Opinion
DOCKET NO. A-4511-12T2
04-21-2015
MICHAEL J. KELSEY, Plaintiff-Appellant, v. HERBERT B. RAYMOND, ESQ. and RAYMOND AND RAYMOND LAW FIRM, Defendants-Respondents.
Lee M. Levitt argued the cause for appellant (Lee M. Levitt, LLC, attorneys; Michael J. Kelsey, on the pro se brief). Peter M. Perkowsky, Jr. argued the cause for respondents (Riker Danzig Scherer Hyland & Perretti, LLP, attorneys; Lance J. Kalik, of counsel and on the brief; Mr. Perkowski, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Simonelli, Guadagno and Leone. On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-0979-12. Lee M. Levitt argued the cause for appellant (Lee M. Levitt, LLC, attorneys; Michael J. Kelsey, on the pro se brief). Peter M. Perkowsky, Jr. argued the cause for respondents (Riker Danzig Scherer Hyland & Perretti, LLP, attorneys; Lance J. Kalik, of counsel and on the brief; Mr. Perkowski, on the brief). PER CURIAM
In this legal malpractice matter, plaintiff Michael J. Kelsey appeals from the February 22, 2013 Law Division order, which granted summary judgment to defendants Herbert B. Raymond, Esq. and Raymond & Raymond and dismissed the complaint with prejudice based on the six-year statute of limitations, N.J.S.A. 2A:14-1. Plaintiff also appeals from the April 15, 2013 order, which denied his motion for reconsideration. For the following reasons, we affirm.
We derive the following facts from the record. On April 2, 2004, plaintiff retained defendants to represent him in a Chapter 13 bankruptcy matter. In his bankruptcy petition, plaintiff listed his properties located in Long Valley and East Hanover and the mortgages encumbering those properties, among other assets and liabilities. Plaintiff did not include a May 3, 2001 judgment the New Jersey Division of Taxation (Division) obtained against him in the amount of $112,202.66 for unpaid sales taxes relating to his lawn maintenance business, $98,132.03 of which was a lien on the two properties.
As of November 30, 1996, plaintiff was aware of the Division's claim for unpaid sales taxes. Although he asserted the claim was resolved in February 1997, the record indicates that he was aware in 2001 that the Division obtained a judgment against him and also knew that the trustee in a Chapter 7 bankruptcy action he previously filed paid $32,949.42 toward the judgment. The record also indicates that in 2004, plaintiff consulted a different attorney to challenge the lien.
In a July 29, 2004 order, the bankruptcy court stayed a sheriff's sale of the two properties. As for the Long Valley property, the court required plaintiff to pay the mortgage company, World Savings Bank (WSB), $1000 per month and sell the property within forty-five days. In a December 14, 2004 order, the bankruptcy court ordered, in part, that if plaintiff did not pay the WSB mortgage in full by March 1, 2005, the stay would terminate and WSB could continue with the foreclosure action and a sheriff's sale of the property.
Plaintiff defaulted. As a result, in January 2005, WSB filed a motion to vacate the stay and permit it to proceed with its foreclosure action. In a March 29, 2005 order, the bankruptcy court authorized the sale of the Long Valley property on or after May 19, 2005, and ordered that the sales proceeds be used to satisfy all liens on the property and outstanding mortgages and any excess proceeds returned to plaintiff.
Defendants first learned of the Division's lien on May 17, 2005, and notified the bankruptcy court. Plaintiff insisted that the lien was resolved in February 1997, and the "judgment was apparently entered without justification and without knowledge." Plaintiff asserts in his merits brief that from May 18, 2005 to April 17, 2006, he asked defendants to file an adversary proceeding to challenge the lien.
In a May 20, 2005 order, the bankruptcy court confirmed the Division's lien on the Long Valley property. The court ordered that the "lien shall attach to the proceeds from the sale of the property," and that the trustee "shall hold the proceeds, pending a determination by the [c]ourt, or as agreed by the parties, as to the amount due on the lien." Thereafter, on June 6, 2005, the Long Valley property was sold. After satisfying the outstanding mortgages, the trustee held the remaining proceeds in escrow pending resolution of the lien.
Defendants withdrew as plaintiff's counsel sometime in January 2006. In a March 16, 2006 order, the bankruptcy court dismissed the bankruptcy matter, denied plaintiff's discharge from the lien, and ordered that the lien be paid in full from the sale proceeds. Plaintiff filed a motion for reconsideration, arguing that he had appealed the lien. On April 17, 2006, the bankruptcy court denied the motion.
On May 10, 2006, the trustee released $45,835.05 of the sales proceeds to satisfy the lien. On October 29, 2006, plaintiff protested the payment, and in July 2007, he filed a complaint against the Division. In a March 12, 2010 stipulation of dismissal, the Division agreed to issue a refund to plaintiff in the amount of $98,270. Plaintiff received the refund on April 14, 2010.
On April 16, 2012, plaintiff filed a complaint against defendants in the Law Division, alleging, in part, that their failure to file an adversary proceeding to challenge the lien deprived him of the sale proceeds and caused him other damages. Defendants filed a motion for summary judgment and to dismiss the complaint with prejudice based on the six-year statute of limitations, N.J.S.A. 2A:14-1. They argued that plaintiff's cause of action for legal malpractice accrued on March 16, 2006, at the latest, when the bankruptcy court dismissed the bankruptcy matter, denied a discharge from the lien, and ordered the lien to be paid. Plaintiff countered that because he did not suffer actual damages until he received the refund on April 14, 2010, his cause of action did not accrue until that date.
Alternatively, plaintiff argued that the court should toll the limitation period pursuant to N.J.S.A. 2A:14-21 because his physical and mental infirmities prevented him from pursuing his legal malpractice claim. He also argued that incomplete discovery rendered summary judgment premature. Plaintiff did not address either of these arguments in his merits brief. The arguments therefore are deemed waived. Sklodowsky v. Lushis, 417 N.J. Super. 648, 657 (App. Div. 2011); Pressler & Verniero, Current N.J. Court Rules, comment 4 on R. 2:6-2 (2015).
In a February 22, 2013 written opinion, the motion judge granted the motion and dismissed the complaint with prejudice. The judge found that plaintiff knew or should have known of his cause of action against defendants in June 2005, when the Long Valley property was sold and he was deprived of the sale proceeds.
Plaintiff filed a motion for reconsideration, reiterating his prior argument and also arguing that because he did not suffer actual damages until May 10, 2006, when the trustee used the sale proceeds to pay the lien, his cause of action accrued on that date, at the earliest. In an April 15, 2013 written opinion, the judge denied the motion, again finding that plaintiff knew or should have known of his cause of action in June 2005. This appeal followed.
On appeal, plaintiff repeats that his complaint was timely filed because his cause of action for legal malpractice accrued when he was actually damaged on either May 10, 2006, when the trustee used the sale proceeds to pay the lien, or April 14, 2010, when he received the refund. We disagree.
"A ruling on summary judgment is reviewed de novo. We thus apply the same standard governing the trial court, and do not defer to the trial court's . . . interpretation of the meaning of a statute or the common law." Davis v. Brickman Landscaping, Ltd., 219 N.J. 395, 405 (2014) (citations and internal quotation marks omitted). Accordingly, we consider, as the motion judge did, "'whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party.'" Id. at 406 (quoting Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995)). If there is no genuine issue of material fact, we must then "'decide whether the trial court correctly interpreted the law.'" DepoLink Court Reporting & Litig. Support Servs. v. Rochman, 430 N.J. Super. 325, 333 (App. Div. 2013) (citation omitted). We review issues of law de novo and accord no deference to the trial judge's conclusions on issues of law. Nicholas v. Mynster, 213 N.J. 463, 478 (2013).
As for the denial of the motion for reconsideration, we have determined that:
Reconsideration itself is a matter within the sound discretion of the [c]ourt, to be exercised in the interest of justice[.] It is not appropriate merely because a litigant is dissatisfied with a decision of the court or wishes to reargue a motion, but should be utilized only for those cases which fall into that narrow corridor in which either 1) the [c]ourt has expressed its decision based upon a palpably incorrect or irrational basis, or 2) it is obvious that the [c]ourt either did not consider, or failed to appreciate the significance of probative, competent evidence.We will not disturb a trial judge's denial of a motion for reconsideration absent an abuse of discretion. Id. at 289. Applying the above standards, we discern no reason to disturb the judge's grant of summary judgment and denial of plaintiff's motion for reconsideration.
[Palombi v. Palombi, 414 N.J. Super. 274, 288 (App. Div. 2010) (citations and internal quotation marks omitted).]
The six-year statute of limitations applies to legal malpractice claims. N.J.S.A. 2A:14-1; McGrogan v. Till, 167 N.J. 414, 419 (2001). "Ordinarily, a cause of action 'accrues when an attorney's breach of professional duty proximately causes a plaintiff's damages.'" Vastano v. Algeier, 178 N.J. 230, 236 (2003) (quoting Grunwald v. Bronkesh, 131 N.J. 483, 492 (1993)). However, in recognition of "the unfairness of an inflexible application of the statute of limitations when a client would not reasonably be aware of 'the underlying factual basis for a cause of action' to file a timely complaint," the Court "[has] applied the discovery rule in those cases in which the injury or wrong is not readily ascertainable through means of reasonable diligence." Ibid. (quoting Grunwald, supra, 131 N.J. at 492-93).
Under the discovery rule, "the statute of limitations does not commence until 'the client suffers actual damage and discovers, or through the use of reasonable diligence should discover, the facts essential to the malpractice claim.'" Ibid. (quoting Grunwald, supra, 131 N.J. at 494). Although actual damage and knowledge of fault are "key elements" of a legal malpractice claim, "[t]he limitations period begins to run when a plaintiff knows or should know the facts underlying those elements, not necessarily when a plaintiff learns the legal effect of those facts." Grunwald, supra, 131 N.J. at 492-93 (emphasis added). The Court has held that a cause of action for legal malpractice accrues when plaintiff receives an adverse ruling in the trial court, "because at that time he clearly knew or should have known that he was harmed by his attorney's negligent advice." Vastano, supra, 178 N.J. at 237. The accrual of the cause of action is not delayed until the adverse ruling is affirmed on appeal. Ibid.
In this matter, plaintiff received an adverse ruling on May 20, 2005, when the bankruptcy court confirmed the lien on the Long Valley property and ordered that it attached to the sale proceeds. Plaintiff was deprived of the remaining sale proceeds on June 6, 2005, when the Long Valley property was sold and the sale proceeds were placed in escrow. Plaintiff then received a second adverse ruling on March 16, 2006, when the bankruptcy court denied a discharge of the lien and ordered that it be paid in full from the sale proceeds. Thus, the limitations period commenced on May 20, 2005, at the earliest, or March 16, 2006, at the latest, because by that time, plaintiff knew or should have known that he was harmed by defendants' failure to challenge the lien. Plaintiff filed his legal malpractice action against defendants on April 16, 2012—more than six years after the accrual of his cause of action. Accordingly, summary judgment was properly granted and reconsideration was properly denied.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION