NFI INDUSTRIES INC v. W.S.W. REAL ESTATE INC.Annotate this Case
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
DOCKET NO. A-0
NFI INDUSTRIES INC.,
W.S.W. REAL ESTATE, INC. f/k/a
WISSAHICKON SPRING WATER, INC.,
WISSAHICKON MOUNTAIN SPRING
WATER, INC., W.S. WATER, INC.,
W.S. WATER WHOLESALE HOLDING,
INC., CLEARSOURCE, INC., TRIDENT,
LLC a/k/a TRIDENT OF PENNSYLVANIA
(NAMED FOR INFORMATIONAL PURPOSES
ONLY), JAMES J. LAND a/k/a JAMES J.
LAND, SR. a/k/a JAY LAND, SR.,
MICHAEL J. PESSIKI, SAMANTHA HERTZ
a/k/a SAMANTHA LAND, ANDREA HEALEY
a/k/a ANDREA LAND, ABRAM FLORY,
JAMES J. LAND, JR. a/k/a JAY LAND,
IN THE MATTER OF YARON HELMER, ESQ.,
November 20, 2014
Argued September 3, 2014 Decided
Before Judges Messano and Ostrer.
On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-2627-08.
Patricia B. Quelch argued the cause for appellant (Helmer, Conley & Kasselman, P.A., attorneys; Ms. Quelch, of counsel and on the brief).
Brett A. Datto argued the cause for respondent James J. Land, Jr. a/k/a Jay Land, Jr. (Weir & Partners LLP, attorneys; Mr. Datto, on the brief).
Attorney Yaron Helmer appeals from the trial court's September 12, 2013, order denying his motion to vacate and to amend an order dated September 1, 2010, finding him in contempt for failing to comply with a civil discovery order. Having considered Helmer's arguments in light of the record and applicable principles of law, we reverse.
The contempt order at issue was entered in the context of a civil action brought in May 2008 by NFI Industries, Inc. (NFI) against James J. Land, Jr. and various other individuals.1 The civil action was related to a later criminal indictment against certain common defendants, which was returned in June 2009.2 Helmer was the sole witness before the grand jury. Helmer stated that NFI retained him as a victim representative in the criminal matter. The criminal indictment was dismissed in August 2010. The details of the civil claims and criminal charges are not relevant to our resolution of the appeal.
Helmer insisted that he was not retained to represent NFI in the civil action. However, the defendants in the civil action sought his testimony. Helmer received a defense subpoena dated January 25, 2010, commanding him to appear at a deposition on February 8, 2010. Russell L. Lichtenstein of Cooper Levenson April Niedelman & Wagenheim certified that NFI retained him to protect its interests at Helmer's deposition, including invoking the attorney-client privilege. NFI had also been represented by Robert Saldutti.3
The parties dispute whether Lichtenstein represented Helmer personally. Helmer and Lichtenstein both certified in 2013 that Lichtenstein did not. Lichtenstein filed and served an entry of appearance as co-counsel of NFI on February 19, 2010. In an email to defense counsel the day before, Lichtenstein described himself as co-counsel for NFI. In the email, Lichtenstein confirmed that he had canceled Helmer's deposition, which by then was scheduled for February 24.
However, in April 2010, defense counsel served a second notice for Helmer's deposition on Lichtenstein, who was described as Helmer's attorney. In a letter to Lichtenstein in May 2010 regarding the ongoing effort to schedule Helmer's deposition, and obtain document production, and a privilege log, defense counsel referred to Helmer as Lichtenstein's client, and stated that Helmer had retained Lichtenstein. Neither the notice nor the letter indicated that they were also served on Helmer.4 At the time, Lichtenstein did not dispute defense counsel's characterizations of him as Helmer's attorney.
When he ultimately appeared at a deposition in May 2010, Lichtenstein asserted privilege on behalf of NFI and instructed Helmer not to answer. Defense counsel filed a motion to compel Helmer's answers, which the court granted in part in an order entered June 30, 2010. Although the motion papers and argument transcript are not before us, the order reflects that the court determined that the attorney-client privilege was waived in part "only as to those matters about which Mr. Helmer testified before the Cumberland County Grand Jury." Helmer's continued deposition was to be scheduled on or "before the deadline to complete depositions."
The June 30 order was prepared by defense counsel. The order characterized Lichtenstein as Helmer's attorney. It commanded "[c]ounsel for Mr. Helmer" to review the documents listed on the privilege log, and produce them to defendants or, within seven days, provide them to the court for in camera review. The order named an attorney from Saldutti's office as representing NFI. Lichtenstein did not object to the characterization. Helmer claimed he did not receive a copy of that order.
The documents were not produced nor filed with the court within the time ordered. On July 22, 2010, defense counsel filed an application seeking an order finding Helmer in contempt. Although the application and proof of service are not included in the record, it is undisputed that the application was served on Lichtenstein, but not on Helmer.
On August 23, 2010, Lichtenstein produced some of the privilege-logged documents to defense counsel and stated, "I have, this date, provided those additional documents to the Court for an in-camera review." However, Lichtenstein apparently did not provide the withheld documents to the court for in camera review until September 13, 2010, when he also opposed the application for sanctions. Lichtenstein later certified that he was unaware that the court had already granted the defense's request for sanctions on September 1, 2010.
The court's September 1 order, prepared by defense counsel, recited that defendants sought an order for "[c]ontempt [p]ursuant to R. 4:23-2(a)." The order stated that the motion was granted and "Yaron Helmer, Esquire [was] in contempt of this Court's Order dated June 30, 2010." Helmer was required to pay a $500 sanction to defendants. The order also compelled Helmer to comply with the June 30, 2010 order, and attend his continued deposition on August 12, 2010 (although the order was entered September 1).5 Lichtentstein later certified in 2013 that he secured payment of the sanction from his client.
Lichtenstein certified that he did not advise Helmer, or provide a copy to him, of the July 22 contempt motion, Lichtenstein's opposition, the court's orders of June 30 and September 10, 2010, or the $500 payment. Helmer and Lichtenstein both certified that Lichtenstein secured Helmer's attendance at his continued deposition on September 23, 2010 without informing him of the contempt finding. Helmer certified that he first learned of the September 1 order adjudging him in contempt over two years later, in January 2013. The circumstances of his discovery were not revealed.
The September 23, 2010, deposition transcript stated that Lichtenstein appeared as counsel to Helmer; and an attorney from Saldutti's office appeared as counsel for NFI. However, Lichtenstein did not state on the record that he represented Helmer. The contempt finding was not expressly mentioned at the deposition. Defense counsel advised Helmer, "You're here today for your continued deposition pursuant to a couple of court orders. . . . You're aware of that, correct?" Helmer responded, "Well, I knew about that part just a few minutes ago." Defense counsel then followed up, "Do you know now that there's two court orders that relate to your continued deposition?" Helmer responded, "No, but I'll take your word for it."
Helmer certified that after learning of the contempt order in January 2013, he attempted, over the course of several months, to obtain information about the order and related proceedings from Lichtenstein and other sources. Helmer had not yet obtained a requested certification from Lichtenstein when Helmer filed his motion to vacate the order in July 2013. An attorney in his firm described her unsuccessful effort to secure the motion papers that prompted entry of the September 1 contempt order. Lichtenstein executed his certification in September 2013.
Helmer argued that the contempt order should be vacated because he was not properly noticed. He denied that Lichtenstein was his attorney, or authorized to accept service of the contempt motion. Defendant opposed the application. He argued that Lichtenstein presented himself as Helmer's attorney. Defendant cited the correspondence, orders, and transcripts, which we have discussed above, describing Lichtenstein as Helmer's attorney.
After oral argument, the trial court rejected the certifications of both Lichtenstein and Helmer that they did not have an attorney-client relationship. The judge concluded that Lichtenstein did in fact represent Helmer. "My recollection of, and it's been several years ago, was that I was under the impression that Mr. Lichtenstein represented Mr. Helmer by the way he conducted himself in the court room." The court also noted in its findings that both the court's order and the deposition transcript characterized Lichtenstein as Helmer's counsel
[Y]ou don't have to have a retainer agreement, you don't have to pay money to have somebody represent. Mr. Lichtenstein made it, I think, clear to the Court and to other counsel that Mr. Helmer was being represented, and I think we all had a right to assume from that that he was carrying on his obligation to keep Mr. Helmer informed.
On appeal, Helmer argues that the contempt order was improvidently granted, and the court should have granted the application to vacate it. We agree.
We review a trial court's summary contempt finding de novo. R. 2:10-4 ("Every summary conviction by a court for contempt shall be reviewable on the law and the facts."). However, we have before us not a direct appeal from a contempt conviction, but an appeal from a motion to vacate an order of the court. Relief from the September 1, 2010 order is authorized by Rule 4:50-1(d). The Rule states that a "court may relieve a party . . . from a final judgment or order . . . [if] the judgment or order is void . . . ." Ibid. We have held that a motion under subsection (d) for relief from a void order may be made without regard to the time limitations of Rule 4:50-2. Berger v. Paterson Veterans Taxi Serv., 244 N.J. Super. 200, 205-06 (App. Div. 1990) (vacating order that was void for lack of in personam jurisdiction). In any event, there is no evidence to dispute Helmer's testimony that he did not actually learn of the contempt order until January 2013, and then acted within a reasonable time to investigate and file his motion.
At the outset, we note that the court erred in finding that Lichtenstein represented Helmer, notwithstanding the certifications of both men to the contrary. The various documents that characterized Lichtenstein as Helmer's counsel, without objection from Lichtenstein, at most created a fact issue that should not have been resolved on the papers. See, e.g., Conforti v. Guliadis, 245 N.J. Super.561, 565-66 (App. Div. 1991), modified on other grounds, 128 N.J.318 (1992); Fusco v. Fusco, 186 N.J. Super.321, 329 (App. Div. 1982).
However, we need not resolve the issue of Lichtenstein's representation. The order of contempt was void because it obviously was not entered in compliance with the provisions of Rule1:10-2. A proceeding to find a person in contempt not in the presence of the court must be commenced by an order for arrest, or order to show cause, on notice to the allegedly contumacious person. R.1:10-2(a). The Rule also requires that a proceeding to find a person in contempt shall be prosecuted "only by the Attorney General, the County Prosecutor . . . or . . . by the attorney so designated" only upon good cause found by the court. R.1:10-2(c). It is apparent that these strictures were not followed. Rather, defendant apparently filed a notice of motion on notice to Lichtenstein, as presumed counsel for Helmer. The court entered the order without opposition.
Defendant argues that a finding of contempt under Rule4:23-2(a) is not governed by the dictates of Rule1:10-2. We disagree. Rule4:23-2(a) states, "If a deponent fails to be sworn or to answer a question after being directed to do so, the failure may be considered a contempt of that court." The Part IV rule simply defines what constitutes contempt. It does not address the procedural rights of a person charged with contempt. That is addressed by Rule1:10-2.
We expressly held in Canino v. D.R.C. Co., 212 N.J. Super.620, 623-24 (App. Div. 1986), that a finding of contempt and a punitive sanction under Rule4:23-2 must comply with Rule1:10-2. In that case, we reversed the judgment of contempt, and vacated the fine.
In this case, we reverse the judgment of contempt as well. We shall not vacate the $500 sanction, which shall be recharacterized as a compensatory sanction from NFI to defendant under Rule4:23-2(b), based on the conceded non-compliance with the court's June 30, 2010 order.
1 As Land is the only defendant who opposed Helmer's motion before the trial court, we refer to him as "defendant."
2 A copy of the indictment is not included in the record.
3 Land asserts NFI previously engaged in discovery abuses in the civil action, including the withholding of substantial documentation. We need not address that claim for purposes of our opinion.
4 Assuming Helmer was represented by counsel, it would have been inappropriate for defense counsel to do so. See RPC 4.2 ("In representing a client, a lawyer shall not communicate about the subject of the representation with a person the lawyer knows . . . to be represented by another lawyer in the matter.").
5 The order did not reflect whether it was opposed or not. Cf. R. 1:6-2(a) ("The form of order shall note whether the motion was opposed or unopposed.").