New Jersey Appellate Division Broadens Scope of Sham Affidavit Doctrine
Last month, in an opinion approved for publication, the New Jersey Appellate Division, in Metro Marketing, LLC, et al. v. Nationwide Vehicle Assurance, Inc., et al., addressed whether a party who switched sides mid-litigation entered a “sham affidavit,” a self-serving certification that directly contradicts prior representations in order to create an issue of fact, after the side-switching took place.
In this non-compete litigation between rival telemarketing firms, the plaintiffs sued their former employees for misappropriation of trade secrets. Two scenarios arose in which the sham-affidavit doctrine was potentially implicated. The first was after a defendant who had been deposed returned to the plaintiffs’ employ and submitted a certification directly contradicting his prior deposition testimony. The second was after a co-defendant, who was also rehired by one of the plaintiffs’ companies after his deposition, contradicted his former testimony during a secretly recorded phone call. The trial court excluded both pieces of evidence and granted summary judgment to the defendants, dismissing all of the plaintiffs’ claims.
On appeal, the Appellate Division ruled that the court below properly excluded contradictory testimony of the first defendant. On this issue of first impression, the court held that the sham-affidavit doctrine could apply in a side-switching scenario where: (1) a co-defendant is deposed; (2) that deponent thereafter obtains a job with the plaintiff; (3) the deponent then aids his new employer by signing certifications recanting his deposition testimony; and (4) the plaintiff offers those certifications in opposing summary judgment motions by the other defendants. The court held that a “litigant should not be able to woo away an opposing party who already has been deposed and then, having taken that party under its fold and presumptive control by hiring or rehiring him, obtain from that party a contradictory affidavit to defeat summary judgment.” An unexpected “about-face” is exactly what the sham-affidavit doctrine seeks to avoid.
Nevertheless, the Appellate Division remanded the matter after finding the trial court erred in rejecting evidence of the second co-defendant’s recorded telephone conversation. Specifically, the co-defendant, despite admitting that he had violated his non-compete agreement, did not know that he was being recorded. And since such evidence had the capacity to support many of the plaintiffs’ claims, the Appellate Division held that it should have been considered by the court below.
This case is an important ruling, as it has expanded the scope of the sham-affidavit doctrine. Prior to this ruling, the doctrine applied only in scenarios where an offending affidavit or certification was made by the same party presenting it in opposition to summary judgment.