EVANGELOS DIMITRAKOPOULOS VS. BORRUS, GOLDIN, FOLEY, VIGNUOLO, HYMAN AND STAHL, PC(L-5373-15, MIDDLESEX COUNTY AND STATEWIDE) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE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-0880-16T3
EVANGELOS DIMITRAKOPOULOS and
MATILDE DIMITRAKOPOULOS,
Plaintiffs-Appellants,
v.
BORRUS, GOLDIN, FOLEY, VIGNUOLO,
HYMAN AND STAHL, P.C.,
STEVEN L. FOX, ESQ. and
ANTHONY B. VIGNUOLO, ESQ.,
Defendants-Respondents,
and
FRAZER EVANGELISTA & COMPANY, LLC,
and RALPH J. EVANGELISTA,
Defendants.
Argued October 3, 2017 – Decided October 19, 2017
Before Judges Yannotti and Carroll.
On appeal from the Superior Court of New
Jersey, Law Division, Middlesex County, Docket
No. L-5373-15.
Jae H. Cho argued the cause for appellants
(Cho Legal Group, LLC, attorneys; Mr. Cho, on
the briefs).
James E. Stahl argued the cause for respondent
(Borrus, Goldin, Foley, Vignuolo, Hyman &
Stahl, PC, attorneys; Mr. Stahl, on the
brief).
PER CURIAM
Plaintiffs appeal from a November 20, 2015 order that
dismissed their legal malpractice action against defendants
Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl, P.C. (BGF), Steven
L. Fox, and Anthony B. Vignuolo, pursuant to Rule 4:6-2(e). The
trial court found the malpractice action was barred by the entire
controversy doctrine. For the reasons that follow, we affirm.
I.
We provide a detailed procedural history in order to place
this appeal in proper perspective. In October 2009, plaintiffs
retained BGF to represent them in litigation against a former
business partner who had allegedly improperly diverted funds from
the company (the underlying action). Plaintiff Matilde
Dimitrakopoulos was a fifty-one percent owner in the company,
Integrated Construction and Utilities, LLC (ICU). Matilde's
husband, plaintiff Evangelos Dimitrakopoulos, had no ownership
interest in ICU. However, he acted as Matilde's agent, performing
all ownership duties on her behalf, including executing the
retainer agreement with BGF.
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The underlying action proceeded in the Superior Court,
Chancery Division, Middlesex County until December 17, 2010, when
it was agreed that the business dispute would be submitted to
binding arbitration, and BGF was permitted to withdraw as counsel.
The record reflects that Evangelos was present in court and, when
questioned by the Chancery judge, responded that he heard and
accepted that disposition. The underlying action then proceeded
in arbitration until September 2, 2011, when, according to
plaintiffs, they retained new counsel and settled the ICU business
dispute on the final day of arbitration.
In the interim, on March 7, 2011, BGF filed an action in the
Law Division to collect its unpaid legal fees for services rendered
on behalf of plaintiffs in the underlying action (the collection
action). On April 14, 2011, Evangelos filed a pro se answer
denying he "promised to pay for services which were unnecessary
and contrary to [his] direction." On September 2, 2011, the court
suppressed the answer without prejudice for failure to answer
interrogatories.
On January 6, 2012, the court denied BGF's motion to suppress
the answer with prejudice. On February 21, 2012, the court denied
BGF's motion for reconsideration, and extended the time to provide
more specific answers to BGF's interrogatories until March 2,
2012. Because Evangelos still had not provided the required
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discovery, the court granted BGF's motion for final judgment of
default on July 13, 2012. BGF then undertook efforts to collect
the $121,947.99 judgment.
Three years later, on September 10, 2015, plaintiffs filed
the legal malpractice action under review against BGF, Fox, and
Vignuolo.1 Plaintiffs alleged that defendants committed
malpractice in the underlying action by: failing to properly plead
Matilde's claims and obtain her consent before agreeing to binding
arbitration; failing to properly perform discovery and secure
expert rebuttal reports; and improperly billing them excessive
amounts.
Defendants promptly moved to dismiss plaintiffs' complaint
pursuant to Rule 4:6-2(e), arguing it was barred by both the entire
controversy doctrine and the doctrine of waiver. Specifically,
defendants asserted that plaintiffs should have raised their
malpractice claims as a defense or counterclaim in the collection
action.
The court conducted oral argument on the motion on November
20, 2015. Notably, the following colloquy ensued:
THE COURT: So all [plaintiffs'] damages
[were] ascertained as of September 6[], 2011,
correct?
1
The complaint also asserted accounting malpractice claims against
other parties that have since been resolved and are not at issue
in this appeal.
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PLAINTIFFS' COUNSEL: Yes.
In an oral decision, Judge Arthur Bergman granted defendants'
motion to dismiss, finding the malpractice action was barred by
the entire controversy doctrine. The judge agreed with plaintiffs'
contention that the doctrine did not obligate them to raise their
malpractice claims in the underlying action. However, the judge
found that:
[O]nce that underlying case is done,
[plaintiffs have] the obligation to raise
[those claims] in the subsequent [collection]
case and they had ample opportunity to do so.
And I'm not going to tell you that during the
[four] months or [six] months prior to that,
there's an issue and if the default had been
granted and the case had been defaulted
against them within those first [six] months,
I would agree with you [that the entire
controversy doctrine would not apply].
But . . . once [plaintiffs] understood what
the damages were, they had counsel and that
[collection] case was still ongoing until it
was ultimately [resolved ten] months later.
That is an opportunity they chose not to have.
Accordingly, the judge concluded that the entire controversy
doctrine does not require malpractice claims to be brought during
the pendency of an underlying action "in which the malpractice
arose and a reasonable time thereafter." However, the judge
determined that "[ten] months is more than a reasonable time
thereafter." The judge found this ten-month period, during which
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BGF's collection action remained pending after the underlying
action concluded, afforded plaintiffs adequate opportunity to
assert their malpractice claims in the collection action.
Consequently, their failure to do so barred their subsequent
malpractice action. The judge entered an order dismissing the
complaint with prejudice. This appeal followed.
II.
On appeal, plaintiffs argue: (1) the entire controversy
doctrine does not apply to legal malpractice claims; (2) the motion
judge abused his discretionary authority; (3) our standard of
review is de novo; (4) the waiver doctrine does not require
dismissal of the complaint; (5) defendants' motion to dismiss
should have been denied as premature; and (6) the motion judge
improperly relied on facts outside the record.2 We do not find
these arguments persuasive.
A.
We apply a de novo standard of review to a trial court's
order dismissing a complaint under Rule 4:6-2(e). See Stop & Shop
2
Defendants filed a motion to strike points (2) through (5) of
plaintiffs' brief because they were not raised below. On March
27, 2017, the panel denied the motion without prejudice, subject
to our further consideration. We now deny the motion because we
have considered the challenged arguments raised by plaintiffs and
find they lack sufficient merit to warrant further discussion in
a written opinion. R. 2:11-3(e)(1)(E).
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Supermarket Co. v. Cty. of Bergen, 450 N.J. Super. 286, 290 (App.
Div. 2017) (quoting Teamsters Local 7 v. State, 434 N.J. Super.
393, 413, 416 (App. Div. 2014)). Under the rule, we owe no
deference to the motion judge's conclusions. Rezem Family Assocs.,
LP v. Borough of Millstone, 423 N.J. Super. 103, 114 (App. Div.),
certif. denied, 208 N.J. 368 (2011). "[O]ur inquiry is limited
to examining the legal sufficiency of the facts alleged on the
face of the complaint." Printing Mart-Morristown v. Sharp Elecs.
Corp., 116 N.J. 739, 746 (1989) (citing Reider v. Dep't of Transp.,
221 N.J. Super. 547, 553 (App. Div. 1987)). "A pleading should
be dismissed if it states no basis for relief and discovery would
not provide one." Rezem Family Assocs., LP, supra, 423 N.J. Super.
at 113 (citing Camden Cty. Energy Recovery Assoc., L.P. v. N.J.
Dep't of Envtl. Prot., 320 N.J. Super. 59, 64 (App. Div. 1999),
aff'd, 170 N.J. 246 (2001)).
B.
The entire controversy doctrine "embodies the principle that
the adjudication of a legal controversy should occur in one
litigation in only one court; accordingly, all parties involved
in a litigation should at the very least present in that proceeding
all of their claims and defenses that are related to the underlying
controversy." Wadeer v. N.J. Mfrs. Ins. Co., 220 N.J. 591, 605
(2015) (quoting Highland Lakes Country Club & Cmty. Ass'n v.
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Nicastro, 201 N.J. 123, 125 (2009)). The purposes of the doctrine
are "'(1) the need for complete and final disposition through the
avoidance of piecemeal decisions; (2) fairness to parties to the
action and those with a material interest in the action; and (3)
efficiency and the avoidance of waste and the reduction of delay.'"
Wadeer, supra, 220 N.J. at 605 (quoting DiTrolio v. Antiles, 142
N.J. 253, 267 (1995)).
Consistent with the doctrine's objectives, Rule 4:30A
provides that "[n]on-joinder of claims required to be joined by
the entire controversy doctrine shall result in the preclusion of
the omitted claims to the extent required by the entire controversy
doctrine[.]" The rule "encompasses 'virtually all causes, claims,
and defenses relating to a controversy[,]'" Oliver v. Ambrose, 152
N.J. 383, 394 (1998) (quoting Cogdell v. Hosp. Ctr. at Orange, 116
N.J. 7, 16 (1989)), and requires all parties in an action to raise
all transactionally related claims or risk preclusion. K-Land
Corp. No. 28 v. Landis Sewerage Auth., 173 N.J. 59, 69-71 (2002);
R. 4:30A.
"In determining whether a subsequent claim should be barred
under [the entire controversy] doctrine, 'the central
consideration is whether the claims against the different parties
arise from related facts or the same transaction or series of
transactions.'" Wadeer, supra, 220 N.J. at 605 (quoting DiTrolio,
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supra, 142 N.J. at 268). "It is the core set of facts that
provides the link between distinct claims against the same parties
. . . and triggers the requirement that they be determined in one
proceeding." Wadeer, supra, 220 N.J. at 605 (quoting DiTrolio,
supra, 142 N.J. at 267-68).
However, the entire controversy doctrine does not "apply to
bar component claims either unknown, unarisen or unaccrued at the
time of the original action." K-Land, supra, 173 N.J. at 70(quoting Pressler, Current N.J. Court Rules, comment 2 on R. 4:30A
(2002)). Also pertinent here is our Supreme Court's dictate that
"the entire controversy doctrine no longer compels the assertion
of a legal-malpractice claim in an underlying action that gives
rise to a claim." Olds v. Donnelly, 150 N.J. 424, 443 (1997)
(emphasis added).
Additionally, when "considering fairness to the party whose
claim is sought to be barred, a court must consider whether the
claimant has had a fair and reasonable opportunity to have fully
litigated that claim in the original action." Gelber v. Zito
P'ship, 147 N.J. 561, 565 (1997) (internal quotation marks and
citations omitted). Thus, "application of the entire controversy
doctrine requires some degree of equality of forum; that is, the
first forum must have been able to provide all parties with the
same full and fair opportunity to litigate the issues and with the
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same remedial opportunities in the second forum." Hernandez v.
Region Nine Hous. Corp., 146 N.J. 645, 661 (1996) (quoting Perry
v. Tuzzio, 288 N.J. Super. 223, 230 (App. Div. 1996)).
As noted, legal malpractice claims are exempt from the
preclusive effect of the entire controversy doctrine to the extent
they need not be asserted "in the underlying action that gives
rise to the claim." Olds, supra, 150 N.J. at 443. Central to our
analysis, then, is the interpretation of the phrase "underlying
action that gives rise to the [malpractice] claim." Plaintiffs
argue that the collection action constitutes the "underlying
action," and hence they were not required to assert their
malpractice claims in that action. However, plaintiffs
erroneously conflate the collection action with the underlying ICU
business dispute, which in this case is the underlying action that
gives rise to plaintiffs' malpractice claims.
This determination, however, does not conclude our analysis.
Rather, we must assess whether plaintiffs had a fair and reasonable
opportunity to fully litigate their malpractice claims in the
prior collection action. Also, because the entire controversy
doctrine is equitable in nature, we must consider whether its
application "would be unfair in the totality of the circumstances
and would not promote any of its objectives, namely, the promotion
of conclusive determinations, party fairness, and judicial economy
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and efficiency." K-Land Corp., supra, 173 N.J. at 70 (quoting
Pressler, Current N.J. Court Rules, comments 1 & 2 on R. 4:30A
(2002)).
It is true, as plaintiffs point out, that the underlying ICU
action had not yet concluded when BGF first filed the collection
action. They also argue, without any competent factual support
in the record, that they were not aware they had malpractice claims
against defendants until sometime later, when they consulted an
attorney.
It is undisputed, however, that the underlying action
concluded with a settlement on September 2, 2011. At that point,
plaintiffs concededly had ascertained the full extent of their
purported damages. Further, with respect to plaintiffs' knowledge
that their damages were attributable to defendants' alleged
professional negligence, the critical inquiry is "whether the
facts presented would alert a reasonable person, exercising
ordinary diligence, that he or she was injured due to the fault
of another." Caravaggio v. D'Agostini, 166 N.J. 237, 246 (2001).
Contrary to plaintiffs' argument, awareness of the "legal effect
of those facts" is not a requirement for accrual of the cause of
action. Grunwald v. Bronkesh, 131 N.J. 483, 493 (1993) (citing
Burd v. N.J. Tel. Co., 76 N.J. 284, 291-92 (1978)).
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As Judge Bergman correctly pointed out, at the time the
underlying action concluded, or within a reasonable time
thereafter, plaintiffs knew, or should have known, that their
alleged damages were attributable to defendants' professional
negligence. They then had a ten-month period before judgment was
entered to file amended pleadings in the collection action
asserting malpractice as a counterclaim or defense. Instead,
plaintiffs delayed three more years before filing their
malpractice complaint. Our consideration of the facts and
equitable factors leads us to conclude that the motion judge
correctly determined that the entire controversy doctrine applied
here and barred plaintiffs' malpractice complaint.
Affirmed.
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