Legal Malpractice in the Context of Probate, the Entire Controversy Doctrine, and the Right to a Jury Trial

Schindel v.  Feitlen, A-2888-19, 2021 WL 2391583 (N.J. Super. App. Div. June 11, 2021).

Before his death in November 2016, the decedent, Arnold, executed three wills.  In the first will, executed in July 2014, Arnold gave the bulk of his estate to his son, David (the petitioner), and made specific bequests to his friend, Hindy.  The will designated David and Hindy as co-executors.

The second will was executed in December 2015 and, among other things, bequeathed Arnold’s residuary estate in equal shares to David and Hindy.

The third will, executed in May 2016, contained a number of specific bequests, including $25,000 to David.  It bequeathed the bulk of the estate’s residue to Hindy and designated her as executor.

The defendant in this matter was the New Jersey attorney who drafted all three wills for Arnold.

When Arnold died in November 2016, Hindy offered the May 2016 will to probate; David filed a caveat and litigation ensued (“Probate Case”).  David alleged that Arnold lacked sufficient capacity to execute the May 2016 will, and that it was the product of Hindy’s undue influence.  David sought instead probate of the July 2014 will and an order designating him as sole executor of the estate.

During the Probate Case, David’s counsel deposed the drafting attorney, who represented neither Hindy nor the estate in the Probate Case.  The Probate Case settled, and the settlement agreement included terms that released the parties’ attorneys from any and all claims or causes of action arising from or pertaining to the Probate Case, including those claims which could have been raised in the Probate Case.  The court entered an order in June 2018 probating the July 2014 will, enforcing the terms of the settlement, and dismissing the litigation.

David then filed a legal malpractice claim against the drafting attorney.  Specifically, David complained that when the drafting attorney prepared the May 2016 will, he either knew or should have known that Arnold was being unduly influenced by Hindy and that Arnold lacked capacity.

The drafting attorney filed an answer and a third-party complaint against Hindy for contribution and indemnification.  Hindy moved to dismiss the drafting attorney’s third-party complaint, and he filed a cross-motion seeking dismissal of David’s complaint pursuant to the entire controversy doctrine.  The Law Division judge granted both motions.

David filed a motion for reconsideration, which the judge denied.  David appealed.  The issues considered by the Appellate Division were:  (1) whether the entire controversy doctrine applies to probate proceedings; (2) if it does apply, whether the drafting attorney suffered substantial prejudice because of David’s failure to bring his malpractice claim at the same time he litigated the Probate Case; and (3) whether David would have been entitled to a jury trial on the malpractice claims.

The appellate court affirmed the Law Division’s decision as follows.

Entire Controversy Doctrine

Court Rule 4:30A articulates the entire controversy doctrine principle that all related legal issues in a legal controversy should occur in one litigation and in one court.  While the Rule does not require the joinder of all parties, Rule 4:5-1(b)(2) requires parties to certify in their initial pleading that they have joined all non-parties who should be joined in the action, including those who should be joined due to potential liability under the same facts alleged in the pleadings.  This ensures that the courts control which parties should be joined and which claims remain under the jurisdiction of the court.  If a party fails to comply with the Rule, and the failure was inexcusable, then the right of the undisclosed party to defend itself in the successive action has been substantially prejudiced, and the successive action will be dismissed under the entire controversy doctrine.

In this case, the appellate court determined that David’s two claims raised in the malpractice action — that the drafting attorney knew, or should have known, that Arnold lack capacity and that Hindy was unduly influencing Arnold — were based on the same facts raised in the Probate Case, and therefore the malpractice claims arose from interrelated facts and the entire controversy doctrine applied.  Therefore, the trial court’s dismissal of David’s Complaint was appropriate.

Legal Malpractice Claim

David claimed that his malpractice claim did not accrue until the Probate Case ended.  The appellate court disagreed and stated that the accrual date in a legal malpractice situation is when the facts of the malpractice claim are discoverable and the client sustained actual damages.  Accordingly, David’s claim accrued when he knew that the drafting attorney had drafted the three wills and that the third will reduced David’s share of the estate and excluded him as executor.

David also argued that under Higgins v. Thurber, 205 N.J. 227 (2011), the probate court was an inappropriate forum to assert his legal malpractice claim and that legal malpractice claims that arise in the context of probate litigation are excepted from the entire controversy doctrine.  David’s reliance on that case was erroneous.  The focus of Higgins was a summary accounting, which is concerned with the conduct of the executor — it is not an attack on a decedent’s will.  Higgins recognized that in some instances a probate proceeding should encompass a claim of legal malpractice. Accordingly, David should have joined the drafting attorney in the Probate Case and asserted the malpractice claims in that proceeding.

Right To a Jury Trial

David asserted that his right to a jury trial on the malpractice claim would be abrogated if he were forced to pursue it in the same forum as his challenge to the 2016 will.  Higgins, however, explicitly permits a chancery court to include such a claim.  The courts have further recognized that the Chancery Division may conduct jury trials unless the right to jury trial is waived.  See O’Neill v. Vreeland, 6 N.J. 158, 167–68 (1951).  Finally, a court may, on its own initiative, “try with an advisory jury any issue not triable of right by a jury.”  Rule 4:35-2.

Under this guidance, the malpractice claim could have been tried by a jury in the Probate Case, with the trial judge using the jury strictly in an advisory capacity on the issues of testamentary capacity and undue influence.

Accordingly, the appellate panel concluded that David’s failure to assert the malpractice claim, or at least advise the court that the drafting attorney might be liable under the same facts as those presented in the will contest, was inexcusable.

Substantial Prejudice

David then argued that even if his failure to alert the court of the potential claim was inexcusable, the drafting attorney did not suffer substantial prejudice from the failure.  The appellate court disagreed.  It noted that the loss of available evidence and proofs needed to mount a defense is not the only harm suffered by a party who has not been joined in a matter — substantial prejudice can also be a result of the impact of the legal posture of the litigation which might expose the non-joined parties to claims of higher damages than they might otherwise have faced.

Here, for example, the drafting attorney was prejudiced because:  he was already deposed in the Probate Case and might have to be deposed again under the malpractice claim; David’s claim for damages could include attorney’s fees for the Probate Case and the legal malpractice claim; David might have a claim for damages to the extent that the settlement with Hindy diminished his share of the estate; and most importantly, the drafting attorney had no voice in the terms of settlement agreement and the release because he was not a party.