A New Jersey law firm that represented a Stop & Shop supermarket in a suit against the lessors of its parking lot, who were also firm clients, has been hit with a $662,483 malpractice verdict.
A Bergen County jury found on March 5 that Price Meese Shulman & D’Arminio of Woodcliff Lake, and two of its partners, had a conflict of interest.
The judgment may be higher if the plaintiffs are awarded their legal fees.
Alice Boswell, Ruth Belthoff and Charlotte Gann were the owners of a roughly 2.5-acre parcel of land along Route 17, acquired by inheritance.
The land has been under lease since 1955 as a parking lot for adjacent stores. The original tenant, Grand Union, assigned the lease in 1979 to Kmart Corp., which assigned it to Stop & Shop in 2005.
The lease set a $900 per month rent and contained a $142,500 purchase option. It had no provision to increase those amounts, which stayed the same through a series of 10-year extensions.
In 2006, a real estate consultant for Stop & Shop—Michael Blazoski of Keystone Development Group—contacted Boswell, Belthoff and Gann, saying an error in a 1956 subdivision of the property needed to be corrected.
Blazoski told them the subdivision was never properly recorded and it was in their interests as well as Stop & Shop’s to fix it. He said the supermarket would pay for everything, including reimbursement of legal fees paid to a lawyer they had retained, Englewood Cliffs solo Edward Breslin.
Blazoski, in an email to Breslin on July 13, 2006, said Price Meese partners Gail Price and Paul Conciatori would directly represent his clients in the process and would indirectly represent Stop & Shop. He said he would leave it to the lawyers to “work out whatever conflict waivers may be required.”
Conciatori wrote to the property owners on Sept. 6, 2006, saying Price Meese was representing them for the limited purpose of reconfirming the subdivision. He said his letter was meant to confirm their knowledge that the firm represented Stop & Shop and would continue to do so on the matters mentioned in the letter or any others in the future.
Conciatori said his letter was also meant to confirm that there was no conflict with Stop & Shop at that time but an “identity of interests,” that the owners were independently represented by Breslin and that if a conflict arose in the future, the firm would notify them at once, immediately withdraw and hand over their files to any lawyer they chose.
“Of course, consistent with the Rules of Professional Conduct of New Jersey, no knowledge or information gained from our representation of you can or will be used to your disadvantage,” Conciatori added.
He asked Boswell, Belthoff and Gann to countersign the letter to confirm knowledge of and agreement with its contents, and they did.
The subdivision deed was recorded in June 2007, a few months after Stop & Shop allegedly botched the renewal of the lease by sending notice to the wrong address.
Boswell, Belthoff and Gann claimed that created a conflict of interest because Price Meese had an obligation to let them know of the defective notice, which would have allowed them to terminate the lease and seek a market-rate rental.
They claimed they believed they were still clients of Price Meese at that time and in January 2008, when the firm asked them to sign off on applications to the Paramus Planning Board for store renovations, which they did.
Two months later, Stop & Shop sent a letter to Conciatori giving notice of its intent to exercise the $142,000 purchase option. The property was then worth almost $5 million, the complaint says.
In 2009, Stop & Shop—represented by Price Meese—sued Boswell, Belthoff and Gann in Bergen County Superior Court over the validity of the lease and the purchase option. They retained a new lawyer, Philip Boggia, of Boggia & Boggia in Ridgefield Park.
Boggia moved to disqualify Price Meese over the conflict of interest but the firm withdrew before Judge Ellen Koblitz decided the motion. Norris McLaughlin & Marcus of Bridgewater replaced it.
The lawsuit settled during trial in 2011, with Stop & Shop paying $2.5 million for the property.
In the malpractice suit, the plaintiffs claimed that Stop & Shop’s suit was based on information Price Meese obtained while representing them. They further alleged that the firm used actions it had induced them to take as a basis for its equitable estoppel argument—namely, that their cooperation with the zoning applications and failure to notify Stop & Shop regarding the defective renewal lulled the supermarket into laying out money for improvements.
The malpractice case was tried before Bergen County Superior Court Judge Robert Wilson, who threw out additional claims such as fraud and breach of fiduciary duty after the plaintiffs presented their case.
Edward Grossi of Montclair, who represents the plaintiffs, thinks the amount of the verdict was based on the difference between the $2.5 million paid by Stop & Shop and a defense appraisal of about $3.2 million.
Boggia says the plaintiffs’ land was worth even more than its appraised value because it provided crucial access to Stop & Shop’s adjacent nine-acre property worth $19 million.
Grossi says he submitted a judgment on Monday for about $930,000, which includes legal fees as allowed by Saffer v. Willoughby.
The plaintiffs also sought reimbursement for the roughly $800,000 one-third contingency fee paid to Boggia but did not get it.
Price Meese defense counsel Thomas Quinn says his clients never met or spoke to the plaintiffs, wouldn’t have recognized them if they showed up in court and tried to do the right thing in securing a conflict waiver and communicating with them entirely through independent counsel Breslin.
Quinn, of Wilson Elser Moskowitz Edelman & Dicker in Florham Park, says he will file post-trial motions and might appeal.
Norris McLaughlin & Marcuse’s James Shrager, who took over the Stop & Shop case from Price Meese, declines to comment on the malpractice verdict.
Neither Price nor Conciatori returned calls. Breslin could not be reached.
Contact the reporter at email@example.com.