NORTHERN INTERNATIONAL REMAIL AND EXPRESS CO. VS. COFFEY & ASSOCIATES, PC (L-1187-14, MORRIS COUNTY AND STATEWIDE) (RECORD IMPOUNDED)

RECORD IMPOUNDED

NOT FOR PUBLICATION WITHOUT THE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-2104-17T4

NORTHERN INTERNATIONAL
REMAIL AND EXPRESS CO.
and STEFAN PUZYK,

Plaintiffs-Respondents/
Cross-Appellants,

v.

COFFEY & ASSOCIATES, PC,
GREGORY J. COFFEY, ESQ.,
and RICHARD J. DEWLAND,
ESQ.,

Defendants,

and

McELROY, DEUTSCH,
MULVANEY & CARPENTER,
LLP, and GEORGE PARSELLS,
III, ESQ.,

Defendants-Appellants/
Cross-Respondents.

Argued February 11, 2020 – Decided June 10, 2020
 Before Judges Hoffman, Currier and Firko.

On appeal from the Superior Court of New Jersey, Law
Division, Morris County, Docket No. L-1187-14.

Jared James Limbach argued the cause for
appellants/cross-respondents (Donnelly Minter & Kelly
LLC, attorneys; Patrick J. Galligan, of counsel; Jared
James Limbach, on the briefs).

Bruce D. Nimensky argued the cause for
respondents/cross-appellants (Gray Law Group, LLC,
attorneys; Bruce D. Nimensky, on the brief).

PER CURIAM

This legal malpractice action arises out of underlying environmental

litigation concerning a commercial property. Defendants Coffey & Associates,

Gregory J. Coffey (Coffey) and Richard J. Dewland (collectively the Coffey

defendants) represented plaintiff, Northern International Remail and Express

Company (Northern), in the environmental litigation. When a conflict of

interest arose regarding the representation of Northern, Coffey asked appellant

George Parsells, III, a partner at McElroy, Deutsch, Mulvaney & Carpenter, LLP

(the McElroy defendants or defendants) to represent Northern. It is Parsells's

representation of Northern during mediation, settlement negotiations and the

execution of the settlement agreement that is at issue in the malpractice

litigation.

A-2104-17T4
2
 The plaintiffs here, Northern, and its owner, Stefan Puzyk, settled their

malpractice claims against the Coffey defendants before trial. The allegations

against the McElroy defendants were tried before a jury. The jury also

considered and determined the liability of the Coffey defendants for comparative

negligence purposes.

The jury awarded $100,000 to Northern, attributing sixty-five percent of

liability to the Coffey defendants and thirty-five percent to the McElroy

defendants. The jury also awarded $100,000 damages to Puzyk, splitting the

liability equally between the Coffey and McElroy defendants. The trial court

awarded plaintiffs $66,452.96 in attorney's fees and costs.

The McElroy defendants challenge multiple orders issued by the trial

court before, during and after the trial. Plaintiffs cross-appeal the counsel fee

award. After a careful review of the respective contentions, in light of the record

and applicable principles of law, we affirm all of the disputed orders with the

exception of the judgment in favor of Puzyk. We vacate the judgment for Puzyk

and remand for the dismissal of Puzyk's individual claim against the McElroy

defendants. As we affirm the counsel fee award, we dismiss the cross-appeal.

A-2104-17T4
3
 I.

We provide some facts from the underlying litigation for context. We

derive the facts from our opinion issued in the appeal from the environmental

action. N. Int'l Remail & Express Co. v. Robbins, No. A-4652-08 (App. Div.

Aug. 18, 2010).

Northern purchased the commercial property in 1991 from Lester

Robbins, and his business, Milltown Court Associates. Id., slip op. at 2. In

1998, Puzyk discovered the property was contaminated. Id. at 8-9. An

environmental investigation concluded the contamination might be attributable

to Baron-Blakeslee, Inc. (Baron), a division of Purex Industries, Inc. (Purex),

the predecessor-owner to Robbins. Id. at 3. Honeywell is the corporate

successor-in-interest to Baron. Ibid.

Northern, through Puzyk, entered into a Memorandum of Agreement

(MOA) with the New Jersey Department of Environmental Protection (DEP) in

which it agreed to conduct a cleanup of the property with DEP oversight.

However, Northern never remediated the property.

In July 2003, after filing for bankruptcy, Northern entered into a contract

of sale with Satec, Inc., which initially agreed to purchase the property for

$975,000. However, after Satec obtained its own environmental studies that

A-2104-17T4
4
revealed more extensive groundwater and soil contamination, Puzyk reduced the

purchase price. The cleanup cost was estimated at $438,000.1 In December

2003, the bankruptcy court authorized the sale of the property to Satec for

$400,000. Satec agreed to remediate the property.

In 2005, Northern and Satec sued Robbins, Milltown Court Associates,

Purex, and Honeywell under the New Jersey Spill Compensation and Control

Act (Spill Act), N.J.S.A. 58:10-23.11 to -23.24, and common law, to recover the

$438,000 credit Northern extended to Satec for clean-up costs. The complaint

alleged, among other things, that Baron discharged hazardous substances into

the soil and/or groundwater, and that Purex and Honeywell, as corporate

successors to Baron, were liable for the discharge under the Spill Act.2 It further

alleged that Robbins and Milltown Court Associates, as previous owners of the

property, were also liable. The Coffey defendants filed the complaint and

represented both plaintiffs.

1
There were additional credits tendered to Satec which are not at issue in this
appeal.
2
Though named as a defendant, Purex did not participate in the underlying
litigation, "presumably because Honeywell was acting as Baron's successor -in-
interest." N. Int'l Remail & Express Co., slip op. at 3 n.2.
A-2104-17T4
5
 During the course of the litigation, in April 2009, the court granted

Robbins's motion for summary judgment on the Spill Act claim because the

evidence did not demonstrate a discharge had occurred during Robbins's

ownership of the property. N. Int'l Remail & Express Co., slip op. at 2-3. The

common law claims against all parties were dismissed because the six-year

statute of limitations had expired before the complaint was filed. Id. at 2. We

affirmed. Id. at 17.

Prior to the dismissal of Robbins, in February 2008, Northern and Satec

agreed to mediate their Spill Act claims against Honeywell. The settlement

negotiations with Honeywell began in February 2008 and continued into January

2009, when a settlement was reached, and a subsequent agreement signed.

During a session in March 2008, the mediator, retired Superior Court

Judge Mark Epstein, identified a conflict of interest stemming from Coffey's

dual representation of Northern and Satec. This related to the discussions that

arose during mediation regarding the Coffey defendants' fee. Coffey stated the

retainer agreement with Northern executed in November 2004 included a thirty

percent contingent fee. There was no retainer agreement with Satec.

Coffey was instructed by the mediator to procure additional counsel to

represent the two entities. As a result, Coffey enlisted Parsells to represent

A-2104-17T4
6
Northern, and Patrick Spina entered into the settlement discussions on behalf of

Satec.

II.

As stated, the legal malpractice action arises out of Parsells's

representation of Northern during the settlement negotiations with Honeywell.

Plaintiffs essentially claim Parsells should have procured a more favorable

settlement for Northern in the environmental litigation. We derive the following

facts from the summary judgment record and trial testimony.

According to Puzyk, he retained the Coffey defendants to recover from

Honeywell the $438,000 credited to Satec from the purchase price of the

property. Puzyk testified he was aware that, early in the litigation, Coffey sent

a demand letter to Honeywell seeking $1.25 million dollars in damages. Coffey

told him that "1.25 million dollars was what was recoverable."

Puzyk recalled Coffey advising him during a mediation session at Judge

Epstein's office that it was a conflict for Coffey to represent both Northern and

Satec, and that he was going to get another lawyer for Northern. That lawyer

was Parsells. According to Puzyk, Coffey said he would pay Parsells $10,000

for Parsells's representation of Northern.

A-2104-17T4
7
 Puzyk maintained that he first met Parsells at a mediation session at

Epstein's office in late November or early December 2008, "when the

negotiations were drawing to a conclusion . . . ." He stated this was six to eight

weeks before the settlement agreement was executed and after many mediation

sessions with Judge Epstein. Coffey told him that Parsells would participate in

the mediation and represent him and Northern for purposes of finalizing the

settlement agreement.

Puzyk recalled that, before the mediation session began, Coffey explained

his litigation strategy to Parsells, and Coffey and Parsells repeatedly told him

that "it was important to settle with Honeywell to get Honeywell out of the case

in order to successfully pursue the other defendants in the case." Parsells also

told him that it was in Puzyk's best interest to settle with Honeywell "because

the real money in this case was to come from suing the remaining defendants ."

After this discussion, the three men went into a conference room where Epstein

and counsel for the other parties were present. Coffey introduced Parsells as the

attorney representing both Puzyk and Northern.

Puzyk also recalled his dissatisfaction when Coffey told him during

mediation that one of the proposed settlement terms was that Honeywell would

pay Coffey $150,000. He stated that Parsells was not involved in that

A-2104-17T4
8
conversation. He also testified that Coffey told him at some point that

Honeywell wanted to manage the cleanup as opposed to making a large cash

contribution.

Puzyk testified that he met with Parsells a second time, at Parsells's office

in December 2008, to review the terms of the settlement agreement. Coffey was

also present during the meeting. Coffey and Parsells discussed the settlement

terms with him, and Parsells again "repeatedly advised" him that it was in his

best interests to settle with Honeywell and get them "out of the picture" so that

he could "successfully proceed against the remaining defendants."

According to Puzyk, Parsells went over the agreement with him during

this meeting. Puzyk recalled he "was really not happy with it" because under its

terms, Coffey received $150,000, Satec received $25,000, while Northern only

received $75,000. Additionally, Puzyk remained responsible for the cleanup

under the MOA with DEP. Puzyk told Coffey and Parsells that he did not want

to sign the agreement. Despite his reservations, Parsells "urged [him] to settle"

and "take the agreement" because they "had to take Honeywell out of the

picture" as Honeywell had "deep pockets" and "could tie [him] up in court for

years." Parsells emphasized that "the real money" would come from Robbins,

the remaining defendant. Puzyk stated that Coffey also advised him to sign the

A-2104-17T4
9
agreement. Puzyk testified he "absolutely" relied upon Parsells's advice because

he was a partner at a major law firm and "[h]is word carried a lot of weight ."

During his deposition, Puzyk produced three emails sent in December

2008 to Parsells pertaining to settlement negotiations between plaintiffs and

Honeywell. A December 8, 2008 email from Honeywell's attorney included an

attachment of a draft settlement agreement.3

Puzyk stated he heeded the advice of Coffey and Parsells and signed the

settlement agreement in January 2009. The fifteen-page settlement agreement

between Northern, Satec and Honeywell included the following terms relevant

to this appeal:

• Honeywell agreed to pay Northern $75,000, with
the consent of Satec;

• Honeywell agreed to pay Satec $25,000;

• Honeywell agreed to pay the Coffey defendants
$150,000 "for all attorney[']s fees, costs, expert
fees, and litigation and mediation expenses
incurred by Satec, Northern and Puzyk.";

• Honeywell agreed to manage the cleanup of the
property. However, Northern and Puzyk

3
During discovery in the malpractice action, plaintiffs' counsel obtained the
emails from Honeywell's attorney. The Coffey and McElroy defendants
certified they were not in possession of any documents from the underlying
environmental litigation.
A-2104-17T4
10
 remained responsible for the cleanup under the
1999 MOA with DEP;

• The parties agreed that the initial $2 million
dollars of approved costs of remediation would
be allocated between Honeywell and Satec, with
Honeywell responsible for 75% and Satec
responsible for 25% (up to an aggregate cap of
$500,000).[4] If the total approved costs exceeded
$2 million dollars, Honeywell was responsible
for the additional costs; and

• Northern agreed to indemnify Honeywell from
any obligations for damages, indemnification, or
contribution brought by Milltown Court
Associates, and from any future claims for
contribution and/or indemnity "by others
concerning the presence or alleged presence of
contamination on, at, under or about the
Property."

Although Puzyk was not a named plaintiff in the environmental lawsuit,

he was listed as a party on the settlement agreement and signed it both as an

individual, and on behalf of Northern. Under Section 8.1, in exchange for the

$75,000 payment to Northern, Puzyk was jointly and severally liable with

Northern to Satec in the event of a breach of the agreement and further agreed

to forfeit the $75,000 to Satec if a breach occurred. Northern and Puzyk also

4
As detailed in the agreement, and explained by Spina during trial, Satec did
not have to pay the $500,000 "out of its pocket." Instead, it agreed to a mortgage
on the property up to $500,000.
A-2104-17T4
11
agreed to "release and discharge Satec from any and all claims, causes of action,

charges, expenses, escrows or any other cost, of any nature and to any extent,

relating, in any manner, to the Property or Satec Real Estate Holding, LLC's

purchase of the Property from Northern in December 2003."

Although Robbins had filed its motion for summary judgment in

December 2008, Puzyk stated neither Coffey nor Parsells apprised him of the

application during the settlement negotiations with Honeywell and before he

signed the settlement agreement. In addition, Coffey never disclosed any

potential settlement figures or settlement demands, including an August 2008

settlement offer of $250,000 from Honeywell. He testified he did not see

Honeywell's August 2008 offer sheet until after the filing of the malpractice

lawsuit.

During trial, Puzyk acknowledged that Honeywell expended more than $2

million dollars to clean up the property. He conceded he was not asked to

contribute to those remediation costs.

Puzyk also testified that Coffey violated the settlement agreement by

distributing only $62,000, not $75,000 to Northern, and using the balance to pay

Judge Epstein's fees even though the agreement provided that the mediator was

to be paid out of Coffey's $150,000 share. Coffey's attorney trust account

A-2104-17T4
12
records confirmed that he distributed $13,000 from Northern's $75,000

settlement share to Judge Epstein for his fee.

Parsells's version of events substantially diverged from that presented by

Puzyk. Parsells stated he and Coffey had been friends for approximately twenty

years. He recalled Coffey calling him on March 25, 2008, telling him that his

clients, Northern and Satec, were in mediation before Judge Epstein in an

environmental lawsuit against Honeywell. Coffey said he needed help because

Judge Epstein was concerned about a potential conflict of interest due to

Coffey's dual representation of Northern and Satec, and Coffey's contingent fee

agreement with Northern. Coffey asked Parsells if he would meet with Puzyk

the following day and attend the next mediation session.

Parsells met with Coffey and Puzyk in Parsells's office on March 26, 2008,

for approximately one hour. As Coffey and Puzyk discussed their negotiation

strategy, Parsells stated he "just listened" to them. He learned that the cost to

clean up the property was approximately $2 million dollars, and he remembered

Puzyk saying that "he needed money . . . ."

The following day, March 27, 2008, Parsells attended a mediation session

where the parties occupied numerous conference rooms. He testified that he sat

in a conference room by himself, and that Coffey, Puzyk, and Epstein would

A-2104-17T4
13
enter the room "from time to time." At one point, Epstein raised a concern about

Puzyk's potential liability for the $2 million dollar cleanup cost. Parsells

recalled Puzyk saying that he "wanted more money." He testified that the only

conversation he had with Puzyk was "small talk" and not anything "substantive

about the case." He did not think that the parties reached a settlement that day.

Although Parsells denied any discussion of a potential conflict of interest,

he did recall a conversation about Coffey's contingent fee, which could

potentially be one-third of $2 million dollars. Coffey, Puzyk, and Epstein were

present during that conversation. Parsells also stated "there were proposals" as

to the amount of Coffey's fee, but the issue was not settled that day. Parsells

testified he did not know if the conflict of interest issue was resolved during the

mediation session.

Once the session concluded, Parsells told Coffey and Puzyk his "services

hadn't been utilized" and that, as a favor, he would not charge them for his time.

He wished them luck in the case and stated he "wasn't going to have any other

involvement in it." Puzyk thanked him for attending the mediation and for not

charging him a fee.

According to Parsells, he never heard from Puzyk again and he had no

substantive discussions with Coffey about the case. He denied meeting with

A-2104-17T4
14
Coffey and Puzyk when Puzyk signed the settlement agreement and denied ever

seeing the agreement or giving Puzyk any advice about it. Parsells

acknowledged there were emails sent to his email address in December 2008,

but he did not recall receiving any emails about the litigation and did not know

why he was copied on them. Parsells stated his law firm searched for the emails

but could not find them. He denied personally deleting any emails related to the

litigation.

During the trial, Coffey testified regarding his representation of Northern

and Satec in the underlying environmental litigation. He stated that mediation

with Honeywell began in January or February 2008 and continued into 2009

when a settlement was reached. The funds were disbursed in July 2009.

At the first mediation session, Coffey's demand for settlement to

Honeywell exceeded $1 million dollars. He stated Puzyk did not want

Honeywell to do the remediation and was not interested in having any part of

the settlement be in kind. He recalled, after being shown an offer letter from

Honeywell dated February 19, 2008, that Honeywell offered Satec $50,000,

along with sixty-five percent of the remediation costs after the first mediation

session. He testified that he discussed this and all other offers and demands with

Puzyk.

A-2104-17T4
15
 This initial settlement discussion prompted Judge Epstein to request

Northern and Satec obtain separate counsel for the March 27, 2008 mediation

session. Therefore, Coffey reached out to Parsells to represent Northern at the

session.

Coffey said he first met with Puzyk and Parsells at Parsells's office on

March 26, 2008. However, he recalled going to Parsells' office after Parsells

and Puzyk had an initial discussion. In addition, Coffey's recollection of the

March 27, 2008 mediation session differed substantially from the recall of Puzyk

and Parsells.

Coffey stated Parsells and Puzyk were together in a conference room

during the mediation, while he sat alone for most of the session in a different

room. He said that "[a] framework of a settlement was worked out" at this

session and that Honeywell "maxed out its cash contribution offer at $250,000,"

and agreed to pay 80% of the cleanup costs. Coffey testified Puzyk was aware

after the March 27, 2008 mediation session that Northern would receive $75,000

in the proposed settlement. The proposal included a $150,000 counsel fee for

the Coffey defendants.

In discussing the various counsels' roles during the March 27, 2008

mediation session, Coffey stated:

A-2104-17T4
16
 I continued to represent Satec and Northern on issues
which were not of a nature that created a conflict. Satec
was represented by Mr. Spina with respect to the terms
of the site response that became a complicated
undertaking. Mr. Parsells simply negotiated the
number and then when we walked out of the mediation
session where the amount, which I think was $75,000
or $100,000 was agreed to, Mr. Parsells really had no
further role.

Over a month later, on May 14, 2008, Coffey emailed a preliminary term

sheet to Honeywell, including a $250,000 cash payment. Honeywell countered

on June 4, 2008, offering $250,000, but seeking a cap on its responsibility for

cleanup costs at $1.2 million dollars. Coffey stated thereafter there were

significant negotiations between Satec and Honeywell regarding the terms of the

cleanup and how it would be funded.

On August 7, 2008, Honeywell sent an additional counteroffer to Coffey

in which it proposed, among other things, to "[p]rovide Northern with $250,000

(in two installments) in full and complete satisfaction for any past costs or future

claims," with $100,000 to be paid upon execution of the agreement and releases,

and $150,000 to be paid no later than January 7, 2009. Honeywell would be

responsible for up to $2 million dollars of cleanup costs and would control the

remediation process. The preliminary term sheet did not include any payment

for attorney's fees to Coffey or any distribution to Satec out of the $250,000.

A-2104-17T4
17
 This did not resolve the matter, however, as Honeywell and Satec still had

not agreed upon the terms of the cleanup. Therefore, according to Coffey, he

met with Spina and Judge Epstein at a restaurant in November 2008, and a

mediation session took place at the Union County Courthouse in December

2008. Coffey thought Parsells attended the December mediation session.

Thereafter, Honeywell circulated numerous versions of a draft settlement

agreement in which the cash component of the settlement remained at $250,000

with the Coffey defendants receiving $150,000 for counsel fees. Coffey

explained that it took a long time to finalize the details of the settlement, and

there were at least six draft versions of the agreement. Coffey knew Puzyk was

very anxious to get the deal done and Coffey stated he kept Puzyk apprised of

the settlement process. He claimed that Spina requested the $25,000 Satec

received in the settlement for his counsel fees in negotiating the deal.

Coffey testified that when Puzyk finally signed the agreement in February

2009, it reflected what Puzyk had agreed to at the March 27, 2008 mediation

session, and that neither he nor Parsells forced Puzyk to sign it . Coffey said

Parsells was not present when Puzyk signed the agreement.

On March 5, 2009, Coffey sent a letter to the court advising that Northern,

Satec, and Honeywell had fully resolved their differences. At the time, Robbins'

A-2104-17T4
18
motion for summary judgment was still pending. Coffey admitted that during

the litigation he told Puzyk there was the potential to recover the $438,000 credit

from Robbins because he was an earlier owner of the property. However, he

stated he had simultaneously advised Puzyk that Honeywell would not

reimburse the $438,000 as part of its settlement. Since Northern had not spent

the $438,000 to remediate its property, Honeywell contended it was not liable

for those monies under the Spill Act.

During cross-examination, Coffey conceded the May, June, and August

2008 settlement term sheets did not include Northern's receipt of $75,000 or

reference Coffey's $150,000 legal fee. This questioned his earlier testimony that

those figures were agreed to at the March 27, 2008 mediation session.

When questioned by the court as to the reason for Parsells's involvement,

Coffey testified that Judge Epstein required separate counsel for Northern and

Satec because Honeywell was proposing that some of the settlement be in kind.

He stated that during the March 27, 2008 mediation session, Judge Epstein spoke

with him alone regarding settlement of the Coffey defendants' counsel fee.

Judge Epstein also testified at the trial. He recalled serving as a mediator

in the environmental lawsuit. His records reflected mediation sessions took

place on February 11, February 21, March 27, July 16, 2008 and April 20, 2009

A-2104-17T4
19
at his office in New Brunswick. He noted he also attended a settlement

conference outside of New Brunswick on November 26, 2008, at which Coffey

and Spina were present, and a mediation session on December 4, 2008 at the

Union County Courthouse.

Although Judge Epstein's billing notation concerning the third mediation

session on March 27, 2008 stated that Coffey "and all plaintiffs with separate

counsel" attended, he could not recall whether Parsells was present. He did

remember meeting Parsells once during the course of the mediation, but he could

not recall any specific interaction with Parsells during the mediation sessions.

Judge Epstein did not send Parsells a bill for his mediation services.

Spina testified that he has represented Satec since 2000 and was involved

with the company's purchase of the property from Northern. Pertinent to the

underlying lawsuit, Spina testified that Satec was unaware that it was a named

plaintiff in the environmental matter until Judge Epstein called him, forwarded

a copy of the pleadings, and invited him to attend a mediation session. Spina

stated he subsequently attended a mediation session at which Parsells was

present, but he could not remember the date. Spina explained that during

negotiations, "Satec objected to Mr. Puzyk and Northern getting anything" but

felt that Coffey was entitled to a fee.

A-2104-17T4
20
 III.

A.

In conjunction with the filing of the complaint, plaintiffs presented an

affidavit of merit (AOM) from Steven Angstreich, Esq. The AOM set forth

Angstreich's professional background and his conclusion that Parsells's conduct

in connection with the Honeywell settlement agreement fell below the

appropriate standard of care for New Jersey attorneys. Angstreich reviewed the

complaint and the settlement agreement prior to rendering his opinion.

The McElroy defendants objected to the sufficiency of Angstreich's AOM.

They contended Angstreich impermissibly based his opinion on an assumption

that the allegations in the complaint were true, as opposed to reviewing the facts

independently. Following a Ferreira5 conference, the court granted plaintiffs

thirty days to submit a revised AOM.

Plaintiffs thereafter presented a revised AOM within the designated

timeframe. Angstreich certified he had reviewed a certification from Puzyk

"swearing to the truth of the allegations contained in paragraphs 38 -53 of the

[c]omplaint." Angstreich's conclusions in the revised AOM mirrored those

stated in the first AOM.

5
Ferreira v. Rancocas Orthopedic Assocs., 178 N.J. 144 (2003).
A-2104-17T4
21
 B.

Several months later, before discovery was completed, the McElroy

defendants moved for summary judgment or, in the alternative, to dismiss the

complaint on the grounds that Angstreich's first AOM was deficient. On April

21, 2015, the court denied the motion for summary judgment, stating that

discovery was ongoing and there were multiple disputed issues of material fact.

The court further found that Angstreich's first AOM was timely and sufficient,

and noted the second AOM was "even more clearly sufficient." Defendants'

motion for reconsideration was denied.

C.

The McElroy defendants filed a second motion for summary judgment,

which was denied on January 26, 2017. In its statement of reasons, the court

identified "genuine issues of material fact" as to whether the McElroy

defendants breached the duty owed to plaintiffs and proximately caused

plaintiffs' damages.

A-2104-17T4
22
 D.

On February 3, 2017, the court denied the McElroy defendants' motion to

bar certain portions of Angstreich's testimony, advising a Rule 104 hearing6

would be held prior to the expert's testimony at trial.

IV.

Prior to opening statements on July 19, 2017, the court conducted the Rule

104 hearing. The McElroy defendants contended certain aspects of Angstreich's

opinion regarding damages were net opinions. Specifically, defendants argued

Angstreich could not testify about the $438,000 credit given to Satec at the time

of the sale of the property because Northern did not incur any costs in

remediating the property. Under the Spill Act, the $438,0000 was not

recoverable from Honeywell because Northern did not do any cleanup.

In addition, defendants asserted Angstreich could not testify about the

Coffey defendants' fee because it also could not be recovered from Parsells in

this malpractice litigation. They contended the fee could only be disgorged from

Coffey.

6
See N.J.R.E. 104(a) (explaining that the admissibility of evidence is to be
determined by the judge out of the presence of the jury).
A-2104-17T4
23
 In denying the motion, the court stated it was unable to rule without

hearing testimony from the various witnesses, in order to have some context to

defendants' arguments. The court instructed defendants they could renew their

motion at the end of the trial.

A.

Before the jury, Angstreich was qualified as an expert in the field of legal

malpractice. He is an attorney with experience in environmental law and Spill

Act litigation.

In addressing the attorney-client relationship between Parsells and

Northern, Angstreich opined that the relationship began after the mediator raised

a conflict issue, and Parsells agreed to represent Northern. He agreed that

Parsells's role was limited to the settlement negotiations. However, he disagreed

with Parsells's position that his relationship with Northern ended at the

conclusion of the March 27, 2008 mediation session because Parsells was copied

on the settlement-related emails from Honeywell in December 2008. The expert

found it irrelevant that Parsells was not paid a fee, because a relationship begins

upon the agreement to represent a client.

In addressing the standard of care required of an attorney in the context of

settlement negotiations, Angstreich testified that the attorney must become

A-2104-17T4
24
familiar with all of the underlying facts and circumstances of the case in order

to assess whether a settlement is reasonable. Since Parsells did not familiarize

himself with the case, he could not give Puzyk all of the facts needed to make

an informed decision on behalf of Northern. Parsells needed to know what was

happening in the environmental litigation, the parties' status, the relative

liabilities of Robbins and Honeywell, and the facts surrounding the $438,000

credit for which Northern sought reimbursement. In his opinion, Northern was

entitled to recoup the $438,000 under the Spill Act as a remediation cost .

In addition, Angstreich opined that Parsells should have educated himself

about the prior settlement offers from Honeywell and Robbins's pending motion

for summary judgment so he could properly advise Puzyk. The summary

judgment motion was particularly significant because Robbins contended the

statute of limitations expired before Coffey filed the complaint, therefore

requiring the dismissal of Northern's common law claims. Angstreich opined

Puzyk should have been informed about the probable outcome of the motion ,

and the likelihood that Northern might not recover any damages from Robbins.

This information was necessary in deciding whether to accept the settlement

offer from Honeywell.

A-2104-17T4
25
 Angstreich explained that Parsells should have also discussed with Puzyk

the proposed $25,000 payment to Satec, because "Satec wasn't out of pocket any

money" and "wound up getting the property cleaned up . . . ." Likewise, Parsells

should have counselled Puzyk on the proposed $150,000 fee to Coffey.

Angstreich opined that Parsells had a duty to assess the reasonableness of the

fee because it was double what it should have been.

In sum, Angstreich opined that Parsells should have explained all of the

ramifications of settlement to Puzyk to enable him to make an informed

decision, as opposed to only advising him to take the settlement. He further

opined that the settlement was not in Northern's best interest, and instead

favored Satec and Honeywell. He explained that Northern "derived no benefit

[from the settlement] . . . because if Honeywell stopped cleaning up the

property[,] Northern was still responsible and so was Mr. Puzyk."

Angstreich further opined that Parsells's deficient advice to Puzyk

concerning the settlement agreement was a proximate cause of Northern's

damages, which included the excessive fee to Coffey and the failure to recoup

the $438,000 credit. The expert explained that, while Coffey initially put

Northern "in a bad position" due to his mishandling of the litigation, Parsells

could have said "this is a bad settlement and here are the reasons why" and

A-2104-17T4
26
stopped Coffey from collecting a fee well in excess of what was agreed upon in

the contingent fee arrangement.7

Although Angstreich opined that Parsells had a duty to ask for the return

of the $438,000 credit during the settlement negotiations, he conceded during

cross-examination that there was no evidence to indicate that Honeywell or any

other party was willing to give Northern $438,000. Also, there was no evidence

to indicate that Honeywell was willing to settle with Northern for more than

$250,000.

B.

The McElroy defendants presented Arnold Lakind, Esq. as an expert in

the field of legal malpractice related to litigation and environmental law. It was

his opinion that Parsells and the McElroy defendants did not breach any duty

owed to Northern during the settlement negotiations.

Lakind stated that Parsells's representation of Northern was "very limited"

and spanned just three days in March 2008, because Parsells stopped

representing Northern after the mediation session on March 27, 2008 . He also

pointed to the lack of a retainer agreement, which "suggested . . . there was no

7
Angstreich also opined that Coffey breached the standard of care he owed to
Northern, and that breach was a proximate cause of plaintiffs' damages.
A-2104-17T4
27
long-term representation," and the fact that Parsells was not paid for his services.

In addition, the expert noted that the majority of emails sent after March 2008

were not sent to Parsells.

Lakind reasoned that since the settlement was reached in January 2009,

not in March 2008, and "[t]here was no inquiry made of [Parsells] during the

course of that mediation," Parsells could not have breached any duty owed to

Northern during the course of his limited representation. In his opinion, nothing

happened at the mediation session that could have proximately caused plaintiffs

to incur damages related to the settlement.

Lakind conceded during cross-examination there was a conflict regarding

Coffey's fee. However, he maintained since Coffey collected the excessive fee,

it was he, not Parsells, who proximately caused plaintiffs' damages. Therefore,

plaintiffs' recourse was to recover the excess fee from Coffey.

Even assuming Parsells's representation continued and he breached his

duty to advise Northern concerning the settlement, Lakind concluded Northern

was not harmed by Parsells's actions. The expert described the settlement as "a

very good settlement" for Northern because it could not have recovered any

money damages under the Spill Act, and its common law claims were not viable

due to the expiration of the statute of limitations.

A-2104-17T4
28
 Lakind did not find the MOA obligation significant because plaintiffs

could have moved to enforce the settlement agreement if Honeywell failed to

complete the cleanup. He thought it was "a tremendous advantage" to Northern

to have Honeywell responsible for the remediation because of Honeywell's level

of expertise and familiarity with the process. He found no indication in the

record to support a theory that either Satec or Honeywell would have settled the

case any differently than they did, or that a "better deal" could have been

achieved for Northern.

V.

Following the completion of the presentation of evidence, the McElroy

defendants moved for an involuntary dismissal under Rule 4:37-2(b), and for

judgment pursuant to Rule 4:40-1. Defendants argued there was no evidence

that Northern could have obtained a different settlement. Therefore, plaintiffs

failed to establish any negligence on defendants' part that was a proximate cause

of any damages. The court denied the Rule 4:37-2(b) motion, and reserved

decision on the motion for judgment until after the jury verdict .

During closing arguments, plaintiffs' counsel explained to the jury that his

clients sought two elements of damages. Plaintiffs contended they should have

received an additional $100,000 from the $250,000 Honeywell settlement

A-2104-17T4
29
monies. The $100,000 was calculated as the $25,000 allocated to Satec and the

excess $75,000 Coffey took as a fee. Plaintiffs asserted Coffey was only entitled

to a $75,000 fee, not the $150,000 he received. In addition, plaintiffs sought the

$438,000 credit from the purchase price of the property. Therefore, they asked

for $538,000 in damages. Counsel did not specify whether that amount should

all be awarded to Northern or whether Puzyk individually was also entitled to

damages.

In its instructions to the jury, the court stated:

Instructions regarding multiple plaintiffs. By
now you've noticed there are two plaintiffs. Northern
International Express Company and Stefan Puzyk.
When I told you earlier that the plaintiffs have the
burden of proving the liability of Mr. Parsells, that
means that Northern and Puzyk must separately prove
that Mr. Parsells is liable to each of them. Thus[,] it is
possible that you may find Mr. Parsells liable to only
one of the plaintiffs, or neither of them, or to both of
them. The same can be said for Mr. Coffey.

The court also included the following in its charge on damages:

Plaintiffs have the burden of establishing by the
preponderance of evidence each item of damages that
they claim. A plaintiff must also prove that the
damages were the natural and probable consequences
of the attorney defendants['] actions. Damages may not
be based on conjecture or speculation.

Plaintiffs are claiming that the[] legal
malpractice of either one or both of the attorney

A-2104-17T4
30
 defendants resulted in damages to either or both of
them.

During deliberations, the jury submitted the following question: "Can we

consider Northern and S. Puzyk as one [and] the same? If no, please advise how

to differentiate." If there was a discussion between the court and counsel as to

how to respond to this question, it was not done on the record.

In responding to the question, the court told the jurors:

I'm going to read the instructions regarding
multiple plaintiffs again and then I'll try to explain.

By now you should've noticed that there are two
plaintiffs in this case. Northern International and
Stefan Puzyk. When I told you earlier that the plaintiffs
had the burden of proving the liability of Mr. Parsells
that means that Northern and Mr. Puzyk must
separately prove that Mr. Parsells is liable to each of
them. Thus, it is possible that you may find Mr.
Parsells liable to only one of the plaintiffs, or neither,
or both. The same can be said for Mr. Coffey.

Can we consider Northern and Mr. Puzyk as one
[and] the same? The answer is they are separate
plaintiffs. So, that you will have to follow my verdict
sheet and will have to make a finding as to each one of
them as to each defendant. Okay. Hopefully, that
makes it clearer.

Can these parties suffer the same damages? That
is for you to decide. You are to decide who or what the
damages were as to each plaintiff if you do find that the
damages have been shown.

A-2104-17T4
31
 [Y]ou can't compound it. In other words, . . . you
can't find that both -- how do we say it? You can't
compound the damages because you know what the
damages requested are, but you must determine what
percentage of those damages go to each plaintiff or --
I'm sorry. What . . . percentage each defendant is
responsible for if you do find damages. But you can
and you must find, obviously, that there[] . . . was a
duty, and that there was proximate cause, and that the
damages have been shown by a preponderance of the
evidence.

Later that day, the jury returned its verdict, finding both the McElroy and

Coffey defendants negligent, and their negligence was a proximate cause of

damages to both plaintiffs. The jury awarded Northern $100,000, attributing

sixty-five percent of liability to the Coffey defendants, and thirty-five to the

McElroy defendants. It also awarded $100,000 to Puzyk, individually, finding

the McElroy and Coffey defendants each responsible for fifty percent of the

damages.

On August 1, 2017, the court denied defendants' Rule 4:40-1 motion for

judgment, finding that "reasonable minds could differ as to whether the

[d]efendants were negligent, and whether their actions/inactions constituted

malpractice."

Plaintiffs' counsel filed a certification in support of an application for

attorney's fees and costs pursuant to Rule 4:49-2. The certification references

A-2104-17T4
32
two retainer agreements. The first agreement was executed on March 17, 2014,

when counsel was a sole practitioner. The second supplemental agreement was

executed on February 20, 2015, after counsel began practicing at a firm.

Under the agreements, plaintiffs paid a $12,000 retainer fee. Both

agreements set counsel's contingent fee at thirty-three and one-third percent of

the first $500,000 recovered, and set an hourly rate of $350. In addition, the

agreements capped the legal fees billed on an hourly basis at $35,000, or 100

hours.

The first agreement stated: "In no event shall the legal fees billed to You

on an hourly basis, pending the [lawsuit], exceed $35,000.00. The hourly billing

shall cease once the sum of the total billable hours equals $35,000.00 ." The

second agreement stated: "Provided You pay the first $35,000.00 of billable

hours for which you are invoiced The Firm will not seek to cease representing

You during the litigation of this matter through the conclusion of the trial or

settlement of this matter."

Counsel sought $87,998 in attorney's fees for over 400 hours billed

between March 2014 and July 25, 2017. Some of the hours were billed at a

reduced rate. While he was a sole practitioner between March 2014 and January

2015, he did not use an electronic computerized timesheet system, and therefore,

A-2104-17T4
33
he did not submit any itemized billing records for that period. He did submit

itemized billing records for the hours worked between February 19, 2015, and

July 25, 2017, at the law firm, along with documentation pertaining to costs

totaling $19,452.96, including expert fees, costs of depositions and the

mediator's fee.

By order dated November 13, 2017, the court granted plaintiffs' motion

for attorney fees and costs in part, awarding $47,000 in attorney fees and

$19,452.96 in costs, for a total award of $66,452.96. The court found the

retainer agreements were clear, and that counsel and plaintiffs had capped the

legal fees at $35,000, aside from the contingent fee. The court explained that

an adversary cannot be responsible for billing hours that are not billed to one's

client. In addition, had the damages verdict been a larger award, counsel would

have netted a greater fee under the contingency fee provision. However, the

contingent fee here would have been less than the $35,000 capped fee amount.

Therefore, the court awarded counsel $47,000 – $35,000 plus the $12,000

retainer.

The court denied the McElroy defendants' Rule 4:40-2(b) motion for

judgment notwithstanding the verdict (JNOV), remittitur, or a new trial on

November 16, 2017, finding that reasonable minds could differ on the outcome

A-2104-17T4
34
and the damage awards were supported by the evidence. On December 13, 2017,

the court entered a final judgment against the McElroy defendants for

$151,452.96.

VI.

On appeal, the McElroy defendants challenge the following orders: (1) the

April 21, 2015 order denying their motion to dismiss the complaint for failure

to serve an adequate AOM; (2) the January 26, 2017 order denying their second

motion for summary judgment; (3) the February 3, 2017 order denying their

motion to bar Angstreich's expert testimony as a net opinion; (4) the August 1,

2017 order denying their motion for judgment at trial; (5) the November 13,

2017 order awarding attorney's fees; (6) the November 16, 2017 order denying

their motions for JNOV, a new trial, and/or remittitur; and (7) the December 13,

2017 final judgment. Plaintiffs cross-appeal the award of attorney's fees.

A.

The McElroy defendants contend the court erred when it denied their

motion to dismiss the complaint for "plaintiffs' failure to serve a timely and

adequate affidavit of merit." They assert the first AOM was legally deficient

because it "lacked a factual foundation," and the second AOM was untimely as

it was filed beyond the 120-day statutory deadline. We review a trial court's

A-2104-17T4
35
decision to deny a motion to dismiss the complaint de novo. Dimitrakopoulos

v. Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl, P.C., 237 N.J. 91, 108

(2019) (citation omitted).

"The Affidavit of Merit statute was intended to flush out insubstantial and

meritless claims that have created a burden on innocent litigants and detracted

from the many legitimate claims that require the resources of our civil justice

system." Ferreira, 178 N.J. at 154. It "was not intended to encourage

gamesmanship or a slavish adherence to form over substance." Ibid.; see Buck

v. Henry, 207 N.J. 377, 383 (2011) (explaining that the AOM statute's purpose

"is to weed out frivolous complaints, not to create hidden pitfalls for meritorious

ones.").

Angstreich's initial AOM stated the following:

Based upon my review and analysis of the
[c]omplaint and [s]ettlement [a]greement concerning
the actions of attorney George H. Parsells, III, I have
concluded that there is a reasonable probability that the
care, skill and knowledge exercised and/or exhibited by
him fell outside the customary standards and practices
of New Jersey lawyers; that he failed to exercise the
required skill, knowledge, ability and judgment
required of him under the circumstances, and that he
failed to provide sufficient information upon which
Puzyk and Northern could make an informed decision
as to whether to agree to the terms of the settlement.
Further, it is my opinion that the firm of McElroy,
[Deutsch,] Mulvaney & Carpenter, LLP failed to

A-2104-17T4
36
 provide proper supervision and/or is responsible for the
conduct of one of its members.

It is my opinion within a reasonable degree of
certainty that there is a sufficient basis to pursue the
instant claims against Mr. Parsells and the law firm of
McElroy, [Deutsch,] Mulvaney & Carpenter, LLP. It is
also my opinion, within a reasonable degree of certainty
that Parsells'[s] conduct fell below the appropriate
standards of care.

After a Ferreira conference, Angstreich submitted a second AOM. The

conclusions were identical to those stated in the first affidavit. In addition, the

expert referenced his review of a certification from Puzyk "swearing to the truth

of the allegations contained in paragraphs 38-53 of the [c]omplaint." The second

AOM was provided within the timeframe set by the court.

Here, Angstreich provided the attestation required by N.J.S.A. 2A:53A-

27, named Parsells specifically, and briefly described how his actions fell

outside acceptable professional standards. Plaintiffs filed the first AOM

simultaneously with the complaint, well within the statutory deadline.

The McElroy defendants' contention that Angstreich should have

reviewed additional records to substantiate the AOM is without merit. No

discovery had yet occurred, and defendants do not specify what records should

have been reviewed. Plaintiffs did not execute a retainer agreement with the

McElroy defendants and Parsells did not have any billing records. We are

A-2104-17T4
37
satisfied that Angstreich's AOM based on the sworn facts certified to by Puzyk

in the complaint and his review of the settlement agreement complied with the

statutory requirements under N.J.S.A. 2A:53A-27.

B.

Likewise, we are unpersuaded by the McElroy defendants' contention that

the court erred in denying their motion to bar Angstreich's testimony on

proximate cause and damages as a net opinion. Defendants assert the opinion

was not supported by the evidence, and the $438,000 credit to Satec was not

recoverable under the Spill Act.

A trial court's decision to admit or exclude expert testimony in a civil case

is reviewed under "a pure abuse of discretion standard . . . ." In re Accutane

Litig., 234 N.J. 340, 391-92 (2018) (citing Townsend v. Pierre, 221 N.J. 36, 52-

53 (2015)). "Accordingly, the trial court's decision here should not be disturbed

on appeal unless the decision was 'made without a rational explication,

inexplicably departed from established practices, or rested on an impermissible

basis.'" Estate of Kotsovska v. Liebman, 221 N.J. 568, 588 (2015) (quoting

Flagg v. Essex Cty. Prosecutor, 171 N.J. 561, 571 (2002)).

"N.J.R.E. 703 addresses the foundation for expert testimony." Townsend,

221 N.J. at 53. Under that rule, an expert opinion must be grounded in "facts or

A-2104-17T4
38
data derived from (1) the expert's personal observations, or (2) evidence

admitted at the trial, or (3) data relied upon by the expert which is not necessarily

admissible in evidence but which is the type of data normally relied upon by

experts." Ibid. (quoting Polzo v. Cty. of Essex, 196 N.J. 569, 583 (2008)).

"The net opinion rule is a 'corollary of [Rule 703] . . . which forbids the

admission into evidence of an expert's conclusions that are not supported by

factual evidence or other data.'" Id. at 53-54 (alterations in original) (quoting

Polzo, 196 N.J. at 583). In other words, the expert must "'give the why and

wherefore' that supports the opinion, 'rather than a mere conclusion.'" Id. at 54

(quoting Borough of Saddle River v. 66 E. Allendale, LLC, 216 N.J. 115, 144

(2013)).

"Evidential support for an expert opinion is not limited to treatises or any

type of documentary support, but may include what the witness has learned from

personal experience." Rosenberg v. Tavorath, 352 N.J. Super. 385, 403 (App.

Div. 2002) (citation omitted); see, e.g., State v. Townsend, 186 N.J. 473, 495

(2006) (holding that an expert's "education, training, and most importantly, her

experience, provided a sound foundation for her opinion" which was "not a net

opinion"); but see Carbis Sales, Inc. v. Eisenberg, 397 N.J. Super. 64, 79 (App.

Div. 2007) (citations omitted) ("In the context of legal malpractice, an expert

A-2104-17T4
39
must base his or her opinion on standards accepted by the legal community and

not merely on the expert's personally held views.").

We discern no abuse of discretion in the court's decision allowing

Angstreich's testimony. The expert opined that Parsells was negligent in failing

to request the monies during the mediation and settlement negotiations. And

that his failure to properly represent plaintiffs was a proximate cause of their not

recovering the $438,000 credit. The opinion was supported by the evidence and

predicated upon Angstreich's experience handling legal malpractice and

environmental law cases for more than thirty years.

During the Rule 104 hearing, Angstreich testified that he had successfully

recovered similar monies in other matters, "so long as the credit that's given off

the purchase price is directly attributed to what has been determined to be the

cost to clean up" the property. Angstreich further opined that even if the credit

was not recoverable under the Spill Act, Parsells should have attempted to

recoup it during settlement negotiations so that Satec did not receive a windfall.

We are satisfied Angstreich sufficiently supported his opinions.

C.

We next address the McElroy defendants' contention of error in the trial

court's denial of their second motion for summary judgment. They assert

A-2104-17T4
40
summary judgment was warranted because the material facts were undisputed,

and plaintiffs failed to demonstrate the necessary element of proximate cause

under either the "'suit within a suit' approach" or the "'expert' [testimony]

approach" in a legal malpractice case.

In reviewing a summary judgment order, we are bound by the same

standard as the trial court under Rule 4:46-2(c). State v. Perini Corp., 221 N.J.

412, 425 (2015) (citations omitted). Summary judgment is required if "the

pleadings, depositions, answers to interrogatories and admissions on file,

together with the affidavits, if any, show that there is no genuine issue as to any

material fact challenged and that the moving party is entitled to a judgment or

order as a matter of law." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520,

528-29 (1995).

A court determines whether genuine issues of material fact exist by

"consider[ing] whether the competent evidential materials presented, 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 540. "The slightest doubt as to an issue of material

fact must be reserved for the factfinder, and precludes a grant of judgment as a

matter of law." Akhtar v. JDN Props. at Florham Park, LLC, 439 N.J. Super.

A-2104-17T4
41
391, 399 (App. Div. 2015) (citation omitted). "Any issues of credibility must

be left to the finder of fact." Ibid. (citation omitted).

An action for legal malpractice has "three essential 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.'" Jerista v. Murray,

185 N.J. 175, 190-91 (2005) (quoting McGrogan v. Till, 167 N.J. 414, 425

(2001)).8

"Like most professionals, lawyers owe a duty to their clients to provide

their services with reasonable knowledge, skill, and diligence." Ziegelheim v.

Apollo, 128 N.J. 250, 260 (1992) (citing St. Pius X House of Retreats v. Diocese

of Camden, 88 N.J. 571, 588 (1982)). "[L]awyers' duties in specific cases vary

with the circumstances presented." Ibid. That said, "[t]he lawyer must take 'any

steps necessary in the proper handling of the case.'" Id. at 260-61 (quoting

Passanante v. Yormark, 138 N.J. Super. 233, 239 (App. Div. 1975)). "Those

steps will include, among other things, a careful investigation of the facts of the

matter, the formulation of a legal strategy, the filing of appropriate papers, and

8
Parsells does not dispute the existence of an attorney-client relationship
between he and Northern. He does dispute there was any attorney-client
relationship between he and Puzyk individually.
A-2104-17T4
42
the maintenance of communication with the client." Id. at 261 (citing

Passanante, 138 N.J. Super. at 238-39).

"In accepting a case, the lawyer agrees to pursue the goals of the client to

the extent the law permits, even when the lawyer believes that the client's desires

are unwise or ill[-]considered." Ibid. (citing Lieberman v. Emp'rs Ins. of

Wausau, 84 N.J. 325, 340 (1980)). "At the same time, because the client's

desires may be influenced in large measure by the advice the lawyer provides,

the lawyer is obligated to give the client reasonable advice." Ibid.

"Accordingly, the lawyer is obligated to keep the client informed of the status

of the matter for which the lawyer has been retained, and is required to advise

the client on the various legal and strategic issues that arise." Ibid. (citations

omitted).

"What constitutes a reasonable degree of care is not to be considered in a

vacuum but with reference to the type of service the attorney undertakes to

perform." St. Pius X House of Retreats, 88 N.J. at 588. Concerning the handling

of settlements in particular, our Supreme Court has held:

[W]e recognize that litigants rely heavily on the
professional advice of counsel when they decide
whether to accept or reject offers of settlement, and we
insist that the lawyers of our state advise clients with
respect to settlements with the same skill, knowledge,
and diligence with which they pursue all other legal

A-2104-17T4
43
 tasks. Attorneys are supposed to know the likelihood
of success for the types of cases they handle and they
are supposed to know the range of possible awards in
those cases.

[Ziegelheim, 128 N.J. at 263.]

"[D]eviation from accepted standards of professional care will result in

liability for negligence." Ibid. "[W]e see no reason to apply a more lenient rule

to lawyers who negotiate settlements." Ibid. Moreover, "[t]he fact that a party

received a settlement that was 'fair and equitable' does not mean necessarily that

the party's attorney was competent or that the party would not have received a

more favorable settlement had the party's incompetent attorney been

competent." Id. at 265.

However, "plaintiffs must allege particular facts in support of their claims

of attorney incompetence and may not litigate complaints containing mere

generalized assertions of malpractice." Id. at 267. "[A]ttorneys cannot be held

liable simply because they are not successful in persuading an opposing party to

accept certain terms." Ibid. "The law demands that attorneys handle their cases

with knowledge, skill, and diligence, but it does not demand that they be perfect

or infallible, and it does not demand that they always secure optimum outcomes

for their clients." Ibid.

A-2104-17T4
44
 Primarily at issue in this case is whether the McElroy defendants

proximately caused plaintiffs' damages, and the quantum of those damages.

"The test of proximate cause is satisfied where the negligent conduct is a

substantial contributing factor in causing the loss." 2175 Lemoine Ave. Corp.

v. Finco, Inc., 272 N.J. Super. 478, 487 (App. Div. 1994) (citations omitted).

Under this test, "there can be any number of intervening causes between the

initial wrongful act and the final injurious consequences and [it] does not require

an unsevered connecting link between the negligent conduct and the ultimate

harm." Conklin v. Hannoch Weisman, 145 N.J. 395, 420 (1996). "The test is

thus suited for legal malpractice cases," such as this one, "in which inadequate

or inaccurate legal advice is alleged to be a concurrent cause of harm." Ibid. In

such cases, "[t]he negligent attorney . . . often does not 'create' the risk of

intervening harm . . . but rather fails to take the steps that competent counsel

should take to protect a client from the risks that ultimately produce the injury."

Id. at 418 (citation omitted).

"[D]amages should be generally limited to recompensing the injured party

for his economic loss," that is, "the amount that the client would have received

but for his attorney's negligence." Gautam v. De Luca, 215 N.J. Super. 388,

397, 399 (App. Div. 1987) (citing Lieberman, 84 N.J. at 342); see Nappe v.

A-2104-17T4
45
Anschelewitz, Barr, Ansell & Bonello, 97 N.J. 37, 48 (1984) ("Compensatory

damages are designed to compensate a plaintiff for an actual injury or loss.").

"Actual damages are those that are real and substantial as opposed to

speculative." Grunwald v. Bronkesh, 131 N.J. 483, 495 (1993). The plaintiff

must "show what injuries were suffered as a proximate consequence of the

attorney's breach of duty" and "[t]hat burden must be sustained by a

preponderance of the competent, credible evidence" as opposed to "conjecture,

surmise or suspicion." 2175 Lemoine Ave., 272 N.J. Super. at 487-88 (citations

omitted).

In a written statement of reasons, the court concluded that, viewing the

facts in the light most favorable to plaintiffs, there were genuine issues of

material fact as to whether the McElroy defendants breached the duty owed to

plaintiffs, and whether any breach was the proximate cause of any damages, as

well as the extent of plaintiffs' claimed damages. The court noted Puzyk's

certification, in which he maintained that neither Coffey nor Parsells told him

about Honeywell's August 2008 offer, that he would not have agreed to the later

settlement had he known about the offer, and that neither Coffey nor Parsells

sought to recoup the $438,000 credit given by Northern to Satec upon the sale

of the property. It also considered the August 2008 preliminary term sheet in

A-2104-17T4
46
which Honeywell offered to pay Northern $250,000 without allocating any

monies to Coffey or Satec, and the contingency fee agreement between plaintiffs

and Coffey providing for a fee of thirty percent of any recovery plaintiffs

received. In addition, the court cited Angstreich's report and its opinions

regarding the McElroy's defendants' duty to plaintiffs and their breach of that

duty. Angstreich also found, as discussed above, that Parsells's negligence was

a proximate cause of plaintiffs' damages.

In denying summary judgment, the court stated

a rational jury could find that had [d]efendants not
committed the alleged malpractice and [p]laintiffs
knew that their entire recovery would be limited to the
amount they received from the Honeywell settlement,
[p]laintiffs would not have agreed to Coffey receiving
a $150,000 legal fee or Satec receiving $25,000 in
addition to keeping the credit it received from
Northern.

The McElroy defendants contend its summary judgment motion "was

based on the wholly undisputed facts surrounding Northern's ownership,

transfer, and legal rights with respect to the . . . property." (emphasis omitted).

However, this limited characterization ignores the disputed material facts

relevant to plaintiffs' legal malpractice claim against the McElroy defendants,

including those pertaining to the extent and duration of Parsells's representation

A-2104-17T4
47
of Northern and Puzyk in mediation and the settlement negotiations with

Honeywell.

For instance, Puzyk contended, among other things, that he first met

Parsells in November or December 2008, and that Parsells pressured him to

accept unfavorable settlement terms in January 2009 during a meeting at

Parsells's office. Parsells, on the other hand, claimed his role in the underlying

litigation was extremely limited, and he never gave Puzyk any legal advice and

did not see or speak to him after the March 27, 2008 mediation session. These,

and numerous other conflicting versions of events, presented a credibility issue

that "must be left to the finder of fact." Akhtar, 439 N.J. Super. at 399 (citation

omitted). "The question of which version is more plausible or believable . . . is

not susceptible to summary disposition." Winstock v. Galasso, 430 N.J. Super.

391, 404 (App. Div. 2013) (citing Brill, 142 N.J. at 543).

Because material facts were in dispute, the trial court properly denied the

McElroy defendants' second motion for summary judgment. There also was

conflicting evidence on the issues of proximate cause and damages.

D.

We turn to the McElroy defendants' motions for judgment, JNOV,

remittitur, and a new trial, all premised on the grounds that the evidence was

A-2104-17T4
48
insufficient to be considered by a jury and to support the jury's verdict. They

assert that: (1) there was no evidence to show that the other parties to the

settlement would have been willing to pay Northern more than they actually did;

(2) Puzyk's damages award cannot stand because he was not a party to the

underlying litigation, lacked an attorney-client relationship with the McElroy

defendants, and the award constituted a double recovery; and (3) disgorgement

of Coffey's legal fees from the McElroy defendants should not have been

permitted as a matter of law.

When reviewing decisions on Rule 4:40-1 motions for judgment and Rule

4:40-2(b) motions for JNOV, we apply the same standard that governs the trial

courts. "[I]f, accepting as true all the evidence which supports the position of

the party defending against the motion[s] and according him the benefit of all

inferences which can reasonably and legitimately be deduced therefrom,

reasonable minds could differ, the motion[s] must be denied[.]" Smith v.

Millville Rescue Squad, 225 N.J. 373, 397 (2016) (fourth alteration in original)

(citation omitted).

In considering a damages verdict, we are mindful that "[a] jury's verdict,

including an award of damages, is cloaked with a 'presumption of correctness.'"

Cuevas v. Wentworth Grp., 226 N.J. 480, 501 (2016) (quoting Baxter v.

A-2104-17T4
49
Fairmont Food Co., 74 N.J. 588, 598 (1977)). A new trial is only granted "if,

having given due regard to the opportunity of the jury to pass upon the

credibility of the witnesses, it clearly and convincingly appears that there was a

miscarriage of justice under the law." R. 4:49-1(a). We "will not reverse a trial

court's determination of a motion for a new trial 'unless it clearly appears that

there was a miscarriage of justice under the law.'" Delvecchio v. Twp. of

Bridgewater, 224 N.J. 559, 572 (2016) (quoting R. 2:10-1). Courts have the

power to decide whether a jury's "grossly excessive award is a miscarriage of

justice" and "to enter a remittitur reducing the award to the highest amount that

could be sustained by the evidence." Orientale v. Jennings, 239 N.J. 569, 590

(2019) (quoting Cuevas, 226 N.J. at 499).

The McElroy defendants moved for judgment at trial under Rule 4:40-1.

The court reserved its decision and after the verdict, denied the motion, finding

plaintiffs' claims remained a question of fact for the jury to decide. In its written

statement of reasons, the court concluded that "reasonable minds could differ as

to whether the [d]efendants were negligent, and whether their actions/inactions

constituted malpractice."

In its Rule 4:40-2(b) motion, the McElroy defendants argued there was no

support for the jury's award of damages to Puzyk individually. They contended

A-2104-17T4
50
the corporate entity, Northern, instituted suit, alleging Parsells owed it a duty,

and breached that duty, proximately causing Northern damages. They further

asserted Angstriech's opinion supported Northern's claims against Parsells.

The trial judge disagreed. In a ruling encompassing the motions for

JNOV, new trial and remittitur, he stated that the trial testimony and Puzyk's

testimony "provided evidence that a reasonable jury could find that an

attorney/client relationship existed between Puzyk and the defendants." The

judge explained that the jury could have relied upon Angstreich's testimony that

Parsells breached his duty to Northern to conclude that Parsells also breached

his duty of care to Puzyk individually, since Puzyk was the "sole owner" of

Northern.

In addressing the damage award and requested remittitur, the trial judge

found the jury's award of damages was "clearly supported by the evidence,"

noting plaintiffs "asked for substantially more." The motions for a new trial,

JNOV and remittitur were denied.

We are satisfied the court's rulings as to Northern are adequately

supported by the substantial, credible evidence contained in the record. Parsells

was asked, and agreed, to represent Northern when a conflict arose stemming

from Coffey's representation of both Northern and Satec. Puzyk and Parsells

A-2104-17T4
51
presented sharply conflicting versions of events pertaining to the mediation

sessions, the settlement negotiations, and the eventual finalization of the

settlement agreement. Angstreich opined that Northern could have obtained a

more favorable settlement but for the McElroy defendants' breach of duty to it.

Lakind disagreed.

A reasonable jury could conclude from its review of the August 2008

preliminary term sheet that Honeywell was willing to pay Northern at least

$250,000, if not the $438,000 desired, to settle their claims. But, in the end,

Northern only received $75,000 from Honeywell in the settlement, $13,000 of

which was taken by Coffey to pay mediation fees, while Coffey himself received

a direct payment of $150,000 from Honeywell, and Satec received $25,000.

Based upon the trial testimony, a reasonable jury could conclude that Parsells, a

longtime friend of Coffey, pressured Puzyk to settle, failed to look out for

Northern's interests, and that his breach of duty to Northern was "a substantial

factor in causing" Northern's damages. See Conklin, 145 N.J. at 420; see also

2175 Lemoine Ave., 272 N.J. Super. at 487.

Because reasonable minds could differ as to whether Parsells proximately

caused Northern's damages, and also as to the quantum of the damages suffered,

the trial court properly denied the motion for judgment. Similarly, the verdict

A-2104-17T4
52
in Northern's favor is supported by competent evidence and did not constitute a

miscarriage of justice. Therefore, there was no error in the denial of the motions

for JNOV, remittitur, and a new trial as concerns Northern. The damages

awarded to Northern in the amount of $100,000 is not patently excessive or

grossly disproportionate. It was substantially less than the $438,000 sought.

We discern no merit to the McElroy defendants' characterization of the

damages award, at least in part, as an unlawful disgorgement of Coffey's fee

from them. The circumstances here did not just involve Coffey's fee itself, but

plaintiffs contended Parsells's negligence resulted in a misallocation of

settlement funds which resulted in Coffey receiving substantially more than the

contingent fee agreement allowed under the retainer agreement.

Angstreich testified that Parsells should have advised Puzyk and Northern

that the $150,000 fee was excessive, and that Coffey was not entitled to it. Even

Lakind conceded that, assuming Parsells's representation of Northern continued

through finalization of the settlement agreement, he should have addressed the

fee issue.

Based upon the evidence in the record, a reasonable jury could conclude

that, in his role as counsel for Northern, Parsells had a duty to alert Puzyk that

the payment from Honeywell to Coffey far exceeded the agreed-upon amount

A-2104-17T4
53
for attorney fees. A reasonable jury could conclude that Parsells should have

attempted to redirect a portion of Coffey's share to Northern, and that his failure

to act accordingly was "a substantial factor in causing" Northern's damages in

this regard. See Conklin, 145 N.J. at 420; see also 2175 Lemoine Ave., 272 N.J.

Super. at 487. We see no error in the jury's award regarding Northern.

In turning to the McElroy defendants' argument concerning the award to

Puzyk individually, we agree the trial court erred in denying the motions for

judgment and JNOV. Although there was sufficient evidence to demonstrate the

existence of an attorney-client relationship between Puzyk and Parsells, there

was no evidence to support a finding that Parsells proximately caused Puzyk,

individually, to suffer actual damages independent of the damages incurred by

Northern.

"All that is necessary" to establish an attorney-client relationship "is that

the parties relate 'to each other generally as attorney and client.'" Petit-Clair v.

Nelson, 344 N.J. Super. 538, 543 (App. Div. 2001). In Petit-Clair, we rejected

an attorney's contention that he only represented a corporation, and not its

husband and wife owners, finding that the parties "related to each other as

attorney and client." Id. at 543-44. It was the husband and wife, not the

corporation, who relied on the attorney's "guidance and advice." Id. at 544.

A-2104-17T4
54
 Here, it is undisputed that Puzyk was the sole owner of Northern, and that

he was the person responsible for accepting or rejecting the settlement on

Northern's behalf. Although Angstreich did not opine whether Parsells had an

attorney-client relationship with Puzyk individually, Puzyk's own testimony

regarding his interactions with Parsells provided sufficient evidence for a

reasonable jury to conclude that they related to one another as attorney and

client.

However, that relationship was not enough for the jury to award Puzyk

damages as an individual. "It is well established that the plaintiff must show a

breach of duty and resulting damage to prevail in a negligence action." Nappe,

97 N.J. at 45 (emphasis in original) (citations omitted). "Ordinarily, the issue

of proximate cause should be determined by the factfinder," except "in the

highly extraordinary case in which reasonable minds could not differ on whether

that issue has been established." Fleuhr v. City of Cape May, 159 N.J. 532, 543

(1999) (citations omitted).

Although Angstreich mentioned during his testimony that Puzyk could

suffer damages because, under the settlement agreement's terms and the MOA

with DEP, he remained personally liable for the remediation of the property if

Honeywell failed to complete it, there was no evidence presented that those

A-2104-17T4
55
circumstances occurred. To the contrary, Puzyk admitted the remediation was

completed by Honeywell. Despite the clean-up costs having exceeded the

estimates, neither Honeywell nor anyone else had sought any money from him

in connection with the remediation. There was no evidence of any breach of the

settlement agreement, or that Puzyk had to indemnify Honeywell or Satec, or

that he had suffered any consequences at all under the MOA with DEP. Puzyk

failed to present evidence he individually sustained any actual monetary loss.

Therefore, the potential damages testified to by Angstreich were speculative and

not recoverable. See Grunwald, 131 N.J. at 495.

Therefore, the trial court erred when it denied the McElroy defendants'

motion for judgment as to Puzyk individually. Since plaintiffs offered no

evidence to show that Parsells proximately caused Puzyk to suffer actual

damages, the jury's award of $100,000 to Puzyk individually constitutes a

miscarriage of justice.

E.

The McElroy defendants contend that the attorney's fee award to plaintiffs

was unreasonably high in comparison to their limited recovery at trial. In a

cross-appeal, plaintiffs contend the court erred when it failed to award them the

full amount of attorney's fees they sought.

A-2104-17T4
56
 Attorney fee determinations by trial courts "will be disturbed only on the

rarest of occasions, and then only because of a clear abuse of discretion."

Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001) (citation

omitted). "[A] negligent attorney is responsible for the reasonable legal

expenses and attorney fees incurred by a former client in prosecuting the legal

malpractice action." Saffer v. Willoughby, 143 N.J. 256, 272 (1996). "Those

are consequential damages that are proximately related to the malpractice."

Ibid.; see Bailey v. Pocaro & Pocaro, 305 N.J. Super. 1, 6 (App. Div. 1997)

(explaining that Saffer "dictates that a plaintiff who is economically injured by

an attorney's legal deficiency should be made whole" and that "'wholeness'

includes the attorney's fees and costs to pursue the malpractice claim.").

Here, the court awarded plaintiffs $47,000 in attorney fees, substantially

less than the $87,998 requested. In making its determination, the court properly

analyzed the factors under RPC 1.5(a), and concluded the requested fee was

"unreasonable and disproportionate to the verdict" and the "modest recovery"

awarded. The court reduced the award to $47,000 pursuant to the $12,000

retainer fee and the $35,000 cap on billable hours under the two retainer

agreements, reasoning that counsel could not bill an adversary for hours not

properly billed to the client.

A-2104-17T4
57
 The court's well-reasoned determination does not constitute a clear abuse

of discretion. It was not unreasonable or excessive in light of the amount of the

verdict. Moreover, in reducing the award from $87,998 to $47,000, the court

considered that plaintiffs sought over $500,000 in damages and recovered

substantially less. We discern no abuse of discretion in the attorney's fee award.

In sum, the judgment in favor of Puzyk is vacated and remanded for the

entry of an amended judgment. We affirm the remainder of the appeal and

dismiss the cross-appeal.

Affirmed in part, vacated in part and remanded in accordance with this

opinion. We do not retain jurisdiction.

A-2104-17T4
58