Sims v. Budd Lerner P.C., 2012 WL 4741587, (Super.Ct., App. Div. N.J. Oct. 5, 2012) is a case which examines the legal malpractice case within the scope of a post-divorce settlement agreement. The Plaintiff hired the defendant attorneys in relation to a post-judgment matter.
Originally, the Plaintiff had filed for divorce in 1997, and a property settlement agreement was executed in relation to the divorce. Under the agreement, Plaintiff and his ex-wife owned a property together, and agreed that joint ownership would be maintained until one party decided to buy or sell out the other.
From 1998-2000, the Plaintiff loaned money to his ex-wife and made various mortgage payments on behalf of his ex-wife. In 2005, the Plaintiff's ex-wife sent correspondence containing her desire to sell, while the Plaintiff wanted to retain the property because he believed it would be a nice retirement home. In 2004, Plaintiff retained the defendant to provide legal services in relation to the make-whole clause of the original agreement.
The defendant requested loan documents from the Plaintiff which would substantiate the claims relating to the mortgage. In 2006, the defendant informed the Plaintiff he was closing the file because no correspondence had been received related to the loan documents. Ex-wife became ill and unfortunately passed away. During the pendency of the estate, Plaintiff contacted the defendant again to file a claim against the estate. At that time, the estate objected to the claim, and asserted a 50% interest in the claim to the property. The claim settled when the estate admitted that Plaintiff owned 100% of the property. The court believed this ownership interest was enough to reimburse the loans and mortgage.
In January 2009, the Plaintiff initiated this complaint for legal malpractice because he believed the defendant did not file a claim within the statute of limitations causing him to lose money from the loans and reimbursement of the mortgage. The defendant moved for summary judgment on the grounds that the statute of limitations did not begin until the property sale; the Plaintiff failed to provide evidence of the loan; and there was no damage. The Court sustained the motion and the Plaintiff filed this appeal.
Generally an attorney by law must exercise the skill, knowledge and ability of similarly situated members of the legal profession and to employ reasonable care in connection therewith. Legal malpractice claims require a plaintiff show an attorney-client relationship; breach of the duty of care by the attorney outlined above; and proximate causation of damages. If a Plaintiff fails to show any of these on summary judgment, the claim will be dismissed. After viewing the facts in the light most favorable to the Plaintiffs, as required by law, the appeals court upheld the motion for summary judgment.
One of the keys to this decision was the 2004 retainer agreement signed by the Defendant and Plaintiff. That agreement provided that scope of representation involved "a pending post-judgment matter", as opposed to asking for representation expressly for reimbursement. Additionally, Defendant's request for information did not relate to mortgages or loans. Also, in 2005, the Plaintiff in correspondence with his ex-wife admitted that reimbursement could be provided out of the closing. The court implied that this communication meant the Plaintiff did not hire the defendant in connection with the loan and reimbursement since the Plaintiff and his ex-wife had made agreements related to the reimbursement. However, giving the benefit of doubt to the Plaintiff, required finding that there was a retainer in 2004 related to the loans.
First, related to the Plaintiff's argument that the defendant missed a 6 year statute of limitation in 2004, the Court found in favor of the defendant. This was especially so because the Plaintiff suffered no damages and was in fact made whole by taking the property.
Second, due to the requirements of legal malpractice, the Plaintiff had to show clear and convincing evidence in his claim against his ex-wife, which he could not do. Dead-man's statutes require clear-and-convincing evidence in favor of the moving party in an action against a decedent, where the evidence in question is an oral statement. In this case, any action against Plaintiff's ex-wife would have required clear and convincing evidence, because the Plaintiff admitted he would not have filed an action until after her death. Because of this admission, the Court ruled for the defendant on this issue.
Finally, the Court believed the actions of the defendant did not proximately cause damage. This burden on the plaintiff requires real damages, not conjecture according to the court. This means the case if filed appropriately would have been won, and a favorable recovery would have resulted. In this case, the Plaintiff could not prove proximate causation of damages. The court analyzed the implications of what a favorable award would have provided, concluding that such an award would have resulted in a windfall because the Plaintiff would have received the property and in addition to reimbursement.
This case shows not only the general elements of legal malpractice, but also the way in which rules of law are still applicable. A legal malpractice action is unlike many other torts because statutes like the dead-men's statute can serve to bar a suit initially, and then the malpractice suit which may have resulted. Of course, the other lesson is that a Plaintiff can't ask for more than 100%. Actions of law are to make people whole, not double there original value. This is not an innovative idea, but something all possible plaintiffs should keep in mind.