On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-916-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 28, 2011
Before Judges A. A. Rodriguez, Grall and Coburn.
Plaintiffs Angela M. Roper, Esq., Robyne D. LaGrotta, Esq., and the law firm of Roper & Twardowsky, L.L.C. (collectively "Roper Firm"), appeal from (1) the summary judgment dismissing its legal malpractice claim against defendants, Steven Z. Jurista, Esq., and Wasserman, Jurista & Stolz, P.C. (WJ&S); and (2) the order denying its motion for reconsideration and to file an amended complaint. We affirm.
The Roper Firm specializes in legal malpractice claims. The present action follows the unfavorable outcome of the Roper Firm's earlier lawsuit against Hilton L. Stein, a former attorney and legal malpractice specialist who owed the Roper Firm fees. In September 2001, the Roper Firm entered into an arrangement with Stein to be substituted as counsel in several legal malpractice cases. Stein agreed to protect the Roper Firm's earned fees. However, this relationship deteriorated because Stein failed to pay the fees.
During the pendency of the Roper Firm's suit, Stein filed for Chapter 11 bankruptcy protection. The Roper Firm retained WJ&S to represent their interest in the bankruptcy action. Those proceedings revealed that the Roper Firm was the largest and most active creditor in the Stein bankruptcy.
WJ&S advised the Roper Firm to reject the $140,000 settlement from Stein; oppose a motion to dismiss the bankruptcy action; and seek to become the trustee in bankruptcy. The Roper Firm followed this advice.
At a hearing in the Bankruptcy Court for the District of New Jersey, the Office of the United States Trustee moved for the appointment of a Chapter 11 trustee*fn1 and opposed the dismissal. The U.S. Trustee explained that the peculiarities of this bankruptcy matter called for that result, rather than a dismissal of the action in anticipation of a settlement among the bankrupt estate and its creditors. The U.S. Trustee offered the following explanation to the judge:
Section 1104 calls for the appointment of a Trustee for cause, including fraud, dishonesty, incompetence, for gross mismanagement or [where] it's in the best interest of creditors, interest holders of the estate.
. . . Frankly, I think the fact that [Stein's attorney] went to state court is evidence of the fact that he really has no concept of what's going on in the bankruptcy proceeding and that causes me great concern. I don't know what kind of money is coming in and going out of those various trust accounts. I don't know of any pre-petition creditors of Mr. Stein who have been paid out of those accounts. I have no idea of what is going on vis-a-vis the law practice of what's left of it, because as Your Honor is aware of my motion, Mr. Stein currently is unable to practice law, in fact, has been suspended from practicing law . . . .
So, yeah, I have real concerns about the fact that we have [Stein's attorney] going to state court without any notice to the Bankruptcy Court, any notice to our office and I believe without any notice to his former partners.
The schedules and statements of financial affairs weren't filed, were not verified, so they have absolutely no significance to anybody at this stage because there's no declaration as to their veracity.
After the statements and schedules were filed, the Clerk's Office set a 341 meeting. The day before the 341 meeting a letter from counsel to the debtor informing me that he would not be able to appear because of his medical incapacity. So again, we have another obligation that the debtor was unable to fulfill or refused to fulfill . . . . The debtor has f[a]iled to comply with any reporting requirements. . . . We don't know whether the debtor-in-possession account was ever opened. We have no monthly operating reports that were ever filed. . . [E]ven if the debtor were to try to submit those ...