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. e du/thir dc ir c uit_2001/247Filed October 24, 2001

UNITED STATES COURT OF APPEALS

FOR THE THIRD CIRCUIT

NO. 00-2111

RICHARD GILLMAN, Appellant,

v.

WATERS, MCPHERSON, MCNEILL, P.C.;
ESTATE OF JACK ROSEN, THE

On Appeal from the United States District Court for the District of New Jersey District Judge: Honorable John C. Lifland (D.C. No. 99-00037)

Argued: May 9, 2001

Before: BECKER, Chief Judge, MCKEE, Circuit Judge, and POLLAK, District Judge*

(Filed: October 24, 2001)

Robert Novack, Esquire (Argued) Edwards & Angell 51 John F. Kennedy Parkway Short Hills, New Jersey 07078 Counsel for Appellant

___________________________________________________ ______________ * Honorable Louis H. Pollak, United States District Judge for the Eastern District of Pennsylvania, sitting by designation.Brian C. Harris, Esquire (Argued)

Braff, Harris & Sukoneck 570 W. Mt. Pleasant Avenue,

P.O. Box 657 Livingston, New Jersey 07039 Counsel for Appellees

OPINION OF THE COURT

POLLAK, District Judge.

This appeal from a grant of summary judgment presen ts questions arising under New Jersey's "entire contro versy doctrine" -- a body of law that has given rise to m uch litigation and a substantial body of academic comme ntary.

I.

With a view to clarifying the setting in which the questions on appeal are presented, we begin by desc ribing the underlying controversy, and the resultant state court litigation, which together form the predicate for t he case at

bar.

Appellant Richard Gillman was for many years a seni or executive of Bally Manufacturing Corporation ("BMC" ), and of Bally's Park Place, Inc. ("Park Place"), the cas ino operating arm of BMC. (In this opinion, when Park P lace and BMC are referred to jointly, or without need to distinguish one from the other, they are designated "Bally"). In 1991 Gillman and Bally entered into Stock Option Award Agreements under which Gillman received options to purchase 1,000,000 shares of BMC and 300,000 shares of Bally Gaming International, Inc., a BMC subsidiary; these options, of very considerable potential value, were to be exercisable over a period of ten years. In 1992, pu rsuant to a management reorganization, it was determined that Gillman would leave Bally. To represent him in nego tiating with Bally an agreement governing the terms of his anticipated separation, Gillman retained Waters, McPherson, McNeill, P.C. ("Waters, McPherson"), a N ew Jersey law firm that had for some years performed l egal

2services both for Gillman and for Bally (and that c ontinued

to handle some of Gillman's affairs until 1998). Ke nneth D. McPherson, Sr. and Jack Rosen were the two Waters, McPherson partners who had principal responsibility for negotiating and drafting, on Gillman's behalf, the agreement pursuant to which he was to leave Bally.

It was a matter of substantial importance to Gillma n that the elaborate agreement governing his retirement fr om Bally preserve his entitlement to exercise his stock opti ons for the balance of the ten-year period agreed upon by G illman and Bally in 1991 -- i.e., until 2001. On January 8 , 1993, Gillman executed the Retirement and Separation Agreement, and, simultaneously, retired. Gillman, according to his later testimony, understood that t he Retirement and Separation Agreement protected the t enyear entitlement to exercise the stock options. How ever, when, on January 24, 1994, Gillman undertook to exe rcise options for the purchase of 100,000 Bally shares, h e was informed by Bally that his unexercised options had expired on January 8, 1994, the first anniversary of his re tirement. (Bally's position was that (a) Gillman's Stock Opti on Award Agreements provided that a Bally employee had a ten -year purchase window for the exercise of vested options but that a retired employee's purchase window was only one y ear, and (b) the Retirement and Separation Agreement"ves ted" Gillman's option rights as of the date of his retir ement and provided that exercise of those vested rights was t o be "in accordance with the applicable provisions" of the S tock Option Award Agreements -- hence, one year.)

In March of 1994 -- two months after Bally refused to honor Gillman's stock options -- Gillman filed suit against Bally in the New Jersey Superior Court to enforce h is claimed stock option rights. Gillman was represente d by Frederic K. Becker, a partner in the New Jersey fir m of Wilentz, Goldman, Spitzer, P.C.; McPherson and Rose n advised Becker, and Rosen supplied an affidavit sup porting Gillman's claims. On July 18, 1994, while Gillman's suit was pending in the Superior Court, Becker wrote Gil lman a letter recapitulating a June 30 conference:

3PERSONAL & CONFIDENTIAL

July 18, 1994

Mr. Richard Gillman c/o Waters, McPherson, McNeill 300 Lighting Way Secaucus, NJ 07096

Re: Gillman v. Bally Manufacturing Corporati on, et al.

Dear Dick:

This will confirm the matters discussed and agreed upon when Roger Kaplan and I met with you on June 30, 1994, with respect to certain issues rai sed by the above-referenced litigation.

As you had previously discussed with Kennet h D. McPherson, Sr., the fact that you have been required to institute suit against Bally Manufacturing C orporation and Bally's Park Place, Inc. raises certain issues regarding claims that you may have against t he firms of Waters, McPherson, McNeill and Shereff, F riedman, Hoffman & Goodman for professional malpracti ce in connection with representing your interests relevant to your Retirement and Separation Agreement, an d the exercise of your options, which are the subj ect of the above-referenced litigation: (a) in the nego tiation of your Retirement and Separation Agreement (sp ecifically in connection with Section 2(d) of that Agre ement, as it relates to the "Retirement" paragraphs of th e Option Agreements); and (b) in connection with advi sing you as to the potential effect of Section 2(d) o f the Retirement and Separation Agreement, insofar as that section might, when read with the relevant p rovisions of the Option Agreements, cause your options to terminate within one year.

A recent decision in New Jersey suggests th at any such claims for professional malpractice are presently ripe and assertable by you by reason of the fact that you have already incurred an injury and dama ges arising from the need to pursue litigation a gainst Bally Manufacturing and Bally's Park Place, causin g the expenditure of sums for attorneys' fees and litigation

4costs, and that you need not wait to assert such claims

until after the conclusion of the litigation with Bally Manufacturing and Bally's Park Place.

Moreover, given that such claims would like ly be presently assertable, the New Jersey courts have a requirement under what is called the "entire controversy doctrine," that all claims again st all parties relating to the same controversy or subject matter should be asserted in a single litigation or , if not asserted, be forever barred and precluded in the future. As a result, if these potential claims for p rofessional malpractice are not now asserted in the pres ent litigation with Bally Manufacturing and Ball y's Park Place, such claims would, in all likelihood, be barred and precluded from being asserted by you in the
future. If such claims were to be asserted i n the pending litigation, the Court might (or migh t not) decide to separate these claims from the cla ims against Bally Manufacturing and Bally's Park Place, but we would expect that Bally would argue against the severance of such claims and would argue tha t the attorney-client privilege was waived by you by suing your own attorneys, thereby possibly opening up for discovery your confidential or attorney-clie nt
communications with these law firms.

You told us that you had a similar conversa tion with Kenneth D. McPherson, Sr., and had given the subject
a considerable amount of reflection and cons ideration in the past. You also told us that you were of the view that you did not want to pursue a claim agai nst these law firms, notwithstanding the fact that the failure to assert the claims now would likely make it i mpossible
to assert the claims at a later date.

As a result of your determination not to as sert any claims against either Waters, McPherson, McN eill or Shereff, Friedman, Hoffman & Goodman, we wil l not, as we advised you, take any action to protec t or preserve your interests in asserting any cla ims against
either of these firms.

5Please call me if you have any questions or if you

want to discuss further any issues addressed by this

letter.

Sincerely,

FREDERIC K. BECKER

FKB:ald

It appears that the June 30 conference and the July 18 letter were responsive to the February 16, 1994 dec ision of the Appellate Division of the Superior Court in Cir cle Chevrolet Co. v. Giordano, Halleran & Ciesla, 274 N .J. Super. 405 (App. Div. 1994), holding that attorney malpractice claims were one of the categories of cl aims embraced by the entire controversy doctrine, with t he result that non-inclusion in an underlying action of claim s of attorney malpractice that, putatively, gave rise to the necessity of the underlying action, might result in preclusion of such claims. Notwithstanding Becker's July 18 letter, Gillman did not alter the position he ap pears to have taken in the June 30 conference -- namely, tha t he would not authorize enlarging the scope of the Ball y suit by adding malpractice claims against Waters, McPherson

.

On August 23, 1994, Judge Margolis, Presiding Judge of the Chancery Division of the Superior Court, grante d Bally's motion for summary judgment and denied Gill man's motions for partial summary judgment. In the conclu ding pages (pages 20-22) of his opinion, Judge Margolis wrote as
follows:

Gillman's retirement from Bally was governe d by a Retirement and Separation Agreement that incorporated other agreements by reference. Pursuant to the terms of those agreements, Gillman ha d one year within which to exercise his options. For wh atever reason, Gillman failed to do so. Although Gi llman thereby sustained significant monetary losse s, he executed a contract that was negotiated at a rm's length by competent counsel.

. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

. .

. . . . [G]illman was represented by compete nt counsel at all relevant times -- he was a sophistica ted

6businessman upon whose behalf a detailed agr eement

was negotiated. . . . [I]f Gillman was not a ware of the option exercise date, his counsel was, or sh ould have

been.

Gillman appealed. While Gillman's appeal was pendin g, the New Jersey Supreme Court affirmed the Appellate Division's ruling in Circle Chevrolet that attorney malpractice claims were subject to the entire contr oversy doctrine. Circle Chevrolet Co. v. Giordano, Hallera n & Ciesla, 142 N.J. 280, 662 A.2d 509 (1995). On Gillm an's appeal, Kenneth McPherson, Jr., of Waters, McPherso n joined Frederic Becker as counsel of record.

The Appellate Division affirmed Judge Margolis's gr ant of summary judgment. "The trial court properly enforce d the express, bargained-for terms of his Option Agreemen t and Retirement and Separation Agreement, and refused to grant plaintiff equitable relief from the consequences of his and his counsel's neglect." Gillman v. Bally Mg. Corp., 286 N.J. Super. 523, 531, 670 A.2d 19 (N.J. App. Div. 1996).

The decision of the Appellate Division was handed d own on January 4, 1996.

On January 20, 1996, Jack Rosen died.

On March 20, 1996 the New Jersey Supreme Court denied certification. 144 N.J. 174, 675 A.2d 1122 ( 1996).

II.

As Gillman's unsuccessful litigation against Bally made its way through the courts of New Jersey between 19 94 and 1996, it was paralleled by the Circle Chevrolet li tigation in which the Appellate Division in 1994 announced, and the New Jersey Supreme Court in 1995 confirmed, that Ne w Jersey's entire controversy doctrine embraced attor ney malpractice claims. The entire controversy doctrine has not been a favorite of the New Jersey bar, and its exte nsion to attorney malpractice claims was not widely acclaime d. ". . . [T]he failure to exclude legal malpractice c laims from the Entire Controversy doctrine . . . harms attorne ys, clients, and the legal system itself. The sooner ou r Supreme Court reconsiders its opinion in this matter, the b etter off

7we will all be." Albert L. Cohn and Terri Smith, Pr actice and

Malpractice after Circle Chevrolet: Some Practical Considerations of the Entire Controversy Doctrine , 28 Rutgers L. J. 79, 84-85 (1996). Academic criticism of Circle
Chevrolet tended to be more restrained. As Professo r Hazard put it, "Why, in the name of any conception of justice and good order, should a client engaged in a complicated, expensive and protracted controversy w ith an opposing party be required to enlarge and complicat e that litigation, perhaps with fatal effects on its merit s, by extending the attack to his own lawyer in the middl e of the proceeding?" Geoffrey C. Hazard, Jr., Before and Be hind the "Entire Controversy" Doctrine, 28 Rutgers L. J. 7, 24 (1996).

In 1997 the New Jersey Supreme Court did "reconside r its opinion." The court's new ruling was announced in Olds v. Donnelly, 150 N.J. 424, 696 A. 2d 633 (1997). Th e court stated that (1) "[w]e are aware of the criticism of Circle Chevrolet's expansion of the entire controversy doc trine to attorney-malpractice actions," 696 A. 2d at 641, (2 ) "[c]andor compels that we acknowledge that the appl ication of the entire controversy doctrine to legal-malprac tice claims has not fulfilled our expectations," ibid., and (3) "[i]n sum, we conclude that the entire controversy doctri ne no longer compels the assertion of a legal-malpractice claim in an underlying action that gives rise to the claim." Id. at
643.

In January of 1999, Gillman (formerly a citizen of New Jersey, but now a citizen of Florida) filed the ins tant diversity action in the United States District Cour t for the District of New Jersey. The named defendants were W aters, McPherson and the Estate of Jack Rosen (the Waters, McPherson partner who, together with Kenneth McPher son, Sr., had represented Gillman in negotiating and dra fting the Separation Agreement). The suit -- initiated a year-anda-half after Circle Chevrolet was overruled by Olds -- alleged malpractice.

The defendants moved for summary judgment. Gillman filed a cross-motion for partial summary judgment. The District Court granted defendants' motion. In its
Memorandum and Order the District Court first addre ssed the question "whether the Court should apply the sh ort-

8lived legal malpractice claim preclusion rule artic ulated by

the New Jersey Superior Court, Appellate Division, in early 1994, adopted by the New Jersey Supreme Court in Ci rcle Chevrolet Co. v. Giordano, Halleran & Ciesla, 142 N .J. 280 (1995), and overruled two years later in Olds v. Do nnelly, 150 N.J. 424 (1997)." Memorandum and Order, p. 8. T he District Court's analysis was as follows:

In abrogating Circle Chevrolet, the Olds co urt contemplated the extent of retroactive effec t it should give to its decision and specifically held t hat the decision should be given "limited or `pipeli ne' retroactivity" rather than full retroactive effect. See [150 N.J.] at 449. The court explained that its decision should apply to cases in the litigation "pip eline," that is, "all pending cases, whether on appeal or in the trial

courts." Id. . .

Gillman argues that because this malpractic e action was filed after the Olds ruling, it is gover ned by Olds and not by Circle Chevrolet, and thus the EC D [entire controversy doctrine] would not bar his lega l malpractice claim for failure to have joined it in the prior state court action. Gillman's legal th eory would grant full retroactive effect to the Olds de cision such that all attorney malpractice claims that ha d accrued under Circle Chevrolet and that were not yet time- barred would be resurrected. This interpreta tion would render meaningless the plain words of the Ne w Jersey Supreme Court's decision regarding retroacti vity. In holding that legal malpractice claims were n o longer subject to the ECD, the court plainly stated that the Olds decision would be accorded only limited retroactive effect such that cases already i n the litigation pipeline -- cases "on appeal or i n the trial
courts" -- would receive the benefit of the new rule. Necessarily, cases that were not yet pending in the trial courts or on appeal, thus not in the pipelin e, would not receive the benefit of the Olds abrogation o f Circle
Chevrolet. Claims that accrued under Circle Chevrolet and that were not in the pipeline at the tim e of the Olds decision on July 16, 1997 are clearly s ubject to the Circle Chevrolet rule, not the Olds rul e.

9Gillman's legal malpractice claim accrued l ong before

the Olds decision. At the latest, Gillman kn ew that he had a potential malpractice claim against Wa ters, McPherson when he received the July 18, 1994 letter from Becker explaining the claim-preclusive effect that the ECD could have on any potential legal ma lpractice claim Gillman might want to assert against W aters,
McPherson.

Memorandum and Order, pp. 10-11 (footnote omitted).

Toward the close of its Memorandum and Order, the District Court stated an alternate ground for its g rant of summary judgment:

Furthermore, the Court does not view Gillma n as an unsuspecting victim of the ECD's claim-precl usive impact. He was fully informed by his attorne y during the pendency of his state court action that he must assert any potential legal malpractice claim against Waters, McPherson at that time and he did no t. Quite the contrary, he assured his attorneys that he would not assert a malpractice claim against them in the pending state court action. Thereby, Gillman voluntarily surrendered a known right. Accor dingly,
even in the absence of the Circle Chevrolet ruling
Gillman's claim could be barred under the do ctrine of
waiver.

III.

A.

In approaching the question whether the District Co urt's grant of summary judgment was warranted, we first
consider the District Court's assessment of the lim ited retroactive effect of Olds. The District Court, it will be recalled, observed that "Gillman's legal theory wou ld grant
full retroactive effect to the Olds decision such t hat all attorney malpractice claims that had accrued under Circle Chevrolet and that were not yet time-barred would b e resurrected," and stated that "[t]his interpretatio n would render meaningless the plain words of the New Jerse y Supreme Court's decision regarding retroactivity," since

10"the court plainly stated that the Olds decision wo uld be

accorded only limited retroactive effect such that cases already in the litigation pipeline -- `cases on app eal or in
the trial courts' -- would receive the benefit of t he new

rule."

This meant, so the District Court reasoned, that ca ses "that were not in the pipeline at the time of the O lds decision on July 16, 1997 are clearly subject to th e Circle Chevrolet rule, not the Olds rule." And, since Gill man's suit, although arising out of events that transpired duri ng the Circle Chevrolet era, was not initiated until 1999, and hence was not pending on July 16, 1997, it was, under the District Court's analysis of the Olds court's prono uncement with respect to the limited retroactive impact of i ts decision, barred by Circle Chevrolet.

To assess the correctness of the District Court's a nalysis,
we set forth in full the Olds court's discussion of retroactivity:

The parties have not briefed or argued the issue whether the within decision should apply ret roactively or prospectively. In fairness to other litig ants and the judicial system, however, we conclude that o ur decision should apply not only to the present case, b ut to all pending cases, whether on appeal or in the t rial courts.

Ordinarily, judicial decisions apply retroa ctively. Crespo v. Stapf, 128 N.J. 351, 367, 608 A.2d 241 (1992). Policy considerations may justify gi ving a
decision limited retroactive effect. Id. The first consideration is whether litigants reasonabl y have relied on settled law in ordering their affa irs. Id. at 368.
Another consideration is whether retroactive application will advance the purposes of the rule
announced in the decision. Id. at 370. "The final consideration is whether retroactive applica tion would produce inequitable results and adversely af fect the administration of justice." Id. at 371.

Here, those considerations point toward lim ited or "pipeline" retroactivity of our decision. Fi rst, we decided Circle Chevrolet only two years ago, a facto r that affects the extent to which litigants reasonably hav e relied on

11the application of the entire controversy do ctrine to

legal-malpractice claims. Second, the genera l purpose of the legal-malpractice exception is to pre serve the attorney-client relationship. Limited retroa ctivity will adequately protect existing relationships. G iving the benefit of our decision to litigants with pe nding cases serves the interests of justice by permittin g resolution of their claims on the merits. Complete retr oactivity, however, potentially would expose the judici al system to the undue burden of resolving numerous co ncluded

matters.

696 A.2d at 646.

In applying the Olds rule of "limited or`pipeline' retroactivity" to Gillman's suit, the District Cour t ruled that Gillman's suit was not yet in the "pipeline" when O lds was decided and hence was barred. We agree with the Dis trict Court that Gillman's suit, not filed until 1999, wa s not in the pipeline on July 16, 1997, when Olds was decide d. But we do not agree that the Olds court, in clothing it s ruling with "limited or `pipeline' retroactivity," meant b y the use of that phrase to exclude from the coverage of Olds a suit filed subsequent to July 16, 1997 (provided, of course, t hat the suit was filed within the applicable six-year statu te of limitations, as Gillman's was). We think that in de termining that its new rule was to have " `pipeline' retroact ivity," the court in Olds signified that it was selecting from available options the rule of limited retroactivity which the court had described and applied just a year before, in State of New Jersey v. Knight, 678 A. 2d 642 (1996). In Knight t he court explained that to "give [a] new rule `pipeline retr oactivity,' " is to "render[ ] it applicable in all future cases, the case in which the rule is announced, and any cases still on direct appeal." Id. at 651. "[P]ipeline retroactivity" was contrasted by the Knight court with "complete retroactive effe ct" which involves "applying [the new rule] to all cases, inc luding those in which final judgments have been entered an d all other avenues of appeal have been exhausted." Ibid.

Viewing Gillman's malpractice suit through the pris m of "pipeline retroactivity" as deployed in Knight and in Olds, it falls within the category of what Knight termed "fu ture cases." 678 A. 2d at 651. Thus, we think that, if t he New

12Jersey Supreme Court were today to have occasion to

address a suit like Gillman's malpractice suit agai nst Waters, McPherson and the Rosen Estate -- a suit wh ich was not in fact filed until after Olds was decided, but a suit which could have been filed during the brief hegemo ny of Circle Chevrolet and which would then have properly beenfound by the lower courts of New Jersey to be noncognizable -- the New Jersey Supreme Court would ru le that such a suit was governed by Olds.

In predicting how the New Jersey Supreme Court woul d rule, we do not confine ourselves to a textual deconstruction of the term "pipeline retroactivity. " We are also guided by the three-factor inquiry on which th at court has long relied in determining the scope of retroac tive application of a new rule. See, e.g., Fischer v. Ca nario, 143 N.J. 235, 244-245, 670 A.2d 516, 521 (1996). As the court explained in Fischer a year before Olds was decide d, "the competing considerations in each case are weighed b y examining the following three factors: (1) the purp ose of the new rule and whether it would be advanced by retroa ctive application; (2) the reliance placed on the old rul e by the parties and the community; and (3) the effect that retroactive application would have on the administr ation of justice." Ibid., citing Rutherford Educ. Ass'n. v. Rutherford Bd. of Educ., 99 N.J. 8, 22, 489 A.2d 1148 (1985), and State v. Burstein, 85 N.J. 394, 406, 427 A.2d 525 ( 1981).

First, we consider the purpose of the Olds rule and inquire whether that purpose would be effectuated b y applying it to Gillman's situation. Three purposes may be said to support the Olds rule: to preserve the sanc tity of the attorney-client relationship, to foster judicial ef ficiency, and to increase fairness. All three are well served by extending the Olds rule to Gillman's situation: (1) The Olds rule is protective of the attorney-client relationship in t hat it permits a client to avoid what Circle Chevrolet ap peared to mandate: undermining a current attorney-client relationship by joining the lawyer as a malpractice defendant in underlying litigation. (2) The Olds r ule promotes judicial efficiency by obviating the neces sity of enlarging and complicating the underlying litigatio n through the addition of a malpractice claim before the

13plaintiff can ascertain whether the result in the u nderlying

litigation renders the malpractice claim unnecessar y. (3) The rule relieves a client of the Hobson's Choice, imposed by Circle Chevrolet, of, on the one hand, surrender ing the attorney-client privilege by adding a claim for mal practice in the underlying litigation, or on the other hand, surrendering the right to pursue a malpractice clai m in the

future.

Second, we consider the extent to which the parties and the larger community may have relied on the rule th e Olds court jettisoned. As the Olds court concluded, the Circle Chevrolet rule was of such short duration -- only t wo years -- as to encourage little reliance. Moreover, criti cism and calls for the overruling of Circle Chevrolet were s o immediate and so vehement that any reliance thereon could only have been tentative.

Third, we consider the impact of retroactive applic ation of the new rule on the administration of justice. We t hink that bringing within the ambit of Olds those cases, like the case at bar, in which the cause of action had accrued, b ut no claim had been filed, when Olds was decided, would not be detrimental to the administration of justice becaus e it would not involve the reopening of cases that had b een fully adjudicated. Furthermore, the Olds rule promotes th e resolution of attorney malpractice claims on the me rits, rather than on the basis of the arcane procedural jurisprudence spawned by Circle Chevrolet.

In sum, we conclude that the "pipeline retroactivit y" called for by the Olds court requires the applicati on of Olds
to Gillman's claim.

B.

We turn now to the District Court's alternate groun d for granting summary judgment: Gillman, so the District Court put it, "assured his attorneys that he would not as sert a malpractice claim against them in the pending state court action. Thereby, Gillman voluntarily surrendered a known right. Accordingly, even in the absence of the Circ le Chevrolet ruling, Gillman's claim could be barred u nder the
doctrine of waiver."

14Some of the evidence before the District Court lent

support to a finding that Gillman knowingly and intelligently disavowed any thought of suing Waters
, McPherson. But other evidence cut in a different di rection. In his sworn declaration submitted in opposition to defendants' summary judgment motion, Gillman descri bed
the difficult choice he confronted when Becker told him about the potential impact of the entire controvers y doctrine. "Faced with the dilemma, I accepted the
assurances I received from McPherson and Rosen that my position in the Bally Litigation would prevail, and that the Court would conclude that I had ten years to exerci se my options. It appeared to be against my best interest s to add Waters, McPherson to the Bally Litigation (thereby waiving my attorney-client privilege) especially since none of my attorneys suggested that I even had a claim against Waters, McPherson. To this day, McPherson has denied that h is firm was negligent [citing deposition testimony of Kenneth McPherson, Sr.]." Gillman Declaration, paragraph 31

. Further, according to Gillman, "I never waived or relinquished my rights to file a claim against Wate rs, McPherson. Nor did I ever inform Mr. Becker or anyo ne at Waters, McPherson that I had waived or relinquished any claims that I had against the firm. During those ye ars, I merely accepted the assurances that McPherson and R osen repeatedly gave me that I would prevail in the Ball y Litigation and mindful of the advice Mr. Becker gav e me that joining Waters, McPherson would create serious tactical problems, determined not to join Waters, McPherson as a defendant in the Bally Litigation wh ich would have required me to sever my attorney-client relationship with the firm."

With the record in this posture, a grant of summary judgment on the issue of waiver was inappropriate." Waiver, under New Jersey law, involves the intentional relinquishment of a known right, and thus it must b e shown that the party charged with waiver knew of hi s or her legal rights and deliberately intended to relin quish them . . . Questions of waiver, therefore, are usua lly questions of intent, which are factual determinatio ns that should not be made on a motion for summary judgment ." Shebar v. Sanyo Business Systems Corp., 544 A.2d 37 7,

15384 (N.J. 1988); accord, Garden State Buildings, L. P., v.

First Fidelity Bank, N.A., 702 A.2d 1315, 1325 (N.J . Super. 1997).1

Conclusion

For the foregoing reasons the judgment of the Distr ict
Court is reversed and the case remanded for further proceedings consistent with this opinion.

A True Copy:

Teste:

Clerk of the United States Court of Appeals
for the Third Circuit

___________________________________________________ ______________

1. It may be added that the complexity of establish ing "that the party charged with waiver knew of his or her legal rights and deliberately intended to relinquish them" is significantly compo unded in a setting, such as that presented in the case at bar, in which the legal principles
that constitute the framework within which a choice is to be made, while seemingly valid at the time of the choice, are subs equently undercut by

later case law.

16