Tormo v. Yormark, Civ. A. No. 298-73.

CourtUnited States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
Writing for the CourtHannoch, Weisman, Stern & Besser by John E. Finnerty, Newark, N. J., for third-party defendant
Citation398 F. Supp. 1159
PartiesKaren Wendel TORMO and Henry Wendel, Plaintiffs, v. Milton YORMARK et al., Defendants. FIDELITY UNION TRUST COMPANY and Keene National Bank, Third-Party Plaintiffs, v. Edward DEVLIN, Third-Party Defendant.
Decision Date12 May 1975
Docket NumberCiv. A. No. 298-73.

398 F. Supp. 1159

Karen Wendel TORMO and Henry Wendel, Plaintiffs,
v.
Milton YORMARK et al., Defendants.

FIDELITY UNION TRUST COMPANY and Keene National Bank, Third-Party Plaintiffs,
v.
Edward DEVLIN, Third-Party Defendant.

Civ. A. No. 298-73.

United States District Court, D. New Jersey.

May 12, 1975.


398 F. Supp. 1160
COPYRIGHT MATERIAL OMITTED
398 F. Supp. 1161
COPYRIGHT MATERIAL OMITTED
398 F. Supp. 1162
COPYRIGHT MATERIAL OMITTED
398 F. Supp. 1163
COPYRIGHT MATERIAL OMITTED
398 F. Supp. 1164
Riker, Danzig, Scherer & Debevoise by Dennis J. O'Grady, Newark, N. J., for third-party plaintiffs

Hannoch, Weisman, Stern & Besser by John E. Finnerty, Newark, N. J., for third-party defendant.

OPINION

COOLAHAN, District Judge.

This case raises questions concerning a New York attorney's liability for negligence in transferring his clients' personal injury case to a criminally indicted New Jersey lawyer who subsequently embezzled the clients' funds. The questions arise on a motion for summary judgment by third-party defendant Edward Devlin, the New York lawyer, against defendants-third-party plaintiffs Fidelity Union Trust Company (Fidelity) and Keene National Bank (Keene).1

398 F. Supp. 1165

Pertinent procedural history may be briefly summarized. Devlin's clients, plaintiffs Henry Wendel and Karen Wendel Tormo,2 brought the main action against six defendants to recover $148,997, the face amount of an instrument issued to settle the personal injury suit and wrongfully converted by Milton Yormark, the New Jersey lawyer consulted by Devlin. Against Fidelity, the depository bank, and Keene, a collecting and presenting bank, plaintiffs alleged causes of action for conversion under section 3-419(1) of New Jersey's Uniform Commercial Code, N.J.S.A. 12A:1-101 et seq. In addition, they alleged against Fidelity alone a cause of action for negligence based on its failure to take reasonable measures to discover whether Karen's endorsement on the draft was genuine. The banks in turn filed a third-party complaint for either contribution or indemnity against Devlin based on negligence toward his clients in selecting and failing properly to supervise Yormark.3 Procedural facts unrelated to the present motion are set forth in the margin.4

Facts pertinent to Devlin's role in this case are confused and conflicting. A chronological history must begin on July 5, 1968. On that date Karen Tormo, then an unmarried infant and a citizen of New York, was involved in a boating accident in Dover Township, New Jersey. Shortly afterward, Karen's father, Henry Wendel, consulted Devlin concerning the matter. Devlin, whom Wendel had often consulted concerning his business affairs, visited the Wendel home on July 20 to discuss the incident. Although no retainer agreement

398 F. Supp. 1166
was executed, and Devlin's fee was not discussed,5 Devlin agreed "to see what could be done with regard to settlement" of Karen's claim. Devlin Deposition at 10; see Wendel Deposition at 8-9

Devlin initially learned of Yormark several days later through Yormark's telephone call to his office. Representing that he was "familiar with the accident," Yormark requested a personal meeting. Devlin Deposition at 18. Devlin agreed. Yormark, accompanied by an associate, met Devlin at the Kings County Courthouse in Brooklyn on July 23, 1968. He informed Devlin that "he and/or his representatives had discussed the accident with the Wendels and they had secured Devlin's name." Id. at 18. Explaining that he was a "negligence specialist," id. at 25, Yormark indicated that he was interested in handling the case. Id. at 20. Devlin declined this "offer," but promised to "consult him later if something developed." Id.

Devlin's testimony indicates that he informed Wendel of the incident several weeks later. Wendel, however, apparently could not recall having met Yormark. His response, according to Devlin, was "I had a lot of people in the home" after the accident. Id. at 21. Wendel's testimony indicates that he had never conferred with Yormark and that Devlin never informed him of the meeting. Wendel Deposition at 10-11.

By June 1970, Devlin had not settled Tormo's accident claim, and she had married, changed her residence to Spain, and obtained Spanish citizenship. Since New York was no longer a proper venue for the action, see 28 U.S.C. § 1391(a), and since Devlin was not licensed to practice outside New York, he contacted Yormark, requesting that he bring suit in New Jersey. Whether either Wendel or Tormo actually participated in Devlin's decision is disputed. Devlin testified that he advised Wendel of his action "when the matter was referred to Yormark." Devlin Deposition at 23. Wendel's testimony flatly contradicts Devlin. He stated that Devlin failed to advise him of his decision until January 1971. At that time, moreover, Devlin allegedly stated that Yormark was a "good well-qualified lawyer." Wendel Deposition at 55-56.

Yormark, meanwhile, had been indicted in 1969 in Essex County, New Jersey, for conspiring fraudulently to obtain money from an insurance company.6 He was subsequently convicted in January 1971, sentenced the following month to two consecutive 18-month prison terms,7

398 F. Supp. 1167
and disbarred in February 1972.8 The facts concerning Yormark's criminal misadventure received coverage in the New Jersey press,9 but Devlin never discovered them until after Yormark had fully executed his scheme. Devlin Deposition at 26. Prior to consulting him, Devlin's only independent inquiry into Yormark's reputation consisted of ascertaining that he was listed as a licensed New Jersey attorney in a lawyers' directory. Id. at 25

Devlin's testimony indicates that he believed his responsibilities terminated as a result of the transfer. He notified Wendel that "Mr. Yormark was going to handle the case," id. at 39, but never expressly advised him that he considered his own role to have ended. Id. Wendel's testimony indicates that he never understood that to be true. After the transfer, he testified, he contacted Devlin at least twice monthly concerning the case, Wendel Deposition at 19, and Devlin repeatedly assured him that it was progressing well. Id. at 48. Devlin admitted these conversations, but stated that never was any reference made as to his responsibilities in the matter. Devlin Deposition at 39.

Devlin, at any rate, never consulted Yormark concerning resolution of the case after the transfer.10 Yormark communicated nearly exclusively with Tormo in Spain. Tormo, in turn, communicated with Wendel, and Wendel with Devlin. In early 1971 Yormark communicated a $150,000 offer of settlement to Tormo. She mailed him a letter indicating her willingness to accept that figure in February 1971. In March, misrepresenting to her that he needed further evidence of her intent, he induced her to sign a release. The release was delivered personally by one James Clare, an attorney for the insurance company whose services Yormark had solicited. Clare acted as a witness to the signing. Tormo neither read the document, see Tormo Deposition at 53-54, nor retained a copy for her records. Id. at 26.11

Wendel's testimony indicates that he advised Devlin of her signing this document, which he described as "needed for Mr. Yormark to prove that he wasn't bluffing." Wendel Deposition at 43. Wendel could not recall if he described Clare's role in the incident, id. at 50, and there is no indication that Devlin was advised of Tormo's February letter to Yormark. But, Wendel stated, Devlin expressed concern about the nature of the document and indicated that he would investigate the matter. Id. at 50-51. Tormo, further, testified that Devlin telephoned her to obtain a copy of the instrument, but she never complied because she had no copy herself. Tormo Deposition at 25. Devlin's testimony indicates that the call to Tormo never occurred, see Devlin Deposition at 60-61, but that Wendel "may have" advised him that his daughter signed a letter evidencing her willingness to settle. Id. at 62.

Shortly after the release was signed, the insurance company delivered two

398 F. Supp. 1168
drafts totaling $150,000 to Yormark. Yormark, who was then appealing his conviction, and who had apparently been experiencing financial difficulties for several years,12 forged Tormo's endorsement on the larger draft for $148,997. After depositing the item in a trustee account which he maintained at Fidelity, he immediately applied a substantial portion of the proceeds to his own use. See Askin Deposition Testimony at 89

Tormo contacted him five weeks later concerning settlement developments. He assured her that all was well. Tormo Deposition at 29. In July 1971, while visiting her family in New York, she and Wendel met personally with Yormark. Yormark explained that three insurance companies involved in the settlement were debating their respective liabilities. Summer vacations, he warned, would further delay payment. Id. at 32. Wendel's testimony indicates that he communicated the substance of this meeting to Devlin. Wendel Deposition at 70. He purportedly complained of the delay involved, but he conveyed to Devlin no suspicion concerning Yormark. Id. Devlin's testimony indicates that this conversation never occurred. Devlin Deposition at 64-65.

After Tormo returned to Spain, she contacted Yormark nearly monthly. He put her off with similar excuses. In March 1972 she was unable to reach him at his office. Devlin, upon being apprized of this by Wendel, contacted Yormark's office and discovered he had disappeared. His investigation then revealed Yormark's embezzlement scheme.

I

Devlin has predicated his motion for summary judgment against the banks on numerous grounds. His primary contention is that there is no factual issue concerning his own liability to the plaintiffs. Before addressing that contention, however, consideration must be given to Devlin's objection to use of Wendel's and Tormo's...

To continue reading

Request your trial
43 practice notes
  • S.E.C. v. Antar, No. 93-CV-3988 (HAA).
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • November 17, 2000
    ...they were not parties to the action at the time the deposition was taken. The relief defendants rely on Rule 32(a) and Tormo v. Yormark, 398 F.Supp. 1159 (D.N.J.1975), in support of their argument that the deposition testimony is inadmissible against them. Rule 32(a) provides that "[a]t the......
  • Franko v. Mitchell, No. 1
    • United States
    • Court of Appeals of Arizona
    • June 2, 1988
    ...advice given at a cocktail party. Second, Franko asked for and Mitchell gave what appeared to be "legal advice." Tormo v. Yormark, 398 F.Supp. 1159 (D.N.J.1975). Legal advice is often defined as giving an opinion as to the law applicable to the subject matter. Togstad v. Vesely, 291 N.W.2d ......
  • Cartel Capital Corp. v. Fireco of New Jersey
    • United States
    • United States State Supreme Court (New Jersey)
    • January 23, 1980
    ...561 S.W.2d 801 (Tex.Sup.Ct.1978); Gies v. Nissen Corp., 57 Wis.2d 371, 384, 204 N.W.2d 519, 526 (Sup.Ct.1973). Cf. Tormo v. Yormark, 398 F.Supp. 1159 (D.N.J.1975) (applying New Jersey law, the court held a bank, absolutely liable under statute, may seek contribution from a negligent attorne......
  • Erickson v. Erickson, Civ. A. No. 6:94-0089.
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • April 14, 1994
    ...Hughes v. Housely, 599 P.2d 1250 (Utah 1979); Evans v. Steinberg, 40 Wash.App. 585, 699 P.2d 797 (1985). But see Tormo v. Yormack, 398 F.Supp. 1159 (D.N.J. 1975).591 F.2d 1211 (7th Cir. 1979). In that case the defendant brought a third-party complaint against the Commodity Futures Trading C......
  • Request a trial to view additional results
43 cases
  • S.E.C. v. Antar, No. 93-CV-3988 (HAA).
    • United States
    • United States District Courts. 3th Circuit. United States District Courts. 3th Circuit. District of New Jersey
    • November 17, 2000
    ...they were not parties to the action at the time the deposition was taken. The relief defendants rely on Rule 32(a) and Tormo v. Yormark, 398 F.Supp. 1159 (D.N.J.1975), in support of their argument that the deposition testimony is inadmissible against them. Rule 32(a) provides that "[a]t the......
  • Franko v. Mitchell, No. 1
    • United States
    • Court of Appeals of Arizona
    • June 2, 1988
    ...advice given at a cocktail party. Second, Franko asked for and Mitchell gave what appeared to be "legal advice." Tormo v. Yormark, 398 F.Supp. 1159 (D.N.J.1975). Legal advice is often defined as giving an opinion as to the law applicable to the subject matter. Togstad v. Vesely, 291 N.W.2d ......
  • Cartel Capital Corp. v. Fireco of New Jersey
    • United States
    • United States State Supreme Court (New Jersey)
    • January 23, 1980
    ...561 S.W.2d 801 (Tex.Sup.Ct.1978); Gies v. Nissen Corp., 57 Wis.2d 371, 384, 204 N.W.2d 519, 526 (Sup.Ct.1973). Cf. Tormo v. Yormark, 398 F.Supp. 1159 (D.N.J.1975) (applying New Jersey law, the court held a bank, absolutely liable under statute, may seek contribution from a negligent attorne......
  • Erickson v. Erickson, Civ. A. No. 6:94-0089.
    • United States
    • United States District Courts. 4th Circuit. Southern District of West Virginia
    • April 14, 1994
    ...Hughes v. Housely, 599 P.2d 1250 (Utah 1979); Evans v. Steinberg, 40 Wash.App. 585, 699 P.2d 797 (1985). But see Tormo v. Yormack, 398 F.Supp. 1159 (D.N.J. 1975).591 F.2d 1211 (7th Cir. 1979). In that case the defendant brought a third-party complaint against the Commodity Futures Trading C......
  • Request a trial to view additional results

VLEX uses login cookies to provide you with a better browsing experience. If you click on 'Accept' or continue browsing this site we consider that you accept our cookie policy. ACCEPT