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Grubbs v. Knoll4/15/2005
eir attorney in the real estate transaction, he was the "backstop" who should have protected the Knolls from fraud perpetrated by Stevens and the Grubbs. Although the Knolls' argument would theoretically impact upon the allocation of compensatory damages, its practical effect here, given the Knolls' settlement with Stevens, is limited to the trial judge's treatment of attorney's fees since the appeal and cross-appeal focus solely on awardable counsel fees and their allocation.
In rejecting this argument at the final charge conference, the trial judge had this to say: there was no testimony that a lawyer is a back stop, that the lawyer is the court of last resort on a closing.... obody is saying that his obligation is a higher duty or anything like that than anybody else's, and I -- factually that's not supported so I'm not going to do it.
The Knolls now renew their contention that Chapman was jointly and severally liable for all of the compensatory damages. The Knolls cite no authority for their "backstop" theory of legal malpractice liability or for their proposition that a real estate attorney has an affirmative duty to detect and prevent fraudulent conduct by a seller and/or realtor . Cf. Schimenti v. Whitman & Ransom, 617 N.Y.S.2d 742, 742-43 (App. Div. 1994) (affirming dismissal of legal malpractice claim, premised on attorney's failure to investigate and discover fraud and collusion by borrower and senior lienor bank in representing plaintiff as subordinate lienor, where defendant attorney had no reason to believe that investigation was necessary and no duty to anticipate various possible misuses of client's funds). Rather, they merely assert that " t is admitted that Chapman's duty was to protect the Knolls from fraud" given his "role as a 'backstop'."
Chapman challenges the Knolls' "backstop" theory, but, like the Knolls, cites no legal malpractice jurisprudence addressing the issue. Instead, Chapman characterizes the "backstop" argument as analogous to the "captain of the ship" doctrine that has been rejected by this court in the medical malpractice setting. See Diakamopoulos v. Monmouth Med. Ctr., 312 N.J. Super. 20, 34-35 (App. Div. 1998) (noting that disfavored "captain of the ship" doctrine "suggests imposing vicarious liability on a doctor because of the negligence of others not under the doctor's control or supervision").
While it is true that a duty of protection is inherent in the duty that a real estate attorney owes to his clients, we are not persuaded that an attorney should be viewed as a "backstop" and held jointly and severally responsible for all damages in circumstances like these. Research has not disclosed any case law expressly condemning or endorsing the characterization of a lawyer as a "backstop" in a transactional setting or otherwise. Cf. Conklin v. Hannoch Weisman, P.C., 145 N.J. 395, 421 (1996) (noting that an attorney is not a guarantor of the future and there is usually no such thing as a risk-free deal). Likewise, Chapman's analogy to the "captain of the ship" doctrine is inapt because the Knolls do not contend that Chapman should be vicariously liable for the wrongdoing of Stevens and the Grubbs.
Chapman argues that he could not be jointly and severally liable because "Stevens' fraudulent act of not revealing the Wetlands on the property at issue was unforeseeable." Although Chapman does not challenge the jury's underlying finding of legal malpractice, its award of compensatory damages, or its apportionment of fault, the arguments regarding foreseeability are relevant in addressing whether apportionment of fault among tortfeasors is permissible in the legal malpractice setting.
For their part, the Kn
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