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Legal Update for Lawyers' Professional Liability

December 19, 2018
Presented by the Professional Liability Practice Group

New Jersey Appellate Division Rejects Claims for Attorney’s Fees, Emotional Distress Damages and Damages for Inadequate Divorce Settlement

By John Slimm, Esq. and Jeremy Zacharias, Esq.

In G.B. v. Christine N. Rossi, A-0240-17T3 (App. Div. December 17, 2018), a case we handled at the trial level and argued on appeal, the Appellate Division addressed whether the Rules of Professional Conduct can give rise to a cause of action, whether intentional infliction of emotional distress claims are viable in legal malpractice actions, whether dissatisfied claimants can bring an action arising from an inadequate settlement in a divorce litigation, and when attorney’s fees are recoverable against opposing counsel. This significant decision provides defenses to attorneys in legal malpractice actions in connection with claims for damages arising out of matrimonial settlements, claims for damages for emotional distress damages and attorney fee claims.

The plaintiff alleged that the defendant attorney used privileged information she obtained from an initial consultation with the plaintiff, which gave the attorney and her client, the plaintiff’s husband, a tactical advantage in the trial of an underlying domestic violence case and in the divorce action that followed.

In addition, the plaintiff argued that the settlement in the matrimonial case did not extinguish her claims against the attorney and that her claim for intentional infliction of emotional distress should not have been dismissed by the trial court for lack of medical proof. Also, the plaintiff argued that the trial court erred in holding that she waived her claim for counsel fees in her successful domestic violence appeal because the attorney was not a party to that appeal.

As the Appellate Division stressed, an assertion that an attorney violated the Rules of Professional Conduct does not give rise to a cause of action, even though the evidence may be relevant for another purpose. In the plaintiff’s appeal of an October 2013 domestic violence temporary restraining order, the Appellate Division did find that our client had a conflict and should not have represented the husband because of an initial consultation with the plaintiff. In J.B. v. G.F.B., No. A-1802-13T3, the Appellate Division reversed and remanded for a new trial in the domestic violence case. However, the plaintiff’s attorney in that  appeal did not file a motion for fees pursuant to R. 2:11-4.

In the subsequent divorce action, the parties entered into a property settlement agreement. They then appeared for the uncontested divorce hearing, and confirmed to the court that they accepted the terms of the agreement and wished to be bound by it. The re-trial of the domestic violence case, following remand, did not occur because the husband dismissed the temporary restraining order as part of the deal when the divorce action settled.

In the malpractice action against the attorney who represented the husband in the domestic violence case, we argued that the plaintiff failed to demonstrate causation and damages related to the attorney’s representation of the husband in the domestic violence case and the alleged harms the plaintiff suffered in the divorce case (inadequate alimony award, inadequate equitable distribution award and fees).

We argued that the plaintiff failed to prove her intentional infliction of emotional distress claims because she did not produce expert testimony and opinion from a psychiatrist. In addition, we argued that her attorney fee claim was barred and waived because she failed to seek an award of counsel fees from the attorney following the successful domestic violence appeal, pursuant to R. 2:11-4.

The Appellate Division found that the plaintiff never demonstrated that the information at trial was derived from her initial consultation with the defendant attorney and the attorney could only have obtained that information through her. It was evident the husband had independent knowledge of the plaintiff’s prior acts of domestic violence  and brought them to the attorney’s attention to enable the attorney to prosecute the domestic violence case.

The plaintiff also claimed that she was disadvantaged in the divorce litigation because, as a result of the restraining order in , she could not get into the house to obtain the husband’s business records and a recording on her cell phone that contained evidence of the valuation of the husband’s interest in his company. However, the plaintiff failed to demonstrate a causal link between her initial consultation with the attorney, the entry of the temporary restraining order, the final restraining order or inability to access the residence. There was no evidence of special knowledge acquired by the attorney causing the trial court to grant either the temporary restraining order  or the final restraining order.

The Appellate Division also held that the emotional distress damages could not be awarded in favor of the plaintiff in the legal malpractice action in the absence of egregious or extraordinary circumstances. The court found that aggravation, annoyance, and frustration constitute unfortunate products of daily living and damages for idiosyncratic psychiatric reactions are not permitted. The Appellate Division held that the plaintiff’s proofs fell short of the requisite, egregious or extraordinary conduct necessary for an intentional infliction of emotional distress claim to proceed in the legal malpractice action without objective medical evidence of damages.

With respect to the claim for attorney’s fees, the Appellate Division held that while attorneys are responsible for legal expenses and fees incurred by a former client in prosecuting a legal malpractice action, the claimant must prove that the attorney’s breach arose from the attorney-client relationship. See, Packard-Bamberger & Co., Inc. v. Collier, 167 N.J. 427 (2001). The threshold issue was whether the party seeking the fee prevailed in the litigation. Id. at 444.

Under the two-prong test established by the court, “[t]he first prong requires that the litigant seeking fees establish that the ‘lawsuit was causally related to securing the relief obtained; a fee award is justified if [the party’s] efforts are a ’necessary and important’ factor in obtaining relief.’” Ibid. (Quoting, N. Bergen Rex Transp., 158 N.J. at 570). The second prong involves a factual and legal determination requiring the party seeking fees to prove that the relief granted has some basis in law. Ibid. (Quoting, N. Bergen Rex Transp., 158 N.J. at 571).

The Appellate Division held that the plaintiff had no cause for a claim of counsel fees against the attorney as a form of damages since she did not seek those fees when she successfully prosecuted the appeal of the FRO. Even had she sought fees and was denied, she could not claim them as a form of damages in the legal malpractice action where she did not sustain her burden to establish causation to survive summary judgment in her favor.

Please click here to read the opinion. Should you have any questions, please contact Jack Slimm, who argued the appeal, or Jeremy Zacharias, who wrote the appellate brief.

 

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