NOT FOR PUBLICATION WITHOUT THE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-3254-16T4
LIONEL POWELL and LP TRUCKING,
INC.,
Plaintiffs-Respondents,
v.
LASTING LEGACY, JENNA ZERINGO,
VIRGILLO, AAA MIDLANTIC,
GEICO, NJM a/s/o MARY DAMPF,
ROCHDALE INSURANCE COMPANY, and
WESTERN UNITED INSURANCE COMPANY,
Defendants,
and
NATIONAL LIABILITY & FIRE
INSURANCE COMPANY,
Defendant-Appellant.
______________________________________________________________
Argued September 19, 2017 – Decided September 28, 2017
Before Judges Fisher and Moynihan.
On appeal from Superior Court of New Jersey,
Law Division, Cumberland County, Docket No.
L-0875-15.
John T. Coyne argued the cause for appellant
(McElroy, Deutsch, Mulvaney & Carpenter, LLP,
attorneys; Mr. Coyne and Diana M. Hendry, on
the brief).
Richard M. Pescatore, argued the cause for
respondents Lionel Powell and LP Trucking
(Richard M. Pescatore, PC, attorneys; Mr.
Pescatore, on the brief).
Audrey L. Shields argued the cause for
respondents Lasting Legacy and Jenna Zeringo
(Golden, Rothschild, Spagnola, Lundell,
Boylan & Garubo, PC, attorneys; Ms. Shields,
on the brief).
PER CURIAM
We granted the motion of defendant, National Liability & Fire
Insurance Company (NLF), for leave to appeal an order disqualifying
its attorneys McElroy, Deutsch, Mulvaney and Carpenter (McElroy).
We are compelled to vacate the court's order and remand the motion
because the judge failed to provide a rationale for his ruling.
Plaintiffs, Lionel Powell and LP Trucking, Inc., were sued
following a motor vehicle accident. NLF, subject to a reservation
of rights,1 retained the law firm of Tompkins, McGuire to defend
plaintiffs in the action brought by a party injured in the
accident.
McElroy filed a declaratory judgment action in federal court
on NLF's behalf seeking a judicial determination that plaintiffs'
1
NLF claimed plaintiffs' insurance agent, Lasting Legacy, LLP,
cancelled plaintiffs' insurance coverage by emailing a signed
request for cancellation prior to the accident.
2 A-3254-16T4
insurance policy through NLF was cancelled, and that NLF did not
cover or owe plaintiffs a duty to defend or indemnify.
Richard Pescatore, now and then, represents plaintiffs in a
suit brought against plaintiffs' insurance agent in the Superior
Court of New Jersey seeking indemnification for damages resulting
from the agent's unauthorized cancellation of NLF's policy.2
Both McElroy and Tompkins, McGuire were involved in a
mediation of claims related to the motor vehicle accident. Neither
plaintiffs nor Pescatore participated. Although mediation did not
result in an immediate settlement, NLF later settled the underlying
claims brought by the injured party. McElroy admits that it "took
the lead" in negotiating that settlement, explaining the
settlement involved a coincident assessment of the tort claim and
coverage issues. To that point, McElroy negotiated with the
injured party's uninsured motorist (UM) carrier and obtained
contribution from them, ostensibly because of the UM carrier's
potential exposure if NLF prevailed in the declaratory judgment
action. The injured party, and his UM carrier, signed releases
in favor of both NLF and, as NLF's potential insured, plaintiffs.
Plaintiffs' claims, including those against NLF, were not
2
The initial complaint was thrice amended to add other defendants,
including NLF.
3 A-3254-16T4
resolved, and this motion was made to disqualify McElroy from
representing NLF in that pending action.
Plaintiffs made numerous arguments to the motion judge, some
of which were not germane to the issue of disqualification; rather
they pertained to substantive claims involving the alleged
cancellation of NLF's coverage, and other coverage-related issues.
According to plaintiffs, the motion to disqualify McElroy "was
based upon a variety of reasons including conflict of interest,
violation of Rules of Professional Conduct and the conduct of
NLF's principal adjuster . . . wherein Powell claimed prejudice
and estoppel."
Plaintiffs contend "[a]ny one of several transgressions by
counsel in the [McElroy] firm provided more than a sufficient
basis to support [the judge's] order of disqualification. After
two extensive oral arguments and a review of extensive
documentation, the [c]ourt appropriately entered an order of
disqualification and barred McElroy from further participation."
Echoing the motion judge's decision, plaintiffs claim, "[t]he
basis for the disqualification is contained in the record below."
More specifically, plaintiffs advance that the McElroy
attorney falsely stated in a certification that he "never spoke
with or had any conversations with Powell's representative." In
the certification, counsel asserted that he had "never spoken with
4 A-3254-16T4
Lionel Powell or any representative of LP Trucking." 3 Despite
plaintiffs' argument that the "false certification was obviously
considered by the court below in conjunction with the same
attorney's undisputed communications with Powell's
representative/counsel," and that McElroy's counsel's false
representation "was viewed as especially egregious by the [motion]
court," we do not know if the motion judge found the certification
false. He never made a credibility finding, nor could he since
he did not conduct an evidentiary hearing. We do not know if his
decision was even based on that statement.
Plaintiffs also claim that the McElroy attorney settled the
claims at mediation after making the "false and misleading"
statement to plaintiffs' personal counsel that he would "not
proceed with the settlement if it will still have to defend your
client's affirmative claim." Plaintiffs assert that the motion
judge considered emails between the McElroy attorney and
plaintiffs' personal counsel that buttress this claim. Again, we
do not know which of plaintiffs' arguments the judge adopted.
3
The McElroy attorney admits that he spoke with plaintiffs'
counsel, but considered that discussion one between attorneys; he
did not view plaintiffs' counsel as a "representative of LP
Trucking." Plaintiffs contend their counsel was a
"representative" and that MDMC counsel's statement is false.
5 A-3254-16T4
The foregoing is but a sampling of the reasons plaintiffs
proposed for McElroy's disqualification. We do not know which of
the many legal grounds advanced by plaintiffs formed the basis for
the judge's ruling. We cannot ascertain if the facts supported
the judge's unspoken legal conclusion because he provided no
rationale for his decision.
We cannot assess the judge's findings of fact and conclusions
of law unless we know what they are. See Magill v. Casel, 238
N.J. Super. 57, 65 (App. Div. 1990) (holding, in the context of
an application for judicial recusal, the "challenged judge who
hears the motion should painstakingly set forth the . . . bases
for the ultimate decision" in order to allow proper appellate
review).
We vacate the order and remand the case to another judge for
further proceedings in conformity with this opinion. We do not
retain jurisdiction.
6 A-3254-16T4