Submitted October 8, 2013.
Approved for Publication May 21, 2014.
On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-2096-12.
Weisberg Law, P.C., attorneys for appellant ( Matthew B. Weisberg, on the brief).
Goldberg Segalla, LLP, attorneys for respondents ( Matthew S. Marrone and Gregory D. Hanscom, on the brief).
Before Judges FISHER, ESPINOSA and KOBLITZ. The opinion of the court was delivered by ESPINOSA, J.A.D.
[435 N.J.Super. 593] ESPINOSA, J.A.D.
Plaintiff Eduardo Cortez filed a complaint against his former counsel, defendants Joseph G. Gindhart and his law firm (Gindhart), alleging legal malpractice, breach of contract, and breach of fiduciary duty. He now appeals from an order that granted summary judgment, dismissing his complaint. We affirm.
Cortez was the owner and operator of People's Multiple Services, a tax preparation business in Atlantic City. In 2004, after the Internal Revenue Service (IRS) commenced an investigation [435 N.J.Super. 594] regarding the preparation of fraudulent tax returns, Cortez retained Gindhart to represent him. Gindhart represented Cortez until shortly after Cortez was indicted in April 2008.
In his complaint, Cortez alleges that Gindhart recommended he retain an accountant, Ronald R. Petlev, and assured Cortez that all communications Cortez had with Petlev would be privileged. Cortez retained Petlev, who then assisted in the audit and prepared his tax returns for
2003, 2004, and 2005. The complaint alleges that, shortly after Petlev was retained, the IRS matter was referred to the Criminal Investigations Division. Cortez alleges further that he asked Gindhart to represent two employees of his company who were potential targets of the IRS investigation and that, although Gindhart initially declined on the ground he might have a conflict of interest, he later agreed to do so.
The complaint alleges that Cortez " repeatedly made requests to Gindhart to negotiate a plea agreement with the United States Attorneys office." It is further alleged that Gindhart " refused to negotiate a plea agreement." However, a letter dated November 28, 2006, addressed to Gindhart from the trial attorney for the United States Department of Justice states it is in response to Gindhart's November 27, 2006 letter " regarding the investigation of your client, Eduardo Cortez, and a possible pre-trial resolution of this matter." The letter continues:
As you may be aware, Internal Revenue Service has authorized prosecution of Mr. Cortez for various criminal violations of the Internal Revenue Code, including evasion of income taxes for the years 1993 to 1995 (26 U.S.C. § 7201), two counts of making and subscribing a false document for the false Offers in Compromise filed by Mr. Cortez (26 U.S.C. § 7206(1)), and 43 counts of aiding and assisting in the preparation or presentation of false returns (26 U.S.C. § 7206(2)).
The tax loss as currently calculated, and subject to change, is in excess of $460,000. Adding other relevant conduct, Mr. Cortez's failure to pay approximately $160,000 additional tax due and owing for 2001 and 2002, the total tax loss approaches $600,000. This amount may increase as the government gathers new information.
Should your client be convicted, a court may impose a sentence of up to the maximum penalty permitted by statute. Specifically, a violation of 26 U.S.C. § 7201, tax evasion, carries a maximum penalty of five years incarceration and a fine of $250,000. In addition, each violation of 26 U.S.C. § 7206(1), making and [435 N.J.Super. 595] subscribing a false document, carries a maximum penalty of three years incarceration and a fine of $250,000. Finally, each violation of 26 U.S.C. § 7206(2), aiding and abetting the preparation or presentation of a false return, carries a maximum penalty of three years incarceration and a fine of $250,000. If your client is convicted of all the authorized charges, he faces a maximum period of incarceration of 140 years and a maximum fine of $11,500,000.
According to the United States Sentencing Guidelines, sections 2T1.1, 2T1.4, and 2T4.1, the base offense level for your client's conduct is 20. Moreover, a sentencing court likely would find that your client was in the business of preparing or assisting in the preparation of tax returns, increasing the offense level by 2 points. Thus, without taking into account any other enhancements of your client's criminal history, should a jury convict your client of some or all of the charged offenses, he could be sentenced within a guideline range of 41-51 months imprisonment and a fine of $7,500 to $75,000.
Should Mr. Cortez choose to clearly accept responsibility for the offenses, there is a possibility of a reduction of the offense level by two points. Further, a timely notification of your client's intent to plead guilty could lead to a further one-point reduction of the offense level.
The discussion set forth above does not constitute a binding offer for a plea agreement. Please call me to discuss this matter further.
The complaint alleges that in February 2008, Petlev was subpoenaed to testify before a federal grand jury and that Gindhart fought, unsuccessfully, to quash the subpoena on the ground that Petlev's communications with Cortez were privileged. According to the complaint, Petlev was ordered to ...