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September 2014

Gordon & Rees New Jersey Team Wins Summary Judgment in Professional Malpractice and Successor Liability Dispute

On Sept. 19, Gordon & Rees partner Ronald A. Giller and senior counsel Michael T. Miano of the New Jersey office won summary judgment in the New Jersey Superior Court, resulting in the dismissal of professional malpractice, breach of contract, and breach of fiduciary duty claims against a commercial real estate broker, as well as the successor liability claims against the brokerage’s alleged successor company. 

One month after signing a five-year lease, the plaintiff learned that the property was in an area designated as being in need of redevelopment and subject to government taking.  The plaintiff decided not to relocate its operations there and unsuccessfully attempted to sublet the premises.  The plaintiff sought $1,605,367 in damages for rent payments and fit-up work performed to make the premises suitable for its operations. 

The plaintiff first filed suit against the landlord, alleging deliberate concealment of the redevelopment designation, which was dismissed on summary judgment.  The plaintiff also filed a separate legal malpractice action against its attorney, alleging that he failed to properly perform due diligence on the property and discover the redevelopment designation, which settled. 

The plaintiff then filed a third action against the real estate broker, claiming professional malpractice, breach of contract, and breach of fiduciary duty, alleging that it was the broker’s duty to investigate whether the property was subject to government taking. The plaintiff further claimed that the broker merged with another company and brought successor liability claims against the other company.

In Jade Apparel, Inc. v. Team Resources, Inc., and SBWE, Inc., Judge Rachelle L. Harz of the New Jersey Superior Court, Bergen County granted Gordon & Rees’s motion for summary judgment in its entirety, dismissing all claims against the real estate broker and the alleged successor company with prejudice.  Harz called the plaintiff’s suit a “third bite at the apple” and dismissed it as an improper successive action, noting the prejudice to the defendants.  This result significantly demonstrates New Jersey’s disfavor of piecemeal litigation, and policy to prevent plaintiffs from seeking windfalls by filing separate actions against different defendants based on the same transaction.  

Ronald A. Giller


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