MICRO TECH TRAINING CENTER INC. VS. DECOTIIS FITZPATRICK & COLE, LLP (L-8652-19, ESSEX 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NOT FOR PUBLICATION WITHOUT THE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-0143-20
MICRO TECH TRAINING
CENTER INC. d/b/a EASTERN
INTERNATIONAL COLLEGE
and BASHIR MOHSEN,
Plaintiffs-Appellants,
v.
DECOTIIS FITZPATRICK &
COLE, LLP and CHASAN
LAMPARELLO MALLON &
CAPPUZZO, PC,
Defendants-Respondents.
____________________________
Submitted November 3, 2021 – Decided December 27, 2021
Before Judges Fisher, DeAlmeida and Smith.
On appeal from the Superior Court of New Jersey, Law
Division, Essex County, Docket No. L-8652-19.
Peter A. Ouda, attorney for appellants.
Wilson Elser Moskowitz Edelman & Dicker, LLP,
attorneys for respondent Chasan Lamparello Mallon &
Cappuzzo, PC (Thomas F. Quinn, of counsel; Susan
Karlovich, of counsel and on the brief).
PER CURIAM
Plaintiffs Micro Tech Training Center, Inc. d/b/a Eastern International
College and Bashir Mohsen (collectively Micro Tech) appeal from the August
20, 2020 order of the Law Division staying their legal malpractice action against
defendant Chasan Lamparello Mallon & Cappuzzo, P.C. (Chasan), and
compelling arbitration of their claims. We affirm.
I.
In 2015, Micro Tech, which operates a college in Jersey City, was sued
by its landlord for early termination of its lease. Micro Tech countersued for
constructive eviction and loss of revenue and retained defendant DeCotiis
Fitzpatrick & Cole, LLP (DeCotiis) to provide legal representation in its dispute
with its landlord.
On August 9, 2017, Micro Tech, at the urging of its in-house counsel,
retained Chasan to replace DeCotiis as counsel in the dispute. Micro Tech's
retainer agreement with Chasan provides in relevant part:
12. ARBITRATION. Should any differences,
disagreements or disputes arise between us relating to
your representation, we both agree to submit such
differences, disagreements or disputes to binding
arbitration.
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....
(B) Any Other Disagreements. Should an issue arise
between us as to fee dispute [sic] which the Fee
Arbitration Committee declines to accept or involving
any matter other than a fee dispute, the [sic] we both
agree to submit the difference, disagreement or dispute
to binding arbitration according to the New Jersey
Uniform Arbitration Act, N.J.S.A. 2A:24-1 et seq. An
arbitrator shall be chosen by consent of the parties or in
accordance with N.J.S.A. 2A:24-5, the fees for which
shall be an issue to be determined by the arbitrator.
Any arbitration award shall be confirmed by the
Superior Court of New Jersey in accordance with
N.J.S.A. 2A:24-8, and a judgment entered in
accordance with N.J.S.A. 2A:24-10.
By signing this Agreement you acknowledge you have
an absolute right in the first instance (and obligation
under this Agreement) to submit any fee disputes
between us to the appropriate Fee Arbitration
[C]ommittee for resolution, and should that method not
be available, then you or we have the obligation to
submit any fee or other dispute to binding arbitration as
set forth in this Section 12B instead of submitting the
difference, disagreement or dispute to resolution by the
court or through trial by jury. By signing this
Agreement you will be deemed to have given your
consent to the Alternative Dispute Resolution
mechanisms recited in Paragraph 12 and to waive the
right to a trial.
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Client initials signifying approval of this Section 12:
_[BM]1_
....
13. AGREEMENT. You have read and agree to this
Agreement. We have answered all of your questions
and fully explained this Agreement to your complete
satisfaction. You have been given a copy of this
Agreement.
In 2019, Micro Tech filed a legal malpractice action in the Law Division
against DeCotiis and Chasan. In lieu of filing an answer, Chasan moved for an
order staying the complaint and compelling arbitration of Micro Tech's claims.
Micro Tech opposed the motion, arguing: (1) that legal malpractice claims are
not expressly identified in the retainer agreement as being subject to arbitration;
and (2) the arbitration provisions of the retainer agreement are invalid because
no representative of Chasan orally advised Micro Tech that its legal malpractice
claims would be subject to arbitration.
The trial court granted Chasan's motion. In a written opinion, the court
concluded that the phrase "any differences, disagreements or disputes arising
between us relating to your representation" in the arbitration provisions of the
1
Micro Tech concedes that the retainer agreement contains Mohsen's initials
after paragraph 12 and does not dispute his authority to bind Micro Tech to the
contract.
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retainer agreement plainly included legal malpractice claims. In addition, the
court concluded that a specific reference to legal malpractice claims in the
retainer agreement was not necessary to put Micro Tech, a sophisticated
business with in-house counsel, on notice that those claims were subject to
arbitration. The court noted that Micro Tech had the benefit of attorney review
of the retainer agreement prior to consenting to its terms and that the arbitration
provisions were initialed by Mohsen, a principal of Micro Tech.
An August 20, 2020 order stayed Micro Tech's legal malpractice action
against Chasan and referred its claims to arbitration.2
This appeal follows. Micro Tech repeats its arguments that the arbitration
provisions in the retainer agreement did not put it on notice that legal
malpractice claims were subject to arbitration and are unenforceable because
Chasan did not advise Micro Tech orally or in a separate writing that its legal
malpractice claims would be subject to arbitration.
II.
The holding in Delaney v. Dickey, 244 N.J. 466 (2020), issued after the
trial court's decision, resolves the issues raised in this appeal. In that case, the
Supreme Court considered the circumstances in which an arbitration provision
2
Micro Tech's claims against DeCotiis remain pending in the Law Division.
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in a retainer agreement for legal services is enforceable with respect to legal
malpractice claims. The Court's holding is unequivocal:
We conclude that the professional and fiduciary
obligation imposed on a lawyer by RPC 1.4(c) – to
"explain a matter to the extent reasonably necessary to
permit the client to make informed decisions regarding
the representation" – requires that the lawyer discuss
with the client the basic advantages and disadvantages
of a provision in a retainer agreement that mandates the
arbitration of a future fee dispute or malpractice claim
against the attorney.
[Id. at 496.]
Without having provided such advice, an attorney will be precluded from
enforcing an arbitration provision in a legal retainer agreement when sued for
legal malpractice. Id. at 501.
The Court was equally clear, however, that its holding would be applied
prospectively:
Because the professional obligation we now impose
may not have been reasonably anticipated and would
unsettle expectations among lawyers, we apply this new
mandate prospectively, with one exception. Applying
the holding of our opinion here is "consistent with the
usual rule that the prevailing party who brings a claim
that advances the common law receive the benefit of his
efforts." See Estate of Narleski v. Gomes, 244 N.J. 199,
204 (2020).
[Id. at 474.]
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Thus, apart from the retainer agreement signed by the plaintiff in Delaney, the
Court's holding does not apply to retainer agreements, like the one signed by
Micro Tech in 2017, executed prior to the Court's December 21, 2020 holding
in Delaney.
Micro Tech does not, therefore, enjoy the benefit of the new rule
announced in Delaney requiring an attorney to provide advice explaining
arbitration provisions in a retainer agreement for legal services. As a result, the
trial court correctly rejected Micro Tech's argument that its legal malpractice
claims are not subject to arbitration because Chasan failed to explain the
arbitration provisions of the retainer agreement.
The holding in Delaney also resolves Micro Tech's argument that the
arbitration provisions are unenforceable because they do not specifically list
legal malpractice claims as being subject to arbitration. The arbitration
provision of the retainer agreement before the court in Delaney applied to "any
dispute (including, without limitation, any dispute with respect to the Firm's
legal services and/or payment by you of amounts to the Firm)" and "[a]ny
disputes arising out of or relating to this agreement or the Firm's engagement by
you . . . ." Id. at 475-76. The agreement did not specifically mention legal
malpractice claims as being subject to arbitration.
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The Court held that "[t]he arbitration provision at issue in this case – on
its face – would be enforceable if [it] were a typical contract between a
commercial vendor and a customer." Id. at 494 (citing Atalese v. U.S. Legal
Servs. Grp., L.P., 219 N.J. 430, 444-45 (2014)). The Court held that "if this
were an ordinary commercial contract, the term 'any dispute' is broad enough to
encompass a dispute about whether the attorney committed legal malpractice."
Id. at 498. The only exception to this interpretation of the contract noted by the
Court is the attorney's "fiduciary duty to make clear the retainer agreement's
terms so that the meaning of those terms is readily apparent to the client." Ibid.However, as noted above, the Court held that the attorney's obligation to provide
an explanation will be applied prospectively from the date of the issuance of its
opinion in Delaney.
The terms of the Chasan retainer agreement with Micro Tech, applying
the arbitration provisions to "any differences, disagreements or disputes arising
between us relating to your representation" is as broad, and arguably broader,
than the language found by the Delaney Court to apply to legal malpractice
claims. Because the attorney advice obligation established in Delaney does not
apply to the Micro Tech retainer agreement, its plain language is enforceable
and requires arbitration of Micro Tech's legal malpractice claims.
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To the extent we have not specifically addressed any of Micro Tech's
remaining claims, including its contention that the pendency of its claims against
DeCotiis should preclude arbitration of its legal malpractice claims against
Chasan, we conclude they lack sufficient merit to warrant discussion in a written
opinion. R. 2:11-3(e)(1)(E). 3
Affirmed.
3
We offer no opinion with respect to whether a stay of Micro Tech's claims
against DeCotiis, if requested by the parties, would be warranted.
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