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Gilgallon v. R.C. Shea & Associates

July 9, 2008

RONALD GILGALLON, EILEEN GILGALLON AND MARY HENNIG, AS INDIVIDUALS AND TAXPAYERS OF HUDSON COUNTY, PLAINTIFFS-APPELLANTS,
v.
R.C. SHEA & ASSOCIATES, SHEA & NOVY, P.C., ROBERT NOVY, ROBERT SHEA, STACIE BRUSTMAN, AND COUNTY OF HUDSON, DEFENDANTS-RESPONDENTS, AND MICHAEL DERMODY, DEFENDANT.



On appeal from Superior Court of New Jersey, Law Division, Hudson County, L-4228-03.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued February 14, 2008

Before Judges Payne and Sapp-Peterson.

Plaintiffs Ronald Gilgallon, Eileen Gilgallon and Mary Henning appeal, pro se, from the dismissal of their action against Hudson County and their former attorneys, designated in the complaint as R.C. Shea & Associates, Shea & Novy, P.C., Robert Novy, Robert Shea, and Stacie Brustman. On appeal, they raise as issues (1) whether plaintiffs' complaint against defendant Hudson County was properly dismissed without prejudice as the result of the entry of a federal court injunction against further such suits; (2) whether plaintiffs were collaterally estopped from bringing their claims against their former attorneys; and (3) whether entry of summary judgment in favor of plaintiffs' former attorneys was appropriate because plaintiffs could not demonstrate that the attorneys had failed to file opposition on plaintiffs' behalf to a successful motion in federal court to dismiss plaintiffs' complaint, because they could not demonstrate in the absence of expert testimony that the attorneys' representation was negligent, and because proximate causation between the attorneys' conduct and plaintiffs' alleged damages had not been shown. Following our review of the issues raised in light of the record on appeal, the arguments of the parties, and applicable legal precedent, we affirm.

I.

This matter has a tortured history and precedents that we describe in simplified form for purposes of this appeal. For approximately seventeen years, plaintiff Ronald Gilgallon was the owner of security services known first as Consec Security Group and then Consec Security Systems. However, on December 16, 1992, he was arrested for insurance fraud. Thereafter, on May 19, 1993, Ronald's wife Eileen, a nurse with very limited involvement in her husband's security businesses, formed Consec Security Strategies, Inc. and later merged that company into another entity designated as CFS Services. (For convenience, we will refer to Eileen Gilgallon's companies hereafter as CFS.) Although Eileen Gilgallon's companies purchased no assets from her husband's business, they occupied the same offices, utilized the same employees, and carried on the same business. It was later determined that throughout the relevant period, Ronald was either designated as an employee of CFS or, erroneously, as having left that employment, so that the company could list on its public bid applications that no officer had been arrested or convicted of a crime. Ronald Gilgallon was in fact convicted on felony charges of insurance fraud on February 22, 1995.

In 1995, Hudson County solicited bids for a contract to provide security guard services to various of its facilities, including Meadowview Hospital. Although CFS was the low bidder, the contract was awarded to Labor Management Concepts, Inc. (LMC), which had submitted the second lowest bid, following a determination that CFS was not the lowest "responsible" bidder pursuant to N.J.S.A. 40A:11-6.1. A similar result occurred in 1996. Both awards were contested in court by CFS.

Eventually, a ten-day responsibility hearing took place before Charles P. Daglian who, on April 28, 1997, issued findings and a recommendation to the Hudson County Board of Chosen Freeholders that the Board declare CFS not to have been a responsible bidder in either year. The hearing officer's recommendation was adopted on June 12, 1997, and the two contracts were retroactively awarded to LMC. That determination was upheld by Judge Gallipoli in a ruling in a CFS-initiated legal action, issued on October 23, 1997. Judge Gallipoli denied plaintiffs' motion for reconsideration in an order dated December 4, 1997.

During the pendency of the state court action, plaintiffs moved to amend their complaint to assert a taxpayer claim that an "embezzlement scheme" existed between the County and LMC. However, before plaintiffs' motion was decided, on October 16, 1997, Hudson County filed an amended answer asserting a cross-claim against LMC for unauthorized use of County telephones at Meadowview Hospital. In light of Hudson County's action and in anticipation of settlement, CFS's motion to amend was denied.

Hudson County's cross-claim was settled on December 26, 1997. The settlement agreement between the parties recited that CFS had made various allegations concerning Hudson County and LMC; among them, claims that LMC had:

(a) Made unauthorized telephone calls from telephones belonging to County of Hudson which were located at Meadowview Hospital;

(b) That Labor Management[] Concepts, Inc. had not been fully authorized by Freeholder Resolution to perform security guard services during the period July 1995 through the present and was thus not entitled to payment during that period; and

(c) That Labor Management Concepts, Inc. had applied for, and obtained, payments for more security guard service hours ...


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