On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-2782-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges R. B. Coleman and J. N. Harris.
This is a professional negligence action. Plaintiffs Donald Nix and Donald Nix, LLC (collectively Nix) seek remedies against attorney Martin Verp*fn1 for failing to unearth the existence of a $176,000 municipal tax lien prior to Nix's acquisition of real property at a Sheriff's sale. After discovery expired, Verp moved for an order limiting Nix's damages by excluding the overlooked tax lien. The Law Division granted the motion. Nix responded with an unsuccessful motion for reconsideration and a motion for summary judgment to determine Verp's liability. The court entered an order finding only Verp & Leddy, LLC liable to plaintiff in the amount of $13,835, plus Saffer*fn2 counsel fees and costs. Following the submission of evidence relating to counsel fees and costs, a final order assessed $50,233.31 against Verp, and in favor of Nix and Nix's attorney, for such counsel fees and costs.
Nix appealed the orders limiting damages, denying reconsideration, and finalizing legal fees and costs. Verp's notice of cross-appeal limited itself to the final order that "assess[ed] legal fees and costs against [d]efendants pursuant to Saffer v. Willoughby." We part company with the Law Division's truncation of Nix's damages and reverse for further proceedings. Except to the extent that the final order may result in a larger reallocation of legal fees and costs to Nix, we affirm the cross-appeal.
For ten years, Nix had been a commercial tenant at 359-367 Hamilton Avenue in Paterson (the property) where he operated Nix Transportation, a bus company. In mid-2003, Nix received a telephone call from a representative of the Bank of New York (BNY), who inquired whether Nix was interested in purchasing the property for $5,000. Nonplussed by the asking price and attracted by the prospect of owning the property, Nix hired Verp to represent him in the acquisition.
At an early meeting with Nix, Verp explained that Nix would not actually be buying the property from BNY. Instead, Nix would purchase (through an assignment) BNY's mortgage, note, and existing foreclosure judgment,*fn3 and then bid at a Sheriff's sale in order to acquire the property. In a letter dated June 26, 2003, Verp sent Nix a proposed Assignment of Judgment, and indicated that although he had yet to complete a title search on the property, he would "proceed with everything necessary so you have clear title." Verp also requested payment in the sum of $1,000 "to cover costs so that I can proceed to perfect title in your name."
On July 29, 2003, BNY assigned the mortgage, note, and foreclosure judgment to a Nix-controlled entity known as Tiffany Tours, Inc. (Tiffany Tours) for the sum of $5,000. More than one year later, on August 27, 2004, Tiffany Tours obtained a writ of execution and proceeded through the Sheriff of Passaic County to auction the property. On November 23, 2004, with Nix and Verp's partner defendant Francis J. Leddy, Jr. in attendance, a different Nix-controlled entity was the only bidder at the Sheriff's sale, resulting in its purchase of the property for $100. A deed memorializing the transaction was executed on December 6, 2004, conveying title of the property to defendant Donald H. Nix, LLC.*fn4
Three days later, on December 9, 2004, Verp received for the first time a written, computer-generated Account Balance Summary from Kathleen J. Gibson (Gibson), Director of the Paterson Revenue Collection Division, indicating that unpaid municipal taxes and interest relating to the property for the third and fourth quarters of 2004 totaled $8,984.10. That same day, Verp sent Nix a letter advising him of the tax situation.*fn5
Shortly thereafter, Nix appeared at the Paterson tax office to pay the $8,984.10, and was told for the first time that approximately $176,000 was due and owing for past due municipal taxes. Nix immediately contacted Verp, who was unaware of the additional amount of the municipal tax lien.
On April 4, 2005, Nix was notified by Paterson of a planned assignment of the tax sale certificate relating to the property to an outside investor. This notification contained an account summary that confirmed a balance due of unpaid taxes and interest of $176,366.89 dating back to 1993. After Verp requested a postponement of the assignment of the tax sale certificate, which was denied, Paterson transferred its rights to a third party. A tax sale certificate ...