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Daily Decision Service Alert: Vol. 21, No. 245 ? December 19, 2012
New Jersey Law Journal
STATE COURT CASES
07-2-8502 Henderson v. Castro, App. Div. (per curiam) (4 pp.) Plaintiff filed a complaint in March 2010 for injuries sustained in an auto accident almost two years before. Service of process was not completed until October 2011, after the case's administrative dismissal in April 2011 as to all defendants for lack of prosecution. Plaintiff appeals the order granting the motion of two defendants to dismiss the complaint with prejudice. Finding that the motion judge did not abuse his discretion by following the plain language of Rule 1:13-7(a), which requires that a plaintiff show "exceptional circumstances" when seeking to reinstate a multi-defendant case more than 90 days after an administrative dismissal, the panel affirms.
09-2-8503 Trico Equipment Inc. v. Ellsee Construction, Co., LLC, App. Div. (per curiam) (22 pp.) Defendant rented an excavator from plaintiff which failed mechanically on the second day of the rental. Plaintiff alleged that defendant misused the equipment and sued to recover repair costs. Defendant filed a counterclaim alleging, inter alia, breach of contract and violation of the Consumer Fraud Act for failure to provide a written rental agreement. Both parties appeal the net judgment in favor of plaintiff finding that defendant caused the machine's failure and that defendant had proven consumer fraud losses as the absence of a written rental contract was a violation of the CFA. The panel concludes that defendant did not prove a CFA violation based on the failure to provide a written rental agreement because defendant failed to prove that a statute or CFA regulation was violated by that failure where no standard rental agreement was created or preserved and defendant did not sign any such document. Finding that the case should have been decided as purely a contractual case, and looking to defendant's 2002 application for credit with plaintiff, the rental delivery and inspection form signed by defendant, the insurance certificate request faxed to defendant, and plaintiff's first rental invoice, the panel concludes that defendant's interpretation of the parties' agreement was reasonable and that plaintiff was not entitled to recover the expense of repairing the excavator where defendant had paid for a physical damage waiver. The panel concludes that neither party proved entitlement to recovery of damages from the other and that both the complaint and the counterclaim should have been dismissed.
CONTRACTS REAL PROPERTY LIENS
11-2-8504 L&W Supply Corporation v. DeSilva, App. Div. (Ashrafi, J.A.D.) (18 pp.) The Construction Lien Law, N.J.S.A. 2A:44A-1 to -38, and Craft v. Stevenson Lumber Yard Inc., 179 N.J. 56, 63 (2004), impose an obligation on a materials supplier that files a construction lien to show that it applied payments correctly against several open accounts of a contractor that purchased materials for different building jobs. This opinion elaborates on that obligation and holds that, when the contractor has not provided specific, reliable instructions as to the allocation of its payment based on the source of the payment funds, or when a reasonable supplier should suspect that the contractor has not used an owners funds to pay for materials supplied for that owner, then the supplier must make further inquiry and attempt to verify the source of the payment funds so that it can allocate them to the correct accounts. [Approved for publication.]
17-2-8505 New Jersey Department Of Environmental Protection Oversight Resource Allocation v. Nanak Auto Fuel, Inc., App. Div. (per curiam) (9 pp.) Defendants operated a gas station and reported to the New Jersey Department of Environmental Protection (NJDEP) that hazardous substances had been discharged from underground storage tanks into the groundwater. A remedial investigation report confirmed the presence of hazardous substances. Defendants appeal from the final agency decision of the NJDEP assessing a civil penalty against them of $20,000 for failure to sample potable wells, and $20,000 for failure to maintain and sample a "point of entry" treatment unit (POET) at a residence adjacent to their property. These requirements had been imposed pursuant to a NJDEP's field directive. Defendants argue that the failure to report sampling results was due to noncompliance by their environmental consultants and that the contamination levels have now been found to be "de minimus." The appellate panel affirms, finding that as owners and operators of the underground storage tanks, defendants were the responsible parties for noncompliance with NJDEP requirements. Also, the fact that the leak source has been eliminated does not absolve defendants from monitoring, sampling and reporting on the levels and spread of the existing contamination in the groundwater.
52-2-8506 M.G. v. Eastern Camden County Regional School District Board Of Education Records Custodian, App. Div. (per curiam) (14 pp.) Plaintiff M.G., a student, appeals from the dismissal of his claim that defendant, Eastern Camden County Regional School District Board of Education, violated the Open Public Records Act (OPRA). While a prevailing party fee dispute was pending remand from the Third Circuit, M.G. sought school records of attorney bills and other documents related to his federal claim against the school. The appellate panel affirms the findings by the Law Division judge that the documents provided by the Board were adequate and responsive to his requests, and other requested documents were protected by the attorney-client privilege or otherwise not subject to OPRA.
TRUSTS AND ESTATES ATTORNEY/CLIENT
38-2-8507 I/M/O Estate of Krzeminski, App. Div. (per curiam) (16 pp.) Attorney Joel A. Davies appeals from an order denying his motion for reconsideration of the amount of attorney's fees the Probate Part awarded to him following litigation of a contested will. He contends that the court reduced his requested fee based on an improper policy of capping the hourly rate where the attorney's fees are to be paid out of the estate. Although the panel agrees with Davies that a judge's personal policy or a local court policy should not be the basis for determining reasonable
attorney's fees pursuant to Rule 4:42-9, it finds that the judge in this case did not abuse his discretion in reducing the $350 hourly rate Davies requested based on his finding that all of the attorneys involved in the matter had impliedly agreed to the reduced rate at the time of the settlement discussions, and it affirms the judge's order.
WORKERS COMPENSATION AND OTHER COMPENSATION SYSTEMS
39-2-8508 Terebush v. Creative Safety Products, App. Div. (per curiam) (5 pp.) Petitioner George Terebush appeals from the dismissal of his workers' compensation claim petition, in which the Judge of Compensation found that his automobile accident did not arise out of and in the course of his employment. This appeal involves the interpretation of the "going and coming rule." Terebush, who lived in Avenel, was employed by Creative Safety Products as a magician and puppeteer and conducted school assembly programs. Creative's office was in South Hackensack. Terebush received his work assignments and pay by mail. Terebush was paid a salary. He drove a vehicle owned by Creative from his home to various schools and did not use the vehicle for his personal use. Terebush did not receive any specific payment for mileage or travel time above his annual salary. On his way home from a school located approximately 40 miles from his home, Terebush was involved in the car accident. The appellate panel affirms the dismissal of his workers compensation claim, finding the Judge of Compensation reasonably found that Terebush's place of employment was at the school where he performed on a particular day and that the school located 40 miles from his home did not constitute a distant job site.
14-2-8509 State v. Sanders, App. Div. (per curiam) (49 pp.) Defendant appeals from his conviction and sentence for murder, felony murder, and multiple armed robberies and carjackings. Defendant challenges the validity of the warrantless search of his girlfriend's apartment; the voluntariness of his self-incriminating custodial statement; the admission of hearsay statements; and his sentence. The appellate panel affirms the convictions but remands for resentencing. The State agrees with defendant that the court erred in omitting a NERA-based period of parole ineligibility, the sentence is illegal, and resentencing is required, but asserts the court is not barred from increasing the parole ineligibility term. The panel detects a more fundamental problem with the sentence for felony murder, finding the court should have merged the felony murder conviction into the intentional murder conviction, instead of the reverse. The court should have sentenced defendant for intentional murder, not felony murder. Since defendant has not completed his sentence, the court may correct the illegality and impose a sentence for purposeful and knowing murder subject to NERA.
FEDERAL COURT CASES
42-6-8510 In re Cordova, U. S. Bankruptcy Ct. (Winfield, U.S.B.J.) (8 pp.) Jose Cordova and Nancy Pavic filed for relief under Chapter 7 of the Bankruptcy Code. The trustee moves to compel the debtors to turnover post-petition rental income to the trustee from property located in Paterson. The debtors opposed the motion, arguing that the rental income at issue is not property of their bankruptcy estate and not recoverable by the trustee. The court denies the motion, holding that because of the prepetition absolute assignment of rents to the lender, the rents from the debtors' property are not property of the estate under sections 541(a)(1) or (a)(6) and the trustee may not compel their turnover. Further, because the rents are not property of the estate, the trustee lacks standing to compel turnover of the rents. [Filed December 17, 2012]
46-7-8511 Mendez v. New Jersey State Lottery Commission, U. S. Dist. Ct. (Wolfson, U.S.D.J.) (17 pp.) In this action, plaintiff, who claims to have purchased a winning lottery ticket later found and cashed in by certain of the non-state defendants, alleges that the state defendants deprived him of his procedural due process rights and to a default judgment in his earlier state case, aided by the non-state defendants (who include plaintiffs' former attorney), in violation of 42 U.S.C. section 1983; the state defendants deprived him of his default judgment by abuse of process; and the state and non-state defendants deprived him of his due process rightsto a fair trial. He asserts that the later two claims allege unspecified civil rights violations under section 1983 and conspiracy to interfere with civil rights pursuant to section 1985. The court holds, inter alia, that plaintiffs complaint fails to state a cause of action under 42 U.S.C. § 1983 or § 1985 against the moving defendants as his claims against the state defendants are barred by sovereign immunity under the Eleventh Amendment; his claims as to the non-state defendants fail as they are not state actors within the meaning of § 1983 and plaintiff has failed to allege that any of their actions were motivated by a class-based invidiously discriminatory animus. Defendants' motion to dismiss are granted. [Filed December 17, 2012]
46-7-8512 Mikhaeil v. Santos, U. S. Dist. Ct. (Martini, U.S.D.J.) (5 pp.) Plaintiff Adel Mikhaeil brings this Section 1983 action for false arrest and false imprisonment against defendants, including police officers and the Jersey City Police Department (JCPD). On August 7, 2008, Defendant Detective Broady took Angel Santos statement that Plaintiff had threatened him. Santos reported that he was a witness for the Attorney Generals Office and the Hudson County Prosecutors Office in a case against Mikhaeil. Santos stated that Mikhaeil and Michaelangelo Conte, a reporter for the Jersey Journal, were in a car outside of his home, and as they were driving off, Mikhaeil screamed You rat! Youre going to get your[s], Youre dead you rat . . . by the end of the month its gonna be two dead rats! Plaintiff was arrested and charged with making terroristic threats and witness tampering. Mikhaeil later spoke with Conte, who told Mikhaeil that he had informed the JCPD and the Hudson County Prosecutor that Mikhaeil was not in the car with him on August 7, 2008. The criminal proceeding against Mikhaeil was dismissed. Here, the Court grants Defendants motion for summary judgment, finding Plaintiff failed to establish the violation of a constitutional right because the undisputed facts show law enforcement had probable cause to arrest him. [Filed December 14, 2012]
51-7-8513 Bryjak v. Napolitano, U. S. Dist. Ct. (Martini, U.S.D.J.) (5 pp.) Plaintiff filed this petition against Defendants Janet Napolitano, Secretary of the Department of Homeland Security (DHS), and Alejandro N. Mayorkas, Director of U.S. Citizenship and Immigration Services (USCIS), seeking review of the denial of his naturalization application. Plaintiff does not dispute that he made an oral statement under oath in his immigration interview that he had only been arrested once when actually he had been arrested twice for minor offenses. The Court finds that the evidence fails to support Plaintiffs assertion that he forgot about the second arrest. The Court finds Plaintiff made that statement with the subjective intent of obtaining immigration benefits. The Court upholds the decision of the USCIS. Defendants motion for summary judgment is granted. Plaintiffs cross-motion for summary judgment is denied. [Filed December 14, 2012]
04-8514 Federal Trade Commission v. Circa Direct LLC, U. S. Dist. Ct. (Bumb, U.S.D.J.) (26 pp.) Plaintiff filed a complaint alleging that defendants engaged in certain deceptive practices. The FTC agreed to a stipulated final judgment and order with defendants, settling the FTC's claims without admitting to liability which calls for the turnover of substantially all of defendants' assets to the FTC but authorizes the release of frozen funds to pay attorney fees contingent on FTC consent or approval of the court. Having exhausted its initial $150,000 retainer with its defense counsel, and because the FTC would not agree to release funds to meet its fees and expenses, defendants move for release of $250,076.50. The court reviews defendants' claimed rates and hours, decides that although this is not a statutory fee-shifting case, a lodestar type analysis is appropriate, and authorizes release of an additional $129,095 in fees from the frozen funds and an additional $6139.47 for expenses. [Filed December 17, 2012]
50-7-8515 Kasilag v.Hartford Investment Financial Services LLC, U. S. Dist. Ct. (Bumb, U.S.D.J.) (25 pp.) Plaintiffs filed this action on behalf of six mutual funds against the investment advisor to the funds alleging that it charged excessive investment management fees (count I) and excessive 12b-1 fees (count II) in violation of section 36(b) of the Investment Company Act of 1940. Defendant moves to dismiss. The court holds that while the standard under Jones and Gartenberg is onerous, plaintiffs' complaint alleges sufficient facts to satisfy their burden at this stage of the proceedings and that construing all of the facts in plaintiffs' favor, a plausible inference arises that defendant's management fees are so disproportionately large that they bear no reasonable relationship to the services rendered and could not have been the product of arm's length bargaining. It therefore denies the motion to dismiss count I. The motion is denied as to count II because the fact that defendant charges both front-end sales loads and 12b-1 fees with respect to Class A shares does not render the later excessive or differ from the statements defendant filed with the SEC and the remainder of plaintiffs' allegations in this count are sparse and conclusory. [Filed December 17, 2012]