On appeal from the Superior Court of New Jersey, Law Division, Essex County, ESX-L- 9917-99.
Before Judges King, Cuff and Wecker.
The opinion of the court was delivered by: King, P.J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This is a professional malpractice action by a licensed public accountant brought against his former criminal defense attorney. The plaintiff claims his attorney's professional negligence caused him to plead guilty under oath to a federal misdemeanor charge: refusing to give information to the IRS in a tax investigation. We conclude that the plaintiff client cannot now seek in a civil action to renounce his federal conviction based on his guilty plea, which he has never otherwise attacked, and seek money damages for a wrongful conviction against his attorneys.
This is an appeal from a grant of summary judgment to defendants. On September 27, 1999 plaintiff Philip Alampi filed a professional malpractice complaint against defendants, his former attorney Albert Russo, Esq., and the law firm of Zager, Fuchs & Chianese, P.C. On May 1, 2000 the late Judge Mochary granted the defendants' motion for summary judgment, finding no genuine issue of material fact and the defendant was entitled to judgment because public policy precluded this action.
Plaintiff supplied accounting services to Dr. John Kelly and Dr. Michael Gentile in their medical practice, Family Care, in Bloomfield, Essex County. The record discloses that sometime between 1991 and 1993, Marie Pulio, an employee of Family Care, told plaintiff that checks which should have been deposited into the medical practice's operating account were missing.
Plaintiff spoke with Gentile about these supposedly missing checks. Plaintiff said Gentile told him to ignore Pulio's statement. Later Pulio told plaintiff of additional missing checks and that the operating account was overdrawn. Plaintiff again inquired but Gentile and Kelly gave him no information about the alleged missing deposits.
In July 1995, Kelly and Gentile told plaintiff they were being investigated by the IRS. Both Kelly and Gentile retained legal counsel. Plaintiff met with the doctors' attorneys and they advised him to retain his own attorney.
In August 1995 plaintiff hired defendant Russo and a meeting with the IRS was scheduled. At the beginning of the meeting, the IRS agents read plaintiff his Miranda warnings and Russo advised plaintiff not to answer any questions. In November 1995 Russo and the doctors' attorneys asked plaintiff to sign two documents: (1) a joint defense memorandum and agreement, dated November 15, 1995, and (2) an affidavit dated November 28, 1995 stating that plaintiff had made mistakes in preparing the taxes for Family Care, Kelly and Gentile. Plaintiff refused to sign either.
On December 20, 1995 Russo sent a letter to plaintiff explaining his situation and memorializing Russo's advice. In the letter, Russo stated, "the complexities of the case have changed in that the IRS is now including you in their investigation for potential criminal referral." Russo advised plaintiff to assert his Fifth Amendment privilege and not to discuss the case with the IRS without a grant of immunity. Russo at that time told plaintiff he had the option to provide the IRS with further information, but he advised against that course. His letter stated, "Agent Lessoff has clearly indicated to me that a mere denial by you of the factual allegations made against you will not convince him to discontinue his inquiries." Finally, Russo advised Alampi that he could seek the opinion of other counsel on how to proceed. Alampi discharged Russo and retained his present counsel.
On April 13, 1998 Alampi was indicted for violations of 18 U.S.C. § 371 (conspiracy to defraud by preparing false and fraudulent tax returns); 26 U.S.C. § 7203 (failure to supply information); and 26 U.S.C. § 7206(2) (fraud and false statements).
During trial, on August 4, 1998, Alampi pled guilty to a misdemeanor, one count of failing to supply information with regard to an IRS investigation in violation of 26 U.S.C. § 7203. The doctors were acquitted on August 7. On November 6, 1998 Alampi was sentenced to twelve months of unsupervised probation and a fine of $2000.
As noted, on September 27, 1999 Alampi filed this legal malpractice complaint for damages against the defendants. In rendering his decision, Judge Mochary stated that while there was no precedent in New Jersey on this public policy issue, he was persuaded by the Texas Supreme Court's reasoning in Peeler v. Hughes & Luce, 909 S.W.2d 494 (Tex. 1995) (4-3 decision). Judge Mochary granted defendant's motion for summary judgment because plaintiff pled guilty and was precluded as a matter of public policy from renouncing that plea and bringing a legal malpractice action.
We now consider the guilty plea entered under oath by plaintiff before United States District Court Judge Simandle on August 4, 1998. The entire guilty plea colloquy is reproduced as Appendix A to this opinion. Here we include only the most pertinent part of this meticulous and precise discourse conducted by Judge Simandle.
THE COURT [Judge Simandle]: All right. Then I'll ask these questions in order to determine whether there is a factual basis for accepting this plea.
First, did you provide accounting services to John Kelly, Michael Gentile and their medical practice, Family Care Medicenter, which is located in Bloomfield, New Jersey?
THE DEFENDANT: Yes, I did.
THE COURT: In or about July of 1995 did Dr. Kelly and Dr. Gentile tell you that they were in trouble with the IRS for a bank account that was missing from their tax returns?
THE COURT: Did they say that they would need you to say that you made a mistake?
THE COURT: Was it your understanding from your conversation with them that they wanted you to say that, that you had made a mistake even if you had not?
THE COURT: Later that same day, in or about July of 1995, were you interviewed by the IRS?
THE COURT: Did you fail to inform the IRS about the fact that the doctors wanted you to say that you made a mistake when you believed that you had not?
THE DEFENDANT: Yes, I did.
THE COURT: Am I correct that you believed that you had not made a mistake?
THE DEFENDANT: I didn't. I thought I was protecting my interests and everybody else's. I thought that was my duty at the time.
THE COURT: Did you also fail to inform the IRS about the information you possessed about missing checks and deposits related to the medical partnership?
THE DEFENDANT: I'm sorry.
THE COURT: Yes, did you fail to inform the Internal Revenue Service about the information you possessed about missing checks and deposits related to the medical partnership?
THE COURT: In doing so, did you assist Dr. Kelly and Dr. Gentile in their failure to supply information to the IRS as they were required to do under law?
THE DEFENDANT: Yes, I did.
THE COURT: Did you do so knowingly and willfully, that is, voluntarily and with the knowledge that by not disclosing the information that you had received you willfully assisted Dr. Kelly and Dr. Gentile in their failure to provide information required by law?
THE COURT: Mr. Pollack [Assistant United States Attorney], do you believe also that there's a factual basis?
MR. POLLACK: Yes, I do, your Honor. [Emphasis added.]
At the time of this meticulously conducted proceeding during which plaintiff pled guilty to a federal crime before Judge Simandle, he was represented by Walter Weir, Esq., his present counsel in this professional liability action. Plaintiff neither appealed from this conviction nor sought to ...