On appeal from Superior Court, Law Division, Cumberland County.
Petrella, Shebell and Gruccio. The opinion of the court was delivered by Petrella, P.J.A.D.
This interlocutory appeal focuses on whether the judge in a negligence suit brought in part on behalf of an infant plaintiff may remove the father of that infant as guardian ad litem because the father will not accept the settlement offers. We find no basis under the circumstances of this case to warrant the judge's removal of the guardian ad litem and his appointment of a substitute guardian. Accordingly, we reverse and remand.
The underlying tort action stems from a February 28, 1977 accident to the then not quite three year old infant plaintiff, Ethan Zukerman (born April 8, 1974). Ethan suffered severe
brain damage and neurological impairment from a near drowning in a neighbor's above-ground swimming pool. It had been somewhat warm on the afternoon of the accident and Ethan's mother left him in their fenced-in back yard playing with the family's two St. Bernard dogs. Although Mrs. Zukerman checked on Ethan at various times, at some point he was noticed missing. He apparently left the yard and found his way to the Holdens' property located on the street behind and parallel to the street on which the Zukermans' property was located and about three homes away. Ethan was found about 45 minutes later floating unconscious in the Holdens' back yard swimming pool.*fn1
Suit was instituted on May 21, 1980 by Robert Zukerman, individually and as guardian ad litem of the infant plaintiff, against various defendants, including the neighbors, David and Zeita Holden, Piper Pools, Inc., and Atreo Manufacturing Co., Inc. From time to time the complaint was amended primarily to add defendants on theories of direct or successor liability, including Arthur and James Rambo (the Rambos) who installed the pool. Disputes arose between various parties and their insurance carriers and insurance agents. Three declaratory judgment actions were instituted. One is still pending,*fn2 although
consolidated with this case. Notwithstanding the pendency of that unresolved and consolidated action, the trial of the tort action was ordered to commence on September 5, 1988.*fn3
Certain significant events relative to this appeal took place prior to that date. In September of the preceding year a judge assigned to the case began holding conferences with plaintiffs and defendants. The record reflects that the judge had extensively involved himself in settlement discussions and negotiations. He met with all parties as well as separately with the attorneys for defendants and their insurance representatives, and with plaintiff and his attorneys on separate occasions. He also handled subsequent conferences and became the assigned trial judge. Although plaintiffs argue that the judge had excluded their attorneys*fn4 without their consent from some of these meetings, they apparently did not object below to such procedures. Indeed, their implied consent appears in some of the transcripts, particularly that of an in camera proceeding.
Obviously, a judge should not confer or meet with one party or attorney to the exclusion of the adversary unless there is express consent, or unless necessary on an aspect or matter having nothing to do with the merits or ultimate disposition of any issue. See R. 1:2-1; Code of Judicial Conduct, Canon 3A(5); Matter of Yaccarino, 101 N.J. 342, 391 (1985); Hake v. Manchester Tp., 98 N.J. 302, 317-318 (1985); Stout v. Stout, *
155 N.J. Super. 196, 203-204 (App.Div.1977). But, even in the latter situation the adversary should be advised and the appearance of impropriety avoided. In any event, the judge spent considerable time and effort in attempting to forge a settlement.
On September 15, 1987 the judge signed a so-called "management order" which, among other things, scheduled a settlement conference on December 21, 1987. In February 1988 the judge requested plaintiffs to provide him with a demand for settlement. In response, plaintiffs submitted a $10.8 million settlement demand in March 1988. The judge communicated this demand to defendants.
After a June 23, 1988 conference the judge advised plaintiffs' attorneys that defendants offered a settlement consisting of $300,000 payable up front to cover counsel fees and costs, and a structured settlement costing $1,250,000, for a total package allegedly costing $1,550,000.*fn5 A June 27, 1988 management order directed plaintiffs to review defendants' settlement offer, and accept or reject it by July 15, 1988, or submit a counter-proposal. It also scheduled "final settlement discussions" on July 22.
After consultation with his attorneys, his financial advisers and his wife, plaintiff rejected the offer as inadequate and made a demand for $9.3 million. Piper Pools filed a motion returnable on short notice on August 19, 1988, to remove Zukerman as guardian ad litem and have a substitute appointed on the ground that the father's refusal to accept defendants' settlement offer was not in the infant's best interests. The judge described the motion as asserting that the guardian was not acting in the infant's best interests "in refusing to agree to a proper structured settlement which the court negotiated with
defense counsel." The judge denied the motion at this time, without prejudice, stating:
What Mr. Colquhoun, however, fails to note is the fact that the proposal to plaintiff's counsel dealing with the proposed structure was merely a proposition. Although, I have actively worked with defense counsel in an attempt to put together a package, and although the package proposal as referred to was tentatively . . . refused, the Court could not guarantee that that proposal was a reality. The reason for that is that the proposal as discussed with defense counsel would have required Mr. Colquhoun's carrier to pay three hundred thousand dollars when, in fact . . . and only offered two hundred thousand dollars, as required Ms. Wright's . . . carrier to pay three hundred thousand dollars when, in fact, Ms. Wright has only offered two hundred thousand dollars. Thus, the proposed settlement, which would call for one point two million dollars, never reached fruition. The Court, at its best, only had one million dollars and no arrangements had been made for up -- for monies to pay counsel fees, which clearly was a part -- it would be necessary to be discussed between the defense counsel. Therefore, the motion to dismiss Mr. Zukerman, Sr., is denied without prejudice.
If, in fact, on the day of trial a new settlement proposal is placed unconditionally before the plaintiff as guardian, and if, in fact, the plaintiff as guardian were still denied a proper settlement, and if the plaintiff offers no predicate upon which it -- he has reached the decision to deny the proposed settlement, then Mr. Colquhoun, on behalf of his client, may resume or renew his motion. But until the plaintiff turns down a firm settlement, he should continue to act on behalf of his minor son who is the injured plaintiff.
Although the motion was denied, the judge essentially invited its renewal on the trial date.
Jury selection began on September 6, 1988 after pretrial motions were heard, and continued on September 7 and 9 until the jury panel was exhausted. The judge entered a September 7 order which plaintiffs' attorneys represent was signed without their knowledge or consent, requiring all defendants and their insurance carriers to attend a meeting in the judge's chambers on September 13, 1988 to discuss settlement.*fn6 The
entry of an order in the cause without notice to all parties is generally not proper, R. 1:5-1, even if certain parties are not directly affected, except for scheduling and administrative matters. Notice is an essential requirement of due process; the rules provide for consideration of ex parte matters or the entry of ex parte orders only in certain limited and emergent situations.*fn7 However, as previously observed, a judge should not confer or meet with any party, or with counsel for any party, without all attorneys either consenting or having the opportunity to be present. R. 1:2-1; Canon 3A(5); Matter of Yaccarino, supra (101 N.J. at 391); Hake v. Manchester Tp., supra (98 N.J. at 317-318); Stout v. Stout, supra (155 N.J. Super. at 203-204).
Jury selection resumed and was completed on the morning of September 14, 1988. The judge spent the remainder of the day unsuccessfully trying to negotiate a settlement. About 3:00 p.m., at plaintiff's attorneys' request, the judge met with plaintiff, his wife and their attorneys, for an in camera discussion in chambers. The judge said he had negotiated a settlement with defendants totaling $2,415,000, and that although they wanted a decision by 5:00 p.m., he had persuaded them to give plaintiffs until 9:30 the following morning. However, if no answer was received by then the offer would be withdrawn and the trial
would commence. Plaintiff's request for additional time to review the proposal with his attorneys and financial advisers was denied.
On September 16, 1988, at plaintiff's request, the judge held another in camera meeting with him, his wife and his attorney so that he could tell the judge why he rejected the proposed settlement. The meeting was stenographically recorded on the understanding, or at least the request, of Zukerman's attorney that the record*fn8 would remain confidential as to the specifics of the discussions. Plaintiff informed the judge that he was working on a counter-proposal with his financial advisers at the investment banking firm of Morgan Stanley, where his brother was a vice-president. The judge denied plaintiffs' request for an additional extension of time, and informed them for the first time that defendants were offering a lump sum settlement of $2,415,000 as an alternative to the structured settlement and also mentioned a third structured settlement proposal by one of the defendants.
The judge then went on the bench and advised defendants' attorneys that although plaintiffs' attorneys had assertedly recommended acceptance of the offer, plaintiff rejected it. Piper Pools orally renewed its motion to remove Zukerman as guardian ad litem. Oral arguments were heard. Plaintiffs' attorneys submitted a new settlement demand through the judge during a recess, but they were told that it was unattainable. The judge then provided plaintiff with a proposed fourth structured settlement, but because court was about to reconvene, plaintiff was unable to analyze it. The ...