JACQUELINE ORTIZ VS. LOURDES G. OTIS (L-0068-19, 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NOT FOR PUBLICATION WITHOUT THE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
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-5655-18T2
JACQUELINE ORTIZ,
Plaintiff-Appellant,
v.
LOURDES G. OTIS,
LGO PROPERTIES LLC,
and 6 W END AVE LIMITED
LIABILITY COMPANY,
Defendants-Respondents.
__________________________
Submitted March 2, 2020 – Decided April 24, 2020
Before Judges Sumners and Natali.
On appeal from an interlocutory order of the Superior
Court of New Jersey, Law Division, Bergen County,
Docket No. L-0068-19.
Jean A. Amagsila, attorney for appellant.
Post Polak, PA, attorneys for respondents (David
Lawrence Epstein, of counsel and on the brief).
PER CURIAM
On leave granted, plaintiff Jacqueline Ortiz appeals from April 29, 2019
and June 27, 2019 Law Division orders: 1) denying her motion to strike
defendants Lourdes Otis's, LGO Properties LLC's (LGO), and 6 W. End Ave.
LLC's (6 W. End Ave.) late amended answer and to disqualify defendants'
counsel, David L. Epstein, Esq. (Epstein) of Post Polak, P.A. (Post); and 2)
granting defendants' motion to disqualify her counsel, Jean Amagsila, Esq.
(Amagsila). After considering the parties' legal arguments against the record on
appeal, we affirm in part and vacate and remand in part.
I.
We discuss the facts gleaned from the motion record to provide context
for our opinion. Plaintiff entered a lease with defendants to reside in a
multifamily residence in Bogota. LGO and 6 W. End Ave. owned and operated
the residence, and Lourdes Otis was the registered President of both entities.
Plaintiff resided at the unit until January 2017 as a Section 8 tenant. At all
relevant times, including the current appeal, plaintiff was represented by
Amagsila.
The underlying litigation stems from plaintiff's alleged injuries caused by
"black mold growing in the bedrooms." In 2016, plaintiff wrote to the Bergen
County Housing Authority and the Bogota Health Department regarding the
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condition of the property. A few days later, the Health Department sent a
violation notice to Lourdes Otis regarding the existence of a "[m]old -like
substance . . . in one of the apartments." According to defendants, around this
time, plaintiff failed to pay rent, and LGO issued her a notice to quit the
premises. Shortly thereafter, defendants instituted summary eviction
proceedings against plaintiff. At this time and throughout the underlying action,
defendants were represented by Clyde Otis, a lawyer at Post and Lourdes Otis'
son.
The parties settled the tenancy litigation with plaintiff agreeing to vacate
the premises by November 30, 2016 in exchange for defendants being permitted
to keep $1700 of the $2100 security deposit for repairs to the unit. Despite the
settlement, plaintiff did not move out by November 30, 2016. Instead, upon the
request of Amagsila, defendants permitted plaintiff to remain in the unit until
December 31, 2016, provided she pay rent for that month. Despite the extension,
plaintiff, in December 2016, filed a motion to stay the eviction until January 3,
2017, which defendants did not oppose. Plaintiff eventually vacated the
premises on January 4, 2017.
Two years later, on January 3, 2019, plaintiff filed a complaint in the Law
Division, naming Lourdes Otis, her daughter Ana I. Otis, LGO, and 6 W. End
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Ave. as defendants.1 Plaintiff alleged negligence, property damage, breach of
contract, and wrongful eviction, and sought compensatory and punitive
damages, as well as costs and attorneys' fees.
LGO and 6 W. End Ave. failed to file timely answers, allegedly because
they contacted an insurance company which took "many weeks" to determine
that it would cover only the portions of the complaint relating to Lourdes Otis.
Counsel for Lourdes Otis filed a timely answer on her behalf only on February
28, 2019.
On March 28, 2019, Epstein, who along with Clyde Otis, was a
shareholder at Post, filed a motion to permit a late answer on behalf of
defendants LGO and 6 W. End Ave. In support of the motion, Epstein attached
certifications from himself and Clyde Otis explaining the delay. The proposed
answer listed only Epstein as designated trial counsel. In his certification, Clyde
Otis stated that he "was directly involved in counseling [his] mother and a direct
witness to many of the events and circumstances set forth in the [a]mended
[c]omplaint" and described the factual scenario giving rise to plaintiff's
complaint. Further, he explained that because of the delay in the insurance
1
Plaintiff amended the complaint two weeks later, removing Ana Otis as a
defendant after learning she had passed away.
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company's review of the case, he was unable to apprise Epstein of the situation
with enough time to file timely answers.
In response, plaintiff filed a cross-motion to strike defendants' answer and
disqualify Epstein as defendants' designated trial counsel. Plaintiff alleged that
Epstein had conflicts of interest in violation of the New Jersey Rules of
Professional Conduct (RPC), specifically RPCs 1.7, 1.8, and 1.10, with
defendants because Clyde Otis was Lourdes Otis's son and the registered
treasurer of LGO and 6 W. End Ave. Plaintiff further maintained that Clyde
Otis was disqualified because he was "likely to be a necessary witness," in
violation of RPC 3.7. Plaintiff contended that the relationship between Clyde
Otis and defendants disqualified Epstein from representing them.
In defendants' opposition to plaintiff's cross-motion, they argued that
neither the RPCs nor legal precedent supported the conclusion that a conflict of
interest existed or provided any basis to disqualify Epstein. Defendants noted
that Epstein was designated as trial counsel because Clyde Otis "knows he may
very well be a fact witness," and "thus is not handling this matter as counsel."
Moreover, while defendants further suggested that "Amagsila's conflicts are
serious enough that the [c]ourt could, on its own motion, disqualify her from the
case" because she is a "material fact witness" who could "end up being a
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[d]efendant on third party complaints," they filed no motion to that effect. In
separate April 29, 2019 orders, the trial court granted defendants' motion to
permit a late answer and denied plaintiff's cross-motion to strike and disqualify
Epstein. The court provided no written or oral statement of reasons for its
decision denying plaintiff's disqualification motion and did not conduct oral
argument.
The following month, on May 20, 2019, plaintiff filed a "[m]otion to
[a]lter or [a]mend" the April 29, 2019 order, pursuant to Rule 4:49-2.
Substantively, however, plaintiff argued only against Amagsila's
disqualification as counsel, as suggested (but not moved for) by defendants in
their opposition to plaintiff's cross-motion to disqualify Epstein. While
plaintiff's "legal standard" section provided discussed Rule 4:49-2 and the
standard for reconsideration applications, the only point heading in its two-page
"legal argument" section stated: "THIS OFFICE WILL NOT BE
DISQUALIFIED AS TRIAL ADVOCATES pursuant to RPC 3.7 and 1.8(a)."
In this regard, plaintiff argued that: 1) disqualification of Amagsila
"would impose an undue hardship on [plaintiff] due to her financial situation,
medical condition, and current living situation"; 2) that Amagsila's testimony
was "not 'necessary' and 'likely' as required by RPC 3.7" because "documents
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and other witnesses" may be introduced instead; and 3) "pursuing [plaintiff] 's
interests in this type of litigation promotes public policy" because of her status
as a Section 8 recipient.
In support of her motion, plaintiff attached documents indicating that
Lourdes Otis was the President of LGO and 6 W. End Ave., copies of the court's
April 29, 2019 orders, and paperwork indicating that plaintiff was a Section 8
recipient and sought assistance from the Bergen County Fair Housing Council.
Plaintiff also contended that defendants' actions caused her to lose her housing
voucher, forcing her to move out of state to obtain affordable housing.
In addition to opposing plaintiff's motion, defendants also filed a cross-
motion to disqualify Amagsila as plaintiff's counsel pursuant to RPC 3.7(a). In
support of their opposition and cross-motion, defendants contended that
"[p]laintiff does not even pretend to have 'newly discovered evidence'" or "point
to any fact or precedent that the [c]ourt overlooked" in issuing its April 29, 2019
orders. Defendants also argued that Amagsila should be disqualified as
plaintiff's counsel "given her undeniable role as a material fact witness"
regarding the tenancy action. Defendants further maintained that the
"substantial hardship" exception to RPC 3.7(a) did not apply merely because
"her client would have difficulty finding another attorney." Defendants attached
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a copy of plaintiff's complaint and a certification from Clyde Otis which
included a copy of the parties' consent judgment in the eviction action, a copy
of the request for defendants' warrant of removal, and emails between Clyde
Otis and Amagsila regarding plaintiff's tenancy action.
On June 27, 2019, again without oral argument, the trial court issued
orders denying plaintiff's Rule 4:49-2 motion but granting defendants' cross-
motion to disqualify Amagsila as plaintiff's counsel and indicated that
defendant's cross-motion was unopposed. In its decision to deny plaintiff's
motion, the court characterized the application as "nothing more than a request
for reconsideration of [p]laintiff's previous cross-motion and opposition to
[d]efendants' motion that led to the [c]ourt's April 29, 2019 [o]rders." Relying
on Rule 4:49-2 and Cummings v. Bahr, 295 N.J. Super. 374, 384-85 (App. Div.
1996), the court explained that plaintiff introduced no "'newly discovered
evidence' that was not available when she filed her opposition and cross-motion
in April 2019." The court also found that plaintiff did not "point to any fact or
precedent that the [c]ourt overlooked in granting [defendants'] motion . . . [and]
denying [plaintiff's] cross-motion."
With respect to defendants' cross-motion to disqualify Amagsila, the court
concluded that she was "a material fact witness and . . . disqualified as counsel
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pursuant to RPC 3.7(a)." Initially, the court noted that "[n]o opposition was
submitted to [d]efendants' [c]ross-[m]otion." The court detailed various
portions of the complaint that alleged wrongful eviction and explained that
Amagsila represented plaintiff throughout the tenancy action and reached the
settlement. It further noted that because plaintiff asserted in the current case
that her removal from defendants' property was "'forced' or 'involuntary,'"
Amagsila's involvement in the tenancy action was "direct and material" because
she "represented . . . [p]laintiff and communicated for her with the [l]andlord
. . . in agreeing to [plaintiff's] voluntary departure . . . ."
Moreover, the court described Amagsila's role in plaintiff's tenancy
action, finding that she "negotiat[ed] an extension of the occupancy period
allowed under the settlement agreement after [p]laintiff failed to leave o n the
agreed-upon date" in which she proposed that defendants would retain plaintiff's
security deposit in satisfaction of the additional month's rent. Based on the
allegations in the complaint that "[d]efendants' retention of [p]laintiff's security
deposit was unlawful," the court found that "Amagsila would be a witness" to
explain how defendants' conduct was unlawful despite that "she herself proposed
in writing, on behalf of [p]laintiff, that the [l]andlord should retain the full
balance of the security deposit . . . ."
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Finally, the court observed that the complaint asserted that defendants
"allegedly engaged in unlawful rent increases, over-charges or 'double charges'
of rent and other allegedly improper lease charges." Again, because Amagsila
raised the same claims in the underlying tenancy action, the court determined
that "testimony about her review of the outstanding lease charges and her
negotiation of a final number owed would be highly relevant and material to
[p]laintiff's current claim . . . ." We granted plaintiff's motion for leave to appeal
the April 29, 2019 and June 27, 2019 interlocutory orders.
On appeal, plaintiff alleges that the trial court erred because it: 1) "fail[ed]
to conduct a single evidentiary hearing for [either] disqualification motion"; 2)
improperly denied plaintiff's motion to disqualify Epstein under RPC 1.7, RPC
1.8 and RPC 3.7; 3) incorrectly granted defendants' motion to disqualify
Amagsila as she was neither a necessary witness nor a likely witness pursuant
to RPC 3.7, and disqualification of Amagsila would "work substantial hardship
on the client"; 4) erroneously granted defendants' motion to file a late amended
answer and denied plaintiff's motion to strike defendants' late amended answer;
and 5) denied plaintiff relief because "the public has a substantial interest in
policies that allow attorneys to advocate for injured and aggrieved litigants like
[plaintiff] who have limited resources to retain counsel."
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II.
With respect to the trial court's April 29, 2019 order granting LGO's and
6 W. End Ave.'s motion to file a late amended answer, plaintiff argues that the
court abused its discretion because it permitted those defendants to file an
answer well after the expiration of the time permitted by Rule 4:9-1 despite
receiving timely and proper service of the complaint. We disagree.
Rule 4:9-1 "requires that motions for leave to amend be granted liberally."
Kernan v. One Wash. Park Urban Renewal Assocs., 154 N.J. 437, 456 (1998).
Motions for leave to amend "should generally be granted even if the ultimate
merits of the amendment are uncertain." G & W, Inc. v. Borough of E.
Rutherford, 280 N.J. Super. 507, 516 (App. Div. 1995); see also Interchange
State Bank v. Rinaldi, 303 N.J. Super. 239, 256 (App. Div. 1997) (explaining
that motions for leave to amend should be liberally granted without
consideration of the ultimate merits of the amendment). Further, "the granting
of a motion to file an amended complaint always rests in the court's sound
discretion." Kernan, 154 N.J. at 457.
In its April 29, 2019 order, the court indicated that it "considered the
pleadings and materials submitted in support of and in opposition to . . . [the]
motion," and concluded defendants established good cause. It also noted in its
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June 27, 2019 written decision that at the time it granted defendants' motion to
file a late amended answer, "no default ha[d] been entered, discovery ha[d] only
just begun[,] and process was served not long before the motion to extend was
filed." These factual findings and attendant legal conclusions are amply
supported by the record and, accordingly, the court did not abuse its discretion
in permitting the filing of LGO's and 6 W. End Ave.'s belated answer.
III.
With respect to plaintiff's cross-motion, she contends that Epstein should
be disqualified because Clyde Otis is a "key and 'direct witness' in this
litigation," violating RPC 3.7, and a conflict of interest between Clyde Otis and
defendants has been established in violation of RPC 1.7. Further, plaintiff
argues that Epstein violated RPC 1.8(a) because Post "entered into a business
transaction" with defendants. Finally, plaintiff asserts that under RPC 1.10,
"Epstein . . . [is] barred from representing the multiple [d]efendants in this
matter" as he and Otis are members of Post and conflicts of interest are imputed
to the entire firm.
A trial court's "determination of whether counsel should be disqualified
is, as an issue of law, subject to de novo plenary appellate review." City of Atl.
City v. Trupos, 201 N.J. 447, 463 (2010) (citing J.G. Ries & Sons, Inc. v.
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Spectraserv, Inc., 384 N.J. Super. 216, 222 (App. Div. 2006)). Therefore, the
trial court's decision on an attorney's disqualification is "not entitled to any
special deference" on appeal. See Manalapan Realty, LP v. Twp. Comm. of
Manalapan, 140 N.J. 366, 378 (1995) (citing State v. Brown, 118 N.J. 595, 604
(1990); Dolson v. Anastasia, 55 N.J. 2, 7 (1969); Pearl Assurance Co. v. Watts,
69 N.J. Super. 198, 205 (App. Div. 1961)).
According to Rule 1:6-2(f), "[i]f the court has made findings of fact and
conclusions of law explaining [the court's] disposition of the motion, the order
shall indicate whether the findings and conclusions were written or oral . . . ."
The Rule directs courts to provide a statement of reasons supporting
interlocutory orders "where explanation is required by reason of the nature of
the matter." Pressler & Verniero, Current N.J. Court Rules, cmt. 7 on R. 1:6-2
(2020); see, e.g., Magill v. Casel, 238 N.J. Super. 57, 65 (App. Div. 1990)
(holding, in the context of an application for judicial recusal, the "challenged
judge who hears the motion should painstakingly set forth the . . . bases for the
ultimate decision" in order to allow proper appellate review).
As to that portion of the court's April 29, 2019 order denying
disqualification of Epstein, we conclude a comprehensive statement of reasons
was required in light of the significant nature of the relief requested . Without
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findings of fact and conclusions of law stated on the record, or a statement of
reasons appended to the order, we cannot discern the basis for the court's ruling
denying the motion to disqualify Epstein. See Magill, 238 N.J. Super. at 65. As
a result, we vacate the trial court's April 29, 2019 order denying plaintiff's cross-
motion to disqualify Epstein and remand for the court to consider the parties'
arguments and issue a statement of reasons supporting its decision.
IV.
Plaintiff further contends that the trial court improperly disqualified
Amagsila as her counsel pursuant to RPC 3.7. 2 Specifically, she asserts that
defendants could not have met the burden of showing that she was a necessary
2
RPC 3.7 states:
(a) A lawyer shall not act as advocate at a trial in which
the lawyer is likely to be a necessary witness unless:
(1) the testimony relates to an uncontested issue;
(2) the testimony relates to the nature and value of legal
services rendered in the case; or
(3) disqualification of the lawyer would work
substantial hardship on the client.
(b) A lawyer may act as advocate in a trial in which
another lawyer in the lawyer's firm is likely to be called
as a witness unless precluded from doing so by RPC 1.7
or RPC 1.9.
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or likely witness because the trial court did not conduct an evidentiary hearing
and because "there are several other witnesses and documentary evidence
available to introduce relevant evidence at trial." In this regard, she contends
that Amagsila is not a necessary witness because other witnesses, such as
plaintiff, Clyde Otis, "associates from the Fair Housing Council," various
members of the Housing Authority of Bergen County, and others may testify.
Plaintiff further argues that disqualification of Amagsila would create
"substantial hardship" on plaintiff "because of her financial situation, medical,
condition, and current living situation."
As noted, RPC 3.7 prohibits a lawyer, with certain exceptions, from acting
as an advocate at a trial in which the lawyer will likely be a "necessary witness."
"RPC 3.7 does not require certainty as to a lawyer's testimony; the plain
language of RPC 3.7 requires only 'likelihood.'" Freeman v. Vicchiarelli, 827
F. Supp. 300, 302 (D.N.J. 1993). "A 'necessary' witness under [RPC] 3.7 is one
whose testimony is unobtainable elsewhere." Annotated Model Rules of Prof'l
Conduct R. 3.7 (2019); see also J.G. Ries & Sons, Inc., 384 N.J. Super. at 231(App. Div. 2006) (deeming a lawyer's testimony regarding a letter he wrote not
necessary as it could be introduced through the recipient); State v. Tanksley,
245 N.J. Super. 390, 394 (App. Div. 1991) (determining a criminal defense
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attorney who witnessed client's statement not a necessary witness because the
statement could be introduced through another witness and there was no dispute
as to the statement's completeness or accuracy). The party seeking
disqualification bears the burden of demonstrating that the disqualification is
justified. Trupos, 201 N.J. at 462-63.
An exception to disqualification under RPC 3.7 exists if "disqualification
of the lawyer would work substantial hardship on the client." RPC 3.7(a)(3). In
determining whether a lawyer's disqualification would constitute "substantial
hardship" to a client, courts examine "the amount of time and money invested
by the client in his counsel, as well as . . . the proximity of the trial . . . ."
Freeman, 827 F. Supp. at 304. In this regard, "[p]laintiff's difficulty in finding
alternative counsel does not, in itself constitute 'substantial hardship.'" Id. at
305. In addition, a lawyer who is also a necessary witness will not be
disqualified as a trial advocate under RPC 3.7(a) if counsel's testimony relates
to an uncontested issue or if the proposed testimony relates to the "nature and
value of legal services rendered in the case." See RPC 3.7(a)(1) and (a)(2).
Here, we conclude that further factual findings are necessary to determine
whether disqualifying Amagsila was appropriate under RPC 3.7. Although the
court's written decision concluded Amagsila was a necessary witness pursuant
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to RPC 3.7(a), it failed to address whether disqualification of Amagsila would
constitute substantial hardship under RPC 3.7(a)(3). Although we acknowledge
that plaintiff's submission was not in technical compliance with Rule 1:6-3 as it
was filed prior to defendant's cross-motion to disqualify, plaintiff nevertheless
substantively opposed defendants' cross-motion in her initial brief, and included
proof that plaintiff was of limited financial means as a Section 8 recipient. The
court also failed to address the exceptions contained in RPC 3.7(a)(1) and (a)(2).
Because we are vacating the June 27, 2019 orders disqualifying Amagsila and
remanding for further factual findings, the court should also consider the
arguments raised in plaintiff's May 19, 2019 brief as it does not appear the court
evaluated those arguments, having treated defendants' cross-motion as
unopposed.
In sum, we affirm the court's April 29, 2019 order granting defendants'
motion to file a late amended answer. We vacate and remand, however, the trial
court's April 29, 2019 order denying plaintiff's cross-motion to disqualify
Epstein as counsel for LGO and 6 W. End Ave. On remand, the trial court should
provide a statement of reasons, including factual findings, to amplify its bases
for its decision. We also vacate and remand the court's June 27, 2019 order to
the extent it granted defendants' cross-motion to disqualify plaintiff's counsel
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for further factual findings including whether plaintiff would suffer substantial
hardship pursuant to RPC 3.7(a)(3) if Amagsila were to be disqualified as well
as necessary findings under RPC 3.7 (a)(1) and (a)(2).
In light of our decision, we need not address plaintiff's argument that the
"public has a substantial interest in policies that allow attorneys to advocate for
injured and aggrieved litigants like [plaintiff] who have limited resources to
retain counsel."
Affirmed in part and vacated and remanded in part. We do not retain
jurisdiction.
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