SOBEL AND BROWN, PC VS. THOMAS HOXIE (L-4418-18, BERGEN COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE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-0528-19T3
SOBEL AND BROWN, PC,
Plaintiff-Appellant,
v.
THOMAS HOXIE,
Defendant-Respondent.
______________________________
Argued December 14, 2020 – Decided January 4, 2021
Before Judges Fasciale and Mayer.
On appeal from the Superior Court of New Jersey, Law
Division, Bergen County, Docket No. L-4418-18.
Illya D. Lichtenberg argued the cause for appellant.
Thomas Hoxie, respondent, argued the cause pro se
(Thomas Hoxie and Cory S. Poker, on the brief).
PER CURIAM
Plaintiff appeals from an August 23, 2019 order granting summary
judgment in favor of defendant, denying its cross-motion for summary
judgment, and dismissing its complaint with prejudice. The core issue is at what
point did plaintiff cease to represent defendant, thereby triggering the running
of the statute of limitations (SOL) for plaintiff's filing of this attorney-fee
collection action. We affirm.
Defendant is a practicing attorney who employed plaintiff law firm to
represent him in a matrimonial proceeding. Phillip Sobel (Sobel) was the only
attorney in the firm who practiced matrimonial law. Sobel represented defendant
until his death on February 20, 2012. After Sobel's death, plaintiff ceased operation.
The last billable event by plaintiff occurred on March 22, 2012. Thereafter,
plaintiff's sole remaining member, Joseph Brown (Brown), provided unbilled
administrative services to defendant, such as trust distribution, but performed no
legal work on his behalf.
On or about April 2, 2012, Brown transitioned to another law firm and had no
interaction or connection with defendant. At no point did Brown inform the court
that plaintiff was defunct or that he had transitioned. On April 13, 2012, defendant
informed Brown, opposing counsel, and the matrimonial arbitrator by email that he
was proceeding pro se in the matrimonial action. On June 1, 2012, plaintiff, through
Brown, sent defendant a letter acknowledging that defendant was proceeding pro se
and a signed substitution of counsel form to return for filing. On June 13, 2012,
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plaintiff sent a second substitution of counsel form, which he urged defendant to file.
Defendant did not acknowledge or file either. As of June 15, 2012, when the judge
entered the final judgment of divorce, plaintiff was still listed as counsel of record.
On June 27, 2012, defendant made a final payment to plaintiff for outstanding
legal bills, leaving an unpaid balance of $38,984.66, which is the amount in dispute
here. In June 2013 and April 2018, plaintiff sent defendant fee arbitration notices.
On October 1, 2013, plaintiff sent defendant a final invoice for non-legal services
billed through March 2012.
On June 14, 2018, plaintiff filed this attorney-fee collection action against
defendant. Defendant moved for summary judgment on SOL grounds and plaintiff
cross moved for summary judgment. On August 23, 2019, the motion judge entered
an order and rendered a written opinion granting defendant's motion and denying
plaintiff's cross-motion. The judge applied Protopapas1 and concluded that the
attorney-client relationship ended, at the latest, by April/May 2012. He determined
that the last legal service was performed on March 22, 2012 when plaintiff's records
show it last billed defendant for services. He rejected plaintiff's contention that the
June 13, 2012 substitution was dispositive for SOL purposes. The judge reasoned
1
Pellettieri, Rabstein & Altman v. Protopapas, 383 N.J. Super. 142 (App. Div.
2006), cited with approval in, In re Simon, 206 N.J. 306 (2011).
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that the substitution was "a matter of form" because by April 2012, plaintiff was
defunct, plaintiff's sole remaining attorney had transitioned to another firm, and all
parties to the matrimonial litigation were made aware that defendant was proceeding
pro se. The judge therefore held that plaintiff's attorney-fee collection complaint,
which was filed on June 14, 2018, was time-barred by the applicable six-year SOL.
On appeal, plaintiff raises the following points for this court's consideration:
POINT I
THE TRIAL [JUDGE'S] DECISION CONSTITUTED
PLAIN ERROR WHEN [HE] FAILED TO CONSIDER
THIS CASE WAS AN ATTORNEY COLLECTION
MATTER AGAINST A CLIENT BY HOLDING:
(1) THE [SOL] BEGAN TO RUN PRIOR TO THE
REPRESENTATION TERMINATING OR THE
MATTER BEING CONCLUDED[.]
(2) FAILING TO FIND THE [SOL] WAS
TOLLED DURING THE FEE ARBITRATION
NOTICE PERIOD[.]
POINT II
THE [SOL] HAD NOT BEGUN TO RUN UNDER
CONTRACT LAW PRINCIPLES AS IT BEGAN TO
RUN AT:
(1) THE TIME THE FINAL PAYMENT WAS
MADE ON JUNE 27, 2012[.]
(2) THE FINAL PAYMENT[,] WHICH WAS
MADE ON JUNE 27, 2012, RESET THE [SOL.]
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(3) THE FINAL INVOICE, SENT ON OCTOBER
1, 2013, BEGAN THE RUNNING OF THE [SOL.]
The judge properly applied Protopapas and determined that the attorney-
client relationship had ended by, at the latest, April/May 2012, and properly
concluded that plaintiff's claims were barred by the SOL. Moreover, general
contract principles are inapplicable here because the Protopapas rule supersedes
them in cases involving attorney-client disputes.
I.
We first address plaintiff's contention that the trial judge erred in
determining that the attorney-client relationship ended by, at the latest,
April/May 2012. Plaintiff maintains that the trial judge misinterpreted and
improperly applied Protopapas because there was no clean break in the attorney-
client relationship and services did not conclude until resolution of the matter
on June 15, 2012.
We review the grant of summary judgment applying the same standard as
the trial judge. Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co. of
Pittsburgh, 224 N.J. 189, 199 (2016). Summary judgment is appropriate "if the
pleadings, depositions, answers to interrogatories and admissions on file, together
with the affidavits, if any, show that there is no genuine issue as to any material fact
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challenged and that the moving party is entitled to a judgment or order as a matter
of law." Ibid. (quoting R. 4:46-2(c)).
To determine whether there are genuine issues of material fact, the court must
consider "whether the competent evidential materials presented, when viewed in the
light most favorable to the non-moving party, are sufficient to permit a rational
factfinder to resolve the alleged disputed issue in favor of the non-moving party."
Davis v. Brickman Landscaping, Ltd., 219 N.J. 395, 406 (2014) (quoting Brill v.
Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995)). "An issue of material fact
is 'genuine only if, considering the burden of persuasion at trial, the evidence
submitted by the parties on the motion, together with all legitimate inferences
therefrom favoring the non-moving party, would require submission of the issue to
the trier of fact.'" Grande v. St. Clare's Health Sys., 230 N.J. 1, 24, 164 (2017)
(quoting Bhagat v. Bhagat, 217 N.J. 22, 38 (2014)). We see no issue as to any
material fact that would preclude summary judgment on SOL grounds here.
New Jersey's SOL requires that a claim for breach of contract be filed within
six years from the date that the cause of action accrues. See N.J.S.A. 2A:14-1.
However, "[a] contract for legal services is not like other contracts." Estate of Pinter
by Pinter v. McGee, 293 N.J. Super. 119, 128 (App. Div. 1996) (citing Cohen v.
Radio-Electronics Officers Union, Dist. 3, 275 N.J. Super. 241, 259 (App. Div.
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1994)). In Protopapas, we explained that because of "the unique and special
relationship between an attorney and a client, ordinary contract principles governing
agreements between parties must give way to the higher ethical and professional
standards enunciated by our Supreme Court." 383 N.J. Super at 150 (quoting Estate
of Pinter by Pinter, 293 N.J. Super. at 128). In Protopapas, which governs this
attorney-fee collection matter, we set forth a bright-line rule that a cause of action
accrues between an attorney and client "when the services are concluded or attorney-
client relationship is ended, whichever occurs first." Id. at 145.
The judge properly applied Protopapas and found that services effectively
concluded on March 22, 2012. The last invoice for new services which plaintiff
billed defendant was dated March 31, 2012, which included the last attorney
service billed for March 22, 2012. While plaintiff performed administrative
services for defendant after this period, such as making final distributions of
assets from the attorney trust account to himself and opposing counsel, these
services did not serve to maintain the attorney-client relationship. The judge
noted—and we agree—that any later "'handling' of [defendant's] matrimonial file
by Brown was simply administrative, not performance based" and occurred
"after [plaintiff] knew [defendant] was representing himself." Plaintiff indeed
performed no legal work for defendant after March 2012.
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Plaintiff argues that the trial judge was required to use the June 15, 2012
judgment of divorce as the operative date legal services ended. We conclude
this argument lacks a proper legal basis as it is premised on an erroneous reading
of Protopapas which conflates the conclusion of services with conclusion of the
matter. In Protopapas we noted that the SOL begins to run when "the matter is
concluded," id. at 153, but we also noted "the [SOL] . . . commences when the
services are concluded," id. at 145, and "absent completion of services . . . the
attorney-client relationship must be terminated[.]" Id. at 151. Thus, it is clear
that the meaning is the same, and both connote that services end when plaintiff
is no longer doing the legal work for which it was hired to do. Contrary to
plaintiff's assertion, nothing in Protopapas requires that the judge use the June
15, 2012 judgment of divorce as the trigger here, which in this case was the
conclusion of the matter.
Despite the Protopapas rule that a judge need only consider the event
which occurs first—which in this case was services concluding—the judge also
determined that the attorney-relationship terminated by, at the latest, April/May
2012. This determination is well-supported by the record. After Sobel's passing,
plaintiff ceased operation as a law firm. On or about April 2, 2013, Brown
transitioned to another firm. In his deposition testimony, Brown asserted that
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he is "not a matrimonial attorney and [defendant knew] that" and that it was why
defendant "didn't retain [Brown] to represent [him] after [Sobel's] death." In
fact, Brown referred defendant to a matrimonial attorney at his new firm.
Defendant provisionally hired the attorney, but elected to proceed pro se.
Though plaintiff was defunct, and Brown had transitioned to another firm, he
failed to properly withdraw, substitute counsel, or otherwise inform the court
that plaintiff was no longer operational.
On April 13, 2012, defendant sent an email to opposing counsel, the
matrimonial arbitrator, and Brown, unequivocally advising them that he was
"unrepresented" and "acting pro se." While he copied Brown on the email,
defendant plainly stated "plaintiff's counsel may consider me to be
unrepresented and communicate directly with me as necessary." Because
defendant's counsel had died, plaintiff was defunct, and defendant notified the
parties that he was proceeding pro se, there can be no question that the attorney -
client relationship had terminated by, at the latest, April/May 2012.
Moreover, the judge properly rejected plaintiff's argument that the June
13, 2012 substitution of counsel was the operative date. Nearly three months
after the date of the last billing for legal services and two months after being
notified that defendant would be proceeding pro se, Brown sent defendant two
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substitution of counsel forms, which were signed and dated. By email, Brown
requested that defendant sign and file the second substitution. Plaintiff now
argues that defendant's failure to acknowledge and file the substitutions meant
there was no clean break in the attorney-client relationship. We see no merit in
this argument, especially where plaintiff acknowledged in its June 1, 2012 letter
that defendant was self-represented, improperly requested that defendant file the
substitution himself, and otherwise failed to properly withdraw or substitute for
three months.
Rule 1:11-2 governs the withdrawal or substitution of attorneys and states
that
prior to the fixing of a trial date in a civil action, an
attorney may withdraw upon the client's consent provided
a substitution of attorney is filed naming the substituted
attorney or indicating that the client will appear pro se. If
the client will appear pro se, the withdrawing attorney
shall file a substitution.
[R. 1:11-2(a)(1) (emphasis added).]
As such, plaintiff, as the withdrawing attorney, was responsible for filing the
substitution in this case. Plaintiff cannot improperly shift this responsibility to the
pro se defendant, then rely on defendant's failure to file to argue it did not know the
status of the attorney-client relationship. To the extent that plaintiff now argues that
an attorney-client relationship existed because it remained listed as counsel of
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record, it invited that error. We reject the invitation to permit a discharged attorney
to delay withdrawal or substitution, then rely on that delay to circumvent the SOL
for purposes of suing the client. To do so would contravene the public policy goals
underpinning the bright-line rule set forth in Protopapas. We note that even if this
court found the June 13, 2012 substitution to be operative, plaintiff's complaint was
filed beyond the six-year SOL.
As such, the judge properly determined that services concluded and the
attorney-client relationship terminated by, at latest, April/May 2012, thus time-
barring plaintiff's claims.
II.
We now turn to plaintiff's alternative argument that under general contract
principles the SOL began to run at various subsequent dates. Plaintiff specifically
argues that the two fee arbitration notices tolled the SOL, the June 27, 2012 transfer
of funds restarted the running of the SOL, and the October 1, 2013 invoice marks
the date the SOL began to run.
The judge properly applied, and both parties assert in their merit briefs, that
Protopapas controls this attorney-fee collection case. In Protopapas we explained
that its bright-line rule for attorney-client disputes supersede standard contract
principles, as evidenced by the numerous references to the uniqueness of the
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attorney-client relationship and the Court's "commit[ment] to preserving the
fiduciary responsibility that lawyers owe their clients." Protopapas, 383 N.J. Super.
at 150 (citing Cohen, 146 N.J. Super. at 155). We see no reason to deviate from
Protopapas here. We nevertheless add the following remarks.
We disagree with plaintiff's argument that the SOL was tolled during the
thirty-day period following the June 2013 and April 2018 arbitration notices. Rule
1:20A-6 governs fee arbitration notice requirements and states that "[n]o lawsuit to
recover a fee may be filed until the expiration of the [thirty-day] period herein giving
[p]re-[a]ction [n]otice to a client[.]" A plain reading makes clear that the rule only
requires that a suit not be filed and does not indicate that the fee notice requirement
and the SOL are to be read together. As such, the two fee arbitration notices did not
toll the SOL here.
We also disagree with plaintiff's argument that its withdrawal of the last funds
from defendant's trust account restarted the running of the SOL. We note that
plaintiff mischaracterizes the withdrawal as a "payment [by defendant] to plaintiff
from defendant's account" when it was actually a payment from plaintiff's attorney
trust account, which only Brown had access and could disperse from. The judge
found that "[defendant's] ex-wife's attorney, in the matrimonial action, [sent] pro se
[defendant] a [May 25, 2012] letter asking for the distribution of the counsel fee
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award by [June 8, 2012]" but plaintiff failed to transfer until June 8, 2012 and "[n]o
reason for the delay was evident." It is therefore clear that had plaintiff made the
withdrawal when originally requested, or even within a month of the arbitrator's
decision, no such argument could have been made here. Plaintiff cites no authority—
and indeed none exists—for its proposition that the date of a last trust payment
restarts the SOL here.
Finally, we disagree with defendant's characterization of the October 1, 2013
invoice as a "final bill" and reject its use as the trigger for the running of the SOL.
Plaintiff to cites G & L Assocs., Inc. v. 434 Lincoln Ave. Assocs., 318 N.J. Super.
355, 360 (App. Div. 1999), for the proposition that "plaintiff's claim accrue[s] . . .
when plaintiff billed defendant for services rendered[.]" In an inapt commercial
transaction, we noted that the relevant inquiry in determining when a cause of action
accrues is "when did the party seeking to bring the action have an enforceable right."
Id. at 359. Plaintiff in G & L Assocs. demanded payment four years after the first
bill and "had numerous contacts with [defendants]" about money owed, like here,
yet we found that this did not serve to restart the SOL period. Id. at 358. Even in a
traditional contract setting, we found that the cause of action accrued when the client
was first billed for services rendered. Id. at 360.
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Here, the last invoice from plaintiff which billed defendant for a newly
rendered legal service was the March 25, 2012 invoice, for March 22, 2012 services.
All later invoices, such as the final October 1, 2013 invoice, were merely statements
of account as of September 2, 2011 through March 25, 2012, which added interest
but did not bill for any new legal services. Thus, under G & L Assocs., any claim
would effectively stem from the March 25, 2012 bill. Under the retainer agreement,
which plaintiff argues should control under general contract principles, the invoice
would have been due within thirty days. Therefore, the cause of action would have
accrued within thirty days of March 25, 2012, not thirty days of the final October 1,
2013 invoice for previously rendered services. Thus, even if this court were to apply
general contract principles, plaintiff's complaint would still have been filed well
outside the six-year SOL.
Affirmed.
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