MOSHE MEISELS VS. FOX ROTHSCHILD, LLP (L-0483-13, MERCER COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-3519-15T4
MOSHE MEISELS, CHANIE
MEISELS, MONROE ESTATES,
LTD., and PREMIER ESTATES
NY, INC.,
Plaintiffs-Appellants,
v.
FOX ROTHSCHILD LLP and
ANTHONY ARGIROPOULOS,
ESQUIRE,
Defendants-Respondents.
___________________________________
Argued July 18, 2017 – Decided June 22, 2018
Before Judges Ostrer and Leone.
On appeal from Superior Court of New Jersey,
Law Division, Mercer County, Docket No.
L-0483-13.
Brian K. Condon argued the cause for
appellants (Condon Catina & Mara, PLLC,
attorneys; Brian K. Condon and Laura M.
Catina, on the briefs).
Francis P. Devine, III, argued the cause for
respondents (Pepper Hamilton LLP, attorneys;
Francis P. Devine and Angelo A. Stio, III, of
counsel and on the brief).
The opinion of the court was delivered by
OSTRER, J.A.D.
We reversed dismissal of plaintiffs' complaint under Rule
4:6-2(e) because the Law Division had not indulgently presumed the
truth of plaintiffs' allegations that they had standing to sue.
See Meisels v. Fox Rothschild, LLP, No. A-1102-13 (App. Div. Feb.
19, 2015) (Meisels I). Once discovery was completed, defendants
obtained dismissal again, this time on a motion for summary
judgment. We part company with the trial court's determination
that plaintiff Moshe Meisels (Meisels) failed to establish
standing to pursue his claims of conversion and breach of fiduciary
duty pertaining to $2.4 million deposited in the attorney trust
account of defendant Fox Rothschild LLP.1 We also hold that he
presented sufficient evidence to reach a jury on his conversion
claim. A formal demand for the return of the funds was not
required. However, Meisels, whose identity was undisclosed to
defendants, did not establish that defendants entered into a
fiduciary relationship with him. Therefore, the court properly
dismissed his breach of fiduciary duty claim. We therefore affirm
in part, reverse in part, and remand for a trial.
1
For the sake of brevity, we will refer to Moshe Meisels as
Meisels, and refer to Chanie Meisels as Chanie, and mean no
disrespect in doing so.
2 A-3519-15T4
I.
We presume the reader's familiarity with our previous
opinion. According to plaintiffs' verified complaint, Meisels, a
real estate investor residing in London, England, entered into a
real estate deal with Eliyahu Weinstein. Each agreed to provide
$2.5 million toward the purchase of a property in Irvington, New
Jersey. Plaintiffs alleged that at Weinstein's direction, Meisels
wired $2,412,163.50 to the attorney trust account of Fox
Rothschild, Weinstein's attorneys;2 and, thereafter, at
Weinstein's direction, Fox Rothschild disbursed all the funds for
other purposes. These included payments for Weinstein's
investments in other properties not involving Meisels, and payment
of a fee to Fox Rothschild. Plaintiffs alleged the purchase that
Meisels and Weinstein had agreed to make was never consummated.
They alleged that Weinstein defrauded them, as he had others. They
noted he was ultimately indicted for fraud.3
2
Plaintiffs do not explain the discrepancy between the $2.5
million obligation and the transfer, which we will round to $2.4
million for convenience.
3
Weinstein eventually pleaded guilty to "operating a Ponzi scheme
from 2004-2011 whereby he misappropriated hundreds of millions of
dollars that victims thought they were investing in specific real
estate transactions." United States v. Weinstein, 658 Fed. Appx.
57, 58 (3d Cir. 2016) (affirming denial of motion to withdraw
3 A-3519-15T4
Although Meisels, Chanie, Monroe Estates, Ltd., and Premier
Estates NY, Inc. asserted various legal theories in support of
their claims for relief in the amended complaint that Meisels
verified, only Meisels now claims a right to relief, based solely
on theories of conversion and breach of fiduciary duty by Fox
Rothschild and its then-partner, defendant Anthony Argiropoulos.
The reduction of parties and claims was not simply strategic.
Rather, it was compelled by facts Meisels presented that
contradicted those he initially verified as true.
Since the early stages of this litigation, defendants have
contended that any right to relief that may exist — which they
also contest — belongs to a London-based corporation called
Rightmatch, Ltd. Although the four plaintiffs alleged in their
initial verified complaint that "Meisels wired" the $2.4 million,
actually Rightmatch ordered the transfer of the $2.4 million into
Fox Rothschild's trust account. Rightmatch did so through two
wire transfers executed by Cambridge Mercantile Group for
$1,328,680.99 and $1,083,482.51. The wire confirmations, attached
to plaintiffs' first verified complaint, were addressed to
plea). Plaintiffs, along with other entities, sued Weinstein in
a separate lawsuit in Ocean County. See Meisels v. Weinstein, No.
A-2734-10 (App. Div. Oct. 21, 2011).
4 A-3519-15T4
Rightmatch, to Meisels's attention, and confirmed that the
payments were made upon Rightmatch's order.
In their amended verified complaint, plaintiffs explained
that Rightmatch was simply a conduit and had no interest in the
funds. Rather, they alleged that Meisels and Chanie received the
funds as a "dividend" from Monroe Estates, a British corporation
they owned. Plaintiffs alleged that Monroe Estates lacked an
account that could convert currencies; consequently, "they had the
money go through . . . Rightmatch, Ltd., so that Rightmatch's
account with Cambridge Mercantile Group could be used to convert
the funds from British Pound Sterling to Dollars and transferred
to the United States." In Meisels I, we held that plaintiffs
should be entitled to present proof that they owned the funds.4
During the discovery period that followed, plaintiffs
disclosed no evidence that the funds came from Monroe Estates.
Faced with defendants' motion for summary judgment, Meisels then
presented a new explanation for the origin of the $2.4 million.
He certified they were "personal funds that I obtained from
4
Plaintiffs' pleading did not explain the basis for a claim by
plaintiff Premier Estates NY, which was identified as a New York
corporation, principally based in Brooklyn, New York.
5 A-3519-15T4
mortgages that I took out on different properties that I owned."
Meisels identified five London properties.5
Meisels contended that documents he produced in discovery
established his new claim about the origin of the $2.4 million.
He referred to correspondence from his London solicitors Bude
Storz; loan offers from a lender, Cheval Bridging Finance; mortgage
deeds referring to four of the five properties, which identified
Cheval as mortgagee and Meisels as mortgagor; and documents from
Barclays, reflecting transfers into the solicitors' account, and
out of the solicitors' account to Cambridge Mercantile. We will
5
Meisels's "certification" lacked the essential statement
immediately before his signature, per Rule 1:4-4(b): "I certify
that the foregoing statements made by me are true. I am aware
that if any of the foregoing statements made by me are willfully
false, I am subject to punishment." See also R. 1:6-6 (requiring
that factual assertions in a motion response be supported by
affidavits made upon personal knowledge). Defendants did not
object on that ground. Cf. Pascack Cmty. Bank v. Universal
Funding, LLP, 419 N.J. Super. 279, 288 (App. Div. 2011) (rejecting
a "certification" on that ground among others). An objection
would have given Meisels an opportunity to seek the trial court's
permission to cure the infirmity. We therefore treat the
certification as evidential and give it the weight it deserves,
which is substantial, mainly because it was supported by
documentary proof. Cf. State v. Ingenito, 87 N.J. 204, 224 n.1
(1981) (Schreiber, J., concurring) (noting that hearsay subject
to a well-founded objection is evidential absent an objection);
N.J. Div. of Child Prot. & Permanency v. J.D., 447 N.J. Super.
337, 348-49 (App. Div. 2016).
6 A-3519-15T4
address these in greater detail in our discussion of defendants'
standing argument.
During oral argument, plaintiffs' counsel conceded that
Chanie, Monroe Estates and Premier Estates lacked a basis for
relief, since Meisels claimed the funds were his. The trial court
agreed with defendants that: Meisels lacked standing because he
did not prove ownership; his lack of ownership doomed his
conversion claim; the conversion claim also failed because
plaintiffs did not demand the return of the funds; and the breach
of fiduciary duty claim failed because Meisels had not communicated
or made himself known to defendants. The court granted summary
judgment, dismissing those two claims. The court also dismissed
plaintiffs' other causes of action, which are not the subject of
this appeal.
On appeal, Meisels argues he presented sufficient evidence
to create a genuine issue of fact regarding his interest in the
funds and his standing. He argues that a demand was not essential
to his conversion claim, nor was direct communication with Fox
Rothschild or its partner essential to his breach of fiduciary
duty claim.
II.
We review the trial court's order de novo, and employ the
same standard as the motion judge under Rule 4:46-2(c). Henry v.
7 A-3519-15T4
N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010). The 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." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540
(1995); see also R. 4:46-2(c). Moreover, "[a] trial court's
interpretation of the law and the legal consequences that flow
from established facts are not entitled to any special deference."
Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366,
378 (1995).
A.
We reject the trial court's finding that Meisels lacked
standing to sue for the return of the $2.4 million. "Every action
may be prosecuted in the name of the real party in interest
. . . ." R. 4:26-1. To establish standing, "a party must present
a sufficient stake in the outcome of the litigation, a real
adverseness with respect to the subject matter, and a substantial
likelihood that the party will suffer harm in the event of an
unfavorable decision." In re Camden Cty., 170 N.J. 439, 449
(2002).
Our courts take a liberal view toward standing. See
EnviroFinance Grp., LLC v. Envtl. Barrier Co., 440 N.J. Super.
8 A-3519-15T4
325, 340 (App. Div. 2015). However, regarding a claim of
conversion, "[i]t is essential that the money converted by a
tortfeasor must have belonged to the injured party." Advanced
Enters. Recycling, Inc. v. Bercaw, 376 N.J. Super. 153, 161 (App.
Div. 2005) (quoting Commercial Ins. Co. of Newark v. Apgar, 111
N.J. Super. 108, 115 (Law Div. 1970)).
"Ordinarily, a litigant may not claim standing to assert the
rights of a third party." Jersey Shore Med. Ctr.-Fitkin Hosp. v.
Estate of Baum, 84 N.J. 137, 144 (1980). Also, a third party
generally may not assert the claims of a corporation, which is a
separate jural entity. See Strasenburgh v. Straubmuller, 146 N.J.
527, 549 (1996) (stating that "[r]egard for the corporate
personality demands that suits to redress corporate injuries which
secondarily harm all shareholders alike are brought only by the
corporation"); cf. Bondi v. Citigroup, Inc., 423 N.J. Super. 377,
437-39 (App. Div. 2011) (recognizing an exception allowing a parent
corporation, under the circumstances, to assert claims on behalf
of its wholly owned subsidiary).
However, Meisels does not claim to wholly own or control
Rightmatch. Rather, he contends that Rightmatch agreed to act as
a conduit for the transfer of his personal funds to Fox Rothschild.
Granting him the favorable inferences required under our summary
judgment standard, we are satisfied he presented sufficient
9 A-3519-15T4
evidence that Rightmatch agreed to serve as a conduit, and the
$2.4 million belonged to Meisels.
As to Rightmatch's agreement, we note that Meisels testified
in a deposition that he was Rightmatch's sole director, and
Rightmatch was in the real estate investment business and owned
property in London. Therefore, he presumably was in a position
to have personal knowledge of the agreement, and the authority to
approve it.
Regarding Meisels's ownership of the funds, the letter of
Meisels's solicitors, Bude Storz, confirmed that Meisels
instructed and directed them in making transfers related to the
mortgage loans. Meisels also pointed out that his name appeared
on the "Payment Reference" line of a Barclays document noting the
transfer of £672,249.87 from Bude Storz's account to Cambridge
Mercantile. Two similar documents, which referred to payments of
£548,404.37 and £800,000 to Cambridge Mercantile from Bude Storz's
account, identified Rightmatch on the payment reference line, but
Meisels asserted that was an error. Also, the £800,000 payment
appears unrelated to the $2.4 million payment. Utilizing published
exchange rates in effect at the time, we calculate the £548,404.37
and £672,248.87 were equivalent to $1,084,389.23 and $1,329,273.57
— totaling $2,414,653.45 — close to the total amount transferred
by Cambridge Mercantile to Fox Rothschild's account upon
10 A-3519-15T4
Rightmatch's order. We presume that the exchange rate actually
used in the transaction resulted in the dollar amount that Fox
Rothschild actually received.
Meisels presented two apparently separate loan offers from
Cheval. One referred to an offer to lend £733,000 on three
properties. A second offered to lend £590,000 on the remaining
two properties. Two Barclays documents, entitled "Funds Transfer
- Credit Advice," confirmed that £684,679.25 and £552,048.75 were
received into Bude Storz's account by order of Aubrey David, who
apparently was counsel to the lender. Presumably, the difference
between the offered amounts, and the received amounts, is
attributable to various fees, charges or pre-payments. Meisels's
name was noted under "Payment Details." After further reductions,
£672,248.87 and £548,404.37 were transferred to Cambridge
Mercantile, for currency conversion and transfer to Fox Rothschild
upon Rightmatch's order.
We recognize that the proofs are not conclusive. Although
Bude Storz's letter referred to mortgages on the five properties
Meisels identified, along with ten others that were completed in
three months after the $2.4 million transfer, the solicitors
expressed no view of the funds' ownership. The mention of Meisels
on the reference lines does not definitively prove ownership.
Meisels's contradictory explanations also raise questions about
11 A-3519-15T4
his credibility. But, determining issues of credibility is a
quintessential jury function. Conrad v. Michelle & John, Inc.,
394 N.J. Super. 1, 13 (App. Div. 2007) (choosing between witness's
inconsistent statements is for the jury).
Moreover, on summary judgment, we cannot disregard Meisels's
certification to the facts set forth above, explaining that the
money belonged to him. Notably, defendants did not argue before
the trial court, or before us, that Meisels's certification should
be disregarded under the sham affidavit doctrine. Shelcusky v.
Garjulio, 172 N.J. 185, 194 (2002).6
Defendants also highlight the fact that other persons or
entities owned the five properties that Meisels claimed to own,
and against which he said he borrowed the $2.4 million. On
defendants' behalf, an English solicitor certified, with the
support of title documents, that as of the date of the loans, a
British corporation, Gilda Estates Ltd., owned three of the
6
A court may not apply the doctrine "mechanistically," but must
"evaluate whether a true issue of material fact remains in the
case" despite the affiant's prior sworn statement. Id. at 201.
Critical to a court's analysis is an affiant's explanation for the
contradictory statements. Ibid. (stating a court may not reject
the contradictory affidavit "where the contradiction is reasonably
explained"). Meisels was not prompted to provide an explanation,
since defendants did not invoke the doctrine.
12 A-3519-15T4
properties, Chanie owned a fourth, and Feige Ernster owned a
fifth.7
However, Meisels presented deeds listing him as the mortgagor
of four of the properties. We note that Meisels testified in a
deposition that he was a director of Gilda Estates, as well as
Rightmatch. According to the land registry reports, Gilda
Estates's London address was the same as Rightmatch's. Whether
Meisels was permitted to borrow funds against property formally
owned by other entities with which he was involved is an issue
between those property owners and Meisels. Likewise, if Meisels
lacked authority to use Rightmatch's account to transfer the funds,
then it is for Rightmatch to object.8 Just as Meisels would lack
7
Although plaintiffs' counsel questioned the accuracy of the
certification at summary judgment argument, he made no effort to
present contrary documentary evidence, either before argument, in
a motion for reconsideration, or before us. By contrast, a letter
from Bude Storz to Aubrey David, attached to Meisels's
certification, implicitly acknowledged that Gilda Estates owned
two properties discussed in the letter, stating, "Our clients
confirm . . . Gilda Estates Limited is solvent." The letter also
implied that Gilda Estates's compliance with all legal formalities
may have been questionable, stating, "The Director is chasing the
accountant to file any outstanding returns."
8
Rightmatch and Gilda Estates were among the plaintiffs in the
separate Ocean County lawsuit. Asked if he were a shareholder,
Meisels answered, "I think I am," but did not remember his
percentage of ownership, or the identity of other shareholders.
During discovery, Meisels objected to providing documentation
regarding a lawsuit defendants identified as "Rightmatch Ltd v.
Meisels [2014] B.P.I.R. 733."
13 A-3519-15T4
standing to seek the return of the $2.4 million, absent proof he
owned it, or was authorized by its owner to seek its return,
defendants lack standing to claim that Meisels exceeded his
authority when he borrowed the funds, or transferred them through
Rightmatch. See Correia v. Deutsche Bank Nat'l Trust Co., 452
B.R. 319, 324-25 (B.A.P. 1st Cir. 2011) (stating that debtors
lacked standing to object that an assignment of their mortgage
violated a pooling and servicing agreement because they were
neither parties to, nor third-party beneficiaries of, the
agreement); Rajamin v. Deutsche Bank Nat'l Trust Co., 757 F.3d 79,
88-90 (2d Cir. 2014) (holding that mortgagors lacked standing to
complain of violation of the securitization trust agreement).
We conclude that Meisels presented sufficient evidence of
standing to present to a jury his claimed right to seek the return
of the $2.4 million.
B.
We turn to Meisels's claim of conversion. We have adopted
the Restatement's definition of conversion, as the "intentional
exercise of dominion or control over a chattel which so seriously
interferes with the right of another to control it that the actor
may justly be required to pay the other the full value of the
chattel." Chicago Title Ins. Co. v. Ellis, 409 N.J. Super. 444,
454 (App. Div. 2009) (quoting Restatement (Second) of Torts
14 A-3519-15T4
§222A(1) (Am. Law Inst. 1965)). "The gist of an action in trover
is conversion, that is, the exercise of any act of dominion in
denial of another's title to the chattels, or inconsistent with
such title." Mueller v. Tech. Devices Corp., 8 N.J. 201, 207
(1951).
The defendant need not intend to act wrongfully, but must
have "intended 'to exercise a dominion or control over the goods
which is in fact inconsistent with the plaintiff's rights.'"
LaPlace v. Briere, 404 N.J. Super. 585, 595 (App. Div. 2009)
(quoting Prosser and Keeton on Torts, §15 at 92 (5th ed. 1984)).
A person may be liable for conversion "although he acted in good
faith and in ignorance of the rights or title of the owner."
McGlynn v. Schultz, 90 N.J. Super. 505, 526 (Ch. Div. 1966)
(quoting 89 C.J.S. Trover and Conversion § 1 (1955)), aff'd, 95
N.J. Super. 412 (App. Div. 1967).
Although conversion historically applied to tangible
chattels, we held in Chicago Title that the tort may, under certain
circumstances, apply to the exercise of dominion or control over
money. Chicago Title, 409 N.J. Super. at 449, 455-56; see also
Harper, James and Gray on Torts, § 2.13 at 210 (3d ed. 2006)
(noting that conversion "is frequently recognized in connection
with funds that have been or should have been segregated for a
particular purpose or that have been wrongfully obtained or
15 A-3519-15T4
retained or diverted in an identifiable transaction"). "It is
essential that the money have belonged to the injured party and
that it be identifiable, but the money need not be the identical
bills or coins that belong to the owner." Chicago Title, 409 N.J.
Super. at 455-56. Addressing a conversion claim against an
attorney who allegedly misdirected attorney trust account funds,
we stated that "in the bailment context '[t]he tort arises from
the bailee's commission of an unauthorized act of dominion over
the bailor's property inconsistent with the [bailor's] rights in
that property.'" Dynasty Bldg. Corp. v. Ackerman, 376 N.J. Super.
280, 286 (App. Div. 2005) (quoting Lembaga Enters., Inc. v. Cace
Trucking & Warehouse, Inc., 320 N.J. Super. 501, 507 (App. Div.
1999)).
On the other hand, a conversion claim does not lie for
collection of a mere debt. Bondi, 423 N.J. Super. at 431. We
held it did not lie where a benefits administrator withdrew funds
from volunteer firefighters' accounts, and returned them to the
municipality from which it received them, in accord with its
contract. N. Haledon Fire Co. No. 1 v. Borough of N. Haledon, 425
N.J. Super. 615, 631 (App. Div. 2012). We reasoned the
administrator did not exercise independent dominion or control of
the funds; the municipality did. Ibid.; see also Pereira v. United
Jersey Bank, 201 B.R. 644, 676 (S.D.N.Y. 1996) (applying New Jersey
16 A-3519-15T4
law, and finding that a bank subject to a contract with a customer
did not exercise dominion and control over funds in the customer's
account).
Defendants present two grounds for dismissing Meisels's
conversion claim: (1) he failed to prove he owned the $2.4 million
and (2) he failed to demand its return. We have already detailed
why Meisels presented sufficient evidence on ownership. As for
the demand, defendants contend, quoting Mueller, 8 N.J. at 207,
that Meisels was required to show that he demanded the return of
his property "at a time and place and under such circumstances as
defendant is able to comply with if he is so disposed, and the
refusal must be wrongful."
Defendants misread Mueller. Demand is not invariably an
essential element of conversion. In particular, it is not required
when the alleged converter has already parted with the chattel or,
in this case, identifiable fund of money. Rather, demand is
required where the possessor of the chattels lawfully acquired
them, and still retains them. In Mueller, "the chattels were
lawfully obtained and in the possession of Technical, and . . .
there was no removal of them, [and] no destruction of them . . . ."
8 N.J. at 208.
The Mueller Court stated, "It is well settled that where
possession of chattels is lawfully acquired, a demand therefore
17 A-3519-15T4
and refusal to deliver is generally necessary before an action in
trover and conversion will accrue." Id. at 207. Refusal of demand
is merely evidence of conversion. Ibid. "'To constitute a
conversion of goods there must be some repudiation by the defendant
of the owner's right [as by a refusal of a demand], or some
exercise of dominion over them by him inconsistent with such right
. . . .'" Ibid. (quoting Farrow v. Ocean Cnty. Trust Co., 121
N.J.L. 344, 348 (Sup. Ct. 1938)) (emphasis added); see also Bondi,
423 N.J. Super. at 432 (stating that "[t]he repudiation must be
manifested in the injured party's demand for the funds and the
tortfeasor's refusal to return the monies sought").
However, where conversion has already occurred by
destruction, or wrongful transfer — events not present in Mueller
— demand is both futile and unnecessary. "'There must be an actual
conversion, or a refusal to deliver on demand, which is evidence
of conversion, before the detention becomes unlawful." Mueller,
8 N.J. at 207 (quoting Farrow, 121 N.J.L. at 348) (emphasis added).
"The defendant being lawfully in possession of the property, that
possession could not become tortious until it has refused upon
demand made to deliver them to plaintiff, in the absence of any
evidence to show a removal of the goods by the defendant or
destruction of them." Temple Co. v. Penn Mut. Life Ins. Co., 69
N.J.L. 36, 37 (Sup. Ct. 1903) (emphasis added).
18 A-3519-15T4
This limitation on the demand requirement is well-recognized.
"If [a] defendant has already incurred liability for converting
goods (as by dispossession, by purchase of them, by alteration,
etc.) then neither demand nor refusal is necessary to complete the
basis for liability . . . ." Harper, James and Gray on Torts, §
2.27 at 245. "A demand is not necessary when there has been a
wrongful taking or an exercise of dominion and control over the
property inconsistent with the rights of the owner." Stuart
Speiser et al., 7 The American Law of Torts, § 24:2 at 1015 (2011).
Connecticut's Appellate Court has succinctly explained when
demand is, and is not, required. Demand is only required "where
the possession, originally rightful, becomes wrongful by [1]
reason thereafter of a wrongful detention," but it is not required
in the case of "[2] a wrongful use of the property, or [3] the
exercise of an unauthorized dominion over the property." Luciani
v. Stop & Shop Cos., 544 A.2d 1238, 1240 (Conn. App. Ct. 1988).
The court reasoned that in the latter two cases, "the wrongful use
and the unauthorized dominion, constitute the conversion;
therefore no demand for the return of the personal property is
required." Ibid. (emphasis removed).
In sum, Meisels presented sufficient evidence of ownership
to support his claim of conversion, and proof of a demand and
refusal was unnecessary under the facts alleged.
19 A-3519-15T4
C.
Meisels also claims that Fox Rothschild owed him a fiduciary
duty. However, there was no evidence that Fox Rothschild knew
Meisels existed. Fox Rothschild received money from Cambridge
Mercantile which referenced Rightmatch, but Meisels's role in or
use of Rightmatch and his claimed ownership of the money was not
disclosed to Fox Rothschild.
Meisels's undisclosed status undermines his breach of
fiduciary duty claim. Meisels admitted that he never communicated
with Fox Rothschild or its former partner. He stated he was
represented by a different attorney. To prove breach of fiduciary
duty, Meisels must first prove a fiduciary relationship existed.
We acknowledge that "a member of the bar owes a fiduciary
duty to persons, though not strictly clients, who he knows or
should know rely on him in his professional capacity." Albright
v. Burns, 206 N.J. Super. 625, 632-33 (App. Div. 1986); see also
Banco Popular No. America v. Gandi, 184 N.J. 161, 183-86 (2005)
(attorney prepared a false opinion letter to a lender, regarding
his client's financial status, to assist his client in obtaining
a loan); Petrillo v. Bachenberg, 139 N.J. 472, 479-80, 487-88
(1995) (real estate attorney provided incomplete percolation
reports to a potential buyer, which the potential buyer reasonably
relied upon). "[A]n express agreement – such as an escrow
20 A-3519-15T4
arrangement – can serve as the source of an attorney's duty to a
third party." Kevin H. Michels, N.J. Attorney Ethics, §§ 46:2 at
1212, 46:2-2(b) at 1222 (2018).
Yet, Meisels presented no evidence that Fox Rothschild
entered into an express or implied agreement with him.
Furthermore, based on his undisclosed status, there is no evidence
that the firm or its former partner knew, or had reason to know,
that he allegedly relied on them in their professional capacity.
In Dynasty Bldg., 376 N.J. Super. at 283, upon which Meisels
relies, the plaintiffs had deposited funds into the defendant's
attorney trust account. They claimed the attorney breached his
fiduciary duty by misdirecting the funds. We held, "If in fact
the plaintiffs can establish that it was their funds, a fiduciary
relationship developed between them and [the attorney] even though
he did not represent them in any matter." Id. at 287. However,
in that case, the plaintiffs asserted their claim to the funds
before the attorney disbursed them, and the attorney acted based
on his client's competing claim. That, he was not free to do.
Ibid.Likewise, Meisels misplaces reliance on In re Hollendonner,
102 N.J. 21 (1985), and In re Frost, 171 N.J. 308 (2002). The
Court in those cases found a fiduciary relationship, but the
attorney in Frost communicated with or knew the party claiming
21 A-3519-15T4
breach, Frost, 171 N.J. at 316-17; and there was an express escrow
agreement involving the party in Hollendonner, 102 N.J. at 22.
Fox Rothschild may have been aware, based on the wire
confirmation, that it was entrusted with funds from Rightmatch. 9
However, we are not asked to determine whether Rightmatch has a
viable breach of fiduciary duty claim. As for Meisels, we conclude
that his undisclosed status dooms his claim.
D.
In sum, we conclude Meisels has presented sufficient evidence
to reach a jury on his ownership of the $2.4 million and his
standing to seek its return. He also has presented sufficient
evidence to support his conversion claim. He was not required to
demand the return of the $2.4 million after defendants allegedly
disbursed it at Weinstein's direction. Finally, the court
correctly granted summary judgment dismissal of the breach of
fiduciary duty claim.
Affirmed in part; reversed and remanded in part. We do not
retain jurisdiction.
9
We acknowledge the equitable principle that "once moneys have
been received or allocated for a certain purpose such moneys become
impressed with a definite trust to be disbursed for that purpose
only." Nat'l Surety Corp. v. Barth, 11 N.J. 506, 514 (1953).
However, there is no evidence that Rightmatch communicated to Fox
Rothschild the purpose for which the funds were to be used.
22 A-3519-15T4