by:  Peter J. Gallagher (@pjsgallagher)

For husbands, the lesson from a recent Appellate Division opinion is that you cannot assert the marital privilege in an attempt to keep their wives from being deposed by a judgment creditor about assets that you might be trying to conceal from that judgment creditor. In U.S. Electrical Services, Inc. v. Electrical Solutions Group, Inc., plaintiff obtained a judgment for approximately $165,000 against defendants (a corporation and an individual who was alleged to be the sole shareholder of the corporation). In post-judgment proceedings, plaintiff applied for, and obtained, an order of discovery permitting the deposition of the individual defendant's wife based upon plaintiff's assertion that she had knowledge of certain assets that the individual defendant had failed to disclose.

The individual defendant moved to vacate the order, arguing that any testimony from his wife would be subject to the marital privilege — codified at N.J.SA 2A:84A-22 — and that he did not consent to the disclosure of the information. The trial court denied the motion, holding that the individual defendant's wife could be deposed about her "first-hand knowledge and observations of facts and occurrences." The individual defendant appealed.

The Appellate Division affirmed the trial court's order. It started with the general proposition that privileges must be narrowly construed. With this in mind, it turned to the specific elements of the marital privilege: (1) a communication; (2) made in confidence; (3) between spouses. The Appellate Division further noted that the purpose of the privilege is to "encourage[] free and uninhibited communication between spouses, and, consequently, [to] protect[] the sanctity and tranquility of marriage." But, because the "only effect" of the privilege is to "suppress[] [] relevant evidence," it must be "confined as narrowly as is consistent with the reasonable protection of marital communications."

In U.S. Electrical Services, the individual defendant argued that any "personal and business financial records" that he "brought into the martial home where [his wife] may have seen them [were] necessarily [ ] confidential communication[s] between spouses." The Appellate Division disagreed for a number of reasons.

First, it held that documents that were stored in the marital home and were observed by a spouse do not a "confidential communication" make. The privilege protects communications, not conduct or occurrences. Thus, a wife's observations of what her husband did, including bringing documents into the marital home, are not covered by the privilege. The court did hold, however, that communications about the documents could potentially be protected under the marital privilege "provided the right proofs" (which were not present in the instant case).

Second, the Appellate Division held that the contents of the documents were not automatically privileged "just because both parties have seen them." In this regard, the court held that many business and financial records are generated by, or submitted to, third parties outside of the marital home. As a result, they may not be confidential at all. Moreover, the Appellate Division observed that, even if documents were initially confidential, "placement in the home where another member of the household or a guest could discover them does not guarantee continued confidentiality." At a minimum, a party seeking to assert the privilege would have to demonstrate that the underlying documents remained confidential while in the marital home.

Third, the Appellate Division held that the act of leaving document in the marital home does not encourage communications between spouses or protect marriages, the very purpose behind the privilege. Absent convincing evidence that applying the privilege would protect and further the interests it was designed to advance, the Appellate Division saw no reason to recognize the privilege.

Ultimately, the take home message from U.S. Electrical Services is that simply bringing documents into the marital home, and even sharing them (or making them visible or available to  your spouse) does not bring the existence or content of those documents within the marital privilege. But, both the trial court and Appellate Division left open the possibility that communications about such documents, in the right situation, might be privileged.