Plaintiff-Appellant-
Cross-Respondent,
and
JACQUELINE STOECKEL, THOMAS ESPOSITO
and KAREN ESPOSITO,
Plaintiffs,
v.
TOWNSHIP OF KNOWLTON, NORMAN CHIDIAC
and CHARLES O'CONNELL,
Defendants-Respondents,
and
IRA COHEN,
Defendant-Respondent-
Cross-Appellant,
and
RICHARD FIFIELD, DANIEL VNENCHECK,
RICHARD STEIN and MULLIGAN & MULLIGAN,
Defendants.
__________________________________
Argued January 11, 2006 Decided
Before Judges Stern, Parker and C.L. Miniman.
On appeal from Superior Court of New Jersey, Law Division, Warren County, Docket
No. WRN-L-358-98.
Batya Wernick argued the cause for appellant-cross-respondent Eric Stoeckel (Batya G. Rephun, attorney).
Richard P. Cushing argued the cause for respondent Township of Knowlton (Gebhardt &
Kiefer, attorneys; Mr. Cushing and Leslie A. Parikh, on the brief).
Meredith Kaplan Stoma argued the cause for respondent-cross-appellant Ira Cohen (Morgan, Melhuish, Monaghan,
Arvidson, Abrutyn & Lisowski, attorneys; Ms. Stoma, of counsel; Jeffrey S. Leonard, on
the brief).
David A. Ward argued the cause for respondent Norman Chidiac (Fox & Fox,
attorneys; Mr. Ward, of counsel and on the brief).
Diana C. Manning argued the cause for respondent Charles V. O'Connell (Bressler, Amery
& Ross, attorneys; Ms. Manning and Marie Saraceni, on the brief).
The opinion of the court was delivered by
C.L. MINIMAN, J.S.C. (temporarily assigned)
Plaintiff Eric Stoeckel appeals from summary judgment orders entered on February 4, 2000,
June 10, 2002, July 16, 2003, and February 6, 2004, which disposed of
all claims as to all parties.
See footnote 1
Defendant Ira Cohen cross-appeals from denial of
his motion to strike the opinion of plaintiff's expert as an inadmissible net
opinion.
This is an action against the Township of Knowlton for inverse condemnation and
violations of
42 U.S.C. §1983. Plaintiff also alleges claims of legal malpractice,
See footnote 2
as
well as negligence and misrepresentation,
See footnote 3
against the remaining defendants, all of whom are
attorneys. We affirm the dismissal of all claims except for those against defendants
Ira Cohen and Norman Chidiac. Because the claims against the professionals were dismissed
on summary judgment, we view the facts in the light most favorable to
plaintiff and draw all reasonable inferences in his favor. Brill v. Guardian Life
Ins. Co.,
142 N.J. 520, 540 (1995).
See footnote 4
[Id. at 226-27.]
The Federal District Court here, unlike Zacharias, never concluded that it did not
have subject-matter jurisdiction over the action. Rather, it always had jurisdiction over the
federal question and decided the issues respecting those claims against the Township of
Knowlton. Then and only then did it remand the non-federal claims to the
state court.
Defendants argue that this court has no jurisdiction to review the factual findings,
legal conclusions, opinion and order of the federal court despite the state court's
February 4, 2000, order implementing that dismissal. They urge that the federal order
became a final judgment upon remand of the balance of the case and
could have been reviewed by the Third Circuit.
This issue was addressed by the United State Supreme Court early in the
twentieth century. In Waco v. U.S. Fid. & Guar. Co.,
293 U.S. 140,
55 S. Ct. 6,
79 L. Ed. 244 (1934), a state court action
was removed to the Federal District Court, which dismissed the action against one
party and then remanded the case to the state court because diversity jurisdiction
no longer existed. Id. at 141-42, 55 S. Ct. at 6, 79 L.
Ed. at 244-45.
The plaintiff appealed from the dismissal of its action against the one party,
but the Circuit Court of Appeals held that no appeal can lie from
an order of remand. Id. at 142, 55 S. Ct. at 7, 79
L. Ed. at 245.
The Supreme Court then held that while it was true that no appeal
lies from an order of remand, "but in logic and in fact the
decree of dismissal preceded that of remand and was made by the district
court while it had control of the cause. Indisputably this order is the
subject of an appeal; and, if not reversed or set aside, is conclusive
upon the petitioner." Id. at 143, 55 S. Ct. at 7, 79 L.
Ed. at 245.
We are of [the] opinion that the petitioner was entitled to have the
Circuit Court of Appeals determine whether the dismissal of its cross-action against the
Fidelity Company was proper. If the District Court erred on this point, which
we do not decide, its action should be reversed. A reversal cannot affect
the order of remand, but it will at least, if the dismissal of
the petitioner's complaint was erroneous, remit the entire controversy, with the Fidelity Company
still a party, to the state court for such further proceedings as may
be in accordance with law.
[Id. at 143-44, 55 S. Ct. at 7, 79 L. Ed. at 245-46.]
Despite the subsequent enactment of
28 U.S.C.A.
§1291 in 1940 and the adoption
of Fed. R. Civ. P. 54, Waco has continuing vitality. Carr v. Am.
Red Cross,
17 F.3d 671, 675 (3d Cir. 1994). Where an order is
"logically precedent to, and separable from, the remand decision," as where a dismissal
order impacts "on more than the issue of federal subject matter jurisdiction alone,"
it is appealable as of right. Ibid. (holding that the dismissal of the
American Red Cross was a collateral order appealable as of right to the
Circuit Court of Appeals upon remand of the remaining claims to state court
because federal question jurisdiction was destroyed upon dismissal of the Red Cross). See
also Christopher v. Stanley-Bostitch, Inc.,
240 F.3d 95, 99 (1st Cir. 2001); Beneficial
Consumer Co. v. Poltonowicz,
47 F.3d 91, 93 (3d Cir. 1995).
Here, the federal court's dismissal of the action against the Township of Knowlton
occurred while the district court had control of the case. When the balance
of the action was remanded to state court, the dismissal as to the
township became appealable as of right to the Third Circuit. We may not
review the merits of the district court's decision; it is entitled to preclusive
effect. Velasquez v. Franz,
123 N.J. 498, 511-12 (1991). The order of February
4, 2000, implementing that final decision was properly entered. Although the district court's
decision is not subject to review by a state appellate court, the preclusive
effect of that decision must be considered in evaluating the balance of the
plaintiff's claims of error relating to the dismissal of Cohen, Chidiac and O'Connell.
(b) A lawyer shall explain a matter to the extent reasonably necessary to permit
the client to make informed decisions regarding the representation.
[R.P.C. 1.4.
See footnote 7
]
In denying Cohen's summary judgment motion, the first state court judge noted that
the expert relied on seven depositions and a dozen exhibits, an attorney's duty
to exercise due care and adequately advise his client, and on R.P.C. 1.4.
He found that a violation of those rules is evidence of legal malpractice,
relying on Baxt v. LoLoia,
155 N.J. 190, 200 (1998). Finally, he concluded
that the opinion was clearly supported by factual evidence, which, if true, demonstrated
a violation of the tenets of the Rules of Professional Conduct. Cohen argues
that this decision was erroneous, relying on Kaplan, supra,
339 N.J. Super. 97.
In Kaplan the expert ventured an opinion that a property settlement agreement did
not provide the client with the alimony, child support, equitable distribution, and counsel
fees, among other things that she ought to have received in settlement. Id.
at 100. Because that expert did not offer any evidential support to establish
the existence of a standard of care respecting settlement of divorce actions, we
affirmed the trial court's conclusion that the expert had presented an inadmissible net
opinion. Id. at 103. Specifically, the expert had
failed to render a comparison of similar property settlement agreements, other than one
anecdotal reference to a case he had recently handled. Moreover, he failed to
provide an analysis of how legal issues would have affected the settlement amount.
In the final analysis, [the] opinion can be reduced to the bald assertion
that if he had represented plaintiff, he could and would have effectuated a
more favorable settlement on her behalf. Even if that were so, that does
not establish a standard by which to judge defendants' conduct.
[Id. at 104.]
This case is a far cry from Kaplan. Here, the expert's opinion was
based on the facts of record, to which he applied generally accepted standards
of care. Those standards are reflected in our case law and in the
Rules of Professional Conduct. St. Pius X House of Retreats, supra, 88 N.J.
at 588; R.P.C. 1.4. To satisfy those duties, Cohen at the very least
had to advise his client of the risks of closing on a lot
in a development where the street had not been constructed and no utilities
served the lot. The claims made against Cohen have adequate support in the
record to demand a trial on all issues respecting his representation of plaintiff
in 1989.
We turn to the dismissal of the claims against Cohen respecting his representation
of plaintiff in March 1993. The first state court judge held that there
were allegations that might, if believed, present a cause of action against the
municipality for matters other than inverse condemnation and a § 1983 civil rights action.
He pointed to the Stoeckels' allegation that the township and its officials had
a duty to speak up and advise him that the letter of credit
had become worthless and explain that that was why the road had not
been built. He concluded that the case-within-a-case issue could not be resolved in
favor of Cohen. The second state court judge on reconsideration decided otherwise.
Initially, we note that the second state court judge failed to find that
Cohen met his burden to demonstrate that the decision of the first state
court judge was plainly incorrect or that the first judge failed to consider
evidence. Cummings, supra, 295 N.J. Super. at 384-85. As a consequence, the second
judge improperly reached the merits of the alleged malpractice based on the lost
§ 1983 claims.
He concluded that the Stoeckels could not prevail on their § 1983 claims because
the Federal District Court had dismissed their inverse condemnation claims on the ground
that the diminution in value of their property was caused by the developer
and not the township. He reasoned that in order to prevail on a
§ 1983 claim, "plaintiffs must prove (1) the existence of a violation of a
right secured by the Constitution or laws of the United States and (2)
that the conduct complained of was committed by a person acting under the
color of state law," citing West v. Atkins,
487 U.S. 42, 48,
108 S. Ct. 2250, 2254-55,
101 L. Ed.2d 40, 48-49 (1988). Because their
inverse condemnation claim had been dismissed on the merits, the judge concluded that
there was no violation of a right secured by the Constitution or law
of the United States.
The second state court judge also concluded that plaintiffs' § 1983 claims based on
state law were not viable in the first instance because they had failed
to demonstrate that they suffered any harm caused by an official policy, relying
on City of Canton v. Harris,
489 U.S. 378, 385,
109 S. Ct. 1197, 1203,
103 L. Ed.2d 412, 424 (1989). This was so because
they had not alleged "[a] persistent widespread practice of city officials or employees,
which, although not authorized by officially adopted and promulgated policy, is common and
well settled as to constitute a custom that fairly represents municipal policy," citing
Shelton v. College Station,
754 F.2d 1251, 1257 (5th Cir. 1985). The judge
also found that there was no single policy decision generated by a policy-making
official nor a deliberate indifference on the part of the township or its
policy-making officials that could be identified to support a § 1983 claim. Finding that
the township never adopted a resolution or ordinance in which it committed to
complete the improvements to Bridge Lane, the plaintiffs could not have prevailed in
an action against it, rendering the legal malpractice claim not viable. He also
found that other state law claims were barred by the immunities preserved by
the Tort Claims Act, N.J.S.A. 59:2-4, 3-3, 3-5.
We are cognizant of the fact that the Federal District Court did not
address the merits of the § 1983 action at all, finding only that it
was time-barred. That court did, however, finally resolve the issue of inverse condemnation
and it is no longer an issue in this case. However, the § 1983
claim is distinct from the inverse condemnation claim. A plaintiff can establish a
policy that denies a constitutional right in a variety of ways. In Bair
v. City of Atlantic City, 100 F. Supp. 2d 262, 267-68 (D.N.J. 2000),
the court described how this may be done:
Official policy may arise in different contexts, including "a single decision by municipal
policymakers under appropriate circumstances." Pembaur v. City of Cincinnati,
475 U.S. 469, 480,
106 S. Ct. 1292,
89 L. Ed.2d 452 (1986). Liability may rest upon
"a course of action tailored to a particular situation and not intended to
control decisions in later situations" where "a deliberate choice to follow a course
of action is made from among various alternatives by the official or officials
responsible for establishing final policy with respect to the subject matter in question."
Id. at 481-82,
106 S. Ct. 1292.
A municipality's failure to act may also constitute municipal policy where the municipality
has knowledge of the need for action and the failure to act rises
to the level of "deliberate indifference" which causes a constitutional injury. City of
Canton v. Harris,
489 U.S. 378,
109 S. Ct. 1197,
103 L. Ed. 2d 412 (1989).
Here, a "policy" to deny plaintiff his property rights might reasonably be found
from the township's failure to draw down on the one-year letter of credit,
in failing to request an extension and confirm that it was granted, and
in concealing the loss of the letter of credit for an extended period
of time.
See footnote 8
Cohen, however, argues that even if Stoeckel can establish a policy,
he cannot show that the conduct was so egregious that it may fairly
be said to shock the conscience, as required by United Artists Theatre Circuit,
Inc. v. Twp. of Warrington,
316 F.3d 392, 400 (3d Cir.), rehearing denied,
324 F.3d 133 (3d Cir. 2003). This is an issue for a jury,
which might reasonably conclude that the conduct of the township rises to that
level.
The second trial court judge also found that there was no triable issue
under the Tort Claims Act, citing N.J.S.A. 59:2-4, 3-3, 3-5. N.J.S.A. 59:2-4 provides
that "[a] public entity is not liable for any injury caused by adopting
or failing to adopt a law or by failing to enforce any law."
N.J.S.A. 59:3-3 provides in part that "[a] public employee is not liable if
he acts in good faith in the execution or enforcement of any law."
And, N.J.S.A. 59:3-5 provides that "[a] public employee is not liable for an
injury caused by his adoption of or failure to adopt any law or
by his failure to enforce any law."
Stoeckel contends that his claims are not predicated upon the adoption or enforcement
of any law or the failure to do so. Rather, he claims that
his cause of action is based on the conduct of the township and
township officials in allowing the letter of credit to expire and then in
misrepresenting that fact to him.
The record does not support a conclusion as a matter of law that
the municipal clerk and other township employees were acting in good faith when
they failed to draw down the letter of credit in disregard of the
very likely and substantial injury to owners of lots in the subdivision if
roads were not built. The public employee must demonstrate that his conduct was
objectively reasonable and that he behaved with subjective good faith. Alston v. City
of Camden,
168 N.J. 170, 186-87 (2001). We have held that the question
of "good faith" under N.J.S.A. 59:3-3 is generally a fact question to be
resolved by a jury. Kelty v. State, Dep't of Law and Public Safety,
Div. of State Police,
321 N.J. Super. 84, 94 (App. Div. 1999). Surely,
we cannot say that the actions of municipal officials in this case were
objectively reasonable as a matter of law. To the extent that the officials
may be liable, so, too, may the township. N.J.S.A. 59:2-2(a). Similarly, if this
claim is based on actual fraud, actual malice, or willful misconduct and was
outside the scope of employment, there is also no immunity for it. N.J.S.A.
59:3-14.
The fact that the Stoeckels consulted with Norman Chidiac after they sought counsel
from Cohen in 1993 does not necessarily break the chain of causation when
he too failed to act on their behalf. He did not advise plaintiff
in 1993 of his rights and the remedies available to him. Had he
done so, the chain of causation might have been broken when the Stoeckels
consulted with Chidiac. With Chidiac, too, failing to properly advise them of their
rights, a jury could reasonably conclude that the negligence of Chidiac combined with,
rather than superseded, the negligence of Cohen.
Chidiac's entitlement to summary judgment rises and falls with that of Cohen. The
third state court judge granted summary judgment to Chidiac on the strength of
the second state court judge's conclusion that the Stoeckels could not prove their
case within a case. Having reversed that conclusion, the summary judgment in favor
of Chidiac must be reversed as well.
[Id. at 297 (citations omitted).]
To summarize, notice of claim is not required at all when the cause
of action accrued prior to the effective date of the 1994 amendment to
N.J.S.A. 59:8-3, i.e., July 1, 1994. Thereafter, notice of claim was required for
causes of action accruing on or after July 1, 1994, for all claims
other than ones alleging tortious intentional conduct by a public employee. However, as
to the latter, notice of claim is required for causes of action accruing
after June 29, 2004.
We previously held in Martin that the six-year statute of limitations applied to
claims against a publicly employed attorney. However, since then N.J.S.A. 59:8-8 and -9
were amended effective July l, 1994, to expressly require the presentation of claims
against public employees within two years, failing which the claims would be forever
barred. As a result of these amendments and the Velez decision, our conclusion
in Martin must be modified. We hold that the six-year statute of limitations
found in N.J.S.A. 2A:14-1 applies to all claims against publicly employed attorneys which
accrued prior to July 1, 1994. That limitations period continues to apply to
causes of action for tortious intentional conduct by a publicly employed attorney which
accrued prior to June 29, 2004. All other causes of action against publicly
employed attorneys which accrued on or after July 1, 1994, are subject to
the two-year statute of limitations.
Here, the complaint was amended to state claims against O'Connell on September 18,
2002. Plaintiff acknowledges that he became aware of his claims against O'Connell sometime
in 1997, although that timing is disputed by O'Connell. As a consequence, all
claims against O'Connell except for tortious intentional conduct are barred by the statute
of limitations in the Tort Claims Act. N.J.S.A. 59:8-8, -9. As to tortious
intentional conduct, the trial court must conduct a Lopez hearing to determine when
plaintiff first learned that he had such a claim and then apply the
six-year statute of limitations to determine whether the claims are barred. If they
are not, those claims based on the evidence before the court are sufficient
to require trial by jury.
Affirmed in part, reversed in part, and remanded for further proceedings consistent with
this opinion.
Footnote: 1
Plaintiffs Thomas and Karen Esposito and Jacqueline Stoeckel have not filed an
appeal.
Footnote: 2
These claims are against defendants Ira Cohen, Esquire; Norman Chidiac, Esquire; Richard Fifield,
Esquire; Daniel Vnencheck, Esquire; Richard Stein, Esquire; and Mulligan & Mulligan.
Footnote: 3
These claims are against Charles O'Connell, Esquire.
Footnote: 4
The dismissal of the claims against the Township of Knowlton involves purely
a question of law at this time.
Footnote: 5
Section 1983 "creates a remedy for the violation of rights found in
the Constitution and elsewhere in federal law." Loigman v. Twp. Comm. of Middletown,
185 N.J. 566, 577 (2006) (citing Oklahoma City v. Tuttle,
471 U.S. 808,
816-17,
105 S. Ct. 2427, 2432,
85 L. Ed.2d 791, 799-800 (1985)).
Footnote: 6
Lopez v. Swyer,
62 N.J. 267, 274-75 (1973).
Footnote: 7
Adopted July 12, 1984, effective September 10, 1984; new paragraphs (a) and
(d) adopted and former paragraphs (a) and (b), as they appeared in 1989,
redesignated as paragraphs (b) and (c) November 17, 2003, to be effective January
1, 2004.
Footnote: 8
In addition, the township purchased the lots surrounding that of Stoeckel and
rezoned them as farmland preservation, which Stoeckel contends precluded development of his lot.
A-