On appeal from Superior Court, Law Division, Somerset County.
Lynch, Bischoff and Kole. The opinion of the court was delivered by Kole, J.A.D.
Defendants, who are attorneys, were sued for malpractice. Plaintiff, a passenger in a car owned and operated by Joseph DePoe, was injured when the car was involved in an accident. For the purpose of this appeal, we consider that the only negligent party was DePoe.*fn1 The malpractice claim was predicated on defendants' failure to file a complaint within the period of the statute of limitations. It was stipulated that DePoe was uninsured and had no assets at the time of the accident or at the date the motion was argued, had an income that did not exceed $45 a week and had been in and out of jail on a number of occasions. Prior to trial both parties consented that the issue here involved be decided as if a motion for summary judgment had been made by defendants. The trial judge denied the motion and held, contrary to defendants' contention, that their liability was not limited to the maximum amount (then $10,000) set forth in the statute relating to the Unsatisfied Claim and Judgment Fund (the Fund). Defendants appeal.*fn2
The trial judge ruled that, assuming plaintiff would have obtained a judgment against DePoe, in no event would the damages collectible against the attorneys be limited to the maximum recoverable against the Fund, notwithstanding DePoe's obviously weak financial status at the time of the accident or thereafter. He stated that, had the case been tried before a jury, he would not have submitted the issue of collectibility of a judgment against DePoe, or the extent thereof, for the following reasons: (1) the judgment would
be viable for a period of at least 20 years; (2) during that period, by reason of financial success, inheritance or other means, DePoe might have acquired sufficient assets to pay in full the total amount of the judgment that the jury might have awarded against him; and (3) to ask the jury to determine the future with respect to DePoe's likelihood of acquiring assets or otherwise being able to pay the judgment against him would be to require it to indulge in sheer speculation. For these reasons, he determined in advance of the trial that the judgment should not be limited to the $10,000 that plaintiff might have recovered from the Fund.
We affirm the denial of the summary judgment, but hold that the ruling of the court was premature. It should have awaited an appropriate time during trial.
Defendants claimed below, as it is also contended here, that plaintiff's rights to recover must be limited to the $10,000 which he would have received from the Fund had the matter actually been placed in suit and judgment been recovered against DePoe, and that the limitation of DePoe's assets and the extent of his solvency at the time of the accident or the malpractice action must be considered in determining the damages to which plaintiff is entitled in the malpractice action. The argument is that to the extent that any judgment against DePoe would be uncollectible, the damages suffered by plaintiff would not have been proximately caused by defendants' malpractice. To hold otherwise, it is argued, would put plaintiff in a better position by reason of his succeeding in the malpractice action than he would have been in had his claim against DePoe been properly pursued by defendants.
An attorney's duty to his client requires him to exercise the knowledge, skill and ability ordinarily possessed and exercised by members of the legal profession similarly situated. He is bound to exercise a reasonable degree of care and prudence, having reference to the character of the service he undertakes to perform. Failure to file suit before the
running of the period of the statute of limitations plainly constitutes malpractice where there is no reasonable justification shown therefor. Passante v. Yormark , 138 N.J. Super. 233, 238-239 (App. Div. 1975), certif. den. 70 N.J. 144 (1976). For the purpose of the motion here involved, defendants admit their negligence in this respect.
The attorney is responsible for the loss proximately caused the client by his negligence. Passanante v. Yormark, supra. The measure of that loss or the amount of damages recoverable against an attorney for such malpractice necessarily depends upon the nature of his undertaking for the client.
If his negligence consists of failing to discover a lien in connection with a search of real estate title, then the damage recoverable is the amount of the lien. Bayerl v. Smyth , 117 N.J.L. 412 (E. & A. 1937); Jacobsen v. Peterson , 91 N.J.L. 404 (S. Ct. 1918), aff'd 92 N.J.L. 631 (E. & A. 1918). See also French v. Armstrong , 80 N.J.L. 152 (S. Ct. 1910). If the attorney is retained to give legal advice, is negligent in that respect and the client pays money to others as a result thereof, he is responsible to the client for the full amount paid, even though the client may have an action for damages against another in connection with the transaction involved. Fabry v. Jay , 104 N.J.L. 617 (E. & A. 1928). If he is negligent in preparing a chattel mortgage so that it later is found to be invalid in a bankruptcy proceeding involving the mortgagor, he is ...