VICTOR LOURO VS. FELIPE PEDROSOÂ (L-5717-12, ESSEX 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NOT FOR PUBLICATION WITHOUT THE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 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-0826-15T2
VICTOR LOURO AND
JENNIFER LOURO,
Plaintiffs-Respondents,
v.
FELIPE PEDROSO, PEDROSO LAW
FIRM, P.C., AND PEDROSO LEGAL
SERVICES, L.L.C.,
Defendants-Appellants.
_________________________________
Argued April 6, 2017 – Decided June 14, 2017
Before Judges O'Connor and Whipple.
On appeal from Superior Court of New Jersey,
Law Division, Essex County, Docket No. L-5717-
12.
Filipe Pedroso,1 appellant, argued the cause
pro se.
Monique D. Moreira argued the cause for
respondents (Moreira & Moreira, P.C.,
attorneys; Ms. Moreira, on the brief).
1
Filipe Pedroso's name is spelled as Felipe in the captions and
orders in this matter. However, he signs his documents as Filipe.
Therefore, we refer to him as Filipe Pedroso throughout this
opinion.
PER CURIAM
On January 8, 2014, the trial court entered a $21,673 judgment
against defendants Pedroso Law Firm, P.C. and Pedroso Legal
Services, L.L.C., after a jury found defendants owed plaintiffs
unpaid rent. Because defendants have not paid the judgment,
plaintiffs sought to compel Filipe Pedroso, as principal of Pedroso
Law Firm, P.C., to attend a deposition, to provide plaintiffs with
financial documents, and to pay attorney's fees. Defendants now
appeal from August 21, September 10, October 9, and October 23,
2015 orders compelling Pedroso to do so. We affirm in part and
remand in part.
On August 1, 2012, plaintiffs filed suit against Pedroso
individually and Pedroso Law Firm, P.C. for unpaid rent and fraud.
Tried before a jury, the matter concluded on December 16, 2013,
when the jury rendered a verdict finding defendants occupied the
first floor at 38 Jefferson Street in Newark in 2012 and 2013, and
did not pay the fair monthly rental value of $1500. The jury
found no fraud, and thus, the judge dismissed a fraud claim against
Filipe Pedroso.
The January 8, 2014 judgment ordered "Pedroso Law Firm[,]
P.C. shall pay the plaintiffs in this matter $21,000.00," as well
as $673.15 in pre-judgment interest, for a total of $21,673.15.
The judgment also included Pedroso Legal Services, L.L.C. This
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entity was included because Pedroso had created this LLC while
litigation was ongoing, an act that was the subject of a direct
appeal from the judgment. We agreed it was not error for the
trial court to include Pedroso Legal Services, L.L.C. as a
successor law firm, in the judgment. Louro v. Pedroso Law Firm,
P.C., No. A-2599-13 (App. Div. June 4, 2015).
At a point unclear from the record, plaintiffs served an
information subpoena on defendants, which resulted in the
production of defendants' bank account number. In May 2014, a
writ of execution disclosed this account had a balance of $0.
On August 4, 2015, plaintiffs moved to compel Filipe Pedroso,
as principal of Pedroso Law Firm, P.C. and Pedroso Legal Services,
L.L.C., to appear for a post-judgment deposition and produce "any
and all tax returns for the years 2012, 2013, and 2014, bank
account statements, and all pertinent financial information for
both Pedroso Law Firm[,] P.C. and Pedroso Legal Services, L.L.C."
Plaintiffs also sought legal fees and costs, as well as any other
relief the court might "deem just and equitable." Defendants
opposed the motion.
On August 21, 2015, the court ordered Pedroso to attend a
post-judgment deposition within twenty days and produce the
requested financial documents. The order also provided "defendant
shall pay plaintiff's attorney fees in connection with this motion
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in an amount to be decided pursuant to the submission of an
affidavit of services."
Defendant moved for a protective order, with a signature date
of September 3, 2015, seeking in camera review of the tax returns
and other financial documents. Plaintiff opposed the motion and
submitted an affidavit of services requesting $925 in legal fees.
On September 10, 2015, the court ordered "defendants, Felipe
Pedroso and Pedroso Law Firm[,] P.C. and Pedroso Legal Services,
[L.L.C.] shall pay the moving party $925."
On September 11, 2015, defendants wrote to the court,
asserting they should not have to pay plaintiffs' legal fees
related to the motion because they had no prior notice of
plaintiffs' request for a deposition.2
Defendants received the September 10, 2015 fee order on
September 16, 2015. Defendants moved for reconsideration on
September 25, 2015, arguing Pedroso, as an individual, was not
subject to the order, and the award of counsel fees was
inappropriate. Defendants continued to press for a protective
order.
2
A post-judgment deposition took place on October 29, 2015.
Whether defendant ever provided any requested financial documents
is unclear.
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The court issued another order for payment of costs and fees
of $925 on October 9, 2015. That order provided "defendant shall
pay plaintiff's attorney fees in connection with this opposition
in an amount to be decided pursuant to the submission of an
affidavit of services." The court also denied defendants' motion
for a protective order on October 9, 2015, and again, ordered
Pedroso to attend the deposition and provide the relevant financial
documents at the deposition. In denying the motion, the judge
wrote "no privilege" and "no 'good cause.'" On October 23, 2015,
the judge denied defendants' motion for reconsideration,
indicating, "denied, relief sought was previously adjudicated and
movant has proven no legal basis for its motion."
Defendants appealed the August 21, 2015 and October 9, 2015
orders on October 23, 2015. Defendants then filed an amended
notice of appeal adding the September 10, 2015 and October 23,
2015 orders.
On appeal, defendants argue the judge erred by refusing an
in camera review of the financial documents before compelling
their release to plaintiffs. Because the notes on the October 9,
2015 order justifying its entry are ambiguous, and possibly
contradict denial of relief, we are constrained to remand this
matter for clarification.
5 A-0826-15T2
Tax returns are not privileged, Finnegan v. Coll, 59 N.J.
Super. 353, 356 (Law Div.), certif. denied, 32 N.J. 357 (1960);
however, individuals have "a legitimate interest" in their tax
records remaining confidential, Lepis v. Lepis, 83 N.J. 139, 157
(1980). Thus, New Jersey courts have allowed "discovery and
inspection of income tax returns for good cause." De Graaff v.
De Graaff, 163 N.J. Super. 578, 582 (App. Div. 1978) (requiring
in camera review before disclosure of tax returns in child support
litigation) (quoting Ullmann v. Hartford Fire Ins. Co., 87 N.J.
Super. 409, 415 (App. Div. 1965)).
Disclosure should only be required when it serves a
"substantial purpose," and disclosure of full returns should not
be required "if partial disclosure will suffice." Ibid. "[I]n
all but the clearest cases[,] the return should be examined by the
judge before any disclosure is ordered." Ullman, supra, 87 N.J.
Super. at 416. Further, if the information sought from the tax
records can be obtained through other means, a party has not shown
good cause for production. De Graaff, supra, 163 N.J. Super. at
582. Good cause is a term without a precise definition, but good
cause must be determined on a case-by-case basis based on the
facts presented. Ullman, supra, 87 N.J. Super. at 414.
Here, the denial of defendants' motion for a protective order
includes the handwritten notes "no privilege applies" and "no
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'good cause.'" We can only surmise the denial language is a
reference to defendants' form of order, which proposed
"[d]efendant filed this motion for a protective order asking the
court to undergo an in camera review of the documents to determine
whether production is appropriate; and the court having reviewed
the motion papers, opposition (if any), and oral argument (if
granted); and for good cause shown . . . ." (emphasis added).
Good cause, however, is the standard plaintiffs must show to
gain access to defendant's tax returns. By finding "no 'good
cause,'" the judge's reasons implies plaintiffs did not meet their
burden to justify the release of the tax returns; however, the
relief denied defendant's request for a protective order and in
camera review, which appears in direct conflict with the reasoning.
Therefore, we remand for the judge to clarify why the protective
order was denied.
Defendants next argue the trial court erred by granting
plaintiff counsel fees in the August 21, 2015 order because
"defendant(s) were not in violation of any discovery order." We
disagree and affirm the order for defendants to pay costs.
Under Rule 6:7-2(b), an information subpoena can be served
upon a judgment debtor. If a judgment debtor fails to comply with
the information subpoena, a judgment creditor can commence
proceedings for relief through a motion to the court. R. 6:7-
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2(e). The proceedings should comply with Rule 1:10-3, which
states, "[t]he court in its discretion may make an allowance for
counsel fees to be paid by any party to the action to a party
accorded relief under this rule."
Rule 4:59-1(f) provides for the deposition of a judgment
debtor by the judgment creditor to aid in the execution of a
judgment pursuant to Rule 6:7-2, discussed above. This rule allows
a judgment creditor to obtain an order requiring a deposition of
any person who may have information concerning property of a
judgment debtor. R. 6:7-2(a). The rule does not require notice
of a motion to compel a deposition but requires service of the
order for discovery. R. 6:7-2(c). Additionally, "[t]he court may
make any appropriate order in aid of execution." R. 4:59-1(f).
Defendant contends counsel fees were erroneously awarded
because plaintiffs never made a request for a deposition prior to
filing their motion to compel a deposition. Defendant relies on
the rules for conducting discovery depositions, found in Rule
4:23-1.
Plaintiffs were not required to request a deposition of
defendant prior to filing a motion to compel one. Plaintiffs
moved for the court to compel the deposition of Pedroso based upon
defendants' failure to comply with an information subpoena and
actions that plaintiffs characterized as defendants' attempts to
8 A-0826-15T2
evade paying the judgment. The judge was presented with a record
upon which he could have reasonably concluded defendants were
avoiding paying the judgment by failing to comply with the
information subpoena. Thus, we discern no abuse of discretion,
and the imposition of counsel fees was appropriate.
Defendant also argues the trial judge erred by entering two
orders on October 9, 2015, because they had been prepared by
plaintiffs when plaintiffs had not filed cross-motions.
Defendants' argument lacks merit. R. 2:11-3(E)(1)(e).
On August 21, the court ordered "defendant shall pay
plaintiffs' attorney fees in connection with this motion in an
amount to be decided pursuant to the submission of an affidavit
of services." When plaintiffs responded to defendant's motion for
a protective order, they provided a certification of the legal
services and a form order, so the appropriate fees could be
determined by the court. The judge then issued an order stating
the specific fees defendants must pay plaintiff. No cross-motion
was necessary, and the orders were appropriate.
Last, defendant argues the motion judge erred by entering the
September 10, 2015 and October 9, 2015 orders against Pedroso as
an individual, in addition to his law firm entities. We agree and
remand for the trial judge to correct such orders.
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We previously determined the original judgment applied to
both defendant's original law firm entity, Pedroso Law Firm, P.C.,
and a subsequently created entity, Pedroso legal Services, L.L.C.
Louro, supra, No. A-2599-13. We stated the ultimate jury verdict
for unpaid rent "was only against the law firm and not against
Pedroso personally." The caption of this decision also has a
footnote providing, "The party was incorrectly designated as
Felipe Pedroso."
Plaintiff argues Pedroso should be included individually on
the order for legal fees as the attorney for the law firm because
he deliberately obstructed the discovery process. See Baxt v.
Liloia, 155 N.J. 190, 210-11 (1998). However, the use of Pedroso's
name after the word "defendant" implies he was included in the
order as a defendant and not for his role as counsel for his law
firms. We agree Filipe Pedroso, as an individual, should not have
been included on the orders for costs. We therefore remand for
the trial judge to re-issue the orders with the appropriate
defendants.
Affirmed in part and remanded in part. We do not retain
jurisdiction.
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