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A standard release in a settlement of a whistleblower case left a loophole large enough for a plaintiff to reopen discovery — even over events preceding the settlement — in a retaliation suit against the same defendant. The Appellate Division last Monday overturned a summary judgment for the defendants, despite the plaintiff’s agreement to release them from “any and all claims, rights, actions and causes of action” that were or could have been asserted. Judges Clarkson Fisher Jr., Donald Coburn and Stephen Skillman held that discovery rules, especially in cases involving allegations of violations of the Conscientious Employee Protection Act, should be read liberally. “We conclude that a general release which does not expressly include a waiver of discovery cannot serve to limit the scope of discovery in the future pursuit of an unrelated claim,” the panel said in Isetts v. Roseland, A-4873-02T5. Robert Isetts, a Roseland police officer for 20 years, sued the borough and its police department, claiming that he was harassed and assigned to a midnight shift after he complained of misconduct by Chief Richard McDonough and other superiors. He settled his CEPA suit for $650,000 on March 5, 2001. The defendants agreed they would answer any inquiry about his employment status by only confirming his dates of employment and highest rank; that they would have only “inadvertent contact” with him and that they would not interfere with his pension rights or his right to retain his service weapon. He agreed to a paid leave of absence and retired as of Sept. 1. In March the next year, Isetts filed a second suit in Essex County, claiming that the defendants, almost immediately after the settlement of the first case, began violating the terms of the agreement. He alleged that McDonough and another officer attempted to have his pension forfeited because of an unspecified allegation of misconduct eight years earlier, “stalked and harassed” him by following him in and around Roseland, tried to interfere with his second career and attempted to have the state police deny him a weapons permit. Isetts’ attorneys, Linda Wong and Daniel Fleming, both partners at Wong Fleming of Princeton, immediately sought to re-open discovery over events that preceded the original settlement. They said they needed access to that information because the defendants’ latest conduct was related to the incidents that led to the first suit. Superior Court Judge Carol Ferentz granted summary judgment, saying, “the intent of settlement [is that] the defendants now shouldn’t be sucked back into a morass of discovery that’s been waived. This quite frankly in this Court’s opinion is one purpose of settlement, and … settlements [are] looked upon with favor by the Courts.” Ferentz limited discovery to events that occurred after March 5, 2001, the date Isetts settled his initial CEPA claim. In Monday’s ruling, Fisher said broad discovery should be allowed in cases alleging violations of civil rights, including CEPA claims, because evidence of prior bad acts may be admissible under the state Supreme Court’s ruling in Rendine v. Pantzer, 141 N.J. 292 (1995). “Broad discovery and liberal procedures for discovery, as Chief Justice Vanderbilt said in Lang v. Morgan’s Home Equipment Corp., 6 N.J. 333 (1951), ‘are essential to any modern judicial system in which the search for truth in aid of justice is paramount,’” Fisher wrote. “As a result, our rules expansively declare that a party ‘may obtain discovery regarding any matter, not privileged, which is relevant to the subject matter involved in the pending action.” Fisher said the case turns on whether the “right” to seek discovery in a later unreleased action is within the ambit of the release, by which Isetts surrendered “any and all” of his existing “claims, rights, actions and causes of action.” He found it was not. “Of the many potential definitions which might be assigned to the word ‘right,’ its associated words suggest that it should be limited to the ‘right’ to make a ‘claim’ or assert a ’cause of action,’ and should not be interpreted as including the ‘right’ to seek discovery which would otherwise attach to a later unreleased claim,” Fisher wrote. Fisher warned Wong and Fleming that they could not conduct a fishing expedition, saying the ruling “does not necessarily mean that the parties have an unfettered right to duplicate the same discovery which could have been obtained during the course of the first suit had it not been dismissed.” The trial court, Fisher said, should limit pre-settlement discovery if it “begins to unduly or unnecessarily overtake the post-settlement discovery in amount or intensity.” The appellate court took no stance on whether the evidence adduced in discovery would eventually be admitted. Fleming says civil rights and employment lawyers will welcome the ruling. “It’s consistent with the expanding rights of plaintiffs to get liberal discovery to establish their claims,” he says. “This tells defendants they can’t shield their prior bad acts just because they thought they settled a prior claim.” David Fox, the lawyer representing the borough and the police department, says he is “deeply disappointed” by the ruling and the creation of new law. He says he plans to ask for permission to appeal to the Supreme Court. “I have great respect for the Appellate Division and the entire judicial system … but this is way out of bounds,” says Fox, a partner at Livingston’s Fox and Fox. “This disregards the whole concept of settling claims and going forward.”

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