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Fahs Rolston Paving Corp. v. Pennington Properties Development Corp.

December 27, 2006

FAHS ROLSTON PAVING CORP., PLAINTIFF,
v.
PENNINGTON PROPERTIES DEVELOPMENT CORP., INC., ET AL., DEFENDANTS.



The opinion of the court was delivered by: Bongiovanni, J.

OPINION and ORDER ON INFORMAL MOTION

This matter comes before the Court on an informal motion to compel discovery by Plaintiff, Fahs Rolston Paving Corporation ("Fahs Rolston" or "Plaintiff"). Fahs Rolston contends that Defendants Mark Ellenbogen and Peter Blicher (hereinafter respectively "Ellenbogen" and "Blicher") waived the attorney-client privilege by relying on the advice of counsel during their depositions, and therefore that Fahs Rolston is entitled to discovery on the specifics of that advice. (Fahs Rolston Letter Brief of June 29, 2006 ("Moving Brief") at 1). On July 11, 2006, Defendants Stark & Stark and Daniel Haggerty, Esq., (hereinafter collectively "Stark") filed an opposition letter brief and informal cross motion to compel discovery under the same waiver of attorney-client privilege theory (hereinafter "Stark Opposition Brief"). Defendants Pennington Properties Development Corporation, Inc., Westrum Development Company, Ellenbogen and Blicher (hereinafter collectively "Pennington") filed a letter brief in opposition to Plaintiff's informal motion and in support of Stark's cross-motion on July 13, 2006 (hereinafter "Pennington Opposition Brief"). Fahs Rolston submitted a letter reply brief on July 13, 2006 (hereinafter "Reply Brief"). No oral argument has been held pursuant to Fed. R. Civ. P. 78. The Court has reviewed the submissions of the parties and for the foregoing reasons Fahs Rolston's informal motion to compel is GRANTED and Stark's informal cross-motion to compel is DENIED.

I. Background

The parties are familiar with the background and lengthy history of this matter and therefore it shall not be repeated here at length. The underlying case revolves around an agreement between Fahs Rolston and Pennington for the purchase and development of a subdivision of real property in Lawrence Township, New Jersey. Defendants Stark represented both Fahs Rolston and Pennington in this deal. The agreement subsequently failed.

On September 28, 2000, Messrs. Fahs and Burritt of Fahs Rolston and Blicher and Ellenbogen of Pennington met to discuss the land deal. (Pennington Opposition at 3). Also present were Daniel Haggerty, Esq., representing Pennington and Marc Citron, Esq., representing Fahs Rolston. (Id.) Pennington and Stark assert that during the meeting Fahs Rolston stated that it could not obtain financing for the development project. (September 28, 2004 Opinion of the District Court at 4 [Docket Entry No. 25] (hereinafter "September 28, 2004 Opinion")). Fahs Rolston contends that it did not relinquish its participation in the project and it had every intent to move forward. (Id. at 4-5). "Rather, Fahs Rolston claims that [it] merely inquired as to whether Pennington Properties had any contacts with financial institutions that were financing such projects and/or whether [Pennington Properties was] interested in participating in Plaintiff's part of the Project." (Id. at 5 (internal quotations omitted)).

On October 3, 2000, Pennington sent Fahs Rolston a Notice of Default, alleging breach of the land use agreement. (Id.) Fahs Rolston responded on October 25, 2000, arguing that Pennington breached the contract and requesting that Stark immediately cease representing Pennington because of the existence of a conflict of interest. (Id.) Soon thereafter litigation commenced and the parties have, on numerous occasion, attempted to pierce the attorney-client privilege.

A. Fahs Rolston's Claims

Fahs Rolston claims that Ellenbogen and Blicher waived the attorney-client privilege by relying upon the advice of counsel during deposition testimony regarding events that occurred during September and October 2000. (Moving Brief at 1). Ellenbogen's deposition took place on May 31, 2006, and Blicher's commenced on June 1, 2006. (Id. at Ex. A, B). During the depositions, Fahs Rolston's line of questioning was designed to support their contention that "Ellenbogen and Blicher had no basis to declare [Fahs Rolston] in default and that this was conjured up because Defendants had already decided to eliminate [Fahs Rolston's] portion of the Project." (Moving Brief at 3). When questioned, Ellenbogen and Blicher "both stated that they were not acting willfully, but rather that they relied on advice of counsel." (Id.; see also Blicher Dep. at 103:9-10, 108:5-6, 118:14-15, 120:1-3, 130:6-9; Ellenbogen Dep. at 51:5-6).

B. Stark and Pennington's Claims

Stark argues that Carl Guy (hereinafter "Guy"), a "representative of [Fahs Rolston] placed the advice of counsel at issue as an affirmative defense to [Pennington's] breach of contract claim." (Stark Opposition at 6). Pennington asserts that "it is clear that plaintiff is hiding behind the directives of Marc Citron who no doubt orchestrated this tortured set of facts to find a vehicle for his client to abandon the contract." (Pennington Opposition at 8). Guy's deposition took place on February 1, 2006. (Stark Opposition at Ex. A). When Guy was questioned about whether Fahs Rolston was able to proceed with the transaction and whether Pennington was advised of this, he expressed his thoughts on conversations with Fahs Rolston's counsel. (Id.at p. 23-25, 37-38, 53:1-12, 53-56).

Pennington further asserts that the Court should pierce or waive the attorney client privilege to all communications regarding all parties. (Pennington Opposition at 8). The Court also notes that Pennington's opposition brief fails to assert the attorney-client privilege between Pennington and Stark and barely mentions Fahs Rolston's assertions that Ellenbogen and Blicher waived the attorney-client privilege.

II. Analysis

A. Choice of Law

As a preliminary matter, the Court notes that jurisdiction is based on ...


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