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Twenty-First Century Rail Corporation v. New Jersey Transit Corp

February 3, 2011

TWENTY-FIRST CENTURY RAIL CORPORATION, PLAINTIFF, AND FRONTIER-KEMPER/SHEA/BEMO, JOINT VENTURE, PLAINTIFF-APPELLANT,
v.
NEW JERSEY TRANSIT CORP., DEFENDANT, AND PB AMERICAS, INC., F/K/A/ PARSONS BRINCKERHOFF QUADE & DOUGLAS, INC., DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-9700-08.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued January 5, 2011

Before Judges R. B. Coleman, Lihotz, and J. N. Harris.

The opinion of the court was delivered by JONATHAN N. HARRIS, J.A.D.

In this interlocutory appeal we address the question of attorney disqualification in the context of successive representation -- that is, a lawyer's duty to a former client -- under the lens of City of Atlantic City v. Trupos, 201 N.J. 447 (2010).*fn1 From our plenary and de novo review of the record, we agree with the Law Division's ultimate conclusion that respondent's attorney was not required to be disqualified. Accordingly, we affirm the denial of appellant's motion to disqualify its former attorney.*fn2

I.

A.

The five-count complaint that produced this litigation was filed on December 5, 2008. In it, plaintiffs Twenty-First Century Rail Corporation (21st Century) and Frontier-Kemper/Shea/BEMO Joint Venture (FKSB) seek contract and tort remedies against defendants New Jersey Transit Corp. (NJT)*fn3 and PB Americas, Inc. (formerly known as Parsons Brinckerhoff Quade & Douglas, Inc.) (PB), respectively. Plaintiffs' contentions arise from a protracted and complex construction project connected with NJT's Hudson-Bergen Light Rail Transit System (the Light Rail System). Specifically, the four parties were participants in the execution of the N30 Tunnel Civil and Facilities Project (the N30 Project). At issue are allegations against NJT for breach of contract, breach of the implied covenant of good faith and fair dealing, and unjust enrichment. Claims of professional negligence and negligent misrepresentation are lodged against PB.*fn4

The parties agree upon few things, but there is substantial accord regarding the nature of the N30 Project and the contractual relationships engendered thereby, as recited in FKSB's appellate brief:

The N30 Project is a portion of the [Light Rail System] project. The [Light Rail System] is an 18.5-mile light rail system that originates in Bayonne and runs north, terminating in North Bergen. The N30 segment of the [Light Rail System] is located at the northern end of the transit system and consists generally of enlarging and rehabilitating the pre-existing Weehawken Tunnel, the construction of the Bergenline Station (within the tunnel), the construction of an above-ground plaza at Bergenline Avenue, the addition of an elevator shaft (from the plaza down to the Bergenline Station), and the integration of signaling and switchwork into the overall Train Control System.

The owner of the [Light Rail System] is defendant [NJT]. PB is the engineer of record on the N30 Project and, as such, was responsible for the tunnel design, engineering documents, and related interpretations. Plaintiff [21st Century] is the prime contractor on the [N30] Project. In January 2002 [21st Century] -- through its contracting arm, [Washington Group] -- entered into a subcontract with FKSB in connection with the N30 Project, whereby FKSB agreed to construct the civil, electrical, mechanical, and emergency portions of the tunnel, station, plaza, and elevators for the [N30] Project.

B.

The law firm of Peckar & Abramson, P.C. (P&A) represents PB in this litigation. This, however, was not P&A's first involvement with the N30 Project. In February 2004, P&A provided direct legal services to the "lead venture partner of [FKSB]" -- Frontier-Kemper Constructors, Inc. (FK Constructors)

-- in connection with its concern about potential liability for construction delays associated with the N30 Project. In a certification in opposition to FKSB's motion to disqualify counsel, P&A partner Bruce D. Meller averred that he was informed that FK Constructors "had partners" and that P&A was to identify and bill the client as FK Constructors.

In a March 8, 2004 "engagement letter and fee agreement" (the retainer agreement) -- addressed to and endorsed on behalf of FK Constructors by "Richard Raab, President" -- P&A thanked Raab "for the opportunity to work with [FK Constructors] and its tri-venture partners." The letter further expressed gratitude to Raab "for the privilege and opportunity to represent [FK Constructors] with respect to its disputes with [Washington Group] and on any other matter upon which we may be of service."

As part of the motion to disqualify P&A, Raab submitted a certification dated March 23, 2010, in which he stated that he was Vice President of FK Constructors, but "President of the Northeast Division Office of Frontier-Kemper Constructors, Inc." Any inconsistency in the nomenclature of the office held by Raab is overshadowed by his admitted lack of recollection of the March 8, 2004 retainer agreement with P&A until it was brought to his attention by one of FKSB's litigation attorneys almost six years later, in February 2010.

The total time expended by P&A in 2004, pursuant to its engagement by FK Constructors, consisted of approximately twenty hours. P&A charged FK Constructors $5,360.08 for the legal services provided. The services were billed by P&A to FK Constructors, and presumably paid in full.

An invoice dated March 31, 2004, reveals that P&A lawyers -- Meller and Charles F. Kenny, Jr. -- met with Raab on March 8, 2004,*fn5 and thereafter reviewed unspecified contractual provisions, engaged in indefinable legal research, conducted a handful of telephone conversations with Raab and another representative of FK Constructors, and "[p]repar[ed] [a] report letter." The culmination of P&A's retention was, in fact, a four-page letter dated March 24, 2004, authored by Kenny (the Kenny letter).*fn6

The Kenny letter correctly identified that the immediate contracting partners for the N30 Project were FKSB and Washington Group, which was the contracting affiliate of 21st Century. The Kenny letter provided a thumbnail summary of those parties' subcontract and confirmed that FKSB was behind schedule in its assignments. Kenny candidly noted,

I also understand that there are numerous reasons for the delay, not the least of which is the onerous nature of the work.

In addition, . . . you have been forced to deal with a local labor force that is inexperienced with tunnel projects of this type and magnitude.

Other factors contributing to the delay are interferences from Weehawken Municipal officials who have failed to approve and/or issue the blasting permits necessary, as well as design and constructability issues.

The Kenny letter neither explicated the "design or constructability issues," nor did it attribute any of them to PB or NJT.

Kenny noted that Washington Group had "informally advised" FKSB that FKSB would be held responsible for schedule delays and that Washington Group "may start to withhold ten percent from [FKSB's] payment requisitions." In light of these facts, Kenny provided his opinion on the risks facing FKSB, and its best course of action. Kenny based his analysis on decisional law, the General Conditions of the subcontract, the Project Labor Agreement (PLA), and Kenny's professional experience as a construction industry lawyer.*fn7 His ultimate advice was for the client to keep itself well-informed concerning NJT's measures (including its negotiations with respect to work schedules and any acceleration directives) ...


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