This NJ case was was "dismissed on the ground that plaintiff had voluntarily settled the underlying case without exhausting its appeal and separate active lawsuits, and thus was precluded as a matter of law from attempting to recoup the difference in the malpractice action against defendant. We reverse and remand. " wrote the SUPERIOR COURT OF NEW JERSEY,APPELLATE DIVISION ,
DOCKET NO. A-2991-05T52991-05T5 .
"We are persuaded by many of plaintiff’s arguments and are satisfied the complaint should not have been dismissed on summary judgment. This case is factually and legally distinguishable from Puder and does not have the "fairness and the public policy [considerations] favoring settlements" or the equities that pervaded that case. Plaintiff’s principal never represented to anyone, let alone a court, that its settlement with the nursing homes was a "fair" and satisfactory resolution of its underlying claims. Nor by now suing Squitieri for malpractice is plaintiff seeking to profit from litigation positions that are "clearly inconsistent and uttered to obtain judicial advantage." Puder, supra, 183 N.J. at 444 (quoting Newell v. Hudson, 376 N.J. Super. 29, 46 (App. Div. 2005)). Moreover, plaintiff did not settle the underlying suit with the nursing homes prior to the trial court ruling on its motion to amend the complaint to assert the omitted Medicare-denied claims. That plaintiff chose to take the further steps and appeal the trial court’s denial of its motion to amend and to file the subsequent lawsuits to preserve the statute of limitations on its underlying claims, and thereafter decided, for a variety of reasons, to settle with the nursing homes prior to obtaining judicial determinations did not, under the circumstances of this case, preclude plaintiff’s malpractice claim as a matter of law.
The trial court should have evaluated whether plaintiff took reasonable steps, from plaintiff’s point of view, to remedy Squitieri’s alleged negligence before pursuing its malpractice action, which presented factual issues that could not be decided on this record on summary judgment. Instead, the court erroneously assumed as a matter of law under Puder that by filing the appeal and subsequent lawsuits, plaintiff had other forums in which to pursue its underlying claims, which it voluntarily chose not to pursue, and thus it was estopped from now proceeding against Squitieri. Moreover, the record does not support the court’s finding as to the viability of the two Law Division actions. On the contrary, we are satisfied there was credible evidence the complaints would not withstand Dellridge nursing home’s May 2003, dismissal motion. There was also an insufficient basis for the court’s finding on summary judgment that plaintiff had a good chance of success on its appeal. We do not believe the case law is as clear-cut as stated by the court. Expert testimony will most likely be required to assist the jury to determine the merits of plaintiff’s appeal of the underlying case and the potential for reversal of the motion judge’s denial of leave to amend the complaint, as well as the merits of the nursing home’s cross-appeal of the jury verdict. Furthermore, in assessing the reasonableness of plaintiff’s actions, the jury will also need to analyze all of the considerations that entered into plaintiff’s decision to settle the underlying case and dismiss the appeal, including the amount of the settlement.
We reverse the summary judgment dismissal of plaintiff’s malpractice complaint and remand for further proceedings. Plaintiff will proceed to prove Squitieri’s malpractice by way of the suit-within-a-suit or other appropriate format. Garcia v. Kozlov, Seaton, Romanini, & Brooks, P.C., 179 N.J. 343, 358 (2004). Defendant has the right to assert, among its other defenses, that it was unreasonable for plaintiff to settle the underlying case and dismiss the appeal, including that the amount of the settlement was unreasonable. "