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Newell v. Hudson3/16/2005
arital estate as appraised by Apollo and the accountant. Id. at 257. After the settlement was read into the record, both the plaintiff and her husband testified they understood the agreement, thought it was fair, and entered into it voluntarily. Ibid. Thereafter, she filed a malpractice action, asserting, among other claims, that she accepted the agreement only after Apollo advised her that wives in her position could expect to receive no more than ten to twenty percent of the marital estate if they went to trial, and she could expect to receive no more than twenty percent, which advice did not comport with that which a reasonably competent attorney would have given under the circumstances. Ibid.
The trial court granted summary judgment, noting that the client had stated on the record in the divorce action that she thought her agreement was"fair." Id. at 257-60. We affirmed the dismissal of all but one of the five counts of the malpractice complaint. Id. at 260.
The Supreme Court reversed and remanded the matter for trial on all counts of the complaint. Id. at 260-67. The Court noted New Jersey's judicial policy encouraging settlements but declined to adopt the rule espoused by the Pennsylvania Supreme Court in Muhammad v. Strassburger, McKenna, Messer, Shilobod and Gutnick, 587 A. 2d 1346 (Pa.), certif. denied, 502 U.S. 687, 112 S.Ct. 196, 116 L.Ed. 2d 156 (1991), as urged by Apollo, barring a malpractice action against an attorney who negotiated a settlement accepted by the litigant in the absence of actual fraud on the part of the attorney. Ibid. Recognizing that litigants rely heavily on the professional advice of counsel when they decide whether to accept or reject offers of settlement, the Court found no reason to apply a more lenient rule to attorneys who negotiate settlements than it does to those who provide other legal services. Id. at 263-64.
The Court further held that the plaintiff's statement on the record that the settlement agreement was fair and the Family Court's denial of her motion to set aside the agreement on that basis did not collaterally estop her from litigating her subsequent malpractice claim. Id. at 265-66. The Court reasoned that" he earlier ruling did not implicate the competence of counsel and, indeed, was premised on the presumptive competence of counsel." Id. at 266. According to the Court," he fact that a party received a settlement that was'fair and equitable' does not necessarily mean that the party's attorney was competent or that the party would not have received a more favorable settlement had the party's incompetent attorney been competent." Id. at 265.
Thus the plaintiff was permitted to maintain a legal malpractice action based on the proofs presented, which raised a genuine issue of material fact as to whether her matrimonial attorney gave deficient advice or inadequately investigated her husband's assets. The Supreme Court, however, was cautious that its decision in Ziegelheim not be read so broadly as to"open the door to malpractice suits by any and every dissatisfied party to a settlement," noting that" any such claims could be averted if settlements were explained as a matter of record in open court in proceedings reflecting the understanding and assent of the parties." Id. at 267. The Court further stated,
laintiffs must allege particular facts in support of their claims of attorney incompetence and may not litigate complaints containing mere generalized assertions of malpractice. We are mindful that attorneys cannot be held liable simply because they are not successful in persuading an opposing party to accept certain terms. Similarly, we acknowledge that attorneys who pursue reasonable strategies in handli
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