ANNETTE JANKOWSKI v. DEANNA SANDOR, ESQ MEDIATION ASSOCIATES OF NEW YORK

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0770-10T2

ANNETTE JANKOWSKI,

Plaintiff-Appellant,

v.

DEANNA SANDOR, ESQ., MEDIATION

ASSOCIATES OF NEW YORK AND NEW

JERSEY, LLC, SANDOR & SANDOR, LLP,

Defendants-Respondents,

and

JEFFREY JANKOWSKI,

Defendant.

_______________________________________________

Argued May 11, 2011 Decided July 27, 2011

Before Judges Fuentes, Ashrafi and Newman.

On appeal from Superior Court of New Jersey,

Law Division, Bergen County, Docket No.

L-1703-10.

Cindy D. Salvo argued the cause for appellant

(The Salvo Law Firm, P.C., attorneys; Ms.

Salvo, of counsel and on the brief).

Christopher J. Carey, argued the cause for

respondent (Graham Curtin, attorneys; Mr. Carey,

of counsel; Mr. Adrignolo and Anthony Longo, on

the brief).

PER CURIAM

Plaintiff Annette Jankowski appeals from the order of the Law Division dismissing her legal malpractice action against defendants Deanna Sandor, an attorney licensed in New York and in this State, and Mediation Associates of New York and New Jersey, a New York corporation formed by Sandor to provide mediation services in the area of matrimonial disputes.

Plaintiff and her then-husband Jeffrey Jankowski retained Sandor to mediate the dissolution of their marriage and negotiate a property settlement agreement (PSA) disposing of their marital assets. With Sandor's assistance, plaintiff and her husband entered into a PSA through which the husband agreed to relinquish his rights to his pension plan. All relevant conduct at issue in this case took place in New York.

When plaintiff subsequently moved to New Jersey, she discovered that her husband had withdrawn all the pension funds. The husband was able to do this because he never executed and filed a qualified domestic relations order (QDRO) with the administrator of the pension plan. This legal malpractice action is predicated on Sandor's failure to advise plaintiff of the need for a QDRO.

The trial court granted defendants' motions to dismiss plaintiff's complaint finding it barred under New York State's statute of limitations. Notwithstanding this time restriction, the court also found Sandor did not act as plaintiff's attorney during the mediation sessions, and hence did not owe her a duty to advise her on how to secure and perfect her claims against her husband's pension funds. Plaintiff now appeals. We affirm.

I

At all times relevant to this case, Mediation Associates was a limited liability corporation formed under the laws of the State of New York, with offices located in Mount Kisco, New York. Plaintiff and her husband were New York residents, and all of the mediation services provided to them took place in New York.

The Mediation Agreement entered into in New York between plaintiff and her husband and Sandor contained the following relevant provisions:

We understand that the Mediators are acting as "neutrals" here, and in no way, will "represent" either party as attorney. We have not waived our right to consult with and/or retain our own attorneys concerning this or any other matter. . . . We further understand that each of us is free to consult our own independent attorney at any point in the mediation process.

 

Mediation Associates has made it clear that it expects and encourages each of us to consult an independent attorney for review of any Separation Agreement written by Mediation Associates, LLC, and we agree to do so, or will be deemed to have voluntarily waived such review despite informed consent.

 

[(Bold emphasis in original).]

 

The mediation process produced a PSA which plaintiff and her husband signed on January 14, 2003; Sandor notarized the signatures. Of particular relevance here, the PSA stated that plaintiff represented "she has been represented by D'Avanzio & Morreale, PC [of] Somers, New York 10589 and has considered her counsel before signing this Agreement." The PSA also contained the following provisions:

Article XIII

LEGAL REPRESENTATION

1. Both parties understand and agree that they have been advised to seek legal counsel before the signing of this or any Agreement and that their failure to do so may result in a waiver of their rights under the law.

 

2. The Wife represents she has been represented by D'Avanzio & Morreale PC . . . and has considered her counsel before signing this Agreement. The Wife shall pay her own attorney fees.

 

. . . .

 

4. The parties acknowledge and agree that they have reached this Agreement through settlement negotiations with neutral facilitors who have not represented either party, and that all of the agreements contained herein have been reached by full and true disclosure, voluntarily, willingly, knowingly among and between the parties absent duress, misrepresentation or fraud. The parties further acknowledge that the mediator who prepared this Agreement acted only as a Scrivener.

. . . .

 

Article XIV

 

FULL DISCLOSURE

 

1. . . . Each party acknowledges that he or she has had ample opportunity to confer with his or her own attorney and with full knowledge of the legal consequences of the intended binding effect of this Agreement . . . .

 

[(Bold emphasis in original, other emphasis added).]

Through the PSA, the husband agreed to "waive[] all rights, title and interest in the Rexam Combined Pension Plan . . . ." On or around July 1, 2003, almost seven months after entering into the PSA, the husband withdrew all of the assets in the pension plan. Plaintiff did not learn of this until September 2009. She resided in New Jersey at the time. According to a letter from Rexam, there had been no valid assignment of the plan's benefits to plaintiff because Rexam never received a QDRO pursuant to the Early Retirement Income Security Act of 1974 (ERISA), Pub. L.No. 93-406, 88 Stat.829 (codified as amended in scattered sections of 5 U.S.C., 18 U.S.C., 26 U.S.C., 29 U.S.C., and 42 U.S.C.). Although Rexam indicated it was made aware of the PSA in late 2004, the husband was paid a lump sum of his entire benefit on July 1, 2003, after terminating employment, thereby depleting all of the fund's assets.

Plaintiff and her husband finalized their divorce in New York on March 18, 2005. Mediation Associates was dissolved on March 6, 2007. Despite this, a second mediation session occurred in December 2007 for the purpose of modifying the husband's alimony payments. A new mediation agreement was not signed because the parties viewed the 2007 session as a continuation of the previous mediation agreement. Plaintiff paid for this session by check issued to Sandor and Sandor, LLP, a corporate entity formed under the laws of New York on January 3, 2007. Plaintiff and her former husband currently reside in New Jersey.

II

In her complaint, plaintiff asserted a count of legal malpractice alleging that "[a]t all relevant times, an attorney-client relationship existed between Sandor/Mediation Associates/Sandor & Sandor and plaintiff." Plaintiff also included a second count based on negligent misrepresentation, alleging that "Sandor negligently misrepresented to [plaintiff] that no further action was necessary to protect [plaintiff]'s interest."

Defendants moved to dismiss with prejudice arguing that: (1) the allegations are time barred by either New York's or New Jersey's statute of limitations; (2) Sandor and Mediation Associates did not owe plaintiff a duty to act as her attorney with respect to the negotiation that led to the PSA; (3) Sandor is entitled to quasi-judicial immunity; (4) Mediation Associates no longer exists and cannot properly be served; and (5) Sandor and Sandor LLP cannot be held liable for events that occurred prior to its existence.

Defendants submitted a certification in support of the motion to dismiss which alleged that plaintiff resided in New York at the time of the mediations; all of the mediations took place in New York; Sandor acted as a mediator between plaintiff and her former husband; Sandor also certified that at all times relevant to the complaint, she did not own property or have any offices in New Jersey, Mediation Associates was dissolved on March 6, 2007, and that Sandor and Sandor LLP was formed on January 3, 2007 with no predecessor entities. Plaintiff's certification in opposition to the motion to dismiss did not dispute these facts.

On these facts, Judge Harz issued a memorandum of opinion reflecting her factual findings and explaining her reasons for granting defendants' motion to dismiss. Judge Harz found this legal malpractice action was governed by New York's three-year statute of limitations. N.Y. C.P.L.R. 214(6). The judge did not find any basis to toll the statute's time restrictions. Plaintiff's complaint was thus time-barred because it was filed more than three years after her cause of action accrued. Assuming the action was timely filed, Judge Harz also held that no attorney-client relationship existed between plaintiff and defendants under New York law. In this light, Sandor did not owe a duty to provide plaintiff with legal advice concerning how to collect her claim against her former husband's pension plan.

III

We affirm substantially for the reasons expressed by Judge Harz in her memorandum of opinion dated September 2, 2010. We add only the following brief comments.

Pursuant to Rule 4:6-2(e), when a motion to dismiss, based on failure to state a claim upon which relief can be granted, includes matters outside the pleadings, it shall be treated as one for summary judgment and disposed of pursuant to Rule 4:46. Although this standard may not have been expressly stated at the trial level, when the parties' certifications are considered, defendants' Rule 4:6-2(e) motion is automatically converted to a motion for summary judgment. See Pressler & Verniero, Current N.J. Court Rules, comment 4.1.2 on R. 4:6-2(e) (2011).

"In resolving a summary judgment motion, both the trial court and appellate court must view the facts in the light most favorable to the party opposing the motion, and, if the competent evidential materials, when viewed in that light, present material issues of disputed fact, summary judgment must be denied." Lederman v. Prudential Life Ins. Co., 385 N.J. Super. 324, 337 (App. Div.), certif. denied, 188 N.J. 353 (2006) (citing Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995)).

New Jersey courts apply this state's choice of law rules. Rowe v. Hoffman-La Roche, Inc., 189 N.J. 615, 621 (2007). In a choice of law analysis, the first step is to determine whether a conflict of laws actually exists. P.V. ex rel T.V. v. Camp Jaycee, 197 N.J. 132, 143 (2008). Here, as the parties concede, the statutes of limitations of New York and New Jersey are in conflict. As stated by the trial court:

New Jersey's statute of limitations [for legal malpractice] is six years while New York's statute of limitations [for legal malpractice] is three years. N.J.S.A. 2A:14-1; N.Y. C.P.L.R. [] 214(6). Additionally, while New York has a discovery rule, it is much more narrowly circumscribed than New Jersey's discovery rule. Keil v. Nat. Westminster Bank, 311 N.J. Super. 473, 489-90 (App. Div. 1998). New York only allows the tolling of a claim for legal malpractice under the continuous representation theory.

 

Because the PSA was prepared in 2003 but the "injury" was not discovered until 2009, the application of the New York law, if not tolled, bars plaintiff's claim, while the New Jersey statute will not. Further, to the extent that plaintiff's claim relies on the existence of a duty between defendant as an attorney and plaintiff as a non-client third party, the laws of New Jersey and New York differ with regard to the scope of such a duty.

Once a conflict is established, New Jersey courts normally apply the presumption in section 146 of the Restatement (Second) of Conflict of Laws (1971), which provides that the local law of the place of the injury will apply. Camp Jaycee, supra, 197 N.J. at 136. "Once the presumptively applicable law is identified, that choice is tested against the contacts detailed in section 145 and the general principles outlined in section 6 of the Second Restatement." Ibid.

However, under section 146, the law of the place of the injury is only presumed in a personal injury action, which is not the case here. Restatement (Second) of Conflict of Laws 146. Under section 145 of the Second Restatement, the following are the relevant factors a court must consider:

Contacts to be taken into account in applying the principles of sections 145 and 6 to determine the law applicable to an issue include:

 

(a) the place where the injury occurred,

 

(b) the place where the conduct causing the injury occurred,

 

(c) the domicil, residence, nationality, place of incorporation and place of business of the parties, and

 

(d) the place where the relationship, if any, between the parties is centered.

 

These contacts are to be evaluated according to their relative importance with respect to the particular issue.

 

[Restatement (Second) of Conflict of Laws 145.]

 

The trial court found the "place where the injury occurred" was New York because that is where any alleged advice concerning the need for a QDRO would have been given. Plaintiff's argument identifying the place where the injury occurred as New Jersey because that is where she suffered the economic impact of the injury is unavailing. As noted by the Restatement:

Situations do arise . . . where the place of injury will not play an important role in the selection of the state of the applicable law. This will be so, for example, when the place of injury can be said to be fortuitous or when for other reasons it bears little relation to the occurrence and the parties with respect to the particular issue (see 146, Comments d-e). This will also be so when, such as in the case of fraud and misrepresentation (see 148), there may be little reason in logic or persuasiveness to say that one state rather than another is the place of injury, or when, such as in the case of multistate defamation (see 150), injury has occurred in two or more states. Situations may also arise where the defendant had little, or no, reason to foresee that his act would result in injury in the particular state. Such lack of foreseeability on the part of the defendant is a factor that will militate against selection of the state of injury as the state of the applicable law. Indeed, application of the local law of the state of injury in such circumstances might on occasion raise jurisdictional questions (see 9, Comment f).

 

[Restatement (Second) of Conflict of Laws

145, comment e.]

 

Here, it is not disputed that the parties resided in and attended mediation sessions in New York and that at the time of the mediation, New York was the only state with any connection to the parties. This leads only to one conclusion: the injury - the alleged malpractice and misrepresentation - occurred in New York.

As to the second factor, the "place where the conduct causing the injury occurred," with respect to Sandor and her associated law firms, the conduct occurred in New York. While it is unclear where plaintiff's former husband resided when he withdrew the pension funds, such an inquiry is irrelevant. With respect to plaintiff's malpractice claims, all relevant conduct on the part of Sandor occurred in New York.

As to the third factor, the "domicil, residence, nationality, place of incorporation and place of business of the parties," the importance of each will frequently depend upon the particular issue involved and varies with the nature of the interest affected. Restatement (Second) of Conflict of Laws 145, comment e. These factors are less important "if the interest is a business or financial one." Ibid. Similarly, "[t]he fact, for example, that one of the parties is domiciled or does business in a given state will usually carry little weight of itself." Ibid.

For obvious reasons, this factor weighs strongly in favor of New York. Sandor's conduct occurred in New York and the law firms she is or was associated with were or are located in New York. All of the contacts between the parties occurred in New York, where plaintiff and her former husband then resided. Plaintiff's residence in New Jersey, at the time she filed this complaint, is irrelevant in this analysis.

Finally, in light of the issue here - professional malpractice - New York's interest is clearly greater than New Jersey's. The conduct occurred in New York and Sandor was licensed to practice law in New York. Thus assuming Sandor was "practicing law" when she interacted with plaintiff and her former husband, New York has a strong interest in the manner its attorneys dispense legal services to New York-domiciled consumers. At the time of the mediation and separation, there was never any interest in this matter attributable to New Jersey.

After examining the section 145 factors, New Jersey courts weigh them against the factors of section 6. Camp Jaycee, supra, 197 N.J. at 147. Those factors are: "(1) the interests of interstate comity; (2) the interests of the parties; (3) the interests underlying the field of tort law; (4) the interests of judicial administration; and (5) the competing interests of the states." Ibid. (internal quotations and citation omitted).

Weighing these factors does not diminish New York's greater interest in this case. Although both states have some interest in the subject matter of this case, New Jersey's interest in seeing that a recently domiciled plaintiff is compensated for an alleged instance of professional malpractice that occurred in New York, pales in comparison to New York's interest in regulating the practice of law and ensuring the proper conduct of businesses offering mediation services.

Evaluating the parties' respective interests requires a court to determine the expectations of the parties and their need for predictable results. Fu v. Fu, 160 N.J. 108, 123 (1999). On this record, it is highly unlikely that the parties expected that their conduct may subject them to liability in this State.

When one state's laws are stricter than the other state's, applying the more relaxed law interferes with the policies of the stricter state, and undermines uniformity and predictability of judicial administration. Cornett v. Johnson & Johnson, 414 N.J. Super. 365, 381 (App. Div. 2010), certif. granted, ___ N.J. ___ (2011). New York's statute of limitations and the absence of the discovery rule doctrine as a means of tolling its application are far stricter than New Jersey's analogous rules regarding attorney malpractice. Applying New Jersey law in this case would impair New York's ability to regulate attorney conduct within its borders, especially in light of the fact that all conduct between plaintiff and defendant occurred in New York. See ibid. For the same reasons, interstate comity is furthered when we "defer[] to the rights of other jurisdictions to regulate conduct within their borders," especially when that conduct is continual and directed at both residents and non-residents. Camp Jaycee, supra, 197 N.J. at 153.

F

or these reasons, the trial court correctly decided the conflict of laws issue in this case in favor of New York. Plaintiff's legal malpractice and negligent misrepresentation action against Sandor and her affiliated corporate entities are time-barred under New York law.

Affirmed.