ORDER OF ST. BENEDICT OF NEW JERSEY VS. GREGORY G. GIANFORCARO, ESQ. (L-2323-12, MORRIS 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NOT FOR PUBLICATION WITHOUT THE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-1158-16T3
ORDER OF ST. BENEDICT OF
NEW JERSEY,
Plaintiff-Appellant,
v.
GREGORY G. GIANFORCARO,
ESQ.,
Defendant-Respondent.
____________________________
Argued April 19, 2018 – Decided July 27, 2018
Before Judges Simonelli and Haas.
On appeal from Superior Court of New Jersey,
Law Division, Morris County, Docket No.
L-2323-12.
Christopher W. Kinum argued the cause for
appellant (Critchley, Kinum & Denoia, LLC,
attorneys; Michael Critchley, Christopher W.
Kinum and Christopher L. Fox, on the briefs).
Christopher J. Carey argued the cause for
respondent (McElroy Deutsch Mulvaney &
Carpenter, LLP, and David L. Norris,
attorneys; Christopher J. Carey, of counsel
and on the brief; Theodore T. Reilly and
Venanzio E. Cortese, on the brief).
PER CURIAM
This matter involves defendant Gregory G. Gianforcaro's
alleged breach of a confidentiality clause in a settlement
agreement between W.P.W., a former student at Delbarton School,
and his parents (collectively W.W.),1 and plaintiff Order of St.
Benedict of New Jersey (OSBNJ), regarding sexual misconduct claims
against a priest. OSBNJ filed a complaint against Gianforcaro,
alleging breach of contract, tortious interference with
contractual relations, breach of duty of good faith and fair
dealing, tortious interference with prospective economic
advantage, and civil conspiracy.
OSBNJ appeals from the September 27, 2013 Law Division order,
which denied its motion to amend the complaint to assert a legal
malpractice claim against Gianforcaro. OSBNJ also appeals from
the March 6, 2015 order, which granted summary judgment to
Gianforcaro on the breach of contract and breach of duty of good
faith and fair dealing.2 We affirm the September 27, 2013 order,
1
We use initials to identify the parties involved in this matter
pursuant to Rule 1:38-3.
2
In an October 11, 2016 consent order, OSBNJ consented to
dismissing the remaining claims with prejudice. The September 27,
2013 and March 6, 2015 orders are appealable because the consent
order reserved OSBNJ's right to appeal. See Whitfield v. Bonanno
2 A-1158-16T3
reverse the March 6, 2015 order, and remand for further
proceedings.
I.
We derive the following facts from the evidence submitted by
the parties in support of, and in opposition to, the summary
judgment motion, viewed in the light most favorable to OSBNJ.
Elazar v. Macrietta Cleaners, Inc., 230 N.J. 123, 135 (2017).
In 1988, W.W. and their then-attorney, Thomas Roth, and OSBNJ
and its then-attorney, Edward F. Broderick, Jr., executed a
settlement agreement and release,3 which contained the following
confidentiality clause:
[W.W.] and their attorney will keep
confidential and not make public, or knowingly
or negligently reveal to anyone, including,
without limitation, any current, former or
future student of Delbarton School or member
. . . of their family, any information
regarding [W.W.'s] claims against . . .
[OSBNJ], or disclose any claim that is in any
way related to this [s]ettlement [a]greement
and [g]eneral [r]elease, or the terms or
existence of this [s]ettlement [a]greement and
[g]eneral [r]elease, including, without
limitation, the amount, or amounts, they are
receiving under it. [OSBNJ] will keep
confidential and not make public or knowingly
or negligently reveal to anyone, any
Real Estate Group, 419 N.J. Super. 547, 550-51 and n.3 (App. Div.
2011); Janicky v. Point Bay Fuel, Inc., 410 N.J. Super. 203, 207
(App. Div. 2009).
3
Other individuals who also executed the settlement agreement
are not involved in this matter.
3 A-1158-16T3
information regarding . . . [W.W.'s] claims
against [OSBNJ] and will mutually maintain
confidentiality about the terms and conditions
of this [s]ettlement [a]greement except to the
extent applicable to the terms of this
[s]ettlement [a]greement.
[(Emphasis added).]
The confidentiality clause contained the following liquidated
damages provision:
[OSBNJ] shall have the unequivocal right to
cease further payments, and to recover the
full amount paid to . . . [W.W.] under this
[s]ettlement [a]greement and [g]eneral
[r]elease, if they or their agents or attorney
knowingly or negligently breach this
confidentiality provision.
[(Emphasis added).]
The settlement agreement also provided that:
Mr. Roth and his partners will keep
confidential and will not knowingly or
negligently make public or reveal to anyone,
including, without limitation, any current,
former or future student of Delbarton School
or member of their family, any information
regarding . . . [W.W.'s] claims against . . .
[OSBNJ], or any claim that is in any way
related to their [s]ettlement [a]greement and
[g]eneral [r]elease or the terms of this
[s]ettlement [a]greement and [g]eneral
[r]elease, including, without limitation, the
amount . . . [W.W.] are receiving under it.
The settlement agreement contained the settlement amount. It
further provided that "[t]he [s]ettlement [a]greement and
[g]eneral [r]elease contains the entire agreement between . . .
4 A-1158-16T3
[W.W.] and . . . [OSBNJ] with regard to the matters set forth
herein and shall be binding upon and enure to the benefit of the
executors, administrators, personal representatives, heirs,
successors, and assigns of each. (Emphasis added). The settlement
agreement required that "[a]ll applications for relief under the
terms of this [s]ettlement [a]greement and [g]eneral [r]elease
shall be on twenty days . . . notice to the other party, and in
writing[.]"
Gianforcaro began representing W.W. in 2012. He filed a
complaint in the Superior Court, seeking to void the
confidentiality clause. He had read the settlement agreement
prior to filing the complaint, and knew of the settlement amount
and the confidentiality clause and liquidated damages provision.
He held a press conference outside the Morris County Courthouse
the day he filed the complaint, and publicly revealed that the
settlement amount "was approximately seven figures." This lawsuit
followed.
II.
OSBNJ filed a motion to amend the complaint to assert a legal
malpractice claim against Gianforcaro. The motion judge denied
the motion, finding as follows:
[OSBNJ] sued for breach of contract and now
wishes to amend the complaint to add [a] legal
5 A-1158-16T3
malpractice [claim] against . . .
[Gianforcaro].
I think that our understanding of when you can
sue for malpractice where you don't have an
attorney-client relationship differs. In
order to [sue for malpractice where there is
no attorney/client relationship] you have to
show an independent duty which existed. . . .
see Fitzgerald [v. Linnus,] 336 [N.J.] Super.
458, 468 [(App. Div. 2001)]. It's not the
kind of duty and the cases decided are not
like this.
They involve a lawyer doing something
with the . . . third-party . . . on which the
third-party relies. Here, we just have an
express contract where the attorney agrees
that he's going to keep it confidential. That
. . . failure to do so may very well be breach
of contract, but it's not legal malpractice
as I understand it.
On appeal, OSBNJ argues the judge erred in failing to
recognize that an attorney's duty to a non-client is not restricted
to situations involving the attorney's doing something with the
non-client on which the non-client relies. OSBNJ cites to the
balancing test set forth in Albright v. Burns, 206 N.J. Super.
625, 632-33 (App. Div. 1986) for determining an attorney's duty
to a non-client:
1. "the extent to which the transaction was
intended to affect the plaintiff;"
2. "the foreseeability of harm to" the
plaintiff;
3. "the degree of certainty that the
plaintiff suffered injury;"
6 A-1158-16T3
4. "the closeness of the connection between
the defendant's conduct and the injury
suffered;" and
5. "the moral blame attached to the
defendant's conduct, and the policy of
preventing future harm."
OSBNJ claims it satisfied the first factor because
Gianforcaro used the press conference and breach of the
confidentiality provision to carry out his personal vendetta
against Broderick and advance his publicity campaign in order to
obtain clients to sue OSBNJ and gain leverage in connection with
his four pending cases against OSBNJ. As to the remaining factors,
OSBNJ argues Gianforcaro's purpose in breaching the
confidentiality provision "was to negatively affect OSBNJ and
advance [his] personal interests[;]" "there was 100%
foreseeability of harm to OSBNJ and 100% certainty that OSBNJ
would suffer injury" because Gianforcaro's purpose "was to harm
and injure OSBNJ;" there was a close connection between
Gianforcaro's conduct and the injury OSBNJ suffered; and "a duty
must be imposed on . . . [him] to prevent attacks from being
carried out by attorneys in the future."
OSBNJ further argues that under Fitzgerald, 336 N.J. Super.
at 468, the interests of fairness and policy require finding that
Gianforcaro owed a duty to OSBNJ, which he breached because: (1)
7 A-1158-16T3
the right of confidentiality belonged to OSBNJ; (2) he was W.W.'s
agent at the press conference; (3) once he became W.W.'s agent,
he became bound by the settlement agreement and confidentiality
provision; (4) the settlement agreement precluded him from
discussing the settlement; and (5) he discussed the settlement at
the press conference, specifically mentioning the settlement
amount was seven figures. We disagree with OSBNJ's arguments.
"Rule 4:9-1 requires that motions for leave to amend be
granted liberally" and that "the granting of a motion to file an
amended complaint always rests in the court's sound discretion."
Kernan v. One Wash. Park Urban Renewal Assocs., 154 N.J. 437, 456-
57 (1998). "The exercise of discretion requires a two-step
process: whether the non-moving party will be prejudiced, and
whether granting the amendment would nonetheless be futile." Notte
v. Merchs. Mut. Ins. Co., 185 N.J. 490, 501 (2006). Courts are
thus "free to refuse leave to amend when the newly asserted claim
is not sustainable as a matter of law . . . [because] a subsequent
motion to dismiss must be granted." Interchange State Bank v.
Rinaldi, 303 N.J. Super. 239, 256-57 (App. Div. 1997) (quoting
Mustilli v. Mustilli, 287 N.J. Super. 605, 607, (Ch. Div. 1995)).
Applying these standards, we discern no abuse of discretion in the
denial of OSBNJ's motion to amend.
8 A-1158-16T3
An attorney owes an independent duty of care to a non-client
when the attorney "intended or should have foreseen that the [non-
client] would rely on the [attorney's] work" or when the attorney
"know[s], or should know, that non-clients will rely on the
attorney['s] representations and the non-clients are not too
remote from the attorney[] to be entitled to protection."
Petrillo v. Bachenberg, 139 N.J. 472, 482-84 (1995) (citation
omitted). To sustain a malpractice claim, a non-client must show
that reliance on the attorney's actions or representations was
reasonably foreseeable by the attorney, as it is the reasonably
foreseeable reliance by the non-client on the attorney's
representation that imposes the duty of care. Id. at 483-84. As
our Supreme Court further clarified in Banco Popular N. Am. v.
Gandi, 184 N.J. 161, 180 (2005):
If the attorney['s] actions are intended to
induce a specific non-client['s] reasonable
reliance on his or her representations, then
there is a relationship between the attorney
and the third party. Contrariwise, if the
attorney does absolutely nothing to induce
reasonable reliance by a third party, there
is no relationship to substitute for the
privity requirement.
"Put differently, the invitation to rely and reliance are the
linchpins of attorney liability to third parties." Id. at 181.
There are no facts in this case showing that Gianforcaro did
anything in the performance of his duties as an attorney to induce
9 A-1158-16T3
OSBNJ to rely on his actions or representations as an attorney.
Gianforcaro did not represent W.W. in connection with the
settlement agreement. He had no involvement whatsoever in the
negotiation or preparation of the settlement agreement, and gave
no false or misleading information to OSBNJ about the settlement
agreement or confidentiality clause and liquidated damages
provision. Further, OSBNJ and Gianforcaro are adversaries, making
them too remote from one another for OSBNJ to maintain a legal
malpractice claim against him. Thus, Gianforcaro owed no
independent duty of care to OSBNJ as a non-client.
Albright and Fitzgerald, on which OSBNJ relies, do not change
this result. Our decision in Albright turned on the attorney's
duty to act in the best interests of a non-client because the
attorney knew his client had power of attorney for the non-client,
which the client used to sell the non-client's stock in order to
make a loan of the proceeds to himself. 206 N.J. Super. at 630.
We did not apply the five-factor balancing test to find the
attorney had a duty to the non-client. Rather, we found there was
an attorney-client relationship between the attorney and non-
client despite the lack of a formal contract because at the time
of the stock sale and loan, the attorney was aware of the conflict
of interest between his client and the non-client and potential
10 A-1158-16T3
for harm to the non-client. Id. at 632. Such circumstances did
not exist here.
In Fitzgerald, 336 N.J. Super. at 469-71, we found there was
an attorney-client relationship between the plaintiff and the
attorney; however, the attorney's duty of care was limited by the
scope of his representation of the plaintiff in her capacity as
executrix of her late husband's estate, not her estate planning.
We also found the attorney owed no independent duty of care to the
plaintiff's children, who were non-clients, to advise them of the
tax consequences of disclaiming insurance proceeds because of the
limited scope of his representation, and because the children were
not beneficiaries of the husband's estate. Id. at 472-73.
Likewise, here, Gianforcaro's representation was limited to
litigating W.W.'s claims against OSBNJ, not to negotiating the
settlement agreement. Gianforcaro is OSBNJ's adversary attorney
in this litigation, and thus, OSBNJ had no reason to rely on his
actions as an attorney.
In the absence of Gianforcaro's independent duty of care to
OSBNJ, a non-client, the proposed legal malpractice claim was
unsustainable as a matter of law and would not have survived a
motion to dismiss. Accordingly, the motion to amend was properly
denied.
11 A-1158-16T3
III.
Gianforcaro moved for summary judgment on the breach of
contract and breach of duty of good faith and fair dealing claims.
He argued, in part, that he was not bound by the confidentiality
clause.
Roth submitted a certification in support of the motion and
Broderick submitted a certification in opposition. The
certifications differed significantly as to the parties' intent
regarding the confidentiality clause and liquidated damages
provision. Roth certified:
At the time the [s]ettlement [a]greement
was signed, I understood that my firm and I
were bound by the [a]greement's
confidentiality provision. I further
understood that by its terms, the [s]ettlement
[a]greement barred me and my law firm from
representing any other former or current
Delbarton students who may have been abused
by [the priest].
At no time during the negotiation of the
[s]ettlement [a]greement did any party or
attorney raise or discuss the issue of whether
any other attorney or attorneys who
represented . . . [W.W.], other than me or my
law firm, would be bound by the [s]ettlement
[a]greement or the confidentiality contained
therein.
At no time during the negotiation of the
[s]ettlement [a]greement did any party or
attorney raise or discuss a question about
potential sources of recovery in the event of
a breach of the confidentiality provision
other than a return from . . . [W.W.] of the
12 A-1158-16T3
actual funds paid to them under the
[s]ettlement [a]greement.
My understanding at the time the
[s]ettlement [a]greement was signed was that
in the event of a confidentiality breach by
. . . [W.W.], myself, or any member of my
firm, OSBNJ would be entitled to seek return
of the settlement funds from . . . [W.W.].
To the contrary, Broderick certified that "during [the
parties'] extensive negotiations, it was the clear intent of both
parties to create a strong confidentiality provision with respect
to the settlement." To that end, the terms "attorney" and "agent"
were included in the liquidated damages clause "to cover all
potential sources of a breach" and "to make the provision as broad
and strong as possible and give OSBNJ a direct right to secure
reimbursement from [W.W.'s] attorney and/or agent in the event
that the attorney and/or agent breached the agreement." To support
this assertion, Broderick pointed to post-settlement dispute over
an alleged breach of the confidentiality clause, where Broderick
had confirmed to Roth, and Roth did not deny, that Roth was
potentially liable if he breached the confidentiality clause.
Broderick also certified:
I reiterate under penalty of perjury that
it was our clear intent to create a strong and
broad liquidated damages clause. Consistent
with this intention, the phrase "agents or
attorney" was specifically included in the
liquidated damages clause to bind [W.W.'s]
agents and attorneys to the agreement and give
13 A-1158-16T3
OSBNJ the right to a direct recovery from any
[W.W.] agents and attorneys who divulged the
terms of the settlement.
Having the right to a direct recovery
from several sources, including the agent or
attorney who actually committed the breach,
was consistent with the emphasis that the
parties placed on keeping the terms of the
settlement confidential and manifested the
clear intention of the parties to create a
strong and broad confidentiality provision.
OSBNJ's right to a direct recovery from
[W.W.'s] attorneys and agents was discussed
by Mr. Roth and me during our prolonged
settlement negotiations and agreed to by Mr.
Roth. The inclusion of the phrase "agents or
attorney" was consistent with the overriding
purpose of the agreement, and was intended to
memorialize that OSBNJ had the right to seek
a direct recovery from any [W.W.] agent or
attorney who might divulge the terms of the
settlement and breach the confidentiality
provision.
[T]he allegation contained in . . .
Roth's certification that "at no time did
OSBNJ or its attorneys discuss (or even
suggest) the possibility that I, my firm, or
anyone besides [W.W.] might be responsible for
contractual damages arising from a
confidentiality breach" is categorically
false.
Similarly, the allegations contained in
. . . Roth's certification are also patently
false as our inclusion of the terms "agent"
and "attorney" memorialized our discussions
and agreement allowing a direct recovery in
the amount of the settlement proceeds paid to
[W.W.] from Mr. Roth, his firm and any [W.W.]
"agent" or "attorney" who breached the
confidentiality provision.
14 A-1158-16T3
The intent of the provision was to hold
the individual who actually breached the
confidentiality, whether it be [W.W.] . . .
Mr. Roth, any member of Mr. Roth's firm or any
[W.W.] agent or attorney personally and
directly responsible for repayment of the
settlement proceeds.
The motion judge made no finding as to whether Gianforcaro
was bound by the confidentiality clause. Rather, the judge found
there was no evidence the parties' intended for anyone other than
W.W. to be responsible for liquidated damages in the event of a
breach of the confidentiality clause. The judge rejected
Broderick's certification, finding it was "written in conclusory
terms or [was] written in terms of personal opinion that
[Broderick] had in his mind as to what the effect of the language
would be."
On appeal, OSBNJ argues the judge failed to view the evidence
in a light most favorable to OSBNJ and improperly weighed the
evidence, decided material facts in dispute, and made credibility
determinations.4 We agree.
4
We reject OSBNJ's additional argument that the law of the case
doctrine applies to the court's prior rulings on the breach of
contract claim. There was no ruling made on the merits of that
claim. Lombardi v. Masso, 207 N.J. 517, 538-39 (2011). In
addition, because we reverse the grant of summary judgment and
remand for further proceedings, we do not address OSBNJ's argument
that Gianforcaro is bound by the confidentiality clause and liable
for breach of contract and the duty of good faith and fair dealing.
15 A-1158-16T3
Our review of a ruling on summary judgment is de novo,
applying the same legal standard as the trial court. Conley v.
Guerrero, 228 N.J. 339, 346 (2017). Like the trial court, our
"function is not . . . to weigh the evidence and determine the
truth . . . but to determine whether there is a genuine issue for
trial." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540
(1995) (citation omitted). To make this determination, we must
consider "whether the evidence presents a sufficient disagreement
to require submission to a jury or whether it is so one-sided that
one party must prevail as a matter of law." Liberty Surplus Ins.
Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007) (quoting
Brill, 142 N.J. at 536).
Summary judgment must be granted "if 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." Templo
Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co., 224 N.J. 189,
199 (2016) (quoting R. 4:46-2(c)). As our Supreme Court has
instructed:
a determination whether there exists a
"genuine issue" of material fact that
precludes summary judgment requires the motion
judge to consider whether the competent
evidential materials presented, when viewed in
16 A-1158-16T3
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, 142 N.J. at 540 (1995)).]
Summary judgment should be denied when the determination of
material disputed facts depends primarily on credibility
evaluations. Petersen v. Twp. of Raritan, 418 N.J. Super. 125,
132 (App. Div. 2011) (citation omitted). It has been long-settled
that credibility is always for the factfinder to determine.
Ferdinand v. Agric. Ins. Co. of Watertown, N.Y., 22 N.J. 482, 492
(1956).
If there is no genuine issue of material fact, we must then
"decide whether the trial court correctly interpreted the law."
DepoLink Court Reporting & Litig. Support Servs. v. Rochman, 430
N.J. Super. 325, 333 (App. Div. 2013) (citation omitted). We
review issues of law de novo and accord no deference to the trial
judge's legal conclusions. Nicholas v. Mynster, 213 N.J. 463, 478
(2013). Applying the above standards, we conclude that summary
judgment was improperly granted.
Our review of a trial court's interpretation and construction
of a contract is de novo. Manahawkin Convalescent v. O'Neill, 217
N.J. 99, 115 (2014). "[We] give 'no special deference to the
trial court's interpretation and look at the contract with fresh
17 A-1158-16T3
eyes.'" Ibid. (quoting Kieffer v. Best Buy, 205 N.J. 213, 223
(2011)).
The construction of a written contract is usually a legal
question for the court, suitable for disposition on summary
judgment, unless there is ambiguity or the need for parol evidence
to aid in interpretation. Driscoll Constr. Co. v. State Dep't of
Transp., 371 N.J. Super. 304, 313-14 (App. Div. 2004) (citations
omitted); see also Kaur v. Assured Lending Corp., 405 N.J. Super.
468, 474 (App. Div. 2009) (the interpretation and construction of
a settlement agreement is a matter of law). The court's aim is
to determine the intentions of the parties to the contract, as
revealed by the language used, the relations of the parties, the
attendant circumstances, and the objects the parties were trying
to attain. Driscoll Constr. Co., 371 N.J. Super. at 313 (citation
omitted). "[W]here the terms of a contract are clear and
unambiguous there is no room for interpretation or construction
and the courts must enforce those terms as written." Schor v. FMS
Fin. Corp., 357 N.J. Super. 185, 191 (App. Div. 2002) (quoting
Karl's Sales and Serv., Inc. v. Gimbel Bros., Inc., 249 N.J. Super.
487, 493 (App. Div. 1991)).
Whether a contract is ambiguous is a legal question for the
court. Nester v. O'Donnell, 310 N.J. Super. 198, 210 (App. Div.
1997). To ascertain the intention of the parties, and to determine
18 A-1158-16T3
if an ambiguity exists, a court may, if necessary, consider
extrinsic evidence offered to support conflicting interpretations.
Conway v. 287 Corp. Ctr. Assocs., 187 N.J. 259, 269-70 (2006).
Extrinsic evidence permissible to consider in the event of an
ambiguity includes "consideration of the particular contractual
provision, an overview of all the terms, the circumstances leading
up to the formation of the contract, custom, usage, and the
interpretation placed on the disputed provision by the parties'
conduct." Id. at 269 (quoting Kearny PBA Local #21 v. Town of
Kearny, 81 N.J. 208, 221 (1979)). If there is an ambiguity, then
the resolution of the ambiguity is for the jury. Michaels v.
Brookchester, Inc., 26 N.J. 379, 388 (1958).
We conclude that the liquidated damages provision is
ambiguous with respect to whether OSBNJ could directly recover
damages from any of W.W.'s agents or attorneys who breach the
confidentiality clause. Viewing the evidence in the light most
favorable to OSBNJ, which the motion judge failed to do, there is
a genuine issue of material fact as to what the parties intended
with respect to the liquidated damages clause. There were also
credibility issues that must be decided by the factfinder.
Affirmed in part, reversed in part, and remanded for further
proceedings. We do not retain jurisdiction.
19 A-1158-16T3