NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-1249-19
WILLIAM J. FOCAZIO, M.D.,
Plaintiff-Appellant,
and
ARTHUR ST. REALTY, LLC, and ENDO SURGICAL CENTER OF EAST BRUNSWICK, LLC,
Plaintiffs,
v.
JOSEPH S. ABOYOUN, ESQ., ABOYOUN & HELLER, LLC, NAGEL RICE, LLP, RANDEE MATLOFF, ESQ., and BRUCE NAGEL, ESQ.,
Defendants-Respondents. _____________________________
Argued May 20, 2021 – Decided June 7, 2021
Before Judges Yannotti, Haas, and Natali.
On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-2643-16. Kenneth S. Thyne argued the cause for appellant (Roper & Thyne, LLC, attorneys; Kenneth S. Thyne, of counsel and on the briefs).
Daniel A. Malet argued the cause for respondents Joseph S. Aboyoun, Esq. and Aboyoun & Heller, LLC (McElroy, Deutsch, Mulvaney & Carpenter, attorneys; Christopher J. Carey, of counsel; Daniel A. Malet, on the brief).
Joanna Piorek argued the cause for respondents Nagel Rice, LLP, Randee Matloff, Esq., and Bruce Nagel, Esq. (Wilson Elser Moskowitz Edelman & Dicker, LLP, attorneys; Thomas F. Quinn and Joanna Piorek, of counsel and on the brief).
PER CURIAM
In this legal malpractice action, plaintiff William J. Focazio, M.D. appeals
from the Law Division's March 6, 2019 orders that barred his experts' reports as
net opinions and granted defendants' motions for summary judgment. 1 We are
constrained to reverse and remand for further proceedings because the court did
not adequately explain the reasons for its decision and, by not exercising its
1 Focazio states in his notice of appeal that he is also challenging the court's October 30, 2019 order denying his motion for reconsideration. However, he did not address that order in his appellate brief. Therefore, we deem his appeal on this issue to have been abandoned. Grubb v. Borough of Hightstown, 353 N.J. Super. 333, 342 n.1 (App. Div. 2002) (explaining that an issue raised in a notice of appeal but not briefed is abandoned).
A-1249-19 2 discretion to conduct a Rule 104 hearing, failed to develop a complete record
permitting appellate review.
I.
We begin by reciting the most salient facts in a light most favorable to
plaintiff, the non-moving party. Polzo v. Cnty. of Essex (Polzo II), 209 N.J. 51,
56 n.1 (2012) (citing Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540
(1995)). In December 2007, Focazio bought a residential property in Wayne for
approximately $1.6 million. At first, Focazio thought he could renovate the
historic house that was located on the property, but he soon decided to demolish
the structure and build a new home.
Focazio hired George A. Tsairis Architects, P.C. (GAT) to design the new
house and retained GAT's affiliated construction company, Northeast Modular
Homes, Inc. (Northeast) to construct a new modular home on the site. 2 Focazio
retained defendants Joseph S. Aboyoun, Esq. and his law firm, Aboyoun &
Heller LLC, to represent him in his contract negotiations with Tsairis.
Under the contracts, Focazio agreed to pay the Tsairis companies
approximately $2.3 million for their work on the project. Of this amount,
2 Both of these business entities were owned by George A. Tsairis, a licensed architect. A-1249-19 3 Focazio paid Tsairis deposits totaling $969,000. Plaintiff alleged he questioned
Aboyoun about the amount of the required deposits, but his lawyer told him not
to worry. About $400,000 of the total Focazio paid was supposed to be set aside
to buy the modular home from the manufacturer named in the contracts.
However, Tsairis switched manufacturers without Focazio's knowledge or
permission. Tsairis allegedly paid the new manufacturer only $5000 of the
amount due and kept the rest.
As required by the architectural contract, GAT conducted a zoning study
and opined the proposed construction would comply with local land
development ordinances and that no variances or waivers were needed.
However, after Northeast demolished the home, the municipality stopped all
work on the project because an environmental protection disturbance waiver was
required and had not been obtained.
The entire project was supposed to be completed within 300 days of the
"date of commencement," which was defined as the date on which all necessary
construction permits were obtained. Because these permits were not all
obtained, work never "commenced" under the terms of the contract. Focazio
complained about the delay to Aboyoun. The lawyer told Focazio that he could
A-1249-19 4 cancel the contract because of the delay, but he would have to sue Tsairis's
companies to attempt to recoup the deposits he had already made.
In June 2010, Aboyoun sent a letter to Northeast advising that Focazio
was canceling the contract and asking that Tsairis return all the payments
received to date. Tsiaris's attorney sent a letter in response, and blamed the
delay on the project engineer Focazio had hired. On Focazio's behalf, Aboyoun
rejected Tsiaris's efforts to resolve the matter and retained an attorney from
another law firm to help him prepare for litigation.
At first, Focazio wanted to mediate the dispute, but Aboyoun advised the
attorney he had hired to draft a complaint. Aboyoun reviewed the complaint
and the attorney revised it pursuant to Aboyoun's instructions.
In the midst of the drafting process, Focazio retained defendant Nagel
Rice LLP, and two of its attorneys, Bruce Nagel, Esq. and Randee Matloff, Esq.
(collectively the Nagel defendants), to represent him in the lawsuit against
Tsairis. Aboyoun remained involved on plaintiff's behalf, but the attorney he
had recently hired did not.
Matloff prepared a new complaint, and Aboyoun approved it for filing on
June 1, 2011. In the complaint, Focazio sought damages against the Tsairis
companies for breach of contract, breach of good faith and fair dealing, unjust
A-1249-19 5 enrichment, conversion, and consumer fraud. The complaint did not name
Tsairis as a defendant in his individual capacity.
In early 2012, Focazio hired another attorney, George Abdy, Esq., to
advise him on the litigation. Aboyoun and the Nagel defendants also remained
as Focazio's attorneys. By March 2013, however, Focazio was in arrears in
paying the Nagel defendants and had also failed to retain an engineering expert
needed for the litigation.
In May 2013, the trial court granted the Nagel defendants' motion to be
relieved as Focazio's attorneys, and Abdy and Matthew Cavaliere, Esq.
substituted in as his counsel of record. Prior to becoming Focazio's "official"
attorney in the litigation, Abdy noticed that under the terms of the construction
contract, the date of commencement of work did not begin until the final
municipal approvals were obtained. Thus, Abdy advised Focazio that the
contract had been prematurely terminated. At that point, Abdy and Cavaliere
decided their best course of action was to move the matter into binding
arbitration.
In arbitration, Abdy attempted to amend the complaint to assert a
professional negligence claim against Tsairis in his individual capacity as
A-1249-19 6 Focazio's architect. However, the arbitrator determined that this claim was
barred by the statute of limitations.
Ultimately, the arbitrator ruled in favor of the Tsairis companies in
December 2016. The arbitrator found that Focazio had improperly terminated
both the architectural contract with GAT and the construction contract with
Northeast. The arbitrator ordered Focazio to pay GAT $164,470, plus interest
and counsel fees, for breaching the architectural contract by terminating it too
early. As for the construction contract, the arbitrator ruled that the parties'
claims against each other were a "wash" and did not warrant any additional
damages.
In July 2016, several months before the completion of arbitration, Focazio
hired a new attorney, who filed a separate legal malpractice complaint against
Aboyoun and his firm and against the Nagel defendants. Among other things,
Focazio alleged that Aboyoun and his firm failed to advise him of the pitfalls
present in the contracts that required him to pay large deposits without any
guarantees that work would progress at a reasonable pace. Focazio also claimed
that Aboyoun should have included provisions in the agreements that would
have allowed him to reclaim his payments in the event the project was cancelled.
A-1249-19 7 In addition, Focazio asserted that Aboyoun was negligent because he
advised him he could cancel the contracts, when work on the contracts had not
yet commenced under the terms of the agreements because the necessary
municipal approvals had not yet been obtained. As a result, Focazio was
exposed to claims for lost profits and attorney's fees. Focazio alleged this would
not have occurred had Aboyoun brought different causes of action against
Tsairis and his companies.
As for the Nagel defendants, Focazio alleged they breached their duty of
care to him by not timely asserting a claim for architectural malpractice and
fraud against Tsairis individually. By that time in the litigation, both of Tsairis's
companies were effectively "judgment proof" and, therefore, Focazio believed
the only possible source of damages was Tsairis.
A period of discovery followed, which was extended several times by
order of the court. Because Focazio had still not filed his expert reports on the
question of causation and liability, Aboyoun and the Nagel defendants filed
motions for summary judgment in July 2018. Focazio attempted to obtain
additional time from the court to submit the reports and eventually filed them in
September 2018.
A-1249-19 8 Barry E. Levine, Esq., prepared a twenty-page report concerning Aboyoun
and his firm. Levine opined that these defendants breached their duty to Focazio
in four ways. First, Levine found that Aboyoun failed to apprise Focazio of the
risks of entering the transaction and did not advise him to reject the deal,
particularly because the contract required Focazio to pay, without security, "over
$800,000 and receive nothing in return." Second, Levine stated that in
cancelling the contract on Focazio's behalf, Aboyoun incorrectly asserted a
breach on grounds that were not provided in the contract, thereby exposing
Focazio to the claim of lost profits and attorney's fees that he was required to
pay as a result of the arbitration.
Third, Levine opined that Aboyoun failed to assert in the complaint that
Tsairis was professionally negligent by failing to know that an environment
disturbance waiver was required and that zoning approvals were also needed.
Finally, Levine stated that Aboyoun should have claimed that Tsairis breached
the contract when he unilaterally switched modular home manufacturers without
Focazio's knowledge or permission.
Focazio's other expert, Peter A. Ouda, Esq., submitted a seventeen-page
report concerning Focazio's claims of legal malpractice against the Nagel
defendants. According to Ouda, these defendants breached their duty to Focazio
A-1249-19 9 by failing to advise him that the contracts were wrongfully terminated and by
failing to assert a professional negligence claim against Tsairis individually.
Although the two expert reports were untimely, the trial judge entered an
order on September 28, 2018 extending the time for discovery after conducting
oral argument on defendants' summary judgment motions on September 14,
2018. As a result, no depositions were conducted of Levine or Ouda. In
addition, the judge did not hold a hearing on the admissibility of the reports as
permitted by N.J.R.E. 104.
On March 6, 2019, the judge entered two orders granting summary
judgment to Aboyoun and his firm and to the Nagel defendants. In a short
written opinion attached to the orders, the judge explained that he granted the
motions after finding that Levine's and Ouda's expert reports were inadmissible
net opinions and, without expert testimony on the legal standard of care owed
to Focazio and the proximate cause of any damages due to him, Focazio could
not sustain his burden of proof.
The judge did not cite to any specific portions of the expert reports.
Instead, he generally stated that both reports repeated the allegations made by
Focazio in his complaint and "fail[ed] to cite to any legal precedent or standard
for the conclusions" presented by the experts.
A-1249-19 10 In terms of legal analysis, the judge relied solely upon our decision in
Froom v. Perel, 377 N.J. Super. 298 (App. Div. 2005). In that case, we held
[w]here . . . a plaintiff alleges that he suffered a loss in a particular transaction because an attorney failed to take steps to protect his interest, the plaintiff must present evidence that, even in the absence of negligence by the attorney, the other parties to the transaction would have recognized [the] plaintiff's interest and [the] plaintiff would have derived a benefit from it.
[Id. at 315 (citations omitted).]
Here, the judge found that Levine and Ouda presented no evidence in their
reports that Tsairis and his companies would have acceded to Focazio's requests
for changes to the contract terms if the attorneys had proposed them. Thus,
under Froom, the judge ruled that all of the experts' claims against defendants
were inadmissible net opinions.
As discussed above, however, not all of the experts' opinions concerned
the actions and inactions of Focazio's attorneys during the contract negotiation
phase covered by our decision in Froom. Levine and Ouda both opined that
Aboyoun and the Nagel defendants should have insisted that the contracts be
structured in a manner more favorable to Focazio. As the judge found, this
opinion was not supported by evidence in the record that Tsairis and his
A-1249-19 11 companies would have accepted these terms and, therefore, the expert opinions
on the contract negotiation issues ran afoul of our ruling in Froom.
However, Levine also stated that Aboyoun wrongfully asserted a breach
of contract for a reason that was not supported by the agreement when he
cancelled the contract for not being completed in a timely manner. As the
contract made clear, the 300-day completion period incorrectly relied upon by
Aboyoun did not begin to run until the municipal approvals were received.
However, these approvals had not been obtained before Aboyoun prematurely
declared that a breach had occurred.
Unlike in Froom, this claim was not dependent upon the submission of
evidence by the expert that the other party to the contract would have
"recognized plaintiff's interest and plaintiff would have derived a benefit from
it." Ibid. Similarly, Levine's opinion that Aboyoun failed to assert breach of
contract claims against Tsairis individually after he unilaterally substituted the
modular home manufacturer and because he did not advise Focazio of the
project's zoning requirements did not fall under the Froom evidentiary
requirement relied upon by the judge.
The judge also found that Ouda's two findings of legal malpractice by the
Nagel defendants were barred by Froom. As noted above, Ouda opined that
A-1249-19 12 these defendants failed to advise Focazio that Aboyoun wrongfully terminated
the contracts and failed to assert a professional negligence claim against Tsairis
individually. However, neither of these findings was dependent upon the
presentation of evidence that Focazio would have changed his position and that
Tsairis would have assented to a modification of the contracts. Thus, Ouda's
position on these issues did not constitute a net opinion under Froom. However,
the judge provided no other basis for excluding it.
Focazio filed an untimely motion for reconsideration, which the judge
nevertheless considered. After conducting oral argument on August 12, 2019,
the judge denied the motion on October 30, 2019. In a short written opinion,
the judge again noted that he was relying on Froom to bar all of the experts'
opinions, including those that did not arise during the contract negotiation phase.
This appeal followed.
II.
On appeal, Focazio argues that the trial judge erred in granting defendants'
motions for summary judgment. For the reasons that follow, we reverse the
March 6, 2019 orders and remand for further factfinding on whether plaintiff's
two experts provided only net opinions.
A-1249-19 13 Our review of a trial court's grant of summary judgment is de novo,
applying the same legal standard as the trial court. RSI Bank v. Providence Mut.
Fire Ins. Co., 234 N.J. 459, 472 (2018) (citing Bhagat v. Bhagat, 217 N.J. 22,
38 (2014)). Under that standard, summary judgment will be granted when "the
competent evidential materials submitted by the parties," viewed in the light
most favorable to the non-moving party, show that there are no "genuine issues
of material fact" and that "the moving party is entitled to summary judgment as
a matter of law." Grande v. Saint Clare's Health Sys., 230 N.J. 1, 24 (2017)
(quoting Bhagat, 217 N.J. at 38); see also R. 4:46-2(c).
"An issue of material fact is 'genuine only if, considering the burden of
persuasion at trial, the evidence submitted by the parties on the motion, together
with all legitimate inferences therefrom favoring the non-moving party, would
require submission of the issue to the trier of fact.'" Grande, 230 N.J. at 24
(quoting Bhagat, 217 N.J. at 38). We owe no special deference to the motion
judge's legal analysis. RSI Bank, 234 N.J. at 472 (quoting Templo Fuente De
Vida Corp. v. Nat'l Union Fire Ins. Co., 224 N.J. 189, 199 (2016)).
To prevail on a legal malpractice claim, a plaintiff must prove "(1) the
existence of an attorney-client relationship creating a duty of care upon the
attorney; (2) the breach of that duty; and (3) proximate causation." Conklin v.
A-1249-19 14 Hannoch Weisman, 145 N.J. 395, 416 (1996) (quoting Lovett v. Estate of Lovett,
250 N.J. Super. 79, 87 (Ch. Div. 1991)). In order to establish these factors,
Focazio submitted expert reports prepared by Levine and Ouda.
Two rules of evidence frame the analysis for determining the admissibility
of expert testimony. N.J.R.E. 702 identifies when expert testimony is
permissible and requires the experts to be qualified in their respective fields.
N.J.R.E. 703 addresses the foundation for expert testimony. Expert opinions
must "be grounded in facts or data derived from[:] (1) the expert's personal
observations, or (2) evidence admitted at the trial, or (3) data relied upon by the
expert which is not necessarily admissible in evidence but which is the type of
data normally relied upon by experts." Townsend v. Pierre, 221 N.J. 36, 53
(2015) (quoting Polzo v. Cty. of Essex (Polzo I), 196 N.J. 569, 583 (2008)).
"The net opinion rule is a 'corollary of [N.J.R.E. 703] . . . which forbids the
admission into evidence of an expert's conclusions that are not supported by
factual evidence or other data.'" Id. at 53-54 (alteration in original) (quoting
Polzo I, 196 N.J. at 583).
Therefore, an expert is required to "'give the why and wherefore' that
supports the opinion, 'rather than a mere conclusion.'" Id. at 54 (quoting
Borough of Saddle River v. 66 E. Allendale, L.L.C., 216 N.J. 115, 144 (2013)).
A-1249-19 15 The net opinion rule directs that experts "be able to identify the factual bases for
their conclusions, explain their methodology, and demonstrate that both the
factual bases and the methodology are reliable." Id. at 55 (quoting Landrigan v.
Celotex Corp., 127 N.J. 404, 417 (1992)). In short, the net opinion rule is "a
prohibition against speculative testimony." Harte v. Hand, 433 N.J. Super. 457,
465 (App. Div. 2013) (quoting Grzanka v. Pfeifer, 301 N.J. Super. 563, 580
(App. Div. 1997)).
However, "[t]he net opinion rule is not a standard of perfection."
Townsend, 221 N.J. at 54. "An expert's proposed testimony should not be
excluded merely 'because it fails to account for some particular condition or fact
which the adversary considers relevant.'" Ibid. (quoting State v. Freeman, 223
N.J. Super. 92, 116 (App. Div. 1988)). An expert's failure "to give weight to a
factor thought important by an adverse party does not reduce his testimony to
an inadmissible net opinion if he otherwise offers sufficient reasons which
logically support his opinion." Ibid. (quoting Rosenberg v. Tavorath, 352 N.J.
Super. 385, 402 (App. Div. 2002)).
As with any dispositive motion presented to a trial court, the judge has an
obligation to fully explain the factual and legal bases for his or her conclusions.
In this regard, Rule 1:7-4(a) clearly states that in addition to entering an
A-1249-19 16 appropriate written order, a trial judge "shall, by an opinion or memorandum
decision, either written or oral, find the facts and state its conclusions of law
thereon . . . on every motion decided by a written order that is appealable as of
right . . . ." See Shulas v. Estabrook, 385 N.J. Super. 91, 96 (App. Div. 2006)
(requiring an adequate explanation of the reasons for the court's action).
The judge's decision must clearly demonstrate that the litigants have been
heard and their arguments were considered. While a judge need not author a
lengthy written opinion, or deliver an hour-long oral ruling to meet this
requirement in every case, he or she must always state what facts form the basis
of his or her decision, and then weigh and evaluate those facts in light of the
governing law "to reach whatever conclusion may logically flow from" those
facts. Slutsky v. Slutsky, 451 N.J. Super. 332, 357 (App. Div. 2017). Because
justice requires no less, "[a]ll conclusions must be supported." Ibid.
In sum, "[m]eaningful appellate review is inhibited unless the judge sets
forth the reasons for his or her opinion." Strahan v. Strahan, 402 N.J. Super.
298, 310 (App. Div. 2008) (quoting Salch v. Salch, 240 N.J. Super. 441, 443
(App. Div. 1990)). Unfortunately, the judge's decision in this case did not
satisfy these requirements.
A-1249-19 17 As already noted, the judge's written ruling that Focazio's expert reports
were inadmissible as net opinions was entirely conclusory in nature. It did not
cite to specific portions of Levine's or Ouda's reports to support the
determination that neither presented the facts or evidence underlying their
opinions.
Even more concerning, the judge's decision did not differentiate between
the various grounds each of the experts raised in support of Focazio's claim that
Aboyoun and the Nagel defendants breached their duty to him and were the
proximate cause of the losses he sustained in his litigation with Tsairis and his
companies. Instead, the decision incorrectly combines each of the experts'
contentions into a single assertion, i.e., that defendants should have drafted
better contracts between Focazio and Tsairis and provided him with different
advice than they did in the contract negotiation stage. Because the experts did
not present evidence that Tsairis and his companies would have agreed to the
changes they now propose, the judge found that our decision in Froom rendered
the reports inadmissible net opinions.
However, the problems Levine and Ouda identified during the contract
negotiation stage were only part of the actionable mistakes the experts believed
defendants made while representing Focazio. Levine also opined that Aboyoun
A-1249-19 18 cited the wrong reason for terminating the contracts by incorrectly focusing on
the 300-day construction period which had not yet begun to run because
municipal approvals had not been secured. In addition, Levine stated that
Aboyoun could have launched successful causes of actions against Tsairis
individually for unilaterally changing the modular home manufacturer and for
architectural malpractice due to Tsairis's failure to know about the need for the
environmental waiver or other zoning requirements.
Regarding the Nagel defendants, the judge did not address Ouda's
assertion that they should have sued Aboyoun individually for professional
malpractice or his assertion that these defendants should have advised Focazio
that Aboyoun had wrongfully terminated the contracts. Again, Ouda's opinion
on these points was not barred by Froom and the judge provided no other
grounds for determining it was a net opinion.
In sum, the judge did not fully analyze all of the opinions rendered by
Focazio's experts or make adequate findings of fact concerning them. As a
result, we are unable to review the contentions the parties have raised about the
judge's decision on the admissibility of the expert reports or his grant of
summary judgment to defendants.
A-1249-19 19 In so ruling, we note that the difficulty in addressing the expert reports
was likely caused by Focazio's late submission of them after the close of
discovery and after defendants had already filed their motions for summary
judgment. The parties did not conduct depositions of either Levine or Ouda and
the judge did not hold a Rule 104 hearing concerning the admissibility of the
experts' reports. As a result, and even though the judge accepted the untimely
reports submitted by Focazio, the experts never had the opportunity through
testimony to explain fully the bases for their conclusions and the judge did not
have the opportunity to review that testimony in rendering his decis ion on
whether the reports were net opinions.
In pertinent part, N.J.R.E. 104(a)(1) provides that a judge "shall decide
any preliminary question about whether a witness is qualified, a privilege exists,
or evidence is admissible." The judge "may hear and determine such matters
out of the presence or hearing of the jury." N.J.R.E. 104(a)(2). The decision to
conduct a Rule 104 hearing rests within the sound discretion of the trial court.
Kemp ex rel Wright v. State, 174 N.J. 412, 432 (2002).
However, when "the court's ruling on admissibility may be dispositive of
the merits, the sounder practice is to afford the proponent of the expert's opinion
an opportunity to prove its admissibility at a Rule 104 hearing." Id. at 432-33.
A-1249-19 20 "The Rule 104 hearing allows the court to assess whether the expert's opinion is
based on . . . sound reasoning or unsubstantiated personal beliefs . . . ." Id. at
427 (citing Landrigan, 127 N.J. at 414).
Under the idiosyncratic circumstances presented in this case, we are
satisfied that a Rule 104 hearing was warranted, especially because barring
Focazio's experts would clearly result in the dismissal of his case. Id. at 432-
33. Thus, on remand, the trial court should permit the parties to depose the
experts and then conduct a Rule 104 hearing before determining the
admissibility of Levine's and Ouda's opinions.
Finally, we acknowledge that our review of an order granting summary
judgment is de novo. RSI Bank, 234 N.J. at 472. However, "our function as an
appellate court is to review the decision of the trial court, not to decide the
motion tabula rasa." Estate of Doerfler v. Fed. Ins. Co., 454 N.J. Super. 298,
302 (App. Div. 2018). Accordingly, we have no alternative but to reverse the
March 6, 2019 orders, and remand this matter to the trial court for further
proceedings. In doing so, we do not suggest a preferred result, but only that the
trial court reconsider the matter and fully address the factual and legal arguments
presented in this case.
Reversed and remanded. We do not retain jurisdiction.
A-1249-19 21