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Arthur v. Klitzman & Gallagher

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


November 23, 2009

LANZY A. ARTHUR, PLAINTIFF,
v.
KLITZMAN & GALLAGHER AND THOMAS T. CUTCHALL, ESQ.,
DEFENDANTS/THIRD-PARTY PLAINTIFFS-APPELLANTS/CROSS-RESPONDENTS,
v.
ANSELL, ZARO, GRIMM & AARON AND EDWARD J. AHEARN, ESQ. AND JOSEPH L. GIJANTO, ESQ., THIRD-PARTY DEFENDANTS, AND SCHIBELL & MENNIE, THIRD-PARTY DEFENDANTRESPONDENT/CROSS-APPELLANT.

On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-2861-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted November 12, 2009

Before Judges Fisher and Sapp-Peterson.

Plaintiff commenced this legal malpractice action, alleging defendants Klitzman & Gallagher and Thomas Cutchall (defendants) gave him negligent advice during his workers' compensation action. Defendants commenced a third-party action against Ansell, Zaro, Grimm & Aaron (the Ansell firm), which preceded defendants, and Schibell & Mennie (the Schibell firm), which succeeded defendants in the representation of plaintiff in the compensation action. The Schibell firm successfully moved for summary judgment and was awarded counsel fees as a sanction based on a finding that the third-party complaint was frivolous.

Defendants appeal the orders entered in the Schibell firm's favor. The Schibell firm has cross-appealed, arguing that the sanctions awarded were inadequate.

The appeal and cross-appeal raise questions regarding the timeliness of defendants' appeal, the legal sufficiency of defendants' third-party action against the Schibell firm, and the amount of sanctions awarded. We find defendants' appeal to be timely, but we find no merit in the appeal or the cross-appeal and affirm.

I.

In considering the timeliness of the appeal, it is necessary to briefly recount the trial court proceedings and the action's status when the appeal was actually commenced and when the Schibell firm argues the appeal should have been commenced.

Plaintiff's complaint was filed on June 24, 2004. In a nutshell, the record suggests that plaintiff claimed defendants failed to provide adequate or correct advice to plaintiff regarding his eligibility for a traumatic disability pension, pursuant to N.J.S.A. 43:15A-43, at the time he retired. On November 9, 2005, defendants filed a third-party complaint against the Ansell firm and the Schibell firm. Defendants alleged they represented plaintiff from the end of December 1998 -- at approximately the same time plaintiff retired -- and only until February 16, 1999; the Ansell firm preceded defendants and the Schibell firm succeeded defendants in the representation of plaintiff.

In the proceedings that followed, the Ansell firm obtained a dismissal of the third-party complaint without prejudice due to defendants' failure to timely provide discovery. Around the same time, the Schibell firm moved for summary judgment. The trial judge extended discovery for a brief period of time and adjourned the Schibell firm's motion to a later time.

By order entered on November 14, 2006, the judge granted the Schibell firm's motion for summary judgment dismissing the complaint for reasons set forth in an oral decision of that same date. Later, on April 4, 2007, the Ansell firm obtained an order dismissing with prejudice the third-party action. The only issues remaining in the wake of those orders were those existing between plaintiff and defendants.

On May 3, 2007, the Schibell firm moved against defendants for sanctions, pursuant to Rule 1:4-8 and N.J.S.A. 2A:15-59.1, based on its assertion that the third-party complaint was frivolous. After hearing oral argument on October 17, 2007, the judge granted the motion for sanctions; she concluded that the Schibell firm was entitled to the fees and expenses incurred in defending against and obtaining the dismissal of the third-party action, but denied the request insofar as it sought a recovery for the time spent in seeking fees and expenses and insofar as it sought damages based upon a future increase in the Schibell firm's malpractice insurance premiums. The judge directed the Schibell firm to provide an affidavit of services.

The Schibell firm not only submitted an affidavit of services on November 1, 2007, but it also sought reconsideration of that part of the judge's earlier ruling which denied all the fees and expenses sought. Defendants did not respond.

On November 13, 2007, the judge rendered an oral decision and entered an order that awarded the Schibell firm $16,622.49 as a sanction for defending against the third-party action, and $15,555.20 to compensate the Schibell firm for the time expended in seeking sanctions. The order also memorialized the judge's denial of an award based upon an increase in the Schibell firm's malpractice insurance premiums. In addition, the order denied the Schibell firm's request that it be permitted to seek judgment against defendants should defendants fail to pay the fees awarded within the time frames set forth in the order.*fn1

When defendants failed to pay within the time frames imposed by the November 13, 2007 order, the Schibell firm moved for the entry of judgment pursuant to Rule 4:42-2. The motion went unopposed and a judgment -- in the form submitted by the Schibell firm -- was entered on February 19, 2008. That order declared that "judgment is hereby entered in favor of [the Schibell firm] and against [defendants], jointly and severally, for $32,177.69 plus $455.00 representing the attorneys' fees and costs incurred by [the Schibell firm] in having to make th[is] application." The Schibell firm docketed this order as a judgment.

Against this procedural backdrop, we consider the appeal's timeliness. Viewing the February 19, 2008 order as a final and appealable order, the Schibell firm contends that the time to file an appeal of that order commenced on that date. On the other hand, defendants contend that the February 19, 2008 order was an interlocutory order because it was not certified as final and because there had been no final disposition of all remaining issues by that point in time. That is, defendants claim that the time to appeal did not commence running until plaintiff's claims against them were settled on or about May 14, 2008, and that their notice of appeal, which was filed on June 27, 2008, was timely because it was filed within forty-five days of the disposition of plaintiff's claims.

We agree with defendants that the appeal of the earlier orders, which granted the Schibell firm's motion for summary judgment and which imposed sanctions against them, were interlocutory and remained so until plaintiff's claim against defendants was settled. Although it may have been the Schibell firm's desire, as revealed by the content of its unopposed motion, that the February 19, 2008 order be certified as final, the order did not contain the direction required by Rule 4:42-2.

Without a valid certification of an interlocutory order as final pursuant to Rule 4:42-2, the orders entered in favor of the Schibell firm remained interlocutory absent the complete and final adjudication of all the other claims pled in this suit. See Grow Co. v. Chokshi, 403 N.J. Super. 443, 457-58 (App. Div. 2008). Rule 4:42-2 permits a trial judge to certify an interlocutory order as final but only when the order would otherwise be subject to execution pursuant to Rule 4:59,*fn2 and only upon a declaration that there "was no just reason for delay" in the entry of a final judgment. Although the language of the February 19, 2008 order would suggest the judge was correctly of the view that the order, standing alone, would be subject to execution, the order does not contain the judge's statement that there "was no just reason for delay" in the entry of a final, appealable order at that time. Accordingly, we conclude that the February 19, 2008 order was interlocutory and did not become appealable until the final disposition of all remaining issues two months later.

II.

We next consider the merits of defendants' third-party action against the Schibell firm. Although defendants have stated in their brief that they do not seek reinstatement of the third-party action,*fn3 we discern from their brief that they do assert the third-party complaint had merit in arguing that the judge erred in sanctioning them. Accordingly, we consider whether the third-party complaint was maintainable as a matter of law.

Defendants' theory of recovery against the Ansell and Schibell firms was based upon the fact that defendants only briefly represented plaintiff in the workers' compensation matter. Although the record on appeal discloses little regarding the merits of plaintiff's claim, we assume it was plaintiff's contention that defendants failed to advise him --or negligently advised him -- of the disadvantage of retiring when he did or in failing to pursue a traumatic disability pension. Defendants asserted that, to the extent there was any merit to plaintiff's contention, the third-party defendants also bore some responsibility. Indeed, defendants asserted that although the retirement occurred at approximately the same time that defendants began their representation of plaintiff, it was not too late to rescind the elections he made when retiring once the Schibell firm took up its representation of plaintiff.

Notwithstanding the fact that plaintiff may have had a viable cause of action against the Schibell firm -- or at least an action as viable as that asserted against defendants -- the judge dismissed the third-party complaint filed against the Schibell firm because in these circumstances, as a matter of law, defendants could have no viable claim for contribution from the Schibell firm. The judge correctly relied upon Cherry Hill Manor Assocs. v. Faugno, 182 N.J. 64, 72-74 (2004) and LaBracio Family P'ship v. 1239 Roosevelt Ave., Inc., 340 N.J. Super. 155, 164-66 (App. Div. 2001), as well as other authorities, in finding that attorneys in this situation cannot be characterized as joint tortfeasors and that a successor attorney owes no duty to a predecessor attorney to correct the predecessor's errors.

Accordingly, for purposes of assessing the arguments regarding the sanctions imposed, we conclude that the third-party action was not maintainable and that the judge was entitled on this record to find that the third-party complaint was frivolous.

III.

In their brief on appeal, defendants argue that the fees sought and awarded were grossly excessive and patently unreasonable. They claim the theory upon which the Schibell firm's successful motion for summary judgment rested was not something that required any great amount of lawyer time and that the Schibell firm could have extricated itself from this case with a smaller expenditure of counsel fees. Those arguments are certainly colorable.

However, defendants never responded to either the affidavit of services submitted by the Schibell firm or its motion for reconsideration. As a result, the application for the fixing of the quantum of damages caused by defendants' frivolous third-party complaint went unopposed. Although the absence of opposition does not provide a court with carte blanche in awarding fees, defendants' failure to respond relegated the judge to resolving the matter by way of her own examination of the record without any counter arguments and contentions. Indeed, in this circumstance, it was not inappropriate for the judge to conclude that defendants' failure to respond to the affidavit of services meant that defendants acknowledged the reasonableness of the fees sought. In addition, a consideration of the fact that the claim against the Schibell firm was maintained for approximately one year before dismissed by way of summary judgment also suggested the general reasonableness of the amount sought. And the judge, having handled the proceedings relating to the imposition of sanctions, had sufficient information from which to conclude that the time expended in pursuit of sanctions was reasonable.

In short, defendants' argument that the fees sought were excessive should have been asserted in the trial court and not -- for the first time -- on appeal. As a result, we need not further consider the argument of excessiveness at this late date. See Nieder v. Royal Indemn. Ins. Co., 62 N.J. 229, 234 (1973).*fn4

IV.

Lastly, the Schibell firm argues in its cross-appeal that the judge erred in refusing to award damages based on an increase in malpractice insurance premiums allegedly caused by defendants' third-party complaint. Pursuant to Rule 2:11- 3(e)(1)(E), we find insufficient merit in that argument to warrant discussion in a written opinion.

Affirmed.


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