Settlement Does Not Preclude Malpractice Claim

The New Jersey Appellate Division reversed an order granting summary judgment to the defendant in a legal malpractice case. Plaintiff and his uncle had agreed to pursue a joint business venture with plaintiff as a full-time employee. The lawyer handled the purchase transaction, creating two business entities and attending the settlement. Thereafter, a dispute arose between plaintiff and his uncle. He claimed malpractice in the failure of the lawyer to properly document the agreement with his uncle.

The present suit was filed after the plaintiff and his uncle had settled. Consistent with another recent decision that we reported, the court held that the trial court erred in holding that the settlement barred the malpractice claim. The court notes the uncle also has sued the attorney for malpractice and that the case had survived summary judgment. Here, the court concludes that the fact that only uncle paid for the representation does not matter in evaluating the viability of the malpractice claim. (Mike Frisch)