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N.J.
Appeals Court: Client's Henry Gottlieb A New Jersey state appeals court cleared a law firm of malicious civil prosecution on Wednesday in a decision that champions the right of lawyers to advocate zealously even when they know a claim is baseless. Giordano, Halleran & Ciesla represented a beach club owner in a failed defamation suit against a neighbor. The neighbor, having won, countersued the club owner and the Middletown, N.J., firm, alleging the first suit had no purpose but to stifle her free speech rights maliciously. The appeals court found, however, that lawyers cannot be liable for malicious prosecution unless they are acting for an illegitimate purpose of their own. And the fact that a client has an illegitimate purpose does not automatically mean the lawyer does too, the three-judge panel said in Lobiondo v. Schwartz, A-4325-04. The decision "insures that representation will be available when the client's claim has only marginal merit and may be pursued by the client for other than legitimate purposes," the court said. Judges Jack Lintner, George Seltzer and Christine Miniman, writing per curiam, said they could find no reported decision on the issue. Their own opinion is not published either, but lawyers in the case say it should be. "I think it is a significant opinion and not just for Giordano, Halleran but for all attorneys in New Jersey because the Appellate Division has now provided attorneys with a bright-line test for malicious use of process, says the firm's lawyer, David Bauman of Bressler, Amery & Ross in Florham Park, N.J. "The effect of it is going to allow lawyers to discharge their primary obligation of zealous representation of their clients without fear of being held liable as ensurers of the quality of the case," he says. Giordano, Halleran's client, James Lobiondo Jr., owner of Surfrider Beach Club in Sea Bright, N.J., sued neighbor Grace Schwartz in 1991 for defamation, intentional infliction of emotional distress and tortiuous interference after she publicly complained about the club to other neighbors and to local and state regulatory bodies. She countersued for malicious prosecution, but that action was dismissed and a jury that was given copies of Schwartz's flyers and letters damning the club found her liable. Lobiondo won $66,000 in damages. The award was reversed on appeal. Schwartz was engaged in legitimate public protest, not defaming the plaintiff, the Appellate Division ruled in a decision that is often cited favorably by critics of strategic lawsuits against public participation, Lobiondo v. Schwartz, 323 N.J. Super. 391 (App. Div. 1999), certif. denied, 162 N.J. 488 (1999). The appeals court ruled that Schwartz could pursue a counterclaim against Lobiondo for malicious prosecution and on remand they both brought Giordano, Halleran into the case. Lobiondo defended himself by saying he was acting on the firm's advice and Schwartz said the firm was complicit in the malicious prosecution. During an appellate hearing last October, Schwartz's lawyer, Ira Karasick of Sweeney Lev in Montclair, N.J., argued that the firm should be punished with the client for advising him to sue. "How can this be anything but malicious use of process?" Karasick asked. And Judge Lintner wanted to know, too. "If an attorney truly believes a lawsuit has been filed with malicious purpose, is there an obligation to ask to be removed as counsel?" the judge asked at the argument. The answer, in his opinion is, no. For attorneys to be liable they have to know the client's case was baseless and then they have to litigate for their own improper purpose. To rule otherwise would open lawyers to litigation whenever a client with a weak case and with great animus toward an opposing litigant lost on summary judgment, the court suggested. This does not mean lawyers will have carte blanche to harm adverse parties without probably clause, in their clients' interests, the judges said. Attorneys remain liable for frivolous suit sanctions and discipline for violation of rules of professional conduct, the court said. Karasick says no decision has been made on seeking review by the state Supreme Court. "Lawyers should have a higher standard, not a lower one because they know what probable cause is," he says. Co-counsel Joan Pransky, who has a firm in Montclair, adds: "This court has just said that a lawyer cannot be held liable for malicious use of process even though anybody else can be liable for the very same thing. That's a pretty outrageous position to take." The ruling makes it hard to imagine a realistic scenario that would put a lawyer in jeopardy of being liable for malicious prosecution, Pransky says. First the client would have to tell the lawyer the case against the adversary has no merit. Then, the lawyer would have to say, in effect, that's OK because I have an axe to grind with the adversary, too, she says. The court remanded the case for trial on Schwartz's claim against Lobiondo and he can raise the defense that he was acting on advice of counsel. That means, ironically, that Lobiondo could theoretically be found not liable because he took his lawyer's advice, while the lawyers cannot be held liable for pursuing the case. "They have created a situation where a client goes to a lawyer and says, 'I want to file a defamation action even though there was nothing said about me that was untrue and I have an improper motive,'" Pransky says. The lawyer can then file the lawsuit and neither of them is liable, she says. http://www.law.com/jsp/article.jsp?id=1186132004975
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A Feast
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