On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L- 2879-99.
Before Judges A. A. Rodríguez, Wells and Payne
The opinion of the court was delivered by: Wells, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
We address in this appeal from a judgment dismissing a legal malpractice action, the issue of whether and to what extent, if any, an attorney may limit the scope of his representation of a matrimonial client in reviewing a mediated property settlement agreement (PSA).
The circumstances out of which the appeal arises are undisputed. The plaintiff, Lynne C. Lerner, was married to Michael H. Lerner in November 1969 and had been married to him 24 years when he filed an action for divorce in 1994. The couple had two children, a son and a daughter, born in 1974 and 1976. Michael contacted a New York lawyer, Brett Meyer, who represented him and his company in New York, but who also was a friend of the family and trusted by Lynne, to mediate a PSA. The couple had amassed a considerable fortune.
Meyer mediated over several sessions as the result of which a comprehensive, written PSA emerged. He then gave Lynne a list of New Jersey attorneys to consult prior to signing the agreement. That list, in turn, had been given to Meyer by James Andrews, a New Jersey attorney who would represent Michael in the divorce proceedings. While the record does not disclose whether Andrews alerted everyone on the list, he did alert the defendant, William Laufer, that Lynne might call, and on January 26, 1994, sent him a draft of the mediated PSA. Lynne selected Laufer of the firm of Courter, Kobert, Laufer, Purcell & Cohen, P.C. (CKLP&C) from the list. Laufer was an experienced matrimonial attorney and held himself out as a specialist in the field.
On January 28, 1994, Lynne and Laufer spoke by telephone.
On February 2, 1994, the first time that Lynne and Laufer met in person, Laufer produced a two-page letter, dated that day, for Lynne to consider. While the letter is of some length, its importance to this case is such that we reproduce it in full: *fn1
This letter will confirm that you have retained my law firm for the purpose of reviewing a Property Settlement Agreement that was the product of divorce mediation conducted by Mr. Brett J. Meyer, an Attorney at Law of the State of New York.
This letter will further confirm that I have not conducted any discovery in this matter on your behalf. I have not reviewed income tax returns or other financial documentation to confirm or verify your husband's income for the past several years. I have no information concerning the gross and net values of the properties in Summit, Belmar, Teluride, Colorado or Short Hills, New Jersey. I have seen no information concerning the value of the stock in Marisa Christina, Inc. or the other corporations referred to on Page 10 of the Property Settlement Agreement. In addition, I have not had the opportunity to review any documentation concerning the respective incomes, assets, liabilities or other financial information in your case.
Based upon the fact that I have not had an opportunity to conduct full and complete discovery in this matter, including but not limited to appraisals of real estate and business interests, depositions and interrogatories, I am not in a position to advise you as to whether or not the Agreement is fair and equitable and whether or not you should execute the Agreement as prepared. Accordingly, it is difficult for me to make a recommendation as to whether you should accept the sum of $500,000.00 and 15% of the stock that the two of you have acquired during the marriage in consideration for waiving your right to 85% of the stock that was acquired during the marriage.
In sum, I am not in a position to make a recommendation or determination that the Property Settlement Agreement as prepared represents a fair and reasonable compromise of the issues concerning equitable distribution or whether the amount of alimony and/or child support that you will receive under the terms of the Agreement is an amount that would be awarded to you if, in fact, this matter proceeded to trial.
This letter will confirm that I have reviewed and suggested various modifications to the Property Settlement Agreement to the mediator. I have discussed the contents of the Agreement with you, and in your opinion you are satisfied that the Agreement represents a fair and reasonable compromise of all issues arising from the marital relationship. You have indicated to me that you are entering into the Agreement freely and voluntarily and that you have been satisfied with the services of the mediator in this matter. You have further indicated to me that the Agreement will be providing you with a substantial amount of assets in excess of Three Million Dollars, and that you will be receiving alimony payments as specifically set forth in Paragraph 5 of the Property Settlement Agreement.
After reviewing the Agreement with you and Mr. Meyer, I am satisfied that you understand the terms and conditions of the Agreement; that you feel that you are receiving a fair and equitable amount of the assets that were acquired during the marriage; and that the amount of support 4
that is provided in the Agreement will, in fact, provide you with an income that will allow you to maintain a respectable lifestyle.
This letter will also confirm that you are accepting my services based upon the representations specifically set forth above and that under no circumstances will you now or in the future be asserting any claims against me or my firm arising from the negotiation or execution of your Property Settlement Agreement.
Thank you for the opportunity to be of service to you in this matter, and if I can be of any future assistance, please do not hesitate to contact me.
Lynne read and signed the letter. She and Laufer then conferenced for about an hour, during which time each term of the mediated PSA was read and discussed. In addition, they discussed the value of the couple's interest in Marisa Christina, a very valuable company doing business in New York. Thereupon, a four-way conference ensued between Lynne, Laufer, Michael and Andrews, and the PSA was executed.
Five days later, on February 7, 1994, a standard retainer agreement issued from Laufer's office to Lynne, which she signed and returned. It provided in part:
The legal services which I anticipate will be rendered to you will involve legal research and factual investigation as to (i) assets which you owned at the time you were married, assets which were acquired over the course of the marriage; (ii) income and your ability/need for support; (iii) grounds for divorce; (iv) custody and visitation, and (v) payment of counsel fees and costs.
The retainer agreement also provided that the plaintiff:
will have the benefit of my [defendants'] advice and my prediction of the likely results if the matter were not settled, and were instead submitted for judicial resolution.
On April 11, 1994, an uncontested divorce proceeding took place before Judge Glickman. Lynne was represented by William Laufer and Michael by James Andrews. The cause of action proved was sexual desertion. Regarding the PSA, the following colloquy occurred between Lynne and Laufer on her direct examination:
Q: Now isn't it a fact that this agreement that is quite extensive and deals with the substantial amount of assets and provides you with substantial amount of alimony was the product of a mediation process that took place with Mr. [Brett] Meyer, an attorney in New York; is that correct?
Q: And Mr. Meyer was an attorney, basically, that you and your husband had contacted and worked with before you even contacted me or, I believe before you [sic] husband even contacted Mr. Andrews; isn't that correct?
Q: And this matter was submitted to us in the -- pretty much in the form of an agreement; isn't that correct?
Q: Now, after you met with me there were several modifications to that agreement; isn't that true?
Q: But the basis of the agreement was - was the result of a mediation with Mr. Meyer; isn't that correct?
Q: And in fact, I had you execute a letter back in February of 1994 pretty much explaining my participation in this case; more specifically, that I had not been involved in any major discovery proceedings; isn't that correct?
Q: In other words, when you came to see me and you signed the letter that I gave to you, basically there was a waiver of appraisals on houses, appraisal on the business in New York, and really the review of tax ...