Court Opinion

ID: 5140669
Source: CourtListenerOpinion
Date Created: 2021-12-27 15:09:05.309205+00
Date Added: 2024-06-11T08:24:24.851895
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NOT FOR PUBLICATION WITHOUT THE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-0143-20

MICRO TECH TRAINING
CENTER INC. d/b/a EASTERN
INTERNATIONAL COLLEGE
and BASHIR MOHSEN,

          Plaintiffs-Appellants,

v.

DECOTIIS FITZPATRICK &
COLE, LLP and CHASAN
LAMPARELLO MALLON &
CAPPUZZO, PC,

     Defendants-Respondents.
____________________________

                   Submitted November 3, 2021 – Decided December 27, 2021

                   Before Judges Fisher, DeAlmeida and Smith.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Essex County, Docket No. L-8652-19.

                   Peter A. Ouda, attorney for appellants.

                   Wilson Elser Moskowitz Edelman & Dicker, LLP,
                   attorneys for respondent Chasan Lamparello Mallon &
            Cappuzzo, PC (Thomas F. Quinn, of counsel; Susan
            Karlovich, of counsel and on the brief).

PER CURIAM

      Plaintiffs Micro Tech Training Center, Inc. d/b/a Eastern International

College and Bashir Mohsen (collectively Micro Tech) appeal from the August

20, 2020 order of the Law Division staying their legal malpractice action against

defendant Chasan Lamparello Mallon & Cappuzzo, P.C. (Chasan), and

compelling arbitration of their claims. We affirm.

                                       I.

      In 2015, Micro Tech, which operates a college in Jersey City, was sued

by its landlord for early termination of its lease. Micro Tech countersued for

constructive eviction and loss of revenue and retained defendant DeCotiis

Fitzpatrick & Cole, LLP (DeCotiis) to provide legal representation in its dispute

with its landlord.

      On August 9, 2017, Micro Tech, at the urging of its in-house counsel,

retained Chasan to replace DeCotiis as counsel in the dispute. Micro Tech's

retainer agreement with Chasan provides in relevant part:

            12. ARBITRATION. Should any differences,
            disagreements or disputes arise between us relating to
            your representation, we both agree to submit such
            differences, disagreements or disputes to binding
            arbitration.

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                                       2
      ....

(B) Any Other Disagreements. Should an issue arise
between us as to fee dispute [sic] which the Fee
Arbitration Committee declines to accept or involving
any matter other than a fee dispute, the [sic] we both
agree to submit the difference, disagreement or dispute
to binding arbitration according to the New Jersey
Uniform Arbitration Act, N.J.S.A. 2A:24-1 et seq. An
arbitrator shall be chosen by consent of the parties or in
accordance with N.J.S.A. 2A:24-5, the fees for which
shall be an issue to be determined by the arbitrator.
Any arbitration award shall be confirmed by the
Superior Court of New Jersey in accordance with
N.J.S.A. 2A:24-8, and a judgment entered in
accordance with N.J.S.A. 2A:24-10.

By signing this Agreement you acknowledge you have
an absolute right in the first instance (and obligation
under this Agreement) to submit any fee disputes
between us to the appropriate Fee Arbitration
[C]ommittee for resolution, and should that method not
be available, then you or we have the obligation to
submit any fee or other dispute to binding arbitration as
set forth in this Section 12B instead of submitting the
difference, disagreement or dispute to resolution by the
court or through trial by jury. By signing this
Agreement you will be deemed to have given your
consent to the Alternative Dispute Resolution
mechanisms recited in Paragraph 12 and to waive the
right to a trial.

                                                             A-0143-20
                            3
            Client initials signifying approval of this Section 12:
            _[BM]1_

                   ....

            13. AGREEMENT. You have read and agree to this
            Agreement. We have answered all of your questions
            and fully explained this Agreement to your complete
            satisfaction. You have been given a copy of this
            Agreement.

      In 2019, Micro Tech filed a legal malpractice action in the Law Division

against DeCotiis and Chasan. In lieu of filing an answer, Chasan moved for an

order staying the complaint and compelling arbitration of Micro Tech's claims.

Micro Tech opposed the motion, arguing: (1) that legal malpractice claims are

not expressly identified in the retainer agreement as being subject to arbitration;

and (2) the arbitration provisions of the retainer agreement are invalid because

no representative of Chasan orally advised Micro Tech that its legal malpractice

claims would be subject to arbitration.

      The trial court granted Chasan's motion. In a written opinion, the court

concluded that the phrase "any differences, disagreements or disputes arising

between us relating to your representation" in the arbitration provisions of the

1
   Micro Tech concedes that the retainer agreement contains Mohsen's initials
after paragraph 12 and does not dispute his authority to bind Micro Tech to the
contract.

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                                          4
retainer agreement plainly included legal malpractice claims. In addition, the

court concluded that a specific reference to legal malpractice claims in the

retainer agreement was not necessary to put Micro Tech, a sophisticated

business with in-house counsel, on notice that those claims were subject to

arbitration. The court noted that Micro Tech had the benefit of attorney review

of the retainer agreement prior to consenting to its terms and that the arbitration

provisions were initialed by Mohsen, a principal of Micro Tech.

       An August 20, 2020 order stayed Micro Tech's legal malpractice action

against Chasan and referred its claims to arbitration.2

       This appeal follows. Micro Tech repeats its arguments that the arbitration

provisions in the retainer agreement did not put it on notice that legal

malpractice claims were subject to arbitration and are unenforceable because

Chasan did not advise Micro Tech orally or in a separate writing that its legal

malpractice claims would be subject to arbitration.

                                        II.

       The holding in Delaney v. Dickey, 244 N.J. 466 (2020), issued after the

trial court's decision, resolves the issues raised in this appeal. In that case, the

Supreme Court considered the circumstances in which an arbitration provision

2
    Micro Tech's claims against DeCotiis remain pending in the Law Division.
                                                                              A-0143-20
                                         5
in a retainer agreement for legal services is enforceable with respect to legal

malpractice claims. The Court's holding is unequivocal:

            We conclude that the professional and fiduciary
            obligation imposed on a lawyer by RPC 1.4(c) – to
            "explain a matter to the extent reasonably necessary to
            permit the client to make informed decisions regarding
            the representation" – requires that the lawyer discuss
            with the client the basic advantages and disadvantages
            of a provision in a retainer agreement that mandates the
            arbitration of a future fee dispute or malpractice claim
            against the attorney.

            [Id. at 496.]

Without having provided such advice, an attorney will be precluded from

enforcing an arbitration provision in a legal retainer agreement when sued for

legal malpractice. Id. at 501.

      The Court was equally clear, however, that its holding would be applied

prospectively:

            Because the professional obligation we now impose
            may not have been reasonably anticipated and would
            unsettle expectations among lawyers, we apply this new
            mandate prospectively, with one exception. Applying
            the holding of our opinion here is "consistent with the
            usual rule that the prevailing party who brings a claim
            that advances the common law receive the benefit of his
            efforts." See Estate of Narleski v. Gomes, 244 N.J. 199,
            204 (2020).

            [Id. at 474.]

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Thus, apart from the retainer agreement signed by the plaintiff in Delaney, the

Court's holding does not apply to retainer agreements, like the one signed by

Micro Tech in 2017, executed prior to the Court's December 21, 2020 holding

in Delaney.

      Micro Tech does not, therefore, enjoy the benefit of the new rule

announced in Delaney requiring an attorney to provide advice explaining

arbitration provisions in a retainer agreement for legal services. As a result, the

trial court correctly rejected Micro Tech's argument that its legal malpractice

claims are not subject to arbitration because Chasan failed to explain the

arbitration provisions of the retainer agreement.

      The holding in Delaney also resolves Micro Tech's argument that the

arbitration provisions are unenforceable because they do not specifically list

legal malpractice claims as being subject to arbitration.         The arbitration

provision of the retainer agreement before the court in Delaney applied to "any

dispute (including, without limitation, any dispute with respect to the Firm's

legal services and/or payment by you of amounts to the Firm)" and "[a]ny

disputes arising out of or relating to this agreement or the Firm's engagement by

you . . . ." Id. at 475-76. The agreement did not specifically mention legal

malpractice claims as being subject to arbitration.

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      The Court held that "[t]he arbitration provision at issue in this case – on

its face – would be enforceable if [it] were a typical contract between a

commercial vendor and a customer." Id. at 494 (citing Atalese v. U.S. Legal

Servs. Grp., L.P., 219 N.J. 430, 444-45 (2014)). The Court held that "if this

were an ordinary commercial contract, the term 'any dispute' is broad enough to

encompass a dispute about whether the attorney committed legal malpractice."

Id. at 498. The only exception to this interpretation of the contract noted by the

Court is the attorney's "fiduciary duty to make clear the retainer agreement's

terms so that the meaning of those terms is readily apparent to the client." Ibid.

However, as noted above, the Court held that the attorney's obligation to provide

an explanation will be applied prospectively from the date of the issuance of its

opinion in Delaney.

      The terms of the Chasan retainer agreement with Micro Tech, applying

the arbitration provisions to "any differences, disagreements or disputes arising

between us relating to your representation" is as broad, and arguably broader,

than the language found by the Delaney Court to apply to legal malpractice

claims. Because the attorney advice obligation established in Delaney does not

apply to the Micro Tech retainer agreement, its plain language is enforceable

and requires arbitration of Micro Tech's legal malpractice claims.

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      To the extent we have not specifically addressed any of Micro Tech's

remaining claims, including its contention that the pendency of its claims against

DeCotiis should preclude arbitration of its legal malpractice claims against

Chasan, we conclude they lack sufficient merit to warrant discussion in a written

opinion. R. 2:11-3(e)(1)(E). 3

      Affirmed.

3
  We offer no opinion with respect to whether a stay of Micro Tech's claims
against DeCotiis, if requested by the parties, would be warranted.
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