On appeal from Superior Court, Law Division, Camden County.
O'Brien and Landau. The opinion of the court was delivered by Landau, J.s.c. (temporarily assigned).
This is an appeal by Marlene Westhoff (Marlene), plaintiff in a malicious prosecution action in which summary judgment was awarded to the defendants, Kerr Steamship Co., Inc. (Kerr), Richard Motta (Motta), Michael A. Ferrara, Jr., Esq. (Ferrara); Ferrara and Waldman, P.C. (F & W), Mel P. Barkan, Esq. (Barkan), and Brauner, Baron, Rosenweig, Kligler, Sparber & Baron, Esqs. (B,B,R,K). Marlene appeals also from earlier rulings which denied her requests for financial disclosure and to pierce the attorney-client privilege asserted by the attorney defendants.
The present matter arises out of a prior action, in which appellant had been joined as a defendant together with her husband John Westhoff (John). There Kerr sought recovery of funds embezzled by John in a fraudulent scheme. That suit
was later settled by John, but the underlying embezzlement resulted in his federal conviction.
The embezzlement was brought to light in March 1982 as the result of an investigation conducted by Motta, who is an officer of Kerr, and Lee Joiner (now deceased), Kerr's risk management consultant. Barkan and his law firm B,B,R,K participated as attorneys for Kerr, but the New Jersey lawsuit was handled by Ferrara and his firm, F & W. It appears uncontested that the investigation included an interview with a Kerr employee named William P. Hale who confessed to being involved in the scheme, implicating John. Hale made a statement, recorded by a certified shorthand reporter. According to certifications filed in the present matter, he also made oral statements to Joiner, Barkan and Motta on the same occasion, asserting his belief that Marlene had to be aware of what was happening. This asserted oral portion of the Hale statements did not surface during the underlying litigation, including Marlene's motion for summary judgment, which was granted without opposition. Among the facts mentioned by Hale were the substantial lifestyle of the Westhoffs, coupled with John's heavy gambling at Atlantic City casinos. Prior to institution of the underlying action, it was undisputed that John told Motta that he discussed his personal and business activities with Marlene, and confirmed the substantial lifestyle. This was also a subject of Joiner's investigation.
The amount of monies embezzled exceeded $500,000.
The underlying suit proceeded by complaint and writ of attachment in New Jersey. There was also an action brought in New York in which Marlene was not joined. It is not disputed that the Westhoffs owned property in the State of New Jersey, including the marital home, in some form of joint ownership.
In support of the underlying complaint and writ of attachment in New Jersey, Motta executed an affidavit describing the nature of John's scheme, which involved bogus fuel purchases
for a chartered oil tanker in Ecuador. Motta swore that John had contacts throughout Central and South America and had recently met locally with certain Ecuadorians. He expressed the fear that John's years of experience in the steamship and transport business throughout Central and South America had afforded him numerous contacts and places to go were he to flee the United States. His affidavit also asserted (because of the large amounts involved, and because the FBI had already met with John so that he knew Hale had confessed) that John had the ability and motivation to abscond, either alone or with his wife. The Motta affidavit further indicated that Hale stated that Marlene was "fully aware of the fraudulent activities of her husband and participated and/or acquiesced in them."
Paragraph 13 of the underlying complaint contained the only specific reference to Marlene. It stated, "[t]he defendant, Marlene L. Westhoff, wife of the defendant, John D. Westhoff, Jr., is employed by an Atlantic City casino. She was aware of the defalcations and fraudulent acts of the defendant, John D. Westhoff, Jr. and was also a ...