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It is not uncommon for people to either accidentally or purposely delete e-mails, thinking that they are gone forever. However, having an e-mail vital to a judge’s ruling in a lawsuit go missing can lead to costly and time consuming procedures needed to retrieve it. In the case of Goldmark v. Mellina & Eichler, LLC, the appellate division confirmed the ruling of the trial court in finding that sanctions were appropriately imposed on the defendant’s law firm for failing to take “adequate precautions to prevent the temporary disappearance of two critical e-mails.” Sanctions in the amount of $5,502.50 were properly assessed against the firm when the trial court made Mr. Eichler’s firm (defendants’ attorney) and Ms. Mellina (defendant) split the cost of $10,075 in attorneys fees, $30 in costs, and $900 for the forensic specialist. Only the defendants’ attorney appealed his portion of the sanction.
In 2007 plaintiffs, Lloyd and Elizabeth Goldmark (“Goldmarks”) agreed to purchase a home in Westfield, NJ for $4,100,000 that the defendants, Thomas Mellina, Beth Mellina, Steven Needle, and Needle Point Homes, LLC (“sellers”) would build. To secure the house, the Goldmarks put down a $1,000,000 deposit. However, after disputes arose between the parties, attorney for the sellers, Mr. Kraus, suggested that the Goldmarks just buy the property and complete the construction of the house with a new set of contractors. The Goldmarks rejected this suggestion and drafted settlement documents instead. However, this was allegedly never finalized and Mr. Kraus was then fired and replaced with new counsel for the sellers, Mr. Eichler.
Subsequently, the Goldmarks sued the sellers, claiming that they had settled the construction disputes with their settlement agreement and they wanted their million dollar deposit back. In response, the sellers claimed that the Goldmarks breached the contract and therefore were not entitled to a return of their deposit.
A bench trial then took place in front of Judge Frederic Kessler where he was required to determine whether the matter actually had been settled and whether that alleged settlement should be enforced, or if not, whether the contract was breached or repudiated by one of the parties. Judge Kessler found that a settlement had not been reached between the parties but the sellers had breached the contract, therefore requiring that the Goldmarks get back their million dollar deposit. To come to the conclusion that the sellers had cancelled the contract, the trial judge quoted and relied heavily on two e-mails between the sellers and their initial attorney, Kraus on March 4 and 31, 2008.
Although these two e-mails were vital to the judge’s decision, they proved to be difficult and expensive to obtain because of defendant and their counsel’s actions. The Goldmarks had served a subpoena on Kraus to get the non-privileged portions of his file and then Kraus later took a video deposition. The privilege log, pursuant to Rule 4:10-2(e) was provided and listed the two 2008 e-mails between Kraus and defendant, and the sellers insisted that they were covered by attorney-client privilege. However, when Judge Brock did an in camera inspection of the privilege log, she noted that the e-mails were not actually included in the packet. Defendants’ attorney responded, stating that he did not have the e-mails and now that Kraus was deceased he could not obtain them.
When the two e-mails were unable to be found, the Goldmarks amended their complaint to add a claim of fraudulent concealment, re-opening discovery. At this time defendant claimed that she had deleted all of her e-mails and had no copies of them. The Goldmarks then hired a forensic specialist to go to Kraus’ law firm to search the database. The e-mails were eventually located on the server back up tapes of the firm.
Once found, the judge reviewed the e-mails in camera and determined that they be given to the Goldmarks. At this point the judge also allowed the Goldmarks to impose sanctions on both defendant and defendants’ attorney because failure to preserve the e-mails resulted in “additional and unnecessary efforts” by the Goldmarks.
Defendants’ attorney made a number of arguments on appeal so to why it was not his responsibility to have the e-mails or retain them from after Mr. Kraus was no longer the sellers’ attorney and later passed away. The appellate division “found no merit in these arguments” and affirmed the ruling of the trial court, specifically addressing the issue of the missing e-mails. These two e-mails greatly influenced Judge Kessler’s determination after the 12 day bench trial because it summarized the “negotiated settlement” for the sellers and defendant responded in the later e-mail saying that she and her husband were “in accord with your summary of the negotiated settlement.”
The vital holding of the appellate division was that, “upon taking the position that relevant material is privileged or subject to protection from discovery, a litigant has the obligation of maintaining and eventually disclosing the material as directed by the court.”
Going further, the appellate judge stated that it was not necessary for the trial judge to find that defendants’ attorney knowingly allowed the e-mails to disappear for a sanction to be imposed. Because the matter was one of interest to the Goldmarks counsel was obligated to protect the information.
Addressing the discovery process generally, the appellate judge noted that discovery procedures are vital to a justice system that pursues the truth. Therefore, it would “make a mockery of our discovery rules to allow a party or its counsel – after identifying privileged information – to destroy or carelessly lose or misplace the materials in question.” Therefore, the Court found that the imposition of sanctions, in the amounts determined by the trial court were “just, reasonable and well-deserved.”
Catherine graduated magna cum laude from Rutgers University, New Brunswick in 2010 with a B.A. in political science. She will receive her J.D. from Rutgers School of Law – Camden in 2014. This year she will participate in the competitive Hunter Moot Court. This past summer she interned with a magistrate judge for the U.S. District Court, District of New Jersey where she contributed to a bench trial opinion, among other notable experiences. Catherine also has past experience working for a New Jersey state trial court judge, the United Nations, and as a research assistant for a prominent professor at Rutgers University’s prestigious Eagleton Institute of Politics.