Capitol Report: NJSBA amicus overview: Malpractice, retainer agreements, and drug recognition experts

By NJSBA Staff posted 08-29-2019 10:39

  

Several cases that will impact the way lawyers practice law are expected to be heard by the state Supreme Court in the next term. The New Jersey State Bar Association (NJSBA) has sought amicus curiae status in matters where the Court will: decide what duty is owed by a lawyer to an unknown third party who contributed to moneys being held in trust by a lawyer, examine retainer agreements, and address the admissibility of drug recognition expert testimony in criminal cases.

Meisels v. Fox Rothschild

The NJSBA argued that the duty to honor a client’s wishes under the Rules of Professional Conduct 1.2 does not require an affirmative obligation on the part of an attorney to “investigate whether a competing claim exists prior to disbursement” of the client’s own funds, held for the client’s benefit separate from the law firm’s funds. In Meisels v. Fox Rothschild, Fox Rothschild received $2.5 million in funds for its client, Eliyah Weinstein, from a non-party company, Rightmatch, Ltd. Meisels alleged that Rightmatch wired the funds to be used as part of a real estate transaction to which Meisels was a party. Though Meisels admits never having contacted Fox Rothschild or the attorney handling the matter, he alleged that Fox Rothschild disbursed the funds in accordance with its client, Weinstein. Five years later, Meisels and others affiliated with him sued Fox Rothschild, alleging multiple claims, including conversion and breach of fiduciary duty under RPC 1.15. The trial court granted summary judgment to the defendant law firm. The Appellate Division held that the trial court properly dismissed the breach of fiduciary duty claim, but that Meisels could pursue a conversion claim based on the distribution of the $2.5 million at Weinstein’s direction.

In its brief, the NJSBA argued that a client’s interest should not be jeopardized “in favor of an amorphous and undefined duty to search out the existence of any competing claims to funds held for the benefit of the client.” Arguing that RPC 1.15 does not apply here, the NJSBA further pointed out that even the Appellate Division acknowledged that Meisels’ identity was undisclosed to the defendants and, therefore, “his undisclosed status dooms his claim.” NJSBA Trustee Diana Manning will present oral argument before the Supreme Court in the matter on Sept. 10.

Balducci v. Cige

The NJSBA is challenging a published appellate court decision that imposes new requirements on attorneys when entering into retainer agreements in fee-shifting cases. Attorney Brian Cige was sued by a former client who challenged a retainer agreement she signed relative to a Law Against Discrimination case that proposed a fee of the greater of either an hourly billing rate or 37.5 percent of the net recovery or the statutory fees, by settlement or award. In Balducci v. Cige, the attorney argued the client read the agreement and understood the terms. When the client terminated the attorney-client relationship and received a bill for fees and expenses in the amount of nearly $287,000, she challenged the billing and filed suit.

The Appellate Division upheld the trial court’s decision that the attorney was obligated by the Rules of Professional Conduct to communicate clearly that his fee structure was different, and that the plaintiff would be obligated to pay regardless of the success in her case. The court further held that attorneys must tell clients that if the case becomes too complex, an hourly rate-based fee could approach or even exceed any recovery, and advise of other attorneys who would represent the client on a purely contingency fee basis. The NJSBA argues that this ruling constitutes improper rulemaking and imposes an unsupported obligation to inform the client above and beyond what is required in the Rules of Professional Conduct. Oral argument has not yet been scheduled in the matter.

State v. Olenowski

The issue presented in State v. Olenowski emanates from defendant Michael Olenowski’s conviction for driving while intoxicated, which occurred on two separate occasions in the same year. In his first arrest, Olenowski appeared impaired, but had a blood alcohol content of .04 percent, drawing a request for a drug recognition expert (DRE) to perform a drug influence evaluation (DIE). The DRE concluded Olenowski was under the influence of a combination of drugs and alcohol. His second arrest, which occurred six months later, registered a zero-percent blood alcohol content, though he failed field sobriety tests, drawing another request for a DRE. That DRE also concluded that Olenowski was under the influence of a combination of stimulants and depressants. The Law Division upheld the convictions, holding that DRE evidence was “generally acceptable and reliable in the scientific community.” The Appellate Division affirmed, finding that there was “sufficient credible evidence in the record” to support the Law Division’s findings that Olenowski was driving while intoxicated on both occasions.
  
The NJSBA urged the Supreme Court in its brief to exclude the DRE evidence because of the lack of foundation that these tests meet the requirements of Frye. “Given the scientific nature of the DIE and DRE opinion, the appropriate standard of review for their admissibility should be based on general acceptance within the scientific community,” wrote the NJSBA. The NJSBA underscored the susceptibility of the accuracy of DRE opinions, pointing out that the relationship between the results of the DIE and the consumption of drugs or driving impairment are inconsistent among the scientific community. Unless the proponent of DIE techniques and DRE opinions derived from them lays an appropriate foundation, the NJSBA urged the Supreme Court to declare the evidence inadmissible for any purpose. It further argued that admissibility in prior cases is not enough to show general acceptance, and more is needed to meet that standard. Oral argument has not yet been scheduled in the matter.

This is a status report provided by the New Jersey State Bar Association on recently passed and pending legislation, regulations, gubernatorial nominations and/or appointments of interest to lawyers, as well as the involvement of the NJSBA as amicus in appellate court matters. To learn more, visit njsba.com.

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