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Halbach v. Boyman

May 26, 2004

RUSSELL HALBACH, PLAINTIFF-APPELLANT,
v.
CHRISTOPHER BOYMAN AND BOYMAN & ASOCIATES, P.C., DEFENDANTS-RESPONDENTS.
CHRISTOPHER BOYMAN AND BOYMAN & ASSOCIATES, P.C., DEFENDANTS/THIRD PARTY PLAINTIFFS-RESPONDENTS,
v.
MARY THURBER, ESQ., THE LAW OFFICES OF MARY THURBER AND THURBER CAPPELL, LLC, THIRD PARTY DEFENDANTS-APPELLANTS.



On appeal from Superior Court of New Jersey, Law Division, Bergen County, L-2041-01.

Before Judges Petrella, Wefing and Collester.

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

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 3, 2003

Plaintiff Russell Halbach appeals pursuant to leave granted from a trial court order entered on February 13, 2004. After reviewing the record in light of the contentions advanced on appeal, we reverse.

Halbach owned twenty-five percent of the stock of D.P.S. Acquisition Corporation and several related corporations, all of which the parties have collectively referred to as DPS. The remaining seventy-five percent of the stock was owned by Lawrence P. Scalzo and his wife. Scalzo and Halbach each borrowed money from Michael Wilenta for DPS and in connection with that, executed an agreement on July 28, 1989, that conferred equal decision making authority upon Scalzo and Halbach despite the difference in their ownership interest. The agreement included the following language.

In short, although Scalzo has a 75 percent (75%) interest in D.P.S. and Halbach has a 25 percent (25%) interest in D.P.S. it is the intention of all the parties hereto that neither Scalzo nor Halbach shall take any action materially affecting the business of D.P.S. at any time without the consent of the other party.

Differences eventually developed between Halbach and Scalzo which, according to Halbach, culminated in Scalzo attempting to fire him. According to the record before us, the final rupture occurred in July 1997. Scalzo and Halbach then began the process of negotiating an agreement which would sever their business relationship.

During the course of their business relationship, DPS was represented by defendant Christopher Boyman, Esq. Boyman had also represented Scalzo and Halbach individually in several matters over the years. Because of the potential conflict of interest, Boyman did not represent either Halbach or Scalzo in their negotiations. Halbach selected his own attorney, third party defendant Mary Thurber, Esq., to represent him in these negotiations. Thurber represented Halbach in these negotiations no later than August 27, 1997.

Scalzo and Halbach eventually agreed upon the terms under which Scalzo would purchase all of Halbach's interest in DPS. In addition, they agreed that Boyman would draft the redemption agreement setting forth the terms and conditions for Scalzo's purchase of Halbach's stock.

Boyman proceeded to draft the agreement and submitted it to Thurber for her comments. Before Halbach finally executed the agreement, it was revised several times in light of her comments and suggestions. It was finally executed by both Scalzo and Halbach in December 1997.

Although both men signed the agreement, another dispute erupted between the two and the scheduled closing never took place. Halbach asserted that the agreement he had negotiated with Scalzo called not only for payment of a flat price for his stock interest but also included an agreement that he would receive a distributive share of DPS's earnings through the time of the closing. Scalzo denied this, maintaining Halbach was entitled only to be paid for his stock, not to share in the corporation's earnings.

Halbach and Scalzo sued each other. They each moved for summary judgment, Halbach contending that the language of the redemption agreement supported his position that he was entitled to share in earnings, Scalzo contending the agreement supported his position that Halbach had no such entitlement. Both motions were denied. The final version of the redemption agreement upon which both relied is not contained in the record before us.

Eventually, Halbach and Scalzo settled their dispute and Halbach then sued Boyman, which is the matter now before us. He contended that Boyman breached his duty to Halbach in the manner in which he drafted the redemption agreement and placed Salzo's interests over his. After Halbach sued Boyman, ...


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