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Selective Ins. Co. of America v. Ronzo

Decided: February 10, 1992.

SELECTIVE INSURANCE CO. OF AMERICA, PLAINTIFF-APPELLANT,
v.
JOHN A. RONZO, LORBER, SCHNEIDER, NUZZI, VICHNESS & BILINKAS, AND THOMAS W. GATTIS, DEFENDANTS-RESPONDENTS



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

Gaulkin, Brody and Muir, Jr. The opinion of the court was delivered by Brody, J.A.D.

Brody

BRODY, J.A.D.

Plaintiff is a workers' compensation insurance carrier. Defendant John Ronzo, one of its insured's workers, sustained a compensable injury in an accident with defendant Thomas Gattis.*fn1 Defendant Charles Lorber, Esq. (defendant), is an attorney who represented Ronzo in a third-party liability action against Gattis. That action settled for $37,500, which defendant disbursed to Ronzo without reimbursing plaintiff for the workers' compensation benefits that it had paid. Ronzo did not

thereafter reimburse plaintiff and he died insolvent. Although plaintiff had perfected a lien against Gattis in the amount of $3,235.52 for the reimbursement, it sought judgment only against defendant, whom it considered to be ultimately liable.

The case was tried without a jury. The evidence consisted of a stipulation of facts and defendant's testimony. The trial Judge found that although defendant had known before he disbursed the settlement proceeds that plaintiff held a lien against Gattis for reimbursement, he did not then know the amount of the lien. He held that defendant was therefore not liable to plaintiff.

The parties stipulated that plaintiff's office records contain the following entry made before the proceeds were disbursed:

Called claimant's attorney. Talked to Myra. Advised her of the amount of our lien.

Defendant acknowledged that Myra is a secretary in his office "involved with negligence files." When asked whether Myra ever told him the amount of plaintiff's lien, defendant testified, "I don't believe she ever told me that."*fn2

Plaintiff argues in this appeal that the trial Judge should have held that defendant is liable for the reimbursement because he or his office knew of the lien before he made the disbursement to his client. We disagree. Unless defendant owed plaintiff a fiduciary duty, he is not liable for failing to reimburse plaintiff from the proceeds of the settlement. In In re Gioia, 91 N.J. 378, 450 A.2d 1328 (1982), an attorney was disciplined who disbursed part of a PIP settlement directly to his client's medical doctor to pay the doctor's fee. The attorney had deducted a portion of what was due the doctor as his own fee even though he did not represent the doctor. The Court held that it was unethical for the attorney to have charged the doctor a legal fee, and said that the attorney "could have

avoided this situation by forwarding the entire balance of the settlement directly to his client." Id. at 380, 450 A.2d 1328. Without more, an attorney who simply knows of a client's debt has no duty ...


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