ROBERT COLLETTI v. JOHN McLAUGHLIN

(NOTE: The status of this decision is .)
 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-3397-08T23397-08T2

ROBERT COLLETTI,

Plaintiff-Appellant,

v.

JOHN McLAUGHLIN a/k/a JACK

McLAUGHLIN and SANDRA

BALISTRIERI A/K/A "SANDY

BALISTRIERI,"

Defendants-Respondents,

and

MARY GOLDBERG, VITTORIA

CARAMAGNA, JOHN SUSINO, JIM

MADDEN, THE GALLOWGLASS GROUP,

ESTELLE RONDELLO, PETER PELLEGRINE,

JOSEPH MONGELLI and FRANK FASOLO,

Defendants.

________________________________________________________

 

Submitted May 20, 2009 - Decided

Before Judges Parrillo and Messano.

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-3659-07.

Steven C. Schechter, attorney for appellant.

Piekarsky & Associates, L.L.C., attorneys for respondent John McLaughlin (Justin J. Walker, on the brief).

Norton, Sheehy, Higgins & Rosa, P.C., attorneys for respondent Sandra Balistrieri (Ramsey S. Merhi and Neil A. Tortora, of counsel; Mr. Merhi, on the brief).

PER CURIAM

We granted plaintiff Robert Colletti's motion for leave to appeal from an interlocutory order compelling disclosure to defendant Sandra Balistreri of his "state and federal tax returns for the years 1999-2008" subject to "a confidentiality agreement" that the parties were to "effectuate" within ten days of the order. In addition, the order compelled plaintiff to "supply defendant with [the] statements" of five specific witnesses. Under the terms of the order, plaintiff's failure to comply permitted defendant to "move to dismiss [p]laintiff's complaint." The order was entered without oral argument, and without the judge conducting an in camera review of the documents, all of which plaintiff asserted were either privileged or not otherwise subject to disclosure. We have considered the arguments raised in light of the record and applicable legal standards. We reverse and remand for further proceedings consistent with this opinion.

I.

We recite the underlying facts as alleged in plaintiff's amended complaint, filed on July 3, 2008. From 1996 until 2004, plaintiff was a duly-elected member of the borough council of Elmwood Park. In November 2006, he "was running for re-election[.]" Defendants John McLaughlin and Balistrieri were running for the same office in the 2006 election in opposition to plaintiff's candidacy. A few days prior to the election, McLaughlin, Balistrieri, and the other defendants, either personally, or through corporate entities they controlled, were alleged to have published and circulated a letter entitled "Think Twice." Therein, they alleged that during his tenure as councilman, plaintiff "failed to inform his Council colleagues of his involvement" with a "condo development" in the town. The letter further inferred that plaintiff had engaged in "criminal and unethical" behavior, and "lacked the integrity to lead." It urged the citizens to vote for McLaughlin and Balistrieri and was signed by McLaughlin. In another circular urging voters to reject plaintiff's candidacy and that of his running mate, Bob Kassai, and to support McLaughlin and Balistrieri, plaintiff was described as the "$60 Million Dollar Man," a reference to alleged monies that plaintiff obtained "when he exploited his position as Councilman[.]"

In his complaint, plaintiff pled causes of action for defamation and false light invasion of privacy. Alleging defendants acted willfully and maliciously, plaintiff sought compensatory damages, including damages to his "profession and business career," as well as punitive damages.

Defendants answered and discovery ensued. Balistrieri served interrogatories in which she requested copies of plaintiff's tax returns "from 1998 to date[,]" as well as the name of every person "from whom plaintiff ha[d] obtained a statement, written or oral, concerning the damages claimed in this case." She also demanded copies of "any written statements or notes or memoranda reflecting such statements[.]"

On September 30, 2008, plaintiff responded to defendant's interrogatories, lodging a number of generalized objections to the requests. As to the demand for tax information, plaintiff specifically refused to provide the documents absent the "execution of a protective order or upon order of the Court[,]" citing Campione v. Soden, 150 N.J. 163 (1997), and Ullmann v. Hartford Fire Ins. Co., 87 N.J. Super. 409 (App. Div. 1965). Plaintiff did furnish, however, eighteen pages of financial information related to R. Colletti Construction, Inc., for years 2003 through 2006.

Although he identified fourteen persons and all the members of the municipal council as individuals that had knowledge of the facts alleged and/or his claim for punitive damages, plaintiff specifically refused to provide any statements from any witnesses, citing the "attorney-client privilege," and the "attorney work-product doctrine[.]" He attached a privilege log to his answers in which five individuals, David Siedel, Tom Barillo, William H. Schwind, Jeffrey J. Leider, and Marc Iuliani, were identified as witnesses that had provided statements. Each person was further identified in the log as the "Author" of the statement, and in turn, plaintiff's counsel was identified as the "Recipient[]."

In December 2008, Balistrieri moved "for an Order compelling [] plaintiff [] to produce tax returns and witness statements." The accompanying certification of counsel acknowledged receipt of the privilege log, but claimed the witness statements were not "privileged." Counsel also asserted he had prepared a "protective order" for the tax returns, but plaintiff had refused to execute it and furnish the documents. Plaintiff opposed the motion, filing a legal brief expounding upon the recitation of reasons for non-disclosure already contained in the interrogatory answers. Balistrieri then filed a brief in support of the application.

Without oral argument, the judge entered the order under review. It contained no statement of her reasons for granting the relief. R. 1:7-4(a). The five statements that she compelled plaintiff to produce are those identified in the privilege log. We initially stayed operation of the order pending plaintiff's motion for leave to appeal, which we subsequently granted. The stay remains in effect.

II.

Plaintiff argues that the trial court erred by compelling plaintiff to disclose the tax returns without any in camera review, and without making any findings that the returns were substantially relevant, or that the information had not already been obtained through less intrusive means, i.e., the financial statements already supplied. As a corollary to this argument, plaintiff contends the judge mistakenly exercised her discretion by ordering the parties to mutually agree on a protective order. With regard to the witness statements, plaintiff contends again that the judge erred in not conducting any in camera review of the documents to determine whether they were privileged, and she further failed to find that Balistrieri could not obtain the substantial equivalent of the information without undue hardship.

Balistrieri counters by arguing that the tax returns are discoverable because plaintiff has made a claim for economic damages suffered as a result of the alleged defamatory and false comments. Succinctly stated, she contends "[t]he tax returns are the only, and best, way to reveal what loss of income, if any, plaintiff has allegedly suffered." With regard to the inadequacy of the financial data already supplied, she notes that R. Colletti Construction, Inc., lists plaintiff's wife, Roselyn, as the company's "sole shareholder." Thus, the data fails to provide any proof of plaintiff's alleged personal financial losses. As to the witness statements, Balistrieri contends that plaintiff's counsel represented he would provide the statements, and then reneged on the offer. She claims the statements are discoverable and she "should not be required to depose five witnesses without having the opportunity to review their prior statements." Lastly, Balistrieri argues a privilege cannot apply to the statements because the log listed each witness as the "author[]" of the statement, not plaintiff's counsel.

While the substantive law as to the two discovery demands may differ, the obligation by the motion judge to have conducted an in camera review applies to each. Without the benefit of the results of such an examination, and the subsequent reasoning for ordering the release of the documents under existing precedent, we are unable to reach the underlying merits of the dispute.

Although plaintiff's tax returns are not privileged, in camera review is required before their production can be compelled. De Graaff v. De Graaff, 163 N.J. Super. 578, 582-83 (App. Div. 1978) (citing Irval Realty v. Bd. of Pub. Util. Comm'rs, 61 N.J. 366, 375-76 (1972)). In considering production of the returns, the judge must first find the party seeking the returns has demonstrated "good cause." Ullmann, supra, 87 N.J. Super. at 415; see Campione, supra, 150 N.J. at 190 (quoting Ullmann and characterizing the requisite showing as a "strong need" for the information). Thereafter, the judge must weigh plaintiff's, and, in this case because the returns were joint returns, his wife's, privacy interests in the documents against Balistrieri's demonstrated need, and the ultimate potential relevancy of the tax returns to the issues in the case. See Ullmann, supra, 87 N.J. Super. at 417 (where we found the nexus between information contained in the returns, and the issues at stake to be "too trifling to justify" production). As we explained in greater detail in Ullmann,

The average taxpayer is sensitive about his return and wishes to keep it from publication. He is entitled to that privacy unless there is strong need to invade it. If disclosure will not serve a substantial purpose it should not be ordered at all. If ordered, disclosure should be no greater than justice requires.

[Id. at 415-416.]

Even if the preliminary review militates in favor of disclosure, the court must proceed cautiously and must narrowly tailor any relief ordered.

The disclosure of entire returns should never be ordered if partial disclosure will suffice, and in all but the clearest cases the return should be examined by the judge before any disclosure is ordered. Even then the judge should impose such restrictions and limitations as may be necessary for the protection of the taxpayer.

[Id. at 416.]

Applying the above standards to the case at hand, we are compelled to reverse that portion of the order that required plaintiff to produce ten years of his federal and state income tax returns. We reach no conclusion as to the merits of the request, except to note that it was a mistaken exercise of her discretion for the judge to order production of ten years of returns, and without any redaction whatsoever. We can envision no "good cause" for such an expansive order. We leave to the judge's discretion after conducting an in camera review whether any of the returns should be produced, whether redactions, or other substitute documents such as W-2 statements or 1099 Forms would suffice, or whether plaintiff has already substantially provided the information through the financial documents supplied in interrogatory answers. Any remedy provided must also consider the privacy interest that plaintiff's wife has in the tax returns. See De Graaff, supra, 163 N.J. Super. at 583.

Turning to the witness statements, plaintiff appropriately complied with Rule 4:10-2(e) by specifically identifying the documents over which he was asserting protection under the "attorney work product and trial preparation" privilege. Once that was done, it was incumbent for the judge to conduct an in camera review of the actual documents. As we have explained,

When a New Jersey trial court reviews documents in camera, it must make specific determinations regarding [defendant]'s access to them, including an expression of reasons for the court's rulings. The trial court must examine each document individually, and explain as to each document deemed privileged why it has so ruled.

[Seacoast Builders Corp. v. Rutgers, 358 N.J. Super. 524, 542 (App. Div. 2003) (internal quotations and citations omitted).]

This procedure was not followed in this instance. Since we have not been provided with the allegedly privileged documents, we are unable to resolve the merits of the issue ourselves through the exercise of original jurisdiction. R. 2:10-5. We therefore are compelled to reverse this portion of the order, too, and remand the matter to the motion judge for further proceedings. We provide the following comments for purpose of guidance when the judge conducts her review in camera.

As we recently explained,

The "work product" doctrine protects from disclosure those documents and other tangible things that a party or a party's representative prepares in anticipation of litigation. Generally, a document will be deemed to have been prepared in anticipation of litigation when the dominant purpose in its preparation was concern for potential litigation, the prospect of which was objectively reasonable. The fact that the documents sought for discovery do not necessarily include legal advice is as a matter of law, irrelevant.

[Rivard v. Am. Home Prods., Inc., 391 N.J. Super. 129, 155 (App. Div. 2007) (Internal quotations and citations omitted).]

The threshold question to be determined is whether the document was "prepared in anticipation of litigation or for trial[.]" R. 4:10-2(c); Miller v. J.B. Hunt Transp., Inc., 339 N.J. Super. 144, 150 (App. Div. 2001); see also Medford v. Duggan, 323 N.J. Super. 127, 135 (App. Div. 1999) (the work product privilege may be invoked if "the dominant purpose in obtaining a statement [was] . . . the potential for litigation"). However, "[t]he work product privilege is not absolute and can be disregarded 'upon a showing that the party seeking discovery has substantial need of the materials in the preparation of the case and is unable without undue hardship to obtain the substantial equivalent of the materials by other means.'" Rivard, supra, 391 N.J. Super. at 155 (quoting R. 4:10-2(c)). Even if disclosure is ordered, "the court shall protect against disclosure of the mental impressions, conclusions, opinions, or legal theories of an attorney or other representative of a party concerning the litigation." R. 4:10-2(c).

We have considered the privilege in the context of an opposing party's access to witness statements secured by its adversary in a variety of situations. In Dinter v. Sears, Roebuck & Co., 252 N.J. Super. 84, 95 (App. Div. 1991), we considered whether the plaintiff in a fall-down case was entitled to witness statements given by the defendants' employees, handwritten but later typed by an insurance investigator for the defendant. We observed that "[s]ince the record d[id] not reflect that the statements were actually taken by an insurance investigator or under the direction of an attorney, a question arises as to whether these statements should even be considered privileged or qualified privilege work product." Id. at 98-99. We limited our holding, noting only "that where a fact witness testifies for an adverse party, the factual statement of that witness must be produced on demand for use in cross-examination as a potential tool for impeachment of credibility." Id. at 100.

In Medford, a dog-bite case, we considered whether statements given by the defendant and an eyewitness to the defendant's insurance company's representative were privileged. Supra, 323 N.J. Super. at 132. We concluded that resolution of the issue required "a case-by-case, fact-sensitive analysis" to determine whether the statements were taken in anticipation of litigation. Id. at 135. We went on to consider whether plaintiff had demonstrated "substantial need of the requested documents [] and [] that [s]he [wa]s unable, without undue hardship, to obtain the substantial equivalent of the materials by other means." Id. at 137. We concluded that because the defendant had been deposed, and had a clear memory of the events, the plaintiff was not entitled to disclosure. Ibid. However, with respect to the eyewitness, whose deposition disclosed a lack of recall, the plaintiff had met her burden and disclosure was required. Id. at 137-38.

In Miller, we considered whether the defendant's employee's statement provided to its attorney on the day of a motor vehicle accident was shielded from discovery by the work-product or attorney-client privilege. Supra, 339 N.J. Super. at 146-47. We determined the statement was given in anticipation of litigation, and thus privileged. Id. at 150. The fact that the employee provided his statement to the defendant's attorney served to distinguish the case from Pfender v. Torres, 336 N.J. Super. 379 (App. Div.), certif. denied, 167 N.J. 637 (2001) (holding the defendant's statement was made to an insurance adjustor whose primary motivation was to determine whether to provide a defense, and whose statement was not secured because of potential for litigation.) We also concluded in Miller that the plaintiff had made no showing of need or hardship because defendant's employee had been fully deposed. Supra, 339 N.J. Super. at 152.

As already noted, the record that exists in this case fails to disclose when the witness statements were given, whether they were provided directly to plaintiff's counsel, or at his request, and whether, under all the circumstances presented, the dominant motive in securing the statements was anticipation of the litigation that has now matured. Moreover, defendant clearly has not demonstrated "substantial need" for the statements or that she "is unable without undue hardship to obtain the substantial equivalent . . . by other means." R. 4:10-2(c). Defendant has failed to demonstrate any attempts made to interview any of the witnesses herself, and the alleged costs of deposing the five witnesses hardly demonstrates "undue hardship."

Having said that, however, we hasten to add that we reverse specifically on the grounds that no in camera review of the statements was conducted by the judge, and no determination was made as to whether the privilege applied, or whether defendant had overcome it. Thus, we express no opinion on the ultimate merits of the dispute. In light of our holding, we need not consider plaintiff's corollary argument that the judge exceeded her discretion in ordering the parties to submit a mutually acceptable protective order regarding plaintiff's tax returns.

Reversed and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.

 

Plaintiff's attempted re-election in 2004 apparently failed.

(continued)

(continued)

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A-3397-08T2

June 23, 2009