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Deutch & Shur, P.C. v. Roth

March 3, 1995

DEUTCH & SHUR, P.C. A PROFESSIONAL CORPORATION, PLAINTIFF
v.
EDWIN ROTH, DEFENDANT.



Longhi, A.j.s.c.

The opinion of the court was delivered by: Longhi

LONGHI, A.J.S.C.

This is a motion made pursuant to the Frivolous Litigation Statute, N.J.S.A. 2A:15-59.1. Plaintiffs Deutch & Shur, P.C. seek to recover fees and costs incurred in defending a counterclaim for legal malpractice brought by defendant Edwin Roth, a former client. No one has responded or appeared on behalf of the defendant Edwin Roth with regard to this motion.

Deutch & Shur represented Mr. Roth in a claim for insurance proceeds arising from an explosion that destroyed his house. The policy required that Roth submit to an oral proof-of-loss examination under oath. Pursuant to the terms of the insurance policy any misrepresentation by the insured precludes coverage. During the examination, Roth was asked if he had ever been charged with or convicted of a crime. Defendant testified that he had never been arrested or convicted of a crime. *fn1 In fact, he had been indicted on thirty-five counts of insurance fraud and convicted on four. The trial court found that defendant lied at the proof-of-loss examination when he testified under oath that he had never been charged with or convicted of a crime and entered summary judgment against defendant in the insurance claim. The grant of summary judgment was upheld in the Appellate Division.

Subsequently, plaintiffs sought to collect legal fees due and owing from its representation of Roth in the insurance claim. In May of 1992, plaintiffs notified defendant of the fee arbitration option. *fn2 Defendant did not exercise this option. As a result, plaintiffs, acting pro se, commenced an action in October of 1992 to recover legal fees. Defendant did not appear or answer the complaint. Ultimately, default judgment was entered in plaintiffs' favor for $10,970.68. A Writ of Execution was issued and a levy was effected on defendant's airplane in January of 1993.

In February of 1993, defendant successfully moved to have the judgment vacated. Defendant then filed an answer and counterclaim alleging legal malpractice. Roth alleged that he did not understand the question posed to him regarding prior charges and convictions and that plaintiffs had failed to adequately assert this point in opposition to the summary judgment motion. Specifically, it was asserted that the plaintiffs knew about and failed to utilize information possessed by Jack Gold, Esq., the defendant's attorney in the prior criminal matter, which would have raised a factual issue and precluded entry of summary judgment against the defendant in the underlying insurance matter. In support of the counterclaim, defendant submitted a certification from Gold. Gold, under oath, said that "during the pendency of those charges we had numerous Discussions wherein Mr. Roth became aware of the maximum fines and penalties... assuming conviction." Nonetheless, Mr. Gold also certified, "I really believe that Mr. Roth didn't think he was convicted of a crime ...". It was Roth's contention that Deutch & Shur had an obligation to utilize this information to place into question whether Roth knew he had been charged with or convicted of a crime.

In January of 1994, this court found that "nobody in the world would believe" defendant's assertion that he did not know he was charged with or convicted of a crime, and granted plaintiff's motion to strike defendant's legal malpractice claim for failure to state a claim upon which relief can be granted. In an opinion from the bench, this court said:

He was indicted, 35 counts.... The very document that he wants to rely on to support his claim for legal malpractice and to support his defense of this motion tells me that the lawyer sat down and explained to him all 35 counts, what the charges were, what the maximum penalties were and what the maximum fines were.

...

If that doesn't tell [the defendant] that he was charged with a crime, that he got away with a bigger crime and found guilty of a lesser crime, I don't know what it is.

...

If he tells me that he didn't understand that the was charged with or convicted of a crime] ... that is so unworthy of belief that it's not worth giving it any credibility at all as a matter of law.

Additionally summary judgment was entered in plaintiff's favor on its own claim. Plaintiff was awarded $10,970.68, the same amount as had been awarded in the default judgment nine months prior. The Appellate Division, in an unreported decision, upheld this court's Disposition of the claim and counterclaim, saying the following in regard to the counterclaim:

The counterclaim in the present matter asserts malpractice only by way of failure to present the Gold materials on the question of Roth's understanding of whether he had been "convicted." The relevant inquiry was, as recognized by the motion Judge, whether Roth misrepresented that he had never been charged with a crime Gold's certification is more than unhelpful to Roth, it is irremediably damning in that it ...


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