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In re Callan

Decided: February 4, 1975.

IN THE MATTER OF MICHAEL CALLAN, HARRIS DAVID AND GERARD CLARK, CHARGED WITH CONTEMPT OF COURT


For reversal -- Chief Justice Hughes and Justices Jacobs, Hall, Mountain, Sullivan, Pashman and Clifford. For affirmance -- None. The opinion of the Court was delivered by Sullivan, J. Mountain, J. (concurring). Justice Pashman and Clifford join in this concurring opinion. Mountain, Pashman and Clifford, JJ., concur in the result.

Sullivan

Defendants-appellants were convicted of contempt of court arising out of their conduct in the course of a civil trial. In re Callan, 122 N.J. Super. 479 (Ch. Div. 1973). Their convictions were upheld by the Appellate Division, 126 N.J. Super. 103 (1973). This Court granted certification. 64 N.J. 503 (1974). The matter has the following background.

The Stella Wright Housing Project, operated by the Housing Authority of the City of Newark, had become the object of a tenants rent strike to protest intolerable living conditions in the Project. A Stella Wright Tenants Association was formed and rents withheld from the Housing Authority were turned over to representatives of the Tenants Association. In all, some $94,000 was received by the Association and was deposited in a bank. This money was later withdrawn, converted into money orders and then placed in a safe deposit box. The Housing Authority filed suit for the rent money and in the interim asked that the court order the Association and its representatives to turn the money over to a receiver for safekeeping. The Association and its representatives opposed the application by giving assurances in affidavit form that the funds were intact and secure.

The court did not order the money to be turned over to a receiver. Instead it ordered the Association to account for all moneys received, and directed that the funds in hand were to be retained in the then depository and not withdrawn or removed except by order of the court, pending a court determination as to the rights of the Housing Authority and the contributing tenants respectively in the funds.

Appellants-attorneys were representing the Tenants Association at this point and participated in the several court hearings involving custody of the money.

On October 12, 1972 the trial judge made a determination based on Marini v. Ireland, 56 N.J. 130 (1970), that the tenants were not entitled to rent free occupancy in the Project because of the living conditions, and that at most they would be entitled to an abatement of rent. All tenants who had paid rent money into the fund were ordered on November 6, 1972 to show cause why the fund should not be turned over to the Housing Authority, subject to the tenants establishing the basis for any claimed refund. The order was returnable on November 17, 1972.

When word of the court's proposed action was received, a meeting of the executive committee of the Association was held on November 13, 1972. Possible refund of the rent money to the contributing tenants was discussed. Appellants who were present at a part of the meeting counseled strongly against disbursement of the funds, said it would be a violation of the court order and would subject those responsible to charges of contempt. They advised that if the court ordered the money turned over to the Housing Authority, the tenants could appeal and still have a chance to retain possession of the funds. The executive committee then decided to hold a meeting of all of the contributing tenants the next day to decide what to do with the money.

On the morning of November 14, 1972 the funds were taken from the safe deposit box to be available for distribution if the tenants so decided. Appellants were unaware of this action, nor did they attend the November 14, 1972 meeting. However, they knew the meeting was going to take place and what its purpose was.

At the November 14, 1972 meeting the unanimous decision was to refund the rent payments to the contributing tenants. A large portion of the moneys was returned to the tenants that same day.

Appellants had requested that they be told before November 17 whether or not their advice was going to be followed so that a charade would not be made of the court hearing on that day. Accordingly, on the evening of November 15 appellant Callan was notified of the decision and was told the reasons why the moneys were returned.

Apparently,*fn1 Callan communicated this information to the other attorneys and a written statement was prepared for presentation in court on November 17.

When the matter was called in open court on the 17th, after counsel for the Housing Authority had begun to speak, appellant Callan interrupted him and read the prepared statement in which it was disclosed to the court and to counsel for the Housing Authority for the first time that the funds had been withdrawn from the depository "to redistribute ...


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