Opinion
DOCKET NO. A-1297-15T1
05-05-2016
FIORRELLA ROTONDI, on her own behalf and on behalf of a class of similarly situated persons, Plaintiff-Appellant, v. DIBRE AUTO GROUP, LLC d/b/a NORTH PLAINFIELD NISSAN, Defendant-Respondent.
Lessie B. Hill, attorney for appellant. Schiller & Pittenger, P.C., attorneys for respondent (Thomas G. Russomano, of counsel and on the brief; Jay B. Bohn, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Ostrer, Haas and Manahan. On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-1967-13. Lessie B. Hill, attorney for appellant. Schiller & Pittenger, P.C., attorneys for respondent (Thomas G. Russomano, of counsel and on the brief; Jay B. Bohn, on the brief). PER CURIAM
Plaintiff Fiorella Rotondi appeals from an October 23, 2015 order disqualifying Lessie Hill, Esq. from serving as her counsel. We affirm.
On March 29, 2011, plaintiff purchased a new Nissan Altima from defendant Dibre Auto Group, LLC, d/b/a North Plainfield Nissan. As part of the transaction, plaintiff traded in her 2007 Honda Civic and was informed by defendant that she could return at a later date to refinance her new vehicle. Almost a year later, on March 3, 2012, plaintiff returned to defendant's dealership to inquire as to refinancing the Altima.
Although not entirely clear from the record, when performing the refinance, defendant erroneously alleged that plaintiff traded in her Altima on March 3, 2012, and purchased a new vehicle. This was inaccurate as plaintiff traded in her vehicle in March 2011. During the transaction, plaintiff was also charged $199.98 by defendant for antitheft vehicle security etching. Plaintiff contends that this charge, among others, was in error, as she had already paid for the etching when she originally purchased the Altima in 2011.
Plaintiff filed a class-action complaint against defendant on May 30, 2013. Plaintiff alleged defendant violated the New Jersey Consumer Fraud Act (NJCFA), N.J.S.A. 56:8-1 through -20, obtained unjust enrichment, committed theft by deception, breached their contract, and engaged in common law fraud. On June 26, 2013, plaintiff filed an amended complaint and added claims for violation of the Truth-In-Consumer Contract, Warranty and Notice Act (TCCWNA), N.J.S.A. 56:12-14 through -18. None of these pleadings were served on defendant. Defendant was informed of the litigation by TD Auto Finance, LLC (TD Auto), an entity to whom plaintiff mailed a subpoena duces tecum.
We discern that defendant collaborated with TD Auto when customers sought to finance or refinance purchased vehicles.
Plaintiff filed her second amended complaint on September 17, 2013. Plaintiff added TD Auto as a co-defendant. Defendant was served with plaintiff's second amended complaint on September 24, 2013. Defendant filed its answer on October 4, 2013.
Since TD Auto is not involved in this appeal, "defendant" will be used herein to refer only to Dibre Auto Group, LLC.
On September 19, 2014, Judge James Hely entered a discovery confidentiality order (DCO), which was predicated upon a consent order signed by both parties. The order permitted the parties, when responding to discovery requests, to designate certain materials as "Confidential" or "Attorneys' Eyes Only." Paragraphs 1 and 3 of the DCO addressed the use of documents designated as "Confidential."
1. Any party to this litigation and any third-party shall have the right to designate as "Confidential" and subject to this [o]rder any information, document, or thing, or portion of any document or thing: (a) that contains trade secrets, competitively sensitive technical,
marketing, financial, sales or other confidential business information, or (b) that contains private or confidential personal information, or (c) that contains information received in confidence from third[-]parties, or (d) which the producing party otherwise believes in good faith to be entitled to protection pursuant to New Jersey Rules of Court 4:10-2. Any party to this litigation or any third[-]party covered by this [o]rder, who produces or discloses any Confidential material, including without limitation any information, document, thing, interrogatory answer, admission, pleading, or testimony, shall mark the same with the foregoing or similar legend: "CONFIDENTIAL" or "CONFIDENTIAL - SUBJECT TO DISCOVERY CONFIDENTIALITY ORDER" (hereinafter "Confidential").
. . . .
3. All Confidential material shall be used by the receiving party solely for purposes of the prosecution or defense of this action, shall not be used by the receiving party for any business, commercial, competitive, personal or other purpose, and shall not be disclosed by the receiving party to anyone other than those set forth in Paragraph 4, unless and until the restrictions herein are removed either by written agreement of counsel for the parties, or by [o]rder of the [c]ourt. It is, however, understood that counsel for a party may give advice and opinions to his or her client solely relating to the above-captioned action based on his or her evaluation of Confidential material, provided that such advice and opinions shall not reveal the content of such Confidential material except by prior written agreement of counsel for the parties, or by [o]rder of the [c]ourt.
[(emphasis added).]
Paragraphs 2 and 7 of the DCO referred to the use of documents designated as "Attorneys' Eyes Only."
2. Any party to this litigation and any third-party shall have the right to designate as "Attorneys' Eyes Only" and subject to this [o]rder any information, document, or thing, or portion of any document or thing that contains highly sensitive business or personal information, the disclosure of which is highly likely to cause significant harm to an individual or to the business or competitive position of the designating party. Any party to this litigation or any third[-]party who is covered by this [o]rder, who produces or discloses any Attorneys' Eyes Only material, including without limitation any information, document, thing, interrogatory answer, admission, pleading, or testimony, shall mark the same with the forgoing or similar legend: "ATTORNEYS' EYES ONLY" or "ATTORNEYS' EYES ONLY - SUBJECT TO DISCOVERY CONFIDENTIALITY ORDER" (hereinafter "Attorneys' Eyes Only").
. . . .
7. Material produced and marked as Attorneys' Eyes Only may be disclosed only to outside counsel for the receiving party and to such other persons as counsel for the producing party agrees in advance or as [o]rdered by the [c]ourt.
On July 16, 2015, plaintiff filed her fourth amended complaint, which omitted TD Auto as a defendant. Defendant filed its answer on August 12, 2015. On September 2, 2015, defendant filed a motion for leave to file a motion which could include, as exhibits, documents under seal. The judge granted defendant's motion on September 18, 2015.
On that same date, the judge, in a separate order, denied plaintiff's motion for certification of the Rotondi matter as a class-action.
Pursuant to the September order, on October 7, 2015, defendant filed a motion in aid of litigant's rights to enforce the DCO. Defendant alleged that plaintiff utilized materials designated as "Attorneys' Eyes Only" to initiate a separate class-action complaint against defendant in Essex County (Essex County matter) in violation of the DCO. In its motion, defendant sought the consolidation of the Essex County matter with the underlying Rotondi matter, and an order compelling plaintiff's counsel, Lessie Hill, to file a stipulation of dismissal with prejudice in the Essex County matter.
The Essex County matter was captioned, Tamika Jones and Kathryn J. Markowski v. Dibre Auto Group, LLC doing business as North Plainfield Nissan, Docket No. ESX-L-3699-15, Superior Court of New Jersey, Law Division, Essex County. --------
After hearing argument on October 23, 2015, the judge issued a written opinion and an implementing order. In the order, the judge: (a) denied the motion to consolidate, as it was a decision reserved for the assignment judge under Rule 4:38-1; (b) relieved Hill from serving as plaintiff's counsel in the Rotondi matter, due to her "confidentiality order violation"; and (c) referred the matter to the Office of Attorney Ethics.
On November 6, 2015, plaintiff filed a motion for leave to appeal "from the Law Division's Interlocutory Order of October 23, 2015 imposing sanctions barring Lessie Hill from representing Plaintiff/Appellant, Fiorella Rotondi." After we granted the motion, this appeal followed.
Plaintiff raises the following points:
[POINT I]
THE DISCOVERY CONFIDENTIALITY CONSENT ORDER WAS AMBIGUOUS AND UNCLEAR IN ITS TERMS.
[POINT II]
COUNSEL [DID NOT] VIOLATE THE CONSENT ORDER.
[POINT III]
[RULE] 1:10-3 RELIEF TO LITIGANTS DOES NOT PROVIDE FOR PUNITIVE SANCTIONS.
[POINT IV]
[THE] SANCTIONS IMPOSED WERE AN ABUSE OF DISCRETION.
[POINT V]
THE JONES/MARKOWSKI COMPLAINT SHOULD NOT BE DISMISSED.
At the outset, we hold that plaintiff's arguments concerning the ambiguity of the DCO and the Jones/Markowski complaint lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). We therefore confine our discussion to the propriety of the judge's decision to disqualify Hill as plaintiff's counsel.
In finding that Hill violated the terms of the DCO, the judge held:
The case pending before this court in the Union County Vicinage . . . was initially instituted as a class[-]action complaint. Plaintiff's counsel sought and received the ability to discover from defendant dealer documents covering a long period of time of transactions which arguably could have been similar to the transaction in which [plaintiff] was involved. The court specifically permitted discovery in this area. This was done under a confidentiality protective order. This order made specifically clear that documents produced in discovery by the dealer pertaining to other transactions could not be disclosed to anyone outside of the [Rotondi] litigation, "unless an order is obtained or the producing party gives consent to the disclosure." Neither a court order nor adversary consent was ever obtained.
This limitation was spelled out as follows: "material produced and marked as [Attorney's Eyes Only] may be disclosed only to outside counsel for the receiving party and to such other persons as counsel for the producing party agrees in advance or as ordered by the court." This is not ambiguous language. The dealer did in fact produce the documents as ordered, but those documents were specifically protected by the confidentiality order, and marked "[Attorneys' Eyes Only]."
It is worth noting that as the [Rotondi] litigation progressed, court
ordered approval certifying the matter as a class[-]action case was never obtained from the court. Indeed, it was specifically denied. Hence, the [Rotondi] matter ultimately became simply a claim by [plaintiff] against the dealer.
Lo and behold, after the dealer produced the documents under the confidentiality order, a new lawsuit was filed in Essex County . . . . The same attorney representing [plaintiff] in Union County, Lessie Hill, filed this purported new class-action case in Essex County. When asked about this during oral argument of another motion pertaining to this matter, Ms. Hill acknowledged that she had filed these Essex complaints, and that she had found out about the prospective plaintiffs from the documents obtained in the [Rotondi] litigation. She claimed that this was not a violation of the confidentiality order.
She is completely wrong about that. If she wanted to use documents produced in the [Rotondi] matter for another purpose, all she had to do was get consent from her adversary or apply to the court. She did neither. The violation of the confidentiality order is clear. It cannot be ignored by the court.
In the employment of our standard of review, we will "not interfere with the trial court's findings of fact to the extent they find support within the record." Lobiondo v. O'Callaghan, 357 N.J. Super. 488, 495 (App. Div.), certif. denied, 177 N.J. 224 (2003) (citing State v. Locurto, 157 N.J. 463, 470 (1999)). The trial court's conclusions of law, however, "are not entitled to such deference; they are subject to plenary review." Lobiondo, supra, 357 N.J. Super. at 495; see also Manalapan Realty v. Twp. Committee, 140 N.J. 366 (1995).
We commence by stating our concurrence with the judge's ruling that Hill violated the terms of the DCO. The plain language of Paragraph 3 states that absent the consent of the court or defendant, "Confidential" material "shall be used by the receiving party solely for purposes of the prosecution or defense of [the Rotondi] action, [and] shall not be used by the receiving party for any business, commercial, competitive, personal or other purpose[.]" Although we note that this Paragraph references only the use of "Confidential" material by plaintiff in the Rotondi matter, we see no reason why the same restrictions would not apply to the use of "highly sensitive" material designated by defendant as "Attorneys' Eyes Only." To find otherwise would be contrary the purpose of the DCO; which was to protect and limit the use of confidential and highly sensitive material produced by defendant during discovery in the Rotondi matter.
Here, without consent of the court or defendant, Hill utilized materials marked as "Attorneys' Eyes Only" to solicit other plaintiffs and to file a separate class-action in Essex County against defendant. We are satisfied that her conduct was in clear contravention of the DCO and its intended purpose.
Upon finding that Hill violated the DCO, the judge disqualified her from serving as plaintiff's counsel. In making this determination, the judge cited Rules of Professional Conduct (RPC) 3.4(c) and 8.4(c) and (d), and held:
As a result of the conduct of Ms. Hill described above, I am disqualifying her from serving as counsel for the plaintiff in the [Rotondi] matter further. . . . I cannot countenance or reward Ms. Hill by allowing her to further represent the plaintiff in this pending matter. She has violated the trust of the court and her adversary. Such conduct is not acceptable.
In Abtrax Pharmaceuticals, Inc. v. Elkins-Sinn, Inc., 139 N.J. 499 (1995), our Supreme Court held that the standard of review for discovery misconduct is whether the trial judge abused his discretion. In Cavallaro v. Jamco Property Management, 334 N.J. Super. 557 (2000), we applied a similar discretionary standard of review when assessing the propriety of a disqualification of counsel sanction for violation of the discovery rules. Given the abuse of discretion standard of review, we uphold the determination under review unless "an injustice has been done." Id. at 571; see also Cunningham v. Rummel, 223 N.J. Super. 15, 19 (App. Div. 1988).
"In assessing the propriety of a sanction, we recognize that 'apart from any specific provisions of the discovery rules, an inherent authority empowers our courts to impose sanctions for . . . [blatant violations] of the spirit of those rules.'" Cavallaro, supra, 334 N.J. Super. at 571 (quoting Summit Trust Co. v. Baxt, 333 N.J. Super. 439, 450 (App. Div.), certif. denied, 165 N.J. 678 (2000)). We also recognize that "[d]isqualification of counsel is a harsh discretionary remedy which must be used sparingly." Id. at 572.
In Dewey v. R.J. Reynolds Tobacco Co., 109 N.J. 201 (1988), the Court adopted a balancing test to determine when disqualification of counsel was appropriate. The Court held that "a motion for disqualification calls for us to balance competing interests, weighing the 'need to maintain the highest standards of the profession against a client's right freely to choose his counsel.'" Id. at 218 (quoting Gov't of India v. Cook Indus., Inc., 569 F.2d 737, 739 (2d Cir. 1978)). In determining a fair balance, the Court instructed that "a person's right to retain counsel of his or her choice is limited in that 'there is no right to demand to be represented by an attorney disqualified because of an ethical requirement.'" Ibid. (quoting Reardon v. Marlayne, Inc., 83 N.J. 460, 477 (1980)); see also Twenty-First Century Rail Corp. v. N.J. Transit Corp., 210 N.J. 264, 274 (2012). Although Dewey did not involve the disqualification of counsel as a result of a discovery order violation, we find, as we did in Cavallaro, supra, 334 N.J. Super. at 572, that "its basic principles and balancing analysis are relevant here."
Judge Hely held that Hill's conduct violated RPC 3.4(c), which forbids a lawyer from "knowingly disobey[ing] an obligation under the rules of a tribunal except for an open refusal based on an assertion that no valid obligation exists[.]" The judge also held that Hill violated RPC 8.4(c) and (d), which state that a lawyer commits professional misconduct if he or she "(c) engage[s] in conduct involving dishonesty, fraud, deceit or misrepresentation[,]" or "(d) engage[s] in conduct that is prejudicial to the administration of justice[.]" In applying the conduct of Hill to these rules, we find no basis to disturb the judge's holding.
Hill knowingly utilized materials designated as "Attorneys' Eyes Only" to solicit clients and to initiate a separate lawsuit against defendant. Hill did so both in derogation of the DCO and her ethical obligation as an attorney. Despite our recognition of plaintiff's right to be represented by counsel of her choosing, we view a remedy other than disqualification here would tend to assuage the severity of Hill's unethical conduct. As such, we find Judge Hely did not abuse his discretion in balancing the relevant factors and disqualifying counsel. See Dewey, supra, 109 N.J. at 218.
While we do not propose a "bright-line" rule for disqualification of counsel for discovery violations such as what occurred in this matter, we underscore that an attorney's failure to conform to his or her ethical obligations may imperil their client's right to counsel of their choice.
Affirmed. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION