August 3, 2011
MARK LANZILOTTI, PLAINTIFF-APPELLANT,
MARK S. GREENBERG, ESQ. AND STEPHEN LACHEEN & ASSOCIATES, DEFENDANTS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-1675-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued June 2, 2011
Before Judges Cuff, Simonelli and Fasciale.
This matter involves plaintiff Mark Lanzilotti's allegations of legal malpractice and fraud against his former attorney, defendant Mark Greenberg,*fn1 who represented Lanzilotti in a criminal matter in the United States District Court for the Eastern District of Pennsylvania. A jury convicted Lanzilotti on several drug-trafficking charges. Lanzilotti was sentenced to two concurrent terms of life imprisonment. The United States Court of Appeals for the Third Circuit affirmed the conviction and sentence, and the United States Supreme Court denied Lanzilotti's petition for certiorari. United States v. Lanzilotti, 58 F. App'x 890, 901 (3d Cir.), cert. denied, 540 U.S. 864, 124 S. Ct. 176, 157 L. Ed. 2d 117 (2003). Following the appeal, pursuant to a stipulation Lanzilotti's sentence was vacated and he was resentenced to a term of thirty-years imprisonment. He is presently serving his sentence in a federal facility in Pennsylvania.
Lanzilotti admits his involvement in the manufacture of methamphetamine, that the evidence against him was overwhelming and he had no absolute defenses. However, he claims he would have received a lesser sentence had Greenberg not committed malpractice by making fraudulent misrepresentations about plea agreements, the untrustworthiness of the government's plea negotiations, and the "winnability" of his case.
The trial judge granted summary judgment to Greenberg, concluding that an expert was required to establish the standard of care and breach thereof. Alternatively, the judge concluded that exoneration is a predicate for a legal-malpractice claim arising from a criminal prosecution. We affirm.
The following facts are derived from evidence submitted by the parties in support of, and in opposition to, the summary judgment motion, viewed in a light most favorable to plaintiff. See Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Lanzilotti was arrested as the result of his involvement in the manufacturing of methamphetamine in Pennsylvania and New Jersey. He delivered phenyl-2-propanone (P2P) oil, the main ingredient used to manufacture or "cook" the methamphetamine. He and his coconspirators were indicted in Pennsylvania on several drug-trafficking charges.*fn2
Prior to Lanzilotti's arrest, he and Marc "One Star" met with Greenberg and paid him a $5000 retainer, half of which One Star paid. Lanzilotti had a long-standing personal relationship with One Star, and Greenberg had represented One Star in an unrelated criminal matter involving the manufacture of methamphetamine. After Lanzilotti's arrest, he and One Star again met with Greenberg, and One Star continued to pay Lanzilotti's legal fees.
Following his arrest, Lanzilotti knew the federal government sought his cooperation and wanted information about One Star, who the government believed to be the P2P oil supplier. Lanzilotti did not cooperate, due to either loyalty to One Star or fear of retribution. However, he claims that Greenberg advised him there was no benefit to cooperating because Lanzilotti would receive the same sentence, thirty years to life, as if he lost at trial, even if he cooperated; rather, Greenberg advised Lanzilotti that his "only option here is to go to trial and win and get no time, and we can win. It's a winnable case."
Lanzilotti also claims he asked Greenberg to negotiate a plea agreement but Greenberg advised against it stating, "the feds can't be trusted. There's nothing to make them stand by their word, I'm telling you, I got experience in this, they're just going to screw you over." Lanzilotti admitted, however, that Greenberg's statements made no sense to him based on his understanding that "[n]obody goes to trial. Everybody knows that you can't beat the feds." Lanzilotti also admitted that One Star and Richard Haag, another seasoned criminal Lanzilotti knew, told him there was no benefit to a plea deal because "[t]he feds can't be trusted."
Prior to trial, Lanzilotti and Greenberg attended a reverse proffer, where the government presented all of the evidence it had accumulated against Lanzilotti. According to Lanzilotti, Greenberg explained that the Assistant U.S. attorney asked them to attend the reverse proffer because he believed Greenberg was not telling Lanzilotti everything about his exposure if he proceeded to trial. Lanzilotti understood that the Assistant U.S. attorney also believed Greenberg might be telling Lanzilotti that if he went to trial and lost, he would only receive a five to ten-year term of imprisonment. Notably, Lanzilotti admitted that the United States attorney emphasized at the reverse proffer that he faced thirty years to life imprisonment but would face "a lot less time" if he cooperated. Lanzilotti did not cooperate. Instead, he proceeded to trial, where he gave perjured testimony.
A jury convicted Lanzilotti of manufacturing methamphetamine and conspiracy to manufacture methamphetamine. Following the verdict, the government offered him another opportunity to cooperate and explained the mandatory minimum sentences and United States Sentencing Guidelines (USSG).*fn3
Plaintiff knew he faced thirty years to life imprisonment but still did not cooperate. He claims he did not cooperate because Greenberg said he would have to retain another attorney.
Prior to sentencing, Greenberg advised Lanzilotti, in writing, that the United States attorney placed Lanzilotti on a "43" offense level, which carries a mandatory sentence of life imprisonment, calculated as follows: a base "38" offense level based on the quantity of methamphetamine manufactured, plus a three-level enhancement for defendant's supervisory role in the "cooks" of the methamphetamine and a two-level enhancement for his obstruction of justice stemming from his perjury at trial.
Greenberg also advised Lanzilotti that the government again requested his cooperation in exchange for a possible motion for a downward departure based upon substantial assistance. Greenberg explained to Lanzilotti that "there is no guarantee that the Government would file a Motion for Downward Departure even if you did cooperate or that the Judge would grant such a motion. This option [to cooperate] is, however, available to you and you may wish to consider it."
Lanzilotti subsequently retained a different attorney to represent him at sentencing. The attorney objected to the three-level enhancement for Lanzilotti's supervisory role and filed a motion for a downward departure on the grounds that (1) Lanzilotti had rehabilitated himself, and (2) the USSG "overstate the seriousness of the offense" and constitute cruel and unusual punishment. The federal district court overruled the objection, denied the motion and sentenced Lanzilotti to two concurrent terms of life imprisonment based on a "43" offense level.
Lanzilotti appealed his conviction and sentence. He contended, in part, that the court erred in overruling his objection to the three-level enhancement for his supervisory role and erroneously denied his motion for a downward departure. Lanzilotti, supra, 58 F. App'x at 900-01. The United States Court of Appeals for the Third Circuit affirmed Lanzilotti's conviction and sentence. Id. at 901. The court found that out of approximately twenty participants in the drug-trafficking scheme, "Lanzilotti was one of the three or four most culpable." Id. at 900. Accordingly, the court concluded that Lanzilotti's sentence was properly enhanced by three levels under USSG § 3B1.1(b). Ibid.
Lanzilotti filed motions thereafter, which he later withdrew after entering into a stipulation that his sentence should be vacated and he should be resentenced at a "42" offense level to a thirty-year term of imprisonment.*fn4 The stipulation also provided that Lanzilotti "voluntarily and expressly waive all rights to appeal or collaterally attack [his] conviction, sentence, or any other matter relating to this prosecution . . . ."
Lanzilotti thereafter filed a complaint alleging legal malpractice and fraudulent misrepresentations. He testified at his deposition that Greenberg made the following fraudulent misrepresentations:
1. the government offered no plea agreement;
2. Lanzilotti could not rely on any plea agreement offered by the government;
3. Greenberg had inquired if the government would offer a plea agreement and was informed there would be no offer; and
4. the resolution of this case could only be through trial and the case was "winnable."
Greenberg filed a motion for summary judgment, contending that Lanzilotti (1) produced no expert report and, thus, could not establish a standard of care and breach thereof; (2) cannot establish a breach of duty because, inter alia, there is no evidence the government offered a plea agreement that was not transmitted to Lanzilotti; (3) has not sustained any damages because he was guilty of the charges and received a reduced sentence; and (4) cannot establish any of the common-law fraud elements. Greenberg also contended that Lanzilotti's malpractice claim is barred because Lanzilotti was not exonerated, which is a predicate for a legal-malpractice claim arising from a criminal prosecution, and his claims are barred by collateral estoppel and the stipulation.*fn5
In response to Greenberg's statement of material facts, Lanzilotti admitted his guilt and that he produced no evidence of any plea agreement offered by the government that Greenberg did not relay to him. He also admitted that he refused to cooperate and offered perjured testimony at trial despite knowing how his cooperation might have impacted his potential sentence. Nevertheless, he countered that an expert is not required because this is a "common knowledge" legal-malpractice case, exoneration is not required, the stipulation does not bar his claims, and collateral estoppel does not apply. He also countered that he "was damaged by not having been given the chance to benefit from cooperation. If [he] had cooperated against One Star his sentence would have almost certainly been reduced."*fn6
The judge questioned whether "anyone is ever going to be able to determine whether or not it's a true statement that the government can . . . can never be trusted . . . ." The judge concluded an expert was necessary because in the end it does have to do with the whole manner of how a criminal defense attorney handles and counsels a client in a case such as this. That really is the subject of this [and is] beyond the ken of the average juror. The average juror cannot decide that simply on a question of whether they believe or not believe, whether [Greenberg] said what [Lanzilotti] contends [Greenberg] did to [Lanzilotti], whether it's true or not true, or whether . . . [Greenberg] had some basis to . . . say what he said, it all is bound up in the overall counseling and handling and management of a client in the context of a very serious Federal prosecution.
The judge also concluded, in the alternative, that Lanzilotti could not demonstrate legal malpractice because he knew the government sought his cooperation and advised him of the possibility of a lesser sentence if he cooperated, yet he declined to pursue that option.
Also, in the alternative, citing McKnight v. Office of the Public Defender, 197 N.J. 180 (2008), the judge concluded that exoneration is a predicate for Lanzilotti's legal-malpractice claims under the particular facts of this case. Thus, the judge determined that summary judgment was proper because Lanzilotti was not exonerated.
On appeal, Lanzilotti does not challenge the judge's ruling on exoneration. He merely contends, in part, that expert testimony is not necessary to prove legal malpractice because this is a common-knowledge case. We disagree.
Our review of a ruling on summary judgment is de novo, applying the same legal standard as the trial court. Coyne v. N.J. Dep't of Transp., 182 N.J. 481, 491 (2005); Chance v. McCann, 405 N.J. Super. 547, 563 (App. Div. 2009). Thus, we consider, as the trial judge did, "'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007) (quoting Brill, supra, 142 N.J. at 536). Summary judgment must be granted "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c). If there is no genuine issue of material fact, we must then "decide whether the trial court correctly interpreted the law." Massachi v. AHL Servs., Inc., 396 N.J. Super. 486, 494 (App. Div. 2007), certif. denied, 195 N.J. 419 (2008). We review issues of law de novo and accord no deference to the trial judge's conclusions on issues of law. Zabilowicz v. Kelsey, 200 N.J. 507, 512-13 (2009).
"The elements of a cause of action for legal malpractice are (1) the existence of an attorney-client relationship creating a duty of care by the defendant attorney, (2) the breach of that duty by the defendant, and (3) proximate causation of the damages claimed by the plaintiff." McGrogan v. Till, 167 N.J. 414, 425 (2001) (citing Conklin v. Hannoch Weisman, 145 N.J. 395, 416 (1996)). "Because the duties a lawyer owes to his client are not known by the average juror, a plaintiff will usually have to present expert testimony defining the duty and explaining the breach." Stoeckel v. Twp. of Knowlton, 387 N.J. Super. 1, 14 (App. Div.), certif. denied, 188 N.J. 489 (2006). "Expert testimony is required in cases of professional malpractice where the matter to be addressed is so esoteric that the average juror could not form a valid judgment as to whether the conduct of the professional was reasonable."
Sommers v. McKinney, 287 N.J. Super. 1, 10 (App. Div. 1996). Expert testimony is also generally required to establish a causal link between the alleged negligence and actual damages in a malpractice case. See Brach, Eichler, Rosenberg, Silver, Bernstein, Hammer & Gladstone, P.C. v. Ezekwo, 345 N.J. Super. 1, 15 (App. Div. 2001) (holding the trial court properly dismissed the defendant's legal malpractice counterclaim where there was no expert testimony establishing the requisite standard of care and proximate causation).
It is the rare legal-malpractice case where an expert is not required because "the duty of care to a client is so basic that it may be determined by the court as a matter of law." Brizak v. Needle, 239 N.J. Super. 415, 429 (App. Div.), certif. denied, 122 N.J. 164 (1990). Such rare cases include the attorney's failure to conduct an investigation into a claim, id. at 429-30, the failure to execute and record a bond and mortgage, Stewart v. Sbarro, 142 N.J. Super. 581, 591 (App. Div.), certif. denied, 72 N.J. 459 (1976), and the failure to file a cause of action within the statute of limitations, Fuschetti v. Bierman, 128 N.J. Super. 290, 295 (Law Div. 1974). However, "if the adequacy of an investigation or the soundness of an opinion is the issue, a jury will usually require the assistance of an expert opinion." Sommers, supra, 287 N.J. Super. at 11. "To the extent that [a] plaintiff challenges the quality of the work done on [his or] her behalf, [the claim is] properly dismissed . . . because of [the] failure to submit an expert report." Id. at 13-14 (citing Brizak, supra, 239 N.J. Super. at 432).
In this case, Lanzilotti challenges the adequacy and soundness of Greenberg's representation. This requires an evaluation of Greenberg's opinion about plea negotiations in drug-trafficking cases brought in the Eastern District of Pennsylvania and whether and how such negotiations occur. It also requires an evaluation of Greenberg's opinion that the case was "winnable" at trial, and whether Lanzilotti suffered any damages proximately caused by Greenberg's conduct. Without question, these issues are clearly beyond the ken of the average juror and require expert testimony. The judge, therefore, correctly granted summary judgment for Lanzilotti's failure to submit an expert report.
The judge also correctly granted summary judgment because exoneration is a predicate for a legal-malpractice claim arising from a criminal prosecution. In a legal-malpractice action against a criminal defense attorney, the cause of action does not accrue until the client is in some way exonerated.
McKnight, supra, 197 N.J. at 182.*fn7 Exoneration includes dismissal of a charge "or any disposition more beneficial to the criminal defendant than the original judgment." Ibid. (citation and internal quotation marks omitted). Any cause of action Lanzilotti may have had against Greenberg evaporated when Lanzilotti exhausted his federal appeals without any form of exoneration. He, thus, has no colorable legal-malpractice claim against Greenberg.
As for Lanzilotti's fraud claim, we first note that he argues, incorrectly, that the judge usurped the jury's function by determining the fraud issue and concluding there was no material misrepresentation. The judge did no such thing. The judge merely restated Greenberg's argument that "the elements of common law fraud have not been made out here. There is no material . . . misrepresentation that's been shown here by the plaintiff in this matter." The judge then granted summary judgment based on Lanzilotti's failure to submit an expert report and, alternatively, on the lack of exoneration. Thus, we reject Lanzilotti's argument that the judge usurped the jury's function by determining the fraud issue and concluding there was no material misrepresentation.
We also reject Lanzilotti's claim that he established the elements of common-law fraud. Fraud must be proved by clear and convincing evidence. Stoecker v. Echevarria, 408 N.J. Super. 597, 617 (App. Div), certif. denied, 200 N.J. 549 (2009). "To establish common-law fraud, a plaintiff must prove: '(1) a material misrepresentation of a presently existing or past fact; (2) knowledge or belief by the defendant of its falsity; (3) an intention that the other person rely on it; (4) reasonable reliance thereon by the other person; and (5) resulting damages.'" Banco Popular N. Am. v. Gandi, 184 N.J. 161, 172-73 (2005) (quoting Gennari v. Weichert Co. Realtors, 148 N.J. 582, 610 (1997)).
Lanzilotti argues that Greenberg made material misrepresentations about a plea agreement, which caused Lanzilotti damage, that is, a greater sentence than he would have received if he had cooperated.*fn8 Lanzilotti admits that to establish the first element of fraud he "must first show that a plea agreement was in fact available and then that [Greenberg] communicated contrary information to him." To establish the first element, he relies on a purported letter from his sentencing attorney, which states that FBI agents had advised the attorney that Greenberg was offered, but rejected, a plea agreement to a charge that would not involve Lanzilotti's cooperation. Lanzilotti argues the letter creates a material dispute as to whether the government had, in fact, offered a plea agreement. He is wrong. The purported letter constitutes inadmissible hearsay and contains double hearsay, and it, therefore, cannot be used to defeat summary judgment. See R. 4:46-5 (requiring a party opposing summary judgment to respond by affidavits meeting the requirements of Rule 1:6-6, which requires affidavits to be "made on personal knowledge, setting forth only facts which are admissible in evidence to which the affiant is competent to testify"); El-Sioufi v. St. Peter's Univ. Hosp., 382 N.J. Super. 145, 164 (App. Div. 2005) (reiterating that only admissible evidence may form the factual basis for summary judgment).
Because there is no admissible evidence indicating the government offered a plea agreement, Lanzilotti cannot prove by clear and convincing evidence either that Greenberg made any material misrepresentations about a plea agreement or that any of Greenberg's statements about a plea agreement were false. He also cannot prove that he would have received a lesser sentence if he had cooperated.
Lanzilotti contends for the first time on appeal that Greenberg made a fraudulent omission about Lanzilotti's eligibility for a reduction of the mandatory minimum sentencing requirement pursuant to "federal safety valve," 18 U.S.C.A. § 3553(f). Although we should decline to consider this contention, we nevertheless conclude it lacks merit.
Under the "federal safety valve," a court may, but is not required to, impose a sentence without regard to the statutory minimum only if all of the following requirements are met:
(1) the defendant does not have more than 1 criminal history point, as determined under the sentencing guidelines;
(2) the defendant did not use violence or credible threats of violence or possess a firearm or other dangerous weapon (or induce another participant to do so) in connection with the offense;
(3) the offense did not result in death or serious bodily injury to any person;
(4) the defendant was not an organizer, leader, manager, or supervisor of others in the offense, as determined under the sentencing guidelines and was not engaged in a continuing criminal enterprise, as defined in section 408 of the Controlled Substances Act [21 U.S.C.A. § 848]; and
(5) not later than the time of the sentencing hearing, the defendant has truthfully provided to the Government all information and evidence the defendant has concerning the offense or offenses that were part of the same course of conduct or of a common scheme or plan, but the fact that the defendant has no relevant or useful other information to provide or that the Government is already aware of the information shall not preclude a determination by the court that the defendant has complied with this requirement.
[18 U.S.C.A. § 3553(f).]
Lanzilotti was not eligible for the "federal safety valve" because he had a supervisory role in a continuing drug-trafficking scheme. 18 U.S.C.A. § 3553(f)(4). Also, he did not cooperate as required by 18 U.S.C.A. § 3553(f)(5). He had numerous opportunities to cooperate but refused to do so despite knowing that he faced thirty years to life imprisonment and would likely receive a lesser sentence if he cooperated. Greenberg advised him to consider cooperating prior to sentencing and Lanzilotti refused to do so even when represented by a different attorney. Accordingly, his fraudulent-omission claim fails.