LYNDA K. DILLMAN VS. KENNETH PETRIE, ESQ. VS. STEVEN C. CHAIT, CPA/ABC (L-0318-14, PASSAIC COUNTY AND STATEWIDE) ( 2018 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-5250-15T3
LYNDA K. DILLMAN,
Plaintiff-Appellant,
v.
KENNETH PETRIE, ESQ. and PETRIE,
COTRONEO & GOSSNER, LLC,
Defendants/Third-Party
Plaintiffs-Respondents,
v.
STEVEN C. CHAIT, CPA/ABC, and
CHAIT & ASSOCIATES, INC.,
Third-Party Defendants.
________________________________________
Argued May 1, 2018 – Decided August 30, 2018
Before Judges Mawla and DeAlmeida.
On appeal from Superior Court of New Jersey,
Law Division, Passaic County, Docket No.
L-0318-14.
Kenneth S. Thyne argued the cause for
appellant (Roper & Thyne, LLC, attorneys;
Kenneth S. Thyne, on the brief).
John R. Gonzo argued the cause for respondents
(L'Abbate, Balkan, Colavita & Contini, LLP,
attorneys; John R. Gonzo, of counsel and on
the brief; Jason Mastrangelo, on the brief).
PER CURIAM
Plaintiff Lynda K. Dillman appeals the June 27, 2016 order
of the Law Division granting summary judgment in favor of
defendants Kenneth Petrie, Esq., and Petrie, Cotroneo & Gossner,
LLC (PCG), on her legal malpractice claims. We affirm.
I.
The following facts are taken from record. Plaintiff and
Scott Dillman were married in November 1980. On June 29, 2006,
Scott1 filed a complaint for divorce. Plaintiff retained Petrie
to represent her in the divorce proceedings. During the course
of the proceedings Petrie became a partner at PCG.
On January 17, 2008, the parties entered into a property
settlement agreement (PSA). They placed the terms of the agreement
on the record before a court reporter at the office of Scott's
attorney. The PSA provides that plaintiff would receive limited
duration alimony ending on January 31, 2017. In exchange for the
irrevocable termination of alimony in 2017, plaintiff received a
$150,000 credit from Scott's share of the equity in the marital
home. She agreed to purchase Scott's remaining interest in the
1
Because the Dillmans share a last name we identify Mr. Dillman
by first name. No disrespect is intended.
2 A-5250-15T3
marital residence, and he agreed to pay off an outstanding home
equity loan on the home. Scott also agreed to contribute $27,000
towards plaintiff's credit card debt. Plaintiff agreed to be
responsible for child-related expenses while she was the primary
parent of residence, and Scott agreed to pay eighty-five percent
of the college tuition costs for their youngest child's three
remaining years of college. The couple's older child was an adult.
At the time of the divorce, Scott was an equity partner in
PricewaterhouseCoopers (PWC). The PSA provides that Scott's PWC
capital account, and vested pension accounts would be distributed
forty percent to plaintiff and sixty percent to Scott. The
agreement does not address distribution of Scott's unfunded PWC
modified partner retirement plan. At the time the divorce
complaint was filed, Scott had an unvested interest in the
retirement plan. His interest in the plan vested by the time that
the PSA was executed. The plan, however, would not enter pay
status until Scott retired.
On January 25, 2008, the parties appeared in the Family Part
to enter the terms of the PSA on the court record. Plaintiff
testified that she understood the agreement was a compromise, and
agreed it was fair and equitable under the circumstances. She
also stated that she did not have a medical or psychological
condition preventing her from understanding the PSA. Plaintiff
3 A-5250-15T3
acknowledged that she was giving up her right to a trial and that
"we're cutting our losses." Plaintiff told the court that she was
satisfied with defendants' legal services. The court accepted the
terms of the PSA.
On June 29, 2008, the court entered a dual final judgment of
divorce incorporating the terms of the PSA. The judgment stated
that "the parties have each voluntarily entered into the agreement
and have accepted the terms thereof as fair and equitable."
On June 12, 2009, plaintiff filed a motion in the Family Part
to modify the terms of the PSA. In a certification in support of
the motion, she asserted that changed circumstances warranted an
increase in alimony, and a modification to make alimony permanent.
Plaintiff claimed that her economic opportunities had been limited
by mental illness, and that the economic recession had "drastically
affected" her earning potential. The court denied the motion on
August 14, 2009.
In November 2012, plaintiff hired new counsel and filed
another motion to vacate the final judgment of divorce and PSA,
or in the alternative, to schedule a plenary hearing after the
exchange of discovery. Plaintiff argued that at the time she
entered into the PSA she was mentally impaired and did not fully
comprehend its terms. She also argued defendants did not properly
4 A-5250-15T3
counsel her with respect to the settlement agreement, or protect
her interests in the divorce proceedings.
On January 11, 2013, the Family Part denied plaintiff's
motion, finding that she failed to produce sufficient evidence to
show that she had been unable to understand the PSA when she agreed
to its terms. We affirmed that decision on May 21, 2014. Dillman
v. Dillman, No. A-2645-12 (App. Div. May 21, 2014) (slip op. at
19).
On January 27, 2014, almost six years after entry of the
final judgment of divorce, plaintiff filed a complaint against
defendants, alleging legal malpractice and related claims arising
from their representation of plaintiff in the divorce action. She
alleges that defendants counseled her to accept a settlement
agreement that "did not in any way reflect the range of likely
recovery [p]laintiff would receive in her divorce proceeding." In
addition, plaintiff alleges that defendants did not account for
her mental incapacity when counseling her on the settlement. At
the time that plaintiff filed the complaint, the appeal of the
Family Part's denial of her motion to vacate or modify the PSA
based on her mental capacity was pending in this court.
On May 13, 2016, after the parties exchanged discovery, and
after we affirmed the Family Part's denial of plaintiff's motion
to vacate or modify the PSA, defendants moved for summary judgment.
5 A-5250-15T3
At that point, plaintiff had abandoned all but two arguments in
support of her claim of malpractice: (1) that the forty-percent
distribution from Scott's PWC capital account, and vested
retirement assets was insufficient because of defendants'
inadequate advice; and (2) that defendants' failure to consider
Scott's PWC unfunded retirement plan as an asset subject to
distribution resulted in an inadequate settlement.
In support of their motion defendants relied, in part, on the
expert report of Vincent P. Celli, Esq. He opines that the forty-
percent distribution of Scott's PWC capital account, and vested
retirement assets correctly reflects the fact that these were
Scott's business assets. In support of his opinion, Celli notes
that no legal precedent requires that marital assets be distributed
fifty percent to each party. He also opines that the forty-percent
distribution to plaintiff was the product of negotiations which
were motivated, in part, by plaintiff's desire to retain the
marital home. With respect to the unfunded PWC retirement plan,
Celli opines that the plan's value was too speculative to be
quantified at the time that the PSA was negotiated. He notes that
it was possible that the plan might never be funded and that
there being nothing in this record that
identifies how the asset was distributed
between the parties or for what other
consideration it may not have been considered
an asset by the parties at all, the handling
6 A-5250-15T3
of this asset cannot be said to have been
professionally negligent.
Plaintiff opposed the motion. She relied on the expert
reports of Dale E. Console, Esq., and Kalman A. Barson, CPA.
Console, after setting forth the legal standards defining an
attorney's obligations to a client in the context of a distribution
of marital assets, opines that
[t]he agreement divides Scott's capital
account with PWC as well as most of the
retirement assets derived from his employment
with [plaintiff] receiving 40% of those. Mr.
Petrie states in his deposition that that
distribution was because it was his business.
I find no legal basis for that assumption. It
is true that business assets are not always
divided on an equal basis but that is where
the business value is based upon intangible
value including good will which does not exist
in this case. Even when that exists, the
retirement assets are never divided on that
theory. This is a deviation from the standard
of care. The damages that result are the
difference between the 40% [plaintiff]
received and the 50% to which she was
entitled. The differential comes to $31,260.
Conversely, Console's report notes that "[m]atrimonial
litigants often have an [emotional] attachment to the marital
residence" and "are often willing to trade off on other things
solely in order to keep the house." She continues,
[t]he other intangible on any settlement is
the fact that litigants may not want to try
the case. Trials are enormously stressful.
They carry a degree of [uncertainty]. In this
case, if [plaintiff] had tried the case, based
7 A-5250-15T3
on the known facts, she probably would have
received more alimony but she would not have
been able to refinance and keep the house
after a trial. She, at that time, may very
well have been willing to settle for less than
she otherwise might have received in order to
avoid the stress and uncertainties of the
trial and future litigation.
With respect to Scott's unfunded PWC retirement plan, Console
opines that
[t]his is an unfunded retirement plan which
was not vested when the complaint was filed
but was vested by the time of the divorce.
. . . .
This is a substantial marital asset that was
not distributed in the divorce. The fact that
it was not vested when the complaint was filed
is irrelevant under the law. Mr. Petrie was
plainly on notice the asset, which is also
listed on Scott's CIS, existed but failed to
deal with it. That is malpractice. The
damages are the amount that [plaintiff] would
have received. I am not qualified to make
that calculation as it requires an expert.
Mr. Barson is correct that this is not an ERISA
qualified plan and therefore was not eligible
for a Qualified Domestic Relations Order
(QDRO). However, there are plans of this
nature that will allow a Domestic Relations
Order (DRO) which would divide the benefit so
that the alternate payee would receive
periodic payments over time. This should have
been investigated. The preferred method is
to have [the] coverture portion of the plan
valued and paid out as a lump sum but that
requires an expert.
8 A-5250-15T3
Barson's report contains his opinion of the value of Scott's
interest in the unfunded PWC retirement plan. Using a coverture
fraction, Barson opines that Scott's interest in the plan at the
time of the divorce ranged from $342,600 to $463,500. His opinion
is based on present value discount rates of four, five, and six
percent, which he concludes to be "the most likely rates that
would be applied under the circumstances at hand." He provides
no explanation of how he identified those discount rates as the
most likely to be applied, or any data supporting his conclusion.2
The trial court granted summary judgment in favor of
defendants. The court concluded that plaintiff could not prove
she was damaged by any alleged acts of malpractice because she
relied on pure speculation when arguing that had defendants
provided her with better legal advice, Scott would have been
willing to settle for anything other the terms in the PSA, or that
the trial court would have approved distribution to her of anything
more than what was contained in the PSA, if there had been no
agreement. The court explained its reasoning as follows:
No one, no one, particularly plaintiff's
expert, Dale Console, could say what Mr.
Dillman would have settled for.
2
Notably, Console found Barson's expert report "[w]ith certain
exceptions," to be "almost entirely without merit." She does not
identify which portions of Barson's report she finds credible.
9 A-5250-15T3
The only one who could say that is Mr. Dillman.
And actually he can't even say what he would
have settled for, because if he were to say
it now, he'd be in effect saying either I think
I would have settled for something other than
what I did, or I would not have.
. . . .
And, again, . . . it would be a worthless
assumption to try to project what Mr. Dillman
would have agreed to or would not have agreed
to.
And this case can[not] proceed on the
assumption as to what Mr. Dillman would have
agreed to or would not have agreed to if an
alternative settlement opportunity had been
presented to him. He might have jumped at it,
he might not have.
. . . .
And the other critical thing that I think
needs to be noted . . . is, no one could
predict or prognosticate what [the Family Part
judge] would have done if the case did[ not]
settle and [was] tried before him. The only
person who could do that is [the Family Part
judge].
. . . .
So, I am of the opinion that summary judgment
should be granted in favor of the defendants
in this case.
The court also noted that it found Barson's opinion to be "pure
conjecture and speculation" and "beyond . . . a net opinion."
In addition, the trial court held that plaintiff's
malpractice claims were not ripe because she had not moved in the
10 A-5250-15T3
Family Part to vacate or modify the PSA based on the parties'
failure to consider the unfunded PWC retirement plan as an asset
subject to distribution. The court held that were plaintiff to
seek such relief and be unsuccessful, she could then file a
malpractice claim against defendants. The court acknowledged,
however, that such a claim might be time barred.3
This appeal followed.
II.
We review the trial court's decision granting summary
judgment de novo, using "the same standard that governs trial
courts in reviewing summary judgment orders." Prudential Prop. &
Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div. 1998).
Rule 4:46-2 provides that a court should grant summary judgment
when "the pleadings, depositions, answers to interrogatories and
admissions on file, together with the affidavits, if any, show
that there is no genuine issue as to any material fact challenged
and that the moving party is entitled to a judgment or order as a
matter of law." In addition, we review the record "based on our
consideration of the evidence in the light most favorable to the
3
The trial court also held that plaintiff's claims related to her
mental capacity were resolved by this court's May 21, 2014 opinion
and could not be raised in the malpractice action. Plaintiff does
not appeal that aspect of the trial court's decision.
11 A-5250-15T3
parties opposing summary judgment." Brill v. Guardian Life Ins.
Co., 142 N.J. 520, 523 (1995).
"[T]he movant must show that there does not exist a 'genuine
issue' as to a material fact and not simply one 'of an
insubstantial nature'; a non-movant will be unsuccessful 'merely
by pointing to any fact in dispute.'" Prudential, 307 N.J. Super.
at 167 (quoting Brill, 142 N.J. at 524). Self-serving assertions
that are unsupported by evidence are insufficient to create a
genuine issue of material fact. Miller v. Bank of Am. Home Loan
Servicing, L.P., 439 N.J. Super. 540, 551 (App. Div. 2015).
"Competent opposition requires 'competent evidential material'
beyond mere 'speculation' and 'fanciful arguments.'" Hoffman v.
Asseenontv.Com, Inc., 404 N.J. Super. 415, 426 (App. Div. 2009)
(citations omitted).
It is well settled that "the elements of a cause of action
for legal malpractice are (1) the existence of an attorney-client
relationship creating a duty of care by the defendant attorney,
(2) the breach of that duty by the defendant, and (3) proximate
causation of the damages claimed by the plaintiff." Kranz v.
Tiger, 390 N.J. Super. 135, 147 (App. Div. 2007) (quoting McGrogan
v. Till, 167 N.J. 414, 425 (2001)). "[A] lawyer is required to
exercise that 'degree of reasonable knowledge and skill that
lawyers of ordinary ability and skill possess and exercise.'"
12 A-5250-15T3
Brach, Eichler, Rosenberg, Silver, Bernstein, Hammer & Gladstone,
P.C. v. Ezekwo, 345 N.J. Super. 1, 12 (App. Div. 2001) (quoting
St. Pius X House of Retreats v. Diocese of Camden, 88 N.J. 571,
588 (1982)).
A legal malpractice claim is not barred by the settlement of
the underlying lawsuit. Ziegelheim v. Apollo, 128 N.J. 250 (1992).
In Ziegelheim, after "extensive negotiations" in a divorce
proceeding, the client agreed to accept a settlement that she
affirmed on the record was fair and equitable. Id. at 257-58.
Dissatisfied with the settlement, she later sued her former lawyer
for malpractice, alleging that because of the attorney's
inadequate representation, she agreed to a settlement far less
than what she could have obtained had she gone to trial. Id. at
255-57. She alleged that the attorney failed to discover
approximately $149,000 in marital assets and to advise her
adequately about what she might have received if she went to trial
instead of accepting the settlement. Id. at 255-57.
The Supreme Court rejected "the rule . . . that a dissatisfied
litigant may not recover from his or her attorney for malpractice
in negotiating a settlement that the litigant has accepted unless
the litigant can prove actual fraud on the part of the attorney."
Id. at 262. The Court concluded that the "fact that a party
received a settlement that was 'fair and equitable' does not mean
13 A-5250-15T3
necessarily that the party's attorney was competent or that the
party would not have received a more favorable settlement had the
party's incompetent attorney been competent." Id. at 265. The
Court explained that clients rely on their attorneys to advise
them what constitutes a fair settlement under the circumstances,
and that a competent lawyer is obligated to help his client
understand "the likelihood of success" of the case and "the range
of possible awards," even if the client ultimately chooses another
path. Id. at 263. The Court warned, however, that its decision
was not meant to "open the door to malpractice suits by any and
every dissatisfied party to a settlement" and that "[m]any such
claims could be averted if settlements were explained as a matter
of record in open court in proceedings reflecting the understanding
and assent of the parties." Id. at 267.
The holding in Ziegelheim clearly provides that a claim of
legal malpractice alleging deficient advice resulted in a client's
acceptance of an inadequate settlement agreement is a valid cause
of action. It is permissible for a jury, with the aid of expert
testimony, to determine whether a settlement recommended to a
client was outside the range of awards she could have expected to
receive had she been provided with sound legal advice. It is also
permissible for a jury to determine that a client would have
secured a more favorable settlement had she not been provided
14 A-5250-15T3
inadequate advice from counsel. Thus, the trial court here erred
when it held that summary judgment was warranted because no jury
could determine whether plaintiff would have negotiated a more
favorable settlement agreement, or secured a more favorable
outcome at trial, had defendants provided her with adequate legal
advice.
Nor do we agree with the trial court's conclusion that
plaintiff's malpractice claim is not ripe until she unsuccessfully
seeks relief with respect to Scott's PWC unfunded retirement plan
in the Family Part. The Supreme Court rejected this argument in
Guido v. Duane Morris, LLP, 202 N.J. 79 (2010). There, the
defendants in a legal malpractice action urged the Court to
"require that the malpractice plaintiff first try to vacate the
settlement, and that a malpractice claim should lie only if those
efforts fail." Id. at 95. The Court held that while a prior
attempt to vacate a settlement may be a relevant factor, "the
failure to do so cannot be, in and of itself, dispositive" of the
legal malpractice claim. Id. at 96.
We agree with the trial court's conclusion, however, that
plaintiff's experts offered net opinions and affirm the order
15 A-5250-15T3
granting summary judgment on this basis.4 For an expert’s opinion
to be meaningful to the trier of fact, it must be based on credible
facts and data. As we held in Rosenberg v. Tavorath, 352 N.J.
Super. 385, 401 (App. Div. 2002):
As construed by applicable case law, N.J.R.E.
703 requires that an expert’s opinion be based
on facts, data, or another expert’s opinion,
either perceived by or made known to the
expert, at or before trial. Buckelew v.
Grossbard, 87 N.J. 512, 524 (1981); Nguyen v.
Tama, 298 N.J. Super. 41, 48-49 (App. Div.
1997). Under the “net opinion” rule, an
opinion lacking in such foundation and
consisting of bare conclusions unsupported by
factual evidence is inadmissible. Johnson v.
Salem Corp., 97 N.J. 78, 91 (1984), Buckelew,
87 N.J. at 524. The rule requires an expert
to “give the why and wherefore” of his or her
opinion, rather than a mere conclusion.
Jimenez v. GNOC Corp., 286 N.J. Super. 533(App. Div. 1996).
With respect to the distribution of marital assets in the
PSA, Console offered the opinion that plaintiff was "entitled" to
a fifty-percent distribution. Console cites no legal support for
this proposition. In fact, legal precedents reject the notion
that a spouse is presumed to be entitled to an equal share of
marital assets. As we recently stated:
The equitable distribution statute "reflects
a public policy that is 'at least in part an
acknowledgement that marriage is a shared
4
As noted above, the trial court expressly found that Barson
offered a net opinion. Our review of the record leads us to the
conclusion that Console also offered a net opinion.
16 A-5250-15T3
enterprise, a joint undertaking, that in many
ways . . . is akin to a partnership.'" Thieme
v. Aucoin-Theime, 227 N.J. 269, 284 (2016)
(quoting Smith v. Smith, 72 N.J. 350, 361
(1977)). But, equitable is not synonymous
with equal. See Rothman v. Rothman, 65 N.J.
219, 232, n.6 (1974). Our courts must remain
true to the legislative mandate expressed in
N.J.S.A. 2A:34-231, which assures an ordered
equitable distribution to be "designed to
advance the policy of promoting equity and
fair dealing between divorcing spouses." Barr
v. Barr, 418 N.J. Super. 18, 45 (App. Div.
2011). This requires evaluation of unique
facts attributed to each asset.
[Slutsky v. Slutsky, 451 N.J. Super. 332, 358
(App. Div. 2017).]
Console provided no rationale for her conclusion that a forty-
percent distribution to plaintiff was inequitable. Nor does
Console square her opinion with her observation that plaintiff's
desire to maintain the marital home, an outcome not likely if the
matter went to trial, could have influenced her to accept a smaller
distribution of assets than that to which she might otherwise
claim entitlement.
In addition, although Console explains the basis for her
opinion that Scott's PWC unfunded retirement plan is an asset that
should have been considered when negotiating the PSA, she admits
that she does not have the expertise to opine as to value of
Scott's interest in the plan. Barson's opinion on the value of
the plan was rejected by the trial court as a net opinion. We
17 A-5250-15T3
find ample support in the record for the trial court's conclusion.
The key element of Barson's analysis is the correct discount rate
to determine the present value, as of the date of the filing of
the divorce complaint, of Scott's interest in the retirement plan.
He provides three opinions of value based on three discount rates.
He does not explain how he selected those discount rates,
which he describes as "the most likely rates that would be applied
under the circumstances at hand." Barson provides no data,
anecdotal evidence, or other support for his view of the likelihood
that those discount rates would apply. This is precisely the
definition of a net opinion. Nor does Barson opine as to which
of the three rates would be appropriate in this instance. The
three opinions of value that he offers diverge significantly,
underscoring the need for an explanation of the evidence supporting
the three rates.
Affirmed.
18 A-5250-15T3