Bailey v. Pocaro & Pocaro

• Decision Date: 27 October 1997
• Citation: 305 N.J.Super. 1,701 A.2d 916
• Parties: Richard BAILEY and Marie Bailey, Plaintiffs-Respondents/Cross-Appellants, v. POCARO & POCARO, and Ralph J. Pocaro, improperly pleaded as Ralph B. Pocaro, Defendants. and Jeffrey R. Pocaro, improperly pleaded as Jeffrey C. Pocaro, Defendant-Appellant/Cross-Respondent.
• Court: New Jersey Superior Court — Appellate Division

Page 1

305 N.J.Super. 1

701 A.2d 916

Richard BAILEY and Marie Bailey Plaintiffs-Respondents/Cross-Appellants, v. POCARO & POCARO, and Ralph J. Pocaro, improperly pleaded as Ralph B. Pocaro, Defendants and Jeffrey R. Pocaro, improperly pleaded as Jeffrey C. Pocaro Defendant-Appellant/Cross-Respondent.

Superior Court of New Jersey Appellate Division.

Submitted Jan. 28, 1997.

Decided Feb. 24, 1997.

Remanded by Supreme Court July 16, 1997.

Resubmitted Sept. 15, 1997.

Decided Oct. 27, 1997.

Carton, Witt, Arvanitis & Bariscillo, Asbury Park, for defendant-appellant/cross-respondent (Peter V. Koenig, of counsel and on the brief).

Robert H. Jaffe & Associates, Springfield, for plaintiffs-respondents/cross-appellants (Mr. Jaffe, on the brief).

Before Judges DREIER, NEWMAN and VILLANUEVA.

The opinion of the court was delivered by

NEWMAN, J.A.D.

In our decision of February 24, 1997, we reversed and vacated the judgment embodying the jury verdict against defendant Jeffrey R. Pocaro (reference to defendant is to Jeffrey R. Pocaro, only). We did so on the ground that the entire controversy doctrine barred the claims of plaintiffs, Richard and Marie Bailey, because they were required to "present all claims, even those against different parties, that stem from the same transactionally related facts in one controversy before one court." See Circle Chevrolet Co. v. Giordano, Halleran & Ciesla, 142 N.J. 280, 299, 662 A.2d 509 (1995). In doing so, we relied expressly on our decision in Donohue v. Kuhn, 292 N.J.Super. 197, 678 A.2d 737 (App.Div.1996). In view of our reversal of the judgment and dismissal of the complaint, we did not address the issues raised on plaintiffs' cross-appeal, dismissing them as moot.

The Supreme Court has now spoken in Olds v. Donnelly, 150 N.J. 424, 696 A.2d 633 (1997), holding that the party joinder requirements of the entire controversy doctrine do not extend to claims of attorney malpractice. The Court also reversed our judgment in Donohue v. Kuhn, 150 N.J. 484, 696 A.2d 664 (1997), reaffirming the holding of Olds that the entire controversy doctrine does not compel joinder of legal malpractice claims in underlying actions. See also Karpovich v. Barbarula, 150 N.J. 473, 696 A.2d 659 (1997).

Plaintiffs filed a petition for certification from our judgment. That petition was granted by the Court and the case remanded for reconsideration in light of Olds v. Donnelly.

We directed the attorneys for both parties to file briefs on the issues affected by the Supreme Court's remand. They have done so and we have considered them. Based on the Supreme Court's trilogy of cases holding that a party need not join a legal malpractice claim in the underlying action, we vacate our previous judgment and reinstate and affirm the judgment containing the jury verdict in favor of plaintiffs.

Before addressing plaintiffs' arguments on cross-appeal, we consider defendant's arguments that, in the event that the entire controversy doctrine no longer bars plaintiffs' action, he should be permitted to argue that the claims against him are barred by collateral estoppel, that the plaintiffs are subject to the doctrine of judicial estoppel and that piecemeal litigation contains other issues which defendant should be permitted to explore fully before the trial court by way of remand. Defendant never raised these arguments before the trial judge, despite his failure to successfully argue there that the entire controversy doctrine barred the legal malpractice trial against him as he stood in the place of the original defendants: United Airlines, certain employees of the airline and the Airline Pilots Association, International. More significantly, the trial against defendant has already been conducted and the jury's verdict returned. While we would not entertain arguments on appeal that were not raised before the trial court, see Ferraro v. Demetrakis, 167 N.J.Super. 429, 400 A.2d 1227 (App.Div.), certif. denied, 81 N.J. 290, 405 A.2d 834 (1979) (even constitutional issues not raised below will not ordinarily be considered on appeal), we certainly have no basis to do so here, where the trial has already been completed. Defendant's attempt to challenge the jury verdict on arguments that should have been raised prior to the commencement of trial is analogous to challenging a criminal conviction by the post-conviction relief procedure. R. 3:22. However, this is a civil case and there is no comparable procedure to collaterally attack a money judgment.

In view of our reinstatement of the jury verdict, we address the issues raised by plaintiffs on their cross-appeal. Plaintiffs argue that they were entitled to be reimbursed for their legal expenses, which included costs and attorneys' fees incurred in pursuing the legal malpractice action against defendant, and the trial judge erred by not including these expenses as an element of consequential damages. Plaintiffs also contend that prejudgment interest was not properly calculated.

* 5 At the time that the trial judge denied plaintiffs' timely request to include litigation expenses incurred in pursuit of their malpractice claim, the Supreme Court had not yet decided Saffer v. Willoughby, 143 N.J. 256, 670 A.2d 527 (1996). There, the Court ruled that a client may recover for losses which are proximately caused by the attorney's negligence or malpractice. "The purpose of a legal malpractice claim is 'to put a plaintiff in as good a position as he [or she] would have been had the [attorney] kept his [or her] contract.' " Saffer, supra, 143 N.J. at 271, 670 A.2d 527 (quoting Lieberman v. Employers Ins. of Wausau, 84 N.J. 325, 341, 419 A.2d 417 (1980)). The Court in Saffer went on to say:

[A] negligent attorney is responsible for the reasonable legal expenses and attorney fees incurred by a former client in prosecuting the legal malpractice action. Those are consequential damages that are proximately related to the malpractice. In the typical case, unless the negligent attorney's fee is determined to be part of the damages recoverable by a plaintiff, the plaintiff would incur the legal fees and expenses associated with prosecuting the legal malpractice suit.

[Id. at 272, 670 A.2d 527.]

The Court unmistakably concluded that the expenses incurred by a plaintiff may be consequential damages recoverable in order to make it whole in a successful malpractice prosecution. Ibid.

Contrary to defendant's assertion, this court's decision in Strauss v. Fost, 213 N.J.Super. 239, 517 A.2d 143 (App.Div.1986), does not require that the decision in Saffer be read differently. In Saffer, the Court reiterated the general rule that, "[o]rdinarily, an attorney may not collect attorney fees for services negligently performed." Saffer, supra, 143 N.J. at 272, 670 A.2d 527; Strauss, supra, 213 N.J.Super. at 243, 517 A.2d 143. Strauss addressed the ability of an attorney to collect fees for services negligently performed. However, the Court in Saffer went beyond Strauss, stating: "In addition, a negligent attorney is responsible for the reasonable legal expenses and attorney fees incurred by a former client in prosecuting a legal malpractice action." Saffer, supra, 143 N.J. at 272, 670 A.2d 527. Saffer, therefore, added to Strauss by holding the negligent attorney responsible for fees and costs incurred in the malpractice action.

Defendant argues that R. 4:42-9(a) governs the award of counsel fees and that the fees addressed here are not embraced by the court rule. Even if that is so, the award of attorneys' fees has become an element of damages in this particular cause of action for legal malpractice. See Gerhardt v. Continental Ins. Cos., 48 N.J. 291, 225 A.2d 328 (1966). R. 4:42-9 "does not preclude an allowance of reasonable counsel fees where the incurring thereof is a traditional element of damages in a particular cause of action." See Pressler, Current N.J. Court Rules, comment 2 on R. 4:42-9 (1998) and the cases cited therein.

Defendant also argues that our state follows the "American rule" regarding the payment of counsel fees, which recognizes that the prevailing litigant is ordinarily not entitled to collect any attorneys' fees from the loser. See Van Horn v. City of Trenton, 80 N.J. 528, 538, 404 A.2d 615 (1979). De...