August 3, 2010
ELLEN M. CASEY, PLAINTIFF-RESPONDENT,
UNIVERSITY OF MEDICINE AND DENTISTRY OF NEW JERSEY, DENISE MULKERN AND MARYANN MASTER, DEFENDANTS-APPELLANTS.
On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-3657-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued April 27, 2010
Before Judges Wefing, Grall and LeWinn.
This is an interlocutory appeal from an order of disqualification based on an alleged violation of the Rules of Professional Conduct (RPC), specifically RPC 1.9. RPC 1.9 is not implicated unless the party seeking disqualification is a "former client" of the lawyer or a member of the lawyer's firm. Because this record does not permit a finding of the essential attorney-client relationship between the plaintiff and defendants' lawyers, we reverse.
Plaintiff Ellen M. Casey, a member of the New Jersey bar who has practiced in the public and private sectors, is the former Executive Director of Materials Management for defendant University of Medicine and Dentistry of New Jersey (UMDNJ). One year after her employment was terminated, Casey filed a complaint charging UMDNJ and the individual defendants, who are UMDNJ's Senior Vice Presidents for Finance and Administration and Human Resources, with wrongful termination and violation of the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to -8. The factual basis for Casey's claims is that she was terminated for bringing improprieties in the spending practices UMDNJ employed to the attention of UMDNJ personnel, an independent monitor appointed by UMDNJ, a monitor appointed by the Federal District Court under a deferred prosecution agreement between UMDNJ and the United States Attorney for the District of New Jersey, and the Star Ledger.*fn1
Although the Attorney General filed an answer on behalf of UMDNJ, within two months UMDNJ retained McElroy, Deutsch, Mulvaney & Carpenter (MDMC) to defend against Casey's claims. MDMC is the law firm disqualified from representing UMDNJ under the terms of the order that is the subject of this appeal.
Casey alerted MDMC to her objection to its representation of UMDNJ in her employment litigation soon after the firm was retained by UMDNJ. On September 21, 2007, Casey urged MDMC to withdraw because she "was interviewed by Walter Timpone," a member of MDMC, "in the context of an SCI [State Commission of Investigation] investigation of UMDNJ" on October 19, 2005. On October 2, 2007, Casey sought discovery of documents "setting forth the scope of [MDMC's] representation of [Casey] and/or UMDNJ," and MDMC advised that it had no pertinent documents.
On November 20, 2007, Casey's attorney confirmed her willingness to "hold her objections to [MDMC's] conflict of interest in abeyance," if UMDNJ was willing to "seriously mediate."
Mediation was not successful, and in April 2008, Casey again sought documents "setting forth the scope of [MDMC's] representation of [Casey] and/or UMDNJ . . . ." MDMC again advised that there were no documents. Nonetheless, on September 12, 2009, MDMC produced correspondence written by Timpone discussing MDMC's relationship with the employees of UMDNJ in connection with a federal investigation of UMDNJ. Within two weeks of that disclosure, on September 25, 2009, Casey moved to disqualify the firm. Two days before the motion was heard, MDMC provided additional discovery.
On October 16, 2009, the judge entered an order disqualifying MDMC, giving UMDNJ thirty days to secure new representation, imposing sanctions, reopening discovery for a period of ninety days and adjourning the trial on Casey's termination claims that was scheduled for November 9, 2009. The judge stayed the order to permit UMDNJ to seek interlocutory review.
MDMC filed a motion for leave to appeal on behalf of UMDNJ, which we granted on December 30, 2009. We also granted UMDNJ's motion to supplement the record with additional discoverable material previously overlooked by MDMC - a letter of June 25, 2005 confirming MDMC's retention "to provide assistance to [UMDNJ] regarding [an] SCI investigation." MDMC agreed to the arrangement.*fn2
The evidential materials disclose the following facts relevant to Casey's motion to disqualify MDMC from defending UMDNJ in her action alleging wrongful termination.
UMDNJ retained MDMC in June 2005 "to provide assistance" with the SCI investigation. The SCI subpoenaed employees of UMDNJ. Timpone of MDMC corresponded with the SCI to schedule the appearances of those three UMDNJ employees. The scheduling letters all refer to three employees; one of the three is Casey. Casey did not ask Timpone to schedule her appearance.
The day prior to Casey's testimony before the SCI, she met with Timpone. Robert Scrivo, a second MDMC attorney, was present during Casey's interview and took notes. According to Casey, she was "directed by UMDNJ management . . . to meet" with Timpone prior to testifying before the SCI. The record does not include any correspondence between Timpone and Casey, and Casey does not assert that they had any communication before or after her interview.
Casey "believed that [her] conversation with [Timpone] was a confidential conversation with [her] attorney." According to Timpone and Scrivo, at the outset of the interview, Timpone told Casey he was representing UMDNJ and not representing her. Casey initially certified that she did not recall Timpone saying that; in a subsequent certification, however, she said that neither Timpone nor anyone else ever informed her that Timpone was not representing her. Casey did not certify that she was told that Timpone was her lawyer. Scrivo's notes of the interview shed no light on the subject. As Casey confirmed during her deposition, however, Scrivo's notes reflect that she told Timpone about her work experience in the legal field.
In certifications submitted to the trial judge, Timpone explained that the purpose of the interview was to learn what information Casey expected to convey during her testimony and inform her about what to expect during her appearance. Timpone told Casey that "pursuant to SCI practices, he would not be permitted to be present in the room during [her] testimony, but that [she] could take a break and it would be possible to ask to speak to him" at that time. There is nothing in the record that indicates that Casey took a break or spoke to one of the lawyers from MDMC during her testimony.
While MDMC was retained in connection with the SCI investigation, Timpone was also providing legal services in connection with an investigation conducted by the United States Attorney for the District of New Jersey. In that capacity, Timpone wrote to the Assistant United States Attorney (AUSA) and to the employees of UMDNJ describing the relationship between MDMC and the employees of UMDNJ.
In a letter dated October 5, 2005 to the AUSA, Timpone wrote:
Please accept this letter as a summary of a conversation I had with you last week concerning our representation of UMDNJ and its employees. I understand that prior counsel may have taken the position that they represented the University and not the employees. We have revisited the issue. We represent the University and its employees. Each employee you have selected to appear before the grand jury is told that we represent the University and that any privilege that envelops the conversation is held by the University.
In instances where the government may believe a conflict exists, we will consider obtaining separate counsel for the witness once the issue is brought to our attention.
Since these witnesses are "represented parties," I would ask that any contacts made by the government and its agents come through this firm. Both Robert Scrivo and I intend to be cooperative in making witnesses accessible to you in preparation for the grand jury sessions. Scheduling the witnesses, however, should come through us.
In a second letter to the AUSA dated October 21, 2005, Timpone wrote "[i]n accordance with the [RPC], [MDMC] represent[s] the University and its employees in this investigation." (emphasis added).
In a letter to the employees of UMDNJ dated October 26, 2005, Timpone identified himself as a member of the firm and "outside counsel for UMDNJ and its employees." (emphasis added). He alerted the employees that "law enforcement" was visiting employees at home, and he informed them that, at the request of an employee, MDMC would arrange for a lawyer to be present for an "interview and at the grand jury."
Casey does not assert that she saw or was aware of any of the foregoing correspondence, and there is nothing in the record indicating that she appeared before the grand jury. At oral argument, Casey's attorney confirmed that Casey was not claiming that she was aware of the correspondence.
Without the benefit of testimony and on the basis of the certifications, deposition testimony and correspondence discussed above, the trial judge determined that MDMC, through Timpone, represented Casey during the interview before her SCI appearance. The only documentary evidence that the trial judge did not have is the letter confirming MDMC's representation of UMDNJ in connection with the SCI investigation.
The judge noted that the evidence relevant to the attorney-client relationship consisted of Casey's certification, the conflicting certifications of Timpone and Scrivo and the letters from Timpone to the AUSA stating that he represented UMDNJ and its employees. The judge viewed those letters as the "clincher," and he concluded that Casey's belief that Timpone was representing her was reasonable.
Our review of a trial court's decision to disqualify an attorney is de novo and plenary. City of Atl. City v. Trupos, 201 N.J. 447, 463 (2010); J.G. Ries & Sons, Inc. v. Spectraserv, Inc., 384 N.J. Super. 216, 222 (App. Div. 2006); State v. Bruno, 323 N.J. Super. 322, 331 (App. Div. 1999). "[A] lawyer's duty to a former client is addressed by RPC 1.9." City of Atl. City, supra, 201 N.J. at 461. "[RPC 1.9] provides straightforwardly that '[a] lawyer who has represented a client in a matter shall not thereafter represent another client in the same or substantially related matter in which that client's interests are materially adverse to the interests of the former client[.]'" Id. at 462 (quoting RPC 1.9(a)).
To state the obvious, RPC 1.9(a) has no relevance unless the party seeking disqualification is a "former client." The "initial burden of production" on the question of former representation is on the party seeking to disqualify its adversary's attorney. Id. at 462; Dewey v. R.J. Reynolds Tobacco Co., 109 N.J. 201, 221-22 (1988). The burden of persuasion on that issue remains with the moving party throughout. City of Atl. City, supra, 201 N.J. at 463. We cannot conclude that Casey met that burden.
A motion to disqualify "should ordinarily be decided on the affidavits and documentary evidence submitted, and an evidentiary hearing should be held only when the court cannot with confidence decide the issue on the basis of the information contained in those papers . . . ." Ibid. (quoting Dewey, supra, 109 N.J. at 222). Illustrative of cases requiring testimony are those where "gaps" in the documentary evidence "must be filled" or when a finding turns on a "question of witness credibility." Ibid.
In this case, an order of disqualification could not be entered without assessing the relative credibility of Timpone's and Scrivo's assertions that Timpone told Casey MDMC was representing UMDNJ, not her, and Casey's denial. If information clarifying that MDMC had no attorney-client relationship with Casey was conveyed to her at the outset of the interview, then Casey's belief that Timpone was representing her could not be deemed "reasonable."
Legal representation is "'inherently an aware, consensual relationship,' one which is founded upon the lawyer affirmatively accepting a professional responsibility." In re Palmieri, 76 N.J. 51, 58-59 (1978) (agreeing with the respondent's characterization of the relationship). While the attorney's acceptance of professional responsibility to the client need not be expressly articulated, when it is not articulated, there must be conduct on the part of the parties to the purported attorney-client relationship that gives rise to that inference. Id. at 59-60.
An attorney-client relationship may be found by implication based upon conduct when:
(1) a person manifests to a lawyer the person's intent that the lawyer provide legal services for the person; and either
(a) the lawyer manifests to the person consent to do so; or
(b) the lawyer fails to manifest lack of consent to do so, and the lawyer knows or reasonably should know that the person reasonably relies on the lawyer to provide the services[.] [Herbert v. Haytaian, 292 N.J. Super. 426, 436-37 (App. Div. 1996) (quoting The Restatement of the Law Governing Lawyers (Proposed Final Draft No. 1) § 26 (1996)).]
In the context of an employee of an organization that is represented by an attorney, RPC 1.13 provides a special rule. Pursuant to paragraph (a) of that rule, an attorney "retained to represent an organization represents the organization" not its employees. Nonetheless, pursuant to paragraph (d) of RPC 1.13, an attorney representing an organization must "explain the identity of the client when the lawyer believes that such explanation is necessary to avoid misunderstanding on [the] part" of an employee of the organization.
Without testimony permitting the judge to reject, as not credible, Timpone's and Scrivo's assertions that Casey was told Timpone was representing UMDNJ and not her, the judge could not infer an attorney-client relationship arising by implication from conduct or a breach of the obligation imposed by RPC 1.13(d). If Timpone advised Casey that UMDNJ, not Casey, was MDMC's client, then any conduct implying otherwise, short of retraction, could not defeat Timpone's express denial of the acceptance of any professional responsibility as to Casey. See Home Care Indus., Inc. v. Murray, 154 F. Supp. 2d 861, 869 (D.N.J. 2001) (noting that the firm could have protected its position by revealing its loyalty was to the corporate client). Moreover, if Timpone identified his client, then he fully complied with any special obligation that he might owe pursuant to paragraph (d) of RPC 1.13. Viewed without reference to the information Timpone and Scrivo contend that Casey was given, Casey's voicing of criticisms and praise of individuals she had encountered while working at UMDNJ arguably gives reason to question whether Casey, despite her credentials as a lawyer, actually understood RPC 1.13. Cf. Ferranti Int'l PLC v. Clark, 767 F. Supp. 670, 671-72 (E.D. Pa. 1991) (considering that the employee was an attorney in concluding that the employee's belief that he had an attorney-client relationship with a firm representing the corporation was unreasonable); Home Care Indus., supra, 154 F. Supp. 2d at 869 (noting that the employee in Home Care was not an attorney and distinguishing Ferranti). If Timpone explained the identity of his client, however, no further action on his part was required by RPC 1.13(d), and any contrary misunderstanding entertained by Casey was not reasonable.
The trial judge's decision can be understood to suggest that the credibility of Timpone's and Scrivo's assertions about what Timpone told Casey was wholly undermined by Timpone's correspondence with the AUSA about the federal investigation. That conclusion, however, is at odds with the record. One might infer that Timpone's letter to the AUSA was an unjustified attempt to expand the scope of the AUSA's obligations under RPC 4.2 and 4.3 beyond the scope of RPC 1.13(a), but Timpone's letter does not reflect any ambivalence or inconsistency relevant to the question of import here, which is the identity of the party who enjoyed MDMC's loyalty and held the privilege of confidentiality. In that regard, Timpone gave the AUSA information that is substantially the same as the information he claims to have given Casey. He informed the AUSA: "Each employee you have selected to appear before the grand jury is told that we represent the University and that any privilege that envelops the conversation is held by the University."
For the foregoing reasons, we conclude that the order of disqualification was entered without conducting an evidentiary hearing that is essential to the preliminary question of Casey's status as a former client of MDMC. Accordingly, reversal of the trial judge's order and remand for an evidentiary hearing are required.
We decline to address the remaining question critical to the applicability of RPC 1.9, which is whether Casey's action based on a claim of wrongful termination is "substantially related" to the SCI investigation. The Supreme Court's decision in City of Atlantic City, which was issued while this appeal was pending, now controls that determination. Accordingly, if there is still a need to determine whether these matters are "substantially related" after a hearing on the issue of former representation, then the parties should have an opportunity to argue the point to the trial court with careful reference to the evidential materials submitted on the motion and the standard established in City of Atlantic City.
The parties have presented additional arguments with respect to the timing of Casey's application. Both urge us to consider the other's litigation conduct in addressing UMDNJ's claim that Casey waived the right to seek disqualification. On UMDNJ's side there are discovery oversights that are, at best, not easily understood. On Casey's side, there is the willingness to set the question of conflict aside during negotiations that is, at best, difficult to understand given that most of the relevant information was within her personal knowledge and that she was willing to proceed to mediation without resolving the question of conflict.
The trial judge did not address the issue, and we deem it improvident to address waiver before the question of Casey's status as a former client is resolved. In the event it is necessary to resolve the issue, Rohm & Haas Co. v. American Cyanamid Co., 187 F. Supp. 2d 221, 229-30 (D.N.J. 2001) is informative. Rohm identifies the factors relevant to waiver of a claim for disqualification, which include the length of the delay, reasons for the delay and prejudice to the non-moving party. Id. at 229. Rohm also explains that the "essence" of the inquiry is whether the delay is a "tactical maneuver." Id. at 229-30.
Reversed and remanded for further proceedings in conformity with this decision. We do not retain jurisdiction.