A New Jersey appeals court has partially reinstated a legal malpractice suit against the law firm Ansell, Grimm & Aaron over a troublesome real estate transaction it was involved in.

The Appellate Division reversed the dismissal of a claim for legal fees and other costs associated with Ansell Grimm's failure to define a property's boundaries, finding factual disputes on the record are sufficient to deny the law firm's motion to dismiss, Appellate Division Judges Jack Sabatino and Arnold Natali Jr. ruled.

The court affirmed the trial court's finding that any negligence by Ansell Grimm or attorney David Zolotorofe was not the proximate cause of damages by the former client, Charles Bressman. He bought vacant land to expand his business, but ran into trouble that he blames on confusion over the property's boundaries. The panel upheld the ruling by Superior Court Judge Frank Covello in Passaic County, who found the law firm's alleged negligence could not be the proximate cause of Bressman's damages because the local zoning authority voted not to approve his plans.

Joshua Bauchner of Ansell Grimm represented the firm and Zolotorofe. He declined to comment. Peter Ouda, a Somerville lawyer who represented Bressman, said in an email that he is "glad that the Appellate Division recognized the cause of action that we believe was properly alleged in the complaint."

Somerville attorney Peter Ouda/courtesy photo.

Bressman owns commercial property on Route 46 in Totowa. When New Jersey set out to sell a nearby plot of vacant land, both Bressman and a neighboring landowner, known as J&J Specialized, were interested in buying it to expand their businesses. Bressman and J&J reached an oral agreement calling for J&J to purchase the land, then divide it and sell 38,000 of the 56,000 square feet to Bressman. The agreement further said Bressman intended to build a 5,000-square-foot retail building  on the property.

After J&J bought the land from the state, its attempt to sell a portion to Bressman ran into trouble because the parties could not agree on where to divide the parcel. Still, the parties signed a sales agreement without agreeing on where to draw the boundary line. In 2011, Bressman sued J&J for performance, and a judge found the agreement included all the necessary terms of an enforceable contract. The parties then applied to the Totowa Planning Board for subdivision approval, but the application was denied. Ultimately, a settlement was reached giving Bressman $444,000 and J&J retaining ownership of the parcel.

Bressman then sued Ansell Grimm and Zolotorofe for malpractice, claiming their failure to delineate the boundary line on the property caused him to lose time, money and business opportunities. Covello granted the defendants summary judgment, finding that the need for the subdivision never materialized. The court emphasized that whether the transaction could actually go forward "does affect the ultimate outcome in a … claim for legal malpractice."

On appeal, Bressman argued that his failure to secure planning board approval might offset his damages claim but he "need not prove that he would have been successful before the Planning Board in order to recover damages."

Sabatino and Natali agreed with Covello, however, that summary judgment was appropriate to the extent Bressman claimed Ansell Zaro and Zolotorofe's "alleged malpractice proximately caused him to sustain damages related to his inability to develop the property, as development under the contract was conditioned upon land use approval, which plaintiff indisputably did not secure."

However, damages resulting from the lengthy litigation of the boundary dispute were not dependent on the planning board decision, the panel said. "As noted, there are genuine and material factual questions with respect to whether the appeals and trial court proceedings related, in whole or in part, to the lack of clarity associated with the boundary line dispute and what person(s) were responsible for that lack of clarity. Consequently, when viewed in the light most favorable to plaintiff, a rational fact finder could reasonably conclude that plaintiff suffered damages as a result of defendants failing to explicitly memorialize the boundary line, which was a material term of the contract," Sabatino and Natali said.