In re-affirming the timeliness analysis under the New Jersey Tort Claims Act, the Appellate Division deferred a complex legal malpractice successor liability issue.

In McNellis-Wallace v. Hoffman, Docket No. A-1488-19T1 (App. Div. July 31, 2020), a decision to be published, the New Jersey Appellate Division evaluated the dismissal of third-party indemnification and contribution claims of a legal malpractice defendant against a successor attorney who took over the underlying medical malpractice case. The successor attorney moved to dismiss the third-party claims and argued both that a successor attorney has “no duty” against the predecessor attorney and that, under the particular facts of the case, the predecessor attorney had no valid claim against the successor attorney. The Appellate Division declined to rule on the general proposition of whether a successor attorney owes a legal duty to a predecessor attorney and thus could have liability under a contribution theory. Instead, the Court found that there was no possibility of the successor attorney curing the predecessor attorney’s failure to properly and timely serve a public entity with a Tort Claims Act Notice, and thus there was no valid claim by the predecessor attorney against the successor attorney for contributing to the plaintiff’s damages.

Nevertheless, this issue arises repeatedly in legal malpractice cases: where a client retains a successor attorney to continue the representation despite the errors of the predecessor attorney. Does the successor attorney owe a duty to a negligent predecessor to complete the representation without negligence – for the benefit of the client, the successor-attorney and the predecessor-attorney?

The New Jersey Supreme Court seemingly resolved the issue in Olds v. Donnelly, 150 N.J. 424 (1997), by ruling that a predecessor-attorney’s claim for contribution against a successor-attorney could not be maintained in the context of litigation, because successor attorneys have no duty of care to their predecessors. Olds, 150 N.J. at 443-44. But the Supreme Court revisited the issue in Cherry Hill Manor Assocs. v. Faugno, 182 N.J. 64 (2004). In Cherry Hill Manor, the Supreme Court noted that contribution is available only when the parties meet the definition of “joint tortfeasors.” Cherry Hill Manor, 182 N.J. at 72. Under the Joint Tortfeasors Contribution Act (“JCTL”), joint tortfeasors are defined as “two or more persons jointly or severally liable in tort for the same injury to person or property, whether or not judgment has been recovered against all or some of them.” N.J.S.A. 2A:53A-1.

In Cherry Hill Manor, the Supreme Court clarified the applicability of the JTCL to attorney malpractice claims. 182 N.J. at 70. There, the plaintiff sued its former attorney for legal malpractice. Id. at 69. The defendant attorney filed a third-party complaint against the plaintiff’s prior attorneys seeking indemnification and contribution under the JTCL. Id. at 69-71. The predecessor attorneys moved to dismiss the third-party action as a matter of law, arguing they could not be held liable for contribution because they did not meet the definition of joint tortfeasors under the JTCL. Id. at 69.

Ultimately, the Supreme Court in Cherry Hill Manor found that the JTCL was not applicable, because there was no “joint liability” between the parties, and the injuries caused by the predecessor attorneys were not the “same injury” as caused by the successor attorney. Id. at 75-76. The Court ruled that “joint, common or concurrent negligence” does not provide for joint liability under the JTCL; rather, there must be “common liability” when the plaintiff’s cause of action accrues. Id. at 72.

The Cherry Hill Manor standard would be difficult to meet in any predecessor-successor attorney contribution claim, because, by their nature, such claims arise successively, not simultaneously – thus negating most instances of “common liability” at the time the plaintiff’s cause of action “accrues.”

So why avoid the “no duty” issue in cases such as McNellis-Wallace and determine the merits of the contribution claim without regard to the Cherry Hill Manor standard? This may be a distinction without a difference. But, there should be no doubt that allowing the possibility of any liability for contribution by a successor-attorney to a predecessor-attorney increases the cost of litigation for all parties, because defense counsel will not stop attempting to bring in successor-attorneys to spread the potential damages under contribution theories until there is a blanket legal ban on the practice. The threat of the contribution claims also curtails attorneys from agreeing to represent clients in the successor-attorney position, because it is an open invitation for a contribution claim in a subsequent legal malpractice case – which no attorney would be excited for. As a result, both the attorneys and clients suffer. A blanket ban on such contribution claims, on the other hand, would also benefit malpractice insurers, who would not have to defend successor-attorneys for the claims. In any event, the Supreme Court will doubtless have to address the issue yet again for attorneys, clients and insurers to obtain any level of certainty.

The McNellis-Wallace decision can be accessed at:
https://www.njcourts.gov/attorneys/assets/opinions/appellate/published/a1488-19.pdf?c=EOo

To discuss legal malpractice or commercial litigation matters with this article’s author, please contact:

Jonathan P. Vuotto, Esq.
jpv@mcandrewvuotto.com