TREVOR SHEPPARD VS. FRANK J. LENTZ, ESQUIRE (L-2083-13, ATLANTIC AND CAPE MAY COUNTIES 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NOT FOR PUBLICATION WITHOUT THE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-0131-16T4
TREVOR SHEPPARD,
Plaintiff-Appellant,
v.
FRANK J. LENTZ, ESQUIRE,
and THE LAW OFFICES OF
FRANK J. LENTZ, LLC,
Defendants,
and
PERSKIE, WALLACH, FENDT &
HOLTZ, PC, (n/k/a
PERSKIE & FENDT, PC),
and M. DANIEL PERSKIE,
ESQUIRE,
Defendants-Respondents.
_______________________________
Argued May 31, 2018 – Submitted June 26, 2018
Before Judges Alvarez and Geiger.
On appeal from Superior Court of New Jersey,
Law Division, Atlantic and Cape May Counties,
Docket No. L-2083-13.
Thomas B. Duffy argued the cause for
appellant.
Matthew S. Marrone argued the cause for
respondents (Goldberg Segalla, LLP,
attorneys; Matthew S. Marrone, on the brief).
PER CURIAM
Plaintiff Trevor Sheppard appeals from a July 27, 2016 order
granting defendants Perskie, Wallach, Fendt & Holtz, PC and M.
Daniel Perskie (collectively, the Perskie defendants) summary
judgment and denying plaintiff's cross-motion for leave to file
an amended complaint. We affirm.
We glean the following facts from the record. On August 4,
2003, plaintiff and his friends, Kevin Farrell and Scott Knoedler,
were occupants of a vehicle involved in a collision with another
vehicle. Plaintiff was a passenger; it was unclear who was
driving. Plaintiff suffered serious facial and dental injuries.
Plaintiff, Farrell, and Knoedler retained the Perskie
defendants to represent them in their personal injury claims
arising out of the accident. On August 12, 2003, plaintiff entered
into a standard-form contingency fee agreement with the Perskie
defendants regarding his personal injury claim.
Perskie, the attorney handling the matter, subsequently
determined he had a conflict of interest in representing plaintiff
and the other two claimants due to a dispute over who was driving
the vehicle they occupied on the night of the accident. As a
result, Perskie referred plaintiff to defendant Frank J. Lentz,
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an attorney in a separate law firm with offices in a different
suite in the same building as Perkie's office, to represent
plaintiff on the personal injury claim. Lentz then commenced a
personal injury lawsuit on behalf of plaintiff. Farrell and
Knoedler retained other counsel. Perskie continued to represent
plaintiff on his personal injury protection benefit (PIP) claim
for medical expenses against his own automobile insurer.1
At all relevant times, Lentz was licensed to practice law in
New Jersey. The license was in good standing. He had never been
the subject of any prior disciplinary charges or sanctions. There
is no evidence he was under criminal investigation or had
previously committed legal malpractice.
The Perskie defendants did not seek or obtain a referral fee
from Lentz. They did not enter into a fee-sharing agreement with
Lentz. They did not seek, expect, or receive compensation from
Lentz for the services they rendered on the personal injury claim
before it was referred to Lentz. Attorneys in their office
performed no further legal services on the personal injury file
after it was referred to Lentz.
1
The Automobile Reparation Reform Act, N.J.S.A. 39:6A-1 to -20,
requires insurers of private passenger vehicles to provide
enumerated PIP benefits, including medical expense benefits, to
occupants of automobiles injured in a motor vehicle accident
without regard to fault. N.J.S.A. 39:6A-4.
3 A-0131-16T4
Plaintiff contends this transfer occurred after Perskie
introduced plaintiff to Lentz following a "walk down the hallway."
Plaintiff argues neither attorney informed him of whether there
was joint representation or a referral fee. He claims Perskie's
staff continued to work on plaintiff's case after his referral to
Lentz. As evidence, plaintiff claims members of Perskie's law
firm arranged for service of Sheppard's complaint against Farrell
and continued to represent plaintiff in his PIP action against his
insurer.
Lentz retained Frank Larkins to serve Farrell, whom plaintiff
claims is the investigator for the Perskie firm. The Perskie
defendants contend the PIP action remained wholly separate from
the personal injury action filed against third parties.
Plaintiff contends Lentz mishandled the personal injury
action by failing to name two potentially liable parties as
defendants and by failing to assert a claim for negligent
entrustment against Farrell. Specifically, the complaint did not
name Knoedler as the negligent driver of the vehicle in which
plaintiff was riding or the Borgata Hotel Casino & Spa (Borgata)
under a dram shop theory of liability.2 The three actions brought
2
Although Lentz eventually filed an amended complaint asserting
a dram shop claim against the Borgata on behalf of plaintiff,
Lentz filed it after the two-year statute of limitations had
expired.
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by plaintiff, Farrell, and Knoedler were consolidated and
proceeded to trial.
In our prior opinion, Farrell v. Knoedler, we summarized the
evidence produced at trial:
On August 3, 2003, at approximately 11:30
p.m., Trevor Sheppard, Farrell, and Knoedler
left their home in Farrell's truck. Knoedler
was the driver. They went to a bar, where
they stayed and were drinking until closing
at 2:00 a.m. Knoedler drove the men back to
their house. During the ride, Sheppard sat
on the passenger side because he is deaf in
his right ear. Farrell sat in the middle of
the truck's bench seat.
At the house, the men continued to drink.
After about an hour, Knoedler drove the men
to the Borgata in Atlantic City. He drove
because he was the "most sober." Again,
Farrell sat in the middle and Sheppard sat on
the right.
At approximately 4 or 5 a.m., after
drinking additional alcoholic beverages, they
left the Borgata. They do not remember
whether Farrell or Knoedler was driving.
Their truck ran a red light and collided
with another vehicle. The driver-side airbag
deployed. Farrell was ejected from the truck
and was pinned under the passenger side front
tire.
[No. A-5451-06 (App. Div. June 10, 2008) (slip
op. at 2-3).]
The jury found Knoedler was the driver. Because Lentz did
not name Knoedler or the Borgata as defendants, and did not plead
a negligent entrustment claim against Farrell, plaintiff did not
5 A-0131-16T4
recover any damages for his injuries, despite having stipulated
damages of $150,000. Lentz did not appeal the verdict on behalf
of plaintiff or file a respondent's brief in the appeal filed by
Farrell.
On April 27, 2013, plaintiff filed this action against Lentz,
his law firm, and the Perskie defendants, alleging they committed
legal malpractice. Plaintiff settled his claims against Lentz and
his law firm. As to the Perskie defendants, plaintiff alleged
they negligently referred him to Lentz and failed to follow-up
after the referral to ensure Lentz was "conforming to the standard
of care and professional practice in the profession." The
complaint alleged, in part:
3. Such a referral is legal guidance for
which the referrer remains liable for its own
malpractice in making the referral or for the
malpractice of the firm to whom it refers the
case, or both. In the alternative, it is
asserted that the referring attorney is
strictly liable for the malpractice of the
attorney to whom the case is referred.
4. Mr. Perskie knew or should have known
that Mr. Lentz was mainly a criminal attorney,
having been a former police officer, and that
he was unqualified in personal injury
litigation. As a result, it was legal
malpractice to refer Sheppard's case to Mr.
Lentz. In any case, the referral was made and
Lentz initiated an attorney-client
relationship with Sheppard. However, it was
very unclear to Sheppard whether he had
actually been transferred to a new law firm
as Mr. Lentz seemed to [be] treated as an
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associate in the Perskie Firm, sharing
offices, assistants and machinery.
Plaintiff also alleged the Perskie defendants were strictly
liable for Lentz's errors because Lentz was their agent or partner
or operating under some other legal status.
Perskie and Lentz practiced in different law firms located
in separate office suites in the same building. Although Perskie
retained the PIP claim, his involvement in the personal injury
action ended upon referral of that claim to Lentz. Perskie did
not draft, sign, or file any pleadings in the personal injury
case. He did not attend any conferences between plaintiff and
Lentz after the referral. Nor did he attend any depositions or
court appearances in the personal injury action.
Notably, the complaint states "Lentz had an easy job to do"
and that "discovery in the [personal injury] action seems to have
proceeded with few incidents."
Plaintiff filed the malpractice action in Atlantic County
However, the complaint stated venue "may have to be changed because
a member of the Atlantic County Bench may be called as a witness
to the malpractice and its damages (as well as other reasons)."
Plaintiff's counsel claims "[v]arious retaliatory events happened"
in other unrelated cases while this case was pending "which made
[him] more insistent on a transfer." He states he complained to
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the assignment judge and the case was moved from Atlantic County
to Cape May County but argues the case should have been moved to
another vicinage. Thereafter, counsel moved before the sitting
judge and claimed no action was taken regarding venue change.
Counsel contacted the assignment judge again and was advised the
disqualification transfer issue had been referred to the
Administrative Office of the Courts. He claims he has not received
a decision on the issue.
The Perskie defendants moved to dismiss the complaint for
failure to state a claim pursuant to Rule 4:6-2(e). On April 9,
2014, the trial court issued a memorandum of decision denying the
motion as premature based on the lack of discovery. The court
also noted:
This is not a motion for summary judgment. It
is a motion for dismissal for failure to state
a cause of action. With so little law, it
cannot be determined at this stage of the
pleadings whether a claim for negligence
against Perskie could stand. . . .
This is not a claim that can be dismissed at
this point in time. The court cannot find
that there is no cause of action against
defendant Perskie based solely on the
pleadings. After discovery is completed and
the facts and circumstances are known, then a
motion for summary judgment can be filed.
Pursuant to the order, the parties engaged in extensive
discovery. After the completion of discovery, the Perskie
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defendants moved for summary judgment. Plaintiff opposed the
motion and cross-moved for leave to file an amended complaint,
which would have added counts for breach of contract, per se
liability, res ipsa loquitor, and spoliation of evidence. The
Perskie defendants argued negligent referral is not recognized as
a cause of action in New Jersey and plaintiff failed to establish
any facts during the course of discovery that would support a
claim for liability.
On July 27, 2016, the trial court issued an order and fifteen-
page memorandum of decision granting summary judgment to the
Perskie defendants and denying plaintiff's cross-motion for leave
to file an amended complaint. After noting there is a dearth of
case law addressing negligent referral as a cause of action in New
Jersey, the judge found the facts in Tormo v. Yormark, 398 F.
Supp. 1159 (D.N.J. 1975) to be distinguishable.
The judge found Perskie had no communications with plaintiff
regarding the personal injury claim after he was introduced to
Lentz. He noted plaintiff testified, as of March 9, 2005, when
the complaint was filed, plaintiff knew Lentz, not Perskie, was
representing him in the lawsuit and had filed the complaint of his
behalf. The judge found "no evidence in the record to support a
finding" that defendants "knew or had reason to know that Mr.
Lentz would be negligent or guilty of an offense."
9 A-0131-16T4
The trial court also found the new claims raised by plaintiff
in the proposed amended complaint to be moot in light of the
summary judgment granted to the Perskie defendants. This appeal
followed.
On appeal, plaintiff argues (1) the court erred in hearing
the case in Vicinage I based on appearances of impropriety, (2)
the Perskie defendants were jointly and severally liable with
Lentz for legal malpractice, (3) the court erred in allowing parole
evidence to defeat the default condition of joint and several
liability, (4) New Jersey's facts and circumstances test
decisively determines defendants' liability, and (5) the court
should impose strict liability for not informing clients of liens
or fee splitting agreements.
A court should grant summary judgment "forthwith" 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." R. 4:46-2(c). Under this standard, "a court should deny a
summary judgment motion only where the party opposing the motion
has come forward with evidence that creates a 'genuine issue as
to any material fact challenged.'" Brill v. Guardian Life Ins.
Co. of Am., 142 N.J. 520, 529 (1995) (quoting R. 4:46-2(c)).
10 A-0131-16T4
The trial court must "consider whether the competent
evidential materials presented, when viewed in the light most
favorable to the non-moving party, are sufficient to permit a
rational factfinder to resolve the alleged disputed issue in favor
of the non-moving party." Id. at 540; see also R. 4:46-2(c). To
grant the motion, the court must find that the evidence in the
record "is so one-sided that one party must prevail as a matter
of law." Brill, 142 N.J. at 540 (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 252 (1986)).
Our review of an order granting summary judgment is de novo.
See, e.g., Van Horn v. Harmony Sand & Gravel, Inc., 442 N.J. Super.
333, 340 (App. Div. 2015). We must observe the same standards as
the trial court, including the obligation to view the record in a
light most favorable to the non-moving parties. See IE Test, LLC
v. Carroll, 226 N.J. 166, 184 (2016) (quoting Brill, 142 N.J. at
540). We accord no "special deference" to a trial court's legal
determinations. Manalapan Realty, L.P. v. Manalapan Twp. Comm.,
140 N.J. 366, 378 (1995).
Applying those principles, we affirm the dismissal of
plaintiff's complaint and the denial of his motion for leave to
amend the complaint. The undisputed facts demonstrate the Perskie
defendants are entitled to judgment as a matter of law.
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Relying primarily on Tormo, a federal district court opinion,
plaintiff argues New Jersey recognizes a cause of action for the
negligent transfer or referral of cases and employs a facts and
circumstances test to determine liability. However, we are aware
of no New Jersey case law recognizing a cause of action for
negligent referral. Moreover, plaintiff's reliance on Tormo is
misplaced; the operative facts in Tormo are readily
distinguishable.3
In Tormo, the court denied a summary judgment motion involving
"a New York attorney's liability for negligence in transferring
his clients' personal injury case to a criminally indicted New
Jersey lawyer who subsequently embezzled the client's funds." 398
F. Supp. at 1164. The judge found the facts surrounding the New
York attorney's role to be "confused and conflicting." Id. at
1165.
In 1968, the New Jersey attorney unethically solicited the
transfer of the claim by calling the New York attorney and telling
him he was "familiar with the accident" and was a "negligence
specialist." Id. at 1166. Since New York was no longer a proper
3
We also note the interpretation of New Jersey law by a federal
district court is not binding upon us. See Kavky v. Herbalife
Int'l of Am., 359 N.J. Super. 497, 501 (App. Div. 2003); Shaw v.
City of Jersey City, 346 N.J. Super. 219, 229 (App. Div.), rev'd
on other grounds, 174 N.J. 567 (2002).
12 A-0131-16T4
venue for the action, and since the New York attorney was not
licensed to practice outside New York, he later contacted the New
Jersey attorney, requesting he bring suit in New Jersey. Ibid.The New York attorney allegedly told his clients the New Jersey
attorney was a "good well-qualified lawyer" who "was going to
handle the case." Id. at 1166-67. The New York attorney's "only
independent inquiry into [the New Jersey attorney's] reputation
consisted of ascertaining that he was listed as a licensed New
Jersey attorney in a lawyer's directory." Id. at 1167. The New
York attorney "never consulted [the New Jersey attorney]
concerning resolution of the case after the transfer." Ibid. The
New Jersey attorney took over the file, settled the claim, and
converted the settlement proceeds. Id. at 1167-68.
Meanwhile, the New Jersey attorney was indicted in 1969 for
conspiring to fraudulently obtain money from an insurance company.
Id. at 1166 (citing State v. Yormark, 117 N.J. Super. 315 (App.
Div. 1971)). "He was subsequently convicted in January 1971,
sentenced the following month to two consecutive 18-month prison
terms, and disbarred in February 1972." Id. at 1166-67. The
crimes "received coverage in the New Jersey press, but [the New
York attorney] never discovered them until after [the New Jersey
attorney] had fully executed his scheme." Id. at 1167.
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The plaintiffs brought suit against the New Jersey attorney
and two banks for conversion. Plaintiffs alleged one of the banks
failed to take reasonable measures to discover whether the
endorsement on the settlement draft was genuine. The banks brought
third-party claims against the New York attorney for negligently
selecting and failing to supervise the New Jersey attorney. The
banks also asserted he "failed to diligently file suit even after
[the New Jersey attorney's] fraud was discovered." Id. at 1165
n.3.
The New York attorney moved for summary judgment on both
substantive and procedural grounds. The District Court emphasized
the New York attorney's knowledge of New Jersey attorney's
unethical conduct before the case was transferred to him, stating:
But even if as a matter of law [the New
York attorney] was not required to know of
[the New Jersey attorney's] indictment, that
conclusion does not resolve entirely the
question whether a jury might find him
negligent in retaining the New Jersey lawyer.
[The New York attorney's] testimony shows that
[the New Jersey attorney] informed him that
he had obtained his name through [plaintiff].
But that testimony raises a question whether
[plaintiff] consulted [the New Jersey
attorney] or his "representatives," or whether
the opposite was true. As an attorney, [the
New York attorney] was required to realize
that the latter situation would constitute a
breach of the Code of Professional
Responsibility. The offense of soliciting
legal employment from laymen constitutes a
ground for disbarment. It evidences a
14 A-0131-16T4
lawyer's unworthiness of the trust and
confidence essential to the attorney-client
relationship. An attorney who knowingly
entrusted his client's business to a lawyer
who he had reason to believe was guilty of
that offense would be clearly negligent either
in making the referral at all, or in doing so
without advising his client of his suspicions.
[Id. at 1171 (citations omitted).]
The District Court denied summary judgment, finding "[t]he
record is laced with conflicting testimony concerning what, if
any, supervisory responsibilities [the New York attorney] assumed
by virtue of his express representations to [plaintiff] concerning
the progress of the case." Id. at 1173. The court concluded
"[s]ufficient evidence exist[ed] to justify submitting the
question of factual causation to the jury, for it cannot be assumed
that, had [plaintiff] been advised of the gravity of [the New
Jersey attorney's] conduct, he would have ratified [the New York
attorney's] decision to retain him." Id. at 1172.
Here, there is no allegation or evidence Lentz engaged in any
unethical behavior before or during the referral of the file. Nor
is there any allegation or evidence he engaged in criminal conduct
before, during, or after the referral. Lentz's license to practice
law in New Jersey was in good standing. He had never incurred
disciplinary charges or sanctions. He was not under criminal
investigation. Lentz represented to Perskie he was able to handle
15 A-0131-16T4
the file. There is no evidence he had previously committed legal
malpractice. Thus, the trial court properly concluded "there is
no evidence in the record to support a finding that the
[d]efendants knew or had reason to know that Mr. Lentz would be
negligent or guilty of an offense."
The Perskie defendants did not seek or obtain a referral fee
or enter into a fee-sharing agreement with Lentz. They did not
seek, expect, or receive compensation from Lentz for the services
they rendered on the personal injury claim before it was referred.
Attorneys in their office performed no further legal services on
the personal injury file after it was referred to Lentz.
Additionally, the personal injury claim was referred to Lentz
because the Perskie defendants could no longer represent plaintiff
due to a conflict of interest. Therefore, unlike the New York
attorney in Tormo, the Perskie defendants were not permitted to
undertake any supervision of Lentz to determine if all potentially
liable parties and viable causes of action were pursued by Lentz
in a timely fashion. See In re Advisory Comm. on Prof'l Ethics
Op. No. 613, 121 N.J.L.J. 1037 (May 19, 1988) (stating "the
conflict precluded the forwarding attorney from participating for
either party"); In re Advisory Comm. on Prof'l Ethics Op. No. 301,
101 N.J.L.J. 209 (Mar. 9, 1978) (explaining lawyers should avoid
representing multiples clients where his or her independent
16 A-0131-16T4
judgment may become divided, and if a conflict develops, should
withdraw from the matter entirely); In re Advisory Comm. on Prof'l
Ethics Op. No. 188, 93 N.J.L.J. 789 (Nov. 12, 1970) (stating
"[s]hould conflict develop, the attorney who undertakes to act for
several plaintiffs must retire from all representations"); RPC
1.7(a); RPC 1.16(a)(1).
The Perskie defendants continued to represent plaintiff on
his PIP claim against his insurer for medical expenses related to
the accident. In doing so, they may have shared discovery of
medical bills and records with Lentz. However, PIP claims are
brought against the insurer and are not based on fault for the
happening of the accident.4 N.J.S.A. 39:6A-4. Plaintiff's medical
bills and records were not directly relevant to whether additional
parties should have been named defendants or additional theories
of liability should have been asserted. Moreover, plaintiff's
damages were stipulated in the personal injury action.
4
Medical expense benefits are triggered by notice of the loss
and are overdue if not paid by the insurer within sixty days.
N.J.S.A. 39:6A-5(g). If not paid in a timely fashion, the injured
claimant may seek relief against the delinquent insurer through
binding arbitration or civil litigation. Riverside Chiropractic
Grp. v. Mercury Ins. Co., 404 N.J. Super. 228, 235 (App. Div.
2008) (citing Cynthia Craig & Daniel Pomeroy, N.J. Auto Ins. Law
§ 10:1 at 187 (2008)).
17 A-0131-16T4
In this case, we decline to recognize a new cause of action
for negligent referral. Even if we were inclined to do so, the
undisputed facts do not support a claim of negligent referral.
Plaintiff's remaining arguments are without sufficient merit
to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
In particular, we find no evidence to support plaintiff's claim
that the motion judge was disqualified from hearing this case.
We affirm the grant of summary judgment to the Perskie
defendants and the denial of plaintiff's motion for leave to file
an amended complaint. Plaintiff's remedy for the alleged legal
malpractice was against Lentz and his law firm. Plaintiff pursued
his malpractice claim against Lentz and his law firm. If
successful at trial, he would have recovered his actual and
consequential damages, including the reasonable legal expenses and
attorney fees incurred in prosecuting the legal malpractice
action. See Saffer v. Willoughby, 143 N.J. 256, 272 (1996).
Plaintiff elected to settle his claims against Lentz and his law
firm before trial. There is no factual or legal basis for
additional recovery against the Perskie defendants.
Affirmed.
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