In Estate of Mendonca v. DaSilva, Docket No. A3515-11T2 (App. Div. Feb. 22, 2013), the decedent, Ricardo Mendonca died intestate as a result of an automobile accident. His only heir was his minor son, who lived with his mother in Brazil.
Unbeknownst to the minor child’s mother, the decedent’s other family members had filed a wrongful death claim in Maryland against the vehicle’s insurer, which paid out its policy limits to those family members.
The mother then retained a law firm to file a wrongful death lawsuit in New Jersey. Although liability was clear, the driver’s insurance company resisted paying out its policy limits a second time.
Following motions and negotiations, the insurance company agreed to make the second policy limit payment to Mendonca’s estate, for the benefit of the minor child. At the “friendly” settlement hearing, the law firm sought, without objection, payment of its 33 1/3% contingent fee, consistent with the retainer agreement. However, the judge reduced that rate to 25% pursuant to R. 1:21-7, because the only beneficiary was a minor, and declined to apply an enhanced fee under R. 1:21-7(f).
The Appellate Division affirmed. It found that enhanced fees were not applicable and that the contingent fee should be reduced because, although the client was the Estate, the only beneficiary was a minor child:
where the exclusive distribution is to minors or mentally incapacitated individuals, we find that for all intents and purposes, the wrongful death action was settled on behalf of, and the amount was recovered for, that class of persons within the intendment of the contingent fee reduction provision of R. 1:21-7(c)(6). We find such an interpretation better serves the underlying rationale for the 25% limitation which, obviously, is to preserve a greater recovery for such persons.
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