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NJ: Time Limits That Can Bite You, When You Least Expect it

Barry v. Barry, App. Div. of N.J., October 29, 2010 (Unreported)

NJ: Underlying Matrimonial Case

Facts: The Plaintiff’s former law firm appeals an order denying its motion to intervene in a matrimonial case, contending that Plaintiff’s current counsel  mishandled the case. The former firm obtained a final judgment of divorce, entitling Plaintiff to half of defendant’s pension benefits. Subsequently, Plaintiff learned that Defendant/Spouse had been receiving pension benefits for 10 years without her knowledge. Plaintiff questioned the former firm as to why she hadn’t received her share of defendant’s pension to which it admitted that it did not timely serve a qualified domestic relations order with the State Division of Pensions.

After it conceded this failure to file and fault for consequential non payment, the former firm attempted to correct its mistake. It filed an amended supplemental order to the final judgment of divorce. The Division informed Plaintiff she would receive a check monthly going forward and former firm took no further action. Plaintiff’s present attorney sought payment of ten years of pension benefits from defendant that plaintiff had not received. The Court denied the application. Plaintiff neither moved to reconsider nor filed an appeal from the denial. The former firm took no action until it filed a motion to intervene, stating that plaintiff’s counsel failed to argue that defendant was unjustly enriched and that the motion judge erred by not establishing a constructive trust. And although the former firm failed to serve the qualified domestic relations order for 10 years, the divorce decree entitled plaintiff to half of defendant’s pension.

Issue: Whether Plaintiff’s former firm may intervene to mitigate its damages in a potential legal malpractice lawsuit?

Ruling: The Court, treating this as a motion for reconsideration since the former firm is rearguing the fact that the motion judge erred by not granting plaintiff reimbursement for 10 years of pension benefits, affirmed the motion judge’s holding. Intervention was not warranted because the application was untimely, primarily because the time to reconsider the prior order expired and may not be enlarged. The former firm waited months before it filed its motion to intervene, which proved fatal.

While R. 4:50-1 allows for relief from an order to a party or party’s legal representative, the former firm was neither a party nor counsel for Plaintiff. It filed the motion to limit its potential exposure in an expected legal malpractice lawsuit, not because plaintiff rehired the firm to pursue the unpaid benefits. If plaintiff were granted the benefits, any damages resulting from the former firm’s negligence would be reduced. Although plaintiff would benefit from a ruling amending the order, the former firm does not represent plaintiff and, therefore, the R 4:50-1 is inapplicable.

Lesson: When an attorney is  faced with a possible malpractice claim, and has the opportunity to correct the mistake in the underlying case, it should do so quickly as the time limitations for reconsideration/intervention are strict and short.

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Posted in: Mitigation of Damages, New Jersey