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Mertl v. Champion Mortgage

SOM-L-1310-02 (N.J. Super. Law Div. 2002) (Unpublished)

ATTORNEYS; DEEDS— An attorney who prepares a deed for an inter-family transfer can’t be expected to foresee that the deed would be used many months later to perpetrate a fraud on the grantor.

A mother executed a deed from her, alone, to her, her daughter, and her son-in-law, as joint tenants with rights of survivorship n connection with a loan. The title company handling the loan closing engaged an attorney for the “limited purpose” of preparing the deed in connection with that particular loan. There was no allegation that the mother was defrauded or harmed by the loan. In addition, there was no allegation that the mother did not understand the meaning of the deed. Seven months after that closing, the mother took another loan with the same lender and then, not wanting to pay the second loan, claimed that had the attorney not drafted the original deed, she would not have been induced to seek an additional refinancing loan seven months later. The attorney sought to have the complaint dismissed on a motion for summary judgment. The Court found that “no rational factfinder could conclude that [the attorney’s] preparation of the deed for the [original] loan seven months before [the mother] subsequently took another loan” was the proximate cause of the mother’s alleged loss resulting from the second loan. According to the Court, “[f]oreseeability is the touchstone of duty. ... Therefore, it follows that it is completely unreasonable to expect [the attorney] to foresee that his drafting of the deed would lead to the [mother’s daughter and son-in-law] inducing [the mother] to allow an additional refinance loan to be taken out some seven months later.”

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