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Malcolm Blum v. Poonam Agarwal

September 12, 2011

MALCOLM BLUM, PLAINTIFF-APPELLANT,
v.
POONAM AGARWAL, DEFENDANT, AND JUSTIN GILLMAN, ESQ., AND GILLMAN & GILLMAN, ESQS., DEFENDANTS-RESPONDENTS.



On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-7480-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 28, 2011

Before Judges A. A. Rodriguez and C. L. Miniman.

Plaintiff, Malcolm Blum, appeals from the April 16, 2010 summary judgment dismissing all claims against his former client's bankruptcy lawyer, defendant, Justin Gillman, Esq. and his law firm Gillman & Gillman, LLC (Gillman firm). We affirm.

Defendant, Poonam Agarwal, was represented by several lawyers from different firms during the course of her contentious divorce from her husband. On August 23, 2003, Agarwal discharged Budd Larner, one of the law firms that represented her. Budd Larner obtained a judgment against her for $126,178.24 in legal fees.

Blum was subsequently representing Agarwal when her husband filed for bankruptcy and the divorce action was stayed pending the resolution of the bankruptcy proceeding. In February 2006, the stay was vacated by a bankruptcy judge.

On September 15, 2006, the matrimonial judge modified the dual judgment of divorce. The husband was ordered to pay: Agarwal's legal and expert fees consisting of $51,247.75 to Blum and $126,178.74 to Budd Larner. Blum contacted Budd Larner to request that the judgment against Agarwal be vacated based on the matrimonial judge's order that the husband pay Agarwal's legal fees. The husband appealed the judgment of divorce and Blum continued to represent Agarwal in the appeal.

On August 18, 2006, the bankruptcy judge permitted the Bankruptcy Trustee to sell some of the Agarwals jointly held real estate and ordered that the proceeds be held in escrow. Agarwal retained the Gillman firm to represent her in the bankruptcy proceedings in December 2006. Three weeks later, the Gillman firm informed Blum that it was Agarwal's lawyer in the bankruptcy proceeding.

Eight months later, on August 30, 2007, the bankruptcy judge ordered that the automatic stay does "not apply to any action taken by [Agarwal] to recover from non-estate property expert fees and attorney fees owed by the Debtor under the Modified Amended Dual Judgment of Divorce." In October 2007, the bankruptcy judge determined that certain surplus funds from foreclosure sales on rental properties were the property of Agarwal. Therefore, these funds were to be released to the Gillman firm and held in an escrow account pending further order from the court. Gillman passed this information to Blum.

The Gillman firm received a $147,491.56 check for the surplus funds. Gillman then informed Blum of this, noting that the "funds were to be held pending entry of an Order by any Court regarding the levy on those funds by Budd Larner as a levying creditor." Blum wrote Gillman that he had an attorney's lien against Agarwal that "exceeds $51,000.00." Gillman replied advising that "[i]f Budd Larner agrees to release its levy on those funds, any funds which are authorized by Agarwal may[ ]be released in a manner she determines subject to" a fee claim by the Gillman firm for approximately $8,000.

Around this time, Law Division Judge Donald S. Goldman signed an order directing the Gillman firm to disburse $58.996.62 to Budd Larner, $25,000 to Blum and $63,494.94 to Agarwal from the escrow account. The three parties consented to this order. On July 29, 2008, the Gillman firm distributed the funds to Budd Larner and Blum in accordance with the consent order and advised Blum that his firm would be distributing the remaining funds to Agarwal.

On November 14, 2007, the bankruptcy judge ordered that another property held jointly by the Agarwals could be sold and the proceeds held in escrow by the trustee. Later, the judge determined that Agarwal's interest in the property was $184,612.75. The bankruptcy trustee issued a check for this amount to the Gillman firm. Blum wrote to Gillman claiming that he just learned from Agarwal that the $184,612.75, less Gillman's fee, had been distributed to her. After Blum confirmed that he would no longer be representing Agarwal, he sent her a final bill for $58,452.12 and notified her of her right to fee arbitration.

She did not pay the fee. Blum filed this action seeking $58,452.12 from Agarwal and $51,257.75 ...


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