NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited . R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4357-16T4
ROBERT HULL and POINT
PLEASANT LANDCO, LLC,
Plaintiffs-Appellants,
v.
MICHAEL T. COLLINS, ESQ.,
LAW OFFICES OF MICHAEL
T. COLLINS, PC, PATRICK J.
SPINA, ESQ., PATRICK J. SPINA,
ESQ., PC, SODINI & SPINA, LLC,
DAY PITNEY LLP (f/k/a PITNEY
HARDIN LLP), CAMILLE V.
OTERO, ESQ., FRANCES B. STELLA,
ESQ., JAMES SHERMAN, ESQ., and
SHERMAN LAW OFFICES LLC,
Defendants-Respondents,
and
EDWARD FEUREY, ESQ., MARY JANE
LIDAKA, ESQ., BERRY SAHRADNIK
KOTZAS & BENSON, PC, CARL W.
ERLER, ESQ., and KEVIN RIORDAN, ESQ.,
Defendants.
_________________________________________
Argued December 17, 2018 – Decided April 5, 2019
Before Judges Haas, Sumners and Mitterhoff.
On appeal from Superior Court of New Jersey, Law
Division, Passaic County, Docket No. L-2096-14.
Raphael M. Rosenblatt argued the cause for appellants
(Rosenblatt Law, PC, attorneys; Raphael M.
Rosenblatt, of counsel and on the brief).
Robert E. Rue argued the cause for respondents
Michael T. Collins, Esq., and Law Offices of Michael
T. Collins, PC.
Rowena M. Duran argued the cause for respondents
Patrick J. Spina, Esq., and Patrick J. Spina, Esq., PC,
(Vasios, Kelly & Strollo, PA, attorneys; Rowena M.
Duran, of counsel and on the brief; Brooke E.
Anderson, on the brief).
Paul R. Marino argued the cause for respondents Day
Pitney LLP, Camille V. Otero, Esq., and Frances B.
Stella, Esq. (Day Pitney LLP, attorneys; Paul R. Marino
and Alba V. Aviles, on the brief).
Robyn Ann Valle argued the cause for respondents
James Sherman, Esq., and Sherman Law Offices, LLC.
Gregg S. Sodini argued the cause for respondent Sodini
& Spina, LLC.
PER CURIAM
In this legal malpractice action, Robert Hull and Point Pleasant Landco,
LLC (collectively Hull) sued their former attorneys, defendants Michael T.
A-4357-16T4
2
Collins, Esq., Law Offices of Michael T. Collins, PC, Patrick J. Spina, Esq.,
Patrick J. Spina, Esq., PC,1 and Sodini & Spina, LLC, and the attorneys who
represented Robert Lewis, William Lewis and Lewis Enterprises (collectively
Lewises), defendants Day Pitney, LLP, Camille V. Otero, Esq., Frances B.
Stella, Esq., James Sherman, Esq., Sherman Law Offices, LLC, (collectively
defendants). Hull claimed he settled his lawsuit against the Lewises seeking
compensation to remediate a contaminated property, which Hull purchased from
the Lewises, for a compromised amount because his attorneys failed to
adequately investigate the Lewises' financial condition and the existence of
insurance coverage to pay for the cleanup, and because the Lewises' attorneys
failed to disclose in discovery that there was insurance coverage to pay for the
cleanup.
Hull appeals orders in which three judges, on separate occasions, entered
orders granting summary judgment in favor of defendants. Hull also appeals an
order denying his motion for reconsideration of the dismissal of defendants
Michael T. Collins and Law Offices of Michael T. Collins, PC (collectively
1
Hull concedes that Patrick J. Spina, Esq., PC should be dismissed from this
litigation, as this entity was not in existence during the underlying litigation.
A-4357-16T4
3
Collins) and Sodini & Spina. Hull contends there were multiple errors that
precluded his claims from being tried on the merits.
For the reasons stated below, we affirm the order dismissing the complaint
against Day Pitney, Camille V. Otero, Frances B. Stella, (collectively Day
Pitney), Patrick J. Spina, Esq., Patrick J. Spina, Esq., PC, (collectively Spina),
and Sodini & Spina, but reverse the orders dismissing the complaint as to the
other defendants, James Sherman, Esq., Sherman Law Offices, LLC
(collectively Sherman) and Collins.
I.
We summarize the following facts from the record, viewing them "in the
light most favorable to [plaintiff,] the non-moving party." Globe Motor Co. 23
v. Igdalev, 225 N.J. 469, 479 (2016) (citing R. 4:46-2(c)).
A.
Underlying Claims
1. Environmental Remediation Action
In June 1993, Hull purchased property – used for a coin-operated laundry,
a commercial dry-cleaning business and two apartments – from the Lewises for
$300,000. Prior to the purchase, plaintiffs did not conduct an environmental
assessment of the property. In 2002, when Hull attempted to sell the property,
A-4357-16T4
4
a Phase II environmental site investigation authorized by a prospective buyer
revealed the property was contaminated with Perchloroethylene, a chemical
heavily used in the dry cleaning industry, classified as a hazardous substance
under the New Jersey Spill Compensation and Control Act (Spill Act), N.J.S.A.
58:10-23.11 to -23.24.2
In 2003, Hull retained the law firm of Berry, Sahradnik, Kotzas & Benson,
PC (BSK&B) to prosecute all parties liable for the contamination of the property
and apportion damages relating to its remediation. In January 2004, Hull filed
a ten-count complaint 3 against the Lewises.
2
Hull subsequently sued Wachovia Bank, N.A., as successor in interest to First
Fidelity Bank, N.A. ("Wachovia"), and Environmental Waste Management
Associates, Inc. ("EWMA") alleging they had a duty to notify Hull of the results
of a Phase I environmental audit that had been conducted at the time Hull
purchased the property and their failure to do so was a breach. The audit was a
paper review and physical inspection of the property that did not reveal any
environmental concerns. Hull sought damages for the cost of remediating this
contamination. Wachovia and EWMA were granted summary judgment because
there was no evidence in the record that Hull relied on the bank's satisfaction
with the result of the Phase I environmental audit to close the transactio n and
that even if he had, such reliance would not be reasonable. We affirmed the
orders granting defendants' motions. Hull v. Lewis, No. A-5403-07 (App. Div.
June 11, 2009).
3
The complaint alleged equitable allocation of contribution shares under the
Spill Act; abnormally dangerous activities; negligence; trespass; public
nuisance; private nuisance; breach of contract; relief under the New Jersey
Environmental Cleanup Responsibility Act, N.J.S.A. 13:1K-6 to -13, replaced
A-4357-16T4
5
Throughout the course of the litigation, the Lewises, represented by Day
Pitney and Sherman, consistently represented to Hull's counsel that they "did
not have insurance coverage for the property and were in jeopardy of having to
file for bankruptcy." Hull served a document request on Lewis defendants,
requesting: "[a]ll insurance policies which the Lewis[es] procured covering any
occurrences at the [p]roperty . . . ." In response, Hull received Hanover
Insurance Company policy no. QDQ989473 and North River Insurance
Company policy no. 5234874246.
Determining it needed the assistance of an experienced environmental
counsel, BSK&B retained Collins, as a consultant. In turn, Collins reviewed the
documents produced by the Lewises and repeatedly asked their counsel whether
they had insurance coverage for the property. Day Pitney told Collins that there
was no insurance coverage, and that they were not pursuing a declaratory action
against any insurance carrier because they were terminating their representation
of the Lewises due to non-payment of fees.
The Lewises subsequently filed a motion for summary judgment against
Hull. The judge partially granted the motion by dismissing several counts of the
by the Industrial Site Recovery Act, N.J.S.A. 13:1K-6 to -14;
fraud/concealment; and equitable relief.
A-4357-16T4
6
complaint and limited Hull's claims against them to seeking contribution under
the Spill Act and common law theories of negligence and breach of contract.
The parties thereafter commenced settlement negotiations.
In preparation for trial, Collins, at some point, brought in Spina of Sodini
& Spina to help prepare Hull's experts for trial. The Lewises had also hired
Sherman to replace Day Pitney as their counsel in June 2007, two months prior
to the close of discovery in September.
Unbeknownst to Hull, the Lewises at some point retained Paul Breene,
Esq., of Anderson Kill & Olick PC,4 in an effort to obtain insurance coverage
against Hanover for Hull's environmental clean-up claims. Breene, on behalf of
the Lewises, subsequently filed a declaratory judgement action against Hanover
on March 28, 2008, seeking insurance coverage to pay for remediation of the
property.5
A month later, Hanover gave Breene authority to settle Hull's claims
against the Lewises, within the range of $200,000 to $500,000. Collins was the
4
Neither Paul Breene nor Anderson Kill & Olick PC were sued by Hull.
5
Although the record reveals that North River contributed to the eventual
settlement, it is unclear why North River was not a named defendant in the
declaratory judgment action.
A-4357-16T4
7
only Hull attorney involved in the settlement negotiations, according to both
Breene and Collins.
A short three months after the declaratory judgment action was filed, the
parties reached a settlement agreement in June 2008. Hull received $290,000
from the Lewises, to cover the past, present, and future remediation expenses of
the property. Hull agreed to complete remediation of the property, and to hold
harmless and indemnify the Lewises for any past, present or future claims and
costs of any kind related to the property's contamination.
2. Settlement Enforcement of Environmental Remediation Action
For reasons unrevealed in the record, Hull never remediated the property.
Consequently, in May 2010, the New Jersey Department of Environmental
Protection (NJDEP) issued a directive and notice to Hull, the Lewises, and the
predecessor owners of the property indicating a notice of deficiency for not
remediating the property, which was served on Hull in September 2008. Hull
informed the NJDEP that he did not intend to remediate the property.
In response to Hull's refusal to remediate the property, the Lewises sued
Hull for the return of the settlement money, claiming he breached the settlement
agreement. During the ensuing discovery, Hull discovered the Lewises'
A-4357-16T4
8
insurance coverage funded the settlement payment, as well as the Lewises' out-
of-pocket expenses, including counsel fees.
Eventually, the trial court granted summary judgment in favor of the
Lewises. Hull then moved for reconsideration, arguing that at the time he
entered the settlement he was led to believe the Lewises had no insurance
coverage. He explained that the Lewises' insurers – Hanover, Century
Indemnity, 6 and North River – paid the entirety of the settlement and their
expenses. In fact, the insurers had been paying for remediation through
December 31, 2015, and paid approximately $842,209.
Following denial of his motion for reconsideration, Hull appealed to this
court, asserting that summary judgment was improper because he pled the
affirmative defense of fraud that raised an issue of fact regarding the Lewises’
failure to disclose they had insurance coverage with Hanover, which funded the
settlement.
While the appeal was pending, Hull moved before this court to supplement
the record to include his post-settlement finding of Hanover's integral role in the
Lewises' settlement decision. Although the motion was denied without
6
Beyond indicating that Century Indemnity made settlement payments on
behalf of Hanover, the record is unclear of the Century Indemnity's connection
with the insurance coverage issues.
A-4357-16T4
9
prejudice, we granted a limited remand to allow Hull to file a motion with the
trial court to seek relief from the summary judgment order.
Hull's Rule 4:50-1 motion was denied. In its written decision, the trial
court reasoned:
While it is true that [the] Lewis[es were] not
forthcoming about their attempts to obtain insurance
coverage . . . , Hull is incorrect in his statement that
[the] Lewis[es] did[,] in fact[,] have insurance coverage
for Hull's claims. . . . [T]he parties were never able to
reconstruct all of the insurance policies or confirm the
coverage was either owed or excluded . . . [the]
Lewis[es] would not "have insurance coverage" unless
and until they prevailed in the declaratory judgment
action. At best, [the] Lewis[es'] disclosure would have
put Hull on notice that coverage had been denied and
that a coverage claim was being pursued.
....
Taking Hull's argument to its logical conclusion, had he
been aware of insurance carrier involvement he may
had been able to obtain more money in the settlement
while still refusing later to undertake remediat[ion] of
the contamination.
The court determined Hull was not allowed to keep the $290,000
settlement without remediating the property, and, therefore, if he rescinded the
agreement, he would be required to either return the $290,000, or affirm the
contract, which would require him to remediate the property and seek money
damages for the alleged deceit.
A-4357-16T4
10
Hull filed an amended notice of appeal to include review of the denial of
his Rule 4:50-1 motion. We affirmed the trial court's decisions, Lewis v. Hull,
No. A-2537-14 (App. Div. March 2, 2017), and our Supreme Court denied a
petition for certification, Lewis v. Hull, 230 N.J. 477 (2017).
B.
Legal Malpractice Claim
At the same time Hull was successfully pursuing claims against the
Lewises, he filed the within malpractice action against defendants in June 2014.
Hull alleged the environmental claim against the Lewises was settled for far less
than its actual value because he was unaware the Lewises had insurance
coverage and agreed to settle without full knowledge of their actual financial
situation. Thereafter, three different trial judges (designated first, second and
third judge) entered separate orders granting summary judgment dismissing
claims against defendants.
With regards to Day Pitney and Sherman, the first judge reasoned in his
oral decision that a litigant in a civil action had no cause of action sounding in
malpractice against an adverse attorney, even if that adverse attorney violated
the Rules of Court governing discovery, as well as the Rules of Professional
Conduct 3.3 (candor to the tribunal) and 3.4 (regarding fairness to the opposing
A-4357-16T4
11
party). Additionally, the judge held that the litigation privilege barred
malpractice claims against Day Pitney and Sherman. Thus, absent a legal duty
towards Hull, Day Pitney and Sherman were granted summary judgment
dismissal of the complaint.
With regard to Spina, the second judge issued an oral decision stating
Hull:
patently fail[ed] to offer a legally sufficient expert
opinion as to the deviations from standards of care as
to Patrick J. Spina, and this failure is fatal to its legal
malpractice claim against him.
....
Significantly, none of the [Hull's] experts specifically
speak to any breach by Spina, a defendant whose role
in the underlying litigation was undoubtedly unique.
With respect to the remaining defendants, Sodini & Spina 7 and Collins,
on the eve of trial, the complaint was dismissed by the third judge when she
granted a motion in limine.8 They both argued that this court's decision in Lewis
7
After Collins was retained by BSK&B to consult with Hull, he brought in
Sodini & Spina.
8
The order provided in the record does not mention Sodini & Spina. However,
it is clear from the parties' appeal briefs, as well as the subsequent motion for
reconsideration, that the complaint against Sodini & Spina was also dismissed.
A-4357-16T4
12
v. Hull rendered Hull's malpractice claims moot, and any further remedy he had
did not sound in legal malpractice and must be asserted directly against the
Lewises. The judge's order, in pertinent part, stated:
. . . this matter must be dismissed with prejudice at this
time to comply with [the first judge's] decision and the
Appellate Division['s] decision on March 2, 2017. If
the settlement agreement is vacated and Hull elects to
return the money as outlined by [the first judge] and the
Appellate Division, then Hull may not have any
damages against his attorney Michael T. Collins, Esq.,
et al.
Hull's motion for reconsideration was denied.
This appeal followed.
II.
Hull argues on appeal that the three judges each erred in granting summary
judgment to defendants. Because the respective defendants had different
relationships with Hull, we will separately address the respective summary
judgment orders. Before doing so, however, we explain the principles that guide
our analysis.
Appellate review of a ruling on a motion for summary judgment is de
novo, applying "the same standard governing the trial court[.]" Davis v.
Brickman Landscaping, Ltd., 219 N.J. 395, 405 (2014). Thus, we consider, as
the motion judge did, "'whether the competent evidential materials presented,
A-4357-16T4
13
when viewed in the light most favorable to the non-moving party, are sufficient
to permit a rational factfinder to resolve the alleged disputed issue in favor of
the non-moving party.'" Id. at 406 (quoting Brill v. Guardian Life Ins. Co. of
Am., 142 N.J. 520, 540 (1995)). "If there is no genuine issue of material fact,"
an appellate court "must then decide whether the trial court correctly interpreted
the law." DepoLink Court Reporting & Litig. Support Servs. v. Rochman, 430
N.J. Super. 325, 333 (App. Div. 2013) (citation omitted). We accord no
deference to the trial judge's legal conclusions. Nicholas v. Mynster, 213 N.J.
463, 478 (2013) (citing Zabilowicz v. Kelsey, 200 N.J. 507, 512-13 (2009)).
To prevail on a legal malpractice claim, a plaintiff must establish the
following elements: "(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). "To establish the requisite causal
connection between a defendant's negligence and plaintiff's harm, plaintiff must
present evidence to support a finding that defendant's negligent conduct was a
'substantial factor' in bringing about plaintiff's injury, even though there may be
other concurrent causes of the harm." Froom v. Perel, 377 N.J. Super. 298, 313
(App. Div. 2005) (quoting Conklin v. Hannoch Weisman, 145 N.J. 395, 419
A-4357-16T4
14
(1996)). Expert testimony is required in professional malpractice claims where
the issue to be resolved is so esoteric that the average juror could not form a
valid judgment as to whether the conduct of the professional was reasonable.
See Sommers v. McKinney, 287 N.J. Super. 1, 10 (App. Div. 1996); Butler v.
Acme Markets, Inc., 89 N.J. 270, 283 (1982).
"The most common way to prove the harm inflicted by [legal] malpractice
is to proceed by way of a 'suit within a suit' in which a plaintiff presents the
evidence that would have been submitted at a trial had no malpractice occurred."
Garcia v. Kozlov, Seaton, Romanini & Brooks, P.C., 179 N.J. 343, 358 (2004).
"The 'suit within a suit' approach aims to clarify what would have taken place
but for the attorney's malpractice." Ibid. Courts, however, need not rigidly
adhere to the "suit within a suit" paradigm; "flexibility [is] accorded to lawyers
and judges to limn an appropriate procedure in each case based on the facts and
on the claim[]." Id. at 361. As in this case, "[a] flexible approach is particularly
warranted in the more unusual cases where the aggrieved plaintiff in the
malpractice action was the defendant in the . . . underlying action." Carbis Sales,
Inc. v. Eisenberg, 397 N.J. Super. 64, 86 (App. Div. 2007) (citing Lieberman v.
Employers Ins. of Wausau, 84 N.J. 325, 343 (1980)).
A-4357-16T4
15
A.
Hull first argues the judge erroneously granted summary judgement to
Day Pitney and Sherman, attorneys for the Lewises, by determining that: 1) they
owed no duty to him; 2) the litigation privilege barred his claims; and 3) no
genuine issue of any material fact existed.
With regard to the litigation privilege, Hull argues that it does not include
legal malpractice. Buchanan v. Leonard, 428 N.J. Super. 277, 286 (App. Div.
2012). Legal malpractice claims based on false or negligent misrepresentations
by an attorney, even to an adversary, are cognizable when the attorney knows or
should know that the adversary will rely on those statements. See Banco Popular
v. Gandi, 184 N.J. 161,179-181 (2005); Petrillo v. Bachenberg, 139 N.J. 472,
484 (1995). Thus, Hull argues Day Pitney and Sherman are liable for legal
malpractice because their "failure to supplement discovery responses in the face
of counsel's knowledge of conflicting factual information [regarding the
Lewises' insurance coverage] undermines the discovery process and also runs
counter to R.P.C. 3.3 (candor [to the] tribunal) and 3.4 (regarding fairness to the
opposing party)." Hull further maintains he had an actionable claim against Day
Pitney and Sherman because he presented expert reports that supported his
A-4357-16T4
16
theory that Day Pitney and Sherman withheld, masked, or disguised evidence
sought after discovery.
With regard to genuine issues of material fact, Hull argues there were
disputed facts regarding what Day Pitney and Sherman defendants knew about
the insurance coverage prospects, the declaratory judgment action, and who
funded Hull's settlement with the Lewises. Hull relies on his expert reports,
which state that since Day Pitney told Collins they were not filing a declaratory
action, this should have indicated to Collins that someone else might have been
doing it. In addition, Hull relies on the fact that Sherman argued that there was
no insurance coverage even though there were checks written out to Sherman
Attorney Trust Account by Century Indemnity and North River. Accordingly,
Hull maintains these factual issues should have precluded summary judgment.
In opposition, Day Pitney and Sherman argue attorney communications
made during discovery are protected by the litigation privilege. See Loigman v.
Twp. Comm. of Middletown, 185 N.J. 566, 589-90 (2000) (opining that
attorneys need the freedom to be "'candid and objective'" in advancing their
strengths of their client's case). The situation here, according to Day Pitney and
Sherman, is not one of the unusual situations in which an attorney owes a duty
to his clients' adversary. Green v. Morgan Props., 215 N.J. 431, 458 (2013);
A-4357-16T4
17
Restatement (Third) of the Law Governing Lawyers § 51 cmt. c (Am. Law Inst.
2000) (stating that "[a] lawyer representing a party in litigation has no duty of
care to the opposing party . . . and hence [has] no liability for lack of care, except
in unusual situations . . . ."). They argue Hull has failed to identify any act,
overt or otherwise, by them that could possibly have induced Hull to rely on
their representations. At the time Day Pitney responded to Hull's discovery
requests in 2004, Hanover and North River had denied insurance coverage for
Hull's claims and they continued to do so until they ceased representing the
Lewises.
In addition, Day Pitney contends its involvement in the underlying lawsuit
was too remote to impose a duty upon them, as they withdrew from the litigation
a year before the settlement was reached. See Petrillo, 139 N.J. at 483-84
(stating that liability to a non-client cannot arise if the relationship between
attorney and non-client is too remote). It did not file the declaratory judgment
action against Hanover and, as evidenced by Breene's deposition testimony, Day
Pitney was not involved in the settlement discussions with Hull's attorneys. Day
Pitney also argues it is undisputed that there was no insurance coverage at the time
of the settlement agreement as the judge determined that its attorneys did not conceal
evidence of the existence of insurance coverage.
A-4357-16T4
18
Considering the parties' arguments, we find the prevailing arguments favor
Day Pitney's contention that it should have been granted summary judgment and
Hull's contention that summary judgment should not have been granted to Sherman.
Going back to Petrillo, "we recognized that there are circumstances in which
an attorney may owe a duty to a third party with whom the attorney does not have a
contractual relationship." Banco Popular, 184 N.J. at 179. We have imposed third-
party liability on an attorney for negligent acts or omissions when third-party
reliance on such acts was foreseeable. See e.g., Atl. Paradise Assocs. v. Perskie,
Nehmad & Zeltner, 284 N.J. Super. 678, 685 (App. Div. 1995) (finding cause of
action by plaintiff-purchasers against law firm where plaintiffs relied on
misrepresentations in a public offering statement); R.J. Longo Constr. Co. v.
Schragger, 218 N.J. Super. 206, 207-08 (App. Div. 1987) (holding a cause of action
existed against municipal attorneys who had prepared bid documents referencing
easements the attorneys had failed to obtain); Albright v. Burns, 206 N.J. Super. 625,
632-33 (App. Div. 1986) (holding attorney liable to decedent's estate where attorney
knowingly facilitated improper transactions); Stewart v. Sbarro, 142 N.J. Super. 581,
586-87 (App. Div. 1976) (holding a cause of action existed against attorney for
buyers of a corporation where attorney agreed but failed to obtain the buyers'
A-4357-16T4
19
signatures on bond and mortgage indemnifying sellers against liability for corporate
debt).
On the other hand, in Hewitt v. Allen Canning Co., 321 N.J. Super. 178, 186,
(App. Div. 1999), we found no duty where a non-client did not rely on a law firm's
discovery violation and no misrepresentation had occurred. And in Banco Popular,
the Court found there was no liability for negligence on the part of an attorney who
had assisted a client in transferring assets "in order to place them beyond [a
creditor]'s reach." 184 N.J. at 167. Nonetheless, the Court acknowledged that an
invitation to rely and reliance are the linchpins of attorney liability to third parties.
Id. at 181.
We conclude Day Pitney and Sherman's discovery responses are not protected
by the litigation privilege because looking at the facts in the light most favorable to
Hull those facts are sufficient to establish malpractice. Hull settled its claims against
the Lewises on the mistaken belief that they did not have insurance coverage and
that they had to pay the settlement from their own resources.
With regard to Day Pitney, we conclude the judge properly dismissed the
complaint on summary judgment, as Hull did not establish a prima facie claim of
negligent misrepresentation against it. Day Pitney initially transmitted the discovery
response that no insurance coverage had been identified, but that the Lewises were
A-4357-16T4
20
trying to locate information. The interrogatories answers Day Pitney forwarded to
Hull's counsel disclosed that, "Lewis has been unsuccessful in locating any
insurance policies pre-1986 with respect to the property . . . and accordingly has
not been able to assert any claims for potential coverage against any insurance
carriers." Up until the time Day Pitney withdrew as counsel, no insurance
company had indicated it was responsible for covering the remediation costs at
the property. This fact was confirmed by an email sent by Breene to Day Pitney,
six months after it withdrew, stating "[w]e have not yet secured any agreement on
the part of any insurance company to pay any part of the defense or indemnity."
Therefore, during Day Pitney's involvement in the matter, no misrepresentation
regarding the status of the property's insurance coverage was made to Hull's counsel.
Accordingly, we affirm the judge's order dismissing the complaint against Day
Pitney.
With respect to Sherman, we see it differently. Sherman replaced Day Pitney
and was representing the Lewises for approximately eight months when Breene filed
the declaratory judgment action against Hanover for the Lewises. Sherman may be
liable for the Lewises' insurance coverage discovery responses that Sherman knew
were untruthful or misleading. Because discovery was still open when Sherman
substituted into the case, Sherman had the continuing obligation under Rule 4:17-7,
A-4357-16T4
21
to amend the Lewises' discovery responses that were contradicted by information
within its knowledge. Such was the situation with respect to the insurance coverage
declaratory judgment action and subsequent agreement by the insurers to fund the
Lewises' settlement contribution and pay for their attorney fees and costs. The fact
that Sherman was not involved in the settlement discussions with Hull does not
negate its representations or failure to amend discovery responses that insurance
coverage was available for environmental claims against the property. As noted,
since Hull was potentially led to believe there was no insurance coverage, his
negotiating position was compromised. Hull relied upon this misrepresentation, in
deciding to settle for $290,000, a far cry from its projected clean-up costs of
$782,294.42. Thus, summary judgment should not have been granted to Sherman.
B.
Hull contends that the third judge erred in granting summary judgment to
his former attorneys Collins and Sodini & Spina solely based on this court's
decision in Lewis v. Hull, which directed plaintiffs to either rescind or affirm
the underlying settlement agreement, and if rescinding, to return the $290,000
settlement payment. Hull maintains that because the decision did not address
the conduct of the attorneys or any allegations of malpractice, it does not
preclude, bar, or otherwise limit his ability to prosecute a legal malpractice
A-4357-16T4
22
claim. Even if the decision bars recovery of the settlement payment, according
to Hull, he should be able to recover the cost of environmental consultants, lost
value of property and attorney's fees for his ex-counsels' less than zealous
representation under Saffer v. Willoughby, 143 N.J. 256, 272 (1996). Hull also
argues the judge procedurally erred in permitting a motion in limine to be used,
on the eve of the trial, as a dispositive motion to dismiss his claims against
Collins and Sodini & Spina on the merits. See Seoung Ouk Cho v. Trinitas Reg'l
Med. Ctr., 443 N.J. Super. 461, 471 (App. Div. 2015) (speaking to the
impropriety of utilizing a motion in limine as a means to grant a dismissal on
the merits).
In opposition, Collins and Sodini & Spina contend Hull's claims were
properly barred by the judge's application of Lewis v. Hull based on the
doctrines of res judicata and collateral estoppel. Under the former, the attorneys
maintain Hull's allegations of malpractice were determined to finality in Lewis
v. Hull between the same parties or their privies and cannot be relitigated as the
malpractice claims have a common nucleus of operative fact – the environmental
cleanup of the property – as in the 2004 litigation in Hull v. Lewis and Lewis v.
Hull. Roberts v. Goldner, 79 N.J. 82, 85 (1979).
A-4357-16T4
23
With regards to collateral estoppel, Collins and Sodini & Spina contend
the doctrine applies to bar Hull's malpractice claims because the issue was
decided by the prior judges who determined that Hull did not have viable
malpractice claims against other attorneys. See Olivieri v. Y.M.F. Carpet, Inc.,
186 N.J. 511, 521 (2006).
Collins and Sodini & Spina further contend that because Lewis v. Hull
affirmed the trial court's decision that Hull's breach of the settlement agreement
by not cleaning up the property makes it unenforceable, Hull's malpractice
complaint is now moot as there is no settlement. They reason now that the
settlement agreement is rescinded, the parties are restored back to square one,
their pre-settlement positions, thereby only affording Hull the recourse of
pursuing a remedy against the Lewises for the alleged environmental
contamination of the property.
Sherman makes the same arguments to support his position that the two
decisions bar Hull's malpractice claims against him.
The argument that Lewis v. Hull bars Hull's malpractice complaint is
without merit. Although the dispute involved Hull's assertion that he was
deprived of discovery, which impacted settlement negotiations, there was no
claim that Hull's attorney or an attorney representing an adversary deviated from
A-4357-16T4
24
a professional standard of care that caused them damages, including litigation
fees and expenses, and alleged property value loss. Thus, the judge failed to
consider that vacating the settlement agreement due to Hull's non-compliance
with the remediation requirement, did not bar Hull from pursuing those
damages. Simply put, Lewis v. Hull did not address the issues that are integral
to the resolution of Hull's malpractice claims. Thus, summary judgment should
not have been granted to Collins.
With regard to Sodini & Spina, as previously noted, the order being
appealed does not mention Sodini & Spina, but the parties are under the
impression that the complaint against Sodini & Spina was also dismissed by that
order.9 It is important to note that the record is unclear as to what role Sodini &
Spina played in the underlying litigation other than being the firm Spina was
affiliated with at time he consulted on the case. Accordingly, as the complaint
against Spina was dismissed, the complaint against Sodini & Spina should also
have been dismissed. Therefore, we affirm the dismissal of the complaint
against Sodini & Spina for other reasons than those articulated in the judge's
order. See State v. DeLuca, 325 N.J. Super. 376, 389 (App. Div. 1999) (stating
9
We share in that view because Sodini & Spina moved for dismissal, and the
order clearly dismisses the complaint as to all remaining parties.
A-4357-16T4
25
that an appellate court may affirm the trial judge's order for reasons other than
those of the trial court).
C.
Finally, Hull argues the second judge improperly granted summary
judgment in favor of Spina by determining Hull's experts failed to establish that
Spina deviated from acceptable standards of care for the unique role he played
in assisting Collins by preparing experts for trial. Specifically, Hull maintains
his experts opined that Spina breached his duty of care relative to the assessment
of the discovery, insurance coverage and settlement. Alternatively, Hull asserts
that if Spina did not have an obligation to investigate, he should have refrained
from recommending Hull settle his claims against the Lewises. We are
unpersuaded.
We agree with Spina that the judge was correct in finding Hull's expert
did not establish any acts or omissions committed by Spina, that proximately
caused Hull damages. Spina was retained by Collins to only help prepare Hull's
experts for trial; he was not involved with discovery or settlement negotiations.
The judge stated in his written decision:
[A]lmost the entirety of [Hull's] expert reports opine
that the Lewis[es'] . . . attorneys deviated from [the]
standards of care by failing to disclose the insurance
declaratory actions and misrepresenting the true status
A-4357-16T4
26
of the insurance coverage as well as being highly
critical of [BSK&B] for failing to obtain an insurance
reconstruction expert. Significantly, none of [Hull's]
experts specifically speak to any breach by Spina, a
defendant whose role in the underlying litigation was
undoubtedly unique.
Based on our review of the record, we see no reason to disturb the judge's
findings. We therefore affirm the dismissal of Hull's claims against Spina
substantially for the reasons stated by the judge.
Affirmed in part, reversed in part, and remanded for further proceedings.
We do not retain jurisdiction.
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27
ROBERT HULL VS. MICHAEL T. COLLINS, ESQ. (L-2096-14, PASSAIC COUNTY AND STATEWIDE)
Combined Opinion