A recent appellate decision has upheld a lower court’s ruling that a law firm and its attorney did not owe a legal duty to an investor who claimed his $200,000 loan was mishandled during a commercial transaction. The case highlights ongoing questions about when attorneys can be held responsible for non-clients’ losses in business deals involving trust accounts.
The complaint was filed by Ahikam BenNaim in the Superior Court of New Jersey, Law Division, Mercer County, against JDNB Capital Holdings, LLC; Kara A. Kaczynski, Esq.; and McNally, Yaros, Kaczynski & Lime, LLC (MYKL). The appeal was decided on April 7, 2026.
According to the court documents, BenNaim is described as a businessman and real estate investor who was approached in September 2020 by members of JDNB Capital Holdings regarding an opportunity to provide a short-term loan. The proposal involved BenNaim lending $200,000 to JDNB with the understanding—based on a document called the “Bridge Loan Package”—that his funds would be held in an escrow account managed by attorney Kara Kaczynski and her firm MYKL. The Bridge Loan Package identified Kaczynski and her firm as JDNB’s “legal team.”
After negotiations between BenNaim and JDNB, MYKL was retained by JDNB to prepare two promissory notes for $100,000 each. Although BenNaim received draft notes indicating that funds would be transferred to MYKL’s trust account, there was no explicit reference to escrow or any requirement for incremental disbursement or approval from BenNaim. Despite being advised to seek independent counsel before finalizing the agreement—a suggestion he declined—BenNaim signed the notes and wired $200,000 to MYKL’s trust account.
When the loans matured without repayment from JDNB, BenNaim attempted multiple times to contact Kaczynski for confirmation that his money remained in escrow but received limited responses due to client confidentiality concerns. After litigation began, Kaczynski acknowledged transferring all funds to JDNB shortly after receipt without seeking authorization or providing notice to BenNaim.
BenNaim initially filed suit against JDNB in July 2021; after securing default judgment against them for $284,000 plus costs when they failed to respond, he amended his complaint to include Kaczynski and MYKL. He alleged professional negligence and breach of duties as an escrow holder.
Kaczynski and MYKL responded by filing their own declaratory judgment action related to insurance coverage disputes with Preferred Professional Insurance Company and Coverys Specialty Insurance Company. These actions were consolidated for discovery purposes in January 2024. Ultimately, summary judgment was granted in favor of Kaczynski and MYKL regarding both insurance coverage issues and BenNaim’s claims.
On appeal, BenNaim argued that there were disputed material facts precluding summary judgment—specifically whether Kaczynski knew about representations made in the Bridge Loan Package regarding escrow arrangements. However, the appellate panel found no evidence that defendants were aware of these representations or had agreed to act as escrow agents for BenNaim’s benefit.
The opinion outlined that under New Jersey law—and following standards set forth by recent Supreme Court decisions such as Christakos v. Boyadjis (2026) and Meisels v. Fox Rothschild LLP (2020)—an attorney owes duties only under narrow circumstances where there is clear invitation for reliance or express fiduciary responsibility towards non-clients. In this case, the court found no such invitation or agreement existed between BenNaim and either Kaczynski or her firm.
Further analysis rejected analogies drawn by BenNaim from prior cases involving misuse of escrow funds because no actual escrow agreement had been formed here; instead all documents referenced only trust accounts with no restrictions on disbursement nor obligations toward notification or approval from BenNaim prior to release of funds.
The court also addressed arguments about ambiguity in contract language but determined that the promissory notes clearly established a lender-borrower relationship without imposing additional requirements on how or when funds could be distributed by MYKL at JDNB’s direction.
In conclusion, the appellate division affirmed summary judgment for defendants based on lack of evidence supporting any legal duty owed by Kaczynski or her firm toward BenNaim as a non-client lender whose money passed through their trust account at their client’s instruction.
Attorneys representing appellant included Patricia B. Quelch (Helmer, Conley & Kasselman PA) and John E. Shields Jr., while Meredith Kaplan Stoma and Anthony A. Doss (Lewis Brisbois Bisgaard & Smith LLP) represented respondents Kara A. Kaczynski and McNally Yaros Kaczynski & Lime LLC. The case is recorded under Appellate Division Docket No. A-2650-24.
Source: A265024_Bennaim_v_JDNB_Capital_Holdings_LLC_Opinion_New_Jersey_Superior_Court_of_Appeals.pdf
