LAWRENCE CAPOBIANCO,

Plaintiff,

v.

ARLENE GLENN SIMOLIKE, ESQ.

and ARLENE GLENN SIMOLIKE ESQ.

AND ASSOCIATES, P.C.,

Defendants.

UNITED STATES DISTRICT COURT

DISTRICT OF NEW JERSEY

 

HONORABLE JOSEPH E. IRENAS

CIVIL ACTION NO. 11-625

(JEI/JS)

OPINION

APPEARANCES:

ALAN L. FRANK LAW ASSOCIATES, P.C.

By: Alan L. Frank, Esq.

1103 Laurel Oak Road, Suite 140

Voorhees, NJ 08043

Counsel for Plaintiff

SWARTZ CAMPBELL LLC

By: Jeffrey B. McCarron, Esq.

Two Liberty Place

50 South 16th Street, 28th Floor

Philadelphia, PA 19102

Counsel for Defendants

IRENAS, Senior District Judge:

Plaintiff Lawrence Capobianco initiated this action against

Arlene Glenn Simolike, Esq. and Arlene Glenn Simolike Esq. and

Associates, P.C., (collectively “Defendants”), after discovering

that Simolike did not record the mortgage on a North Wildwood

property executed in favor of Capobianco. Pending before the 1

 The Court has subject matter jurisdiction pursuant to 28 1

U.S.C. § 1332. 

1

Case 1:11-cv-00625-JEI-JS Document 14 Filed 04/25/11 Page 1 of 9 PageID: 98
Court is Defendants’ Motion to Dismiss the Complaint pursuant to

Fed. R. Civ. P. 12(b)(6) and 12(b)(3).

I.

Plaintiff was the owner of real estate located in North

Wildwood (the “Property”). (Compl. ¶ 7.) In 2003, he sold the

Property to his son and daughter-in-law, Joseph and Camille

Capobianco (collectively “the Buyers”), for $180,000 to be paid

over a thirty year period at a rate of $500 per month without

interest. (Id. ¶¶ 9-10.) 

Plaintiff and the Buyers split the cost of having Defendants

prepare a contract for sale of the Property, a deed for transfer

of the Property, a promissory note evidencing the Buyers’

indebtedness to Plaintiff, and a mortgage securing the promissory

note with the Property. (Id. ¶ 13.) Defendants did not seek a

waiver of the conflict of interest created by representing both

Plaintiff and the Buyers of the Property. (Id. ¶ 14.) 

Although Defendants prepared all of the documents, which

were executed by Plaintiff and the Buyers, the mortgage was not

recorded. (Id. ¶¶ 15, 18.) According to Plaintiff, he first 2

became aware that the mortgage had not been recorded in May 2009

when he visited Defendants because the Buyers had failed to make

 Plaintiff alleges that it is his belief that Camille 2

Capobianco contacted Simolike and advised her not to record the

mortgage on the Property that was executed in favor of Plaintiff. 

(Compl. ¶ 16.)

2

Case 1:11-cv-00625-JEI-JS Document 14 Filed 04/25/11 Page 2 of 9 PageID: 99
payments for several months. (Id. ¶ 20.) At that time,

Plaintiff also learned that in 2006 the Buyers mortgaged the

Property in favor of Chase Home Finance, LLC. (Id. ¶ 21.) 

Plaintiff then recorded the mortgage, initiated a lawsuit

against the Buyers, and obtained a judgment in the amount of

$179,000, the balance due under the promissory note. (Id. ¶ 26.) 

According to Plaintiff, the Buyers do not have any assets to

satisfy the outstanding judgment against them, and the Property

is encumbered by the first mortgage recorded in favor of Chase

Home Finance, LLC. (Id. ¶ 29.) Therefore, according to 3

Plaintiff, the judgment he obtained is uncollectible and has no

real value. (Id. ¶ 30.)

Plaintiff initiated the instant action on March 31, 2011

against Defendants, alleging claims for conflict of interest,

professional negligence, breach of fiduciary duty and breach of

contract. Defendants moved to dismiss the Complaint for failure

to state a claim and improper venue pursuant to Fed. R. Civ. P.

12(b)(6) and 12(b)(3). 

II. 

A. 

A defendant seeking dismissal under Rule 12(b)(3) has the

 Camille Capobianco filed for protection pursuant to the 3

United States Bankruptcy Code on December 9, 2010. (Compl. ¶

27.) Plaintiff believes that a bankruptcy filing on behalf of

Joseph is imminent. (Id. ¶ 28.) 

3

Case 1:11-cv-00625-JEI-JS Document 14 Filed 04/25/11 Page 3 of 9 PageID: 100
burden of showing that venue is improper. See Myers v. Am.

Dental Ass’n, 695 F.2d 716, 724-25 (3d Cir. 1982). Pursuant to

28 U.S.C. § 1391(a), 

[a] civil action wherein jurisdiction is

founded only on diversity of citizenship may,

except as otherwise provided by law, be

brought only in (1) a judicial district where

any defendant resides, if all defendants

reside in the same State, (2) a judicial

district in which a substantial part of the

events or omissions giving rise to the claim

occurred, or a substantial part of property

that is the subject of the action is situated,

or (3) a judicial district in which any

defendant is subject to personal jurisdiction

at the time the action is commenced, if there

is no district in which the action may

otherwise be brought.

28 U.S.C. § 1391(a). 

B. 

Federal Rule of Civil Procedure 12(b)(6) provides that a

court may dismiss a complaint “for failure to state a claim upon

which relief can be granted.” In order to survive a motion to

dismiss, a complaint must allege facts that raise a right to

relief above the speculative level. Bell Atlantic Corp. v.

Twombly, 550 U.S. 544, 555 (2007); see also Fed. R. Civ. P.

8(a)(2). 

While a court must accept as true all allegations in the

plaintiff’s complaint, and view them in the light most favorable

to the plaintiff, Phillips v. County of Allegheny, 515 F.3d 224,

231 (3d Cir. 2008), a court is not required to accept sweeping

4

Case 1:11-cv-00625-JEI-JS Document 14 Filed 04/25/11 Page 4 of 9 PageID: 101
legal conclusions cast in the form of factual allegations,

unwarranted inferences, or unsupported conclusions. Morse v.

Lower Merion Sch. Dist., 132 F.3d 902, 906 (3d Cir. 1997). The

complaint must state sufficient facts to show that the legal

allegations are not simply possible, but plausible. Phillips,

515 F.3d at 234. “A claim has facial plausibility when the

plaintiff pleads factual content that allows the court to draw

the reasonable inference that the defendant is liable for the

misconduct alleged.” Ashcroft v. Iqbal, 129 S.Ct. 1937, 1949

(2009).

When evaluating a Rule 12(b)(6) motion to dismiss, the Court

considers “only the allegations in the complaint, exhibits

attached to the complaint, matters of public record, and

documents that form the basis of a claim.” Lum v. Bank of

America, 361 F.3d 217, 221 n.3 (3d Cir. 2004). A document that

forms the basis of a claim is one that is “integral to or

explicitly relied upon in the complaint.” Id. (quoting In re

Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1426 (3d Cir.

1997)).

III.

A.

Defendants move to dismiss the action for improper venue

arguing that no substantial part of the events or omissions

giving rise to the claim occurred within New Jersey. 

5

Case 1:11-cv-00625-JEI-JS Document 14 Filed 04/25/11 Page 5 of 9 PageID: 102
Alternatively, Defendants seek a transfer to the Eastern District

of Pennsylvania pursuant to 28 U.S.C. § 1406, which permits a

court to transfer a case filed in an improper venue to “any

district or division in which it could have been brought.” 28

U.S.C. § 1406(a). 

Defendants argue that because documents related to the sale

of the Property were prepared in Pennsylvania, the proper venue

is the Eastern District of Pennsylvania. However, the Property

was located in Wildwood, New Jersey, and Defendants’ failure to

record the mortgage occurred in New Jersey. This satisfies the

“substantial part of the events” standard in § 1391(a)(2), which

“is intended to preserve the element of fairness so that a

defendant is not haled into a remote district having no real

relationship to the dispute.” Cottman Transmission Sys., Inc. v.

Martino, 36 F.3d 291, 294 (3d Cir. 1994).

Accordingly, Defendants’ Motion to Dismiss for improper

venue is denied. 

4

B.

Defendants argue that Plaintiff has failed to state claims

for conflict of interest and breach of fiduciary duty because

 Since venue is proper in this district, Defendants’ 4

motion to transfer pursuant to 28 U.S.C. § 1406 is also denied. 

While Defendants have not sought a transfer to the Eastern

District of Pennsylvania pursuant to 28 U.S.C. § 1404, the Court

notes that it is unlikely that such a transfer would be in the

interests of justice or for the convenience of the parties and

witnesses. See 28 U.S.C. § 1404(a). 

6

Case 1:11-cv-00625-JEI-JS Document 14 Filed 04/25/11 Page 6 of 9 PageID: 103
Plaintiff has not alleged disloyal or dishonest conduct. (Defs’

Br. in Support at 6.) Defendants further argue that Plaintiff

has failed to state a claim for conflict of interest because a

violation of ethical rules cannot form the basis of a civil cause

of action for damages. (Defs’ Reply at 2.) 

While Defendants are correct that a violation of the Rules

of Professional Conduct standing alone does not give rise to a

civil cause of action for damages, see Baxt v. Liloia, 155 N.J.

190, 198 (1998), Plaintiff is not relying solely on a violation

of the Rules of Professional Conduct to make out his conflict of

interest claim. A review of Count One of the Complaint indicates

that Plaintiff has pled a claim for legal malpractice based on

Defendants’ conflict of interest in representing both Plaintiff

and the Buyers. 

Legal malpractice requires that a plaintiff demonstrate “(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.” Jerista v. Murray, 185 N.J. 175, 190-91

(2005). 

Plaintiff alleged that Defendants undertook legal

representation of him in connection with the sale of the Property

(see Compl. ¶ 35), that Defendants breached a duty of care by

representing both Plaintiff and the Buyers of the Property

despite the conflict of interest and by failing to record the

7

Case 1:11-cv-00625-JEI-JS Document 14 Filed 04/25/11 Page 7 of 9 PageID: 104
mortgage (Id. ¶¶ 38-39), and that this breach proximately caused

damages in the amount of $179,000 to Plaintiff (Id. ¶ 40). 

Therefore, Count One of Plaintiff’s Complaint states a claim for

legal malpractice.5

Count Three of Plaintiff’s Complaint is a claim for breach

of fiduciary duty. Under New Jersey law, such a claim requires

that the plaintiff show “that one party places trust and

confidence in another who is in a dominant or superior position.” 

McKelvey v. Pierce, 173 N.J. 26, 57 (2002). While a breach of

fiduciary duty claim “may arise in the legal malpractice

context,” it may also be “prosecuted as an independent tort.” 

Packard-Bamberger & Co., Inc. v. Collier, 167 N.J. 427, 443

(2001). As the New Jersey Supreme Court explained, “an attorney

who intentionally violates the duty of loyalty owed to a client

commits a more egregious offense than one who negligently

breaches the duty of care.” Id. 

Accepting all of Plaintiff’s allegations in the Complaint as

true, Plaintiff has stated a plausible claim for breach of

fiduciary duty. Plaintiff has alleged the requisite attorney-

 New Jersey requires that a plaintiff claiming 5

professional malpractice file an affidavit of merit to show that

there “exists a reasonable probability that the care, skill or

knowledge exercised or exhibited in the treatment, practice or

work that is the subject of the complaint, fell outside

acceptable professional or occupational standard or treatment

practices.” N.J.S.A. § 2A:53A-27. The affidavit must be filed

within 60 days following the date that the defendant files his

answer. See id. 

8

Case 1:11-cv-00625-JEI-JS Document 14 Filed 04/25/11 Page 8 of 9 PageID: 105
client relationship (see Compl. ¶¶ 58-61), an alleged breach of

that relationship through representation of Plaintiff and the

Buyers who had competing interests and an allegedly intentional

failure to record the mortgage (see Compl. ¶¶ 63-65, 16, 23), and

resulting damages (see Compl. ¶ 66). See Kim v. Baik, 2007 WL

674715, at *3 (D.N.J. Feb. 27, 2007)(denying motion to dismiss

breach of fiduciary duty claim where plaintiff alleged attorneyclient relationship and potential intentional misconduct). 

Accordingly, Defendants’ Motion to Dismiss Plaintiff’s

fiduciary duty claim is denied. 

6

IV.

For the reasons stated above, Defendants’ Motion to Dismiss

will be denied. An appropriate Order accompanies this Opinion. 

Dated: April 25, 2011

 s/Joseph E. Irenas 

JOSEPH E. IRENAS, S.U.S.D.J.

 

 Defendants also move to dismiss Plaintiff’s request for 6

“such other and further relief as this Court deems just and

proper,” arguing that it is not a statement of relief sought. 

(Defs’ Br. in Support at 6-7.) Defendants’ motion is denied. 

9

Case 1:11-cv-00625-JEI-JS Document 14 Filed 04/25/11 Page 9 of 9 PageID: 106