Opinion
DOCKET NO. A-1198-12T1
2013-10-11
MARCIA VENTURI, Plaintiff-Appellant, v. EDWARD O'DONNELL, ESQ. and SKOLOFF & WOLFE, P.C., Defendants-Respondents.
Peter A. Ouda argued the cause for appellant (Peter A. Ouda, LLC, attorney; Mr. Ouda, on the brief). Marshall D. Bilder argued the cause for respondents (Eckert, Seamans, Cherin & Mellott, LLC, attorneys; Mr. Bilder, of counsel and on the brief; David P. Skand, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Parrillo and Harris.
On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-0337-12.
Peter A. Ouda argued the cause for appellant (Peter A. Ouda, LLC, attorney; Mr. Ouda, on the brief).
Marshall D. Bilder argued the cause for respondents (Eckert, Seamans, Cherin & Mellott, LLC, attorneys; Mr. Bilder, of counsel and on the brief; David P. Skand, on the brief). PER CURIAM
Plaintiff Marcia Venturi appeals from the September 28, 2012 summary judgment order dismissing her legal malpractice action against defendants with prejudice because it is time-barred by N.J.S.A. 2A:14-1. We affirm.
I.
Because this matter comes to us from the motion court's grant of summary judgment in favor of defendants (the moving parties), we view the evidence in the light most favorable to Venturi. Polzo v. Cnty. of Essex, 209 N.J. 51, 56 n.1 (2012).
Sometime prior to 1997, Venturi hired defendants Skoloff & Wolfe, P.C. and Edward J. O'Donnell, Esq. to represent her in a divorce action against Giovambattista Venturi. The divorce was settled, and the terms of the couple's agreement were stated on the record in the Family Part in December 1996. Venturi believed that, based upon earlier negotiations and representations of her lawyer, her receipt of alimony payments would not be federally taxable to her because they would similarly not be a deductible tax expense to her husband. Indeed, the transcript of the December 23, 1996 Family Part proceeding reveals O'Donnell stating the following on the record:
[Giovambattista Venturi] will pay permanent alimony to [Marcia Venturi] in the amount of $3200 per month, on the fifteenth day of each month, beginning with the month of December 1996. . . . This payment of alimony shall not be taxable to [Marcia Venturi], nor shall it be deductible to [Giovambattista Venturi].
For reasons that are unclear, the ten-page final judgment of divorce was not issued until April 22, 1997. In this final memorialization, the treatment of alimony payments was truncated as follows:
[Giovambattista Venturi] shall pay to [Marcia Venturi], as permanent alimony, the sum of $3,200.00 per month, payable on the 15th day of each month, effective December 15, 1996.
On the day in 1997 when Venturi received a filed copy of the final judgment of divorce, she called O'Donnell and inquired why the language regarding the tax treatment of alimony was not included in that instrument. According to an affidavit signed by Venturi in November 2010, which was submitted as part of the summary judgment proceeding here, O'Donnell "advised [Venturi] not to worry unless [her] ex-husband claims alimony as a deduction." Not satisfied with this response, Venturi's affidavit went on to explain the following:
The affidavit was prepared for use in the Family Part, prior to the present legal malpractice action being filed. Its purpose was to bolster Venturi's attempt, in that forum, to change the language (and effect) of the 1997 final judgment of divorce. Venturi was unsuccessful in that endeavor.
Further, before filing my 1996 income tax returns, I called my ex-spouse to remind him that the alimony payments to me were not taxable to me and not deductible by him. He responded cavalierly by saying, 'What's the matter. Do you think you will get in trouble if I claim it?'
More than a decade passed. Then, in 2008, the Internal Revenue Service (IRS) notified Venturi that her 2005 federal tax return had been audited, and that she owed approximately $12,800 in taxes and interest on alimony income that she had not reported.
Venturi vainly challenged the IRS's audit. In addition to contesting the audit, Venturi also unsuccessfully petitioned the Family Part to amend the final judgment of divorce to include an express provision to allow her to avoid federal taxation on her alimony. When those avenues of redress were exhausted, Venturi commenced this legal malpractice action in January 2012 against O'Donnell and his former law firm.
Defendants immediately moved for summary judgment, but were rebuffed when the Law Division permitted limited discovery on the issue of when Venturi's cause of action accrued. Following the completion of that discovery, defendants renewed their motion for summary judgment. On September 28, 2012, the motion judge granted the motion, finding the following:
I do believe the cause of action accrued when the plaintiff received the judgment of divorce and noted the error and confronted the error with her attorney. I do not believe that her attorney's response somehow placed her in a place [] of perceived safety where the discovery rule would carry her forward until the ex-husband decided one day, that, [] who knows, that he was facing an adverse tax return and he decided theThis appeal followed.
deduction would work real well, but he claimed it one day. And she faced adverse tax consequences because of it.
So, the judgment of the Court is that the matter is dismissed as being time barred.
II.
This matter was decided as part of a motion for summary judgment; accordingly, we review the matter de novo and are governed by the same standard governing the motion court under Rule 4:46-2(c). Khandelwal v. Zurich Ins. Co., 427 N.J. Super. 577, 585 (App. Div. 2012). Thus, the "'trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.'" McDade v. Siazon, 208 N.J. 463, 473 (2011) (quoting Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 382 (2010)) (citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).
We start our substantive review with recognition that N.J.S.A. 2A:14-1's six-year limitation of actions period governs whether Venturi's action is time-barred:
Every action . . . for any tortious injury to the rights of another . . . shall be commenced within 6 years next after the cause of any such action shall have accrued."[T]he date when a cause of action is deemed to have 'accrued' is 'the date upon which the right to institute and maintain a suit first arises." Holmin v. TRW, Inc., 330 N.J. Super. 30, 35 (App. Div. 2000) (quoting Hartford Accident and Indem. Co. v. Baker, 208 N.J. Super. 131, 135-36 (Law Div. 1985)), aff'd o.b., 167 N.J. 205 (2001).
Defendants argue that the six-year period commenced in 1997, when Venturi was told by O'Donnell "not to worry unless [her] ex-husband claims alimony as a deduction." Venturi contends that "because [she] did not suffer actual damages until she learned[, in 2008,] that she owes taxes for alimony that she received," her filing in January 2012 was timely. We agree with defendants.
In the professional malpractice context, a cause of action accrues "'when: (1) the claimant suffers an injury or damages; and (2) the claimant knows or should know that its injury is attributable to the professional negligent advice.'" Vision Mortg. Corp., Inc. v. Patricia J. Chiapperini, Inc., 156 N.J. 580, 586 (1999) (quoting Circle Chevrolet Co. v. Giordano, Halleran & Ciesla, 142 N.J. 280, 296 (1995) (citing Grunwald v. Bronkesh, 131 N.J. 483, 494 (1993)). Once a cause of action accrues, "the plaintiff has a right to sue and the statute of limitations begins to run." Grunwald, supra, 131 N.J. at 492 (citing Montag v. Bergen Bluestone Co., 145 N.J. Super. 140, 144 (Law Div. 1976)). However, where special circumstances exist and the interests of justice require, courts apply "the discovery rule to postpone the accrual of a cause of action when a plaintiff does not and cannot know the facts that constitute an actionable claim." Ibid.
The discovery rule is an equitable rule intended to remedy the unjust results that can occur when a rule of law is rigidly applied. Ibid. Under the rule, the limitations period begins to run when a plaintiff is aware of "the facts underlying" the injury and fault, and "not necessarily when a plaintiff learns the legal effect of those facts." Id. at 493. "Thus, the discovery rule encompasses two types of plaintiffs: those who do not become aware of their injury until the statute of limitations has expired, and those who are aware of their injury but do not know that it may be attributable to the fault of another." Ibid. Venturi does not fall into either situation.
In an attorney malpractice case, "[l]egally cognizable damages occur when a plaintiff detrimentally relies on the negligent advice of an attorney." Id. at 495. In such a case, the attorney's affirmative act of giving negligent advice has an immediate effect, even if the extent of the negative consequences remains uncertain. See Vision Mortg. Corp., supra, 156 N.J. at 586 (noting that accrual of a cause of action is not delayed because damages are uncertain).
Venturi was aware in 1997 that she had a significant problem with the tax consequences emanating from the final judgment of divorce. She sought the aid of her attorney, who gave her a wholly unsatisfactory solution. That solution — "not to worry unless [her] ex-husband claims alimony as a deduction" — left Venturi in the exact state of affairs that she did not want to be in, that is, subject to the whim of Giovambattista Venturi. This precarious situation was further intensified when, in attempting to impress her ex-spouse with the righteousness of her position, "[h]e responded cavalierly by saying, 'What's the matter. Do you think you will get in trouble if I claim [the tax deduction]?'"
Indubitably, Venturi's knowledge of injury and of fault were satisfied more than six years before the present action was filed. Venturi knew "or [through] the exercise of reasonable diligence should have learned, that [s]he may have a basis for an actionable claim" emanating from the omission of the no-taxation-of-alimony provision from the final judgment of divorce as negligently crafted by O'Donnell. Tevis v. Tevis, 79 N.J. 422, 431-32 (1979). Her concern over this omission prompted her immediate communication with O'Donnell, who provided her with the dubious guidance of not worrying about it unless her ex-husband was actually to claim the alimony as a deductible expense. Possessed of this disquieting advice, Venturi did nothing, waiting while the trigger to the taxation time bomb remained in the hands of Giovambattista Venturi. Her repose was unwarranted, and cannot serve to change the 1997 accrual date for her claims against defendants.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION