August 28, 2008
SUSAN ANN LAUBACH, PLAINTIFF-APPELLANT,
COLIN QUINN, APPLEGATE QUINN AND MAGEE, JOSEPH SCIARETTA AND PATRICIA SCIARETTA, DEFENDANTS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Law Division, Morris County, L-202-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued May 28, 2008
Before Judges Coburn, Chambers and Waugh.
This appeal requires us to address the parameters of discovery concerning the notes of a party's psychotherapist when the psychotherapist is a licensed physician (psychiatrist) rather than a licensed psychologist and when that party's mental health condition is not primarily at issue in the litigation. Because we have determined that the motion judge's discovery order was overly broad and inadequately protective of highly personal information, we vacate the dismissal of the action and remand for further proceedings not inconsistent with this opinion.
Plaintiff Susan Ann Laubach is the daughter of Charles P. Laubach, who died testate in 2002. Three months prior to his death, Charles executed a will containing a special needs trust for Susan, naming as trustees his other daughter, defendant Patricia Sciaretta, her husband, defendant Joseph Sciaretta, and a financial institution. Twenty-nine percent of Charles's residuary estate was left to the trust. Any trust assets remaining at Susan's death are to be distributed to Patricia and her two children.
The relevant portion of the trust provision of the will provides as follows:
(a) Twenty-Nine Percent (29%) to the Trustees, hereinafter named, of a Special Needs Trust for the benefit of my daughter, SUSAN ANN LAUBACH, if she survives me. It is my intention to create a special needs trust so that the Trustee shall have complete discretion over any distributions for my daughter, SUSAN ANN LAUBACH. I grant to the Trustee sole and absolute discretion to invade income and principal for any need that may be required for my daughter, SUSAN ANN LAUBACH, taking into consideration any aid that she may receive from any governmental source. It is my intention that no part of the trust shall be used to supplant or replace public assistance benefits of any county, state, federal or other governmental agency that has a legal responsibility to serve persons with disabilities that are the same or similar to those which SUSAN ANN LAUBACH may be experiencing. The Trustee should cooperate with the beneficiary's conservator, guardian, or legal representative to seek support and maintenance for the beneficiary from all available resources, including but not limited to, the Supplemental Social Security Income Program (SSI); Supplemental Income Program (SIP); the Old Age Survivor and Disability Insurance Program (OASDI); the Medicaid Program; and any additional, similar or successor programs; and from any private support sources. Any expense of the Trustee, including attorney fees, shall be a proper charge to the trust. No interest of this Trust shall be subject to anticipation or voluntary or involuntary alienation. Upon the death of my daughter, SUSAN ANN LAUBACH, or in the event that she does not survive me, the balance on hand shall be distributed in equal shares to PATRICIA LEE SCIARETTA, MICHAEL SCIARETTA and LEE ANN ENG. If any of them shall not survive me, his or her share shall be distributed as set forth in the other sections of this Article Two.
Although Susan concedes that she has been diagnosed with several forms of mental illness, including bipolar disorder, depression and anxiety, she contends that she is able to function normally, pointing to the fact that she retired after a thirty-five year career in teaching and that she continues to work part-time. She maintains that she does not have or need a conservator or a guardian, and consequently does not require a special needs trust.*fn1 Susan argues that her father never intended there to be a special needs trust, which had not been included in his two prior wills. Instead, she asserts that her sister and brother-in-law arranged for the inclusion of the trust in the will so that her access to her father's bequest would be limited, thereby preserving the assets for members of their family to inherit on her death.
Susan initially challenged the will in the Chancery Division, Probate Part, but her action was dismissed as untimely. See R. 4:85-1, which generally requires a person aggrieved by the probating of a will to file a challenge within four months. She filed the present action in January 2006. The initial defendant was Colin Quinn, the attorney who drafted the will. Susan subsequently filed an amended complaint to name Quinn's law firm and her sister and brother-in-law as defendants. The amended complaint states eight causes of action, including malpractice, breach of fiduciary duty, fraud and defamation.
During the discovery process, a dispute arose with respect to Quinn's request that Susan produce copies of all of her mental health records, including the notes of her psychotherapist, who is psychiatrist rather than a psychologist. As will be seen, the difference has some significance because a psychiatrist, being a physician, is covered by the physician-patient privilege, N.J.R.E. 506 and N.J.S.A. 2A:84A-22.1, whereas a psychologist is covered by the more restrictive psychologist-patient privilege, N.J.R.E. 505 and N.J.S.A. 45:14B-28.
Quinn moved for an order compelling production of the psychotherapy records, as well as other documents not at issue on this appeal. Susan opposed the motion, requesting oral argument because of the confidential nature of the records at issue. The motion judge denied oral argument and ordered production of the documents. The motion judge did not explain his reasons, nor did he order an in camera review of the documents.
Susan filed a motion for reconsideration, again requesting oral argument. The motion judge again denied oral argument. He also denied the motion. He briefly explained his reasons at the foot of the order. After noting that oral argument is not required on discovery motions, R. 1:6-2(a), and that Susan had failed to meet the "stringent standard" for reconsideration set forth in Cummings v. Bahr, 295 N.J. Super. 374, 384 (App. Div. 1996), he stated his conclusion that the documents were "clearly relevant to the issues in the case."
Susan filed an unsuccessful motion for leave to appeal the discovery orders. She then produced all of the disputed documents except for the psychotherapy records. Quinn subsequently moved for dismissal of the amended complaint without prejudice for failure to produce the disputed records as previously ordered. Susan opposed the motion and requested oral argument. The motion judge granted oral argument, which was held on May 25, 2007.
The oral argument centered on whether the psychotherapy records were relevant to the case and whether they were protected by the more restrictive psychologist-patient privilege, which affords such records the same level of protection as the attorney-client privilege, or whether they were covered by the physician-patient privilege, which contains the following specific exception: "There is no privilege under this act in an action in which the condition of the patient is an element or factor of the claim or defense of the patient or of any party claiming through or under the patient or claiming as a beneficiary of the patient through a contract to which the patient is or was a party or under which the patient is or was insured." N.J.R.E. 506(d); see Arena v. Saphier, 201 N.J. Super. 79, 85 (App. Div. 1985), holding that the quoted language is not applicable to the psychologist-patient privilege.
The motion judge held that the physician-patient privilege (N.J.R.E. 506) was applicable, that Susan had put her mental condition at issue and that the documents were relevant. He did, however, limit the period of disclosure to ten years, rather than the thirty years originally ordered. Initially, the motion judge declined to review the documents in camera because of the time involved in reviewing "massive amounts of documents." However, he subsequently agreed to do so, "against [his] best instincts," but then went on to state that he "trust[ed] that [Susan's counsel was] not going to bombard [him] with hundreds of pages of documents." He added that "if it does come to that, then [he might] modify the ruling."
Because Susan's attorney had stated during oral argument that Susan was not willing to provide the psychotherapy records for in camera review, the motion judge dismissed that case without prejudice for failure to comply with the prior order, as modified. He set forth the parameters required for a motion to reinstate, specifically that ten years of the psychotherapy records be provided for his in camera review.
Susan did not move to restore the amended complaint or produce the disputed records. In August 2007, Quinn moved for dismissal with prejudice. Oral argument on that application, which is required under Rule 4:23-5(a)(2), was held on October 10, 2007. The motion judge granted the motion and stated his reasons as follows:
As long as the mental state of the plaintiff is an issue in the case, and the Court believes that it is, then the records have to be disclosed. They can be disclosed to the Court, an in-camera review can be done, which I'm certainly not anxious to do, but I would represent to plaintiff's counsel, and the plaintiff apparently is sitting here, that if there are things in there that do not need to be disclosed, they won't be disclosed, but I can't expect the defense to just sit with a certification from a treating psychiatrist who says she is competent to handle her own affairs and accept that on face value. These records, I believe, are relevant.
How much they get used at a trial is another issue, but they certainly are relevant discovery, and it's necessary, when we're discussing the testator's intent and why his intent was captured in a special needs trust to determine the mental competency of the plaintiff. It may not be the only issue that such a trust was created, but as long as it's an issue, then they have to be disclosed. And I've ruled on this on several occasions. I'm not going to recite the procedural history because I was closer to it earlier on than I am now and I don't want to recite something now that would contradict what was said before.
But I've given Miss LaGrotta, I think, ample opportunity to state her position in person, in briefs, and I just plain disagree with it. And the Appellate Division did not find on interlocutory appeal that I was so incorrect that they had to take the matter on an interlocutory basis and reverse the trial court.
I reduced the records from 30 years to 10 years. I've said it can be in camera and, I mean, I would eliminate the last five years if there is continuing treatment because we're talking about the testator's intent in 2002, but I'm not going to completely reverse my prior position. I cannot understand what the reluctance is here.
MS. LA GROTTA: Can I ask a question, Your Honor?
THE COURT: And I don't draw that significant a distinction between a psychiatrist and any other physician, but we have medical records turned over in cases every day of the week; and, I'm sorry, psychiatric records may strike deeper than other medical records, but if you're going to have litigation of this sort, then I believe these records are relevant and they're going to have to be disclosed. So I'm not reversing my prior position.
I would give you ten days to think about it further. I will give you every opportunity to discuss it with your client, but if you're position is as firm as it has been and under no circumstance are you turning anything over, even in camera, then I am going to grant the motion to dismiss the case with prejudice.
MS. LA GROTTA: May I ask one question? Would Your Honor be willing to restrict the order from the prior will of 2000 to the will of 2002? Because clearly under their position something happened in the two years.
THE COURT: No. Apparently, there's a history here. And what I mean by that is, Mr. Quinn dealt with Charles Laubach over a number of years and I have a feeling a lot of this history is going to come into play in this case. I don't have all the details at this point, but I'm unwilling to just restrict it to a two-year period. It's one thing if we're talking about the last five years because I don't think that has any significance. It's one thing if we are going way, way back in time because that could be too remote, but certainly for the ten years, 1992 to 2002, and I'm saying this without speaking with Mr. McCormick or Mr. Roney again, but I would think that's a period that we could deal with.
MR. MC CORMICK: I have no objection to that time period.
MS. LA GROTTA: What if -
THE COURT: That's 1992 to 2002.
MS. LA GROTTA: One last question.
They have indicated a -- I had requested, if we did disclose the records, concern about them being shared with her sister and brother-in-law, and I was told that they would insist that they be done so. If the records were to be turned over, is there a way that it could be limited to counsel and Mr. Quinn?
THE COURT: Yeah. Why do we have to get involved with the sister and brother-inlaw?
MR. RONEY: Your Honor, Just -
THE COURT: I'm sorry, Mr. Roney.
MR. RONEY: That's okay.
Just to the extent that if the records are turned over and we don't have the testator to tell us whether or not he was aware or unaware of certain events, if the brother and sister -- brother-in-law and sister are aware of the events, or perhaps there is -- they were unaware of the events --
THE COURT: I'm sorry. Are they --they're all parties here?
MS. LA GROTTA: Yes, Your Honor.
THE COURT: I mean, if they're parties, you're really tying the hands of parties. It's one thing --
MS. LA GROTTA: If they're aware of issues, they know them. If they're not aware, they're going to be made aware of things. For what purpose in defense of their litigation does that help them?
And that, I think, is certainly part of the reticence to turn over these records.
There's a bad family history, to begin with, between my client and her sister. This would just feed right into it.
MR. RONEY: I have not discussed the issue with my clients, I believe since when we were here last. I certainly can discuss that issue, but I do think that in order to provide an effective defense, I need to speak with at least the sister, if not both the sister and brother-in-law, to determine the family dynamics at the time, were there events going on during the -- in the time period when some of these medical histories may be relevant, what was said back and forth. And perhaps they don't remember. Perhaps they need to refresh their recollection as to events that happened ten years ago. I can't right now say that --that I won't need them to --
THE COURT: Yeah. I understand that, and I don't blame you.
I would be willing to give counsel two weeks, ten day, two weeks, whatever, to deal with that issue.
I would give you then days two weeks to decide whether you'll reconsider your position, but if you just -- if your intransigence continues, I'm sorry, the case is done.
MR. RONEY: Your Honor, just on -- on one minor point, and perhaps this can be resolved between counsel in the next ten days. If I'm hearing the theory of the case correctly at this point, the issue is the testator's intent at the time the will was signed and whether the will properly captured that intent. The claims against the Laubachs are the conspiracy and for fraud.
MS. LA GROTTA: The Sciarettas.
MR. RONEY: The Sciarettas, I'm sorry. While I'm not specifically sure about the factual basis for that fraud, because we haven't particularly gotten into that in discovery and it's not clear on the face of the complaint, if we are now -- if the discovery has now shown that really the intent and the capturing of the intent is the issue, whether or not my clients were involved in contacting the -- the firm to begin the process is irrelevant to whether the lawyers in this case captured the intent and properly put the -- special needs trust in the case.
THE COURT: What it sounds like, from what you're saying, and I -- if I knew this, I've long since forgotten, that the allegation is that the family members conspired with Mr. Quinn to create this special needs trust, where it was absolutely unnecessary.
MR. RONEY: From what I can glean, that's the case, Your Honor.
THE COURT: Right. I mean, it sounds to me like -- I'll still give everybody the opportunity.
It sounds to me like they're going to need to see this, quite honestly. I mean, I --
MR. RONEY: And the reason why I'm not --
THE COURT: I am not going to handicap people, in terms of their ability to either prosecute or defend a case because of the alleged confidentiality of some medical records. And, I mean, everyone in this day and age is quite up on HIPAA and the confidentiality of medical records and whatnot, but when you get into litigation, things are different. And that's where you're at.
If you want the time, I'll give it to you; otherwise, today it's a grant and a dismissal with prejudice.
MS. LA GROTTA: You can go forward and dismiss, Your Honor.
THE COURT: Go forward with the dismissal?
Well, is that because your client just said it to you, as opposed to you thinking about it and talking with her outside of the courtroom?
MS. LA GROTTA: She will not give me her medical records. And I have no objection to her refusal to turn them over.
THE COURT: All right.
MS. LA GROTTA: That has been her stance from day one.
THE COURT: Okay. Motion granted. Case dismissed.
MS. LA GROTTA: No reason to delay any further
THE COURT: All right.
Susan appeals from the order dismissing her amended complaint with prejudice.
In reviewing the propriety of the dismissal of a plaintiff's complaint with prejudice because of discovery violations, we consider only whether the court abused its discretion. Abtrax Pharm., Inc. v. Elkins-Sinn, Inc., 139 N.J. 499, 517 (1995). This deferential standard of review "cautions appellate courts not to interfere unless an injustice appears to have been done." Ibid. (citations omitted); see also Cavallaro v. Jamco Prop. Mgmt., 334 N.J. Super. 557, 570-72 (App. Div. 2000).
Rule 4:10-2, which allows the parties to "obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action," is to be "liberally construed." Shanley & Fisher, P.C. v. Sisselman, 215 N.J. Super. 200, 216 (App. Div. 1987). N.J.R.E. 401 defines "relevant evidence" as "evidence having a tendency in reason to prove or disprove any fact of consequence to the determination of the action." The "notion of relevance has to do with whether the evidence proffered renders the desired inference more probable than it would be without the evidence." Verdicchio v. Ricca, 179 N.J. 1, 33-34 (2004) (internal quotation and citation omitted).
The central issue in this case is whether Charles wanted a special needs trust, or something like it, for Susan or whether one was put into his will either surreptitiously or as the result of undue influence. Quinn and the other defendants contend that the 2002 will reflects Charles's intentions. In maintaining that it does not, one of Susan's arguments is that there was no need for a special needs trust. She points out that she does not have a guardian or conservator and has not been found to be incapacitated, as that term is defined in N.J.S.A. 3B:1-2 ("[A]n individual who is impaired by reason of mental illness or mental deficiency to the extent that he lacks sufficient capacity to govern himself and manage his affairs.")
As a result, Susan has, at least to a limited extent, put her mental health at issue in this litigation. However, it is clearly not a primary issue, as it would be if she were seeking compensatory damages for a psychiatric injury. Arena, supra, 201 N.J. Super. at 89.
While it is true that Susan has not been found to be "incapacitated" and that there is no guardian or conservator in place, there is still a question of fact as to whether her father believed she was financially vulnerable because of her mental health history and wanted a mechanism, such as some form of trust, to protect the assets that he left her. The defendants contend that Charles had expressed such concerns, and that Quinn placed the special needs trust in the will to address them. Information about the extent and nature of Charles's knowledge of Susan's mental condition and vulnerability with respect to financial management would, consequently, clearly be relevant to the issue of whether Charles actually wanted some sort of protective provision in his will. That sort of information could potentially be found in the records at issue, inasmuch as Susan might have discussed them during therapy.
Having determined that aspects of the psychotherapy records maintained by Susan's psychiatrist are, in broad terms, potentially relevant and thus potentially discoverable, we must next determine whether they are privileged. In Arena, supra, we recognized the highly personal nature of psychotherapy, in contrast to purely medical treatment, as follows:
The nature of psychotherapy might well justify a greater degree of confidentiality and protection than is generally afforded medical treatment of a physical condition. The nature of the psychotherapeutic process is such that full disclosure to the therapist of the patient's most intimate emotions, fears and fantasies is required. The patient rightfully expects that his personal revelations will not generally be subject to public scrutiny or exposure. We recognize that "many physical ailments might be treated with some degree of effectiveness by a doctor whom the patient did not trust, but a [psychologist] must have his patient's confidence or he cannot help him. . . . . [201 N.J. Super. at 86 (internal footnote and quotation omitted).]
See also Kinsella v. Kinsella, 150 N.J. 276, 295-98 (1997) ("[T]he psychotherapist-patient privilege protects the individual from public revelation of innermost thoughts and feelings that were never meant to be heard beyond the walls of the therapist's office."); Smith v. Am. Home Prods. Corp. Wyeth-Ayerst Pharm., 372 N.J. Super. 105, 130 (Law Div. 2003), discussing the added protection given to "psychotherapy notes" under both New Jersey and Federal law.
Quinn argues that the records are, nevertheless, not privileged under N.J.R.E. 506(d), which is part of the physician-patient privilege, because Susan put her mental condition at issue. Susan urges us to apply N.J.R.E. 505, which is part of the psychologist-patient privilege and considerably more stringent than the physician-patient privilege. Even though the records were created by a medical doctor, Susan relies upon the fact that they involve psychotherapy, which is a therapeutic method employed by many types of mental health professionals, including psychologists, psychiatrists and licensed clinical social workers.
In essence, Susan argues that the nature of the treatment, psychotherapy, rather than the licensure of the treating mental health professional, in this case physician versus psychologist, should inform the outcome. However, N.J.R.E. 505, by its specific terms, applies only to communications between "a licensed practicing psychologist and individuals, couples, families or groups in the course of the practice of psychology." We find no basis in law to apply the more stringent provisions of N.J.R.E. 505 to the records of a physician, even one engaged in psychotherapy, given the rule's specific application to licensed psychologists. Arena, supra, 201 N.J. Super. at 85-86.
The fact that the psychotherapy notes are potentially relevant and not privileged does not necessarily mean that they are fully discoverable. Rule 4:10-3 protects parties from discovery under certain circumstances, even when the discovery sought is relevant and non-privileged. A trial court has the authority to enter a protective order "that justice requires to protect a party or person from annoyance, embarrassment, oppression, or undue burden or expense. . . ." R. 4:10-3. There can be no question that the release of her psychotherapy records has the significant potential to embarrass Susan. In Kinsella, supra, the Supreme Court quoted the following language from Group for Advancement of Psychiatry, Report No. 45, Confidentiality and Privileged Communication in the Practice of Psychiatry 92 (June 1960): "Because of the sensitive nature of the problems for which individuals consult psychotherapists, disclosure of confidential communications made during counseling sessions may cause embarrassment or disgrace." 150 N.J. at 296 (quoting Jaffee v. Redmond, 518 U.S. 1, 10, 116 S.Ct. 1923, 1928, 135 L.Ed. 2d 337, 345 (1996)). In addition, if the records contain no or minimal relevant information, their release in bulk would be oppressive in our view.
In determining whether to enter a protective order and what, if any, limitations to put on discovery, the trial courts must balance between considerations supporting disclosure and those supporting the need for confidentiality of the records sought. See In re Liquidation of Integrity Ins. Co., 165 N.J. 75, 92 (2000). The party seeking the protective order bears the burden of demonstrating that one is appropriate.
In this case, the documents at issue are highly personal and confidential. Although they are not actually privileged, solely because of the nature of the therapist's license, the courts and the Legislature have recognized the highly sensitive nature of the documents, as discussed above. Those factors must be weighed against Quinn's need for the documents.
The issue in this case is not whether Susan is incapacitated and in need of a guardian. Even if it were, that decision would be based upon her current, rather than her past, mental condition. See R. 4:86-2(b), which requires two affidavits based upon medical examinations performed within 30 days of the filing of the complaint. See also Kinsella, supra, 150 N.J. at 328, in which the Supreme Court held, in the context of a child custody dispute, that the "first source" of information about a parent's mental health should be "independent experts" rather than "professionals who have an established relationship with the parties."
. . . . Only when the court perceives, after consideration of all of the evidence, that the information gained from independent evaluations is inadequate, should the court consider piercing the psychologist-patient privilege to compel disclosure of prior treatment records to the court and the parties. The decision to order such disclosure must be based on independent evidence of potential for harm to the child, for example, the fact of a recent hospitalization, the opinion of an expert, or the court's own observations. The court must also consider whether, based on the context of the prior treatment, the records are likely to contain relevant evidence, and whether such evidence is likely to be merely cumulative. Before releasing records to the parties, the court should conduct an in camera review, releasing only material that is relevant and material to the issues before it. [Kinsella, supra, 150 N.J. at 328.]
As noted above, the issue is whether Charles, who placed no limitation on his bequest to Susan in wills executed in 1999 and 2000, actually wanted to limit her access to the assets set aside for her benefit when he undertook the preparation of a new will in 2002. The determination of that issue turns primarily on what Charles knew about Susan and what he communicated to his lawyers, rather than what Susan may have told her psychiatrist in the privacy of their therapy sessions during thirty, or even ten or five, years of psychotherapy.
If Susan and her therapist discussed specific topics that relate to the central issue in this matter, such as her father's concerns about how she handled money, her vulnerability to being taken advantage of financially, and his testamentary intentions or his belief that she required a guardian, a conservator or a trustee, then the psychiatrist's notes, carefully redacted, would, in our view, clearly be subject to discovery. However, given the highly confidential nature of the psychotherapy records and the likelihood that the bulk of them would have absolutely no bearing on the issues in this case, we find that the motion judge's articulated reluctance to engage in a careful in camera review of the documents, whatever their volume, and the suggestion that he might refuse or limit an in camera inspection if they were voluminous, raised genuine concern that the documents would be released in bulk and made available, not only to opposing counsel, but also to Susan's sister and brother-in-law. That, in our view, bespeaks an abuse of discretion warranting our interference. Abtrax Pharm., Inc., supra, 139 N.J. at 517.
We find that Susan has met her burden to demonstrate that the psychotherapy notes should be subject to a protective order and that they should not be subject to discovery except to the extent that discrete sections directly touching on Charles and his alleged concerns about her ability to care for herself and handle money, as articulated in the preceding paragraph. Discovery will be limited to the period between the execution of the 2000 will and Charles's date of death.
These are not the type of documents for which the task of separating the relevant sections from the irrelevant should be left to opposing counsel or parties. On remand, if the parties cannot agree on a method for identifying those limited sections subject to discovery, the motion judge should arrange for a careful in camera inspection of the psychotherapy notes to verify that notes that should have been produced were not improperly withheld. The motion judge should also consider whether the initial disclosure should be limited to counsel and experts only, unless there is a genuine need for broader disclosure, such as Susan's relatives who are adverse parties in this action.
The dismissal with prejudice is vacated and the matter remanded for further proceedings not inconsistent with this opinion.