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Cole, Schotz, Meisel, Forman & Leonard, P.A. v. Kleiman


July 16, 2008


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, L-1745-06.

Per curiam.


Argued April 23, 2008

Before Judges Cuff, Lihotz and Simonelli.

Defendants appeal from two Law Division orders. The first, entered on May 11, 2007, granted plaintiff partial summary judgment and dismissed defendants' answer, separate defenses and counterclaim with prejudice. The second, entered August 3, 2007, granted plaintiff summary judgment and entered final judgment against defendants in the amount of $123,387.31. We affirm that part of the May 11, 2007 order dismissing defendants' counterclaim with prejudice; we reverse that part of the May 11, 2007 order dismissing defendants' answer and separate defenses with prejudice; and we reverse the August 3, 2007 order entering final judgment.

Plaintiff claims defendants hired it to represent them in a complex commercial matter entitled, 300 Broadway Healthcare Center, L.L.C. v. Happy Days Adult Healthcare, L.L.C., filed in the Superior Court of New Jersey, Chancery Division, Essex County (the Chancery action). The plaintiffs in the Chancery action sought to remove defendant, Happy Days Adult Healthcare, L.L.C. (Happy Days), as manager of a nursing home located in Newark. Defendants, Brian Kleiman, Rivka Chaya Kleiman, Steven Kleiman and Rivka Basya Kleiman were managers of Happy Days and the nursing home.

Plaintiff did not obtain a signed retainer agreement from any of the defendants in the Chancery action. Nonetheless, plaintiff performed legal services, and claimed that defendants owed it $123,387.31. Defendants refused to pay, claiming that the individual defendants did not retain plaintiff, that plaintiff over-billed, and that plaintiff committed malpractice.

Plaintiff filed a complaint for payment. Defendants filed an answer, separate defenses, and a counterclaim alleging malpractice stemming from plaintiff's failure to file a motion to recuse the judge in the Chancery action, who had allegedly expressed bias against them;*fn1 to follow defendants' directions; to adequately represent them; and to provide them with a minimum standard of care. Defendants also filed an affidavit of merit.

Following the close of discovery, plaintiff filed a summary judgment motion to dismiss defendants' counterclaim for failure to provide an expert report. Plaintiff did not request dismissal of defendants' answer and separate defenses. The motion judge granted the motion, but in addition to dismissing defendants' counterclaim, he dismissed defendants' answer and separate defenses.

Defendants sought reconsideration and to re-open discovery, contending that the judge exceeded his authority by dismissing their answer and separate defenses. They attached an expert report to their motion papers. The judge denied the motion without explaining why he dismissed defendants' answer and separate defenses.

Plaintiff had also filed a motion for summary judgment on its claim for payment of counsel fees. The judge granted the motion based upon oral argument presented at plaintiff's first summary judgment motion. The judge did not make any written or oral findings of facts and conclusions of law, and entered judgment in the amount of $123,387.31. This appeal followed.

Defendants contend the motion judge erred in granting summary judgment dismissing their counterclaim based upon their failure to provide an expert report. Defendants argue that an expert report is not necessary because the malpractice and damages were "so obvious that the trier of fact [could] resolve the issue as a matter of common knowledge." Defendants also argue that the judge erred by failing to request a copy of the expert's report when advised of its existence, and by not permitting defendants to submit an expert report beyond the discovery deadline. We disagree.

"To establish legal malpractice, a plaintiff must show '(1) the existence of an attorney-client relationship creating a duty of care upon the attorney; (2) the breach of that duty; and (3) proximate causation.'" Stoeckel v. Twp. of Knowlton, 387 N.J. Super. 1, 14 (App. Div.) (quoting Conklin v. Hannoch Weisman, 145 N.J. 395, 416 (1996)), certif. denied, 188 N.J. 489 (2006). In a professional negligence action, an expert is not required if "the average layperson could apply his or her general understanding and knowledge to find that the defendant" breached a duty of care. Hubbard v. Reed, 168 N.J. 387, 396 (2001). However, "[b]ecause the duties a lawyer owes to his client are not known by the average juror, a plaintiff will usually have to present expert testimony defining the duty and explaining the breach." Stoeckel, supra, 387 N.J. Super. at 14 (citing Sommers v. McKinney, 287 N.J. Super. 1, 10 (App. Div. 1996)); Carbis Sales, Inc. v. Eisenberg, 397 N.J. Super. 64, 78 (App. Div. 2007). It is only in rare cases that expert testimony is not required in legal malpractice actions. Sommers, supra, 287 N.J. Super. at 10.

Here, the allegations in defendants' counterclaim involve an attorney's relationship with a client and the attorney's performance in a complex commercial matter. We agree with the motion judge that an expert is required to prove defendant's malpractice claim. Thus, we find no error in his dismissal of the counterclaim on this basis.

We also find no error in the judge's failure to request a copy of the expert's report when advised of its existence, and his refusal to permit defendants to submit an expert report beyond the discovery deadline. Defendants never filed a motion to extend discovery to permit the late filing of an expert report. R. 4:24-1(c). Had they done so, the motion would have been properly denied for failure to show good cause, Rule 4:24-1(c), or due diligence, Rule 4:17-7. Defendants offered no explanation whatsoever for their delay in proffering an expert report. Bender v. Adelson, 187 N.J. 411, 428-29 (2006).

Furthermore, the expert's report is a net opinion. "Qualified expert opinion is admissible to assist the jury, N.J.R.E. 702, but there must be a factual and scientific basis for an expert's opinion." Jimenez v. GNOC, Corp., 286 N.J. Super. 533, 540 (App. Div.) (citing Rubanick v. Witco Chem. Corp., 242 N.J. Super. 36, 45 (App. Div. 1990), modified o.g., 125 N.J. 421 (1991)), certif. denied, 145 N.J. 374 (1996). N.J.R.E. 703 governs the basis of expert opinion. It states:

The facts or data in the particular case upon which an expert bases an opinion or inference may be those perceived by or made known to the expert at or before the hearing. If of a type reasonably relied upon by experts in the particular field in forming opinions or inferences upon the subject, the facts or data need not be admissible in evidence. [N.J.R.E. 703.]

Based upon this rule, "[a]n opinion lacking foundation is worthless." Jimenez, supra, 286 N.J. Super. at 540. "An expert opinion that is not factually supported is a net opinion or mere hypothesis to which no weight need be accorded." Nextel of N.Y., Inc. v. Borough of Englewood Cliffs Bd. of Adjustment, 361 N.J. Super. 22, 43 (App. Div. 2003) (citing Buckelew v. Grossbard, 87 N.J. 512, 524 (1981)). "The net opinion rule is a prohibition against speculative testimony." Grzanka v. Pfeifer, 301 N.J. Super. 563, 580 (App. Div.) (citing Vuocolo v. Diamond Shamrock Chem. Co., 240 N.J. Super. 289, 300 (App. Div.), certif. denied, 122 N.J. 333 (1990)), certif. denied, 154 N.J. 607 (1997). "'Under this doctrine, expert testimony is excluded if it is based merely on unfounded speculation and unquantified possibilities.'" Ibid. (quoting Vuocolo, supra, 240 N.J. Super. at 300).

The net opinion rule also "focuses upon 'the failure of the expert to explain a causal connection between the act or incident complained of and the injury or damage allegedly resulting therefrom.'" Kaplan v. Skoloff & Wolfe, P.C., 339 N.J. Super. 97, 102 (App. Div. 2001) (quoting Buckelew, supra, 87 N.J. at 524). The doctrine is "a mere restatement of the established rule that an expert's bare conclusions, unsupported by factual evidence, [are] inadmissible." Buckelew, supra, 87 N.J. at 524.

Here, defendants' expert report fails to set forth any standard of care and how plaintiff breached that standard; fails to show any causal connection between the alleged breach and damages suffered by defendants; and fails to address damages. The report is nothing more than an impermissible net opinion, which was insufficient to defeat summary judgment on defendants' malpractice claim. Thus, the motion judge properly dismissed the counterclaim with prejudice.

We do not reach the same conclusion about the judge's dismissal of defendants' answer and separate defenses, and his entry of final judgment against defendants. First, the dismissal of defendants' answer and separate defenses exceeded the scope of the relief plaintiff sought in its first summary judgment motion. Second, the judge improperly entered final judgment based upon his erroneous dismissal of the answer and separate defenses. More importantly, defendants provided evidence that the individual defendants had no personal liability for the legal fees owed to plaintiff, that defendants disputed the services rendered, and that the fee sought was unreasonable. This evidence, viewed in a light most favorable to defendants, creates a genuine issue of material fact precluding summary judgment on plaintiff's claim for payment of its legal fees. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

Affirmed in part, and reversed in part.

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