Gordon Rees Scully Mansukhani Partner Amanda King and Associate Ashley Varghese successfully secured a complete dismissal with prejudice on behalf of the firm’s clients in a complex real estate case.
The case arose when GRSM initially entered to defend a third-party defendant, an attorney, in a legal malpractice claim filed by the attorney’s former client, who was being sued by his ex-wife. Early in the litigation, GRSM reached a nominal settlement with the former client and substituted in as the former client’s defense counsel to avoid Saffer fee exposure.
In the original dispute, the plaintiff alleged that her ex-husband had failed to remove a judgment lien from a New Jersey property she was attempting to sell in a timely manner. She claimed this failure caused her to lose an initial buyer and ultimately forced her to sell the property at a reduced price to a second buyer.
Through aggressive discovery, including subpoenaing key documents and deposing key witnesses, GRSM uncovered evidence that the plaintiff and her counsel had fabricated the basis for the claim. Specifically, emails between the plaintiff’s counsel and the original buyers’ attorney revealed that the buyers had not been aware of the lien until informed by the plaintiff’s counsel after they had already backed out of the transaction under the inspection contingency clause due to the plaintiff’s failure to make requested repairs.
There was further evidence that the plaintiff’s attorney, in an effort to generate false evidence to support the planned lawsuit against the ex-husband, requested that the buyers’ attorney provide a letter stating that the lien was the basis for the buyers’ termination of the transaction. During that timeframe, the plaintiff was refusing to release the buyers’ deposit, and her counsel indicated to the buyers’ attorney that the deposit would be released upon receipt of such a letter. The buyers refused.
Upon discovering the evidence of fabrication demonstrating that allegations contained in the complaint against GRSM’s client were knowingly false, GRSM promptly filed a Rule 11 Motion, challenging the validity of the plaintiff’s claims and seeking sanctions, dismissal, attorneys’ fees, and costs. In response, the plaintiff voluntarily dismissed the case with prejudice, effectively ending the litigation.
Prior to that ultimate dismissal, GRSM also successfully defeated a motion to amend the complaint, preventing the plaintiff from naming GRSM’s original client attorney as a direct defendant. The district court ruled in GRSM’s favor, finding that the proposed amendment would be futile as the plaintiff had no viable legal basis to pursue a direct claim against the defendant’s attorney.
