MATTHEW GOODWIN v. DONAHUE HAGAN KLEIN NEWSOME & O'DONNELL

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3476-10T2

MATTHEW GOODWIN,

Plaintiff-Appellant,

v.

DONAHUE HAGAN KLEIN NEWSOME &

O'DONNELL,

Defendant-Respondent.

___________________________________

Submitted December 5, 2011 Decided December 30, 2011

Before Judges Parrillo and Alvarez.

On appeal from the Superior Court of New Jersey,

Law Division, Morris County, Docket No. L-2885-09.

Peter A. Ouda, LLC, attorney for appellant.

Traub Lieberman Straus & Shrewsberry, LLP, attorneys

for respondent (Matthew Toto, on the brief).

PER CURIAM

Plaintiff Matthew Goodwin appeals from the summary judgment dismissal of his legal malpractice complaint against defendant Donahue Hagan Klein Newsome & O'Donnell. We affirm.

The facts, viewed most favorably to plaintiff, Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523-24 (1995), are as follows. After filing his divorce complaint on October 31, 2006, plaintiff changed counsel and by written agreement of July 31, 2007, retained defendant to represent him in his ongoing matrimonial litigation. A member of the firm, Edward J. O'Donnell, handled the matter on plaintiff's behalf.

According to plaintiff, on the scheduled trial date of April 24, 2008, O'Donnell recommended the matter proceed to arbitration as the least expensive and most expeditious means of resolving the marital dispute.1 Both parties agreed and executed an arbitration agreement listing the issues to be arbitrated; identifying the arbitrator; fixing the arbitrator's fee; and allocating its cost. The Family Part judge signed an order that same day referring the matter to arbitration.

Six months later and prior to the commencement of arbitration, on October 9, 2008, plaintiff again retained new counsel, Skoloff & Wolfe, P.C., to represent him in his divorce action. More than nine months later, the arbitrator issued his final arbitration award.

Evidently dissatisfied with the result, on September 1, 2009, plaintiff filed the instant legal malpractice complaint against defendant, alleging that the arbitration, in which he spent an additional $200,000, was neither cheaper nor quicker than a court proceeding. Defendant answered and following discovery, filed a motion for summary judgment, which the court granted on February 4, 2011, concluding:

Both the husband and wife agreed to arbitration. Counsel for each recommended it. An agreement was signed on April 24, 2008 by both the husband and wife and each page of that agreement was initialed by them. There also are several handwritten inter-lineations which would indicate that it was carefully reviewed by the parties before they entered into the agreement.

The fact that it did not go to arbitration until many months later and an award was not issued until July 21, 2009 cannot be considered the fault of the defendant. The defendant firm was replaced in October 2008, some six months after the arbitration agreement was entered into, by a third law firm representing the plaintiff and the arbitration award was not until July 2009, some 15 months after the arbitration agreement was entered into.

The malpractice is simply that the defendant represented to the plaintiff that it would be cheaper and more expeditious to submit the divorce matter to arbitration. It generally is true that arbitration is not only a favored means of resolution, but also is more expeditious and less expensive.

. . . .

When all is said and done, the advice was appropriate. Whether or not the advice worked out as intended does not create an issue of legal malpractice. The question is whether or not under the circumstances the lawyer gave the client reasonable advice. See [Ziegelheim v. Apollo, 128 N.J. at 250, 261 (1992).].

The strategy is a reasonable one and cannot be questioned. In this case, counsel felt there were tax issues which were better left to a more private, informal setting than open court. Even though that is disputed, that does not take away from the fact that the advice that arbitration was less expensive and more expeditious is a reasonable strategy. Otherwise, every lawyer would be subject to suit when he recommends arbitration over continued litigation. This obviously would not be fair.

Under the circumstances, the Court finds that the defendant's firm, which was replaced some months after the arbitration agreement was entered into, has no responsibility for the fact that the arbitration became more drawn out and more expensive than the plaintiff contemplated. The plaintiff was well aware of what his responsibility was with respect to the arbitrator's fees and the amount of the hourly rate, because that was set forth in the arbitration agreement.

We agree and accordingly affirm substantially for the reasons stated by Judge Dumont in his oral decision of February 4, 2011. We add only the following comments.

To establish legal malpractice, a plaintiff must show "'(1) the existence of an attorney-client relationship creating a duty of care upon the attorney; (2) the breach of that duty; and (3) proximate causation.'" Conklin v. Hannoch Weisman, P.C., 145 N.J. 395, 416 (1996) (quoting Lovett v. Estate of Lovett, 250 N.J. Super. 79, 87 (Ch. Div. 1991)). Lawyers owe a duty to their clients to provide their services with reasonable knowledge, skill, and diligence. St. Pius X House of Retreats v. Diocese of Camden, 88 N.J. 571, 588 (1982). Because the client's desires may be influenced in large measure by the advice the lawyer provides, the lawyer is obligated to give the client reasonable advice. Ziegelheim, supra, 128 N.J. at 261. "Accordingly, the lawyer is obligated to keep the client informed of the status of the matter for which the lawyer has been retained, and is required to advise the client on the various legal and strategic issues that arise." Ibid. By the same token:

We are mindful that attorneys cannot be held liable simply because they are not successful in persuading an opposing party to accept certain terms. Similarly, we acknowledge that attorneys who pursue reasonable strategies in handling their cases and who render reasonable advice to their clients cannot be held liable for the failure of their strategies or for any unprofitable outcomes that result because their clients took their advice. The law demands that attorneys handle their cases with knowledge, skill, and diligence, but it does not demand that they be perfect or infallible, and it does not demand that they always secure optimum outcomes for their clients.

[Id. at 267.]

Here, there was no legal duty on the part of defendant to refrain from recommending arbitration inasmuch as our State's strong public policy favors this alternative means of dispute resolution, EPIX Holdings Corp. v. Marsh & McLennan Companies, 410 N.J. Super. 453, 471 (App. Div. 2009), particularly in matrimonial matters, Faherty v. Faherty, 97 N.J. 99, 105-06 (1984). A fortiori, no reasonable jury could find the requisite breach of duty in defendant's recommendation of arbitration as a speedy and inexpensive course of action to pursue. Nor could plaintiff establish other than by pure speculation the third element of proximate causation, namely that the arbitration in fact was more costly and time consuming than a trial that never occurred. Here again, no jury could reasonably find the required nexus between defendant's alleged negligent advice and plaintiff's claimed damages. And lastly, although plaintiff seeks to attribute the alleged "excess" costs and delays incurred by arbitration to defendant, the undeniable fact is that nine months before the arbitration award, plaintiff terminated defendant's legal services and retained his third attorney, after which defendant clearly and indisputably had no control over the course of proceedings leading to the ultimate result.

1 According to O'Donnell, part of the reason for recommending arbitration was his concern over a tax issue plaintiff might face if he proceeded to trial. We do not consider this slight discrepancy in accounts to be a material factual dispute.