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R.J. Longo Construction Co. v. Schragger

Decided: June 3, 1987.

R.J. LONGO CONSTRUCTION CO., INC., A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF-APPELLANT,
v.
BRUCE M. SCHRAGGER, ESQ., AND SCHRAGGER, SCHRAGGER & LAVINE, A PROFESSIONAL CORPORATION, JOINTLY AND SEVERALLY, DEFENDANTS-RESPONDENTS



On appeal from Superior Court of New Jersey, Law Division, Passaic County.

J. H. Coleman, R. S. Cohen and Gruccio. The opinion of the court was delivered by Coleman, J.h., J.A.D.

Coleman

The critical issue raised in this appeal is whether an attorney for a municipality who prepares contract documents to be used by the public in the bidding process for construction of a sewer facility may be held liable to the successful bidder for economic losses due to the negligent failure adequately to draft the contract or for the negligent failure to obtain easement rights of way on behalf of the municipality.

The Township of West Windsor (Township) requested public bids for constructing a sewerage facility. Defendants, as attorneys for the Township, prepared the contract documents used in the bidding process. After plaintiff's bid was accepted, defendants drafted the contract. Plaintiff began the construction work after the Township notified it to proceed. Plaintiff ran into a problem when the Township failed to obtain the

necessary easement rights of way for the sewer system. Plaintiff instituted the present action against the defendants alleging, among other things, that defendants as Township attorneys negligently permitted plaintiff to begin construction work without the easements necessary for completion, contrary to explicit language in the contract. On defendants motion, the trial judge dismissed the complaint for failure to state a cause of action. Plaintiff appeals; we now reverse in part and affirm in part.

Section 28 of the contract entitled "LAND AND RIGHTS-OF-WAY" provides:

28.1 Prior of issuance of notice to proceed, the owner shall obtain all land and rights of way necessary for carrying out and for the completion of the work to be performed pursuant to the contract documents unless otherwise mutually agreed. (Emphasis added)

In discovery taken in a companion case, defendants have admitted that, as Township attorneys, they were responsible for obtaining the easements which they failed to obtain, and they allowed the Township to give notice to plaintiff to begin the work before the easements were obtained.

In dismissing the complaint for failure to state a cause of action, see R. 4:6-2, the trial judge based his decision on the failure of the complaint to allege the existence of an attorney-client relationship between plaintiff and defendants or the existence of a fiduciary relationship between plaintiff and defendants. Plaintiff argues in this appeal that defendants owed a duty to use reasonable knowledge and skill not merely to their clients, but to all persons who reasonably could have been expected to rely on them or their skills.

Ordinarily, the existence of an attorney-client relationship is an essential element of a legal malpractice claim. Tormo v. Yormark, 398 F. Supp. 1159, 1169-1173 (D.N.J.1975). As a general rule, the attorney's duty of care springs from the hiring contract and only parties in privity are owed a duty. However, the need to establish privity by third parties in claims against a professional, such as an attorney, or indeed in the

field of tort liability, may have outlived its usefulness. See People Exp. Airlines, Inc. v. Consolidated Rail, 100 N.J. 246, 251-264 (1985); H. Rosenblum, Inc. v. Adler, 93 N.J. 324, 334-339 (1983); Immerman v. Ostertag, 83 N.J. Super. 364, 369-370 (Law Div.1964), aff'd sub nom. Com. Un. Ins. Co. of N.Y. v. Thomas-Aitken Const. Co. et al., 54 N.J. 76, 81 (1969); McEvoy v. Helikson, 277 Or. 781, 562 P. 2d 540 (1977); Martin v. Trevino, 578 S.W. 2d 763 (Tex.Civ.App.1978). For present purposes, however, we need not take that giant step of eliminating privity today because we find the dismissal was inappropriate under existing law. We have heretofore held that even absent an attorney-client relationship, an attorney "owes a ...


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