On certification to the Superior Court, Appellate Division, whose opinion is reported at 394 N.J. Super. 292 (2007).
(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).
In this appeal, the Court considers the scope of the authority of the courts to visit upon a client the burden of a penalty imposed because of his or her attorney's violation of the obligation of candor to a tribunal.
Carol Brundage was represented by Patrick T. Collins in a family law matter. Prior to his filing a complaint in the Brundage matter, Collins represented Jeanette Levine, the plaintiff in a pending matter in Essex County where the critical issue was whether cohabitation was an essential element of a palimony claim. In June 2004, the Family Part judge in the Levine matter issued an unpublished decision granting defendant's motion to dismiss the complaint, concluding that because the cause of action rested on the existence of a marital-type relationship, no palimony claim could proceed without evidence of cohabitation. Collins appealed to the Appellate Division, raising the question of "whether cohabitation is an indispensable element of a cause of action seeking palimony support."
While the Levine appeal was pending, Brundage retained Collins to represent her in a palimony claim against defendant, Estate of Carl Carambio (Estate). In October 2004, Collins filed a complaint on behalf of Brundage in the Family Part, Union County. Similar to the parties in the Levine matter in the Essex County, Brundage and Carambio had not cohabitated at any time during the course of their relationship. In her complaint, Brundage alleged that Carambrio had made an oral promise to support her for the rest of he life and had instructed his attorney to draft changes to his estate plan to effectuate that promise, but that his wishes had been thwarted by Carambio's family who had prevented him from executing the revised will during the last days of his life. Brundage argued that, notwithstanding the failure of the parties to cohabitate, those facts evidenced a promise sufficient to support a right in contract that survived Carambio's death as a claim against his estate.
Following discovery, in April 2005, the Estate moved to dismiss the complaint, contending that cohabitation was an essential element of a palimony cause of action and that Brundage's stipulation that she and Carambrio had not cohabitated was a fatal flaw warranting dismissal. In opposition to that motion, Collins filed a brief in which he argued, as a matter of law, that cohabitation was not an essential element of the palimony cause of action. Although the argument was consistent with the position taken in the Levine matter, Collins did not disclose to the trial court the existence of that matter, that the trial judge in Levine had decided the issue against him, or that the question was then pending on appeal.
Collins opposed the Estate's motion, making four carefully worded statements in his brief regarding published and reported decisions in New Jersey that have since become the focus of these proceedings because of Collins' failure to reveal the existence of the Levine matter. In July 2005, the Family Part judge denied the Estate's motion to dismiss, concluding that there was a sufficient factual basis on which to deny the motion to dismiss.
The Estate then moved before the Appellate Division for leave to appeal. In opposing that motion, Collins did not disclose to the Appellate Division judges either the contrary conclusion in the unreported decision in the Levine matter or the fact that an appeal was pending. The Appellate Division denied the Estate's motion for leave to appeal. Thereafter, in October 2006, the parties reached a settlement, wherein the Estate agreed to pay Brundage $175,000 by February 1, 2006.
On February 6, 2006, but prior to the effectuation of the Brundage settlement, the Appellate Division published its decision in Levine, holding that cohabitation is an essential element of a palimony action. After learning of the Levine decision and the fact that Collins had represented the plaintiff in that case, the Estate moved to rescind, terminate, or estop Brundage from enforcing the settlement based on a theory of concealment of a material fact or anticipatory breach. The trial judge declined to grant the relief requested, reasoning that the unpublished Family Part decision in Levine would not have been binding precedent and thus, that decision or the pending appeal was not required to have been disclosed by Collins. The judge also found that the Estate had not proven materiality and detrimental reliance as elements of fraud entitling the Estate to relief. The court concluded that even if Collins had perpetrated a fraud, there was no basis to attribute that to his client and, therefore, there was no ground to set aside the settlement. The court noted that defense counsel had some obligation to keep abreast of relevant pending matters. Moreover, the trial judge determined that there are varied reasons for reaching settlement and that there was no evidence that Collins' silence on the Levine matter had any direct relevance to the decision to settle.
The Appellate Division noted on appeal that, pursuant to the Rules of Professional Conduct (RPCs), the Estate would be entitled to relief if the existence of the pending appeal was a material fact. The appellate panel concluded that because the Case Information Statement (CIS) that must be filed in connection with an appeal requires disclosure of existing similar appeals, and because the efficient administration of justice demands coordination of matters on appeal, public policy would have militated in favor of granting the motion for leave to appeal had the existence of the Levine appeal been disclosed. Therefore, the panel found that the existence of the Levine appeal was a material fact creating an ethical duty for counsel to have disclosed it, a duty Collins violated. In response, the panel set aside the settlement.
The Supreme Court granted certification.
HELD: The behavior of plaintiff's attorney, although certainly calculated to work an advantage for his client based on information that was uniquely his, approached but did not exceed the bounds of acceptable behavior identified by our ethical rules. It was a course of conduct the Court neither applauds nor encourages, but one that our rules do not prohibit. Thus, the imposition of a litigation sanction on the attorney's client cannot be condoned.
1. RPC 3.3 addresses an attorney's requirement of candor toward a tribunal. Subsections (a)(1), (a)(3), and (a)(5) of that RPC have relevance to this appeal. Subsection (a)(1) prohibits a lawyer from making a false statement of material fact or law to a tribunal. Because the information that Collins knew, but did not reveal, is not a matter of fact or of law, he did not violate RPC 3.3(a)(1). RPC 3.3(a)(3) requires a lawyer to disclose court opinions and decisions that constitute "legal authority in the controlling jurisdiction," even if that authority is directly contrary to the interest of the client being represented by the attorney. Rule 1:36-3 provides, however, that unpublished opinions do not constitute precedent and are not binding on another court. Because the Levine decision was an unpublished trial court decision, it was not "legal authority in the controlling jurisdiction" obligating Collins to reveal to the Family Part judge or the appellate panel. (Pp. 16-21)
2. In its initial articulation, RPC 3.3(a)(5) prohibited a knowing failure "to disclose to the tribunal a material fact with knowledge that the tribunal may tend to be misled by such failure." In 2004, the Court amended the language of subsection (a)(5), raising the threshold "tend to be misled" to the current language "reasonably certain to mislead." The language change is significant because almost all of the published decisions on this issue, and all of those relied on by the Appellate Division, arose in the context of the language prior to the 2004 amendment. (Pp. 21-27)
3. The sole basis for the Appellate Division's conclusion that counsel had violated RPC 3.3(a)(5) was his failure to notify the panel reviewing the motion for leave to appeal of the pending Levine appeal, thereby interpreting (a)(5) as imposing an affirmative duty to inform an appellate panel of a pending matter with substantially similar issues. In the context of this appeal, it is important to note that the Appellate Division's power to grant leave to appeal is exercised only sparingly. In addition, settlements are usually honored absent compelling circumstances. (Pp. 27-32)
4. There is an inherent tension between an attorney's duty of candor to the tribunal and his or her duty to be a zealous advocate for the client. Conduct that falls on the wrong side of that line, even if well-intentioned, subjects the attorney to discipline and, where appropriate, sanctions. Traditionally, the Court has separated the unethical acts of the attorney from the cause of action of the client, preferring to penalize the attorney and not the innocent client. (Pp. 32-35)
5. The Court does not approve of "sharp practices," which are tactics employed by some members of the bar that are not explicitly unethical but nonetheless tread perilously close to the line of being unacceptable. It cannot be said that Collins, in failing to disclose the existence of the Levine decision or its pending appeal, knew that the omission was reasonably certain to mislead the tribunal. Nor is there evidence that the Family Part judge was misled or that awareness of the Levine matter would have had any impact on the judge's decision on the merits of the motion. Further, there is nothing in the record that suggests that knowledge of the existence of the Levine appeal would have vaulted the otherwise unexceptional motion for leave to appeal over the "interest of justice" threshold into the realm of a motion that would have been granted. In the absence of a conclusion that knowledge of the Levine appeal would likely have had such an impact on the motion, it cannot be concluded that Collins' election to carefully word his brief so as to sidestep revealing it actually violated RPC 3.3(a)(5). (Pp. 35-42)
6. Applying ordinary rules regarding settlements and their enforcement leads to the conclusion that there was no evidence requiring the settlement be set aside. Brundage had no knowledge of the pending appeal and the judge found in denying the motion to set aside the settlement that the defense had not met its burden of demonstrating that the settlement would not have been reached or would have been materially different. That finding was entitled to deference. Moreover, the appellate panel penalized the offending attorney's client rather than the attorney. Attempting to enforce the RPCs through imposition of sanctions on a client is outside the role of trial and appellate courts. (Pp. 42-46)
7. If the Court were to conclude that an attorney has an affirmative duty to advise his adversary or the court of every unpublished adverse ruling against him, a system would be created in which a single adverse ruling would be the death knell to the losing advocate's practice. Nor would it advance the administration of justice. In addition, to agree with the appellate panel would be to conclude that each time a decision on a new issue is made at the trial level and is pursued on appeal; all similar issues must await that outcome. Further, parties enter into settlements for many reasons and they are routinely enforced. The Family Part judge made a determination that was overlooked by the appellate panel because of its own view of Collins' behavior. In addition, and unique to this case, the Levine opinion turned out to be incorrect in light of the Court's recent opinion on the issue raised here. Sharp practices and "playing fast and loose" with the rules that govern the legal profession are behaviors entitled to the Court's stern condemnation. When such behavior amounts to a violation of the RPCs, it calls for disciplinary sanctions on the attorney, and, in an appropriate case, might call for sanctions on the attorney other than the imposition of discipline. Any penalty to be imposed should be visited on the attorney and not the client. The appellate panel erred by imposing a penalty on Brundage that was intended to be an act of discipline. (Pp 46-50)
Judgment of the Appellate Division is REVERSED and the Order of the Family Part enforcing the settlement is REINSTATED.
JUSTICE ALBIN, CONCURRING, in which JUSTICE WALLACE joins, respectfully concurs with the Court's well-reasoned decision but cannot agree that Collins deserves to be publicly castigated by this Court because, in compliance with out Court Rules and the RPCs, he did not disclose knowledge about an unpublished trial court decision that would have been harmful to his client's case. However close Collins came to the line separating professional from unprofessional conduct, he did not cross that line.
CHIEF JUSTICE RABNER and JUSTICES LONG, LaVECCHIA and RIVERA-SOTO join in JUSTICE HOEN'S opinion. JUSTICE ALBIN filed a separate concurring opinion, in which JUSTICE WALLACE joins.
The opinion of the court was delivered by: Justice Hoens
In this appeal, we are called upon to consider the intersection between zealous representation of one's client and an attorney's obligations of candor to a tribunal. More to the point, we are called upon to consider the scope of the authority of the courts to visit upon a client the burden of a penalty imposed because of his or her attorney's violation of that obligation of candor.
The facts and circumstances that bring this matter before the Court are in some ways truly unique because, merely by the happenstance of timing, the effect of the attorney's behavior, even if we were to find that it violated our ethical standards, could not have affected the outcome of the litigation. Although we regard this attorney's behavior as worthy of reproach, in the end we cannot conclude that he violated his duty of candor to the trial court or to the Appellate Division. More to the point, however, we cannot endorse the decision of the appellate panel to visit punishment for the attorney's behavior on his entirely innocent client.
We reach our result today with some reluctance, however. But for the fact that the point of law that was central to the parties' dispute, and that became the lynchpin for their decision to settle, has now been decided by this Court in favor of the attorney in question, his behavior might otherwise have worked to provide an unfair advantage for his client. Nevertheless, our strong sense of the requirements of justice demands that our ethical rules be enforced vigorously, but not without attention to their content and purpose; that those rules be enforced by this Court through the disciplinary mechanisms we have established; and that punishment for violations of those rules fall, with exceedingly rare exceptions, on the offending attorney rather than upon his or her client.
Applying these standards, we cannot escape the conclusion that this attorney's behavior, although certainly calculated to work an advantage for his client based on information that was uniquely his, approached but did not exceed the bounds of acceptable behavior identified by our ethical rules. As such, it was a course of conduct that we neither applaud nor encourage, but nevertheless, one that our rules do not prohibit. In that context, imposing a litigation sanction upon his client cannot be condoned.
We begin with a recitation of the facts that give rise to this dispute, focusing, as we must, on the facts as they relate to the acts of plaintiff's attorney, Patrick T. Collins.
Prior to the filing of the complaint in this litigation, Collins represented one Jeanette Levine. She was the plaintiff in an action pending in Essex County in which the critical issue was whether cohabitation was an essential element of a palimony claim. See Levine v. Konvitz, 383 N.J. Super. 1 (App. Div.), certif. denied, 186 N.J. 607 (2006). In June 2004, the Family Part judge in the Levine matter issued an unpublished decision granting defendant's motion to dismiss the complaint that Collins had filed on behalf of Levine. The Essex County judge, after considering this Court's rulings relevant to that novel question of law, see In re Estate of Roccamonte, 174 N.J. 381 (2002); Crowe v. De Gioia, 90 N.J. 126 (1982), concluded that because the cause of action rested on the existence of a marital-type relationship, no palimony claim could proceed without evidence of cohabitation. Collins filed an appeal in that case, raising the question of "whether cohabitation is an indispensable element of a cause of action seeking palimony support." Levine, supra, 383 N.J. Super. at 2.
While that appeal was pending, plaintiff Carole Brundage retained Collins to represent her in a palimony claim to be filed against defendant Estate of Carl Carambio. In October 2004, Collins filed the complaint on behalf of Brundage in the Family Part in Union County. Like Levine and the defendant in the Essex County matter, Brundage had not cohabited with Carambio at any time during the course of their relationship. Brundage asserted that although they never resided in the same household together, beginning in 1991 and continuing until Carambio's death, they dined and spent weekends together frequently, traveled on numerous vacations together, and regularly enjoyed recreational activities. In addition, Brundage alleged that Carambio was generous to her, showering her with gifts, supporting her lifestyle, and providing her with a credit card for her use. Moreover, she contended that she cared for Carambio throughout most of his final illness in place of his family members, who only interceded near the very end of his life.
As a part of plaintiff's claim, she alleged that Carambio had made an oral promise to support her for the rest of her life and had instructed his attorney to draft changes to his estate plan to effectuate that promise, but that his wishes had been thwarted by his spouse and children who had prevented him from executing the revised will during his last days of life. Brundage argued that, notwithstanding the failure of the parties to engage in cohabitation, those facts evidenced a promise sufficient to support a right in contract that survived Carambio's death as a claim against his estate.
Following discovery, in April 2005, the Estate moved to dismiss the complaint, arguing that cohabitation was an essential element of a palimony cause of action and that plaintiff's stipulation that the parties had never cohabited was fatal to her complaint. In opposition to that motion, Collins filed a brief in which he argued, as a matter of law, that cohabitation was not an essential element of the cause of action. Although that argument was consistent with the position Collins had taken in the Levine case, he did not disclose to the trial court the existence of that other matter, or that the Family Part judge in the Levine case had decided the issue against him, or that the question was then pending on appeal.
Instead, in his opposition brief, counsel included four statements that have since become the focus of these proceedings. First, he asserted that "no New Jersey case has held [cohabitation] to be a requirement for the enforceability of [a palimony] agreement." Second, he wrote that "nowhere has there been articulated in any reported decision in New Jersey a rule of law to the effect that in order for [a palimony] agreement to be enforceable, it is necessary that the parties live in the same residence and/or hold themselves out to be husband and wife." Third, he emphasized that "no reported decision in New Jersey has held that the absence of the sharing of a single residence by the parties to [a palimony] agreement renders it unenforceable." Finally, counsel maintained that if the Family Part judge in this matter held that cohabitation was an essential element of a palimony cause of action, the court would "do so in the absence of any New Jersey precedent."
In July 2005, after hearing oral arguments, the Family Part judge denied defendant's motion to dismiss. That judge, like his counterpart in Essex County, analyzed this Court's decisions in Roccamonte and Crowe, as well as other decisions called to the court's attention, in order to discern whether any of them included a requirement of cohabitation as a prerequisite for a palimony claim. The Family Part judge in this matter, however, reached a conclusion different from the judge in Levine. The judge in this matter concluded that the language in Roccamonte, defining the parameters of the cause of action, did not evidence an intention to exclude individuals who had all of the indicia of a promise of support sufficient to bespeak a contractual agreement, absent only a period of cohabitation. Recognizing that the issue was not ...