Jeremy J. Zacharias RPLU

Jack and Jeremy received their third successful Appellate Division decision within 30 days in a complex legal malpractice action. Frank Castella v. Gerald Lepis was a major case against an attorney arising out of an environmental claim by the N.J. Department of Environmental Protection, which was litigating against Castella in connection with his purchase of property in Jersey City, New Jersey. The DEP’s claim for the cleanup was in the hundreds of thousands. 

Dr. Castella alleged that our client failed to give him proper advice and to obtain a Phase 1 Study before he purchased the property. After he purchased the property, the N.J. DEP did a vapor study and found PCE exceeding residential levels. Therefore, they classified it under New Jersey’s Site Remediation Reform Act and its Spill Compensation Control Act (strict liability). 

The plaintiffs then submitted a claim to the New Jersey Spill Fund, seeking compensation for alleged property value diminution. The DEP issued a denial, referencing the plaintiff’s failure to conduct due diligence before purchasing and stating that the plaintiff was “strictly liable without regard to fault for all clean up and removal costs.” 

Consequently, the plaintiff filed a complaint for legal malpractice against our client, Mr. Lepis. Castella argued that had he been adequately counselled about the former use of the property by a dry cleaner, he would have taken titles through a corporate entity, obtained an environmental assessment prior to purchase, or declined to proceed with the transaction. 

Jack and Jeremy submitted discovery requests and obtained orders to which the plaintiff did not respond. He finally responded with an expert report, however the report was deficient. 

The plaintiff then moved for reinstatement of his complaint, which Jack and Jeremy opposed. The judge gave the plaintiff more time to fix the problem. However, the plaintiff’s expert report was lacking, and the plaintiff’s discovery was also lacking. Accordingly, the court dismissed the case, and the plaintiff moved for reconsideration. That motion was denied. 

The Appellate Division found that we were prejudiced because we could not mount a defense and could not take depositions without the plaintiff submitting a proper expert report on damages. The plaintiff’s expert report only opined as to the standard of care and deviation. It never went into a monetary figure. 

In reaching its decision, the Appellate Division followed the case we had argued, which is reported in Morris Properties v. Wheeler, 476 N.J. Super 448 (App. Div. 2023). There, the Appellate Division held that a plaintiff’s failure to present expert evidence on proximate causation and damages in a legal malpractice case entitles defendants through judgment; therefore, the court dismissed the Castella case as a matter of law.

In addition, the plaintiff’s expert’s report barely mentioned causation, and it failed to elaborate on causation under Froom v. Perel, 377 N.J. Super 298 (App. Div. 2005). 

Accordingly, this is a key opinion in legal malpractice actions; it explains the why and how cases can be dismissed even prior to depositions based upon expert reports that do not comply with the strict standards in New Jersey. 

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