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Wallach v. Gowing

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


November 9, 2009

HOWARD AND JENNIFER WALLACH, MICHAEL AND JAN ROSENSTEIN, HARSHARD AND PALLAVI AMIN, JEFFREY AND JILL KRAUS, GARY AND BONNIE DUBOFF, PIERRE AND MICHELLE ONEID, GIM S. LIM AND SUAT ENG TER, MICHAEL WOLINSKY, JEFFREY AND LISA RUFFNER, ERIC AND LARA SCHWARTZ, TODD AND VANIA VORON, ASHISH AND SEJAL MODI, SCOTT AND SUSAN MURPHY, BRIAN AND DENISE WHITE, DATESH AND SONAL PATEL, RICHARD AND GIA LAMBERT, JAYESH PATEL AND MIRA VAISHNANI, SALVATORE AND SONIA EVOLA, BETTY AND ROGER DECAIRES, ANTONIO AND ANNA SKILKAS, RAJNIKANT AND DIMPLE KANERIA, CHRIS AND CHERYL MATTESON, JOBANY AND JILL GARCES, JOHN AND BONNIE GREENBERG, RICHARD AND LIZ PETRELLI, BRIAN AND CONNIE DAWKINS, JATIN AND PARUL MEHTA, PRAVIN AND NILA PATEL, SUDHIR AND RAMA PATEL, ISHWAR AND UMA CHAUHAN, JAIPAL AND NEERAJA REDDY, DENNIS AND DANIELLE MOORE, PANKAJ AND SONAL DESAI, MARC PASSALACQUA, AND SHERRI SCHWEITZER, PLAINTIFFS,
v.
SARA K. GOWING, SUSAN NYDICK, THE QUAKER GROUP, QUAKER GROUP ASSOCIATES, L.P., QUAKER REAL ESTATE DEVELOPMENT, INC., QUAKER N.J. CONSTRUCTION, INC., AND QUAKER GROUP DEVELOPMENT, L.P., DEFENDANTS/THIRD-PARTY PLAINTIFFS, AND COOPER CROSSING ASSOCIATES, AND A-1 BRACKET, INC., DEFENDANTS,
v.
STACY L. SCHOLNICK, NEIL SCHOLNICK, AND TAMI L. KRUPNICK, THIRD-PARTY DEFENDANTS, AND BRAD R. KRUPNICK, THIRD-PARTY DEFENDANT/FOURTH-PARTY PLAINTIFF-RESPONDENT,
v.
KENNETH GOODKIND, AND FLASTER/GREENBERG, FOURTH-PARTY DEFENDANTS-APPELLANTS, AND KARR TRUST INVESTORS, FOURTH-PARTY DEFENDANT.

On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-6527-07.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted October 20, 2009

Before Judges Skillman and Gilroy.

Appellant Kenneth Goodkind, an attorney in the law firm of appellant Flaster/Greenberg, represents defendants Sara K. Gowing, Susan Nydick, and Quaker Group entities (Quaker defendants) in a lawsuit brought by respondent Brad R. Krupnick, an attorney in the law firm of Josel and Feenane, on behalf of homeowners seeking to recover for damage caused by water infiltration and mold growth.

Goodkind filed a motion to disqualify Krupnick as counsel for the plaintiff homeowners based on the Quaker defendants' expressed concern that Krupnick, in his representation of the plaintiff homeowners, was using information designated as confidential under a release Krupnick signed in settling similar claims that he had brought personally as a homeowner against the Quaker defendants. This motion was denied. Krupnick then filed a motion for sanctions against the Quaker defendants for frivolous litigation pursuant to Rule 1:4-8(b), which was also denied.

Goodkind subsequently filed a third-party complaint on behalf of the Quaker defendants against Krupnick and his wife, Tami L. Krupnick, and Stacy and Neil Scholnick, for breach of contract and breach of the implied covenant of good faith and fair dealing, alleging they violated the confidentiality provision of the releases they signed in settling their claims concerning water infiltration against the Quaker defendants.

In response, Krupnick filed a fourth-party complaint against Goodkind, Flaster/Greenberg, and Karr Trust Investors.

Krupnick alleged that Goodkind and Flaster/Greenberg had engaged in tortious interference with contract and prospective economic advantage by interfering with his representation of "current and additional Quaker homeowners with water intrusion and/or mold problems."*fn1 The complaint identified two acts of interference by Goodkind: the filing of the motion to disqualify Krupnick from representing the plaintiff homeowners and the filing on behalf of the Quaker defendants of the third-party complaint against Krupnick based on his alleged violation of the release he signed in settling his own claims against these defendants.

Goodkind and Flaster/Greenberg filed a motion to dismiss Krupnick's fourth-party complaint on the grounds that his claims against them were barred by the litigation privilege and collateral estoppel.*fn2 The trial court denied this motion "without prejudice." Goodkind and Flaster/Greenberg then filed a motion for reconsideration, which the trial court also denied. We granted Goodkind and Flaster/Greenberg's motion for leave to appeal from the order denying their motion to dismiss and now reverse.

This appeal is controlled by the Supreme Court's decision in Loigman v. Twp. Comm. of Middletown, 185 N.J. 566 (2006).

That case involved a claim under the Federal Civil Rights Act (42 U.S.C.A. § 1983) for an alleged violation of the plaintiff's First Amendment right to attend an administrative law hearing, which was based on the alleged improper use of a sequestration motion to exclude plaintiff from the hearing. Id. at 571-72.

The Court held that the litigation privilege protected the defendants from being subjected to a damages action for the filing of a motion for sequestration. Id. at 572. In so holding, the Court stated:

[The] sequestration motion at an administrative hearing was a "communication" within a proceeding covered by the privilege.

Without the protection of the privilege, an attorney might hesitate to exclude a potential witness from the courtroom out of fear of becoming ensnared in costly civil litigation. We cannot allow the frightful specter of retributive civil actions against attorneys to paralyze them from exercising mundane trial duties on behalf of their clients.

....

We conclude that the litigation privilege applied to [the attorney's] filing of a sequestration motion, thus clothing defendants with absolute immunity from civil liability.

[Id. at 585-86, 589-90.]

Goodkind and Flaster/Greenberg's filing of a motion to disqualify Krupnick and a third-party complaint against Krupnick is substantially the same kind of action by an attorney on behalf of a client as the motion for sequestration of an alleged potential witness that the Court held was protected by the litigation privilege in Loigman. There is no support in Loigman for the trial court's view that the litigation privilege applies only to "statements" and not to "actions" relating to the litigation. Although the attorney for the defendants in Loigman made an allegedly false statement in support of the sequestration motion, the plaintiff's action was predicated upon the motion, which resulted in his exclusion from the administrative hearing, rather than the attorney's statements in support of the motion. Moreover, the Court described the issue posed by the appeal as "whether the litigation privilege shields a lawyer from a civil suit charging him with the improper use of a sequestration motion[,]" id. at 571, and it held that "the litigation privilege protects [a lawyer] from being haled into a civil court to face a damages judgment as a result of [the attorney's] sequestration motion[,]" id. at 572. Goodkind and Flaster/Greenberg's litigation activities on behalf of their clients are indistinguishable from the sequestration motion that the attorney involved in Loigman filed on behalf of his client, which the Court held was protected by the litigation privilege.

Accordingly, the order of the trial court denying Goodkind and Flaster/Greenberg's motion to dismiss the first and second counts of Krupnick's fourth-party complaint is reversed, and the case is remanded to the trial court to proceed with the parties' other claims.


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