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While lawyers may owe a duty of care to nonclients in transactional matters, the line is drawn at the courthouse door, a New Jersey appeals court has ruled in dismissing a legal malpractice suit. The Appellate Division, in Markovic v. Wolff & Samson, A-4401-02T2, affirmed dismissal of the malpractice suit against Wolff & Samson and two of its lawyers, filed by their adversaries in a construction bond dispute who claimed the lawyers lied and misrepresented. Worse for the plaintiffs, the panel remanded the case to the Law Division on an application for fees and sanctions under the frivolous litigation rule, R. 1:4-8, which a Passaic County, N.J., trial judge had denied without stating a reason. The judges said that prior case law holding lawyers liable for failure to give warnings, advice or information to nonclients “generally dealt with situations outside the courtroom.” In Davin L.L.C. v. Daham, 329 N.J. Super. 54 (App. Div. 2000), the Appellate Division held that a lawyer’s duty to represent his client vigorously is tempered by a charge to be “fair, candid and forthright.” The case offered a four-part test to determine a duty to nonclients might be found to exist. And in Petrillo v. Bachenberg, 139 N.J. 472 (1995), the state Supreme Court said that a lawyer in a real estate transaction has a duty of care to nonclients when the lawyer knows “the nonclients will rely on the attorneys’ representations and the nonclients are not too removed from the attorneys to be entitled to protection.” But since the plaintiffs here dealt with Wolff & Samson in the course of litigation and had their own lawyer, the litigation privilege controls, the court ruled. The claim against Wolff & Samson “does not suffice to excuse any lack of attention by plaintiffs or their litigation counsel to engage in adequate discovery or advance any viable defense,” Judges Edwin Stern, Barbara Byrd Wecker and Susan Reisner wrote per curiam on Jan. 7. George Canellis, of Canellis & Adams in Watchung, N.J., who wrote an amicus curiae brief in Petrillo for the State Bar Association — opposing any duty to nonclients — says the distinction is apt. “It’s an overwhelming stretch to extend [the duty] to litigation matters,” he says. “If a court were to decide differently, the practice would be in turmoil.” CLAIMED RELIANCE ON ADVICE Plaintiffs John and Colette Markovic, owners of an asbestos removal business, claimed they had relied on the advice of Wolff & Samson partners Armen Shahinian and Robert Tchack in the bond case even though the two represented the Markovics’ adversary. Shahinian’s client was International Fidelity Insurance Co., which issued performance bonds on behalf of the Markovics’ business. When the state Division of Buildings and Construction declared the Markovics in default on three contracts in 1989, they sued the state in Mercer County to enjoin the default declaration. The state brought in International as a third-party defendant. In 1996, all claims against International were dismissed and Wolff & Samson won judgments against the Markovics for fees and costs on behalf of International. The Markovics claimed in the malpractice case that Wolff & Samson inflated the fee request. They said their own lawyer, Fair Lawn solo Dennis Cummins Jr., rebuffed their questions on the fee award’s validity. “I’m not going to ask a lawyer about the basis of his conclusion — he’s not going to risk his license,” they allege Cummins to have told them. Cummins says the Markovics, whom he still represents in other matters, did not authorize him to comment on the case. The Markovics’ attorney in the malpractice suit, Bloomfield, N.J., solo Anthony Ambrosio, says he will consider appealing to the state Supreme Court after the sanction issue is resolved. He says the Markovics did not bring a malpractice suit against Cummins because the statute of limitations had expired. Ambrosio, who has represented the Markovics since July 2002, says his clients have had several attorneys over the life of the Wolff & Samson case but he could not say how many or name them. He says he “didn’t advise [the clients] to take this cause of action” but rather that “their ultimate remedy may be against the counsel who didn’t sue the counsel.” Shahinian calls the malpractice suit “ridiculous” and “frivolous” and says the Markovics brought it to recoup judgments against them in the prior case. John Markovic “kept losing and he kept appealing,” he says. “More counsel fees kept getting incurred because of his relentless effort to avoid his obligation.” Tchack, who represented the defendants in the malpractice suit, declines to comment.

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