RHEA ALMEIDA v. JULIE M. MARINO, ESQ
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION DOCKET NO. A-2749-09T3
JULIE M. MARINO, ESQ. and
MARINO & MAURICE, P.C.,
December 23, 2010
Argued November 30, 2010 - Decided
Before Judges Baxter, Koblitz and Newman.
On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-4590-07.
Louis David Balk argued the cause for appellant (Balk & Cistrelli, P.A., attorneys; Mary M. Theroux, on the briefs).
Michael J. Marone argued the cause for respondent Julie M. Marino (McElroy, Deutsch, Mulvaney & Carpenter, LLP, attorneys; Mr. Marone and William F. O'Connor, Jr., of counsel and on the brief).
Kaufman Borgeest & Ryan LLP, attorneys for respondent Marino and Maurice, P.C. (Kristopher M. Dennis joins in the brief and relies on the arguments of respondent Julie M. Marino).
In this legal malpractice action, plaintiff Rhea Almeida appeals from a January 15, 2010 Law Division order granting the summary judgment motion of defendants, Julie M. Marino and Marino & Maurice, P.C., the firm in which she was a partner.1 We agree with the trial judge's conclusion that even if, as plaintiff claims, plaintiff accepted and executed the matrimonial property settlement agreement (PSA) only because defendant promised to subsequently attempt to obtain further discovery and negotiate for additional terms not contained within the PSA, principles of judicial estoppel preclude plaintiff from bringing a malpractice claim against her attorney and the attorney's firm. We affirm.
In May 1999, plaintiff retained defendant to represent her in her divorce, which had been pending since June 1998. After participating in the matrimonial early settlement program, Rule 5:5-5, as well as mediation on the economic issues, plaintiff and her then-husband, Richard Ginsberg, settled the terms of their divorce on April 16, 2001. Their settlement was memorialized in a twenty-eight page PSA, which resolved the issues of custody, parenting time, child support, alimony, life insurance, and equitable distribution.
On April 17, 2001, Almeida and Marino reviewed the PSA and numerous handwritten changes for approximately an hour and one-half prior to appearing before Judge Paul W. Armstrong. The judge questioned both Almeida and Ginsberg concerning their acceptance of the terms of the PSA and their respective requests that the PSA be incorporated in the Judgment of Divorce. Under oath, on the record, Almeida assured Judge Armstrong that: she signed and understood the PSA; it was the product of lengthy negotiations; numerous changes were made to the PSA and she had initialed each and every one of those changes; no one coerced her or forced her to settle the terms of her divorce or enter into the PSA; she entered into the PSA voluntarily and freely; she was not under any undue influence, nor was she impaired by drugs or alcohol; she was fully satisfied with the legal representation Marino had provided; she had had sufficient time to consider the PSA and its provisions; and she understood she would be bound by the Judgment of Divorce, which would incorporate the PSA.
After Ginsberg provided similar assurances, Judge Armstrong found that Almeida and Ginsberg each understood the terms of the PSA, had been afforded sufficient time to consider its terms, had entered into it freely and voluntarily, and that each believed the agreement was a "fair and equitable resolution of the differences between them."
Notably, the PSA contained three sections that have a bearing upon the malpractice action Almeida filed against Marino. First, Almeida agreed that she had read the agreement and entered into its terms freely and voluntarily without any duress or undue influence:
[T]he parties respectively fully understand the terms, conditions and provisions of this Agreement and believe same to be fair, just, adequate and reasonable, and, accordingly, both the Husband and the Wife, after mature consideration, freely and voluntarily, and without any coercion, duress or undue influence accept such terms, conditions and provisions.
Second, the PSA specified that the document was the entire understanding between the parties and there were no representations other than those expressed in the PSA:
The parties acknowledge that the provisions of this Agreement and its legal effect have been fully explained to each of them by independent counsel of their own choosing. The parties further acknowledge that they have read this Agreement and understand its provisions, and that this Agreement contains the entire understanding between the parties, and there are no representations, warranties, covenants or undertakings other than those expressly set forth herein.
Third, Almeida acknowledged that even though Marino had not yet propounded interrogatories on Ginsberg, or taken Ginsberg's deposition, and Marino consequently might not be in a position "to fully advise" Almeida relative to all assets subject to equitable distribution, Almeida was nonetheless desirous of settling of her divorce and entering into the PSA:
The Husband and Wife expressly acknowledge and agree one to the other as well as acknowledging for the benefit of their respective counsel that the within Agreement has been negotiated by the parties with the help of their attorneys. However, the parties expressly acknowledge that they are aware that neither party has answered Interrogatories nor have depositions been taken. The parties and each of them have expressly acknowledged that they have advised their attorneys that they are willing to execute the within Agreement notwithstanding the lack of discovery. Each party acknowledges . . . [that] their respective counsel . . . may not be in the position to fully advise the respective client relative to all assets which may be subject to equitable distribution. Notwithstanding this fact, each party wishes to enter into this Agreement feeling that they are sufficiently cognizant of the assets of the other and that they are willing to proceed as hereinabove set forth.
On August 31, 2002, Ginsberg died in a kayaking accident. Although Ginsberg had established life insurance policies naming his daughters as beneficiaries, as required by the PSA, the trust naming Almeida and an unnamed "local banking institution" as co-trustees of the life insurance trusts had not been finalized by the time of Ginsberg's death.
Almeida filed a caveat against Ginsberg's will, ultimately filing a complaint against his estate in the Probate Part. She did not prevail in the Probate Part action, or on appeal, see In re Estate of Richard S. Ginsberg, No. A-5154-03 (App. Div. October 25, 2005).
On April 12, 2007, Almeida filed the legal malpractice action that is the subject of this appeal, alleging that Marino refused to consider documents provided by plaintiff, "failed to conduct proper discovery which would have produced information [that] would have been beneficial to [Almeida] and which caused [Almeida] to suffer serious economic loss in the ultimate award of equitable distribution and support;" and, at the time Marino ceased representing Almeida in March 2002, Marino had failed to take steps to "correct the damage done" to plaintiff as a result of Marino's negligence.
Although not alleged in her complaint, Almeida testified during her deposition in the legal malpractice action that she signed and accepted the PSA only because Marino advised her that she should execute it first and then, after the divorce was granted, attempt to obtain further discovery and negotiate for additional items not contained in the PSA. During her deposition, Almeida was asked to explain why she had failed to tell Judge Armstrong that she had a side agreement with her attorney that the PSA would not be the final document because Marino would pursue further discovery. Almeida answered:
. . . I [didn't] believe it was the appropriate forum to tell the judge there were things left out, that was between [Ms. Marino] and me. So I didn't think that was the appropriate forum at all.
When pressed, and asked to explain why she did not think it was "appropriate" to tell the judge there was "more that needs to be done," Almeida answered:
[Almeida]: Because I was not advised to do that. I wasn't coached to do that. I was coached by [Ms. Marino] to sign the document the way it was prepared, even though I raised issues about certain things and she said, we'll get this done and then we'll follow up. I trusted her guidance and did what she asked me to do.
[Counsel:] So are you saying to me that when you were in court affirming to the court that this was the entirety of your divorce settlement, that you understood that it was the end and there was nothing more to be done; are you saying that you were deceiving the court?
[Almeida:]I don't believe it was deception. I believe it was indicating trusting [sic] the judgment that I got from my lawyer at the time to follow up with things.
There were many things including the various deeds that were not procured at the time of this signing, and that I know happens a lot of times with divorces. I should also say that neither I nor my ex-husband were put on the stand and asked whether we were telling the truth and nothing but the truth, we were not put in that position.
[Counsel:] Do you need to be put on the stand before you will tell the truth?
[Almeida:] No, because I am indicating to you that I just know that that should have been done because I have seen it done in other cases. It was not done in our case.
[Counsel:] When a judge speaks to you in court, don't you think you ought to tell the truth?
[Counsel:] Don't you think by omitting what you are telling us that Ms. Marino -- what you claim Ms. Marino told you, don't you think that was a deception by omission?
[Almeida:]I don't believe it was a deception at all, no, sir.
In her deposition testimony, Almeida also asserted that not until after Ginsberg died, and she for the first time saw his life insurance policy, did she realize that he had considerably more life insurance than the amount she had been told. Referring to Marino, Almeida asserted "we were doing this blindly because we didn't see the face value of what he really had." Thus, at her deposition Almeida insisted that she was unhappy with her divorce settlement because she had been put in a position of negotiating the terms of the divorce without knowing the full extent of her former husband's assets.
She also maintained in her deposition that she had accepted Marino's advice about designating a "local banking institution" as co-trustee of the life insurance policies for the benefit of the parties' children even though her accountant had advised her that such a designation might not accomplish her goals and, in her words, "might not be the greatest thing." When asked why she "went ahead, anyway and signed the agreement," she answered that Marino was her lawyer and she "didn't fight her because she was representing me."
Almeida conceded that her claim in the malpractice case -- that Marino had assured her they could pursue additional discovery after the divorce was granted -- was entirely at odds with the provision in the PSA stating that the document represented the entire agreement and the parties were satisfied with its terms. Moreover, even though she had told Judge Armstrong she had ample time to review the PSA, and satisfy herself that its terms were agreeable to her, she insisted at her deposition that she "didn't have time to look at it, to digest it, to say wait a minute, do I have assurance here that this will happen. Because a lot of changes . . . were made under very stressful conditions in the courthouse in the cafeteria where the entire memorandum of understanding was changed."
At the conclusion of discovery, Marino sought, and obtained, partial summary judgment on the issue of damages. She then moved for summary judgment dismissing Almeida's entire claim, arguing that Almeida's sworn statements before Judge Armstrong -- in which she testified that she considered the PSA to be fair and equitable, understood its terms, was satisfied with the legal advice provided by Marino, and understood she was bound by the PSA -- barred Almeida from proceeding with a malpractice complaint. Marino also argued Almeida failed to demonstrate that Marino had deviated from accepted professional standards.
On January 15, 2010, in a written opinion, Judge LeBlon granted Marino's summary judgment motion, thereby dismissing Almeida's malpractice complaint with prejudice. Relying on Ziegelheim v. Apollo, 128 N.J. 250 (1992), and Puder v. Buechel, 183 N.J. 428 (2005), the judge held that Almeida's testimony that she was satisfied with the resolution of her divorce and with the legal representation Marino provided, precluded, as a matter of law, her later claim of malpractice against Marino and Marino's law firm.
On appeal, plaintiff maintains: 1) the grant of summary judgment was improper because there were genuine issues of material fact that should have been resolved by a jury; and 2) the grant of partial summary judgment that drastically reduced Almeida's damages claim was premature because discovery had not been completed.
We review the trial court's grant of summary judgment de novo. See Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). Employing the same standard the trial court uses, ibid., we review the record to determine whether there are material factual disputes and, if not, whether the undisputed facts viewed in the light most favorable to plaintiff nonetheless entitle defendants to judgment as a matter of law. See Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
We begin our review by analyzing the two decisions upon which the motion judge relied in granting defendant's summary judgment motion. Ziegelheim v. Apollo, supra, involved a legal malpractice matter arising out of a divorce, in which a matrimonial litigant sued her divorce attorney, after having assured the matrimonial judge that she was satisfied with the legal services rendered by her attorney, and believed the divorce settlement was fair and equitable. Ziegelheim, supra, 128 N.J. at 257. The Supreme Court began by observing that litigants rely heavily on an attorney's advice when deciding whether to settle a claim:
New Jersey . . . has a longstanding policy that encourages settlements, but . . . [a]lthough we encourage settlements, we 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 [S]tate advise clients with respect to settlements with the same skill, knowledge, and diligence with which they pursue all other legal 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.
[Id. at 263.]
Ultimately, the Court held that a litigant's statement on the record that he or she "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. For that reason, the Court reversed the grant of summary judgment to the plaintiff's divorce lawyer, thereby permitting the plaintiff to proceed to trial on claims that her attorney convinced her to accept a settlement that a "reasonably prudent attorney would have advised against accepting," id. at 260, failed to undertake a proper investigation and failed to discover concealed assets, id. at 265, failed to correctly memorialize the settlement in the PSA, id. at 266, and failed to present the offer in writing so that the plaintiff could review the terms and assess the overall fairness of the agreement, id. at 266-67. Thus, a client's acceptance of the settlement, and testimony that the settlement was fair and equitable, did not foreclose a later suit against the lawyer for malpractice. Id. at 266-67.
In Puder v. Buechel, supra, the Supreme Court revisited the effect of a prior settlement on a subsequent legal malpractice action. There, a dissatisfied matrimonial litigant sued her former lawyer over a rejected settlement after retaining new lawyers, who negotiated a new settlement that was "substantially similar" to the earlier disputed settlement. Puder, supra, 183 N.J. at 433. The client told the trial judge under oath that the second settlement was both fair and acceptable. Id. at 433-34. However, unlike Ziegelheim, supra, in which the divorce settlement was not a bar to a later malpractice suit, 128 N.J. at 265-67, in Puder, the Court held that the client's acceptance of the settlement barred a subsequent malpractice action against her lawyer. 183 N.J. at 443. The Court observed that "unlike the plaintiff in Ziegelheim, Mrs. Buechel2 entered into the second settlement admittedly aware of the discovery deficiencies leading up to the first settlement." Ibid. The Court observed that "a client should not be permitted to settle a case for less than it is worth . . . and then seek to recoup the difference in a malpractice action against [the] attorney," ultimately holding that the client's acceptance of the settlement barred her from suing her lawyer for malpractice. Ibid.
In Puder, looking back upon its opinion in Ziegelheim, the Court observed:
. . . [O]ur holding in Ziegelheim was not meant to open the door to malpractice suits by any and every dissatisfied party to a settlement. That is precisely why [we held in] Ziegelheim . . . that many malpractice claims could be averted if settlements were explained as a matter of record in open court in proceedings reflecting the understanding and assent of the parties. Zielgelheim's reasoning discourages malpractice litigation when a court finds that a plaintiff, although well aware that the attorney was negligent, nevertheless testifies under oath that the settlement was both acceptable and fair.
[Id. at 443 (internal quotation marks and citations omitted).]
In concluding that the dissatisfied client should not be permitted to sue her former lawyer because she had "entered into the second settlement admittedly aware of the discovery deficiencies leading up to the settlement," id. at 444, the Puder Court also relied upon the principles of judicial estoppel that we had applied in Newell v. Hudson, 376 N.J. Super. 29 (App. Div. 2005). Id. at 443-44. Although the Court observed in Puder that Newell "implicate[d] different policy considerations and involve[d] facts that [were] distinguishable, the [Newell] panel's reasoning" was "instructive." Id. at 443.
We turn now to Newell, as we conclude that the present appeal is governed not by Ziegelheim or Puder, but rather by the principles of judicial estoppel we articulated in Newell. Judicial estoppel "is 'an equitable doctrine precluding a party from asserting a position in a case that contradicts or is inconsistent with a position previously asserted by the party in the case or a related legal proceeding.'" Newell, supra, 376 N.J. Super. at 38 (quoting Tamburelli Props. v. Cresskill, 308 N.J. Super. 326, 335 (App. Div. 1998)).
In Newell, the client testified during the divorce proceeding that she understood the terms of the PSA and voluntarily entered into the agreement. Id. at 32. Later, in a malpractice action against her matrimonial attorney, the plaintiff asserted that the attorney failed to conduct appropriate discovery. Id. at 34. The plaintiff repudiated her earlier statement about the PSA, and "testified that her sworn testimony to [the matrimonial judge] which she understood was being offered to obtain his approval of the settlement, was false." Ibid.
On appeal, we found that the principles of judicial estoppel applied because the plaintiff had "intentionally misrepresented in the matrimonial action with secret intent to obtain judicial approval of the agreement and a divorce." Id. at 47. In affirming the grant of summary judgment to the defendant lawyer, we concluded the doctrine of judicial estoppel was designed to prevent such "self-serving" and "inconsistent judicial position-taking" behavior. Ibid.
Like the plaintiff in Newell, Almeida assured the judge under oath that she was satisfied with Marino's services, the agreement was "fair and equitable," she had sufficient time to review its terms, and understood she would be bound by the PSA, while in the next breath she insisted at her deposition that she had accepted some portions of the PSA "blindly" because she and Marino did not know the full extent of Ginsberg's assets and she had ignored her accountant's warnings about the insurance trust only because Marino assured her they would be able to continue with discovery and secure more favorable terms later. As we observed in Newell, this sort of duplicity, in which the dissatisfied client sues her lawyer for malpractice and repudiates the sworn statements she made to the matrimonial judge to secure the judge's approval of the settlement, bars the client from later suing her lawyer for malpractice. Ibid.
As in Newell, supra, 376 N.J. Super. at 46, Almeida "waived her right to further discovery," and "[i]n order . . . to subsequently pursue this malpractice action, she had to disavow her prior contradictory sworn testimony" before Judge Armstrong. Having "intentionally misrepresented in the matrimonial action with secret intent to obtain judicial approval of the agreement and a divorce, as she now claims she did, she is subject to judicial estoppel of her legal malpractice claim." Id. at 47. Her "inconsistent judicial position-taking" bars her malpractice claim against Marino. Ibid.3
Almeida's circumstances bear absolutely no similarity to the plaintiff in Ziegelheim, who, at the time she accepted her divorce settlement, believed her lawyer had given her good advice when he advised her that judges typically do not award wives more than twenty percent of the marital estate. Ziegelheim, supra, 128 N.J. at 257. Only later did the plaintiff in Zielgelheim learn that such advice was incorrect and that her former lawyer's advice was so deficient as to deviate from accepted professional standards. Ibid.
Nor do Almeida's circumstances bear any similarity to the circumstances in Guido v. Duane Morris, LLP, 202 N.J. 79, 95 (2010), in which the dissatisfied plaintiffs did not represent to the court that they were satisfied with the settlement, or that the settlement was "fair and adequate." Instead, "[t]he entirety of the colloquy between the court and plaintiffs concerning the settlement addressed but two questions: whether plaintiffs understood and agreed to abide by the settlement terms, and whether plaintiffs were subject to any impediment in understanding those terms." Ibid.
In determining that the plaintiffs in Guido should not be foreclosed from filing a legal malpractice claim against their prior counsel, the Supreme Court emphasized that "[g]laringly absent" from the record was "any representation by plaintiffs that the settlement was 'fair' and 'adequate,' a representation deemed crucial in Puder." Ibid. Obviously, the present appeal bears no similarity to Guido, as Almeida assured the judge that the settlement was "fair" and "adequate," even though she now claims to have entertained considerable doubts on that subject.
Moreover, Judge LeBlon was correct when he determined that there were no genuine issues of material fact. Plaintiff asserted in the Law Division, and continues to assert before us on appeal, that she was entitled to have a jury decide whether Marino promised to undertake additional discovery and pursue further negotiations after the divorce was granted. As we have already concluded, even if such a promise had been made, Almeida's failure to disclose it, and her assurances to Judge Armstrong that she was satisfied with Marino's services and considered the agreement fair and equitable, bar her, under principles of judicial estoppel, from now seeking to repudiate those claims in a malpractice action by asserting that she was in fact not satisfied with the settlement Marino had achieved on her behalf and intended after the trial to undo that very agreement. Thus, the "promises" to which Almeida now points are irrelevant as a matter of law. There was consequently no genuine issue of material fact that barred the judge from granting defendant's summary judgment motion.
1 The term "defendant" used throughout this opinion shall refer to defendant Julie Marino unless the context indicates or suggests otherwise.
2 Because Puder v. Buechel began as a collection case by the attorney, and the client counterclaimed for malpractice, the plaintiff Puder was the lawyer, and the defendant Buechel was the client. Id. at 430.
3 In light of our disposition of the appeal, we need not reach plaintiff's claim that the judge erred by dismissing the majority of her damages claim.