August 21, 2008
SCHACHTER, TROMBADORE, OFFEN, STANTON & PAVICS, P.A., PLAINTIFFS-RESPONDENTS,
TRUDI PETERS, DEFENDANT/THIRD-PARTY PLAINTIFF-APPELLANT,
MICHAEL J. STANTON, AN ATTORNEY AT LAW OF THE STATE OF NEW JERSEY; SCHACHTER, TROMBADORE, OFFEN, STANTON & PAVICS, P.A.; NORRIS, MCLAUGHLIN & MARCUS, P.A.; WILLIAM TROYAN; AND WILLIAM M. TROYAN, INC. AND/OR TROYAN, INC., THIRD-PARTY DEFENDANTS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Law Division, Hunterdon County, Docket No. L-290-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued: October 31, 2007
Before Judges Cuff, Lisa and Lihotz.
This matter is before the court on leave granted to review an August 18, 2006 order denying a motion for reconsideration of March 3 and May 22, 2006 orders granting summary judgment in favor of counterclaim defendant Schachter, Trombadore, Offen, Stanton & Pavics, P.A. (Schachter firm),*fn1 and third-party defendant William Troyan.*fn2 Peters retained third-party defendant Michael Stanton, a partner in the Schachter firm, to obtain a qualified domestic relations order (QDRO) to enforce the equitable distribution provisions of her 1993 property settlement agreement (PSA)*fn3 and Judgment of Divorce (JOD). She claims the combination of inordinate delay and negligent performance of his services caused her substantial monetary loss. Troyan prepared a domestic relations order (DRO), which ultimately became a QDRO,*fn4 but Peters claims that Troyan performed his services negligently and caused her to receive significantly less than the agreement reached by the parties. We conclude that the prior enforcement proceedings, particularly the second proceeding before Judge Herr, and the subsequent appeal do not bar the current negligence and breach of contract actions against the lawyer or the expert. We, therefore, reverse and remand for further proceedings.
Plaintiff, the Schachter firm, filed a complaint in the Special Civil Part on November 14, 2002, against defendant Peters in which plaintiff sought to recover $7,061.90 in attorneys' fees incurred and unpaid by Peters during post-judgment proceedings to enforce the terms of the JOD. Peters filed an answer in which she denied owing anything to the Schachter firm, and filed a counterclaim in which she asserted that the Schachter firm had performed its services negligently.
On July 14, 2005,*fn5 defendant filed a second amended answer with affirmative defenses, a counterclaim, and a third-party complaint against the Schachter firm, Stanton, the Norris firm, Troyan and William M. Troyan, Inc. In order to place the issues presented in this appeal in context, we need to review the prior matrimonial proceedings.
Defendant Peters and John Thornton, Jr., married on February 16, 1979. The complaint for divorce was filed January 16, 1993. The JOD was filed on December 6, 1993.
The JOD states:
3. Each party's pension shall be the subject of a Qualified Domestic Relations Order which shall be prepared by plaintiff's counsel. The parties agree that each shall be entitled to 50 percent of their respective pensions for the period from February 16, 1978*fn6 until January 16, 1993. The QDRO Order shall be submitted to the trustee for their respective pensions providing for the payment at the time of distribution of this agreed sum to each party.
Peters intended to begin immediate receipt of her share of her husband's pension. Thornton and Peters were employed by the New Jersey Education Association and participated in the same pension plan (the Plan).
Thornton failed to obtain the QDROs as required by the JOD. Peters sought assistance from a pension attorney, Barbara Murray, and an actuary, Mikel Uchitel, of Abar Pension Services, Inc. (Abar), between 1993 and 1995. Murray did not litigate; therefore, Peters retained Stanton of the Schachter firm in September or October of 1995. In the enforcement proceeding commenced by Stanton, he retained Troyan, who held himself out as an actuary and pension expert, and who was generally accepted as such by many judges.
On January 11, 1996, Stanton wrote to Troyan requesting his services "as an expert for the purpose of preparing the appropriate QDRO." In his response, Troyan noted that the fee for the first order is $500 and the fee for the second and, if necessary, third order is $400. This fee structure was predicated upon the provision of all necessary data to his firm. Troyan informed Stanton that the quoted fee did not include "independent discovery by our firm." The retainer letter also stated, "[i]f redrafting is due to an oversight on our part, the work is done at no additional fee." The letter informed Stanton that all drafting would be based upon "the literal language of the [PSA], [JOD] or other operative instrument," and silence by an attorney would be deemed as an endorsement of the literal language. Troyan's letter also stated, "[a] key feature of our drafting service is 'preapproval review,'" because it reduces the cost of the DRO and allows the attorney to be more confident that the order executed by the court will be qualified by the plan. Stanton signed and returned Troyan's retainer agreement on February 15, 1996.
Abar, the firm previously retained by Peters and her former attorney, sent its calculations to Stanton, who provided them to Troyan. On May 20, 1996, Stanton was sent drafts prepared by Troyan. The letter stated that the drafts were based upon the December 28, 1995 calculations of Abar's employee, Uchitel. It also stated,
THERE WILL BE NO FOLLOW-UP TO THIS LETTER, IF YOU DO NOT CONTACT THIS OFFICE WITHIN TWO MONTHS OF THE DATE OF THIS LETTER, WE WILL CONCLUDE THAT YOU HAVE MADE OTHER ARRANGEMENTS FOR THE SUBMISSION AND QUALIFICATION OF THE ENCLOSED DRAFT(S) AND THEREFORE NO FURTHER SERVICES WILL BE REQUIRED FROM OUR FIRM.
Stanton replied to this letter five months later on October 29, 1996, voicing some questions on the drafts. On October 30, 1996, Troyan sent revised drafts to Stanton and subsequently two DROs were submitted to the court for its approval.
In early 1997, Peters filed a post-judgment motion in the matrimonial action seeking an order to enforce the JOD and for reimbursement of the fees incurred to prepare the DROs and to prosecute the enforcement motion. In opposition, Thornton contended that his obligation was unclear and that the JOD did not provide that his former wife was entitled to draw on his pension prior to his retirement. Judge Bernhard entered an order allowing Peters to submit the two DROs prepared by Troyan to the administrator of the parties' pension plan (1997 DROs). He also ordered Thornton to reimburse Peters $7,740.50 for fees incurred by her. Thornton appealed from this order and we affirmed. Thornton v. Thornton, A-3741-96 (App. Div. Nov. 5, 1998). In the appeal, Thornton argued there was no basis to impose fees and the motion judge acted precipitously.
The 1997 DRO for Thornton's pension provided that Peters, the alternate payee, was to be paid $2,106.08 each month, over her lifetime. In addition, Peters would receive each month the additional sum of $2,106.08 until her death or the receipt of thirty-six monthly payments, whichever was earlier. This provision was designed to capture the monthly benefit not received by Peters due to Thornton's delay. The 1997 DRO for Peters' pension provided that the annuity start date for Thornton, the alternate payee, was to coincide with the annuity start date for Peters, and if Peters retired early, then both parties' benefits would be reduced by the same percentage. Thornton was to receive $303 of Peters' monthly benefit.
The Plan administrator found that the 1997 DROs were not qualified. Stanton informed Troyan of this event by letter dated May 14, 1997, and requested Troyan's assistance in preparation of a response to the Plan's analysis of the DROs. Troyan sent revised drafts of the DROs on September 2, 1997. Under the revised drafts, the monthly benefit was not "actuarially reduced for the Alternate Payee's age" and the additional thirty-six monthly payments to Peters were excluded.
On October 20, 1997, Stanton requested that the revised orders be sent for pre-qualification to the Plan. On February 24, 1998, the Segal Company, the Plan actuary, contacted Troyan, Inc. expressing its concern over the provision that allowed Peters to elect when she received her benefit. Consequently, On February 28, 1998, Troyan's office requested additional calculations, which would be inserted into another draft of the DROs, from the Plan. However, on April 1, 1998, the pension Plan notified Troyan that it would not incur the additional expense of further actuarial calculations without the written acknowledgement of Thornton that he has preliminarily agreed to the drafts that required the new calculations.
On May 13, 1998, Stanton wrote Peters summarizing their past discussions, including a suggestion that she may be required to sue the Plan, but he did not endorse this course of action. He stated:
I did not make a "decision" nor a "recommendation" that you sue the company or the Plan. In fact, I advised you that you must consult with another attorney who might be qualified to make such a recommendation. I advised you that it was outside of the scope of my expertise to determine whether or not you have the right to sue the company or the Plan, or whether or not it is advisable under the circumstances to sue the company or the Plan.
Stanton clarified that he had not been negotiating with the Plan over the payments, but had been negotiating with the Plan to ensure qualification of the DRO. He also noted that "[t]o the best of [his] knowledge the Plan has told  Troyan that the existing, signed and filed DRO cannot be qualified in its present form because part of it applies to the retroactive portion of your interest in the Plan."
Peters then hired Peter Fallon. She initially consulted with him in order to sue the Plan. In an attempt to avoid suing the Plan, Fallon decided that he would pursue the entry of new DROs, which could be qualified. Thus, Fallon requested that Troyan revise the 1997 DROs, which Troyan agreed to do for an additional fee.
After communicating with the Plan and working with Troyan, Fallon submitted revised DROs. The Plan pre-qualified these DROs and they were submitted with Peters' August 2, 2000 motion to revise and replace the 1997 DROs. Judge Herr issued an order on September 15, 2000, requiring Peters to retain Troyan, Inc. and stating, "Troyan shall prepare a Domestic Relations Order for each pension that the plan administrator will be able to qualify and that will distribute each party 50% of the other party's pension for the period of February 16, 1978 to January 16, 1993." The judge directed the attorneys to provide Troyan with a copy of the order, the JOD, and the transcript describing the interests to be equitably distributed by the DROs. Fallon requested additional direction from the court in order for the pension expert or actuary to correctly draft the new DROs. He proposed five different approaches that could be utilized for the calculations.
Thornton's attorney advocated two of those scenarios, including one in which the pension expert would do a straight Marx*fn7 analysis under the court's preliminary order, so that Peters would receive monthly payments at her retirement or would receive lower monthly payments if she elected to receive her payments earlier. Alternatively, Thornton argued that Peters should receive (1) a basic monthly benefit of $2,106 actuarially reduced to a smaller monthly payment due to Peters' age being less than the normal retirement age, plus (2) an additional monthly amount to compensate Peters for prior payments she did not receive. This would result in a total monthly payment of $2,398.58. During these discussions, Thornton expressed his objections to Troyan's involvement.
At the motion hearing, Judge Herr emphasized that the DRO should "make provision for [Peters] to receive every cent that she was due at the time she was due it together with interest that its earned from that time to the present, or until the time it is actually distributed to her." When asked to clarify how the DRO should be drafted, Judge Herr directed the parties to Linek v. Korbeil, 333 N.J. Super. 464 (App. Div.), certif. denied, 165 N.J. 676 (2000), which she held stood for the principle that the parties are entitled to the full benefit of the pension, plus all earned interest until the time of distribution. She further stated that her main concern was to have the pension expert draft an order that implemented the intent of the PSA and JOD as if there had been no delay from the date of divorce in Peters receiving her distributed share of her former husband's pension.
Judge Herr expressly declined to direct the actuarial formula or approach that should be used. She stated, "I'm going to give it to the pension evaluator to implement it exactly as it says in the property settlement agreement, making due regard for any credits that need to be given for payments that have been made." Judge Herr noted that whatever elections made since the QDRO was supposed to be carried out "will impact as would be normally dictated by having it done when it should have been done." She stated that the solution imposed on the parties' ongoing inability to qualify the DROs would be the same as that which was imposed in Linek. Thus, Troyan was to be retained in order to prepare the DROs assuring that [Peters] receives the same net benefits she would have received had [Thornton] complied with his obligation to prepare these Orders within a reasonable time after the December 6, 1993 entry of the Dual Judgment of Divorce, which I now find would have been no later than June 30, 1994.
Judge Herr rejected Thornton's objection to Troyan because he was a recognized expert and Thornton's attorney had no alternate to offer.
Subsequently, on September 29, 2000, Judge Herr, Peters' attorney, Thornton's attorney, Troyan, and Troyan, Inc. employee Rose Mary Weiss discussed the DROs telephonically. During the conference, Troyan stated he could serve as an impartial expert for the court. Troyan told the court that if Peters wanted to trigger her benefit before the earlier of Mr. Thornton's actual retirement or his attaining normal retirement age, as such age is defined in the plan, then we, unlike what we did before, would have to dramatically reduce the size of her benefit, so that she would sustain a very large actuarial reduction.
Alternatively, Troyan suggested that Peters could defer payment of her benefit to a later date, but that such an election would be within counsel's judgment.
The first issue Troyan addressed was the date at which Peters' property interest should be moved to pay status. He then inquired whether he was drafting orders using a Marx formula. Troyan also inquired whether Peters would receive survivor benefits.
In a September 29, 2000 letter confirming the telephonic discussions, Troyan stated he would prepare two draft orders that would entitle each party to an anti-Marx allocation and that each party would receive fifty percent of the marital portion of the other parties' pension earned as of January 16, 1993. The marital portion period would span from February 16, 1979 to January 16, 1993, and the benefit to each party would be the actuarial equivalent of the benefit payable over each party's own lifetime. Peters' benefits would commence as soon as practicable subsequent to the date the Plan administrator determines the order is qualified and Thornton would have the right to elect when to commence his payments. Troyan submitted the DRO drafts to the parties on October 16, 2000.
On October 23, 2000, Peters objected to the DRO draft because it inaccurately reflected that she had voluntarily waited until October 2000 to begin receiving the pension payments. Troyan responded that it was his understanding that payments were to commence as soon as possible and not as if Peters had begun receiving payments in July 1994. Additionally, Troyan estimated that Peters would receive a monthly benefit over $1,794.08. Troyan forwarded the DRO drafts to the court on December 18, 2000, which, with one slight modification, were pre-approved by the Plan.
On January 17, 2001 Judge Herr approved the revised DROs (the 2001 DROs) drafted by Troyan pursuant to her September 2000 order, and they were submitted to the Plan. In Peters' appeal from this order, she argued that Judge Herr abused her authority in ordering the preparation of the DROs and in approving those orders. We affirmed. Thornton v. Thornton, A-3516-00 (App. Div. April 12, 2002).
Once the DROs were qualified and accepted by the Plan, Peters began receipt of monthly payments from her former husband's pension plan but at an amount lower than anticipated at the time the couple entered their PSA, and at an amount that did not reflect the sum "lost" between entry of the JOD and the final implementation of the QDRO. This is the context in which Peters filed a counterclaim alleging legal malpractice and a third-party complaint against Troyan alleging negligence in response to the Schachter firm's complaint seeking unpaid legal fees.
In her second amended answer, counterclaim and third-party complaint that was the subject of the motions for summary judgment filed by the Schachter parties and Troyan, Peters alleged that Stanton negligently performed the services for which he was retained because he unreasonably delayed seeking enforcement of her right to her share of her former husband's pension, failed to investigate the expertise or capabilities of Troyan and any limitations on his expertise, and improperly delegated his legal responsibilities to a non-attorney, the purported actuarial expert. As a result of his negligence, Peters alleged that she never obtained a QDRO that would allow her to begin immediate receipt of her share of her former husband's pension.
As to Troyan, Peters alleged that he held himself out as an expert in DROs and dealing with large pension plans. Peters alleged that Troyan failed to keep Stanton and her informed of the difficulties he encountered and his progress in preparing a DRO that would effectuate the PSA and JOD and would be acceptable to the Plan. She alleged that Troyan had a duty not to cause financial harm to her, but the untimely QDRO did not effectuate the intent of the parties and caused her financial harm. She also alleged that Troyan did not have the expertise he purported to have and failed to inform the litigants and the court of his limitations.
In support of her negligence claims against Stanton of the Schachter firm, Peters relied on an opinion from Anthony Ambrosio, an attorney at law. He opined that Stanton and his firm had a duty to act promptly and diligently on Peters' behalf and the delay experienced in performing the task for which they were retained was substantial and unreasonable. He also opined that Stanton and his firm had an obligation to monitor the work of Troyan, to know and understand the qualifications and limitations of the retained expert, and that Stanton did not appreciate that only the pension plan may qualify a domestic relations order as consistent with the plan. Ambrosio opined that the Schachter parties deviated from the standard of care and that deviation caused direct financial harm to Peters.
In January 2006, the Schachter parties filed a motion for partial summary judgment. They argued that Peters' claims for lost pension benefits were barred by collateral estoppel. The motion judge granted this motion on March 3, 2006. The motion judge held that he was "constrained to find that . . . [Peters'] claims are barred by collateral estoppel." He held Peters may not believe she received everything to which she was entitled, but she had a full opportunity to litigate the issues. In so ruling, he stated that Puder v. Buechel, 183 N.J. 428 (2005) was controlling authority. Peters filed a motion for reconsideration of this order on March 22, 2006. By order dated April 12, 2006, the motion for reconsideration was denied.
In the memorandum opinion accompanying the order denying reconsideration, the judge noted that the motion did not meet the criteria for reconsideration set forth in D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990), and Rule 4:49-2. In response to Peters' claim that neither Judge Herr nor this court made a judicial determination whether the DROs prepared by Troyan conformed to Judge Herr's instructions, he stated:
Ms. Peters also notes that Judge Herr never made any judicial determination as to whether or not the QDROs prepared by Mr. Troyan were prepared in accordance with her instructions. However, there was no need for Judge Herr to do so. She gave instructions to Mr. Troyan to prepare the QDROs in accordance with the 1993 judgment of divorce and she signed the QDROs he prepared. Her decision was then upheld by the Appellate Division. The alleged incompetence was thus addressed, just as if there had been a settlement.
Additionally, Ms. Peters argues that the Appellate Division did not make a judicial determination as to whether the DROs entered by Judge Herr were prepared in accordance her instructions, and it merely determined that Judge Herr did not abuse her discretion. The fact remains, however, that Ms. Peters litigated the issue of the QDRO benefits to the farthest extent possible, and she cannot re-litigate it now. Contrary to Ms. Peters' assertion, this Court did consider the facts in the light most favorable to the non-moving party, consistent with R. 4:46-2 and Brill v. Guardian Life Ins. Co., 142 N.J. 520 (1995), and it did consider the significance of all probative, competent evidence.
On April 3, 2006, Troyan filed a motion for summary judgment. He, too, argued that Peters had previously litigated the issue of the value of her share of her former husband's pension benefits and was estopped from re-litigating that issue in this action. By order dated May 22, 2006, the judge granted this motion. He further ordered Troyan to appear for a previously noticed deposition on or before June 22, 2006. In his memorandum opinion, the judge stated that summary judgment is appropriate "[b]ecause Mr. Troyan's calculation of Ms. Peters' DROs was done pursuant to Judge Herr's Order and was approved by Judge Herr and the Appellate Division, and because the doctrine of collateral estoppel applies, as it did with respect to the Schac[h]ter Trombadore parties . . . ."
On June 22, 2006, Troyan was deposed. On August 3, 2006, Peters filed a motion for reconsideration of the March 3, 2006 and May 22, 2006 orders in favor of the Schachter parties and Troyan. The judge denied reconsideration by order dated August 18, 2006. In his memorandum of decision, the judge recognized that the Troyan deposition testimony disclosed information that raised questions about the nature and extent of his expertise. Nevertheless, the judge concluded that Peters "is still making the same arguments she made with respect to the previous motions." As to whether Troyan erred or misled the court and the parties, the judge noted "[w]hether or not he misled them, however, Judge Herr approved his calculations and her decision was upheld."
Having granted leave to appeal, the Supreme Court has remanded this matter to us to determine whether the resolution of the post-judgment matrimonial litigation to enforce and effectuate equitable distribution of Thornton's pension collaterally estops Peters from pursuing her negligence and breach of contract claims against the Schachter parties and the Troyan parties.
The central issue in this appeal is whether Judge Herr's order and this court's disposition of the appeal from that order can be viewed as a definitive ruling that the DRO drafted by Troyan and qualified and accepted by the Plan effectuated not only the intent of the parties expressed in the PSA but also Judge Herr's directive that Peters was to receive everything to which she was entitled. We hold that neither Judge Herr's order nor this court's prior ruling can be so considered.
Collateral estoppel, or issue preclusion, bars the re-litigation of an issue of law or fact which has been fully and fairly litigated in a prior proceeding. Mocci v. Carr Eng'g Assocs., P.A., 306 N.J. Super. 302, 309 (App. Div. 1997) (citing Restatement (Second) of Judgments § 29 (1982)), certif. denied, 153 N.J. 404 (1998).
For the doctrine of collateral estoppel to apply to foreclose the relitigation of an issue, the party asserting the bar must show that: (1) the issue to be precluded is identical to the issue decided in the prior proceeding; (2) the issue was actually litigated in the prior proceeding; (3) the court in the prior proceeding issued a final judgment on the merits; (4) the determination of the issue was essential to the prior judgment; and (5) the party against whom the doctrine is asserted was a party to or in privity with a party to the earlier proceeding. [In re Estate of Dawson, 136 N.J. 1, 20-21 (1994) (citations and parentheticals omitted).]
Accord Busch v. Biggs, 264 N.J. Super. 385, 399 (1993).
In determining whether collateral estoppel correctly applies in the instant case, the motion judge equated this case with Puder, supra, 183 N.J. 428, and distinguished it from Ziegelheim v. Apollo, 128 N.J. 250 (1992). Ziegelheim, involved a claim by a matrimonial litigant against her former attorney. 128 N.J. at 257-58. The plaintiff filed a legal malpractice against her former attorney claiming that he had failed to discover important information that led her to accept an inadequate settlement. Id. at 255. The trial judge ruled in favor of the attorney noting that the plaintiff had stated on the record that she understood the terms of the settlement and that they were fair. Id. at 259. The judge also noted that the record revealed that the attorney made an effort to execute the agreement in a timely fashion. Ibid. The trial court found that the attorney's alleged failure to investigate the case properly was precluded by the findings of the court when the plaintiff attempted to reopen the settlement itself. Ibid.
The Supreme Court recognized that lawyers owe a duty to their clients, which includes, among other things, making a careful investigation of the facts of the matter, formulating a legal strategy, filing the appropriate papers, and maintaining communication with the client. Id. at 260-61. Thus, the Court found that "[t]he fact that a party received a settlement that was 'fair and equitable' does not mean necessarily that the party's attorney was competent or that the party would not have received a more favorable settlement had the party's incompetent attorney been competent." Id. at 265.
The judge denied the request to reopen the settlement because "'[a]mple opportunity existed for full discovery,' and that 'the parties had their own accountants as well as counsel.'" Id. at 266. The Supreme Court found that the court's failure to reopen the settlement "did not implicate the competence of counsel, and indeed, was premised on the presumptive competence of counsel." Ibid. Consequently, the attorney could not invoke the court's ruling on that matter to bar a challenge to his competence. Ibid. In addition, the Court found that there were factual disputes concerning the attorney's delay in finalizing the agreement, as well as his failure to write down the settlement terms prior to the hearing, so summary judgment on those counts were not warranted. Ibid.
In Puder, supra, the Court also addressed the issue of attorney malpractice within the context of a matrimonial settlement. 183 N.J. at 430. The wife alleged that her attorney improperly recommended that she accept an inadequate settlement and failed to obtain her consent before accepting that settlement. Ibid. The wife's attorney negotiated a favorable settlement for her client and advised her client to accept. Id. at 431-32. After the court was advised that the parties' had reached a settlement, the wife received a second opinion on the settlement, and based upon that opinion, she informed her attorney that she would not abide by the settlement, discharged her first attorney, and hired new counsel. Id. at 432. The husband moved to have the first settlement enforced, during which the wife's first attorney sued her for unpaid legal fees. Ibid. The wife brought a counterclaim for malpractice. Ibid.
During the trial on whether the first settlement should be enforced, the parties reached a new settlement. Id. at 433. When questioned on the stand about the new settlement, the wife stated that the new settlement was acceptable to her and that she discussed it thoroughly with her attorney. Ibid. She also stated that she understood the court had not yet decided the validity of the first settlement, and she was voluntarily accepting the second settlement, which she found to be fair. Id. at 433-34. However, upon further questioning, the wife stated that a motivating factor in accepting the second agreement was the fact that the court could enforce the first agreement at the conclusion of the trial. Id. at 434-35. She also testified that it was her understanding that accepting the second settlement would not prejudice her malpractice action against her first attorney. Id. at 435.
The trial court found that the wife's malpractice action was precluded by principles of judicial estoppel because she had previously certified that if she prevailed in the matrimonial action, her malpractice claim would be "rendered moot." Ibid. The Supreme Court affirmed the trial court finding that public policy favoring settlements dictates that the wife is bound by her representation that the settlement was acceptable and fair. Id. at 437. The Court noted that her acceptance of the settlement based upon the belief that it would not affect her malpractice claim was inconsequential because courts are not bound by "what essentially amounts to a private agreement between Mrs. Beuchel's matrimonial counsel and her malpractice counsel." Id. at 441.
The Court distinguished this situation from the facts in Ziegelheim, because in Puder, the wife's malpractice claim was not her only remedy to the alleged malpractice. Id. at 442-43. She made a calculated decision to accept the second settlement prior to the ruling as to whether the first settlement was enforceable. Ibid. Unlike the plaintiff in Ziegelheim, the wife in Puder entered into the second agreement admittedly aware of the discovery deficiencies leading up to the first settlement. Ibid.
Unlike Puder, in which the wife claimed that prevailing in her matrimonial action would make her malpractice claim moot and that she was voluntarily entering into a fair settlement, id. at 435, 437, Peters never claimed that the January 2001 QDROs drafted by Troyan were fair. Her attorney wrote to Judge Herr objecting to the drafts of the DROs, and subsequently she appealed the entry of those DROs. Peters' acceptance of the court's order to retain Mr. Troyan cannot be equated with a voluntary acceptance of a settlement. See Schulman v. Wolff & Samson, P.C., ___ N.J. Super. ___, ___ (App. Div. 2008) (slip op. at 12) (restricting the holding of Puder and questioning whether the case would bar a settling client from asserting a cause of action other than legal malpractice against a former attorney). In addition, this case does not implicate "'fairness and public policy [considerations].'" Prospect Rehab. Servs., Inc. v. Squitieri, 392 N.J. Super. 157, 167 (App. Div.) (quoting Puder, supra, 183 N.J. 437), certif. denied, 192 N.J. 293 (2007).
Moreover, Peters' was not given the realistic power to reject Troyan's appointment and the subsequent entry of the 2001 DROs. Peters' attorney, Fallon, seemed to accept Troyan's appointment based upon the court's belief that he was an unbiased pension expert and because the court was the one that was ordering his appointment. However, after his appointment, Fallon continued to voice his concerns over his work.
Moreover, we cannot assume that Judge Herr "approved" the DROs prepared by Troyan in 2001. By 2000, it was clear that the parties intended Peters to be able to draw on her former husband's pension immediately, even though he had not retired. It was also clear that Thornton's plan allowed Peters to do so. By 2000, a DRO had been qualified and accepted by Thornton's Plan and Peters had received nothing from this portion of her equitable distribution. Judge Herr directed Troyan to prepare orders to effectuate the original intent of the parties and to make Peters whole. Judge Herr entered an order requiring the orders drafted by Troyan to be filed with the Plan based implicitly, if not explicitly, on the premise that the person, who held himself out as an expert in pension valuations and preparations of DROs, had crafted orders consistent with her direction to accomplish the ultimate goal of effectuation of the 1993 PSA and JOD. This court affirmed on the same premise. It is incorrect, therefore, to hold that the prior litigation definitively resolved the issue of whether the submitted and implemented QDRO effectuated the intent of the parties.
Furthermore, Peters presents claims that Troyan, the expert initially retained by Stanton, did not have the expertise he purported to have, and he proceeded to craft orders that not only failed to implement the PSA and the directive of the judge to enforce and effectuate that agreement but also caused financial harm to her. Peters also claims that Stanton, the attorney initially retained by her to enforce and effectuate the PSA lacked the expertise to detect that Troyan had not crafted orders that would be acceptable to allow her to receive her share of her former husband's pension. This claim is akin to the claim asserted in Ziegelheim, 128 N.J. at 266, that the Court held was not barred by the prior litigation.
In sum, we hold that collateral estoppel does not bar Peters' actions against her former attorney and Troyan. We express no opinion on any other issue presented in this litigation.
Reversed and remanded.