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National Freight Inc. v. Ostroff

April 24, 1975

NATIONAL FREIGHT, INC., A CORPORATION OF THE STATE OF NEW JERSEY, PLAINTIFF,
v.
HAROLD OSTROFF; BENJAMIN BERGSTEIN, INDIVIDUALLY AND T/A CARMEL LUMBER CO.; YETTA BERGSTEIN AND MAX EISENMAN, INDIVIDUALLY AND T/A BONANZA CLOTHES, JOINTLY, SEVERALLY AND IN THE ALTERNATIVE, DEFENDANTS



Miller, J.c.c., Temporarily Assigned.

Miller

On July 25, 1974, and subsequent thereto, over 100 criminal complaints issued out of Vineland Municipal Court against defendant Harold Ostroff charging him with larceny, embezzlement, forgery and conspiracy to defraud plaintiff National Freight. The complaints were forwarded for consideration by the Cumberland County grand jury on August 9, 1974. No indictments have been returned to date.

On January 29, 1975 National Freight filed a civil complaint against Ostroff and other defendants seeking compensatory and punitive damages. Both criminal and civil complaints appear to have the same factual basis. Ostroff now moves to place the civil matter on the inactive list pending conclusion of the criminal charges against him. He claims that a complete defense to the civil action would necessitate full revelation of any defense to the criminal charges, thereby compromising his Fifth Amendment rights.

The case appears novel in New Jersey.

In Sternberg v. Michigan State Bar, 384 Mich. 588, 185 N.W. 2d 395 (Sup. Ct. 1971), an attorney moved to stay a bar grievance proceeding on the ground that his testimony in the hearing could be used against him in a pending criminal prosecution for embezzlement. Denial of this motion was upheld.

State v. Schauenberg, 197 Iowa 445, 197 N.W. 295 (Sup. Ct. 1924), involved a suit to enjoin a liquor nuisance. The same facts gave rise to a pending indictment against defendant charging him with maintaining a nuisance. Defendant moved for a continuance on the ground, among others, that he would be compelled to take the witness stand and testify concerning matters involved in the criminal case and would, therefore, be deprived of his constitutional rights. His motion was denied.

Other cases with similar results are Poston v. Home Insurance Co. of New York, 191 S.C. 314, 4 S.E. 2d 261 (Sup. Ct. 1939), Lowe v. Lowe, 293 S.W. 915 (Tex. Civ. App. 1927), and Fagan v. Powell, 237 So. 2d 579 (Fla. App. 1970).

In DeVita v. Sills, 422 F. 2d 1172 (3 Cir. 1970), plaintiff, a member of the New Jersey Bar and a judge of the Union County District Court, sought to restrain a state judicial inquiry looking toward the attorney's disbarment and removal from judicial office. He alleged that a criminal indictment arising out of the same alleged misconduct was pending and claimed that holding such judicial inquiry prior to completion of the criminal prosecution would violate his right against self-incrimination.

Recognizing that granting the attorney's motion would create countervailing possibilities of prejudice to civil litigants, the Third Circuit Court of Appeals denied him the relief sought, stating:

But, says the plaintiff, I will nevertheless be put to a difficult choice, and the Fifth Amendment should be so construed that one is not faced

with the compulsion to add his own possibly affirmative good impression to weight of evidence in the disciplinary ...


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