Litigation Privilege Protects Client’s Statement That His Former Lawyer Was a Liar, Thief, and “No Good Drunk”

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Anyone who has practiced law for any period of time likely has a story about a misdirected email. You know, the one you meant to send to a client or a colleague, but it went to your adversary or your supervising partner instead. These situations often just result in mild to moderate awkwardness around the office, but they sometimes create bigger problems. MacNaughton v. Harmelech, a recent decision from the Appellate Division, involved the latter. But it also involved the litigation privilege, something I wrote about just a few weeks back. (What Do eBay, The "40 Year Old Virgin," And The Litigation Privilege Have In Common?). And, fortunately for defendant, the statements in his misdirected email were protected by that privilege.

In MacNaughton, plaintiff, a New Jersey lawyer, represented defendant in a lawsuit involving defendant's company. Defendant disputed plaintiff's bill and plaintiff eventually sued defendant over the bill. At some point during the litigation, the trial court asked the parties whether they were interested in mediation. Around the same time, however, plaintiff was "in contact with another of defendant's creditors about banding together to force defendant into involuntary bankruptcy." As you might expect, when defendant learned about plaintiff's efforts, it colored his decision about whether to agree to mediation. In fact, defendant sent the following email, reprinted exactly as it appeared in the Appellate Division's decision, to his lawyers on the subject:

Please I Am asking you to file a paper in the state court there WILL NOT BE AGREE NOT TO BE A MEDIATION MACNAUGHTON CALL TODAY AND ASK HIM TO TRY TO POT ME IN IN VALENTRY BANKRUPTCY AS YOU SEE HE IS A. LIAR THIEF AND NO GOOD DRUNK

NO TO BE TRUSTED THANKS

Unfortunately, defendant also copied plaintiff on this email. Upon receiving it, plaintiff filed a one-count complaint for defamation. The trial court held a hearing on whether the statements were protected under the litigation privilege. After taking testimony from defendant and his current counsel, the court applied the four-factor test from Hawkins v. Harris, and held that they were. As a result, plaintiff's claim was dismissed. Plaintiff appealed.

Continue reading “Litigation Privilege Protects Client’s Statement That His Former Lawyer Was a Liar, Thief, and “No Good Drunk”” →

What Do eBay, The “40 Year-Old Virgin,” And The Litigation Privilege Have In Common?

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

Not much, but please keep reading.

In the movie, the 40-Year-Old-Virgin, an almost unrecognizable Jonah Hill has a very small, but funny, part. He plays a customer at the “We Sell Your Stuff On Ebay” store, which is owned by Steve Carell’s character’s love interest, played by Catherine Keener. According to IMDB.com, Hills plays “Ebay Customer,” who is, to say the least, having trouble understanding how the store works. He wants to buy some "wonderful" shoes that he found at the store. Keener's character explains that she does not actually sell any of the items in her store at the store, she sells them on eBay. Hill's character just doesn't get it, eventually telling Keener's character that he just wanted to buy the shoes and take them home, but that she was "making it extremely difficult" for him to do so.

The recent Appellate Division decision, XCalibur Communications v. Karcich, involved a dispute over the sale of the plaintiff’s merchandise on eBay. No word on whether any of those sales involved shoes like the ones Hill’s character was looking to buy, but the decision helps clarify the scope of the litigation privilege, which is broader than many people think.

Continue reading “What Do eBay, The “40 Year-Old Virgin,” And The Litigation Privilege Have In Common?” →

“Here’s the mail it never fails . . . :” Judge Posner Criticizes “Rhetorical Envelopes” In Which Judicial Opinions Are “Delivered To The Reader”

by: Peter J. Gallagher (@pjsgallagher) (LinkedIn)

[Apologies for the Blue's Clues reference in the title to this post.]

In his concurring opinion in a recent Seventh Circuit decision — United States v. Dessart — Judge Posner agreed with the majority's conclusions, but wrote separately to express his "reservations about some of the verbal formulas in the majority opinion." He did not "criticize the majority for reciting them" because, as he noted, they are "common, orthodox, even canonical." But he did criticize the "verbal formulas" themselves as being "inessential and in some respects erroneous" and thus, he urged, "ripe for rexamination."

What were the "verbal formulas" that Judge Posner was so keen to criticize? Just some of the legal standards that we see recited in opinions every day. For example, the commonly-used "abuse of discretion" standard, of which Judge Posner appears not to be a big fan. In his concurring opinion, Judge Posner noted that the majority defined this standard as including "among other missteps, 'material errors of law.'" This apparently did not jibe with Judge Posner's understanding of discretion and its abuse, as he explained:

Of course, material errors of law are potentially very serious, but what has that to do with discretion or its abuse? Common as the term "abuse of discretion" is in opinions dealing with appeals from district court decisions, I find it opaque. If the appellate court is persuaded that the trial court erred in a way that makes the trial court's decision unacceptable, it reverses. What has discretion to do with it? And "abuse" seems altogether too strong a term to describe what may be no more than a disagreement between equally competent judges – the trial judge and the appellate judges – that the appellate judges happen to be empowered to resolve as they see fit.

Similarly, he challenged the majority's similarly well-settled statement that an appellate court, when reviewing a trial court's decision to issue a search warrant, must afford that decision "great deference." (Among the issues in the Dessart case was whether a search warrant was supported by probable cause.) Judge Posner acknowledged that the standard comes from a Supreme Court decisions holding that "[a] magistrate's determination of probable cause should be paid great deference by reviewing courts," but questioned it nonetheless. First, he questioned why "great" deference should be afforded to such decisions since "warrants [are] usually issued by the most junior judicial officers – and often police or prosecutors can shop among magistrates for one who is certain or almost certain to respond affirmatively to a request to issue a warrant." Second, Judge Posner noted that "[n]othing in the [Fourth] amendment requires warrants – ever," therefore it was not fair, in Judge Posner's opinion, to conclude, as is often concluded, that the Constitution expresses a preference for searches conducted pursuant to warrants or to afford great deference to a trial court's decision to issue one.

Continue reading ““Here’s the mail it never fails . . . :” Judge Posner Criticizes “Rhetorical Envelopes” In Which Judicial Opinions Are “Delivered To The Reader”” →

Even in Texas It Is Not OK For A Judge To Share Details Of A Pending Trial Over Facebook

by: Peter J. Gallagher (@pjsgallagher)

I recently wrote an article for law360.com about when, if ever, it is appropriate for active judges to become “friends” with lawyers on Facebook and other social media. Courts and ethics authorities in several states have weighed in on the issue, with some banning judges from “friending” lawyers who regularly appear before the judge and others permitting all such “friending” unless it violates one of the canons of the Code of Judicial Conduct (e.g., the prohibition against ex parte communications between a judge and counsel).

According to a recent article from the Texas Lawyer (h/t Above the Law), Judge Michelle Slaughter, a judge on the Texas state district court, got herself into some hot water, not for the “friends” she kept on social media, but for broadcasting details of a pending trial to those “friends” over Facebook, including the following:

On the first day of testimony, Slaughter posted the following comments on her Facebook page: "Opening statements this morning at 9:30 a.m. in the trial called by the press 'the boy in the box' case"; "After we finished day 1 of the case called the 'boy in the box' case [the defendant was charged with unlawful restraint for allegedly keeping a 9-year-old boy in a 6 feet by 8 feet wooden enclosure that had been used as the child's bedroom], trustees from the jail came in and assembled the actual 6'x8' 'box' inside the courtroom!"; and "This is the case currently pending in the 405th!" The post included a link to a Reuters article about the case.

The "actual box" comment referenced evidence that had not yet been presented in the trial, and the Reuters article contained extraneous information that had also not been presented in the case.

Somewhat ironically, Judge Slaughter’s Facebook posts came after she warned the empaneled jury not to discuss the case with anyone, including over Facebook and other social media.

Continue reading “Even in Texas It Is Not OK For A Judge To Share Details Of A Pending Trial Over Facebook” →

When, If Ever, Is A Residential Mortgage Not “Residential” For The Purpose of Foreclosure?

by: Peter J. Gallagher (@pjsgallagher)

Believe it or not, this question comes up from time to time in my practice (exciting life, I know). In recent years I have prosecuted many foreclosure actions, but only commercial foreclosures. So the first question I usually ask a colleague who comes to me with a foreclosure question is: "Is it a commercial or residential property?" When the answer starts with something like, "Well, that is actually an interesting question . . . " then I can almost guess what is coming next. Usually it is some variation of: "It is a home, but they mortgaged it to get money to start a commercial enterprise, so I want to argue that its commercial property." Unfortunately, you usually can't make that argument (at least not successfully), and the Appellate Division's recent decision in City National Bank of New Jersey v. Hodge reminded us all of that fact again.

To begin with, the differences between commercial and residential foreclosures in New Jersey are significant. Most importantly, commercial foreclosures are not subject to the Fair Foreclosure Act, including the various notice requirements that are required for residential foreclosures under the Act. Simply put, New Jersey law provides greater protections for residential owners who are about to lose their homes than they do for commercial owners who are about to lose their place of business. This means that the burdens on lenders seeking to foreclose on a residential mortgage are more demanding, if not entirely onerous.

Continue reading “When, If Ever, Is A Residential Mortgage Not “Residential” For The Purpose of Foreclosure?” →