STEPHANIE C. HUNNELL v. ALIDA MCKEON (L-4179-19, MONMOUTH COUNTY AND STATEWIDE) ( 2022 )

NOT FOR PUBLICATION WITHOUT THE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-0127-20
STEPHANIE C. HUNNELL,
Plaintiff-Respondent,
v.
ALIDA MCKEON,
Defendant-Appellant.
________________________
Submitted February 2, 2022 – Decided August 11, 2022
Before Judges Gilson, Gooden Brown, and Gummer.
On appeal from the Superior Court of New Jersey, Law
Division, Monmouth County, Docket No. L-4179-19.
Lora B. Glick, attorney for appellant.
Hunnell Law Group, LLC, attorneys for respondent
(Caitlin E. Holland, on the brief).
PER CURIAM
Plaintiff Stephanie Hunnell, a licensed attorney, represented defendant
Alida McKeon in divorce proceedings which resulted in McKeon receiving a
$630,000 settlement in 2008 as her share of equitable distribution. However,
McKeon's ex-husband failed to comply with the settlement terms, and McKeon
never received the full settlement amount despite Hunnell filing numerous post-
judgment enforcement motions on her behalf. Ultimately, the legal
representation ended, although the parties dispute the termination date.
Thereafter, Hunnell obtained a $55,352 award from the District Fee
Arbitration Committee (Fee Committee) for past due legal fees owed by
McKeon. McKeon never appealed the award. When McKeon failed to pay, on
November 25, 2019, Hunnell filed a verified complaint in the Law Division
pursuant to Rule 4:67-1(a) seeking a judgment. In response, McKeon filed a
contesting answer, including affirmative defenses, and a counterclaim alleging
legal malpractice and other claims. When Hunnell moved to dismiss the
counterclaim pursuant to Rule 4:6-2(e), McKeon opposed the motion and cross-
moved to amend her counterclaim to add a legal malpractice claim based on
fraudulent billing and stay the arbitration award pending the outcome of her
malpractice countersuit.
In two separate orders filed on July 31, 2020, the trial court granted
Hunnell's Rule 4:6-2(e) motion, dismissed McKeon's counterclaim in its entirety
with prejudice, entered judgment, and denied McKeon's cross-motions to stay
A-0127-20
2
the arbitration award and amend her counterclaim. McKeon now appeals from
the July 31, 2020 orders.1 For the reasons that follow, we affirm in part, reverse
in part, and remand for further proceedings.
First, we address the dismissal of McKeon's counterclaim. Because this
appeal comes to us on a Rule 4:6-2(e) motion to dismiss, we accept the facts
alleged in the counterclaim as true, affording defendant "'every reasonable
inference of fact.'" Green v. Morgan Props., 215 N.J. 431, 452 (2013) (quoting
Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989)).
Thus, we begin with a summary of the facts pled in the counterclaim.
According to the counterclaim, the divorce was finalized in 2008 with the
entry of an amended judgment of divorce that provided McKeon with a $630,000
settlement representing her share of the marital assets, to be paid in part from
the proceeds of the sale of certain properties owned by McKeon and her ex-
husband. Among the properties identified in the divorce judgment were two
rental properties in Garfield. Under the terms of the settlement, McKeon's ex-
husband was responsible for preparing the Garfield properties for sale and the
properties were to be listed for sale no later than December 15, 2008.
1
An amended order correcting clerical errors was entered on August 25, 2020.
A-0127-20
3
However, as of 2010, the properties remained unsold. Between 2009 and
2011, Hunnell filed four enforcement motions on McKeon's behalf to address
McKeon's ex-husband's recalcitrant conduct, all to no avail. The last motion
was adjudicated by way of an order dated February 7, 2012. On March 15, 2012,
Hunnell emailed McKeon to explain that she would file an appeal of the
February 7, 2012 order to address equitable distribution payments as soon as she
returned from vacation. However, Hunnell never filed the appeal.
The counterclaim makes no mention of any further interaction between
the parties between March 2012 and December 2013. According to the
counterclaim, the next interaction occurred on December 27, 2013, when
Hunnell had "a telephone status conference" with McKeon and McKeon's
second husband and attorney-in-fact, John Conroy. McKeon was "a senior
citizen, who had been adjudicated totally disabled since 1994." Because
McKeon "ha[d] been suffering from numerous health problems" since 2013, she
appointed Conroy "as her authorized legal representative."
At the end of the December 27, 2013 telephone status conference, Hunnell
stated that she would "get back to [McKeon] in a couple of weeks." However,
that telephone meeting was the last time Hunnell spoke to McKeon. In
December 2014, McKeon emailed Hunnell to discuss her case and clarify
A-0127-20
4
whether Hunnell was still representing her. The email mentioned that the
Garfield properties, which were still unsold, had fallen into disrepair and
suggested McKeon's ex-husband had intentionally vandalized the properties. In
the email, McKeon also acknowledged receiving a letter and invoice for
outstanding legal fees from Hunnell "in the spring of 2014" and insisted she had
made repeated attempts to contact Hunnell since then.
Hunnell's letter, which was dated April 22, 2014, and attached to the
motion to dismiss as an exhibit, outlined a plan to obtain McKeon's ex-husband's
compliance with the settlement agreement. The letter also stated that Hunnell
was willing "to resume" representing McKeon "without a new retainer fee" in
exchange for McKeon agreeing to "an attorney charging lien on the past due fees
when the property sells or equitable distribution is effectuated by some other
means."
According to the counterclaim, Hunnell never responded to McKeon's
December 2014 email or any subsequent attempts to "re-establish contact."
"Sometime in 2015, the Garfield properties were sold in a greatly debilitated
condition and for a greatly reduced price," resulting in McKeon only receiving
$70,000 from the proceeds. The counterclaim further alleged that in 2016, 2017,
and 2018, Hunnell refused or ignored requests by McKeon, Conroy, and new
A-0127-20
5
attorneys acting on McKeon's behalf to provide copies of McKeon's "divorce
and post-divorce file." It was not "until mid-to-late 2018," that Hunnell
eventually provided the copies after charging McKeon more than $700 in
copying costs.
McKeon's counterclaim, set forth in an amended answer filed on February
10, 2020, contained four counts: legal malpractice (count one); violation of the
Rules of Professional Conduct (RPC) (count two); breach of contractual and
ethical duties (count three); and discriminatory and predatory action against a
disabled, elderly and infirm person (count four). On March 3, 2020, McKeon
filed a second amended answer and counterclaim adding a fifth count for
fraudulent concealment.
Over McKeon's objection, on April 15, 2020, Hunnell moved to dismiss
the counterclaim "in its entirety, with prejudice" pursuant to Rule 4:6-2(e) for
failure to state a claim upon which relief can be granted. The parties submitted
numerous documents and certifications in support of and in opposition to the
motion. Following oral argument conducted on July 10, 2020, the judge entered
an order on July 31, 2020, granting the motion. In an accompanying written
statement of reasons, the judge recited the governing legal standard for Rule 4:6-
2(e) motions and stated he would "focus [his] attention solely on the claims in
A-0127-20
6
the [counterclaim] and the attached [settlement a]greement and not on proofs
outside that document." In that regard, in adjudicating the motion, the judge
analyzed McKeon's second amended answer and counterclaim. 2
The judge explained that there is a six-year statute of limitations for legal
malpractice claims. Thus, the viability of most of McKeon's claims was
dependent on "when legal services concluded." The judge determined that
counts one, two, and three of the counterclaim failed because nothing in the
counterclaim or in McKeon's moving papers suggested McKeon and Hunnell
had an attorney-client relationship after 2012.
In support of that finding, the judge relied on the opposing certification of
McKeon's current lawyer in which she asserted that "Hunnell's legal services to
[McKeon] arguably concluded with her March 18, 2012[3] e-mail to her, after
the issuance of the February 7, 2012 Superior Court [o]rder" in the post-
judgment matrimonial litigation. Accordingly, the judge determined that March
2
There is no indication in the record that McKeon obtained the court's
permission to file the second amended answer and counterclaim. Rule 4:67-4
provides that in summary actions under Rule 4:67-1, as involved here, "[n]o
counterclaim . . . shall be asserted without leave of court."
3
This date appears to be an error as the record shows the email was sent on
March 15, 2012.
A-0127-20
7
18, 2018, was the latest date McKeon could have filed a legal malpractice claim,
rendering her February 10, 2020 counterclaim beyond the statute of limitations.
Specifically addressing each count, the judge explained:
[T]he [f]irst [c]ount must fail because the statute of
limitations on such claim leaves no theory of
actionability. Even when searching with the most
liberality, discovery would provide no new information
o[r] facts that legal services have . . . been provided in
the actionable period.
Likewise, the [s]econd [c]ount, which is a list of
violations of the Rules of Professional [C]onduct [RPC]
must also fail. The RPC does not itself give rise to
actionable causes of action, but rather violations of
such are used to prove malpractice claims. Therefore,
like the [f]irst [c]ount, without the legal services being
rendered during an actionable period of time, there is
no cause of action . . . . for malpractice . . . . The [t]hird
[c]ount must fail for similar reasons . . . .
Further, the judge determined the counterclaim did not allege facts to
substantiate McKeon's discrimination claim in count four. "Even in the most
liberal readings," the judge described McKeon's "assertions in the [f]ourth
[c]ount" as "fantastical based on the facts presented" and found no evidence that
Hunnell "took advantage of [McKeon's] protected status." The judge noted
"even if such had happened, [McKeon] is relying on a theory of malpractice
which has already run the statute of limitations." Likewise, the judge
determined McKeon's fraudulent concealment claim in count five failed
A-0127-20
8
"because there [was] no theory of actionability." According to the judge, the
counterclaim did not even allege that the $700 photocopy charge was
"unreasonable." Therefore, the judge dismissed McKeon's entire counterclaim
with prejudice.
In this ensuing appeal, McKeon argues the judge misapplied the standard
for deciding a Rule 4:6-2(e) motion to dismiss. She also maintains her legal
malpractice claim was not barred by the statute of limitations because in her
counterclaim, she alleged her attorney-client relationship with Hunnell
continued until April 2014, rendering her February 10, 2020 counterclaim within
the actionable period. McKeon also argues that her discrimination claim should
have survived, as she alleged Hunnell engaged in a "consistent pattern of
wrongful behavior."
We review de novo the trial court's grant of a motion to dismiss under
Rule 4:6-2(e) and "owe[] no deference to the trial court's legal conclusions."
Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl, P.C., 237
N.J. 91, 108 (2019). Rule 4:6-2(e) provides that a counterclaim may be
dismissed for "failure to state a claim upon which relief can be granted." "The
standard traditionally utilized by courts to determine whether to dismiss a
pleading . . . is a generous one." Green, 215 N.J. at 451. In that regard, "'our
A-0127-20
9
inquiry is limited to examining the legal sufficiency of the facts alleged on the
face of the complaint.'" Ibid. (quoting Printing Mart, 116 N.J. at 746). "At this
preliminary stage of the litigation the [c]ourt is not concerned with the ability of
plaintiffs to prove the allegation contained in the complaint." Printing Mart, 116
N.J. at 746.
In interpreting the Rule, our Supreme Court explained in Printing Mart
that "the test for determining the adequacy of a pleading . . . [is] whether a cause
of action is 'suggested' by the facts." 116 N.J. at 746 (quoting Velantzas v.
Colgate-Palmolive Co., 109 N.J. 189, 192 (1988)). The Court directed judges
to "'search[] the complaint in depth and with liberality to ascertain whether the
fundament of a cause of action may be gleaned even from an obscure statement
of claim" and grant "opportunity . . . to amend if necessary.'" Ibid. (quoting Di
Cristofaro v. Laurel Grove Mem'l Park, 43 N.J. Super. 244, 252 (App. Div.
1957)). "Moreover, on a motion to dismiss the entire complaint, the court has
the discretion to dismiss some of the counts." Pressler & Verniero, Current N.J.
Court Rules, cmt. 4.1.1 on R. 4:6-2(e) (2022). Nonetheless, "the essential facts
supporting plaintiff's cause of action must be presented in order for the claim to
survive; conclusory allegations are insufficient in that regard." Scheidt v. DRS
Techs., Inc., 424 N.J. Super. 188, 193 (App. Div. 2012).
A-0127-20
10
The Court also stressed that motions to dismiss under Rule 4:6-2(e)
"should be granted in only the rarest of instances" and generally "without
prejudice" to the "filing of an amended complaint." Printing Mart, 116 N.J. at
772; see also Smith v. SBC Commc'ns Inc., 178 N.J. 265, 282 (2004).
Nevertheless, dismissal with prejudice is appropriate if the claim is barred by an
"impediment such as a statute of limitations." Printing Mart, 116 N.J. at 772.
Pertinent to this appeal, the elements of a legal malpractice claim are: "(1)
the existence of an attorney-client relationship creating a duty of care by the
defendant attorney, (2) the breach of that duty by the defendant, and (3)
proximate causation of the damages claimed by the plaintiff." Nieves v. Off. of
the Pub. Def., 241 N.J. 567, 583 (2020) (quoting McGrogan v. Till, 167 N.J.
414, 425 (2001)). The statute of limitations for a legal malpractice claim is six
years, N.J.S.A. 2A:14-1, but, under the applicable discovery rule, the cause of
action accrues when "the client suffers actual damage and discovers, or through
the use of reasonable diligence should discover, the facts essential to the
malpractice claim," Rogers v. Cape May Cnty. Off. of the Pub. Def., 208 N.J.
414, 422 (2011) (quoting Grunwald v. Bronkesh, 131 N.J. 483, 494 (1993)).
To be sure, "the RPCs set forth 'the minimum standard of competence
governing the [legal] profession.'" Meisels v. Fox Rothschild LLP, 240 N.J.
A-0127-20
11
286, 299 (2020) (quoting Albright v. Burns, 206 N.J. Super. 625, 634 (App. Div.
1986)). However, an RPC violation, "standing alone . . . does not create a cause
of action for damages in favor of a person allegedly aggrieved by that violation."
Ibid.; see also Sommers v. McKinney, 287 N.J. Super. 1, 13 (App. Div. 1996)
("Violation of the rules of professional conduct do[es] not per se give rise to a
cause of action in tort.").
The elements of a fraudulent concealment claim are:
(1) That defendant in the fraudulent concealment action
had a legal obligation to disclose evidence in
connection with an existing or pending litigation;
(2) That the evidence was material to the litigation;
(3) That plaintiff could not reasonably have obtained
access to the evidence from another source;
(4) That defendant intentionally withheld, altered or
destroyed the evidence with purpose to disrupt the
litigation; [and]
(5) That plaintiff was damaged in the underlying action
by having to rely on an evidential record that did not
contain the evidence defendant concealed.
[Rosenblit v. Zimmerman, 166 N.J. 391, 406-07
(2001).]
A fraudulent concealment claim must be pled with particularity. See R. 4:5-
8(a).
A-0127-20
12
Here, the judge determined that the attorney-client relationship between
McKeon and Hunnell ended in 2012 and concluded that McKeon's last
opportunity to file a legal malpractice claim was in 2018. However, a legal
malpractice cause of action may accrue after the representation has ended. See
Vastano v. Algeier, 178 N.J. 230, 242 (2003) (concluding the plaintiffs' cause
of action accrued when they took possession of their case file after firing their
attorney).
More significantly for our purposes, in the counterclaim, McKeon alleged
that the parties' attorney-client relationship continued into 2014, at least until
McKeon received the April 2014 letter from Hunnell. The judge should have
taken that assertion at face value. See Banco Popular N. Am. v. Gandi, 184 N.J.
161, 184 (2005) (explaining that the issue on a Rule 4:6-2(e) motion is not
whether the allegations are true "but only whether they [a]re made").
Additionally, in the counterclaim, McKeon alleged that Hunnell's
negligence in litigating the case led to a greatly reduced sales price for the
properties in 2015 and a monetary loss for McKeon. Based on McKeon's
allegation that Hunnell's negligent representation was the proximate cause of
her losses, McKeon averred sufficient facts to state a legal malpractice claim
within the limitations period. Because we are convinced that "a cause of action
A-0127-20
13
is 'suggested' by the facts," Printing Mart, 116 N.J. at 746 (quoting Velantzas,
109 N.J. at 192), we agree that the judge misapplied the standard for evaluating
a Rule 4:6-2(e) motion and erred in dismissing counts one, two, and three, all of
which were dependent upon the continuing attorney-client relationship.
On the other hand, we are satisfied the judge correctly dismissed the
fraudulent concealment claim in count five, as McKeon did not allege that she
was damaged in any existing or pending litigation by not having access to her
files – she only complained about copying costs. Likewise, the judge correctly
dismissed the discrimination count (count four) because in the counterclaim,
McKeon only presented conclusory allegations and did not allege sufficient facts
to state an unlawful discrimination claim. See N.J.S.A. 10:5-12 (prohibiting
certain discriminatory practices in employment, public accommodations,
housing, and lending). Indeed, "conclusory allegations are insufficient" to
withstand a Rule 4:6-2(e) dismissal. Scheidt, 424 N.J. Super. at 193.
Nonetheless, following the guidance of Printing Mart, these claims should have
been dismissed without prejudice in case McKeon can discover and plead
sufficient facts. 116 N.J. at 772.
A-0127-20
14
Next, we turn to the denial of McKeon's cross-motion to amend the
counterclaim. In a fourth amended answer and counterclaim,4 McKeon sought
leave to add another legal malpractice count based on allegations of fraudulent
billing. According to McKeon, Hunnell submitted billing records with her
motion to dismiss that revealed "duplicative charges, overcharges and [a] failure
to accurately record and deduct payments received." McKeon also claimed she
did not receive Hunnell's billing records prior to the fee arbitration hearing
despite the judge's observation that the Fee Committee confirmed in its
statement of reasons that McKeon had received Hunnell's submissions,
including billing records.
The judge denied McKeon's motion to amend, reasoning:
The [c]ourt . . . cannot simply ignore the fact that
[McKeon] and [her new attorney] had their chance to
attack the alleged corrupted billing practices of
[Hunnell] during the [f]ee [a]rbitration. Not only did
the Committee of same find that the billing was
reasonable, [McKeon], who was represented by [her
current attorney] had every opportunity to cross-
examine [Hunnell] about the billings. This amendment
is little more than a veiled attempt to improperly appeal
the [f]ee [a]rbitration [d]etermination, and as such, the
[c]ourt denies [McKeon's] motion to [a]mend.
4
There is no reference in the record to a third amended answer and
counterclaim.
A-0127-20
15
Rule 4:9-1 provides that after the time for amending pleadings as a matter
of course has passed, "a party may amend a pleading only by written consent of
the adverse party or by leave of court which shall be freely given in the interest
of justice." Our Supreme Court explained that courts should liberally grant Rule
4:9-1 motions and that "the granting of a motion to file an amended complaint
always rests in the court's sound discretion." Notte v. Merchs. Mut. Ins. Co.,
185 N.J. 490, 501 (2006) (quoting Kernan v. One Wash. Park Urb. Renewal
Assocs., 154 N.J. 437, 457 (1998)). "That 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." Ibid.An amendment is futile when the new claim would fail as a matter of law.
"'In other words, there is no point to permitting the filing of an amended pleading
when a subsequent motion to dismiss must be granted.'" Ibid. (quoting
Interchange State Bank v. Rinaldi, 303 N.J. Super. 239, 257 (App. Div. 1997)).
However, courts make that determination "without consideration of the ultimate
merits of the amendment." Ibid. (quoting Interchange State Bank, 303 N.J.
Super. at 256).
Although McKeon could have challenged the accuracy of Hunnell's
billing records during the fee arbitration hearing, she could not have brought a
A-0127-20
16
legal malpractice claim before the Fee Committee because "a Fee Committee
lacks jurisdiction to decide legal malpractice claims." Saffer v. Willoughby,
143 N.J. 256, 266 (1996). Consequently, even if McKeon had raised the issue
during arbitration, because the Fee Committee had no jurisdiction to decide the
issue, McKeon would not have been precluded from later filing a legal
malpractice claim based on a fraudulent billing allegation. See id. at 267(declaring "neither the evidence submitted to a Fee Committee nor the 'decision
or settlement made in connection with a fee arbitration proceeding shall be
admissible evidence in a legal malpractice action' in the Superior Court"
(quoting R. 1:20A-2(c)(2)(B))). Because the judge had no basis for concluding
the fraudulent-billing legal malpractice claim was futile and made no finding of
prejudice to Hunnell, the judge erred in denying McKeon's motion to amend the
counterclaim given the liberality with which such motions must be considered.
Finally, we address the denial of McKeon's cross-motion to stay the
arbitration award. In support of the motion, McKeon certified that had she "been
provided with Hunnell's billing record prior to the [f]ee [a]rbitration hearing,
[she] would have requested that fee arbitration be withdrawn and pursued a legal
malpractice action." As previously noted, the judge observed that McKeon had
received Hunnell's billing records based on the Fee Committee's confirmation
A-0127-20
17
that McKeon had the relevant billing records prior to the arbitration hearing.
Further, the judge pointed out that McKeon had not appealed the arbitration
award within the applicable timeframe. See R. 1:20A-3 (governing appeal of
fee arbitration decisions).
Consequently, the judge concluded that McKeon was barred from seeking
a stay, explaining:
[T]his [c]ourt cannot and will not stay the fee
arbitration award. Failure to follow the appeal
procedure . . . within the applicable timelines bars
[McKeon] from staying such determinations now.
[McKeon] who initiated the matter, offered testimony,
and who was given the chance to cross-examine
[Hunnell] cannot simply stay the unanimous finding by
an unbiased committee. [Hunnell] met her burden of
proof to the Committee to prove reasonable fees and as
such the [c]ourt refuses to stay the fee arbitration
determination.
We review the denial of a motion to stay an arbitration award for abuse of
discretion. Granata v. Broderick, 446 N.J. Super. 449, 469 (App. Div. 2016).
In Saffer, the Court announced that "[i]f the substantial basis for a malpractice
claim is discovered after a Fee Committee has awarded a fee, a client may seek
a stay of the award from the Superior Court either before or after the award has
been confirmed," applying the discovery rule. 143 N.J. at 268. The Court also
A-0127-20
18
explained that the filing of the legal malpractice action ordinarily "should be a
precondition to granting a stay of a fee award." Id. at 269.
McKeon relies on Saffer's holding to support her position. However,
McKeon's reliance is misguided because ample evidence in the record supports
the judge's finding that McKeon obtained the billing records prior to the Fee
Committee awarding the fee. See Granata, 446 N.J. Super at 467 (deferring to
the trial judge's findings that are "supported by adequate, substantial, and
credible evidence"). Because McKeon possessed the billing records prior to the
determination by the Fee Committee, she did not discover the substantial basis
for a fraudulent-billing legal malpractice claim after the fee was awarded.
Additionally, McKeon knew the basis for her other malpractice claims well
before the arbitration hearing. Therefore, we discern no abuse of discretion in
the judge's denial of her motion to stay the arbitration award.
In sum, we affirm the judge's denial of McKeon's motion to stay the
arbitration award and affirm the judge's dismissal of counts four and five of the
second amended answer and counterclaim, but remand for the entry of an order
dismissing counts four and five without prejudice. We reverse the judge's
dismissal of counts one, two, and three of the counterclaim and the denial of
McKeon's motion to file an amended counterclaim to add a legal malpractice
A-0127-20
19
count based on allegations of fraudulent billing. We remand for further
proceedings consistent with this opinion.
Affirmed in part, reversed in part, and remanded for further proceedings.
We do not retain jurisdiction.
A-0127-20
20