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


Menu:
  •                         NOT FOR PUBLICATION WITHOUT THE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.
    
    
    
    
                                                  2                                   A-0880-16T3
          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
    
                                          3                                 A-0880-16T3
    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.
    
                                        4                              A-0880-16T3
              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
    
    
                                     5                         A-0880-16T3
    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).
    
                                        6                               A-0880-16T3
    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.
    
                                     7                          A-0880-16T3
    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,
    
                                      8                               A-0880-16T3
    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
    
                                     9                         A-0880-16T3
    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
    
                                               10                                     A-0880-16T3
    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)).
    
    
    
                                           11                                A-0880-16T3
        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.
    
    
    
    
                                            12                                   A-0880-16T3