On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-3784-01.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
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.
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.
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 ...