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Sklodowsky v. American Developers of New Jersey, LLC

2005 WL 3488456 (N.J. Super. Law Div. 2005) (Unpublished)

CONTRACTS; DISCLOSURE; ATTORNEYS—In a malpractice suit against a seller’s attorney, the buyer’s attorney is not liable to the seller’s attorney where the seller’s attorney’s theory is that the buyer’s attorney should have investigated whether all owners of the property have signed the contract and advised the buyer if that was not the case.

A developer attempted to buy a property owned by a man and his wife. Ultimately, “[t]he sale was aborted because [the developer] refused unless his wife signed the deed.” The contract and the deed prepared by the seller’s attorney were in the husband’s name alone. At some point after the original contract was signed, but before closing, the wife refused a request “to sign the deed or to relinquish her marital rights in the marital residence located on the property.” The seller sued the developer. The developer, in its response to the suit, filed a third party complaint against an attorney who represented the seller with respect to the transaction. It also sued the law firm for whom that attorney worked. In response to the suit, the seller’s attorney and his law firm sought permission to file a fourth-party complaint against the developer’s attorney and the law firm for whom the developer’s attorney worked. Their theory was that “in the event that it [was] determined [the developer] sustained damages because it was not advised by [the seller’s attorney] that [the seller-husband] was married, [the seller’s attorney and his employer] would be entitled to contribution from [the buyer’s attorney] for his alleged negligent representation of [the developer-buyer].”

The Court found “no legal cause of action against [the developer-buyer’s attorney] that would merit him and his employer being inpleaded at the request of the seller’s attorney.” It stated: “[v]ery simply, [the seller’s attorney] cannot be a joint tortfeasor as to the conduct of [the buyer’s attorney]. Whether an attorney owes a duty to a non-client third party depends on balancing his duty to represent clients vigorously with the duty not to provide misleading information on which third parties may rely. ... Further, attorneys may owe a duty of care to non-clients when the attorneys know, or should know, that non-clients will rely on the attorney’s representations and that the non-clients are not too remote from the attorneys to be entitled to protection.” Essentially, the seller’s attorney and his law firm claimed that it was the buyer’s attorney’s duty to the seller’s attorney to investigate the husband-seller’s “marital status and determine whether the dwelling on the property was [his] marital residence.” The Court stated flatly, “no such duty to [the seller’s attorney] existed.” It agreed with the opposition brief filed by the attorney for the buyer’s attorney when it said: “it is custom and practice in New Jersey that the Seller’s attorney prepares the Seller’s Affidavit of Title and Deed. Thus it was the responsibility of [the seller’s] attorney, ... to prepare a correct Deed and convey possession pursuant to the terms of the Agreement of Sale. [The buyer’s attorney] owed no duty to [the seller’s attorney] or any other proposed fourth-party plaintiff in this matter. Nor should he be held partially liable for [the seller’s attorney’s] benefit if [the seller’s attorney] acted fraudulently or negligently as to third-party plaintiffs.” Accordingly, the claim against the buyer’s attorney and his employer was found to lack legal support and the seller’s attorney was denied the right to file a fourth-party complaint.

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