NOEL L. HILLMAN, District Judge.
This case is related to three other actions filed by plaintiff, John Fink, all of which concern Fink's loan to Advanced Logic Systems, Inc. ("ALSI") in 2001. Those other cases were resolved in the defendants' favor, and the decisions were affirmed on appeal.
Fink claims that Kirchner lied to Fink that the judge presiding over Fink's state court suit to enforce the settlement agreement with ALSI told the parties to go to arbitration instead of litigating in court. Fink also claims that Kirchner altered an email submitted to the arbitrator presiding over an arbitration between Fink and ALSI, and that the arbitrator's decision was unfavorable to Fink as a result. The altered email incident also led to a New Jersey Disciplinary Review Board ethics complaint against Kirchner, in which Fink participated.
Fink also claims that the arbitrator's decision revealed to him that defendants were not working in Fink's best interests, but instead defendants were acting in the interests of the firm to maximize billing. Relatedly, Fink claims that in defendants' attempts to collect payment for their legal fees — totaling over $650,000 — Kirchner tried to extort money from him. Fink claims that when Kirchner was subpoenaed to testify in a case where Fink was suing another law firm over its bills, Kirchner stated that he would only testify on Fink's behalf if Fink paid his outstanding bill to Flaster/Greenberg. Based on these allegations, Fink claims in his original complaint that defendants have committed legal malpractice and fraud, and breached their fiduciary duty to him.
In April 2016, this Court resolved defendants' first motion for summary judgment, which Fink opposed because discovery had not yet been completed. The Court granted summary judgment in defendants' favor on Fink's legal malpractice claims, finding that no amount of discovery would provide facts to dispute the arbitrator's own words that the altered email had no impact on his decision. The Court also found that ALSI's bankruptcy, as well as Fink's three failed lawsuits to recoup money from ALSI or its purported successors and related parties, all demonstrate that even if Fink received the arbitration decision he desired, he would not have been able to collect on that arbitration award.
The Court denied without prejudice defendants' motion for summary judgment as to Fink's fraud and breach of fiduciary duty claims, and permitted defendants to refile their motion after the close of discovery, which was only a few weeks away. After discovery was completed, Fink was granted leave to file a second amended complaint, which added claims for concealment of evidence and tampering of evidence relating to the altered email.
Several motions are currently pending before the Court, including Fink's motion for reconsideration of the Court's decision on his legal malpractice claim [225], and defendants' motions for summary judgment as to the other claims in Fink's complaint [223, 270].
This Court has jurisdiction over this matter pursuant to 28 U.S.C. § 1332 because there is complete diversity of citizenship between the parties and the amount in controversy exceeds $75,000.
Summary judgment is appropriate where the Court is satisfied that the materials in the record, including depositions, documents, electronically stored information, affidavits or declarations, stipulations, admissions, or interrogatory answers, demonstrate that there is no genuine issue as to any material fact and that the moving party is entitled to a judgment as a matter of law.
An issue is "genuine" if it is supported by evidence such that a reasonable jury could return a verdict in the nonmoving party's favor.
Initially, the moving party has the burden of demonstrating the absence of a genuine issue of material fact.
The Court has noted in its Opinions in Fink's other cases that have arisen out of his relationship with ALSI that it is evident Fink feels he has been continuously victimized by the players involved with the ALSI deal and his attorneys who have represented him. The Court does not doubt Fink's emphatic belief of the wrongs he has suffered, and the Court recognizes his avid advocacy on his behalf. The pervasive problem with Fink's allegations in all of his cases, however, is that they have been entirely speculative. Similarly, in this case, even if the Court were to accept all of Fink's propositions as true, gaping holes exist as to causation for his alleged damages.
Fink's claims against Kirchner center on three events: (1) Kirchner's alleged lie to Fink that the judge presiding over Fink's state court suit to enforce the settlement agreement with ALSI told the parties to go to arbitration instead of litigating in court; (2) Kirchner's alleged alteration to an email presented to the arbitrator and his alleged lies about his involvement; and (3) these two lies caused Fink to lose his claims against ALSI, thwart another settlement with ALSI, and were intended to milk Fink for unnecessary and exorbitant attorney's fees.
An essential element of Fink's legal malpractice
According to Fink, he chose to discontinue his state court suit to enforce the settlement with ALSI in favor of binding arbitration because Kirchner told him that the state court judge presiding over his state court action strongly suggested that the matter should be resolved in mediation or arbitration. Fink contends that the state court judge never suggested that Fink should consider an alternative dispute resolution, and that Kirchner lied that it was the state court judge's direction, because Kirchner knew that Fink would not agree to arbitration otherwise. Fink claims that this lie cost him hundreds of thousands more in attorney's fees due to the redundancy of what had already been accomplished in the state court action.
Fink also claims that concurrent with this state court suit, he was engaging in settlement negotiations with ALSI, which had not yet filed for bankruptcy and was worth $58 million dollars. When Kirchner submitted the altered email to the arbitrator, Fink claims that ALSI was still solvent. But, when the arbitrator noted the altered email during the arbitration proceedings, Fink claims that he lost credibility with the arbitrator, and it also destroyed his settlement talks with ALSI because ALSI saw this development as a benefit to its opposition to Fink's claims. Soon thereafter ALSI filed for bankruptcy, causing Fink to lose any hope of obtaining any additional settlement money from ALSI.
Fink further contends that Kirchner's lie about the state court judge's suggestion that Fink's case should be arbitrated is proved by billing records that do not corroborate Kirchner's statements that the judge spoke with the parties' attorneys in her robing room during Fink's two days of testimony. Fink also contends that secretly tape-recorded conversations between Fink and Kirchner proves that Kirchner intentionally altered the email, rather than it simply being a clerical error as Kirchner claimed to the arbitrator.
Fink claims that Kirchner's first lie is legal malpractice that set off a series of events that damaged him, including unnecessary attorney's fees and the loss of a settlement with ALSI. Fink further claims that Kirchner's second lie destroyed his credibility in the arbitration, resulting in the loss of another settlement attempt with ALSI, as well as an unfavorable decision by the arbitrator.
Even if the Court accepts as true that Kirchner lied about the impetus for arbitration and altered an email submitted to arbitration, Fink's claimed damages as a result of Kirchner's actions are too attenuated to be directly linked.
Fink states that he accepted Kirchner's advice to proceed with arbitration because he did not want to inflame the judge, and because Kirchner represented that arbitration would be less costly. Even if the judge had not suggested arbitration, there is no evidence that Kirchner purposely advised that Fink go to arbitration so that he could generate excessive attorney's fees. It is unknown how costly Fink's state court proceeding could have become had he declined Kirchner's advice, and there are no guarantees about how less costly an arbitration may be.
At the same time, there are numerous unknown variables as to why Fink's settlement talks with ALSI stalled. Simply because ALSI may have had a valuation of $58 million does not ensure that whichever path Fink ultimately chose — state court, arbitration, or settlement — it would have resulted in a check in Fink's hand. Indeed, Fink had instituted the state court action because ALSI had allegedly breached a prior settlement with Fink and failed to pay him all of the agreed-upon settlement amount.
With regard to the arbitration, even accepting as true that Kirchner intentionally altered the email, as the Court found in its prior Opinion, that fact did not affect the arbitrator's decision — as confirmed by the arbitrator himself. To the extent that Fink claims that the altered email also blew up any settlement with ALSI while it still remained solvent, that premise fails for the same reason as the settlement talks during the state court proceedings.
In short, even if Kirchner lied about the judge's suggestion that Fink should arbitrate his claims,
Fink has the burden of proving his fraud, breach of fiduciary duty, and spoliation claims, in addition to the previously dismissed, but currently reconsidered, malpractice claims. Each of these claims requires sufficient evidence to demonstrate that Fink was harmed by those alleged events. The Court does not discount the serious accusation that a lawyer lied to his client and intentionally submitted an altered document to a tribunal, but the record contains only suspicion, innuendo, hypothesis, and unsupported suppositions rather than any material issues of disputed fact.
The Court has reconsidered Fink's legal malpractice claim now that discovery is complete, as requested by Fink, but the Court finds its decision to grant summary judgment in defendants' favor on that claim remains unchanged. The Court also finds that defendants are entitled to summary judgment on the remaining claims in Fink's complaint for fraud, breach of fiduciary duty, concealment of evidence and tampering with evidence. Other than presenting his own beliefs, Fink has not demonstrated through competent evidence that Kirchner's alleged deceit was motivated by his desire to charge Fink with unnecessary and excessive fees, and caused Fink to lose his claims against ALSI or a settlement with ALSI. Absent an ability to prove this essential element of each of his claims, Defendants are entitled to summary judgment.
An appropriate Order will be entered.
Also pending is Fink's motion [278] seeking permission to use Kirchner's May 20, 2011 letter to the New Jersey District IV Ethics Committee investigator, as well as the entire investigator's report which contains the Kirchner letter, in his oppositions to defendants' motions. Defendants have opposed this motion on the basis of privilege and relevancy. The Court will grant Fink's motion nunc pro tunc as to his reference to the existence of these documents, but deny his motion as to their substance, primarily because the Court finds them irrelevant to resolution of Fink's claims based on his failure to establish the causation element for each of his claims.