MICHAEL ANGERAME v. MARIE ARNOLD, ESQ. et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4732-05T54732-05T5

MICHAEL ANGERAME,

Plaintiff-Appellant,

v.

MARIE ARNOLD, ESQ. and

ARNOLD & ARNOLD, ESQS.,

Defendants-Respondents.

________________________________________

 

Argued September 11, 2007 - Decided

Before Judges Wefing and Lyons.

On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-5013-03.

Eric A. Summerville argued the cause for appellant (Law Office of Steven A. Hershkowitz, attorneys; Mr. Hershkowitz, on the brief).

Christopher J. Carey argued the cause for respondents (Graham Curtin, attorneys; Mr. Carey, of counsel and on the brief; Patrick J. Galligan and Theodore H. Hilke, on the brief).

PER CURIAM

Plaintiff, Michael Angerame, appeals an order granting summary judgment to defendants, Marie Arnold, Esq. and Arnold & Arnold, Esqs., on plaintiff's legal malpractice claim against defendants. We affirm.

The following factual and procedural history is relevant to our consideration of the issues advanced on appeal. In February of 2001 plaintiff entered into a contract to purchase a home in Middletown, New Jersey. He was represented by defendant Marie Arnold and her firm Arnold & Arnold in the negotiations, the signing of the contract and at the closing. In March 2001, a home inspection was conducted pursuant to the contract by a firm known as Almost Home. The report referred to the overall condition of the home as excellent but pointed out some significant concerns particularly with the roof, the foundation, the floor framing, insect damage and some wiring issues. Title closed on June 27, 2001.

In October 2002, plaintiff filed a suit against the sellers, the real estate brokers, the title guarantee company, the home inspection agency and plaintiff's homeowner's insurance company. The complaint alleges that the sellers misrepresented and concealed the condition of the home, that there were title problems, that the real estate brokers were negligent in failing to inspect and then inform plaintiff of the true condition of the property, that the home inspection agency was negligent in its home inspection, and that plaintiff's homeowner's insurance company wrongfully denied his claim for damage to the home. The complaint sought rescission as well as damages. That suit was settled for $15,000 in May 2003.

Approximately five months later, plaintiff filed the within legal malpractice suit claiming that he advised his attorney prior to closing of the significant structural defects in the home and the defendants failed to protect the plaintiff by either negotiating a significant reduction in the purchase price or canceling the agreement without liability to plaintiff. In April 2006, defendants moved for summary judgment which was granted by the trial court. This appeal ensued.

On appeal plaintiff raises the following points for our consideration:

POINT I:

THE STANDARD OF APPELLATE REVIEW FOLLOWING THE GRANT OF SUMMARY JUDGMENT DOES NOT REQUIRE ANY DEFERENCE TO THE MOTION COURT ON RULINGS OF LAW.

POINT II:

THE MOTION COURT COMMITTED ERROR AS A MATTER OF LAW BY HOLDING THAT PLAINTIFF'S LEGAL MALPRACTICE ACTION IS BARRED UNDER PRINCIPLES OF JUDICIAL ESTOPPEL.

POINT III:

THE MOTION COURT COMMITTED ERROR AS A MATTER OF LAW BY HOLDING THAT PLAINTIFF'S "NUISANCE VALUE" SETTLEMENT OF A PREVIOUS ACTION OPERATED TO BAR THE INSTANT ACTION UNDER PUDER v. BEUCHEL.

POINT IV:

THE INSTANT ACTION IS NOT BARRED BY THE ENTIRE CONTROVERSY DOCTRINE.

In this case, the trial judge granted summary judgment, finding that plaintiff was judicially estopped from proceeding with the second action since the position he took in the second action was inconsistent with the position taken in the first action. In the first action plaintiff alleged that the sellers, realtors, and home inspection company concealed and/or failed to disclose the true condition of the property. He alleged he relied upon the representations and statements made by those defendants, as well as their silence concerning the condition of the property, to his detriment because he had to later expend significant funds to put the home in satisfactory condition.

In the second suit, plaintiff claims that he brought the significant structural defects to his attorneys' attention prior to closing and the attorneys failed to appropriately act. He claims now that the $15,000 settlement was a nominal "nuisance value" settlement because he became convinced at the settlement conference conducted by the trial court in that case that the then pending summary judgment motion in that case would be entered against him. He notes that he never placed on the record any statement that he felt the settlement in that case was in complete satisfaction of his losses or one that was fair and reasonable. Accordingly, he argues that the logic of Puder v. Buechel, 183 N.J. 428 (2005) is not applicable.

The trial court, however, in granting summary judgment, concluded that plaintiff's having taken mutually exclusive, factually inconsistent positions in these cases, constituted a violation of the doctrine of judicial estoppel and, therefore, granted the motion.

We note at the outset that plaintiff, in what appears from the record provided to us to be his first pleading served on defendants in the first action, did not conform to the requirements of Rule 4:5-1(b)(2), which requires on the first pleading a certification as to whether any other action is pending, or contemplated with respect to the subject matter of the complaint and further requires a party to disclose the names of any non-parties who should be joined in the action as necessary parties, or who are subject to joinder because of potential liability to any party on the basis of the same transactional facts.

While plaintiff in the first action could have joined the defendants in this case, he did not do so, nor did he put the defendants in the first action on notice of the Arnold defendants' potential liability to the plaintiff. It would have been perfectly acceptable for plaintiff in the first action to have advanced alternative theories of liability. See City of Jersey City v. Hague, 18 N.J. 584, 603 (1955). Rather than doing so, however, plaintiff proceeded with his first action against the sellers, realtors, home inspector and other defendants and settled same.

Plaintiff pleaded the defendants in both of these suits as alternative tortfeasors rather than joint or successive tortfeasors. Joint tortfeasors are "two or more persons jointly or severally liable in tort for the same injury to persons or property, whether or not judgment is recovered against all or some of them," N.J.S.A. 2A:53A-1. The test for joint tortfeasor liability is whether defendants had "common liability at the time of the accrual of plaintiff's cause of action." Markey v. Skog, 129 N.J. Super. 192, 200 (Law Div. 1974); and see Cherry Hill Manor Assoc. v. Faugno, 192 N.J. 64, 76 (2004). A successive tortfeasor is one whose liability succeeds that of an initial tortfeasor; for example, a doctor who negligently treats a party injured at an accident caused by an initial tortfeasor. See, e.g. Ciluffo v. Middlesex General Hosp., 146 N.J. Super. 476, 484 (App. Div. 1977), (holding that when a plaintiff settles with an initial tortfeasor for less than the full amount of her damages, she may proceed against the successive tortfeasor for the remainder of her damages).

In this case, the Arnolds are alternative tortfeasors, meaning that once plaintiff recovered from the sellers, he can not recover from the Arnolds. This is because the alternative theories advanced in each of the law suits are based on mutually exclusive inconsistent factual allegations. In going against defendants in the first action, plaintiff alleges that he was not appropriately informed of the serious structural defects in the home. In pursuing his cause against the Arnolds he states he was advised of the serious defects, directed his attorneys to terminate the contract or negotiate a reasonable price reduction to accommodate the repairs and that the attorneys negligently failed to do so. These are two mutually exclusive factually-based theories of liability against two groups of defendants. By settling with the sellers and the other defendants in the first action, plaintiff is estopped from proceeding against the attorneys. This is because in this factual setting the inescapable fact is that the plaintiff could not have recovered against both groups of defendants. See Norcia v. Liberty Mutual Insurance Co., 297 N.J. Super. 563, 570 (Law Div. 1966), aff'd o.b., 308 N.J. Super. 194 (App. Div. 1998), certif. denied, 154 N.J. 608 (1998). If plaintiff had joined all defendants together in the first action, an award against both the attorney defendants and defendants in the first suit, would have been impossible under the mutual exclusive alternative factual theories advanced.

We believe though, that the trial judge mistakenly used the phrase "judicial estoppel" as the rationale for her ruling. Judicial estoppel binds a party only to a position that it successfully asserted in the same or prior proceeding. Kimball Inter. v. Northfield Metal, 334 N.J. Super. 596, 606 (App. Div. 2000). Plaintiff by settling did not successfully advance for judicial acceptance his position. Hence, the doctrine of judicial estoppel does not apply.

That judicial estoppel is not applicable does not mean, however, that plaintiff may advance against defendants in a later suit a position that is mutually exclusive and factually inconsistent with a position advanced against other defendants in an earlier suit. Plaintiff's choice to institute the first action without joining his alternative tortfeasors as co-defendants, and his election to settle the case against the seller defendants and receive those settlement funds can be viewed as confirming plaintiff's assertion that the sellers failed to adequately disclose the conditions of the property. See, e.g., Norcia v. Liberty Mutual supra, at 569.

While we recognize that a party may advance an alternative and inconsistent pleading under Rule 4:5-6, we hold that a plaintiff is estopped from pursuing a successive action against a tortfeasor where: (1) plaintiff earlier settled a suit against other tortfeasors for the same damages; (2) the preceding suit was based upon a mutually exclusive inconsistent position with the successive action; (3) all of the alleged tortfeasors in both suits are alleged to be liable to plaintiff for the same damages but on the basis of a different standard of care or duty; and (4) plaintiff failed to provide the required Rule 4:5-1(b)(2) notice in the preceding suit. Such estoppel is in accord with fairness and public policy. See, e.g., Puder, supra, 183 N.J. Super. 428. Estopping plaintiff from bringing this action is consistent with our court's policy of favoring settlements, promoting judicial economy, promoting party fairness, encouraging comprehensive and conclusive litigation determinations, avoiding fragmented litigation, preserving the integrity of the judicial process, and insuring candor and fair dealing with the courts.

The initial defendants, if informed of potential co-defendants, could have joined them and may have differently evaluated their litigation and settlement strategies. The attorney defendants, while they might file a third-party complaint against the initial defendants for indemnity or contribution in this case, would be prejudiced by having to advance plaintiff's initial factual position without the cooperation of plaintiff - a difficult task where plaintiff's allegation was he was defrauded.

Accordingly, we affirm the entry of the order of summary judgment.

Plaintiff's counsel in that suit only agreed to represent plaintiff on the basis that no claim would be made in that suit against the attorney defendants in this suit.

Plaintiff alleges in his argument that his actual repair costs are in the approximate amount of $300,000.

We recognize this case is distinguishable from Puder v. Buechel because here plaintiff did not represent to the first court that the settlement was fair and equitable.

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A-4732-05T5

October 3, 2007