Local
Firm That Offered Job
to Sitting Judge Off the Hook in Lawsuit
By Charles Toutant
New Jersey Law Journal
New York Lawyer
March 12, 2010
A law firm that engaged
a retiring judge in employment talks while he presided over one
of its cases is not liable for damages to the other party in the
case, the Appellate Division ruled Wednesday.
The appeals court
affirmed the dismissal of legal malpractice and deprivation of
due process counts against Hackensack's Herten, Burstein,
Sheridan, Cevasco, Bottinelli, Litt & Harz and attorney Thomas
Herten.
The malpractice count
was invalid because Herten and his firm had no duty of care to
plaintiff Michael Cupo, a nonclient, and Herten and the firm had
no liability under the Fourteenth Amendment because there was no
evidence they were state actors, the appeals court said.
The suit, Cupo v.
Herten, A-5881-08, stems from an earlier suit by Herten on
behalf Lawrence DeNike, who sued Cupo in a dispute over
dissolution of their business partnership.
As Bergen County
Superior Court Judge Gerald Escala was wrapping up the case,
Herten asked him in chambers on Jan. 24, 2006, whether he would
consider joining Herten Burstein when he reached retirement age
a month later. Escala expressed interest.
On Feb. 1, 2006, Escala
signed a final order which, in effect, denied a motion by Cupo
for an additional $98,530. On Feb. 3, Herten and Escala agreed
in principle that the judge would join the firm, and Escala
announced his plans at a retirement dinner that night.
Cupo protested, moving
for a new trial after the case was transferred from Bergen
County to Passaic County. Judge Robert Passero offered Cupo a
chance to seek reconsideration of any issues, but he preferred a
new trial. Passero denied the motion to vacate, and the
Appellate Division affirmed.
The Supreme Court found
no evidence that the job offer caused Escala to rule in favor of
Herten Burstein's client but ordered a new trial after
concluding Escala's conduct had the appearance of impropriety.
The retrial is set to begin in June.
Cupo's malpractice suit
attempted to recover the $250,000 he spent to try his case
against DeNike and compensation for having to endure a second
trial. Morris County Superior Court Judge Catherine Enright
dismissed the suit for failure to state a claim on which relief
could be granted.
On appeal, Cupo claimed
he relied in the underlying case on Herten's adherence to the
Rules of Professional Conduct, but the appeals court rejected
his argument.
"In our view, a
litigant's reliance on the assumption that every attorney will
comply with the Rules of Professional Conduct is qualitatively
different than the reliance adequate to establish an attorney's
duty to a non-client," Judges Dorothea Wefing, Jane Grall and
Laura LeWinn said.
"Action by the attorney
inducing the non-client's reliance creates a relationship
between them that substitutes for an attorney-client
relationship by establishing privity, but when the attorney does
absolutely nothing to induce reasonable reliance by a third
party, there is no relationship to substitute for that element
of a legal malpractice claim essential to imposition of a duty,"
the court said.
In addition, the
appeals court noted that the Supreme Court held in
Banco Popular North America v.
Gandhi, 184 N.J. 161 (2005), that a violation
of RPC
1.2 does not give a
nonclient injured by the attorney's ethical breach a cause of
action for legal malpractice. Cupo claimed that Herten violated
RPC
1.12(c), prohibiting a
judge from negotiating employment with an attorney in a matter
before the judge;
3.5, prohibiting efforts
to influence a judge and ex parte communications; and
8.4, defining
misconduct. All three, like 1.2, afford protection to people
other than the attorney's client. Cupo gave no reason to
distinguish a violation of 1.2 from a violation of the other
provisions, the court said.
Citing Cupo's argument
that Enright rejected his "invitation to establish a new,
precedent-setting cause of action," the appeals court said
appropriate sanctions and remedies for ethical breaches are
"within the exclusive province of the Supreme Court."
As for the Fourteenth
Amendment claim, Cupo failed to cite any authorities to support
his assertion that Herten and his firm were state actors. While
private parties can be civilly liable for violations of
constitutional rights caused through cooperation with a state
actor, "the joint participation essential to establish state
action requires more than contribution to circumstances that
give rise to an appearance of impropriety," the panel said.
Cupo's lawyer, Fanwood
solo Jeffrey Pocaro, says he will petition to appeal the ruling
to the Supreme Court.
"The Appellate Division
got it right when they're saying it's not our job to create new
case law," Pocaro says. "Getting the Appellate Division to
recognize what I was asking for is a moral victory, when you
think about it, because they came to grips with the issue."
Christopher Carey of
Graham Curtin in Morristown, who represented Herten and his
firm, says the appeals court ruling forestalls what he says was
the intended effect of the malpractice suit, which was to keep
Herten from representing DeNike in the retrial of the underlying
case.
Carey says Cupo is
responsible for having to endure a second trial in the
underlying case because he declined Passero's offer to
reconsider Escala's rulings. "It was coming back down, one way
or another," Carey says.
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