RICHARD NOBIS VS. STEVEN BELMONTE (L-3595-14, UNION COUNTY AND STATEWIDE) ( 2018 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited . R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2890-16T1
RICHARD NOBIS and
CHRISTINA NOBIS,
Plaintiffs,
v.
STEVEN BELMONTE and
DWYONIA BELMONTE,
Defendants-Appellants,
and
WILLIAM V. LANE, JOHNSTONE,
SKOK, LAUGHLIN & LANE,
MATTHEW TAL, HOSPITALITY
SOLUTIONS REALTY SERVICES,
LLC, HOSPITALITY SOLUTIONS,
LLC, HOSPITALITY SOLUTIONS
WORLDWIDE, LLC, RE/MAX
FIRST CHOICE REALTORS,
and PATRICIA DiGERONIMO,
Defendants,
and
LAURIE BOGAARD,
Defendant-Respondent.
Argued September 20, 2018 – Decided December 13, 2018
Before Judges Alvarez and Nugent.
On appeal from Superior Court of New Jersey, Law
Division, Union County, Docket No. L-3595-14.
Anthony M. Bedwell argued the cause for appellants
(Jardim, Meisner & Susser, PC, and Bedwell & Pyrich,
LLC, attorneys; Anthony M. Bedwell, of counsel and
on the briefs).
Gregg S. Kahn argued the cause for respondents Laurie
Bogaard and Bogaard & Associates, LLC (Wilson,
Elser, Moskowitz, Edelman & Dicker, LLP, attorneys;
Gregg S. Kahn, of counsel and on the brief; John P.
O'Toole, on the brief).
PER CURIAM
Defendants Steven Belmonte and Dwyonia Belmonte appeal the February
1, 2017 grant of partial summary judgment to defendants Bogaard & Associates,
LLC, and Laurie Bogaard, Esquire, (Bogaard) dismissing the Belmonte's
crossclaim for legal malpractice. For the reasons that follow, we affirm.
In January 2011, the Belmontes entered into an agreement to sell their
home to plaintiffs Richard and Christina Nobis. 1 The agreement was contingent
1
The plaintiffs and the Belmonte defendants will be referred to by their first
names where necessary to avoid confusion.
A-2890-16T1
2
upon the Nobises obtaining a satisfactory home inspection. The home
inspection report noted that the attic space above the garage had been painted
white, and that a fan had been installed in the den. Concerned that those two
circumstances might indicate a mold problem, the inspector suggested follow-
up.
On February 10, 2011, the Nobises' attorney, Bogaard, sent the Belmonte's
attorney, William Lane, a copy of the report. At the end of the letter, Bogaard
asked for an explanation of the painting in the attic and the fan in the den. Lane
responded, stating that "what the purchaser has seen is self-explanatory." He
made no mention of any mold problem.
On February 22, 2011, Bogaard inquired about possible mold conditions,
stating:
My clients still have concern over the issue as to why
the attic was painted white. Please advise if the sellers
have ever experienced any type of mold or other issues
in the attic and if so, how same was remediated.
Lane responded on February 23, 2011:
My clients have never experienced a mold problem in
the attic. The attic was painted white, assumably
because that was a personal preference. However, as a
result of an overflowed toilet during a short term
tenancy, there was the appearance of a small amount of
mold in the garage and in a small area in the basement.
My clients engaged a licensed certified mold
A-2890-16T1
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remediation company who tested the entire house and
then remediated the affected area. That remediation
came with a warranty (see copy attached), which
remains in full force and effect.
No copy of the warranty was attached, however.
On February 24, 2011, Bogaard again wrote to Lane: "[a]fter speaking
with my clients, the purchasers find the sellers' response to their concerns
acceptable, with exception to the pool." When deposed, Richard acknowledged
that he had a conversation with Steven around February 24, 2011, during which
Steven mentioned the word "mold," and acknowledged the presence of a small
amount of mold in the basement. During depositions, the Nobises disputed the
extent of the information they had been provided regarding the source and
treatment of the mold, and their receipt of relevant documents. Richard also
said that Steven assured him during the call that the amount of mold in the garage
was small but that mold spores travel. Both Nobises insisted the first time they
actually learned about the existence of the mold was two days prior to closing
when informed by Steven, and that he assured them that the problem had been
addressed. The Nobises assumed the mold report and the warranty would be
produced at closing, which took place on March 1, 2011. They were not given
the documents at that time.
A-2890-16T1
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When deposed, Lane claimed that he heard Bogaard advise the Nobises at
closing that they had remedies beyond the closing if the mold remediation
documents were not provided. That fall, the Nobises filed suit against their
attorney, the attorney's firm, and the Belmontes. That triggered the Belmontes'
third-party complaint against the Bogaard defendants alleging legal malpractice
and seeking attorney's fees and costs.
The Belmontes contend that Bogaard owed them a duty of care arising
from Bogaard's representation of the Nobises. Furthermore, they allege that
Bogaard told the Belmontes that she had discussed the mold condition and the
warranty with the Nobises, that the information was acceptable, and that they
went through with the sale relying on the assurance.
In the February 1, 2017 written order, the trial court said:
Buyer's attorney does not breach a duty to seller for
failing to represent Buyer properly. Petrillo v.
2
Bachenberg[ ] is not applicable, as it addresses duty of
Seller's attorney to a Buyer whom Seller's attorney
knows will rely on his misrepresentations. Reasons to
be set forth more fully on the record at 3 p.m. on Feb.
2, 2017.
On February 2, 2017, the trial judge granted the Bogaard defendants'
motion for summary judgment. She concluded as a matter of law that the
2
139 N.J. 472 (1995).
A-2890-16T1
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Belmontes, who were non-clients, could not assert a legal malpractice claim
against the Bogaard defendants because they failed to establish that the Bogaard
defendants owed any sort of duty to them.
On February 2, 2017, the court explained:
If Bogaard told the Belmontes that she discussed the
mold problem and didn't, I still don't see how this gives
the Belmontes a cause of action against Bogaard. It
may well give . . . the Nobises a cause of action for
breach of their own attorneys' duties, but not the sellers,
who, of course, it should be noted, were represented by
counsel themselves, and everything, basically, flowed
through Mr. Lane or in some circumstances there are
allegations that Mr. No[b]is – or Mr. Belmonte himself
made some statements.
So Petrillo says that under some circumstances . . . an
attorney assumes a duty to a non-client, which is what
the Belmontes want here, to provide reliable
information. That is not the situation we have . . . .
[T]he buyer's claim is, in large part, against their own
lawyer, who failed to do her job. But . . . for the sellers
to say, yes, and now we're in this lawsuit because . . .
that buyer's attorney didn't do her job, I think there's no
basis for a cause of action on that.
There's no duty between the – between the two, and
certainly it's not the type of situation – if –if I permitted
that, we would basically be making every adversary's
or other party to an action's attorney liable to the party
they're not representing.
This is too broad a rule, and – and I don't think Petrillo
makes that rule. . . . Petrillo says in some
A-2890-16T1
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circumstances, if you expect that a buyer is going to
rely on the seller's attorney's representations, and the
buyer is harmed, then the buyer will have a – a cause of
action. But under any facts that are alleged by either
side here, I don't see where the Belmontes get a cause
of action against the Bogaard defendants.
In dismissing the Belmontes' claim for attorneys' fees and expenses, the
trial court added:
We've talked about Innes verses Marzano-Lesnovich,
which is the most recent – recent statement at 224 N.J.
584 [(2016)] talking about the fiduciary duty that arises
as an escrow agent in that case, although these people
happened to be a – attorneys for one of the parties.
....
[T]here is no case that says a non-client can get
attorney's fees in an action. . . .
[A]s the Court noted in Innes, departures from the
American Rule are the exception. We have awarded
counsel fees to a prevailing plaintiff in a legal
malpractice action premised upon professional
negligence because of the unique nature of the
attorney/client relationship. Not the unique nature of
the fiduciary relationship – the unique nature of the
attorney/client relationship. And certainly, the
Belmontes can look to their lawyer, and the Nobises can
look to their lawyer for those damages.
But now we are in a situation where they're looking to
the other party's lawyer, when they do not have the
unique attorney/client relationship. So – and the Court
goes on to say [in Innes,] we have never held that a non-
A-2890-16T1
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client is entitled to a fee-shifting award for an attorney's
negligence.
....
There's – there's not authority for finding an
attorney/client relationship. There . . . could be a
finding that a – fiduciary obligation was breached, but
that does not necessarily . . . flow from there that the
attorney/client relationship allowing the recoupment of
attorney's fees would be permissible. And I note that
everybody's attorney is already in this case.
Prior to trial, scheduled for February 6, 2017, all of the claims were
dismissed except for the Nobises' and the Belmontes' claim against Bogaard.
Before trial commenced, the Nobises settled their claims against Bogaard.
Now on appeal, the Belmontes allege the following points of error:
POINT I
THE TRIAL COURT ERRED IN GRANTING THE
BOGAARD DEFENDANTS' MOTION FOR
PARTIAL SUMMARY JUDGMENT AGAINST THE
BELMONTES BECAUSE (A) THE TRIAL COURT
COMMITTED REVERSIBLE ERROR BY HOLDING
THAT AS A MATTER OF LAW A SELLER OF REAL
ESTATE CANNOT MAINTAIN A CAUSE OF
ACTION FOR PROFESSIONAL NEGLIGENCE
AGAINST THE BUYER'S ATTORNEY AND (B)
MATERIAL DISPUTED FACTS TAKEN IN A
LIGHT MOST FAVORABLE TO THE BELMONTES
PROHIBIT GRANTING SUMMARY JUDGMENT.
A. THE TRIAL COURT COMMITTED
REVERSIBLE ERROR BY HOLDING THAT
AS A MATTER OF LAW A SELLER OF REAL
A-2890-16T1
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PROPERTY CANNOT MAINTAIN A CAUSE
OF ACTION FOR PROFESSIONAL
NEGLIGENCE AGAINST THE REAL ESTATE
BUYER'S ATTORNEY.
B. MATERIAL DISPUTED FACTS TAKEN IN A
LIGHT MOST FAVORABLE TO THE
BELMONTES PROHIBIT GRANTING
SUMMARY JUDGMENT BECAUSE THOSE
FACTS TAKEN IN A LIGHT MOST
FAVORABLE TO THE NON-MOVING
PARTY PROVIDE SUFFICIENT FACTS TO
CONCLUDE THAT THE BOGAARD
RESPONDENTS BREACHED THEIR DUTY
OF CARE OWED TO THE BELMONTES AND
THAT THE BOGAARD'S BREACH OF DUTY
PROXIMATELY CAUSED DAMAGES TO
THE BELMONTES.
POINT II
THE TRIAL COURT ERRED BY GRANTING THE
BOGAARD DEFENDANTS' PARTIAL SUMMARY
JUDGMENT DISMISSING THE BELMONTE'S
CLAIM FOR RECOVERY OF FEES AND COSTS
INCURRED IN PROSECUTING THE CLAIMS
AGAINST THE BOGAARD DEFENDANTS.
I.
We review summary judgment decisions de novo, applying the same
standard used by the trial court. Rowe v. Mazel Thirty, LLC, 209 N.J. 35, 41
(2012) (citing Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010)).
Summary judgment is properly granted when no genuine issue of material fact
exists, considering the evidence in the light most favorable to the non -moving
A-2890-16T1
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party, and the moving party is entitled to prevail as a matter of law. Ibid. (citing
Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 529 (1995)); R. 4:46-2(c).
Any issue of material fact has to be "genuine." Brill, 142 N.J. at 529.
"[Q]uestions of law [are] particularly suited for summary judgment." Badiali v.
N.J. Mfrs. Ins. Grp., 220 N.J. 544, 555 (2015) (citation omitted). Such is the
case in this appeal.
In order to succeed on a legal malpractice claim, the proponents must
establish: (1) the existence of an attorney-client relationship that creates a duty
of care upon the attorney; (2) a breach of that duty; (3) proximate causation of
the damages claimed by the plaintiff; and (4) actual damages. See Cortez v.
Gindhart, 435 N.J. Super. 589, 598 (App. Div. 2014); see also Sommers v.
McKinney, 287 N.J. Super. 1, 9-10 (App. Div. 1996).
Not surprisingly, where no attorney-client relationship exists, the standard
is considerably more stringent. The duty owed by counsel to a non-client
requires close scrutiny—"balancing the attorney's duty to represent clients
vigorously, [RPC 1.3], with the duty not to provide misleading information on
which third parties foreseeably will rely, [RPC 4.1]." Petrillo, 139 N.J. at 479.
In Petrillo, the Supreme Court recognized that "[t]he determination of the
existence of a duty is a question of law for the court.” Id. at 479. Furthermore,
A-2890-16T1
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"attorneys may owe a duty of care to non-clients when the attorneys know, or
should know, that non-clients will rely on the attorneys['] representations and
the non-clients are not too remote from the attorneys to be entitled to protection."
Id. at 483-84.
Nonetheless, the nature of the relationship between the attorney and the
non-client is critical to the determination. Banco Popular N. Am. v. Gandi, 184
N.J. 161, 180 (2005). "[I]f the attorney does absolutely nothing to induce
reasonable reliance by a third party, there is no relationship to substitute for the
privity requirement." Ibid. As the Court phrased it, "the invitation to rely and
reliance are the linchpins of attorney liability to third parties." Id. at 180-81.
Indeed, in determining the nature of privity between third parties and an
attorney, the latter's duty is limited to those situations in which the attorney
intended or should have foreseen that the third party would rely on the lawyer's
work. Petrillo 139 N.J. at 482. The attorney must have withheld information or
made outright misrepresentations knowing that the non-client will rely on the
information. Ibid.In this case, the Belmontes were represented by their own attorney.
Communications regarding the upcoming closing took place between counsel,
not between the Bogaard defendants and the sellers. From this record, it seems
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clear that other than seeing Bogaard's letters to Lane, there was no direct
communication between the Bogaard defendants and the sellers. The Belmontes
did not even attend the closing. In fact, when Steven spoke to the Nobises on
the phone, he attempted to reassure them about the mold problem, about which
his own attorney had initially claimed no knowledge.
To state that no duty of care existed between the Bogaard defendants and
the Belmontes under these circumstances is to state the obvious. The Belmontes
claim that the Bogaard defendants misrepresented to the Belmontes' attorney
that Bogaard had discussed the mold condition and the related warranty with the
Nobises, and that it was acceptable to them. This mischaracterizes the record.
No mention of the mold was made in Bogaard's February 24, 2011 letter.
Bogaard was merely attempting to update the Belmontes' attorney as to the status
of the sale. Nothing in that letter indicated she had discussed the mold condition
or the warranty with the Nobises.
As we have said, Lane initially denied knowledge of any mold problem.
When on February 28, 2011, Bogaard wrote again requesting all the paperwork
regarding mold remediation along with a copy of the warranty, nothing was
forthcoming before or at the closing. Bogaard did not know the extent of the
mold condition, nor did she make any representations on which the Belmontes
A-2890-16T1
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relied. The record presented to the judge who decided the motion for summary
judgment did not include any genuine disputes of material fact. The Bogaard
defendants were not party to the telephone conference during which Steven
appeared to have minimized, at least according to the Nobises, the extent of the
mold condition.
The judge did not err by granting the motion. To have done otherwise
would have distorted the meaning of Petrillo. That case simply did not make
attorneys liable to third parties represented by their own counsel for any alleged
malpractice in circumstances such as these.
II.
The Belmontes also challenge the award of summary judgment on their
request for counsel fees, based on Saffer v. Willoughby, 143 N.J. 256, 271
(1996). However, as the Supreme Court pronounced in Innes, attorney's fees
and costs are not recoverable by a non-client against a lawyer in a negligence
case. See Innes v. Marzano-Lesnevich, 224 N.J. 584, 597 (2016). The Innes
Court reiterated that departures from the American rule are the exception, and
that a non-client is not entitled to a fee-shifting award for an attorney's alleged
negligence. Ibid.Affirmed.
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