DAVID FISHEL VS. AMI ROSEN VS. COLDWELL BANKER (L-0198-17, BERGEN COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2895-17T4

DAVID FISHEL,

Plaintiff-Respondent,

v.

AMI ROSEN and CARA ROSEN,

Defendants/Third-Party
Plaintiffs-Appellants,

v.

COLDWELL BANKER and STUART
ARONOFF,

Third-Party Defendants-
Respondents.
_________________________________

Submitted September 13, 2018 – Decided September 25, 2018

Before Judges Nugent and Mawla.

On appeal from Superior Court of New Jersey, Law
Division, Bergen County, Docket No. L-0198-17.

Charles I. Epstein, attorney for appellants (Charles I.
Epstein and Christopher J. Koller, on the brief).
 Chasan Lamparello Mallon & Cappuzzo, PC, attorneys
for respondent David Fishel (Mitchell L. Pascual, of
counsel and on the brief; Joseph E. Santanasto, on the
brief).

PER CURIAM

This case, at its core, is a Landlord-Tenant dispute. On leave granted,

defendants Ami Rosen and Cara Rosen appeal a Law Division order that denied

their motion to quash three subpoenas. Plaintiff David Fishel served the

subpoenas on out-of-state institutions in an attempt to obtain financial and

employment information concerning defendant Ami Rosen. 1 In terse and

conclusory handwritten notations on the denial order, some of which are

illegible, the trial court ruled the subpoenaed information was relevant to

defendants' counterclaim. Failing to discern how, and unable to determine

whether the trial court decided the motion under the proper standard, we

conclude the court misapplied its discretion. We thus reverse.

The appellate record establishes these facts. Plaintiff owns a house in

Englewood, which he leased to defendants in June or July, 2014 for one year.

1
Plaintiff served the subpoenas on three out-of-state institutions. In their
motion before the trial court, defendants questioned the propriety of plaintiff
issuing New Jersey subpoenas to institutions in other states. Defendants have
not raised the issue on this appeal.
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The parties extended the lease for a second year. They dispute what happened

at the second year's end, plaintiff claiming they verbally agreed to a third one -

year term, defendants claiming they remained in the home as month-to-month

tenants.

In October 2016, a dispute arose over mold. Defendants alleged the house

had mold, a health hazard they learned plaintiff had previously attempted

unsuccessfully to remediate, his efforts only concealing the condition. Plaintiff

alleged no mold existed when defendants first moved into the house. He claimed

the mold developed due to their neglect. Defendants stopped paying rent the

same month. Litigation ensued.

Plaintiff commenced an action in the Special Civil Part, Landlord Tenant

Section, to evict defendants. Defendants assert that when they sought a

habitability hearing, plaintiff responded by filing a Law Division action.

Plaintiff filed the latter action in January 2017. Defendants vacated the home

the following month.

Plaintiff's amended Law Division complaint has thirteen counts. The

counts allege causes of action for breach of contract; breach of the implied

covenant of good faith and fair dealing; waste; negligence; unjust enrichment;

intentional conduct; a book account, tortious interference with prospective

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economic advantage; injurious falsehood & tortious property disparagement;

prima facie tort; and malicious abuse of legal process. Two other counts are

entitled "Attorney's Fees and Costs" and "Punitive Damages."

Defendants' amended responsive pleading includes twelve affirmative

defenses, a seven-count counterclaim, and a third-party complaint. The

counterclaim includes two counts alleging fraudulent concealment and four

counts alleging breach of the warranty of habitability, gross negligence and

reckless and wanton conduct, intentional and knowing misconduct, and

constructive eviction. The counterclaim also alleges a count for "Attorney's

Fees and Costs."

During the course of discovery, plaintiff served subpoenas on three out -

of-state financial institutions, one each in New York, Pennsylvania, and Rhode

Island. Two were subpoenas ad testificandum, the other a subpoena duces

tecum.

Each subpoena ad testificandum directed the institution to produce a

corporate representative "to appear and give testimony" at plaintiff counsel's law

office in New Jersey "in connection" with the institution's employment of

defendant Ami Rosen, "including but not limited to" three enumerated topics.

The topics were salary and other compensation during defendant Ami Rosen's

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employment; complaints made against him in connection with his employment,

"ethical or otherwise, to any oversight commissions or boards"; and, complaints

made against him in connection with his employment, "ethical or otherwise ," to

"any court of law or administrative body." The subpoenas also directed the

recipients to produce a copy of defendant Ami Rosen's resume.

The subpoena duces tecum directed the institution to appear at plaintiff

counsel's office – or mail, but not before the specified date, and not in the event

a motion to quash was filed – documents concerning defendants' mortgage

application and mortgage on a home they purchased.

Defendants moved to quash the subpoenas. They argued the subpoenas

were procedurally defective, sought irrelevant information, and were issued to

further both plaintiff's obvious "vendetta" against defendants and his strategy of

"'scorched earth' litigation, using [p]laintiff's vastly superior financial resources

. . . to cause personal harm," as evidenced by his discovery tactics in general.

Defendants noted plaintiff's non-production of a report from "the actual mold

remediation company who remediated the premises." Defendants sought

attorney's fees and costs.

In response, plaintiff denied defendants' allegations. He claimed he was

seeking the financial information on the theory defendants' failure to pay rent

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"had nothing to do with the condition of the property, but was instead related to

financial difficulty that [d]efendants had in connection with [their] purchase" of

an expensive home. Plaintiff insisted the financial information he sought "is

very much relevant to my defense against their frivolous counterclaim."

Plaintiff argued defendants' mold claim was "a ruse to recover rent money . . .

because they could not afford the rent to begin with and their need for what

appears to be a [substantial] down payment on the heels of what seems like a

[significant] loss on their last house."

The trial court denied defendants' motion to quash the subpoenas. The

court filed an order on February 2, 2018. The parties do not dispute that the

relevant handwritten explanation on page one of the order states:

Financial records and employment records including
days worked and compensation are relevant as
defendants are counterclaimants. Relevant to
counterclaim [two, three and four].

The handwritten explanation on page two of the order states:

The defendants' financial records regarding
compensation and work history are clearly relevant as
counterclaims are set forth for breach of warranty of
habitability (based on alleged mold hazard), gross
negligence, intentional misconduct, and fraudulent
concealment are claimed. Defendants seek
compensatory, incidental and consequential damages
and as such have placed their financial and work history
subject to discovery as relevant to such claims.

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 Pursuant to court rule these records may be redacted for
personal identifiers (social security numbers, bank
account numbers, etc.).

Counsel should consider mediation of this action.

On appeal, defendants argue the trial court abused its discretion by not

granting their motion to quash the subpoenas and issue a protective order. They

also contend the court should have at least arranged to review the information

in camera, and if necessary, limit the scope of disclosure. Defendants also argue

the court erred by denying their application for counsel fees and costs.

Plaintiff responds defendants have failed to overcome the presumption in

favor of discovery. He "maintains that [d]efendants' mold claims were simply a

pretext, designed to mask their inability to afford the rental expense that

accompanied their tenancy . . . and moreover insulate them from damages

running from their breach of the lease." Plaintiff also argues defendants'

financial condition is relevant to his punitive damages claim.

Generally, parties may discover non-privileged information "which is

relevant to the subject matter involved in the pending action." R. 4:10-2(a). If

the discovery requests are "reasonably calculated to lead to the discovery of

admissible evidence," an opponent's objection that the information will be

inadmissible at trial is unavailing. Ibid. Nonetheless, "the scope of discovery

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is not infinite." K.S. v. ABC Prof'l Corp., 330 N.J. Super. 288, 291 (App. Div.

2000). "Discovery is intended to lead to facts supporting or opposing an asserted

legal theory; it is not designed to lead to formulation of a legal theory." Camden

Cty. Energy Recovery Assocs. v. N.J. Dept. of Envtl. Prot., 320 N.J. Super. 59,

64 (App. Div. 1999), aff'd o.b., 170 N.J. 246 (2001).

Our Supreme Court has explained that "[t]empering the normal rule

favoring wide discovery of relevant issues is a regard for the defendant's interest

in maintaining the confidentiality of information about its financial status."

Herman v. Sunshine Chem. Specialties, 133 N.J. 329, 343 (1993). Similarly, we

have held that "[i]f disclosure [of tax returns] will not serve a substantial purpose

it should not be ordered at all." Ullmann v. Hartford Fire Ins. Co., 87 N.J. Super.

409, 415-16 (App. Div. 1965). Moreover, "[i]f ordered, disclosure should be no

greater than justice requires . . . and in all but the clearest cases the return should

be examined by the judge before any disclosure is ordered." Id. at 416; see also

Campione v. Soden, 150 N.J. 163, 189-91 (1997) (discussing the "strong need"

or "good cause" standard for discovery of tax return information).

A trial court should not compel disclosure of financial information merely

because a party has asserted a punitive damages claim. The party asserting a

punitive damage claim must establish "proof of a prima facie case as a condition

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precedent to discovery of a defendant's financial condition[.]" Herman, 133

N.J. at 346.

Here, the trial court did not engage in the "[s]ensitive balancing . . .

essential to the accommodation of a plaintiff's need for discovery and the

defendant's right to maintain the confidentiality of information abo ut its

financial condition." Id. at 344. Plaintiff's subpoenas were not "reasonably

calculated" to lead to relevant evidence. He was attempting to find evidence

that would help him formulate a theory or motive. Stated differently, he was on

a fishing expedition. Plaintiff offered no facts – only unsupported assertions –

for his theory defendants were so financially stressed they fabricated their mold

complaint to avoid paying rent or to have money to put toward a down payment

on an expensive home. In contrast, the record reflects defendants paid their rent

for more than two years until they discovered the mold.

Moreover, we fail to discern how defendants' financial condition makes

more or less likely a fact of consequence to the determination of the action. The

trial court has not explained its decision to the contrary.

The trial court thought defendants' financial condition was somehow

relevant to three counts of their counterclaim, but did not explain how. There

was either mold in the house or there was not, and if defendants' assertion about

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the report plaintiff allegedly withheld is true, there was. Defendants' financial

condition did not affect the existence or non-existence of the mold, plaintiff's

conduct in concealing or not concealing the mold, or defendant's negligence or

willful misconduct. Besides, plaintiff sought more than financial information;

he sought information about defendant's job performance as well as a resume.

Nor is any party currently entitled to discover another's financial

information based on a punitive damage claim. No one has established a prima

facie case for punitive damages.

We find no abuse of discretion in the trial court's decision to deny

defendants counsel fees. Although this record suggests one or mor e parties has

filed unnecessary pleadings and engaged in abusive discovery, we have neither

the trial court's insight nor its feel for the case. For that reason, we reverse the

part of the order denying the motion to quash plaintiff's three subpoenas, but we

affirm the part of the order denying counsel fees.

We recommend the trial court conduct a case management conference to

streamline additional discovery, establish dates for dispositive motions, and if

necessary, enter appropriate protective orders.

Affirmed in part, reversed in part, and remanded for further proceedings

consistent with this opinion. We do not retain jurisdiction.

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