JOSEPH R. LUPO VS. KENNETH M. THIMMEL (L-0604-14, SOMERSET COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-1732-16T2

JOSEPH R. LUPO,

Plaintiff-Appellant,

v.

KENNETH M. THIMMEL,

Defendant,

and

ALBERT H. WUNSCH, III, ESQ.,

Defendant-Respondent.
____________________________

Argued April 30, 2018 – Decided July 20, 2018

Before Judges O'Connor and Vernoia.

On appeal from Superior Court of New Jersey,
Law Division, Somerset County, Docket No. L-
0604-14.

Peter A. Ouda argued the cause for appellant.

Albert H. Wunsch, III, argued the cause pro
se (Paul A. Krauss, on the brief).

PER CURIAM
 Plaintiff Joseph R. Lupo appeals from a May 2, 2016 order

denying his motion to compel an inspection of defendant Albert H.

Wunsch, III's firm's computer hard drive, and a July 22, 2016

order granting defendant's motion for summary judgment and denying

plaintiff's cross-motion for partial summary judgment. Plaintiff

asserts the trial court abused its discretion in denying his motion

to inspect the hard drive because it "was of enormous importance,"

erred by granting defendant's summary judgment because the court

erroneously "found facts based on disputed evidence submitted and

rejected expert testimony," and erred by denying plaintiff's

cross-motion for summary judgment because the record shows

defendant breached his fiduciary duty to plaintiff. We disagree

and affirm.

Plaintiff is a certified public accountant. He was co-

defendant Kenneth M. Thimmel's accountant and, in 2007, supplied

Thimmel with monies for an interest in a sports memorabilia

business, Classic Sports Collectibles, LLC (CSC), in which Thimmel

was also a member. In 2007, Thimmel entered into a sale and

leaseback transaction on his Franklin Lakes home. Defendant and

his law firm represented Thimmel in the transaction.

Plaintiff alleges the transaction was undertaken to protect

Thimmel's equity in the home, and was intended to secure monies

plaintiff would later advance to Thimmel and CSC. In a

2 A-1732-16T2
certification to the court, plaintiff states that Thimmel entered

into the sale and leaseback transaction because he had financial

issues and wanted to induce plaintiff "to invest more monies with

him, which [he] did in the amount of approximately $308,047."1

Plaintiff further certified he extended additional credit to

Thimmel following the sale and leaseback transaction because

Thimmel represented "there would be substantial equity in the home

to secure the additional monies" and Thimmel "constantly assur[ed]

[him]" the sale and leaseback "would guarantee that."

Thimmel later declared bankruptcy and identified plaintiff

as a creditor. The Bankruptcy Trustee initiated an adversarial

proceeding on Thimmel's behalf against the purchaser of the

property, the mortgage company and the respective attorneys,

including defendant, who represented the participants in the

transaction. The complaint in the adversarial proceeding claimed

the transaction was fraudulent and should be voided, and alleged

the defendants acted to defraud Thimmel. The complaint also

asserted a malpractice claim against defendant. The complaint was

subsequently dismissed by stipulation without prejudice against

defendant without any disposition on the merits.

1
Plaintiff certifies that his claims in this action are limited
to the monies he invested with Thimmel following the 2007 sale and
leaseback transaction.

3 A-1732-16T2
 In May 2014, plaintiff filed a Law Division complaint alleging

causes of action for fraud, breach of fiduciary duty, and forgery

against Thimmel, and a claim of legal malpractice against

defendant. By leave granted, plaintiff filed an amended complaint

adding a cause of action for breach of fiduciary duty against

defendant, alleging defendant represented Thimmel in the sale and

leaseback transaction, and "knew or should have known that Thimmel

participated in the sale[]/leaseback so that he could continue to

. . . engage in a business relationship with" plaintiff. Plaintiff

alleged that defendant should have known the sale and leaseback

transaction was fraudulent as to him, as Thimmel's future creditor,

and breached his duty to him "by participating in a transaction

that was fraudulent."

Plaintiff filed a November 16, 2015 certification of merit

and expert report from attorney Barry E. Levine, Esq. Levine

stated it was his "opinion that [defendant] deviated from accepted

standards of practice and otherwise breached his fiduciary duty

to" plaintiff. Levine stated there were "numerous [E][-]mails"

from defendant's office showing defendant represented plaintiff

and Thimmel "together at the same time," and although defendant

and plaintiff were not parties to a retainer agreement, "the

correspondence and circumstances support the conclusion that

[plaintiff] believed that [defendant] was representing him."

4 A-1732-16T2
Levine further opined that defendant "was engaged in a concurrent

conflict of interest" in violation of Rule of Professional Conduct

(R.P.C.) 1.7, because he represented plaintiff and Thimmel despite

their ongoing business relationship, and defendant failed to make

necessary disclosures to plaintiff. Levine stated defendant

failed to warn plaintiff of the "risks of the transaction," and

"[a]n attorney who conformed to the standard of care would not

have counseled [plaintiff] to base his investment on the

sale/leaseback transaction."

Levine further stated that even if there was no attorney-

client relationship between plaintiff and defendant, defendant

owed a fiduciary duty to plaintiff. Levine opined that defendant

breached his fiduciary duty to plaintiff because although

defendant "apparently advised Thimmel against the [sale and

leaseback] transaction, he didn't advise [Thimmel] that [he] was

engaging in a fraud."

Defendant testified at his deposition that he advised Thimmel

against entering into the sale and leaseback transaction because

it was "a deal that [he] found to be a mistake." He also testified

that a few days before the closing, he drafted a "Waiver and

Acknowledgement of Risk"2 stating he "clearly and unequivocally

2
The parties refer to the waiver as a "letter."

5 A-1732-16T2
advised [Thimmel] against" the sale and leaseback transaction.

Thimmel signed the document, and his signature was notarized by a

duly licensed notary public on June 25, 2007, three days before

the sale and leaseback transaction.

In April 2016, plaintiff filed a motion to compel discovery

seeking an order permitting him to inspect defendant's law firm's

computer hard drive. In his certification in support of the

motion, plaintiff asserted "he doubt[ed] the legitimacy of the

date" of the "self-serving" waiver, and inspecting the hard drive

would permit plaintiff to establish when it was drafted.

Judge Thomas C. Miller entered a May 2, 2016 order and written

statement of reasons denying the request and finding plaintiff

failed to demonstrate "how whether this [waiver] currently exists

is relevant to any of his claims against" defendant. The judge

further found plaintiff's certification failed to provide a

factual basis supporting his "allegation that the [waiver] was not

created on the date stated," noting there must be more than a

showing that plaintiff had a "suspicion or feeling that the

document is not genuine before [it would] authorize an intrusion

into . . . [d]efendant's hard drive."

Defendant subsequently moved for summary judgment, and

plaintiff cross-moved for partial summary judgment on his

fiduciary duty claim against defendant. In response to defendant's

6 A-1732-16T2
motion, plaintiff admitted he never had a retainer agreement with

defendant, asked defendant for any legal advice or paid defendant

to render any legal advice, and that CSC neither had a retainer

agreement with defendant nor paid him any legal fees. Plaintiff

also admitted he was Thimmel's accountant and financial advisor,

partners with Thimmel in CSC, and "knew full well about . . .

Thimmel's desperate financial situation." Plaintiff admitted he

introduced Thimmel to the finance company that arranged the sale

and leaseback of Thimmel's home, and knew Thimmel sold his house

in 2007 pursuant to the sale and leaseback transaction.

In opposition to defendant's summary judgment motion and in

support of his cross-motion, plaintiff submitted a certification

and relied on a supplemental certification of merit and expert

report from Levine. Plaintiff asserted defendant retained a five

percent ownership in CSC, and that "there was a wealth of evidence

showing . . . [plaintiff] was reasonably relying on [defendant's]

office to protect" his interests. Plaintiff certified that "two

ex[-]employees of CSC . . . will state that [defendant] was the

attorney for the company and received tickets to events and

merchandise for his legal services."3 Plaintiff further certified

that had defendant advised him that the sale and leaseback

3
Plaintiff never provided competent evidence to the court from
the two employees confirming his assertion.

7 A-1732-16T2
transaction was fraudulent, he would not have "extended further

credit to Thimmel" following the transaction.

Levine's supplemental certification of merit and expert

report concluded defendant "was the gatekeeper for [the sale and

leaseback] transaction and if there were any risks to Thimmel his

attorney[, defendant,] should have advised him." Levine stated

that defendant's testimony that he did not represent CSC "was

contradicted by the [E][-]mail correspondence," but did not cite

to any E-mails supporting his assertion. Levine further stated

"there [was] no denying that the HUD was fraudulent," and that

defendant "should have known that the transaction was fraudulent

on many levels," and defendant's participation in the closing

amounted to a deviation "from accepted standards [of] practice

and" otherwise constituted a breach of his fiduciary duty to

plaintiff.

Judge Miller granted defendant's summary judgment motion and

denied plaintiff's cross-motion for partial summary judgment. In

a detailed and well-reasoned written statement of reasons, Judge

Miller determined plaintiff did not establish defendant committed

legal malpractice, because the "uncontradicted evidence" showed

plaintiff was not defendant's client and that, contrary to

plaintiff's claim, plaintiff failed to present evidence showing

defendant served as plaintiff and Thimmel's attorney "with regards

8 A-1732-16T2
to CSC." The court noted that plaintiff admitted during his

deposition that he never retained defendant as his attorney or

sought legal advice from him, and plaintiff failed to produce any

evidence showing defendant served as CSC's counsel.

The judge rejected plaintiff's reliance on Levine's

conclusion that plaintiff and defendant had an attorney-client

relationship because it was founded on purported E-mails Levine

never identified. Judge Miller determined Levine's supplemental

report failed to precisely indicate which E-mails or records

supported his opinion, and plaintiff failed to present any "direct

evidence to indicate that [defendant] received or even reviewed

the [E][-]mails."

Judge Miller also found plaintiff failed to produce "any

documentation showing that [d]efendant acted as CSC's attorney or

. . . had an ownership interest in the company aside from an

[E][-]mail originated by . . . Thimmel stating that [defendant]

'should get [five percent] of CSC.'" The judge noted that

plaintiff admitted defendant was never copied on the E-mail, did

not provide any evidence showing defendant "was aware of any such

ownership interest," and Thimmel testified defendant declined his

offer for a five percent interest in CSC. Thus, Judge Miller

determined plaintiff failed to present any competent evidence

defendant had an ownership interest in CSC.

9 A-1732-16T2
 Judge Miller granted defendant's summary judgment motion and

dismissed the legal malpractice claim because plaintiff failed to

present any competent evidence showing there was an attorney-

client relationship between plaintiff and defendant.4 The court

concluded that the "uncontradicted evidence supports the

proposition that [plaintiff] was not a client of" defendant, and

there was "no credible evidence to support a proposition that

[defendant] represented both [plaintiff] and . . . Thimmel with

regards to CSC."

Judge Miller also determined that based on the evidence and

circumstances presented, defendant did not have a fiduciary duty

to advise plaintiff that, following the sale and leaseback

transaction, there was insufficient equity in Thimmel's interest

in his home to secure the future loans plaintiff made to him.5 The

judge determined plaintiff failed to present evidence establishing

4
Judge Miller also rejected plaintiff's claim defendant violated
R.P.C. 1.7, which prohibits an attorney from representing a client
with whom he has a concurrent conflict of interest, because
plaintiff did not present evidence establishing he was defendant's
client. The judge found Levine's conclusion that defendant
violated R.P.C. 1.7 by creating a conflict of interest amounted
to "nothing but the expert's bare conclusions, unsupported by
factual evidence or other data," and was thus an inadmissible net
opinion.
5
As noted, plaintiff's claims against defendant are based on
monies he loaned to Thimmel following the sale and leaseback
transaction.

10 A-1732-16T2
that defendant "had a duty to advise [plaintiff] that . . . Thimmel

no longer had an interest in his real estate holding . . . to

secure the loan transactions that [plaintiff] continued to make

with . . . Thimmel" following the sale and leaseback transaction.

Judge Miller observed the evidence showed plaintiff knew

about the sale and leaseback transaction, and "understood he could

not secure any further loans by a lien on Thimmel's former

property," because plaintiff received an almost $200,000 payoff

from the transaction for monies he had previously loaned Thimmel,

and then discharged a mortgage he had on Thimmel's property

securing those loans. Judge Miller found plaintiff introduced

Thimmel to the buyer's finance company, "arranged for the

transaction, was the primary beneficiary of the transaction, and

. . . admit[ted] that he understood the nature and ramifications

of the transaction." Judge Miller concluded "no duty can be

imposed upon [defendant] to advise [plaintiff] of facts and

circumstances that [plaintiff] knew or should have known existed."

In addition, there was no direct evidence showing defendant was

actually aware plaintiff continued to loan money to Thimmel

following the transaction, and defendant denied having such

knowledge.

Judge Miller also determined that even if defendant had such

a duty, "no reasonable jury could determine" that defendant's

11 A-1732-16T2
failure to warn plaintiff caused plaintiff harm, because

plaintiff's own actions following the transaction constituted an

intervening cause of harm.6 The judge found the evidence showed

plaintiff never sought or received advice from defendant

concerning the post-transaction loans, plaintiff made the loans

without investigating the status of Thimmel's ownership of, or

equity in, his home, plaintiff never sought post-transaction liens

on the home when the loans were made, and the loans made by

plaintiff to Thimmel constituted separate and independent

transactions that superseded any action or inaction on defendant's

part concerning the sale and leaseback transaction. The court

determined that no reasonable jury could conclude that plaintiff's

alleged damages resulting from Thimmel's default on the post-sale

and leaseback loans were a result of defendant's purported breach

of any alleged duty.

Following the court's entry of the order granting defendant's

summary judgment motion and denying plaintiff's cross-motion, the

court conducted a bench trial on plaintiff's claims against Thimmel

6
We note that although the trial court granted defendant's
summary judgment motion and dismissed all claims against him with
prejudice, the court also denied defendant's motion for summary
judgment on statute of limitations grounds without prejudice. This
determination is of no moment here because we affirm the court's
dismissal of the complaint with prejudice on the merits.

12 A-1732-16T2
and entered final judgment against him in the amount of

$245,473.77. This appeal followed.

Plaintiff presents the following arguments for our

consideration on appeal:

POINT I

THE COURT ABUSED ITS DISCRETION IN DENYING THE
MOTION TO INSPECT THE HARD DRIVE.

POINT II

SUMMARY JUDGMENT SHOULD NOT HAVE BEEN GRANTED
TO [] DEFENDANT.

POINT III

THE COURT SHOULD NOT HAVE DENIED PLAINTIFF'S
MOTION FOR SUMMARY JUDGMENT BASED ON
[DEFENDANT'S] FIRM[']S BREACH OF ITS FIDUCIARY
DUTY.

When reviewing an order granting or denying summary judgment,

we apply the same standard as the trial court. State v. Perini

Corp., 221 N.J. 412, 425 (2015) (citing Town of Kearny v. Brandt,

214 N.J. 76, 91 (2013); Liberty Surplus Ins. Corp. v. Nowell

Amoroso, P.A., 189 N.J. 436, 445-46 (2007)). In considering a

motion for summary judgment, "both trial and appellate courts must

view the facts in the light most favorable to the non-moving party,

which in this case is plaintiff." Bauer v. Nesbitt, 198 N.J. 601,

605 n.1 (2009) (citing R. 4:46-2(c); Brill v. Guardian Life Ins.

Co. of Am., 142 N.J. 520, 540 (1995)).

13 A-1732-16T2
 Summary judgment is proper if the record demonstrates "no

genuine issue as to any material fact challenged and that the

moving party is entitled to a judgment . . . as a matter of law."

Burnett v. Gloucester Cty. Bd. of Chosen Freeholders, 409 N.J.

Super. 219, 228 (App. Div. 2009). Issues of law are subject to

the de novo standard of review, and thus the trial court's

determination of such issues is accorded no deference. Kaye v.

Rosefielde, 223 N.J. 218, 229 (2015) (citations omitted).

We have carefully considered the record and plaintiff's

arguments supporting his contention the court erred by granting

defendant's summary judgment motion and denying his cross-motion,

find they are without merit sufficient to warrant discussion in a

written opinion, R. 2:11-3(e)(1)(E), and affirm the court's order

substantially for the reasons set forth in Judge Miller's detailed

and well-reasoned written decision.

Because we have determined the court correctly granted

defendant's summary judgment motion, it is unnecessary to

determine whether the court erred by denying plaintiff's request

for inspection of defendant's law firm's computer hard drive.

Plaintiff claims he was entitled to the inspection because it may

have shown the notarized waiver signed by Thimmel was prepared at

a time later than defendant contended, but makes no showing

14 A-1732-16T2
resolution of that issue is material to the court's disposition

of the summary judgment motions.

Affirmed.

15 A-1732-16T2