Justia New Jersey Supreme Court Opinion Summaries

In this appeal, the New Jersey Supreme Court considered whether an attorney’s pledge of anticipated attorney’s fees could be considered an account receivable and secured under Article 9 of the Uniform Commercial Code (UCC), and whether the lender here complied with the requirements of the UCC to perfect its security interest. Plaintiff John Giovanni Granata retained Diane Acciavatti to bring a legal malpractice complaint against defendants Edward Broderick Jr., and Broderick, Newmark, & Grather. Acciavatti accepted a $10,000 retainer and agreed to a contingent fee arrangement. After a jury trial, Granata was awarded a judgment of $1,597,193, and the trial judge granted Acciavatti’s motions for fees, costs, and pre-judgment interest. Defendants appealed, and Granata cross-appealed. Acciavatti had an oral agreement with Granata to represent him at $350 per hour and told him she would seek counsel fees from defendants after the appeal. While the appeal was pending, Acciavatti withdrew from the practice of law. Dominic Caruso was appointed attorney-trustee for Acciavatti’s practice, and the firm of Roper & Twardowsky, LLC (the Roper firm), filed a substitution of counsel form for Acciavatti. The Appellate Division reversed and remanded for a new trial. Following a two-day mediation, the case settled for $840,000. Three of Acciavatti’s creditors then claimed liens upon any legal fees owed to her from the case. The appellate panel considered whether Acciavatti possessed an interest in her anticipated legal fees and whether one of her creditor's UCC filing granted it a perfected interest in those fees. The panel reasoned that, “[i]f both questions [we]re answered in the affirmative, [the creditor], as a perfected secured creditor, would enjoy priority over [the other creditors], who are subsequent lien creditors seeking to levy on the same collateral.” The panel expressed agreement with cited decisions and held “that, under certain circumstances, an attorney’s pledge of anticipated counsel fees can be considered an account receivable and secured under Article 9.” The panel observed that “[the appealing creditor] met the requirements of N.J.S.A. 12A:9-203 for its security interest to attach to Acciavatti’s counsel fees." Finding no reversible error in that judgment, the Supreme Court affirmed. View "Granata v.Broderick" on Justia Law

In 1983, the New Jersey Supreme Court affirmed a final consent judgment for a settlement agreement between the New Jersey State Bar Association and the New Jersey Association of Realtor Boards. The terms of the settlement provided that real estate brokers and salespersons may prepare contracts to sell or lease real property, so long as a standard form is used that includes a three-day period for attorney review. Plaintiffs Michael Conley, Jr., and Katie M. Maurer (Buyers) made an offer to purchase a condominium from defendant Mona Guerrero (Seller), and, a few days later, Seller signed and executed the contract. Before the three-day attorney-review period expired, Seller s attorney sent Buyers attorney and their realtor notice of disapproval by e-mail and fax, rather than by the methods approved under the 1983 holding and prescribed in the parties' contract (certified mail, telegram, or personal service). Buyers sued for specific performance, claiming the contract was enforceable because Seller s notification of disapproval was sent improperly. At issue before the Supreme Court was whether the attorney-review provision of a standard form real estate contract had to be strictly enforced, thereby nullifying Seller's notice of disapproval and requiring enforcement of the real estate contract. The Court concluded that, because Buyers received actual notice of disapproval within the three-day attorney-review period by a method of communication commonly used in the industry, the notice of disapproval was valid. The Court also exercised its constitutional authority over the practice of law and found that an attorney's notice of disapproval of a real estate contract could be transmitted by fax, e-mail, personal delivery, or overnight mail with proof of delivery. Notice by overnight mail will be effective upon mailing. The attorney-review period within which this notice must be sent remained three business days. View "Conley v. Guerrero" on Justia Law

In this appeal, the issue this case presented for the Supreme Court's review centered on whether a law firm practicing as a limited liability partnership (LLP) failed to maintain professional malpractice insurance to cover claims against it, and, if so, whether that failure should cause the revocation of the firm's LLP status, rendering innocent partners personally liable. In July 2009, Mortgage Grader hired Olivo of Ward & Olivo (W&O) to pursue claims of patent infringement against other entities. Mortgage Grader entered into settlement agreements in those matters. In exchange for one-time settlement payments, Mortgage Grader granted those defendant-entities licenses under the patents, including perpetual rights to any patents Mortgage Grader received or obtained through assignment, regardless of their relationship to the patents at issue in the litigation. It is those provisions of the settlement agreement that allegedly gave rise to legal malpractice. In 2011, W&O dissolved and entered into its windup period. W&O continued to exist as a partnership for the sole purpose of collecting outstanding legal fees and paying taxes. The next day, Ward formed a new LLP and began to practice with a new partner. Mortgage Grader filed a complaint against W&O, Olivo, and Ward in October 2012, alleging legal malpractice by Olivo, and claiming that the settlement agreements resulting from Olivo's representation harmed Mortgage Grader's patent rights. The motion court denied Ward's motion to dismiss, first determining that Mortgage Grader had failed to comply with the statutory requirement to serve an affidavit of merit (AOM) on each defendant named in the complaint, and rejected its substantial compliance argument. However, the court also determined that W&O failed to maintain the requisite insurance, which caused its liability shield to lapse and relegated W&O to a GP. Thus, the motion court concluded that Ward could be held vicariously liable for Olivo's alleged legal malpractice. The Appellate Division reversed. The Supreme Court affirmed, finding that law firms organized as LLPs that malpractice insurance did not extend to the firm's windup period, and tail insurance coverage was not required. View "Mortgage Grader, Inc. v. Ward & Olivo, L.L.P." on Justia Law

Plaintiff Bruce Kaye, the controlling principal of three entities that sold and managed timeshare interests in resort properties in Atlantic County, hired defendant Alan Rosefielde, an attorney admitted to practice law in New York but not in New Jersey, initially as outside counsel, and then as an employee. After defendant had worked closely with plaintiff for approximately four months, the parties entered an agreement providing that, as compensation for his services, defendant would earn an annual salary of $500,000. For approximately two years, defendant served as Chief Operating Officer for several of the timeshare entities, and effectively functioned as their general counsel. In that capacity, defendant committed serious misconduct by acting on his own behalf instead of for his employers benefit, and exposing his employers to potential liability. Based on this misconduct, and dissatisfaction with defendant’s performance, plaintiff terminated defendant’s employment. Kaye, in his individual capacity and as trustee of two trusts, Kaye’s son Jason Kaye, and the business entities that Kaye owned, sued Rosefielde and several other entities. Plaintiffs asserted claims based on Rosefielde’s breach of fiduciary duty, fraud, legal malpractice, unlicensed practice of law, and breach of the duty of loyalty. Following a lengthy bench trial, the trial court found that Rosefielde engaged in egregious conduct constituting a breach of his duty of loyalty, breach of his fiduciary duty, legal malpractice, and civil fraud. The trial court rescinded Rosefielde’s interest in several entities, awarded compensatory damages, punitive damages, and legal fees, and dismissed Rosefielde’s counterclaims. It declined, however, to order the equitable disgorgement of Rosefielde’s salary as a remedy for his breach of the duty of loyalty, on the ground that his breach did not result in damage or loss to the entities that employed him. The Appellate Division affirmed that determination, and the New Jersey Supreme Court granted certification on the issue of equitable disgorgement. “In imposing the remedy of disgorgement, depending on the circumstances, a trial court should apportion the employee’s compensation, rather than ordering a wholesale disgorgement that may be disproportionate to the misconduct at issue. . . . If an agent is paid a salary apportioned to periods of time, or compensation apportioned to the completion of specified items of work, he is entitled to receive the stipulated compensation for periods or items properly completed before his renunciation or discharge. This is true even if, because of unfaithfulness or insubordination, the agent forfeits his compensation for subsequent periods or items.” The judgment of the Appellate Division was reversed with respect to the remedy of equitable disgorgement, and the matter was remanded to the trial court to decide whether plaintiffs were entitled to disgorgement. If so, the trial court should apportion Rosefielde’s compensation, ordering disgorgement only for monthly pay periods in which he committed acts of disloyalty. View "Kaye v. Rosefielde" on Justia Law

At trial, when Abbas Husain was sworn in, he raised his right hand and spoke the oath, but did not place his left hand directly on the Bible. Ultimately, the jury returned a verdict in favor of Tomika Davis for $12,500. After the verdict was rendered and the jury was discharged, but before post-trial motions were argued and the judgment was entered, the trial judge had a conversation with the jurors, outside the presence of counsel, which was not recorded. During that discussion, one juror noted that she was surprised that Husain had not placed his hand on the Bible before he testified. The judge did not make a record of the juror's observation, but later informed counsel. Both parties subsequently filed post-trial motions. A certification by Husain, filed in support of his post-trial motion, included a brief reference to the juror's observation. At oral argument on the motion, the trial judge expressed surprise that information he had provided counsel in confidence ended up in a certification and as part of the trial record. Ultimately, the court denied Husain's motion, finding the amount allocated in the verdict fair in light of the evidence and giving no regard to the comment the juror made in reference to the fact that Husain did not touch the Bible. After the judgment was entered, Husain appealed, raising several arguments. Relevant to the limited issue presented in this appeal as of right, he argued that the trial judge erred by failing to declare a mistrial on the basis of the juror's comment about the fact that he did not touch the Bible. In an unpublished decision, a majority of the Appellate Division panel affirmed the verdict as to this issue, holding that no manifest injustice inhered in the juror's observation and comment. The dissenting judge maintained that the trial judge had violated the Code of Judicial Conduct and that the juror's observation was sufficient to warrant a new trial. Husain appealed to the Supreme Court as of right. The Supreme Court reversed and remanded: post-verdict discussions between the court and discharged jurors are prohibited unless those discussions are part of a hearing ordered on good cause shown. View "Davis v. Husain" on Justia Law

In this appeal, the issue before the Supreme Court centered on whether a chief municipal court judge whose son became a member of the police department in the same municipality could hear cases involving that police department. The Supreme Court held that, "consistent with the canons of the Code of Judicial Conduct, a municipal court judge whose child becomes a police officer in the same municipality may not hear any cases involving that police department. The judge also may not supervise other judges who hear those cases." View "In the Matter of Advisory Letter No. 7-11 of the Supreme Court Advisory Committee on Extrajudicial Activities" on Justia Law

This dispute arose in the context of a large construction project known as the Hudson-Bergen Light Rail Transit System. Plaintiff Twenty-First Century Rail Corporation served as the prime contractor for the Project. In January 2002, Twenty-First Century, acting through its contracting affiliate, Washington Group, entered into a contract with Frontier-Kemper/Shea/Bemo, Joint Venture (FKSB). Pursuant to that contract, FKSB was responsible for construction of “the civil, electrical, mechanical and emergency system portions of the tunnel, station, plaza, and elevators” for the (N30) Project. In 2004, FKSB retained Bruce Meller and his law firm, Peckar & Abramson, in connection with the work that FKSB was performing on the N30 Project. In particular, Richard Raab, who was an officer of FKSB and who served as its representative, first telephoned Meller in February 2004 and arranged to meet with him at the Peckar & Abramson offices. Raab signed a retainer agreement on behalf of FKSB, pursuant to which the lawyers were asked to provide FKSB with certain legal advice. The law firm provided its opinion on the issues about which it had been consulted in the form of a letter. A year later, Meller received a phone call from Paul Killian, Esquire. Killian told Meller that he was representing FKSB and wanted Meller’s impressions of Washington Group because FKSB was considering whether to enter into an agreement with it. Thereafter, the lawsuit at issue in this appeal was filed. Twenty-First Century, for which Washington Group was the contracting affiliate, and FKSB alleged that PB Americas was responsible for the N30 Project delays and the resulting costs due to defective project designs and slow responses to requests for corrections. Meller’s law firm, Peckar & Abramson, represented PB Americas. PKSB filed a motion to disqualify Peckar & Abramson based on the prior representation. The trial court denied the motion, concluding that many of the documents that would have been provided to the law firm for its use in preparing the opinion letter were publicly available, the representation there was insignificant and immaterial, and the matters were not substantially related. The Appellate Division affirmed. Upon review, the Supreme Court concluded that disqualification of the attorney for PB Americas was warranted in this case because details relating to the construction project, the relationship among the parties, and the attorney’s prior representation of an adverse party, FKSB, demonstrate that the subsequent representation was prohibited by RPC 1.9(a). View "Twenty-FirstCentury Rail Corp. v. New Jersey Transit Corp." on Justia Law

The issue before the court was whether Defendant John Rogers was "exonerated" when his conviction was reversed and his case remanded for trial, or on the day his indictment was dismissed. Defendant sued the Cape May Public Defender's office for malpractice. The date the case was reversed would subject Defendant's claim to a one-year time bar, but a dismissal would not. One year later, his attorney filed a motion for leave to file a late notice of tort claim, which was denied. The trial judge determined that Defendant's claim accrued in 2007, and because he filed his notice more than one year later, the court concluded it lacked jurisdiction to hear his case. The appellate court affirmed, finding that the late notice must be filed within one year after accrual of a claim; "exoneration" (and therefore accrual) occurred in 2007. Upon review, the Supreme Court found that Defendant was not "exonerated" until the indictment was dismissed with prejudice in 2008. His claim was thus not barred by the one year filing limitation. Nevertheless, because the claim was filed ten days beyond the ninety-day limit, the Court remanded the case for further proceedings to determine whether the "extraordinary circumstances" as defined by the governing statute was satisfied. View "Rogers v. Cape May County Office of the Public Defender" on Justia Law

Disciplinary proceedings against Respondent Steven Perskie (who retired from the judiciary in 2010) began with the filing of grievances with the Advisory Committee in July 2008 by Alan Rosefielde, a party to a civil action over which respondent presided between February 2005 and October 2006. The litigation was a business dispute involving issues that arose from Rosefielde's employment with and eventual termination from a business based in Atlantic City. Rosefielde contended that his termination was due to his recommendation that his employer end its business relationship with an insurance broker named Frank Siracusa, whom Rosefielde alleged had engaged in improper and questionable business practices. Siracusa was a central witness to Rosefielde’s counterclaim. Respondent had a longstanding business, social, political, and personal relationship with Siracusa, but informed the parties to the litigation several times that notwithstanding his relationship with Siracusa, he was not uncomfortable presiding over the case and evaluating Siracusa's credibility if Siracusa were to appear as a witness. The Advisory Committee recommended that respondent be censured for violating multiple Canons of the Code of Judicial Conduct. Upon review, the Supreme Court held that Respondent violated Canons 1, 2A, 2B, and 3C(1) of the Code of Judicial Conduct and R. 1:12-1(f). The Court censured Respondent. View "In the Matter of Steven P. Perskie, a Former Judge" on Justia Law