SYLLABUS
(This syllabus is not part of the opinion of the Court. It has
been prepared by the Office of the Clerk for the convenience of the
reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not
have been summarized).
Dr. Buechel moved to enforce the settlement agreement. The trial court ordered that
a plenary hearing be conducted to determine whether the parties had reached a
binding agreement, and, if so, whether the agreement was enforceable. In March 1997,
while the hearing was still pending, Puder sued Mrs. Buechel for unpaid legal
fees and costs associated with her divorce representation. Mrs. Buechel filed an answer
and counterclaim, alleging that Puder committed legal malpractice by negotiating an inadequate settlement
based on insufficient income and asset information. In addition, Mrs. Buechel alleged that
Puder failed to obtain her consent before accepting the settlement on her behalf.
In June 1998, the trial court held a plenary hearing to determine whether
the parties had reached a binding settlement agreement, and, if so, whether the
agreement was enforceable. After six days of testimony, Braun informed the court that
Mrs. Buechel had agreed to settle the divorce. The new settlement was substantially
similar to the disputed settlement, with the principal difference being that the new
settlement provided Mrs. Buechel with an additional $100,000 IRA distribution and $8,000 more
per year in alimony with all alimony payments now taxable to Dr. Buechel.
On June 30, Mrs. Buechel testified before the trial court that the agreement
was acceptable to her and that she entered into it voluntarily. Mrs. Buechel
also testified that she was only agreeing to the settlement because she believed
that the trial court would find the first settlement enforceable and because it
was her understanding that the second settlement would not affect the status of
her malpractice claim against Puder. The trial court ruled that Mrs. Buechel knowingly
and voluntarily entered into the second settlement agreement with Dr. Buechel and granted
a judgment of divorce to Mrs. Buechel. The trial judge did not comment
on Mrs. Beuchels testimony in respect of the effect of the second settlement
agreement on the malpractice claim.
In January 2001, before a different judge, Puder moved for summary judgment on
the legal malpractice counterclaim, arguing that Mrs. Buechel waived her right to sue
Puder by entering into the second settlement before the validity of the first
settlement was determined. The court agreed and granted the motion on that ground
and on judicial estoppel principles. The court based its decision on the certification
filed in support of Mrs. Buechels motion to stay the malpractice claim, which
stated that the claim would be rendered moot if Mrs. Buechel prevailed in
the matrimonial action. Mrs. Buechels motion for reconsideration was denied.
In a published opinion, the Appellate Division reversed and remanded, holding that the
trial court erred in dismissing Mrs. Buechels malpractice counterclaim. The Appellate Division concluded
that clients clearly have a right to bring legal malpractice actions stemming from
divorce litigation even where settlement has been reached. In addition, the Appellate Division
rejected the trial courts application of the judicial estoppel doctrine.
We initially denied Puders Petition for Certification, but granted certification upon reconsideration. The
Court also granted amicus curiae status to the New Jersey Bar Association.
HELD: Mrs. Buechel is bound by her testimony before the trial court concerning
the acceptability and fairness of the divorce settlement agreement. Those representations demonstrate that
Mrs. Buechel resolved her divorce in a manner that was satisfactory to her,
precluding her from bringing a malpractice claim against Puder.
1. Our courts have actively encouraged litigants to settle their disputes. Advancing that
public policy is imperative in the family courts where matrimonial proceedings have increasingly
overwhelmed the docket. Mrs. Buechels responses to the trial courts inquiries as to
her acceptance of the second agreement demonstrate that she bargained for, and received,
what she believed was an equitable distribution of the marital estate. Thus, any
alleged deficiency resulting from the first settlement was ameliorated by the second settlement
that she deemed to be fair and equitable. It would contravene principles of
fairness and our policy in favor of encouraging conclusive settlements in matrimonial cases
to allow Mrs. Buechel to now pursue her attorney for greater monetary gain.
She is bound by her calculated decision to resolve the dissolution of her
marriage by accepting her former spouses settlement offer, a settlement she approved in
open court. (Pp. 13-15)
2. The Appellate Division agreed that Mrs. Buechels professed understanding that the trial
court would bind her to the first settlement justified her acceptance of the
second settlement and her continued pursuit of the malpractice claim against Puder. Despite
her self-serving assertions to the contrary, Mrs. Buechel has failed to present sufficient
evidence that the trial court intended to bind her to the first settlement.
Conclusory and self-serving assertions by one of the parties are insufficient to overcome
a summary judgment motion. Neither the Court nor any of our lower courts
are bound by what essentially amounts to a private agreement between Mrs. Buechels
matrimonial counsel and her malpractice counsel. Upon consideration of all of the circumstances
of this appeal including Mrs. Buechels sworn representation to the trial court that
the settlement was acceptable and fair, the public policy in favor of conclusive
settlements, and the passage of almost nine years since Puder negotiated the first
settlement we conclude that Mrs. Buechel is precluded from pursuing this malpractice action.
The trial judge, however, should have informed Mrs. Buechel that her reservation would
not necessarily preserve her ability to bring future related claims. (Pp. 15-19)
3. Contrary to the Appellate Divisions reasoning, our conclusion here does not conflict
with Ziegelheim v. Apollo,
128 N.J. 250 (1992). Our holding in Ziegelheim is
inapplicable to this appeal because there are profound distinctions, both factual and legal,
between the two cases. Here, unlike in Ziegelheim, Mrs. Buechels claim against Puder
was not her only remedy to the alleged malpractice. Mrs. Puder made a
calculated decision to accept the second settlement one negotiated by a lawyer other
than Puder before the trial court could decide whether the first agreement was
enforceable. The burden of Mrs. Buechels failed legal strategy rests with her, not
Puder, in particular since she entered into the second settlement admittedly aware of
the discovery deficiencies leading up to the settlement. Ziegelheims reasoning discourages malpractice litigation
when a court finds that a plaintiff, although well aware that the attorney
was negligent, nevertheless testifies under oath that the settlement was both acceptable and
fair. (Pp. 19-23)
4. Upon consideration of all of the circumstances of this appeal including the
public policy that favors conclusive settlements, and the extensive delay in this matter
we hold that Mrs. Buechel cannot sue Puder for malpractice. Given that Mrs.
Buechels litigation against Puder has lasted almost as long as her marriage to
Dr. Buechel, it is time for closure, if not repose. After evaluating the
potential unfairness to both parties if the malpractice action were allowed to continue,
we find that the scales of equity weigh heavily against Mrs. Buechels claim.
(Pp. 23-24)
The judgment of the Appellate Division is REVERSED and the matter is REMANDED
to the trial court for reinstatement of summary judgment in favor of Puder.
JUSTICE WALLACE filed a separate CONCURRING opinion stating that although Mrs. Buechel has
a cause of action for legal malpractice against Puder, her complaint was properly
dismissed because she essentially satisfied the damages portion of her cause of action
when she accepted the second settlement as a fair and equitable distribution of
the marital assets.
JUSTICE LONG filed a separate DISSENTING opinion, in which JUSTICE ALBIN joins, stating
that to hold Mrs. Buechel to the settlement while denying her right against
Puder at this late stage is not an outcome she would consider just.
CHIEF JUSTICE PORITZ and JUSTICES LaVECCHIA and RIVERA-SOTO join in JUSTICE ZAZZALIs opinion.
JUSTICE WALLACE filed a separate concurring opinion. JUSTICE LONG filed a separate dissenting
opinion, in which JUSTICE ALBIN joins.
Plaintiff-Appellant,
v.
KATHLEEN BUECHEL,
Defendant-Respondent.
Argued November 29, 2004 Decided June 7, 2005
On certification to the Superior Court, Appellate Division, whose opinion is reported at
362 N.J. Super. 479 (2003).
Joseph P. Castiglia argued the cause for appellant (Mr. Castiglia and Pashman Stein,
attorneys; Mr. Castiglia and Michael S. Stein, on the briefs).
David Feinsilver argued the cause for respondent (The Feinsilver Law Group, attorneys; Mr.
Feinsilver and H. Jonathan Rubinstein, on the briefs).
Christopher J. Carey argued the cause for amicus curiae, New Jersey State Bar
Association (Edwin J. McCreedy, President, attorney; Mr. Carey and Mr. McCreedy, of counsel;
Mr. Carey and Theodore H. Hilke, on the brief).
JUSTICE ZAZZALI delivered the opinion of the Court.
In this matter, a matrimonial attorney sued a former client to recover unpaid
legal fees arising from her representation of the client in a divorce action.
The client responded by filing a malpractice counterclaim against the attorney for negotiating
an allegedly inadequate divorce settlement and for failing to obtain informed consent before
accepting the settlement on the clients behalf. With the assistance of new counsel,
the client then negotiated a second divorce settlement that she deemed acceptable and
a fair compromise of the issues. Subsequently, the matrimonial attorney moved for summary
judgment on the malpractice counterclaim, arguing that by entering into the second settlement,
the client waived her right to sue for malpractice arising from the first
settlement. The Law Division granted the motion, but the Appellate Division reversed.
We hold that the client is bound by her representation to the trial
court that the settlement was acceptable and fair. Accordingly, we reverse the Appellate
Division and remand for reinstatement of summary judgment in favor of the attorney.
KATHLEEN BUECHEL: Yes.
THE COURT: . . . . I dont want you to think that
youre being forced or pressured into accept[ing] an agreement. Youve been through an
emotional experience, and I want to make sure that this agreement is acceptable
to you. Is it acceptable to you?
KATHLEEN BUECHEL: Yes, it is.
THE COURT: And youve discussed it thoroughly with Mr. Braun?
KATHLEEN BUECHEL: I have.
THE COURT: . . . . You realize that I was getting close
to deciding whether or not there was an enforceable agreement . . .
. I have not yet decided whether or not that agreement was to
be enforced. But that trial was to continue today. It can still continue
tomorrow. And I will then decide whether or not there was an agreement
to be enforced and if so, whether I consider that agreement to be
fair. That can continue. Do you understand?
KATHLEEN BUECHEL: I understand.
THE COURT: Okay. I dont want you to think now that youre being
forced to enter into a settlement that you havent discussed with your attorney,
a settlement that youre not satisfied with. Youre telling me that you have
discussed it with your attorney and that you think its a fair compromise
of the issues. Is that accurate?
KATHLEEN BUECHEL: Yes.
THE COURT: You probably feel youre not getting as much as you want.
Im sure your husband feels hes paying more than he should. And if
thats true its probably a test of a fair compromise. But I have
to be satisfied that you are accepting it voluntarily. So I ask you
one more time: Are you accepting this compromise voluntarily?
KATHLEEN BUECHEL: Yes.
THE COURT: All right.
[(Emphasis added.)]
Mrs. Buechels attorney then questioned her regarding the agreement:
MR. BRAUN: And picking up on what [the judge] asked you: Do you
feel that your frame of mind right now and for the last hour
or so is such where you can make a decision as to whether
or not to enter into this agreement? And if you decide to enter
into it you understand youll be bound by it? . . .
KATHLEEN BUECHEL: I understand that.
MR. BRAUN: And - and Miss Buechel, everybody who goes through what youve
been through is very upset. Do you feel that - right now as
youre called upon to make the decision youre in the frame of mind
where you can make an intelligent, knowledgeable free decision with respect to the
terms of this agreement?
KATHLEEN BUECHEL: Yes.
MR. BRAUN: [The judge] indicated to you that he would continue with the
trial, make a decision. We were ready for your testimony today. We can
continue it tomorrow. Youre aware of that.
KATHLEEN BUECHEL: Yes, Im aware of that.
MR. BRAUN: And if you do enter into an agreement you waive your
right to that trial and have [the judge] make the decisions.
KATHLEEN BUECHEL: Correct. I know that.
Upon further questioning by her attorney, however, Mrs. Buechel testified that she was
only agreeing to the settlement because she believed that the trial court would
find the first settlement enforceable and because it was her understanding that the
second settlement would not affect the status of her malpractice claim against Puder:
MR. BRAUN: . . . [O]ne of the things that concerns us, you
and I . . . is the fact that [the judge] may bond
you to this purported agreement that Miss Puder represented she was entering into
on your behalf.
KATHLEEN BUECHEL: Yes.
MR. BRAUN: And the exposure of the Court finding that may, in fact,
take place is one of the motivating if not the motivating factor to
you entering into this agreement.
KATHLEEN BUECHEL: Yes, it is.
MR. BRAUN: And although under this agreement you dont feel youre getting everything
youre entitled to - equitable distribution, lifetime alimony, youre entering into this agreement
as a compromise fully aware of the exposure that if [the judge] finds
that the quote/unquote Puder agreements enforceable you would be getting less than what
youre agreeing to today.
KATHLEEN BUECHEL: Thats true.
MR. BRAUN: And Ive explained to you that I spoke to your attorney,
Pat Collins, in the malpractice case and with - against Puder - and
with the proviso Ill just place on the record, its your understanding that
entering into this agreement will not prejudice you in that case. Correct?
KATHLEEN BUECHEL: Its my correct understanding.
. . . .
MR. BRAUN: So that your understanding is by entering into the agreement you
are not - you are still preserving any and all claims you have
against Miss Puder in connection with her representation of you in this matrimonial
action.
KATHLEEN BUECHEL: Yes.
Following this exchange, the trial court ruled that Mrs. Buechel knowingly and voluntarily
entered into the second settlement agreement with Dr. Buechel. The judge therefore approved
the agreement and granted a judgment of divorce to Mrs. Buechel.
In January 2001, before a different judge, Puder moved for summary judgment on
the legal malpractice counterclaim, arguing that Mrs. Buechel waived her right to sue
Puder by entering into the second settlement before the validity of the first
settlement was determined. The court agreed and granted the motion on that ground.
The court also held that Mrs. Buechels continued prosecution of her legal malpractice
claim against Puder would violate principles of judicial estoppel. The court based its
decision on the certification filed in support of Mrs. Buechels motion to stay
the malpractice claim, which stated that the claim would be rendered moot if
Mrs. Buechel prevailed in the matrimonial action. The court concluded that Mrs. Buechel
had so prevailed. After the court denied Mrs. Buechels motion for reconsideration, Mrs.
Buechel appealed.
In a published opinion, the Appellate Division reversed and remanded, holding that the
trial court erred in dismissing Mrs. Buechels malpractice counterclaim. Puder v. Buechel,
362 N.J. Super. 479, 484 (2003). First, the panel concluded that our holding in
Ziegelheim v. Apollo,
128 N.J. 250 (1992), plainly allows a former client to
bring a legal malpractice action against an attorney for professional negligence in divorce
litigation where a settlement ensued. Id. at 485. Second, the panel held that
the trial courts use of the judicial estoppel doctrine was erroneous because the
conditions justifying application of this extraordinary remedy were not present. Id. at 494.
We initially denied Puders Petition for Certification.
179 N.J. 309 (2004). However, on
reconsideration, we granted certification.
180 N.J. 147 (2004). We also granted amicus curiae
status to the New Jersey State Bar Association (NJSBA).
VIRGINIA B. PUDER, ESQ.,
Plaintiff-Appellant,
v.
KATHLEEN BUECHEL,
Defendant-Respondent.
JUSTICE WALLACE, JR., concurring
I concur. It is my view that Mrs. Buechel has a cause of
action for legal malpractice against Puder, but that her complaint was properly dismissed
because she essentially satisfied the damages portion of her cause of action when
she accepted the second settlement as a fair and equitable distribution of the
marital assets.
In Ziegelheim, the plaintiff ultimately filed her malpractice action against the defendant, her
previous attorney, after her motion to reopen the divorce decree and set aside
the settlement agreement was denied. Supra, 128 N.J. at 257-58. The defendant moved
for summary judgment. Id. at 258. The plaintiff testified at deposition that the
defendant had told her that if the case were tried she would not
receive more than twenty percent of the marital assets causing her to agree
to the settlement. Id. at 258-59. The trial court granted the defendants motion,
concluding that the plaintiff understood the terms of settlement, believed they were fair,
and freely entered into the agreement. Id. at 259. The Appellate Division reversed
in part and ordered a trial on whether defendant was negligent because he
convinced [plaintiff] to accept an agreement that a reasonably prudent attorney would have
advised against accepting. Id. at 260. We agreed, but also permitted plaintiff to
proceed on other counts of her complaint including the failure to make proper
investigation, the negligent failure to discover concealed assets, id. at 265, the negligent
delay in finalizing the settlement and the failure to correctly memorialize the settlement,
id. at 266, and the negligent failure to present the offer in writing
so plaintiff could review the terms and assess the fairness of the agreement.
Id. at 266-67.
We explained that in reaching our decision,
we do not open the door to malpractice suits by any and every
dissatisfied party to a settlement. Many such claims could be averted if settlements
were explained as a matter of record in open court in proceedings reflecting
the understanding and assent of the parties. Further, plaintiffs must allege particular facts
in support of their claims of attorney incompetence and may not litigate complaints
containing mere generalized assertions of malpractice. We are mindful that attorneys cannot be
held liable simply because they are not successful in persuading an opposing party
to accept certain terms. Similarly, we acknowledge that attorneys who pursue reasonable strategies
in handling their cases and who render reasonable advice to their clients cannot
be held liable for the failure of their strategies or for any unprofitable
outcomes that result because their clients took their advice. The law demands that
attorneys handle their cases with knowledge, skill, and diligence, but it does not
demand that they be perfect or infallible, and it does not demand that
they always secure optimum outcomes for their clients.
[Id. at 267.]
The dissent also accepted the right of a settling party to sue his
or her lawyer, but concluded that because the plaintiff failed to submit an
experts report on the defendants motion for summary judgment, the trial court correctly
granted judgment in favor of the defendant. Id. at 268-69.
There are clear differences between Ziegelheim and the present case. The plaintiff in
Ziegelheim was unsuccessful in her effort to open the judgment and the settlement
agreement. Thus, the plaintiffs only remedy to obtain what she believed was a
fair share of the marital assets was to institute a malpractice claim and
prove the negligence of her attorney. If plaintiff were ultimately successful in that
action, she would have recovered at least the difference between the settlement share
defendant obtained and the fair share a competent attorney would have recovered.
In the present case, like the plaintiff in Ziegelheim, Mrs. Buechel believed that
plaintiff, her first attorney, was negligent in representing her in the initial settlement.
However, unlike the plaintiff in Ziegelheim, before the trial court ruled on her
motion to vacate the settlement, Mrs. Buechel agreed to a second settlement that
she believed was fair and equitable. On the occasion of the second settlement,
the terms were clearly explained to Mrs. Buechel. Thus, unlike the plaintiff in
Ziegelheim, Mrs. Buechel was able to recover the difference between the amount she
would have received in the settlement Puder obtained for her and the settlement
terms her second attorney negotiated for her. Consequently, Mrs. Buechel received all that
she was due. Any asserted negligence by Puder did not result in any
damages to Mrs. Buechel.
In short, Mrs. Buechel failed to demonstrate that she suffered a loss as
a result of Puders asserted negligence. The determining factor here is not her
ultimate attainment of a fair and equitable settlement, but the fact that in
reaching the second settlement, Mrs. Buechel recovered all of her damages allegedly suffered
from Puders alleged deficient representation of her in the first settlement.
The result here mirrors the outcome that one would anticipate if the trial
court had granted Mrs. Buechels motion to open the judgment, and thereafter, settlement
ensued or a trial concluded on more favorable terms than the original settlement
to Mrs. Buechel. In that event, Puders alleged deficiencies would have run their
course because Mrs. Buechel would have received a full recovery.
I recognize that in some other case not before us a person in
Mrs. Buechels shoes may be able to prove damages beyond what he or
she might receive in a settlement. For example, if such a hypothetical person
were to incur substantial fees and costs that would otherwise not have been
incurred and were not recovered as part of the settlement, then that would
constitute damages recoverable against the deficient attorney. That is not the case here
because Mrs. Buechel recovered her attorneys fees as part of the second settlement.
I concur in the result.
FILE (VAL) 5/24/05
SUPREME COURT OF NEW JERSEY
A-
95 September Term 2003
VIRGINIA B. PUDER, ESQ.,
Plaintiff-Appellant,
v.
KATHLEEN BUECHEL,
Defendant-Respondent.
JUSTICE LONG, J.,, dissenting.
I would affirm the judgment of the Appellate Division substantially for the reasons
expressed in Judge Kestins thorough and thoughtful opinion. Like the Appellate Division I
would hold that, in the unique circumstances presented, the settlement of the matrimonial
case was not an impediment to Mrs. Buechels malpractice action against Ms. Puder.
I agree with the Court that, as a matter of policy, a party
in Mrs. Buechels position should in the future be required to pursue an
enforcement motion to disposition. I am simply not willing to apply that policy
to this case in which it will effectuate an unfair outcome.
Here, Mrs. Buechel stated unequivocally on the record that she was settling on
the condition that the agreement would not prejudice her in pursing the malpractice
case against Puder. The very experienced trial judge must have thought that the
reservation she expressed would be honored, otherwise he would have advised her that
she had no right to any future action against Puder and that her
settlement was final for all purposes. If that had occurred, Mrs. Buechel would
likely have rethought her position and may have opted for a different course.
To hold her to the settlement while denying her right against Puder at
this late stage is simply not an outcome that I consider just. Therefore
I dissent.
Justice Albin joins in the opinion.
SUPREME COURT OF NEW JERSEY
NO. A-95 SEPTEMBER TERM 2003
ON CERTIFICATION TO Appellate Division, Superior Court
VIRGINIA B. PUDER, ESQ.,
Plaintiff-Appellant,
v.
KATHLEEN BUECHEL,
Defendant-Respondent.
DECIDED June 7, 2005
Chief Justice Poritz PRESIDING
OPINION BY Justice Zazzali
CONCURRING OPINION BY Justice Wallace
DISSENTING OPINION BY Justice Long
CHECKLIST