Luis Perez v. Zagami, LLC, Etc., and Nash Law Firm, LLC

128 A.3d 1139, 443 N.J. Super. 359

• Court: New Jersey Superior Court Appellate Division
• Decided: January 12, 2016
• Docket: A-3268-14T2
• Status: Published

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-3268-14T2

LUIS PEREZ, APPROVED FOR PUBLICATION Plaintiff-Respondent, January 12, 2016 v. APPELLATE DIVISION ZAGAMI, LLC, d/b/a THE LANDMARK AMERICANA TAP AND GRILL, d/b/a LANDMARK LIQUORS, d/b/a THE SPOT,

Defendant,

and

NASH LAW FIRM, LLC, WILLIAM A. NASH, ESQ., and ALAN A. REUTER, ESQ.,

Defendants-Appellants. _________________________________

Argued December 1, 2015 – Decided January 12, 2016

Before Judges Fisher, Espinosa, and Currier.

On appeal from the Superior Court of New Jersey, Law Division, Gloucester County, Docket No. L-1248-10.

John L. Slimm argued the cause for appellants (Marshall, Dennehey, Warner, Coleman & Goggin, attorneys; Mr. Slimm, Arthur F. Wheeler, Jeremy J. Zacharias, and Dante C. Rohr, on the briefs).

Wesley G. Hanna argued the cause for respondent (Law Office of Sander D. Friedman, attorneys; Mr. Hanna, on the brief). The opinion of the court was delivered by

CURRIER, J.S.C. (temporarily assigned).

After the successful dismissal of a defamation case which

had been brought against plaintiff Luis Perez by the Zagami1

defendants, Perez filed a complaint for malicious use of process

against Zagami and their attorneys. The Nash2 defendants moved

to dismiss the complaint, arguing that Perez required an

affidavit of merit to sustain his claim against them. We

granted leave to appeal after the trial judge denied the motion.

Because we find that a malicious use of process action is an

intentional tort requiring proof of malice and not a deviation

from a standard of care, Perez does not need an affidavit of

merit to support the claim. We, therefore, affirm.

Perez and Zagami have a long history of litigation between

them. The backdrop for the current dispute and the relationship

between the parties has been described in a reported decision.

See Zagami, LLC v. Cottrell, 403 N.J. Super. 98 (App. Div.

1 Zagami LLC operates a restaurant, bar and grill, liquor store and night club under the names The Landmark Americana Tap and Grill and Landmark Liquors. We will refer to these entities collectively as Zagami. 2 William A. Nash and Alan A. Reuter are attorneys at the Nash Law Firm, LLC. We will refer to them collectively as Nash.

2 A-3268-14T2 2008), certif. denied, 189 N.J. 309 (2009). We set forth these

additional facts necessary for our consideration of this appeal.

After Perez voiced his objections to the renewal of

Zagami's liquor license during a public hearing on the matter,3

Zagami retained the Nash firm to file a Strategic Lawsuit

Against Public Participation (SLAPP) suit, alleging defamation

and the related torts of commercial disparagement, trade libel,

interference with business relations and civil conspiracy. Id.

at 101-03. We affirmed the dismissal of that suit, finding

Perez's statements at the municipal hearing to be protected by

the litigation privilege and therefore non-actionable. Id. at

112.

Following our decision, Perez filed a SLAPP-back suit

against Zagami for malicious use of process, alleging that the

defamation complaint: (1) lacked probable cause, (2) was

actuated by malice, (3) had concluded in Perez's favor, (4)

caused Perez to incur substantial attorney's fees, and (5) had

the effect of discouraging Perez from participating in future

public proceedings. Zagami moved to dismiss the complaint,

stating that Perez had failed to state a cause of action under

Rule 4:6-2(e) in that the defamation allegations were privileged

3 Zagami ultimately prevailed on its application when the municipal council renewed its liquor license.

3 A-3268-14T2 as they were based on the advice of counsel. Perez, thereafter,

moved for leave to amend his complaint to name Nash and the

individual attorneys as defendants. The trial judge granted

Zagami's motion to dismiss, finding that Perez had failed to

meet the required element that Zagami's defamation complaint

lacked probable cause and denied Perez's cross-motion to amend

the complaint.

We reversed both decisions in Perez v. Zagami, No. A-3296-

10 (App. Div. July 12, 2012) (slip op. at 18), rev'd in part,

218 N.J. 202 (2014). In addressing the failure to meet the

required elements of the malicious use of process, we noted:

"Glassboro's liquor license renewal procedures, and Perez's

participation in those procedures, more than meet the long-

established test for quasi-judicial proceedings, and no

reasonable person would have believed otherwise at the time

Zagami filed its defamation complaint." Id. at 13. Perez,

therefore, had met his burden on the motion to dismiss.

As to Perez's request to name the Nash attorneys as

additional parties in the SLAPP-back suit, we stated: "when the

advice-of-counsel defense is asserted, the party seeking relief

may then pursue a cause of action against the attorney claimed

to have been the source of that advice as well." Id. at 18

(quoting LoBiondo v. Schwartz, 199 N.J. 62, 73 (2009)). We

4 A-3268-14T2 found that Perez was entitled to pursue his claim against the

Nash firm.

On remand, Nash moved to dismiss the case, alleging that

plaintiff had failed to provide an affidavit of merit pursuant

to N.J.S.A. 2A:53A-27, thus requiring dismissal. After the

denial of the motion, we granted defendants' leave to appeal.

The issue before us is one of first impression as we are

asked to determine if an affidavit of merit is required to

support Perez's malicious use of process claim against the

attorneys who provided counsel to his adversary — their clients.

We conclude it is not.

Preliminarily, we note the long-standing reluctance in

permitting a nonclient to sue an adversary's attorney. The

Court addressed this in LoBiondo stating:

Our reluctance to permit nonclients to institute litigation against attorneys who are performing their duties is grounded on our concern that such a cause of action will not serve its legitimate purpose of creating a remedy for a nonclient who has been wrongfully pursued, but instead will become a weapon used to chill the entirely appropriate zealous advocacy on which our system of justice depends.

[LoBiondo, supra, 199 N.J. at 100-01.]

As there is no direct relationship between an attorney and a

nonclient, there is no traditional duty owed. A SLAPP-back

suit, as discussed in LoBiondo, affords a very limited

5 A-3268-14T2 circumstance in which a nonclient can file suit against

another's attorney. Id. at 100-03. Therefore, each element of

the tort must be satisfied in order to preserve an attorney's

ability to independently and zealously represent his client.

Id. at 103-05.

Nash contends that Perez cannot meet his burden of

supporting his claims without the appropriate expert testimony.

They argue that the drafting and filing of a defamation

complaint in connection with their representation of Zagami is

providing a professional service, and therefore Perez is

required to establish through expert testimony the applicable

standard of care and the deviations from it. Nash argues that

Perez has failed to comply with the legislative requirement of

serving an affidavit of merit, applicable to any action against

a licensed professional, and as a result his claim must fail.

We turn then to the affidavit of merit statute. N.J.S.A.

2A:53A-27 provides in pertinent part:

In any action for damages for personal injuries, wrongful death or property damage resulting from an alleged act of malpractice or negligence by a licensed person in his profession or occupation, the plaintiff shall, within 60 days following the date of filing of the answer to the complaint by the defendant, provide each defendant with an affidavit of an appropriate licensed person that there exists a reasonable probability that the care, skill or knowledge exercised or exhibited in the treatment, practice or

6 A-3268-14T2 work that is the subject of the complaint, fell outside acceptable professional or occupational standards or treatment practices.

The "purpose of the statute is 'to require plaintiffs in

malpractice cases to make a threshold showing that their claim

is meritorious, in order that meritless lawsuits readily could

be identified at an early stage of litigation.'" Cornblatt v.

Barow, 153 N.J. 218, 242 (1998) (quoting In re Hall, 147 N.J.

379, 391 (1997)). Failure to provide an affidavit results in a

dismissal of the complaint.

Perez contends that his complaint against Nash is neither

founded in negligence nor malpractice, but rather lies in the

intentional actions and malice on the part of the attorneys,

thus rendering the statute inapplicable. In response, Nash

argues that Perez is "disguising" a professional negligence

claim under another label and that calling it an intentional

tort does not relieve the necessity of providing an affidavit of

merit. That concern was addressed in Couri v. Gardner, 173 N.J.

328 (2002). In that case, the plaintiff husband was involved in

divorce proceedings and retained a psychiatrist to serve as his

expert witness. Id. at 331. The expert prepared a preliminary

report and distributed it to plaintiff's wife without the

husband's knowledge or consent. Ibid. After the husband filed

a complaint against the psychiatrist alleging breach of

7 A-3268-14T2 contract, the psychiatrist moved to dismiss the case arguing

that it sounded in professional malpractice, for which an

affidavit of merit was required. Id. at 331-32. Plaintiff

argued that he did not have to file an affidavit of merit

because his claim was based in contract. Id. at 332. In

addressing the issue, the Court stated:

It is not the label placed on the action that is pivotal but the nature of the legal inquiry. Accordingly, when presented with a tort or contract claim asserted against a professional . . . rather than focusing on whether the claim is denominated as tort or contract, attorneys and courts should determine if the claim's underlying factual allegations require proof of a deviation from the professional standard of care applicable to that specific profession. If such proof is required, an affidavit of merit is required for that claim.

[Id. at 340.]

In concluding the claim did not require an affidavit of

merit, the Court determined that "[p]laintiff is not claiming

that defendant erred in respect of the conclusions that he drew

concerning psychiatric/medical matters or that defendant acted

improperly from a psychiatric/medical standpoint," but rather

that defendant acted improperly in his duty as an expert

witness. Id. at 342.

In using the Couri test, we do not find that Perez has

styled his complaint as something other than a negligence or

8 A-3268-14T2 malpractice suit, for which the statute was meant to apply. He

brings this SLAPP-back suit following the dismissal of the

defamation action. Malicious use of process requires a

plaintiff to prove five elements:

(1) a[n] . . . action was instituted by this defendant against this plaintiff; (2) the action was motivated by malice; (3) there was an absence of probable cause to prosecute; . . . (4) the action was terminated favorably to the plaintiff. . . . [and (5)] that the plaintiff has suffered a special grievance caused by the institution of the underlying civil claim.

[LoBiondo, supra, 199 N.J. at 90.]

The element at issue here is the requirement that the

defamation action be motivated by malice. Nash contends that

the scrutiny of its advice to Zagami regarding the defamation

action and the subsequent drafting and filing of that complaint

lie in professional malpractice. The claim, however, is not the

alleged negligence of the attorney in doing his work; rather, it

goes to the attorney's intentions and motive in doing the work.

"[T]he evaluation of this essential element of proof requires an

inquiry into the attorney's motive for filing the litigation."

Id. at 109. Perez must prove Nash was motivated by malice in

filing the claim against him. The nature of the legal inquiry

is not whether Nash performed their work in accordance with the

9 A-3268-14T2 applicable standard of care, but whether Nash provided advice

and filed the claim with a malicious intent.

[I]n order to demonstrate that the attorney's actions were "actuated by malice," the nonclient must demonstrate that the attorney's primary purpose was an improper one. In that analysis, the purpose may be the attorney's entirely separate one, or it may be one that is shared with the client, but it must be the primary purpose for filing the matter and it must be a purpose of the attorney rather than simply the purpose of the client.

[Id. at 113 (citing Restatement (Third) of the Law Governing Lawyers § 57 comment d (2000)).]

We find that the determination of that purpose in the

present circumstances does not require an affidavit of merit.

The attorney's intent and purpose for the filing of the SLAPP

suit can be discovered through interrogatories and depositions.

When those facts are uncovered, the parties will be able to

discern the propriety of the SLAPP suit.

In rejecting Nash's argument that the SLAPP-back suit

required an affidavit of merit, and in further support of our

conclusion, we are compelled to note the impracticalities

surrounding a plaintiff's ability to obtain one in this

situation. In the normal course of a professional malpractice

claim, information such as medical reports or construction

documents are provided to a potential expert to analyze and

10 A-3268-14T2 provide an opinion as to whether there was a deviation from the

accepted standard of care. A plaintiff in a SLAPP-back suit

only learns of an advice of counsel defense upon the filing of a

responsive pleading. Plaintiff has no knowledge as to the basis

for this defense. It stems from a relationship between an

attorney and client to which plaintiff is not privy. There are

no facts for a plaintiff to provide to a potential expert for

his review and opinion. The only basis for a bad advice claim

against Nash comes from their client Zagami; it is not Perez's

claim. Therefore, Perez does not have any information to

provide in an affidavit of merit.

We conclude that the analysis of the motive of the attorney

in the client's assertion of an advice of counsel defense to a

SLAPP-back suit does not depend on proof of a deviation from a

standard of care. The claim, therefore, lies beyond the purview

of the affidavit of merit statute. As we find Perez was not

required to file an affidavit of merit, we affirm the ruling of

the trial judge.4

Affirmed.

4 We express no opinion as to whether, during the course of the action, Perez may need to support some aspect of his claim or rebut some aspect of the defense with expert testimony.

11 A-3268-14T2