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LaBracio Family Partnership v. 1239 Roosevelt Avenue

May 01, 2001

LABRACIO FAMILY PARTNERSHIP, PLAINTIFF,
v.
1239 ROOSEVELT AVENUE, INC. MICHAEL SEVDALIS, EVDOXIA SEVDALIS, DEFENDANTS/THIRD-PARTY PLAINTIFFS,
v.
GARY A. KROOP, GARY A. KROOP, P.A., DESMOND R. ABAZIA, DESMOND R. ABAZIA, P.C., 1239 ROOSEVELT AVENUE, INC., AND JOHN ZERVAS, THIRD-PARTY DEFENDANTS,
AND GARY A. KROOP, GARY A. KROOP, P.A., DESMOND R. ABAZIA, DESMOND R. ABAZIA, P.C., FOURTH-PARTY PLAINTIFFS-RESPONDENTS,
v.
MARTIN BURGER, FOURTH PARTY DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, L-4496-96.

Before Judges Pressler, Ciancia and Alley.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued April 3, 2001

In this legal malpractice action, Martin Burger, the fourth- party defendant, appeals from a January 3, 2000 order of Judge Bryan D. Garruto finding Burger negligent and allocating to him liability for twenty-five percent of a $275,000 settlement. We affirm.

These are the circumstances. Third-party plaintiffs Gary A. Kroop and Gary A. Kroop, P.A. (Kroop) represented Michael and Evdoxia Sevdalis (Sevdalises) in the sale of a diner in Carteret, New Jersey. Third-party plaintiffs Desmond Abazia and Desmond Abazia, P.C. (Abazia) represented the buyer, John Zervas (Zervas). The closing took place in September 1992.

As part of the purchase price, Zervas was to assume a first mortgage to a party named LaBracio, and the Sevdalises were to take back a purchase money mortgage for $500,000 which was to be secondary to the LaBracio mortgage of approximately $125,000. At the closing, Abazia took the deed and Sevdalis mortgage to record them. Abazia did not immediately record the deed and mortgage, allegedly because Zervas did not have the sufficient monies for the payment.*fn1

Zervas physically assaulted Abazia on November 23, 1992, and took the file, including the unrecorded Sevdalis mortgage. The mortgage remained unrecorded. By letter dated December 9, 1992, Abazia notified Kroop that Zervas had taken the file and that the Sevdalis mortgage remained unrecorded. Kroop responded with two letters dated December 15, 1992, one to Abazia and the other to Zervas. In his letter to Zervas, Kroop requested that his office be contacted immediately as to whether his client's mortgage remained unrecorded.

By letter dated December 18, 1992, Burger, who by then had become the lawyer for Zervas, wrote to Kroop stating in relevant part "... I have received the original Deed and Mortgage for recording ...." Burger, however, did not record the deed or mortgage and returned the unrecorded deed and mortgage to Zervas. After the return of the deed and mortgage, Zervas recorded the deed, but not the Sevdalis mortgage. When Kroop became aware the Servdalis mortgage was still unrecorded, he recorded it on November 3, 1993.

In the meantime, Zervas, through a corporation named 1239 Roosevelt Avenue, Inc., granted mortgages on the property to mortgagees who were unconnected to the Sevdalises. Those mortgagees recorded their mortgages in July 1993 and August 1993. These new mortgage liens took priority over the Sevdalis mortgage, which was not recorded until November 1993. Under our recording statute, N.J.S.A. 46:22-1, New Jersey is a "race notice" state, Lieberman v. Arzee Mid-State Supply Corp., 306 N.J. Super. 335, 341 (App. Div. 1997), generally according priority to those who record first without knowledge of earlier unrecorded conflicting claims and interests.

The Sevdalises commenced a legal malpractice action against Kroop and Abazia. The action eventually was settled pursuant to a consent judgment entered for $275,000 without allocation as to either Kroop or Abazia. All that was left was the fourth-party complaint made on behalf of Kroop and Abazia against Burger, which asserted that Burger was a joint tortfeasor liable for all or some of the settlement funds paid to the Sevdalises. See R. 4:8-1.

The remaining issue, then, was allocation of liability as among Kroop, Abazia and Burger. That issue was tried before Judge Garruto. Following trial, Judge Garruto found no dispute that the $275,000 was paid in accordance with the consent judgment on January 3, 2000, and allocated twenty-five percent of the liability to Burger, twenty-five percent to Abazia, and fifty percent to Kroop.

Burger contends in this appeal that the trial court "did not adequately address" the duty he allegedly owed and to whom the duty ran, that he had "no identifiable duty" to Sevdalis, Kroop, or Abazia, and that there was "no proximate cause between [his] actions" and the damages incurred. He further contends that the trial court's decision was against the weight of the evidence, failed to adequately consider the written submission and testimony of the experts, and ignored Abazia's testimony. Finally, ...


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