Argument Date: October 9,?

015
TERESA GIUDICE,
Plaintiff,

SUPERIOR COURT OF NEW JERSEY

LAW D.TVISION

-against-

Docket No.: MRS-L-1861-15

JAMES A. KFZIDEL, JR.,

Civil Action

Defendant.

Hon. Robert J. Brezana~i

PI,A,NTTT+,F TF,RFSA GIUDTCE'S MEM~RANllUM Ok:LAW IN

OPPOSITIC?N TO DEFENDANT KRIDEL'S MOTTfJN TO DISMISS

CARLOS J. CUEVAS,ESQ.
Attorneyfor Plaintiff
Ms. Teresa Giudice
Carlos J. Cuevas, Esq.
Attorney ID #001811985
1250 Central Park Avenue
Yonkers, New York 10704
(914)964-7060
ccuevas576(a~aol.coral

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~'

BUDD EARNER,P.C.
ilttorr~eysfor Plaintiff
Ms. Teresa Giudice
Philip C. Chrnalcis, Esq.
Attorney ID #443181997
150 Joluz F. Kennedy Pkwy.
Short Hills, NJ 07078
(973)315-4520
PCl~ronakis@BuddLarner.com

'I'A13LF OI' CONTE:ti''~'S

PAGE

T'RC~,~MrNARY STAT~M~NT..........................................................

S iiATENLNT GF FACTS....................................................................

AntGUI!?,~N'~'
.....................................................................................

10

~OIN`i' r
1V~S. GIi1Di~'E'S GUILTY P~,r~A ~~~~~
N~`~'
~'R~CLUI~~;~~ER rRQM PROSECUTING
~'~3IS ~.EGAL MALPi2ACTTCE ACTION
AGAINST DE~EN~AN'~'KRIDE~,

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A. Tlr.e Illotio~r to.Dismiss Standard.........................................

10

B. Tlae Legal Malpractice Standard.........................................

11

C. Ms. Gittdice is ~aot Estoppedfrom Prosecuting Her Legal Malpractice

Claim Against Defe~arlant Xridel.............................................

12

D. Ms. Giudree leas Sufficiently Alleged Proxin7ute Cnuse ~~~~~~~~~

Defenct'ant ICridel's Negligence and Her I~zjuries and Dn~nages.........

l6

~OrNT I~

18

~~F~NDAN'!''KRIDE~.,INT~NTIONAI.,LY
BREACHED 1~iS FIDUCIAI2X DUTY TO MS.
GiUl)IC~ AND SHE HAS SUFFERED
SIGNIFICANT DAMAGES; THUS,MS.
vUTDZCE ~-aAS STATED A CAUSE OF
ACTION AGAINST DEFENDANT KRTDEL
FUR BREACH OF FIDUCIARY DUTY

}'AGE
I'()3'!'T ~I~

21

MS. ~~IIJDIC~, ~~AS STANDrNG TO PURSUE

THE CAUSES OF ACTON AGAINST
~3~'.F~,letD~leI'I' K~2][DEL ~3JECAfJ~~ TREY~
NOT PROPERTY ~?F HER BANKR~TPTCY
~;SFATE
~'~:INT [V

24

MS. G~ULICF ~-~~S A~..~..EGED A

CilGNZABL~ CLAIM AGAINST
~LrEnTDANx KR.~DEL FaR BREACH ~~+
~~NT~ZACT;?'~~~?2FFnRF, THE MOTION
"~~O DISMISS S~~(.U~1~ SE DEN~~L*
~ONC~.~J~~~N~................................:.............................

25

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z~l~r_:r, of~ AIITIIORXTXI~,s

ti~SES

PAC E

21?S Lezozne A>>e, Corgi. v. Finco, Inc.,

272 N.3.St~pet'. X478 (App. Div. I994)...........................................

16

Alampi v, Russo,
345 N.J.Super. 360(App. Div. 2001}............................................

15

Atanasov v. Brunswick Bank &Trust Co. (lip r~e Atr~naso~~),

221 B.R. 1 l 3(D.N.J. 199$)......................................................

22

Butner v. U.S.,
440 U.S. 48 (1979}................................................................

21

Ca~obiaj~co v. Sifnolike,
2011 WL 1564627 {D.N.3. 2011)...............................................

20

Charles A. Mangar~as~o Consulting Engineef-s, Inc. v, Carne~~s Point

Tp. Sewerage ~Iutlaofity, 344 N.J.Super. 343(App. Div. 2001).............

25

Conkli7z v. ~Iannoch Weisman,

145 N..i. 39b (1996)...............................................................

16

C~aig v. Suburban Cablevisfon, Inc.,

140 N.T. 623(1995)...............................................................

10

Gr~u~zwccld v. 13rvnkesh,
131 N.J. 483(1993)...............................................................

12, 21,22

Holstein v. Knopfley (In t^e Holstein),

321 B.R. 229(Bankr. N.D.III. 2045)............................................

23, 24

Jetista v. A7urf~a~;
i RS N.J. 175 (2405}...............................................................

11, 12

Kanter- ex f-el. Estate ofSchwartz v. Equrt~cble Life Assur. Svc. of U.S.,

363 Fed. App'x 862(3`d Cir. 2010).............................................:

I9

Kim v. Baik.,
2007 WL 674715 {D.N.J. 2007).................................................

20

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PAUL

C11S?t;5
Levn v. Rite Ard Cofp.,
340 N.J.Super. 462(App.Div.2001).............................................

10

1LIulik v. Hal~rzc~h,
667 F.SuA~-2d 4~5 (D.N.J. 2009)...............................................

17

Moy v. NI & T Mortgage CoY~.,

2002 WL 523907(E.D.Pa. 2002)................................................

23

New ,Tersey Sports PNoductions, Inc, v. Bobby Bostick Promotions, ILC,

405 N.J.Super. 173, 178 {Ch. Div. 2007}........................................

11

O'Do~nd >>. 1f~ueger(In re O'Doivd),

233 F.3d 197 {3`~ Cir. 2000)......................................................

24

Packard-Banaberger & Co., Inc. v, Collief,

167 N.J. 427, 4~3 (2001)..........................................................

18

KI~~C S~~stenzs, Inc. v. ModeNn Technology Gt~oup, Is~c.,

861 F.Su~p.2d 436(D.N.J. 2012)..................................................

24

SornZers v. McKinney,
287 N.J. Super l(App. Div. 1996)................................................

12

State, Dept. ofLativ c~:: Public Safety v. Gonzalez,

142 N.J. 61b(1995)..........................................................~--....

12

Union Ink Co., Inc. v. AT&T Corp.,

352 N.J.Super. bl7(App. Div. 2002)...........................................

10

I~ideo Pipeline, Inc. v. Buena Vista Hoare Enter~tain~nent, Inc.,

275 F.Supp.2d 543(D.N.J. 2003).................................................

24

I~'iatt v. Winston c~: StYaia~~~ LLP,

838 F.Supp.2d 296{DN.J. 2012)................................. ................

I7

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t~'instock v. Galasso,
430 I~T..T. Super. 391 (App. lliv. 2012)............................................
1V

~'assim

Pr~Ci ~;

ST~TUTES
11 U.S.C. 341{a).............................................................

22 M.S.C. X41(a}.............................................................

2l

11 U.S.C. 727(a)(3)........................................................

~ 1 U.S.C. 727(a}(4)(A).....................................................

11 U.S.C. 727{a){4)(B}.....................................................

11 IJ.S.C. 727(a){4)(D).....................................................

18 U.S.C. 152(1}.............................................................

9, 22

18 U.S.C. 152(2).............................................................

9, 22

18 U.S.C. 152(3).............................................................

9, 22

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18. U.S.C. 1349...............................................................

9, 21,22

Fed. R. Banlcr. P. 2004.:......................................................

R. 4:6-2..........................................................................

11

SUPERIOR COURT OF NEW ,JERSEY

LAW DIVISION

TERESA GIUDICE;
Plaintiff,
-against-

Docket No.: MRS-L-1861-15

TAMES A. KRIDEL, JR.,

Civil Action
Hon. Robert J. Brennan

Defendant.

FLA~Ni~~~'~~Y2ESA GtUr~kCE'S MEMORANDUM 4F LA.W ~N OPPpSITrQN

TG-T~~xENFANT JAMES A. I~RInF,i~ JR.'S MOTION `~'O DISMISS
PRELIMINARY STATEMENT
This Mernorazzdum of Law is respectful]y submitted by Plaintiff Teresa Giudice firms.
Giudic~~ in opposition to the Motion to Dismiss of Defendant. James A. Kridel, Jr. ~`KzideP~. Ms.

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Giudice respectfully submits that her detailed Cozx~plaint sets forth a legally cognizable claznn for

legal malpractice. Kxidel failed to exercise reasonable skill in the legal representation of Ms.

Giudice throughout her bar~lcruptcy case. Kridel prepared acid filed the docume7its throughout
the Giudice bankruptcy case that led to Ms. Giudic~s waiving her baxzlcruptcy discharge acid her
conviction for banla-uptcy fraud. After the Giudice bankruptcy case was filed, Kridel pi-eparecl
and filed the numerous banitt~uptcy documents fox which Ms. Giudice was indicted and convicted
for bankruptcy fraud. The Complaint alleges that Kxidel advised Ms. Giudice fa proffer false
testimony at her Section 341 meeting. As set forth Herein iii greater detail, under Winstock v.
Galasso, Q30 N.J. Super. 391 {App. Div. 2012) Ms. Giudice's guilty plea is not a bar to her legal
malpractice action against Kridel.

Tl~e Complaint also alleges that Kridel's legal rrzalpractice was the proximate cause of Ms.
Gi~.~dice's ~vaivir~g leer Chapter 7 discharge and her incarceration. The Complaint alleges, in
tremendous detail; Kridel's z~uznerous errors azac~ omissions throt~gl~oi~t the Giudice Bankn~ptcy
Case, and low Defendant KridePs poor legal advice and represez~ztatioi~ led to Ms. Giudice's
wazver of her ba~Ikruptey discharge arad incarceration.
The Complaint also sets forth a cognizable cause of action against Kridel for bzeach of
fiduciary duty. Tl~e Cor~aplaint alleges that Defendant Kridel intentionally fazled to disclose his
malpractice azad its r~mi~cations to Ms. Giudice. KridePs intentional concealment of his legal
zaialpxaetice was a substantial factor in Ms. Giudice's waiving he~~ Chapter 7 discharge and he~~
incaaceration.
The Complai~lt sets forth a cause of action for breach of contract. A plaintiff is

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simultaneously pezxnitted to prosecute causes of action or legal n~aipractice and breach of

contxact as long as he oz she files an affidavit of merit. Ms. Giudice has attached an affidavit of

merit to her Complaint.

Ms. Giudice lzas standing to prosecute this civil action because it is not pzoperty of her
ba.nl~ruptcy estate. Under New Jersey law a cause of action for legal r~aalpractice accrues when a
~la,intiff sustains damages. The Giudice bankruptcy case was filed on October 29, 2009. The
Complaint alleges that Kridel was negligent throughout the entire Giudice bankruptcy case. On
December 15, 2011 and Decerzlber l9, 2d11, Consent Orders were entered in the Giudice
bankt~ptcy case in which Ms. Giuctice waived her Chapter 7 discharge. On October 2, 2014 Ms.
Giudice was sentenced to fifteen months imprisoniz~ent; supervised release for two years; a
$8,OOd.00 fine; restitution of $414,58890; and a special assessment of$400A0. Ms. Giudice~s
cause of action far legal malpractice accrued subsequent to the coinmenceznent of the Giudice
2

bankruptcy case. Ms. Giudice's claim for legal malpractice against Defendant Kridel is zaot
property of her bankruptcy estate, and tl~ierefore, she has standing to prosecute her claim for legal
malpractice against Kridel.
STATEMENT OF FAC'flS
Ms. Giudice has uo background in finance axed no i~ackground in real estate.(Comb.
42}. At the time ofthe filing ofthe Giudice Bankruptcy Case, Ms. Giuclice was financially
unsophisticated.(Comp. ~j 43). During the period fro~z~ 3anuuy 1, 2004 through t~pril 30, 2009,
NIs. Giudice was atz unemployed housewife. (Comp. ~~ ~4). In May 2049, Ms. Giadice started
appearing on the Bravo television show entitled"7he Real Housewives ofNew .Iersey" {Comp. `~
46). On Se}~temher 14, 2009 Ms. Giudice's youngest daughter, Audriana, was born.(Comp. "j(
47).

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Iu October 2009 Mr. Giusseppe Giudice and APIs. Giudice retailed Kridel to file a joint

bankruptcS~ case for them.(Comp. ~ 61). On October 29, 2009 Ka:idel filed a joint Chapter 7 case

for the Git~dices, In re Giuc~ice, 09-39032(MS), U~-~zted States Baxilcruptcy Court for the District
of New Jersey {the"Criudice Bankruptcy Case').(Comp. ~1~~ 10, 64).
Defendant I~idel was negligent in preparing the Giudice bankruptcy petition, schedules

and statement offinancial affairs.(Comp. ~(~( 88-134). Bankruptcy Code Section 707(b)(4}(D)
states that the attorney's szgz~aYur~ ou the petition and schedl~les constitutes a certification t~lat the
information is correct.(Comp. ~j 88). A cursory perusal of the Giudices' bankruptcy initial
schedules reveals KrxdePs fundamental errors and omissions.(Comp. ~( 103-1 l7). A glaring
example of Defendant I~~idel's negligence in preparing the Guzdices' initial bankruptcy schedules
is Schedule I. {Comp.`j(104). Kz-idel omitted Ms. Giudices empioyrnent on"The Recrl
Housewives ofNew Jerse~3'froni the Giudices initial Schedule I.(Comp. 104). Ms. Guidice is
3

listed as unemployed o1~ her ia~itial Schedule I. {Come. ~( 104}. Tv omit Ms. Giudice's
employrnerlt on a nationally feievised reality show was inexcusable and is reflective of the
negligent manner in 1~vhich the Giudices~ bankruptcy schedules we~e prepared.(Comp. j( 105).
Another egz-egious error in the original Giudice schedules is ICridel's failure to list any of the
automobiles owned or leased by the Giudices.(Comp. ~j 107}. At the time of the commencement
of the Giudice Banla-uptcy Case the Giudices ovtmed a Cadillac Escalade and leased a Maserati.
(Comp.~( 10$).
It is vital to file accurate schedules and statement offinancial affairs because if a debtors
schedules and state~xient ofinancial affairs contain numex-ous omissions or inaccuracies, such
omissions ox inaccuracies could result in a debtor being denied a discharge or being indicted for
bankruptcy fraud.(Comp.'~ 128}.

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I{xidePs negligent pre~aratiazl of the Giudice's initial schedules and statement offinancial

affai7s necessitated a sezies of anlendz~lents to the Giudice's schedules and statement of financial

affairs. (Comp. ~~~ 135-161). On December 17, 2009, Kridel filed Amended Schedules and an
Amended Statement of ~'inazzeial Affairs. {Comp. ~ 14S}. On March 2, 20Z 0, Ksidel filed a
second Amended Schedule F and a third Amended Statement of ~'ina~~cial Affairs.(Comp. y(
159). Nevertheless, after filing various ainendinents to the schedules and statement offinancial
affairs, the United States Trustee would allege in her objection to discharge that there ~~~~~~still
material omissions to schedules and statement of finatacial affairs including but not limited to
Ms. Giudice's interest in the TG Fabulicious business and Ms. Giudice's true income.(Comp.'~(
160). KridePs errors and omissio~is in tI~e preparation of the amended bankruptcy schedules and
amended statement offinancial affairs resulted in Ms. Giuciice being denied leer discharge and
being indicted for certain counts of bankt-uptcy fraud.{Comp. j~ t 61).
4

The meeting of creditors purst2az~t to 11 U.S.C. 341(a) ~2Vleeting of Creditors')zn the

Giudice Bankruptcy Case was held on December 23, 2009.(Comp. ~ 162). Kridel instructed
Ms. Giudice to testify, under oath, at the Meeting of Creditors in an ~intrtlthfiiI manner.(Comp. ~~
i b5). Mr. Gt~idice and Ms. Giudice testified under oath that the information coxatained in the
Petition, Schedules, and Statement of k'inancial Affairs filed as of that date was true and correct.
(Comp. ~1 169). Ms. Giudice testified that she did not hold interests iii any businesses.(Connp. ~~(
l70). Defendant Kridel directed Ms. Giudice to testit'y that skze had no rental income from 11er
rental property in Lincoln Park, New Jersey, which was false.(Comp. ~T 171}. KrideI's negligent
representation of Ms. Giudice in cot~_tzection with the Meetizzg of Creditors resulted in Ms.
Giudice losing her discharge and her being indicted for two coiu~ts of bankruptcy fraud,
concealrz~ent and false oath. (Comp. 172).

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On April 23, 2010, an eaannination field pursuant to Federal Rule of Bankruptcy

Procediu-e 2004 ~2Zule 2004 Examinatiori~ was conducted of Ms. Giudice.(Comp. ~ 173).

Ms. Giudice tes#ified that slie owned TG Fabulicious, LLC, which was not disclosed in either tl~e

initial schedules or amended schedules filed by Kridel.(Comp.~ 175}. Ms. Giudice also testified
t~iat she had a previously undisclosed book deal with Hyperion, an imprint of Buena Vista
Books, In.c., to publish a previo~isl~~ undisclosed cookbook titled"Skin~~y Italian"(Comp. 176).
Kridel's failure to adequately prepaz'e the Giudice bankruptcy schedules and staterz~ent of
financial affairs; his failure to adequately prepare the several past-petition an~endments to the
Giudice bankruptcy schedules and statement offinancial affairs; and his failuz'e to adequately
prepare Ms. Giudice to testify resulted in Ms. Giudice being indicted for bankruptcy fraud.
(Comp. 177).

On .tune 3~, 201 d, John S}~vilolc, the Chapter 7 Trustee of Mr. Giudice and Ms. Giudice
filed a complaint objecting to the discharge of Mr. Giudice and Ms. Giudice, SV1NlI0IC V.

Gl2lL~lL'2,

Adv. Pro. No. 10-01845(MS), United States Bankruptcy Curt for the District of New Jerse~~
f`Tz-ustee Sywilok CompIaznt').(Comp. ~( 178). The First Count of the Trustee Sywilok
Complaint, pursuant to Banlauptcy Code Sectiozi 727(a)(3), sought to deny Ms. Giudiccs
discharge because of alleged conceal~czent of documents, records and papers from which the
Giudices'fnancial condition could be ascertained.(Comp. ~( 179}. The acts complained of
include the failure to disclose an intexest in TG ~'aUulieious, LLC and a book deal.(Copp. ~~(
179). The Second Count of the Trustee Sywilok Complaint, pursuant to Banitruptcy Code
Section 727(a)(4)(A), sought to deny Ms. Giudice's discharge because of alleged false oaths
made in the petition and schedules. (Comp. ~( 180). Tnistee Sywilok alleged false oaths as to

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income, expenses and assets.(Comp. 180). The Tllird Count of the Txttstee Sywilok Complaint,
pursuant to Bantc~-uptcy Code Section 727(a)(4)(D), sought to deny Ms. Giudice's discharge

because of alleged withholding of inforn~.ation concerning her financial affairs.(Comp. l 81).

The acts complained of include the failure to disclose an interest in TG Fabulicious LLC and a
book deal.(Comp. ~ 181).
When Trustee Sywilok filed his objection to disck~arge, Kridel had a conflict of interest
with Ms. Giudice. (Comp. ~ 182). Kridei's negligent errors and omissions iz~ preparing the
znatez-ially deficient schedules and statement offiYiancial affairs and the erroneous amendments
as well as his negligent repxesentation of Ms. Giudice in connecCion with her sworn testimony in
tl~e Giudice Bankruptcy Case caused the Trustee Sywilok Complaint to be filed. Kridel dicE not
disclose to Ms. Giudice that his negligence was the impetus for the Trustee S}~wilok Complaint

~7

to be filed. Co1np. 1~ l 82). Instead, Kridel embarked on a plan to cover up and conceal his
negligence fion1 Ms. Giudice.(Comp. ~ 182).
The (~f~ce of the United States Trustee is a division of the United States Department of
Justice zesponsible for the adniinistratioxl of bankruptcy cases.(Comp. ~'( 193). On Septezr~ber 2,
2010 the Office of the United States Trustee :Filed a complaint objecting to Ms. Giudzce's
discharge, DeAngelis v. Gizsdice, Adv. Pro. No. 10-2150(MS), United States Bankruptcy Court
foz- the District of New Jersey (the"U.S. Trustee Coxn~lainf').(Comp. ~ 194}.
The First Count of the U.S. Trustee Complaint objected to Ms. Giudice's discharge
on account of a false oath, 11 U.S.C. 727(a)(4)(A). (Comp. i95}. Tlie pertinent portion of
the First Count states:
78. Even aftex multiple amendments to their Schedules and Statement of
~'inasicial Affairs, the Defendants still have not filed any amendments disclosing
the existence o:F the book"Skuiny Italzan;'the Defendant wife's publishing deal
with Hyperion, the ~~~~~~~~~~~wife's interest in TG Fabulicious, LLC,and the
Defendant husband's interest iii 1601 Maple Avenue Associates, LLC.

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79. T'he Defendant wife testified at the Meeting of Creditors that she does not have
any interests iri any businesses, which was a false oath in light of her subsequent
disclosure of her ownership of TG Fabulicious, LLC.

(U.S. Trustee Comp. ~jy~ 78-79)(Comp. ~( 195).

The Third Count of the U.S. T7ustee Complaint objected to Plaintiff Giudice's discl~ar~e
on accotuit of tl~e conceali~~ent of property with intent to defraud creditors aftez the ~`iling of the
bankruptcy petition, 11 U.S.C. 727{a}(2){B}.(Comp. 197).
Kxidel failed to disclose to Ms. Giudice that his malpractice was an affi~~mative defense to
the United States Trustee's objection to discharge.(Comp. ~ 201). KiidePs inalpracfice should
1?ave been employed as an affirnlative defense to negate the issue of Ms. Giudic;e's fraudulent
intent. {Comp. `~( 201).
7

Upon information and belief, during the pe~iod of Mt~rch 23, 2011 and March 24, 2011
Defez~d~lt Kridel had at least two telephone conversations with, and correspondence, from the
United States Attorneys Office for tl~e District of New Jersey during which Defe~~dant Iiridel
was notified that the Gi~.idzces were the targets of a federal gzand jury investigation for mortgage
fraud and baf~lcruptcy fraud.(Comp. (207}. On or about Marc11~24, 2011, Kridel received a
letter from the Uzazted States Attoi-~iey for' the District of New Jersey informing hznn that Ms.
Giudice was a. target of a fedezal grand jury far mortgage fiaud and bankruptcy fraud.(Comp. j(
2a8}. Kzidelffled to explain to Ms. Giudice the import of t1~e Target Letter. (Camp. ~ 211).
Ksidel failed to explain to Ms. Giudice that she immediately ~~eeded to retain a criminal attorney
~~ith significant federal white collar crzminal experience because it was probable that she would
be indicted for bankruptcy fraud oz mortgage fraud. (Comp. 212). KridePs actions were

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consequential and injurious to Ms. Giudice because she was not indicted until July 29, 2013.

(Comp. ~ 220). Kridel acted in his best interests to conceal his malpractice from Ms. Giudice,
and he failed to protect Ms. Gzudice, the victim of his malpractice.(Comp. ~ 221).

Kridet exercised poor'judgment because he continued to Iitzgate the U.S. Tnistee

Complaint and engaged in discovery instead of addressing the potential criminal charges against
Ms. Giudice.{Comp. ~j~j{ 223, 230-31). Kaidel failed to warn Ms. Giudice that she could
incriminate herself by engaging in discovery in the pending adversary proceedings.(Comp. ~(
229).
K.ridel mishandled the Giudice Chapter 7 case to the extent that Ms. Giudice's Chapter 7
discharge could i~ot be salvaged.(Comp. 255}, On December 15, 2011, a Consent Order was
entered in c~hich Ms. Giudice v~~aived her Chapter 7 discharge in the United States Trustee's
adversary proceeding objecting to her discharge.(Corrip. `~( 256). On Decen-~ber 19, 2011, a
8

Coi~ser~T Judgment was entered in the Chapter 7 Trustee's adversa~~y proc~edii~~ in which 1~Is.
Giilclice waived 11er discharge.(Comp. j~ ZS7).
Ms. Giudice on July 29,2013 was indicted, U.S.A. v. Giudice, 2:13-cr-00495-ES, United
St~3tes District Court for the District ofNew Jersey.(Comp. x(267). On November 18, 2013 a
First Superseding Indictment fi`FSI') was filed agaziast Ms. Giudice. (Comp. ~ 26~). The FSI
charged Ms. Giudice with comrr~itting thirt~~-three crimes.(Comp. ~( 269). The FSI charged Ms.
Giudice with committing nineteen baz~la~upt~y crizxies.(Comp. 270). Fifteen out of the
i~ineteezl counts for bankruptcy crimes are for incidents that occurred after the Giudice
Bankruptcy Case was filed. (Comp. ~j 271}. The FSi includes counts relating to tl-ce ~unei~dnaents
ofthe schedules and statement of financial affairs; the Meeting of Credito7s; the Fede~~al Rule of
Bai~la~uptcy Procedure 2004 exa.cx~ination; and the deposition in the United States Trustee's

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adversary proceeding.(Con~}~. ~ 295).

On March 4, 20 i4 Ms. Giudice entered into a plea agreement under which she plead

guilty to conspiracy to con~znit mail and wire fraud 18 U.S.C. 1349 (Count 1); concealrrzez~t of

assets in violation of 13 U.S.C. 152(1)(CoLuit 15); false oath in violation of 18 U.S.C. 152(2)
(Co~mt 23); and false declaration in violation of 18 U.S.C. 152(3)(Count 36).{Comp. `~ 296}.
On October 2, 2014 Ms. Giudice was sentenced to fifteen months inlprisorunent; supervised
release for two years; a $8,000.00 fine; restitution of $414,588.9Q; and a special assessment of
$40U.OU.(Comp. ~( 297).

~.

Ak2GUi~IE':VT
PUIi~'T I
n~S. G~~JDICE'S GUILTY PLEA DOES NOT
PRE~LU~E HER FRC1M PROSECUTING
'~'4-i7S ~.,~~A~. MALPRACTICE ACTION
AGAINST DEFENDANT KRIDEL
A. The Motion to Dismiss Standard
The New Jersey Supreme Coiu-t has made the following statements cor~cerniizg a r~~otio~i
to ciiszniss under Rule 4:6-2(e):
Because the matter arises on defendants' motion to dismiss, we accept as
true d~te facts alleged i~1 the complaint. Riedej~ v. De~ccYtment ofTi~ansp.,
221 N.J.Super. 547, 552, 53S A.2d 512(App.Div.1987). The test is
v~~hether the alleged facts`~uggesf'acause of action. Ve1czT~atzas v. ColgcrtePalmolive Co., I09 N.J. 1.89, 192, 536 A.2d 237(1985). Plaintiffs are
entitled to every reasonable inference i~~ thezr favor.

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Craig v. Suburban Ccablevision, Inc., 140 N.J. 623,625-26 (1995). A motion to dismiss
for

failure to state a clazm under R. 4:C~-2{e) shat~ld be granted with great cautiozz. Unzon Ink Co.,

Inc. v. AT&T Corp., 352 N.J.Super. 617,644(App. Div. 2002). The plaintiffs obligation
iti

order to defeat a motion to disrtaiss is`~aot to prove the case but only to snake allegations, which,
if i~z~o~~en, woult3 constitute a valid cause of action'.'Leon v. Rrte Aid Corp., 340 N.J.Super. 462,
472(App.Div.2001}.
Kridel advocates that`~laintiffs claims are ineritless and the Complaint should be
dismissed"{Defendants Me~z7o. of Law ~. 1). Ttlis is simply the incorrect legal standard to
apply
to a motion to dismiss. As set Earth above in the opinion written by Chzef Justice Pollack, all t~ze
allebations in the Complaint are to be accepted as true, and Ile standard for disrziissal tale

10

dismissal of a compIainE is whether the alleged facts"suggest'a cause of action. It is res~3ectfully

submitted that the Complaint"suggests'a cause of action for legal malpractice against Kridel.~
Nevertheless, if ~i~atters outside the ~teading are presented to aiad not. excluded b}~ the
court, the motion shall ~e treated as one for suzzamary judgment and disposed of as provided by
R. 4:46, and all parties stall be given reasonable opportunity to }resent all ~natez-ial pertinent to
such a motion"R. ~:~-2. It is respectfully represented that if the Motion to Dismiss is converted
to a Motion for Summary Jud~n~ent that the Motion for Suinmazy Judgment should be dezaied.
There are numerous material facts in dispute that preclude Kridel being awarded sunaxnary
judgment:
a) Was Defendant Kridel's negligence a substantial factor in Ms. Giudice waiving her
discharge acid pleading guilty to three counts of bankruptcy fraud;
b) Was Defendant Kridel negligent in preparing the amendments to Ms. Giudic~s
schedules and statement offinancial affairs;
c} Did Defendant Kridel z~itentionally instruct Ms. Giudice to testif~~ falsely at her
Sectiol~ 341 Meeting;
d) Was Defendant Kridel negligent in handling the Target Letter;
e) Did Defe7idant K.ridel intentionally conceal his negligence ~~~~~~~Ms. Giudice; and
fl Did Defendant Kridel negligently represent Ms. Giudice throughout the Giudice
Bankrup#cy Case.

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B. The Legal Mal~~ractice Standard
A cause of action for- legal malpractice requires a plaintiffto prove: a) the existence of an
attorney-client relationship creating a duty of care upon the attorney; b)the breach of that duty
by the attorney; and c) proximate causation of the damages claimed by the plaintiff. Jerista v.
Nlurray, 185 N.J. 175, 190-91 (?005). The Appellate Division has made the following
comments concerning the standard of care that a lawyer must fui~iish to a client:

A motion to dismiss is nat converted veto a summary judgnent motion by fiiiz~g ~~ith the court a document
referred to in the pleading. Ne~v Jet-sey Sports Productions, Inc. >>. Bobby Bostick Promotions, I.LC, X105 N.1.Super.
173, 178(Ch. Div. 2007).
11

An attorne}~ is obligated to exercise that degree of ~'easonable l~no~~~ledge

ai d slcilI that lawyers of ordinary ability and skill possess and exercise.
St. Pius,YHouse o~Retreats v. Diocese ofCanzc~er~, 88 N.J. 571; 588;
X43 A.2d l 052(1982). Necessary steps to tiie proper handling of a case
i~zciude caxeful investigation of tl~e facts of the zz~atter, formulation of
legal strategy,fling o~ the appropriate papers; and maintenance of
coinznunicatioi~ with the client. Ziegellzeini v. Apollo, 128 N.J. 25Q, 26 i,

607 A.2d 1298 {1992).

Somme~~s v. McKrn~ey, 287 N.J. Super 1, 9{App. Div. 1996). A claim for legal malpractice does
zaot accxue until the plaizatiffhas suffezed deliages. Gt~unwald v. Brof~kesh, 13I N.J. 483, 492
(1993).
C. Ms. Giudice is not EstoppedfNom Prosecuting Her Legal Malpractice Cl~.~ir~~
Against Defendant Kridel
In a civil action involving tort or contract claims, t ie doctrine of issue preclzzsion does ~~ot
autoinaticaily preclude a plaintiff in a civil trial from contesting the adi~iissions that formed the

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basis for his or her guilty plea. YYinstock v. Galasso, 430 N.J.Super. 391, 396(App. Div. 2013).

The New Jersey Supreme Court has stated:

It is beyond dispute that in a trial involving a cause of action based on

tort or contract, a paz-ty's guilty plea may be used as affirmative,
substantive evidezace against that party. Eaton v. Eaton, 119 N.J. 628,

643, 575 A.2d 858 {1990); Stoelting v. Hauck, 32 N.J. 87, 106, 159 A2d
3~5 (1960). In such civil ptoceediugs, the guilty plea is introduced into
evidence as an admission, but it does not constitute conclusive proof of
the facts underlying the offense. Eato~r, supra, 1 i9 N.J. at 644, 575 A.2d
858. In that context,"the party who has entered the plea may rebut ox
othen~vise explazn the circumstances suxrounding the adinission'.'Ibid.
{citations omitted}. Consequently, the doctxine of issue preclusion does
not prevent the pleadzng party in t3ie trial of a tort or contract claim from
contesting the admitted facts.

State, Dept. ofLaw &Public Safety v. Gonzalez, 142 N.J. 618, 624 (1995).
is

A rece~~t case in which the Appellate Division held that a plaintiff who had pled guilty to
a crime was permitted to prosecute a legal malpractice action against his former attorney is
12

WirZstock v. Galasso, 430 N.J.Super. 391 (App. Div. 2013). There, the Plaintiff Richard
Winstocl~s limited liability company retained the defendant to furiaish legal advice concerning
the operation of pokez totunaments. The defendant p~~e~ared a memorandum concerning tl~e
legality of the Winstocl~s limited liability company's proposed business. The defendant tendered
an opinion that the proposed operation of a poker tournament by the limited liability coxilpany
would not violate New Jersey law. Wirzstock was taped by an undercover agent stating that he
had a legal opinion that his poker tournaza~ez~t was legal. Winstock was subsequently ai-~-ested ad
pleaded guilty to fourth degree maintenance of a g~unbling zesort for participating in tl~e proceeds
of gambling activities and to thi~d degree pronrzoting gambling.
The Appellafie Division ruled that Winstock could prosecute the legal malpractice action
against the defendant, his former attorney. The couz`t distinguished the Alarnpi decision, which is

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relied upon by Kridel, and it stated:

As our extensive review of the facts underlying our decision in Alampi

shows, tIae plaintiffwas already involved in criminal activzty as an
accountant by failing to report to the IRS the uzilawfitl diversion and
concealment of income by his clients, before he retained t ie defendant.
Alarnpi, supra, 345 N.J.Super. at 3b465,735 A.2d 65. Anothez
significant distinction froYn the facts here, the colloquy between the
plaintiff and the federal judge illust~ate that the ~iaintiff knew he was
violating the law before he retained the defendant. See ibic~

Id. at 415.
The court reasoned t~lat Winstock proceeded with the venture after he had obtained legal
advice from the defendant that the proposed business venture was legal. The Appellate Division
stated:
It is undisputed that all of this activity Richard ~~~instock admitted lie
engaged in occurred after he had retained defendant as his legal advisor.
Accepting plaintiffs' version of events in the light most favorable to
them; as required under Rule 4:46-2(c), defealdant reviewed and approved
13

plaintiffs' business model in kris November 23, 2004 legal memor~z~dz~m.

Althou~;l~ defendant's legzai~inion may not l~~ve absolved RicI~ard
Winstack of criminal re~orzsibilit~for his actzons Mr. Winstock's
admission of criminal curability did riot zelieve defendant of his duty to
~ovide plaintiffs 1~-ith legally correct advice. (Eznpl~asis added).
Td.
Equally important, even if Winstock's statements before t11e crirz~inal court were
interpreted as azz unequivocal admission that he ~uas operating a gairzbling z~esort that such
admission is not dispositive of the defendant's potential civil liability for lazs alleged incorzect
legal advice. In a trial involving a cause of action based ozi tort or contract, a parts guilty plea
does not constitute conclusive proof of ttie facts undez~lying the offense.
The cotu~t concluded by suinn~arizing its holding:
Richard Winstock's admissions at the plea liearii3a may be evidential in
his civil claims of professional malpractice against defendant. His lea
alone, howevex, does not preclude hinl or Jeiuiifer VVinstocl< from
arguiu~ that defendant`s alleged professional negli~~ence was a proximate
cause of the damages they iiicurz~ed by o~eratin~ the fifth Street Club,
LLC. (Emphasis added).

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Icy. at 418.
Under Winstock, Ms. Giudice's guilty ilea to bankruptcy fraud is not a bar to the
prosecution of this civil action. Ms. Giudice retaz~aed Kridel to prepare her bankruptcy
doctunents, and to represent I~er in tl~e Gii~dice Bai~icruptcy Case.{Camp. 4, 62). Prior to
engaging KrideI, Ms. Giudice i~ad not conunitted any type of bankruptcy crime. Defendant
I~idePs ni~tnerous errors anti omissions resulted in Ms. Giudice beitzg incaz'cerated. (Comp. 4).
Ms. Giudice's Complaint catalogues the i~.tuilex-aus instances of Kridel's negligence. (Comp.
61-266). Paragraph 316 of the Complaint provides a summary of Kridel's post-petition
negligence:

14

(a) representing the Plaintiff tkuoughout t ie Bankruptcy Case whew it was appa~~ellt
that he lacked the ability to competently represent the Plaintiff;
(b} alegligently preparing materially ii~accuz~ate amendments to tlxe
schedules aild statement of financial affairs;
(c) negligently advising Plaizatiff tl~uoughout the Banla-uptcy Case;
(d} z~egligez~t z-epresei~tation in cot~ection with the Section 3~k1 Me~tin;;
{e) negligent representation in coruiectioi~ with the 2004 Exan~iaaafiozl;
(~ waiving the attoxney-client privilege by appearing with Plaintiff
Giudice ai d discussing matters pertaining to the Giudice Banla~uptcy Case
on the Real Housewives of New 3ersey;
(g)failing to disclose his conflict of intez~est; and
(h) negligent representation in connection with the Target Letter.
(Comp. X1316). Under N~i~tstock, despite her guilty plea, Ms. Giudice is authorized to prosecute
her claim fo~~ legal malpractice ag~insfi Kridel.
Kridel's reliance onAlampi v. Rrssso, 345 N.J.Super. 360 {App. Div. 2001)is misplaced.
There; the plaintiff was engaged in the criminal conduct that he sought to hold the attorney
accountable for in the malpractice action. Izi tl~e case at bar, NIs. Giudice is alleging that it is

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I~~idel's negligent legal representation that is responsible for the waiver- of her Chapter 7

discharge, her indictment for baa~latiiptcy fraud, at~d her guilfy plea for bankruptcy fraud. For

example, Paragraph 165 of the Gitxdice Complaint states:"Defend~7t Kridel znstructed Plaintiff
Giizdice to testify under oath at the Meeting of Creditors in an untruthful manner"(Camp. 165).
Ms. Giudice has alleged that the reason she is incarcerated is because slle followed Kride]'s legal
advice. (Comp. ~~`~( 2, 4}. Under these cireiunstances, yVinstock, is controlling and Alampi, is
inapplicable.

D. Ms. Giudice has Stffiriently Alleged Proximate Carrse Betrveef~ Defendant

Kriclel's Negligei7ce and Her Injwies and Damages
The New Jersey Supx-eme Court 11as adopted the"substatatial factor tesf'for pz~nxir~atP
cause in legal malpractice cases, and it has stated:
Generally, our cotaeepts of causation for' failure to act az-e expressed its
terms of whether the negligent conduct may be considered a substantial
factor contributing to the loss. See Brown v. Uraited States Stove Co., 98
N.J. 155, 171, 484 A.2d 1234 {1984) `With respect to concurrent
~zoximafe causation, a tortfeasor will be held answerable if its `negligent
conduct vvas a substantial factor in bringing about the injtuies,' evert
where there are `other intervening causes which were foreseeable or were
t~.orrnal incidents of tI-~e risk created"~(quoting R~~ppr~port v. tiTichols, 31
N.J. 188, 202, X56 A2d 1 (1959)). Although the law ~fnegligence
recognizes that there may be auy number of concurrent causes of an
injury,"[nJever-theless, these acts need not, of themselves, be capable of
producing the injury; it is eziough if they area `substantial facto'in
bringi~ig it aboi~t'.'Scott v. Salem Count~~ Memorial Hosp., 116 N.J.Super.
29, 33-34, 280 A.2d 343 (App.Div.1971).

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Conklin v. Haf~noch i~eisfnc~n, 145 N.J. 396,419-20(1996). Tlie test ofproxiinate cause
is

satisfied ~~lhere the negligent conduct is a substantial contriUuting Factor in causing the loss.

2175

Lernozne Ave. Corp. v. Frnco, Inc., 272 N.J.Super. 478, 487(App. Div, 1994).
In the case at bax, the classic example of substantial contributing factor is Defendant
Kridel's negligent handling ofthe Target Letter. (Coizlp. `~~ 207-54}. Paragraphs 217-219 of tl~e
Con~~laialt state:
2I7. Plaintiff Giudice was relying upon Defendant Kxidel to protect laer
Iegal interests.
218. Defendant Iiridel knew that Plaintiff Giudice was totally dependent
upon him fot legal counsel.
219."When Defexzdant Kridel received the Target Letter he was aware
that Plaintiff Giudice's liberty was at stake, and he failed to refer Plaintiff
Giudice to a conlpeter~t criminal attorney specializing iii federal cxiininal
lar~~ to protect Izer fro~ii a potential federal criminal indictrrzent.
(Comp. j~~1217-19).
I6

A~~othex~ example of pruxin~ate cause and substantial facto' is tl~e waiver of Ms. Giudice's
discharge. Ms. Giudice had to waiver her Chapter 7 discharge. The Complaint alleges that
because of Defendant Kridel's negligence Ms. Giut3ice hacl to waive her discharge. {Comp.'~j~
27,188-$9). The pertinent portion of Paragraph 27 of the Complaint states:"As a result of
Defendant KridePs multiple errors and omissions Plaintiff Giudice waived hey- bankruptcy
discharge ..."(Comp. j~ 27). Paragx-aphs 188 and 189 of the Complaint allege:
188. Defendant Kridel was i~ot competent to handle t1~e Giudice
B~nla-tiptcy Case.
189. At every stage of the Giudice Bankruptcy Case Defendant Kridel
made cx~ztical errozs that resulted in two objections to discharge being
filed against Plaintiff Giudice.
{Comp ~1~) 188-89).
The Complaint also alleges that it was Defendant Kridel's negligence that was the

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pzoximate cause of criinil~al charges being brought against Ms. Giudice and Ms. Giudice having

to plead guilty to three counts of bankt'uptcy fraud. (Comp. Z, 4, 27, 253, 254 & 305). Ms.

Giudice plead guilty to four counts, ai-~d three of the counts were for bankruptcy fraud.(Comp.'~
296).
Under these circumstances, Ms. Giudice has sufficiently plead that Defendant Kridel's
negligence vas a substantial facto- in her waiving her bankruptcy discharge axed pleading guilty
to three counts of bankruptcy fraud. i~icrtt v. T~linston & Strawn .L LP, 838 F.Supp2d 296, 3d9-13
(D.N.J. 2012); Mcrizlc tip. Hannah, 661 F.Supp.2d 485, 491-93 (D.N.J. 2009).

POlI~1'II
DESFNDANT KRIDEL INT~NTInNALLY
I3REACHEI? HIS FIDUCIARY X?UTY TO NIS.
GII1J~~E AND SHE HAS SU~'FEREll
SI~I~7it+I~A.NT DAii~A,G?~+;5; TH~liS,1~~S.
GUa~I 'E r~A.S STATED A CAUSE OF
ACTION AGAINST DE~'~NDANT KRIDEL
FJR BREACH Obi+ FIDUCIARY DUTY
T11e New Tersey Supreme Court has made tl~e following comments concerning a cause of
action for breach of #iduciaiy duty as it relates to an attorney:
Stated plainly, an attorney wino intentionally violates the duty of loyalty
owed to a client commits a mere egregious offense than one who
negligently breaches the duty of care. A client's claim concerning the
defendant-attorney's breach of a fiduciary duty ma~~ arise in the legal
malpractice context.

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Packard-BarnbeYger & Co., Inc. v. Collier, 167 N.J. 427, 443 (2001).

The Complaint alleges a fiduciary relationship between Ms. Gitidice and Kridel.(Comp.

`~~ 62). Tl~e Complaint alleles tl~e numerous ways in which Kridel inte~~tionally breacl3ed leis

fiduciary duties to Ms. Giudice:

a) Defendant Kridel repeatedly chose to conceal his en~ors and omissions to his
client, despite his State-licensed duty to do even-}thing in his power to advance
the interests of hzs client and protect P1aii~tiff Gzudice from a federal cxi~~~znal
prosecution and incarceration.(Comp. ~j 21}_
b} Defendant Kridel instructed Plaintiff Giudice to testify under oath at the Meetitlg
of Creditors in an untruthful manner.(Cozz~p. 165).
c) ..When the Chapter 7 Tr~isfee filed his objection to discharge Defendant Kridel
had a conflict of interest wit11 Plaintiff Giudice. Defendant KridePs negligent
errors and omissions in preparing the maternally deficient schedules anti
statement of financial affairs and the erroneous amendments as welt as his
negligent representation ofPlaintiff Giudice in connection with her sworn
testi.rx~ony in the Giudice Bankruptcy Case caused the Trustee Sywilok
Complaint to be filed. Defendant Kridel did not disclose to Plaintiff Giudice that
is

his negligence was the impetus for the Trustee Sywilok Complaint to be filed.
Instead Defend~ult ICridel embarked. on a plan to cover up and conceal his
xzegligence fioin Plaintiff Giudice. {Coznp.~ 182).
d) Defendant Kridel did Plaintiff Giudice a grave disservice by faili~~g to reveal to
filer that he had a conflict of interest. (Comp.~(186}.
e) Defendant Kridel faited to disclose to Plaintiff Giudice that Ile has commi~iecl
malpractice tlu-oLighouf his representation of her in the Giudice Banlciuptcy Case.
{Comp. j( 200).
~ Defendant Kridel failed to disclose to Plaintiff Giudice ttzat his malpractice was
a~~ affirmative defense to the United States Trustee's objection to discharge.
Defendant KaictePs malpractice should have been employed as an affirmative
defense to Negate tI~e issue of Plaintiff Giudice's fraudulent intent.{Comp.~ 2Q1),
g) Defendant Kridel failed to disclose to Plaintiff Giudice that he lead a conflict o~
interest old that he should not have represented her in connection with the United
States Trustee's objection to discharge.(Comp. ~~j 202).
h} Defendant Kridel breached his fiduciary relationship with Plaintiff Giudice by,
amozzg other tl~izigs: {a) representing her even though 11e knew or reasonably
should have known that he was not competent to represent her;(b)covering up
and concealing his legal n~aIpractice ttuol~ghout the Giudice Bankruptcy Case;
(cj failing to prope~~ly advise Plaintiff Giudice in connection with Plaintiff
Giudice's testimony durizlg tl~e 341 Meeting and the 2004 Examination..;(d)
failing to disclose his conflict of interest; and (e)failing to properly advise
Plaintiff Gitzdice in coiuiection with the Target Letter.(Comp. 4, Co~int III)..

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A cause of action for breach offiduciary duty also requires that the plaintiff allege that he
or she leas been dai7iaged by the breach of fiduciary duty. Kantef~ ex gel. estate o~'Schwartz v.
Equitable Ifife ~lssur. Soc. of U.S., 363 Fed. ~lpp'x 862, 866 {3`d Cir. 2010}. In lie~~ Complaint,
Ms. Giudice has alleges that she been damaged by Kridel's numerous breaches offiduciary duty.
(Comp. j( 4; 27). Ms. Giudice tivaived her bankruptcy discharge; she was co~rz~pelled to plead
guilty to three counts of bankruptcy fraud; and she was sentenced to a period ofincarceration of
fifteen months, supervised release for two years, a $8,000.00 fne, restitution of $414,SS8.90, and
a special assessn~eni of $400.00. (Comp. ~~ ?7).
fi7

Tl~e cerise of action for breach of fiduciat-y duty alleges that Kz-idel instructed Ms.
Giudice to lze uz~dez oath at her Meeting of Creditors. (Comp. 165). Ms. Gi~idi.ce was
subsequently indicted for her tesizmo~ly at the Meeting of Creditors. {Comp. ~ 281). Under
Winstock v. Gcrlusso, 430 N.J.Supef. 391(App. Div. 2013) Ms. Giudice's guilty plea is not a far to
this action Uecause it is alleged that Ms. Giudice relied upon Defendant Kridel's legal advice
t~iraugl~out her bankruptcy case. K~~ide1 was the sole counsel of record for Ms. CJiudice during the
pendency of her bai~uptc}~ case.
An action can be maintained for both legal malpractice and breach of fiduciary duty when
there is an inte3ltional breach of fiduciary duty by ~i attorney. Capobinnco v. Si~nolike, 2011
~NL, 1564627 at 3 (D.N.7. 20l 1); Kinz v. Baik, 2007 WL 674715, at 3 (D.N.3. Feb. 27, 2007). In
Capobianco v. Sinaolike, 201] WL 1564627(D.N.J. 2071)t ae coua-t denied a x~notion to dismiss a

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claim far breach offiduciary duty. The court stated:

Accepting all ofPlaintiffs allegations in the Complaint as true, Plaintiff

has stated a plausible claim for breach offiduciary duty. Plaintiff has
alleged the requisite attorney-client relationship (see CompL `~~ 5$-6I), a.0
alleged breach of that relationship through representation of Plaiiatiff and
the Buyers wlio had competing interests and an allegedly intentional
failure to record the mortgage (see Coi~~pl. ~ 63-b5, 16, 23}, and
resulting damages (,see Compl. j( 66). See King v. Bark, 2007 WL 674715,
of ~`3 (D.I~T.J. Feb. 27, 2007)(denying motion to dismiss breach of
fiduciary duty claim where plaintiff alleged attorney-client relationship
and potential intentional misconduct}.

Id. at 3. Therefore, Kridel's Motion to Dismiss should be denied.

20

P~II~TT III
MS. GIUBXC~ IIAS STANDING TO PLTRSU~
TIFF CAUSES OF ACTION AGAINST
DEFENDANT ~I2IllEL BECAUSE THEY AILS
N(;T PROPER'~"~ OT'HE'R ~3ANKk2UPTCI'
~S'I'A'TE

Bankruptcy Code Section 541(x.} defines what constitLrtes property of the estate. 11
U.S.C. 541(a). Property interests izz bankruptcy cases are determined by non-bankruptcy law.
Butne~~ v. U.S., 440 U.S. 48, 55 (1979).
Here, the causes of action for legal malpractice, breach of cozlh~act, and breacl~ of
fiduciary duty accrued after the commencement of the Giudice Bank~~uptcy Case. A legal
malpractice claim acen~es when a lavvyer's breach of professional duty proximately causes a

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pIaintiff's damages. Grainwald }~. Bronkesh, 131 N.J, 483,492(1493).

On December 15, 2011 a Consent Order was entered in which Ms. Giudice waived bez~

Chapter 7 discharge i~l the United States Trustee's adversary proceeding objecting to Izer
discharge.(Comp. x(256}. On Decerzlber 19, 2011 a Consent Judgment was entered in the
Chapter 7 Trustee's adversary proceedinb in which 1VIs. Giudice waived her discharge.{Comp. j~
257).
On July 29, 2013 a criminal indictrnezlt was filed against Ms. Giudice, U.S.A. v. Giuclice,
2:13-cr-00 95-ES, United States District Court foz tlae District of New Jersey.(Comp.~ 267).
On November 18, 20l 3 the FSI was filed against Ms. Giudice. (Comp. 268). Fiftee~l out of
the nineteen cotu2ts for baulcruptcy crimes are for incidents that occurred after the Giudice
~3an3:suptcy Case was filed.(Comp.`i1271). On March 4, 2014 Ms. Giudice entered into a plea
`

agreement under w11icI~ she plead guilty to conspiracy to commit mail and wire fraud 18 U.S.L.
21

1349 {Count 1); concealment of assets in violation of 13 U.S.C. 152(1)(Count 1S}; false oath in
violation of 18 L1.S.C. 152(2)(Count 23}; and false declaration in violation of 18 U.S.C. 152
(3)(Count. 36).(Comp. ~( X96). On Octo~ez- 2, 2014 Ms. Giudice vas sentenced to fifteen months
imprisonment; supervised release fog two years; a $8,000.00 fi~~e; restitution of$414,588.90; and
a special assessment of $400.00.(Comp. j~ 297).
Tl~e Complaint alleges ntnnerous neglige~lt acts committed by Kridel after the
commencement of the Giudice Bank~~uptcy Case:
(aj representing the Plaintiff tlu-oughout the Baxzkruptcy Case whet? it
was apparent that he lacked t13e ability to competently represent the
Plaintiff;
(b)negligently preparing materially inaccurate amendments to tlae
sck~edutes and statement of financial affairs;
(c) negligently advising Plaintiff throughout the Bankruptcy Case;
{d)negligent zepresentation in connection with the Section 341 Meeting;
(e) negligent representation in connection with the 2004 Examination;
(f} waiving tl~e attorney-client privilege by appearing with Ms. Git~dice
and. discussing matters pertaining to the Giudice Bankruptcy Case on the
Real Housewives of New Jersey;
(g)failing to disclose his conflict of interest; and
{h)negligent representation in connection with the Target Letter.

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(Comp. ~~ 3l 6)
Ms. Giudices cause of action for legal malpractice is predicated upon acts that occurred
subsequent to the filing of the Giudice Bankruptcy Case. The accrual of Ms. Giudice's cause of
ac#ion for lebal malpractice occurred years after the Ming of the Giudice Bankruptcy Case.
Gr~uyz~~~ald v. Bfonkesh, 131 N.J. 483,492 {1993)(a claim for Iegal x-~ialpz~actice does not accrue
until plaintiff has been damaged). Therefore, Ms. Giudic~s action for legal malpractice is not
property of the estate. lttunasov v. Bfunswr.'ck Bank &Trust Ca (In re ~ltanasov), 22l B.R. T 13
(D.N.J. Y 993)(~nalicious prosecution actio~l that acczued after filing of bankruptcy case is not
j
~

c
f

property of the estate).

22

Defendant ICride]'s Bost-petition negligence is also tl~e basis for Ms. Giudice's breach of
contract action. Ms. Giudice count for breach of contract specifically incozporates the prior
allegations contained in the count for Iegai malpractice.(Comb.`~ 1, Count II). Ms. Giudice's
cause of action for breach of contract arose post-petition, and therefore, she has standi7ig to
prosecute the cause of actiol~ for breach of contract. Moy v. M & T Mortgage Cofp., 2002 WL
523907 p.3 (E.D.Pa. 2002}(estate does not have an interest iia a cause of action. that accnies postpetition}.
Ms. Giudice also leas standing to prosecute the cause of action for breach offiduciary
dirty. The acts alleged to constitute a breach of fiduciary duty all occurred post-petition. (Coz1~p.
'~j~ 4-9, Count III}. The cause of actioza for breach offiduciary duty accrued post-petztion when
she suffered her damages. Therefore, Ms. Giudice has standing to prosecute the cause of actio~a

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for breach of fiduciary duty. Holster.'n v. K~opfler (ha re Holstein), 32i B.R. 229(Bankr. N.D.III.
2005).

In Holstean v. Knopfler (In re Holstein), 32I B.R. 229(Bankr. N.D.III. 20Q5)the debtor

alleged that his fox-nier attorneys failed to exercise proper supervision over the preparation of his
'

petition acid schedules; failed to identify and schedule assets that the debto~~ was alleged to have
transferred; and failed to raise a timely objection to a creditor's claim. The court ruled that a Legal
malpractice action against the debtor's attorney was not property of tl~ze estate. The court stated:
Holstein had suffered no loss as of June 19, 2000, when he filed his
petition. "The loss that forms the basis of Holstein's malpractice
complaint(in fact, the only loss the complaint mentions} is the`~nancial,
professional and personai'loss resulting from the denial of his discharge.
The discharge, however, was necessarily denied post-petition. Indeed, it
was not denied until September 24, 2003, more than three years after' the
bankruptcy began. Holstein's cause of action therefore could not ha~e~e
accrued be#ore that date. Until his discharge was actually denied,
Holstein's injury was merely a possibility: there was still a chance he
23

would defeat the Uoldberg adversazy. The`~nere possibilit}~'of hams does

not give rise to a legal malpractice claim in Illinois.
Icy at 2;b.`
I'(JT~tT l~V
NIS. ~IIJD~CE I-IA.S ALLL~~i~ A
~:'~GNIZABLE C~A~M AGAINST
~Ek'ENX:ANI' KI2IDEL FOR BREACH OF
`:ON~'RACT; THETt~Ta'ORE, T'kl;~ MOTION
iiO ,'~ISIVIISS SI~f~ULD BE DEriIE
Unde7~ New Jersey Lavv the elements ~oz' a breach of contract actiar~ are the following: 1)
the existe~~ce of a valid conriact; {2) a Ureach of that co~ztract; and (3) resu~tizig damage to the
plaintiff RNC Systems, Inc. v, Moc~e~n Technology Group, Inc., 861 F.Supp.2d 436, 444(D.N.J.
2412}. Ms. Gitidice has allegecE that Mr. Gittdice and she retained Kridel to file a joint Chapter 7
petition for them.(Comp.'j~ 62}. Ms. Giudice has alleged z~unierous material Ureaches of tl~e

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contract ~y Kridel.(Comp. ~~~135-297). Ms. Giudice has alleged that she has been damaged by

Kridel.(Comp. ~~J 255-58 & 296-97). Therefore, Ms. Giudice has alleged a claim for breach of

contract. Video Pipeline, Inc. v. Buena Vista Home Entertainment, Inc., 275 F.Supp.2d 543, 566
(DN.3. 200}.
KsidePs reliance on ChaNles A. Nlanganaro Consulting Engirzeer-s, Inc. v_ Carneys Pornt
Tp. Sewerage Authofity, 344 N.J.Super. 343(App. Div. 2001} is likewise misplaced. 7n
Mangc~nciro, the Appellate Division held that when suing for breach a~ contract concerning a
KrideYs reliance on O'Dvwd v. Tiueger (In re O'Do1vd), 233 F'.3d 197(3`d Cir. 200(}) is misplaced. In 1990 the
debtor purchased an aparnnent building, and had an attorney represent her named Mr. Sevack. The debtor filed for
Chapter 1 l on March 27, 1992. '1he debtor subsequently sued Mr. Sevack for legal malpractice ("Lawsuit I). It was
undisputed that Lawsuit I was property of the estate. Lawsuit I was eventually settled. The debtor subsequently
sued Mr. Trueger wlio had represented her in Lawsuit I because several claims had been omitted and were tzme
bared ("Lawsuit T7"). The court ruled that Lawsuit II vas property of the estate because it was the estate that was
banned because of Mr. Tzueger's malpractice. Undea~ these circumstances, ICridel's Motion to Dismiss should be
denied:
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legal services contract an affidavit of merit was required. Therefore, a plaintiffis not bar7~ed
from. suing for both breach of contract and legal malpractice. An affidavit of merit is attac~~ed to
Ms. Giudice's Complaint.
CONCLUSION
Foz- all the reasons set forth herein Ms. Giudice respectfully requests that this Court deny
Defenda~lt Kridel's Motiozi to Dismiss.
Respectfully submitted,
CARLOS J. CUEVAS,ESQ.
Attorney far Plaintiff
Ms. Teresa Giudice
r

BY~

~ e~
C os J. Cuevas
Attorney ID #001811985
1250 Central Park Avenue
Yonkers, New York 10704
Tel_ No. 914.964.7060
Ccuevas576@aol.com

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BUDD EARNER,P.C.
Attorneysfor Plaintiff
Philip C. Clu'r~akis, Esq.
Attarz~ey YD #043181997
I54 John F. Kennedy Pkwy.
Short Hills, NJ 07073
(973)315-1520
PChronakis@BuddLarner.com

Dated: September 30, 2015

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