Ravich v. Gourvitz

The opinion of the court was delivered by VILLANUEVA, J.A.D. Plaintiff appeals from a Special Civil Part order, purportedly based upon stipulated facts, that plaintiff is not entitled to a referral fee under a written agreement with defendant because the trial judge “found no authority to allow the payment of — 535 — referral fees in matrimonial actions.” We reverse and remand to the trial court to have judgment entered in favor of plaintiff. In October 1988 Michael N. Tobin, Esq., of the law firm of Ravich, Koster, Tobin, Oleckna, Reitman and Greenstein, P.C. (plaintiff), formerly Shevick, Ravich, Koster, Tobin, Oleckna and Reitman, was consulted by Ninette Hoff who was seeking representation in a matrimonial action. Plaintiff chose not to undertake the representation but, instead, referred Hoff to defendant Elliot H. Gourvitz, a certified civil trial attorney. Tobin contacted defendant, then a member of the firm Gourvitz & Braun, to discuss the referral. Gourvitz represented that a 25% referral fee would be paid to plaintiff as the money was received from the client. On October 17, 1988, defendant acknowledged the referral and memorialized the agreement between plaintiff and defendant in a letter that he signed personally.* 1 The division of fees was to be determined in accordance with R. 1:39-6(d). Gourvitz & Braun made payments to plaintiff of 25% of some of the fees received. The total fee earned by defendant or his successors in the Hoff matter as determined by the District Fee Arbitration Committee was $29,271. The referral fee to be paid to plaintiff according to the agreement was $7,317.75 or 25% of the total fee. Defendant made payments totalling $2,110.25, which leaves a balance allegedly due of $5,207.50. — 536 — Plaintiff filed this lawsuit against defendant to recover $5,207.50 plus interest. Defendant filed an answer but did not set forth any affirmative defense that the agreement was unenforceable. During a pretrial conference before a Superior Court judge, the parties stipulated to several facts. Specifically, they agreed that the figures set forth in the statement of facts in plaintiffs submission were accurate and acceptable; at the time of the offer and acceptance, defendant was a member of a partnership known as Gourvitz & Braun; defendant acknowledged his obligation up to the amount which had been paid to him while a member of that partnership. The legal issue was whether defendant was personally liable for the balance due plaintiff on the entire obligation or whether his liability terminated after defendant became a member of a professional association. The judge determined that he could decide the issue without submission of a formal motion and the parties’ briefs. Plaintiff submitted two letter memoranda. Defendant submitted one letter memorandum asserting that Gourvitz, Diamond, Hodes, Braun and Diamond, a Professional Association, was a successor law firm to Gourvitz & Braun, and all subsequent fees paid went into the professional association which has since dissolved and has no assets; Mr. Tobin referred the client to defendant’s first firm, Gourvitz & Braun, which engaged in her representation, and the professional association took over that representation; there has been no proof submitted of total fees received by the professional association, only a statement that $14,271 was previously paid and an Arbitration Determination which sets forth the fact that an additional $15,000 was due by the client; there is no proof before the court that any of those monies went anywhere other than to the professional association; and at the conference, it was stipulated that the Arbitration Determination’s figures were correct, but it was never stipulated that these monies were received. On May 17,1995, the trial judge issued a letter opinion in which he stated the following: — 537 — The court has reviewed the submission and argument concerning plaintiffs attempt to collect a residual matrimonial referral fee. At issue is whether R. 1:39-6 limits referral fees to Civil Part only and does not extend to Family Part matters. Plaintiff is a law firm with a significant civil negligence practice. Defendant is a matrimonial law specialist who is coincidentally a certified civil trial attorney. The New Jersey Supreme Court has yet to establish a certification for matrimonial trial attorneys. See Certification Plan Vague, Says Family Bar, 138 N.J.L.J. 892 (Oct. 31, 1994). Article 6, § 3, H 3 of the New Jersey Constitution divides the Superior Court into different Parts. See generally D’Angelo v. D’Angelo, 208 N.J.Super. 729, 732, 506 A.2d 851 (Ch.Div.1986), which noted the jurisdictional limits between the Superior Court Law Division/Probate part and Chancery Division/Family Part. This Court has found no authority to allow the payment of referral fees in matrimonial actions. The plaintiff’s complaint is therefore dismissed with prejudice. On appeal, plaintiff argues that R. l:39-6(d) applies to the referral of a matrimonial matter to a certified civil trial attorney and defendant is personally liable for the fees based upon the agreement he signed personally. The legal matter which was referred to defendant, a certified civil trial attorney, was the representation of a party in a matrimonial proceeding. R. 1:39 — 6(d), provides as follows: A certified trial attorney who receives a case referral from a lawyer who is not a partner in or associate of the certified attorney’s law firm or law office may divide a fee for legal services with the referring attorney or the referring attorney’s estate. The fee division may be made without regard to services performed or responsibility assumed by the referring attorney, provided that the total fee charged the client relates only to the matter referred and does not exceed reasonable compensation for the legal services rendered therein. The judge dismissed the complaint relying on R. l:39-6(d) which he ruled does not apply to Family Part matters since only civil or criminal trial attorneys are certified. This is an unduly restrictive reading of the rule. The Family Part is in the Chancery Division which is a civil court. R. 5:1-1, governing practice in the Chancery Division, Family Part, specifically states that “[t]he rules in Part V shall govern family actions. All family actions shall also be governed by the rules in Part I insofar as applicable. Civil family actions shall also be governed by the rules in Part IV insofar as applicable and except as otherwise provided by the rules in Part V.” Part IV contains the rules governing civil procedure. There — 538 — is no prohibition in any of the foregoing Parts of paying a referral fee. R. l:39-6(d) does not prohibit payment by a certified civil trial attorney, although solely a matrimonial practitioner, of a referral fee to the referring attorney. Here, plaintiff relied upon, first, a written referral agreement from a certified civil trial attorney — defendant herein — and, second, the referral rule in effect at that time. It justifiably believed that the agreement was enforceable and would be honored by the defendant.2 The fact that the Supreme Court has approved certification for “matrimonial attorneys” and prohibited referral fees in matrimonial actions in the future3 does not mean that such practice was prohibited when this matrimonial matter was started and concluded nor does it mean that R. 1:39 — 6(d) should not be enforced according to its plain language. Our function is to interpret the meaning of the statutes or rules and apply them to the facts. See Watt v. Mayor of Franklin, 21 N.J. 274, 277, 121 A.2d 499 (1956). When the statutes are clear and unambiguous, we need look no further than their words and phrases for their true intent and purpose. Beaugard v. Johnson, 281 N.J.Super. 162, 169, 656 A.2d 1282 (App.Div.1995). The language of defendant’s obligation under the agreement which he signed personally is clear and unambiguous. Therefore, he is — 539 — personally liable for whatever fees he or his successor firms received.4 Because the case was referred to defendant, he remains liable on his agreement to pay a referral fee. When he brought his matters into the newly-formed firm it should have been with the understanding that there was an outstanding referral obligation. One can assign assets but cannot assign liabilities. The responsibility to pay plaintiffs referral fee was and is defendant’s personal liability. We reverse and remand to the trial court to have judgment entered in favor of plaintiff against defendant in the amount of $5,207.50, together with interest from the date the moneys were received by defendant or his law firms. Footnotes [1] The letter dated October 17, 1988, states in part: I received from this client, the sum of $7,000.00 and have deposited the sum of $3,500.00 into my operating account. Pursuant to DR2-107(3), I am herewith forwarding to you $875.00 which represents 25% of the initial retainer deposited by me. I bill my clients on the first of each month, which billing shows the amount of work done and the total cost of same. As I forward it to the client, you will receive copies of the billing, and when more than the $5,000.00 is earned, I will forward to you additional moneys from the subsequent moneys received from the client. [2] We note that in the hearing before the Family Part Practice Committee's General Procedures Subcommittee regarding certification of matrimonial attorneys and whether referral fees should be permitted for such a referral, defendant Elliot H. Gourvitz backed referral fees for matrimonial lawyers, asserting that a constitutional issue of equal protection could be at stake. He also questioned why family lawyers should be treated differently from other certified attorneys when it come to referral fees. 4 New Jersey Lawyer 2327 (Nov. 20, 1995). [3] The Supreme Court announced its decision in a Notice to the Bar published in the New Jersey Lawyer, 4 N.J.L. 2274 (Nov. 13, 1995). The Court approved using “matrimonial law" for certification. The Court has instructed the Board on Trial Attorney Certification to prepare implementing Rules and Regulations in respect of Matrimonial Law certification. [4] Defendant has never denied under oath that he or his firms did not receive the full amount of the arbitration award. Although defendant in his counter-statement of facts in his brief states that there is “no proof in fact that these monies were received by Gourvitz, Diamond, Hodes, Braun & Diamond, P.A., or by the defendant, Elliot H. Gourvitz individually," he does not make this argument in his brief. See R, 2:6-2(a)(5).