`L

--------------------------------------------TERESA GIUDICE;

-X

riaintiff,
v.

Argument Date: October 9,2015 `~~

,;%~' `~

SUPERIOR COURT OF NEV~~J.~~SE~~ ~?~~-=

LA'lX1 DIVISION
',~.`~>~
.,;,j
MORRIS COUNTY
~='` ;;~~:~ "~
l am- O

JAMS A. KRIDEL, JR.,

DOCKET NO.: MRS-L-1861-15

Defendant.
---------------------------------------------------------X

Hon. Robert J. Brennan

llEFENDANT JAMES A. KRIDEL,JR.'S MEMORANDUM

OT LAW IN SUPPORT OF MOTION TD DISMISS

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Clausen Miller P.C.
100 Campus Drive, Suite 112
Florham Park, NJ 47932
Phone:(973)410-4130
Attorneysfor Defenda~~t,
Janes ~(. K~-idel, Jr.
On the Brief:
Carl M.Petri, Esy.
Id. No.: 2382000
Ruth V. Simon, Esq.
Id No.: 5831985

3853401

';'~,

T,~~~L of co~iTF~v~rs
"IABLE OF AUTHORITIES ................................................................

PAUL
ii

PRELIMINARY STA7'EMENT............................................................

STA'T'EMENT OF FACTS..................................................................

POINT I:
PLAINTIFF CANNOT BRING A MALPRACTICE CLAIM 'I'O
CHALLENGE HER CRIMINAL CONVICTION
A.

Motion 1'o Dismiss Standard.......................................................

12

B.

Legal Malpractice Standard.........................................................

12

C.

Plaintiff's Unimpeached Guilty Plea Bars This Action.........................

12

D.

Plaintiffs Complaint Pails To Allege Proximate Cause Between

The Asserted Negligence And Her Criminal Conviction.....................

15

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POINT II:

PLAINTIFF'S BREACH OF CONTRACT CLAIM

SHOULD BE DISMISSED AS A MATTER OF LAW............................

16

POINT III:
PLAINTIFF'S BREACH OF FIDUCIARY CLAIM SHOULD
BE DISMISSED AS A MATTER OF LAW..............................................

I~

POINT IV:
PLAINTIFF LACKS STANDING TO
ASSERT A CLAIM AGAINST MR. KRIDEL.......................................

18

CONCLUSION ...............................................................................

20

z
3853401

'T~h~3LE OF AUTH~RITT.r,S
CASES
~Ilampi >>. Rztsso,
345 N.J. SuPer. 360 ~APP. Div. 2001 ............................................................................... 13, 15
Charles!I. Mar~gQf2QY0 COYlsulting Eyag'rs, Inc. v. C~rneys .Point Twp. Sererage Auth,
344 N.J. Super. 343 App. Dz:~. 2nn7~ ........................................................................
............. i7
Ua~-cia v. Kozlov, Seaton, Roman.ini ~Bi~ooks, P.C.,
179 N.J. 343 (2004)................................................................................................................. 1G
Grunwald v. Brortkesh,
131 N.J. 483(1993)................................................................................................................. 12
Kaye v. Rosefr.elde,
432 N.J. Super. 421 (App. Dzv. 2013)..................................................................................... 17
McGrogan v. Till,
167 N.J. 414(2001)................................................................................................................ 16
McLaughlin v. Ascella Mortg., I,LC,
2011 Baalk. Lexis 4088, 2011 WL 5025335(D. Ma. 2011)........................................19
Moy v. M&T Mortg. Cor-p.,
2002 U.S. Dist. LEXIS 5923,2002 WL 523907(E.D. Pa. 2002)........................................... 18
Packard-Bamberger cQ, Co. v. Collier;
167 N.3.427,443(2001)......................................................................................................... 17
Printz~ag Mort-Mortisto~~n v. Sharp Electr-onzcs. Corp.,
116 N.J. 739(1989) ................................................................................................................. 12
Sickles v. Cabot Corp.,
379 N.J. Super 100(App. Div. 2005}...................................................................................... 12
Sommers ~~. McKinney,
287 N.J. SuPer. 1 ~APp. Div. 1996)......................................................................................... 12
Sommers v. McKin~~ey,
287 N.J. Su~er. at 9-1Q omitting citation)............................................................................. 17
Velantzas v. Colgate-Palmolive Co.,
109 N.J. 189(1988} ....................................................
.................... 12

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STATUTORY AUTHORITIES

11 U.S.C. ~ 541 (a)(1}................................................................................................................... 18

11 U.S.C. 541 (a)(7)................................................................................................................... 18
1 I U.S.C. 554(c)......................................................................................................................... 14
26 U.S.C. ~ 7203..................................................................................................................... 14, IS
RULES.AND REGULATIONS
Fed. R. Bankr. P.341 ....................................................................................................................... 2
Fed. R. Bankr. P2004................................................................................................................. 2. 3
ADDITIONAL AUTHORITIES
Totoli >>. Mecca, Docket No. A-3005-13T2,
201 S 1V.J. Super. Ui~pub. LEXIS(App. Div. Jan. 20, 2015....................................................... 15

38534GI

ii

PRELI'YIINARY S`1.'ATEl1'[ENT
Plaintiff Teresa Giudice ("Plaintiff') pled guilty to one count of Conspiracy to coirunit
Mait and Wire 1~raud for crimes corn2nitted from 2001 through 2008 for submitting false
information and fake documents to lending institutions in connection with loans. She also pled
guilty to three counts of Bankruptcy Fraud for concealing her income when she filed
tlae
bankruptcy petition on October 29, 2009; falsely testifying under oath at a bankruptc
y
proceeding on April 23, 2010 regarding her income; and signing a false and fraudulent statement
on March 2, 2010 which she knew would be submitted to the bankruptcy court. Plaintiff now
files a Complaint against h.er bankruptcy attorney James A. Kridet, Jr., Esq., and asserts that he
was negligent in handling leer bankruptcy case wliieh caused leer to get caught. She also asserts
causes of action for breach of contract and breach offiduciary duty under the same facts.

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Plaintiff's claims are meritless ai d the Complaint should be dismissed. What Plaintiff is

really seeking is damages against Mr. I~-idel for her crimes and conviction without directly

challenging her criminal conviction. Plaintiff asserts in her Complaint drat Mr. Kridel was
negligent in representing her in a bankruptcy case so that she was forced to plead guilty to fraud
related to applications for loans preceding the filing of her bankruptcy petition for years
and
concealing income earned prior to the filing of the bankruptcy petition in the bankruptcy case.
Plaintiff is barred fi-om suing Mr. Kridel for negligence in handling her bankniptcy because she
has not challenged her guilty plea in any way and certainly has not been exonerated.
Additionally, the claims for breach of contract and breach of fiduciary duty are not cognizable as
separate claims. Firialiy, she lack standing to b1-ing this suit. Accordingly, the Complaint should
ire dismissed.

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STATEMENT Or l?.ACTS
Plaintiff asserts that Mr. Kridel corrulutted professional malpractice throughout the
pendency of Plaintiffs bankniptcy case. See Complaint, Exl~ibat A, Certification in Support of
Motion to Dismiss of Carl M. Perri, dated August _, 2015 ("Perri Cert."). She asserts llu~ee (3)
causes of action: 1) Negligence-Legal Malpractice; 2) Breach of Conta~act; and 3) Breach of
Fiduciary Duty. Id. at pp. 47, 50, and 51.
Plai~itifFresides in Township of Montville, County of Morris, State of New Jersey. Icl. at
33. Mx. Kridel is licensed to practice law in the State of New Jersey and maintains an office in
Clifton, New Jersey. Id. at 34. PIaintiff was married to non-party Mr. Uiuseppe Giudice("Mr.
Giudice" or "Plaintiff's Husband"}. Id. at ~[ 40. Plaintiff's Husba~~d met with Mr. Knidel
conceniing fili~lg a bankruptcy case. Id. at 61. Plaintiff and Plaintiffs Husband retained Mr.
Kridel to file a joint barik~-uptcy case for them. Id. at 62. On October 29, 2009, Mr. Kridel

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filed a joint Chapter 7 bankruptcy case. on behalf of Plaintiff and Plaintiff's Husband iri the
United States Bankruptcy Court for the District of New Jersey. Id. at lU, 64; see also

Bankruptcy Docket Sheet, E~ibit B, Perri Cert. On October 29, 2009, Mr. Kridel filed a
Chapter' 7 Voluntary Petition for Plaintiff and Plaintiff's Husband. See Bankruptcy Docket
Sheet, Exhibit C,Perri Cert.
Mr. Kridel filed Amended Schedules and an Amended Statement of Financial Affairs.
See ~ ]48, Exhibit A, Petri Cert. On December 23, 2009, Plaintiff testified at a Federal Rule of
Bankruptcy Procedure 341 meeting of the creditors. Id. at 162. On April 23, 2010, Plaintiff
testifiui at an examination pursua~it fo Federa] Rule of Bankruptcy Procedure 2004. Id. at ]72.
On June 30, 2010; the Chapter 7 Trustee filed a complaint (Sy~n~ilolc v. Giudice, Adv. Pro. No. l 001845(MS}) objecting to Plaintiff and Plaintiff's Husband's discharge.

3853401

Yd. at 178. On

Septen7ber 2, 2Q10, the United States Trustee filed a complaint objecting to Plaintiffs discharge.
Irl. at 194. On June 7_9, 2011, Plaintiff was exatnined by the Office of the U~iited States Trustee.
Id. at 238. On December 15, 20I 1, a Consent Order was entered in that proceeding in which
Plaintiff waived her discharge. Id. at 255. On December 19, 2011, a Consent Judgment was
eilteied in the Chapter 7 Trustee's adversary proceeding in which Plaintiff waived her discharge.
Id. at 257. The Bankruptcy Case remained open until it was closed in September 2014. Id. at
298.
On July 29, 2013, the United States of America filed a federal criminal case agauist
Plaintiff and Plaintiff's husband in the United States District Court for tl~e Distzict of New
Jersey, titled United States of E(~nerica v. Giudice et al, Case No. 2:13-cr-00495-ES (the
"Criminal Case"). Icl. at 267, see also, Criminal Case Docket Sheet Exhibit D, Perri Cert. On
November 18, 2Q13, a First Superseding Indictment was filed by the United States Attoniey for

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the District of New Jersey, charging Plaintiff with ~l~irty-tlu-ee (33) crimes. Id. at 268; see also,

First Superseding T~idictment, Exhibit E, Perri Cert.

On March 4, 2014, a plea hearing was held before United States District Court Judge
Esther Salas, at which Plaintiff was represented by Henry E. Klingeinan, Esq. her criminal
attorney. Plaintiff pied guilty to four {4) counts set forth in the first Superseding Indictment,
including three (3}bankruptcy crimes. See Exhibit A, at 296; see also, Transcript of hearing of
March 4, 2013, exhibit F, Perri Cert. Plaintiff testified as to her crimes at the hearing on May 4,
2014 before Judge Salas as follows:
Q. Same to you, Mrs. Giudice. Mr. Kliageman has been representing you
tlu~oughout the course of this case, right?
MR5_ GNDICB: Yes, your Honor.
Q. He has had an opportunity to go over the superseding indictment, the case
against you, possible defenses,. go over discovery as well with you?
MRS. GNDICI:: Yes, your Honor.

3
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Q. He has answered any and all of your questions, regarding tl~e case in general?
MRS. GIUDICE: Yes, your Honor.
Q. Has he talked about possible defenses that you might have?
MRS. GTtJDICE: Yes, your IIonor.
Q. Okay. And overall, are you satisfed with the representation that you have
received from Mr. Klingeinan?
MRS. GNDICE: Yes, your Honor.
Q. Now we are going to talk about what you give up by pleading guilty.
Do you understand that you have an absolute right to plead not guilty to the
superseding indictment. Arid I have asked counsel to make sure that we, we are
going to be going over the superseding indictment, we are going to be reviewing
the plea memos. We are going to also be reviewing the Rule 1 I form as well as
the plea agreement. So let's make sure those documents are in front of your
clients, counsel. So let's start with whether you understand that you have a right to
plead not guilty to the offense offenses against you, Mr. Giudice?
MR. GIUDICE: I do, your Honor.
MRS. GNDICE: I do, your Honor.
Q. If you persisted with a not guilty plea you would have the right to a trial by
jury and during the trial you ~t~ould also have the right to the assistance of counsel.
Do you understand that, sir?
MR. GT(JDICE: Yes, I do.
MRS. GICTDTCE: Yes.

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See Perr-i Cert, at Exhibit F at pp. 6-8.

Q. Do yoU further ~anderstaiid that by waiving fiat plea of not guilty and entering
a plea of guilty, there will be no trial. Not today, not tomon-ow, not ever. Do you
understand that?
MR. GIUDICE: I do, your Honor.
MRS. GIUDICE: Yes, your Honor.
Q. You will have waived or given up your right to trial as well as the other rights
associated with a trial that I have dust described. Do yogi understand that?
MR. GIUDICE: I do.
MRS. GIUDICE: Yes, your Honor.

See Pef~-i Cert, at Exhibit F at p. 11.

Q. Now that you are holding that agreement, let's go ahead and turn to the
signature page of the agreement. Page 9. Mr. Giudice, above your name, is that
your signature there?
MR. GIUDICE: Yes, your Honor.
Q. It says you signed it on February 26. Is that coc~rect, sir?
MR. GIUDICE: Yes, your Honor.
Q. And Mrs. Giudice, it says that above your name, is that your signature?
MRS. GTUDICE: Yes, your Honor.
Q. And you also signed it on February 26, is that accurate?

4
3853401

MRS. GIUDICE: Yes, your Honar.

Q. Befare you signed that plea agreement did each of you read the plea
agreement, from the if very first page to the very last page of that agreement?
MK. GIUDICI,: Yes, your Honor.
MRS. GIUDICE: Yes, your Honor.
Q. And did you go over the agreement with your attorneys?
MR. GIUDICE: Yes, your Honor.
MRS. GiUI710E: Yes, your Honor.
Q. Did they answer any and all of your questions regarding that agreement? Mr.
Giudice?
MR. GIUDICE: Yes, your Honor.
MKS. GIUDICE: Yes, your Honor.
Q. Did they go over certain teens and conditions of the agreement?
MR. GIUDICE: Yes, your Honor.
MRS. GIUDICE: Yes, your Honor.
Q. And you understood aid you were satisfied with the advice they provided you?
MR. GIUDICE: Yes, your Honor.
MRS. GTUDICE: Yes, your Honor.
THE COURT': Cowisel, did yoU witness your clients signahlres?
MR. FEINSTEIN: Yes, your Honor.
MR. KLINGEMAN: Yes.
See Perri Cert. at E~ibit F at pp. 12-14.

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Q. All right. So what I am now going to do is I am going to ask the assistant
United States .11ttoiney, Mr. Romanko~v, to summarize your plea agreement. You
may be seated during the summary. But what I want to do is make sure that you
continue to listen very carefully because when Mr. Romankow is done
summarizing your plea agreement I have a number of questions for each of you.
Okay. You may all be seated.
MR. ROMANKOW: Thank you, your Honor.
*~*
MR. ROMANKOW: With regard to Teresa Giudice, plea agreement, it is dated
February 21, 2014. It sets forth that the defendant, Teresa Giudice, wil] plead
guilty to counts 1, 15, 23, and 36 of the superseding indictment which charge
respectively conspiracy to commit male [sic] and wire fraud, concealment of
assets, false oaths and false declarations. If the defendant enters a guilty plea and
is sentenced on those charges and otherwise she folly complies with all the terms
of the plea agreement, the United States Attorney's office for the District of New
Jersey will not initiate any fizrther criminal cl2arges against Teresa Giudice for
conduct bett~een in or about September, 2001 to in or about June, 2011,
conspiring with others to obtain mortgage loans by means of fraud and
inisrepreseutations, by co~nmitti~ag bankruptcy fi~aucl, by concealing assets,
makingfalse oaths arzd makingfalse declaratio~is.
*~x~

5
3853401

As tl~e plea agreement with the co-defendant, Giuseppe, this plea

agreement does contain Iangiaage about forfeiture. Ic sets forth that she agrees
to
be jointl}~ and severally liable with Giuseppe Giudice for the total amounf
of
proceeds due to the conspiracy to commit wire and mail fraud and bankrup
t [sicJ
fraud, and consents to the entry of a forfeiture money judgment in that
amount.
x~~
The plea agreement contains language where she agrees to surrend
er
` 200,000 to the government on or before the date she is sentenced.
Tlus is
considered an initial payment, and it will be applied in partial satisfaction
of the
forfeiture moneyjud~nent amount wltil it is paid in full.
Defendant Teresa Giudice agrees and understands that sloe wi11 remain
respozisible fox the outstanding Valance of the forfeiture money judgment until
it
is paid in full.
*~*
Q. Now I ask the question, Mr. Giudice, was that an accurate summary of the
plea
agreement between you and the United States, sir?
MR. GNDICE: Yes, your Honor.
Q. Same yes to you, ma'am?
MRS. GNDICE: Yes, your Honor.
(emphasis added). See Perri Cerd. at Exhibit F at pp. 14, 17-20.
Q. Has anyone attempted to force you to plead guilty?
MK. GNDICE: No, your Honor.
MRS. GNDICE: No, your Donor.
Q. Are you pleading guilty ofyour o~vi~ free ~ti~ill because you are ilzdeed guilty,

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SCF'~

MR. GNDICE: Yes, your Honor.

MRS. GIUDICE: Yes, you~~ Honor.
Q. Do you tu~derstand that t11e offenses to which you are both bleedin
g guilty,
those are felony offenses. You understand that?
MR. GIUDICE: I do.
MRS. GIUDICE: Yes, your Honor-.
Q.Is ifyour plea is accepted you will be adjudged bsilty ofthose offenses Do
.
you
u~.derstand that, sir?
MR. GIUDICE: Yes.
MRS. GNDICE: Yes, youY Ho1~.or.
{emphasis added). See Perri Cer-t. at Exhibit I' at pp. 21-22.
Q. I am going to ask the government to go over the essential elements of
the
orrenses to which you are cunently pleading. 1 vs~ould like you again to listen
very
carefully. I will have a numbei of questions for you following the govez-nment's
review of the elements of each of your offenses.
You may be seated.
~~~=

3853401

Next are the elements of bankruptcy fraud, concealment, 18 United States

Code Section 1521, they are as follows. One, banlauptcy proceeding were
implemented. Two, there was a property belonging to the bankruptcy state. Three,
the defendant knowingly and fraudulently concealed property or assets fcom
custodians, trustee, marshal or other officers of the eourl charged with control or
custody, or in connection with t~~e case under Title XI from predators or tl~e
United States trustee.
Next, elements of bankruptcy fraud, false oaths, 1$ USC section 1522.
'I'Iiere are four elements. One, bankruptcy proceeding was in existence. Two, the
defendant made a statement under oath. Three, the statement was false and
material. And four, the false material staterrient was made knowingly and
fraudulently.
Next, elements of the violation of 18 USC 1523, which is ba~~a-i.iptcy
fraud, false declarations, there axe four events. Number one, banlauptcy
proceeding was in existence. Number two, the defendant made a declaration,
specifically, verification or other statement in relation to the bankruptcy
proceeding. `I7~-ee, a declaration, certificate, vez-ification or other statement is
false and material; and fow-th, the false declaration, certification or other
statement was made knowingly and fraudulently.
**~
THE COURT: With respect to Title 18 Section 1521, oza page 7 of Teresa
Giudice's plea memo to me. I want to make sure we went over those elements as
~~e1L
MR. ROMANKOW: Yes, your Honor. Concealment in Bankruptcy.
THE COURT: Olcay, great. Can each of you please rise again.
Q. Each of you have heard the Assistant United States Attorney, Mr. Romankow,
go over the elements of the offenses to which you are both pleading. Do you
understand fliose essential elements?
MRS. GNDICE: Yes, your Honor.
MR. GIUDICE: Yes, youi Honor.
Q. And of course, it would be important for you to understand the essential
elements because had you gone to trial, and you had pled not guilty, the
goverrunent would have had to prove each and every essential element of the
offenses to which they were charging you in order for you to be convicted. Do
you understand that?
MR. GNDICE: Y do, your Honor.
MRS. GNDICE: Yes, your Honor.

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See Peyr~i Cert. at Exhibit F at pp. 35, 37-39

THE COURT: All right. Now let's go to fihe factual basis questions for Teresa.
EXAMINATION BY MR. ROMANKOW:
Q. Ms. Giudzce, fro2n in or about September, 2001; through in or about
September, 2008, did you and your husUand; Giuseppe Giudice, also known as
Joe Giudice, supply information and obtain numerous loans from various lending
institutions.
MRS. GNDICE: Yes.

3853401

Q. Did the loans consist of purdiase money mortgages; construction loans and
home equity lines of credit?
NfRS. GIUDICE: Yes.
Q. Were some of the loans in your name only?
MRS. GIUDICT: Yes.
Q. Were some of the loans in the flames of both you and your husband.?.
MRS. GIUDICE: Yes.
Q. In the course of applying for the loans did you and your husband, Giuseppe,
conspire and agree with each other to submit false information and fake
documents to the lending institutions?
MRS. GILJDICE: Yes.
Q. Did you or your husband submit the false information and fake documents
through use of the United States mails and tlu~ough use of private or coirunercial
interstate carriers and wire communications iii interstate conunerce?
MRS. GIUDICE: Yes.
Q. On some of the loans, did the loan application falsely state that that you were
an officer in your husband's stucco company?
MRS. GIUDICE: Yes.
Q. On at least one of the loans did t11e loan application falsely state that you were
a realtor?
MRS. GNDIC~: Yes.
Q. On some of the loans slid you or your husband submit to the lending
institutions false documents such as fake tax retunis, fake W-2 forms and fake pay
stubs?
MRS. GILIDIC~: Yes.
Q. Do you agree that in evaluating and approving the loans, the ]ending
institutions relied upon the false information and documents which you and your
husband provided to fliem?
MRS. GICJDICE: Yes.
Q. llid some of these loans go alto foreclosure?
MRS. GNDICL: Yes.
Q. As a result, did soiree of the lending institutions suffer actual financial losses?
MRS. GILTDICE: Yes.
Q. Are you guilty of count 1 of the superseding indictment?
.MRS. GILTDICE: Yes.
Q. Next is count I5, Ga~a.kruptcyfraud, cortcealrnent ofassets Mrs. Giudzce, ota
or about October 29, 2009, did you and yoccr husbmid, Giuseppe,file a chapter
VIIbankruptcy petition in U.S bankruptcy court in Newark, New Jef~sey?
MRS. GIUDICE: Yes?
Q. Did you and your husband subsequently file ainendinents to the petition on or
about December I7, 2009, January 8, 2010 and March 2, 2010?
MRS. GIL7DICE: Yes?
Q.I~t the petition filed o~i October 29, 2009, did you knowingly andfrauclule~:tly
conceal pt-operty helonging to your bankruptcy estate front tlae Ulaited States
t~usree?
MRS. GIliDICE: Yes.

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~~
3853401

Q. Spec:tfically, dad yoU conceal tlae folloivi~zg: Yot-t~- business, TG F'abulieioats,

LLC; the TG Fabulicious LLC bank account, f-enta/ income fi~oni a property you
o~vnecf r'n Lirtcol~~ Park, Neia~ .terse}%, tl~e trzse income you ~~eceived between.
Janua~-~~ 1, 2009 a~ad October 29, 2009, from the television sh.orv, TI~e Real
Houseiti~ives of New Jersey, irlconze ~~ou ~~ecei~~ecl during that time period front
your personal and ~naga~ine appearances, and youf- business, TG Fabitilicious,
LLC, anal your ai~.ticipated income firona all ofthese sources? Did can you conceal
all ofthat?
MRS. GIUDICE: Yes.
Q.flre you guilty ofcozcfat 1S ~fthe supefsedi~zg indictment?
MRS. GIUDICE: Yes.
Q. Next is count 23. Barilcr~lptcy fraud, false oaths. Mrs. Giudice, did you testify
under oath at several proceedings in coiu~ection with the bankruptcy case?
MRS. GIUDICE: Yes.
Q. At a~a ~Ipril 23, 2010 ba~ak:rupzcy pj~oceea'i~zg before the United States t~~z~stee i~r.
Ne~var~k., did you testifyfalsely wader- oath that in ?009, you had rao other sources
of income other than. the television show, The Real Hotcsewives ofNew Jersey,
and one television appearance?
MRS. GNDICE: I'es.
Q. In fact, did you have other sources of income, specifically, income from your
personal and magazine appearances as. well as income from your business, TG
Fabulicious, LLC?
MRS. GIUDJCE: Yes.
Q. At the Apr-i123, 2010 bafakruptcy proceeding, did you also testifyfaXsely under
oath that tlaey~e tiaras never a tenaft.t at a residential p~operiy which you own in
Zin.col~a Parr New Jersey.
MRS. GNDICE: Yes.
Q. In fact, fi-om at least Marcll, 2009, through at least October, 201 I, did you and
your husband receive monthly rental income from the property in Lincoln Park?
MRS. GICJDICE: Yes.
Q. Did you personally endorse many of these r~ionthly rent checks and deposit
them into your TG Fabulicious LLC business bank account?
A. Yes.
Q. Are you giiiln~ ofcount 23 ofthe indictment?
MRS. GNDICE: Yes.
Q. Firaall>>, count 36, brrrrkru~tcy fiaud. False declarations. Mrs. Giudice, did
ynzc sign your third ameizded stutenzeizt offinancial affairs on March 2, 2D10,
k~zofving it tivould he submitted to t17e bankrz~ptey eourt?
MRS. GNDICE: Yes.
Q. Did you sign the third amended statement of financial affairs under penalty of
perjury, representing that the information in it was true and correct?
MRS. GNDICE: Yes.
Q. Did ~~ots sign the third amended statemefaz of~nancial affairs ~C71.OYV712g Cl2QI

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certain inforntatiotz in it tivas not true and correct?

MRs. ~r~~c~: ~~eS.

3853401

Q. Specifically, clyd t1~e third amended stateme~zt offina~tciaX afaitsfail to list tlae
,folloivi~ag. Yoarr barriness, TG Fabi~licious LLC.; the TG 1%abulicloats LLC bank
QCC01/lYl, 1'8MlL7Z 171C0772E f"OYri Q IJl"0~2YI)~ you o1.~~ne~l in Iirecoln. Park, New .Iersey,
th.e tf-ue income you received behti~ee~z .Ia~zua~~~ 1, ?009, and October- 29, 2009,
from t/ze television. sl~o~t~, The Real Ilozrsetivives of 1Vely Jersey, a~zd income yoit
recei~~ed dui-i~~g that titre per-rod/rom your perso~ral and f~iagazine appearances,
arad you~~ busi.iiess, TG Fabulicioz~s, LLC. Dicl the tlzi~~a' amended stateaent of
financial affairsfail to list those?
MRS. GIUDICE: Yes.
Q. Are you guilty ofcount 3b ofthe superseding irzdict~nei~t?
MRS. GIUDICE: Yes.
MR. ROMANKOW: Thank you.
Your Honor, we believe there is a sufficient factual basis for the pleas.
THE COURT: Thank you., Mr. Romankow. The tune has come. I need to hear
fi-om both of you, how do can you plead, guilty or not guilty? Mr. Giudiee7
MR. GIiJDICE: Guilty, your Honor.
THE COURT: N1rs. Giudice?
MRS. GNDICE: Guilty, your Honor.
THE COURT: All right. It is the finding of this Court in the case of United States
of America versus Giuseppe Giudice and Teresa Giudice, the defendants are fully
competent and capable of entering an informed plea. Each of the defendants is
aware of the nature of the charges and the consequences of their pleas. And I note
that each defendant has entered a plea voluntarily and knowingly at this tiine.an
informed plea.
Each of the defendants is aware of the natw-e of the charges and the consequences
of their pleas. And I note that each defendant leas entered a plea voluntarily and
lalowingly at this time.
Having just heard each of their responses to the factual basis questions, I also find
that there is an independent. basis in fact containing each of the essential elements
of their offenses to which they are currently pleading guilty. Tlie pleas are
tlrerefose accepted. The defendatzts afe notiv adjudged guilty ofthose offenses.

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(emphasis added). See Peryi Cert. at E7chibit F at pp. 46-53.
Further, on March 4, 2014, Plaintiff, with the assistance of hei- criminal law attorney,
Han~y E. Klingeznan, Esq., signed an Application for Pei7nission to Enter Plea of Guilty (the
"Guilty Plea Application"}. See Uuilty Plea Application, at pp. 7-8, Exhibit G, Perri Cei-t.. In
the Guilty Plea Application, Plaintiff certified the following information aid statements to be
true and if they were false, sloe was subject to punishment:

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7. T received a copy of the...INDICTMFNT...bcfore being called upo~1 to plead.

I have read and discussed it with my lawyer. I understand that the substance of
the charges} against ine is that I: committed Loan Fraud and Baiilcruptcy Fraud.
~~=*
43. I lulow the judge will riot permit anyone to plead GUILTY who claims to be
innocent, and with that in mind and because T am GUILTY, I respectfully request
that the Court accept my plea of GUILTY and to have the Clerk enter my plea of
GUILTY as follows:
To Counts) 1, I5, 23, 36 ofihis...INDICTMENT....
44. I offer my plea of GUILTY freely and voluntarily and of my own accord and
with full understanding of all matters set forth in tl~e_..INDICTMENT..., in this
application, and in the certification of my lawyex which is attached to this
application.
45. I further declare that I wish to wazve the reading of the...INDICTMENT in
open court, and I request the Court to enter my plea of GUILTY as set forth in
Paragaph 43, above.
See Per~~i Cert. at exhibit G.
On October 2, 2014, a sentencing Bearing was held Uefore Judge Salas, whereby Plaintiff

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was represented. See October- 2, 2Q14 transcript, Exhibit H, Perri Cert. On October 10, 2014, a

judgment was entered against Plaintiff in the Criminal Matter. See Judgment, Exhibit I, Perri
Cert. On October 2, 2014, Plaintiff was sentenced to fifteen (15) months imprisomnent;
supervised release for two {2) years; an $8,000.00 fine; restitution of $414,588.90; and a special
assessment of $400.00. See exhibit A, at 297. On October 27, ?014, an amended judgment
was entered against Plaintiff. See Amended Judgment, Exhibit J, Peni Cert.

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ARGUMENT
P~TNT I
PLAINTIFF CANNOT ~RLNG A'i'Ir1LPRAC'i'ICE CLAI'VI
TO CHALLENGE HER CRIMINAL C~NVICTIQI~T
A.

Motioaz To I~ismoiss Standard

The test foz determining the adequacy of a pleading under Rule 4:6-2(e} is "whether a

cause of action is `suggested' by the facts." Printing Mart-Morr-rstoivn v. Sharp Electronics.

Corp., l l6 N.J. 739, 746 (2989)(grsoting Yelantzas v. Colgate-Pubz~oli>>e Co., 109 N.T. 189, 192
(1488)). In reviewing the complaint under R. 4:6-2(e), the court must examine the legal
sufficiency of the facts alleged on the face of the complaint. Id. at 746. "A court must dismiss
the plaintiffs complaint if it fails to articulate a legal basis entitling plaintiff to relie#" Sickles v.

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Cabot Corp., 379 N.J. Super 100, 106 (App. Div. 2005).

B.

Legal Malpractice Standard

A plaintiff bringing a legal malpractice claim is required to show "1) the existence of an
attorney-client relationship creating a duty of care upon the atton~ey; 2) that the attorney
breached. the duty owed; 3) that the breach was the proximate cause of any damages sustained;
and 4) that actual damages were incun-ed." Sommers v. McKinney, 287 N.T. Super. 1, 9-10(App.
Div. 1996)(omitting citation). A legal malpractice action accrues when an attorney's breach of a
professional duty proximately causes a plaintiff's damages. Grunwald v. Bronkesh, 131 N.J. 483,
492(1993).
C.

Plaintiffs Unimpeacued Guilty Plea Bars This Action

Plaintiff pled guilty to one count of Conspiracy to corrunit Mail and Wire Fraud for

crimes coininitted from 2001 through 2008 for submitting false information and fake documents

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to Iendirzg institutions u~ co~ulection with loans.

She also pled guilty to three counts of

Bankruptcy Fxaud for concealing her income when she filed the bankruptcy petition on October
29, 2009; falsely testifying under oath at a bankruptcy proceeding on April 23, 2010 regarding
her income; and signing a false and fraudulent statement on March 2, ?010 which sloe view
would be submitted to the bankruptcy court. Plaintiff now asserts that it was NIr. Kridel's
alleged negligent representatiola that led to her criminal conviction. Plaintiff's argument is
incorrect. Plaintiff has adll~itted I~er guilt but has not challez7ged her conviction. Thus, public
policy precludes Plaintiff from circumventing her unimpeached gailty plea in this case.
In Alampi ~~. Russo, 345 N.J. Super. 360 {App. Div. 2001), the court held that a plaintiff's
tu~impeached guilty plea baii-ed lus recovery in a legal malpractice case against his foi7ner
attorney. The plaintiff in Alampi, was an accoui~taiit who provided accounting services to two

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physicians ruruiing a medical practice. Id. at 362. During the course of hi.s employment, an

employee of the medical practice informed plaintiff of an apparent diversion of revenue

generated by the practice. Id. When plaintiff brought these improprieties to the attention of one
of the physicians, he was told to "ignore" the matter. Id. The two physicians subsequently told
plaintiff that "they were being investigated" by the InternaE Revenue Service ("IRS"). Id. The
attorneys representing the physicians advised plaintiff to retain his own counsel_ Id. He then
retained the defendant, attorney Albert Russo (`'Russo"). Id.
After meeting with the IRS, Russo advised plaintiff "not to answer any questions." Id.
Months after this meeting with the IRS, Russo and the attorneys representing the two physicians
asked plaintiff to sign a joint defense agreement and affidavit stating that plaintiff "had made
mistakes in preparing the taxes" for the two doctors and the medical practice. Id. T-Ie refused to
sign these documeirts. Id. A month later, Russo sent plaintiff a letter "memorializing" this

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advice. Id. at 363. Russo later told plaintiff that the IRS was now including him in the
investigation "for potential criminal refer~~al." Id. at 363. Russo subsequently advised plaintiff
"not to discuss the case with tl~e IRS without a Brant of immunity." Id. Russo also reminded
plaintiff that he had the option to cooperate with the IRS, but ad~~ised against it. Id.
Russo suggested that plaintiff"seek the opinion oFother counsel on how to proceed" iFhe
wished, and plaintiff discharged Russo and retained another attoi7~ey. Id. Plaintiff was thereafter
indicted for conspiracy to defraud by prepazing false and fraudulent tax returns. .Icy. He pled
guilty to the misdemeanor of failing to supply information with regard to an IRS investigation, in
violation of 26 U.S.C. ~ 7203, and was sentenced to a twelve month term of probation and
ordered to pay a fne. Id.
Plaintiff theta sued Russo for legal malpractice, contending that Russo neglected to keep

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him properly infornied about the potential of a criminal investigation, and failed to ai7~ange a

meeting vsrith the 1RS at a time when plaintiff argued that the government could have been

persuaded to either grant lum transactional immunity or decline to prosecute him. Id. at 365.
Russo denied that the governn~eiit ever had any inclination to grant plaintiff immunity. Id. The
trial court granted summary judgment to Russo, fording that "public policy precluded this
action." Id. at 362.
Tl~e court found the issue presented "the novel question in this jurisdiction: whethex an
unimpeached guilty plea in a criminal proceeding bars recovery in a legal malpractice action."
Id. at 368. After canvasing the opinions of the jurisdictions that had addressed similar questions,
the court held that plaintiff was precluded from taking a position iii the legal malpractice action
that was inconsistent with tl~e factual basis he gave to induce the criminal court to accept his
guilty plea. Id. at 368-71. The court viewed plaintiffs malpractice action as akin to a collateral

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attack on his criminal conviction. Id. at 366-67. Purtl~ern~ore, the court rejected plaintiff's
argument made in hindsight that Russo's alleged malpractice somehow caused plaintiffs
criminal conduct. Id. at 370. Titus, the court concluded that plaintiff's "thesis for recovery
uz~derniir~e[d] t11e public policy expressed by the doctri~le of judicial estoppel_." Id. at 367. See
also, Totoli v. Mecca, Docket No. A-3005-13T2, 2015 N.J. Super-. Ui~pzeb. LEXIS 105 (App. Div.
Jan. 20, 2015, cer-tif. denied, 221 N.7. 286 (2015), attached as Exhibit K, Perri Cert. (following
Ala~nyi and holding that plaintiff could not bruig legal malpractice claim without some fonn of
exoneration of criminal conviction where plaintiff's attorney allegedly told him to cooperate with
the FBI which led to his arrest and conviction).
In the instant case, as in Alan~pi, Plaintiff's illegal acts occurred prior to Mr. Kridel's
representation in the bankruptcy action.

PIaintiff snbnnitted false documents and made

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misrepresentations in connection with obtaining loans well before Mr. KrideI represented her.

Likewise, the crimes conuliitted by Plaintiff during her banknzptcy case were the result of liei-

failure to disclose information and income that predated her bankruptcy petition, and her false
testimony regarding her prior income. She is, therefo7~e, barred from collaterally challenging her
conviction by suing Mr. Kridel for damages in a malpractice action for a conviction that she has
not challenged in any way and for which she has not been exonerated.
D.

Plaintiffs Complaint rails To Allege Proximate Cause Between The Asserted

Negligence And Her Criminal Conviction
In Alampi, the court dismissed plaintiff's malpractice action brougf~t subsequent to his

guilty plea, where plaintiff "in hindsight asserted] that his criminal conduct was somehow
caused" by his former attonley's failure to convey certain information. 345 N.J. Super. at 370.
However, because plaintiff had clearly and unconditionally pled guilty to a criminal offense
which was committed prior to the defendant attorney's representation, the court would not

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entertain the plaintiffs "highly speculative" claim that plaintiff would have achieved an
"optimum outcome" of no prosecution if his attorney lead used different tactics. Id.
Likewise, Plaintiff in the instant case asserts u1 hindsight that her criminal co~iviction was
someho~.~ caused by Mr. Kridei's handling of her bankruptcy case. Specifically, she alleges than
had Mr. Ki-idel handled her bankruptcy differently her criminal conduct would not have been
exposed and she would not have been convicted. However, this allegation ignores the fact that
Plaintiff was involved in a seven year criminal conspiracy before she was represented by NIr.
Kridel and the crimes s1~e conunitted during the bankruptcy were in furtherance of her effort to
conceal lzer crinnes and income.

T~xerefore, even if Mr. Kridel was negligent, which is

vehemently denied, Plaintiff caruiot argue that her criminal conviction was proximately caused
by Mr. Kridel's negligence. Accordingly, the Complaint should be disrr~issed.

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POINT II

PLAINTIFI''S BREACH OF CONTRACT

CLAIM
SHOULD BE DISMISSED AS A MATTER Or LA~'V

In Count II of the Complaint, Plaintiff alleges a breach of contract claim for breach of the
duties under the retainer agreement between Plaintiff and Mr. Kridel. This assertion fails to state
a claim under New Jersey law.

Legal malpz-actice is grounded in the tort of negligence.

~1~cGr-ogan >>. Till, 167 N.J. 414, 425 (2001); see Gaf~cia v. Kozlov, Seaton, Romanini &Brooks,
P.C., 179 N.J. 343, 357 (2004)("Legal malpractice is a variation on the tort of negligence."). A
plaintiff bringizlg a legal malpractice claim is required to show "1) the existence of an attoineyclient relationship creating a duty of care upon the attorney; 2) that the attorney breached ttie
dti~ty owed; 3) that the breach was the proximate cause of any damages sustained; and 4} that

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16

actual damages were incurred." Sommers v. McKiney, 2~7 N.J. Supez~. at 9-10 (omitting
citation).
New Jersey law does not allow a separate claim for breach oi~ contract where there is a
claim for legal malpractice. Where the esseirtial factual allegations upon ~hic1~ a plaintiff's
claim rests "are that the defendants' perf'orniance of the professional ~~~ark for which the plaintiff
retained them fell short of the skill that an average member of the defendants' profession
ordinarily possesses and of the care that an average memUer ordinarily exhibits in similar
circumstances, the claim is one for professional malpractice, even if the plaintiff denozniilates it
as a claim far breach of contract. See Charles A. Manganaro Consa~lting Eng'rs, Inc. v. Car~rreys
Point Ttiti~. Ser-erage Autlt, 344 N.J. Super. 343, 349 (App. Div. ?001).

Accordingly, the

Plaintiff's breach of contract claim should be dismissed.

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POINT III

PLAINTIFF'S BREACH OF FIDI]CIARY CLAIM

SHOULD BE DISMISSED AS A MATTER OF LAW

In Coiurt III of the Complaint, Plaintiff asserts a breach of fiduciary duty by Mr. Kridel.
However, she has not alleged any basis for such a claim and it fails under New Jersey law. The
only cases in which New Jersey has permitted a breach of fiduciary duty to proceed against an
attorney involve self-dealing, misappropriating client funds or disclosing confidential client
infornlation for the attorney's benefit. See Packard-l3amberger & Co. v. Collier, 167 N.J. 427,
437-38, 443 (2001} (finding that defendant-attorney usurped his corporate-client's economic
opportunity for leis own benefit); Kuye v. Rose~elde, 432 N.J. Super. 421, 481-82 (App. Div.
2013} (attorne}~ alleged to have concocted a series of schemes to eiiricli himself at his clients'
expense).

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3853401

Plaintiff has alleged no such basis for ]ier claim of breach of fiduciary duty against Mr.
Kridel. Instead, Plaintiff is simply alleging her malpractice claim again and calling it a breach of
fiduciary duty. It is clear that such a claim does not lie under New Jersey law. Moreover, sloe
does not dispute, z~o~ ct~uld she, that the underlying crimes were committed by her pi7or to Mi-.
Kridel's representation of her in the bankr~2ptcy matter. S1~e is barred, therefore, from bringing a
breach of fiduciary duty claim far the same reason that she is barred from challenging her
criminal conviction by suing Mr. Kridel and asking for damages for being convicted of various
crimes. Accordingly, the breach offiduciary claim should be dismissed.
POINT IV
PLAINTIFF
LACKS
ST11~iDING
TD
ASSERT A CLAIM AGAINST MR. KRTDEL

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Bankruptcy Code 541 provides that upon commencement of a Chapter 7 pa-oceeding alI

legal or equitable interests of the debtor in property as of the commencement of the case become
assets of the bankruptcy estate. ll U.S.C. 541 (a)(1). Further, any interest in property that the

estate acquires after the coirunencement of the case is also estate property. 11 U.S.C. S 541
(a)(7).

However, causes of action that accrue to the debtor after- the commencement of the

proceeding are not property of the estate. See Moy >>. M&T Mo~-tg. Corp., 2002 U.S. Dist.
LEXIS 5923 at *3, 200? WL 523907 {E.D. Pa. 2002).
The Third Circuit Court of Appeals in O"Dotivd . Ti~zcger, 233 F.3d l97 (3d Cir. 2000)
considered who was entitled to bring a suit against a lawyer who colrunitted malpractice after the
filing of a bankruptcy petition under New Jersey ]aw. The Court held that the plaintiff did not
have standing to assert a malpractice case against her bankruptcy attorney because the e[aims
could be traced directly to pre-petition conduct. In tl~e instant case, Plaintiff alleges that Mr.
Kridel did not im~estigate her untruthful claims sutticiently prior to filing for bankruptcy and had

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he done so he would have realized the extent of her untruthful statements and would not have
fled a petition for bar~la-uptcy and she would not have beezl convicted of crimes. See Complai~lt,
88-134; Exhibit "~", Perri Cert. Accordingly, Plaintiffs claims are alleged to have a basis in
pre-petition actions and could be traced to pre-petition conduct.
In O'Do1~~cl, the defendant filed a motion to dismiss the state court legal
malpractice action on the grounds that the plaintiff lacked standing to bring the action. Id. at
201. The state court ordered O'Dowd to seek a determination in the Bankz~uptcy Court as to
whether that malpractice action constituted estate property. O'Dowd was required to obtain and
did obtain a ruling from the Bankruptcy Court. Id. In the case at bar, Plaintiff is foreclosed
from bringing this case because she lacks standing to do so because the claim of malpractice is a
claim of the estate.

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Moreover, while disclosed assets are deemed abandoned upon the closing of a Chapter 7

ba.nlcruptcy estate under 11 U.S.C. ~ 554(c}, "property that is not fornially scheduled is not

abandoned and therefore remains part of the estate." McLuuglilin v. Ascella Mor~lg., LLC, 2011
Sank. Lexis 4088, 2011 WL 5025335 (D. Ma. 2011). Accordingly, the only entity that can bang
the instant action is the Bankruptcy Tnistee, who is not a party to this suit. Since Plaintiff does
not have standing to bring the instant suit, it must be dismissed.

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CONCLUSION
F'or the reasons stated herein, defendant James A. Kridel, Jr. respectfully requests t11at
this Court grant the Motion to Dismiss The Plaintiff's Complaint.

Respectfully submitted,
GLAUSEN MILLER P.C.

G~ wt _ (~.~
i

Carl M. Perri

CLAUSEN MILLER P.C.

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Ruth V. Simon

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