Court Opinion

ID: 9897560
Source: CourtListenerOpinion
Date Created: 2023-11-14 19:16:08.226476+00
Date Added: 2024-06-11T09:14:34.511969
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
              APPROVAL OF THE APPELLATE DIVISION

                                  SUPERIOR COURT OF NEW JERSEY
                                  APPELLATE DIVISION
                                  DOCKET NO. A- 2653-20

MORRIS PROPERTIES, INC.
and KRISTEN A. MORRIS,

     Plaintiffs-Appellants,

v.                                  APPROVED FOR PUBLICATION

                                           August 22, 2023
JONATHAN WHEELER,
MARIO BARNABEI, and                     APPELLATE DIVISION
LAW OFFICES OF
JONATHAN WHEELER,
P.C.,

     Defendants-Respondents.
__________________________

           Argued November 1, 2022 – Decided February 28, 2023

           Before Judges Gilson, Rose and Gummer.

           On appeal from the Superior Court of New Jersey, Law
           Division, Atlantic County, Docket No. L-0238-19.

           Chad M. Sherwood argued the cause for appellants
           (Law Office of Chad M. Sherwood, LLC, attorneys;
           Chad M. Sherwood, on the brief).

           John L. Slimm argued the cause for respondents
           (Marshall Dennehey, attorneys; John L. Slimm and
           Jeremy J. Zacharias, on the brief).
      The opinion of the court was delivered by

GUMMER, J.A.D.

      In this legal-malpractice case, plaintiffs Morris Properties, Inc. (MPI) and

Kristen A. Morris appeal from an order granting summary judgment to

defendants Jonathan Wheeler, Mario Barnabei, and the Law Offices of Jonathan

Wheeler, P.C. (the firm). Because plaintiffs failed to establish defendants owed

a duty to Morris or that defendants' alleged negligence had proximately caused

plaintiffs' asserted damages, we affirm.

                                        I.

      We discern the material facts from the summary-judgment record, viewing

them in the light most favorable to plaintiffs, the non-moving parties. See

Richter v. Oakland Bd. of Educ., 246 N.J. 507, 515 (2021). MPI owns a

commercial building located in Somers Point. According to plaintiffs, the

building sustained damages from Hurricane Sandy in October 2012. At that

time, the building was insured under a policy issued to MPI by West American

Insurance Company (West American).

      About one month after the hurricane, MPI retained Metro Public

Adjustment (Metro), a public adjusting firm, to assist it in pursuing an insurance

claim. Metro submitted an insurance claim to West American for wind damage

and the ensuing water damage MPI's building allegedly sustained from

                                                                           A- 2653-20
                                        2
Hurricane Sandy. In an October 15, 2013 letter, MPI's president Morris was

advised that West American's inspector had concluded wind damage from the

hurricane was limited to one area of the roof and that West American had denied

coverage because the cost of repairing the damage related to that one area of the

roof was less than MPI's $51,590.76 deductible.

      On April 1, 2014, MPI entered an agreement retaining the firm to

represent MPI in its efforts to obtain damages from West American. About two

weeks later, the firm filed a complaint executed by Wheeler on behalf of MPI in

the Law Division, naming West American as the defendant. MPI alleged West

American had acted in bad faith and had breached its contractual obligations by

refusing to pay benefits owed to MPI under the policy. West American removed

the case to the United States District Court for the District of New Jersey. The

district court issued a scheduling order and an amended order requiring MPI to

serve its expert reports and disclosures by a certain date. During an initial court

conference, West American's counsel informed defendant Barnabei, an attorney

with the firm, that a pre-litigation offer of $34,000 to resolve the claim, which

MPI had rejected, might "still be on the table" but asked whether MPI was also

pursuing the deductible. Barnabei reported that conversation to Wheeler and

understood Wheeler, in turn, would communicate the offer to MPI.

                                                                            A- 2653-20
                                        3
      In July 2015, a lawyer associated with the firm served MPI's answers to

West American's first set of interrogatories. In those answers, MPI identified

Robert Schmidt and Jay Furhmann of Metro as fact and expert witnesses and

asserted that although work had been done on the roof in the past, MPI had

"never had a roof problem prior to this loss" and had "never had a claim or

damage to the roof prior to this loss." Morris signed a verification, stating MPI's

answers were accurate "to the best of [her] knowledge, information and belief."

      On October 8, 2015, Morris was deposed as a corporate designee for MPI.

See R. 4:14-2(c). Barnabei met with Morris the morning of her deposition.

Barnabei, on behalf of the firm, represented MPI at the deposition. During the

deposition, Morris denied the building's roof had any history of leaks before it

was damaged by Hurricane Sandy and denied anyone or any tenant had

complained about roof leaks.      However, West American's counsel showed

Morris letters sent to MPI by tenants complaining about roof leaks before

Hurricane Sandy. Morris testified she had not previously seen those letters.

      On January 27, 2016, Wheeler's legal assistant sent an email to Mor ris,

advising her she would be deposed again on February 11, 2016. When Morris

asked why she was being deposed again, the legal assistant responded:

                  You stated at your deposition that you never had
            complaints of any of your tenants having water damage
            before Hurricane Sandy, but your largest tenant . . .

                                                                           A- 2653-20
                                        4
            testified under oath that there had been a series of leaks
            for years . . . . The Judge has intervened and ruled that
            you and [the tenant] be re-deposed because you lied
            under oath.

      West American did not depose Morris again. On June 6, 2016, the district

court granted West American's motion for leave to amend its answer to assert a

counterclaim for insurance fraud. Within a month, Wheeler and the firm moved

to withdraw as counsel for MPI. The district court ultimately allowed Wheeler

and the firm to withdraw.      Represented by new counsel, MPI entered a

settlement agreement with West American in which MPI and West American

released their claims against each other and West American paid MPI $10,000.

      On February 4, 2019, plaintiffs filed a complaint against defendants,

pleading two counts of legal malpractice against defendants, one on behalf of

MPI and the other on behalf of Morris individually. Regarding MPI, plaintiffs

faulted defendants for not naming an expert, submitting an expert report, or

preparing Morris for her deposition in the coverage action. Plaintiffs asserted

that due to defendants' negligence, MPI was forced to settle its claims against

West American "for a small fraction of their full value." Regarding Morris

individually, plaintiffs alleged defendants had known that West American

accused her of committing insurance fraud in a report to New Jersey's

Department of Banking and Insurance. Plaintiffs faulted defendants for failing

                                                                         A- 2653-20
                                        5
to advise them of that report and claimed that during the State's subsequent

investigation, Morris had "lived under the threat of significant fines and crimi nal

incarceration." Plaintiffs asserted the investigation, which did not result in any

charges, would have been avoided had defendants properly prepared Morris for

her deposition.   Alleging defendants had acted willfully, wantonly, and in

reckless disregard of duties they purportedly owed to both MPI and Morris,

plaintiffs sought compensatory and punitive damages on behalf of MPI and

punitive damages on behalf of Morris.

      In support of their case, plaintiffs produced a report prepared by William

B. Hildebrand, Esq. According to Hildebrand, the "purpose" of his report was

"to give [his] expert opinion regarding [defendants'] representation of [MPI]" in

the coverage case. Hildebrand stated, "[s]pecifically, I have been asked to

determine whether that representation fell below the standard of care exercised

by reasonably prudent attorneys in New Jersey." Hildebrand said nothing about

being retained to opine about whether defendants' alleged breaches of the

standard of care proximately had caused plaintiffs' damages or what, if anything,

those damages were.

      Hildebrand opined that: defendants had breached the applicable standard

of care by (1) failing to hire an expert; (2) failing to "communicate with client,"

in that (a) Wheeler had failed to advise Morris that West American's counsel

                                                                            A- 2653-20
                                         6
sent an email on November 5, 2014, indicating his client was interested in

exploring settlement and had failed to follow up on that email; 1 (b) Wheeler had

failed to advise "his client" that West American's counsel had told him West

American's $34,000 pre-litigation settlement offer might still be on the table;

and (c) Wheeler failed to notify Morris about other depositions scheduled in the

case; and (3) failing to prepare Morris properly for her deposition. Hildebrand

did not opine about damages; in the fact section of his report, he simply stated

that Metro's final estimate of covered loss was $182,494.14. He did not opine

about proximate causation; he asserted, without any reference to facts, that

defendants' failure to hire an expert "was fatal to [MPI's] claim."

       After the close of discovery, defendants moved for summary judgment.

They did not seek summary judgment on the issue of whether they had deviated

from a standard of care or duty owed to MPI. Instead, they sought summary

judgment on the discrete issues of proximate causation and damages, the

viability of Morris's individual claim, and plaintiffs' punitive-damages claim.

Specifically, defendants argued Hildebrand had failed to opine about proximate

causation and damages, Morris had lacked standing to maintain an individual

1
    The record before us did not contain a copy of the November 5, 2014 email.
                                                                          A- 2653-20
                                        7
claim, and plaintiffs had not presented sufficient proofs to meet the standard for

punitive damages.

      Following oral argument, the motion judge issued an order and written

opinion granting defendants' motion. The judge found Hildebrand had failed to

analyze how the alleged breaches of the standard of care would have impacted

a potential jury verdict or settlement and had not opined that defendants' alleged

malpractice proximately caused any damages. The judge also held Morris's

individual claim failed because the undisputed facts showed she and defendants

did not have an attorney-client relationship.       Finally, finding no evidence

defendants had acted with malice or had intended to cause plaintiffs' harm, the

judge held plaintiffs were not entitled to punitive damages.

      On appeal, plaintiffs argue the judge failed to view the facts in a light most

favorable to them; failed to apply a "suit within a suit" standard of proving

damages in a legal malpractice case and improperly held a damages expert was

required when the underlying case had settled; improperly dismissed Morris's

claims even though she had claimed damages beyond those alleged by MPI; and

improperly dismissed their punitive-damages claim by failing to find a trier of

fact could reasonably infer that defendants' conduct was willful and wanton.

Because plaintiffs failed to establish defendants' alleged negligence proximately

                                                                            A- 2653-20
                                         8
caused their asserted damages or that defendants had a duty to Morris, summary

judgment was appropriate, and we affirm.

                                         II.

      We review de novo the grant of summary judgment, applying the same

standard as the motion judge. Branch v. Cream-O-Land Dairy, 244 N.J. 567,

582 (2021). That standard requires us to "determine whether '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.'" Ibid. (quoting R. 4:46-2(c)). "To decide whether a genuine

issue of material fact exists, the trial court must 'draw[] all legitimate inferences

from the facts in favor of the non-moving party.'" Friedman v. Martinez, 242

N.J. 449, 472 (2020) (alteration in original) (quoting Globe Motor Co. v.

Igdalev, 225 N.J. 469, 480 (2016)). "The 'trial court's interpretation of the law

and the legal consequences that flow from established facts are not entitled to

any special deference.'" Town of Kearny v. Brandt, 214 N.J. 76, 92 (2013)

(quoting Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366,

378 (1995)). Summary judgment is properly granted "when the evidence 'is so

one-sided that one party must prevail as a matter of law' . . . ." Brill v. Guardian

Life Ins. Co. of Am., 142 N.J. 520, 540 (1995) (quoting Anderson v. Liberty

                                                                             A- 2653-20
                                         9
Lobby, Inc., 477 U.S. 242, 252 (1986)); see also Davis v. Brickman

Landscaping, Ltd., 219 N.J. 395, 406 (2014).

      "A legal malpractice claim is 'grounded in the tort of negligence.'" Nieves

v. Off. of the Pub. Def., 241 N.J. 567, 579 (2020) (quoting McGrogan v. Till,

167 N.J. 414, 425 (2001)). "[A] legal malpractice action has three essential

elements: '(1) the existence of an attorney-client relationship creating a duty of

care by the defendant attorney, (2) the breach of that duty by the defendant, and

(3) proximate causation of the damages claimed by the plaintiff.'" Jerista v.

Murray, 185 N.J. 175, 190-91 (2005) (quoting McGrogan, 167 N.J. at 425).

"The plaintiff bears the burden of establishing those elements by some

competent proof." Davis, 219 N.J. at 406 (citations omitted).

      Generally, a client recovers only losses proximately caused by the

attorney's professional negligence. Lieberman v. Emps. Ins. of Wausau, 84 N.J.

325, 341 (1980); Froom v. Perel, 377 N.J. Super. 298, 313 (App. Div. 2005).

Proximate cause "'requires an initial determination of cause-in-fact' . . . [which]

'requires proof that the result complained of probably would not have occurred

but for the negligent conduct of the defendant.'" New Gold Equities Corp. v.

Jaffe Spindler Co., 453 N.J. Super. 358, 379 (App. Div. 2018) (first quoting

Francis v. United Jersey Bank, 87 N.J. 15, 39 (1981); then quoting Vuocolo v.

Diamond Shamrock Chems., Co., 240 N.J. Super. 289, 295 (App. Div. 1990)).

                                                                           A- 2653-20
                                        10
The plaintiff then "must present evidence to support a finding that defendant's

negligent conduct was a 'substantial factor' in bringing about plaintiff' s injury,

even though there may be other concurrent causes of the harm." Froom, 377

N.J. Super. at 313 (quoting Conklin v. Hannoch Weisman, 145 N.J. 395, 418

(1996)). Finally, the plaintiff must "show what injuries were suffered as a

proximate consequence of the attorney's breach of duty," ordinarily measured

by "the amount that a client would have received but for the attorney's

negligence." 2175 Lemoine Ave. Corp. v. Finco, Inc., 272 N.J. Super. 478, 488

(App. Div. 1994). The client must have sustained actual damage that is real, not

merely speculative. Olds v. Donnelly, 150 N.J. 424, 437 (1997).

      The burden is on the client to show what injuries were suffered as a

proximate consequence of the attorney's breach of duty. 2175 Lemoine Ave.,

272 N.J. Super. at 488. That burden must be met "by a preponderance of the

competent, credible evidence and is not satisfied by mere 'conjecture, surmise

or suspicion.'" Ibid. (quoting Long v. Landy, 35 N.J. 44, 54 (1961)). In legal-

malpractice cases, proximate causation ordinarily must be established by expert

testimony, except when "the causal relationship between the attorney's legal

malpractice and the client's loss is so obvious that the trier of fact can resolve

the issue as a matter of common knowledge." Id. at 490; see also Sommers v.

                                                                           A- 2653-20
                                        11
McKinney, 287 N.J. Super. 1, 10 (App. Div. 1996) (finding it is only in "rare

cases" in which expert testimony is not required in a legal malpractice action).

      In sum, to establish the proximate-cause element of their legal-

malpractice claim, plaintiffs must prove by a preponderance of the competent,

credible evidence that their alleged damages were proximately caused by

defendants' negligence. Applied here, plaintiffs must prove defendants' alleged

failure to hire an expert, "communicate with client," or prepare Morris properly

for her deposition was a substantial factor in causing MPI to accept a $10,000

settlement when it otherwise would have been awarded more by a jury or in a

different settlement with West American if the case had not been colored by

those alleged breaches of the standard of care. See Lerner v. Laufer, 359 N.J.

Super. 201, 221 (App. Div. 2003) (holding that to establish proximate causation

of damages in a legal-malpractice action, a plaintiff "must demonstrate that he

or she would have prevailed, or would have won materially more . . . but for the

alleged substandard performance"). Without expert testimony demonstrating

MPI would have prevailed in its coverage case against West American or would

have received a greater settlement had defendants met the standard of care,

plaintiffs' legal-malpractice claims fail as a matter of law.

      We agree with the motion judge that plaintiffs had not established

proximate cause as a matter of law and that expert testimony was necessary in

                                                                          A- 2653-20
                                        12
this case to prove proximate causation and damages. The causal relationship

between defendants' alleged malpractice and plaintiffs' asserted loss is not "so

obvious that the trier of fact [could have] resolve[d] the issue as a matter of

common knowledge" without the assistance of expert testimony. Sommers, 287

N.J. Super. at 11. As the motion judge recognized, many factors could impact

the settlement value of or potential jury verdict on MPI's insurance-coverage

claim. Only an expert could show that MPI would have succeeded in obtaining

a better result at trial – which would have required MPI to convince a jury of its

entitlement to insurance coverage of its full claim of wind-related damages

based on a record that included pre-Sandy complaints from tenants about roof

leaks2 – or in another settlement had defendants not committed the alleged

breaches of the standard of care. See Kaplan v. Skoloff & Wolfe, P.C., 339 N.J.

Super. 97, 103-04 (App. Div. 2001) (finding that in a legal malpractice action

based on an insufficient-settlement theory, expert testimony is required to

establish the value of the claim); Kelly v. Berlin, 300 N.J. Super. 256, 269 (App.

2
   To state a viable claim for coverage, an insured bears the initial burden of
demonstrating that its asserted claim falls within the basic scope of
the coverage under the policy. Bldg. Materials Corp. of Am. v. Allstate Ins.
Co., 424 N.J. Super. 448, 464 (App. Div. 2012). The insurer then would have
the opportunity to prove the insured's claim fell within one or more of the
policy's exclusions. Aviation Charters v. Avemco Ins. Co., 335 N.J. Super. 591,
594 (App. Div. 2000).
                                                                           A- 2653-20
                                       13
Div. 1997) (finding expert testimony is necessary to enable a jury to determine

whether the alleged malpractice "caused plaintiff to settle for a lower amount

than he otherwise would have, and, if so, the amount of damages plaintiff

sustained as a result").

      Hildebrand did not opine about proximate cause or damages. As he

clearly stated in his report, he was retained to opine only about whether

defendants had breached "the standard of care exercised by reasonably prudent

attorneys in New Jersey." He did not opine that if defendants had met that

standard, MPI would have prevailed at trial or obtained a better settlement given

the facts underlying the coverage case.       He did not opine about the fair

settlement value of the underlying coverage case.         Contrary to plaintiffs'

argument, Hildebrand did not opine about what their purported damages were.

Merely repeating Metro's final estimate of covered loss is not the equivalent of

rendering an expert opinion on damages.

      We recognize an attorney must communicate all settlement offers to his

or her client and that a legal-malpractice action based on a straight-forward

failure to relay a settlement offer may not require expert testimony on the breach

of that duty or the damages caused by it. See Sommers, 287 N.J. Super. at 12.

Even assuming counsel's comment at the initial court conference indicating

West American's $34,000 pre-litigation settlement offer "might" still be on the

                                                                           A- 2653-20
                                       14
table constituted an actual settlement offer that Wheeler had an obligation to

relay, the record is devoid of any evidence, such as a certification from or any

testimony of Morris or any other MPI representative, establishing MPI would

have accepted the $34,000 offer it already had rejected.

      We also recognize Hildebrand stated defendants' failure to hire an expert

"was fatal to [MPI's] claim." That bald assertion, with nothing more, is not an

admissible expert opinion on causation. See Buckelew v. Grossbard, 87 N.J.

512, 524 (1981) (explaining that "an expert's bare conclusions, unsupported by

factual evidence, is inadmissible"). To make that statement anything more than

what it is – an impermissible net opinion with no evidential weight – Hildebrand

would have had to explain the why and wherefore behind it. See Crispino v.

Twp. of Sparta, 243 N.J. 234, 257 (2020) (finding an expert is required to "'give

the why and wherefore' that supports the opinion, 'rather than a mere

conclusion'" (quoting Townsend v. Pierre, 221 N.J. 36, 54 (2015))). Hildebrand

would have had to explain why not having an expert "was fatal to [MPI's] claim"

and, to establish proximate causation of damages, he would have had to opine

that retaining an expert would have enabled MPI to obtain a jury verdict in its

favor or a better settlement. And he didn't do that.

      We reject plaintiffs' argument that summary judgment was not appropriate

because MPI could have proceeded without expert testimony by following a

                                                                          A- 2653-20
                                       15
"suit within a suit" procedure at trial. That argument, which, if followed, would

have the effect of barring summary judgment in nearly every legal-malpractice

case, confuses a procedural trial framework with plaintiffs' prima facie burden.

The "suit within a suit" approach allows a plaintiff to "present[] the evidence

that would have been submitted at a trial had no malpractice occurred[,]" thereby

"clarify[ing] what would have taken place but for the attorney's malpractice."

Garcia v. Kozlov, 179 N.J. 343, 358 (2004). That procedural choice does not,

as plaintiffs seem to suggest, relieve plaintiffs of their substantive, prima facie

burden to establish proximate cause.

      Plaintiffs' failure to present expert evidence on proximate causation and

damages entitles defendants to judgment dismissing the case as a matter of law.

Accordingly, we affirm the order granting summary judgment.

      As for Morris's individual claim, plaintiffs also failed to demonstrate the

first prong of a legal-malpractice claim: the existence of an attorney-client

relationship between Morris and defendants. "The existence of an attorney -

client relationship is, of course, essential to the assertion of a cause of action for

legal malpractice." Froom, 377 N.J. Super. at 310.

      The record is devoid of evidence supporting plaintiffs' claim that an

attorney-client relationship existed between Morris and defendants. The parties

did not include a copy of the retainer agreement in the appellate record, but we

                                                                              A- 2653-20
                                         16
know the retainer agreement was between MPI and defendants, not Morris and

defendants. In their complaint, plaintiffs alleged "[p]laintiff [MPI] executed a

Legal Fee Agreement with . . . [d]efendants, Jonathan Wheeler and/or Law

Offices of Jonathan Wheeler, P.C." and that the agreement "concern[ed] [MPI's]

right to recover from West American . . . ." Plaintiffs made no allegation about

any agreement between Morris and defendants about defendants representing

her individually. In the underlying lawsuit, only MPI was named as a plaintiff.

The transcript of Morris's deposition identifies defendant Barnabei and the firm

as representing "the [p]laintiff[,]" which was MPI, not Morris. Hildebrand did

not opine Morris and defendants had an attorney-client relationship.

      Plaintiffs claim defendants represented Morris because they "clearly

interacted directly with [her]." Mere interaction does not establish the existence

of an attorney-client relationship. With no citation to the record, plaintiffs also

assert defendants "purported to represent her during her deposition in the

underlying matter." That unsupported assertion does not create a genuine issue

of material fact sufficient to defeat summary judgment on this issue, especially

when the record evidence demonstrates otherwise. The motion judge's finding

that Morris was deposed as a corporate representative of MPI is supported by

credible and unrebutted evidence in the record.

                                                                            A- 2653-20
                                        17
      In "carefully circumscribed" holdings, courts have found an attorney owed

a duty to a non-client. Green v. Morgan Props., 215 N.J. 431, 458 (2013).

However, "the grounds on which any plaintiff may pursue a malpractice claim

against an attorney with whom there was no attorney-client relationship are

exceedingly narrow" and are not present here. Ibid.; see also Banco Popular N.

Am. v. Gandi, 184 N.J. 161, 182-83 (2005) (allowing bank's claim against

attorney for one of bank's creditors to proceed based on attorney's negotiations

with the bank and an opinion letter provided to the bank); Petrillo v. Bachenberg,

139 N.J. 472, 474 (1995) (finding an attorney for a real-estate seller has a duty

not to provide misleading information to potential buyers who the attorney

knows or should know will rely on it).

      Having concluded the motion judge properly granted summary judgment

on plaintiffs' substantive claims, we need not reach their argument regarding

their punitive-damages claims. To the extent we have not otherwise commented

on them, we have duly considered plaintiffs' remaining arguments and conclude

they lack sufficient merit to warrant discussion in a written opinion. R. 2:11-

3(e)(1)(E).

      Affirmed.

                                                                           A- 2653-20
                                         18