Cole v. Cole, N.J. App. Div. February 8, 2010
Facts: Defendant allegedly failed to pay his attorneys for services rendered, and the attorneys sought to impose a lien under N.J.S.A. which attaches to a verdict, report, decision, award, judgment, or final order in the client’s favor. The trial court made a determination as to the proper amount of the lien and ordered its judgment to be paid. Defendant argued that the trial court should not have decided the issue while a malpractice action was pending.
Issue: Can the Court enter and enforce an attorney’s lien while a separately filed legal malpractice action is pending?
Ruling: Yes. Holding a plenary hearing to determine the amount of the attorney’s lien within the underlying action is in accordance with the generally accepted procedure regarding attorney’s liens in the absence of a motion to stay:
While arguably a client may be entitled to a stay of the adjudication of any attorney’s lien issue pending the outcome of a legal malpractice case, the record does not indicate that defendant sought such a stay.
Ordinarily, an attorney will not be able to collect fees for services that were negligently performed. As a result, a fee arbitration award will be stayed pending the outcome of a related legal malpractice case provided the court finds a ‘substantial basis’ for the legal malpractice action.
While defendant sought to vacate the judgment in his motion for reconsideration, he did not, in the alternative, seek a stay of its enforcement. Under these circumstances, we find no error in the trial court’s action determining the amount of the attorney’s lien, and entering and enforcing a judgment for the attorney fees owed.
Lesson: In the absence of a motion to stay pending resolution of a separately pending legal malpractice action, courts may properly determine and enforce attorney’s liens in the underlying matter.