EHRLICH v. MCINERNEY et al
Filing
73
OPINION. Signed by Judge Noel L. Hillman on 9/30/2019. (rtm, )
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
JONATHAN EHRLICH,
Plaintiff,
1:17-cv-879 (NLH/KMW)
OPINION
v.
DENNIS P. MCINERNEY, ESQ.,
THOMAS W. SASAKI, ERIC
SASAKI, RE/MAX WORLD CLASS
REALTY, O'HARA APPRAISALS,
AND MARTIN T. O'HARA,
Defendants.
APPEARANCES:
PETER A. OUDA
PETER A. OUDA, LLC
19 NORTH BRIDGE STREET
SOMERVILLE, NEW JERSEY 08876
On behalf of Plaintiff
JOHN L. SLIMM
MARSHALL, DENNEHEY, WARNER, COLEMAN & GOGGIN
15000 MIDLANTIC DRIVE, SUITE 200
P.O. BOX 5429
MOUNT LAUREL, NEW JERSEY 08054
On behalf of Defendant Dennis P. McInerney
MICHAEL S. MIKULSKI II
PHILIP JOHN DEGNAN
CONNOR WEBER & OBERLIES, P.C.
304 HARPER DRIVE
SUITE 201
MOORESTOWN, NJ 08057
On behalf of Defendants Thomas W. Sasaki, Eric Sasaki, and
Re/Max World Class Realty
ANNE M. DALENA
WILSON ELSER MOSKOWITZ EDELMAN & DICKER LLP
200 CAMPUS DRIVE
FLORHAM PARK, NJ 07932
On behalf of O'Hara Appraisals and Martin T. O'Hara
HILLMAN, District Judge
This matter arises from a decades’ worth of litigation
regarding the Estate of Richard D. Ehrlich, who died on
September 21, 2009. 1
One of the claims lodged by Plaintiff,
Jonathan Ehrlich, the decedent’s nephew, in his original
complaint in this action was a breach of fiduciary duty claim
against Defendant Dennis P. McInerney, the temporary
administrator of the Estate.
On December 13, 2017, this Court
dismissed Plaintiff’s claims against McInerney, finding that
Plaintiff’s claims were barred by New Jersey’s entire
controversy doctrine and N.J.S.A. 3B:17-8. 2
1
This Court has diversity jurisdiction pursuant to 28 U.S.C. §
1332(d), as the parties are diverse and the amount in
controversy exceeds $75,000.
2
N.J.S.A 3B:17-8, Effect of judgment allowing account, provides:
A judgment allowing an account, including a guardian's
intermediate account, after due notice, shall be res
adjudicata as to all exceptions which could or might have
been taken to the account, and shall constitute an approval
of the correctness and propriety of the account, the
legality and propriety of the investments and other assets,
the legality and propriety of the changes in investments or
other assets, and the legality and propriety of other
matters, and also shall exonerate and discharge the
fiduciary from all claims of all interested parties and of
2
Currently pending before the Court is the motion of
Plaintiff pursuant to Fed. R. Civ. P. 60(b) to vacate the
Court’s dismissal of his claims against McInerney because of
evidence obtained from McInerney’s deposition as a fact witness
with regard to Plaintiff’s claims against the other defendants.
As to the other defendants, Plaintiff claims that Re/Max World
Class Realty, Thomas W. Sasaki, and Eric Sasaki (“Realtor
defendants”) acted negligently in the real estate listing of two
of the decedent’s properties.
Plaintiff also claims that O’Hara
Appraisals and Martin T. O’Hara (“Appraisal defendants”)
negligently prepared appraisals for the two properties.
Also
pending before the Court are the motions of these defendants for
summary judgment.
McInerney has opposed Plaintiff’s Rule 60(b) motion.
Plaintiff has partially opposed the Realtor defendants’ motion
for summary judgment.
Plaintiff has not filed an opposition to
those in privity with or represented by interested parties
except:
a. For the investments and other assets in the
fiduciary's hands at the close of the period covered
by the account, and assets which may come into his
hands after the close of the account;
b. Insofar as exceptions to the account shall be taken
and sustained; and
c. As relief may be had from a judgment in any civil
action.
3
the Appraisal defendants’ summary judgment motion.
For the reasons expressed below, the Court will deny
Plaintiff’s motion, and grant Defendants’ motions.
BACKGROUND
The Court restates the relevant background from the Court’s
December 13, 2017 Opinion (Docket No. 31), which recounted the
June 29, 2012 decision by the New Jersey Superior Court,
Appellate Division, In re Estate of Ehrlich, 47 A.3d 12 (N.J.
Super. Ct. App. Div. 2012), certif. denied, 59 A.3d 602 (N.J.
2013), appeal dismissed, 64 A.3d 556 (N.J. 2013).
Decedent was
a trust and estates attorney in Burlington County, New Jersey.
Id. at 13-14.
He died on September 21, 2009, with his only next
of kin being his nephews, Todd Ehrlich and Plaintiff, and his
niece Pamela Venuto.
Id. at 14.
While Decedent had not had
contact with Todd or Pamela for over twenty years, he maintained
a close relationship with Plaintiff, who he had told friends was
the person to contact if he were to die and was the person to
whom he would leave his estate.
Id.
Upon learning of Decedent’s death, a search for Decedent’s
will ensued.
Id.
Plaintiff located a copy of a purported will
in a drawer in Decedent’s home.
Id.
On December 17, 2009,
Plaintiff filed a complaint seeking to have the purported will
admitted to probate.
Id.
Todd and Pamela objected.
McInerney, who had previously been named as Trustee of
Id.
4
Decedent’s law practice, was appointed as temporary
administrator.
Id.
While McInerney was ordered to inspect
Decedent’s home, no other document purporting to be Decedent’s
will was ever located.
Id.
The purported will that was recovered provided a specific
bequest of $50,000 to Pamela, a specific bequest of $75,000 to
Todd, twenty-five percent of the residuary to pass through a
trust to a friend, and seventy-five percent of the residuary to
pass to Plaintiff.
Id.
was admitted to probate.
On April 20, 2011, the proffered will
Id. at 13.
The court then denied a
motion for reconsideration on June 20, 2011.
Id.
The Appellate
Division then affirmed, finding the will was properly admitted
to probate.
Id. at 19.
While the decision was appealed to the
New Jersey Supreme Court, Plaintiff’s complaint provides that
the matter was settled by the siblings.
On January 18, 2013, Judge Karen L. Suter of the Superior
Court of New Jersey, Chancery Division granted McInerney’s
motion for instructions 3 and to allow a settlement with regard to
two actions pending against the Estate arising from Decedent’s
law practice: IMO Estate of Farias v. Estate of Ehrlich and
3
New Jersey Court Rule 4:95-2, Summary Action by Fiduciary for
Instructions, provides: “A summary action pursuant to R. 4:83
may be brought by executors, administrators, guardians or
trustees for instructions as to the exercise of any of their
statutory powers as well as for advice and directions in making
distributions from the estate.”
5
Farias v. Estate of Ehrlich.
McInerney filed the motion for
instructions believing settling the matters was in the best
interest of the Estate, as he believed the Estate could
potentially be liable for more than the settlement amount.
Plaintiff opposed the motion, arguing “more information is
required before a determination of the propriety of the
settlement can be made.”
Judge Suter determined McInerney was
“acting within his powers as temporary administrator” and thus
approved the settlement.
The settlement was thereafter
consummated.
On July 15, 2011, Judge Michael J. Hogan of the Superior
Court of New Jersey, Chancery Division approved McInerney’s
first intermediate account on behalf of the Estate.
By a May
23, 2012 Order, Judge Suter denied Plaintiff’s motion to vacate
the July 15, 2011 court order. 4
his motion to vacate.
Plaintiff appealed the denial of
In re Estate of Ehrlich, 2013 WL 2476490.
The Appellate Division affirmed, stating:
4
The Appellate Division provided the following background
information regarding the underlying motion. In re Estate of
Ehrlich, No. 4714-11, 2013 WL 2476490, at *1 (N.J. Super. Ct.
App. Div. June 11, 2013). Plaintiff did not file any exceptions
to the first intermediate accounting, but after an order was
entered approving it filed a motion to remove the temporary
administrator, sought the turnover of all papers and files, and
sought an audit and investigation of the administration of the
Estate. Id. After that motion and a motion for reconsideration
were denied, Plaintiff moved to vacate the order approving the
accounting, predominantly on the grounds that the accounting
failed to include certain assets of the Estate. Id.
6
The present case provides no basis for disturbing the
July 15, 2011 order approving respondent’s intermediate
accounting. Appellant, by his own admission, knew the
accounting to be incomplete upon his receipt of the
document yet neither filed any exceptions nor voiced any
objection to the accounting at the hearing on its
approval.
Moreover,
all
acknowledged
that
the
accounting was interim in nature and that the final
accounting would include the assets belatedly brought to
the administrator’s attention by appellant.
Id. at *1.
In a July 25, 2014 decision, Judge Mary C. Jacobson of the
Superior Court of New Jersey, Chancery Division considered
exceptions to a final accounting filed for Decedent’s Estate, a
motion seeking removal of McInerney as temporary administrator
and appointment of Plaintiff as executor, and applications by
McInerney and two other attorneys for fees payable from the
Estate.
In the course of considering the exceptions to the
accounting, Judge Jacobson considered Plaintiff’s complaint that
the sale price of Decedent’s home was substantially less than
its value as set forth in prior appraisals.
Judge Jacobson
found, while the property had originally been appraised around
$350,000 at Decedent’s death and for a couple years thereafter,
Defendant had only received offers well below the original
appraisal value.
McInerney thus sought two updated appraisals,
which determined the appraisal value had dropped to somewhere
around $225,000 to $250,000, with necessary repairs
7
approximating over $107,000.
McInerney thus sought instructions
from the court as to whether he should accept an offer of
$212,500 or make repairs to the property to try to rent it until
the market improved.
After hearing Plaintiff’s opposition,
Judge Suter approved and authorized the proposed sale.
Judge Jacobson concluded:
The record reveals no action taken by Mr. Ehrlich
to stop the sale after Judge Suter’s ruling. Moreover,
Mr. Ehrlich has presented no evidence that would allow
this court to set aside Judge Suter’s Order . . . . To
allow Mr. Ehrlich to re-litigate this issue after the
property has been sold in an effort to obtain a surcharge
would be unjust and oppressive to the Temporary
Administrator. When a fiduciary has properly applied to
the probate court for advice and direction with respect
to a transaction involving the administration of the
estate and acts in accordance with the court’s
instructions, it would be inequitable to allow an
exceptant who had an opportunity to be heard at the time
of the application to the court for instructions to later
pursue the same objection through an exception to the
final accounting.
By that time the Temporary
Administrator’s actions had been sanctioned by the court
and should be given res judicata effect.
To allow
otherwise by an exceptant would create havoc in the
administration of estates, leaving none but the
foolhardy willing to serve as fiduciaries.
Mr.
McInerney proceeded to sell the property only after
court approval and an opportunity for Mr. Ehrlich to be
heard.
Mr. Ehrlich’s exception to the sale of the
property must therefore be denied.
The court also addressed Plaintiff’s allegation that
Defendant did not take adequate steps to locate Decedent’s will
on his computer:
Even if this claim is true, Mr. Ehrlich offers no
explanation as to how this failure caused any loss to
the Estate. The writing that was admitted to probate
8
pursuant to N.J.S.A. 3B:3-3 by Judge Hogan, who issued
a Judgment to this effect that was upheld by the
Appellate Division, was a paper copy of a will, unsigned
by the decedent and any witnesses, but which bore a
notation in the handwriting of the decedent stating,
“original mailed to H.W. Van Sciver 5/20/00.”
. . .
Because this document was admitted to probate, any
failure to locate a draft of this document on the
decedent’s computer caused no loss to the Estate or to
Mr. Ehrlich. Whether the decedent had any other draft
of a different purported will on his computer and whether
that different draft would have benefited Mr. Ehrlich is
mere speculation.
Moreover, any draft of an alleged
will retrieved from the decedent’s computer would lack
the handwritten notation that both the chancery court
and the Appellate Division relied upon in deciding that
the decedent intended to constitute his will.
Also in addressing the exceptions, the state court stated
Plaintiff’s “numerous allegations of duplicitous conduct” by
McInerney were “factually unsupportable in the record before the
court.”
Rather, the court found McInerney “acted appropriately
in bringing issues to the attention of the court for direction
and presenting his accountings to the court for approval.”
Later in the opinion, in addressing the motion to remove
McInerney as temporary administrator, the court stated: “Mr.
Ehrlich has not demonstrated that there has been a flagrant
dereliction of duty by the Temporary Administrator . . . .”
Judge Jacobson ultimately approved the account in all respects.
In an October 30, 2015 Motion Hearing, Judge Jacobson
considered a motion by McInerney seeking an order awarding
attorneys’ fees and costs to him, providing direction as to
payment of an attorneys’ fee award, and seeking direction as to
9
the distribution of the balance of the Estate, among other
requests.
Plaintiff opposed the motion, largely based on the
alleged failure of McInerney to pursue a particular asset of the
Estate – a condominium titled in Decedent’s name in the Harbour
House Towers of Freeport in the Grand Bahamas.
McInerney certified he was not made aware Decedent had an
interest in property in the Bahamas, and if he had been so
aware, he would have taken action to transfer the property to
the Estate.
Judge Jacobson concluded:
The Court is not convinced that Mr. McInerney, on
the basis of the record before it, was ever informed
about the Bahamas property and . . . made aware that it
was something he should investigate. Jonathan Ehrlich
himself had access to the decedent’s files and
documents. It is throughout the record of this lengthy
estate litigation that he had removed documents and
files
prior
to
Mr.
McInerney’s
appointment
as
administrator. . . .
. . . .
N.J.S.A. 3B:17-8 provides that a judgment allowing
an account after due notice shall be res adjudicata as
to all exceptions which could or might have been taken
to the account and shall constitute, exonerate and
discharge the fiduciary from all claims of all
interested parties, and the statute was relied upon by
the Appellate Division in the earlier estate litigation
in refusing to allow Mr. Ehrlich to raise issues as to
Mr. McInerney’s performance that could have been raised
in the first accounting but were not . . . .
Since Mr. Ehrlich was aware of the claim that the
decedent owned a condominium in the Bahamas prior to the
first and second accountings and failed to file an
exception in this regard to either accounting the Court
finds that the judgments approving both accountings
constitute res adjudicata and eliminate any liability on
the part of Mr. McInerney with regard to the Bahamas
10
property.
Similarly, in addressing McInerney’s fee request, the court
noted Plaintiff “claim[ed] that the Estate ha[d] been mishandled
in many respects,” but the court found Plaintiff’s allegations
meritless. 5
DISCUSSION
1.
Plaintiff’s Motion for relief under Rule 60(b)
In his now-dismissed breach of fiduciary claim, Plaintiff
alleged that, as a court-appointed fiduciary, McInerney “owed a
common law and statutory duty of care to the beneficiaries and
to the estate.”
The complaint claimed that McInerney breached
his fiduciary duty to Plaintiff and breached his duty, as an
attorney, to comply with the Rules of Professional Conduct –
specifically Rules 3.3 and 4.1. 6
Relevant to Plaintiff’s Rule
60(b) motion, Plaintiff had claimed in his complaint:
•
“Mr. McInerney in contravention of his fiduciary role
also severely undersold estate assets such as the
decedent’s home in Delanco, New Jersey. The home was
appraised at $350,000.00 but it was undersold by over
$100,000.00.”
5
The Court notes that there were additional proceedings and
issues before the state court not addressed in this Opinion.
This Court recites only those proceedings, issues, and findings
it finds necessary for deciding this Opinion.
6
RPC 3.3 concerns a lawyer’s candor toward the tribunal, which
directs, among other things, that a lawyer should not knowingly
make a false statement about a material fact, or fail to
disclose a material fact, to the court. RPC 4.1 concerns a
lawyer’s obligation to make truthful statements to third
parties.
11
•
“[H]e had listed for sale the decedent’s law office [43
West Broad Street, Burlington, New Jersey] for $300,000
but as of 2014 he suggested in open court before Judge
Jacobson that the property should be donated because it
had little value.”
In his Rule 60(b) motion, Plaintiff contends that testimony
elicited from McInerney’s deposition as a fact witness relative
to Plaintiff’s claims against the Realtor defendants and the
Appraisal defendants revealed two new claims he could assert
against McInerney, both of which he was unaware until
McInerney’s deposition.
Plaintiff claims he only recently
learned of the following:
(1) McInerney retained Defendant Thomas Sasaki of Haines &
Haines who advised him immediately in a letter dated September
9, 2011 that a $300,000 listing price for the West Broadway
property was too high and suggested a listing price of
$169,000.00, over a 40% reduction from the appraisal of the
$300,000.00.
McInerney had previously sent a letter to Eric
Sasaki on July 11, 2011 directing that the property be listed
for $300,000 based on the appraisal that he sent to him.
It
remained on the market until it was sold in 2015 by Plaintiff
for $64,000.
Thomas Sasaki confirmed at his deposition that he
gave the September 2011 advice to McInerney.
(2)
Pursuant to the subpoena served upon McInerney, he
provided a document dated May 2015 referencing a tax sale
12
certificate and an offer to redeem the tax sale certificate.
Plaintiff claims that he had no idea that McInerney was
advised as early as September 2011 that the West Broad Street
property was listed too high and that he was directed to reduce
it to $169,000.
Plaintiff claims that the property remained on
the market from 2011 to 2015 at an inflated price despite
McInerney being advised by a professional that he retained in
2011 that the listing was way too high.
Plaintiff claims that
he could not have known it prior to that time because that
letter was not produced until McInerney’s deposition.
Plaintiff
argues that this new fact suggests a new cause of action for
breach of fiduciary duty that was not part of the December 2017
dismissal, and about which Plaintiff was unaware until the last
several months.
Plaintiff also argues that he never knew of the tax
certificate sale until it was produced in discovery in
preparation for depositions, and had this been known it would
have been brought up in the estate matter.
Plaintiff claims
that he thereafter retained a searcher to perform a tax sale
search which revealed 57 properties with unresolved tax lien
certificates held by the decedent.
Plaintiff claims there was
never an investigation into these tax sale certificates and one
should be undertaken into all of these properties to see if any
claims have been irretrievably lost.
13
The Court does not find that Plaintiff’s purported new
evidence warrants relief under Rule 60(b).
Rule 60(b) provides:
(b) Grounds for Relief from a Final Judgment, Order, or
Proceeding. On motion and just terms, the court may relieve
a party or its legal representative from a final judgment,
order, or proceeding for the following reasons:
(1) mistake, inadvertence, surprise, or excusable
neglect;
(2) newly discovered evidence that, with reasonable
diligence, could not have been discovered in time to
move for a new trial under Rule 59(b);
(3) fraud (whether previously called intrinsic or
extrinsic), misrepresentation, or misconduct by an
opposing party;
(4) the judgment is void;
(5) the judgment has been satisfied, released, or
discharged; it is based on an earlier judgment that
has been reversed or vacated; or applying it
prospectively is no longer equitable; or
(6) any other reason that justifies relief.
Fed. R. Civ. P. 60(b).
As a primary matter, a Rule 60(b) motion only applies to a
final judgment, order, or proceeding.
The Court’s December 13,
2017 dismissal of Plaintiff’s claims against McInerney does not
constitute a “final judgment” under Rule 60(b).
See Penn West
Associates, Inc. v. Cohen, 371 F.3d 118, 124–25 (3d Cir. 2004)
(noting that Rule 60(b) allows a party to seek relief only from
a “final judgment, order, or proceeding . . .,” and the
14
application of the word “final” is clarified by the Advisory
Committee Notes, which explain that “the qualifying word ‘final’
emphasizes the character of the judgments, orders or proceedings
from which Rule 60(b) affords relief; and hence interlocutory
judgments are not brought within the restrictions of the rule,
but rather they are left subject to the complete power of the
court rendering them to afford such relief from them as justice
requires”); State National Insurance Company v. County of
Camden, 824 F.3d 399, 406 (3d Cir. 2016) (explaining that Rule
60(b) grants the district court the power to relieve a party
from a “final judgment, order, or proceeding,” and the district
court’s order dismissing one defendant - and not all of the
defendants - was not a final order, but rather an interlocutory
order, thus making the plaintiff’s Rule 60(b) motion not the
proper avenue by which to challenge the defendant’s dismissal).
Thus, Plaintiff’s motion for relief under Rule 60(b) is not
ripe until the Court resolves Plaintiff’s claims against all
defendants. 7
The Court, however, will consider the arguments
advanced by Plaintiff in his motion pursuant to the Court’s
7
McInerney points out that Plaintiff’s motion for relief under
Rule 60(b)(2) is untimely. Rule 60(c)(1) provides that a Rule
60(b) motion “must be made within a reasonable time--and for
reasons (1), (2), and (3) no more than a year after the entry of
the judgment or order or the date of the proceeding.” Fed. R.
Civ. P. 60(c)(1). Plaintiff’s Rule 60(b)(2) motion cannot be
late because it is premature.
15
inherent authority to reconsider its prior orders.
See State
National, 824 F.3d at 406 (“Apart from Rule 60(b), the District
Court has the inherent power to reconsider prior interlocutory
orders.”).
With regard to Plaintiff’s proffer of two pieces of
purported “new evidence,” “newly discovered evidence is ‘(1)
material and not merely cumulative, (2) could not have been
discovered prior to trial through the exercise of reasonable
diligence, and (3) would probably have changed the outcome of
the trial.’”
MZM Construction Company, Inc. v. New Jersey
Building Laborers’ Statewide Benefit Funds, 2019 WL 3812889, at
*10 (D.N.J. Aug. 14, 2019) (quoting Bohus v. Beloff, 950 F.2d
919, 930 (3d Cir. 1991)) (other citations omitted).
The “new
evidence” proffered by Plaintiff would not change the basis of
the Court’s dismissal of Plaintiff’s claims against McInerney.
First, the state court squarely addressed Plaintiff’s
concerns regarding the pricing of the West Broad Street
property.
As this Court previously found, any claims based on
what the state court judge already considered are barred.
(Docket No. 31 at 21-23.)
Second, with regard to Plaintiff’s claim that McInerney
never conducted an investigation into the tax sale certificates
of the decedent, the state court also directly addressed
Plaintiff’s exceptions to McInerney’s accounting, and after the
16
surrogate audited it without exception, it approved his final
accounting.
(Id. at 22-23.)
It was therefore the province of
the state court to determine whether McInerney’s accounting was
incomplete.
See N.J.S.A. 3B:7-8 (providing that a judgment
allowing an account shall be res judicata as to all parties who
received notice and as to all exceptions which could or might
have been taken to the account, and shall constitute an approval
of the correctness and propriety of the account . . . and the
legality and propriety of other matters and also shall exonerate
and discharge the fiduciary from all claims of interested
parties and of those in privity with or represented by
interested parties).
Even accepting as true Plaintiff’s claim that he could not
have advanced an exception in the state court action about the
tax sale certificates because he only discovered the issue now,
Plaintiff’s concern cannot be advanced here.
The state court
approved of the accounting, and any challenge to that accounting
as sanctioned by the state court must be directed to that forum. 8
8
See N.J. Ct. R. 4:50-1 (“On motion, with briefs, and upon
such terms as are just, the court may relieve a party or the
party's legal representative from a final judgment or order for
the following reasons: (a) mistake, inadvertence, surprise, or
excusable neglect; (b) newly discovered evidence which would
probably alter the judgment or order and which by due diligence
could not have been discovered in time to move for a new trial
under R. 4:49; (c) fraud (whether heretofore denominated
intrinsic or extrinsic), misrepresentation, or other misconduct
of an adverse party; (d) the judgment or order is void; (e) the
17
Finally, this case does not present the extraordinary
circumstances required to implicate Rule 60(b)(6) which the
Court considers in exercising its inherent authority.
Cf., Buck
v. Davis, 137 S. Ct. 759, 777–78 (U.S. 2017) (“Rule 60(b) vests
wide discretion in courts, but we have held that relief under
Rule 60(b)(6) is available only in ‘extraordinary
circumstances.’ In determining whether extraordinary
circumstances are present, a court may consider a wide range of
factors.
These may include, in an appropriate case, the risk of
injustice to the parties and the risk of undermining the
public's confidence in the judicial process.” (citations and
quotations omitted)).
The Court will therefore decline to vacate the Opinion
dismissing Plaintiff’s claims against McInerney.
2.
Realtor defendants’ motion for summary judgment
Plaintiff alleges that Defendants Thomas Sasaki and Eric
Sasaki, “as professionals licensed to sell real property in New
Jersey, completely and utterly miscalculated the value” and
“failed to properly market” the decedent’s two properties decedent’s home in Delanco, New Jersey and decedent’s law office
judgment or order has been satisfied, released or discharged, or
a prior judgment or order upon which it is based has been
reversed or otherwise vacated, or it is no longer equitable that
the judgment or order should have prospective application; or
(f) any other reason justifying relief from the operation of the
judgment or order.”).
18
in Burlington, New Jersey (“West Broad Street property”) - “in a
manner than would produce the highest and best price.”
Amended Complaint, Docket No. 44 at 8-9.)
(Third
Plaintiff claims that
“these defendants neglected to ensure that these properties were
maintained while under their care,” and the “estate suffered
financially for these acts of negligence.”
(Id. at 9.)
Plaintiff also alleges “Re/Max is liable for this negligence of
Thomas and Eric Sasaki under principles of respondeat superior
and agency.”
(Id.)
The claims against the Realtor defendants are couched
somewhat differently in Plaintiff’s opposition to the Realtor
defendants’ motion for summary judgment than they are in the
Third Amended Complaint. 9
Plaintiff relates:
The allegations asserted here are basic, clear and rather
uncomplicated. The Sasaki defendants knew of germane and
relevant information that they neglected to disclose on
their listing, namely that the residential units couldn't
be rented because of zoning changes and even if they could
be, the property was in such poor shape that a Certificate
of Occupancy could not be obtained. This was revealed by
defendants on December 27, 2018 at their depositions. The
condition of the property was clearly misrepresented in the
listing.
9
“‘It is one thing to set forth theories in a brief; it is quite
another to make proper allegations in a complaint. . . . [I]t is
axiomatic that the complaint may not be amended by the briefs in
opposition to a motion [].’” Hughes v. United Parcel Service,
Inc., 639 F. App’x 99, 104 (3d Cir. 2016) (quoting Com. of Pa.
ex rel. Zimmerman v. PepsiCo, Inc., 836 F.2d 173, 181 (3d Cir.
1988)).
19
(Docket No. 70 at 4.)
Plaintiff further relates that he relied
upon the appraisal of the West Broad Street property prepared by
the Appraisal defendants that showed a net rental income in
excess of $2,000 per month.
Plaintiff claims that the
representation that the West Broad Street property would provide
him with $2,000 per month is the basis for his damages against
the Realtor defendants because he relied upon that figure when
he settled his dispute with his siblings.
(Id. at 5.)
The Realtor defendants argue that Plaintiff’s professional
negligence claims against them as “professionals licensed to
sell real property in New Jersey” fail because without
proffering an expert as to how they deviated from a real estate
agent’s duty of care, Plaintiff cannot prove they breached that
duty.
Plaintiff argues that he does not need an expert to prove
his claims, because under the common knowledge exception, he can
testify as to defendants’ breach and how that breach caused his
damages.
The Realtor defendants are correct that Plaintiff’s theory
against them requires the testimony of an expert.
In order to
maintain a negligence claim against a licensed professional, a
plaintiff is ordinarily required to provide an affidavit of
merit from an expert - an “appropriate licensed person” - at the
outset of the case to make a threshold showing that their claim
is meritorious.
See N.J.S.A. 2A:53A-27 (“In any action for
20
damages for personal injuries, wrongful death or property damage
resulting from an alleged act of malpractice or negligence by a
licensed person in his [or her] profession or occupation, the
plaintiff shall, ... provide each defendant with an affidavit of
an appropriate licensed person that there exists a reasonable
probability that the care, skill or knowledge exercised or
exhibited in the treatment, practice or work that is the subject
of the complaint, fell outside acceptable professional or
occupational standards or treatment practices.”); Meehan v.
Antonellis, 141 A.3d 1162, 1169 (N.J. 2016) (“The submission of
an appropriate affidavit of merit is considered an element of
the [professional negligence] claim.
Failure to submit an
appropriate affidavit ordinarily requires dismissal of the
complaint with prejudice.”).
Plaintiff’s claim that the listing should have included
more information, or any information at all, about potential
impediments to lease income is precisely the kind of information
that calls for an assessment of industry practice beyond the
“ordinary understanding and experience” of lay persons.
Accordingly, it falls outside of the category of obvious errors
the common knowledge exception was meant to address.
See Cowley
v. Virtua Health System, 193 A.3d 330, 337 (N.J. Super. Ct. App.
Div. 2018) (“Common knowledge cases involve obvious or extreme
error.”); Bender v. Walgreen Eastern Co., Inc., 945 A.2d 120,
21
123 (N.J. Super. Ct. App. Div. 2008) (explaining that the common
knowledge doctrine has been used in circumstances involving
obvious errors: a dentist's extraction of the wrong tooth, the
erroneous hookup of equipment that resulted in the pumping of
gas, rather than the fluid that ought to have been used, into
the patient's uterus, and the use of caustic solution, rather
than the soothing medication intended, to treat a patient’s nose
after surgery).
Plaintiff’s failure to proffer an expert to testify to a
factfinder how the alleged failure to provide such information
in a real estate listing deviates from the applicable standard
of care is therefore fatal to his claim.
Cowley, 193 A.3d at 336
(“Expert testimony about an alleged deviation from a reasonable
standard of care [and to establish breach of that standard] is
required whenever a licensed person exercised professional
responsibilities and judgment before acting or failing to
act[].”) (citation omitted); see also Katz v. N.T. Callaway Real
Estate Broker, LLC, 2016 WL 6677897, at *7 (N.J. Super. Ct. App.
Div. 2016) (not finding fault with the trial court’s dismissal
of the plaintiff’s negligence claim against a real estate broker
because she failed to obtain an expert opinion on the
responsibilities and functions of real estate brokers).
It is true that under the common knowledge exception, a
plaintiff is not required to provide an expert to support his
22
negligence claims.
See Buttacavoli v. Universal Dentistry, PA,
2019 WL 2184960, at *4 (N.J. Super. Ct. App. Div. 2019)
(explaining that “the New Jersey Supreme Court has recognized an
exception to the affidavit requirement in professional
negligence cases in which it is not necessary for plaintiff to
present an expert to establish the standard of care or a
deviation from that standard: the common knowledge exception.
In common knowledge cases, the alleged negligence is unrelated
to technical matters peculiarly within the knowledge of
practitioners within the defendant's field.
Common knowledge
cases are thus treated as ordinary negligence actions in which
the jury can supply the applicable standard of care from its
fund of common knowledge and assess the feasibility of possible
precautions which the defendant might have taken to avoid injury
to the plaintiff.” (citations omitted)).
But even if the Court
assessed Plaintiff’s claims against the Realtor defendants under
the ordinary negligence standard, the Court finds that Plaintiff
has not met his burden to defeat summary judgment. 10
10
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).
23
“In New Jersey, as elsewhere, it is widely accepted that a
negligence cause of action requires the establishment of four
elements: (1) a duty of care, (2) a breach of that duty, (3)
actual and proximate causation, and (4) damages.”
Jersey Cent.
Power & Light Co. v. Melcar Utility Co., 59 A.3d 561, 571 (N.J.
2013).
As set forth above, the nature of Plaintiff’s claims
against the Realtor defendants is unclear.
In his complaint,
Plaintiff alleges that Thomas Sasaki and Eric Sasaki were
negligent in the real estate listings for the Delanco property
and the West Broad Street property because they did not maximize
the highest selling price, and that their negligent listing
resulted in financial injury to the estate.
As noted above, Plaintiff improperly changes the nature of
his claim against the Realtor defendants asserting that they
were negligent in their listing of the West Broad Street
property because they failed to disclose that the residential
units could not be rented because of zoning changes and were in
such poor condition that a Certificate of Occupancy could not be
obtained.
Plaintiff does not make any argument as to the
Delanco property.
Thus, on the one hand, Plaintiff alleges that the Realtor
defendants created a listing that would not garner the highest
possible sale price for the two properties, but on the other
24
hand, Plaintiff claims that the Realtor defendants created a
listing for the West Broad Street property that did not include
specifics about the disrepair of the property, which would
logically lead to a lower sale price.
Plaintiff’s contradictory claims are further confused by
the alleged nature of Plaintiff’s damages.
Plaintiff claims
that he relied upon the appraisal for $2,000 per month in rental
income from the West Broad Street property when he settled his
dispute with his siblings, but he offers no evidence as to how
such reliance affected those negotiations and if so in what
amount.
Even if the Court were to allow Plaintiff to proceed on
this new theory, and even assuming the Realtor defendants owed a
duty of care to a beneficiary of the estate rather than to the
estate that hired them, a factfinder would have to speculate on
what damages, if any, Plaintiff suffered.
An inability to prove
damages regarding the statements concerning the condition of the
West Broad Street property is fatal to his negligence claim
against the Realtor defendants.
The same holds true for Plaintiff’s claims against the
Realtor defendants for not crafting listings for the Delanco
property and the West Broad Street property to maximize their
sale price.
Again, accepting that the Realtor defendants had a
duty of care to Plaintiff and they breached that duty, Plaintiff
has not provided any proof with regard to his damages that were
25
caused by these listings.
Plaintiff’s negligence claim against
the Realtor defendants for their alleged failure to maximize the
sale price in the listings of the two properties is
unsustainable as well.
Consequently, the Realtor defendants are entitled to
judgment in their favor on Plaintiff’s negligence claims. 11
3.
Appraisal defendants’ motion for summary judgment
Plaintiff claims the following against the Appraisal
defendants:
The defendant Sasaki employed appraisers to appraise
the subject properties. Those appraisers were Martin T.
O'Hara the owner /operator of O'Hara Appraisals. Three
appraisals were done on the Delanco property. A date of
death value of $350,000, 00 and a tax appraisal of
$340,000.00 and a third appraisal of $225,000.00, which
listed work that needed to be done on the home. If such
work needed to be done on the home, that existed when the
first two appraisals were completed.
The appraisal of the Delanco property was done
negligently, unprofessionally and carelessly so that the
estate incurred needless carrying charges and fees.
Likewise the appraisal of the law office of the
decedent in the amount of $300,000.00 was so high that it
clearly discouraged any real offers on the property and the
11
Plaintiff asserts claims under respondeat superior and agency
against Re/Max World Class Realty for the actions of Thomas
Sasaki and Eric Sasaki. Re/Max argues that Plaintiff’s claims
against it must be dismissed because it had no involvement in
this matter. Thomas Sasaki and Eric Sasaki were employed by
Haines & Haines during these events, and Re/Max did not come
into existence until after the properties had been sold (the
Delanco property in 2012, and the West Broad Street property in
March 2015). Plaintiff did not file any response to Re/Max’s
argument. Summary judgment is warranted in favor of Re/Max on
this basis as well.
26
estate incurred carrying charges needlessly. The office was
sold by Jonathan Ehrlich for a small fraction of what it
was appraised for.
As proximate cause of the negligence of Martin O'Hara
and O'Hara Appraisals, Plaintiff suffered damages.
(Docket No. 44 at 9-10.)
The Appraisal defendants have moved for summary judgment on
the same basis as the Realtor defendants - that Plaintiff cannot
establish liability and damages against them for their alleged
professional negligence because he has not produced an expert to
support the elements of his claims.
The Court first notes that Plaintiff did not file an
opposition to the Appraisal defendants’ motion.
In an unopposed
motion, a movant who files a proper Local Civil Rule 56.1
statement of undisputed material facts (“SUMF”) receives the
benefit of the assumption that such facts are admitted for
purposes of the summary judgment motion.
Lacroce v. M. Fortuna
Roofing, Inc., 2017 WL 431768, at *3 (D.N.J. 2017) (citing L.
Civ. R. 56.1 (providing that “any material fact not disputed
shall be deemed undisputed for the purposes of the summary
judgment motion”)).
Thus, “where a properly filed and supported
summary judgment motion is unopposed, it would be an exceptional
case where the court concludes that summary judgment should
nonetheless be denied or withheld, although the Court has
discretion to do so if unsatisfied that the law and facts point
27
to judgment as a matter of law.”
Id.
The Appraisal defendants appropriately complied with Local
Civil Rule 56.1, and the Court finds that they are entitled to
summary judgment in their favor on Plaintiff’s claims against
them for the same reasons as the Realtor defendants.
Not only
has Plaintiff failed to proffer expert testimony to show that
the Appraisal defendants breached the duty of care for licensed
professional real estate appraisers, Plaintiff has not provided
any proof as to how the Appraisal defendants caused Plaintiff
damages, even if the Court were to construe his claim to be for
ordinary negligence rather than malpractice.
Plaintiff claims in his complaint that the appraisals of
the two properties were done negligently resulting in the estate
incurring unnecessary carrying charges and fees.
Assuming the
Appraisal defendants had a duty of care to Plaintiff - despite
the fact that McInerney hired Haines and Haines, who then hired
the Appraisal defendants - and the Appraisal defendants breached
that duty, Plaintiff has provided no evidence to support his
claim that he or the estate has suffered damages.
Consequently,
the Appraisal defendants are entitled to summary judgment in
their favor on Plaintiff’s claims against them.
CONCLUSION
The Court will deny Plaintiff’s motion to vacate the
December 13, 2017 Opinion.
The Court will grant the Realtor
28
defendants’ and the Appraisal defendants’ motions for summary
judgment.
An appropriate Order will be entered.
Date:
September 30, 2019
At Camden, New Jersey
s/ Noel L. Hillman
NOEL L. HILLMAN, U.S.D.J.
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