A New Jersey appeals court has ruled that a legal malpractice suit against the firm of Ginarte, Gallardo, Gonzalez & Winograd was dismissed prematurely before the plaintiff had a chance to prove his damages.

The trial judge erred by failing to allow the plaintiff to present a “suit within a suit” to show the difference between the settlement he received in a personal injury case and the amount of money that would have been obtained by judgment, the Appellate Division said Monday as it remanded the case for trial.

Angel Lopez sued Ginarte Gallardo for malpractice after the firm represented him in a personal injury suit stemming from his fall on an ice-covered stairway outside a commercial building, which left him with a brain injury. His suit also named three lawyers from the firm—James Krupka, Bruno Brunini and John Megjugorac. Lopez claimed he was pressured to accept $20,000 to settle his personal injury suit, even though an expert suggested the case might yield a settlement of $3 million.

The defendants do not dispute that they failed to prepare evidence to show a jury that Lopez suffered a brain injury or a damage claim for economic loss. Lopez's medical records showed he suffered cognitive impairments as well as soft-tissue injuries from his fall. But in response to interrogatories, the malpractice defendants did not cite any symptoms related to his brain injury.

The malpractice suit was dismissed on summary judgment by Superior Court Judge Garry Furnari of Essex County after the Ginarte Gallardo lawyers failed to develop evidence of Lopez's neurological impairment or the economic loss that he suffered from the loss of his job as an IT consultant. The firm also failed to locate or interview witnesses to the accident even after Lopez identified such witnesses. It also failed to obtain video from a surveillance camera of his fall or an engineer's expert opinion about the condition of the stairs where Lopez fell. Once the discovery deadline was over, a lawyer from Ginarte Gallardo encouraged him to accept a $15,000 settlement offer.

After Lopez retained another law firm to represent him in the personal injury case, it sought an extension of discovery so Lopez could properly develop proof of his brain injury and economic loss. But Furnari denied the motion, and Lopez accepted a $20,000 settlement.

On appeal, Judges William Nugent and Susan Reisner said the suit-within-a-suit method is a “reasonable and acceptable” way for the plaintiff to prove his damages in the present case, which is the difference between the settlement and the amount that would have been obtained by judgment.

Nugent and Reisner said a legal malpractice trial “may proceed in any number of ways, depending on the issues.” The best method for a particular case will depend on the facts and legal theories, impediments to one or more modes of trial, and plaintiff's preference, they said. In the present case, however, they said the suit-within-a-suit method is “a reasonable and acceptable way for plaintiff to prove his damages.”

“We do not discern from the motion record that the trial court exercised its discretion, resolved a dispute between the parties about the proper method of proof, and ruled to the contrary. Rather, the record reflects the court was fixed in its notion that the only measure of damages was the difference in the settlement values of plaintiff's claim with and without the malpractice. If we are misreading the record, and if the trial court was exercising its discretion to resolve the parties' dispute about plaintiff's method of proving damages, it abused its discretion by failing to consider the facts, legal theories, impediments to one or more modes of trial, plaintiff's preference, and the appropriate measure of damages,” Nugent and Reisner said.

The lawyer for Ginarte Gallardo and the individual defendants, Fredric Shenkman of Cooper Levenson in Atlantic City, said he and his clients “respect the Appellate Division ruling” but added, “we're comfortable we will be successful at trial.”

John Emolo of Emolo & Collini in Paterson, who represented Lopez, did not return a call about the case.