Court Opinion

ID: 4430562
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:43:37.4174+00
Date Added: 2024-06-11T14:50:57.846693
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NOT FOR PUBLICATION WITHOUT THE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-5250-15T3

LYNDA K. DILLMAN,

        Plaintiff-Appellant,

v.

KENNETH PETRIE, ESQ. and PETRIE,
COTRONEO & GOSSNER, LLC,

        Defendants/Third-Party
        Plaintiffs-Respondents,

v.

STEVEN C. CHAIT, CPA/ABC, and
CHAIT & ASSOCIATES, INC.,

     Third-Party Defendants.
________________________________________

              Argued May 1, 2018 – Decided August 30, 2018

              Before Judges Mawla and DeAlmeida.

              On appeal from Superior Court of New Jersey,
              Law Division, Passaic County, Docket No.
              L-0318-14.

              Kenneth S. Thyne argued the cause for
              appellant (Roper & Thyne, LLC, attorneys;
              Kenneth S. Thyne, on the brief).

              John R. Gonzo argued the cause for respondents
              (L'Abbate, Balkan, Colavita & Contini, LLP,
             attorneys; John R. Gonzo, of counsel and on
             the brief; Jason Mastrangelo, on the brief).

PER CURIAM

      Plaintiff Lynda K. Dillman appeals the June 27, 2016 order

of   the    Law   Division   granting       summary   judgment   in   favor    of

defendants Kenneth Petrie, Esq., and Petrie, Cotroneo & Gossner,

LLC (PCG), on her legal malpractice claims.             We affirm.

                                    I.

      The following facts are taken from record.                 Plaintiff and

Scott Dillman were married in November 1980.               On June 29, 2006,

Scott1 filed a complaint for divorce.             Plaintiff retained Petrie

to represent her in the divorce proceedings.               During the course

of the proceedings Petrie became a partner at PCG.

      On January 17, 2008, the parties entered into a property

settlement agreement (PSA). They placed the terms of the agreement

on the record before a court reporter at the office of Scott's

attorney.     The PSA provides that plaintiff would receive limited

duration alimony ending on January 31, 2017.             In exchange for the

irrevocable termination of alimony in 2017, plaintiff received a

$150,000 credit from Scott's share of the equity in the marital

home.      She agreed to purchase Scott's remaining interest in the

1
   Because the Dillmans share a last name we identify Mr. Dillman
by first name. No disrespect is intended.

                                        2                               A-5250-15T3
marital residence, and he agreed to pay off an outstanding home

equity loan on the home.      Scott also agreed to contribute $27,000

towards plaintiff's credit card debt.               Plaintiff agreed to be

responsible for child-related expenses while she was the primary

parent of residence, and Scott agreed to pay eighty-five percent

of the college tuition costs for their youngest child's three

remaining years of college. The couple's older child was an adult.

     At the time of the divorce, Scott was an equity partner in

PricewaterhouseCoopers (PWC).        The PSA provides that Scott's PWC

capital account, and vested pension accounts would be distributed

forty percent to plaintiff and sixty percent to Scott.                      The

agreement does not address distribution of Scott's unfunded PWC

modified    partner   retirement    plan.      At   the   time   the   divorce

complaint    was   filed,   Scott   had   an   unvested   interest     in   the

retirement plan.      His interest in the plan vested by the time that

the PSA was executed.        The plan, however, would not enter pay

status until Scott retired.

     On January 25, 2008, the parties appeared in the Family Part

to enter the terms of the PSA on the court record.                 Plaintiff

testified that she understood the agreement was a compromise, and

agreed it was fair and equitable under the circumstances.                   She

also stated that she did not have a medical or psychological

condition preventing her from understanding the PSA.               Plaintiff

                                     3                                 A-5250-15T3
acknowledged that she was giving up her right to a trial and that

"we're cutting our losses."   Plaintiff told the court that she was

satisfied with defendants' legal services.    The court accepted the

terms of the PSA.

     On June 29, 2008, the court entered a dual final judgment of

divorce incorporating the terms of the PSA.      The judgment stated

that "the parties have each voluntarily entered into the agreement

and have accepted the terms thereof as fair and equitable."

     On June 12, 2009, plaintiff filed a motion in the Family Part

to modify the terms of the PSA.    In a certification in support of

the motion, she asserted that changed circumstances warranted an

increase in alimony, and a modification to make alimony permanent.

Plaintiff claimed that her economic opportunities had been limited

by mental illness, and that the economic recession had "drastically

affected" her earning potential.      The court denied the motion on

August 14, 2009.

     In November 2012, plaintiff hired new counsel and filed

another motion to vacate the final judgment of divorce and PSA,

or in the alternative, to schedule a plenary hearing after the

exchange of discovery.     Plaintiff argued that at the time she

entered into the PSA she was mentally impaired and did not fully

comprehend its terms.   She also argued defendants did not properly

                                  4                          A-5250-15T3
counsel her with respect to the settlement agreement, or protect

her interests in the divorce proceedings.

       On January 11, 2013, the Family Part denied plaintiff's

motion, finding that she failed to produce sufficient evidence to

show that she had been unable to understand the PSA when she agreed

to its terms.   We affirmed that decision on May 21, 2014.   Dillman

v. Dillman, No. A-2645-12 (App. Div. May 21, 2014) (slip op. at

19).

       On January 27, 2014, almost six years after entry of the

final judgment of divorce, plaintiff filed a complaint against

defendants, alleging legal malpractice and related claims arising

from their representation of plaintiff in the divorce action.     She

alleges that defendants counseled her to accept a settlement

agreement that "did not in any way reflect the range of likely

recovery [p]laintiff would receive in her divorce proceeding."      In

addition, plaintiff alleges that defendants did not account for

her mental incapacity when counseling her on the settlement.        At

the time that plaintiff filed the complaint, the appeal of the

Family Part's denial of her motion to vacate or modify the PSA

based on her mental capacity was pending in this court.

       On May 13, 2016, after the parties exchanged discovery, and

after we affirmed the Family Part's denial of plaintiff's motion

to vacate or modify the PSA, defendants moved for summary judgment.

                                 5                           A-5250-15T3
At that point, plaintiff had abandoned all but two arguments in

support of her claim of malpractice: (1) that the forty-percent

distribution    from    Scott's   PWC   capital   account,    and    vested

retirement     assets   was   insufficient   because   of     defendants'

inadequate advice; and (2) that defendants' failure to consider

Scott's PWC unfunded retirement plan as an asset subject to

distribution resulted in an inadequate settlement.

     In support of their motion defendants relied, in part, on the

expert report of Vincent P. Celli, Esq.      He opines that the forty-

percent distribution of Scott's PWC capital account, and vested

retirement assets correctly reflects the fact that these were

Scott's business assets.      In support of his opinion, Celli notes

that no legal precedent requires that marital assets be distributed

fifty percent to each party. He also opines that the forty-percent

distribution to plaintiff was the product of negotiations which

were motivated, in part, by plaintiff's desire to retain the

marital home.    With respect to the unfunded PWC retirement plan,

Celli opines that the plan's value was too speculative to be

quantified at the time that the PSA was negotiated.          He notes that

it was possible that the plan might never be funded and that

          there being nothing in this record that
          identifies how the asset was distributed
          between the parties or for what other
          consideration it may not have been considered
          an asset by the parties at all, the handling

                                    6                               A-5250-15T3
          of this asset cannot be said to have been
          professionally negligent.

     Plaintiff opposed the motion.       She relied on the expert

reports of Dale E. Console, Esq., and Kalman A. Barson, CPA.

Console, after setting forth the legal standards defining an

attorney's obligations to a client in the context of a distribution

of marital assets, opines that

          [t]he agreement divides Scott's capital
          account with PWC as well as most of the
          retirement assets derived from his employment
          with [plaintiff] receiving 40% of those. Mr.
          Petrie states in his deposition that that
          distribution was because it was his business.
          I find no legal basis for that assumption. It
          is true that business assets are not always
          divided on an equal basis but that is where
          the business value is based upon intangible
          value including good will which does not exist
          in this case.    Even when that exists, the
          retirement assets are never divided on that
          theory. This is a deviation from the standard
          of care.    The damages that result are the
          difference   between   the   40%   [plaintiff]
          received and the 50% to which she was
          entitled. The differential comes to $31,260.

     Conversely,   Console's   report   notes   that   "[m]atrimonial

litigants often have an [emotional] attachment to the marital

residence" and "are often willing to trade off on other things

solely in order to keep the house."     She continues,

          [t]he other intangible on any settlement is
          the fact that litigants may not want to try
          the case.   Trials are enormously stressful.
          They carry a degree of [uncertainty]. In this
          case, if [plaintiff] had tried the case, based

                                 7                            A-5250-15T3
         on the known facts, she probably would have
         received more alimony but she would not have
         been able to refinance and keep the house
         after a trial. She, at that time, may very
         well have been willing to settle for less than
         she otherwise might have received in order to
         avoid the stress and uncertainties of the
         trial and future litigation.

    With respect to Scott's unfunded PWC retirement plan, Console

opines that

         [t]his is an unfunded retirement plan which
         was not vested when the complaint was filed
         but was vested by the time of the divorce.

              . . . .

         This is a substantial marital asset that was
         not distributed in the divorce. The fact that
         it was not vested when the complaint was filed
         is irrelevant under the law. Mr. Petrie was
         plainly on notice the asset, which is also
         listed on Scott's CIS, existed but failed to
         deal with it.     That is malpractice.     The
         damages are the amount that [plaintiff] would
         have received.    I am not qualified to make
         that calculation as it requires an expert.

         Mr. Barson is correct that this is not an ERISA
         qualified plan and therefore was not eligible
         for a Qualified Domestic Relations Order
         (QDRO).   However, there are plans of this
         nature that will allow a Domestic Relations
         Order (DRO) which would divide the benefit so
         that the alternate payee would receive
         periodic payments over time. This should have
         been investigated.    The preferred method is
         to have [the] coverture portion of the plan
         valued and paid out as a lump sum but that
         requires an expert.

                               8                           A-5250-15T3
     Barson's report contains his opinion of the value of Scott's

interest in the unfunded PWC retirement plan.            Using a coverture

fraction, Barson opines that Scott's interest in the plan at the

time of the divorce ranged from $342,600 to $463,500.              His opinion

is based on present value discount rates of four, five, and six

percent, which he concludes to be "the most likely rates that

would be applied under the circumstances at hand."                 He provides

no explanation of how he identified those discount rates as the

most likely to be applied, or any data supporting his conclusion.2

     The      trial   court   granted   summary   judgment    in     favor    of

defendants.      The court concluded that plaintiff could not prove

she was damaged by any alleged acts of malpractice because she

relied   on    pure   speculation   when    arguing   that   had    defendants

provided her with better legal advice, Scott would have been

willing to settle for anything other the terms in the PSA, or that

the trial court would have approved distribution to her of anything

more than what was contained in the PSA, if there had been no

agreement.      The court explained its reasoning as follows:

              No one, no one, particularly plaintiff's
              expert, Dale Console, could say what Mr.
              Dillman would have settled for.

2
  Notably, Console found Barson's expert report "[w]ith certain
exceptions," to be "almost entirely without merit." She does not
identify which portions of Barson's report she finds credible.

                                        9                              A-5250-15T3
          The only one who could say that is Mr. Dillman.
          And actually he can't even say what he would
          have settled for, because if he were to say
          it now, he'd be in effect saying either I think
          I would have settled for something other than
          what I did, or I would not have.

               . . . .

          And, again, . . . it would be a worthless
          assumption to try to project what Mr. Dillman
          would have agreed to or would not have agreed
          to.

          And this case can[not] proceed on the
          assumption as to what Mr. Dillman would have
          agreed to or would not have agreed to if an
          alternative settlement opportunity had been
          presented to him. He might have jumped at it,
          he might not have.

               . . . .

          And the other critical thing that I think
          needs to be noted . . . is, no one could
          predict or prognosticate what [the Family Part
          judge] would have done if the case did[ not]
          settle and [was] tried before him. The only
          person who could do that is [the Family Part
          judge].

               . . . .

          So, I am of the opinion that summary judgment
          should be granted in favor of the defendants
          in this case.

The court also noted that it found Barson's opinion to be "pure

conjecture and speculation" and "beyond . . . a net opinion."

     In   addition,   the   trial    court   held   that   plaintiff's

malpractice claims were not ripe because she had not moved in the

                                10                             A-5250-15T3
Family Part to vacate or modify the PSA based on the parties'

failure to consider the unfunded PWC retirement plan as an asset

subject to distribution.     The court held that were plaintiff to

seek such relief and be unsuccessful, she could then file a

malpractice claim against defendants.         The court acknowledged,

however, that such a claim might be time barred.3

     This appeal followed.

                                   II.

     We   review   the   trial   court's   decision   granting   summary

judgment de novo, using "the same standard that governs trial

courts in reviewing summary judgment orders."         Prudential Prop. &

Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div. 1998).

Rule 4:46-2 provides that a court should grant summary judgment

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."    In addition, we review the record "based on our

consideration of the evidence in the light most favorable to the

3
  The trial court also held that plaintiff's claims related to her
mental capacity were resolved by this court's May 21, 2014 opinion
and could not be raised in the malpractice action. Plaintiff does
not appeal that aspect of the trial court's decision.

                                   11                            A-5250-15T3
parties opposing summary judgment."          Brill v. Guardian Life Ins.

Co., 142 N.J. 520, 523 (1995).

     "[T]he movant must show that there does not exist a 'genuine

issue'   as   to   a   material   fact    and    not   simply   one    'of    an

insubstantial nature'; a non-movant will be unsuccessful 'merely

by pointing to any fact in dispute.'"           Prudential, 307 N.J. Super.

at 167 (quoting Brill, 142 N.J. at 524).           Self-serving assertions

that are unsupported by evidence are insufficient to create a

genuine issue of material fact.          Miller v. Bank of Am. Home Loan

Servicing, L.P., 439 N.J. Super. 540, 551 (App. Div. 2015).

"Competent opposition requires 'competent evidential material'

beyond mere 'speculation' and 'fanciful arguments.'"             Hoffman v.

Asseenontv.Com, Inc., 404 N.J. Super. 415, 426 (App. Div. 2009)

(citations omitted).

     It is well settled that "the elements of a cause of action

for legal malpractice are (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."                   Kranz v.

Tiger, 390 N.J. Super. 135, 147 (App. Div. 2007) (quoting McGrogan

v. Till, 167 N.J. 414, 425 (2001)).             "[A] lawyer is required to

exercise that 'degree of reasonable knowledge and skill that

lawyers of ordinary ability and skill possess and exercise.'"

                                    12                                 A-5250-15T3
Brach, Eichler, Rosenberg, Silver, Bernstein, Hammer & Gladstone,

P.C. v. Ezekwo, 345 N.J. Super. 1, 12 (App. Div. 2001) (quoting

St. Pius X House of Retreats v. Diocese of Camden, 88 N.J. 571,

588 (1982)).

       A legal malpractice claim is not barred by the settlement of

the underlying lawsuit. Ziegelheim v. Apollo, 128 N.J. 250 (1992).

In    Ziegelheim,    after    "extensive       negotiations"    in    a    divorce

proceeding, the client agreed to accept a settlement that she

affirmed on the record was fair and equitable.                 Id. at 257-58.

Dissatisfied with the settlement, she later sued her former lawyer

for    malpractice,    alleging       that     because   of    the    attorney's

inadequate representation, she agreed to a settlement far less

than what she could have obtained had she gone to trial.                    Id. at

255-57.     She     alleged   that    the    attorney    failed      to   discover

approximately     $149,000    in     marital    assets   and   to     advise    her

adequately about what she might have received if she went to trial

instead of accepting the settlement.             Id. at 255-57.

       The Supreme Court rejected "the rule . . . that a dissatisfied

litigant may not recover from his or her attorney for malpractice

in negotiating a settlement that the litigant has accepted unless

the litigant can prove actual fraud on the part of the attorney."

Id. at 262.       The Court concluded that the "fact that a party

received a settlement that was 'fair and equitable' does not mean

                                       13                                  A-5250-15T3
necessarily that the party's attorney was competent or that the

party would not have received a more favorable settlement had the

party's incompetent attorney been competent."    Id. at 265.     The

Court explained that clients rely on their attorneys to advise

them what constitutes a fair settlement under the circumstances,

and that a competent lawyer is obligated to help his client

understand "the likelihood of success" of the case and "the range

of possible awards," even if the client ultimately chooses another

path.   Id. at 263.   The Court warned, however, that its decision

was not meant to "open the door to malpractice suits by any and

every dissatisfied party to a settlement" and that "[m]any such

claims could be averted if settlements were explained as a matter

of record in open court in proceedings reflecting the understanding

and assent of the parties."   Id. at 267.

     The holding in Ziegelheim clearly provides that a claim of

legal malpractice alleging deficient advice resulted in a client's

acceptance of an inadequate settlement agreement is a valid cause

of action.   It is permissible for a jury, with the aid of expert

testimony, to determine whether a settlement recommended to a

client was outside the range of awards she could have expected to

receive had she been provided with sound legal advice.   It is also

permissible for a jury to determine that a client would have

secured a more favorable settlement had she not been provided

                                14                          A-5250-15T3
inadequate advice from counsel.        Thus, the trial court here erred

when it held that summary judgment was warranted because no jury

could determine whether plaintiff would have negotiated a more

favorable   settlement    agreement,    or   secured   a   more    favorable

outcome at trial, had defendants provided her with adequate legal

advice.

     Nor do we agree with the trial court's conclusion that

plaintiff's malpractice claim is not ripe until she unsuccessfully

seeks relief with respect to Scott's PWC unfunded retirement plan

in the Family Part.      The Supreme Court rejected this argument in

Guido v. Duane Morris, LLP, 202 N.J. 79 (2010).                   There, the

defendants in a legal malpractice action urged the Court to

"require that the malpractice plaintiff first try to vacate the

settlement, and that a malpractice claim should lie only if those

efforts fail."    Id. at 95.     The Court held that while a prior

attempt to vacate a settlement may be a relevant factor, "the

failure to do so cannot be, in and of itself, dispositive" of the

legal malpractice claim.     Id. at 96.

     We agree with the trial court's conclusion, however, that

plaintiff's experts offered net opinions and affirm the order

                                  15                                 A-5250-15T3
granting summary judgment on this basis.4   For an expert’s opinion

to be meaningful to the trier of fact, it must be based on credible

facts and data.     As we held in Rosenberg v. Tavorath, 352 N.J.

Super. 385, 401 (App. Div. 2002):

          As construed by applicable case law, N.J.R.E.
          703 requires that an expert’s opinion be based
          on facts, data, or another expert’s opinion,
          either perceived by or made known to the
          expert, at or before trial.       Buckelew v.
          Grossbard, 87 N.J. 512, 524 (1981); Nguyen v.
          Tama, 298 N.J. Super. 41, 48-49 (App. Div.
          1997).    Under the “net opinion” rule, an
          opinion lacking in such foundation and
          consisting of bare conclusions unsupported by
          factual evidence is inadmissible. Johnson v.
          Salem Corp., 97 N.J. 78, 91 (1984), Buckelew,
          87 N.J. at 524. The rule requires an expert
          to “give the why and wherefore” of his or her
          opinion, rather than a mere conclusion.
          Jimenez v. GNOC Corp., 286 N.J. Super. 533
          (App. Div. 1996).

     With respect to the distribution of marital assets in the

PSA, Console offered the opinion that plaintiff was "entitled" to

a fifty-percent distribution.   Console cites no legal support for

this proposition.    In fact, legal precedents reject the notion

that a spouse is presumed to be entitled to an equal share of

marital assets.   As we recently stated:

          The equitable distribution statute "reflects
          a public policy that is 'at least in part an
          acknowledgement that marriage is a shared

4
  As noted above, the trial court expressly found that Barson
offered a net opinion. Our review of the record leads us to the
conclusion that Console also offered a net opinion.

                                16                          A-5250-15T3
          enterprise, a joint undertaking, that in many
          ways . . . is akin to a partnership.'" Thieme
          v. Aucoin-Theime, 227 N.J. 269, 284 (2016)
          (quoting Smith v. Smith, 72 N.J. 350, 361
          (1977)).   But, equitable is not synonymous
          with equal. See Rothman v. Rothman, 65 N.J.
          219, 232, n.6 (1974). Our courts must remain
          true to the legislative mandate expressed in
          N.J.S.A. 2A:34-231, which assures an ordered
          equitable distribution to be "designed to
          advance the policy of promoting equity and
          fair dealing between divorcing spouses." Barr
          v. Barr, 418 N.J. Super. 18, 45 (App. Div.
          2011).   This requires evaluation of unique
          facts attributed to each asset.

          [Slutsky v. Slutsky, 451 N.J. Super. 332, 358
          (App. Div. 2017).]

     Console provided no rationale for her conclusion that a forty-

percent distribution to plaintiff was inequitable.        Nor does

Console square her opinion with her observation that plaintiff's

desire to maintain the marital home, an outcome not likely if the

matter went to trial, could have influenced her to accept a smaller

distribution of assets than that to which she might otherwise

claim entitlement.

     In addition, although Console explains the basis for her

opinion that Scott's PWC unfunded retirement plan is an asset that

should have been considered when negotiating the PSA, she admits

that she does not have the expertise to opine as to value of

Scott's interest in the plan.    Barson's opinion on the value of

the plan was rejected by the trial court as a net opinion.         We

                                17                          A-5250-15T3
find ample support in the record for the trial court's conclusion.

The key element of Barson's analysis is the correct discount rate

to determine the present value, as of the date of the filing of

the divorce complaint, of Scott's interest in the retirement plan.

He provides three opinions of value based on three discount rates.

     He does not explain how he selected those discount rates,

which he describes as "the most likely rates that would be applied

under the circumstances at hand."       Barson provides no data,

anecdotal evidence, or other support for his view of the likelihood

that those discount rates would apply.      This is precisely the

definition of a net opinion.   Nor does Barson opine as to which

of the three rates would be appropriate in this instance.        The

three opinions of value that he offers diverge significantly,

underscoring the need for an explanation of the evidence supporting

the three rates.

     Affirmed.

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