FINK v. KIRCHNER et al

Filing 216

OPINION FILED. Signed by Judge Noel L. Hillman on 4/5/16. (js)

UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

JOHN W. FINK,

Civil Action No. 12-4125
(NLH)(KMW)
Plaintiff,
OPINION

v.
J. PHILIP KIRCHNER, and
FLASTER/GREENBERG P.C.,
Defendants.

APPEARANCES:
JOHN W. FINK
6812 YELLOWSTONE BLVD.
APT. 2V
FOREST HILLS, NY 11375
Appearing pro se
ANTHONY LONGO
PATRICK B. MINTER
CHRISTOPHER J. CAREY
GRAHAM CURTIN, PA
4 HEADQUARTERS PLAZA
PO BOX 1991
MORRISTOWN, NJ 07962
On behalf of defendants
HILLMAN, District Judge
Presently before the Court is the motion of defendants for
summary judgment in their favor on plaintiff’s legal malpractice
and other related claims.

Also pending is plaintiff’s motion

seeking, essentially, the stay of defendants’ summary judgment
motion until the close of discovery, at which time plaintiff

states he will file his opposition. 1

For the reasons expressed

below, the parties’ motions will be granted in part and denied
in part.
BACKGROUND
Plaintiff, John Fink, now appearing pro se even though he
began this case represented by counsel, is no stranger to this
Court.

The current matter is related to three other actions

filed by plaintiff, all of which concern plaintiff’s loan to
Advanced Logic Systems, Inc. (“ALSI”). 2

When deciding

1

Plaintiff argues that defendants’ motion to dismiss filed at
the inception of this case constitutes defendants’ “first
summary judgment motion,” and that their attempt now to obtain
summary judgment on the same three claims they tried to dismiss
earlier is improper duplication. Plaintiff also argues that
defendants cannot assert different legal arguments for the
dismissal of his claims. Despite plaintiff’s displeasure with
defendants filing multiple motions, defendants’ actions are not
improper or injudicious. The procedural postures and legal
standards for a motion to dismiss filed pursuant to Federal Rule
Civil Procedure 12(b)(6) and a motion for summary judgment filed
pursuant to Rule 56 are different, and each serves a discrete
litigation purpose. Moreover, nothing in the Rules precludes a
party from filing successive motions to dismiss or summary
judgment motions, if justified by the circumstances of the case,
see Fed. R. Civ. P. 56(a), and nothing in the Rules precludes a
motion for summary judgment from being filed while discovery is
ongoing, see Fed. R. Civ. P. 56(b), although the Rules provide
relief for an opposing party to object to a pre-closed-discovery
summary judgment motion, see Fed. R. Civ. P. 56(d).
2

Fink v. EdgeLink, Civ. A. No. 09-5078 (D.N.J.); In re Advanced
Logic Systems, Inc., Civ. A. No. 12-4479 (D.N.J.); Fink v.
Bishop, Civ. A. No. 13-3370 (D.N.J.). Fink was unmeritorious in
all of these cases, and Fink appealed the Court’s decisions.
The Third Circuit Court of Appeals affirmed this Court in all
three cases.

defendants’ motion to dismiss in this case, the Court summarized
plaintiff’s claims, which are restated here for reference:
In 2001, Fink had been a financial consultant for ALSI, but
he eventually entered into a series of credit agreements with
ALSI to provide working capital to the company’s operations.
Plaintiff provided over $500,000 to ALSI, and in return, he
received rights to purchase a certain amount of stock in ALSI.
The financial condition of ALSI deteriorated, litigation between
plaintiff and ALSI ensued in March 2003, and eventually the
parties settled in March 2006.

After paying only half of the

million dollar settlement to plaintiff, ALSI filed for
bankruptcy in 2008.

In order to recoup the $60 million

plaintiff believes he is owed, plaintiff attempted to collect
the debt from EdgeLink, Inc., an entity plaintiff claimed was a
successor-in-interest to ALSI. 3

Plaintiff also sought to reopen

ALSI’s bankruptcy in order to allow the trustee to investigate
what plaintiff contended was a theft of ALSI’s missing assets. 4
In this lawsuit, plaintiff has brought claims against the

3Judgment

judgment.

was entered in EdgeLink’s favor on summary
(See Fink v. EdgeLink, Civ. A. No. 09-5078 (D.N.J.).)

4This

Court denied Fink’s appeal of the bankruptcy court’s
order denying his request to reopen ALSI’s bankruptcy. (See In
re Advanced Logic Systems, Inc., Civ. A. No. 12-4479 (D.N.J.).)
3

lawyer, J. Phillip Kirchner, and his law firm,
Flaster/Greenberg, P.C., which represented plaintiff in his
attempts to complete his settlement agreement with ALSI, and in
plaintiff’s efforts to enforce his rights under a warrant
agreement to purchase shares of ALSI stock. 5

In defendants’

efforts to assist plaintiff with his legal matters, plaintiff
claims that Kirchner altered an email submitted to the
arbitrator presiding over an arbitration between plaintiff and
ALSI.

Plaintiff claims that the arbitrator’s decision was

affected, to plaintiff’s detriment, by the issues concerning the
altered email.

The altered email incident also lead to a New

Jersey Disciplinary Review Board ethics complaint against
Kirchner, in which plaintiff participated.
Plaintiff also claims that the arbitrator’s decision
revealed to him that defendants were not working in plaintiff’s
best interests, but instead defendants were acting in the
interests of the firm to maximize billing.

Relatedly, plaintiff

claims that in defendants’ attempts to collect payment for their
legal fees - totaling over $650,000 - Kirchner tried to extort

5Fink

also claims that defendants assisted in his appeal of
the summary judgment entered in favor of AFFLINK, which was an
entity Fink sued along with ALSI in his 2003 lawsuit.
4

money from plaintiff.

Plaintiff claims that when Kirchner was

subpoenaed to testify in a case involving plaintiff and another
law firm, Kirchner stated that he would only testify on
plaintiff’s behalf if plaintiff paid his outstanding bill to the
firm. 6

Based on these allegations, plaintiff claims that

defendants have committed legal malpractice and fraud, and
breached their fiduciary duty. 7
Defendants have moved for summary judgment in their favor
on all of plaintiff’s claims.

Plaintiff has opposed defendants’

motion, primarily on the basis that discovery should be
completed prior to the Court’s resolution of defendants’ motion.
DISCUSSION
A.

Jurisdiction

This Court has jurisdiction over this matter pursuant to 28
U.S.C. § 1332 because there is complete diversity of citizenship
between the parties and the amount in controversy exceeds
$75,000.

6

Fink’s complaint contains passages of what Fink claims are
transcriptions of secretly recorded conversations between Fink
and Kirchner.
7

In resolving defendants’ motion to dismiss, the Court allowed
all of plaintiff’s claims to proceed, except for his intentional
infliction of emotional distress claim.
5

B.

Standard for Summary Judgment

Summary judgment is appropriate where the Court is
satisfied that the materials in the record, including
depositions, documents, electronically stored information,
affidavits or declarations, stipulations, admissions, or
interrogatory answers, demonstrate that there is no genuine
issue as to any material fact and that the moving party is
entitled to a judgment as a matter of law.

Celotex Corp. v.

Catrett, 477 U.S. 317, 330 (1986); Fed. R. Civ. P. 56(a).
An issue is “genuine” if it is supported by evidence such
that a reasonable jury could return a verdict in the nonmoving
party’s favor.
248 (1986).

Anderson v. Liberty Lobby, Inc., 477 U.S. 242,

A fact is “material” if, under the governing

substantive law, a dispute about the fact might affect the
outcome of the suit.

Id.

In considering a motion for summary

judgment, a district court may not make credibility
determinations or engage in any weighing of the evidence;
instead, the non-moving party's evidence “is to be believed and
all justifiable inferences are to be drawn in his favor.”
Marino v. Industrial Crating Co., 358 F.3d 241, 247 (3d Cir.
2004)(quoting Anderson, 477 U.S. at 255).

Initially, the

moving party has the burden of demonstrating the absence of a

6

genuine issue of material fact.
U.S. 317, 323 (1986).

Celotex Corp. v. Catrett, 477

Once the moving party has met this

burden, the nonmoving party must identify, by affidavits or
otherwise, specific facts showing that there is a genuine issue
for trial.

Id.

Thus, to withstand a properly supported motion

for summary judgment, the nonmoving party must identify specific
facts and affirmative evidence that contradict those offered by
the moving party.

Anderson, 477 U.S. at 256-57.

A party

opposing summary judgment must do more than just rest upon mere
allegations, general denials, or vague statements.

Saldana v.

Kmart Corp., 260 F.3d 228, 232 (3d Cir. 2001).
C.

Analysis

Defendants argue that plaintiff’s legal malpractice claim
fails for two reasons.

First, defendants argue that no facts

support a claim that the altered email affected the outcome of
the arbitration.

Second, defendants contend that plaintiff

cannot prove any damages relating to the outcome of the
arbitration. The Court agrees with defendants on both points.
Proximate cause is an essential element of a legal
malpractice claim.

Atl. Research Corp. v. Robertson, Freilich,

Bruno & Cohen, L.L.C., No. A-2286-13T4, 2015 WL 10322006, at *9
(N.J. Super. Ct. App. Div. Feb. 22, 2016) (citing Jerista v.

7

Murray, 883 A.2d 350, 359 (N.J. 2005)).

The test of proximate

cause is satisfied where the negligent conduct is a substantial
contributing factor in causing the loss.

Lamb v. Barbour, 455

A.2d 1122, 1125 (N.J. Super. Ct. App. Div. 1982), cert. denied,
93 N.J. 297 (1983) (citations omitted).

The burden of proof is

on the client, and it must be carried by the presentation of
competent credible evidence which proves material facts - it
cannot be satisfied by conjecture, surmise or suspicion.

Id.

Moreover, only where the attorney breaches his duty is he
answerable in damages for losses which are proximately caused by
his negligence.

Id.

Three years after the arbitration decision, plaintiff,
through counsel, filed a motion to reopen the arbitration. 8

In

his motion to reopen, plaintiff argued that the decision of the
arbitrator, Judge Serpentelli, “made explicit reference to the
altered email in a manner reflecting adversely on Plaintiff’s
credibility, [and] it is only reasonable that the Plaintiff have
an opportunity to submit evidence not available at the time of
the arbitration which would conclusively prove Plaintiff’s noninvolvement with the alteration of the exhibit and should lead

8

The arbitrator, Judge Serpentelli, issued his decision on July
2, 2008. Plaintiff filed his motion to reopen on May 2, 2011.
8

to a different result in the Arbitrator’s weighing of the
evidence.”

(Docket No. 159-25 at 4.)

Plaintiff requested that

he “should be given the opportunity to demonstrate his
blamelessness in connection with the email alteration so as to
dispel the manner in which this incident reflected adversely on
the Plaintiff in the decision of this case.”

(Id. at 2.)

Judge Serpentelli rejected plaintiff’s motion to reopen,
explaining:
I am thoroughly satisfied that the alteration of Exhibit P86 and the passing comment made to that document at page 25
of the Arbitrator's Decision was of no significance in the
result reached by the Arbitrator. As to the altered
document, the Arbitrator reached no conclusion regarding
who changed it. Therefore, it cannot be assumed that the
fact of the alteration caused a negative credibility
inference with regard to the plaintiff. In any event, the
decision was based on the overarching failure of the
plaintiff to carry the burden of proof which was unaffected
by the circumstance upon which the motion to reopen was
based.
(Docket No. 159-26 at 2.)
The arbitrator’s denial of plaintiff’s motion to reopen the
arbitration is fatal to plaintiff’s legal malpractice claim.
Even if Kirchner altered the email as plaintiff claims, the
arbitrator did not place any significance on the email in his
decision.

Plaintiff may wholeheartedly believe that the

arbitrator’s decision was affected by the implication that he
was involved in the alteration of an email.

9

Plaintiff cannot,

however, provide any facts to dispute the arbitrator’s own words
to the contrary.

No amount of discovery will change that

result.
Additionally, ALSI’s bankruptcy, as well as plaintiff’s
three failed lawsuits to recoup money from ALSI or its purported
successors and related parties, all demonstrate that even if
plaintiff received the arbitration decision he desired, he would
not have been able to collect on that arbitration award.
Consequently, because no amount of additional discovery would
change this outcome, the Court finds that defendants are
entitled to summary judgment on plaintiff’s claim of legal
malpractice arising out of the arbitration.
Defendants have also moved for summary judgment on
plaintiff’s breach of fiduciary duty and fraud claims related to
plaintiff’s claims that they tried to extort exorbitant
attorneys’ fees by intentionally pursuing certain litigation
tactics.

Defendants argue that the chronology and content of

their representation of plaintiff shows no facts support a
finding that they breached their fiduciary duties 9 to plaintiff,

9

The essence of a fiduciary relationship is that one party
places trust and confidence in another who is in a dominant or
superior position. A fiduciary relationship arises between two
persons when one person is under a duty to act for or give
advice for the benefit of another on matters within the scope of
their relationship. The fiduciary's obligations to the
10

or committed fraud. 10
Although close to completion, discovery is still ongoing,
and plaintiff has argued that he is unable to present his
opposition to defendants’ motion without completed discovery.
Thus, defendants’ motion for summary judgment is substantively
unopposed by plaintiff.
Federal Civil Procedure Rule 56(d) addresses the situation
when a nonmovant cannot present facts essential to justify his
opposition to a summary judgment motion.

In that situation, a

court may: (1) defer considering the motion or deny it; (2)
allow time to obtain affidavits or declarations or to take
discovery; or (3) issue any other appropriate order.

Fed. R.

Civ. P. 56(d).
Because the Court would like to consider plaintiff’s
proffered evidence in support his breach of fiduciary duty and

dependent party include a duty of loyalty and a duty to exercise
reasonable skill and care. Accordingly, the fiduciary is liable
for harm resulting from a breach of the duties imposed by the
existence of such a relationship. McKelvey v. Pierce, 800 A.2d
840, 859 (N.J. 2002) (citations omitted).
10The

five elements of common-law fraud are: (1) a material
misrepresentation of a presently existing or past fact; (2)
knowledge or belief by the defendant of its falsity; (3) an
intention that the other person rely on it; (4) reasonable
reliance thereon by the other person; and (5) resulting damages.
Gennari v. Weichert Co. Realtors, 691 A.2d 350, 367 (N.J. 1997).
11

fraud claims in order to fully consider the merits of
defendants’ summary judgment motion, and because discovery will
be completed in a few weeks, the Court will deny defendants’
motion as it relates to the breach of fiduciary duty and fraud
claims.

The Magistrate Judge’s most recent discovery order

directed that dispositive motions shall be filed with the Clerk
of the Court no later than April 22, 2016.

(Docket No. 215.)

Accordingly, defendants shall refile their summary judgment
motion as to plaintiff’s breach of fiduciary duty and fraud
claims, 11 and plaintiff’s opposition, and defendants’ reply,
shall be due in accordance with the Local Rules.

See Local

Civ. R. 7.1 and 78.1(a).
CONCLUSION
For the reasons expressed above, defendants are entitled to
summary judgment in their favor on plaintiff’s legal malpractice
claims.

Defendants’ motion for summary judgment as to

plaintiff’s breach of fiduciary duty and fraud claims will be
denied without prejudice.

The parties are directed to comply

with the Magistrate Judge’s most recent discovery order and the

11

So as to not waste defendants’ resources, defendants may
simply refile their current motion, edited to remove their
argument as to plaintiff’s legal malpractice claims. Defendants
are not precluded, however, from filing an updated or
supplemented version of their motion as to plaintiff’s breach of
fiduciary duty and fraud claims if they wish to.
12

Local Rules with regard to the filing of subsequent dispositive
motions.
An appropriate Order will be entered.

Date: April 5, 2016
At Camden, New Jersey

s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.

13