A New Jersey appellate court recently held that an attorney could not maintain a claim of tortious interference with contractual relations against another law firm after his client discharged him and entered into a contingent fee agreement with a new law firm. Nostrame v. Santiago, 2011 WL 2297726 (N.J. Super. Ct. App. Div. June 10, 2011).
The plaintiff, Frank Nostrame, represented Natividad Santiago for approximately six months in preparing and filing a medical malpractice lawsuit. However, shortly after Mr. Nostrame filed the complaint, Ms. Santiago discharged Mr. Nostrame and entered into a contingency fee agreement with the defendant law firm, Mazie, Slater, Katz and Freeman, LLC (“Mazie Slater”). Mazie Slater subsequently negotiated a settlement payment of $1,200,000 for Ms. Santiago.
Mr. Nostrame filed suit alleging tortious interference with contractual relations against Mazie Slater, claiming that Ms. Santiago “was induced to discharge [him] and dissolve the contingent fee contract between them by [Mazie Slater].” In examining this claim, the Court first recognized that “a contract between an attorney and client is a contract that is ‘terminable at will’”. Nostrame, 2011 WL 2297726,*3. Because a party to a terminable at will contract has no legal assurance of future relations with the other party, the Court found that “this interest is closely analogous to interference with prospective contractual relations.” Id. Further, “[i[f the defendant was a competitor regarding the business involved in the contract, his interference with the contract may be not improper.” Id.
Applying this general analysis to the facts of this case, the Court determined that the contract that Mazie Slater allegedly interfered with “concern[ed] a matter involved in the competition between [Mazie Slater] and [plaintiff]”, in that both Mr. Nostrame and Mazie Slater represent clients in medical malpractice actions. Id. at *4. Furthermore, the Court Mr. Nostrame did not allege that Mazie Slater employed any wrongful means, such as fraud or defamation, to induce Ms. Santiago to discharge him, and Ms. Santiago’s discharge of Mr. Nostrame would not create “unlawful restraint of trade.” Id. Mazie Slater was simply competing in its own self interest for Ms. Santiago’s case. Id. As a result, the Court determined that Mr. Nostrame did not state a claim for tortious interference with contractual relations.
The Court found its holding to be reinforced by a “client’s freedom of choice” in an attorney-client relationship, which is a “paramount interest.” Id. at *5. In citing to the New Jersey Supreme Court, it held that the courts should not recognize a cause of action for tortious interference with a contract between an attorney and client that could impede that freedom of choice unless the alleged interference involves wrongful means, such as fraud or defamation. Id. at *5.
Benjamin Fink is known for his work in noncompete, trade secret and competition-related disputes. A shareholder at Berman Fink Van Horn, Ben concentrates his practice in business and employment litigation.