New Jersey Appellate Court Finds Contingent Fee Shouldn't Be Deducted From Fee Award
The brand new published (and therefore precedential/binding on lower courts) decision in Katherine Feliciano vs. Jeffrey N. Faldetta, et al. provides personal injury plaintiffs who were victims of car accidents, slip and falls, or similar incidents with a valuable tool to help settle cases in their favor. The Feliciano fact set is relatively straightforward. The plaintiff's injuries stem from a March 2007 motor vehicle accident. Our story truly begins in June 2010, after the suit had run its course through the discovery phase and even survived a motion for summary judgment, when the plaintiff served upon the defendant what is known as an “offer of judgment” in the amount of $15,000. What's an offer of judgment? Quite literally, an offer of judgment is a legal pleading whereby the plaintiff in a personal injury action tells the defendant that he or she will consent to the entry of judgment in a specific amount that's inclusive of costs and attorney fees. It's all governed by New Jersey Court Rule 4:58: 4:58-1(a): Except in a matrimonial action, any party may, at any time more than 20 days before the actual trial date, serve on any adverse party, without prejudice, and file with the court, an offer to take a monetary judgment in the offeror's favor, or as the case may be, to allow judgment to be taken against the offeror, for a sum stated therein (including costs). The offer shall not be effective unless, at the time the offer is extended, the relief sought by the parties in the case is exclusively monetary in nature. Things can get interesting if the offer is NOT accepted within the prescribed time; “[i]f the offer is not accepted on or prior to the 10th day before the actual trial date or within 90 days of its service,” states R. 4:58-1(b), or “whichever period first expires, it shall be deemed withdrawn and evidence thereof shall not be admissible except in a proceeding after the trial to fix costs, interest, and attorney's fee. The fact that an offer is not accepted does not preclude a further offer within the time herein prescribed in the same or another amount or as specified therein.” And what's included in the award? Our Courts have an answer for that question, too, in R. 4:58-2(a): If the offer of a claimant is not accepted and the claimant obtains a money judgment, in an amount that is 120% of the offer or more, excluding allowable prejudgment interest and counsel fees, the claimant shall be allowed, in addition to costs of suit: (1) all reasonable litigation expenses incurred following non-acceptance; (2) prejudgment interest of eight percent on the amount of any money recovery from the date of the offer or the date of completion of discovery, whichever is later, but only to the extent that such prejudgment interest exceeds the interest prescribed by R. 4:42-11(b), which also shall be allowable; and (3) a reasonable attorney's fee for such subsequent services as are compelled by the non-acceptance. That's where the Feliciano case turned after the defendant rejected the plaintiff's offer of judgment and the Court returned a verdict of $50,000 for pain and suffering shortly thereafter. Plaintiff's attorney followed up by filing a motion for fees, and expenses and interest pursuant to R. 4:58-2 in July 2010.
On September 18th, the Judge issued a written decision awarding the plaintiff over $50,000 in fees, expenses and interests in addition to entering judgment against defendant in the amount of almost $110,000. Both parties appealed on a few different grounds, but one holding in particular from the Appellate Division is significant for plaintiffs going forward. In rejecting one of the Feliciano defendant's central arguments, the Court insisted that “to hold that the contingent fee must be deducted from the fee award under the rule would provide a windfall to Faldetta at the expense of Feliciano.” This decision increases the potential for larger attorney fees for lawyers but, in real terms, it allows plaintiff's attorneys to exercise a larger bargaining chip when attempting to achieve settlement, since the vast majority of cases never reach the trial stage let alone appeal. Defense attorneys, normally retained by insurance companies to represent insured clients, will clearly be much more careful in rejecting settlement offers and forcing a trial if the attorney fee cost stakes are higher should the plaintiff prevail. Don't let the complexities of New Jersey's legal system deter you from pursuing the recovery you deserve following your accident. The personal injury attorneys at DeMichele & DeMichele will thoroughly evaluate your potential claim, explain the litigation process in-depth and, vigorously labor to compile the physical and medical evidence necessary to meet New Jersey's applicable legal standards and establish a successful personal injury case to help you recover. To arrange a free personal injury consultation with DeMichele & DeMichele, please click here to contact us online today or call (856) 546-1350 to speak with one of our personal injury attorneys.