Court Opinion

ID: 9918694
Source: CourtListenerOpinion
Date Created: 2024-01-16 15:06:09.977148+00
Date Added: 2024-06-11T08:04:35.966974
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                            APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
  internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                     SUPERIOR COURT OF NEW JERSEY
                                                     APPELLATE DIVISION
                                                     DOCKET NO. A-3518-22

REBECCA MCCARTHY,

       Plaintiff-Respondent,

       v.

CARE ONE MANAGEMENT, LLC,
and ALISON FITZPATRICK-
DURSKI,

     Defendants-Appellants.
______________________________

                Argued December 5, 2023 – Decided January 16, 2024

                Before Judges Whipple, Mayer and Paganelli.

                On appeal from an interlocutory order of the Superior
                Court of New Jersey, Law Division, Bergen County,
                Docket No. L-8657-16.

                Bruce H. Nagel argued the cause for appellant Care One
                Management, LLC (Nagel Rice, LLP and O'Toole
                Scrivo, LLC, attorneys; Bruce H. Nagel, Robert H.
                Solomon, Thomas P. Scrivo, and Michael J. Dee, of
                counsel and on the briefs).

                Paul R. Castronovo argued the cause for respondent
                (Castronovo & McKinney, LLC, attorneys; Thomas A.
            McKinney, Paul R. Castronovo, and Edward W.
            Schroll, on the brief).

PER CURIAM

      By way of leave granted, defendant Care One Management, LLC (Care

One)1 appeals from a June 8, 2023 order denying its motion to disqualify the law

firm of Castronovo & McKinney, LLC, from further representation of plaintiff

Rebecca McCarthy. We affirm.

      In our prior opinion, McCarthy v. Care One Management, LLC, No. A-

2542-19 (App. Div. July 12, 2021) (slip op. at 1), we affirmed the jury's award

of compensatory damages to plaintiff.      We also determined "an award of

punitive damages against Care One was warranted."         Id. at 12. However,

contrary to N.J.S.A. 2A:15-5.12(c), "the jury assessed punitive damages . . .

without the benefit of any evidence regarding Care One's financial condition."

Id. at 13. Thus, we concluded "[u]nder these circumstances, the award must be

vacated and a new trial as to punitive damages must be conducted after an

opportunity for discovery of relevant information." Id. at 14. We expressly

directed discovery of "evidence regarding Care One's financial condition . . . ,

1
 Defendant's current corporate designation is ABC 1857, LLC f/k/a Care One
Management, LLC.
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including [] balance sheets and cash flow statements, as well [as] documents and

information regarding [Care One's parent]." Id. at 13.

      Based on our remand instructions, plaintiff served Care One with requests

to produce documents. Plaintiff's document requests included not only Care

One's financial documents but financial documents from related corporate

entities. Plaintiff subsequently filed two separate motions seeking to compel

Care One to provide discovery related to its financial condition. On June 7,

2022, and again on January 13, 2023, the judge partially granted plaintiff's

motions and ordered Care One to produce its financial documents but not

documents concerning the financial condition of related corporate entities.

      To comply with the first order compelling discovery, on June 10, 2022,

Care One's Executive Vice President and Chief Legal Officer, Ricardo Solano,

sent an email to Howard Tepper, Care One's Senior Vice President of Finance,

asking him to "designate somebody . . . to work with [Care One's outside

counsel] on identifying what potential records [Care One] ha[s] to produce to

satisfy [its] discovery obligation." Tepper designated Care One's Accounting

Manager, Harriet Sarna, to provide Care One's financial documents. On June

13, 14, and 15, 2022, Sarna provided Care One's counsel with payroll records,

general ledgers, and W-3 forms for 2016 through 2020.

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                                       3
        On June 16, 2022, Tepper and Sarna spoke with Care One's in-house and

outside counsel to discuss Care One's compliance with the court's June 7, 2022

order compelling discovery. According to Care One, during this conference

call:

             [T]he participants, led by . . . Tepper, reviewed and
             analyzed certain financial documents maintained by
             Care One to determine whether they were encompassed
             by . . . the [c]ourt's June 7, 2022 order. The call . . .
             involved a detailed discussion . . . regarding the details
             of Care One's financial records, including how those
             records [were] generated and recorded . . . [,] [in order
             to] produc[e] relevant and responsive records.

The next day, Care One produced approximately one thousand pages of financial

documents to plaintiff.

        On November 22, 2022, plaintiff filed another motion to compel

discovery, "seeking records related to not only . . . Care One . . . but also various

related entities." In a January 13, 2023 order, the judge required Care One to

produce "detailed financial information, including tax records; income records;

profit and loss records and related information for Care Services . . . and Care

One."

        On January 26, 2023, Tepper again spoke with Care One's in-house and

outside counsel to discuss Care One's compliance with the January 13 order. On

January 30, 2023, one of Care One's outside counsel circulated a draft cover

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letter to accompany the financial documents produced in response to the court's

January 13 order. Counsel asked Tepper to review the draft letter for accuracy.

Later that day, Care One asserted Tepper communicated with Care One's counsel

by email and telephone to discuss "information and figures contained [i]n the

financial records . . . to determine [the] relevance and responsiveness of the

documents proposed to be produced."

      On February 5 and 22, 2023, Tepper forwarded confidential financial

documents regarding Care One to his personal email account. According to Care

One, Tepper's decision to forward these emails to his personal email account

violated the terms of his employment. Specifically, Care One claimed Tepper

was prohibited from using Care One's proprietary information and confidential

records "for [his] own purpose or for the benefit of any individual or entity other

than [Care One]."

      On February 24, 2023, Care One fired Tepper. Tepper then retained

Castronovo & McKinney to represent him in negotiating a severance package.

Castronovo & McKinney sent a March 6, 2023 letter to Care One, alleging Care

One violated Tepper's rights by "firing him in retaliation for disclosing and

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refusing to participate in [Care One's] illegal conduct."2 The letter offered to

release Tepper's legal claims against Care One in exchange for "a fair severance

package."3

      In response, Care One sent a March 31, 2023 letter to Castronovo &

McKinney, asserting the law firm's representation of Tepper would result in

disclosure of confidential and privileged information relevant to plaintiff's

punitive damages case. Care One claimed Tepper had no right to disclose

privileged information to Castronovo & McKinney.

      A week after sending that letter, Care One filed a motion to disqualify

Castronovo & McKinney from further representing plaintiff in the punitive

damages retrial due to the law firm's violation of the Rules of Professional

Conduct (RPCs). In opposition to the disqualification motion, Tepper certified

his involvement with plaintiff's case was limited to "gather[ing] documents,

without any explanation or input."       Tepper denied possessing "privileged

2
    Tepper asserted a whistleblower claim against Care One under the
Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to -14. Tepper
claimed he was fired by Care One for objecting to Care One's plan to pay State
penalties rather than properly staff its healthcare facilities and challenging the
company's characterization of certain business expenses.
3
  According to information in the record, Tepper eventually retained a different
law firm to pursue legal action against Care One.

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information or documentation from Care One, including regarding [Care One's]

defense" in plaintiff's litigation.

      In a May 8, 2023 order, the judge denied Care One's disqualification

motion without prejudice. In denying the motion, the judge explained he lacked

"specifics and details" of Tepper's alleged involvement in Care One's defense

beyond Care One's "conclusory statements." The judge stated Care One had to

provide "concrete information" that Tepper provided privileged and confidential

information to Castronovo & McKinney and was involved in strategic

discussions about plaintiff's punitive damages retrial to warrant disqualification.

      Care One subsequently renewed its disqualification motion and submitted

additional certifications and exhibits. In opposing the renewed motion, Paul

Castronovo certified Tepper did not provide any privileged information or

materials related to plaintiff's retrial to him or to his law firm. Additionally,

Castronovo denied having any knowledge or possession of the redacted emails

Care One provided to the court for in camera review in deciding the

disqualification motion.

      In a June 8, 2023 order, the judge again denied the disqualification motion.

In deciding the renewed disqualification motion, the judge conducted a

"detail[ed]" in camera review of "the exhibits[,] including emails and

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                                        7
certifications submitted by [Care One's] counsel." After considering the legal

arguments and reviewing documents in camera, the judge found Care One

"failed to meet the heavy burden required for disqualification."            The judge

rejected Care One's contention that Castronovo & McKinney violated the RPCs

and declined to disqualify the law firm from continuing to represent plaintiff.

The judge stated:

            When considering a motion to disqualify . . . , [the]
            movant bears the burden of proving the disqualification
            is appropriate due to . . . an RPC violation. RPC 1.13
            controls here.

            It has to be established that . . . Tepper was responsible
            for or significantly involved in the organization's legal
            position of the matter and did not merely provide
            information or data. . . . Motions to disqualify are
            viewed with disfavor[,] and disqualification [is]
            considered a drastic measure which courts should
            hesitate to impose[] except when absolutely necessary.

            . . . It's this [c]ourt's view that [Care One] [did not] meet
            [its] burden of showing that . . . Tepper was
            significantly involved in litigation control. Instead[,]
            what is revealed through the e-mails is that . . . Tepper
            was involved with production of documents and data.

                    ....

            There's a lot of . . . inference and innuendo, but there's
            nothing here that tells me specifically . . . an attorney
            . . . involved in that litigation strategy . . . met
            with . . . Tepper and had discussions as to legal
            strategy . . . .

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             It sounds to me that . . . Tepper responded to their
             inquiries for documents. If they had a question about
             the document . . . , he would respond to that. But
             he . . . didn't determine how [Care One] . . .
             implement[ed] its legal strategy.

      On July 20, 2023, we granted Care One's motion for leave to appeal the

order denying disqualification of Castronovo & McKinney from further

representation of plaintiff.

      On appeal, Care One contends the judge erred by failing to disqualify

Castronovo & McKinney under RPC 4.4.           Care One argues Castronovo &

McKinney, during its representation of Tepper, obtained confidential and

privileged information relevant to plaintiff's case and must be disqualified

because it obtained evidence in violation of Care One's rights. We reject these

arguments.

      We review a trial court's determination on a motion to disqualify counsel

de novo. City of Atlantic City v. Trupos, 201 N.J. 447, 463 (2010); see also

Greebel v. Lensak, 467 N.J. Super. 251, 257 (App. Div. 2021). In reviewing a

motion for the disqualification of counsel for an adversary based on the RPCs,

we are required to "balance competing interests, weighing the need to maintain

the highest standards of the profession against a client's right freely to choose

his counsel." Twenty-First Century Rail Corp. v. N.J. Transit Corp., 210 N.J.

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                                       9
264, 273-74 (2012) (quoting Dewey v. R.J. Reynolds Tobacco Co., 109 N.J.

201, 218 (1988)).     "[T]o strike that balance fairly, courts are required to

recognize and to consider that 'a person's right to retain counsel of his or her

choice is limited in that there is no right to demand to be represented by an

attorney disqualified because of an ethical requirement.'" Id. at 274 (citations

omitted).

      "Disqualification of counsel is a harsh discretionary remedy which must

be used sparingly." Dental Health Assocs. S. Jersey, P.A. v. RRI Gibbsboro,

LLC, 471 N.J. Super. 184, 192 (App. Div. 2022). Additionally, disqualification

motions are "viewed skeptically in light of their potential abuse to secure tactical

advantage." Escobar v. Mazie, 460 N.J. Super. 520, 526 (App. Div. 2019)

(citing Dewey, 109 N.J. at 218).

      Care One argues Castronovo & McKinney violated RPC 4.4(a) by

obtaining information regarding Care One's privileged litigation strategy related

to plaintiff's punitive damages retrial and Care One's confidential financial

documents. Care One asserts Tepper improperly emailed confidential financial

documents to his personal email and shared those documents with Castronovo

& McKinney.

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      RPC 4.4 addresses "[r]espect for [r]ights of [t]hird [p]ersons." Under RPC

4.4(a), "[i]n representing a client, a lawyer shall not use . . . methods of obtaining

evidence that violate the legal rights of such a person." Care One argues Tepper

possessed protected and privileged information regarding Care's One litigation

strategy in producing financial documents responsive to the June 7, 2022 and

January 13, 2023 court orders.

      Care One contends Tepper communicated with its in-house and outside

counsel regarding corporate financial documents to be produced to plaintiff and

provided legal advice regarding those documents such that the communications

were protected by the attorney-client privilege. Care One portrays Tepper's

involvement in the production of financial information responsive to the court's

orders as "assist[ing] Care One's attorneys in providing legal advice concerning

[plaintiff's] litigation." However, based on Tepper's certification in opposition

to Care One's first motion to disqualify Castronovo & McKinney, Care One

mischaracterizes and overstates Tepper's function.

      Tepper aided in gathering documents on Care One's behalf related to the

disclosure of the company's financial condition relevant to plaintiff's punitive

damages retrial. In his certification, Tepper asserted he engaged in the following

activities: (1) instructed Sarna to provide financial records to be produced in

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response to the judge's orders; (2) determined the documents constituting Care

One's "financial records"; (3) reviewed for accuracy a draft cover letter to

Castronovo & McKinney enclosing the responsive discovery documents; and (4)

provided information regarding Care One's financial records, including how

those records were generated and recorded.

      Based on the information contained in the motion record, Tepper's

involvement was correctly characterized by the judge as "the supplying of

factual information or data respecting the matter." Tepper participated in culling

financial documents relevant to Care One's financial condition as ordered by the

judge. Care One's certifications in support of its disqualification motion simply

explained Tepper's role in the selection of its financial documents produced to

Castronovo & McKinney.

      Accepting as true that Tepper explained certain financial documents to

Care One's counsel, such discussions did not constitute legal strategy. Care

One's counsel had to decide which financial documents were responsive to the

court's orders. Ultimately, Care One's counsel was responsible for producing all

documents relevant to Care One's financial condition and certifying Care One's

compliance with the judge's orders.

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                                       12
      Care One does not claim the documents it produced to Castronovo &

McKinney are privileged.       Because Care One presumably produced all

documents in its possession responsive to the judge's orders, the means and

manner related to the production of the documents lacks any relevance related

to plaintiff's punitive damages retrial. Thus, any discussion Tepper may have

had with Care One's counsel regarding the production of the company's financial

documents would not be evidence at the retrial.

      Consistent with our prior opinion, documents produced by Care One

evidencing its financial condition must be presented to the jury during the

punitive damages retrial under N.J.S.A. 2A:15-5.12(c)(4).         To the extent

Castronovo & McKinney might consider using documents related to Care One's

financial condition which were not produced by Care One's counsel, unless the

documents were otherwise publicly available, the potential consequences to the

law firm could be far more severe than disqualification.

      However, on this record, we are satisfied Care One failed to meet its heavy

burden of demonstrating Castronovo & McKinney violated RPC 4.4(a) to

warrant disqualification of the law firm from continued representation of

plaintiff. Care One proffered "inference and innuendo" that Castronovo &

McKinney obtained, reviewed, and intended to use Care One's confidential

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financial documents in connection with plaintiff's punitive damages retrial. We

are confident the trial judge will be able to address a disqualification motion

during the retrial if Castronovo & McKinney attempt to produce as evidence of

Care One's financial condition any documents not previously produced by Care

One in response to the court's orders or documents not otherwise available to

the general public.

      At this juncture, Care One failed to demonstrate Tepper disclosed to

Castronovo & McKinney any confidential and privileged information or

material to be used during plaintiff's punitive damages retrial. To prevail on its

disqualification motion, Care One had to demonstrate Castronovo & McKinney

violated the RPCs. Care One has failed to do so on the present record.

      Because we are satisfied Castronovo & McKinney did not violate any

ethical rules on the record before us, we need not address the federal cases from

other jurisdictions and unpublished cases relied upon by Care One in support of

its arguments on appeal. First, those cases are not binding on this court. In

addition, the cases are premised upon judicial determinations that the actions of

the adverse law firms constituted ethical violations.

      During the punitive damages retrial, if Castronovo & McKinney were to

use unlawfully obtained confidential or privileged information, then RPC 4.4(a)

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                                       14
may be triggered. We take no position whether a situation may arise during the

course of the punitive damages retrial warranting renewal of Care One's motion

to disqualify Castronovo & McKinney. Nor do we offer any opinion as to the

propriety of the law firm's conduct under these unique circumstances.

      To the extent we have not addressed any of Care One's remaining

arguments, those arguments are without sufficient merit to warrant discussion

in a written opinion. R. 2:11-3(e)(1)(E).

      Affirmed.

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