Title: Kernan v. One Washington Park

State: new-jersey

Issuer: New Jersey Supreme Court

Document:

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized). GARIBALDI, J., writing for a majority of the Court. The issue on appeal is whether a commercial landowner in bankruptcy, who is judicially precluded from engaging in the management and control of its property because of the court appointment of a trustee and managing agent, owes a duty to third persons to maintain an abutting public sidewalk in a reasonably safe condition. On January 17, 1994, Rita Kernan slipped and fell on an icy sidewalk abutting a commercial office building in Newark. As a result of her fall, Kernan fractured her left hip. At all relevant times, the building adjacent to the sidewalk had been owned by One Washington Park Urban Renewal Associates ( OWPURA ). Prior to Kernan's fall, OWPURA filed a Chapter 11 bankruptcy petition. Thereafter, a Trustee in Bankruptcy (Trustee) was appointed by the United States Bankruptcy Court to oversee OWPURA's estate. On May 24, 1991, the Trustee obtained a court order authorizing him to retain McCormick Bank Street Investment Company, a real estate property management company doing business as McCormick Organization ( McCormick ), as managing and disbursing agent for the premises at One Washington Park. McCormick was responsible for managing the building and paying the bills. McCormick employed International Service System, Inc. ( ISS ) to remove snow and ice from the sidewalks adjacent to the building. In October 1994, Kernan sued OWPURA and ISS. In its answer, OWPURA listed several affirmative defenses, including: 1) Kernan's failure to state a claim on which relief can be granted; and 2) any alleged damages were caused by other persons over whom OWPURA had no control. In answers to interrogatories propounded by Kernan, OWPURA did not indicate its bankruptcy status in response to a question regarding the ownership of One Washington Park. Rather, OWPURA provided only the cursory information that the premises were owned by OWPURA but were in the care of a court appointed manager. On July 1, 1996, ISS moved to sever the trial on issues of liability from a trial on damages. The trial court granted that motion. At the conclusion of the evidence presented by Kernan at the liability trial, both ISS and OWPURA moved for an involuntary dismissal. The trial court granted the motions, finding that Kernan failed to present a prima facie case of negligence on the part of either ISS or OWPURA, and that OWPURA owed no duty to Kernan because its status in bankruptcy left it with no control over the operations at One Washington Park. On appeal, the Appellate Division reversed and remanded for further proceedings, concluding that Kernan had presented a prima facie case against both defendants. The court did not rule on the implications of OWPURA's bankruptcy status on its potential liability for Kernan's fall. The Appellate Division noted that OWPURA did not raise its bankruptcy status as an affirmative defense, and that Kernan did not learn of the bankruptcy proceeding until just a few days before trial. As such, the court held that Kernan should be permitted to timely amend her complaint to add McCormick as a defendant should she choose to do so. The Supreme Court granted OWPURA's petition for certification. HELD: One Washington Park Urban Renewal Associates did not owe a duty to maintain the abutting public sidewalk because the Bankruptcy Court appointed a trustee and managing agent who assumed control of the premises and precluded OWPURA's participation in maintaining One Washington Park and its adjacent sidewalks. 1. Whether OWPURA owed a duty to Kernan depends on what effect the appointment by the Bankruptcy Court of a trustee and managing agent to manage the premises at One Washington Park had on OWPURA's ability to participate in the daily management of the premises and its authority to control the snow and ice removal on the day of Kernan's fall. (pp. 6-7) 2. It is ordinarily presumed that a debtor who files a Chapter 11 bankruptcy will remain in control of its estate. Following a bankruptcy petition, the debtor becomes the debtor in possession, which is a new entity with its own rights and duties, subject to the supervision of the Bankruptcy Court. In this case, OWPURA was divested of the status of a debtor in possession by the appointment of the Trustee. (pp. 7-9) 3. The appointment of a trustee in a Chapter 11 reorganization case is the exception, not the rule. The Bankruptcy Code gives the trustee wide-ranging management authority over the debtor. The trustee is automatically substituted for the debtor in possession in any pending action, proceeding, or matter. The trustee may operate the business of the debtor and has considerable leeway to exercise his or her business judgment in running that business. It is evident that the Bankruptcy Court found that OWPURA's estate would best be managed and controlled by someone other than the debtor. (pp. 9-13) 4. OWPURA is immunized from liability for Kernan's fall because of the appointment of the Trustee and McCormick, as well as the subsequent employment of ISS. OWPURA lacked the ability to participate in the daily management of One Washington Park and had no authority to control the snow and ice removal on the day of Kernan's fall. OWPURA did not create any dangerous condition. The accumulation of snow and ice was the result of natural causes. OWPURA had no right to enter the premises to rectify that condition. As such, OWPURA owed no duty to Kernan to maintain the abutting public sidewalk free from snow and ice on the day of her fall. (pp. 13-16) 5. The Court's holding is based on the unique status of OWPURA in this bankruptcy proceeding. Kernan is incorrect in her contention that McCormick and ISS were agents of OWPURA. A necessary element of an agency relationship is the right of the principal to control the conduct of the agent. That element of control is lacking between OWPURA and the Trustee and between OWPURA and McCormick. In addition, Kernan's claim against OWPURA arose in 1994, nearly three years after OWPURA filed its bankruptcy petition. Contrary to the Appellate Division's finding, the automatic stay provision of the Bankruptcy Code does not affect this action. (pp. 16-19) 6. The Appellate Division properly found that Kernan was entitled to have her case heard by the jury. The matter is remanded to allow Kernan to proceed against ISS and, if she chooses, to amend her complaint to include the Trustee and McCormick. Although more than two years have elapsed since Kernan was injured, the relation-back rule, Rule 4:9-3, is applicable. The insurance company is the true party in interest and always has been aware of the proceedings initiated by Kernan. Therefore, there is no prejudice in allowing the complaint to be amended to name the Trustee and McCormick. Kernan's claims against McCormick and the Trustee are not distinctly new or different; they arise out of the same conduct, transaction or occurrence that underlie the present action. An amendment adding McCormick and the Trustee would not introduce a new cause of action barred by the statute of limitations. (pp. 20-25) The judgment of the Appellate Division is AFFIRMED in part and MODIFIED in part, in accordance with this opinion. The matter is REMANDED to the Law Division to allow Kernan to proceed against ISS, and if she so chooses, to amend her complaint to include the Trustee and McCormick. CHIEF JUSTICE PORITZ and JUSTICES HANDLER, O'HERN and STEIN join in JUSTICE GARIBALDI'S opinion. JUSTICE POLLOCK filed a separate concurring opinion in which JUSTICE COLEMAN joins. RITA KERNAN, Plaintiff-Respondent, v. ONE WASHINGTON PARK URBAN RENEWAL ASSOCIATES, Defendant-Appellant, v. INTERNATIONAL SERVICE SYSTEM, INC., ABC CORPORATION 1-5, (said names being fictitious), and JOHN DOES 1-10, (said names being fictitious), Defendants. Argued February 18, 1998 -- Decided June 12, 1998 On certification to the Superior Court, Appellate Division. Jeffrey W. Mazzola argued the cause for appellant (Staehle & Smith, attorneys). Richard T. Garofalo argued the cause for respondent (Garrity, Graham, Favetta & Flinn, attorneys). The opinion of the Court was delivered by GARIBALDI, J. The central question in this appeal is whether a commercial landowner in bankruptcy, who is judicially precluded from engaging in the management and control of its property by the court appointment of a trustee and managing agent, owes a duty to third persons to maintain an abutting public sidewalk in a reasonably safe condition. [Ibid. (citing In re Parker Grande Dev., Inc. 64 B.R. 557, 561 (Bankr. S.D. Ind. 1986)).] In addition, the bankruptcy courts have considered (1) the trustworthiness of the debtor; (2) the reasons the debtor acted as he did; (3) reliance and harm to another party; (4) conclusive evidence of detriment to the estate; and (5) possibilities of future rehabilitation. [Ibid. (citing In re Evans, 48 B.R. 46, 48 (Bankr. W.D. Tex. 1985); In re Tyler, 18 B.R. 574, 576 (Bankr. S.D. Fla. 1982)).] Moreover, the courts have held that neither dissatisfaction with a debtor's management nor slight evidence of imprudent business decisions is sufficient in itself to permit the appointment of a trustee. Id. 276, 347; see also Chapter 11 Business Governance, supra, 6 Bankr. Dev. J. at 55-57, 60 ("The Code does not contemplate that the DIP be replaced by a trustee simply because a court believes that someone else would operate the business more effectively."). The Code provides for the appointment of a trustee either "for cause," 11 U.S.C.A. 1104(a)(1), or if such appointment is "in the interests of creditors . . . and other interests of the estate," 11 U.S.C.A. 1104(a)(2). The most common bases for granting the request of a party in interest to appoint a trustee include "gross mismanagement and incompetence" and "DIP misconduct or self-dealing." Chapter 11 Business Governance, supra, 6 Bankr. Dev. J. at 57-58. The United States Supreme Court has noted that "the Bankruptcy Code gives the trustee wide-ranging management authority over the debtor." Commodity Futures Trading Comm'n v. Weintraub, 471 U.S. 343, 352, 105 S. Ct. 1986, 1993, 85 L. Ed. 2d 372, 381 (1985). Upon appointment, the trustee is automatically substituted for the debtor in possession in any pending action, proceeding, or matter. 9 Am. Jur. 2d Bankruptcy 271 (1991). In addition, a trustee has broad rights, powers, and duties under Chapter 3 of the Code, including the capacity to sue and be sued, 11 U.S.C.A. 323(b), the authority to retain professional persons, 11 U.S.C.A. 327, and the power to use, sell, or lease property of the estate, 11 U.S.C.A. 363. In a Chapter 11 reorganization, a trustee has additional duties to the general powers listed above. Of relevance to this case, a Chapter 11 trustee is required to investigate the acts, conduct, assets, liabilities, and financial condition of the debtor, the operation of the debtor's business and the desirability of the continuance of such business, and any other matter relevant to the case or to the formulation of a [reorganization] plan. [ 11 U.S.C.A. 1106.] As part of that authority, the trustee may operate the business of the debtor, 11 U.S.C.A. 1108, and has considerable leeway to exercise his business judgment in running that business, 9 Am. Jur. 2d Bankruptcy 310 (1991). In this case, the bankruptcy court granted a party's petition to appoint a trustee. Although the record does not indicate the reasons why the court deemed it necessary to appoint the Trustee, given the extraordinary nature of such an appointment in a Chapter 11 reorganization it is evident that the bankruptcy court found that it was required and that OWPURA's estate would best be managed and controlled by someone other than the debtor. A similar finding of cause or necessity to the estate formed the basis of the court's granting of the Trustee's application to authorize the employment of McCormick as managing agent of the premises at One Washington Park. A trustee must obtain leave of the court before he can delegate any of his specific duties as representative of the court. See In re Lowry Graphics, Inc., 86 B.R. 74, 76 (Bankr. S.D. Tex. 1988). Such court authorization was obtained by the Trustee in his application to the bankruptcy court in May 1991, at which time, McCormick was retained as the management company for One Washington Park. In this case, plaintiff's claim against McCormick and the Trustee is not distinctly new or different, but "germane in the sense that they arise out of the same conduct, transaction or occurrence" that underlies the present action. Wimmer v. Coombs, 198 N.J. Super. 184, 188 (App. Div. 1985); see also Cockinos v. GAF Corp., 259 N.J. Super. 204, 209 (Law Div. 1992) ("If the amendment asserts a germane claim, then it is entitled to relation back.") Furthermore: "[i]n the context of amended pleadings, an accommodation has traditionally been made between the defendant's right to rely on the repose afforded by the statute of limitations and the right of the plaintiff to correct pleading errors or to respond affirmatively to his acquisition of new information respecting his claim. This accommodation is based on the perception that a person who has timely notice of the pendency of an action . . . cannot reasonably object to the late assertion against him . . . provided he is reasonably chargeable with the knowledge that those other claims would have been timely asserted against him but for plaintiff's error or lack of information and provided further that the late assertion does not prejudice him in maintaining his defense. We conclude that an amendment by plaintiff to her complaint to add McCormick and the Trustee does not introduce a new cause of action barred by the statute of limitations. Rather, such an amendment merely sets forth a claim arising out of the conduct, transaction, or occurrence already set out in the original complaint. Because there was notice of plaintiff's action, our holding does not offend the policy underlying the statute of limitations, see City of Trenton v. Fowler-Thorne Co., 57 N.J. Super. 196, 207 (App. Div. 1959), aff'd o.b. 32 N.J. 256 (1960), and "accomplish[es], consistent with the general aim and policy of [the Court Rules] . . . substantial justice on the merits by permitting a technical . . . flaw to be corrected where such correction will not materially prejudice another party." Pressler, Current N.J. Court Rules, comment 2 on R. 4:9-3 (1998). The judgment of the Appellate Division is affirmed in part and modified in part, in accordance with this opinion. CHIEF JUSTICE PORITZ and JUSTICES HANDLER, O'HERN and STEIN join in JUSTICE GARIBALDI'S opinion. JUSTICE POLLOCK filed a separate concurring opinion in which JUSTICE COLEMAN joins. RITA KERNAN, Plaintiff-Respondent, v. ONE WASHINGTON PARK URBAN RENEWAL ASSOCIATES, Defendant-Appellant, and INTERNATIONAL SERVICE SYSTEM, INC., ABC CORPORATION 1-5, (said names being fictitious) and JOHN DOES 1-10, (said names being fictitious, Defendants. POLLOCK, J., concurring. On January 17, 1994, plaintiff, Rita Kernan, fractured her hip when she fell on an icy sidewalk in Newark. Kernan filed her complaint on October 10, 1994. In her complaint Kernan alleged that she slipped and fell on the sidewalk adjacent to property owned and maintained by the defendants Urban Renewal Associates, ISS Engineering Services and ABC Corp. 1-5 (said names being fictitious, the real names of said or entities or individuals being currently unknown) located at One Washington Park, Newark, New Jersey. Defendant One Washington Park Urban Renewal Associates (OWPURA) answered the complaint on April 3, 1995. OWPURA stated in relevant part that it is without knowledge or information sufficient to form a belief as to the truth of that allegation. The answer included six affirmative defenses, including one asserting that [t]he alleged damages were caused by other persons over whom this defendant had no control. It also included a cross-claim for contribution and indemnity against all co-defendants and a demand for discovery of plaintiff. Plaintiff failed to answer interrogatories, and on January 8, 1996, the Law Division dismissed the complaint without prejudice. Thereafter, plaintiff sought reinstatement of her complaint, reciting that she was in poor health and that she had been hospitalized from June 12, 1995, until July 18, 1995, during which time she was comatose and ventilator dependent for approximately five weeks. After her release from St. Barnabas she spent two weeks at Wellkind for acute rehabilitation services, followed by extensive therapy at Mountainview Physical Therapy in Hackettstown, N.J. Plaintiff answered the interrogatories, and the Law Division reinstated the complaint on May 19, 1996. Following the entry of a consent order on September 13, 1996, plaintiff amended her complaint to change the designation of the corporate defendants from Urban Renewal Associates to OWPURA and from ISS Engineering Services to International Service System, Inc. (ISS). In propounding interrogatories, plaintiff relied on the Uniform Interrogatories to be Answered in All Personal Injury Cases: Superior Court . See R. 4:17-1(b); Appendix II, Form C. Uniform interrogatories 1 and 3, together with OWPURA's answers state: 1. State: (a) the full name and residence address of each defendant; (b) if a corporation, the exact corporate name; and (c) if a partnership, the exact partnership name and the full name and residence address of each partner. The premises is owned as a partnership between Mr. Charles Geyer and Richard C. Wolffe. One Washington Park Urban Development Association, C/O Court Appointed Manager, McCormick Organization 18-22 Bank Street, Summit, N.J. 3. If you intend to set up or plead or have set up or pleaded negligence or any other separate defense as to the plaintiff or if you have or intend to set up a counterclaim or third-party action, (a) state the facts upon which you intend to predicate such defenses, counterclaim or third-party action; and (b) identify a copy of every document relating to such facts. The owner of the building is One Washington Park Urban Renewal Development Association, c/o Court appointed Manager, McCormick Organization, 18-22 Bank Street, Summit, N.J. OWPURA's answers to plaintiff's interrogatories do not reveal that OWPURA had been in a Chapter 11 bankruptcy since 1991. In fact, on May 24, 1991, the Bankruptcy Court entered an order authorizing the trustee to retain the McCormick organization as managing agents. . . . The McCormick organization (McCormick) retained ISS to maintain the premises, including the sidewalk. Additionally, McCormick obtained a public liability insurance policy insuring it, OWPURA, and the trustee. Kernan's counsel delayed taking depositions until September 28, 1996, when he learned for the first time that OWPURA was in bankruptcy. Before us, counsel acknowledged that perhaps he should have applied to the Bankruptcy Court for leave to join the Trustee. Apparently, the practice in Bankruptcy Court is for an injured party to obtain an order permitting suit against the trustee with recovery limited to the amount of the trustee's public liability insurance. Kernan's counsel explained that, because of the short time period between the deposition and the scheduled trial date, he elected to proceed to trial. Viewing the facts charitably, defense counsel's failure to describe OWPURA's bankruptcy in its answer to the complaint might be explainable. Counsel, who was appearing for an insurance company, might not have known of the bankruptcy when he filed the answer to the complaint. By the time he submitted OWPURA's answers to plaintiff's interrogatories, however, he knew of the bankruptcy. Moreover, at no time has OWPURA claimed anything but that its failure to mention its bankruptcy was intentional. Counsel tries to justify the nondisclosure of the bankruptcy by arguing that he identified the McCormick Organization as OWPURA's property manager and that short of disclosing trial strategy, [OWPURA's] did all that it could possibly do to alert plaintiff of this issue. The facts do not support counsel's view that he did all that he possibly could to alert plaintiff to its bankruptcy. OWPURA's pleadings and answers to interrogatories lead to the opposite conclusion, that defense counsel concealed OWPURA's bankruptcy as a matter of trial strategy. That the strategy ultimately failed is small solace. Nearly five years after her accident, a seriously incapacitated plaintiff still waits for her day in court. The defense trial strategy has imposed substantial costs on Kernan, the judicial system, and the public. The costs include the time and money spent by Kernan and defendants in hauling this case before the Law Division, the Appellate Division, this Court, and back to the Law Division. In effect, the defense trial strategy transformed a routine slip-and-fall case into a failed attempt at artful dodging. The costs, however, extend beyond the parties to the judicial system and the public. The judges who have corrected the injustice to plaintiff could have dedicated their time to the causes of other litigants. All this could have been avoided if OWPURA had stated the true facts in either its answer to the complaint or its answers to interrogatories. That plaintiff's counsel may have been remiss in making discovery begs the question whether defense counsel should have disclosed OWPURA's bankruptcy. As the Court states: In hindsight, plaintiff should have amended her complaint. It is equally clear that OWPURA's counsel should have informed plaintiff that it was in bankruptcy and that a trustee had been appointed. Notably, it appears that OWPURA's lawyer was paid by the same insurance company that was also the insurance company for the Trustee and McCormick. Hence, the insurance carrier is the real party in interest in this case. That fact suggests that the parties were hoping to have the statute of limitations run against the Trustee and McCormick while the plaintiff attempted unsuccessfully to recover from OWPURA. The question logically arises whether diligent, even zealous, representation of a client justifies an attorney's nondisclosure to an adversary in a civil action of material public information about the client. That OWPURA's bankruptcy was material is made manifest by the opinions of the Law Division, the Appellate Division, and this Court. The Law Division dismissed Kernan's complaint for several reasons. Among the reasons was the trial court's conclusion that OWPURA did not owe a duty to Kernan because it was in bankruptcy and the trustee had appointed McCormick as a property manager. In reversing, the Appellate Division noted that OWPURA had not pled bankruptcy as an affirmative defense. The court acknowledged that it was not sure about the effect of the bankruptcy on the owner's liability for common-law negligence, and remanded the matter to the Law Division so Kernan could seek to join McCormick as a defendant. The majority opinion comprehensively addresses the substantive issues. This appeal, however, raises another issue that needs addressing. The unaddressed issue concerns the obligations of lawyers to each other and to the judicial system. The Rules of Professional Conduct, the New Jersey Court Rules, the Principles of Professionalism for Lawyers and Judges, and relevant judicial decisions indicate that defense counsel should have been more forthcoming. The Rules of Professional Conduct frame the relationship between a lawyer's duty to represent a client diligently and the lawyer's duties to the court and an adversary. Analysis of those duties begins with RPC 1.3 Diligence, which states, A lawyer shall act with reasonable diligence and promptness in representing a client. The analysis continues with RPC 3.3, which pertains to Candor Toward the Tribunal. As promulgated by the American Bar Association, RPC 3.3 provides: (A) A lawyer shall not knowingly: (1) make a false statement of material fact or law to a tribunal; (2) fail to disclose a material fact to a tribunal when disclosure is necessary to avoid assisting a criminal or fraudulent act by the client. In commenting on RPC 3.3, the American Bar Association states, [t]here are circumstances where failure to make a disclosure is the equivalent of an affirmative misrepresentation. As adopted in New Jersey, RPC 3.3 exceeds the requirements of disclosure imposed by the ABA version. The New Jersey version of RPC 3.3 mandates that a lawyer shall not knowingly fail to disclose to the tribunal a material fact with knowledge that the tribunal may tend to be misled by such failure. RPC 3.4, which pertains to Fairness to Opposing Party and Counsel, states in relevant part: A lawyer shall not: (d) in pretrial procedure make frivolous discovery requests or fail to make reasonably diligent efforts to comply with legally proper discovery requests by an opposing party. The New Jersey Court Rules strengthen the argument that defense counsel should have disclosed OWPURA's status as a bankrupt. Rule 1:4-8(a) states: Effect of Signing, Filing or Advocating a Paper. . . . By signing, filing or advocating a pleading . . . an attorney . . . certifies that to the best of his or her knowledge, information, and belief, formed after an inquiry reasonable under the circumstances: (1) the paper is not being presented for any improper purpose, such as to harass or to cause unnecessary delay or needless increase in the cost of litigation, (3) the factual allegations have evidentiary support or, as to specifically identified allegations, they are either likely to have evidentiary support or they will be withdrawn or corrected if reasonable opportunity for further investigation or discovery indicates insufficient evidentiary support; and (4) the denials of factual allegations are warranted on the evidence or, as to specifically identified denials, they are reasonably based on a lack of information or belief or they will be withdrawn or corrected if a reasonable opportunity for further investigation or discovery indicates insufficient evidentiary support. In effect, Rule 1:4-8(a) provides that an attorney's signature on a pleading constitutes a certification that to the best of the attorney's knowledge, information and belief, the pleading is not interposed for the purpose of delay. Read together, the Rules of Professional Conduct and the New Jersey Court Rules require what common courtesy and candor suggest, that pleadings and answers to interrogatories should not contain half-truths intended to mislead both adversaries and the court. Two out-of-state cases confirm that defense counsel should have disclosed to Kernan the fact of OWPURA's bankruptcy. In Spaulding v. Zimmerman, 116 N.W.2d 704 (Minn. 1962), the Minnesota Supreme Court affirmed a trial court's decision to set aside the settlement of an infant's personal injury action arising out of an automobile accident. Plaintiff suffered various injuries, but his own doctors failed to detect an aneurysm in his aorta. Years later, the examining defense doctor discovered the aneurysm, which had arisen after the accident. Although the aneurysm was not detectable immediately after the accident, the accident caused the condition that gave rise to the aneurysm. Defense counsel did not disclose the existence of the aneurysm either to plaintiff's counsel or to the court when the settlement was presented for court approval. Although the Supreme Court acknowledged that no canon of ethics or legal obligation may have required defense counsel to disclose the aneurysm to plaintiff's counsel, it held that the trial court had not abused its discretion in setting aside the settlement. In Virzi v. Grand Trunk Warehouse and Cold Storage Co., 571 F. Supp. 507 (E.D. Mich. 1983), plaintiff's counsel presented a personal injury action for a mediation panel at the direction of the United States District Court in Michigan. The panel evaluated the case at $35,000. Unbeknown to plaintiff's counsel, his client had died nine days before the mediation. After the mediation hearing, plaintiff's counsel learned of his client's death, but did not so inform his adversary or the court. At a subsequent pretrial conference, the case settled for $35,000. The District Court set the settlement aside at the request of defense counsel. After noting that knowledge of plaintiff's death would have had a significant bearing on defendant's willingness to settle, the court concluded that plaintiff's counsel owed a duty to disclose that fact to both the court and opposing counsel. Both Spaulding and Virzi present cases with more direct court involvement than the instant case. Still, the Virzi court found that a lawyer's duty of candor to the tribunal extends beyond the court to opposing counsel. The Rules of Professional Conduct do not define the circumstances in which a lawyer's duty of diligent representation should yield to a duty of disclosure to the court or an adversary. Spaulding and Virzi, however, illustrate the willingness of courts to remedy prejudice to a party caused by a lawyer's non-disclosure of material facts, notwithstanding the failure of the Rules of Professional Conduct to delineate the boundaries of the overlapping duties of diligence and candor. If counsel knew that OWPURA was bankrupt when he signed the answer to the complaint, he should have stated that fact in his answer. Compliance with Rule 1:4-8(a) requires more than a statement putting Kernan to her proof. A statement that OWPURA was in bankruptcy would have alerted Kernan's counsel to facts that would have enabled him to take the appropriate action. Additionally, Rule 4:23 imposes sanctions for failure to make discovery. Under that rule an evasive or incomplete answer is to be treated as a failure to answer. R. 4:23-1(b). OWPURA's answer, which identified McCormick as a court-appointed manager, but did not disclose that OWPURA was in bankruptcy, was incomplete and evasive. As Justice Douglas wrote, pretrial procedures make a trial less a game of blind man's buff and more a fair contest with the basic issues and facts disclosed to the fullest practicable extent. United States of America v. Proctor & Gamble Co., 356 U.S. 677, 683, 78 S. Ct. 983, 986, 2 L. Ed. 2d 1077 (1958). Rules 1:4-8 and 4:23 would mean little if they did not require OWPURA to have disclosed its status as a bankrupt in its answer to the complaint and in its answers to plaintiff's interrogatories. Defense counsel apparently based his trial strategy on the fact that OWPURA was bankrupt without disclosing that fact to Kernan's counsel. The fairer and more efficient practice would have been to disclose the fact of OWPURA's bankruptcy in its answer to the complaint and in answers to plaintiff's interrogatories. That practice also would comport with Principles 3 and 4 of the Principles of Professionalism for Lawyers and Judges promulgated by the New Jersey Commission on Professionalism in the Law. Those principles state in relevant part: 3. Forms of pleading, discovery, motions, or other papers, should not be used as a means of harassment, or for gaining an unfair advantage. . . . 4. In the conduct of negotiations, or litigation, a lawyer should conduct himself or herself with dignity and fairness and refrain from conduct meant to harass the opposing party. More egregious examples of discovery abuse may exist. The nondisclosure in this case, however, suffices to make the point. Shenanigans have no place in a law suit. Modern litigation is too time consuming and expensive for courts to tolerate discovery abuses. For over fifty years, courts have endeavored to transform civil litigation from a battle royal to a search for truth. Even before the adoption of the 1947 Constitution, courts were loath to allow defense counsel to lull their adversaries into a false sense of security that would subject claims to the bar of the statute of limitations. Peters v. Public Serv. Corp. of N.J., 132 N.J. Eq. 500, 507 (Ch. 1942). In an appropriate case, the judicial response has been to equitably estop a defendant from denying a fact that would cause a time limitation to bar a claim against the correct defendant. Zielinski v. Philadelphia Piers, Inc., 139 F. Supp. 408 (E.D. Pa. 1956). Here, the Court has devised a response that permits Kernan to proceed against the correct defendant. I join in the Court's opinion. Justice Coleman joins this opinion. NO. A-100 RITA KERNAN, Plaintiff-Respondent, v. ONE WASHINGTON PARK URBAN RENEWAL ASSOCIATES, Defendant-Appellant, v. INTERNATIONAL SERVICE SYSTEM, INC., ABC CORPORATION 1-5, (said names being fictitious), and JOHN DOES 1-10, (said names being fictitious), Defendants. DECIDED