JANET YIJUAN FOU VS. KEVIN KERVENG TUNG, PC (L-6259-12, MIDDLESEX COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE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-4690-18
JANET YIJUAN FOU,
Plaintiff-Respondent,
v.
KEVIN KERVENG TUNG, PC,
and KEVIN TUNG, ESQ.,
Defendants-Appellants.
____________________________
Submitted February 3, 2021 – Decided August 25, 2021
Before Judges Ostrer, Accurso, and Vernoia.
On appeal from the Superior Court of New Jersey, Law
Division, Middlesex County, Docket No. L-6259-12.
Lewis Brisbois Bisgaard & Smith, LLP, attorneys for
appellant Kevin Kerveng Tung, PC (James M. Strauss,
on the brief).
Kevin Tung, Esq., appellant pro se.
Pashman Stein Walder Hayden, PC, attorneys for
respondent (James A. Plaisted and Michael J. Zoller, on
the brief).
PER CURIAM
Following a jury trial and verdict in this legal malpractice case, the court
entered a January 11, 2019 final judgment against defendants Kevin Kerveng
Tung, P.C. (Tung, P.C.) and Kevin Tung, Esq. (Tung) imposing joint and several
liability for $1,547,063.31 in damages ($500,000), attorney 's fees ($702,000),
prejudgment interest on the jury's damages award ($65,250), and prejudgment
interest on the award for attorney's fees and costs ($279,813.31). Defendants
appeal from the final judgment; a June 25, 2018 order denying their motion for
judgment notwithstanding the verdict or a new trial; a May 22, 2019 order
denying their motion for reconsideration of the court's January 28, 2019 order
striking paragraph four of a December 27, 2018 order relating to purported
double recovery; and various evidentiary rulings made by the trial court. Based
on our review of the record and the arguments of counsel in light of the
applicable legal principles, we affirm in part, vacate in part, and remand for
further proceedings.
I.
The legal malpractice claim against defendants arises out of Tung, P.C.'s
and Tung's representation of plaintiff Janet Yijuan Fou in a matrimonial case
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against plaintiff's former husband, Joe Fou (Fou).1 Based on the malpractice
trial record, we first summarize the facts pertinent to the matrimonial matter and
then detail the facts concerning the malpractice case.
Tung's Representation of Plaintiff in the Matrimonial Action
Married in 1975, plaintiff and Fou discussed dissolving their marriage in
2007. On September 22, 2007, they signed an agreement written in Chinese
expressing their intention to divorce and providing that plaintiff would receive
approximately $400,000, representing one-half of the marital assets, and
$10,000 annually in support payments. 2
Shortly thereafter, plaintiff discovered what she described as a draft will
on Fou's computer showing the family had personal and business assets totaling
more than $2,200,000. Around the same time, plaintiff found encrypted
computer records that she later learned in 2013 described family business assets
valued at $2,200,000. In November 2007, plaintiff and Fou signed another
agreement written in Chinese stating plaintiff had received $400,000 and other
1
Tung was employed by Tung, P.C. during his representation of plaintiff in the
matrimonial action. The record shows that subsequent to the entry of the final
judgment in this matter, Tung, P.C. filed for bankruptcy and has advised it is
currently a debtor in possession.
2
English translations of plaintiff's and Fou's putative agreements, which were
written in Chinese, were admitted in evidence at trial.
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property, and providing that the assets of the family business would be "counted
separately."
In 2009, Fou contacted Tung at Tung, P.C., and arranged a meeting to
discuss the filing of an action for an uncontested divorce. On February 15, 2009,
plaintiff and Fou met with Tung. They brought a tax return reflecting Fou's
income, and a typewritten page that included biographical information. During
the meeting, Tung did not inquire about Fou's business or Fou's and plaintiff's
assets. It was decided Tung would represent plaintiff in the divorce matter; Fou
would be the named defendant in the case; and Fou would appear as a self-
represented litigant in the matter.
Plaintiff and Fou brought two new agreements written in Chinese to the
February 15, 2009 meeting with Tung. One of the agreements, labeled "Divorce
Agreement," provided that Fou would pay plaintiff one-third of his salary as
alimony in four installments each year, and plaintiff and Fou would share the
tuition expenses of their younger son and maintain the marital home until their
older son married. The Divorce Agreement further stated plaintiff and Fou had
completed the division of family assets but agreed the "real property and
company assets [were] to be accounted for separately." According to plaintiff,
she and Fou signed three copies of the Divorce Agreement in Tung's presence,
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Tung notarized their signatures, and she, Fou, and Tung each retained a copy of
the agreement. Plaintiff testified Tung retained a copy of the agreement because
he was to translate it into English and incorporate its terms into the divorce
property settlement agreement.
During the February 15, 2009 meeting, plaintiff and Fou also signed a
second agreement, labeled "Supplemental Divorce Agreement," but they did not
show the agreement to Tung or give him a copy. The agreement, which was
written in Chinese, provided that upon the "close of business" of the family's
company, "G&E," plaintiff would receive one-half of the business's assets. The
agreement also provided that plaintiff would assist in the ongoing operation of
the business, and Fou would pay $20,000 into plaintiff's and Fou's medical
expense fund.
Less than two weeks later, on February 27, 2009, plaintiff and Fou again
met with Tung. At the meeting, Fou presented Tung with a putative retainer
agreement for Tung's representation of plaintiff in the divorce proceeding. Tung
later testified he was unaware of New Jersey Court Rule 5:3-5 that required he
have a retainer agreement with plaintiff as his client in the divorce case. The
agreement Fou presented states Tung "acts as the attorney" for plaintiff, but the
agreement did not define or limit the scope of his representation of her. Tung
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testified he was retained solely to act as a scrivener of the terms for the
uncontested divorce, preparing the documents necessary to reflect the agreement
plaintiff and Fou had reached on their own. Plaintiff testified at the malpractice
trial that Tung never advised her of any limitations on his representation of her
in the matrimonial action.
During the meeting, Tung presented plaintiff and Fou with various
documents, written in English, that he and another employee at Tung, P.C.
prepared, including a proposed summons and complaint for divorce, a case
information statement (CIS), and a property settlement agreement (PSA). Tung
reviewed the documents in plaintiff's and Fou's presence. The CIS listed gross
family assets of $234,688 and a prior year's joint income of $77,536.
Plaintiff and Fou signed the PSA, which stated they made a full disclosure
of all assets and income to each other. The PSA further stated that, beginning
in January 2009, Fou would pay one-third of his annual salary as alimony to
plaintiff; each party was responsible for his or her own debts; plaintiff and Fou
would maintain the marital home until their older son married; and plaintiff and
Fou would retain all other assets in their possession with "no further equitable
distribution." The PSA was consistent with the Divorce Agreement plaintiff and
Fou signed on February 15, 2009, and gave to Tung, except the PSA did not
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make a provision separately addressing plaintiff's and Fou's real property and
company assets, and the PSA precluded further equitable distribution of their
assets.
Although Tung and Tung, P.C. represented plaintiff in the divorce, during
the two meetings at Tung's office, the conversations were primarily between
Tung and Fou. Tung testified that during the meetings, plaintiff "didn't talk;
she'd just sit there," and he "always" spoke with Fou. Following the first
meeting, Tung and his office communicated with Fou when additional
information was needed or Fou had questions. During his deposition testimony,
which was read into the record at the trial in the malpractice case, Tung
explained: "Pretty much we dealt with . . . Fou for th[e] divorce case. All the
information we receive is from . . . Fou. Not from [plaintiff]. We didn't talk to
her."
Following the February 27, 2009 meeting, Tung spoke with plaintiff only
during two brief phone calls—one of which was for the purpose of confirming
she was "still alive," and the other to inform her of the court hearing date. At
the subsequent court proceeding, Tung first met briefly with plaintiff and
informed her to answer affirmatively the questions he and the court posed. Fou
did not appear at the court proceeding on the divorce.
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During the proceeding, plaintiff testified through an interpreter and Tung
presented plaintiff with the PSA he drafted in English. As noted, the PSA did
not make a provision for the separate allocation of plaintiff's and Fou's real
property and company assets as set forth in the February 15, 2009 Divorce
Agreement, and the PSA barred plaintiff from seeking any further equitable
distribution of property. The court incorporated the PSA into the final judgment
of divorce, which was entered on May 4, 2009.
In 2009, while living in New Jersey, plaintiff applied for Medicaid
benefits using a New York address and stating she was a New York resident.
Plaintiff did not move to New York until July 2010. Her Medicaid application
stated she received only $600 per month in alimony, and that she had only
$3,000 in assets.3 Her annual Medicaid reapplication forms listed comparable
amounts. The amounts were inconsistent with those set forth in the PSA.
Plaintiff's Medicaid benefits terminated in late 2011, when she turned
sixty-five and qualified for Medicare. The following year, plaintiff received a
letter from the New York City Human Resources Administration demanding
3
Plaintiff testified during the malpractice trial that her net alimony income,
after paying her son's tuition, was $600 per month, and the value of the total
assets in her name was $3,000, at the time she completed the Medicaid
application.
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repayment of her Medicaid benefits because she had applied for Medicaid in
New York before moving there. Plaintiff settled the claim in May 2015; she
agreed to repay $10,500, and she acknowledged the Medicaid benefits were
"incorrectly received." Plaintiff's settlement agreement states plaintiff's
payment "is not to be construed as an admission of wrongdoing." Following the
filing of plaintiff's malpractice case against him, Tung alerted authorities of
potential fraud in plaintiff's application for Medicaid benefits.
Plaintiff Retains New Counsel
In April 2011, plaintiff sought a division of the business assets from Fou
pursuant to the Divorce Agreement. Fou refused. Plaintiff first contacted Tung,
but later retained her current counsel to reopen the matrimonial action and set
aside the PSA. At the same time, plaintiff retained her current counsel on a
contingent fee basis to pursue a malpractice action against Tung and Tung, P.C.
The contingent fee agreement initially provided counsel would receive thirty-
three-and-a-third percent of any recovery, and later was amended to provide
counsel would receive fifty percent of the first $500,000 recovered and thirty-
three-and-a-third percent of anything over $500,000, with counsel paying all
disbursements.
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Plaintiff's Motion to Vacate the Judgment of Divorce and PSA
In September 2011, plaintiff's counsel filed a motion to set aside the
judgment of divorce and the PSA, and to obtain discovery of Fou's income and
assets. Fou opposed the motion.
In support of the motion, plaintiff submitted a certification describing the
contents of the four agreements between her and Fou that had been written in
Chinese (the Chinese agreements) and Tung's reliance on Fou for the
information used to draft the PSA and documents for the matrimonial matter.
Plaintiff certified that because of her limited ability to understand English, she
did not realize the PSA omitted the terms of the agreements written in Chinese
between her and Fou regarding the business assets. She asserted Tung did not
ask her about other agreements during his representation or "mention the
'Chinese [a]greements' previously executed" to the court at the divorce hearing
on May 4, 2009. She further certified Fou concealed assets in China.
On December 2, 2011, the Family Part ordered a plenary hearing on the
enforceability of the PSA. In 2012, the court conducted a four-day hearing
during which Tung testified as a witness for Fou, advocating in favor of the
validity of the PSA, and acknowledging he prepared the PSA in accordance with
Fou's instructions. Fou acknowledged making wire transfers to China in
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connection with his business in an amount of close to $1,000,000. He disputed
the $2,200,000 figure in his draft will but acknowledged sending the encrypted
financial information to his son, which included figures supporting an asset
valuation of $2,200,000.
In September 2012, the court rendered an oral opinion and entered an
order finding the PSA to be null and void. The court found invalid the retainer
agreement between plaintiff and Tung, and determined Tung did not provide
independent counsel to plaintiff. The court also found plaintiff was
"manipulated through th[e] divorce process" because Fou was the "conduit of
all information" with Tung. The court further held the PSA was inconsistent
with the Chinese agreements between plaintiff and Fou, and that all the
agreements were invalid. The court's order barred plaintiff and Fou from
transferring, selling, or encumbering any marital assets, and directed that a
plenary hearing be held to address equitable distribution and alimony.
Fou did not cooperate or provide discovery in the reopened matrimonial
litigation. The court suppressed his pleadings with prejudice and entered a
default against him. The court later ordered Fou to pay $7,929 in counsel fees
in connection with his failure to provide discovery. The court directed that
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plaintiff submit a notice of equitable distribution under Rule 5:5-10. Plaintiff
complied with the court's order.
In February 2014, a different judge held a plenary hearing to determine
equitable distribution and alimony. The court found the evidence, including
plaintiff's testimony as to the couple's assets and Fou's draft will, and "many
thousands of other pages," demonstrated assets totaling $2,200,000. Fou did not
appear for the hearing and therefore did not dispute the value of the marital
assets.
The court entered an Amended Final Judgment of Divorce (AFJD)
awarding plaintiff: permanent annual alimony in the amount of the greater of
$18,000 or one-third of Fou's income; $1,100,000, representing one half of the
total value of the family business as of November 2007; and a share of any
subsequent increase in the business's value. The court further permitted
plaintiff's filing of a lis pendens on property Fou purchased in North Carolina.
The court also awarded plaintiff $229,389.69 in counsel fees.
Fou appealed from the AFJD. We affirmed the order and the court's
counsel fee award. See Fou v. Fou, No. A-1569-14 (App. Div. July 21, 2016)
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(slip op. at 24-25). The Supreme Court denied Fou's petition for certification.
See Fou v. Fou, 238 N.J. 370 (2019). 4
Following entry of the AFJD, plaintiff was unable to collect on the
judgment, aside from her attachment of Fou's social security benefits. In
November 2017, the court issued an arrest warrant for Fou for unpaid alimony
and equitable distribution, but it appears Fou resides in China. The court's order
states Fou had "not complied with any of the [AFJD's] equitable distribution"
requirements.
The Malpractice Action Against Tung and Tung, P.C.
In her malpractice action, plaintiff alleged defendants were negligent in
their representation of her in the initial uncontested divorce case. Plaintiff
alleged defendants were negligent by failing to: conduct discovery of her and
Fou's assets; include key terms from the Chinese agreements in the PSA; and
address in the PSA "issues that necessarily arise in a [d]ivorce proceeding,"
including the division of the family's business assets. Plaintiff alleged
defendants' negligence deprived her of her share of the marital business assets,
4
In the fall of 2018, Tung filed a motion to intervene in the underlying
matrimonial action, and the Family Part denied the motion. On June 12, 2020,
we issued an opinion affirming the denial of the motion to intervene in Fou v.
Fou, No. A-2145-18 (App. Div. June 12, 2020) (slip op. at 9). We also denied
plaintiff's motion for fees and costs incurred in responding to Tung's motion .
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real property, and other assets, and caused her to incur expenses and legal fees
to vacate the PSA and obtain the AFJD. Defendants filed an answer denying the
allegations. The court stayed the malpractice action pending the disposition of
Fou's appeal from the AFJD in the matrimonial case.
On May 13, 2014, plaintiff made a $400,000 offer of judgment in the
malpractice action. Tung denied his malpractice carrier authorization to accept
entry of judgment in response to plaintiff's offer.
The Malpractice Trial
During the 2018 malpractice trial, plaintiff called Tung as a witness. He
testified he did not provide plaintiff with a statement of client rights and
responsibilities or a retainer agreement. He acknowledged Fou drafted his
putative agreement with plaintiff. Further, he testified he was retained only to
"prepare the paperwork to obtain a divorce judgment."
Tung explained he corresponded with Fou rather than plaintiff because
Fou spoke better English. According to Tung, it was decided he would represent
plaintiff because Fou "was in a rush to go to China for business." Tung testified
plaintiff did not tell him about any of the Chinese agreements, including the
agreements from September 2007 and November 2007, or the February 15, 2009
Supplemental Divorce Agreement.
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Tung testified plaintiff and Fou gave him the February 15, 2009 Divorce
Agreement that he notarized at the end of their meeting that day. He explained
that he did not read it, review it, or offer any opinion on its contents and instead
"was asked to do a notary" and merely served as a "witness for the signature[s]."
Tung acknowledged he nonetheless told plaintiff and Fou the agreement would
not be binding, and that only the PSA would be binding. He testified he did not
give plaintiff any advice concerning the agreement or determine if signing the
agreement was in her best interests. He stated he did not keep a copy of the
agreement because he did not have a copier in his New Jersey office. His records
from the meeting, however, include copies of plaintiff's and Fou's driver's
licenses.
An attorney who represented plaintiff in the Family Part in connection
with the motion to vacate the PSA testified concerning plaintiff's certification in
support of the motion. He explained the certification did not assert that the four
Chinese agreements were given to Tung and that, instead, plaintiff certified
Tung never asked plaintiff about the existence of any agreements between Fou
and her. The attorney further testified that encrypted financial records were
admitted into evidence at the plenary hearing in the Family Part, and the records,
including Fou's draft will, reflected plaintiff and Fou had $2,200,000 in assets.
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Plaintiff testified on her own behalf. She explained Fou handled the
finances during the marriage, and most of the family's bank accounts were in
Fou's name. Plaintiff testified that prior to the meeting with Tung, she
understood the family's business assets were worth $2,200,000.
Plaintiff also testified that, at their first meeting with Tung, Fou brought
three copies of the Divorce Agreement, but he did not bring the two 2007
agreements. She did not ask Tung for his opinion about the Divorce Agreement
or for legal advice before signing it. Plaintiff explained she and Fou each kept
a copy of the signed agreement, and Tung kept one for himself so he could
translate it to English. According to plaintiff, Tung said he needed a week to
translate the document and prepare the divorce papers, and he told her she would
be the plaintiff in the divorce action because she was unhappy in the marriage.
Plaintiff testified Tung did not ask her about equitable distribution, child
support, or insurance.
Plaintiff also described the February 27, 2009 meeting, explaining Tung
and Fou spoke with each other and she did not participate in the discussion. The
meeting lasted approximately thirty minutes, and she signed many documents
which were to be sent to the court. On the day of the divorce proceeding,
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plaintiff met with Tung briefly at the courthouse, but he did not go over the
documents with her.
In 2011 or 2012, Fou stopped making support payments to plaintiff. Fou
also refused to share the family business assets with her. In March 2011,
plaintiff met with Tung to discuss obtaining her share of the business assets from
Fou. She showed Tung the February 15, 2009 Divorce Agreement, and he told
her it was poorly written and that it would cost her a lot of money to recover
anything from Fou. Plaintiff then realized the PSA did not address the division
of the business assets, and she obtained new counsel. Plaintiff testified she
incurred legal fees totaling $449,798.59 to vacate the PSA and judgment of
divorce and obtain the AFJD against Fou.
Plaintiff also testified she never received the promised $400,000 payment
from Fou, but instead received access to a mutual fund account with
approximately that amount, titled in Fou's name. The account was later
supplemented by an additional $62,276.50 plaintiff netted from a $100,400
payment from Fou. Plaintiff purchased an apartment in New York with the
funds from the account. Plaintiff explained the marital residence was sold but
she did not receive the proceeds from the sale because she gave them to her older
son.
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Plaintiff called Edward J. O'Donnell, Esq., as an expert witness in
matrimonial law. O'Donnell reviewed the fee agreement Fou prepared, the PSA,
the divorce complaint, transcripts of the matrimonial proceedings, the AFJD, the
malpractice complaint, and Tung's deposition transcript, as well as "some
miscellaneous correspondence."
O'Donnell opined that Tung deviated from the standard of care for a
matrimonial attorney, as established by both acceptable practice and the Rules
of Professional Conduct, during Tung's representation of plaintiff. O'Donnell
testified Tung deviated from the standard of care by: meeting with plaintiff in
Fou's presence because privacy is required for candid communications between
an attorney and client; failing to inquire of plaintiff, his client, about marital
assets and income, and whether either plaintiff or Fou had a will; and failing to
take any steps to verify the parties' assets and instead accepting the information
provided by Fou, who was the adverse party. O'Donnell opined that the PSA's
declaration there was full disclosure between the parties concerning marital
assets and income was incorrect. He testified standard practice required that
plaintiff execute a formal waiver if she intended to disclaim her rights to Fou's
business interests.
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O'Donnell also testified the record showed no "real communications as
between . . . Tung and [plaintiff]," and extensive communications between Tung
and Fou, the "adverse party." O'Donnell testified that Tung did not advise
plaintiff of her options, inform her of her right to obtain discovery of Fou's
financial information, or make plaintiff "aware of what [her] rights are."
O'Donnell also opined the Chinese agreements should have been incorporated
into, or at least referenced in, the PSA, but that Tung could not have done so for
the agreements that neither plaintiff nor Fou disclosed to him.
Further, O'Donnell testified Tung deviated from the standard of care
barring an attorney from representing both sides in a matrimonial case.
O'Donnell found it was clear Tung represented plaintiff, but O'Donnell
explained it was unclear whether Tung also represented Fou because Tung may
have formed an attorney-client relationship with plaintiff and Fou, and Tung
conducted himself as though he represented Fou. O'Donnell also opined Tung
deviated from the standard of care requiring candor with the tribunal because,
during the uncontested divorce proceeding, he failed to ask plaintiff whether she
read and understood the PSA.
Finally, O'Donnell testified Tung deviated from the standard of care
requiring written retainer agreements because the document Fou provided to
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Tung did not comport with Rule 5:3-5. O'Donnell also noted the agreement did
not include any limitation on the scope of Tung's representation of plaintiff in
the uncontested divorce proceeding as required if his representation was subject
to the limitation that he serve only as scrivener as he contended.
O'Donnell explained plaintiff experienced adverse consequences as a
result of Tung's deviations from the standards of care. O'Donnell opined
plaintiff "lost time and she lost opportunity" in her negotiations with Fou,
waived her equitable interest in marital assets, including the couple's business
assets, and lost leverage in resolving financial issues with Fou during the divorce
proceeding. According to O'Donnell, plaintiff's loss is equal to "whatever she
would have gotten ultimately by way of the divorce." O'Donnell also explained
that as a result of defendants' deviations from the standards of care, plaintiff
incurred counsel fees and costs to set aside the first judgment of divorce and
obtain the AFJD. O'Donnell was not sure if Fou transferred or dissipated any
assets between February 2009 and September 2012, when the AFJD was entered.
Chunsheng Lu, an expert in the field of "Chinese law as it relates to
American law," testified for plaintiff by video. Lu testified a New Jersey
Superior Court matrimonial judgment would not be recognized or enforced in
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China because there is no treaty between China and the United States providing
for enforcement of judgments.
Following presentation of plaintiff's evidence, defendants moved for an
involuntary dismissal, arguing plaintiff failed to present evidence establishing
they deviated from the standard of care. Defendants further argued plaintiff
failed to present evidence establishing causation because plaintiff did not
demonstrate Fou depleted or transferred any assets following entry of the
original judgment of divorce and prior to entry of the AFJD. Defendants also
argued plaintiff would obtain a "double recovery" if the jury awarded damages
because she also could recover for the same alleged losses from Fou under the
AFJD.
The court denied the motion, finding O'Donnell's testimony established
defendants' alleged deviations from the applicable standards of care, and that
evidence showing Fou purchased a home in North Carolina demonstrated he had
the opportunity to move assets following the initial judgment of divorce. The
court declined to address defendants' double-recovery contention, explaining it
would consider the claim if the jury awarded compensatory damages.
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Tung testified that Chinese was his native language, and that he earned
his undergraduate and graduate degrees in the United States. He explained he
practiced law for twenty years and had handled "at least 500" matrimonial cases.
Tung acknowledged Fou asked him for assistance in an uncontested
divorce case, and he then met with plaintiff and Fou on February 15, 2009.
During the meeting, they spoke in Chinese.
Fou told Tung he and plaintiff received insurance through a govern ment
program, and they had no children under the age of twenty-one. According to
Tung, he asked them about alimony, pensions, retirement benefits, and the
division of property, but plaintiff and Fou told him that they had resolved those
issues themselves. Tung claimed he told Fou and plaintiff that his representation
was limited to serving as a scrivener in an uncontested divorce, and that he
would not render any legal advice as to the fairness of the division of property.
He also told them the parties waive their right to discovery in an uncontested
divorce. Fou further explained that one of them would have to be designated as
the plaintiff and that he would represent that person only. He explained that
plaintiff appeared to understand. Tung testified plaintiff told him and his staff
to communicate with Fou for any additional information.
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He also explained that at the end of the meeting, plaintiff and Fou asked
him to notarize a document and he did so, but he did not read it and was not
given a copy of that document or any other agreements between plaintiff and
Fou. He testified that had he been given a copy of plaintiff's and Fou's
agreements, he would have included their terms in the PSA.
Tung also described the February 27, 2009 meeting with plaintiff and Fou
during which they reviewed the matrimonial pleadings and the PSA. He testified
he reviewed the PSA with plaintiff line by line, in her native language , and told
her she was waiving her right to discovery of Fou's assets. He also testified
plaintiff did not identify any assets missing from the CIS.
Robert Zaleski, Esq., testified as an expert for the defense in the field of
matrimonial law and the standard of care applicable to Tung's representation of
plaintiff. He identified the pleadings, documents, and transcripts he reviewed
in preparing his report, and he testified Tung did not breach any duty to plaintiff
and did not deviate from the standard of care required. Zaleski opined Tung did
not represent Fou at any time, and that plaintiff and Fou merely wanted Tung to
memorialize the terms of their own agreements and "didn't want any help
negotiating those terms." According to Zaleski, Tung did not have a duty to
provide an opinion as to the fairness of the PSA.
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Zaleski also testified Tung's actions were not the proximate cause of any
damages. He explained the AFJD granted plaintiff the exact relief she sought
in the matrimonial action, including a $1,100,000 judgment against Fou, and
that, as a result, Tung's representation of plaintiff did not result in any losses for
her. Zaleski testified plaintiff could pursue collection of the judgment against
Fou, and Zaleski did not find Tung caused plaintiff to incur counsel fees to
vacate the PSA and initial judgment of divorce. Zaleski acknowledged,
however, plaintiff had unsuccessfully tried to collect on the AFJD, Fou was in
arrears on his alimony obligations, and the court ordered Fou's arrest in
November 2017 because he failed honor his financial obligations under the
AFJD.
At the close the evidence, defendants moved for judgment again, and the
court summarily denied the motion. The jury returned a $500,000 damages
verdict in plaintiff's favor.
Defendants moved for judgment notwithstanding the verdict or,
alternatively, for a new trial, arguing plaintiff failed to prove causation, and that
"the verdict violated basic fairness and judicial estoppel." They alleged plaintiff
did not prove Tung caused her harm, and did not prove the quantum of the
marital estate as of the time of the divorce, or at the time of the Family Part's
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September 12, 2012 order freezing the marital assets. They alleged
misrepresentations in plaintiff's trial testimony concerning the agreements
shown to Tung at the February 15, 2009 meeting, and they again argued plaintiff
might obtain a double recovery because the jury verdict awarded damages for
amounts plaintiff might collect from Fou under the AFJD. Defendants further
argued the court erred by admitting evidence concerning Fou's 2007 draft will,
claiming it constituted inadmissible hearsay as against defendants.
The trial judge issued a written decision on defendants' motion, finding
the trial evidence supported the jury's verdict, and noting plaintiff's damages
included "those legal fees required to invalidate the" PSA and pursue the
malpractice claim.
The court rejected defendants' claim plaintiff provided false testimony at
trial about showing Tung the agreements. The court also found that, contrary to
defendants' claim, plaintiff's certification supporting the motion to vacate the
PSA did not state she showed Tung all of her agreements with Fou. The court
also rejected the claim the 2007 draft will was inadmissible, explaining it was
"probative of the approximate quantum of the marital estate, just as the
Appellate Division concluded [in the matrimonial action]." The court further
found the $500,000 jury award was not inconsistent with the proofs because
A-4690-18
25
there was evidence permitting the jury's estimation of damages with a reasonable
degree of certainty, which is sufficient to support a damages award.
Plaintiff's counsel moved for an attorney's fee award for the services
provided in prosecuting the malpractice action, together with an "enhancement"
of the fees based on the nature of the case and the offer of judgment rule. See
R. 4:58-1 to -6. The claimed fees totaled $1,105,624.58, for which plaintiff
sought a fifty-percent enhancement, for a total of $1,626,162,58. Defendants
opposed the motion. The court issued a letter opinion granting plaintiff's motion
in part, entering an order awarding $702,000 in fees based on a lodestar
calculation.
The court also issued a July 27, 2018 order barring Tung from transferring
assets pending the outcome of an appeal from the judgment, and permitting the
ongoing operation of Tung, P.C. The order further required that defendants file
a bond and defendants' malpractice carrier pay the policy balance into court.
Defendants sought an amendment of the court's July 27, 2018 order
without filing a formal motion. Defendants' proposed amended order included
a provision addressing plaintiff's potential double recovery. The provision
required that plaintiff provide defendants with semi-annual accountings, through
December 31, 2025, of any monies or assets received from Fou. The provision
A-4690-18
26
further required an equal split between plaintiff and defendants of the monies
and assets plaintiff received from Fou, with defendants' share of the split
credited against any sums due to plaintiff from defendants under the final
judgment in the malpractice action.
Plaintiff's counsel opposed the requested amendment to the July 27, 2018
order, but on December 27, 2018, the court entered the proposed amended order
including the double-recovery provision defendants had included. Plaintiff
moved for reconsideration of the amended order, noting the court erroneously
deemed defendants' request for entry of the order unopposed. On January 28,
2019, the court granted the reconsideration motion and entered an order striking
the double-recovery provision defendants had proposed. On May 22, 2019, the
court denied a motion filed by defendants for reconsideration of the January 28,
2019 order. This appeal followed.
II.
A.
Defendants first contend the court erred by denying their motions to
dismiss, for judgment notwithstanding the verdict, and for a new trial, and that
the jury's verdict should otherwise be reversed, because plaintiff failed to prove
they proximately caused her alleged damages. More particularly, they assert the
A-4690-18
27
motions should have been granted for the following reasons: plaintiff failed to
prove she suffered damages resulting from the relief in obtaining the alimony
and equitable distribution of marital assets provided for in the AFJD because
plaintiff failed to present any evidence Fou dissipated any marital assets prior
to entry of the AFJD; O'Donnell's testimony did not establish plaintiff suffered
any financial damages as a result of defendants' negligence; plaintiff is equitably
estopped from claiming damages as a result of any negligence concerning the
preparation of the PSA because she testified in the divorce proceeding that the
PSA was "fair and equitable" and was entered into following a "full disclosure
of all assets"; plaintiff failed to prove she cannot collect the attorney's fees
awarded in the matrimonial action and the marital assets and payments due under
the AFJD directly from Fou, and, as a result, the verdict in the malpractice case
constitutes an impermissible double recovery; and the jury's $500,000 damages
award is not supported by the evidence or applicable law.5
Our review of defendants' arguments is guided by the following
principles. A jury verdict "is cloaked with a 'presumption of correctness,'"
Cuevas v. Wentworth Grp., 226 N.J. 480, 501 (2016) (quoting Baxter v.
5
Tung, P.C. and Tung filed separate briefs on appeal. To the extent their
respective arguments are duplicative or complimentary, we discuss them
collectively for convenience and to avoid repetition.
A-4690-18
28
Fairmont Food Co., 74 N.J. 588, 598 (1977)), and "is entitled to considerable
deference," Risko v. Thompson Muller Auto. Grp., Inc., 206 N.J. 506, 521
(2011). We will overturn a jury verdict only if it "is so far contrary to the weight
of the evidence as to give rise to the inescapable conclusion of mistake, passion,
prejudice, or partiality." Maison v. N.J. Transit Corp., 460 N.J. Super. 222, 234
(App. Div. 2019) (quoting Wytupeck v. City of Camden, 25 N.J. 450, 466
(1957)).
Where a party claims a trial court erred by denying a motion for
involuntary dismissal, we decide whether the evidence, together with the
legitimate inferences that can be drawn from it, sustains a judgment in favor of
the party opposing the motion. R. 4:37-2(b). We must accept as true all
evidence supporting the position of the party opposing the motion and we accord
that party the benefit of all favorable inferences. Dolson v. Anastasia, 55 N.J.
2, 5 (1969).
Similarly, our review of motions for judgment under Rule 4:40-1 and for
judgment notwithstanding a verdict under Rule 4:40-2(b) requires that "we apply
the same standard that governs the trial courts," Smith v. Millville Rescue
Squad, 225 N.J. 373, 397 (2016); that is, "if, accepting as true all the evidence
which supports the position of the party defending against the motion[s] and
A-4690-18
29
according [that party] the benefit of all inferences which can reasonably and
legitimately be deduced therefrom, reasonable minds could differ, the motion[s]
must be denied," ibid. (quoting Verdicchio v. Ricca, 179 N.J. 1, 30 (2004)).
Under Rule 4:49-1(a), a trial court shall grant a motion for a new trial "if,
having given due regard to the opportunity of the jury to pass upon the
credibility of the witnesses, it clearly and convincingly appears that there was a
miscarriage of justice under the law." "An appellate court will not reverse a trial
court's determination of a motion for a new trial 'unless it clearly appears that
there was a miscarriage of justice under the law.'" Delvecchio v. Twp. of
Bridgewater, 224 N.J. 559, 572 (2016) (quoting R. 2:10-1). We give
"considerable deference to a trial court's decision" on a motion for a new trial
because "the trial court has gained a 'feel of the case' through the long days of
the trial." Lanzet v. Greenberg, 126 N.J. 168, 175 (1991).
To prove a claim for legal malpractice, a plaintiff must demonstrate "(1)
the existence of an attorney-client relationship . . . , (2) the breach of that duty
by the defendant, and (3) proximate causation of the damages claimed by the
plaintiff." Jerista v. Murray, 185 N.J. 175, 190-91 (2005) (quoting McGrogan
v. Till, 167 N.J. 414, 425 (2001)). "The burden is on the client to show what
injuries were suffered as a proximate consequence of the attorney's breach of
A-4690-18
30
duty." 2175 Lemoine Ave. Corp. v. Finco, Inc., 272 N.J. Super. 478, 487-88
(App. Div. 1994).
To establish proximate causation of damages in a legal malpractice action,
the plaintiff "must demonstrate that he or she would have prevailed, or would
have won materially more . . . but for the alleged substandard performance."
Lerner v. Laufer, 359 N.J. Super. 201, 221 (App. Div. 2003). "The test of
proximate cause is satisfied where the negligent conduct is a substantial
contributing factor in causing the loss." 2175 Lemoine Ave. Corp., 272 N.J.
Super. at 487; see also Froom v. Perel, 377 N.J. Super. 298, 313 (App. Div.
2005) ("To establish the requisite causal connection between a defendant's
negligence and plaintiff's harm, plaintiff must present evidence to support a
finding that defendant's negligent conduct was a 'substantial factor' in bringing
about plaintiff's injury . . . ." (citation omitted)).
"[T]he measure of damages is ordinarily the amount that the client would
have received [or would not have had to pay] but for his [or her] attorney 's
negligence." Gautam v. De Luca, 215 N.J. Super. 388, 397 (App. Div. 1987);
see also Conklin v. Hannoch Weisman, 145 N.J. 395, 417 (1996). "[D]amages
should be generally limited to recompensing the injured party for his [or her]
economic loss." Gautam, 215 N.J. Super. at 399.
A-4690-18
31
"[M]ere uncertainty as to the amount of damages will not preclude a
recovery even though proof of the amount of damages is inexact. Evidence
which affords a basis for estimating damages with some reasonable degree of
certainty is sufficient to support an award." Viviano v. CBS, Inc., 251 N.J.
Super. 113, 129 (App. Div. 1991) (citation omitted). However, "the 'law abhors
damages based on mere speculation,'" Mosley v. Femina Fashions, Inc., 356 N.J.
Super. 118, 128 (App. Div. 2002) (quoting Caldwell v. Haynes, 136 N.J. 422,
442 (1994)), and a plaintiff must lay a foundation allowing the factfinder to
reach a fair and reasonable estimate of damages with sufficient certainty , id. at
128-29. A legal malpractice plaintiff does not satisfy this burden "by mere
'conjecture, surmise or suspicion.'" 2175 Lemoine Ave. Corp., 272 N.J. Super.
at 488 (quoting Long v. Landy, 35 N.J. 44, 54 (1961)). Damages must be proven
through "competent credible evidence which proves material facts." Lamb v.
Barbour, 188 N.J. Super. 6, 12 (App. Div. 1982).
Defendants' contention plaintiff failed to prove she suffered damages
proximately caused by their negligence is founded on the premise that plaintiff
did not present evidence she suffered a loss of any marital assets or from a failure
to collect payments she would have otherwise received if the terms of the AFJD
had been first included in the original judgment of divorce. Defendants claim
A-4690-18
32
plaintiff failed to prove Fou took any action prior to entry of the AFJD that
resulted in plaintiff receiving less from him than she would have had the original
judgment of divorce included the provisions concerning the division of the
business assets and payment of alimony later included in the AFJD.
Defendants' argument ignores the evidence presented at trial, as well as
plaintiff's entitlement to recover $449,798.59 for fees and costs she incurred in
vacating the PSA and original judgment of divorce and obtaining the AFJD.
Accepting the evidence favorable to plaintiff, as well as the reasonable
inferences from that evidence, plaintiff's and O'Donnell's testimony established
defendants deviated from the standard of care for matrimonial attorneys by:
failing to adequately confer with plaintiff about, and verify, the marital and
family business assets prior to preparing the PSA and proceeding to judgment
in the matrimonial action; failing to properly advise plaintiff concerning her
right to an equitable division of the assets; and failing to incorporate the
provisions of the February 15, 2009 Divorce Agreement, which allowed for a
later division of the marital and family business assets, into the PSA.
O'Donnell and plaintiff further testified that, as a result of defendants'
deviations from the applicable standards of care, plaintiff was required to move
to vacate the PSA and original judgment of divorce and obtain the AFJD. The
A-4690-18
33
evidence showed plaintiff incurred $449,798.59 in attorney's fees and costs to
remedy the errors in the PSA and original judgment of divorce resulting from
defendants' negligence. Thus, the evidence established plaintiff suffered
$449,798.59 in damages as a direct and proximate result of defendants'
negligence. See In re Estate of Lash, 169 N.J. 20, 26 (2001) (explaining a
plaintiff "forced because of the wrongful conduct of a tortfeasor to institute
litigation against a third party . . . can recover the fees incurred in that litigation
from the tortfeasor" and finding "[t]hose fees are merely a portion of the
damages the plaintiff suffered at the hands of the tortfeasor"); see also Lovett v.
Estate of Lovett, 250 N.J. Super. 79, 94 (Ch. Div. 1991) (noting attorney's fees
incurred in litigation that are the "'natural and necessary' consequence" of an
attorney's negligence are recoverable as damages in a malpractice case against
the attorney).
We are therefore convinced plaintiff presented sufficient evidence that the
fees and costs she incurred were the direct and proximate result of defendants'
negligence, and we affirm the jury's damages award in that amount. For the
same reason, we reject defendants' contention the court erred by denying their
motions for judgment, a new trial, and judgment notwithstanding the verdict as
A-4690-18
34
to plaintiff's claim she suffered damages in the amount of $449,798.59 as a direct
and proximate result of defendants' negligence.
The same cannot be said of the $50,201.41 balance of the jury's $500,000
damages award. The trial record is bereft of any competent evidence plaintiff
suffered any actual damages—beyond the fees incurred to vacate the PSA and
original judgment of divorce and obtain the AFJD—as a direct and proximate
result of defendants' negligence. And, in her brief on appeal, plaintiff points to
none. Plaintiff did not present evidence Fou dissipated the marital or business
assets following entry of the original judgment of divorce and prior to entry of
the AFJD, or that she was damaged or suffered any financial losses as a result
of the delay, occasioned by defendants' negligence, in obtaining the relief in the
matrimonial matter with the entry of the AFJD.
Relying on O'Donnell's testimony, plaintiff claims she lost "leverage" in
the initial matrimonial proceeding as a result of defendants' negligence, and she
also contends in a conclusory fashion she was unable to actually collect
payments and her share of the marital assets from Fou that she would have
otherwise collected had defendants' negligence not delayed her from obtaining
the terms later incorporated in the AFJD. Plaintiff's contentions are unsupported
by evidence establishing any actual monetary loss, or monetary loss that can be
A-4690-18
35
reasonably approximated, that was directly and proximately caused by
defendants' negligence. For example, plaintiff did not present any evidence that
had the original judgment of divorce included the same terms as the AFJD, she
would have collected more money or recouped more assets from Fou than she
otherwise did. As a result, the jury's award of damages in excess of the
$449,798.59 in costs and fees she incurred in vacating the PSA and original
judgment of divorce and obtaining the AFJD was based on mere speculation and
is not supported by evidence.
A jury award that is unsupported by the evidence, see Caldwell, 136 N.J.
at 438-40, or is founded on a vague, theoretical damages claim, see McConkey
v. Aon Corp., 354 N.J. Super. 25, 63-64 (App. Div. 2002), cannot be sustained.
Having carefully reviewed the record, we find no competent evidence
supporting the jury's damages award beyond the $449,798.59 in fees incurred
by plaintiff in vacating the PSA and original judgment of divorce and obtaining
the AFJD, and we vacate the $50,201.41 balance of the $500,000 awarded by
the jury. We affirm the jury's damages award in the amount of $449,798.59.
B.
We also reject defendants' claim that plaintiff was equitably or judicially
estopped from asserting a malpractice claim. Defendants assert plaintiff should
A-4690-18
36
have been estopped from asserting in the malpractice case that the PSA was
unfair and did not properly reflect her and Fou's agreement to divide the marital
and business assets because she testified during the divorce proceeding that the
PSA was "fair and equitable" and was made following a "full disclosure of the
assets." Defendants also contend plaintiff made a material omission of fact
during the plenary hearing in the Family Part on her motion to vacate the PSA
and original judgment of divorce by failing to inform the court she did not show
Tung three of the four Chinese agreements when she and Fou met Tung on
February 15, 2009. 6
We find defendants' estoppel arguments lack sufficient merit to warrant
discussion in a written opinion. R. 2:11-3(e)(1)(E). We add only the following.
The doctrine of equitable estoppel prevents a party from repudiating prior
"conduct if such repudiation 'would not be responsive to the demands of justice
and good conscience.'" Carlsen v. Masters, Mates & Pilots Pension Plan Tr., 80
N.J. 334, 339 (1979) (quoting W. Jersey Title & Guar. Co. v. Indus. Tr. Co., 27
N.J. 144, 153 (1958)). "To establish a claim of equitable estoppel, the claiming
party must show that the alleged conduct was done, or representation was made,
6
The three agreements include the two 2007 agreements and the February 15,
2009 Supplemental Divorce Agreement, all of which were written in Chinese
and none of which were provided to defendants by plaintiff or Fou.
A-4690-18
37
intentionally or under such circumstances that it was both natural and probable
that it would induce action." Miller v. Miller, 97 N.J. 154, 163 (1984). "Further,
the conduct must be relied on, and the relying party must act so as to change his
or her position to his or her detriment." Ibid.The purpose of the judicial estoppel doctrine is to protect the integrity of
the judicial process. Cummings v. Bahr, 295 N.J. Super. 374, 387 (App. Div.
1996). A threat to such integrity arises when a party advocates a position
contrary to a position it successfully asserted in the same or a prior proceeding.
Chattin v. Cape May Greene, Inc., 243 N.J. Super. 590, 620 (App. Div. 1990).
Such equitable principles, including the doctrine of "unclean hands," are
"applicable whenever it appears that the litigant seeks to be relieved of the
consequences of a fraud in which he has been an active participant." Prindiville
v. Johnson & Higgins, 93 N.J. Eq. 425, 428 (E & A 1922).
Application of these equitable doctrines is not supported by the evidence
here. Plaintiff's testimony at the divorce proceeding, that the PSA was fair and
the PSA was made following a full disclosure of the marital assets, is not
inconsistent with her subsequent claim defendants failed to include the terms of
the Divorce Agreement in the PSA. To the contrary, plaintiff testified she did
not read the PSA prior to the divorce proceeding, and, during that proceeding,
A-4690-18
38
Tung never asked plaintiff if she reviewed or understood the PSA. Moreover,
plaintiff's testimony during the divorce proceeding was premised on her
understanding that defendants had done what they were retained to do—
incorporate the terms of the Divorce Agreement into the PSA.
There is also no evidence supporting defendants' claim plaintiff misled the
Family Part in her application to vacate the PSA by failing to inform the court
of the existence of the two 2007 Chinese agreements and the February 15, 2009
Supplemental Divorce Agreement, which was also written in Chinese.
Plaintiff's malpractice claim is simply not dependent on those agreements or
whether they were ever shown to Tung. Plaintiff acknowledged during her
testimony in the malpractice case that those agreements were never shown to
Tung. It was defendants' failure to incorporate the February 15, 2009 Divorce
Agreement into the PSA and initial judgment of divorce upon which plaintiff's
malpractice claim is based. There is no dispute that agreement was disclosed by
plaintiff to the Family Part during the proceedings supporting her application to
vacate the PSA and the original judgment of divorce.
In sum, defendants' equitable defenses to plaintiff's malpractice claim find
no support in the evidence. We reject any claim plaintiff is equitably or
judicially estopped from prosecuting her malpractice claim.
A-4690-18
39
C.
Defendants also contend the final judgment should be reversed because it
could result in a double recovery to plaintiff. Defendants contend there is no
evidence establishing that plaintiff cannot collect from Fou the sums for
attorney's fees awarded to plaintiff by the Family Part for her prosecution of her
motion to vacate the PSA and original judgment of divorce, and to obtain the
AFJD, and therefore she could not be properly awarded damages for those fees
by the jury in the malpractice case. 7 We are not persuaded.
In the first instance, the record shows Fou stopped making alimony
payments to plaintiff in 2011 or 2012; Fou relocated to China; the marital
business assets, and Fou's assets, are in China; China will not honor a New
Jersey judgment or order; and the Family Part issued a warrant for Fou's arrest
based on his failure to honor his obligations under AFJD. In addition, the AFJD
requires that Fou pay plaintiff $1,100,000, plus a minimum of $18,000 per
7
We observe that the amount of the fees awarded by the Family Part in the
various proceedings resulting from plaintiff's efforts to vacate the PSA and
original judgment of divorce and obtain the AFJD, including appeals, are not
exactly the same as the evidence in the malpractice showed plaintiff incurred
during the Family Part proceedings. It is unnecessary that we address the
discrepancy because defendants do not challenge plaintiff's testimony during the
malpractice trial that she incurred $449,798.59 in fees and costs prosecuting the
proceedings in the Family Part and on the appeal from the Family Part's orders.
A-4690-18
40
annum in alimony, and $229,389.69 in attorney's fees, but the record shows
plaintiff has been able to attach only Fou's social security benefits as a source
of collecting the enormous sums due. Thus, defendants' claim the evidence does
not demonstrate plaintiff's inability to collect the sums due under the AFJD,
including the attorney's fee award, is undermined by the record.
We recognize "[i]t is fundamental that no matter under what theories
liability may be established, there cannot be any duplication of damages,"
Ptaszynski v. Atl. Health Sys., Inc., 440 N.J. Super. 24, 39-40 (App. Div. 2015)
(quoting P. v. Portadin, 179 N.J. Super. 465, 472 (App. Div. 1981)), but the mere
possibility of a double recovery does not require the reversal of the damages
award on plaintiff's malpractice claim, see, e.g., Distefano v. Greenstone, 357
N.J. Super. 352, 357 (App. Div. 2003) (explaining the plaintiff could properly
receive a $90,000 settlement in an underlying personal injury action without a
deduction for the $30,000 fee otherwise due to her former attorney who
committed malpractice because "the duplicate recovery, even though a windfall
to the plaintiff, is considered the lesser evil to crediting the attorney with an
undeserved fee where he has botched the job").
Moreover, the mere fact that plaintiff might recover monies from Fou
under the AFJD does not equate to a double recovery by plaintiff of the sums
A-4690-18
41
she will collect from defendants based on the jury's verdict. That is because the
damages awarded by the jury in the malpractice case are limited to the attorney's
fees and costs incurred by plaintiff in the proceedings to vacate the PSA and
original judgment of divorce and obtain the AFJD, and the sums due plaintiff
under the AFJD are attributable to equitable distribution ($1,100,000), alimony
(minimum $18,000 annually since around 2012), and other sums wholly separate
from the AFJD's award of damages based solely on attorney's fees and costs. It
is only plaintiff's recovery of attorney's fees from Fou under the AFJD that
provides a potential double recovery for the damages—attorney's fees and costs
in the proceedings to vacate the PSA and original judgment of divorce and obtain
the AFJD—awarded by the jury in the malpractice case. Also, and as noted,
plaintiff presented evidence establishing the collection of anything from Fou is
unlikely.
Under these circumstances, we discern no basis to reverse the jury's
damages award on what appears to be nothing more than an improbable and
theoretical possibility plaintiff might recover some of what is owed to her from
Fou under the AFJD, including a double recovery of the attorney's fees and costs
for which the jury awarded her damages in the malpractice case. As a result, we
A-4690-18
42
affirm the jury's damages award against defendants, as modified by our decision,
in the amount of $449,798.59.
The record shows that in December 2018, defendants submitted a
proposed order to the court purportedly amending a July 27, 2018 order that, in
part, limited defendants from transferring assets and required them to file a
bond. Defendants' submission of the amended order was untethered to any
motion filings, and the order appears to have been submitted as the result of
discussions between the parties concerning issues related to the judgment and
defendants' disposition of their assets. According to plaintiff's counsel,
defendants submitted the order to the court with a representation there was no
objection to its entry.
The order included a provision, proposed by defendants, putatively
addressing the double recovery issue.8 In pertinent part, the provision required
that plaintiff supply defendants with semi-annual accountings of monies
received from Fou through December 31, 2025, and directed that any monies
plaintiff collected from Fou be evenly split between plaintiff and defendants
8
The December 27, 2018 order also addressed other issues not pertinent to this
appeal.
A-4690-18
43
"[t]o ensure there is no double recovery." The court entered the amended order
on December 27, 2018.
Plaintiff moved for reconsideration of the order. As the court explained
in detail in its subsequent written decision, it entered the December 27, 2018
order solely based on an erroneous assumption plaintiff consented to the double-
recovery provision when, in fact, plaintiff had not consented and her counsel
had properly filed an objection to the provision's inclusion in the order. The
court granted plaintiff's motion for reconsideration based solely on its error, and
entered a January 28, 2019 order amending the December 27, 2018 order by
deleting the putative double-recovery provision.
In its written decision on the motion for reconsideration of the December
27, 2018 order, the court noted defendants had not made a formal motion seeking
the relief afforded by the putative double-recovery provision—an accounting of
plaintiff's receipt of funds from Fou as a vehicle to ensure there is no double
recovery. The court further stated counsel for defendants could apply for the
relief "by filing a motion in the ordinary course."
Defendants declined the court's invitation. Defendants never filed a
motion seeking an order providing for periodic accountings of monies received
A-4690-18
44
by plaintiff from Fou to permit an assessment of whether plaintiff obtained a
double recovery and to provide an appropriate remedy for any double recovery.9
Defendants' failure to file a motion seeking the relief set forth in the
proposed double-recovery provision deprived plaintiff the opportunity to
respond, and the motion court of an opportunity to address the merits of the
proposed double-recovery provision in the first instance. "An application to the
court for an order shall be made by motion," R. 1:6-2(a), not a letter.
Defendants' contention the court erred by failing to include the relief in the
proposed provision is tantamount to making its motion for an order including a
double-recovery provision for the first time on appeal. We reject defendant's
belated effort. Defendants' newfound arguments on their claimed entitlement to
an order addressing plaintiff's purported potential double recovery do not go to
the court's jurisdiction or involve a matter of public interest , and, therefore, we
will not consider the arguments for the first time on appeal. Nieder v. Royal
Indem. Ins., 62 N.J. 229, 234 (1973).
9
The certification of counsel supporting defendants' motion for reconsideration
generally requested that the court reconsider its decision to eliminate the double-
recovery provision that defendants included in the December 27, 2018 order, but
the certification offered no facts supporting the request.
A-4690-18
45
We do, however, affirm the court's January 28, 2019 order amending the
December 27, 2018 order because, as the court detailed in its written decision,
it entered the December 27, 2018 order based solely on the mistaken
understanding the order was not opposed by plaintiff. We find no error in that
determination, and defendants do not claim the court erred by reconsidering the
December 27, 2018 order for that reason. We affirm the court's May 22, 2019
order denying defendants' motion for reconsideration of the January 28, 2019
order on the same basis.
D.
Defendants next claim the court erred in its award of counsel fees to
plaintiff. Defendants do not dispute plaintiff is entitled to a counsel fee award
based on her successful prosecution of her malpractice claim against them. As
the Court explained in Saffer v. Willoughby, "a negligent attorney is responsible
for the reasonable legal expenses and attorney fees incurred by a former client
in prosecuting the legal malpractice action." 143 N.J. 256, 272 (1996); see also
Bailey v. Pocaro & Pocaro, 305 N.J. Super. 1, 6 (App. Div. 1997).
Defendants argue only that the court erred by calculating the amount of
fees and costs because plaintiff's retainer agreement with her counsel provided
for a contingent fee, and the court awarded fees exceeding those that would have
A-4690-18
46
been due under the contingency fee arrangement by basing its award on a
lodestar calculation.10 Attorney "fee determinations by trial courts will be
disturbed only on the rarest of occasions, and then only because of a clear abuse
of discretion." Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001)
(citation omitted). An abuse of discretion occurs "when a decision is 'made
without a rational explanation, inexplicably departed from established policies,
or rested on an impermissible basis.'" U.S. Bank Nat'l Ass'n v. Guillaume, 209
N.J. 449, 467 (2012) (quoting Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123
(2007)). We find no abuse of discretion here.
Defendants' argument the court erred by awarding attorney's fees and
costs in excess of the amount to which plaintiff's counsel was entitled under its
contingent fee arrangement with plaintiff ignores that "[t]here is a significant,
material difference between an award of counsel fees under a fee-shifting
statute, court rule, or contractual provision, and a fee dispute between a client
and [his or] her own attorney." Lucas v. 1 on 1 Title Agency, Inc., 460 N.J.
Super. 532, 539 (App. Div. 2019). Thus, "a 'client who has retained an attorney
and promised to pay him [or her] stands on a completely different footing from
10
Plaintiff argues the court erred in its calculation of the attorney fee award
and, as a result, the award was too low. We do not address the argument because
plaintiff did not cross-appeal from the fee award.
A-4690-18
47
the recipient of a fee-shifting allowance,'" ibid. (quoting Gruhin & Gruhin, P.A.
v. Brown, 338 N.J. Super. 276, 281 (App. Div. 2001)), "and the amount a
plaintiff seeks to recover under fee shifting is separate and distinct from the
amount the plaintiff owes [his or] her attorney," id. at 539-40.
In Rendine v. Pantzer, the Court did not limit the plaintiffs' entitlement to
attorney's fees under the fee-shifting provision of the New Jersey Law Against
Discrimination, N.J.S.A. 10:5-1 to -50, to the agreed-upon contingency fee in
the plaintiffs' retainer agreement with their counsel. 141 N.J. 292, 317, 344-46
(1995). To the contrary, the Court allowed for the enhancement of attorney's
fees otherwise due under a contingency fee agreement between a plaintiff and
his or her counsel based on a lodestar calculation and a consideration of various
other factors including, for example, the risk of nonpayment for services
provided under a contingency fee arrangement. Id. at 337-41. The Court further
explained that under a fee-shifting paradigm, the first step in determining the
appropriate fee award is the calculation of the lodestar, which consists of the
hours reasonably expended by counsel multiplied by a reasonable hourly rate.
Id. at 316; see also Packard-Bamberger, 167 N.J. at 445. A court must then
"consider whether to increase that fee to reflect the risk of nonpayment in all
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48
cases in which the attorney's compensation entirely or substantially is contingent
on a successful outcome." Rendine, 141 N.J. at 337.
Defendants rely on our decision in Distefano, where we affirmed the trial
court's rejection of the successful plaintiff's claim in a malpractice case for a
$48,250 fee based on a lodestar calculation in favor of a $30,000 fee under the
contingent fee agreement with the plaintiff's counsel. 357 N.J. Super. at 360-
61. In Distefano, however, we cited Rendine and explained that "[c]ourts
usually use [the lodestar calculation] method in setting fee awards in . . . fee[-
]shifting contexts." Id. at 361. We also noted the plaintiff's attorneys did not
apply "for an enhanced contingent fee." Ibid. Without any further analysis, we
found "no need to resort to a lodestar methodology" because the plaint iff's
attorneys in the underlying matter and malpractice case each "agreed to a one-
third contingent fee," and those agreements "insured appropriate compensation."
Ibid.We find Distefano inapposite. Here, plaintiff applied for an enhanced
contingent fee, and Rendine requires calculation of the lodestar in a fee-shifting
case where such an application is made. See Rendine, 141 N.J. at 334-45(explaining standards for a fee application in a fee-shifting case).
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Defendants do not otherwise challenge the court's thoughtful and detailed
analysis and determination of the lodestar, or its calculation of the attorney's fee
award based on the pertinent factors required by Rendine and R.P.C. 1.5. We
affirm the attorney's fee award substantially for the reasons set forth in the
court's written opinion.
We note the court awarded attorney's fees to plaintiff as a successful
litigant in the legal malpractice action under the principles established in Saffer
and also based on the offer of judgment rule, R. 4:58-1 to -6. The court also
awarded interest on the attorneys' fees awarded in accordance with Rule 4:58-
2(a). Our determination the damages award must be reduced to $449,798.59
renders the relief available under the offer of judgment rule inapplicable because
plaintiff offered to accept judgment in the amount of $400,000, and the reduced
damages award of $449,798.59 is less than 120 percent of the offer of judgment.
See R. 4:58-2(a) (providing for recovery of reasonable litigation expenses and
reasonable attorney's fees where the money judgment obtained is 120 percent or
more of the amount of the offer of judgment). Thus, on the remand for entry of
a new judgment, the court shall vacate the award of interest per Rule 4:58-2(a)
and determine such interest as is otherwise appropriate under the Rules of Court.
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E.
Tung separately makes a series of arguments directed to what he contends
are insufficiencies of plaintiff's evidence and the court's erroneous admission of
evidence. We briefly address the arguments in turn.
Tung contends his failure to incorporate provisions from the agreements
written in Chinese into the PSA did not proximately cause any damages to
plaintiff because the agreements were invalid, the Family Part found the
agreements were unenforceable, and plaintiff therefore could not have recovered
anything under them. We reject the argument because plaintiff's negligence
claim is not based on the validity of the Chinese agreements or on an alleged
inability to enforce them following entry into the PSA. O'Donnell testified that,
independent of the agreements, defendants negligently failed to inquire about
plaintiff's and Fou's marital and business assets in their representation of
plaintiff and preparation of the PSA. Moreover, as noted, plaintiff testified Tung
was given the Divorce Agreement for the purpose of incorporating its terms into
the PSA, and those terms included plaintiff and Fou's agreement to later divide
property and business assets. Tung cites to no legal authority establishing those
terms would have been unenforceable if incorporated into the PSA, and, as
plaintiff demonstrated in the Family Part proceeding, but for Tung's fai lure to
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include those terms in the PSA, plaintiff would not have suffered damages by
incurring the expenses to vacate the PSA and original judgment of divorce and
obtain the AFJD. See Conklin, 145 N.J. at 417 (explaining proximate cause is
established by showing a plaintiff's damages would not have occurred "but for"
the defendant's negligence (citation omitted)). Tung's failure to incorporate
those terms and inquire about the status of the marital and business assets
referenced in the Divorce Agreement support a finding his negligence caused
plaintiff's damages.
Tung also argues the court erred by denying his motion in limine to bar
evidence concerning Fou's will that plaintiff found on a computer in 2007. Tung
contends plaintiff would not have been able to prove her alleged damages
without the admission of the will, which revealed $2,200,000 in marital assets.
We review a court's decision to admit evidence for an abuse of discretion, Estate
of Hanges v. Metro. Prop. & Cas. Ins., 202 N.J. 369, 383-84 (2010), but the
court's decision denying defendants' motion in limine is untethered to a citation
to any legal authority supporting the admission of the will. We need not address
the merits of the court's decision to permit testimony concerning the will,
however, because the testimony, if accepted, established only that plaintiff and
Fou had assets totaling $2,200,000 in 2007, and, prior to the malpractice case,
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the Family Part decided as a matter of fact and law that plaintiff and Fou shared
assets valued in that amount, and entered the AFJD granting plaintiff one -half
of that amount in equitable distribution. The AFJD was admitted in evidence in
the malpractice case and it showed the Family Part's division of the marital
assets. Thus, the admission of the testimony concerning Fou's will was merely
cumulative and harmless. Additionally, plaintiff's damages award, as modified
by our decision, does not include any amounts for any claimed loss of marit al
assets due to defendants' negligence. Thus, even if the will was admitted in
error, it does not require or permit a reversal of the court's final judgment. See
R. 2:10-2.
Tung also claims plaintiff's resolution of Medicaid's claim for
reimbursement of her benefits constitutes "an unimpeached guilty plea in a
criminal proceeding [that] bars recovery in a legal malpractice action." We
reject the claim in the first instance for the simple, but dispositive, reason that
plaintiff was never charged with a criminal offense related to her collection of
Medicaid benefits and there is no evidence she ever pleaded guilty to anything.
Moreover, Tung's claim, that our decision in Alampi v. Russo, 345 N.J. Super.
360 (App. Div. 2001), stands for the broad proposition that a plaintiff who pleads
guilty to a criminal offense may not assert a legal malpractice claim against his
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or her lawyer, is frivolous. We need not distinguish the facts and circumstances
in Alampi from those extant here other than to note that no reasoned reading of
the case permits a supportable argument that it stands for the proposition
asserted by Tung. His claims to the contrary do not merit any further discussion.
R. 2:11-3(e)(1)(E).
Tung further argues the court erred by admitting the Family Part's decision
on plaintiff's motion to vacate the PSA and the original judgment of divorce,
and our decision affirming the Family Part's order. Tung generally argues he
was not a party to those proceedings and the admission of those documents
resulted in a denial of due process as to him and a "fraud upon the court." We
find no merit to Tung's arguments. The court did not abuse its discretion by
admitting the opinions as evidence of the proceedings in the Family Part that
were required to obtain relief from the PSA and original judgment of divorce
that were entered as a result of Tung's negligence. Pursuant to defendants'
request, the trial court redacted the opinions to eliminate any findings
concerning, or references to, defendants' negligence. Tung makes no showing
the court abused its discretion in admitting the redacted opinions, and he also
fails to demonstrate that, even if they were entered in error, their admission was
clearly capable of producing an unjust result. R. 2:10-2. Nor could he
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demonstrate prejudice because the testimonial evidence otherwise established
plaintiff successfully moved to vacate the PSA and original judgment of divorce
and obtained the AFJD in the Family Part, and that those proceedings were
required because Tung negligently failed to obtain for plaintiff that to which she
was entitled when he represented her in the divorce proceeding.
Tung also argues for a reversal of the jury's verdict and the court's orders
denying the motions for judgment, for judgment notwithstanding the verdict,
and for a new trial, because the court erred by sustaining plaintiff's objections
to the admission of attorney-client communications and work product
documents that were inadvertently turned over during discovery; providing
purported erroneous mid-trial instructions to the jury concerning "negligence"
and "discovery"; and permitting the reading of portions of his deposition
testimony to the jury. We find each of the arguments lack sufficient merit to
warrant discussion in a written opinion, R. 2:11-3(e)(1)(E), except we note the
arguments are not supported by the facts or applicable law, and Tung fails to
demonstrate that any of the purported errors were clearly capable of producing
an unjust result, R. 2:10-2.
In sum, we affirm the court's orders denying defendants' motions for
judgment, for judgment notwithstanding the verdict, and for a new trial. We
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also affirm the court's January 28, 2019 order granting plaintiff's motion for
reconsideration of the December 27, 2018 order, and we affirm the court's May
22, 2019 order denying defendants' motion for reconsideration of the January
28, 2019 order. We vacate that portion of the final judgment awarding plaintiff
$500,000 in damages, and awarding plaintiff interest pursuant to Rule 4:58 on
the attorney's fee award, and otherwise affirm the other provisions of the
judgment. We remand for the court to enter a revised judgment awarding
plaintiff $449,798.59 in damages and providing for interest on the attorney's fee
award in accordance with the Rules of Court.
Any arguments we have not directly addressed are without sufficient merit
to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed in part, vacated in part, and remanded for further proceedings.
We do not retain jurisdiction.
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