Grunwald v. Bronkesh

• Citation: 604 A.2d 126,254 N.J.Super. 530
• Parties: Abraham GRUNWALD, Plaintiff-Appellant, v. Noah BRONKESH, Esq., Individually and Sills Beck Cummis Zuckerman Radin & Tischman, t/a Sills Beck Cummis Zuckerman Radin Tischman Epstein & Gross, a professional corporation, Defendants-Respondents.
• Decision Date: 27 February 1992
• Court: New Jersey Superior Court – Appellate Division

Page 530

254 N.J.Super. 530

604 A.2d 126

Abraham GRUNWALD, Plaintiff-Appellant, v. Noah BRONKESH, Esq., Individually and Sills Beck Cummis Zuckerman Radin & Tischman, t/a Sills Beck Cummis Zuckerman Radin Tischman Epstein &amp Gross, a professional corporation Defendants-Respondents.

Superior Court of New Jersey Appellate Division.

Argued Oct. 29, 1991.

Decided Feb. 27, 1992.

Andrew J. Kyreakakis, Bloomfield, for plaintiff-appellant (Ambrosio, Kyreakakis & DiLorenzo, attorneys; Anthony P. Ambrosio, of counsel; Andrew J. Kyreakakis and Ronald S. Bergamini, on the brief).

Philip R. Sellinger, Newark, for defendants-respondents (Sills Cummis Zuckerman Radin Tischman Epstein & Gross, attorneys; Philip R. Sellinger, of counsel; Philip R. Sellinger and Karen L. Jordan, on the brief).

Before Judges MICHELS, O'BRIEN and HAVEY.

The opinion of the court was delivered by

MICHELS, P.J.A.D.

Plaintiff Abraham Grunwald appeals from a summary judgment of the Law Division that dismissed his legal malpractice action against defendants Noah Bronkesh, Esq. (Bronkesh) and Messrs. Sills Cummis Zuckerman Radin Tischman Epstein & Gross (improperly referred to as Sills Beck Cummis Zuckerman Radin & Tischman, and hereinafter referred to as Sills-Cummis) on the ground that the action was barred by the six-year statute of limitations. The novel issue raised by this appeal is whether the statute of limitations commences to run on a legal malpractice action from the time the underlying lawsuit giving rise to the claim is decided in the trial court or from the time the appellate process has been exhausted.

Plaintiff was the owner of undeveloped real property in Atlantic City, New Jersey which he desired to sell to Resorts International Hotel & Casino, Inc. (Resorts). In the summer of 1983, plaintiff retained Bronkesh, a member of the Sills-Cummis law firm, to negotiate an option agreement and to prepare the necessary documentation. Bronkesh prepared an Option Agreement and an Agreement to Sell Property. These documents were sent to Resorts for execution. On September 13, 1983, Resorts signed the Option Agreement under which it had the exclusive option to purchase the property and paid plaintiff $362,500 as consideration for the option. Attached to the Option Agreement was the Agreement to Sell Property, which also was executed by Resorts. After Resorts executed both documents and returned them to plaintiff, plaintiff presented them to Bronkesh and solicited Bronkesh's advice with respect to them. According to plaintiff, on September 16, 1983, Bronkesh advised him that Resorts had exercised its option to purchase his property by executing the two documents. Bronkesh allegedly represented to plaintiff that there was a binding and enforceable agreement whereby Resorts would purchase the property for $13,355,727. Plaintiff claims that he proceeded in reliance upon Bronkesh's advice and rejected another deal regarding the property involving a 214 unit housing project.

On February 28, 1984, Resorts wrote to plaintiff informing him that it decided not to exercise its option. On the following day, defendants wrote to Resorts, advising Resorts that it had already exercised the option by executing the Agreement to Sell Property on September 13, 1983. In March of 1984, Resorts wrote to defendants and defendants responded with each setting forth their respective legal opinions as to the legality and effect of the execution of both documents. Resorts claimed that it signed the Agreement to Sell Property by mistake and denied the existence of a binding contract to purchase the property. Bronkesh insisted that Resorts had exercised the option and demanded that Resorts close on the property on April 2, 1984. Resorts refused to close on the property.

Subsequently, Bronkesh recommended that plaintiff retain another law firm to institute an action against Resorts. Plaintiff retained another law firm, and on April 16, 1984, instituted suit in the Chancery Division against Resorts, seeking specific performance or, alternatively, compensatory damages for the allegedly wrongful breach of the Agreement to Sell Property. On July 31, 1984, at the conclusion of the proofs, the Chancery Division judge found that the execution of the Option Agreement and the Agreement to Sell Property were equivocal; that plaintiff could not rely on them without inquiring into Resorts' intent, and that Resorts had no intention of exercising its right to buy the property on September 13, 1983. The Chancery Division judge further found that Resorts intended only to exercise its option to purchase in the future and thereupon entered judgment in favor of Resorts dismissing plaintiff's suit. According to plaintiff, Bronkesh was present when the Chancery Division judge rendered his oral opinion and Bronkesh recommended an appeal. Plaintiff claims that on the advice of Bronkesh he met with another attorney to discuss the appeal and that this attorney told him that the appeal was viable. On October 11, 1984, plaintiff appealed and on November 20, 1985, we affirmed the Chancery Division judgment in an unpublished opinion in Grunwald v. Resorts International Hotel Casino, Inc., A-544-84T3.

On September 28, 1990, plaintiff instituted this action against Bronkesh and Sills-Cummis, alleging that defendants were negligent and guilty of legal malpractice in advising him that the documents executed by Resorts constituted a binding agreement for Resorts to purchase his property for $13,355,727. Plaintiff claimed that he (1) was prevented from completing a 214 unit project on his property, resulting in substantial losses, including the loss of the land itself and other damages; (2) was forced to incur counsel fees and other expenses in litigating the enforceability of the Agreement to Sell Property in the underlying litigation, and (3) was forced to incur counsel fees and other expenses totaling $150,000 in a law suit entitled Donald Segal, et al. v. Abraham Grunwald, et al. which was pending in the Chancery Division. On December 3, 1990, defendants' motion for summary judgment was granted on the ground that the six-year statute of limitations had run against plaintiff's action from July 31, 1984--the date that the underlying lawsuit in the Chancery Division was dismissed. The trial court, in part, reasoned that plaintiff should have known that his damages were attributable to Bronkesh's negligence and legal malpractice at the time the Chancery Division judge dismissed the suit against Resorts. The trial court further reasoned that the possibility that such damages would be mooted if plaintiff had been successful on appeal was of no moment, because plaintiff had knowledge that a wrong had been committed. The trial court disagreed with plaintiff's contention that the statute of limitations was tolled until the Appellate Division proceeding had concluded. This appeal followed.

N.J.S.A. 2A:14-1 provides, in pertinent part, that: "Every action at law ... for any tortious injury to the rights of another ... shall be commenced within 6 years next after the cause of any such action shall have accrued." This six-year limitations period applies to claims for legal malpractice. Carney v. Finn, 145 N.J.Super. 234, 235-36, 367 A.2d 458 (App.Div.1976); Fuschetti v. Bierman, 128 N.J.Super. 290, 294, 319 A.2d 781 (Law Div.1974). See also, Mant v. Gillespie, 189 N.J.Super. 368, 372, 460 A.2d 172 (App.Div.1983); Aykan v. Goldzweig, 238 N.J.Super. 389, 390, 569 A.2d 905 (Law Div.1989). Statutes of limitations are designed to act as measures of repose, prompting diligent pursuit of claims and preventing assertion of stale claims. Ochs v. Federal Insurance Co., 90 N.J. 108, 112, 447 A.2d 163 (1982); O'Keeffe v. Synder, 83 N.J. 478, 490-91, 416 A.2d 862 (1980); Kaczmarek v. New Jersey Turnpike Authority, 77 N.J. 329, 337, 390 A.2d 597 (1978).

Under New Jersey's traditional rule, a tort cause of action accrues when plaintiff "suffers actual consequential damage or loss from the defendant's negligence." (Emphasis added). Diamond v. New Jersey Bell Telephone Co., 51 N.J. 594, 596, 242 A.2d 622 (1968) (quoting Rosenau v. City of New Brunswick, 51 N.J. 130, 138, 238 A.2d 169 (1968)); P.T. & L. Const. v. Madigan & Hyland, 245 N.J.Super. 201, 207, 584 A.2d 850 (App.Div.), certif. denied, 126 N.J. 330, 598 A.2d 888 (1991); Hermes v. Staiano, 181 N.J.Super. 424, 429, 437 A.2d 925 (Law Div.1981). In Montag v. Bergen Bluestone Company, 145 N.J.Super. 140, 144, 366 A.2d 1361 (Law Div.1976), Judge Pressler, then in the Law Division, explained:

It is well settled, as a matter of judicial interpretation, that the date on which a cause of action accrues, and hence the date from which the statute of limitations starts to run, is the date upon which the right to institute and maintain a suit first arises.

An action for legal malpractice derives from the tort of negligence. Gautam v. DeLuca, 215 N.J.Super. 388, 396, 521 A.2d 1343 (App.Div.1987). A necessary element of this cause of action is that plaintiff's alleged damages were proximately caused by the attorney's breach of a professional duty. Id. at 397, 521 A.2d 1343; Albright v. Burns, 206 N.J.Super. 625, 632, 503 A.2d 386 (App.Div.1986); Synder v. Baumecker, 708 F.Supp. 1451, 1462 (D.N.J.1989); see also Lieberman v. Employers Ins. of Wausau, 84 N.J. 325, 342, 419 A.2d 417 (1980). It is axiomatic that actual damages are an element of a cause of action grounded in negligence and that the statute of limitations will not run until plaintiff has suffered damages. W. Page Keeton, et al., Prosser & Keeton on the Law of Torts § 30, at 165 (5th ed. 1984).

Here, until plaintiff's appeal had been resolved he did not have a right to institute and maintain a suit for legal malpractice. Although the judgment in the Chancery Division may have placed plaintiff on notice that there were facts indicating that he may have suffered damages recoverable in a legal malpractice...