Lipin v. Bender

• Decision Date: 01 November 1994
• Citation: 644 N.E.2d 1300,84 N.Y.2d 562,620 N.Y.S.2d 744
• Parties: , 644 N.E.2d 1300 Joan C. LIPIN, Appellant, v. Robert M. BENDER, Jr., et al., Respondents.
• Court: New York Court of Appeals Court of Appeals

Page 744

620 N.Y.S.2d 744

84 N.Y.2d 562, 644 N.E.2d 1300

Joan C. LIPIN, Appellant, v. Robert M. BENDER, Jr., et al., Respondents.

Court of Appeals of New York.

Nov. 1, 1994.

[84 N.Y.2d 563] Wisehart & Koch, New York City (Arthur M. Wisehart, of counsel), for appellant.

[84 N.Y.2d 564] Weil, Gotshal & Manges, New York City (Mark A. Jacoby, Kevin P. Hughes and Lawrence J. Baer, of counsel), and Morgan, Lewis & Bockius for respondents.

[84 N.Y.2d 565] Jay Carlisle, White Plains, amicus curiae.

OPINION OF THE COURT

KAYE, Chief Judge.

At issue on this appeal is the propriety of dismissing plaintiff's complaint as a remedy for misconduct that involved taking and use of the adversary's privileged documents. In the circumstances presented, we affirm the Appellate Division order upholding dismissal as a proper exercise of the trial court's discretion under CPLR 3103(c).

The underlying facts, as found by the Supreme Court and affirmed by the Appellate Division, 193 A.D.2d 424, 597 N.Y.S.2d 340, are essentially undisputed. In February 1988, plaintiff was terminated as Manager of Health Services for American Red Cross in Greater New York, where she had worked for more than two years. Plaintiff thereafter commenced an action for sexual harassment and discrimination pursuant to the Human Rights Law (Executive Law § 290 et seq.) and 42 U.S.C. §§ 1983 and 1985, against her former supervisor (Robert Bender) and her former employer. She alleged that her refusal of Bender's unwelcome sexual overtures prevented her advancement at Red Cross, ultimately leading to her termination, and that Red Cross itself allowed an environment hostile to its women employees. Plaintiff was represented by Wisehart & Koch (Arthur Wisehart), and defendants Bender and Greater New York Red Cross by Weil, Gotshal & Manges (WGM) (Mark Jacoby).

On Friday, June 28, 1991, during the course of increasingly acrimonious pretrial proceedings marked by mutual accusation of abusive tactics, plaintiff and Wisehart appeared at a hearing room in New York County Supreme Court to argue certain deposition issues before a Special Referee. Now employed as a salaried paralegal by her attorney, plaintiff took what she described as her customary place at the conference table. Already on the table at that spot was a stack of some 200 pages, the top sheet beginning:

"Weil, Gotshal & Manges

memorandum

December 8, 1989

To: File

From: Lawrence J. Baer

Re: Joan Lipin v American Red Cross * * *

Meeting with Mary Stanton 9/15/89".

The page continued with a summary of counsel's meeting with Stanton, a Red Cross employee, including Stanton's candid impressions of plaintiff and her recounting of Jacoby's legal advice regarding plaintiff's termination.

While the attorneys--including the author of the file memorandum, WGM associate Lawrence Baer--were absorbed in heated exchanges regarding the deposition, plaintiff read the first few pages, then shifted the documents (which she concealed in a folder) to her lap and continued to read, undetected, for more than an hour. In plaintiff's own words: "I wasn't reviewing those papers, I was reading them." Immediately, she recognized the documents as containing the lawyer's interview notes of Red Cross personnel, including defendant Bender, as well as deposition digests.

At a break, plaintiff slipped the documents into a Redweld file "for [her] own protection," determined to retain them as "material evidence," and in the corridor told Wisehart about the documents and what she had done. Wisehart said that he would not himself read the documents until he had received a "second opinion." Plaintiff told Wisehart that she would not give him the documents unless she could keep a copy. During the luncheon recess plaintiff returned to Wisehart's office where she made three photocopies, "Bates-stamped" them, and--except for one copy she later took home with her--placed the documents in a locked filing cabinet to which she had a key.

According to plaintiff, Wisehart counseled her that if Baer discovered his documents missing, she must tell the truth: that she had picked them up by mistake. Plaintiff responded that she had not picked them up by mistake, but deliberately, and would not return the originals unless asked to do so by WGM. In consultation with the lawyer who had referred plaintiff's case to him, Wisehart concluded that any claim of privilege as to the documents had been lost as a result of Baer's careless handling of them, and on Sunday evening, June 30, he read through them.

Promptly the next morning, Wisehart wrote to Jacoby that "a recent development causes me to suggest that immediate attention should be given to the subject of settlement from all points of view." At a meeting the following afternoon, Wisehart confronted defense counsel with the documents and demanded immediate termination of defendant Bender, a "substantial" money settlement and other reparations. When Jacoby asked how he had obtained the documents, Wisehart demurred, citing attorney-client privilege, asserting only that plaintiff had obtained them legitimately. Wisehart further cautioned Jacoby that plaintiff had retained a copy "for her own protection" and he had no control over what she might do with the information, suggesting that she could release it to the press.

On Wednesday, July 3, 1991, defendants moved for a protective order pursuant to CPLR 3103, and that very day the parties appeared in court. Wisehart consented to WGM's request for interim relief, including that plaintiff (herself present in the courtroom) turn over to her lawyer "everything in her possession," and that he secure all copies in his vault. Over the Fourth of July holiday, however, plaintiff hand-copied parts of the documents from the set she retained at home, returning the documents to Wisehart on Friday, July 5. Even then, plaintiff kept her handwritten notes, and the documents were placed in the locked cabinet for which she had a key.

Following plaintiff's testimony at a hearing commenced July 8, defendants amended their request for relief to include dismissal of the complaint. Defendants based their request on plaintiff's testimony establishing her "knowing and purposeful course of conduct to misuse the wrongfully acquired information in a blatant violation of accepted moral, ethical and legal standards, and this Court's directive." Her intimate knowledge of these defense documents had caused "irreparable harm" and "forever tainted the conduct of this litigation and * * * severely prejudiced defendants' ability to defend," as "neither plaintiff's memory, nor [Wisehart's] memory can be purged." Because the case was now "poisoned," according to counsel nothing short of dismissal could remedy the wrongdoing.

In connection with a separate discovery dispute, on July 29 Wisehart filed a motion to compel disclosure with the Special Referee. Jacoby alerted the trial court that plaintiff's memorandum exploited information derived from the disputed documents, contending that this violation of the court's directive underscored the need for dismissal of the action. He pointed in particular to arguments made by Wisehart that Jacoby said could have come only from the interview notes. Throughout the autumn, the parties litigated plaintiff's cross motion for disqualification of WGM (on grounds they were fact witnesses in the document dispute, and had conspired in plaintiff's termination, a tort) and other disclosure controversies.

After reviewing the documents in camera, in January the court dismissed the complaint, rejecting plaintiff's claim that careless placement of the papers waived their confidential nature. The court found that plaintiff, in retaining the documents and making notes of their contents, had acted contrary to the court's order, concluding that:

"the actions of the plaintiff and her attorney were so egregious in taking this material that was clearly the attorney's work product, clearly interviews with the defendant's employees, clearly not for perusal by any other attorney or litigant in this litigation, so heinous that the only remedy, as much as I dislike to do this, is to dismiss the lawsuit. Otherwise, there is no meaning to privilege, there is no meaning to conduct among attorneys, and there is no rule of law.

"Whatever was in these papers was confidential. That confidentiality was broken. It was repeatedly broken by both the litigant and the attorney, and cannot be countenanced by the Court. Therefore, I am dismissing the lawsuit in its entirety." ^*

The Appellate Division sustained the trial court's exercise of discretion, agreeing that plaintiff's own egregious conduct warranted the drastic sanction of dismissal. The highly improper manner in which plaintiff obtained the documents, coupled with their subsequent use, in the court's view constituted sufficient basis for dismissal. Having ourselves reviewed the documents in camera, we now affirm.

I

In that plaintiff continues to defend the legitimacy of her behavior, analysis begins with that issue.

The trial court, and the Appellate Division, could hardly have been clearer in their conclusions, characterizing plaintiff's conduct--as well as that of her attorney--as "heinous" and "egregious," a threat to the attorney-client privilege, to the concept of civilized, orderly conduct among attorneys, and even to the rule of law.

Moreover, there is ample support for the affirmed factual findings of wrongdoing by plaintiff, wholly apart from the conduct of her attorney that indisputably compounded it. Having deliberately taken the initial misstep of secretly reading what she recognized as attorneys' confidential documents, plaintiff was presented with several opportunities to purge herself and minimize prejudice to defendants. At each juncture, however, she chose the course of action that exacerbated the harm. Having read the documents, she concealed and then took them. Having taken them, she photocopied...