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Garcia v. Kozlov

April 13, 2004

KAREN GARCIA, PLAINTIFF-APPELLANT,
v.
KOZLOV, SEATON, ROMANINI & BROOKS, P.C., AND ELIZABETH L. SYLVESTER, ESQ., DEFENDANTS-RESPONDENTS, AND HERSH KOZLOV, ESQ., PHILIP B. SEATON, ESQ., DANTE J. ROMANINI, ESQ., GILBERT L. BROOKS, ESQ., AND FRANK A. DIGIACOMO, ESQ., DEFENDANTS.



On certification to the Superior Court, Appellate Division.

SYLLABUS BY THE COURT

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

Karen Garcia v. Kozlov, Seaton, Romanini & Brooks, et als. (A-81-02)

Karen Garcia was injured in a multi-vehicle car accident on Route 130 in East Windsor, New Jersey in April 1992. The accident began with a collision between vehicles driven by Carol Ertel and Emily Forman. That accident cut power to the Forman vehicle, leaving it disabled and unlit in the roadway. Immediately following the collision, Ertel left the scene for a time without taking steps to warn oncoming traffic about the Forman vehicle. Within minutes, another vehicle driven by Karen Marut struck the Forman vehicle. A chain-reaction crash followed in which a vehicle driven by Charlotte Ignall struck Garcia's vehicle, which struck Marut's vehicle. As a result of this accident, Garcia suffered injuries, including, among other things: a dislocating kneecap requiring surgery; a cut tongue; a chipped tooth; chronic headache and neck pain; Temporomandibular Joint Dysfunction (TMJ); and a psychological adjustment disorder relating to the accident.

On November 1, 1993, an associate with the law firm of Kozlov, Seaton, Romanini & Brooks (Kozlov) filed suit on behalf or Garcia against Forman, Marut, and Ignall for negligence. The complaint did not name Ertel as a defendant. The law firm later discovered a conflict of interest with an insurance company implicated in the case and referred the matter to Michael Gentlesk, Esq., who was then retained by Garcia. Although Gentlesk successfully moved to amend the complaint to name Ertel as a defendant, she successfully moved to be dismissed from the action based on the applicable statute of limitations. Garcia later settled her claims against the other drivers for a total of $87,000. Thereafter, Garcia filed a legal malpractice complaint against Kozlov, alleging that the law firm and its associate were negligent in failing to name Ertel, causing Garcia to settle her case for less than its true value.

The legal-malpractice trial began on July 31, 2000. After jury selection, both parties argued for certain limitations of the evidence. Garcia sought to proffer expert testimony regarding the settlement in addition to direct evidence regarding her case. Among other things, Kozlov countered that the matter should instead be tried solely as a "suit within a suit," that Garcia should be precluded from presenting evidence indicating that she had not come to a stop prior to the first impact, that Gentlesk should be barred from testifying, and that the settlement in the underlying case should operate as a bar to the legal malpractice action. The trial court granted Garcia's motion and denied Koslov's requests.

Garcia proffered evidence of the underlying car accident. In deposition testimony, Emily Forman testified that the Ertel car pulled out in front of her and that she was unable to stop in time to avoid colliding with the rear of the Ertel vehicle. Forman also stated that her car lost the hazard lights and was unable to effectively warn oncoming traffic to avoid her car in the roadway. Garcia also testified about her recollection of the accident. She could not recall whether she came to a full stop before hitting the Marut vehicle, which had collided with the Forman vehicle. Garcia testified about her medical complaints and presented the testimony of three expert medical witnesses concerning her medical condition. In addition, Garcia's fiancé testified regarding Garcia's injuries and their effect on her life.

In respect of the settlement, Garcia testified that Gentlesk told her the value of her case was between $200,000 and $250,000 and that she should take the settlement offered because the absence of Ertel in the case would preclude full recovery. According to Garcia, Gentlesk told her Ertel was at fault for the accident and that she should settle with the remaining defendants and sue Kozlov. Garcia testified that she would not have taken the settlement in full satisfaction of all her claims if it were not for the reservation of right to bring a malpractice action. Gentlesk also testified at trial, stating that he recalled valuing the case at $200,000 and that he felt Garcia should take the settlement offered because of the absence of Ertel and the potential of Garcia's comparative negligence. Garcia also presented the testimony of a malpractice expert, Douglas Calhoun Esq., who expressed the opinion that Kozlov deviated from the standard of care when it failed to sue Ertel within the statute of limitations. Calhoun also testified that New Jersey's comparative negligence law, combined with the absence of Ertel from the underlying action, hampered Garcia's ability to recover full compensation for her injuries. Calhoun's estimate that Ertel was fifty to sixty percent negligent, along with Gentlesk's testimony, and the risks of litigation led him to opine that Garcia acted reasonably in settling her case for $87,000. The trial court ultimately struck Calhoun's testimony regarding Ertel's percentage of fault, leaving that for the jury to determine.

Kozlov also produced expert testimony from Timothy Barnes, Esq., who opined that Kozlov's failure to include Ertel in the suit was not malpractice because Garcia's deposition testimony showed that she had come to a full stop prior to hitting the Marut vehicle. According to Barnes, that placed primary responsibility for the accident on Ignall, who hit Garcia. Therefore, because Ertel's negligence was not the proximate cause of Garcia's injuries, Barnes opined that it would not have been ethical to name Ertel as a defendant. Barnes concluded that the $87,000 was a reasonable settlement given her own negligence in failing to activate her hazard lights or to pull to the right. In addition, the defense read portions of Ertel's deposition testimony into the record, indicating that when she made the left turn she saw no approaching traffic. The police reports also were admitted into evidence, which indicated that Ertel made a left hand turn into traffic.

At the close of all the evidence, the trial court decided the issue of negligence in favor of Garcia as a matter of law, finding Barnes's opinion a net opinion. In addition, the court ruled that Garcia acted reasonably in settling the underlying case against the party defendants. After completing jury instructions, the court asked the jury whether Kozlov was the proximate cause of Garcia's loss, to which the jury replied in the affirmative. The second question asked for the reasonable settlement value of Garcia's claim, which the jury found to be $225,000. Based on those findings, the court molded the verdict and awarded Garcia $92,460 in actual damages and prejudgment interest.

Kozlov appealed to the Appellate Division arguing, among other things, that the traditional "suit within a suit" method of trying a legal malpractice case was violated. The Appellate Division reversed, finding that the trial court abused its discretion by departing from the "suit within a suit" method. The appellate panel also concluded that the doctrine of invited error compelled reversal without a remand.

The Supreme Court granted certification.

HELD: The proper approach in trying a legal malpractice action will depend on the facts, the legal theories, the impediments to one or more modes of trial, and, where two or more approaches are legitimate, to plaintiff's preference. Courts are not to become involved in determining how a legal malpractice case is tried unless the parties disagree, in which case the final determination of the court is a discretionary judgment that is entitled to deference.

1. Where the claim of malpractice alleges a failure to meet a time-bar, the client must establish the recovery he or she would have obtained but for the malpractice. The most common method of proving such malpractice is to proceed by way of a "suit within a suit," in which a plaintiff presents the evidence that would have been submitted at trial had no malpractice occurred. However, the "suit within a suit" method is not without criticism. It can ignore the possibility of settlement, is often hampered by difficulties of the parties in presenting an accurate reflection of the evidence in the original action, or is hampered by the passage of time. This approach has also drawn fire for being unfair to plaintiffs who must litigate the underlying claim against the lawyer who originally prepared it. As determined by this Court in Lieberman, alternative approaches are necessary when the situation demands. What is important about Lieberman is the flexibility given to lawyers and judges to find an appropriate procedure in each case based on the facts and on the claims, without favoring one approach over another. (Pp. 19-26)

2. Calhoun's testimony was not presented as a substitute for the jury's evaluation of the case, but only to explain the reasons for settlement. Garcia also presented a full "suit within a suit" by adducing all the circumstances surrounding the underlying accident, along with factual and expert testimony regarding her damages. Hence, the Appellate Division erred, not only in too narrowly interpreting Lieberman but also in failing to recognize that a "suit within a suit," providing the jury with a basis for its determination, did take place. The matter is remanded to address issues raised before but not addressed by the Appellate Division. (Pp. 26-28)

Judgment of the Appellate Division is REVERSED and the matter is REMANDED for further proceedings consistent with this opinion.

CHIEF JUSTICE PORITZ and JUSTICES VERNIERO, LaVECCHIA, ZAZZALI, ALBIN, and WALLACE join in JUSTICE LONG'S opinion.

The opinion of the court was delivered by: Justice Long

Argued February 2, 2004

The issue before us arises out of a legal malpractice case. Plaintiff sued her former lawyers for failing to join an arguably integral party in a personal injury lawsuit. In the subsequent legal malpractice action, plaintiff claimed that she was forced to settle the personal injury case with the named defendants for less than full value as a result of the absence of the negligently omitted party. Because defendant raised the settlement first as a bar and then as a defense in the malpractice case, plaintiff sought to present her case, in part, through expert testimony. The trial court acceded to that request in reliance on Lieberman v. Employers Insurance of Wausau, 84 N.J. 325 (1980), wherein we signaled that the traditional "suit within a suit" format is not the only way to proceed in a legal malpractice action. Plaintiff obtained a verdict and defendant appealed.

The Appellate Division reversed, advocating strict adherence to the "suit within a suit" format in the absence of the precise factors considered in Lieberman. The Appellate Division misreads that case. In Lieberman, we specifically recognized that a legal malpractice case may proceed in any number of ways depending on the issues. Included among those options are a "suit within a suit," any "reasonable modification thereof," and a suit based on "expert testimony." Lieberman, supra, 84 N.J. at 343-44. The ruling in Lieberman did not establish a hierarchy among those approaches nor did it suggest that there is a presumption in favor of the "suit within a suit" scheme. We hold today that the proper approach in each case will depend upon the facts, the legal theories, the impediments to one or more modes of trial, and, where two or more approaches are legitimate, to plaintiff's preference. Courts are not to become involved in determining how a legal malpractice case is tried unless the parties disagree, in which case the final determination of the court is a discretionary judgment that is entitled to deference.

I.

Plaintiff, Karen Garcia, was injured in a multi-vehicle automobile accident on Route 130 in East Windsor, New Jersey on a rainy night in April 1992. The accident began with a collision between vehicles driven by Carol Ertel and Emily Forman. That accident cut power to the Forman car leaving it disabled and unlit in the roadway. Immediately following the crash, Ertel temporarily left the scene without taking steps to warn oncoming traffic about the Forman vehicle. Within minutes, another vehicle driven by Karen Marut struck the Forman vehicle. A chain-reaction crash followed in which a vehicle driven by Charlotte Ignall struck plaintiff's vehicle, which struck Marut's vehicle.

On November 1, 1993, the law firm of Kozlov, Seaton, Romanini & Brooks, filed a complaint prepared by its associate, Elizabeth Sylvester, Esq., on behalf of plaintiff against Forman, Marut, and Ignall for negligence. The complaint inexplicably omitted Ertel. The law firm then discovered a conflict of interest with an insurance company implicated in the case and referred the matter to Michael Gentlesk, Esq., who was then retained by plaintiff. Gentlesk moved to amend the complaint to include a claim against Ertel. After the court granted the motion, Ertel successfully moved for summary judgment based on the applicable statute of limitations. Plaintiff later settled her claims against the other drivers for $87,000. Thereafter, she filed a complaint for malpractice against the Kozlov firm and Sylvester (collectively, defendant) alleging that defendant's negligence in failing to name Ertel caused her to settle her case for less than its true value.

The trial of plaintiff's legal malpractice claim began on July 31, 2000. After jury selection, the trial court was presented with motions in limine from both parties. Plaintiff argued for the right to proffer expert testimony regarding the settlement in addition to direct evidence regarding her case. Defendant countered, among other things, that the matter should instead be tried solely as a "suit within a suit," that plaintiff should be precluded from presenting evidence indicating that she had not come to a stop prior to the first impact,*fn1 that Gentlesk should be barred from testifying, and that the settlement in the underlying case should operate as a bar to the legal malpractice action.

The court granted plaintiff's motion and denied that of defendant stating:

I think that because of the shifting positions by the plaintiff it will be necessary for the plaintiff [] to utilize and the defendants to utilize or may utilize if they wish expert testimony in presenting their case. This does not relieve the plaintiff of their obligation to prove the underlying case, but the case can be presented by the use of expert testimony.

The next issue concerning the net opinion of Mr. Gentlesk and his evaluation of the case at the time of settlement that would be admissible for a limited purpose, that is to show the reasonableness of the settlement that he entered into. The proof of the actual value of the case must come from the witness herself together with any expert testimony [that] [s]he finds.

As to point 3, the barring of the plaintiff from presenting evidence - any evidence indicating she failed to stop prior to the first impact, that is a misapplication of the doctrine. She is estopped from changing her ...


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