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Cardillo v. Bloomfield 206 Corp.

February 18, 2010

CATHY C. CARDILLO, ESQ., PLAINTIFF-RESPONDENT,
v.
BLOOMFIELD 206 CORP., JAMES STATHIS AND STEVEN SILVERMAN, DEFENDANTS-APPELLANTS.



On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-481-09.

The opinion of the court was delivered by: Chambers, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued November 9, 2009

Before Judges Rodríguez, Yannotti and Chambers.

This appeal arises out of an agreement between plaintiff Cathy C. Cardillo, Esq. and defendants Bloomfield 206 Corporation (Bloomfield), James Stathis and Steven Silverman (the Cardillo Agreement). In the Cardillo Agreement, Cardillo, an attorney, agreed not to represent parties in litigation adverse to the defendants. At the same time that she was negotiating the Cardillo Agreement on her own behalf with defendants, she was also negotiating an agreement to settle litigation she had brought on behalf of clients against defendant Bloomfield. Cardillo and counsel for defendants exchanged emails relating their mutual understanding that the two agreements were being negotiated separately.

Cardillo thereafter brought this action to seek a court determination that the Cardillo Agreement was void, contending that it violated RPC 5.6(b) which prohibits an attorney from agreeing to restrict the attorney's practice as "part of the settlement of a controversy between private parties." The trial court granted her application, and defendants appealed. We affirm. Attorneys may not circumvent the import of RPC 5.6(b) by stating that the settlement of litigation is separate from the agreement to restrict the practice of law where the agreements were negotiated contemporaneously and are interconnected.

I.

The path that led to this suit began in 2000, when Cardillo provided legal advice to Liberty Realty, L.L.C. (Liberty) and was paid for those services. The three principals of Liberty were Joseph Covello and defendants Stathis and Silverman.

Thereafter, Cardillo represented Jay Rubinstein and Gary Rubinstein in Rubinstein v. Bloomfield 206 Corp., Docket No. HUD-L-921-07 and Bloomfield 206 Corp. v. City of Hoboken, Docket No. HUD-L-3112-07 (the Rubinstein litigation). Bloomfield was owned by Stathis and Silverman. Since Stathis and Silverman were also owners of Liberty when Cardillo had previously represented that entity, Bloomfield moved to disqualify Cardillo from representing the Rubinsteins.

While this motion was pending, Cardillo and counsel for Bloomfield negotiated a settlement of the Rubinstein litigation. Contemporaneously with those negotiations, Cardillo also negotiated with counsel for Bloomfield and its principals, Stathis and Silverman, for the Cardillo agreement whereby she would refrain from representing clients adverse to defendants. On August 28, 2007, the settlement agreement for the Rubinstein litigation was executed. The next day, August 29, 2007, after some further negotiation regarding the language in the confidentiality provision, the parties executed the Cardillo Agreement which included the following provision limiting Cardillo's practice:

Cardillo expressly agrees not to take any position adverse to, represent or participate in the representation of any party in any future action against Stathis, Silverman, Bloomfield 206 or any corporation, limited liability company or other legal entity in which Stathis or Silverman has an existing ownership interest, at the time of her initial representation or participation in the representation of any party. Cardillo represents that as of August 29, 2007, the date of her execution of this agreement, she does not represent any individual or other entity in any pending or contemplated action against Stathis, Silverman, Bloomfield 206 or any corporation, limited liability company or other legal entity in which Stathis or Silverman have an ownership interest.

The Cardillo Agreement further provided that defendants Bloomfield, Stathis and Silverman waived any conflicts of interest that may have arisen due to Cardillo's representation of any parties in the Rubinstein litigation or any other action, and they agreed to withdraw any action pending before the court asserting such a conflict of interest.

On January 28, 2009, Cardillo commenced this lawsuit by filing a verified complaint and order to show cause, seeking injunctive relief. She sought a ruling that the Cardillo Agreement was void and unenforceable as a violation of RPC 5.6(b). She wanted this relief in order to represent a client against another corporation owned by Silverman and Stathis. Two days later, on January 30, 2009, the trial court heard Cardillo's application for temporary restraints. Based on the papers and argument presented, the trial court determined that the Cardillo ...


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