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Morris v. Greitzer and Locks of New Jersey

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


August 20, 2009

MELISSA C. MORRIS, PLAINTIFF-APPELLANT/CROSS-RESPONDENT,
v.
GREITZER AND LOCKS OF NEW JERSEY, L.L.C., GENE LOCKS, JAMES PETTIT, AND MARTIN GREITZER, DEFENDANTS-RESPONDENTS, AND GREITZER AND LOCKS OF NEW JERSEY, L.L.C., THIRD-PARTY PLAINTIFF/CROSS-APPELLANT,
v.
OMINSKY AND MESSA, P.C., AND ALBERT OMINSKY, THIRD-PARTY DEFENDANTS/APPELLANTS-CROSS-RESPONDENTS, AND JOSEPH MESSA AND HARRY R. BLACKBURN & ASSOCIATES, P.C., THIRD-PARTY DEFENDANTS.

On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-3784-01.

Per curiam.

RECORD IMPOUNDED

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued: May 6, 2009

Before Judges Cuff, Fisher and C.L. Miniman.

Plaintiff Melissa C. Morris appeals from a March 14, 2005, summary judgment dismissing her claim under the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to -8 (CEPA); a June 10, 2005, order determining the amount of a settlement with respect to one of her claims; and an April 26, 2007, final judgment awarding her damages on her contract claims in an amount less than she sought and entering judgment against her on counterclaims filed by defendant Greitzer and Locks of New Jersey, L.L.C. (G&L) and third-party defendant Ominsky and Messa, P.C. (O&M). O&M and third-party defendant Albert Ominsky (the O&M defendants) also appeal from the April 26, 2007, final judgment awarding damages to them in an amount less than they sought in their third-party counterclaims. We reverse.

I.

Plaintiff filed a complaint on June 4, 2001, against G&L and three of its partners, defendants Gene Locks, James J. Pettit, and Martin Greitzer (collectively, defendants). As a former attorney-employee of G&L, she sought damages for (1) breach of contract when G&L did not pay her alleged agreed-upon fees for certain cases she brought to G&L when she joined it; (2) detrimental reliance; (3) intentional infliction of emotional distress; and (4) violation of CEPA. She sought a jury trial.

Defendants filed an answer and demand for trial by jury on September 21, 2001. On December 18, 2001, G&L alone filed a third-party complaint against third-party defendants O&M, Albert Ominsky, and Joseph Messa--plaintiff's former law firm and its partners. G&L sought a declaratory judgment that it owed no fees to the third-party defendants or, in the alternative, a determination of the fees to which they were entitled. The O&M defendants answered and cross-claimed against third-party defendant Messa, seeking a return of any funds might have received in connection with the underlying cases.*fn1 The O&M defendants also counterclaimed against plaintiff and defendants for fees due and owing with respect to the underlying cases. G&L then filed an amended third-party complaint revising its claims against O&M, Ominsky, and Messa and joining as an additional third-party defendant Harry R. Blackburn and Associates, P.C., a law firm for which plaintiff worked after she left G&L.*fn2 G&L sought a declaratory determination of the fees to which all third-party defendants were entitled and demanded a jury trial of its third-party claims.

On January 7, 2005, defendants moved for partial summary judgment. After oral argument, the judge signed an order on March 14, 2005, which dismissed plaintiff's individual contract claims against Pettit and Greitzer; her CEPA claim; her claims for non-economic damages; and her punitive-damages claims. Thus, the only claims that survived summary judgment were plaintiff's breach-of-contract claims against G&L and Locks. A subsequent partial summary judgment on June 10, 2005, limited the amount of plaintiff's claim with respect to one of the underlying cases by determining the disputed amount of its settlement. Although plaintiff appealed this order, no issue respecting it was submitted for our review.

On November 13, 2006, at argument on a pretrial motion, the judge dismissed plaintiff's individual contract claims against Locks. After plaintiff and G&L waived their demands for a jury trial, the judge struck those demands over the objection of the O&M defendants. He also denied their request that he recuse himself from the bench trial on the ground that he had participated in ex parte settlement discussions. On December 4, 2006, the judge denied O&M's and Ominsky's motion to reconsider his November 13, 2006, rulings respecting the jury demands and his recusal. The O&M defendants sought leave to file an interlocutory appeal of that decision, but we denied their application.

The judge then conducted a fourteen-day bench trial between December 8, 2006, and February 26, 2007, and placed an oral decision on the record on March 1, 2007. Final judgment was entered on April 26, 2007, in favor of G&L and against plaintiff for a net amount of $12,406.51. Judgment was also entered in favor of O&M against G&L for $11,543.67 and against plaintiff for $32,057.23. In a separate April 26, 2007, order the judge denied G&L's and O&M's post-judgment requests for an award of legal fees and costs stemming from this action.

The O&M defendants filed a notice of appeal respecting the two April 26, 2007, final orders and the December 4, 2006, order denying their request to reconsider the court's decision to strike the jury demand and deny recusal. Plaintiff then appealed the April 26, 2007, judgment; the March 14, 2005, partial summary judgment; and the June 10, 2005, order determining the amount of one settlement. She did not seek review of the orders dismissing her claims against Locks, Pettit, and Greitzer except to the extent that CEPA claims were made against them. G&L then filed a notice of cross-appeal from the three paragraphs of the April 26, 2007, order that denied their motion for legal fees and costs.

II.

As best we can ascertain them,*fn3 these are the facts submitted in support of and opposition to defendants' summary-judgment motion seeking dismissal of plaintiff's CEPA claims. We view the facts in a light most favorable to plaintiff and draw all reasonable inferences in her favor. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 536 (1995).

While plaintiff was employed by O&M, she sought other employment with G&L. She was interviewed by representatives of G&L at their New Jersey office. Locks, who was located in Philadelphia and had the sole authority to hire employees for G&L, then interviewed plaintiff twice.

Locks and plaintiff also discussed the cases she might bring to G&L and reached an agreement that G&L would pay plaintiff fifty percent of the fees recovered on any case she brought to G&L that was completed by December 31, 2000. Cases she brought that were resolved after December 31, 2000, would be considered at the time her yearly bonus was determined. Locks offered plaintiff an associate position, which she accepted.

At some point in this process, plaintiff discussed her possible departure from O&M with Messa. He told her, if she left her cases with O&M, the firm would pay her a referral fee of thirty percent of the fees earned on those cases, except for certain diet-drug cases where she would receive forty percent.

When plaintiff began employment with G&L on March 27, 2000, she brought a number of cases with her, including one diet-drug case where she had been retained by Alan Weber, her neighbor, to prosecute claims on his behalf and on behalf of the estate of his deceased wife.*fn4 Plaintiff was assigned to work with Pettit.

After consulting with Pettit, plaintiff filed an "opt-out" form on March 29, 2000, thereby removing Weber from the diet-drug class. By filing the opt-out form, plaintiff removed Weber's case from the class-action suit. This freed Weber to pursue his claims independent of the settlement "matrix" that had been established to settle claims with certain dollar amounts paid for certain types of injuries. G&L permitted plaintiff to exclusively handle Weber's case, which Weber's expert determined was a viable diet-drug case shortly after plaintiff became employed by G&L. On April 24, 2000, Weber signed a new contingent fee agreement permitting G&L to handle his case. Suit was instituted on his behalf in Middlesex County by G&L on May 11, 2000. G&L began to negotiate settlements of its diet-drug cases. Initially, Weber authorized G&L to settle his claim for a certain sum but on September 6, 2000, Weber increased that amount by 250%. Thus, G&L could settle his case for any amount in excess of the authorization.

On September 18, 2000, Pettit told Morris that he had settled G&L's opt-out diet-drug cases, including Weber's case. Pettit initially refused to tell Morris the amount of the settlement, although he did say it had settled for substantially more than the authorized amount. On September 20, 2000, Pettit asked Morris to address the liens outstanding on Weber's case.

On September 25, 2000, Morris contacted Locks about another one of her cases, Babezki v. Steffens, which had settled on July 18, 2000. Most of the settlement fund had been received by September 25, 2000, and plaintiff sought to receive her fifty-percent share. The fee-sharing agreement was not disputed at that time.*fn5 On September 26, 2000, Pettit called Morris to say he was ready to disclose the amount of Weber's settlement to her, but would not do so over the telephone. He also expressed that he was concerned about the releases and was afraid that not all of G&L's clients would accept their various settlement amounts. Pettit prepared a release for Weber by which he would release the claims against the drug manufacturer for one dollar. This release became a point of contention with the client.

Sometime on or after September 18, 2000, Pettit told plaintiff that he was withholding ten percent of each diet-drug client's settlements in case any one or more of them objected to the amount of their settlement. Plaintiff understood this to mean Pettit would use this money to remold objecting clients' settlement amounts. When plaintiff asked Pettit if this was ethical, he replied, "Melissa, I am doing the best I can."

On September 27, 2000, plaintiff met with Pettit, who disclosed that Weber's case had settled for substantially more than four times the authorized amount. Pettit refused to tell her what the actual settlement figure was, but authorized her to tell Weber that the amount was substantially more than four times the authorized amount. Plaintiff promptly did so.

Plaintiff sent a memo to Pettit on October 2, 2000, notifying him of the fee-sharing agreement she had with G&L and asked what steps she should take to protect her fee. Pettit replied she was mistaken, there was no such agreement. Plaintiff then sent a letter to Locks on October 2, 2000, with copies to Pettit and Greitzer setting forth the work she had done on Weber's case. She reminded him of their discussions respecting the fees O&M would have paid her and their agreement she would receive fifty percent of the fees on cases resolved by December 31, 2000. She requested her fifty-percent share of the fees earned to date and expressed disbelief that the firm might not honor that agreement.

On October 3, 2000, Pettit met with plaintiff and told her he had made a mistake; the settlement of Weber's case was actually only three times the authorized amount. Plaintiff expressed that Weber would believe the firm was playing with the numbers and lying to cheat him. Pettit left visibly upset. Plaintiff, also upset, believed a scam was taking place. Later that day, Pettit left plaintiff a note to bring Weber in to meet with him. Plaintiff spoke with Weber over the next few days. Weber wanted outside proof of the amount of his settlement. However, after Weber met with Pettit, he told plaintiff he was afraid, if he challenged G&L, he would lose the settlement.

Plaintiff reassured him she would do nothing to jeopardize the settlement. During the ensuing weeks, the issue of plaintiff's entitlement to fifty percent of the fee earned on Weber's case was not resolved.

On November 14, 2000, when plaintiff returned from court on another matter, G&L's office manager told her that Locks and Pettit had given orders to pack her cases and send them to Philadelphia. Although clients on those cases expected plaintiff to handle them, she was told the cases would be handled by the Philadelphia office. Because Locks had previously agreed plaintiff would work on her own cases, she understood the order to transfer them to Philadelphia to be the first step in terminating her employment. Plaintiff did not comply.

A few days before Thanksgiving, Locks appeared in plain-tiff's office demanding surrender of the files. Plaintiff challenged the legal and ethical propriety of the manner in which the diet-drug cases were settled and the reduction to the amount of Weber's settlement. Plaintiff stated she would report the improprieties. Locks said if she did not turn over her cases that day, she would be fired. Because it was clear to plaintiff she was going to be fired, she removed her files from G&L and instituted this action. On December 19, 2000, G&L served Weber with a copy of their motion for a contingent fee allowance in his case.

In her complaint, plaintiff alleged Pettit reduced the amount of Weber's settlement after he learned she was asserting a claim for a share of G&L's counsel fees. Plaintiff alleged she questioned the bona fide nature of the "mistake" and "brought her concerns" about the handling of Weber's case to the attention of Locks, Pettit, and Greitzer. She alleged she told them she believed their activities, specifically, "the fraudulent manipulation and/or concealment" of the actual settlement amount due Weber was a "violation of law." She alleged Locks, Pettit, and Greitzer in retaliation "subject[ed] her to unfair and unequal treatment" and ultimately terminated her employment.

In interrogatory answers annexed to the CEPA summary-judgment motion, plaintiff certified she "suffered retaliation for reporting to her supervisors with the defendants--both orally and in writing--her reasonable concerns that the actual settlement amount i[n] Weber was not being revealed to the client, and that the settlement sum was seemingly in excess of the 'clarified' settlement amount." She claimed she "reasonably believed" defendants were "violating the public policy of the State of New Jersey, specifically, by way of a fraudulent manipulation and/or concealment of the actual settlement amount due to the plaintiff-client in Weber." Plaintiff averred this belief was supported by G&L's requirement that Weber sign a release stating the consideration was one dollar. Plaintiff also certified she "objected to and questioned Defendant James Pettit's stated intention of withholding up to 10% of the settlement amount from the disbursement to the client" as a "reserve fund in the event that the full and entire settlement was not approved" by all of G&L's opt-out diet-drug clients. She questioned the propriety of such action, and stated that she would not be part of any such attempt to misinform the Weber client or to improperly withhold settlement amounts from the client.

Plaintiff also certified in her interrogatory answers defendants retaliated against her after she reiterated her demand for fifty-percent of the earned fees because she had voiced her concerns about the settlement amount. She stated the retaliation "creat[ed] adverse employment conditions and [defendants] adopt[ed] a hostile attitude towards" her. Plaintiff certified an example of this was a memo written by Pettit which "chastised Morris for documenting and placing in the file her concerns" about the fee in Weber. Moreover, plaintiff claimed she was subject to retaliation when Locks told her to move all of the cases on which she had been working that were filed in Pennsylvania to the G&L Pennsylvania branch, where she did not maintain an office.

In support of G&L's motion for summary judgment on the CEPA claim, Pettit supplied a certification. Pettit certified that he handled all of the settlement negotiations in Weber, and on September 18, 2000, he settled the case for three times the authorized amount. He asserted that the next day, he completed a chart listing the settlement amount of Weber's case along with the other settled diet-drug cases and attached a redacted copy of the chart dated September 19, 2000. However, Pettit also attached a portion of Morris's deposition in which she testified that she had seen the chart dated September 19, 2000, and had seen that it was revised on October 3, 2000, to increase the settlement for one client, whose name and settlement amount had been redacted from the chart, and to reduce Weber's settlement amount from over four to three times the authorized amount.

Pettit stated in his certification that on September 27, 2000, he mistakenly advised plaintiff that the Weber case had settled for four and one-half times the authorized amount when he "read from a pre-settlement chart, the wrong piece of paper." He claimed he realized his mistake on October 3, 2000, immediately advised plaintiff, and asked her to call Weber to advise him of the mistake. Eventually, Pettit held a meeting with the Webers, plaintiff, Locks, and Greitzer to explain the error. Pettit denied knowing about plaintiff's claim for a portion of the counsel fees until October 2, 2000, when she told him about it. He denied that he revised the settlement amount from four and one-half to three times the authorized amount at any time after he learned Morris claimed a portion of the fee.

In defendants' statement of material facts, they asserted G&L represented Weber and attached the April 24, 2000, retainer agreement. In response, plaintiff pointed to that document and noted she had signed it and Weber considered her to be his attorney. She admitted Weber authorized a settlement in the alleged amount. Defendants stated Weber's case settled for three times the authorized amount on September 18, 2000, and relied on two letters sent to Weber on October 5 and 18, 2000, for that proposition. Plaintiff admitted the claimed amount was ultimately allocated to Weber, but stated the initial settlement was over four times the authorized amount and G&L had unbridled authority and discretion to allocate monies to Weber. Plaintiff further admitted that the ultimate settlement amount was documented on the list dated September 19, 2000, and she had that list "prior to... being fired on November 28, 2000," as she testified in her deposition, and admitted she produced a copy of it during the litigation.

In ruling on defendants' summary-judgment motion, the judge concluded that plaintiff's claims did not fall under the purview of CEPA. He characterized those claims as based on an allegation that G&L was violating the law, "that she was going to report that to the authorities, which she never did." She also claimed G&L "was performing a scam on their clients, with no proof of the same." The judge summarized N.J.S.A. 34:19-3, the relevant CEPA provision. He further described the allegations respecting the settlement of Weber's case and noted that only plaintiff was complaining about it. He continued:

She believes that there was a violation of the law and a scam. However, under CEPA, if you... look at the items... which [are] covered by the conscientious employee statute, this is not one of the matters that is covered....

She states that she's going to go to the authorities, she's going to file an ethics complaint, she's going to do this, she's going to do that, and as a matter of fact, she does nothing. CEPA was not designed to cover this -- I find that CEPA was not designed or enacted to cover this type of action, which the plaintiff seeks under Count Five of her complaint.

Plaintiff then was told to take the remaining medical malpractice files which she had in her custody to a Philadelphia office to Mr. Locks, and she refuses to do so. Mr. Locks then says if you don't bring the files over here for my review in the Philadelphia office, then you will be terminated. She does not take the files to Philadelphia, and she is terminated for refusing to give up the files. Her position being that they are her files, not Greitzer and Locks's files. She was terminated. She then brings this CEPA claim.

The judge accordingly dismissed the CEPA claim.

Plaintiff argues on appeal that she raised a genuine dispute of material fact and made out a prima facie CEPA case under N.J.S.A. 34:19-3c. Defendants counter that plaintiff did not meet her burden of establishing a prima facie case and, therefore, her claim was properly dismissed. Defendants also assert that plaintiff did not appeal the orders of March 14 and June 10, 2005, and has waived her right to appeal them.*fn6

III.

In reviewing a ruling on a summary-judgment motion, we apply the same standard as that governing the trial court. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998); Antheunisse v. Tiffany & Co., 229 N.J. Super. 399, 402 (App. Div. 1988), certif. denied, 115 N.J. 59 (1989). Summary judgment is appropriate if "there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c). The motion judge must "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational fact-finder to resolve the alleged disputed issue in favor of the non-moving party." Brill, supra, 142 N.J. at 540.

Therefore, the motion must be considered on the basis that the non-moving parties' assertions of fact are true and "grant all the favorable inferences to the non-movant." Id. at 536. The determination is whether the evidence "'is so one-sided that one party must prevail as a matter of law.'" Ibid. (quoting Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 251-52, 106 S.Ct. 2505, 2512, 91 L.Ed. 2d 202, 214 (1986)). "If there exists a single, unavoidable resolution of the alleged disputed issue of fact, that issue should be considered insufficient to constitute a 'genuine' issue of material fact for purposes of Rule 4:46-2." Brill, supra, 142 N.J. at 540.

The Legislature enacted CEPA to "protect and encourage employees to report illegal or unethical workplace activities and to discourage public and private sector employers from engaging in such conduct." Abbamont v. Piscataway Twp. Bd. of Educ., 138 N.J. 405, 431 (1994). It is remedial legislation and "should be construed liberally to effectuate its important social goal." Ibid.

In order to maintain a cause of action under subsections a. or c. of CEPA, a plaintiff must satisfy the following elements:

(1) that he or she reasonably believed that his or her employer's conduct was violating either a law or a rule or regulation promulgated pursuant to law; (2) that he or she performed whistleblowing activity described in N.J.S.A. 34:19-3a, c(1) or c(2); (3) an adverse employment action was taken against him or her; and (4) a causal connection exists between the whistle-blowing activity and the adverse employment action. [Kolb v. Burns, 320 N.J. Super. 467, 476 (App. Div. 1999).]

See also Mosley v. Femina Fashions, Inc., 356 N.J. Super. 118, 127 (App. Div. 2002) (discussing same), certif. denied, 176 N.J. 279 (2003).

Kolb cited the relevant CEPA provision, N.J.S.A. 34:19-3, as it existed in 2000,*fn7 which provided in pertinent part:

"An employer shall not take any retaliatory action against an employee because the employee does any of the following:

a. Discloses, or threatens to disclose to a supervisor or to a public body an activity, policy or practice of the employer... that the employee reasonably believes is in violation of a law, or a rule or regulation promulgated pursuant to law[;]...

....

c. Objects to, or refuses to participate in any activity, policy or practice which the employee reasonably believes:

(1) is in violation of a law, or a rule or regulation promulgated pursuant to law[;]...

(2) is fraudulent or criminal; or

(3) is incompatible with a clear mandate of public policy concerning the public health, safety or welfare or protection of the environment." [320 N.J. Super. at 475.]

A plaintiff who brings a claim pursuant to N.J.S.A. 34:19-3c need not show that the employer actually violated the law or a clear mandate of public policy. Dzwonar v. McDevitt, 177 N.J. 451, 462 (2003) (citations omitted). Neither must such a showing be made under N.J.S.A. 34:19-3a. See Gerard v. Camden County Health Servs. Cent., 348 N.J. Super. 516, 522 (App. Div.) ("CEPA plaintiff need not prove an actual violation" of law or public policy), certif. denied, 174 N.J. 40 (2002). Instead, the plaintiff need only show that he or she "reasonably believed" that to be the case. Estate of Roach v. TRW, Inc. 164 N.J. 598, 613 (2000). "[T]he trial court must identify a statute, regulation, rule, or public policy that closely relates to the complained-of conduct." Dzwonar, supra, 177 N.J. at 463. If no such law or policy is forthcoming, the trial court can and should enter judgment for the defendant. Ibid.

However, the plaintiff need not "allege facts that, if true, actually would violate that statute, rule, or public policy." Ibid. "Instead, a plaintiff must set forth facts that would support an objectively reasonable belief that a violation has occurred." Id. at 464. Then the trial court must make a threshold determination that there is a substantial nexus between the complained-of conduct and a law or public policy identified by the court or the plaintiff. If the trial court so finds, the jury then must determine whether the plaintiff actually held such a belief and, if so, whether that belief was objectively reasonable.

[Ibid.]

Plaintiff maintains the judge erred in finding the activity of which she complained was not covered by CEPA. Specifically, she argues that the manner in which G&L settled Weber's case (i.e., by receiving a settlement for several unrelated clients and then allocating the funds at G&L's own discretion and also withholding ten percent of the mass settlement to use in the event a client objected) violated Rule of Professional Conduct (RPC) 1.8(g). That rule states:

A lawyer who represents two or more clients shall not participate in making an aggregate settlement of the claims of or against the clients... unless each client gives informed consent after a consultation that shall include disclosure of the existence and nature of all the claims or pleas involved and of the participation of each person in the settlement. [Ibid.]

RPC 1.8(g) "forbids an attorney from obtaining consent in advance from multiple clients that each will abide by a majority decision in respect to an aggregate settlement." Tax Auth., Inc. v. Jackson Hewitt, Inc., 187 N.J. 4, 21 (2006). "Before a client may be bound by a settlement, he or she must have knowledge of the terms of the settlement and agree to them." Ibid.

Certainly, RPC 1.8(g) was promulgated pursuant to law and "closely relates to the complained-of conduct." Dzwonar, supra, 177 N.J. at 463. RPC 7.1(a), prohibiting a lawyer from making false or misleading communications, may also relate to the conduct about which plaintiff complains. As a consequence, CEPA clearly applies and the judge's contrary conclusion was simply erroneous.

Defendants argue the judge correctly granted their motion for summary judgment on the CEPA claims because plaintiff did not establish a prima facie case. First, they argue plaintiff's claim that Weber's case was settled as a mass tort action was factually wrong, as it was actually settled individually. Second, defendants urge plaintiff's claim the firm withheld ten percent of the settlement in order to reallocate the settlements if necessary was also factually erroneous. Defendants maintained the change in the settlement amount was due to a simple mistake on Pettit's part, not an attempt to defraud the client or withhold fees from plaintiff. This argument simply ignores the mandate of Brill that the facts alleged by the nonmoving party must be accepted as true and all reasonable inferences must be drawn in that party's favor. 142 N.J. at 540. The disputes raised by the certifications of plaintiff and Pettit, which were made on their personal knowledge, must be resolved by the trier of fact. Parks v. Rogers, 176 N.J. 491, 502 (2003).

Defendants next contend plaintiff could not as a matter of law have reasonably believed that Pettit's admitted and simple mistake had nefarious purposes. This argument suffers two difficulties. It is impermissibly predicated on a resolution of fact disputes in favor of defendants and ignores the allocation of responsibility between a judge on a summary-judgment motion and a jury. In this respect, the Dzwonar Court clearly stated if a trial court finds a substantial nexus between the conduct alleged by the plaintiff and a law or public policy, the jury must decide whether the plaintiff actually believed the conduct was in violation of law or public policy and whether that belief was reasonably objective. 177 N.J. at 464.

Furthermore, defendants have not demonstrated that the fact disputes respecting the settlement of Weber's claims can have only one resolution in their favor. All we have are conflicting affidavits and a document created by Pettit that plaintiff testified was altered on October 3, 2000, to reduce the amount of Weber's settlement. Thus, this credibility dispute must be resolved by a jury. Estate of Roach, supra, 164 N.J. at 612 (holding it is the jury's task to assess the credibility of witnesses and courts should not usurp it).

Defendants next maintain that plaintiff did not meet her prima facie CEPA burden because she did not actually "blow the whistle" on them, meaning that she did not report the activity to any outside agency. However, a plaintiff need not prove he or she complained to an outside agency to assert a claim. Klein v. Univ. of Med. & Dent. of N.J., 377 N.J. Super. 28, 41 (App. Div.), certif. denied, 185 N.J. 39 (2005). Plaintiff alleged that she "threatened" Locks she would report her allegations to the state attorney ethics board. The "threat" of reporting the activity to a public body is all the statute requires, N.J.S.A. 34:19-3a, and thus plaintiff's allegations support a prima facie showing of this prong.

Defendants also argue that plaintiff did not make out a prima facie claim under CEPA because her firing was based on her theft of client files, not her threats to report unethical activity. Of course, making a complaint about an employer's activity "does not insulate the complaining employee from discharge or other disciplinary action for reasons unrelated to the complaint." Higgins v. Pascack Valley Hosp., 158 N.J. 404, 424 (1999). However, defendants conflate plaintiff's prima facie case with their defense to it, implicitly arguing there can only be one resolution of the dispute over the reason for her termination. We disagree.

Plaintiff construed the demand for a turnover of her files as a prelude to her termination. If a jury credits that interpretation, it may conclude that defendants intended to fire plaintiff before she refused to comply with Locks's demand. Plaintiff has set forth sufficient facts that would allow a jury to find that she suffered a retaliatory discharge based on her threats and defendants' proffered reasons were either a post hoc fabrication or otherwise did not motivate the employment action. Kolb, supra, 320 N.J. Super. at 480. A jury must decide the reason for the termination of her employment.

Finally, citing Mehlman v. Mobil Oil Corp., 153 N.J. 163, 188 (1998), and numerous other cases, defendants argue that plaintiff's CEPA claim was properly dismissed because CEPA requires that the offensive activity must pose a threat of public harm, not merely the private harm at issue here. An identical argument was addressed by the Supreme Court in Estate of Roach, supra, 164 N.J. 598. In that case, the jury found that the plaintiff's discharge was contrary to N.J.S.A. 34:19-3a, c(1), and c(2), but was not a violation of c(3). Estate of Roach, supra, 164 N.J. at 608. The jury specifically found that the activity was not incompatible with a clear mandate of public policy concerning the public welfare as described in subsection c(3). Ibid. We overturned the verdict based on that determination. Id. at 608-09.

The Court reversed our ruling, observing, "In essence, the Appellate Division held that all CEPA violations require a specific showing that the complained-about activities implicate the public interest." Id. at 608. The Court noted that the language regarding a "clear mandate of public policy" was "unique" to N.J.S.A. 34:19-3c(3). Id. at 609 (internal quotations omitted). The Court found the employer's reliance upon Mehlman for the proposition that employees must specifically prove that their complaints involve a matter of public interest was misplaced. Ibid.

Mehlman, explained the Court, pertained solely to a complaint brought under N.J.S.A. 34:19-3c(3), and therefore, "our holding in that case does not import the requirements of that section to other parts of CEPA." Ibid. Because plaintiff alleges a violation of a specific law or rule, her claims fall under N.J.S.A. 34:19-3a or c(1), and are not subject to the requirement that the conduct pose a public threat or harm. Summary judgment should not have been granted and the matter is remanded for further proceedings consistent with this opinion.

IV.

The scope of that remand requires resolution of O&M's and Ominsky's claim that the judge erred in ruling they had no right to a jury trial. Defendants urge the judge's denial of O&M's and Ominsky's request for a jury trial should be affirmed because the only cause of action they asserted was the "equitable theory" of quantum meruit as to which they claim no right to trial by jury attaches.

Rule 4:35-1(d) states:

When trial by jury has been demanded as provided by this rule, the trial of all issues so demanded shall be by jury, unless all parties or their attorneys, by written and filed stipulation or oral stipulation made in open court and entered on the record, consent to trial by the court without a jury, or unless the court on a party's or its own motion finds that a right of trial by jury of some or all of those issues does not exist.

Both plaintiff and G&L demanded a jury trial; the O&M defendants did not. At trial, plaintiff and G&L agreed to proceed without a jury; the O&M defendants opposed the waiver. The fact that O&M did not request a jury trial is of no moment as all parties, even those who have not made a jury demand, are entitled to rely on any party's demand. 500 Columbia Tpk. Assocs. v. Haselmann, 275 N.J. Super. 166, 170 (App. Div. 1994). Once a jury demand is made, a jury trial can be waived only with the consent of all parties, unless a judge finds that a right to a jury trial did not exist. Ibid.; R. 4:35-1(d). Thus, under Rule 4:35-1(d), the judge could only order a bench trial if he found there was no right to a jury trial. Here, the judge ruled:

I have concluded that it's strictly law involved here or legal issues and no questions of fact, and I guess I'm taking away your right to a trial by jury because I don't think a jury has to listen to this Quantum Meruit, or this ["]he said, she said["] for three weeks when we can do it in a matter of days, and for judicially [sic] timing and other reasons, and my belief of the facts in this case, we'll be going non-jury....

O&M moved for reconsideration, but the judge denied the motion.

The judge's observation that there were no questions of fact to resolve was clearly incorrect as fourteen days of trial proved. The parties vigorously disputed how much effort each put into the various malpractice and diet-drugs cases plaintiff took from firm to firm and the quantum of fees to which each was entitled. Furthermore, "he said, she said" disputes are credibility determinations long committed to resolution by juries. And, of course, "judicial timing" has never been a basis for striking a jury demand. The only proper basis for striking the jury demand would be that a right of trial by jury did not attach to the quantum meruit claims made by the O&M defendants.

The resolution of this issue necessarily requires consideration of the dispute at issue--the quantum of fees and costs to which the O&M defendants are entitled for work they did on the Weber and other cases. On November 10, 2000, Messa demanded a one-third share in the fees resulting from settlement of Weber's case. In its third-party complaint, G&L alleged that the O&M defendants were not entitled to any share of those fees. In their answer, the O&M defendants sought attorneys' fees and costs in connection with actions of Weber, Samlin, Serogo, Monte, McGinn, Smith, and Babezki. They sought similar relief from Morris with respect to the files she took with her when she left G&L.

Article I, Paragraph 9, of the 1947 New Jersey Constitution provides that "[t]he right of trial by jury shall remain inviolate[.]" "This provision guarantees the right to trial by jury as it existed at common law at the time of the adoption of the New Jersey Constitution." Ciba-Geigy Corp. v. Liberty Mut. Ins. Co. (In re Envtl. Ins. Declaratory Judgment Actions), 149 N.J. 278, 291 (1997). "Traditionally, the right to a jury trial attaches in legal, but not equitable actions." Ibid. "In determining whether a case is primarily legal or equitable, we look to the historical basis for the cause of action and focus on the requested relief." Weinisch v. Sawyer, 123 N.J. 333, 343 (1991). "We consider the nature of the underlying controversy as well as the remedial relief sought in determining whether the cause of action has been historically primarily equitable or legal in nature." Shaner v. Horizon Bancorp., 116 N.J. 433, 450-51 (1989).

The O&M defendants assert that quantum meruit claims are "quasi or constructive contracts... imposed or created by law." They sought only a monetary award. Therefore, they argue their quantum meruit claims were contractual, not equitable, in nature and they were entitled to have those claims heard by a jury.

"Contracts implied by law, more properly described as quasi or constructive contracts, are a class of obligations which are imposed or created by law without regard to the assent of the party bound, on the ground that they are dictated by reason and justice." Callano v. Oakwood Park Homes Corp., 91 N.J. Super. 105, 108 (App. Div. 1966). "Recovery on the theory of quasi-contract was developed under the law to provide a remedy where none existed." Id. at 110. "To recover on the theory of quasi-contract the plaintiffs must prove that defendant was enriched, viz., received a benefit, and that retention of the benefit without payment therefor would be unjust." Id. at 109.

There is a distinct difference between quasi-contractual obligation (implied in law) and an obligation implied in fact. "The term quasi is introduced as a weasel word, that sucks all the meaning of the word that follows it; but this is a fact that the reader seldom realizes." 1 Corbin, Contracts, § 19, p. 38 (1950). Quasi-contractual obligations are imposed by the law for the purpose of bringing about justice without reference to the intention of the parties. 1 Williston, Contracts, § 3A, p. 13 (Jaeger ed. 1957); 1 Corbin, supra, § 19, p. 37. They "rest on the equitable principle that a person shall not be allowed to enrich himself unjustly at the expense of another, and on the principle that whatsoever it is certain that man ought to do, that the law supposes him to have promised to do." 17 C.J.S. Contracts, § 6, p. 324. Indeed they are sometimes imposed even against a clear expression of dissent. [St. Paul Fire & Marine Ins. Co. v. Indem. Ins. Co. of N. Am., 32 N.J. 17, 22 (1960).]

The record suggests the O&M defendants entered into contingent-fee agreements with the clients whose matters were ultimately transferred to G&L.

An attorney hired on a contingent fee basis and later discharged before completion of services is not entitled to recover fees on the basis of such contingent agreement; instead, he or she may be entitled to recover on a quantum meruit basis for the reasonable value of the services rendered. [Glick v. Barclays De Zoete Wedd, Inc., 300 N.J. Super. 299, 310 (App. Div. 1997) (citations omitted).]

See also Kopin v. Orange Prods. Inc., 297 N.J. Super. 353, 367 (App. Div.) (quantum meruit is proper measure of a former law firm's compensation for services rendered on a case that has been removed from its office), certif. denied, 149 N.J. 409 (1997); La Mantia v. Durst, 234 N.J. Super. 534, 537 (App. Div.) (same), certif. denied, 118 N.J. 181 (1989); Fuessel v. Cadillac Bar Corp., 63 N.J. Super. 430, 436 (App. Div. 1960) (same), certif. denied, 34 N.J. 65 (1961). "'Quantum meruit' simply means 'as much as he deserves,'" ibid., and "enables the performing party to recover the reasonable value of services he/she rendered," Kopin, supra, 297 N.J. Super. at 367. Numerous cases describe quantum meruit as rooted in equitable principles. See, e.g., Kopin, supra, 297 N.J. Super. at 367 (quantum meruit relief rests on an equitable foundation); La Mantia, supra, 234 N.J. Super. at 539 (same). Nonetheless, case law recognizes that quantum meruit is actually a legal remedy. See, e.g., Starkey, Kelly, Blaney & White v. Estate of Nicolaysen, 340 N.J. Super. 104, 125 (App. Div.) (quantum meruit a legal remedy based on equitable principles), aff'd in part & modified in part, 172 N.J. 60 (2002).

In Bolte v. Rainville, 138 N.J. Eq. 508, 510 (E. & A. 1946), decided before the 1947 Constitution was adopted, attorneys sued their clients at law under the theory of quantum meruit for the value of services rendered. When the clients counterclaimed alleging coercion by the attorneys, the attorneys sought the intervention of Chancery, which restrained the prosecution of the action at law. Id. at 510-11. The Court of Errors and Appeals reviewed that restraint. Id. at 511.

The Court observed that the counterclaims were cognizable at law "by the common-law action of indebitatus assumpsit for money had and received," or in equity "due to the lack of a remedy at law." Id. at 512. The Court held, "the lack of an adequate remedy at law is the basis of the appeal to equitable jurisdiction in such cases." Ibid. It may not be invoked by a party whose remedy at law is adequate. Ibid.

The Court also observed,

The power of equity to revise or cancel a contract for professional services between an attorney and client is designed to protect the client from the undue influence of his attorney, and is confined accordingly. The law courts are no less able than equity to protect an attorney from injustice in an action for fees and disbursements in circumstances such as these. [Id. at 514.]

Therefore, where the Chancery Court is not acting to protect a client from his attorney, it lacks the power to adjudicate purely legal matters and must accordingly award a jury trial if so demanded. Id. at 515.

Likewise, in In re Application of LiVolsi, 85 N.J. 576, 588-89 (1981), the Court observed that courts of equity "have always had broad powers to adjudicate attorney-client fee disputes on behalf of the client" based on the position of superiority that the attorneys had over clients. The equity court's power to investigate the fairness and reasonableness of the fees remained even if the parties had a contract regarding the legal services. Id. at 588. However, citing Bolte, the Court noted that "courts of equity could not adjudicate the reasonableness of fees on behalf of an attorney. Only a client could claim the protection of equity courts in fee disputes--an attorney was required to seek his remedy at law." Id. at 590 n.11. The Court added that "fee disputes are essentially legal matters for which a jury is normally guaranteed." Id. at 590.

In Ballard v. Schoenberg, 224 N.J. Super. 661, 667 (App. Div.), certif. denied, 113 N.J. 367 (1988), we recognized quantum meruit as a legal remedy, stating the defendant sought "specific performance, an equitable remedy, and damages in quantum meruit, a legal remedy." The plaintiff appealed the judge's denial of his demand for a jury trial, but we held that plaintiff "was in no way prejudiced by the denial of a jury trial on the issue of quantum meruit [because it] was never reached." Ibid. (emphasis added).

In Kopin, supra, 297 N.J. Super. at 373, one of the issues was whether the trial court erred in applying the doctrine of laches to bar plaintiff's quantum meruit claim. We held:

The present matter is controlled by the statute of limitations rather than by the doctrine of laches. The statute of limitations applies to legal actions while laches applies to equitable actions. Quasi-contract or quantum meruit, the theory the present matter is based on, is actually a legal remedy, albeit one based on equitable principles.

Thus whether or not this action is time-barred should have been determined on the basis of the applicable statute of limitations. [Ibid. (citations omitted)]

Further, "[a]lthough 'the nature of the underlying controversy' is useful 'in determining whether the cause of action has been historically primarily equitable or legal in nature,' Shaner, supra, 116 N.J. at 450-51, the remedy remains the most persuasive factor." Weinisch, supra, 123 N.J. at 344. "In actions seeking equitable relief rather than money damages, litigants generally do not enjoy a right to trial by jury." Id. at 343. On the other hand, "where the primary right is legal, and the remedy invoked is likewise legal in character, and there is an adequate, certain and complete remedy at law, equity will not exercise its jurisdiction." Pridmore v. Steneck, 122 N.J. Eq. 35, 37 (E. & A. 1937). For the recovery of damages, the "exclusive remedy in this state lies with the law courts." Polhemus v. Holland Trust Co., 61 N.J. Eq. 654, 655 (E. & A. 1900).

Of course, the O&M defendants are not making a claim against their former clients, but rather against the substituting attorneys, G&L and Morris, and we must necessarily examine whether that distinction alters the nature of what would otherwise be a quantum meruit claim. Needless to say, any rights they may have against superseding attorneys arise only from their common-law and statutory rights to impose a lien on a settlement or judgment. The common law allowed two types of liens to protect an attorney's ability to collect a fee for services rendered--a retaining lien and a charging lien. H. & H. Ranch, 54 N.J. Super. 347, 352 (App. Div. 1959); accord Hoffman & Schreiber v. Medina, 224 B.R. 556, 563 (D.N.J. 1998). The retaining lien attaches to the client's property in the lawyer's possession and, as here, is lost when possession is surrendered to the client. Id. at 351-52.

The common-law charging lien is for "services rendered in a particular cause of action and... attaches to the judgment in the cause for which the services were rendered." Brauer v. Hotel Assocs., Inc., 40 N.J. 415, 420 (1963) (citation omitted), cert. denied, 387 U.S. 944, 87 S.Ct. 2077, 18 L.Ed. 2d 1330 (1967). The charging lien is "a right recognized at common law as rooted in equitable considerations, although not a lien in the true sense of a right resting in the possession, actual or constructive, of the thing upon which it operates." Republic Factors, Inc. v. Carteret Work Uniforms, 24 N.J. 525, 534 (1957) (citation omitted). It has been termed as "'merely a claim to the equitable intervention of the court' for the attorney's 'protection, when, having obtained judgment for his client, there is a probability of the client depriving him of his costs.'" Ibid. (citations omitted); accord Cole, Schotz, Bernstein, Meisel & Forman, P.A. v. Owens, 292 N.J. Super. 453, 460 (App. Div. 1996) (citation omitted) (stating same). In other words, the common-law charging lien "is a judicial device to protect the attorney's rights where he has been unable to get possession; to this end the attorney is considered an equitable assignee of the judgment to the extent of his debt." Republic Factors, supra, 24 N.J. at 534 (citations omitted); accord Horowitz v. Weishoff, 318 N.J. Super. 196, 206 (App. Div. 1999) (citation omitted), opinion corrected on recon., 346 N.J. Super. 165 (App. Div. 2001).

The scope of this lien was codified and enlarged by N.J.S.A. 2A:13-5. H. & H. Ranch, supra, 54 N.J. Super. at 352; see also Musikoff v. Jay Parrino's The Mint L.L.C., 172 N.J. 133, 139 (2002) (the statute codifies and "'expands the common law lien which had attached only to a judgment.'" (citation omitted)). It currently provides:

After the filing of a complaint or third-party complaint or the service of a pleading containing a counterclaim or cross-claim, the attorney or counselor at law, who shall appear in the cause for the party instituting the action or maintaining the third-party claim or counterclaim or cross-claim, shall have a lien for compensation, upon his client's action, cause of action, claim or counterclaim or cross-claim, which shall contain and attach to a verdict, report, decision, award, judgment or final order in his client's favor, and the proceeds thereof in whosesoever hands they may come. The lien shall not be affected by any settlement between the parties before or after judgment or final order, nor by the entry of satisfaction or cancellation of a judgment on the record. The court in which the action or other proceeding is pending, upon the petition of the attorney or counselor at law, may determine and enforce the lien.

[N.J.S.A. 2A:13-5.]

Thus, it arises on the filing of a claim, attaches to the judgment, and does not depend on the attorney actually conducting the trial. H. & H. Ranch, supra, 54 N.J. Super. at 352. It is not affected by a settlement and is not terminated by the consensual substitution of counsel. Ibid. Under the statute, attorneys "are entitled to a lien as of the date of the filing of the complaint, which lien cannot be affected by a settlement between the parties." Guernsey v. Young, 49 N.J. Super. 339, 340 (Ch. Div. 1958).

In construing N.J.S.A. 2A:13-5, first enacted in 1914, the Court of Errors and Appeals noted that the statute applied to both courts of law and courts of equity. Artale v. Columbia Ins. Co., 109 N.J.L. 463, 465 (E. & A. 1932). Thus, both courts have jurisdiction to enforce an attorney's charging lien. Id. at 465-66. Where "there is brought into chancery for distribution a fund on which an attorney claims the statutory lien for services in another court, chancery has jurisdiction to determine the validity of the claim and to enforce the lien by payment out of the fund." Am. Auto. Ins. Co. v. Neibuhr, 124 N.J. Eq. 372, 375 (Ch. 1938) (citations omitted). That, of course, did not happen here. Rather, G&L sought the intervention of the Law Division in determining the amount of any fee due the O&M defendants from the funds in its possession and none of the parties have sought any recompense from the clients in excess of the contingent fees recovered by G&L. In such a case, the enforcement of an attorney's charging lien "is within the equitable jurisdiction of courts of law." Norrell v. Chasan, 125 N.J. Eq. 230, 236 (E. & A. 1939).*fn8

Although in some cases, enforcement of a lien does not require determination of the quantum of the lien, as where the client does not dispute the sum due, in others the quantum must be determined. "[T]he statutory lien of a solicitor in a Chancery suit must be ascertained and enforced in Chancery; and presumably according to the usual practice of that court, without a jury...." Artale, supra, 109 N.J.L. at 465 (citation omitted). As to courts of law, the statute itself "made no provision for a summary determination of the lien." Ibid. (citation omitted). In such a case, the determination of the employment of the attorney, the services performed, any payment made, "the fair value of the service," and any agreement respecting compensation are all to be "tried by a jury, or by the court if a jury be waived, or disposed of by the court where the facts are admitted." Id. at 468 (obiter dicta). We clarified the procedure for enforcing the lien in H. & H. Ranch as follows:

For the guidance of counsel in connection with future applications, consistent with the spirit of our present rules of practice, we suggest that, where the determination or enforcement of an attorney's lien is sought, the following procedure, patterned on Artale, be employed: The attorney should make application to the court, as a step in the proceeding of the main cause, by way of petition, which shall set forth the facts upon which he relies for the determination and enforcement of his alleged lien. The petition shall as well request the court to establish a schedule for further proceedings which shall include time limitations for the filing of an answer by defendants, the completion of pretrial discovery proceedings, the holding of a pre-trial conference, and the trial. The court shall, by order, set a short day upon which it will consider the application for the establishment of a schedule. A copy of such order, together with a copy of the petition, shall be served upon defendants as directed by the court. The matter should thereafter proceed as a plenary suit and be tried either with or without a jury, in the Law Division, depending upon whether demand therefor has been made, R.R. 4:39-1 et seq., or without a jury if the venue of the main cause is laid in the Chancery Division. In no event should the matter be tried as a summary proceeding.

[54 N.J. Super. at 353-54 (emphasis added).]*fn9

In Musikoff, supra, 172 N.J. at 146, the Court specifically "affirm[ed] the basic elements of the process articulated in H. & H., except that we do not interpret the process to require an attorney to file and enforce a lien petition prior to settlement or judgment of the underlying action." Thus, to date there has been no departure in actions at law from the allocation of responsibility first articulated in Artale and clarified in H. & H. Ranch for judicial enforcement of a charging lien and jury determination of its quantum.

We have enforced the right to trial by jury as to the quantum of fees. In Fuessel, supra, 63 N.J. Super. at 433, we reversed a judgment against defendant and in favor of plain-tiff's attorney on two grounds, one of which was the trial court's failure to submit the factual issues to a jury. Plaintiff retained the attorney on a contingent-fee basis and the attorney sought to enforce his lien against the defendant, who paid the judgment in a compromised amount directly to the plaintiff. Id. at 434. Defendant demanded a jury trial, which the trial court struck. Ibid. We held:

Where, as here, the action has been brought in the Law Division of the Superior Court or County Court, the filing of such a petition activates a plenary proceeding within the main action to be determined by court and jury by the procedure in the ordinary course of actions in the Law Division. It is at once apparent, therefore, that unless there were no disputed questions of fact legally material to the determination of petitioner's claim, it was incorrect to decide the matter in the summary manner employed below. [Id. at 435.]*fn10

We do not think the absence of the clients from the dispute before us can have any impact on the constitutional right to a trial jury in an action at law for determination of the quantum of fees due the O&M defendants, if any. Neither does any equitable consideration that might infuse the enforcement of the lien*fn11 derogate from this constitutional right.

The judge here erred in striking the jury demands over the objections of the O&M defendants as the quantum meruit claims among all of these attorneys were legal in nature and the remedies sought were solely legal ones triable by a jury. Indeed, the action instituted by Morris was pending in the Law Division, not the Chancery Division. Because all of the claims adjudicated in the bench trial were irrevocably intertwined with O&M's and Ominsky's quantum meruit claims, no part of the monetary awards can survive the judge's error in depriving the O&M defendants of a jury trial. As a result, a new trial on all issues adjudicated by the bench trial is required. The following guidelines apply:

Because the proper measure of compensation under quantum meruit is as much as is deserved, the crucial factor in determining the amount of recovery is the contribution which the lawyer made to advancing the client's cause. Thus, if a retiring lawyer cedes to his successor a substantially prepared case which resulted from an extensive investment of time, skill and funds, the retiring lawyer might be entitled to compensation greater than the standard hourly rate. In comparison, if a ceding lawyer's work contributed to a recovery by the client, but the new attorney was crucial in the success of the case, then the predecessor's compensation should be based, at most, upon a standard hourly rate. Finally, if the predecessor's work, no matter how extensive, contributed little or nothing to the case, then the ceding lawyer should receive little or no compensation. Where the attorney is discharged for good cause, he or she may not be entitled to any recovery, except reimbursement of the reasonable costs incurred in the representation. [Glick, supra, 300 N.J. Super. at 310-11 (citations omitted).]

In light of our reversal of the summary judgment on plain-tiff's CEPA claims and the denial of a jury trial on the O&M defendants' claims, we need not address the remaining issues on appeal.

Reversed.


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