Plantation Bay, Llc v. Stewart Title Guaranty Company et al

BRIEF in Response to Plaintiff's Sur-Reply

D.N.J.April 7, 2017

UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY PLANTATION BAY, LLC, Plaintiff, v. STEWART TITLE GUARANTY COMPANY, Defendant. Civil Action No. 1:15-cv-02042 (JBS) (AMD) Document filed electronically DEFENDANT STEWART TITLE GUARANTY COMPANY’S RESPONSE TO PLAINTIFF’S SUR-REPLY GIBBONS P.C. One Gateway Center Newark, New Jersey 07102-5310 (973) 596-4500 Attorneys for Defendant Stewart Title Guaranty Company Case 1:15-cv-02042-JBS-AMD Document 64 Filed 04/07/17 Page 1 of 8 PageID: 2014 TABLE OF CONTENTS Page i TABLE OF AUTHORITIES .......................................................................................................... ii PRELIMINARY STATEMENT .................................................................................................... 1 ARGUMENT .................................................................................................................................. 1 I. Plaintiff’s Discussion Regarding The Interplay Between The 1927 Deed Restriction And The Modified Deed Restriction Is A Red Herring. ...................................1 II. Plaintiff’s Sur-Reply Does Not Impact The Outcome Of This Motion. ..............................3 CONCLUSION ............................................................................................................................... 5 Case 1:15-cv-02042-JBS-AMD Document 64 Filed 04/07/17 Page 2 of 8 PageID: 2015 ii TABLE OF AUTHORITIES Page(s) Cases Conopco, Inc. v. McCreadie, 826 F. Supp. 855 (D.N.J. 1993) .............................................................................................2, 3 Schanzer v. Rutgers Univ., 934 F. Supp. 669 (D.N.J. 1996) .................................................................................................2 Rules Fed. R. Civ. P. 12(b)(6)....................................................................................................................2 Case 1:15-cv-02042-JBS-AMD Document 64 Filed 04/07/17 Page 3 of 8 PageID: 2016 1 Defendant Stewart Title Guaranty Company (“STGC”) respectfully submits this response in further support of its motion to compel in-issue discovery from Plaintiff Plantation Bay, LLC (“Plaintiff”) (ECF No. 51), in accordance with the Court’s Order dated March 28, 2017 (ECF No. 61). PRELIMINARY STATEMENT Plaintiff’s sur-reply attempts to distract the Court with a convoluted discussion regarding the so-called “interplay” between the “1927 deed restriction” and the “modified deed restriction.” Plaintiff takes issue with STGC’s citation and quotation of an allegation taken straight from Plaintiff’s First Amended Complaint: The modified Deed Restriction is a defect in title which caused Plaintiff to suffer a loss which Defendant insured against with the Policy. ECF No. 18 ¶ 23. Plaintiff then extrapolates from this reference its belief that STGC is arguing for the 2008 Settlement Agreement to be considered in isolation. However, STGC has said no such thing. In any event, it is an irrelevant and unremarkable point, designed solely to distract the Court from the true issue presented. Simply put, nothing in Plaintiff’s sur-reply alters the conclusion that Plaintiff placed its confidential communications regarding the 2008 Settlement Agreement in issue and thus the Court should grant STGC’s motion to compel in-issue discovery. ARGUMENT I. Plaintiff’s Discussion Regarding The Interplay Between The 1927 Deed Restriction And The Modified Deed Restriction Is A Red Herring. Contrary to Plaintiff’s assertions, STGC has never argued that the “modified deed restriction . . . is somehow unrelated to the 1927 Deed Restriction.” See Pl.’s Sur-reply at 1, ECF No. 62. Instead, STGC’s reply notes that the allegation in Plaintiff’s Complaint that the Case 1:15-cv-02042-JBS-AMD Document 64 Filed 04/07/17 Page 4 of 8 PageID: 2017 2 “modified deed restriction is a defect in title which caused Plaintiff to suffer a loss[,]” see FAC ¶ 23, undermines its current argument that the modified deed restriction is irrelevant to STGC’s liability. To be clear, STGC does not dispute that the modified deed restriction was intended, at least in part, to address (and supersede) the 1927 deed restriction. But this fact has no bearing whatsoever on the present motion. In its sur-reply, Plaintiff attempts to transform a comment made in the opinion on the motion to dismiss about this unrelated point into some definitive ruling adopting Plaintiff’s theory of the case in this action. Interpreting Judge Simandle’s statement that the “modified Deed restriction would not have existed but for the 1927 Deed Restriction and the Superior Court’s holding that the [1927] Deed Restriction runs with the land,”1 Plaintiff extrapolates that Judge Simandle held that the 2008 Settlement Agreement cannot be considered in isolation and that Plaintiff’s mitigation efforts cannot be ignored. Of course, the Court’s opinion did no such thing – the Court merely accepted Plaintiff’s allegations as true, as required for a motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6).2 Thus, Plaintiff’s suggestion that its position “has already been accepted by Judge Simandle” is utter nonsense. In any event, Plaintiff fails to explain how this dicta – even accepting Plaintiff’s interpretation of Judge Simandle’s statement – would impact the present motion (it would not). 1For purposes of clarification, it is noteworthy that had the Superior Court held that the 1927 Deed Restriction did not run with the land, the 2008 Settlement Agreement would have required Plaintiff to grant the conservation easement/restriction in order to proceed with its building plans, which would have had the same end result as the modified deed restriction enforced by Judge Isman – a restriction on 120-acres for use solely as a golf course. 2Notably, the 2008 Settlement Agreement – which was not even before Judge Simandle on the motion to dismiss – contains an express integration clause noting that the “Agreement . . . constitutes the entire Agreement between the Parties . . . .” Thus, contrary to Plaintiff’s argument, it appears that the agreement was intended to be interpreted in isolation. Nevertheless, to the extent Plaintiff interpreted Judge Simandle’s opinion to indicate something different, such a ruling would have been based on allegations the Court was required to “accept as true” for purposes of a motion to dismiss, and thus would not be “law of the case.” Schanzer v. Rutgers Univ., 934 F. Supp. 669, 673 (D.N.J. 1996) (Simandle); Conopco, Inc. v. McCreadie, 826 F. Supp. 855, 867 n.5 (D.N.J. 1993). Case 1:15-cv-02042-JBS-AMD Document 64 Filed 04/07/17 Page 5 of 8 PageID: 2018 3 That is because Plaintiff focuses on the wrong portion of Judge Simandle’s opinion for purposes of this motion. While the Court noted that Plaintiff’s agreement to the “modified deed restriction . . . . does not cure the original title defect of which Plaintiff complains,” the Court’s opinion goes on to recognize that Plaintiff’s assent to the modified deed restriction may have triggered a policy exclusion. In its motion to dismiss, STGC argued that the modified deed restriction, which was born of the 2008 Settlement Agreement, triggers the policy exclusion for defects “agreed to” by Plaintiff. In addressing the policy exclusion, the Court found that Plaintiff’s allegations—that it relied on the advice of counsel appointed by STGC and was forced into the agreement adopting the modified restriction by appointed counsel—”plausibly show a lack of control, intent or voluntariness in its participation in the . . . settlement agreement.” Op. at 15, ECF No. 33; see also id. (“If Plaintiff did not intend to agree to a defect in title preventing its ability to redevelop the Property, it could not have ‘assented’ or ‘agreed to’ that defect within the meaning of Exclusion 3(a).”) (emphasis added). Thus, the Court found that, based on the allegations of Plaintiff’s complaint (accepted as true for purposes of that motion), Plaintiff avoided a policy exclusion because it was (allegedly) forced into the settlement agreement. It is this contention, set forth in Plaintiff’s complaint and relied upon in the Court’s motion to dismiss ruling, which necessitates the discovery STGC seeks in this motion.3 II. Plaintiff’s Sur-Reply Does Not Impact The Outcome Of This Motion. Even more to the point, Plaintiff’s sur-reply does nothing to address any of the inquiries relevant to the in-issue doctrine, all of which require production of the communications Plaintiff placed in issue: 3Indeed, “a well established exception to the application of law of the case is that a previous decision will not be binding where new evidence is available.” Conopco, 826 F. Supp. at 867 n.5. As explained in STGC’s briefing, discovery has already revealed that Plaintiff received separate counsel on the very issues it now alleges it was forced into by appointed counsel, which further highlights the necessity of the materials STGC seeks here. Case 1:15-cv-02042-JBS-AMD Document 64 Filed 04/07/17 Page 6 of 8 PageID: 2019 4 First, Plaintiff placed its confidential communications regarding the 2008 Settlement Agreement in issue by alleging—both in its Complaint and in opposing STGC’s motion to dismiss—that it was forced into the agreement by its appointed counsel, Fox Rothschild. Other than to (incorrectly) contend that STGC placed the topic of the Settlement Agreement in issue— which is irrelevant and contradicts Plaintiff’s own allegations—Plaintiff has not seriously challenged this central component of the present motion. Second, Plaintiff has conceded two of the three Kozlov factors necessary to pierce privilege. In its opposition, Plaintiff argued that STGC failed to satisfy the “relevance” prong because the 2008 Settlement Agreement is irrelevant to STGC’s liability in this action. Yet, as noted in STGC’s reply brief and above, Judge Simandle has expressly found this to be of particular relevance when the Court denied STGC’s motion to dismiss pursuant to Exclusion 3(a) of the title policy on the basis that Plaintiff’s allegations – that it relied on the advice of counsel appointed by STGC and was forced into the 2008 Settlement Agreement – “plausibly show a lack of control, intent or voluntariness in its participation in the . . . settlement agreement.” Op. at 15, ECF No. 33; see also id. (“If Plaintiff did not intend to agree to a defect in title preventing its ability to redevelop the Property, it could not have ‘assented’ or ‘agreed to’ that defect within the meaning of Exclusion 3(a).”) (emphasis added). Third, Plaintiff has entirely failed to address, let alone distinguish, STGC’s cited authorities, despite having had two opportunities to do so. These cases establish that (1) the in issue doctrine applies when a party affirmatively places its advice of counsel in issue; (2) the waiver extends to all communications concerning the subject matters placed in issue; and (3) the waiver extends to advice received from other attorneys on the same subject matters. Case 1:15-cv-02042-JBS-AMD Document 64 Filed 04/07/17 Page 7 of 8 PageID: 2020 5 In sum, STGC has demonstrated, through thorough citation to the record and well- established case law, that Plaintiff waived privilege by placing its confidential communications regarding the 2008 Settlement Agreement in issue. As the case law provides, that waiver reaches Plaintiff’s communications with separate counsel regarding the same subject matters. Therefore, the Court should reject Plaintiff’s most recent attempt to distract from the relevant issues and grant STGC’s motion to compel in-issue discovery. CONCLUSION For the reasons set forth above, Defendant Stewart Title Guaranty Company respectfully requests that the Court grant STGC’s motion to compel in-issue discovery. Respectfully submitted, Dated: April 7, 2017 Newark, New Jersey s/ Joshua R. Elias Frederick W. Alworth, Esq. Joshua R. Elias, Esq. GIBBONS P.C. One Gateway Center Newark, NJ 07102-5310 Tel: (973) 596-4500 Fax: (973) 596-0545 Email: falworth@gibbonslaw.com jelias@gibbonslaw.com Attorneys for Defendant Stewart Title Guaranty Company Case 1:15-cv-02042-JBS-AMD Document 64 Filed 04/07/17 Page 8 of 8 PageID: 2021 Frederick W. Alworth, Esq. Joshua R. Elias, Esq. Daniel J. McGrady, Esq. GIBBONS P.C. One Gateway Center Newark, NJ 07102-5310 Tel: (973) 596-4500 Fax: (973) 596-0545 Email: falworth@gibbonslaw.com jelias@gibbonslaw.com dmcgrady@gibbonslaw.com Attorneys for Defendant Stewart Title Guaranty Company UNITED STATES DISTRICT COURT DISTRICT OF NEW JERSEY PLANTATION BAY, LLC, Plaintiff, v. STEWART TITLE GUARANTY COMPANY, Defendant. Civil Action No. 1:15-cv-02042 (JBS) (AMD) Document filed electronically CERTIFICATE OF SERVICE I, JOSHUA R. ELIAS, hereby certify as follows: 1. I am an attorney at law admitted to practice before this Court and a Director at the firm, Gibbons P.C., attorneys for defendant Stewart Title Guaranty Company (“STGC”) in the above-captioned matter. On April 7, 2017, pursuant to Local Civil Rule 5.2, I caused the following documents to be electronically filed and served: • Defendant’s Brief in Response to Plaintiff’s Sur-Reply; and • Certificate of Service. Case 1:15-cv-02042-JBS-AMD Document 64-1 Filed 04/07/17 Page 1 of 2 PageID: 2022 2. Service was made via ECF on all counsel of record in accordance with the Federal Rules of Civil Procedure and the District of New Jersey’s Local Rules on Electronic Service. I hereby certify that the foregoing statements made by me are true. I am aware that if any of the foregoing statements made by me are willfully false, I am subject to punishment. Dated: April 7, 2017 s/ Joshua R. Elias Newark, New Jersey Frederick W. Alworth, Esq. Joshua R. Elias, Esq. Daniel J. McGrady, Esq. GIBBONS P.C. One Gateway Center Newark, NJ 07102-5310 Tel: (973) 596-4500 Fax: (973) 596-0545 Email: falworth@gibbonslaw.com jelias@gibbonslaw.com dmcgrady@gibbonslaw.com Attorneys for Defendant Stewart Title Guaranty Company Case 1:15-cv-02042-JBS-AMD Document 64-1 Filed 04/07/17 Page 2 of 2 PageID: 2023