Helmar v. Harsche

296 N.J. Super. 194, 686 A.2d 766 (App. Div. 1996)
  • Opinion Date: December 26, 1996

ATTORNEYS; MALPRACTICE—An attorney failed to advise his client that a multi-family building being purchased by that client must comply with the Uniform Fire Code and with the Multiple Dwelling regulations. He claimed that such advice was not within the scope of his engagement. Instead, buyer relied on erroneous information from the broker. Upon being sued, the broker added the attorney as a third party, alleging that the attorney’s failure constituted concurrent or superseding negligence. According to the Court, this was appropriate because the attorney’s acts may have been an intervening (or even a superseding) Act.

When considering purchasing a three story apartment building in 1988, plaintiff asked defendant, a real estate agent, about the need for a fire escape for the third floor. The agent retrieved a metal ladder from the closet and demonstrated how it hooked on to the window frame for use during an emergency. The agent said he had spoken to the fire marshal and was told that this ladder was enough and no other means of escape was needed. When plaintiff asked the real estate agent whether any license was needed to run an apartment house, she was told that since there were only three units, one of which would be owner-occupied, plaintiff would be in a “special category” for which no license was required. At trial, plaintiff claimed she relied on the real estate agent’s assurances when purchasing the building. When plaintiff was cited by the town for violations and ordered to make repairs, she sued the real estate agent and his employer, claiming fraud, consumer fraud and negligence. The real estate agent and his employer made a motion to join plaintiff’s attorney as a third party defendant, claiming their acts were not the proximate cause of plaintiff’s damages and that even if they were negligent, their customer’s loss was attributable to the superseding or concurrent negligence of her attorney. The attorney claimed that although he knew of the Uniform Fire Code and Hotel and Multiple Dwelling regulations, he did not check to insure that buyer’s property complied. The trial judge denied the motion to join buyer’s attorney, ruling that an attorney cannot be liable to third parties for negligence in the performance of professional duties. The Appellate Division concluded that denial of the motion to join plaintiff’s attorney as third-party defendant had such a negative impact on the trial that the jury verdict should be reversed and the case remanded for a new trial on all issues.

The Appellate Division reasoned that buyer’s counsel should have been joined as a third party defendant in the interest of justice and because his advice was at least an intervening cause (and may have even been a superseding cause) of plaintiff’s loss since it was his duty to insure that the building complied with the Multiple Dwelling Law. Even though the real estate agent should have been aware and truthfully informed plaintiff of the fire escape and permit regulations, the fact that buyer’s own attorney was derelict in his duties was cause for him to be made a party to this action. The Court stated that in certain circumstances lawyers owe a duty to third parties and may be liable to them for negligence resulting in damages to their client. In short, the fact that plaintiff never knew of the requirements may have been the fault of both realtor and attorney, therefore both may be liable unless the attorney’s negligence superseded any prior acts or omissions of the real estate broker.