Zahl v. Eastland

• Decision Date: 22 October 2020
• Docket Number: DOCKET NO. A-3696-19T2
• Citation: 465 N.J.Super. 79,239 A.3d 1063
• Parties: Kenneth ZAHL, Plaintiff-Respondent, v. HIRAM EASTLAND, JR., Eastland Law Offices, and Eastland Law Offices PLLC, Defendants-Appellants.
• Court: New Jersey Superior Court — Appellate Division

465 N.J.Super. 79

239 A.3d 1063

Kenneth ZAHL, Plaintiff-Respondent,

v.HIRAM EASTLAND, JR., Eastland Law Offices, and Eastland Law Offices PLLC, Defendants-Appellants.

DOCKET NO. A-3696-19T2

Superior Court of New Jersey, Appellate Division.

Argued September 14, 2020

Decided October 22, 2020

Bruce D. Greenberg argued the cause for appellants (Lite, DePalma, Greenberg, LLC, attorneys; Bruce D. Greenberg, Newark, on the briefs).

David Maran argued the cause for respondent (Maran & Maran, PC, attorneys; David Maran, Newark, on the brief).

Before Judges Messano, Hoffman and Smith.

The opinion of the court was delivered by

MESSANO, P.J.A.D.

We granted defendants, Hiram Eastland, Jr., and his associated law firms, Eastland Law Offices and Eastland Law Offices, PLLC (collectively, Eastland), leave to appeal the trial court's order denying defendants' motion to dismiss for lack of personal jurisdiction. Plaintiff Kenneth Zahl, a New Jersey resident, alleged Eastland committed legal malpractice and excessively billed him during his unsuccessful representation of Zahl in a federal lawsuit. That suit, filed in the federal district court for New Jersey, alleged, among other causes of action, civil racketeer influenced and corrupt organization (RICO) violations against New Jersey officials and departments arising from the State's prosecution of disciplinary actions against plaintiff and revocation of his medical license. See In re License Issued to Zahl, 186 N.J. 341, 895 A.2d 437 (2006). The facts surrounding the jurisdictional question are essentially undisputed.¹

In June 2005, on the advice of an acquaintance, plaintiff contacted Eastland regarding representation in a potential federal lawsuit alleging systemic corruption in New York's court system, the venue of plaintiff's divorce litigation. Eastland was a resident of Mississippi, and the law firms were located there. He had several phone conversations with plaintiff, met an FBI agent in New York to urge the Bureau's pursuit of plaintiff's allegations, and met with plaintiff in Mississippi several times. Eastland met with plaintiff at Newark Liberty Airport during his trip to New York and came to New Jersey on one other occasion to observe plaintiff's pro se presentation during an administrative hearing regarding his medical license.

In December 2005, Eastland emailed plaintiff a six-page engagement letter. Alluding to prior discussions, Eastland described the document as:

a formal engagement letter for the federal legal issues you and I have been extensively reviewing together since earlier this year for which we have now determined if factually and legally feasible to initiate the next phase of the review and litigation initiative by drafting a detailed legal memorandum and associated draft complaints for potential filing in federal court in New York and/or New Jersey.

Eastland continued, "you are also engaging me to provide legal services involving certain other federal issues, including review of certain [M]edicare billing interpretative and policy issues related to your ... lawsuit filed in the ... District Court of New Jersey." Eastland said plaintiff was engaging him to "potentially file certain federal civil RICO claims, as well as ... review and potentially file certain civil rights federal claims you may have in New Jersey[.]" Eastland described these federal claims as pertaining to "actions engaged in by an agent of the [New Jersey] Attorney General's [O]ffice" in revoking plaintiff's medical license.

Eastland added that if "any related state law issues that require review and legal advice" arose, he would "associate local counsel licensed to practice in the respective states." Eastland further alluded to a prior July meeting with plaintiff at which a retainer was discussed and asked plaintiff to agree to a $50,000 retainer, against which Eastland would draw at a $225 hourly rate for the "next phase" of the case. Plaintiff retained Eastland.²

During May and June 2006, Eastland was apparently very busy representing the former governor of Alabama in a criminal trial.³ Eager to have his complaint filed in New Jersey's federal district court, plaintiff visited Eastland in Alabama to discuss the litigation. Eastland certifies that he told plaintiff they "were nowhere near being able to draft a New Jersey federal RICO complaint without extensive further due diligence review." Nevertheless, plaintiff drafted his own complaint, naming the New Jersey Attorney General and other public officials, as well as the Department of Public Safety and the Division of Consumer Affairs, as defendants. A licensed New Jersey attorney, Robert J. Conroy, filed the complaint in federal district court on plaintiff's behalf.⁴

The district court docket indicates Eastland filed a motion on October 9, 2006, to appear pro hac vice on plaintiff's behalf as co-counsel in the federal suit. Eastland's affidavit stated he was an attorney in good standing in the district court for the Northern District of Mississippi, was "familiar with the rules governing the conduct of attorneys in New Jersey, including the rules of [the district court of New Jersey] and the ... Code of Professional Responsibility," and intended "to adhere to those rules." Additionally, Eastland "agree[d] to comply with all local rules of [the district] [c]ourt, to make payment to the New Jersey Lawyer's Fund for Client Protection [ (the Client Protection Fund) ] pursuant to [Rule ]1:28-2(a) and to take no fee ... in excess of New Jersey Court [Rule ]1:27-7 covering contingent fees." The district court granted Eastland's motion and ordered him to make payment to the Client Protection Fund for all years that the case would be pending in federal court. Eastland acknowledges that he prepared numerous pleadings in plaintiff's federal lawsuit, including amended complaints, motions and responses to motions; the federal docket bears witness to the filings, all of which were made by Conroy as local counsel.⁵

In March 2008, the federal district court dismissed most of plaintiff's claims against the State defendants, including the RICO claims. Zahl v. N.J. Dep't of Law & Pub. Safety, No. 06-3749, 2008 WL 816821 (D.N.J. Mar. 26, 2008). According to plaintiff, Eastland recommended the filing of an amended complaint to reinstate the RICO claims, and the docket reveals that Conroy moved to file an amended complaint. The district court judge denied the motion, and, on September 18, 2009, entered an order dismissing with prejudice all claims against the State defendants. Zahl v. N.J. Dep't of Law & Pub. Safety, No. 06-3749, 2009 WL 3055375 (D.N.J. Sept. 18, 2009).

We need not detail applications that continued to be made in the district court, some admittedly drafted by Eastland, before the litigation finally ended in dismissal of the complaint against all parties. Eastland certifies that he "was essentially removed from the case at that point," plaintiff having retained Verner on appeal to the Third Circuit. On May 18, 2011, the Third Circuit affirmed the dismissal of plaintiff's claims in their entirety.

Zahl v. N.J. Dep't of Law & Pub. Safety Div. of Consumer Affairs, 428 F. App'x 205, 207 (3d Cir. 2011). Eastland was never physically present in New Jersey with respect to any of the federal district court proceedings, although he acknowledged being on a phone conference with the district court judge on one occasion.

Plaintiff filed this complaint in 2016, and Eastland immediately contested personal jurisdiction. We detailed in our prior opinion the fits and starts in the litigation, Zahl I, 2019 WL 2025237, slip op. at 2–7, before Eastland again moved earlier this year to dismiss the complaint for lack of personal jurisdiction.

In a comprehensive written opinion, the judge denied the motion. Reviewing general principles regarding specific personal jurisdiction and several federal and out-of-state decisions involving attorneys from outside the forum state, the judge concluded that "[d]efendants['] admittance pro hac vice in federal court in New Jersey [was] not enough, on its own, to establish specific jurisdiction[.]" The judge further found that defendants "did not, on their own account, seek the [p]laintiff out as a client. ... Plaintiff sought out the [d]efendants, and they, in turn, accepted his request for their services." The judge ultimately determined, however, that defendants

purposely availed themselves of the opportunity to represent the [p]laintiff, a New Jersey resident, in federal court in New Jersey. No case has been cited to this [c]ourt which stands for the proposition that the [c]ourt lacks personal jurisdiction over an attorney who has been admitted to practice before any court in the forum state, whether on a "limited" pro hac vice basis or otherwise. ... [T]he limited persuasive authority on this issue stands for the opposite view.

We granted Eastland leave to appeal the order denying his motion to dismiss.

Eastland contends the motion judge made "several crucial legal errors[,]" in particular, utilizing the more liberal standard applicable to motions to dismiss for failure to state a claim under Rule 4:6-2(e), rather than "the more balanced test for personal jurisdiction motions." Eastland also asserts it was error for the judge to conclude he purposely availed himself of the opportunity to represent plaintiff in New Jersey when it is undisputed plaintiff solicited Eastland. Lastly, Eastland argues that considerations of "fair play and substantial justice" mitigate against having to defend himself in New Jersey's state court. Although our court has considered the exercise of personal jurisdiction over out-of-state attorneys before, we have yet to address the issue under similar facts to those presented here.

I.

We agree with Eastland that a court should not review a motion to dismiss based on lack of personal jurisdiction using the same indulgent standard employed to decide a motion seeking dismissal for failure to state a...