On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-904-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Telephonically Argued: June 15, 2010
Before Judges C.L. Miniman and Waugh.
Plaintiff Christopher R. Shafer, Sr. (Christopher)*fn1 appeals from the grant of summary judgment dismissing his claims against defendants Elizabeth Rios (Elizabeth), Juan Rios (Juan), Side Jobs, and Patrick Grimes (Grimes). Because plaintiff has no standing to sue and his claims are barred by res judicata, we affirm.
This lawsuit grows out of an attorney-client relationship between Christopher's former wife, Dorca I. Delgado-Shafer (Dorca), and Juan and Elizabeth. Dorca had been practicing law from an office in Camden.*fn2 Juan and Elizabeth needed legal assistance with some real estate matters and a dog-bite lawsuit in which they were the defendants. They located Dorca through a lawyer-referral service and retained her in March 2004 to assist them with their purchase of the home in which they were tenants and to represent them in the dog-bite case.
In September 2004, Dorca hired Elizabeth as her secretary. Dorca subsequently assisted Juan and Elizabeth in securing refinancing of their home mortgage. Juan and Elizabeth received a net check from the refinance transaction in the amount of $41,843.66, which they intended to use for the purchase of another home. Dorca had recommended that her clients deposit the money in her attorney trust account to demonstrate that they were serious buyers. Juan and Elizabeth followed this recommendation and tendered the money to Dorca. Thereafter, Elizabeth and Juan contracted to purchase another home in Mount Laurel and secured a financing commitment at 7.50%. Settlement was scheduled for October 7, 2005.
On October 4, 2005, during court-ordered arbitration in the dog-bite case, Elizabeth and Juan were found liable, and the arbitrator awarded $25,000 in damages to the injured plaintiff.
The day before the closing on the second home, Elizabeth asked Dorca to release the refinance monies to permit them to close. Dorca admitted to Elizabeth that she had spent a portion of the funds and only had $29,000 left. On October 7, 2005, Elizabeth further pressed Dorca for the balance of the escrowed funds, but Dorca only gave her a $10,000 check from Dorca's brother's girlfriend, which had been made payable to Dorca and endorsed over to Elizabeth. Dorca also gave Elizabeth a $2000 personal check, but it was refused for insufficient funds. A replacement check in the amount of $1500 was refused for a "stop payment."
On October 10, 2005, Elizabeth allegedly failed to go to work; the next day, she was terminated from her employment. At the end of that month, Dorca filed a suit in Burlington County, L-3140-05, to collect legal fees from Juan and Elizabeth. Dorca's statement for legal services contained three separate charges: (1) 1 Granby Lane, $7697.09; (2) 432 Hartford Road, $1659.00; and (3) Civil, $6271.38. Apparently, the first two charges dealt with the real estate matters, and the third charge pertained to the dog-bite case. The total due on the statement was $15,627.47. Juan and Elizabeth did not answer the complaint.
On February 27, 2006, Juan and Elizabeth appeared before the Chancery judge in Burlington County regarding a lis pendens Dorca had filed against their real estate. The judge ordered that $16,000 be placed with a surety company to secure the lis pendens relating to Dorca's fee claim. Juan and Elizabeth had yet to defend the collection matter.
On February 28, 2006, Dorca recovered a default judgment in Burlington County against Elizabeth and Juan for legal fees due and owing in the amount of $15,627.47. On March 3, the parties appeared in court on an order to show cause with respect to Juan and Elizabeth's motion to vacate the default judgment. The judge explained that Dorca was entitled to sufficient time to respond to their motion. He carried the motion for another cycle and stayed any effort to collect the amount due.
On March 23, 2006, Elizabeth executed a certification prepared by Grimes in which she attested that she and Juan had already paid Dorca $11,631.37 in fees for the real estate transactions and did not believe that they owed any additional sums. Elizabeth also averred that she had hired different counsel to represent her and Juan in Dorca's collection action and did not know why the attorney took no action to defend them, allowing the action to proceed to default judgment. They sought to have the default judgment set aside. A hearing on their motion and Dorca's cross-motion was scheduled for March 31, 2006, in Burlington County.
On April 12, 2006, the judge vacated the default and transferred the matter to fee arbitration. There was a hearing on November 16, 2006, at which Juan and Elizabeth testified. Elizabeth averred that when the fees on the real estate transactions began to mount, Dorca offered to provide legal services on the dog-bite case in exchange for Juan making some repairs to the homes owned by Dorca and her brother. Christopher and Dorca had owned a marital home at 22 Sunflower Circle, Lumberton, which they sold to Dorca's brother in May 2004,*fn3 and Dorca owned one or two other properties in Hainesport, which she sold in September 2005. According to Elizabeth, Dorca said that when she and her brother sold the homes, Juan was to give them a bill for the work and Dorca would offset it against the legal fees.
The District Fee Arbitration Committee made an award on November 29, 2006. The award reflected that the bill charged by Dorca was $26,965.80 for legal services and $2826.01 for costs and disbursements. Of the total $29,791.81 in fees and costs, the Committee found that the reasonable charge was $12,131.37. Of that amount, Juan and Elizabeth had paid $11,631.37, leaving a balance due Dorca of $500.
On February 26, 2007, the Office of Attorney Ethics filed a complaint against Dorca. On May 9, 2007, that Office sent Juan and Elizabeth a copy of the formal complaint against Dorca and a copy of the answer she filed. Dorca was charged with knowing misappropriation of funds; making a false statement of material fact; dishonesty, fraud, deceit or misrepresentation; commingling and improper use of trust funds; prohibited business transactions with a client; and conflict of interest.
On June 22, 2007, Elizabeth and Juan, represented by Grimes,*fn4 filed an action in Camden County under Docket No. L-3232-07 against Dorca and Christopher in which they alleged that Christopher was an employee in Dorca's law practice. They alleged the facts to which Elizabeth certified on March 23, 2006, and set forth claims for breach of contract and malpractice. As to Christopher, they alleged that he endorsed a check from Dorca's trust account made payable to cash in the amount of $35,611.36 and that his signature and driver's license number appeared on the back of the check. Christopher then used the check proceeds to obtain a bank check payable to America's Servicing Company, the mortgage servicer on 22 Sunflower Circle. Juan and Elizabeth alleged that another $6000 check was drawn on Dorca's trust account and deposited into her business account, leaving $243.15 in the trust account. They acknowledged repayment of $39,000 and sought recovery of the balance of the trust monies plus other damages from both Dorca and Christopher, asserting a number of legal theories.
Christopher and Dorca separately answered the Camden County complaint on November 16, 2007. They also asserted counterclaims, alleging that Elizabeth and Juan had misappropriated Christopher's private information, including his driver's license number and signature. They contended that Grimes was a witness to the misappropriation and that all three were guilty of conversion. Further, they asserted claims of false-light defamation, infliction of emotional distress, and conspiracy. These claims were stayed based on Christopher's filing for bankruptcy. Juan and Elizabeth moved to reinstate their ...