NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A- 2653-20
MORRIS PROPERTIES, INC. and KRISTEN A. MORRIS,
Plaintiffs-Appellants,
v. APPROVED FOR PUBLICATION
August 22, 2023 JONATHAN WHEELER, MARIO BARNABEI, and APPELLATE DIVISION LAW OFFICES OF JONATHAN WHEELER, P.C.,
Defendants-Respondents. __________________________
Argued November 1, 2022 – Decided February 28, 2023
Before Judges Gilson, Rose and Gummer.
On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-0238-19.
Chad M. Sherwood argued the cause for appellants (Law Office of Chad M. Sherwood, LLC, attorneys; Chad M. Sherwood, on the brief).
John L. Slimm argued the cause for respondents (Marshall Dennehey, attorneys; John L. Slimm and Jeremy J. Zacharias, on the brief). The opinion of the court was delivered by
GUMMER, J.A.D.
In this legal-malpractice case, plaintiffs Morris Properties, Inc. (MPI) and
Kristen A. Morris appeal from an order granting summary judgment to
defendants Jonathan Wheeler, Mario Barnabei, and the Law Offices of Jonathan
Wheeler, P.C. (the firm). Because plaintiffs failed to establish defendants owed
a duty to Morris or that defendants' alleged negligence had proximately caused
plaintiffs' asserted damages, we affirm.
I.
We discern the material facts from the summary-judgment record, viewing
them in the light most favorable to plaintiffs, the non-moving parties. See
Richter v. Oakland Bd. of Educ., 246 N.J. 507, 515 (2021). MPI owns a
commercial building located in Somers Point. According to plaintiffs, the
building sustained damages from Hurricane Sandy in October 2012. At that
time, the building was insured under a policy issued to MPI by West American
Insurance Company (West American).
About one month after the hurricane, MPI retained Metro Public
Adjustment (Metro), a public adjusting firm, to assist it in pursuing an insurance
claim. Metro submitted an insurance claim to West American for wind damage
and the ensuing water damage MPI's building allegedly sustained from
A- 2653-20 2 Hurricane Sandy. In an October 15, 2013 letter, MPI's president Morris was
advised that West American's inspector had concluded wind damage from the
hurricane was limited to one area of the roof and that West American had denied
coverage because the cost of repairing the damage related to that one area of the
roof was less than MPI's $51,590.76 deductible.
On April 1, 2014, MPI entered an agreement retaining the firm to
represent MPI in its efforts to obtain damages from West American. About two
weeks later, the firm filed a complaint executed by Wheeler on behalf of MPI in
the Law Division, naming West American as the defendant. MPI alleged West
American had acted in bad faith and had breached its contractual obligations by
refusing to pay benefits owed to MPI under the policy. West American removed
the case to the United States District Court for the District of New Jersey. The
district court issued a scheduling order and an amended order requiring MPI to
serve its expert reports and disclosures by a certain date. During an initial court
conference, West American's counsel informed defendant Barnabei, an attorney
with the firm, that a pre-litigation offer of $34,000 to resolve the claim, which
MPI had rejected, might "still be on the table" but asked whether MPI was also
pursuing the deductible. Barnabei reported that conversation to Wheeler and
understood Wheeler, in turn, would communicate the offer to MPI.
A- 2653-20 3 In July 2015, a lawyer associated with the firm served MPI's answers to
West American's first set of interrogatories. In those answers, MPI identified
Robert Schmidt and Jay Furhmann of Metro as fact and expert witnesses and
asserted that although work had been done on the roof in the past, MPI had
"never had a roof problem prior to this loss" and had "never had a claim or
damage to the roof prior to this loss." Morris signed a verification, stating MPI's
answers were accurate "to the best of [her] knowledge, information and belief."
On October 8, 2015, Morris was deposed as a corporate designee for MPI.
See R. 4:14-2(c). Barnabei met with Morris the morning of her deposition.
Barnabei, on behalf of the firm, represented MPI at the deposition. During the
deposition, Morris denied the building's roof had any history of leaks before it
was damaged by Hurricane Sandy and denied anyone or any tenant had
complained about roof leaks. However, West American's counsel showed
Morris letters sent to MPI by tenants complaining about roof leaks before
Hurricane Sandy. Morris testified she had not previously seen those letters.
On January 27, 2016, Wheeler's legal assistant sent an email to Mor ris,
advising her she would be deposed again on February 11, 2016. When Morris
asked why she was being deposed again, the legal assistant responded:
You stated at your deposition that you never had complaints of any of your tenants having water damage before Hurricane Sandy, but your largest tenant . . .
A- 2653-20 4 testified under oath that there had been a series of leaks for years . . . . The Judge has intervened and ruled that you and [the tenant] be re-deposed because you lied under oath.
West American did not depose Morris again. On June 6, 2016, the district
court granted West American's motion for leave to amend its answer to assert a
counterclaim for insurance fraud. Within a month, Wheeler and the firm moved
to withdraw as counsel for MPI. The district court ultimately allowed Wheeler
and the firm to withdraw. Represented by new counsel, MPI entered a
settlement agreement with West American in which MPI and West American
released their claims against each other and West American paid MPI $10,000.
On February 4, 2019, plaintiffs filed a complaint against defendants,
pleading two counts of legal malpractice against defendants, one on behalf of
MPI and the other on behalf of Morris individually. Regarding MPI, plaintiffs
faulted defendants for not naming an expert, submitting an expert report, or
preparing Morris for her deposition in the coverage action. Plaintiffs asserted
that due to defendants' negligence, MPI was forced to settle its claims against
West American "for a small fraction of their full value." Regarding Morris
individually, plaintiffs alleged defendants had known that West American
accused her of committing insurance fraud in a report to New Jersey's
Department of Banking and Insurance. Plaintiffs faulted defendants for failing
A- 2653-20 5 to advise them of that report and claimed that during the State's subsequent
investigation, Morris had "lived under the threat of significant fines and crimi nal
incarceration." Plaintiffs asserted the investigation, which did not result in any
charges, would have been avoided had defendants properly prepared Morris for
her deposition. Alleging defendants had acted willfully, wantonly, and in
reckless disregard of duties they purportedly owed to both MPI and Morris,
plaintiffs sought compensatory and punitive damages on behalf of MPI and
punitive damages on behalf of Morris.
In support of their case, plaintiffs produced a report prepared by William
B. Hildebrand, Esq. According to Hildebrand, the "purpose" of his report was
"to give [his] expert opinion regarding [defendants'] representation of [MPI]" in
the coverage case. Hildebrand stated, "[s]pecifically, I have been asked to
determine whether that representation fell below the standard of care exercised
by reasonably prudent attorneys in New Jersey." Hildebrand said nothing about
being retained to opine about whether defendants' alleged breaches of the
standard of care proximately had caused plaintiffs' damages or what, if anything,
those damages were.
Hildebrand opined that: defendants had breached the applicable standard
of care by (1) failing to hire an expert; (2) failing to "communicate with client,"
in that (a) Wheeler had failed to advise Morris that West American's counsel
A- 2653-20 6 sent an email on November 5, 2014, indicating his client was interested in
exploring settlement and had failed to follow up on that email; 1 (b) Wheeler had
failed to advise "his client" that West American's counsel had told him West
American's $34,000 pre-litigation settlement offer might still be on the table;
and (c) Wheeler failed to notify Morris about other depositions scheduled in the
case; and (3) failing to prepare Morris properly for her deposition. Hildebrand
did not opine about damages; in the fact section of his report, he simply stated
that Metro's final estimate of covered loss was $182,494.14. He did not opine
about proximate causation; he asserted, without any reference to facts, that
defendants' failure to hire an expert "was fatal to [MPI's] claim."
After the close of discovery, defendants moved for summary judgment.
They did not seek summary judgment on the issue of whether they had deviated
from a standard of care or duty owed to MPI. Instead, they sought summary
judgment on the discrete issues of proximate causation and damages, the
viability of Morris's individual claim, and plaintiffs' punitive-damages claim.
Specifically, defendants argued Hildebrand had failed to opine about proximate
causation and damages, Morris had lacked standing to maintain an individual
1 The record before us did not contain a copy of the November 5, 2014 email. A- 2653-20 7 claim, and plaintiffs had not presented sufficient proofs to meet the standard for
punitive damages.
Following oral argument, the motion judge issued an order and written
opinion granting defendants' motion. The judge found Hildebrand had failed to
analyze how the alleged breaches of the standard of care would have impacted
a potential jury verdict or settlement and had not opined that defendants' alleged
malpractice proximately caused any damages. The judge also held Morris's
individual claim failed because the undisputed facts showed she and defendants
did not have an attorney-client relationship. Finally, finding no evidence
defendants had acted with malice or had intended to cause plaintiffs' harm, the
judge held plaintiffs were not entitled to punitive damages.
On appeal, plaintiffs argue the judge failed to view the facts in a light most
favorable to them; failed to apply a "suit within a suit" standard of proving
damages in a legal malpractice case and improperly held a damages expert was
required when the underlying case had settled; improperly dismissed Morris's
claims even though she had claimed damages beyond those alleged by MPI; and
improperly dismissed their punitive-damages claim by failing to find a trier of
fact could reasonably infer that defendants' conduct was willful and wanton.
Because plaintiffs failed to establish defendants' alleged negligence proximately
A- 2653-20 8 caused their asserted damages or that defendants had a duty to Morris, summary
judgment was appropriate, and we affirm.
II.
We review de novo the grant of summary judgment, applying the same
standard as the motion judge. Branch v. Cream-O-Land Dairy, 244 N.J. 567,
582 (2021). That standard requires us to "determine whether 'the pleadings,
depositions, answers to interrogatories and admissions on file, together with the
affidavits, if any, show that there is no genuine issue as to any material fact
challenged and that the moving party is entitled to a judgment or order as a
matter of law.'" Ibid. (quoting R. 4:46-2(c)). "To decide whether a genuine
issue of material fact exists, the trial court must 'draw[] all legitimate inferences
from the facts in favor of the non-moving party.'" Friedman v. Martinez, 242
N.J. 449, 472 (2020) (alteration in original) (quoting Globe Motor Co. v.
Igdalev, 225 N.J. 469, 480 (2016)). "The 'trial court's interpretation of the law
and the legal consequences that flow from established facts are not entitled to
any special deference.'" Town of Kearny v. Brandt, 214 N.J. 76, 92 (2013)
(quoting Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366,
378 (1995)). Summary judgment is properly granted "when the evidence 'is so
one-sided that one party must prevail as a matter of law' . . . ." Brill v. Guardian
Life Ins. Co. of Am., 142 N.J. 520, 540 (1995) (quoting Anderson v. Liberty
A- 2653-20 9 Lobby, Inc., 477 U.S. 242, 252 (1986)); see also Davis v. Brickman
Landscaping, Ltd., 219 N.J. 395, 406 (2014).
"A legal malpractice claim is 'grounded in the tort of negligence.'" Nieves
v. Off. of the Pub. Def., 241 N.J. 567, 579 (2020) (quoting McGrogan v. Till,
167 N.J. 414, 425 (2001)). "[A] legal malpractice action has three essential
elements: '(1) the existence of an attorney-client relationship creating a duty of
care by the defendant attorney, (2) the breach of that duty by the defendant, and
(3) proximate causation of the damages claimed by the plaintiff.'" Jerista v.
Murray, 185 N.J. 175, 190-91 (2005) (quoting McGrogan, 167 N.J. at 425).
"The plaintiff bears the burden of establishing those elements by some
competent proof." Davis, 219 N.J. at 406 (citations omitted).
Generally, a client recovers only losses proximately caused by the
attorney's professional negligence. Lieberman v. Emps. Ins. of Wausau, 84 N.J.
325, 341 (1980); Froom v. Perel, 377 N.J. Super. 298, 313 (App. Div. 2005).
Proximate cause "'requires an initial determination of cause-in-fact' . . . [which]
'requires proof that the result complained of probably would not have occurred
but for the negligent conduct of the defendant.'" New Gold Equities Corp. v.
Jaffe Spindler Co., 453 N.J. Super. 358, 379 (App. Div. 2018) (first quoting
Francis v. United Jersey Bank, 87 N.J. 15, 39 (1981); then quoting Vuocolo v.
Diamond Shamrock Chems., Co., 240 N.J. Super. 289, 295 (App. Div. 1990)).
A- 2653-20 10 The plaintiff then "must present evidence to support a finding that defendant's
negligent conduct was a 'substantial factor' in bringing about plaintiff' s injury,
even though there may be other concurrent causes of the harm." Froom, 377
N.J. Super. at 313 (quoting Conklin v. Hannoch Weisman, 145 N.J. 395, 418
(1996)). Finally, the plaintiff must "show what injuries were suffered as a
proximate consequence of the attorney's breach of duty," ordinarily measured
by "the amount that a client would have received but for the attorney's
negligence." 2175 Lemoine Ave. Corp. v. Finco, Inc., 272 N.J. Super. 478, 488
(App. Div. 1994). The client must have sustained actual damage that is real, not
merely speculative. Olds v. Donnelly, 150 N.J. 424, 437 (1997).
The burden is on the client to show what injuries were suffered as a
proximate consequence of the attorney's breach of duty. 2175 Lemoine Ave.,
272 N.J. Super. at 488. That burden must be met "by a preponderance of the
competent, credible evidence and is not satisfied by mere 'conjecture, surmise
or suspicion.'" Ibid. (quoting Long v. Landy, 35 N.J. 44, 54 (1961)). In legal-
malpractice cases, proximate causation ordinarily must be established by expert
testimony, except when "the causal relationship between the attorney's legal
malpractice and the client's loss is so obvious that the trier of fact can resolve
the issue as a matter of common knowledge." Id. at 490; see also Sommers v.
A- 2653-20 11 McKinney, 287 N.J. Super. 1, 10 (App. Div. 1996) (finding it is only in "rare
cases" in which expert testimony is not required in a legal malpractice action).
In sum, to establish the proximate-cause element of their legal-
malpractice claim, plaintiffs must prove by a preponderance of the competent,
credible evidence that their alleged damages were proximately caused by
defendants' negligence. Applied here, plaintiffs must prove defendants' alleged
failure to hire an expert, "communicate with client," or prepare Morris properly
for her deposition was a substantial factor in causing MPI to accept a $10,000
settlement when it otherwise would have been awarded more by a jury or in a
different settlement with West American if the case had not been colored by
those alleged breaches of the standard of care. See Lerner v. Laufer, 359 N.J.
Super. 201, 221 (App. Div. 2003) (holding that to establish proximate causation
of damages in a legal-malpractice action, a plaintiff "must demonstrate that he
or she would have prevailed, or would have won materially more . . . but for the
alleged substandard performance"). Without expert testimony demonstrating
MPI would have prevailed in its coverage case against West American or would
have received a greater settlement had defendants met the standard of care,
plaintiffs' legal-malpractice claims fail as a matter of law.
We agree with the motion judge that plaintiffs had not established
proximate cause as a matter of law and that expert testimony was necessary in
A- 2653-20 12 this case to prove proximate causation and damages. The causal relationship
between defendants' alleged malpractice and plaintiffs' asserted loss is not "so
obvious that the trier of fact [could have] resolve[d] the issue as a matter of
common knowledge" without the assistance of expert testimony. Sommers, 287
N.J. Super. at 11. As the motion judge recognized, many factors could impact
the settlement value of or potential jury verdict on MPI's insurance-coverage
claim. Only an expert could show that MPI would have succeeded in obtaining
a better result at trial – which would have required MPI to convince a jury of its
entitlement to insurance coverage of its full claim of wind-related damages
based on a record that included pre-Sandy complaints from tenants about roof
leaks2 – or in another settlement had defendants not committed the alleged
breaches of the standard of care. See Kaplan v. Skoloff & Wolfe, P.C., 339 N.J.
Super. 97, 103-04 (App. Div. 2001) (finding that in a legal malpractice action
based on an insufficient-settlement theory, expert testimony is required to
establish the value of the claim); Kelly v. Berlin, 300 N.J. Super. 256, 269 (App.
2 To state a viable claim for coverage, an insured bears the initial burden of demonstrating that its asserted claim falls within the basic scope of the coverage under the policy. Bldg. Materials Corp. of Am. v. Allstate Ins. Co., 424 N.J. Super. 448, 464 (App. Div. 2012). The insurer then would have the opportunity to prove the insured's claim fell within one or more of the policy's exclusions. Aviation Charters v. Avemco Ins. Co., 335 N.J. Super. 591, 594 (App. Div. 2000). A- 2653-20 13 Div. 1997) (finding expert testimony is necessary to enable a jury to determine
whether the alleged malpractice "caused plaintiff to settle for a lower amount
than he otherwise would have, and, if so, the amount of damages plaintiff
sustained as a result").
Hildebrand did not opine about proximate cause or damages. As he
clearly stated in his report, he was retained to opine only about whether
defendants had breached "the standard of care exercised by reasonably prudent
attorneys in New Jersey." He did not opine that if defendants had met that
standard, MPI would have prevailed at trial or obtained a better settlement given
the facts underlying the coverage case. He did not opine about the fair
settlement value of the underlying coverage case. Contrary to plaintiffs'
argument, Hildebrand did not opine about what their purported damages were.
Merely repeating Metro's final estimate of covered loss is not the equivalent of
rendering an expert opinion on damages.
We recognize an attorney must communicate all settlement offers to his
or her client and that a legal-malpractice action based on a straight-forward
failure to relay a settlement offer may not require expert testimony on the breach
of that duty or the damages caused by it. See Sommers, 287 N.J. Super. at 12.
Even assuming counsel's comment at the initial court conference indicating
West American's $34,000 pre-litigation settlement offer "might" still be on the
A- 2653-20 14 table constituted an actual settlement offer that Wheeler had an obligation to
relay, the record is devoid of any evidence, such as a certification from or any
testimony of Morris or any other MPI representative, establishing MPI would
have accepted the $34,000 offer it already had rejected.
We also recognize Hildebrand stated defendants' failure to hire an expert
"was fatal to [MPI's] claim." That bald assertion, with nothing more, is not an
admissible expert opinion on causation. See Buckelew v. Grossbard, 87 N.J.
512, 524 (1981) (explaining that "an expert's bare conclusions, unsupported by
factual evidence, is inadmissible"). To make that statement anything more than
what it is – an impermissible net opinion with no evidential weight – Hildebrand
would have had to explain the why and wherefore behind it. See Crispino v.
Twp. of Sparta, 243 N.J. 234, 257 (2020) (finding an expert is required to "'give
the why and wherefore' that supports the opinion, 'rather than a mere
conclusion'" (quoting Townsend v. Pierre, 221 N.J. 36, 54 (2015))). Hildebrand
would have had to explain why not having an expert "was fatal to [MPI's] claim"
and, to establish proximate causation of damages, he would have had to opine
that retaining an expert would have enabled MPI to obtain a jury verdict in its
favor or a better settlement. And he didn't do that.
We reject plaintiffs' argument that summary judgment was not appropriate
because MPI could have proceeded without expert testimony by following a
A- 2653-20 15 "suit within a suit" procedure at trial. That argument, which, if followed, would
have the effect of barring summary judgment in nearly every legal-malpractice
case, confuses a procedural trial framework with plaintiffs' prima facie burden.
The "suit within a suit" approach allows a plaintiff to "present[] the evidence
that would have been submitted at a trial had no malpractice occurred[,]" thereby
"clarify[ing] what would have taken place but for the attorney's malpractice."
Garcia v. Kozlov, 179 N.J. 343, 358 (2004). That procedural choice does not,
as plaintiffs seem to suggest, relieve plaintiffs of their substantive, prima facie
burden to establish proximate cause.
Plaintiffs' failure to present expert evidence on proximate causation and
damages entitles defendants to judgment dismissing the case as a matter of law.
Accordingly, we affirm the order granting summary judgment.
As for Morris's individual claim, plaintiffs also failed to demonstrate the
first prong of a legal-malpractice claim: the existence of an attorney-client
relationship between Morris and defendants. "The existence of an attorney -
client relationship is, of course, essential to the assertion of a cause of action for
legal malpractice." Froom, 377 N.J. Super. at 310.
The record is devoid of evidence supporting plaintiffs' claim that an
attorney-client relationship existed between Morris and defendants. The parties
did not include a copy of the retainer agreement in the appellate record, but we
A- 2653-20 16 know the retainer agreement was between MPI and defendants, not Morris and
defendants. In their complaint, plaintiffs alleged "[p]laintiff [MPI] executed a
Legal Fee Agreement with . . . [d]efendants, Jonathan Wheeler and/or Law
Offices of Jonathan Wheeler, P.C." and that the agreement "concern[ed] [MPI's]
right to recover from West American . . . ." Plaintiffs made no allegation about
any agreement between Morris and defendants about defendants representing
her individually. In the underlying lawsuit, only MPI was named as a plaintiff.
The transcript of Morris's deposition identifies defendant Barnabei and the firm
as representing "the [p]laintiff[,]" which was MPI, not Morris. Hildebrand did
not opine Morris and defendants had an attorney-client relationship.
Plaintiffs claim defendants represented Morris because they "clearly
interacted directly with [her]." Mere interaction does not establish the existence
of an attorney-client relationship. With no citation to the record, plaintiffs also
assert defendants "purported to represent her during her deposition in the
underlying matter." That unsupported assertion does not create a genuine issue
of material fact sufficient to defeat summary judgment on this issue, especially
when the record evidence demonstrates otherwise. The motion judge's finding
that Morris was deposed as a corporate representative of MPI is supported by
credible and unrebutted evidence in the record.
A- 2653-20 17 In "carefully circumscribed" holdings, courts have found an attorney owed
a duty to a non-client. Green v. Morgan Props., 215 N.J. 431, 458 (2013).
However, "the grounds on which any plaintiff may pursue a malpractice claim
against an attorney with whom there was no attorney-client relationship are
exceedingly narrow" and are not present here. Ibid.; see also Banco Popular N.
Am. v. Gandi, 184 N.J. 161, 182-83 (2005) (allowing bank's claim against
attorney for one of bank's creditors to proceed based on attorney's negotiations
with the bank and an opinion letter provided to the bank); Petrillo v. Bachenberg,
139 N.J. 472, 474 (1995) (finding an attorney for a real-estate seller has a duty
not to provide misleading information to potential buyers who the attorney
knows or should know will rely on it).
Having concluded the motion judge properly granted summary judgment
on plaintiffs' substantive claims, we need not reach their argument regarding
their punitive-damages claims. To the extent we have not otherwise commented
on them, we have duly considered plaintiffs' remaining arguments and conclude
they lack sufficient merit to warrant discussion in a written opinion. R. 2:11-
3(e)(1)(E).
Affirmed.
A- 2653-20 18