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Collins v. Menza

January 7, 2009

BARBARA COLLINS, CPA, PLAINTIFF-RESPONDENT,
v.
JOHN MENZA AND LISA MENZA, DEFENDANTS/THIRD-PARTY PLAINTIFFS-APPELLANTS,
v.
IRVIN L. SOLONDZ, ESQ., THIRD-PARTY DEFENDANT-RESPONDENT.



On appeal from Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-631-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted November 10, 2008

Before Judges Sapp-Peterson and Alvarez.

Defendants John Menza and Lisa Menza appeal from a July 8, 2005 order suppressing their expert's report in an accounting malpractice counterclaim against plaintiff Barbara Collins, their accountant. The Menzas also appeal an October 6, 2006 order dismissing their third-party complaint for legal malpractice against third-party defendant Irvin L. Solondz, Esq. We affirm both orders.

On April 21, 2004, plaintiff filed a complaint against the Menzas, who are brother and sister, for accounting fees totaling $80,831 incurred for work performed incidental to defendants' unsuccessful attempts to purchase a bakery. Defendants filed an answer and counterclaim on June 18, 2004. On July 6, 2004, plaintiff served interrogatories on defendants. Plaintiff filed an answer to the counterclaim on September 21, 2004. On December 16, 2004, defendants' answer and counterclaim were suppressed as a result of their failure to answer interrogatories. The affidavit of merit*fn1 was not forwarded to plaintiff until January 13, 2005, fifty-four days out of time.

Before their answer was reinstated on February 4, 2005, defendants filed a motion seeking to extend the discovery period. It is not clear whether this was the first or second time that defendant filed such an application.

On April 15, 2005, the answer and counterclaim were reinstated, conditioned on defendants' completion of discovery and submission of an expert's report within thirty days. The order reinstating the answer and counterclaim indicated that the court would, if discovery was not completed by the May 15, 2005 deadline, "consider suppression with prejudice or other sanctions." The expert's report was not served until sometime after June 10, 2005. On July 8, 2005, oral argument was conducted on defendants' application, as they characterized it, to extend the time for discovery and to permit them to serve their expert's report "nunc pro tunc." The request was denied, and the expert report was suppressed as provided beyond the discovery deadline.

The third-party complaint seeking damages for legal malpractice was filed by defendants on August 19, 2005. No affidavit of merit was ever filed regarding that claim.

Defendants' counterclaim was dismissed on November 7, 2005, due to the unavailability of their expert's report. On October 6, 2006, summary judgment was granted to the third-party defendant dismissing plaintiff's third-party complaint. The matter proceeded to trial and, ultimately, plaintiff obtained a jury award of $25,000 in accounting fees in quantum meruit.

Plaintiff provided accounting services for defendants during their protracted efforts at purchasing a bakery. The prospective sale ended in litigation, during which defendants counterclaimed for damages against the seller. In the verified counterclaim in that lawsuit, defendants claimed that they personally incurred $53,831 in accounting fees for services rendered by plaintiff related to the purchase of the bakery. That lawsuit eventually settled, and defendants obtained a judgment against the prospective seller for $100,000.

In their third-party complaint against the third-party defendant in this case, defendants alleged that their attorney committed malpractice when he prepared and submitted the verified pleading in the first lawsuit in which they admitted to personal liability for accounting fees. Defendants asserted that their attorney should instead have drafted the counterclaim in the first lawsuit so as to allege that accounting fees were incurred solely in the name of the corporation eventually formed for the sole purpose of acquiring the bakery business.

In their answer to plaintiff's complaint, defendants denied owing plaintiff any accounting fees whatsoever. They claimed that either plaintiff performed the services for free or she understood that the services were rendered solely on behalf of the shell corporation.

At deposition, plaintiff testified that she absolutely expected to be paid for the work that she performed. She also said that she would never have agreed to bill defendants' shell corporation because she was well aware that it had no assets. Plaintiff also testified that the third-party defendant had nothing to do with the bakery lease, which defendants negotiated directly with the landlord of the bakery premises. Plaintiff specified that a copy of the signed lease was sent to the attorney, third-party defendant, months after it was signed. When deposed, John Menza could not recall ...


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