Brach, Eichler, Rosenberg, Silver, Bernstein, Hammer & Gladstone, PC v. Ezekwo, 345 N.J. Super. 1 (App. Div. 2001) [October 22, 2001]:

The offer of judgment rule and, in particular, R. 4:58-2, “consequences of non-acceptance of claimant’s offer,” provided in pertinent part:

If the offer of a claimant is not accepted and the claimant obtains a verdict or determination at least as favorable as the rejected offer, the claimant shall be allowed, in addition to costs of the suit, eight percent interest on the amount of any money recovery from the date of the offer or the date of completion of discovery, whichever is later, and also a reasonable attorney’s fee, which shall belong to the client, for such subsequent services as are compelled by the non-acceptance.

The offer-of-judgment rule is “designed particularly as a mechanism to encourage, promote, and stimulate early out-of-court settlement of negligence and unliquidated damages claims that in justice and reason ought to be settled without trial.” Crudup v. Marrero, 57 N.J. 353, 357 (1971). Consistent with this purpose, the rule imposes financial consequences on a party who rejects a settlement offer that turns out to be more favorable than the ultimate judgment.

Two New Jersey trial courts have considered the right of an attorney representing himself pro se to receive attorney’s fees, not under the offer of judgment rule but under the frivolous litigation statute and its provision for awarding attorney’s fees to the successful party. N.J.S.A. 2A:15-59.1(c). These courts reached opposite conclusions. In Asaadi v. Meltzer, 280 N.J.Super. 68 (Law Div.1994), the court held that an attorney representing himself pro se was not entitled to attorney’s fees. In Deutch & Shur, P.C. v. Roth, 284 N.J.Super. 133 (Law Div. 1995), however, the court rejected the Asaadi analysis and held that the prevailing pro se attorney was entitled to recover reasonable attorney’s fees.

In Asaadi, the court interpreted the frivolous litigation statute to require that monies actually be paid out to an attorney in order for the pro se litigant to recover attorney’s fees. The court concluded that a pro se attorney who did not in fact incur attorney’s fees could not recover for the value of the time spent by that attorney in defending a frivolous claim.

Deutch & Shur, in refusing to follow Asaadi, concluded that the purposes of the frivolous litigation statute militated in favor of an award of attorney’s fees to a pro se attorney. The court there reasoned that the legislature had merely failed to consider the possibility of a pro se attorney representing himself in the litigation at the time that it drafted the legislation. The court appropriately pointed to the punitive purpose of the statute to deter frivolous litigation and the absence of any reason why the Legislature would distinguish between pro se attorney litigants and those represented by attorney.

The Appellate Division was persuaded that under the frivolous litigation statute, Deutch & Shur represents the sounder view.

In the event of frivolous litigation, R. 1:4-8 makes a “pro se party” responsible for certain sanctions. R. 1:4-8(a); see Pressler, Current N.J. Court Rules, comment (g) to R. 1:4-8 (2002).

The purposes of frivolous litigation sanctions and of the imposition of costs for failure to accept an offer of judgment are not identical. Sanctionable frivolous litigation has no justification, and the deterrent should be strong. The need for a forceful deterrent for declining a settlement offer, while considerable, is not as compelling. One may act in complete good faith and with sound reasons when rejecting a settlement offer, yet be surprised by a trial’s outcome and exposed to R. 4:58-2 sanctions.

One standard definition of an “attorney” is, “[s]trictly, one who is designated to transact business for another; a legal agent….” Black’s Law Dictionary (7th ed.1999). Here, however, Brach Eichler was not acting for another but for itself.

The source Rule was “intended as a procedural mechanism to facilitate the settlement of cases.” Pressler, Current N.J. Court Rules, comment to R. 4:58 (2002); see also, Crudup v. Marrero, supra, 57 N.J. at 361, 273 A.2d 16. The present form of the Rule has carried forward that original purpose. In our view, the Rule’s purpose would best be fulfilled in these circumstances by allowing the pro se attorney to recover attorney’s fees under R. 4:58-2. The provision in that rule that the fee award “shall belong to the client …” does not preclude this result. All it means is that Brach Eichler, which was it own client, as the client gets to keep the fees awarded. Thus, when a pro se litigant is a law firm earning its income from the private practice of law, we see no reason why, for purposes of R. 4:58-2, that firm should not be entitled to the recovery of attorney’s fees under the offer of judgment rule for the reasonable value of the time expended by the firm when it is compelled to proceed to trial. We quote the rationale expressed in Deutch & Shur, supra:

An attorney representing himself expends time. The old adage that “Time is money” has no greater validity than in an attorney’s world. The time spent by an attorney defending a frivolous claim could have been spent working on a matter for a paying client.

[284 N.J.Super. at 141-142.]

This rationale likewise applies when the attorney has had to spend time unnecessarily presenting a meritorious claim that should have been settled under R. 4:58-2 and that an award of counsel fees to the pro se law firm pursuant to that Rule is clearly appropriate in the circumstances of this case. The court thus upheld the award of attorney’s fees to plaintiff for the reasonable value of the time the firm expended during trial as a consequence of defendant’s non-acceptance of the settlement offer.

BUT, see: ALPERT, GOLDBERG, BUTLER, NORTON & WEISS, PC v. Quinn, App. Div., A-5503-07T2, November 24, 2009: An attorney appearing pro se is not entitled to fees unless they are actually incurred as opposed to imputed.

NOTE: Adwokat / Prawnik Pawel Kostro mowi po polsku.

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