Court Opinion

ID: 4212797
Source: CourtListenerOpinion
Date Created: 2017-10-19 13:11:09.849045+00
Date Added: 2024-06-11T14:40:50.816814
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NOT FOR PUBLICATION WITHOUT THE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-0880-16T3

EVANGELOS DIMITRAKOPOULOS and
MATILDE DIMITRAKOPOULOS,

              Plaintiffs-Appellants,

v.

BORRUS, GOLDIN, FOLEY, VIGNUOLO,
HYMAN AND STAHL, P.C.,
STEVEN L. FOX, ESQ. and
ANTHONY B. VIGNUOLO, ESQ.,

              Defendants-Respondents,

and

FRAZER EVANGELISTA & COMPANY, LLC,
and RALPH J. EVANGELISTA,

              Defendants.

              Argued October 3, 2017 – Decided October 19, 2017

              Before Judges Yannotti and Carroll.

              On appeal from the Superior Court of New
              Jersey, Law Division, Middlesex County, Docket
              No. L-5373-15.

              Jae H. Cho argued the cause for appellants
              (Cho Legal Group, LLC, attorneys; Mr. Cho, on
              the briefs).
            James E. Stahl argued the cause for respondent
            (Borrus, Goldin, Foley, Vignuolo, Hyman &
            Stahl, PC, attorneys; Mr. Stahl, on the
            brief).

PER CURIAM

      Plaintiffs     appeal    from       a       November    20,    2015    order    that

dismissed    their    legal    malpractice            action       against   defendants

Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl, P.C. (BGF), Steven

L. Fox, and Anthony B. Vignuolo, pursuant to Rule 4:6-2(e).                            The

trial court found the malpractice action was barred by the entire

controversy doctrine.         For the reasons that follow, we affirm.

                                           I.

      We provide a detailed procedural history in order to place

this appeal in proper perspective.                   In October 2009, plaintiffs

retained BGF to represent them in litigation against a former

business partner who had allegedly improperly diverted funds from

the   company     (the   underlying               action).          Plaintiff     Matilde

Dimitrakopoulos was a fifty-one percent owner in the company,

Integrated   Construction          and    Utilities,         LLC    (ICU).      Matilde's

husband, plaintiff Evangelos Dimitrakopoulos, had no ownership

interest in ICU.     However, he acted as Matilde's agent, performing

all   ownership    duties     on    her       behalf,   including       executing      the

retainer agreement with BGF.

                                              2                                   A-0880-16T3
      The    underlying   action    proceeded    in    the   Superior    Court,

Chancery Division, Middlesex County until December 17, 2010, when

it was agreed that the business dispute would be submitted to

binding arbitration, and BGF was permitted to withdraw as counsel.

The record reflects that Evangelos was present in court and, when

questioned by the Chancery judge, responded that he heard and

accepted that disposition.         The underlying action then proceeded

in   arbitration    until   September     2,   2011,   when,   according       to

plaintiffs, they retained new counsel and settled the ICU business

dispute on the final day of arbitration.

      In the interim, on March 7, 2011, BGF filed an action in the

Law Division to collect its unpaid legal fees for services rendered

on behalf of plaintiffs in the underlying action (the collection

action).      On April 14, 2011, Evangelos filed a pro se answer

denying he "promised to pay for services which were unnecessary

and contrary to [his] direction."         On September 2, 2011, the court

suppressed the answer without prejudice for failure to answer

interrogatories.

      On January 6, 2012, the court denied BGF's motion to suppress

the answer with prejudice.     On February 21, 2012, the court denied

BGF's motion for reconsideration, and extended the time to provide

more specific answers to BGF's interrogatories until March 2,

2012.       Because Evangelos still had not provided the required

                                      3                                 A-0880-16T3
discovery, the court granted BGF's motion for final judgment of

default on July 13, 2012.       BGF then undertook efforts to collect

the $121,947.99 judgment.

     Three years later, on September 10, 2015, plaintiffs filed

the legal malpractice action under review against BGF, Fox, and

Vignuolo.1       Plaintiffs     alleged   that   defendants     committed

malpractice in the underlying action by: failing to properly plead

Matilde's claims and obtain her consent before agreeing to binding

arbitration; failing to properly perform discovery and secure

expert rebuttal reports; and improperly billing them excessive

amounts.

     Defendants promptly moved to dismiss plaintiffs' complaint

pursuant to Rule 4:6-2(e), arguing it was barred by both the entire

controversy doctrine and the doctrine of waiver.             Specifically,

defendants    asserted   that   plaintiffs   should   have   raised   their

malpractice claims as a defense or counterclaim in the collection

action.

     The court conducted oral argument on the motion on November

20, 2015.     Notably, the following colloquy ensued:

             THE COURT:    So all [plaintiffs'] damages
             [were] ascertained as of September 6[], 2011,
             correct?

1
 The complaint also asserted accounting malpractice claims against
other parties that have since been resolved and are not at issue
in this appeal.

                                    4                              A-0880-16T3
          PLAINTIFFS' COUNSEL:   Yes.

     In an oral decision, Judge Arthur Bergman granted defendants'

motion to dismiss, finding the malpractice action was barred by

the entire controversy doctrine. The judge agreed with plaintiffs'

contention that the doctrine did not obligate them to raise their

malpractice claims in the underlying action.   However, the judge

found that:

          [O]nce   that   underlying  case   is   done,
          [plaintiffs have] the obligation to raise
          [those claims] in the subsequent [collection]
          case and they had ample opportunity to do so.

          And I'm not going to tell you that during the
          [four] months or [six] months prior to that,
          there's an issue and if the default had been
          granted and the case had been defaulted
          against them within those first [six] months,
          I would agree with you [that the entire
          controversy doctrine would not apply].

          But . . . once [plaintiffs] understood what
          the damages were, they had counsel and that
          [collection] case was still ongoing until it
          was ultimately [resolved ten] months later.
          That is an opportunity they chose not to have.

     Accordingly, the judge concluded that the entire controversy

doctrine does not require malpractice claims to be brought during

the pendency of an underlying action "in which the malpractice

arose and a reasonable time thereafter."       However, the judge

determined that "[ten] months is more than a reasonable time

thereafter."   The judge found this ten-month period, during which

                                 5                         A-0880-16T3
BGF's collection action remained pending after the underlying

action concluded, afforded plaintiffs adequate opportunity to

assert    their   malpractice    claims    in    the   collection   action.

Consequently, their failure to do so barred their subsequent

malpractice action.     The judge entered an order dismissing the

complaint with prejudice.       This appeal followed.

                                   II.

     On   appeal,   plaintiffs    argue:   (1)   the   entire   controversy

doctrine does not apply to legal malpractice claims; (2) the motion

judge abused his discretionary authority; (3) our standard of

review is de novo; (4) the waiver doctrine does not require

dismissal of the complaint; (5) defendants' motion to dismiss

should have been denied as premature; and (6) the motion judge

improperly relied on facts outside the record.2            We do not find

these arguments persuasive.

                                    A.

     We apply a de novo standard of review to a trial court's

order dismissing a complaint under Rule 4:6-2(e).          See Stop & Shop

2
  Defendants filed a motion to strike points (2) through (5) of
plaintiffs' brief because they were not raised below. On March
27, 2017, the panel denied the motion without prejudice, subject
to our further consideration. We now deny the motion because we
have considered the challenged arguments raised by plaintiffs and
find they lack sufficient merit to warrant further discussion in
a written opinion. R. 2:11-3(e)(1)(E).

                                    6                               A-0880-16T3
Supermarket Co. v. Cty. of Bergen, 450 N.J. Super. 286, 290 (App.

Div. 2017) (quoting Teamsters Local 7 v. State, 434 N.J. Super.

393, 413, 416 (App. Div. 2014)).       Under the rule, we owe no

deference to the motion judge's conclusions. Rezem Family Assocs.,

LP v. Borough of Millstone, 423 N.J. Super. 103, 114 (App. Div.),

certif. denied, 208 N.J. 368 (2011).    "[O]ur inquiry is limited

to examining the legal sufficiency of the facts alleged on the

face of the complaint."   Printing Mart-Morristown v. Sharp Elecs.

Corp., 116 N.J. 739, 746 (1989) (citing Reider v. Dep't of Transp.,

221 N.J. Super. 547, 553 (App. Div. 1987)).     "A pleading should

be dismissed if it states no basis for relief and discovery would

not provide one." Rezem Family Assocs., LP, supra, 423 N.J. Super.

at 113 (citing Camden Cty. Energy Recovery Assoc., L.P. v. N.J.

Dep't of Envtl. Prot., 320 N.J. Super. 59, 64 (App. Div. 1999),

aff'd, 170 N.J. 246 (2001)).

                                B.

     The entire controversy doctrine "embodies the principle that

the adjudication of a legal controversy should occur in one

litigation in only one court; accordingly, all parties involved

in a litigation should at the very least present in that proceeding

all of their claims and defenses that are related to the underlying

controversy."   Wadeer v. N.J. Mfrs. Ins. Co., 220 N.J. 591, 605

(2015) (quoting Highland Lakes Country Club & Cmty. Ass'n v.

                                 7                          A-0880-16T3
Nicastro, 201 N.J. 123, 125 (2009)).    The purposes of the doctrine

are "'(1) the need for complete and final disposition through the

avoidance of piecemeal decisions; (2) fairness to parties to the

action and those with a material interest in the action; and (3)

efficiency and the avoidance of waste and the reduction of delay.'"

Wadeer, supra, 220 N.J. at 605 (quoting DiTrolio v. Antiles, 142

N.J. 253, 267 (1995)).

     Consistent   with   the   doctrine's    objectives,   Rule     4:30A

provides that "[n]on-joinder of claims required to be joined by

the entire controversy doctrine shall result in the preclusion of

the omitted claims to the extent required by the entire controversy

doctrine[.]"   The rule "encompasses 'virtually all causes, claims,

and defenses relating to a controversy[,]'" Oliver v. Ambrose, 152

N.J. 383, 394 (1998) (quoting Cogdell v. Hosp. Ctr. at Orange, 116

N.J. 7, 16 (1989)), and requires all parties in an action to raise

all transactionally related claims or risk preclusion.             K-Land

Corp. No. 28 v. Landis Sewerage Auth., 173 N.J. 59, 69-71 (2002);

R. 4:30A.

     "In determining whether a subsequent claim should be barred

under   [the    entire   controversy]       doctrine,   'the      central

consideration is whether the claims against the different parties

arise from related facts or the same transaction or series of

transactions.'"   Wadeer, supra, 220 N.J. at 605 (quoting DiTrolio,

                                  8                               A-0880-16T3
supra, 142 N.J. at 268).      "It is the core set of facts that

provides the link between distinct claims against the same parties

. . . and triggers the requirement that they be determined in one

proceeding."   Wadeer, supra, 220 N.J. at 605 (quoting DiTrolio,

supra, 142 N.J. at 267-68).

     However, the entire controversy doctrine does not "apply to

bar component claims either unknown, unarisen or unaccrued at the

time of the original action."        K-Land, supra, 173 N.J. at 70

(quoting Pressler, Current N.J. Court Rules, comment 2 on R. 4:30A

(2002)).   Also pertinent here is our Supreme Court's dictate that

"the entire controversy doctrine no longer compels the assertion

of a legal-malpractice claim in an underlying action that gives

rise to a claim."     Olds v. Donnelly, 150 N.J. 424, 443 (1997)

(emphasis added).

     Additionally, when "considering fairness to the party whose

claim is sought to be barred, a court must consider whether the

claimant has had a fair and reasonable opportunity to have fully

litigated that claim in the original action."       Gelber v. Zito

P'ship, 147 N.J. 561, 565 (1997) (internal quotation marks and

citations omitted).   Thus, "application of the entire controversy

doctrine requires some degree of equality of forum; that is, the

first forum must have been able to provide all parties with the

same full and fair opportunity to litigate the issues and with the

                                 9                         A-0880-16T3
same remedial opportunities in the second forum."                          Hernandez v.

Region Nine Hous. Corp., 146 N.J. 645, 661 (1996) (quoting Perry

v. Tuzzio, 288 N.J. Super. 223, 230 (App. Div. 1996)).

     As    noted,    legal    malpractice         claims     are    exempt    from     the

preclusive effect of the entire controversy doctrine to the extent

they need not be asserted "in the underlying action that gives

rise to the claim."         Olds, supra, 150 N.J. at 443.                Central to our

analysis, then, is the interpretation of the phrase "underlying

action that gives rise to the [malpractice] claim."                          Plaintiffs

argue   that   the    collection      action          constitutes    the    "underlying

action,"    and     hence    they    were       not    required     to   assert     their

malpractice       claims     in     that    action.          However,        plaintiffs

erroneously conflate the collection action with the underlying ICU

business dispute, which in this case is the underlying action that

gives rise to plaintiffs' malpractice claims.

     This determination, however, does not conclude our analysis.

Rather, we must assess whether plaintiffs had a fair and reasonable

opportunity to fully litigate their malpractice claims in the

prior collection action.             Also, because the entire controversy

doctrine is equitable in nature, we must consider whether its

application "would be unfair in the totality of the circumstances

and would not promote any of its objectives, namely, the promotion

of conclusive determinations, party fairness, and judicial economy

                                           10                                     A-0880-16T3
and efficiency."       K-Land Corp., supra, 173 N.J. at 70 (quoting

Pressler, Current N.J. Court Rules, comments 1 & 2 on R. 4:30A

(2002)).

       It is true, as plaintiffs point out, that the underlying ICU

action had not yet concluded when BGF first filed the collection

action.     They also argue, without any competent factual support

in the record, that they were not aware they had malpractice claims

against defendants until sometime later, when they consulted an

attorney.

       It   is   undisputed,      however,    that   the    underlying    action

concluded with a settlement on September 2, 2011.               At that point,

plaintiffs concededly had ascertained the full extent of their

purported damages.     Further, with respect to plaintiffs' knowledge

that    their    damages   were    attributable      to    defendants'   alleged

professional negligence, the critical inquiry is "whether the

facts   presented     would    alert   a     reasonable    person,   exercising

ordinary diligence, that he or she was injured due to the fault

of another."      Caravaggio v. D'Agostini, 166 N.J. 237, 246 (2001).

Contrary to plaintiffs' argument, awareness of the "legal effect

of those facts" is not a requirement for accrual of the cause of

action.     Grunwald v. Bronkesh, 131 N.J. 483, 493 (1993) (citing

Burd v. N.J. Tel. Co., 76 N.J. 284, 291-92 (1978)).

                                       11                                A-0880-16T3
    As Judge Bergman correctly pointed out, at the time the

underlying     action    concluded,      or    within       a    reasonable      time

thereafter, plaintiffs knew, or should have known, that their

alleged damages were attributable to defendants' professional

negligence.    They then had a ten-month period before judgment was

entered   to   file     amended    pleadings    in    the       collection    action

asserting malpractice as a counterclaim or defense.                       Instead,

plaintiffs     delayed     three    more      years   before        filing     their

malpractice    complaint.         Our   consideration       of     the   facts    and

equitable factors leads us to conclude that the motion judge

correctly determined that the entire controversy doctrine applied

here and barred plaintiffs' malpractice complaint.

    Affirmed.

                                        12                                   A-0880-16T3