Court Opinion

ID: 4429202
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:19:51.988966+00
Date Added: 2024-06-11T15:01:15.718600
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NOT FOR PUBLICATION WITHOUT THE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-2405-16T1

ALLEN S. GLUSHAKOW,
M.D., P.A.,

          Plaintiff-Respondent,

v.

ANDREA KUNAK, a/k/a
ANDREA KUNAK-SHARKEY,
and CECILIA W. BLAU, ESQUIRE,

     Defendants-Appellants.
______________________________

                   Argued October 10, 2018 – Decided March 5, 2019

                   Before Judges Hoffman, Suter and Firko.

                   On appeal from Superior Court of New Jersey, Law
                   Division, Essex County, Docket No. L-7032-14.

                   Cecilia W. Blau and Andrea Kunak, appellants, argued
                   the cause pro se.

                   James C. Mescall argued the cause for respondent
                   (Mescall & Acosta, PC, attorneys; James C. Mescall,
                   on the brief).

PER CURIAM
      Defendants Andrea Kunak-Sharkey (Kunak) and Cecilia W. Blau (Blau)

appeal four orders entered in connection with a complaint filed by plaintiff Allen

S. Glushakow, M.D., P.A. arising from his medical treatment of Kunak

following a motor vehicle accident. The case was tried to a jury, which returned

a verdict in plaintiff's favor. Following entry of a judgment that included

attorney's fees and pre-judgment interest, we stayed execution pending appeal

conditioned on defendants depositing $150,000 with the Clerk. Defendants

contend the trial court erred by not allowing them to present evidence to the jury

that an underlying personal injury protection (PIP) arbitration was mishandled

and that plaintiff should be held accountable for his attorney's negligence in that

matter. They assert that a release and assignment of benefits signed by Kunak

was unenforceable.     They claim plaintiff was not entitled to an award of

attorney's fees or pre-judgment interest. We affirm the judgment except for the

award of attorney's fees, which we reverse and remand for further proceedings.

                                      I

      We relate relevant facts from the underlying trial.        At Kunak's first

appointment with plaintiff in July 2009, she told him "she sustained a severe

head injury" from a motor vehicle accident in 2006, had seen a number of other

doctors, "had extensive physical therapy" and "had a number of falls due to a

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balance problem." He commenced conservative treatment. An EMG study

indicated carpel tunnel syndrome.1 He performed surgery to correct this. She

had physical therapy for several months thereafter. Kunak returned to plaintiff's

office in October 2009 complaining about her back, neck and left knee. She

complained of "falling a lot as a result of a balance problem" and left knee pain.

An MRI "[s]uggested a torn meniscus" and there was "pre-existing arthritic

changes in the knee." He performed surgery to repair the torn ligament and

meniscus. In April 2011, she complained of her right knee "locking" and "back

discomfort." Plaintiff performed cartilage surgery on that knee to correct torn

cartilages. Later, he aspirated fluid from her right knee.

      Kunak signed a "Release and Assignment of Benefits" when she initially

sought treatment from plaintiff in July 2009. In relevant part, it provided:

            I understand that regardless of any insurance payment
            or the outcome of any legal proceeding or settlement, I
            am ultimately financially responsible for all charges not
            otherwise paid by insurance or legal settlement or
            covered by this authorization.

                  ....

            Patient is responsible to pay any debts, including
            attorney fees, incurred to collect past due bills. Past

1
   Plaintiff described carpel tunnel syndrome as a "nerve disorder, where the
median nerve in the wrist is injured, and you have numbness in the . . . hands as
a result."
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            due bills are subject to interest charges at the rate of
            [one and one-half percent] per month.

      A month later, she signed an "Agreement For Payment Of Outstanding

Bill." The Agreement stated, in pertinent part, as follows:

            In consideration of withholding immediate legal action
            against me for collection of my outstanding bill for
            medical services rendered, I hereby agree to make a
            minimum payment of $50.00 at the end of treatment and
            direct my attorney, Cecilia Blau, Esq., to pay any such
            outstanding medical bill . . . from the proceeds of any
            settlement or judgment in any case or claim pending on
            my behalf . . . . I understand, however, that my
            obligation to pay this outstanding bill is in no way
            contingent upon the outcome of any pending litigation
            and that I remain primarily responsible for payment of
            this outstanding bill irrespective of the outcome of any
            such litigation.

      Shortly after this, Blau executed a conditional letter of protection, which

stated, "[y]ou may consider this a letter of protection whereby if there is a

recovery for unpaid services rendered in this case, your bill will be protected."

The agreement was "conditioned [on] your submitting timely statements and

proper billing forms to the appropriate insurance companies."

      Kunak's insurer questioned whether some or all of the medical treatment

she received from plaintiff and other medical providers was related to the 2006

automobile accident and submitted the matter to a dispute resolution arbitration.

The PIP arbitration was conducted telephonically by a dispute resolution

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                                       4
professional.   Plaintiff was represented by counsel, but not by Blau, who

represented Kunak for her personal injury claim.

      Plaintiff took the position in the arbitration that Kunak's carpel tunnel was

"an aggravation of a previous condition" that was related to the 2006 car

accident. He also claimed her knee problems were causally related to the same

accident because of her frequent falls and balance disorder. Plaintiff submitted

a report from Dr. Park who claimed Kunak's knee problems were attributable to

the 2006 accident, although Dr. Park did not testify at the arbitration. Kunak

testified about her injuries.

      The arbitrator found the 2006 car accident aggravated Kunak's pre-

existing carpal tunnel syndrome and awarded plaintiff his medical fees for that

treatment. However, he found Kunak's knee injuries were not related to the

accident because she had additional falls after her balance problems were

resolved. He denied plaintiff an award for those fees. Plaintiff's application to

modify or clarify the arbitrator's decision was denied because it "simply

reargu[ed] the evidence submitted in th[e] matter."

      In July 2014, plaintiff filed a breach of contract complaint against Kunak

and Blau seeking a monetary judgment of $26,635.32 plus counsel fees, interest

and costs for the knee surgeries that were denied payment in the arbitration. By

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this time, Kunak had settled the personal injury claim that Blau was handling

for her for $160,000, and the monies were being held by Blau in a trust account.

Plaintiff's complaint alleged Kunak agreed to pay a "fair and reasonable amount"

for his services, had not done so and, as such, breached their contract. The

complaint alleged that Blau breached the letter of protection by not paying

plaintiff.

       Defendants' answer denied they owed plaintiff any compensation for

treatment. In their separate defenses, defendants claimed the PIP arbitration was

mishandled and that negligence caused the loss to plaintiff. There were no

counterclaims, cross-claims or third-party complaints.

       Plaintiff's motion for summary judgment was granted in part and denied

in part. Although Blau's 2009 letter of protection was found to be a "legally

binding contract between plaintiff and defendants," material fact issues existed

about plaintiff's invoice that detailed the "medical services [he] performed on

[Kunak] and payments made by the PIP carrier," which precluded summary

judgment. The case proceeded to trial.2

2
  Blau was disqualified from representing Kunak at the trial. Both defendants
were self-represented.
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      The jury found that plaintiff and Kunak had a contract, Kunak breached

it, plaintiff was not negligent in connection with the arbitration, and Blau

breached her contract with plaintiff.       The jury also found that the "usual,

customary and reasonable fee for the medical services provided by plaintiff" was

$24,359.47. On November 28, 2016, the court entered an order that plaintiff's

counsel fees and interest were to be determined by motion. The order stated that

upon determination of that motion, a final judgment "shall" provide that

judgment would be entered for $24,359.47 in favor of plaintiff against Kunak

and that Blau was to release to plaintiff and his attorney $24,359.47 of the funds

she was holding for Kunak.

      Plaintiff's attorney fee certification requested $31,669.90 for fees and

costs, reflecting 124.40 hours billed at $250 per hour and $569.90 in costs.

Defendants opposed this and filed a motion for a new trial. The court denied

the new trial motion and a subsequent motion for reconsideration. The court

entered a judgment on January 6, 2017, for $24,359.47 in favor of plaintiff

against both defendants, plus attorney's fees of $31,669.90 and interest in the

amount of $17,538.81. We granted an emergent application for a stay pending

appeal conditioned on a $150,000 deposit with the Superior Court Trust Fund.

      On appeal, defendants raise the following issues:

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                                        7
POINT I

WHERE A DOCTOR TAKES, THROUGH AN
ASSIGNMENT OF BENEFITS, THE PATIENT'S
ENTITLEMENT TO PIP INSURANCE COVERAGE
FOR HIS BILL, HE HIRES A LAWYER, THEY
TAKE THE BILL TO PIP ARBITRATION, THEY
NEGLIGENTLY AND GROSSLY MISHANDLE THE
ARBITRATION AND LOSE THE INSURANCE
COVERAGE OF THE BILL, IT WAS ERROR FOR
THE TRIAL JUDGE TO BAR AND PRECLUDE ALL
EVIDENCE OF THE ATTORNEY'S NEGLIGENCE.

POINT II

THE RELEASE AND ASSIGNMENT OF BENEFITS
KUNAK WAS REQUIRED TO SIGN BY DR.
GLUSHAKOW     IN  ORDER  TO    RECEIVE
TREATMENT WAS UNENFORCEABLE AS AN
IMPERMISSIBLE EXCULPATORY CLAUSE AND
UNCONSCIONABLE.

POINT III

THE NEGLIGENT ACTS OF PLAINTIFF'S
ATTORNEY IS ATTRIBUTABLE TO PLAINTIFF
AND LIABILITY THEREFORE MUST REMAIN
WITH PLAINTIFF AS PRINCIPAL AND AGENT.

POINT IV

PLAINTIFF IS NOT ENTITLED TO INTEREST AND
ATTORNEY'S FEES AS THE AMOUNT HE
CLAIMED WAS UNASCERTAINABLE EXCEPT BY
A JURY.

                                            A-2405-16T1
                    8
      With one exception, we do not agree these issues are meritorious. The

attorney fee award was not adequately explained and we are constrained to

reverse only that issue and remand it for further proceedings.

                                        II

      Defendants contend they are entitled to a new trial because of errors made

by the trial court. "The standard for appellate review of a trial court's decision

on a motion for a new trial is substantially the same as that controlling the trial

court except that due deference should be made to its 'feel of the case,' including

credibility." Caldwell v. Haynes, 136 N.J. 422, 432 (1994) (quoting Feldman v.

Lederle Lab., 97 N.J. 429, 463 (1984)). The appellate court defers to the trial

court with respect to "intangibl[es]" not transmitted by the record to decide if

there was a miscarriage, but otherwise makes its own independent determination

of whether a miscarriage of justice occurred. Carrino v. Novotny, 78 N.J. 355,

360-61 n.2 (1979). "Jury verdicts should be set aside in favor of a new trial

sparingly and only in cases of clear injustice." Pressler & Verniero, Current N.J.

Court Rules, cmt. 1.1 on R. 4:49-1 (2019) (citing Caicedo v. Caicedo, 439 N.J.

Super. 615, 628-29 (App. Div. 2015)). "A new trial will be required if the trial

judge concludes that erroneous trial rulings resulted in prejudice to a party. "

Ibid. (citing Crown v. Campo, 136 N.J. 494 (1994)).

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                                        9
      Defendants contend they are entitled to a new trial because the court erred

by not allowing evidence before the jury that the attorney who handled the PIP

arbitration was negligent in presenting plaintiff's claim for Kunak's treatments.

"[T]he decision to admit or exclude evidence is one firmly entrusted to the trial

court's discretion."   State v. Scott, 229 N.J. 469, 479 (2017) (alteration in

original) (quoting Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J.

369, 383-84 (2010)). We apply a deferential standard in reviewing a trial court's

evidentiary rulings and uphold its determinations "absent a showing of an abuse

of discretion." State v. Perry, 225 N.J. 222, 233 (2016) (quoting State v. Brown,

170 N.J. 138, 147 (2001)). A reviewing court must not "substitute its own

judgment for that of the trial court" unless there was a "clear error in judgment,"

a ruling "so wide of the mark that a manifest denial of justice resulted." Ibid.

(quoting State v. Marrero, 148 N.J. 469, 484 (1997)).

      The PIP arbitrator found that the medical treatment Kunak received for

her knees was unrelated to the 2006 automobile accident and denied payment

for these portions of the PIP claim. Defendants argue this was wrong because

the medical treatment received for her knees was related to her imbalance

problems, which was related to the accident. They contend the PIP arbitration

was "lost" because the attorney representing plaintiff was not prepared, did not

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                                       10
call Dr. Park as a live witness, did not prepare Kunak for the arbitration, and

provided an incomplete factual summary to the arbitrator. At the jury trial, Blau

was not permitted to provide the report she prepared about the PIP attorney's

alleged mishandling of the arbitration.

        We do not agree that the trial court abused its discretion in precluding

testimony regarding the alleged malpractice of plaintiff's attorney at the PIP

arbitration. That attorney was not a party in plaintiff's case. 3 Whether he could

have been added to the case as a defendant or third-party defendant begs the

question, because defendants never made a motion to add the attorney even

though in a separate defense they raised that an indispensable party was missing

from the litigation. Without the attorney as a party, the court did not abuse its

discretion in precluding defendants from trying to prove his negligence at the

PIP arbitration.

        Much of what defendants wanted to prove about the absent attorney's

conduct was put before the jury in any event. Blau testified "[t]he arbitration

was not done properly" and that Kunak was not prepared by the lawyer before

the arbitration. When asked if this was the fault of the PIP attorney, Blau

answered "[a]bsolutely." Kunak testified that the lawyer did not prepare her

3
    The record also did not include an affidavit of merit against the attorney.
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                                        11
ahead of the PIP arbitration. She said she kept calling the lawyer to see if she

should come into the office "but they kept saying no." She participated in the

arbitration by phone at "home alone."

      The PIP award was admitted into evidence in the jury trial by consent and

undercut the claim about attorney negligence. It evidenced that the question of

whether Kunak's knee conditions related to the 2006 accident was squarely

before the arbitrator and vetted. There was evidence of a falling episode in 2006,

and she reported to that doctor she was "having falling spells" but "she did not

have any complaints of knee pain and there were no objective findings as they

related to either knee." Dr. Park's report opined the 2006 accident caused an

imbalance injury and that Kunak then suffered falling attacks, injuring her

knees.   The PIP attorney's arbitration summary, criticized as inadequate,

asserted that all of the medical treatment for Kunak's knees was causally related

to the 2006 accident. It stated "[h]er series of falls was attributable to her

balance problems which originated with the accident [of 2006]." Although the

PIP arbitrator did not find a connection between the accident and the knee

surgeries, it was not because the evidence was not presented. The arbitrator

wrote:

            While there was some fall downs, there was no reported
            injury to the knees for a significant period of time

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                                        12
             despite the testimony of [Kunak]. Moreover, despite
             Dr. Park's theory, [Kunak] testified that the imbalance
             was resolved and that she still had fall downs. There
             was no instability of the knees when examined by Dr.
             Wolkstein, despite pain.

      On this record, the trial court did not abuse its discretion in precluding

testimony about the PIP attorney's alleged negligence and certainly there was no

manifest injustice warranting a new trial because much of the information was

already before the jury.

      On appeal, defendants argue that plaintiff may not avoid responsibility for

his attorney's negligent handling of the PIP claim based on a principal agent

relationship. They cite to State v. Mauti, 448 N.J. Super. 275 (App. Div. 2017)

in their brief for the proposition that "a letter written by a lawyer . . . containing

admissions from the defendant, can be used at trial as the statement of the

defendant, because the lawyer was simply acting on behalf of the client

defendant." However, Mauti had nothing to do with holding a client civilly

liable for the negligence of his attorney. In Mauti, the issue was whether an

attorney's letter that described "the medications and dosages" defendant

administered was an adopted admission by defendant under N.J.R.E. 803(b)(3),

or whether the prosecutor was "barred from using any statements of fact

contained in defense counsel's letter because they were made as part of 'plea

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                                        13
negotiations' under N.J.R.E. 410." Id. at 323. The court's holding clarified what

constituted plea negotiations for purposes of N.J.R.E. 410. That issue is not

relevant.

      In this case, the jury expressly found plaintiff was not negligent "in

connection with the arbitration" because it answered "no" to this question on the

verdict sheet. This foreclosed defendants' argument that plaintiff's conduct "in

connection" with the arbitration could be the subject of any further liability

under the novel theory they advance.

      Defendants argue the assignment of benefits and release form that Kunak

signed was "unenforceable as an impermissible exculpatory clause and

unconscionable." Any chose in action arising from a contract is assignable.

Lech v. State Farm Ins. Co., 335 N.J. Super. 254, 258 (App. Div. 2000). PIP

claims are contractual and assignable. Ibid. Their assignment furthers the goal

that injured individuals obtain prompt medical treatment by facilitating "direct

payment on behalf of patients." Id. at 261.

      Defendants characterize the assignment as "exculpatory" because they

contend it afforded plaintiff indemnification for his own negligence.       This

argument fails because the jury found plaintiff was not negligent in connection

with the arbitration. Therefore, factually, the contention that the assignment

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                                       14
indemnified plaintiff for his negligence was not supported. Defendants cite no

other legal authority that an assignment of benefits is unconscionable or against

public policy.

      Defendants argue plaintiff is not entitled to interest and attorney fees

because the amount plaintiff sued on was "unascertainable." Citing to a quote

from General Electric Corp. v. E. Fred Sulzer & Co., 86 N.J. Super. 520, 549-

550 (Law Div. 1965), they contend that where the damages sought are

unliquidated, pre-judgment interest should not be allowed.

      Plaintiff's claim against defendants was plainly capable of calculation.

Defendants even submitted expert testimony to the jury about the proper billing

for all of the codes to reach a dollar amount that was reasonable, customary and

usual. This simply was not a case involving unliquidated damages or a non-

ascertainable amount.

      A court may enter an award of pre-judgment interest when the contract

permits this. See Van Note-Harvey Assocs., PC v. Twp. of E. Hanover, 175 N.J.

535, 542 (2003). "The award of prejudgment interest on contract and equitable

claims is based on equitable principles." Cty. of Essex v. First Union Nat'l Bank,

186 N.J. 46, 61 (2006). An award for pre-judgment interest is addressed to the

sound discretion of the trial judge. Litton Indus. v. IMO Indus., 200 N.J. 372,

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                                       15
390 (2009). "Unless the allowance of prejudgment interest 'represents a manifest

denial of justice, an appellate court should not interfere.'" Ibid. (quoting Cty. of

Essex, 186 N.J. at 61).

      The release and assignment signed by Kunak authorized the assessment

of pre-judgment interest.     Defendants did not challenge the pre-judgment

interest calculation or show how its assessment constituted an abuse of

discretion.

      "We will disturb a trial court's determination on counsel fees only on the

'rarest occasion,' and then only because of a clear abuse of discretion." Barr v.

Barr, 418 N.J. Super. 18, 46 (App. Div. 2011) (quoting Strahan v. Strahan, 402

N.J. Super. 298, 317 (App. Div. 2008)). A court has abused its discretion "if the

discretionary act was not premised upon consideration of all relevant factors,

was based upon consideration of irrelevant or inappropriate factors, or amounts

to a clear error in judgment." Masone v. Levine, 382 N.J. Super. 181, 193 (App.

Div. 2005). In calculating the amount of reasonable attorney's fees, "an affidavit

of services addressing the factors enumerated by R.P.C. 1.5(a)" is required. R.

4:42-9(b); Twp. of W. Orange v. 769 Assocs., LLC, 198 N.J. 529, 542 (2009).

R.P.C. 1.5(a) sets forth the factors to be considered when determining an

attorney's fee award.

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                                        16
      The trial court had a detailed certification of services from plaintiff's

counsel. However, at the motion for a new trial, the trial court only briefly

touched upon the attorney fee issue. There was no analysis of the R.P.C. factors

or consideration of the arguments made by defendants that certain fees should

not be included. The trial court did not provide its reasoning, contrary to Rule

1:7-4(a). Because of this, we reverse the attorney fee award and remand that

issue for appropriate analysis under R.P.C. 1.5.

      Applying our standard of review, we conclude the verdict did not result in

a miscarriage of justice. On the issues raised, the trial court did not abuse her

discretion. Both parties had an opportunity to present their version of the facts

in dispute. Reasonable jurors could have concluded that there was sufficient

evidence to find that plaintiff provided services to Kunak, that these were not

paid by PIP, and that she was indebted to plaintiff for payment of these services.

Then, to the extent that Blau was holding the funds that Kunak obtained in a

personal injury settlement, she agreed to pay these monies to plaintiff, and had

not done so, making her responsible for payment of the required amount. The

contract permitted attorney's fees and pre-judgment interest. The court did not

abuse its discretion in the award of pre-judgment interest.       The award for

attorney's fees is reversed and remanded.

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                                       17
      We conclude that defendants' further arguments are without sufficient

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

      Affirmed in part and reversed and remanded in part. We do not retain

jurisdiction.

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                                      18