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Keywords

plaintiffdefendantlitigationattorneytrialforeclosurecorporation
plaintiffdefendantlitigationattorneytrialcorporation

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Petit-Clair v. Nelson, 344 N.J.Super. 538, 782 A.2d 960

Facts

Defendants Christian and Phyllis Nelson retained plaintiff Edward F. Petit–Clair to represent their corporations in litigation. To secure payment for legal fees, the Nelsons executed a mortgage on their personal residence. After the Nelsons defaulted on the mortgage, Petit–Clair filed a foreclosure action. The trial court ruled the mortgage invalid, citing the attorney's failure to advise the Nelsons to seek independent counsel, which is a requirement under the rules of professional conduct.

Defendants Christian and Phyllis Nelson retained plaintiff Edward F. Petit–Clair to represent their corporations in litigation.

Issue

Did the attorney's failure to advise the defendants to seek independent counsel render the mortgage invalid?

Did the attorney's failure to advise the defendants to seek independent counsel render the mortgage invalid?

Rule

RPC 1.8(a) prohibits an attorney from entering into a business transaction with a client unless the transaction is fair, fully disclosed, and the client is advised to seek independent counsel.

RPC 1.8(a) prohibits an attorney from entering into a business transaction with a client unless the transaction is fair, fully disclosed, and the client is advised to seek independent counsel.

Analysis

The court applied RPC 1.8(a) to the facts, determining that the mortgage constituted a security interest adverse to the defendants. The attorney had the burden to show that the mortgage terms were fair and that he advised the defendants to seek independent counsel. Since the attorney admitted he did not provide such advice, the court concluded that the mortgage was unreasonable and unfair to the defendants.

The court applied RPC 1.8(a) to the facts, determining that the mortgage constituted a security interest adverse to the defendants.

Conclusion

The court affirmed the trial court's decision, holding that the mortgage was invalid due to the attorney's failure to comply with the ethical requirements of RPC 1.8(a).

The court affirmed the trial court's decision, holding that the mortgage was invalid due to the attorney's failure to comply with the ethical requirements of RPC 1.8(a).

Who won?

Defendants Christian and Phyllis Nelson prevailed because the court found the mortgage invalid due to the attorney's failure to provide necessary legal advice.

Defendants Christian and Phyllis Nelson prevailed because the court found the mortgage invalid due to the attorney's failure to provide necessary legal advice.

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