JOSE R. ROJAS et al. v. CHARLES J. KAESS

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2347-05T22347-05T2

JOSE R. ROJAS and

ROJAS MARKET STREET TAVERN, INC.,

A New Jersey Corporation,

Plaintiffs-Appellants,

v.

CHARLES J. KAESS,

Defendant-Respondent,

and

LUIS COSME,

Third-Party Defendant.

 
_________________________________

Submitted July 19, 2006 - Decided August 10, 2006

Before Judges Fuentes and Graves.

On appeal from Superior Court of

New Jersey, Law Division, Middlesex

County, L-3531-04.

Edward G. O'Byrne, attorney for

appellant.

Piltzer & Piltzer, attorneys for

respondent (David S. Piltzer, on

the brief).

PER CURIAM

This is a legal malpractice action. Plaintiff Jose Rojas appeals from the judgment of the Law Division dismissing his claims against defendant Charles Kaess, an attorney who represented him in connection with the purchase of fifty percent of the shares of a privately held corporation. The trial court concluded that Rojas's legal malpractice suit is barred by the applicable six-year statute of limitations. N.J.S.A. 2A:14-1. We agree and affirm.

The material facts are not disputed. Rojas retained Kaess in March of 1994 to represent him in the purchase of fifty outstanding shares of Rojas-Cosme Tavern, Inc., a New Jersey corporation. The shares were owned by Luis Cosme. Rojas paid Cosme $40,000 for the shares of the stock. The closing took place on March 22, 1994. Kaess represented Rojas in the closing and was therefore responsible for investigating and ascertaining whether the corporation had any outstanding debts, including any corporate business taxes. The closing was consummated and Rojas paid Cosme the agreed upon $40,000, without any adjustments or deductions for outstanding taxes.

In 1997, Rojas retained Ralph Evangelista, C.P.A., to represent and assist him in connection with an audit of Rojas's Market (the successor of Rojas-Cosme Tavern, Inc.) initiated by the State Division of Taxation. On December 23, 1997, the Division of Taxation sent Evangelista a Post Audit Conference Report indicating that Rojas's Market Street Tavern had an outstanding tax liability of $39,374.57 for tax-years 1991 through 1994. In July of 1998, Rojas sold the tavern business (through a different corporate entity that was the successor of Rojas's Market Street Tavern). All of the proceeds from that sale were used to pay off the outstanding taxes.

Sometime in 1999, Rojas had a "conversation" with another attorney. Rojas alleges that it was at this time that he first became aware of his right to sue Kaess for malpractice in failing to discover the tax liability in 1994. On May 13, 2004, Rojas and the corporate entities filed suit against Kaess.

Against these facts, Judge Ryan made the following findings and conclusions of law.

The alleged malpractice, here, dates to March 22 of 1994, when Rojas bought out his corporate partner Cosme, and was represented by his Attorney Kaess. Rojas's assertion that he did not; however, know that these taxes would have to be paid, when the tavern was sold on . . . July 1st of 1998, is really irrelevant to the question of when he suffered damages. He suffered the damages, when the State determined, in 1997, he was liable for the taxes. And he knew -- and knew of such liability or certainly should have known that. He was liable for such taxes whether or not Kaess would have discovered them in 1994.

In 1997, Rojas -- Rojas knew of the back taxes owed by him. He did not exercise reasonable diligence. And the plaintiff does not meet -- meet the reasonable diligence discovery test of Grunwald.

We agree. A legal malpractice action must be brought by an aggrieved party within six years of the accrual of the claim. A legal malpractice claim accrues "when an attorney's breach of professional duty proximately causes a plaintiff's damages." Grunwald v. Bronkesh, 131 N.J. 483, 492 (1993). In Grunwald, the Supreme Court recognized the applicability of the "discovery rule" in legal malpractice actions:

Under special circumstances and in the interest of justice, we have adopted the discovery rule to postpone the accrual of a cause of action when a plaintiff does not and cannot know the facts that constitute an actionable claim. The discovery rule is a rule of equity that ameliorates "the often harsh and unjust results [that] flow from a rigid and automatic adherence to a strict rule of law."

The discovery rule focuses on "an injured party's knowledge concerning the origin and existence of his injuries as related to the conduct of another person. Such knowledge involves two key elements, injury and fault. The limitations period begins to run when a plaintiff knows or should know the facts underlying those elements, not necessarily when a plaintiff learns the legal effect of those facts. Thus, the discovery rule encompasses two types of plaintiffs: those who do not become aware of their injury until the statute of limitations has expired, and those who are aware of their injury but do not know that it may be attributable to the fault of another.

[Id. at 492-93 (citations omitted) (emphasis added).]

As correctly noted by Judge Ryan, even applying the Discovery Rule, Rojas's cause of action is barred by the six-year limitation period. Rojas became aware of his right to file suit against Kaess on December 23, 1997, when he received the audit statement from the Division of Taxation. The complaint he filed on May 13, 2004 was thus properly dismissed.

Affirmed.

 
 

 

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A-2347-05T2

 

August 10, 2006