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Vincent J. Gallo, Esq., "Legal Malpractice? The Attorney Who Dodged the Bullet."

posted Apr 11, 2016, 10:01 AM by Pete Weinman   [ updated Apr 11, 2016, 10:31 AM ]
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In a recent Superior Court of New Jersey, Appellate Division decision entitled Shapiro v. Rinaldi, A-1753-14T4, decided March 18, 2016 the Court held that contacting an Attorney’s Secretary did not forge an Attorney-Client bond or relationship, in form necessary to establish an Attorney-Client relationship, for purposes of establishing grounds for Legal Malpractice against the targeted Attorney.

In this case, Shapiro allegedly injured herself by falling into a pothole, resulting in injuries. Shapiro then contacted Rinaldi, an Attorney, who had represented her in a prior unrelated legal matter. Shapiro had spoken to Rinaldi’s Secretary who affirmed that Rinaldi did, in fact, handle such personal injury matters, and directed Shapiro to forward to her photographs of the pothole that led to her injuries. Rinaldi’s Secretary acknowledged receipt of the photographs and instructed Shapiro that she should expect to receive a telephone call directly from Rinaldi. Shapiro alleged that while she did not receive a telephone call from Rinaldi, she was under the belief that her case was under investigation by Rinaldi. Shortly thereafter, she contacted another Attorney who advised her that by that time, the deadline within which to file a Notice of Claim for her case had expired.

Shapiro attempted to file a late Notice of Claim, through another Attorney, but was denied because the Court held that, despite her circumstances relating to Rinaldi, she failed to demonstrate the "extraordinary circumstances" necessary for her to file a late Notice of Claim. Thereafter, and in response, Shapiro brought an action for Legal Malpractice against Rinaldi.

Rinaldi asserted that when Shapiro first brought the action against him, this was the first time that he had ever heard of her personal injury matter. Rinaldi’s Secretary testified that she had forgotten to alert Rinaldi of Shapiro’s matter, which was standard Office procedure. Rinaldi then moved for Summary Judgment, and the Court found that there was no implied Attorney-Client relationship and no proof that Shapiro knew, or should have known, that Shapiro expected Rinaldi to pursue her case. Shapiro asserted that Rule of Professional Conduct 5.3(b), imposes a duty on Attorneys to ensure that Attorneys’ Staff are entrusted with keeping with Attorneys’ ethical obligations, but the Court rejected that argument, asserting that Rinaldi’s Secretary “did make reasonable efforts to ensure that his Secretary complied with his professional obligations.” The Court went on to find that his Office procedures were reasonable for a “reasonable for a solo practitioner”.

On Appeal the Court affirmed, finding no evidence of an express Attorney-Client relationship because Shapiro "never came to Rinaldi’s Office nor did Rinaldi ever send Shapiro a Retainer Agreement", and no evidence of an Implied Agreement, because the "common thread" in case law of Client reliance and tacit Attorney acceptance was lacking in Shapiro's case. Any reliance by Shapiro was "unreasonable," the Court held.

The Court found that Shapiro conceded that Rinaldi’s Secretary never stated that Rinaldi would, in fact, take her case in her telephone conversation with Shapiro, and that when Shapiro received no contact, response, or acknowledgement from Rinaldi, she should have realized that her claim was not being pursued by Rinaldi.

The Court aptly ruled that Rule of Professional Conduct 5.3(b) does not entrust Non-Attorney Staff in advising Clients as to their legal rights, or informing potential Clients of deadlines, relative to filing a claim, since doing so would clearly constitute advising Clients as to their legal rights. The Court went on to state that even assuming, arguendo, that Rinaldi did violate Rule of Professional Conduct 5.3(b), the New Jersey Supreme Court has concluded that a violation of the Rules of Professional Conduct by an Attorney will not, standing alone, create a cause of action for damages in favor a person allegedly aggrieved by that violation.

While in the instant case, Attorney, Rinaldi, “dodged the bullet” as to that personal injury case, and the failure to file a timely Notice of Claim, it raises related serious concerns as it pertains to Attorney Legal Malpractice in the practice of real estate law. In the landmark case entitled New Jersey State Bar Association v. New Jersey Association of Realtor Boards, 93 N.J. 470 (1983), the settlement in that case allowed Realtors to continue preparing Residential Real Estate Sales Contracts which provided for a the three-day attorney-review clause that specified that the Contract could be canceled within the three-day period, and that the rescission notice had to be effectuated by certified mail, telegram or personal delivery, and those modes are specified at N.J.A.C. 11:5-6.2(g)(2). Most Attorneys concur that the form of Broker-Prepared Contract, currently in use in New Jersey, which has the blessing of the New Jersey State Bar Association, is “Seller-skewed” and is tantamount to Legal Malpractice, when representing a Purchaser, to allow for the three-day attorney review period to expire, without comment, modification, amendment, termination, or the like, which would thereby allow for the Contract to be deemed “firm” without the presentation of a Rider or Modifications that endeavor to “even the score” for the benefit of the Purchaser. However, unlike the 90-day time constraint for purposes of filing a Notice of Claim for a personal injury matter, Attorneys practicing real estate law are faced with a three-day clock as it relates to a residential real estate matter. So what oftentimes occurs? Before any form of formal engagement of an Attorney by a prospective Purchaser Client, an Attorney is entrusted with the task of swiftly addressing the “Three-Day Attorney Review”, before any formal engagement, retainer, or money, for that matter is ever addressed, at the risk of the Three-Day Clock expiring. The clock is ticking, and the primary concern among everyone involved is dealing with the clock, causing the common sense priorities of the matter, to wit: formal engagement, retainer, payment, and then legal work, to be skewed. So what happens if the Prospective Purchaser Client reaches out to a Real Estate Attorney, speaks only to the Secretary or Paralegal, having never yet spoken to the Attorney, and through Law Office failure, or some other reason, the Law Office fails to stop the Three-Day Clock from ticking, causing the “Seller-skewed” Broker-Prepared Contract to be deemed firm, and then only because of the Law Office failure the Purchaser finds himself or herself “stuck” in a deal that he or she would otherwise not approve of, having had the opportunity to stop the clock and consider the potential consequences of having executed the Broker-Prepared Contract without modification.

Since common practice in residential real estate matters has evolved since Opinion 26 so as to allow for a strong pro-active direct participation by Paralegals and Secretaries in residential real estate transactions, all with the assent of the Bar Association, I question whether a Real Estate Attorney faced with a claim of Legal Malpractice would fare as well as Attorney Rinaldi. Because unlike within the realm of personal injury law, the Bar Association has assented to non-Attorney direct involvement in residential real estate matters. I am not so sure that he or she would be able to dodge that same bullet. Perhaps Opinion 26 and its progeny deserve a closer look.