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Shu v. Butensky

February 23, 2009

STANLEY SHU, PLAINTIFF-APPELLANT,
v.
HOWARD BUTENSKY, ESQUIRE, DEFENDANT-RESPONDENT, AND THE ESTATE OF EARL C. PETERSON, THE ESTATE OF MARIE E. PETERSON, LAWRENCE E. PETERSON AND DONNA MARIE JONES, DEFENDANTS.



On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-3167-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted December 8, 2008

Before Judges Winkelstein and Fuentes.

Plaintiff Stanley Shu sued defendant attorney Howard Butensky, alleging legal malpractice. Plaintiff's professional negligence case relates back to Shu's acquisition of real property in 1986 in which Butensky represented him as the buyer. The trial court granted Butensky's summary judgment motion, filed in lieu of an answer to plaintiff's complaint, finding that Butensky did not owe plaintiff what the court characterized as a "duty." Plaintiff now appeals, arguing that the trial court erred when it dismissed his legal malpractice cause of action at this juncture, and as a matter of law. We agree with plaintiff's position and reverse and remand.

We describe the following facts from the certifications and supporting documents made available to the trial court.

I.

On November 10, 1986, plaintiff entered into a written contract with Earl and Maria Peterson to purchase real property located at 113 West Main Street, in the Borough of Tuckerton. Plaintiff retained Butensky to represent him in the transaction. Paragraph 26 of the sale contract gave Shu as the buyer a right of first refusal in connection with the future sale of the adjacent lot. Specifically, paragraph 26 read as follows: "Buyer shall have a 30 day right of first refusal to purchase the adjacent property being subdivided from the within lot. These terms shall survive the passage of time."

Sometime between 1986 and 2005, Earl C. Peterson died leaving his wife Maria as the sole owner the property subject to plaintiff's right of first refusal. Sometime thereafter, Maria Peterson transferred title to the property to her children, defendants Lawrence E. Peterson and Donna Marie Jones. On March 11, 2005, Peterson and Jones entered into a contract to sell the property to Robert Gaudiosi, Sr; Peterson and Jones retained Butensky to represent them in the sale.

Before the closing of title, Gaudiosi's attorney, Alphonse De Simone, discovered that a commercial structure and fence located on Shu's property encroached upon the Peterson property. De Simone informed Butensky that his client's title insurance company "will NOT insure the encroachment by the neighbor over the property line." As a means of resolving the problem, De Simone advised Butensky that his client was willing to close title provided that $10,000 be held in escrow "for the purpose of indemnifying [the buyer] for legal fees [incurred] relative to obtaining the removal of the encroachment."

On May 20, 2005, Butensky wrote a letter to Shu, not in his capacity as his former counsel, but as the legal representative of the "Peterson Estate." In this letter, Butensky informed the Shus of the pending sale and encroachment problem, and requested that Mr. Shu contact him to discuss it.

By letter dated May 27, 2005, Butensky again contacted Shu in connection with the encroachment issue. This letter refers to "conversations" that Butensky had had with Shu, as result of which Shu agreed to remove the encroachment "straddling the common lot line with Mr. Peterson's property." After discussing potential problems associated with obtaining the cooperation of Shu's commercial tenant, Butensky concludes the letter as follows:

As I indicated to you on the telephone, I have, due to our past relationship, vouched for you to Mr. Peterson and advised him that he may rely upon your attending to the removal. I would be remiss, however, if I did not point out that the failure to do so would constitute his pursuing an action against you for a forced removal which would give rise to damages. Since I have represented you in the past, I would decline from pursuing the claim myself but Mr. Peterson has access to ample legal talent and the case would be an easy one to win. (Emphasis added.)

Despite Butensky's admonition, Shu refused to remove the encroachment. In March 2006, Gaudiosi, as the new owner of the property, filed suit in the Chancery Division, General Equity Part, against the Shus seeking the removal of the encroachment and damages. The Shu's responsive pleading, dated May 17, 2006, included a counterclaim against Gaudiosi alleging trespass. The ...


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