FRANK DEVONE v. DOMINIC S. FAVIERI, JR., ESQUIRE

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1193-05T11193-05T1

FRANK DEVONE,

Plaintiff-Appellant/

Cross-Respondent,

v.

DOMINIC S. FAVIERI, JR., ESQUIRE,

Defendant-Respondent/

Cross-Appellant.

________________________________________________________________

 

Argued February 6, 2007 - Decided March 5, 2007

Before Judges Skillman and Lisa.

On appeal from the Superior Court of New Jersey, Law Division, Camden County, L-2814-03.

Mark J. Molz argued the cause for appellant/cross-respondent (Mark J. Molz, attorney; Stephen Cristal, on the brief).

Mario A. Iavicoli argued the cause for respondent/cross-appellant.

PER CURIAM

Plaintiff, Frank Devone, appeals from a summary judgment dismissing his legal malpractice claim against defendant, Dominic S. Favieri, Jr., Esquire. The motion judge concluded that the records contained no evidence to establish proximate cause between defendant's allegedly improper conduct and the loss claimed by plaintiff. We agree with the judge's analysis and affirm. Defendant has filed a protective cross-appeal from the refusal by the motion judge to further determine that plaintiff's claim was precluded by principles of collateral estoppel and the entire controversy doctrine. In light of our disposition of the appeal, we will not address the arguments raised by defendant in his cross-appeal.

In 1996, plaintiff and Joseph Marini retained defendant for representation in their proposed purchase of a marina business. Defendant formed two corporations, one to own the real estate and operate the marina business, and the other to own a liquor license and operate the restaurant business. Plaintiff and Marini were equal owners of the shares of both corporations. The purchase price of the business was $1,100,000. The buyers obtained a $770,000 commercial loan and the sellers took back a second mortgage for $150,000. Plaintiff obtained $210,000 from his mother and uncle, which was also used in connection with the purchase of the business.

By the summer of 1997, the business was not prospering. Plaintiff and Marini were unable to meet the obligations of the business, which was falling into debt. Disputes arose between plaintiff and Marini about the business operation.

In July 1997, plaintiff obtained separate counsel, J.P. Reilly, Jr., Esquire. Reilly filed two lawsuits in Camden County. One, in the Law Division, was on behalf of plaintiff's uncle and mother against plaintiff (who, at that time, was Reilly's client) and Marini, seeking repayment of the $210,000 they had advanced. The second action was filed in the Chancery Division on behalf of plaintiff against Marini and the two corporations, seeking an accounting and liquidation of the corporations. Marini hired separate counsel, John Lack, Esquire, to represent him personally in both actions.

The Law Division action was eventually dismissed and is of no further significance with respect to the issues raised in this appeal. Before any responsive pleadings were filed in the Chancery Division action, a buyer was found for the business. Negotiations between Reilly and Lack, for their clients, and counsel for the buyer were successful in arranging for a sale of the business for $1,350,000. The mortgages and all business debts would be assumed by the buyer or paid off. The sums advanced by plaintiff's mother and uncle (up to $200,000) would be paid off. The balance of the proceeds, if any, would be delivered to Lack and Reilly for ultimate distribution to their individual clients. The terms of the agreement were set forth in a November 13, 1997 consent order in the Chancery action. The order was prepared by Reilly. It was signed by Reilly, Lack, and counsel for the buyer. Although he had no role in negotiating the terms of the consent order, defendant signed it on behalf of the two corporations.

As part of the negotiations with the buyer, Lack was successful in obtaining an agreement by which the buyer would hire Marini as a consultant for a period of eighteen months at a total fee of $150,000. That sum was eventually paid to Marini. In this action, filed on May 15, 2003, plaintiff claimed that defendant secretly negotiated that consulting agreement for Marini, thus engaging in an impermissible conflict of interest. Plaintiff claims he was damaged as a result of defendant's improper conduct in that plaintiff should have received one-half of the $150,000 consulting fee paid to Marini, or, alternatively, plaintiff should have received a $150,000 consulting agreement of his own.

In support of his claim, plaintiff submitted an expert report by David H. Dugan, III, Esquire. Based upon his review of materials and information furnished to him, Dugan set forth in his report certain "factual assumptions," including that "Marini was secretly making a deal with the buyer for an extra consulting fee worth $150,000 just for himself." He further surmised that defendant played a role in negotiating the consulting agreement or was at least aware of it. If so, he opined that defendant engaged in an impermissible conflict of interest between plaintiff and Marini. He stated that

the question of whether [defendant] represented Marini personally during this time [when the consulting agreement was negotiated] has crucial importance because it was during this time that Marini secretly made his $150,000 consulting fee deal with the buyer, which defrauded Devone. If [defendant] had an active role in producing that agreement, dated March 5 [1]998, or in helping Marini to collect the fee money during the year following, such services would have been a serious violation of RPC 1.7(b).

Dugan concluded that defendant's RPC violations

produced harm to Devone in that they helped Marini obtain $150,000 in payment from the buyer to the exclusion of Devone. Had there been no fraud by Marini and had the consulting fee opportunity been made available to both co-owners of the selling business, Devone could have obtained an equal $150,000 for himself, or at least, the two could have shared the $150,000.

Material factual premises underlying Dugan's opinion are not supported by the record. Lack negotiated with the buyer on Marini's behalf to obtain the consulting agreement for Marini. There is nothing in the record to support the allegation that defendant participated in those negotiations. And, by letter of February 20, 1998, the buyer's attorney forwarded to Reilly a draft agreement of sale embodying the terms of the consent order in an expanded form. That agreement, although it was never signed, is significant because it contains a disclosure of the consulting agreement between the buyer and Marini. Indeed, that portion of the agreement is marked by a handwritten notation, apparently inserted by Reilly, following Marini's name, stating "and/or Frank Devone," indicating an effort by Reilly to obtain from the buyer's attorney a comparable or shared agreement to include his client. Further, Reilly's billing records and plaintiff's deposition make clear that Reilly reviewed the draft agreement with plaintiff.

Therefore, plaintiff and his personal attorney were on notice of Marini's consulting agreement with the buyer before the transaction was consummated. Plaintiff produced no evidence to suggest that the buyer would have had any interest in hiring him as a consultant. He produced no certification from the buyer and did not depose the buyer. Nor did he produce any evidence, or conduct any discovery that might yield such evidence, to suggest that the $150,000 was actually additional purchase money and that Marini did not indeed provide consulting services for the buyer.

Therefore, the record does not support the contention that defendant engaged in a conflict of interest. And, even if he did, plaintiff failed to demonstrate how any conduct by defendant proximately caused plaintiff's failure to obtain a consulting agreement, individually or jointly with Marini. See Conklin v. Hannoch Weisman, 145 N.J. 395, 419 (1996). Dugan's report makes no such connection, and offers nothing more than a net opinion on the subject, amounting only to conjecture. See 2175 Lemoine Ave. Corp. v. Finco, Inc., 272 N.J. Super. 478, 487-88 (App. Div. 1994).

Affirmed.

 

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A-1193-05T1

 

March 5, 2007