A client’s guilty plea does not bar a malpractice suit against a lawyer whose advice may have helped hatch the crime, a New Jersey appeals court says.
The ruling, in Winstock v. Galasso, A-2715-10, means Ridgewood solo Amato Galasso can be sued for allegedly advising a Morris County couple that they could run a private poker club.
Judicial estoppel would block the suit only if the attorney had been retained after the illegal gambling had begun, the Appellate Division held on Monday.
In 2004, Roxbury police sergeant Richard Winstock, his wife Jennifer and another officer, Thomas Juskus, opened the Fifth Street Club in Dover, a member-paid poker-tournament facility. The Winstocks had earlier held tournaments at other Morris County locations.
The proprietors retained Galasso, himself a ranked poker player, for advice on the legality of the operation. In a memorandum dated Nov. 23, 2004, he said they would not be violating state gaming laws as long as they did not take a cut from any money used for betting.
"Since my client does not profit or receive remuneration for any bet or wager, which may be set by the individual members, my client is not in violation of the gaming statutes," he wrote.
"I am sure you can visit almost any country club and find a card game being played on any given day of the week. The members playing are more than likely wagering on the outcome of the game being played, whether it is for a cup of coffee or for cash. Many members also regularly wager on outcome of the golf games. The country club is not profiting directly from the members playing these games," Galasso concluded.
The Morris County Prosecutor’s Office viewed the Winstocks’ operations differently, and charged them and Juskus with violations of state gaming laws.
Richard Winstock pleaded guilty in September 2007 and was sentenced to two years’ probation. Both Jennifer Winstock and Juskus were admitted into pretrial intervention.
Superior Court Judge W. Hunt Dumont dismissed the Winstock’s legal malpractice suit against Galasso under the doctrine of Alampi v. Russo, 345 N.J. Super. 360 (App. Div. 2001), which held that one who pleads guilty to a crime is estopped from suing his lawyer.
But the panel hearing Winstock’s appeal found Alampi distinguishable, since the plaintiff there began engaging in criminal conduct before he retained an attorney for advice.
"It is undisputed that all of the activity Richard Winstock admitted he engaged in occurred after he had retained defendant as his legal advisor," Judge Jose Fuentes wrote. "Unlike Alampi, a rational jury in this case could find that defendant’s role as a legal advisor was a substantial factor that led plaintiffs to engage in criminal conduct."
Fuentes further found error in treating Winstock’s guilty plea as "an impenetrable wall, shielding defendant from civil liability based on professional malpractice." Winstock’s admissions during his guilty plea could be used against him in his malpractice suit. "His plea alone, however, does not preclude him or Jennifer Winstock from arguing that defendant’s alleged professional negligence was a proximate cause of the damages they incurred by operating the Fifth Street Club," said Fuentes.
Jennifer Winstock can go ahead with her claim because admission into PTI does not require admission of guilt, added Fuentes, joined by Judges Ronald Graves and Jonathan Harris.
Galasso’s attorney, Robert Hille of Morristown’s McElroy, Deutsch, Mulvaney & Carpenter, suggests the appeals court’s separation of pre-advice and post-advice criminal activity is a distinction without a difference.
"Is there any reason for that distinction?" Hille asks. "If [Winstock] admitted that his conduct was illegal, should the consequences of that be shifted to the lawyer? Is the lawyer now acting as the insurer for the client?"
He says no decision has been made on whether to ask the Supreme Court to hear an appeal.
The Winstocks’ attorney, Gabriel Halpern of PinilisHalpern in Morristown, says the distinction is logical and just. The Winstocks relied on Galasso’s legal advice before they opened their club and did not believe they were violating the law, he says, adding, "The attorney has to be responsible for that advice."