Court Opinion

ID: 4431054
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:51:27.472277+00
Date Added: 2024-06-11T14:51:47.121373
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
        parties in the case and its use in other cases is limited. R. 1:36-3.

                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-0131-16T4

TREVOR SHEPPARD,

        Plaintiff-Appellant,

v.

FRANK J. LENTZ, ESQUIRE,
and THE LAW OFFICES OF
FRANK J. LENTZ, LLC,

        Defendants,

and

PERSKIE, WALLACH, FENDT &
HOLTZ, PC, (n/k/a
PERSKIE & FENDT, PC),
and M. DANIEL PERSKIE,
ESQUIRE,

     Defendants-Respondents.
_______________________________

              Argued May 31, 2018 – Submitted June 26, 2018

              Before Judges Alvarez and Geiger.

              On appeal from Superior Court of New Jersey,
              Law Division, Atlantic and Cape May Counties,
              Docket No. L-2083-13.

              Thomas B.       Duffy     argued     the    cause    for
              appellant.
           Matthew S. Marrone argued the cause for
           respondents    (Goldberg     Segalla,    LLP,
           attorneys; Matthew S. Marrone, on the brief).

PER CURIAM

     Plaintiff Trevor Sheppard appeals from a July 27, 2016 order

granting defendants Perskie, Wallach, Fendt & Holtz, PC and M.

Daniel Perskie (collectively, the Perskie defendants)              summary

judgment and denying plaintiff's cross-motion for leave to file

an amended complaint.    We affirm.

     We glean the following facts from the record.           On August 4,

2003, plaintiff and his friends, Kevin Farrell and Scott Knoedler,

were occupants of a vehicle involved in a collision with another

vehicle.     Plaintiff was a passenger; it was unclear who was

driving.   Plaintiff suffered serious facial and dental injuries.

     Plaintiff,   Farrell,   and   Knoedler       retained   the   Perskie

defendants to represent them in their personal injury claims

arising out of the accident. On August 12, 2003, plaintiff entered

into a standard-form contingency fee agreement with the Perskie

defendants regarding his personal injury claim.

     Perskie,   the   attorney   handling   the    matter,   subsequently

determined he had a conflict of interest in representing plaintiff

and the other two claimants due to a dispute over who was driving

the vehicle they occupied on the night of the accident.               As a

result, Perskie referred plaintiff to defendant Frank J. Lentz,

                                   2                               A-0131-16T4
an attorney in a separate law firm with offices in a different

suite in the same building as Perkie's office, to represent

plaintiff on the personal injury claim.                Lentz then commenced a

personal injury lawsuit on behalf of plaintiff.                  Farrell and

Knoedler retained other counsel.             Perskie continued to represent

plaintiff on his personal injury protection benefit (PIP) claim

for medical expenses against his own automobile insurer.1

      At all relevant times, Lentz was licensed to practice law in

New Jersey.    The license was in good standing.            He had never been

the subject of any prior disciplinary charges or sanctions.              There

is   no   evidence   he   was   under       criminal   investigation   or   had

previously committed legal malpractice.

      The Perskie defendants did not seek or obtain a referral fee

from Lentz.    They did not enter into a fee-sharing agreement with

Lentz.    They did not seek, expect, or receive compensation from

Lentz for the services they rendered on the personal injury claim

before it was referred to Lentz.                Attorneys in their office

performed no further legal services on the personal injury file

after it was referred to Lentz.

1
   The Automobile Reparation Reform Act, N.J.S.A. 39:6A-1 to -20,
requires insurers of private passenger vehicles to provide
enumerated PIP benefits, including medical expense benefits, to
occupants of automobiles injured in a motor vehicle accident
without regard to fault. N.J.S.A. 39:6A-4.

                                        3                              A-0131-16T4
     Plaintiff      contends   this    transfer       occurred    after    Perskie

introduced plaintiff to Lentz following a "walk down the hallway."

Plaintiff argues neither attorney informed him of whether there

was joint representation or a referral fee.                He claims Perskie's

staff continued to work on plaintiff's case after his referral to

Lentz.     As evidence, plaintiff claims members of Perskie's law

firm arranged for service of Sheppard's complaint against Farrell

and continued to represent plaintiff in his PIP action against his

insurer.

     Lentz retained Frank Larkins to serve Farrell, whom plaintiff

claims is the investigator for the Perskie firm.                    The Perskie

defendants contend the PIP action remained wholly separate from

the personal injury action filed against third parties.

     Plaintiff      contends   Lentz    mishandled        the   personal    injury

action by failing to name two potentially liable parties as

defendants    and   by   failing   to       assert    a   claim   for   negligent

entrustment against Farrell.          Specifically, the complaint did not

name Knoedler as the negligent driver of the vehicle in which

plaintiff was riding or the Borgata Hotel Casino & Spa (Borgata)

under a dram shop theory of liability.2              The three actions brought

2
   Although Lentz eventually filed an amended complaint asserting
a dram shop claim against the Borgata on behalf of plaintiff,
Lentz filed it after the two-year statute of limitations had
expired.

                                        4                                  A-0131-16T4
by   plaintiff,   Farrell,   and   Knoedler   were   consolidated   and

proceeded to trial.

     In our prior opinion, Farrell v. Knoedler, we summarized the

evidence produced at trial:

          On August 3, 2003, at approximately 11:30
          p.m., Trevor Sheppard, Farrell, and Knoedler
          left their home in Farrell's truck. Knoedler
          was the driver.   They went to a bar, where
          they stayed and were drinking until closing
          at 2:00 a.m. Knoedler drove the men back to
          their house.   During the ride, Sheppard sat
          on the passenger side because he is deaf in
          his right ear. Farrell sat in the middle of
          the truck's bench seat.

               At the house, the men continued to drink.
          After about an hour, Knoedler drove the men
          to the Borgata in Atlantic City.      He drove
          because he was the "most sober."        Again,
          Farrell sat in the middle and Sheppard sat on
          the right.

               At approximately 4 or 5 a.m., after
          drinking additional alcoholic beverages, they
          left the Borgata.     They do not remember
          whether Farrell or Knoedler was driving.

               Their truck ran a red light and collided
          with another vehicle. The driver-side airbag
          deployed. Farrell was ejected from the truck
          and was pinned under the passenger side front
          tire.

          [No. A-5451-06 (App. Div. June 10, 2008) (slip
          op. at 2-3).]

     The jury found Knoedler was the driver.         Because Lentz did

not name Knoedler or the Borgata as defendants, and did not plead

a negligent entrustment claim against Farrell, plaintiff did not

                                   5                           A-0131-16T4
recover any damages for his injuries, despite having stipulated

damages of $150,000.      Lentz did not appeal the verdict on behalf

of plaintiff or file a respondent's brief in the appeal filed by

Farrell.

      On April 27, 2013, plaintiff filed this action against Lentz,

his law firm, and the Perskie defendants, alleging they committed

legal malpractice.     Plaintiff settled his claims against Lentz and

his law firm.      As to the Perskie defendants, plaintiff alleged

they negligently referred him to Lentz and failed to follow-up

after the referral to ensure Lentz was "conforming to the standard

of   care   and   professional   practice   in   the   profession."    The

complaint alleged, in part:

                 3. Such a referral is legal guidance for
            which the referrer remains liable for its own
            malpractice in making the referral or for the
            malpractice of the firm to whom it refers the
            case, or both.    In the alternative, it is
            asserted that the referring attorney is
            strictly liable for the malpractice of the
            attorney to whom the case is referred.

                 4. Mr. Perskie knew or should have known
            that Mr. Lentz was mainly a criminal attorney,
            having been a former police officer, and that
            he   was   unqualified  in   personal   injury
            litigation.     As a result, it was legal
            malpractice to refer Sheppard's case to Mr.
            Lentz. In any case, the referral was made and
            Lentz     initiated     an     attorney-client
            relationship with Sheppard. However, it was
            very unclear to Sheppard whether he had
            actually been transferred to a new law firm
            as Mr. Lentz seemed to [be] treated as an

                                    6                             A-0131-16T4
          associate in the Perskie Firm,          sharing
          offices, assistants and machinery.

     Plaintiff also alleged the Perskie defendants were strictly

liable for Lentz's errors because Lentz was their agent or partner

or operating under some other legal status.

     Perskie and Lentz practiced in different law firms located

in separate office suites in the same building.    Although Perskie

retained the PIP claim, his involvement in the personal injury

action ended upon referral of that claim to Lentz.     Perskie did

not draft, sign, or file any pleadings in the personal injury

case.   He did not attend any conferences between plaintiff and

Lentz after the referral.   Nor did he attend any depositions or

court appearances in the personal injury action.

     Notably, the complaint states "Lentz had an easy job to do"

and that "discovery in the [personal injury] action seems to have

proceeded with few incidents."

     Plaintiff filed the malpractice action in Atlantic County

However, the complaint stated venue "may have to be changed because

a member of the Atlantic County Bench may be called as a witness

to the malpractice and its damages (as well as other reasons)."

Plaintiff's counsel claims "[v]arious retaliatory events happened"

in other unrelated cases while this case was pending "which made

[him] more insistent on a transfer."   He states he complained to

                                 7                          A-0131-16T4
the assignment judge and the case was moved from Atlantic County

to Cape May County but argues the case should have been moved to

another vicinage.     Thereafter, counsel moved before the sitting

judge and claimed no action was taken regarding venue change.

Counsel contacted the assignment judge again and was advised the

disqualification    transfer   issue     had   been   referred    to    the

Administrative Office of the Courts. He claims he has not received

a decision on the issue.

     The Perskie defendants moved to dismiss the complaint for

failure to state a claim pursuant to Rule 4:6-2(e).         On April 9,

2014, the trial court issued a memorandum of decision denying the

motion as premature based on the lack of discovery.              The court

also noted:

          This is not a motion for summary judgment. It
          is a motion for dismissal for failure to state
          a cause of action.    With so little law, it
          cannot be determined at this stage of the
          pleadings whether a claim for negligence
          against Perskie could stand. . . .

          This is not a claim that can be dismissed at
          this point in time.    The court cannot find
          that there is no cause of action against
          defendant   Perskie  based   solely  on   the
          pleadings. After discovery is completed and
          the facts and circumstances are known, then a
          motion for summary judgment can be filed.

     Pursuant to the order, the parties engaged in extensive

discovery.    After   the   completion    of   discovery,   the    Perskie

                                  8                                A-0131-16T4
defendants moved for summary judgment.      Plaintiff opposed the

motion and cross-moved for leave to file an amended complaint,

which would have added counts for breach of contract, per se

liability, res ipsa loquitor, and spoliation of evidence.        The

Perskie defendants argued negligent referral is not recognized as

a cause of action in New Jersey and plaintiff failed to establish

any facts during the course of discovery that would support a

claim for liability.

     On July 27, 2016, the trial court issued an order and fifteen-

page memorandum of decision granting summary judgment to the

Perskie defendants and denying plaintiff's cross-motion for leave

to file an amended complaint.   After noting there is a dearth of

case law addressing negligent referral as a cause of action in New

Jersey, the judge found the facts in Tormo v. Yormark, 398 F.

Supp. 1159 (D.N.J. 1975) to be distinguishable.

     The judge found Perskie had no communications with plaintiff

regarding the personal injury claim after he was introduced to

Lentz.    He noted plaintiff testified, as of March 9, 2005, when

the complaint was filed, plaintiff knew Lentz, not Perskie, was

representing him in the lawsuit and had filed the complaint of his

behalf.   The judge found "no evidence in the record to support a

finding" that defendants "knew or had reason to know that Mr.

Lentz would be negligent or guilty of an offense."

                                9                           A-0131-16T4
     The trial court also found the new claims raised by plaintiff

in the proposed amended complaint to be moot in light of the

summary judgment granted to the Perskie defendants.            This appeal

followed.

     On appeal, plaintiff argues (1) the court erred in hearing

the case in Vicinage I based on appearances of impropriety, (2)

the Perskie defendants were jointly and severally liable with

Lentz for legal malpractice, (3) the court erred in allowing parole

evidence to defeat the default condition of joint and several

liability,   (4)   New   Jersey's        facts   and   circumstances   test

decisively determines defendants' liability, and (5) the court

should impose strict liability for not informing clients of liens

or fee splitting agreements.

     A court should grant summary judgment "forthwith" when "the

pleadings, depositions, answers to interrogatories and admissions

on file, together with the affidavits, if any, show that there is

no genuine issue as to any material fact challenged and that the

moving party is entitled to a judgment or order as a matter of

law."   R. 4:46-2(c).    Under this standard, "a court should deny a

summary judgment motion only where the party opposing the motion

has come forward with evidence that creates a 'genuine issue as

to any material fact challenged.'"           Brill v. Guardian Life Ins.

Co. of Am., 142 N.J. 520, 529 (1995) (quoting R. 4:46-2(c)).

                                    10                             A-0131-16T4
     The   trial   court   must   "consider   whether      the   competent

evidential materials presented, when viewed in the light most

favorable to the non-moving party, are sufficient to permit a

rational factfinder to resolve the alleged disputed issue in favor

of the non-moving party."    Id. at 540; see also R. 4:46-2(c).           To

grant the motion, the court must find that the evidence in the

record "is so one-sided that one party must prevail as a matter

of law."   Brill, 142 N.J. at 540 (quoting Anderson v. Liberty

Lobby, Inc., 477 U.S. 242, 252 (1986)).

     Our review of an order granting summary judgment is de novo.

See, e.g., Van Horn v. Harmony Sand & Gravel, Inc., 442 N.J. Super.

333, 340 (App. Div. 2015).    We must observe the same standards as

the trial court, including the obligation to view the record in a

light most favorable to the non-moving parties.         See IE Test, LLC

v. Carroll, 226 N.J. 166, 184 (2016) (quoting Brill, 142 N.J. at

540).   We accord no "special deference" to a trial court's legal

determinations.    Manalapan Realty, L.P. v. Manalapan Twp. Comm.,

140 N.J. 366, 378 (1995).

     Applying   those   principles,    we   affirm   the    dismissal     of

plaintiff's complaint and the denial of his motion for leave to

amend the complaint.    The undisputed facts demonstrate the Perskie

defendants are entitled to judgment as a matter of law.

                                  11                               A-0131-16T4
     Relying primarily on Tormo, a federal district court opinion,

plaintiff argues New Jersey recognizes a cause of action for the

negligent transfer or referral of cases and employs a facts and

circumstances test to determine liability.     However, we are aware

of no New Jersey case law recognizing a cause of action for

negligent referral.     Moreover, plaintiff's reliance on Tormo is

misplaced;     the   operative    facts   in   Tormo   are   readily

distinguishable.3

     In Tormo, the court denied a summary judgment motion involving

"a New York attorney's liability for negligence in transferring

his clients' personal injury case to a criminally indicted New

Jersey lawyer who subsequently embezzled the client's funds."     398

F. Supp. at 1164.     The judge found the facts surrounding the New

York attorney's role to be "confused and conflicting."       Id. at

1165.

     In 1968, the New Jersey attorney unethically solicited the

transfer of the claim by calling the New York attorney and telling

him he was "familiar with the accident" and was a "negligence

specialist."    Id. at 1166.   Since New York was no longer a proper

3
   We also note the interpretation of New Jersey law by a federal
district court is not binding upon us.    See Kavky v. Herbalife
Int'l of Am., 359 N.J. Super. 497, 501 (App. Div. 2003); Shaw v.
City of Jersey City, 346 N.J. Super. 219, 229 (App. Div.), rev'd
on other grounds, 174 N.J. 567 (2002).

                                  12                         A-0131-16T4
venue for the action, and since the New York attorney was not

licensed to practice outside New York, he later contacted the New

Jersey attorney, requesting he bring suit in New Jersey.            Ibid.

The New York attorney allegedly told his clients the New Jersey

attorney was a "good well-qualified lawyer" who "was going to

handle the case."     Id. at 1166-67.    The New York attorney's "only

independent inquiry into [the New Jersey attorney's] reputation

consisted of ascertaining that he was listed as a licensed New

Jersey attorney in a lawyer's directory."        Id. at 1167.    The New

York    attorney    "never   consulted   [the   New   Jersey    attorney]

concerning resolution of the case after the transfer."         Ibid.   The

New Jersey attorney took over the file, settled the claim, and

converted the settlement proceeds.       Id. at 1167-68.

       Meanwhile, the New Jersey attorney was indicted in 1969 for

conspiring to fraudulently obtain money from an insurance company.

Id. at 1166 (citing State v. Yormark, 117 N.J. Super. 315 (App.

Div. 1971)).       "He was subsequently convicted in January 1971,

sentenced the following month to two consecutive 18-month prison

terms, and disbarred in February 1972."          Id. at 1166-67.       The

crimes "received coverage in the New Jersey press, but [the New

York attorney] never discovered them until after [the New Jersey

attorney] had fully executed his scheme."       Id. at 1167.

                                   13                             A-0131-16T4
       The plaintiffs brought suit against the New Jersey attorney

and two banks for conversion.          Plaintiffs alleged one of the banks

failed       to    take   reasonable   measures   to    discover   whether     the

endorsement on the settlement draft was genuine. The banks brought

third-party claims against the New York attorney for negligently

selecting and failing to supervise the New Jersey attorney.                    The

banks also asserted he "failed to diligently file suit even after

[the New Jersey attorney's] fraud was discovered."                    Id. at 1165

n.3.

       The New York attorney moved for summary judgment on both

substantive and procedural grounds.          The District Court emphasized

the    New    York     attorney's   knowledge     of   New   Jersey    attorney's

unethical conduct before the case was transferred to him, stating:

                       But even if as a matter of law [the New
                  York attorney] was not required to know of
                  [the New Jersey attorney's] indictment, that
                  conclusion does not resolve entirely the
                  question whether a jury might find him
                  negligent in retaining the New Jersey lawyer.
                  [The New York attorney's] testimony shows that
                  [the New Jersey attorney] informed him that
                  he had obtained his name through [plaintiff].
                  But that testimony raises a question whether
                  [plaintiff]    consulted   [the   New   Jersey
                  attorney] or his "representatives," or whether
                  the opposite was true. As an attorney, [the
                  New York attorney] was required to realize
                  that the latter situation would constitute a
                  breach    of   the    Code   of   Professional
                  Responsibility.    The offense of soliciting
                  legal employment from laymen constitutes a
                  ground for disbarment.        It evidences a

                                        14                                A-0131-16T4
          lawyer's unworthiness of the trust and
          confidence essential to the attorney-client
          relationship.    An attorney who knowingly
          entrusted his client's business to a lawyer
          who he had reason to believe was guilty of
          that offense would be clearly negligent either
          in making the referral at all, or in doing so
          without advising his client of his suspicions.

          [Id. at 1171 (citations omitted).]

     The District Court denied summary judgment, finding "[t]he

record is laced with conflicting testimony concerning what, if

any, supervisory responsibilities [the New York attorney] assumed

by virtue of his express representations to [plaintiff] concerning

the progress of the case."      Id. at 1173.     The court concluded

"[s]ufficient    evidence   exist[ed]   to   justify   submitting   the

question of factual causation to the jury, for it cannot be assumed

that, had [plaintiff] been advised of the gravity of [the New

Jersey attorney's] conduct, he would have ratified [the New York

attorney's] decision to retain him."     Id. at 1172.

     Here, there is no allegation or evidence Lentz engaged in any

unethical behavior before or during the referral of the file.       Nor

is there any allegation or evidence he engaged in criminal conduct

before, during, or after the referral. Lentz's license to practice

law in New Jersey was in good standing.        He had never incurred

disciplinary charges or sanctions.       He was not under criminal

investigation.   Lentz represented to Perskie he was able to handle

                                 15                            A-0131-16T4
the file.   There is no evidence he had previously committed legal

malpractice.    Thus, the trial court properly concluded "there is

no   evidence   in   the    record   to    support      a    finding      that   the

[d]efendants knew or had reason to know that Mr. Lentz would be

negligent or guilty of an offense."

      The Perskie defendants did not seek or obtain a referral fee

or enter into a fee-sharing agreement with Lentz.                      They did not

seek, expect, or receive compensation from Lentz for the services

they rendered on the personal injury claim before it was referred.

Attorneys in their office performed no further legal services on

the personal injury file after it was referred to Lentz.

      Additionally, the personal injury claim was referred to Lentz

because the Perskie defendants could no longer represent plaintiff

due to a conflict of interest.            Therefore, unlike the New York

attorney in Tormo, the Perskie defendants were not permitted to

undertake any supervision of Lentz to determine if all potentially

liable parties and viable causes of action were pursued by Lentz

in a timely fashion.       See In re Advisory Comm. on Prof'l Ethics

Op. No. 613, 121 N.J.L.J. 1037 (May 19, 1988) (stating "the

conflict precluded the forwarding attorney from participating for

either party"); In re Advisory Comm. on Prof'l Ethics Op. No. 301,

101 N.J.L.J. 209 (Mar. 9, 1978) (explaining lawyers should avoid

representing    multiples    clients      where   his       or   her    independent

                                     16                                     A-0131-16T4
judgment may become divided, and if a conflict develops, should

withdraw from the matter entirely); In re Advisory Comm. on Prof'l

Ethics Op. No. 188, 93 N.J.L.J. 789 (Nov. 12, 1970) (stating

"[s]hould conflict develop, the attorney who undertakes to act for

several plaintiffs must retire from all representations"); RPC

1.7(a); RPC 1.16(a)(1).

     The Perskie defendants continued to represent plaintiff on

his PIP claim against his insurer for medical expenses related to

the accident.   In doing so, they may have shared discovery of

medical bills and records with Lentz.     However, PIP claims are

brought against the insurer and are not based on fault for the

happening of the accident.4 N.J.S.A. 39:6A-4. Plaintiff's medical

bills and records were not directly relevant to whether additional

parties should have been named defendants or additional theories

of liability should have been asserted.     Moreover, plaintiff's

damages were stipulated in the personal injury action.

4
   Medical expense benefits are triggered by notice of the loss
and are overdue if not paid by the insurer within sixty days.
N.J.S.A. 39:6A-5(g). If not paid in a timely fashion, the injured
claimant may seek relief against the delinquent insurer through
binding arbitration or civil litigation. Riverside Chiropractic
Grp. v. Mercury Ins. Co., 404 N.J. Super. 228, 235 (App. Div.
2008) (citing Cynthia Craig & Daniel Pomeroy, N.J. Auto Ins. Law
§ 10:1 at 187 (2008)).

                               17                          A-0131-16T4
      In this case, we decline to recognize a new cause of action

for negligent referral.       Even if we were inclined to do so, the

undisputed facts do not support a claim of negligent referral.

      Plaintiff's remaining arguments are without sufficient merit

to warrant discussion in a written opinion.              R. 2:11-3(e)(1)(E).

In particular, we find no evidence to support plaintiff's claim

that the motion judge was disqualified from hearing this case.

      We affirm the grant of summary judgment to the Perskie

defendants and the denial of plaintiff's motion for leave to file

an amended complaint.        Plaintiff's remedy for the alleged legal

malpractice was against Lentz and his law firm.              Plaintiff pursued

his   malpractice   claim    against     Lentz   and   his    law   firm.      If

successful at trial, he would have recovered his actual and

consequential damages, including the reasonable legal expenses and

attorney   fees   incurred    in   prosecuting     the    legal     malpractice

action.    See Saffer v. Willoughby, 143 N.J. 256, 272 (1996).

Plaintiff elected to settle his claims against Lentz and his law

firm before trial.      There is no factual or legal basis for

additional recovery against the Perskie defendants.

      Affirmed.

                                    18                                  A-0131-16T4