Cherry Hill Manor Assoc. v. Faugno

• Decision Date: 06 December 2004
• Citation: 861 A.2d 123,182 N.J. 64
• Court: New Jersey Supreme Court
• Parties: CHERRY HILL MANOR ASSOCIATES, Plaintiff, v. Paul FAUGNO, Esq., and Rogan & Faugno, Esqs., Defendants-Third Party Plaintiffs-Respondents, and Harleysville Insurance Company of New Jersey, Third Party Defendant, and Timothy Tuttle, Esq., Robert J. Mancinelli, Esq., and Carver & Mancinelli, Esqs., Third Party Defendants-Appellants.

861 A.2d 123

182 N.J. 64

CHERRY HILL MANOR ASSOCIATES, Plaintiff, v. Paul FAUGNO, Esq., and Rogan & Faugno, Esqs., Defendants-Third Party Plaintiffs-Respondents, and Harleysville Insurance Company of New Jersey, Third Party Defendant, and Timothy Tuttle, Esq., Robert J. Mancinelli, Esq., and Carver & Mancinelli, Esqs., Third Party Defendants-Appellants.

Supreme Court of New Jersey.

Argued October 28, 2004.

Decided December 6, 2004.

Christopher J. Carey, Morristown, argued the cause for appellants Robert J. Mancinelli, Esq., and Carver & Mancinelli, Esqs. (Graham, Curtin & Sheridan, attorneys; Mr. Carey and Patricia A. Brennan, on the briefs).

Leon B. Piechta, West Orange, argued the cause for appellant Timothy Tuttle, Esq. (O'Donnell Piechta, attorneys).

Lance J. Kalik, Morristown, argued the cause for respondents (Riker Danzig Scherer Hyland & Perretti, attorneys; Mr. Kalik and Glenn A. Clark, of counsel; Mr. Kalik and Ronald Z. Ahrens, on the briefs).

Justice RIVERA-SOTO delivered the opinion of the Court.

These consolidated petitions for certification present the question whether a defendant can seek statutory contribution against third-party defendants when the original plaintiff is legally barred from proceeding directly against any of the third-party defendants. The trial court held that the third-party defendants could not be considered joint tortfeasors with the defendant because the third-party defendants were not jointly or severally liable in tort for the same injury to plaintiff as was defendant. The Appellate Division disagreed, reversed the grant of summary judgment in favor of the third-party defendants, and remanded the cause for trial. Cherry Hill Manor Assocs. v. Faugno, 365 N.J.Super. 313, 839 A.2d 95 (App.Div.2004).

We hold that, under the circumstances present here, the third-party defendants were not jointly liable for the same injury to plaintiff as was defendant. We, therefore, reverse the judgment of the Appellate Division and reinstate the judgment of the trial court granting summary judgment in favor of the third-party defendants and against defendant.

I.

As with many a convoluted tale, this one started simply enough. However, in order to fairly present the relevant facts, we must wind our way back some eighteen years through one failed business transaction, three prior lawsuits, one bankruptcy proceeding, two prior appeals to the Appellate Division, and one earlier denial of certification from this Court before we even reach this case.

During October 1986, plaintiff Cherry Hill Manor Associates attempted to purchase a then-mostly unbuilt 16-unit condominium project from Cherry Hill Manor, Inc. (Seller). In this purchase and sale, plaintiff was represented by Timothy Tuttle, Esq. (Tuttle). As part of its contractual obligations, plaintiff paid both a $300,000 deposit and advanced an additional $345,000 to Seller. As counsel for plaintiff, Tuttle was charged with the obligation to insure that plaintiff's deposit monies and advances were secured by a purchase money mortgage on the condominium project. Matters quickly deteriorated. For reasons undisclosed in this record, the purchase money mortgage that was to secure plaintiff's investment in this project was neither delivered nor filed of record and, eventually, Seller defaulted on the transaction.

Three years later, plaintiff retained Robert J. Mancinelli, Esq. and his law firm, Carver & Mancinelli (collectively, Mancinelli), to recover from Seller the aggregate of $645,000 in deposit monies and advances paid by plaintiff. On November 8, 1989, plaintiff, through its lawyer Mancinelli, sued Seller; for reasons also unexplained in this record, plaintiff did not name its original lawyer, Tuttle, as a party defendant in that suit. Seller filed a voluntary petition in bankruptcy and, on April 24, 1992, Seller's debts were discharged. Faced with no prospect of recovery, plaintiff dismissed its complaint against Seller.

More time passed and plaintiff again changed lawyers, this time retaining as its third set of lawyers, Paul Faugno, Esq. and his law firm, Rogan & Faugno (collectively, Faugno). On October 7, 1992, plaintiff, through its lawyer Faugno, sued Tuttle, claiming that Tuttle committed malpractice when, in 1986, Tuttle failed to secure plaintiff's deposit monies and advances by a purchase money mortgage. Tuttle sought dismissal under the entire controversy doctrine, claiming that any claims by plaintiff against him should have been brought as part of the original lawsuit filed on plaintiff's behalf by Mancinelli and against Seller. Tuttle's application was denied and, on June 21, 1994, Tuttle filed a third-party complaint against Mancinelli for contribution as a joint tortfeasor. Although Tuttle claimed that his successor lawyer, Mancinelli, was liable to Tuttle in contribution as a joint tortfeasor, Faugno did not seek to amend the complaint he filed against Tuttle to assert a claim directly against Mancinelli.

On February 26, 1994, the Appellate Division handed down Circle Chevrolet Co. v. Giordano, Halleran & Ciesla, 274 N.J.Super. 405, 644 A.2d 626 (App.Div.1994), aff'd, 142 N.J. 280, 662 A.2d 509 (1995), holding that the entire controversy doctrine barred a suit for attorney malpractice that was not asserted in the underlying litigation. Relying on Circle Chevrolet, Tuttle renewed his motion for summary judgment based on the entire controversy doctrine, this time successfully. On November 28, 1994, the trial court granted Tuttle's summary judgment motion and dismissed the claims against Tuttle which, in turn, caused the dismissal of the third-party complaint against Mancinelli. Faugno, on behalf of plaintiff, sought appellate review and, in an unreported decision, the trial court's grant of summary judgment in Tuttle's favor was affirmed and a petition for certification was denied. Neubaur v. Tuttle, No. A-2341-94T3 (App.Div. Dec. 13, 1995), certif. denied, 144 N.J. 173, 675 A.2d 1121 (1996).

Three years after the trial court granted Tuttle's summary judgment motion, this Court concluded that "the entire controversy doctrine no longer compels the assertion of a legal-malpractice claim in an underlying action that gives rise to the claim" and abrogated its earlier holding in Circle Chevrolet. Olds v. Donnelly, 150 N.J. 424, 443, 696 A.2d 633 (1997). Seizing on that apparent opportunity, Faugno referred this matter to Anthony V. D'Elia, Esq. (D'Elia), who, in turn, filed a malpractice action on behalf of plaintiff and against Mancinelli claiming that Mancinelli should have included Tuttle as a party defendant in the original action against Seller. However, because the rule of Olds v. Donnelly, supra, was granted only limited retroactivity as to those cases that were then pending, either on appeal or in the trial courts, id. at 449, 696 A.2d 633, and plaintiff's suit against Tuttle was already final, on December 8, 1998, the trial court granted Mancinelli's motion for summary judgment. The trial court explained that plaintiff should have joined Mancinelli in the litigation against Tuttle and, therefore, plaintiff's claim against Mancinelli continued to be barred by the entire controversy doctrine. Plaintiff appealed that ruling, and the Appellate Division, in an unpublished decision, affirmed the trial court.

We finally come to the action presently before this Court. On March 29, 1999, three months after the trial court entered summary judgment in favor of Mancinelli and while plaintiff's appeal of the ruling was still pending, plaintiff, through D'Elia, filed a malpractice action against Faugno. It claimed that Faugno committed malpractice by failing to join Mancinelli as a party defendant in the action against Tuttle, particularly when Tuttle had filed a third-party complaint in contribution against Mancinelli. On April 27, 2000, Faugno filed an answer, affirmative defenses and jury trial demand, together with a third-party complaint against both Tuttle and Mancinelli for contribution and/or indemnity under the Joint Tortfeasors Contribution Law, N.J.S.A. 2A:53A-1 to -5 (JTCL). Tuttle and Mancinelli moved for summary judgment and, on December 1, 2000, the trial court granted their motions, holding that Tuttle and Mancinelli could not be sued for contribution because neither Tuttle nor Mancinelli was Faugno's joint tortfeasor as defined in the JTCL. Faugno did not seek leave to appeal that decision until more than thirteen months later and that application was denied. Trial between plaintiff and Faugno commenced on September 3, 2002. On September 6, 2002, they settled the controversy between them by agreeing that judgment would be entered in favor of plaintiff and against Faugno in the amount of $575,000. That settlement was reduced to a consent judgment pursuant to R. 4:42-1(d) and was entered by the trial court on October 21, 2002.

Once the dispute between plaintiff and Faugno was resolved, Faugno sought to revive his joint tortfeasor contribution claim against Tuttle and Mancinelli. The next day, on October 22, 2002, Faugno filed a notice of appeal and civil appeal case information statement with the Appellate Division, and identified the issue on appeal as "[w]hether the trial court erred in dismissing the claims for contribution and indemnification by [Faugno] against [Tuttle and Mancinelli]." The Appellate Division held that, as a matter of law, Faugno should be permitted to pursue his contribution and indemnity claims under the Joint Tortfeasors Contribution Law against Tuttle and Mancinelli and, accordingly, reversed the trial court's grant of summary judgment and remanded the cause for further proceedings. Cherry Hill Manor Assocs. v. Faugno, 365 N.J.Super. 313, 839 A.2d 95 (App.Div.2004). We granted certification. 180 N.J. 151, 849 A.2d 184 (2004). For the reasons that follow, we reverse the judgment of the Appellate Division and reinstate the judgment of the trial court's grant of summary...