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NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
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.
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 ...