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Gere v. Louis

August 25, 2010

JULIA GERE, FORMERLY KNOWN AS JULIA GERE RICKER, PLAINTIFF-APPELLANT,
v.
FRANK A. LOUIS, ESQ., AN ATTORNEY AT LAW OF THE STATE OF NEW JERSEY, LOUIS, ROE & WOLF, ESQS, LOUIS, STOLFE & ZIEGLER, ESQS, JOHN DEBARTOLO, ESQ., AN ATTORNEY AT LAW OF THE STATE OF NEW JERSEY, AND ATKINSON & DEBARTOLO, P.C., DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-5569-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued December 1, 2009

Before Judges Carchman, Lihotz and Ashrafi.

In this legal malpractice action, plaintiff Julia Gere appeals from an order of the Law Division granting summary judgment in favor of her former attorneys - defendants Frank A. Louis and John DeBartolo. We affirm.

These are the facts that were before the motion judge. In 1997, plaintiff was a party to a matrimonial action in Monmouth County Superior Court captioned Peter Evans Ricker v. Julia Gere Ricker, Docket No. FM-13-1761-97. Louis, an attorney and partner at Louis, Roe & Wolf, represented plaintiff in this litigation. "[A]fter protracted and contentious negotiations over a period of many months," on March 13, 2000, the parties reached a Property Settlement Agreement (the 2000 Settlement). The 2000 Settlement contained a provision regarding the disposition of real estate and a marina business.

ARTICLE XVII - ANCILLARY REAL ESTATE INVESTMENTS, section 17.1(a), provides:

The parties acknowledge having acquired interests in various parcels of real estate which are more particularly itemized upon Ex. D. The Wife shall have a period of [six] months from 4-1-2000, subsequent to the execution of this Agreement to review all financial records concerning these investments. Tom Flynn, CPA, the Wife's expert, shall have access to all books and records of those investments thus enabling the Wife to make an informed decision whether she shall retain an interest (see Art. 17.3) in these investments. Any expense for Mr. Flynn shall be the Wife's responsibility. Prior to the expiration of six months, the Wife shall be required to notify the Husband of her decision concerning the status of these investments.

If the Wife determines she no longer wishes to be remain [sic] an equal partner in these assets, then and in that event, she shall relinquish any and all claims, legal or equitable, as to the distributability of these properties. Upon execution of that waiver, the Wife shall execute any and all documents required by the Husband's attorney (and shall not unreasonably withhold her consent to do so), subject to review by the Wife's counsel, implementing transfer of ownership of these assets to the Husband.

In the event the Wife opts to waive her interest in these assets, then and in that event, the Husband shall fully and completely indemnify the Wife as to any obligations arising out of these assets. Article 17.3 of the 2000 Settlement further provides:

In the event the Wife fails to notify the Husband in writing within the six months [] period subsequent to final execution of this Agreement, then and in that event, the parties shall maintain these assets jointly and equally in a fashion to be set forth in a Partnership Agreement consistent with all the terms and conditions of the husband's present partnership agreement to be prepared at that time. This Agreement shall be prepared by counsel mutually selected by the parties. The cost of the preparation of this Agreement shall equally be shared by the parties. The Agreement shall provide that the parties shall be joint and equal owners as to all aspects of these investments, including but not limited to enjoyment of all economic benefits or obligations arising therefrom. The Agreement shall confirm both parties have equal decision making.

On October 4, 2000, plaintiff's husband, Peter Ricker, sent Louis a letter referring to "the real estate deadline of October 20, which needs to be addressed immediately." Louis then had a conversation with John Hope, plaintiff's co-habitant with whom she had a close personal relationship. According to Louis, plaintiff relied on Hope for advice and "viewed [his] conversations with [Hope] to be the function of both [his] conversations with [plaintiff]." Louis recalls that he had "a conversation with Hope and maybe [plaintiff] as well, and it was a short conversation because I was saying, I got to write this letter. You guys make a decision yet? And he said the real estate, yes, marina, no and I wrote a quick letter to get it out."

Hope, in his certification, however, stated that he "was never authorized by [plaintiff] to make any decision for her concerning any aspect of her divorce case." He stated that he received a call some time after October 1, 2000, at plaintiff's residence where he was living. Hope certified that he "answered the phone and Mr. Louis started to discuss the Navesink Marina with me. Mr. Louis did not ask to speak to [plaintiff], who was also home, nor did he ask for a conference call with [plaintiff], Mr. Louis and I participating." Hope recalled the conversation as "short, approximately two minutes, and abrupt in nature, and it was my startled impression that Mr. Louis was in a hurry." Hope specifically claimed that "[d]uring the short and abrupt conversation, Mr. Louis never indicated that he was asking what [plaintiff's] decision was with respect to whether she would waive her interest in any of the real estate investments." Hope recalled commenting that "[plaintiff] 'preferred' not to continue to own the [marina] business and to own only the real estate[.]"

Plaintiff averred that she did not have a phone conversation with Louis prior to him sending the letter, and she did not recall hearing Hope on the phone with Louis. Plaintiff, however, acknowledged that she stated in her deposition on February 13, 2003, that she "guess[es]" she authorized Louis to write that letter. Plaintiff claimed that she was under stress at that time and that the true answer is that she did not authorize the letter to be sent.

Louis next sent a letter to Ricker's attorney, Philip Jacobowitz on October 11, 2000, which stated:

In accordance with the option provided [plaintiff] under the real estate portion of the Property Settlement Agreement, this will confirm that except for the Marina, [plaintiff] wishes to maintain one-half interests in all other properties.

Particularly noteworthy, plaintiff also received a contemporaneous copy of Louis' October 11, 2000 letter.

Louis sent a letter to Jacobowitz on December 17, 2001, stating that plaintiff "wishes to terminate her business relationship with [Ricker] concerning the other assets." Louis wrote that "[w]e need to establish a methodology for her equitable interest in these assets to be acquired or alternatively agree that assets are to be sold." Louis then sent plaintiff a letter on January 15, 2002, advising her that Ricker had contacted him and stated that it was Ricker's position "that you had relinquished your rights in the Marina. He didn't view that as an issue. I only shared with him during the conversation that that was not the position you were taking."

Louis thereafter filed a motion seeking enforcement and/or implementation of various provisions of the 2000 Settlement accompanied with a certification from plaintiff on May 20, 2002. Within plaintiff's certification it stated that:

Pursuant to Art. 17.1 of the PSA, I was provided [with] a period to determine whether I would retain an interest in certain real estate investments. After examining the financial information, I made the decision to maintain an interest in the assets. Art. 17.3 provides what would happen if I maintained an ownership, either by failing to notify [Ricker] or exercising an option. I did, within the time period, exercise my option to remain a partner. The Agreement provided specifically that we were to maintain these assets "jointly and equally" in a fashion to be set forth in a Partnership Agreement to be consistent with the terms of the existing Partnership Agreements [Ricker] had with his partners.

No such Partnership Agreement was prepared by [Ricker] nor does any Agreement limit, eliminate, or restrict any rights I might have as a partner, including but not limited to the right I am now exercising to terminate that partnership. Based upon a series of factors (some personal and some economic), caused by my cancer operation on March 13, 2002. I have now determined there should be a termination of the entanglement between [Ricker] and I. I have chosen to exercise the rights I have as a partner under law to end the ongoing business relationship. Since exercising my original option, not only hasn't the Partnership Agreement been prepared, but I have not received periodic financial information since the original analysis concerning the operation of the entities which I seek to be compensated for. Those entities are: Sea Bright Apartments; Sea Bright Marina; and the Shopping Center known as Panther Valley Center. Simply put, I no longer wish to be in business with [Ricker].

Ricker's attorney, on August 13, 2002, advised Louis that "it is my understanding that your client waived her interest in that Marina and was thus not a party to that refinance." Louis responded by letter on August 19, 2002, requesting "written verification . . . to support the claim that [plaintiff] 'waived her interest' in the Marina."

Plaintiff and Ricker agreed to a consent order on October 30, 2002, giving the parties sixty days for discovery prior to a plenary hearing on all the relevant issues. Plaintiff retained DeBartolo on November 6, 2002, to represent her in the "Post Judgment Plenary Hearing, Including Discovery Process In The Matter Of Ricker v. Ricker, Docket #FM-13-176-97C." On February 4, 2003, Ricker filed a motion for summary judgment in the matter. One of the issues included "[plaintiff's] waiver of her retaining an interest in the Sea Bright Marina" relying upon Louis' October 11, 2000 letter as proof of plaintiff's waiver.

On July 11, 2003, DeBartolo filed a cross-motion for summary judgment seeking "to maintain equal ownership" of the Marina and "[e]mploying an attorney competent to draft and prepare Partnership Agreement pursuant to the provisions of Paragraph 17.3 of the Property Settlement Agreement to establish and maintain equal partnership ownership by plaintiff and defendant of the real estate set forth above[.]" Along with the cross-motion for summary judgment, plaintiff certified:

[Ricker] has attempted to make much of a letter from Frank Louis, Esquire to Philip Jacobowitz, Esquire dated October 11, 2000.

Under no circumstances was this letter ever intended by me, nor more importantly authorized by me, to waive any interest I had in the marina real estate. At the very most, this letter expressed, rather inartfully, my request as an owner of the real estate partnership that I did not want to be a business partner with [Ricker] in the marina. I did not want to be involved in a business which involved risks relating to employees, etc. I wanted, as an equal partner with [Ricker], my ownership interest in the docks, improvements, restaurant and valuable real estate. If anything, Mr. Louis' letter represented, albeit in less articulate terms than I wished, my expression of these wishes to [Ricker]. While I was willing to ride out the natural lifespan of the partnerships in Sea Bright properties and Panther Valley, I was not willing to engage in an endless partnership that involved the operation of the marina business. On October 1, 2000, I was the joint and equal owner of the partnership interest with [Ricker]. The intent of the Louis' letter [sic] was to advise [Ricker] of my desires to end the business. I have annexed hereto as Exhibit "F", a letter from Kushner Companies, a very substantial real estate developer, indicating my efforts at marketing the Marina. Obviously, I believed I owned an interest, otherwise I couldn't attempt to sell it.

Plaintiff's cross-motion for summary judgment was denied on August 7, 2003.

In February 2006, Carl Soranno substituted for DeBartolo as plaintiff's counsel in the "post judgment matrimonial litigation, Ricker v. Gere, Superior Court of New Jersey Monmouth County, Chancery Division, Family Part, Docket No. FM-13-1761-97." Soranno stated that when he received plaintiff's file, he found that "no discovery had been conducted by Mr. DeBartolo on behalf of [plaintiff] with respect to the alleged waiver issue." Soranno conducted limited discovery in the short time he was allotted by the motion judge. Soranno certified that "[t]he Court's limitation of [his] ability to discover correspondence after the date of the October 11, 2000 letter from Mr. Louis impacted the case greatly because [he] was limited in obtaining discovery of evidence concerning the parties' actions following receipt of the October 11, 2000 letter." Soranno ultimately concluded that notwithstanding Louis' January 15, 2002 letter to plaintiff, "the earliest [plaintiff] was aware that Mr. Ricker was asserting that a waiver occurred was August, 2002."

The plenary hearing was held over a period of months beginning on April 12, 2006. Soranno wrote a letter to Louis on September 29, 2006, stating that the matter would not be resolved by the end of the six-year statute of limitations period on October 11, 2006, and requested that Louis enter into a tolling agreement that would toll the computing of any deadline through January 9, 2007 that may be applicable to the commencement of an action by [plaintiff] alleging that you may be liable to [plaintiff] as a result of your role in drafting the letter or waiver or loss of [plaintiff's] interest in marital property.

The parties ultimately agreed that the "time is tolled beginning on the date hereof and extending through and including January 9, 2007."

Plaintiff and Ricker ultimately reached another settlement on July 27, 2007 (the 2007 Settlement), prior to obtaining a ruling on whether plaintiff had waived her interest in the Marina in the October 11, 2000 letter. The 2007 Settlement stated in pertinent part that "[plaintiff] shall share equally with [Ricker] in the net proceeds of any money attributable to [Ricker's] LLC ownership interest when received by [Ricker] arising out of the LLC's ownership of the Real Estate." The 2007 Settlement further stipulated that "40% of all monies received by [Ricker] from the LLC arising out of its Business Operations (including its rents received) shall be paid over to [plaintiff] upon [Ricker's] receipt of those monies." With regard to this, Soranno stated that:

[Plaintiff's] case was unique in the respect that she was not complaining or challenging the underlying settlement, but seeking to preserve the terms of that settlement by litigating to repair the mistake made by counsel. Consequently, as the offers of settlement more closely approached the original intentions of the underlying Property Settlement Agreement the risk of further litigation became greater. Ultimately, in my discussions with [plaintiff], she recognized that the prospect of continuing the litigation to obtain a complete 50 percent interest in Mr. Ricker's interest in the [M]arina versus the potential that the Court could find that a complete waiver had occurred was too great.

The cost of continuing the litigation was becoming prohibitive and a loss of the entire asset would have been a catastrophe.

During the hearing addressing the settlement on July 27, 2007, plaintiff was asked about the fairness of the agreement.

Counsel: [] [D]id anyone force you, threaten you or coerce you into ...


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