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Port-O-San Corp. v. Teamsters Local Union No. 863 Welfare & Pension Funds

October 27, 2003


On appeal from Superior Court of New Jersey, Law Division, Hudson County, L-5217-01.

Before Judges Stern, A. A. Rodríguez and Payne.

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


Argued September 30, 2003

Defendant Norman A. Doyle, Jr., an attorney who was the prevailing party on a motion for summary judgment, appeals from an order of the trial court denying his motion for attorney's fees pursuant to the frivolous claims statute, N.J.S.A. 2A:15-59.1 and Rule 1:4-8(b). We reverse.

The facts follow: Port-O-San Corp. agreed to sell property located at 377 Kearny Avenue, Kearny to Skyview Realty. At the closing, held on March 15, 2001, it was disclosed that three liens affected title to the property, including a judgment lien in favor of Teamsters Local Union No. 863 Welfare & Pension Fund. In order to satisfy the title company, Main Street Title, money sufficient to cover the three liens, including $90,000 for the Teamster's judgment lien, was placed in an interest-bearing account at Valley National Bank by escrow agent Doyle, attorney for Skyview. The closing attorney for Port-O-San, Amy Alkoff Chasin,*fn1 consented to the escrow of funds, so long as the interest accrued to Port-O-San Corp.

In a letter to Doyle dated May 17, 2001, Pennsylvania counsel to Port-O-San sought the release of the $90,000 to Port-O-San on the ground that the Teamsters' judgment was against Easy House d/b/a Port-O-San, not Port-O-San Corp. An affidavit of the president of Port-O-San Corp. and certain supporting documents were supplied as evidence of that fact. On May 29, Doyle responded, stating that"[s]ince the title company will not insure against the... judgment against Port-O-San, I cannot release the escrow." Doyle recommended that Port-O-San retain New Jersey counsel to move for relief from judgment pursuant to Rule 4:50 and to utilize the previously executed affidavit as support for the motion. Thereafter, on June 5, Doyle forwarded to the Teamsters' counsel the affidavit of Port-O-San's president and a warrant to satisfy judgment in Port-O San's favor. In a note to Port-O-San's Pennsylvania counsel appended to the June 5 letter, Doyle stated:

It would appear to me that if Teamsters Local Union does not sign the Warrant of Satisfaction, that it would be up to Port-O San to proceed by motion to have the judgment vacated as against them on the grounds that they were never a proper defendant to begin with.

This is a problem that Port-O-San should have taken care of on its own some time ago and the remedy should not be foisted on me or my client as innocent purchasers.

However, to the extent we can assist in resolving this matter, I am doing so. The Teamsters refused to sign the warrant, and the $90,000 remained in escrow as a result.

Port-O-San did not file the motion suggested by Doyle. As stated by Pennsylvania counsel, while that course might,"in fact, be one alternative, it is probably not the only alternative available to my client." Instead, Port-O-San retained the law firm of Norris, McLaughlin & Marcus, to file suit on Port-O-San's behalf. Since that time, a member of the firm (litigation counsel), has prosecuted Port-O-San's action throughout its course, including this appeal.

A complaint filed by Port-O-San's litigation counsel on August 20, 2001 against the Teamsters, Main Street Title and Doyle alleged Main Street's wrongful requirement that $90,000 be placed in escrow, the designation of Doyle as escrow agent, and the Teamsters' wrongful failure to provide a warrant of satisfaction thereby removing the encumbrance on the property. Causes of action were asserted seeking damages and other relief against all defendants on grounds of slander of title, tortious interference with prospective economic advantage, conversion, and unjust enrichment.

Doyle, regarding the claims against him to be baseless, perfected his rights under the frivolous claims statute and Rule 1:4-8 by correspondence to Port-O-San's litigation counsel dated September 14, 2001 and a counterclaim against Port-O-San filed on September 20. Doyle's letter stated in relevant part:

The basis for my notice is that I, at the time of closing, was attorney for Skyview Realty, and had an obligation to ensure that my client received clear title ...

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