner and Niro thereafter terminated their

(See id. at 3.)

BUDD LARNER subsequently entered into a fee agreement with
Thorner to represent him in the following matters: (1) to oppose a
motion filed by the defendants to enforce the settlement agreement
in the underlying action; (2) to move for a stay pending appeal of
the Court’s March 18, 2013 Order (dkt. entry no. 204), which
granted the defendants’ motion to enforce the settlement agreement;
(3) to file an appeal from the Court’s March 18, 2013 Order to the
United States Court of Appeals for the Federal Circuit; and (4) to
file a complaint for legal malpractice against Niro in the Superior
Court of New Jersey.

(See Budd Larner Mot. at ¶ 2; Affidavit of

Allen L. Harris, Ex. A, 9-14-12 e-mail.)
BUDD LARNER initially argued that Thorner owed a balance of
$62,287.26 for services rendered in, inter alia, the above-listed
matters (the “outstanding balance”), and that its charging lien
attached to the settlement amount of $300,000.
Mot. at ¶¶ 6, 14.)1

(See Budd Larner

Budd Larner acknowledges in its reply brief,

however, that $5,200 of the outstanding balance relates to work
undertaken for potential claims against Microsoft in a separate
lawsuit.

(See dkt. entry no. 234, Budd Larner Reply Br. at 9 n.2.)

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On August 6, 2013, the Court ordered the defendants to “deposit
$62,287.26 [of the $300,000 settlement] into the Court’s Registry
Fund to be transferred into the Court Registry Investment System
(“CRIS”) . . . to be held in escrow pending resolution of [this
motion].” (See dkt. entry no. 226, 8-6-13 Stipulation and Order.)
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Budd Larner agrees not to pursue that portion of the outstanding
balance here, and instead will seek those fees in a separate state
court action.

(See id.)

Budd Larner is thus seeking $57,087.26

“relat[ing] to work performed in connection with the motion to stay
pending appeal, the appeal to the United States District Court
[sic] for the Federal Circuit and the state court complaint against
the Niro firm.”

(See dkt. entry no. 234-2, Affidavit of Allen L.

Harris Pursuant to RPC 1.5 at ¶ 12.)
BUDD LARNER’S assertion of a lien is based upon N.J.S.A.
2A:13-5, which states:
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 cross-claim, 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.
N.J.S.A. 2A:13-5.
THE COURT finds that the plain language of N.J.S.A. 2A:13-5
indicates that Budd Larner can only have a lien for compensation

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upon the action pending in front of this Court.

See id. (stating

that “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 further that “[t]he
court in which the action or other proceeding is pending . . . may
determine and enforce the lien”); see also Schepisi & McLaughlin,
P.A. v. LoFaro, 430 N.J. Super 347, 354 (N.J. App. Div.) (“The
common-law charging lien is for ‘services rendered in a particular
cause of action and . . . attaches to the judgment in the cause for
which the services were rendered.’”), cert. denied, 215 N.J. 486
(2013); H. & H. Ranch Homes, Inc. v. Smith, 54 N.J. Super 347, 353
(N.J. App. Div. 1959) (stating that, “where the determination or
enforcement of an attorney’s lien is sought, . . . [t]he attorney
should make application to the court, as a step in the proceeding
of the main cause, by way of petition”) (emphasis added).
BUDD LARNER thus possesses a lien in an amount equal to the
portion of the outstanding balance that is related to (1) work
performed in connection with the motion to stay pending appeal and
(2) the appeal to the United States Court of Appeals for the
Federal Circuit (“work performed in this case”).

The Court

declines to find that Budd Larner can assert a lien in this action

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for the portion of the outstanding balance related to work
performed in the legal malpractice action against Niro.
AS PART OF the determination and enforcement of an attorney’s
lien pursuant to N.J.S.A. 2A:13-5, the court in which the
underlying matter is pending will determine the amount of the fee
to which an attorney is entitled.

See H. & H. Ranch Homes, Inc.,

54 N.J. Super at 353.
BUDD LARNER – in support of its motion – has submitted
invoices for services rendered that relate to the outstanding
balance.

(See Affidavit of Allen L. Harris, Exs. D-E.)

Allen L.

Harris, a member of the firm of Budd Larner, avers:
The monies owed relate to three particular invoices:
Invoice Nos. 132490 in the remaining amount of $3,005.80
dated April 30, 2013; 133785 in the amount of $53,951.97
dated May 14, 2013; and 133879 in the amount of
$5,329.49 dated May 16, 2013. The time on those
invoices relate to work performed in connection with the
motion to stay pending appeal, the appeal to the United
States District Court [sic] for the Federal Circuit and
the state court complaint against the Niro firm.
(Affidavit of Allen L. Harris Pursuant to RPC 1.5 at ¶ 12
(citations omitted).)
THE COURT, upon review of the relevant invoices, is unable to
decipher which fee entries correspond to work performed in this
case, as those fee entries are intermingled with fee entries
corresponding to work performed in connection with the legal

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malpractice action against Niro.

(See Affidavit of Allen L.

Harris, Exs. D-E.)
THE COURT, for the foregoing reasons, finds that Budd Larner
possesses an attorney fee lien, by virtue of N.J.S.A. 2A:13-5,
which attaches solely to the portion of the outstanding balance
that is related to work performed in this case.

The precise amount

of the lien, however, must be determined by the Court upon further
briefing by Budd Larner and Thorner.

Therefore the Court further

directs Budd Larner and Thorner to SHOW CAUSE, by supplemental
briefing and any supporting documents, on the following remaining
issues: (1) which fee entries – among those contained in invoice
nos. 132490, 133785, and 133879 - correspond to work performed in
this case, (2) the reasonableness of said fees, and (3) whether
Budd Larner is also entitled to attorney fees and costs from
Thorner, payable out of the outstanding balance in connection with
filing this motion and responding to this Order to Show Cause.
THE COURT, for good cause appearing, will: (1) grant Budd
Larner’s motion to enforce its attorney fee lien insofar as it
seeks to assert the attorney fee lien against the portion of the
outstanding balance that is related to work performed in this case;
and (2) deny the motion insofar as it seeks to assert the lien

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against the portion of the outstanding balance related to work
performed in connection with the malpractice action against Niro.2
THE COURT will enter an appropriate Order and Order to Show
Cause.

s/ Mary L. Cooper
MARY L. COOPER
United States District Judge
Dated: March 19, 2014

2

Budd Larner is advised that initiating a separate state court
action premised on the purported breach of its attorney fee
agreement is the proper method to recover any attorney fees
generated in the legal malpractice action filed on behalf of
Thorner against Niro.
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