Case Title: Karen Garcia v. Kozlov, Seaton, Romanini & Brooks, et als.

Citation: 

Docket Number: a-81-02

State: new-jersey

Court: New Jersey Supreme Court

Date: 2004-04-13T00:00:00Z

Document:
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). On November 1, 1993, an associate with the law firm of Kozlov, Seaton, Romanini & Brooks (Kozlov) filed suit on behalf or Garcia against Forman, Marut, and Ignall for negligence. The complaint did not name Ertel as a defendant. The law firm later discovered a conflict of interest with an insurance company implicated in the case and referred the matter to Michael Gentlesk, Esq., who was then retained by Garcia. Although Gentlesk successfully moved to amend the complaint to name Ertel as a defendant, she successfully moved to be dismissed from the action based on the applicable statute of limitations. Garcia later settled her claims against the other drivers for a total of $87,000. Thereafter, Garcia filed a legal malpractice complaint against Kozlov, alleging that the law firm and its associate were negligent in failing to name Ertel, causing Garcia to settle her case for less than its true value. The legal-malpractice trial began on July 31, 2000. After jury selection, both parties argued for certain limitations of the evidence. Garcia sought to proffer expert testimony regarding the settlement in addition to direct evidence regarding her case. Among other things, Kozlov countered that the matter should instead be tried solely as a suit within a suit, that Garcia should be precluded from presenting evidence indicating that she had not come to a stop prior to the first impact, that Gentlesk should be barred from testifying, and that the settlement in the underlying case should operate as a bar to the legal malpractice action. The trial court granted Garcia s motion and denied Koslov s requests. Garcia proffered evidence of the underlying car accident. In deposition testimony, Emily Forman testified that the Ertel car pulled out in front of her and that she was unable to stop in time to avoid colliding with the rear of the Ertel vehicle. Forman also stated that her car lost the hazard lights and was unable to effectively warn oncoming traffic to avoid her car in the roadway. Garcia also testified about her recollection of the accident. She could not recall whether she came to a full stop before hitting the Marut vehicle, which had collided with the Forman vehicle. Garcia testified about her medical complaints and presented the testimony of three expert medical witnesses concerning her medical condition. In addition, Garcia s fiancé testified regarding Garcia s injuries and their effect on her life. In respect of the settlement, Garcia testified that Gentlesk told her the value of her case was between $200,000 and $250,000 and that she should take the settlement offered because the absence of Ertel in the case would preclude full recovery. According to Garcia, Gentlesk told her Ertel was at fault for the accident and that she should settle with the remaining defendants and sue Kozlov. Garcia testified that she would not have taken the settlement in full satisfaction of all her claims if it were not for the reservation of right to bring a malpractice action. Gentlesk also testified at trial, stating that he recalled valuing the case at $200,000 and that he felt Garcia should take the settlement offered because of the absence of Ertel and the potential of Garcia s comparative negligence. Garcia also presented the testimony of a malpractice expert, Douglas Calhoun Esq., who expressed the opinion that Kozlov deviated from the standard of care when it failed to sue Ertel within the statute of limitations. Calhoun also testified that New Jersey s comparative negligence law, combined with the absence of Ertel from the underlying action, hampered Garcia s ability to recover full compensation for her injuries. Calhoun s estimate that Ertel was fifty to sixty percent negligent, along with Gentlesk s testimony, and the risks of litigation led him to opine that Garcia acted reasonably in settling her case for $87,000. The trial court ultimately struck Calhoun s testimony regarding Ertel s percentage of fault, leaving that for the jury to determine. Kozlov also produced expert testimony from Timothy Barnes, Esq., who opined that Kozlov s failure to include Ertel in the suit was not malpractice because Garcia s deposition testimony showed that she had come to a full stop prior to hitting the Marut vehicle. According to Barnes, that placed primary responsibility for the accident on Ignall, who hit Garcia. Therefore, because Ertel s negligence was not the proximate cause of Garcia s injuries, Barnes opined that it would not have been ethical to name Ertel as a defendant. Barnes concluded that the $87,000 was a reasonable settlement given her own negligence in failing to activate her hazard lights or to pull to the right. In addition, the defense read portions of Ertel s deposition testimony into the record, indicating that when she made the left turn she saw no approaching traffic. The police reports also were admitted into evidence, which indicated that Ertel made a left hand turn into traffic. At the close of all the evidence, the trial court decided the issue of negligence in favor of Garcia as a matter of law, finding Barnes s opinion a net opinion. In addition, the court ruled that Garcia acted reasonably in settling the underlying case against the party defendants. After completing jury instructions, the court asked the jury whether Kozlov was the proximate cause of Garcia s loss, to which the jury replied in the affirmative. The second question asked for the reasonable settlement value of Garcia s claim, which the jury found to be $225,000. Based on those findings, the court molded the verdict and awarded Garcia $92,460 in actual damages and prejudgment interest. Kozlov appealed to the Appellate Division arguing, among other things, that the traditional suit within a suit method of trying a legal malpractice case was violated. The Appellate Division reversed, finding that the trial court abused its discretion by departing from the suit within a suit method. The appellate panel also concluded that the doctrine of invited error compelled reversal without a remand. The Supreme Court granted certification. HELD: The proper approach in trying a legal malpractice action will depend on the facts, the legal theories, the impediments to one or more modes of trial, and, where two or more approaches are legitimate, to plaintiff s preference. Courts are not to become involved in determining how a legal malpractice case is tried unless the parties disagree, in which case the final determination of the court is a discretionary judgment that is entitled to deference. 1. Where the claim of malpractice alleges a failure to meet a time-bar, the client must establish the recovery he or she would have obtained but for the malpractice. The most common method of proving such malpractice is to proceed by way of a suit within a suit, in which a plaintiff presents the evidence that would have been submitted at trial had no malpractice occurred. However, the suit within a suit method is not without criticism. It can ignore the possibility of settlement, is often hampered by difficulties of the parties in presenting an accurate reflection of the evidence in the original action, or is hampered by the passage of time. This approach has also drawn fire for being unfair to plaintiffs who must litigate the underlying claim against the lawyer who originally prepared it. As determined by this Court in Lieberman, alternative approaches are necessary when the situation demands. What is important about Lieberman is the flexibility given to lawyers and judges to find an appropriate procedure in each case based on the facts and on the claims, without favoring one approach over another. (Pp. 19-26) 2. Calhoun s testimony was not presented as a substitute for the jury s evaluation of the case, but only to explain the reasons for settlement. Garcia also presented a full suit within a suit by adducing all the circumstances surrounding the underlying accident, along with factual and expert testimony regarding her damages. Hence, the Appellate Division erred, not only in too narrowly interpreting Lieberman but also in failing to recognize that a suit within a suit, providing the jury with a basis for its determination, did take place. The matter is remanded to address issues raised before but not addressed by the Appellate Division. (Pp. 26-28) Judgment of the Appellate Division is REVERSED and the matter is REMANDED for further proceedings consistent with this opinion. CHIEF JUSTICE PORITZ and JUSTICES VERNIERO, LaVECCHIA, ZAZZALI, ALBIN, and WALLACE join in JUSTICE LONG S opinion. Plaintiff-Appellant, v. KOZLOV, SEATON, ROMANINI & BROOKS, P.C., and ELIZABETH L. SYLVESTER, ESQ., Defendants-Respondents, and HERSH KOZLOV, ESQ., PHILIP B. SEATON, ESQ., DANTE J. ROMANINI, ESQ., GILBERT L. BROOKS, ESQ., and FRANK A. DIGIACOMO, ESQ., Defendants. Argued February 2, 2004 Decided April 13, 2004 On certification to the Superior Court, Appellate Division. Martin K. Indik, argued the cause for appellant (Indik & McNamara, attorneys; Mr. Indik and Steven K. Greene, on the brief). Gilbert L. Brooks argued the cause for respondents (Wolf, Block, Schorr and Solis-Cohen, attorneys). JUSTICE LONG delivered the opinion of the Court. The issue before us arises out of a legal malpractice case. Plaintiff sued her former lawyers for failing to join an arguably integral party in a personal injury lawsuit. In the subsequent legal malpractice action, plaintiff claimed that she was forced to settle the personal injury case with the named defendants for less than full value as a result of the absence of the negligently omitted party. Because defendant raised the settlement first as a bar and then as a defense in the malpractice case, plaintiff sought to present her case, in part, through expert testimony. The trial court acceded to that request in reliance on Lieberman v. Employers Insurance of Wausau, 84 N.J. 325 (1980), wherein we signaled that the traditional suit within a suit format is not the only way to proceed in a legal malpractice action. Plaintiff obtained a verdict and defendant appealed. The Appellate Division reversed, advocating strict adherence to the suit within a suit format in the absence of the precise factors considered in Lieberman. The Appellate Division misreads that case. In Lieberman, we specifically recognized that a legal malpractice case may proceed in any number of ways depending on the issues. Included among those options are a suit within a suit, any reasonable modification thereof, and a suit based on expert testimony. Lieberman, supra, 84 N.J. at 343-44. The ruling in Lieberman did not establish a hierarchy among those approaches nor did it suggest that there is a presumption in favor of the suit within a suit scheme. We hold today that the proper approach in each case will depend upon the facts, the legal theories, the impediments to one or more modes of trial, and, where two or more approaches are legitimate, to plaintiff s preference. Courts are not to become involved in determining how a legal malpractice case is tried unless the parties disagree, in which case the final determination of the court is a discretionary judgment that is entitled to deference. The next issue concerning the net opinion of Mr. Gentlesk and his evaluation of the case at the time of settlement that would be admissible for a limited purpose, that is to show the reasonableness of the settlement that he entered into. The proof of the actual value of the case must come from the witness herself together with any expert testimony [that] [s]he finds. As to point 3, the barring of the plaintiff from presenting evidence any evidence indicating she failed to stop prior to the first impact, that is a misapplication of the doctrine. She is estopped from changing her testimony. Her legal position in this case may, of course, change. The plaintiff, of course, will be permitted to testify to the extent of her present medical condition. I take it that there s no issue as to the time limits of or to the notice of those reports offered by her experts that you ve received them within time. Finally, the passage of time itself can be a significant factor militating against the "suit within a suit" approach. Here, for example, the assertedly negligent arteriogram was performed in 1968; the witnesses in the DeSarno suit may no longer be available or their testimony and other evidence, if generally available, may not be susceptible of recapture in the same form or with the same effect as in the original action. [Id. at 342-43.] In terms of procedure, we stated, it should be within the discretion of the trial judge as to the manner in which the plaintiff may proceed to prove his claim for damages and that the appropriate procedure should, if not otherwise agreed upon between the parties, be settled through pretrial proceedings. Id. at 343. By way of example, but not of limitation, we detailed some possible approaches, including: [T]he "suit within a suit" approach or any reasonable modification thereof. Another option, which may be apposite in this case in light of the duality of defendants, the factor of role reversal, and the passage of time, is to proceed through the use of expert testimony as to what as a matter of reasonable probability would have transpired at the original trial. Cf. Shields v. Campbell, 559 P.2d 1275, 1279 (Or. 1977) (in action for attorney malpractice, plaintiff introduces expert who testifies as to the effect malpractice had upon outcome of suit). Such experts would testify, in light of their experience and expertise, concerning the outcome of the DeSarno claim if the case had been brought to trial as anticipated by McDonough and had been defended in the manner McDonough had initially planned. Cf. Rempfer v. Deerfield Packing Corp., 4 N.J. 135, 141-142 (1950) (where jury does not have sufficient knowledge with which to decide an issue, expert testimony is appropriate). [ Id. at 343-44.] What is important about Lieberman is the flexibility it accorded to lawyers and judges to limn an appropriate procedure in each case based on the facts and on the claims, without favoring one approach over another. Indeed, as Justice Handler observed in Lieberman, the court need not even become involved unless the parties have a disagreement over the course that the trial will take. In the absence of a disagreement requiring court intervention, a plaintiff is free, as in any case, to approach the trial as he or she sees fit, so long as the Rules of Court and Rules of Evidence are satisfied. Where the matter is presented to the court because the defendant interposes a legal objection to the plaintiff s proposed trial strategy, it is within the court s discretion to declare an appropriate trial model. That is the backdrop for our inquiry. IV We turn now to the facts of this case. In our view, the trial court was empowered fully to allow this case to proceed as it did. As in nearly all malpractice cases, plaintiff needed to produce an expert regarding deviation from the appropriate standard. Brach, Eichler, P.C. v. Ezekwo, 345 N.J. Super. 1, 12 (App. Div. 2001). Calhoun served that purpose. (Obviously, that is not the kind of expert testimony we addressed in Lieberman.) Ordinarily, a suit within a suit would follow. What complicated matters was defendant s position that plaintiff willingly and reasonably accepted $87,000 as the full value of the case. That leg of the case required Gentlesk to testify, as a fact witness, why in the absence of Ertel, he recommended that plaintiff settle with the remaining defendants for $87,000, although he considered the case to be worth much more. Plaintiff likewise had to explain why she agreed to do so. An expert was proffered to show how Ertel s absence negatively affected plaintiff s litigation and settlement posture in 1996 and why the settlement with the named defendants was a reasonable strategy under the then-existing circumstances. Again, Calhoun provided that evidence. It is important to note, however, that Calhoun s testimony was not presented as a substitute for the jury s evaluation of the case, but only to explain the reason for the settlement. In addition, as our detailed recitation of what transpired at trial reveals, plaintiff presented a full suit within a suit by adducing all of the circumstances surrounding the accident, along with factual and expert testimony regarding the damages she sustained. That evidence provided the jury with an independent basis to determine the effect of Ertel s absence from the case and to value plaintiff s losses. Thus, the issues addressed in Lieberman are not really at play in this case. Lieberman suggested the possibility of expert testimony substituting for a suit within a suit. That is not what occurred here. In this case, a full suit within a suit, providing evidence to support the jury verdict, was produced. The expert testimony was not offered as a substitute for that evidence, but as an adjunct to address a different issue the effect of the earlier settlement. Hence, the Appellate Division erred, not only in too narrowly interpreting Lieberman as a theoretical matter, but in failing to recognize that a suit within a suit, providing the jury with a basis for its determination, in fact took place. That is not to suggest that this was a perfect trial, only that the single error identified by the Appellate Division did not occur. Therefore, because neither error nor invited error is implicated, we reverse the judgment of the Appellate Division to the contrary. Because the Appellate Division based its opinion on the single issue to which we have adverted, it did not reach the remaining questions raised by defendant. Included, among other issues, are defendant s claims involving the sufficiency of the evidence regarding proximate cause; the lack of expert testimony on the settlement value of plaintiff s claims; the lack of evidence regarding the original defendants willingness to settle for more than $87,000; the inadmissibility of evidence regarding plaintiff s post-settlement condition and treatment; the impropriety of plaintiff s questioning of Gentlesk regarding bias; and, the erroneous computation of prejudgment interest. Because those issues remain outstanding, we remand the case to the Appellate Division for disposition. Our remand should not be taken as an indication of our view on the merits of any of those claims. KAREN GARCIA, Plaintiff-Appellant, v. KOZLOV, SEATON, ROMANINI & BROOKS, P.C., and ELIZABETH L. SYLVESTER, ESQ., Defendants-Respondents. DECIDED April 13, 2004 Chief Justice Poritz PRESIDING OPINION BY Justice Long CONCURRING/DISSENTING OPINIONS BY DISSENTING OPINION BY