Innes Ex Rel. Innes v. Marzano-Lesnevich
224 N.J. 584
| N.J. | 2016Background
- Innes and Carrascosa, amid a divorce and custody dispute, executed an escrow-like agreement where Victoria’s U.S. and Spanish passports would be held to prevent international travel without the other’s written consent.
- Liebowitz held Victoria’s passports in trust; Carrascosa later obtained and used Victoria’s U.S. passport to take her to Spain, where she has remained for about ten years.
- Innes sought return of Victoria and damages; a Spanish court barred contact with Victoria, complicating the family dispute.
- A NJ trial jury found the defendants negligent in releasing the passport; the court allowed a post-trial award of attorney’s fees to Innes and Victoria.
- Appellate Division affirmed the fee award, relying on a theory that the attorney-defendants’ fiduciary breach warranted fee-shifting; the Supreme Court granted review to address fee-shifting against non-clients in escrow fiduciary breaches.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether fee-shifting is available when an attorney breaches a fiduciary duty in an escrow context | Innes argues Saffer/Packard-Bamberger extend fees when fiduciary breach occurs | Defendants argue no attorney-client relationship, so no fee-shifting | Remanded to decide if breach was intentional; fee-shifting not established without intentional breach finding |
| Whether the existence of an attorney-client relationship is required for fee-shifting | Innes contends fiduciary breach suffices regardless of client status | Defendants contend no client relationship, so no fee-shifting | Held: need attendant intentional breach under prevailing precedents; remand for intent finding |
| Whether the Appellate Division's decision to award fees should be affirmed | Innes seeks affirmance based on fiduciary breach and reliance on Agreement | Defendants urge reversal due to lack of intentional finding and non-client status | Affirmance contingent on remand; case remanded for trial court to determine intentional breach |
Key Cases Cited
- Saffer v. Willoughby, 143 N.J. 256 (1996) (attorney fees as consequential damages in legal malpractice actions against former attorney)
- Packard-Bamberger & Co. v. Collier, 167 N.J. 427 (2001) (extension of fee-shifting to attorney misconduct; requires attorney-client relationship for recovery)
- In re Estate of Lash, 169 N.J. 20 (2001) (estate fiduciary breach; allowed fees against surety in related litigation, distinct from Saffer/Packard-Bamberger)
- In re Niles Trust, 176 N.J. 282 (2003) (undue influence by fiduciaries; created exception to American Rule for fiduciaries tied to estate actions)
- In re Estate of Vayda, 184 N.J. 115 (2005) (reaffirmed American Rule; limited to probate context; denied broader fee-shifting absent statute/contract)