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Sommers v. McKinney

January 26, 1996

EVELYN Z. SOMMERS, PLAINTIFF-APPELLANT,
v.
THOMAS A. MCKINNEY, DAVID WALDMAN, MICHAEL O. RENDA AND CITIZENS FIRST NATIONAL BANK OF NEW JERSEY, A BANKING CORPORATION OF THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS.



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

Approved for Publication January 26, 1996.

Before Judges Dreier, A.m. Stein and Cuff. The opinion of the court was delivered by Cuff, J.A.D.

The opinion of the court was delivered by: Cuff

The opinion of the court was delivered by CUFF, J.A.D.

In this action for legal malpractice and fraud, plaintiff Evelyn Sommers appeals from separate orders which granted summary judgment in favor of all defendants. This appeal has its roots in prior litigation between plaintiff and her former municipal employer. Plaintiff Evelyn Sommers appeals from the dismissal of her complaint which asserted claims of legal malpractice and fraud against defendant Thomas A. McKinney, and his law partners, David Waldman and Michael O. Renda, and negligence and fraud against defendant Citizens First National Bank of New Jersey. Because defendant bank concedes that it improperly negotiated the settlement check without all necessary endorsements, and because plaintiff demonstrated that there are genuine issues of material fact concerning breach of the duties owed to her by her attorney, and in this case expert testimony is not required to establish the duty owed to her by her attorney, we reverse and remand for further proceedings consistent with this opinion.

In 1984, plaintiff was appointed tax assessor of the Borough of Dumont for a four-year term. When her term expired on June 30, 1988, she continued to work, despite disputes concerning her hours and rate of pay. However, when her pay was cut, she commenced a prerogative writ action to affirm her tenured status and to recover back pay.

She was represented by another law firm in that action until that firm recommended that she accept the Borough's "final" settlement offer. Pursuant to the terms of that offer, the Borough was prepared to acknowledge her tenured status and pay $19,375 in back pay. Plaintiff sought a second opinion from defendant McKinney, and on the strength of McKinney's advice that she was entitled to tenure as a matter of law and additional back pay, she discharged her initial attorney and retained McKinney. Approximately six months later, the matter was settled during trial. Plaintiff received $40,000 but she surrendered her claim for tenure.

When plaintiff retained McKinney, she paid a $3,500 retainer. Plaintiff claims that the money was to be held in trust, and McKinney could draw against this fund only after plaintiff received and approved a monthly itemized bill. It is undisputed that no bills were submitted. However, four days after the settlement was placed on the record she was presented with a bill for services. The total bill for services was $14,164 less the $3,500 retainer plus $2,544.30 for legal services due her former lawyer. The outstanding balance was $10,664.

Plaintiff asserts that she visited McKinney on February 14, 1991, to review the file and contest the bill. On February 15, 1991, plaintiff presented McKinney with a letter in which she informed him that the bill was in dispute and directed him to contact her when the settlement funds were received.

Despite this notice, McKinney did not notify plaintiff when he received the settlement check on February 21, 1991. The check, made payable to "E. Sommers and T.A. McKinney Attorney Trust Account" was deposited by McKinney with his sole endorsement. Defendant bank accepted the check, although it lacked plaintiff's endorsement.

McKinney withdrew his fee and sent a check to plaintiff for $26,791.70. Plaintiff objected to McKinney concerning his action and protested to defendant bank. On March 15, 1991, McKinney sent a letter to plaintiff in which he offered to place the disputed fee in a trust account if plaintiff returned the funds disbursed to her. Plaintiff not only objected to McKinney concerning his suggested solution but also filed a complaint with the Fee Arbitration Committee. Recognizing that this committee could not address the ethical issue raised by McKinney's action, she withdrew the fee complaint and filed a complaint with the District Ethics Committee. McKinney was eventually publicly reprimanded for his conduct. See Matter of McKinney, 139 N.J. 388, 655 A.2d 71 (1995). The Supreme Court also referred the fee dispute to arbitration.

Meanwhile, plaintiff commenced this action pro se against McKinney, his law partners, and the bank. The gravamen of her complaint against McKinney lies in his handling of her case against the Borough of Dumont and McKinney's subsequent mishandling of the settlement proceeds. Her complaint against McKinney's law partners is founded on their relationship to him and their failure to intercede and rectify the situation. Her complaint against the bank centers on their acceptance of the check despite the absence of the requisite endorsements, contrary to the law governing instruments payable to two or more persons. See N.J.S.A. 12A:3-116(b).

On March 4, 1994, plaintiff's complaint for legal malpractice against McKinney and his law partners was dismissed on their motion for summary judgment predicated on plaintiff's failure to file an expert report. In an opinion dated September 15, 1994, another Judge dismissed the remaining counts which asserted intentional, unethical, criminal and fraudulent conduct against McKinney and his partners for which plaintiff sought punitive damages. Having previously refused to disturb a summary judgment order which had dismissed the legal malpractice claims, the motion Judge characterized the remaining claims against McKinney and his partners as "a fee dispute and nothing more." The motion Judge also granted summary judgment in favor of the bank finding that plaintiff had failed to show that the bank did anything "willfully, wantonly or intentionally ... to harm the plaintiff."

The legal malpractice claim against McKinney flows from his representation of her in the Sommers v. Dumont litigation. She alleges that 1) the case was inadequately prepared, 2) McKinney failed to communicate more favorable settlement offers to her, and 3) McKinney misrepresented Discussions in chambers regarding the extent of Dumont's proofs on the tenure issue. Plaintiff asserts that these acts by McKinney not only violated his obligations to her but also induced her to accept a less advantageous settlement. This claim was dismissed for want of an ...


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