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Blitz v. 970 Realty Associates

Decided As Amended June 9 1989.: May 4, 1989.

JEANETTE BLITZ, PLAINTIFF-APPELLANT,
v.
970 REALTY ASSOCIATES, A NEW YORK PARTNERSHIP, AND STUART EISENBERGER, DEFENDANTS-THIRD PARTY PLAINTIFFS-RESPONDENTS, V. PUROLATOR PRODUCTS, INC., PUROLATOR COURIER CORPORATION, EMERY AIR FREIGHT CORP., AND FACET ENTERPRISES, THIRD PARTY DEFENDANTS



On appeal from the Superior Court, Chancery Division, Union County.

Michels and Long. The opinion of the Court was delivered by Long, J.A.D.

Long

On July 26, 1987, plaintiff Jeanette Blitz (Blitz) entered into an agreement of sale with defendant 970 Realty Associates (970 Realty) pursuant to which Blitz agreed to purchase from 970 Realty a parcel of property located in the City of Rahway, consisting of approximately twelve acres of land and containing approximately 295,000 square feet of buildings zoned for industrial, commercial and office purposes. Upon entering into the agreement, Blitz tendered a deposit of $650,000. The closing which was scheduled for August 31, 1987, was postponed until September 29, 1987.

On September 22, 1987, Blitz filed a complaint against 970 Realty and defendant Stuart Eisenberger (Eisenberger), a partner at 970 Realty (collectively defendants), alleging that there was widespread environmental contamination of the property (which had previously housed Purolator Products, Inc.) and that Eisenberger fraudulently induced Blitz to enter into the agreement to purchase the property. The complaint charged that Eisenberger told Blitz, who was only "vaguely aware" of the Environmental Cleanup Responsibility Act, N.J.S.A. 13:1K-6 et seq. (ECRA), that the property was generally ECRA clean and that the cost of the cleanup for the "one or two places of pollution or contamination" would be covered by a $200,000 letter of credit that had been posted in response to an administrative

consent order entered into with the Department of Environmental Protection in February 1985. On the basis of these allegations, Blitz sought a number of different remedies including a restraint on the sale of the property pending a determination of its environmental status; a postponement of the closing; the posting of security by Eisenberger to cover cleanup; rescission; return of Blitz' deposit; and damages, both punitive and compensatory.

During the course of discovery, defendants claimed that Blitz had consulted with various attorneys with regard to ECRA and the advisability of entering into the agreement to purchase the property. Blitz denied that she had consulted with any attorney other than Leo Kaplowitz, her present attorney, prior to signing the agreement. In any event, there was a factual issue presented as to whether plaintiff sought and received counsel from any other attorney in connection with the environmental issue prior to the signing. On June 24, 1988, defendants filed a notice of motion whereby they sought to compel Blitz to waive the attorney-client privilege "with respect to communications between herself and attorneys regarding ECRA or the advisability of entering into the subject transaction," or alternatively to dismiss the fraud allegations of plaintiff's complaint. The trial judge granted defendants' motion to waive plaintiff's attorney-client privilege. He stated:

Furthermore, communications which the defendant requests in my judgment are relevant to the matter. What communications or knowledge did the plaintiff have at the time she contends she relied solely on defendant's statements? Also, this information should be obtained from the plaintiff, the attorney involved. To do otherwise would raise questions of hearsay.

Based on all of the foregoing I will grant the motion of defendant and permit the attorney-client privilege to be deemed waived, and I will order the depositions be taken of those individuals which are the subject of this motion.

Defendants submitted a proposed order which contained the following language:

HEREBY ORDERED that the plaintiff, Jeanette Blitz, her agents and representatives, are hereby deemed to have waived the attorney/client privilege with respect to all communications and conversations of every kind between the plaintiff, Jeanette Blitz, her agents and attorneys, and all attorneys concerning ECRA ("Environmental Clean-up Responsibility Act") or other environmental

matters relating to any real property in the state of New Jersey or with respect to the advisability or lack thereof of entering into or concluding the real property transaction commonly referred ...


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