A New Jersey appellate court has reversed a summary judgment in favor of an attorney in a legal malpractice action. In Gravers v. Lanfrit.doc, a client sued his former attorney for negligently representing him as the seller in a real estate transaction. The attorney negotiated the purchase and sale agreement, which allowed the buyer to assign his rights under the contract, but not without the consent of the seller. The buyer did assign his rights to a developer, who subsequently further assigned those rights to a third party, but without the knowledge or consent of the seller.
The seller did not learn of the second assignment until two years later, just days before a closing on the sale. The seller consented to the second assignment in consideration for additional compensation, permitting the sale to go forward.
The client then sued his attorney for malpractice, alleging that he knew of the second assignment shortly after it occurred, but failed to notify him. The lower court granted summary judgment for the attorney on the basis that there were no damages suffered because the client received the same compensation to which he was entitled, notwithstanding the assignment. The client appealed and argued that he had consented to the second assignment under duress due to the pending closing.
The appellate court agreed and reversed. The court reasoned that if the seller had been timely notified of the assignment, he could have sought higher compensation or refused to permit the assignment. The court also confirmed that there were facts sufficient to make out a claim for duress, given that the seller would have suffered significant monetary loss had the sale not proceeded to close. The case was remanded for further proceedings in the lower court.
Decision: Gravers v. Lanfrit