April 15, 2008
CHARLES W. GEYER, ON BEHALF OF ONE WASHINGTON PARK URBAN RENEWAL ASSOCIATES (OWPURA), PLAINTIFF-APPELLANT/CROSS-RESPONDENT,
PITNEY, HARDIN, KIPP & SZUCH, ATTORNEYS AT LAW OF THE STATE OF NEW JERSEY; PETER A. FORGOSH, ESQ., AN ATTORNEY AT LAW OF THE STATE OF NEW JERSEY; JONATHAN S. BRISTOL, ESQ., AN ATTORNEY AT LAW OF THE STATE OF NEW JERSEY; JOEL ROSEN, ESQ., AN ATTORNEY AT LAW OF THE STATE OF NEW JERSEY; AND DOUGLAS A. KENT, ESQ., AN ATTORNEY AT LAW OF THE STATE OF NEW JERSEY, DEFENDANTS-RESPONDENTS/CROSS-APPELLANTS.
On appeal from the Superior Court of New Jersey, Law Division, Union County, Docket No. L-2680-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued March 10, 2008
Before Judges A.A. Rodríguez, Collester and C.S. Fisher.
This legal malpractice action was dismissed by way of summary judgment. In these cross-appeals, we consider defendants' argument that plaintiff lacked standing to bring this suit, and plaintiff's argument that there was sufficient evidence of professional negligence and proximate cause to defeat summary judgment. Although we conclude that the trial judge erred in his view of the merits of some of plaintiff's claims, we direct that the bulk of the action be dismissed without prejudice because we agree plaintiff lacked standing to pursue all but one of his claims. And we also hold that the one claim defendant had standing to pursue was without merit and properly dismissed.
Although our examination of the issues requires a more in-depth analysis, which will soon follow, we first briefly outline the relevant circumstances.
Plaintiff Charles W. Geyer, a partner of One Washington Park Urban Renewal Associates (OWPURA), brought this action on behalf of OWPURA seeking damages based upon the alleged malpractice of defendant Pitney, Hardin, Kipp & Szuch and the individual defendants, who are attorneys affiliated with the firm (hereafter we refer to all defendants collectively as either "the Pitney firm"*fn1 or "defendants"). At a time when OWPURA was in bankruptcy, the Pitney firm represented OWPURA in the refinancing of a first mortgage held on its building in Newark. Prudential Securities, Inc. (Prudential), through another entity, was the lender in the refinancing, but it also intended to sell the mortgage to another entity soon after the closing. To make this resale profitable, it was allegedly important to achieve "remoteness" from the bankruptcy. Accordingly, the property was transferred to a Delaware trust (the Owner's Trust), and its rental income was paid into a "lock box" controlled by Prudential. To further gain remoteness, the parties executed a consent order that would, upon entry, effect a dismissal of OWPURA's bankruptcy action and divest the bankruptcy court of jurisdiction over the parties and the property.
Geyer has alleged that the Pitney firm failed to timely submit the consent order to the bankruptcy judge for execution and entry. As a result of this alleged omission, motions that were filed within weeks of the closing kept the action open and deprived Prudential of the remoteness it sought and rendered unlikely a profitable resale of the mortgage after the closing.
According to Geyer, because its intentions were frustrated by the continued pendency of the bankruptcy action, Prudential manipulated the rental income it controlled through the lock box arrangement and generated a default on the loan, which was followed by Prudential's filing of a foreclosure action.
At or around the same time, the filing of a state court action led to the appointment of a receiver to dissolve OWPURA. While that action was pending, Geyer commenced a legal malpractice action against the Pitney firm that was quickly dismissed because OWPURA's assets, which included that particular chose in action, were held by the receiver.
The receiver later "abandoned" the claim to Geyer who soon thereafter commenced the action at hand. Ultimately, defendants' arguments that Geyer lacked standing to maintain the action were rejected, but the judge granted summary judgment in favor of defendants on the merits. In this appeal, Geyer contends that the trial judge mistakenly granted summary judgment dismissing his complaint. He claims there was sufficient evidence of defendants' breach of professional standards and that there was a legitimate factual dispute concerning whether that breach proximately caused an injury to OWPURA. In their cross-appeal, defendants contend that plaintiff lacked standing to pursue this claim and that the trial judge erred in denying their motion for summary judgment on this ground.
Because the issues raised were resolved by way of summary judgment, we commence our consideration of the parties' allegations by invoking the applicable standard. That is, in considering the parties' contentions, we recognize that Geyer was entitled to have the relevant evidential material viewed by the trial judge in the light most favorable to him. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). He was also entitled to all the legitimate inferences permitted by the record that favored his position. R. 4:46-2(c). These standards also govern our review of the trial judge's determinations. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998).
In considering the merits of Geyer's malpractice claims, as well as the argument that he lacked standing to pursue those claims, it is helpful to consider in greater depth the history of this property and the circumstances that led to and through the bankruptcy proceedings and the state court litigation that followed.
A. THE FORMATION OF OWPURA AND ITS DEBT STRUCTURE
The record reveals that OWPURA was formed in 1978 by three equal partners -- Geyer, Richard Wolffe, and a business association entitled Loutel -- for the purpose of constructing a seventeen-story commercial office building in Newark. It was OWPURA's intent that the property would qualify for a statutory municipal tax abatement, commonly referred to as a Fox Lance tax abatement.*fn2 In 1981, the City of Newark granted the Fox Lance abatement for the proposed building. OWPURA thereafter obtained construction financing from two sources: a first mortgage loan from Mutual Benefit Life Insurance Company in the amount of $27,250,000 at 13.5% interest, and a secondary loan from the Newark Economic Development Corporation (NEDC) in the amount of $10,000,000 at 4% interest.
The building was constructed in 1982 and 1983. In 1985, Geyer purchased Loutel's interest in OWPURA, giving him a two-thirds interest in the partnership; Wolffe retained his one-third interest.
Bell Atlantic Corporation became the building's prime tenant, leasing 94% of the rentable space for a twenty-year term, thus providing OWPURA with a predictable income stream. Notwithstanding the stability provided by this long-term lease, OWPURA encountered financial difficulties generated by a lawsuit brought by NEDC regarding the property's management and by other disputes with Bell Atlantic. As a result, OWPURA sought to refinance the existing first mortgage at a lower interest rate, and, in 1988, obtained a commitment for a $36,000,000 loan at 9.25% interest. From these borrowed funds, OWPURA anticipated paying off the existing Mutual Benefit loan, of which $27,000,000 was outstanding, and 80% of the $10,000,000 still owed to NEDC, while retaining $1,000,000 as a reserve fund for the building's management.
NEDC's consent to subordinate, however, was needed to implement this plan. Obtaining consent was frustrated when NEDC's executive director demanded $100,000 annual cash payments as a condition. OWPURA refused. NEDC further attempted to block OWPURA's attempts to refinance the first mortgage and, in 1990, threatened to foreclose because OWPURA fell behind in its payment of taxes on the building. Geyer appeared before the Newark City Counsel and obtained an agreement, which was memorialized in a resolution, for the payment of the taxes due over a period of five years. Undaunted, NEDC filed a foreclosure action against OWPURA within days of the City Counsel's resolution.
NEDC's foreclosure action prompted OWPURA to file for bankruptcy relief in November 1990. The bankruptcy court appointed a trustee, who hired the McCormick Organization to manage the building. OWPURA also filed a RICO suit against NEDC, its executive director, and other Newark officials.
OWPURA's plan of reorganization was confirmed in August 1992. It provided that McCormick would continue to manage the building under the supervision of an advisory committee, which consisted of Geyer, Wolffe, NEDC, and others. In gaining consent for this plan, OWPURA released its RICO claims. The bankruptcy court retained jurisdiction following the adoption of the reorganization plan in order to approve the terms of any future refinancing.
B. ENTER THE PITNEY FIRM AND AN OPPORTUNITY TO REFINANCE
In April 1996, the Pitney firm was appointed by the bankruptcy court as special counsel for OWPURA with regard to the refinancing of the existing mortgages. OWPURA soon caught a fortunate break when Mutual Benefit entered into receivership. In the summer of 1996, as part of the required liquidation of its real estate portfolio, Mutual Benefit offered to accept $17,200,000 in satisfaction of OWPURA's outstanding debt to it of more than $29,000,000.
To take advantage of these circumstances, OWPURA was able to obtain a mortgage commitment of $23,170,000 from Mercantile Mortgage Group. Prior to the closing of the transaction with Mercantile, Prudential agreed to purchase the loan from Mercantile, and Midland Commercial Financing Corp. was designated by Prudential to be the lender in that subsequent transaction. Prudential also intended to sell this loan at a profit quickly after the transaction closed to a Canadian bank, Caisse Depot Gestion.
By order dated July 11, 1996, the bankruptcy court approved the mortgage commitment obtained by OWPURA, authorized the closing of the loan transaction, and directed NEDC to subordinate its existing mortgage to the new mortgage on the condition that certain payments be made from the mortgage proceeds. Accordingly, in addition to the $17,200,000 payoff to Mutual Benefit, the loan proceeds were to be used to make an additional payment of $500,000 to Mutual Benefit, and a payment of $370,000 to NEDC ($185,000 at the time of closing and the $185,000 balance in installments over time). The bankruptcy judge also ordered the transaction to close no later than July 31, 1996, with time being of the essence, in order to meet the deadline imposed for the deeply-discounted payoff to Mutual Benefit. In addition, the bankruptcy judge permitted the transfer of the building to a trust, organized under the laws of Delaware, in order to cause a transfer in form of ownership from OWPURA's existing form as a New Jersey general partnership to a Delaware trust, with the partners of OWPURA having the same ownership in the Owner's Trust as they had in OWPURA.
Geyer has alleged that NEDC and its executive director continued "their obstructionist tactics" in an effort to block the refinancing by refusing, among other things, to execute a standstill/subordination agreement. Following an emergency hearing on August 2, 1996, the bankruptcy judge directed NEDC to sign the standstill agreement and directed that the closing take place on August 6. Because the Pitney firm was not ready to close until August 7, an additional payment of $100,000 had to be made to Mutual Benefit. In addition, despite projections provided by the Pitney firm regarding the amount that would be yielded to OWPURA as a result of the refinancing, OWPURA was required to raise and bring to closing $300,000 to cover claims of unsecured creditors.*fn3
Because Prudential did not want to retain the loan as an income-producing asset, but instead wanted to "flip" it by selling it for a profit within a short time, it desired that the asset be rated as a "commercially viable" investment opportunity within the private-securities marketplace. This required that the asset not be directly connected with the bankruptcy process.
C. PRUDENTIAL'S PURSUIT OF "REMOTENESS" AND THE CONSENT ORDER
In order to obtain the "remoteness" desired by Prudential, a consent order -- which called for the dismissal of the bankruptcy action, the divestiture of the bankruptcy court's jurisdiction over the matter, and the referral of all future disputes to the Chancery Division -- was prepared as part of the closing.*fn4 This consent order was executed by Geyer, counsel for NEDC, and counsel for OWPURA.
The closing took place over the course of a number of days and was eventually completed on August 10, 1996. Despite the considerable time and energy spent in connection with this closing -- and the alleged importance of the consent order --the record is not entirely clear as to what immediately happened with the original order after the closing or precisely when it was submitted to the bankruptcy judge for execution. The consent order is listed as a closing document in a letter circulated by the lender's attorney with closing instructions; that letter indicates, however, that the lender's attorney --not the Pitney firm -- would "take possession" of the consent order at the time of closing. Notwithstanding, the record also contains the Pitney firm's September 20, 1996 letter to the bankruptcy judge that enclosed the "original and two (2) copies" of the consent order. This suggests that the Pitney firm had possession of the original consent order following the closing and did not forward it to the judge for execution until more than one month passed from Saturday, August 10, 1996 -- the day the closing was completed.
As a result, the consent order was not executed or entered by the bankruptcy judge by the time Wolffe filed a motion in the bankruptcy court regarding counsel fees or by the time NEDC filed its motion for the removal of Geyer as the building's manager. With regard to the latter motion, the bankruptcy judge entered a preliminary injunction on October 24, 1996, which temporarily removed Geyer as the building's manager. In short, the opportunity to obtain the dismissal of the bankruptcy action -- a matter of apparent great importance to Prudential -- was lost because motions were filed during the delay in the submission of the consent order.
That is, Prudential anticipated selling the loan to a Canadian entity within four months of the OWPURA-Mercantile closing. As Geyer's expert explained at his deposition, this could not occur because of the continuation of bankruptcy jurisdiction over OWPURA:
Q: . . . Did Prudential, to your understanding, make any arrangement to resell the loan after that?
A: They couldn't.
Q: What's the basis for your saying that?
A: They couldn't. There's no way you can sell, there's no way that Prudential could have made any reps and warranties as to that loan and the enforceability of it in any of its documents because of the bankruptcy.
Q: . . . Was the entry of the [consent] order by the [bankruptcy] judge one of the conditions to the funding of the loan?
A: Absolutely. Unconditionally. It's the Holy Grail of this entire transaction.
So long as the bankruptcy matter remained open, there remained a concern that the deed, which had been transferred to the Owner's Trust in order to create remoteness, could be disgorged back to the bankruptcy trustee. As a result, according to Geyer's expert, the specter of the bankruptcy court over the property meant that it was "not sellable as a private placement."
These assertions appear not only in the report and testimony of Geyer's expert, but also in statements made under oath by some of the defendants. Bristol indicated that the Pitney firm was aware from "day one" that the consent order was a necessary condition because it would remove the property "from the bankruptcy court jurisdiction . . . so that the first mortgage could be the first senior secured creditor and . . . they would not be challenged or would not be effectively able to be challenged by subsequent and subordinate lien holders until they were paid"; he further explained:
When a bankruptcy occurs in a special purpose bankruptcy remote entity like One Washington Park Trust, the senior creditor who prohibits everybody else from encumbrance other than the normal trade creditors on a basis which are normal in the scheme of things will not be caught up in a bankruptcy court by an automatic stay where the claims of other creditors and it's usually successful in separating the asset which constitutes the real security and recovering its funds.
Now, that was the whole point behind getting this into a conduit loan intending to be secured so we can meet this criteria so that the assets of One Washington Park Trust would not be consolidated or amalgamated with any other person or entity.
So essentially it would be from [a] substantive law point of view to limit the possible protections a bankruptcy court could give to a borrower in a default situation where bankruptcy was filed. It's a very, very common requirement in all of the securitization transactions and we talked about this from day one.
Defendant Bristol acknowledged that Geyer repeatedly urged him to submit the consent order, and he agreed that the consent order "was like a dangling participle, something that should have been done at the closing." Bristol's deposition testimony can certainly be interpreted as a concession that he or someone at the Pitney firm had made a mistake:
A: That I remember, I remember [Geyer] called, he was, he sounded concerned and upset, okay. Yes, he asked me why the order wasn't filed, I think I told him I mucked up, I fucked up.
Q: What was that?
A: Not me, somebody or I mucked up or fucked up, it was done on the 9th, I had to look into it. I don't remember if it was then or a subsequent conversation and frankly there was I thought a very favorable audience before [the bankruptcy judge] in the bankruptcy court, I don't think anyone in Pitney including myself didn't file it because we wanted to keep [the case] in the bankruptcy court and the NEDC could have brought an action anywhere frankly but, you know, there was a large closing, many, many documents. I apologized to him, I said I'm very, very sorry, you know, it wasn't done right away, I'll take care of it as soon as I can. So I sent it in then and that's what I did. [Emphasis added.]
And, although the bankruptcy judge's recollection was that the consent order was submitted earlier,*fn5 the only documentation that defined the date of submission was Bristol's September 20, 1996 letter to the bankruptcy judge. By that time, motions had been filed in the bankruptcy court that precluded the order's entry.
Because of the continued linkage between the property and the bankruptcy, it is claimed that Prudential's intentions regarding the refinance, i.e., to resell the mortgage at a quick profit, were frustrated. As a result, it is alleged that Prudential embarked on a campaign to wring the profit it had hoped to obtain from a resale through further negotiations with the beneficial owners of the property.
D. MORE LITIGATION AND THE DISSOLUTION OF OWPURA
Meanwhile, litigation commenced between Geyer and Wolffe in the Law Division in Morris County. And Prudential filed a foreclosure action on April 4, 1997 in the Chancery Division in Essex County. These actions were consolidated in Morris County (hereafter "the consolidated actions") and led to the appointment of a receiver, Edward R. McMahon, Esq., who was directed by the court to marshal the assets of the WGL*fn6 and OWPURA Partnerships and . . . to take any and all actions the Receiver deems necessary with respect to such Partnerships and may exercise all rights of the partners with respect to such Partnerships including, but not limited to, the sale or other disposition of any and all assets of the Partnerships, and the assertion or release of any claims by or against the Partnerships.
On October 6, 1997, the receiver filed an answer and counterclaim in Prudential's foreclosure action; he alleged, among other things, that Prudential's declaration of a default resulted from its manipulation of the rents and income of the Owner's Trust.
On December 31, 1997, the trial judge in the consolidated actions entered an order dissolving "the One Washington Park Urban Renewal Association Partnership and the WGL Partnership." Although the language of the order and the pleadings contained in the appendices are not thoroughly illuminating, we assume that the judge was referring not only to OWPURA but also to the Owner's Trust. This conclusion seems fairly well demonstrated by later proceedings in the consolidated actions, particularly the May 15, 1998 order, which directed the transfer of ownership of the building unless the Prudential mortgage was refinanced by a date certain. Since title to the building was held by the Owner's Trust and not OWPURA, and because the court exerted authority over the building and the income derived from it, we assume that the judge intended to appoint the receiver to marshal, maintain, and dispose of the assets not only of OWPURA, but also of the Owner's Trust.
E. THE RECEIVER'S "ABANDONMENT" OF OWPURA'S LEGAL MALPRACTICE CLAIMS AND THE SUIT AT HAND
With all these complications as prologue, we finally turn to the legal proceedings that led to the orders under review in this action. Geyer first filed a complaint on July 31, 1997, alleging the malpractice of the Pitney firm and various attorneys affiliated with the Pitney firm. That action was dismissed without prejudice by way of an order entered on November 10, 1997; the judge then agreed with defendants that "the plaintiff partnerships are in receivership and the receiver alone has the sole authority to institute a legal action on their behalf and has not yet chosen to do so."
Some time after the dismissal of the first malpractice action, a resolution of the disputes between Geyer and Wolffe was achieved. As described by the receiver, Geyer "bought out the entire interest in OWPURA" from Wolffe and, as a result, "appears to be successor in interest to the assets of OWPURA," which, he asserted, included OWPURA's legal malpractice action against defendants. Based on this, the receiver expressed his intentions "to abandon these claims in favor of Mr. Geyer, who would then be free, if he so chooses, to proceed to litigate same as successor to OWPURA." On May 22, 1999, the judge entered an order that authorized the receiver to abandon the malpractice claims against defendants.
On July 22, 1999, Geyer filed the malpractice action at hand. Defendants quickly moved for summary judgment, arguing that Geyer did not have standing in his individual capacity to assert OWPURA's malpractice claim. The judge who heard that motion (the motion judge) reasoned that the receiver may have made a "qualified abandonment" of the claim, having acted under the "false impression" that OWPURA's owner, Geyer, would get the benefit of that abandonment and act on OWPURA's behalf. The judge reasoned further that the receiver might reconsider his abandonment if he were informed that Geyer was unable to pursue the claim and thus preserve OWPURA's "well-being." In light of these uncertainties, the motion judge heard the testimony of the receiver concerning his purported abandonment of the claim.
During the hearing, the receiver testified that the receivership was still active and that OWPURA continued as a solvent business entity, though its affairs were being wound down. He testified that OWPURA had sufficient funds to satisfy its debts and did not need to pursue the malpractice claim in order to successfully complete the receivership. He further stated that his purpose in abandoning the claim was to allow Geyer to pursue it, reasoning that Geyer, as the eventual sole owner of OWPURA, would ultimately receive all of OWPURA's assets, including the malpractice claim, upon OWPURA's final dissolution and that, by abandoning the claim in Geyer's favor, he was "just facilitating that [outcome] in advance."
In considering this testimony, the motion judge determined that the abandonment was merely the receiver's way of allowing Geyer to pursue the claim on OWPURA's behalf at a time when the receiver had no interest in pursuing it himself. As a result, the motion judge held that Geyer had standing to bring the malpractice action "in a representative capacity" on behalf of OWPURA "but not by [Geyer] individually." Because Geyer had filed the complaint in his individual capacity, the motion judge permitted an amendment of the complaint to reflect that the plaintiff in the action was "Geyer on behalf of" OWPURA. An order to this effect was entered by the motion judge on December 3, 1999.
The parties continued on with discovery, but the malpractice suit commenced in 1999 was dismissed without prejudice in 2002.*fn7 A new complaint was filed by Geyer on July 15, 2003.
In a later motion, defendants took an additional tack with regard to standing, asserting that an entity known as Seite LLC succeeded to ownership of the building and that it, and not Geyer, was the real successor-in-interest to OWPURA. Defendants also argued that the receiver's "abandonment" of the claim to Geyer was the functional equivalent of a legally-prohibited assignment of a prejudgment tort claim. Another judge heard the motion and, by way of an order entered on April 12, 2006, denied defendants' standing argument but granted their motion for summary judgment on the merits. Geyer has appealed from the April 12, 2006 order; defendants have cross-appealed from that part of the April 12, 2006 order which denied their standing argument, as well as the order of December 3, 1999, which denied defendants' earlier standing motion in the prior action. Despite what is urged in the notice of cross-appeal, the December 3, 1999 order is beyond our power to review. See n.7, supra.
In considering the question of standing, we first recognize there are some facts about ownership of this malpractice claim that are not entirely clear. As revealed in our lengthy discussion of the underlying circumstances, the action is based upon the allegation that the Pitney firm negligently represented the interests of OWPURA at the time of the August 1996 closing, particularly by failing to obtain a rapid entry of the consent order, which would have deprived the bankruptcy court of jurisdiction and provided Prudential the remoteness it required to profitably resell the mortgage. As part of that August 1996 closing, the assets of OWPURA were transferred to the Owner's Trust. As a result of that transfer, it would seem that the chose in action in question became the property of the Owner's Trust, which would add complications to the standing issue. Despite our concerns in this regard, however, we do not understand defendants' arguments as incorporating an analysis of whether the claim was transferred to the Owner's Trust at that time. Instead, we discern from the parties' submissions that they do not dispute that the chose in action eventually came into possession of the receiver appointed in the consolidated actions. Accordingly, we will proceed to consider the standing issue by assuming -- as have the parties -- that the malpractice claim was an asset obtained by the receiver.
Proceeding on that assumption, defendants argue that the receiver did not "abandon" but instead "assigned" the claim to Geyer. According to defendants, the receiver's ability to dispose of the claim was limited; he could either pursue the claim or waive it, but he could not give it to another person or entity. That is, defendants contend that the alleged abandonment here was actually an assignment of the claim to Geyer. We agree.
Semantically, it is inaccurate to refer to the receiver's actions with regard to this claim as an "abandonment." The act of abandoning property does not imply that the actor's property is relinquished in favor of another. Quite the contrary; abandonment is defined as an owner's "relinquishing of a right or interest with the intention of never again claiming it," State v. Johnson, 193 N.J. 528, 548 (2008); see also State v. Bailey, 97 N.J. Super. 396, 400 (App. Div. 1967), and without the intention to vest title in another person, Hendle v. Stevens, 586 N.E.2d 826, 833 (Ill. App. Ct.), cert. denied, 596 N.E.2d 628 (Ill. 1992); Hays v. Montague, 860 S.W.2d 403, 408 (Tenn. Ct. App. 1993); Railroad Comm'n of Tex. v. Waste Mgmt. of Tex., Inc., 880 S.W.2d 835, 843 (Tex. App. 1994); 11 David A. Thomas, Thompson on Real Property § 91.07 (2d ed. 2002). Here, the receiver did not dispose of this claim in the sense normally associated with an abandonment. His stated intent was not to "discard" the claim, ibid., but to transfer it specifically to Geyer. Thus the act was more akin to an assignment, which is generally defined as "the act of transferring to another" a property interest or right. Black's Law Dictionary 119 (6th ed. 1990) (emphasis added). It is in this latter sense that the right of Geyer to pursue the claim must be considered.*fn8
Our Legislature has delineated the types of claims and interests that may be assigned. N.J.S.A. 2A:25-1 declares that
All contracts for the sale and conveyance of real estate, all judgments and decrees recovered in any of the courts of this state or of the United States or in any of the courts of any other state of the United States and all choses in action arising on contract shall be assignable, and the assignee may sue thereon in his own name.
This statute does not expressly mention tort claims, leading our courts to conclude that the Legislature intended that, as a matter of public policy, tort claims are not assignable prior to the entry of judgment. E. Orange Lumber Co. v. Feiganspan, 120 N.J.L. 410, 413 (Sup. Ct. 1938), aff'd, 124 N.J.L. 127 (E. & A. 1940); Vill. of Ridgewood v. Shell Oil Co., 289 N.J. Super. 181, 195 (App. Div. 1996); DiTolvo v. DiTolvo, 131 N.J. Super. 72, 79 (App. Div. 1974); see also Integrated Solutions, Inc. v. Serv. Support Specialties, Inc., 124 F.3d 487, 490 (3d Cir. 1997); Conopco, Inc. v. McCreadie, 826 F. Supp. 855, 865-67 (D.N.J. 1993), aff'd, 40 F.3d 1239 (3d Cir. 1994). Because our courts have determined that legal malpractice claims are "derive[d] from the tort of negligence," Grunwald v. Bronkesh, 131 N.J. 483, 492 (1993), it follows that an assignment of a legal malpractice claim is impermissible. As one federal court put it, "[a] simple syllogism" inexorably proves the point: "a tort claim is not assignable; legal malpractice is a tort claim; therefore, a legal malpractice claim is not assignable." Alcman Servs. Corp. v. Bullock, 925 F. Supp. 252, 258 (D.N.J. 1996). Accordingly, the receiver was not authorized by law to assign the legal malpractice action to Geyer.
Of interest, the court in Integrated Solutions determined that the ban on assignments of tort claims does not preclude the transfer of such a claim to a bankruptcy trustee, but it does preclude the assignment of the claim by the trustee to another. Integrated Solutions, Inc., supra, 124 F.3d at 491-96. Applying this well-reasoned holding to the circumstances at hand, we would conclude that the nascent malpractice claim was transferred, by operation of law, to the receiver at the time of his appointment. Once there lodged, an assignment by the receiver of the claim became impermissible. The receiver could only pursue the claim in his own name, N.J.S.A. 42:6-8, or he could waive or release it, if appropriate, in the winding down of the partnership's affairs and business. Once all assets were liquidated and creditors were paid in this manner, any surplus assets or funds would then be vested in the beneficial owners of the partnership. It is not consistent with this process for a receiver to convey an asset to another without receiving consideration. And, as we have observed, a transfer of a prejudgment tort claim was not permissible at all. We must, therefore, conclude that the receiver's abandonment was ineffectual, and he remained in possession of the claim until dissolution was complete.
In so holding, we reject the argument that the label placed on the receiver's purported conveyance to Geyer is controlling or meaningful. Instead, we are required to consider the validity of this transfer not by such labels but by the substance of the thing. Applestein v. United Bd. & Carton Corp., 60 N.J. Super. 333, 348-50 (Ch. Div.) (holding that courts "have never hesitated to look behind the form" of a particular transaction despite its "outward appearance" as part of "the common sense observation that judges . . . have the right, and often the duty, . . . to follow the long established equitable maxim of looking to the substance rather than the form, whenever justice requires"), aff'd, 33 N.J. 72 (1960); see also In re Farnkopf, 363 N.J. Super. 382, 394 (App. Div. 2003). We are satisfied that the transfer that occurred here was made in violation of the state public policy against the assignment or transfer of prejudgment tort claims and was invalid. Consequently, we agree with defendants that Geyer had no standing to commence the action.
Instead, the chose in action remained with the receiver until dissolution, and likely then transferred by operation of law to the entity that assumed the remaining assets of OWPURA once the dissolution was completed.*fn9 In light of our determinations that Geyer did not validly receive the chose in action by way of the receiver's purported "abandonment" and that Geyer had no standing to pursue the legal malpractice action at hand, we need not further consider or determine what ultimately came of the chose in action or whether any person or entity that presently possesses it has standing to presently pursue it. We simply reverse that part of the April 12, 2006 order which concluded that Geyer had standing to pursue this claim "on behalf of" OWPURA, and we direct the dismissal without prejudice of the bulk of the action.*fn10 We do not foreclose the substitution of the proper plaintiff or the amendment of the complaint to permit the action to be further pursued by the true party in interest, but we also intimate no view as to how such an application should be decided if ever presented.
Despite our determination that defendants' standing argument should have been sustained, we nevertheless proceed to examine -- for purposes of completeness -- the order granting summary judgment in favor of defendants on the merits.
A. THE FAILURE TO SUBMIT THE CONSENT ORDER FOR EXECUTION AND ITS LINK TO PRUDENTIAL'S SUBSEQUENT ACTIONS
Much of the focus in this case has turned on whether the Pitney firm failed to obtain entry of the consent order that would have ended the bankruptcy court's jurisdiction. In this regard, we conclude there is sufficient evidence that defendants were negligent in failing to secure a quick execution of the consent order. As we have observed, defendant Bristol acknowledged that he "mucked up," and evidence in the record suggests -- although not conclusively -- that the proposed consent order was submitted to the bankruptcy judge for the first time no sooner than September 20, 1996, more than one month after the closing. We are mindful that the bankruptcy judge's stated recollection suggests that the order was on his desk much earlier. However, the question was put by way of summary judgment, and we are, thus, required to assume the truth of the evidence offered in support of the opponent's position. Viewing the record in this way, we must presently accept as true the contention that an inappropriate delay in the submission of the consent order was allowed to occur by defendants.
We recognize that defendants have forcefully argued that a different gloss ought to be put on Bristol's statements and, also, that it was not the obligation of the Pitney firm to secure the execution of the consent order.*fn11 However, in again recognizing that Geyer, who was the opponent of the summary judgment motion, was entitled to all favorable inferences, we must -- at this stage -- adopt Geyer's interpretation of Bristol's statements and assume for present purposes that the Pitney firm was negligent because it was obligated -- but failed -- to timely submit the consent order. Since Bristol's testimony can certainly be interpreted as conceding the negligence of the Pitney firm with regard to the post-closing handling of the consent order, the summary judgment entered in favor of defendants could not be based solely on this point.
The more difficult question is whether defendants were entitled to summary judgment on the contention that the failure to obtain a rapid entry of the consent order was a proximate cause of any damages sustained as a result of Prudential's declaration of a default on the loan and its commencement of the foreclosure action. After careful review, we are satisfied that there was sufficient evidence to show that the alleged negligence proximately caused damage and required a denial of defendants' summary judgment motion in this regard.
Peter Riemenschneider, a Prudential employee with knowledge of the refinance, testified that Prudential's involvement with the OWPURA loan consisted of its agreement to purchase the loan from Midland, its advice to Midland on how to "structure" the deal, and its later plan "to dispose of the loan," evidently by marketing it as a security within a short period of time. Riemenschneider testified to his understanding that the consent order should have been submitted either "concurrent with the closing" or very soon after the closing. He indicated that, as a "consequence" of the failure to submit the consent order in a timely manner, the bankruptcy court continued to have active jurisdiction over OWPURA. Another consequence, according to Riemenschneider, was that Prudential's "[t]rading management wanted to know when they could -- whether they could market [the OWPURA loan security] or not and what I recall is that I told them that it couldn't be marketed until that [bankruptcy] issue was cleared up." This testimony certainly contributed to forming a link between the failure to submit the consent order in a timely manner and the marketability of the loan.
Proximate cause was also demonstrated by the statements and testimony of defendants' liability expert, Paul H. Shur, and two of the individual defendants, Bristol and Peter Forgosh.
Shur testified that one of the "requirements" for "securitizing a loan," as was Prudential's intent, was that both the loan and the borrower "be out of the bankruptcy court." According to Shur, the purpose behind the creation of a "bankruptcy remote entity" like the Owner's Trust is to shield a borrower from the bankruptcy court's jurisdiction. He testified that the creation of such a remote entity is "almost a red flag" indicating to any knowledgeable person that there was "going to be a securitization or some other transfer of credit after the closing or even simultaneously." Shur also testified that the consent order should have been submitted no later than within a "few days after the closing." He additionally testified that if the consent order had been entered by the bankruptcy court, then that court "would have been divested of further jurisdiction" and the parties would have been compelled to litigate any disputes in the superior court.
Bristol testified to his awareness that the Prudential loan to OWPURA had to "meet specific requirements" because it had to be sold in "the secondary market." One of those requirements was the removal of the case from the bankruptcy court's jurisdiction and, according to Bristol, the consent order met this requirement by precluding the parties from litigating future disputes in the bankruptcy court. Bristol also acknowledged that the consent order should have been submitted to the bankruptcy court as part of the closing.*fn12
The receiver testified that he learned from a Prudential loan officer that Prudential had lost $2,500,000 when it was unable to sell the OWPURA mortgage to a particular buyer in the private financial marketplace because the consent order had not been entered and bankruptcy jurisdiction persisted. According to the receiver, as a result of Prudential's inability to dispose of the OWPURA loan in the private financial marketplace, Prudential sought to "coerce" OWPURA to renegotiate the loan by declaring a default based upon "bogus" and "concocted" calculations, which he had reviewed and rejected. The receiver additionally asserted his belief that the Pitney firm was responsible for submitting the consent order either at the time of closing or shortly thereafter.
Peter Gallic, a financial analyst who assisted OWPURA in refinancing the Prudential loan in 1998, testified that he learned at that time that Prudential claimed to have lost $2,500,000 when it was unable to sell the OWPURA loan because the consent order had not been entered. As he put it, "[n]obody wants to buy a loan that's already in court a week after you close it."
Geyer testified that Pitney's failure to timely submit the consent order allowed the bankruptcy court to hear NEDC's post-closing motion, which "killed [Prudential's] opportunity to deliver this loan to the securitization people," prevented Prudential from selling the loan at a profit, and led Prudential to "turn around and start foreclosure proceedings."
OWPURA's financial markets expert, John Halle, as president of Mercantile, had been instrumental in promoting the loan, and he was familiar with its underlying circumstances. He testified that "the most important issue" to Prudential was that the bankruptcy court not have jurisdiction over the parties or the loan transaction. Accordingly, Halle testified that the consent order was the "Holy Grail of this entire transaction." This was so, Halle testified, because "any deal . . . tainted by bankruptcy is not sellable as a private placement." Moreover, according to Halle, Prudential declared the default because it "knew that there was no way out" after the matter remained in bankruptcy court and the resale in the financial marketplace was precluded. Because Prudential could not profitably sell the loan, it felt compelled to foreclose on the encumbered property, and it did so by first declaring a "bogus" default by unnecessarily paying certain expenses before debt-service costs.
As is apparent from this summary, there was sufficient evidence of a causative link between defendants' failure to submit in a timely fashion the consent order to the bankruptcy judge and Prudential's declaration of a default and the circumstances and litigation that followed.
In addition to the testimony outlined above concerning proximate causation, the timing of Prudential's declaration of default also suggests, at least inferentially, a causative link among the bankruptcy court's continued exercise of jurisdiction, Prudential's resultant inability to resell the OWPURA loan in the financial marketplace, and Prudential's declaration of default. And there was evidence to suggest, as described by some of the witnesses, that the default was bogus. After all, OWPURA had a large, well-funded main tenant and, thus, a predictable and steady rental-income stream. Yet, within three months of the closing on a loan that should have alleviated the bulk of the building's financial problems by reducing its debt service on the first mortgage, OWPURA was cast in the role of a defaulting borrower unable to meet its mortgage requirements.
Given the amount of background research and work done on all aspects of this loan by legal, financial, and accounting professionals, this is a very curious turn of events. Forgosh expressed "surprise" that "OWPURA went into default a few weeks after the closing." This quick and largely unexplainable demise of OWPURA's finances lends some credence to OWPURA's charge that Prudential may have wrongfully orchestrated the payment of expenses in order to trigger a default.
We recognize that there may be merit in defendants' argument that Prudential's alleged wrongful declaration of a default severed the causative link between their alleged negligence and the resulting consequences. This argument presents a substantial obstacle to a recovery on the malpractice claim. However, we are satisfied that this argument could not be fully appreciated and its weight not sufficiently gauged at the summary judgment stage. There is enough evidence in the record to suggest, notwithstanding this relevant contention, that defendants' alleged negligence was a substantial factor in causing the injuries complained of. See Conklin v. Hannoch Weisman, 145 N.J. 395, 422 (1996) (holding that "the traditional jury charge on proximate cause as a continuous sequence is inapt for legal malpractice cases in which there are concurrent independent causes of harm and that a jury in such cases must be instructed to determine whether the negligence was a substantial factor in bringing about the ultimate harm").
As a result, we must conclude that the trial judge was mistaken in determining there was insufficient proof of a link between the Pitney firm's failure to timely submit the consent order and Prudential's declaration of a default and commencement of a foreclosure action. Brill, supra, 142 N.J. at 540; R. 4:46-2(c). The testimony outlined above, especially when coupled with the permissible inferences that may be drawn from that testimony, provided more than sufficient proof that defendants' negligence proximately caused the damages associated with the litigation that followed and, ultimately, OWPURA's refinancing of the Prudential loan in August 1998.*fn13
B. GEYER'S CLAIM THAT DEFENDANTS' NEGLIGENCE CAUSED A LOSS OF HIS RIGHT TO MANAGE THE BUILDING
Geyer also argues that defendants' alleged negligence caused a loss of the right to manage the building. As we have observed, this claim appears to belong only to Geyer. Accordingly, our holding on Geyer's standing to commence this action in all other respects has no bearing on this aspect of the action. However, we conclude that it was properly dismissed by way of summary judgment on its merits.
From 1985 to 1989, the building was managed by Geyer. From 1990 to 1996, at the direction of the bankruptcy court, the building was managed by McCormick. See Kernan v. One Washington Park Urban Renewal Assocs., 154 N.J. 437, 442-43 (1998). As part of OWPURA's refinancing of the Mutual Benefit loan in August 1996, Mercantile provided a commitment letter on June 24, 1996, specifically requiring that, at or before closing, it had to receive proof of a management contract between OWPURA and "a management entity controlled by Charles Geyer for the management" of the building. That contract was evidently provided at the August 1996 closing, causing OWPURA's subsequent termination of McCormick as of September 1, 1996, and Geyer's resumption as building manager thereafter.
NEDC was evidently displeased with this turn of events and moved in the bankruptcy court challenging Geyer's resumption of that role. As we have already observed, on October 24, 1996, the bankruptcy court entered an order temporarily removing Geyer as building manager.
In response to defendants' motion for summary judgment in this action, Geyer argued that if the consent order had been submitted in a timely manner, it would have been entered before NEDC's motion was filed, and the bankruptcy court would not have had jurisdiction over NEDC's motion to remove him as building manager. As we have already discussed, there was sufficient evidence in the record of defendants' alleged negligent handling of the consent order and its impact on the litigation that followed, which allegedly caused damage to OWPURA.
Viewing the same circumstances in the context of Geyer's management claim, we must assume that the failure to secure an early dismissal of the bankruptcy action meant that NEDC would have had to pursue its application for Geyer's removal in superior court rather than bankruptcy court. The question that this generates concerns whether the superior court would have entered the temporary injunction entered by the bankruptcy court. Geyer argues that a different result would have attached.
The trial judge disagreed, granting summary judgment and dismissing the management claim because Geyer failed to show that "litigation in state court brought by NEDC would have resulted in a decision more favorable . . . than in Bankruptcy Court." According to the trial judge, the "loss of a potential benefit that might have been obtained in litigation in the face of an un-appealed, unmodified Bankruptcy Court Order to the contrary is too speculative to establish proximate cause."
Geyer argues that the trial court's reasoning is flawed because NEDC could not have prevailed in superior court. He contends that Mercantile's "June 24, 1996 commitment letter for the first mortgage was expressly conditioned on Mr. Geyer's being the manager of the building." That is certainly a legitimate understanding of what Mercantile may have intended. On the other hand, Halle testified that this contractual condition was not a rigid requirement, suggesting it would not have been strictly enforced.
The bankruptcy court inquired about this, at one point asking Halle if Mercantile would make the loan if "Charlie Geyer drops dead tonight" or "if McCormick is running it [OWPURA] or not." Halle replied in the affirmative to both questions.
Accordingly, although the written loan commitment may suggest otherwise,*fn14 we cannot overlook that Halle's testimony is suggestive of the lack of rigidity that may have been attributable to the condition in the loan commitment.
We also discern from Geyer's argument that he believes the superior court would have shown greater deference to the bankruptcy court's approval of Mercantile's commitment letter as part of its overall approval of the Prudential refinancing than it received in the post-closing bankruptcy proceedings. He argued that in approving the commitment letter the bankruptcy court approved the letter's condition that Geyer's future management of the building was part of the loan arrangement. However, the bankruptcy court's approval of the commitment letter did not include an explicit approval and acceptance of the letter's condition that Geyer be the building manager.
Geyer also asserts that NEDC would not have prevailed in superior court because "the lender's attorney expressly stated on the record in the Bankruptcy Court that they consented to Mr. Geyer's managing the building." Geyer is correct that Midland's counsel indicated at a bankruptcy hearing in October 1996, that Midland consented to Geyer acting as the building's manager. But Midland's counsel additionally stated that "Midland did not specifically address in the loan documentation who would, in fact, manage the property. We feel that that is the obligation obviously of the [Owner's] trust." In short, Midland appeared somewhat indifferent about who acted as building manager.
Despite the gloss urged by Geyer, all this evidence was before the bankruptcy judge when he decided to temporarily remove Geyer as manager. In rendering that decision, the bankruptcy judge thus had the same evidence that would have been presented to the superior court if the action had been commenced there. In addition, the bankruptcy judge utilized the standards set forth in Federal Rule of Civil Procedure 65 in granting the preliminary injunction; those standards are not materially different from the standards governing the entry of interlocutory injunctions contained in Rule 4:52, which would have been applied if NEDC's application was heard in the Chancery Division. Certainly, we are not so naïve to think that judges applying the same legal standards will always come to the same conclusion on a confusing or complicated set of facts and circumstances. But Geyer's claim cannot rest solely on the possibility that a state judge might have rendered a different decision than that reached by the bankruptcy judge. Without more, this claim was grounded on thin air and could not, as the trial judge correctly held, survive summary judgment. See Lamb v. Barbour, 188 N.J. Super. 6, 12 (App. Div. 1982) (the burden of proving a causal connection between the attorney's negligence and the client's loss "cannot be satisfied by conjecture, surmise or suspicion"), certif. denied, 92 N.J. 297 (1983); see also 2175 Lemoine Ave. Corp. v. Finco, Inc., 272 N.J. Super. 478, 488 (App. Div.), certif. denied, 137 N.J. 311 (1994); Vort v. Hollander, 257 N.J. Super. 56, 61 (App. Div.), certif. denied, 130 N.J. 599 (1992).
We do not overlook the importance of the fact, urged by defendants, that Geyer may not have been defendants' client. Defendants assert that they represented only OWPURA. Although much of the record supports that contention, we observe that in 1997 the Pitney firm sought the execution of a general release in its favor by not only OWPURA but also Geyer. The record on appeal also includes the Pitney firm's opinion letter, which was part of the closing, that indicates the Pitney firm was acting "as special New Jersey counsel" to Geyer "in connection with the execution and delivery of" a personal guarantee he executed in connection with the closing. These items are suggestive, although not necessarily conclusive, that defendants may have owed some duty to Geyer in connection with his management of the property. Accordingly, the record does not sufficiently support defendants' contention that summary judgment in its favor on the management claim could be based upon the lack of an attorney/client relationship between the Pitney firm and Geyer.
Nevertheless, for the reasons we have indicated, Geyer's malpractice claim against defendants -- with regard to this temporary loss of this personal interest*fn15 -- was without substance and was correctly dismissed by way of summary judgment.
C. THE CLAIM THAT DEFENDANTS' ALLEGED MALPRACTICE CAUSED A LOSS OF THE TAX ABATEMENT AND THE DOCTRINE OF ESTOPPEL
Geyer has also argued that the trial judge erred in estopping him from asserting defendants' malpractice in causing OWPURA to lose the benefit of a municipal tax abatement.
As we have observed, OWPURA transferred title to the building at the August 1996 closing to the Owner's Trust.
Newark's tax-abatement program for the building required that the city be notified and give its approval before any such transfer took place. Prior approval was not obtained, and the city subsequently cancelled the abatement and placed the building on the tax rolls, causing OWPURA to suffer damages. Although Bristol had been notified that the abatement benefit would be forfeited if OWPURA failed to obtain the city's approval prior to the transfer, he did not act on that knowledge, thereby triggering the circumstances that underlie this aspect of the malpractice claim.
The record reveals that, in 1998, the receiver filed an action against the city in an attempt to recover the abatement's benefit. Later, the receiver and the city attempted to settle the matter.
The parties appear to have disputed in the trial court whether a settlement was reached. The trial judge dismissed the tax abatement malpractice claim based on his determination that, through the purported settlement of the receiver's abatement action, OWPURA had obtained a recovery for loss of the tax abatement and that, if the malpractice claim based on that abatement were permitted to continue, OWPURA might obtain two such recoveries for the same economic injury. Finding such an outcome to be impermissible, the trial judge granted summary judgment to defendants.
When the trial judge granted summary judgment on April 12, 2006, the record appeared murky as to whether the receiver and the city settled the abatement action, but the matter was laid to rest in later proceedings in this court. In 2007, we disposed of the receiver's appeal of the dismissal of the tax abatement action. In our unpublished decision of May 24, 2007, we referred to the parties' attempts to settle the matter, but in observing that "those efforts were unsuccessful," we ultimately affirmed the dismissal of the action on its merits. McMahon v. City of Newark, Docket No. A-1703-05T5 (slip opinion at 6). Accordingly, we conclude that it has been determined that no settlement of the tax abatement issue with the city occurred and that there was no factual basis for the trial judge's estoppel theory because there was no likelihood that there had been -- and no further likelihood that there could be -- a double recovery.
D. THE EXCESSIVE PREMIUM CLAIM
Geyer has argued that the trial judge also erred in determining there was insufficient evidence to raise a factual issue regarding whether the Pitney firm's alleged malpractice caused OWPURA to pay an excessive premium for a surety/indemnity bond.
In order to receive the loan from Prudential, OWPURA was required to obtain a bond to cover outstanding judgments that had been entered against OWPURA and its partners. On July 25, 1996, First Fidelity Surety, Inc. issued a bond which covered judgments that accrued both prior to and after the filing of the petition in bankruptcy.
The record suggests that, while post-petition judgments could not be expunged, it would have been a relatively simple exercise for the Pitney firm to have removed and expunged the pre-petition judgments so that they would not have been subject to the bond. The Pitney firm, according to Geyer, was negligent in this regard and, as a result, some part of the $55,000 premium that OWPURA paid for the bond was unnecessarily paid to indemnify against pre-petition judgments.
The trial judge rejected the argument that defendants' alleged mistakes caused an unnecessarily expensive bond. In doing so, the judge focused only on the circumstance that the "posting of a bond to cover post-petition judgment[s] was clearly required" and mistakenly overlooked the circumstance that the bond also partially applied to pre-petition judgments. We agree that the trial judge correctly determined that OWPURA had no viable claim for that part of the $55,000 premium payment necessary to cover the post-petition judgments, but the same cannot be said for that portion of the premium that covered pre-petition judgments. There are questions regarding defendants' failure to secure the removal of pre-petition judgments prior to obtaining the indemnity bond, which may have impacted upon the cost of the bond. These questions could not be resolved by way of summary judgment on the present record.
E. EXCESSIVE FEES AND DISGORGEMENT
We lastly note that as part of the damages sought in this malpractice action, Geyer sought to recover the legal fees that had been paid by OWPURA to the Pitney firm, arguing that those fees were excessive and, also, that a finding of malpractice by defendants would require that fees be disgorged, relying upon Saffer v. Willoughby, 143 N.J. 256, 272 (1996) (holding that "[o]rdinarily, an attorney may not collect attorney fees for services negligently performed").
In its written decision, the trial judge addressed only the excessiveness prong of the argument, granting summary judgment and dismissing Geyer's fee-based claim in its entirety because his liability expert could not opine that the Pitney firm's fees were excessive, given the amount of legal work that the Pitney firm had been required to perform. We have no cause to disturb that ruling.
But, because the judge determined that Geyer had failed to demonstrate an actionable claim of malpractice, the judge did not rule on the disgorgement issue. We agree that disgorgement would not be appropriate absent proof of malpractice, but, if malpractice could be proven, disgorgement would constitute an appropriate basis for recovery. If Geyer had standing to pursue this malpractice action, we agree that he would have been entitled to pursue further this disgorgement theory.
To summarize, with the exception of Geyer's management claim, we agree with defendants' argument that Geyer did not have standing to commence and maintain this legal malpractice action. With that exception, we reverse that part of the April 12, 2006 order that denied defendants' motion on the standing issue. Consequently, the action commenced by Geyer -- again, with the exception of the management claim -- must be dismissed without prejudice. We do not, however, foreclose the trial court's consideration of a motion to amend or intervene to allow the continuation of the action by the true owner of the claim.
We have held that Geyer had standing to pursue the claim regarding the loss of his right to manage the building.
However, we agree with the trial judge that the claim was speculative and, therefore, affirm the dismissal of this claim with prejudice.
To the extent that it has relevance in light of our holding regarding standing, we affirm the grant of summary judgment on the claim that the Pitney firm's fees were excessive, but we reverse the order of April 12, 2006, insofar as it granted summary judgment in favor of defendants on all the other claims that have been raised on appeal.*fn16
We do not retain jurisdiction.