On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County.
Bilder, Baime and Wallace. The opinion of the court was delivered by Wallace, J.s.c. (temporarily assigned).
[263 NJSuper Page 326] Plaintiffs, Dry Branch Kaolin Company and two of its officers, William L. Hartley and Cornelius J. Boylan filed a defamation
action against an anonymous former employee.*fn1 The alleged defamatory and libelous statements were contained in a letter from attorney, William Engle, purporting to speak on behalf of an unnamed former executive of Dry Branch, and subsequent letters from "A Former Employee" containing strikingly similar allegations. Plaintiffs instituted a John Doe action and sought by way of deposing Engle to learn the identity of the author of the statements. After Engle asserted the attorney-client privilege, plaintiffs moved to compel Engle to disclose the name of his client. The Chancery Division Judge denied the motion on the basis that disclosure would "undercut the values that underlie the attorney/client privilege." We disagree and reverse.
The facts are uncomplicated. In February 1991, Engle was contacted by a former executive, John Doe, of Georgia Kaolin Company (Georgia) who expressed "concern of possible improprieties on the part of senior management" at Georgia. John Doe sought counseling "on what steps might be taken to bring these improprieties to the attention of management at Asea Brown Boveri [ABB], the parent company of Georgia [the corporate stock holder of Dry Branch]." As a result of this meeting on March 11, 1991, Engle wrote a letter to Gerhard Schullmeyer of ABB outlining the "serious ethical, and even potential criminal, questions about the conduct of senior management of Georgia Kaolin Company." Engle asked Schullmeyer to contact him if he wished to pursue this matter with his client.
ABB received a letter dated April 27, 1991 concerning questionable ethical practices and possible criminal actions at Georgia Kaolin, and was signed "a Former Employee." The letter noted that "these allegations were relayed by my attorney" in a
letter to Schullmeyer on March 11. On July 1, 1991, Engle wrote to John P. Brett, Vice President and Chief Counsel for ABB stating that there was nothing left to do regarding representing his client, and therefore, he and his client agreed to terminate their relationship. Engle said that he would forward to his client Brett's letter of June 28, 1991 and would suggest that his client contact Brett directly if he wishes to pursue the matter.*fn2
In the latter part of July 1991, a letter was addressed to Brett regarding Brett's previous contact with Engle and his delay in responding to Engle's March 22 letter. The letter was signed "a Former Employee."
A subsequent letter dated August 12, 1991 was addressed to Brett referring to the alleged criminal activity of Brett, Hartley and Boylan and stated that the writer of the letter had been in contact with the Internal Revenue Service regarding these illegal transactions.
Plaintiffs attempted to learn the identity of Engle's client but Engle refused to disclose the information. On December 17, 1991, plaintiffs filed a John Doe complaint alleging false, malicious and untrue statements by John Doe and sought injunction and other relief. On January 24, 1992, plaintiffs deposed Engle to learn the identity of his client. Engle acknowledged that he wrote and sent the March 11, 1991 letter to Schullmeyer and the July 1, 1991 letter to Brett but refused to disclose the identity of his client. After plaintiff's motion to compel Engle to disclose his client's identity was denied, we granted plaintiffs' motion for leave to appeal.
Plaintiffs contend that the "extension of the [attorney-client] privilege encroaches upon the rights of Dry Branch, frustrating plaintiffs' efforts to ...