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Framing the Issue

Gorjuice Wrap, Inc. v. Okin, Hollander & De Luca, LLP refined the existing Puderdoctrine in New Jersey, clarifying when it is to be applied. In this case, the plaintiff, Jasmine Kang began a business, and arranged to lease a building. The lease was arranged by an attorney recommended by the landlords, who did not disclose to Kang, his relationship with the landlord. Almost instantly upon moving into the building, there were problems such as leaks, and structural weaknesses. Kang failed to make several lease payments, and the rent became overdue, resulting in arrears. While remaining in arrears, Kang sought legal representation from the defendant law firm in only the property dispute. As the rent dispute continued on, a flood destroyed the building, causing cessation of business by the plaintiff. Kang sought to remove property from the building after the flood; however the landlords had changed the locks. Kang insisted the defendant law firm contact the landlords to allow her to enter, but Kang was still never allowed to enter the building. Eventually, the building was sold, and the new owners allowed Kang to enter; at which time she saw no evidence of her personal property. Kang sued the landlord, and the original attorney. She also settled with the insurance company regarding the flood. The landlords filed for bankruptcy, and Kang received no award. She did settle with the original attorney in that malpractice case. Following these causes of action, Kang sued defendant De Luca for legal malpractice, for failing to obtain an injunction allowing her to enter the building. The trial court applied the Puder doctrine, but the Superior Court overruled them.

The main idea of Puder is that a person may not settle a claim for less money than its worth, and then seek to recover the remaining balance in a legal malpractice claim against the attorney responsible for the settlement. Upon motion for review, the appellate court reversed, ruling that the Puder doctrine was inapplicable in this matter. The main reasonPuder is inapplicable is because the plaintiff was not alleging that De Luca committed legal malpractice in settling with the original attorney, or with the insurance company. Rather, the malpractice claim against De Luca was raised in reference to the property dispute, which was a different matter.

This also allowed the court to overrule the trial court's determination that judicial estoppel applied. Judicial estoppel prevents a person from claiming a fact in one suit, and then claiming a contrary fact in a later suit. The earlier litigation was settled, thus the court never had a chance to recognize the plaintiff's position in that litigation. Additionally, the claims asserted against De Luca were different than the claims asserted in the earlier suits.

This case allowed the plaintiff to assert a legal malpractice claim against 2 attorneys. Based on the court's opinion, the deciding factor which prevented the defendants from raisingPuder or judicial estoppel was the difference in situations. The first suit concerned the relationship between the landlords, the recommended attorney, and the original lease. This suit concerned only the relationship between De Luca and Kang with regards to how the property dispute was handled.

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