A lawyer who was fired shortly after being retained in a medical malpractice case that eventually settled for $1.2 million wants his cut – from the firm he claims lured the client away.
“This case does not concern a client looking for a new attorney,” Jersey City solo Frank Nostrame told the state Supreme Court on Wednesday. “This case concerns an attorney looking for a new client.”
The target of Nostrame’s tortious-interference suit — now on hold pending interlocutory appeal — is Roseland’s Mazie Slater Katz & Freeman, who took over the underlying case a week after the complaint was filed and, according to its retainer agreement, collected $358,396 in fees when the case was settled. That left Nostrame with only a $11,642 quantum meruit award.
The suit, Nostrame v. Santiago, A-40-11, drew in the State Bar Association, which is urging the high court to reject the claim and to affirm an attorney’s right to solicit retained clients, so long as proper means are used.
The methods are what has Nostrame crying foul. He alleged in his complaint that the client, Natividad Santiago, was “induced to discharge plaintiff and dissolve the contingent fee contract between them by [Mazie Slater].” He said the firm and the client “without legal justification interfered with the contractual relation between [Santiago] and plaintiff [by] contact[ing] the office of [Mazie Slater] for the purpose of creating a contractual relation between [Mazie Slater] and [Santiago] and to terminate the contractual relation.”
Hudson County Superior Court Judge Edward O’Connor Jr. denied Mazie Slater’s motion to dismiss and the Appellate Division granted leave for interlocutory appeal.
The Appellate Division reversed, finding no tortious interference under the four-factor test set out in Restatement (Second) of Torts § 768(1), specifically that the relation concerned a matter involved in the competition between Mazie Slater and Nostrame; Mazie Slater was not alleged to employ wrongful means; Mazie Slater’s action did not create or continue an unlawful restraint of trade; and Mazie Slater’s purpose was at least in part to advance the firm’s interest in competing with Nostrame.
“[P]ermitting discovery to proceed based on the kind of conclusionary allegations contained in plaintiff’s complaint could have a chilling effect upon a client’s exercise of the right to select counsel of his or her choosing,” wrote Appellate Division Judge Stephen Skillman, retired and serving on recall status. Judges Anthony Parrillo and Joseph Yannotti joined in the ruling.
The appeals court found the case governed by Restatement (Second) of Torts § 768(1), which covers tortious interference with contract by a competitor seeking to pursue its own economic interests by encouraging a prospective customer to discontinue a terminable at-will contract with another party. An attorney-client relationship is one such contract, as the court held in Jacob v. Norris, McLaughlin & Marcus, 128 N.J. 10 (1992).
The court agreed to hear Nostrame’s appeal.
Nostrame said he was not challenging the right of a client to choose his or her attorney. Rather, he said, Santiago “was contacted by third parties who may have had an interest in the matter.”
Allowing the Appellate Division ruling to stand, he said, could result in a system of sanctioned poaching.
“Another attorney can say, ‘We can make a better deal. I understand your case and you can save some money,’” Nostrame said. “An attorney could find out who has a good case and take it.”
Justice Barry Albin asked Nostrame if he believed he was entitled to one-third of the collection.
“No,” Nostrame said. “But the allocation should be based on a percentage” of the fee collected.
Albin asked Nostrame what information he had that led him to believe Mazie Slater did something improper.
Nostrame said he called someone in Santiago’s family to ask what happened. “She told me an attorney had contacted her,” he said.
“Is that enough to get a lawsuit going?” Albin asked.
“A client can say, ‘I don’t like the way you comb your hair,’ and I’ll hang up,” Nostrame said. But in this case it appeared to him that someone at Mazie Slater contacted his client.
“Where is it written that a client has to give you a reason?” Albin asked.
“A client doesn’t have to give an explanation,” Nostrame replied. “But no one else can tell that person to not speak to me.”
Adam Slater, representing his firm, said Nostrame had no case because it was Santiago’s absolute right to choose who her lawyer would be. Nostrame, he said, is only entitled to quantum meruit.
“Are lawyers immune from tortious interference?” Albin asked. “Are they immune in any and all circumstances, including fraud or defamation?”
There may be some situation in which a claim could be made, Slater said. But as for the immunity question, “I can speak to this situation and in this situation I can say yes,” he said.
Chief Justice Stuart Rabner asked if Nostrame had any recourse.
“The quantum meruit model is well-established,” Slater said. “And one can file an ethics complaint.
“Lots of people come to us for second opinions,” he added. But Slater said he would refuse to speak to a potential client if that person had had previous contact with an attorney who had a history of pursuing tortious interference claims against other lawyers.
“We don’t need to go there,” he said.
Shalom Stone, representing the amicus State Bar, said Nostrame has no claim here because he has shown no proof that Mazie Slater acted improperly.
Stone, of Roseland’s Walder, Hayden & Brogan, said the bar’s goal was to ensure that a client’s fundamental right to choose his or her attorney remains unchanged.
“The solution here is not to give lawyers carte blanche” to either poach other lawyers’ clients or to file tortious interference claims, he said.
The only time tortious interference claims should be allowed to move ahead is if there are allegations of fraud or defamation, he said. •
Michael Booth is a reporter for the New Jersey Law Journal, a Legal affiliate.