Preview:

a6072-05.opn.html

The status of this decision is unpublished

Original Wordprocessor Version This case can also be found at 197 N.J. 13, 960 A.2d 743. (NOTE: The status of this decision is unpublished.)
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-6072-05R56072-05T5 SUSAN E. NEVINS, Plaintiff-Appellant/ Cross-Respondent, v. PHILIP N. MULDOON, JR., THE LAW OFFICES OF PHILIP N. MULDOON, JR., ESQUIRE, P.C., Defendants, and MARESSA, GOLDSTEIN, BIRSNER, PATTERSON, DRINKWATER & ODDO, P.C., Defendant-Respondent/ Cross-Appellant, and MARMERO & MAMMANO, Defendant-Respondent. _________________________________________________

Argued January 30, 2008 - Decided Before Judges Axelrad, Payne and Messano. On appeal from Superior Court of New Jersey,

file:///C|/Users/Peter/Desktop/Opinions/a6072-05.opn.html[4/20/2013 8:29:09 PM]

a6072-05.opn.html

Law Division, Burlington County, L-3763-01. Fredric J. Gross argued the cause for appellant/cross-respondent (Fredric J. Gross Law Firm, attorney; Mr. Gross and Susan E. Babb, on the brief). Leonard C. Leicht argued the cause for respondent/cross-appellant (Morgan Melhuish Abrutyn, attorneys; Mr. Leicht, of counsel and on the brief with Shaji M. Eapen). Richard A. Ulsamer argued the cause for respondent (Tompkins, McGuire, Wachenfeld, & Barry LLP, attorneys; Mr. Ulsamer, of counsel and on the brief). PER CURIAM In this legal malpractice case, plaintiff Susan Nevins asserts negligence on the part of defendant Philip N. Muldoon, Jr. in failing to competently pursue and exhaust internal appeals with her employer, New Jersey Bell, from a denial of her claim for short-term disability benefits and in failing to file an ERISA appeal in federal district court from Bell's interim denial of such benefits. At the time of the acts at issue, Muldoon was employed by the defendant law firm of Maressa, Goldstein, Birsner, Patterson, Drinkwater & Oddo, P.C. (Maressa Goldstein) as an associate. Following a period of solo practice as The Law Offices of Philip N. Muldoon, Jr., Esquire, P.C., Muldoon took a position as an associate with defendant law firm, Marmero & Mammano, P.C. A stipulation of dismissal of claims against Muldoon has been filed as the result of his declaration of bankruptcy, and claims against his firm, which has no assets, have likewise been dismissed. Summary judgment against plaintiff was granted on her remaining claims against the two law firms. The decision granting summary judgment to Maressa Goldstein was based upon lack of expert evidence on the issue of proximate causation; the decision granting summary judgment to Marmero & Mammano was based upon a lack of successor corporation liability. Plaintiff has appealed from these summary judgment orders. Additionally, defendant Maressa Goldstein cross-appeals from an advisory determination by the judge that, if trial of plaintiff's claims were held, whether plaintiff would have prevailed on her ERISA claim was an issue of fact to be determined by a jury. I. Plaintiff was a long-term employee of New Jersey Bell who, in 1985, commenced having physical difficulties that included chronic pain of unknown origin. As the result of her condition, Bell granted plaintiff three separate periods of temporary disability extending from November 24, 1986 to June 11, 1987, from April 14, 1989 to April 6, 1990, and from November 16, 1992 to September 1, 1993. In 1993, plaintiff was diagnosed with chronic fatigue syndrome,
file:///C|/Users/Peter/Desktop/Opinions/a6072-05.opn.html[4/20/2013 8:29:09 PM]

a6072-05.opn.html

multiple chemical sensitivity, reactive depression and other illnesses allegedly due to toxic chemical exposures to pesticides at her prior home. Plaintiff claimed that her symptoms were exacerbated by workplace exposures to various substances, including perfumes. From September 1993 until November 1993, plaintiff was authorized to telecommute from her home on a limited basis, but then was either required to or voluntarily returned to her job. In March 1995, plaintiff's condition allegedly worsened and, in September 1995, after a further opportunity to telecommute was denied, she ceased work and applied for short-term sickness and accident disability benefits pursuant to Bell's ERISA plan. Her application was denied by letter dated September 29, 1995. Thereafter, plaintiff appealed to Bell's Benefit Claims Committee. Supporting medical documentation was submitted by plaintiff in November 1995, consisting of letters from internist Steven C. Halbert, M.D. stating that plaintiff's symptoms were consistent with chronic fatigue and immune dysfunction syndrome and requesting a period of temporary disability benefits; psychiatrist Bernardo A. Merizalde, M.D., disputing the finding of a Bell expert that plaintiff's condition was purely psychological and urging that she be permitted to telecommute; and osteopathic physician Marc P. Hurowitz, reciting plaintiff's history of treatment for fibromyalgia, Raynauds phenomena, a vasomotor instability, peripheral neuropathy of unknown etiology, plantar facitis, chronic fatigue immune deficiency syndrome, and multiple chemical sensitivity and requesting a period of disability of at least nine months. In March 1996, plaintiff retained the firm of Maressa Goldstein to file a suit against Bell pursuant to the New Jersey Law Against Discrimination (NJLAD), N.J.S.A. 10:5-1 to -49. Philip Muldoon, an associate, was assigned to her case. On April 8, 1996, prior to a determination by the Benefit Claims Committee, Bell's associate medical director, Barton Margoshes, M.D., requested that plaintiff provide updated medical information to Bell's Health Management Center within two weeks. On April 15, 1996, plaintiff's appeal was denied by the Benefit Claims Committee, primarily on the basis of the reports of Bell's two independent medical examiners, David A. Allan, M.D., a rheumatologist, and Gladys S. Fenichel, M.D., a psychiatrist, who concluded that plaintiff was not totally disabled as required by the plan as a condition for receipt of temporary disability benefits. Dr. Allan stated: My assessment is that Ms. Nevins has several trigger points and a history of pain which is consistent with a partial fibromyalgia syndrome, but she does not fulfill the standard criteria for fibromyalgia syndrome. She has signs and symptoms suggesting a continued mild vasospastic disorder which in my examination did not appear to be disabling. There is no evidence of underlying autoimmune disease, specifically a connective tissue disease such a lupus, Sjogren's, or rheumatoid arthritis. Ms. Nevins seems to have tachyarrhythmias of undetermined etiology.
file:///C|/Users/Peter/Desktop/Opinions/a6072-05.opn.html[4/20/2013 8:29:09 PM]

a6072-05.opn.html

The doctor recommended a return to full-time sedentary employment, thyroid and cardiac evaluations, and a psychological evaluation as the result of what appeared to him to be a significant psychological disability. However, Dr. Fenichel was of the opinion "from a psychiatric perspective at the time of [her] evaluation that Ms. Nevins [was] not disabled from a return to sedentary work." She opined that "any disability experienced by Ms. Nevins should be viewed as related to her underlying medical conditions and not to a psychiatric diagnosis." The letter from the Benefit Claims Committee denying benefits stated in relevant part: The Committee considered the following in evaluating Ms. Nevins's claim: Ms. Nevins's claim letter and the documentation that accompanied it; your [Nevins's interim attorney's] letter; and, information from the Health & Safety Management Center (HSMC). Ms. Nevins's benefits were suspended on September 12, 1995, her eighth calendar day of absence, based on the September 8, 1995 progress notes from Ms. Nevins's personal physician, Dr. Hurowitz, which indicated medical conditions that did not warrant disability to work beyond a seven day recovery period. Subsequent documentation submitted by Ms. Nevins's personal physicians, Dr. Moskowitz, Dr. Merizalde, Dr. Halbert, and Dr. Hurowitz, did not contain medical evidence to substantiate that Ms. Nevins was disabled to work as of September 12, 1995. On October 20, 1995, Dr. Allan, Company consultant, conducted an independent medical examination on Ms. Nevins, and reported that, from a medical standpoint, she was not disabled to work. Ms. Nevins underwent an independent psychiatric evaluation on November 16, 1995 with Dr. Fenichel, Company consultant, who stated that Ms. Nevins was not disabled from a psychiatric standpoint. Dr. Margoshes, Company Medical Director, reviewed the record and indicated that it contained no information to substantiate that Ms. Nevins was disabled to work during the period in question. The Plan states that disability payments will terminate when disability ceases. The Committee understands that its decision may disappoint Ms. Nevins. However, the Committee must interpret and administer the Plan in accordance with Plan provisions. Under the Plan, disability to work has consistently been interpreted to mean total disability. Therefore, in order to grant benefits under the Plan, the Committee must have medical evidence which substantiates a claimant's total disability to perform work. For example, although an employee may not be able to perform his/her regular duties, he/she may be able to perform other work as recommended by Health Services; thus, he/she would not be considered disabled to work. Plaintiff was advised that she had sixty days to file a second internal appeal with the Benefit Appeals Committee. The denial letter further stated: If you choose to submit an appeal, please be aware that the Appeals Committee, like the Claims Committee, must base its decision on medical evidence which substantiates total disability to work. If a treating physician merely submits an unsubstantiated opinion that an employee is unable to work, that opinion cannot be given the same weight as a report of specific, clinical findings (quantified, where possible) which are

file:///C|/Users/Peter/Desktop/Opinions/a6072-05.opn.html[4/20/2013 8:29:09 PM]

a6072-05.opn.html

based on a concurrent examination and which evidence careful testing and review. According to plaintiff, Muldoon had informed her that he would take care of the appeal to the Benefit Appeals Committee, and she forwarded to him Margoshes's April 8 request for additional medical information. However, Muldoon did not respond on her behalf and advised her that it was not necessary to pursue a further appeal. According to plaintiff, three pieces of medical information could have been supplied in response to the April 8 request: (1) plaintiff's October 20, 1995 letter to Allen updating him as to her current physical condition (a letter that both Dr. Allen and Dr. Fenichel acknowledged reviewing); (2) a May 9, 1996 report of Dr. Michael B. Lax, wherein he reported that he agreed with Doctors Moskowitz, a clinical psychologist, Halbert and Hurowitz that "plaintiff's illness has characteristics of three syndromes that are often overlapping. These syndromes include fibromyalgia, chronic fatigue syndrome, and multiple chemical sensitivities" and recommended, like Dr. Merizalde, that plaintiff be permitted to telecommute; and (3) Dr. Lax's August 15, 1996 addendum stating that plaintiff was totally disabled. Plaintiff was terminated on September 6, 1996 because of the denial on April 15, 1996 by the Benefit Claims Committee of her appeal from Bell's initial denial of disability benefits, failure to submit supplemental medical information pursuant to the medical department's request, and failure to return to work. On October 31, 1996, Muldoon left Maressa Goldstein to open his own practice, taking plaintiff's file with him. On November 15, 1996 he filed a NJLAD complaint on plaintiff's behalf alleging discrimination as the result of Bell's refusal to permit plaintiff to permanently telecommute. On January 27, 1999, plaintiff was determined to be totally disabled by the Social Security Administration and entitled to receive benefits retroactive to September 5, 1995. Later, she also received benefits under a private plan. In September 1999, plaintiff became dissatisfied with Muldoon, retaining current counsel on October 25, 1999. On December 1, 1999, Muldoon, as a salaried associate, joined a law firm led by Frank Marmero. Muldoon's own firm was not dissolved, but it had no assets. One month later, Marmero merged with another firm to form Marmero & Mammano. Muldoon did not have an ownership interest in either of these firms, which at most, could have collected fees as the result of collection efforts to obtain payment for prior work done by Muldoon. In a letter dated February 11, 2000 to current counsel, Bell offered to settle plaintiff's claim for $27,500, inclusive of attorney's fees, to review plaintiff's medical information to re-determine eligibility for short-term disability benefits (giving rise to the possibility of long-term benefits), and to evaluate plaintiff's explanation why such information was not timely submitted. Plaintiff claims not to have been informed of this settlement offer.

file:///C|/Users/Peter/Desktop/Opinions/a6072-05.opn.html[4/20/2013 8:29:09 PM]

a6072-05.opn.html

In October 2001, plaintiff settled her NJLAD action for $350,000. Her malpractice claim was filed on December 13, 2001. In her complaint, plaintiff alleged that Muldoon was negligent in failing to file a second internal appeal and then an ERISA appeal on her behalf. Maressa Goldstein was charged with negligent failure to supervise; Marmero & Mammano was charged with successor corporation liability. Plaintiff's legal malpractice expert, Bruce McMoran, rendered a report on December 14, 2004 that did not express an opinion as to whether plaintiff would have prevailed in the second internal appeal or in a subsequent federal ERISA action, and he declined to reach an opinion on the issue in his deposition, while observing that because Bell's conduct would have been assessed under an arbitrary and capricious standard in an ERISA appeal, plaintiff would probably have a better chance of recovery under the NJLAD. This evidence led to entry of summary judgment in favor of Maressa Goldstein on the basis of lack of proof of causation. Summary judgment was granted to Marmero & Mammano upon a finding that successor corporation liability had not been established. II. On appeal, plaintiff contests the judge's decision to grant summary judgment to Maressa Goldstein based upon her failure to present expert testimony on the issue of proximate causation. She claims that no expert was needed to determine whether she would have prevailed had a second internal appeal or a subsequent ERISA appeal had been filed on her behalf. In her view, the actual "genuine disputed issue in this case appears to be whether [plaintiff] . . . was disabled within the meaning of . . . [Bell's] Short Term Disability Plan" and a jury would be quite capable of "assess[ing] the proofs of disability," upon evidence that included plaintiff's 1999 Social Security disability benefits award and a private disability award, and resolving this issue anew on its own. According to plaintiff, if the jury were satisfied, based upon its own review of the record, that plaintiff was disabled in 1996, it would be patently obvious that Muldoon's negligence in failing to file the requisite appeals proximately caused plaintiff's damages. Expert testimony is required to establish proximate cause in legal malpractice cases unless the "causal relationship between the attorney's legal malpractice and the client's loss is so obvious that the trier of fact can resolve the issue as a matter of common knowledge." Sommers v. McKinney, 287 N.J. Super. 1, 11 (App. Div. 1996); see also 2175 Lemoine Ave. Corp. v. Finco, Inc., 272 N.J. Super. 478, 490 (App. Div.), certif. denied, 137 N.J. 311 (1994). In the present case, Muldoon is alleged to have failed to submit requested additional medical documentation, file a second internal appeal, and file an ERISA appeal. In a legal malpractice case involving failure to appeal, proximate cause "ultimately reduces to a prediction of what the outcome of a hypothetical appeal would
file:///C|/Users/Peter/Desktop/Opinions/a6072-05.opn.html[4/20/2013 8:29:09 PM]

a6072-05.opn.html

have been." Andrews v. Saylor, 80 P.3d 482, 486-87 (N.M. Ct. App. 2003). In the present matter, Bell's sickness and accident disability plan provided up to fifty-two weeks of shortterm disability benefits for eligible employees "unable to work due to sickness, non-job-related accidental injury or an occupational illness." A section captioned "Participant Rights and Benefit Appeals" gave procedural details on filing claims and on filing appeals following a denial of benefits. It stated, in relevant part: The claims administrator has sole authority to decide claims under the plan. The appeals administrator has sole authority to review and resolve any appeal of a denied claim. In case of an appeal, the appeals administrator's decision is final and binding on all parties to the full extent permitted under applicable law, unless the claimant or a beneficiary later proves that the appeals administrator's decision was an abuse of discretion. The record upon appeal to the Benefit Appeals Committee would have consisted only of those documents submitted to the Benefit Claims Committee, plus those documents that plaintiff has alleged Muldoon neglected to submit in connection with the unperfected second internal appeal. A forecast by the factfinder as to the probable result of a second administrative appeal would also be limited to that record. Mitchell v. Eastman Kodak Co., 113 F.3d 433, 440 (3d Cir. 1997) (thus limiting record on ERISA appeal). No discovery was taken that would further aid in determining the basis for the Claims Committee's decision. Additionally, no discovery was taken that would assist the factfinder in forecasting how the Benefit Appeals Committee would have responded if an appeal had been filed that included plaintiff's October 20, 1005 letter to Dr. Allen and the two reports of Dr. Lax. Nor has any evidence been presented of the composition of that Appeals Committee, the views of its members, or the standards or procedures employed by that committee in evaluating claims. In the circumstances presented, the result of such an appeal does not appear self-evident, particularly in light of plaintiff's concession on appeal that, at the time, multiple chemical sensitivity -- one of plaintiff's primary diagnoses, and the reason that she claimed she could not work outside her home -- was not a condition that was generally accepted by the medical community. In the absence of any evidence in this crucial area, we are at a loss to discern how a factfinder could determine whether an abuse of discretion by the Benefit Claims Committee would have been found upon further internal appeal. A causal relationship between Muldoon's alleged legal malpractice and damage to plaintiff arising from his alleged failure to perfect a second internal appeal simply cannot be established upon the record presented. Plaintiff contends further that Muldoon's failure to exhaust internal claims procedures precluded any ERISA appeal, citing Berger v. Edgewater Steel Co., 911 F.2d 911, 916 (3d Cir.), cert. denied, 499 U.S. 920, 111 S. Ct. 1310, 113 L. Ed.2d 244 (1991) and Wolf v. National Shopmen Pension Fund, 728 F.2d 182, 185-86 (3d Cir. 1984). Plaintiff argues further that Muldoon's alleged abandonment of her internal appeal fatally prejudiced the plaintiff's claim for

file:///C|/Users/Peter/Desktop/Opinions/a6072-05.opn.html[4/20/2013 8:29:09 PM]

a6072-05.opn.html

disability benefits by extinguishing the opportunity to prevail on an ERISA appeal. Nonetheless, plaintiff must provide prima facie evidence that she would have prevailed on that appeal to establish a causal relationship between Muldoon's alleged negligence and damage to her. The standard of review that would have been employed by the federal district court in reviewing any denial of benefits by Bell is relevant in this regard. Although plaintiff's position on this issue is not entirely clear, she appears to argue that the court would have employed a de novo standard. In contrast, Maressa Goldstein claims that an arbitrary and capricious standard would have been employed. The motion judge ruled, following argument on motions for summary judgment, that the applicable standard would have been whether the actions of the Benefit Appeals Committee was arbitrary and capricious. The issue is governed, in part, by the United States Supreme Court's decision in Bruch v. Firestone Tire & Rubber Co., 489 U.S. 101, 109 S. Ct. 948, 103 L. Ed.2d 80 (1989). In that case, involving suit by several former employees under 29 U.S.C.A.

Download a6072-05.opn.pdf

New Jersey Law