ISABEL S. WEIL v. EXPRESS CONTAINER CORPORATION, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5322-04T35322-04T3

ISABEL S. WEIL,

Plaintiff-Appellant,

v.

EXPRESS CONTAINER CORPORATION, a

Bergen County New Jersey corporation;

STEPHEN J. WEIL; AMY R. WEIL,

individually and as trustee of the

STEPHEN J. WEIL 1996 Family Trust;

ALBERT M. WEIL, individually and

as trustee of the ALBERT M. WEIL

LIVING TRUST; ROBERT BREIER; MARC

E. BERSON; SEA COAST PACKAGING

CORPORATION, a New Jersey corporation;

EXPRESS CONTAINER, L.L.C., a North

Carolina limited liability company;

BATTLEGROUND REALTY, L.L.C., a North

Carolina limited liability company;

WILSON FIDELCO REALTY, L.P., a New

Jersey limited partnership; WILLIAM

D. LIPKIND, individually and as

trustee of the 1990 ISABEL S.

WEIL TRUST, the 1990 STEPHEN J.

WEIL FAMILY TRUST, the 1991 STEPHEN

J. WEIL FAMILY TRUST, and the

STEPHEN J. WEIL 1997 FAMILY TRUST;

PAUL M. PETIGROW; LAMPF, LIPKIND,

PRUPIS, PETTIGROW & LABUE, P.C., a

New Jersey professional corporation;

M.S. ACKERMAN & CO., L.L.P., a New

Jersey limited liability partnership;

MORTON ACKERMAN; BRUCE NADLER,

Defendants,

and

PETER W. TILL; GOLDSTEIN, TILL & LITE,

a New Jersey partnership; GOLDSTEIN,

LITE & DE PALMA, a New Jersey

partnership; ANDREW J. GOLDSTEIN;

ALLYN Z. LITE; JOSEPH J. DE PALMA and

NANCY LEM,

Defendants-Respondents.

________________________________________________________________

 

Argued May 31, 2006 - Decided June 29, 2006

Before Judges Hoens and R. B. Coleman.

On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-150-97E.

David A. Schrader argued the cause for appellant (Schrader & Schoenberg, attorneys; Bruce A. Schoenberg, on the brief).

Arnold B. Calmann argued the cause for respondents Goldstein Till & Lite, Goldstein Lite & DePalma, Allyn Z. Lite and Joseph J. DePalma (Saiber Schlesinger Satz & Goldstein, attorneys; Mr. Calmann, Jeffrey Soos and Dennis E. Kadian, on the brief).

Peter W. Till, respondent pro se, on the letter relying on the brief of respondents Goldstein, Till & Lite, Goldstein, Lite & DePalma, Allyn Z. Lite, and Joseph J. DePalma.

Andrew Goldstein, respondent pro se, on the letter relying on the brief of respondents Goldstein, Till & Lite, Goldstein, Lite & DePalma, Allyn Z. Lite, and Joseph J. DePalma.

Goldstein Issacson, attorneys for respondent Nancy Lem, (Andrew J. Goldstein, on the letter relying on the brief of respondents Goldstein, Till & Lite, Goldstein, Lite & DePalma, Allyn Z. Lite, and Joseph J. DePalma).

PER CURIAM

Plaintiff Isabel S. Weil appeals from the April 29, 2005 order granting summary judgment in favor of defendants Goldstein, Till & Lite, the successor of Goldstein, Lite & DePalma, Allyn Z. Lite, and Joseph J. DePalma (collectively, the GTL defendants) and defendant Peter W. Till, and denying plaintiff's cross-motion for partial summary judgment. We affirm.

The matter now before us is an attorney malpractice claim that arose in connection with claims plaintiff asserted in 1997 against several corporations and individuals. Plaintiff's 1997 claims, which were grounded essentially in her status as a minority shareholder of a series of closely held family-operated corporations, are fully detailed in our decision in her earlier appeal. See Weil v. Express Container Corp., 360 N.J. Super. 599 (App. Div.), certif. denied, 177 N.J. 574 (2003). We decline to repeat those claims here except as needed for clarity. In short, however, we there rejected plaintiff's appeal from decisions adverse to her, concluding that her claims against the corporations or for relief by way of the oppressed minority shareholders statute, see N.J.S.A. 14A:12-7, contemplated the continued existence of the corporate entities, and had been lost during the bankruptcy proceedings in which the assets of those corporations were sold. We further affirmed the decision of the Chancery Division judge to the extent that he had rejected plaintiff's several other claims against the individual defendants, including her father and brother.

Following that appeal, plaintiff returned to the Chancery Division and revived the claims in her 1997 complaint that sounded in legal malpractice, which claims had been severed and stayed pending resolution of the other claims both in the bankruptcy proceeding and in the Chancery Division. She now appeals from the judge's order granting summary judgment in favor of the malpractice defendants. In summary, she asserts that the judge erred in concluding that her legal malpractice claims were too speculative, that her proofs of proximate cause were absent and that the evidence failed to demonstrate that the asserted acts of malpractice resulted in any damage to her.

Only the following facts are relevant to our consideration of the issues on appeal. It is undisputed that plaintiff first discussed her substantive claims with defendant Peter Till, an attorney, in or about August 1995 and that she formally retained him and his firm, the GTL defendants, on October 16, 1995, for the purpose of instituting the litigation against the corporations and her family members. According to her complaint, she and Till discussed the facts and the issues from October 1995 until February 1996, at which point plaintiff received a notice of an annual meeting of the Board of Directors of Express Container Corp., which was then scheduled for February 21, 1996. Plaintiff asserts that Till promised to prepare a complaint and to file it shortly after the meeting, planning to incorporate into the contemplated litigation any further causes of action that arose as a result of that meeting.

Plaintiff further asserts that she and Till continued to discuss the matter thereafter, and that although he told her in May 1996 that he had filed the complaint, in fact he had not done so. Rather, according to her complaint, she learned on January 27, 1997, that the complaint had not been filed. Plaintiff contends that, based on her inquiry to one of Till's partners, a complaint, which had apparently been prepared previously, was filed with her consent on January 29, 1997. She then directed Till and the GTL defendants to take no further action on her behalf, after which she terminated their services and retained new counsel. Her new attorneys concluded that the January 1997 complaint was deficient and they filed an amended complaint on May 2, 1997, which included the legal malpractice claims against Till and the GTL defendants along with the substantive claims against the corporate and individual defendants. In October 1997, the Chancery Division judge severed the malpractice claims and stayed them pending resolution of the substantive issues in the litigation.

The litigation between plaintiff and the other defendants continued thereafter. Throughout the remainder of 1997, the parties to the litigation engaged in discovery, much of it directed to exchange of financial records and much of it relating to work by experts for each side charged with valuing the corporations. On March 24, 1998, Express Container filed for the protection of the bankruptcy court and the other corporate defendants did likewise shortly thereafter. Plaintiff filed a proof of claim in the bankruptcy proceeding and participated in that forum. She objected to the plan of reorganization filed by Express Container and in particular objected to the termination of her shareholder's rights. Those objections were decided adversely to her and the reorganization plan was accepted. Plaintiff pursued an appeal of that decision, which was also decided adversely to her in federal court in February 1999.

In November 1998, after the approval of the plan of reorganization, the litigation was remanded to the Chancery Division. In June 1999, plaintiff's attorneys filed an amended complaint in the Chancery Division action where the surviving state court claims, except for the still-severed malpractice claims, were then litigated. Discovery, including depositions of the parties and the fact witnesses, continued throughout most of 2000. In 2001, the motions that resulted in the orders that we considered in our earlier decision on appeal were heard and decided. By August 2001, the substantive matter was concluded, adversely to plaintiff.

After the remand from the bankruptcy court but prior to the resolution of the issues and prior to the revival of the malpractice claims, plaintiff also filed an ethics complaint against Till. On May 9, 2001, he was reprimanded for his conduct in connection with plaintiff's complaint, which were found to be violations of R.P.C. 1.3, R.P.C. 8.4(c), and R.P.C. 1.1(a). See In re Till, 167 N.J. 276 (2001).

The malpractice claims were revived in or about June 2004. In February 2005, the GTL defendants and defendant Till filed their motions for summary judgment. In support of those motions, counsel for both Till and the GTL defendants filed an extensive and detailed Statement of Material Facts Not In Dispute. See R. 4:46-2(a). In March 2005, plaintiff cross-moved for partial summary judgment. In doing so, she did not respond to defendants' Statement of Material Facts Not In Dispute and did not file her own statement, as required by the rules. See R. 4:46-2(b). Instead, she provided the motion judge with a copy of the appendix of materials that had accompanied her original appeal to this court. In opposing defendants' motion for summary judgment, plaintiff argued that her attorney's delay in filing the complaint caused her damages. More specifically, she reasoned that her claims, each of which had value, were ultimately lost as a result of the bankruptcy proceedings. She argues that, had the attorney filed the complaint when he promised, or in any event had he done so sooner than the time in May 1997 when her substitute counsel filed that complaint, she would not have lost these valuable claims. The motion judge rejected this argument, concluding that it was speculative and failed to demonstrate proximate cause. Plaintiff now asserts that the judge erred.

We first note that on appeal from an order granting summary judgment, we apply the same standard that governs the analysis by the motion judge. Prudential Property & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998); see Antheunisse v. Tiffany & Co., 229 N.J. Super. 399, 402 (App. Div. 1988), certif. denied, 115 N.J. 59 (1989). We therefore must first determine whether, giving the plaintiff the benefit of all reasonable inferences, defendants demonstrated that there are no genuine issues of material fact. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). We then analyze whether the motion judge's application of the law was correct. See Prudential, supra, 307 N.J. Super. at 167.

Utilizing this standard, we conclude that there are several shortcomings in plaintiff's theory, each of which suffices to support the motion judge's analysis. First, plaintiff has overlooked the fact that her claims must be tested against the standards applicable to legal malpractice claims. In short, in order to prove legal malpractice, a plaintiff must prove a deviation from the standard of care, proximate causation, and damages. Garcia v. Kozlov, Seaton, Romanini & Brooks, P.C., 179 N.J. 343, 357 (2004). More specifically, the plaintiff must prove by a preponderance of the evidence that: "(1) [s]he would have recovered a judgment in the action against the main defendant, (2) the amount of that judgment, and (3) the degree of collectibility of such judgment." Id. at 358 (quoting Hoppe v. Ranzini, 158 N.J. Super. 158, 165 (App. Div. 1978)). See also Jerista v. Murray, 185 N.J. 175, 190-91 (2005). The motion judge concluded that plaintiff could not meet the first part of this test, a conclusion with which we agree. In order to recover against defendants, plaintiff must prove that they committed malpractice and that their negligence damaged her. The record demonstrates that she can prove neither.

Plaintiff asserts that Till's delay in filing the complaint, which she calculates to have been nineteen months in duration, is actionable negligence. This assertion, however, is insufficient. In the absence of an expert opinion explaining the standard of care and identifying a professional deviation, she cannot demonstrate that defendants' actions or their failure to act constitutes malpractice.

The imposition of discipline is not, by itself, sufficient to support the claim of malpractice. See Sommers v. McKinney, 287 N.J. Super. 1, 13 (App. Div. 1996). See also Baxt v. Liloia, 155 N.J. 190, 198-99 (1998). Rather, under New Jersey law, "delay in the prosecution of a client's cause without more is not necessarily malpractice, although it may result in a reprimand and admonition to the attorney." In re Lanza, 24 N.J. 191, 194 (1957). Moreover, identifying an act of malpractice is not sufficient, for plaintiff must also prove her claim, which is conventionally accomplished by proving the "suit within a suit." See Jerista, supra, 185 N.J. at 190-91, 202-03. In this context, in order to withstand summary judgment, plaintiff must show that "had the action been timely filed it would have resulted in a favorable recovery." Conklin v. Hannoch Weisman, 145 N.J. 395, 417 (1996). Even if the complaint was barred for failing to meet the statute of limitations, plaintiff must still demonstrate that the act of malpractice proximately caused the loss. Ibid.

Here, plaintiff offered no evidence demonstrating what the applicable standard of care in these circumstances required or how defendants' actions constituted a deviation. Similarly, plaintiff has not offered any evidence tending to demonstrate that her claims would not have been lost, had Till filed the complaint when he promised he would or even when he said he had. Nor can we overlook the fact that plaintiff had a full and fair opportunity to litigate all of the claims she asserted against all of the individual and corporate defendants save for those lost in the bankruptcy proceeding. As to those litigated claims, our earlier opinion affirmed the decisions adverse to plaintiff. She cannot, under any circumstances, have a valid claim against these defendants for malpractice as to the claims which we have previously rejected on their merits.

Her arguments, as they relate to the claims against the corporations which were, as a practical matter, lost in the bankruptcy, find no support in the record either when viewed in the context of malpractice claims. That is to say, in order to support the assertion that the delay in filing the complaint, however we measure it, caused the loss of the claims against the corporations, plaintiff must demonstrate that, but for the malpractice, she would have succeeded on those claims. She could, theoretically, do so by demonstrating that but for the delay in commencing the litigation, her claim would have been reduced to judgment and satisfied either prior to or in the context of the bankruptcy proceedings. The record, however, contains no evidence supporting that theory. Indeed, the evidence in the record relating to the time needed for discovery and, in particular, for the extensive efforts of the forensic accountants, is to the contrary. Nor is there evidence that, had the complaint been filed and had discovery commenced sooner, the corporations would not have sought the protection of the bankruptcy court earlier as well. Finally, we are also mindful of the fact that plaintiff did assert a claim against the corporations and did participate in the bankruptcy action, where her arguments were considered and rejected on their merits as well.

The motion judge, in granting defendants' motions for summary judgment and in denying plaintiff's cross-motion, referred to her claims, and in particular her proximate cause arguments, as being speculative, based on conjecture and uncertainty. In particular, he wrote:

The delay in defendants' filing of the complaint might have delayed the progress of the case. But when to file a complaint is not an ascertainable certainty. Rather, it is a matter of judgment reserved for the litigation strategist. There is no incommutable timeline of events that occurred here. There is no certainty that the bankruptcy would have been filed when it was or that the companies would have been financially viable; or that the litigation would have progressed to a certain result at a certain time; or that a judgment would have been certain and collectable. To presume so is mere supposition and conjecture. All of Isabel's propositions in this context are speculative. In sum, she cannot prove she was harmed.

Our consideration of the record and our review of plaintiff's arguments on appeal compel us to agree with this analysis and with the judge's conclusions.

Affirmed.

 

Although the order did not refer to defendants Goldstein and Lem, all parties have described the order as final and appealable, agreeing that it ends plaintiff's claims as against the other defendants as well. We do not agree with the suggestion that these defendants were granted summary judgment sub silentio, or with the implicit assumption of the parties that one can create an appeal of right, simply by asserting that an order is final. Notwithstanding the foregoing, in the interests of judicial economy, we deem plaintiff's claims against defendants Goldstein and Lem to have been abandoned, see In re Certification of Need of Bloomingdale Convalescent Ctr., 233 N.J. Super. 46, 48 n.1 (App. Div. 1989), and we grant leave to appeal as to the other defendants nunc pro tunc. See R. 2:2-3(b).

Eventually, the litigation also included claims against accountants who had performed forensic evaluations of the businesses and others. Our published opinion details these claims and the resolution of these claims adverse to plaintiff, but they are not directly relevant to the issues now on appeal, as a result of which we need not discuss these other parties or the claims against them.

By referring to nineteen months, she presumes that he should have filed the complaint when he was first retained, and that he never did so. In fact, however, her complaint concedes that the GTL defendants filed a complaint in January 1997, a period of delay of sixteen months, and also concedes that she knew that Till planned to file the complaint after the Express Container Corporation's Board of Directors meeting in February, which would represent a delay of only eleven months.

We note that because plaintiff failed to respond to defendants' Statement of Material Facts Not in Dispute, by operation of the applicable rule, all of those facts are deemed admitted for purposes of addressing the motion. See R. 4:46-2(b).

(continued)

(continued)

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A-5322-04T3

June 29, 2006