Callan, In re

• Decision Date: 04 February 1975
• Citation: 331 A.2d 612,66 N.J. 401
• Parties: In the Matter of Michael CALLAN et al., Charged with Contempt of Court.
• Court: New Jersey Supreme Court

Page 401

66 N.J. 401

331 A.2d 612

In the Matter of Michael CALLAN et al., Charged withContempt of Court.

Supreme Court of New Jersey.

Argued Oct. 21, 1974.

Decided Feb. 4, 1975.

Dickinson R. Debevoise, Newark, for appellants(Annamay T. Sheppard, Newark, of counsel and on the brief; Riker, Danzig, Scherer & Brown, Newark, attorneys).

Sara A. Friedman, Asst. Prosecutor, for respondent(Francis John Badach and Ralph J. Jabbour, Asst. Prosecutors, of counsel; Joseph P. Lordi, Essex County Prosecutor, attorney).

A brief was filed for amicus curiae Stanley C. Van Ness, Public Defender(Robert Westreich, Asst. Deputy Public Defender, or counsel and on the brief).

A brief was filed for amici curiae Commission on Law & Social Action of the N.J. Region of American Jewish Congress; The Nat. Conference of Black Lawyers; The Nat. Legal Aid and Defenders Ass'n; The N.J. Legal Services Project Directors Ass'n; The American Civil Liberties Union of N.J.; The Student Bar Ass'n, Rutgers University School of Law, Newark, N.J. (Frank Askin, Newark, attorney).

A brief was filed for amici curiae Joseph Barry, Newark, Murray Brochin, Sheldon Bross, Michael Griffinger, Joshua Levin, John McKay, Newark, Morton Stavis, Seymour Wishman, members of the N.J. Bar (Joseph Barry, Newark, on the brief).

The opinion of the Court was delivered by

SULLIVAN, J.

Defendants-appellants were convicted of contempt of court arising out of their conduct in the course of a civil trial.In re Callan, 122 N.J.Super. 479, 300 A.2d 868(Ch.Div.1973).Their convictions were upheld by the Appellate Division, 126 N.J.Super, 103, 312 A.2d 881(1973).This Court granted certification.64 N.J. 503, 317 A.2d 715(1974).The matter has the following background.

The Stella Wright Housing Project, operated by the Housing Authority of the City of Newark, had become the object of a tenants rent strike to protest intolerable living conditions in the Project.A Stella Wright Tenants Association was formed and rents withheld from the Housing Authority were turned over to representatives of the Tenants Association.In all, some $94,000 was received by the Association and was deposited in a bank.This money was later withdrawn, converted into money orders and then placed in a safe deposit box.The Housing Authority filed suit for the rent money and in the interim asked that the court order the Association and its representatives to turn the money over to a receiver for safekeeping.The Association and its representatives opposed the application by giving assurances in affidavit form that the funds were intact and secure.

The court did not order the money to be turned over to a receiver.Instead it ordered the Association to account for all moneys received, and directed that the funds in hand were to be retained in the then depository and not withdrawn or removed except by order of the court, pending a court determination as to the rights of the Housing Authority and the contributing tenants respectively in the funds.

Appellants-attorneys were representing the Tenants Association at this point and participated in the several court hearings involving custody of the money.

On October 12, 1972 the trial judge made a determination based on Marini v. Ireland, 56 N.J. 130, 265 A.2d 526(1970), that the tenants were not entitled to rent free occupancy in the Project because of the living conditions, and that at most they would be entitled to an abatement of rent.All tenants who had paid rent money into the fund were ordered on November 6, 1972 to show cause why the funds should not be turned over to the Housing Authority, subject to the tenants establishing the basis for any claimed refund.The order was returnable on November 17, 1972.

When word of the court's proposed action was received, a meeting of the executive committee of the Association was held on November 13, 1972.Possible refund of the rent money to the contributing tenants was discussed.Appellants who were present at a part of the meeting counseled strongly against disbursement of the funds, said it would be a violation of the court order and would subject those responsible to charges of contempt.They advised that if the court ordered the money turned over to the Housing Authority, the tenants could appeal and still have a chance to retain possession of the funds.The executive committee then decided to hold a meeting of all of the contributing tenants the next day to decide what to do with the money.

On the morning of November 14, 1972 the funds were taken from the safe deposit box to be available for distribution if the tenants so decided.Appellants were unaware of this action, nor did they attend the November 14, 1972 meeting.However, they knew the meeting was going to take place and what its purpose was.

At the November 14, 1972 meeting the unanimous decision was to refund the rent payments to the contributing tenants.A large portion of the moneys was returned to the tenants that same day.

Appellants had requested that they be told before November 17 whether or not their advice was going to be followed so that a charade would not be made of the court hearing on that day.Accordingly, on the evening of November 15appellant Callan was notified of the decision and was told the reasons why the moneys were returned.

Apparently, ¹ Callan communicated this information to the other attorneys and a written statement was prepared for presentation in court on November 17.

When the matter was called in open court on the 17th, after counsel for the Housing Authority had begun to speak, appellant Callan interrupted him and read the prepared statement in which it was disclosed to the court and to counsel for the Housing Authority for the first time that the funds had been withdrawn from the depository 'to redistribute to the various tenants the full amount of deposits payed by such tenants to the fund.'²

In response to the statement, the trial court noted its embarrassment over what had occurred and in effect said that its trust in those who had been made responsible for the safekeeping of the fund had been misplaced.The court urged counsel for the Association to advise their clients to correct the situation which they had brought about.The hearing was thereupon closed.

Charges of contempt were thereafter preferred against appellants and a plenary hearing held.Appellants elected not to testify at the hearing.The trial court found appellants guilty of contempt basically holding that their remaining silent until the morning of the hearing, after they learned that the funds had been withdrawn and were in the process of distribution, resulted in the court and counsel laboring under a misapprehension of the true facts and amounted to fraudulent and deceitful conduct on appellants' part.³

For reasons hereinafter stated, we conclude that appellants were not guilty of contempt and the charges against them must be dismissed.

Preliminarily, however, it seems clear that the embarrassing situation in which the trial court found itself at the hearing on November 17 could have been avoided had the court acted promptly at the very beginning of the litigation to safeguard the funds by ordering them turned over to a receiver pending its decision on the merits.By leaving the funds under the exclusive control of partisans and then rendering a decision in favor of the Housing Authority the court almost invited the result which followed.

Returning to the matter of appellants' silence, however poor their judgment in the course of conduct they followed, it did not constitute a contempt of court.They violated no order of the court.They had given no personal assurances as to the integrity and safety of the funds.When they learned that consideration was being given by the Association to possible withdrawal of the funds contrary to the court order, they advised strongly against the proposal and warned that those involved would be subject to contempt.They urged their clients to use the appeal process to vindicate their position and not take the law into their own hands.The foregoing, contrary to being contemptuous of the court's authority, dignity and the administration of justice, sought to uphold the rule of law and the authority of the court.

It has been suggested that appellants were under an obligation to inform the court as to the November 13 meeting of the executive committee which they attended, at which possible disbursement of the funds was discussed.As far as the record we have shows, no decision to violate the court order was reached at that meeting and appellants advised strongly against any such course of conduct.

It is impossible to determine from the sparse record of that meeting whether distribution of the funds became a foregone conclusion subject only to approval by the general membership of the association on the following day.If appellants possessed such knowledge, we think they would have been required to inform the court that its order as to the security of the funds was about to be violated.The attorney-client relationship would not require or justify silence in a situation where the integrity of the rule of law was at stake.The record is inadequate in this area.We simply do not know what knowledge appellants possessed.

However, when appellants were told on the evening of November 15 that the funds had been withdrawn and were being refunded to the tenants, they should have notified the court immediately.This information was given to them at their request manifestly so that it might be communicated to the court in advance.For reasons of their own appellants chose not to notify the court of what had happened until the court hearing had commenced and the very charade which they had professed they wanted to avoid, became a reality.

It may well be that little or no money would have been salvaged had appellants made an immediate disclosure to the court.At the least,...