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Steiert v. Levy

August 13, 2010

GEOFFREY L. STEIERT, PLAINTIFF-APPELLANT,
v.
LEVY, ANGSTREICH, FINNEY, BALDANTE, RUBENSTEIN & COREN, P.C. AND THOMAS S. HARTY, ESQ., DEFENDANTS-RESPONDENTS.



On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-3790-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued May 11, 2010

Before Judges Parrillo and Ashrafi.

Plaintiff Geoffrey L. Steiert appeals from an order dated January 9, 2009, granting summary judgment to defendant attorneys and dismissing on statute of limitations and other grounds plaintiff's complaint alleging legal malpractice. We affirm.

Plaintiff, who is a licensed attorney in this State and experienced in bankruptcy work, filed his complaint on April 27, 2006, against defendants Levy, Angstreich, Finney, Baldante, Rubenstein & Coren, P.C., and Thomas S. Harty, an attorney with defendant law firm. He alleged legal malpractice in defendants' representation of him from March 1999 through May 1, 2000, in federal litigation in which plaintiff sought to recover on five promissory notes he held documenting more than $400,000 he had invested in a business venture. Plaintiff alleged that defendant attorneys had negligently failed to protect his interests in the federal litigation causing him to lose the ability to collect on his notes.

After completion of more than two years of discovery in the malpractice action, defendant attorneys moved for summary judgment on three grounds: 1) that plaintiff's malpractice complaint was barred by the six-year statute of limitations, 2) that the undisputed evidence failed to show the alleged negligence of defendants caused plaintiff any damages, and 3) that plaintiff's claims were barred because he had voluntarily settled the federal litigation. Following oral argument, the trial court granted defendants' motion and dismissed plaintiff's complaint in its entirety, placing an oral decision on the record. Plaintiff now appeals from that summary judgment order and decision.

In reviewing a grant of summary judgment, we apply the same standard under Rule 4:46-2(c) that governs the trial court. See Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007); Prudential Prop. & Cas. Ins. Co. v. Boyland, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). We must "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). On this appeal, we review the facts most favorably to plaintiff.

In the 1990s, plaintiff was familiar with Charles McCormick and his corporation, Mata Services, Inc., which operated a "factoring" business buying and selling computer equipment. Plaintiff had made a small investment in the company through two agents working with McCormick, William and Kathy Schroeder, and he had made a profit.

In 1997, McCormick solicited investors for a new venture he was offering through a new company called Ki Digital, Inc., which would offer high-tech special effects services to the film industry and Fortune 500 companies. Between September 1997 and April 1998, plaintiff invested in the new venture through loans totaling more than $400,000, evidenced by five promissory notes payable to him personally or to business entities that plaintiff owned and controlled. The loans carried a very high interest rate, six percent per month. McCormick and the Schroeders allegedly promised plaintiff that through the loans he would be reserving an option to own stock in the new company once a private stock offering was made. Unfortunately for plaintiff, these loans were made at the tail end of a Ponzi scheme; McCormick, Mata Services, Inc., and the new venture had no ability to meet all their obligations and promises made to investors and lenders.

In June 1998, the Attorney General of New Jersey filed a complaint against McCormick, Ki Digital, Inc., and Mata Services, Inc. alleging securities violations. The Chancery Division appointed a receiver to audit and preserve the assets of the corporations, which were determined by an accounting report to be insolvent. Plaintiff was aware of the Attorney General's lawsuit and the accounting report.

In November 1998, represented by attorney Daniel Posternock, plaintiff filed a complaint in the United States District Court in New Jersey alleging fraud and seeking recovery of his investment from a number of individual and corporate defendants. He did not serve the complaint upon the receiver appointed by the Chancery Division. When the defendants did not file timely answers, plaintiff obtained default judgment in December 1998, against some of the defendants in the amount of $865,589.

In January 1999, defendants in the federal litigation filed motions to vacate the default judgment. Also, the attorney for the receiver wrote to Posternock requesting that he agree to vacate the default judgment because the receiver had not been served. Plaintiff, on the other hand, undertook personally, upon Posternock's declining to do so, to docket his default judgment in the Superior Court of New Jersey on February 8, 1999. The attorney for the receiver wrote to federal Judge Stanley Brotman complaining of plaintiff's actions.

In the meantime, United States Magistrate Judge Robert Kugler entered a scheduling order permitting plaintiff to file a response by March 19, 1999, to defendants' motion to vacate the default judgment. Unaware of the scheduling order, Judge Brotman ...


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