Starkey v. Estate of Nicolaysen

172 N.J. 60, 796 A.2d 238 (2002)

 

RULE:

To recover under a theory of quantum meruit, a plaintiff must establish: (1) the performance of services in good faith, (2) the acceptance of the services by the person to whom they are rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of the services. 

FACTS:

The property owners' parents had owned the property when they hired the law firm to terminate a contract. The parents agreed the law firm would handle the matter on a contingent fee basis modeled after a typical condemnation action fee arrangement. The law firm not only succeeded in terminating that contract, but it also successfully defended against consolidated lawsuits for specific performance of that contract. Under a subsequent contract, the parents received a $ 200,000 deposit that was non-refundable. After receipt of that deposit and more than two and a half years after the initial agreement, the oral contingent fee agreement was reduced to writing. The law firm continued to assist the parents until they died and the children took over the property. The children refused to confirm the agreement. 

The trial court held that the contingent fee agreement was unenforceable because it had not been reduced to writing with a reasonable time, as required by the Rules of Professional Conduct. 

ISSUE:

Is an attorney, who enters into an oral contingency-fee agreement that is later deemed to be unenforceable because it was not reduced to writing within a reasonable time, entitled to collect either a fee or an award based on the principle of quantum meruit for services rendered before the contingency has occurred?

ANSWER:

Yes.

CONCLUSION:

The contingent fee agreement was invalid for failure to reduce it to writing within a reasonable time. The law firm is entitled to payment based on quantum meruit notwithstanding the fact that the contingency has not been satisfied.

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