ALM Properties, Inc.
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Daily Decision Service Alert: Vol. 22, No. 25 ? February 6, 2013
New Jersey Law Journal
STATE COURT CASES
BANKING AND FINANICIAL INSTITUTIONS REAL ESTATE
06-4-8934 Hudson City Savings Bank v. Colyer, Chancery Div.-Bergen Cy. (Doyne, A.J.S.C.) (20 pp.) Defendants seek to dismiss plaintiff's foreclosure complaint for failure to mediate in good faith and for failure to provide responses to defendants discovery requests. The primary issue is whether a mortgagees strict adherence to its own internal guidelines for mortgage modification can meet the obligation to mediate foreclosure matters in good faith. The court finds that strict adherence to financial guidelines may not satisfy requirements of good faith. In this case, however, there is insufficient information to find lack of good faith and the court denies defendants motion to dismiss on that basis. Defendants offer no expert testimony to indicate what is reasonable or whether plaintiffs criteria are unreasonable or were applied unreasonably. Plaintiffs haste to decline defendants modification application based upon formulaic facts is not impermissible on its face. For plaintiff to attend a judicially-mandated mediation session without intending to entertain any proposal would qualify as a lack of good faith. However, if a mortgagee relies on in-house guidelines, touted as reasonable, and applies those guidelines consistently in every modification application, the specter of lack of good faith may be diminished. The court also denies defendants motion to dismiss for noncompliance with discovery requests.
CIVIL PROCEDURE JURISDICTION AND SERVICE OF PROCESS
07-2-8935 Capital One Bank v. Jovanovic, App. Div. (per curiam) (7 pp.) Defendant appeals from the denial of his motion to vacate a Special Civil Part default judgment against him on a credit card debt. Finding that in light of defendant's unrefuted evidence of his move to Georgia and then to the Republic of Serbia, plaintiff was required to effect service pursuant to Rule 4:4-4(b) and 4:4-5 but does not contend that it did so, and even if Rule 6:2-3 applied, the proofs do not support a conclusion that service was effective where defendant presented a copy of an envelope, marked certified mail, that was refused by his father and plaintiff has provided no certification or other proof that the ordinary mail sent to defendant at a New Jersey address was not returned. Therefore, the panel concludes that the motion judge erred in denying defendant's motion to vacate the default and default judgment and to file an answer to the complaint.
11-2-8936 Kohel v. Bergen Auto Enterprises, L.L.C., App. Div. (per curiam) (10 pp.) Plaintiffs entered into a sales contract with defendant (Wayne Mazda) for the purchase of a used Mazda. Plaintiffs agreed to pay $26,430.22 for the Mazda and were credited $7,000 as a trade-in for their Nissan. Wayne Mazda assessed plaintiffs a net pay-off of their loan on the Nissan and agreed to remit the balance due to satisfy the lien. Plaintiffs took possession of the Mazda with temporary plates and left the Nissan with defendant. A few days later, defendant advised plaintiffs that the Nissan's vehicle identification tag was missing, it was unable to sell the car, and offered to rescind the transaction. Plaintiffs refused. When the temporary plates on the Mazda expired, defendant refused to provide plaintiffs with the permanent plates they had paid for. Defendant also refused to pay off the Nissan loan. Thus, plaintiffs continued to make payments on both cars. Plaintiffs filed a complaint alleging breach of contract, breach of the implied covenant of good faith and fair dealing, and violation of the Consumer Fraud Act (CFA). The trial court found there was a breach of contract by Wayne Mazda but no violation of the CFA. The court entered judgment of $5,405.17 in favor of plaintiffs. The appellate panel affirms the judgment, rejecting Wayne Mazdas argument that plaintiffs' delivery of the Nissan without a VIN tag was itself a breach of the contract of sale. Also, plaintiffs attempt to remedy the VIN tag issue by obtaining a replacement were frustrated by defendant's unreasonable conduct.
FAMILY LAW CHILD ABUSE
20-1-8937 Division of Youth and Family Services v. A.L., Sup. Ct. (Rabner, C.J.) (44 pp.) The finding of abuse and neglect under Title 9 cannot be sustained because the division failed to show actual harm or demonstrate imminent danger or a substantial risk of harm to the newborn child, which N.J.S.A. 9:6-8.21(c)(4)(b) specifically requires.
FAMILY LAW EQUITABLE DISTRIBUTION
20-2-8938 Gupta v. Gupta, App. Div. (per curiam) (14 pp.) Plaintiff appeals the denial of her application to vacate a matrimonial settlement agreement (MSA) incorporated in a judgment dissolving her marriage to defendant. She also contends that the trial court erred in awarding defendant counsel fees and costs he incurred on his successful cross-motion to enforce plaintiff's obligations under the MSA and in defending against her motion to vacate the MSA. In her motion to vacate the MSA, plaintiff alleged that defendant fraudulently misrepresented his share of his medical practice. The appellate panel finds the trial court appropriately declined to set aside the MSA based on defendant's nondisclosure of his post-complaint acquisition of his partner's interest in the practice, finding plaintiff failed to show that defendant's misrepresentation was materially relevant to the distribution of marital property. There is no evidence that defendant's income exceeded the amount of income noted in the MSA as the premise for support. With the exception of the award of attorney fees, the panel affirms the orders on appeal. The panel vacates the attorney fee award and remands for reconsideration.
23-2-8939 Gutierrez v. Travelers Property and Casualty Co. of America, Inc., App. Div. (per curiam) (7 pp.) In this declaratory judgment action seeking a declaration that Travelers provided coverage to a subcontractor, Builders of America Inc., that allegedly performed negligent work as part of an extensive home improvement project, plaintiffs appeal from an order that granted summary judgment to Travelers, finding no coverage for plaintiffs' claims against BOA. The panel affirms substantially for the reasons expressed below. Because the policy was an occurrence policy, and the severe cracking, shifting and other major deficiencies did not begin to develop until well after the date the policy was cancelled, there was no covered property loss during the policy period and summary judgment was appropriate.
23-2-8940 Nascarella v. American International Group, Inc., App. Div. (per curiam) (6 pp.) Plaintiff was a passenger in a pick-up truck driven by defendant Joseph Petrocelli when she suffered injuries during an accident. The pick-up was owned by Joseph's friend, who was unrelated and did not reside with him. Plaintiff filed a complaint against Joseph alleging negligence, and seeking a declaration that liability insurance coverage under a personal automobile policy issued by American International Group Inc. (AIG) to Robert Petrocelli, Joseph's brother, extends to Joseph. The only named insured is Robert. A Lincoln Navigator is listed on the policy as a covered auto. Clement Petrocelli, Robert and Josephs father, is listed as a driver. As the Navigator is owned by Robert and Clement, plaintiff argues that Clement is an "insured" under the policy, and because Joseph resides with Clement, he is covered as a "family member." In granting AIG's motion to dismiss, the motion judge determined there was no coverage for Joseph while he was driving an uncovered vehicle. The appellate panel affirms, finding that under the unambiguous policy exclusion, coverage for a family member of a non-resident relative, like Joseph, is only provided when driving a covered auto.
LABOR AND EMPLOYMENT EMPLOYEE BENEFITS
25-2-8941 Williams v. City of Camden, App. Div. (per curiam) (11 pp.) In this dispute over payment of sick leave and health benefits to a retired municipal employee, the city appeals the order requiring it to pay plaintiff $67,787.19 in accrued sick time. Plaintiff cross-appeals the denial of his motion to require the city to pay him $29,544 in health care premiums. The panel affirms, substantially for the reasons expressed by the judge below. Because the applicable collective bargaining agreement stated that upon retirement from service to the city, employees would receive 50% of accumulated sick time as additional severance, and did not expressly state that retirement had to be from active employment, plaintiff, who was advised that he would be laid off from his employment with the city on January 18, 2011, and who filed for retirement but because he filed after January 1, his retirement could not become effective until February 1, 2011, was still entitled to sick leave pay. Also, although the city was required to provide health care coverage for plaintiff because he had over 25 years of service to the city, since he had not obtained substitute coverage for the period that the city refused to provide coverage and had had no health care claims, he suffered no damages from the city's failure to provide coverage and he is not entitled to recover the health care premium that the city would have paid during the period he was without coverage.
LANDLORD/TENANT LAW RENT REGULATIONS
27-2-8942 Burns v. Hoboken Rent Leveling and Stabilization Board, App. Div. (Lihotz, J.A.D.) (17 pp.) We review defendant Bloomfields challenge to an order denying its motion to vacate plaintiffs voluntary dismissal because it was not made a party to the stipulation. We agree the trial judges denial of Bloomfields motion to vacate the stipulation of voluntary dismissal was error because the stipulation failed to conform to requirements set forth in Rule 4:37-1(a). However, the error was harmless as the judge considered and granted plaintiffs cross-motion to dismiss the action with prejudice, pursuant to Rule 4:37-1(b). [Approved for publication.]
37-2-8943 Newton v. Public Service Electric & Gas Co., App. Div. (per curiam) (8 pp.) Appellant appeals from the Law Division order dismissing his complaint against Public Service Electric and Gas Company (PSE&G) based upon lack of subject matter jurisdiction. Appellant has engaged in multiple proceedings, both in the courts and before the New Jersey Board of Public Utilities (BPU), regarding the propriety of bills he has received for providing electric service at his residence and related issues. Plaintiff filed a complaint in the Chancery Division regarding this dispute, in which he sought injunctive and other relief. That action was dismissed by an order which specified that the dismissal was without prejudice to appellant's right to file an action before the BPU. Appellant availed himself of that right, filing an extensive petition with the BPU involving the same subject matter. The matter was deemed a contested case and transferred to the Office of Administrative Law (OAL) and remained pending when appellant appellant filed the Law Division complaint in this case. The appellate panel affirms the dismissal of the case for lack of subject matter jurisdiction where primary jurisdiction lies with the BPU.
35-5-8944 Howarth v. Township of Mantua, Tax Ct. (DeAlmeida, J.T.C.) (11 pp.) Plaintiffs property was for many years assessed and taxed as farmland pursuant to the Farmland Assessment Act. On October 25, 2010, the municipal tax assessor denied plaintiffs farmland assessment application for tax year 2011. Plaintiff did not file an appeal and paid the non-farmland taxes. In September 2011, the assessor filed a complaint with the Gloucester County Board of Taxation seeking the assessment of rollback taxes on the property for tax years 2008, 2009 and 2010. The taxpayer then filed an appeal of the denial of his 2011 farmland assessment application. The assessor rejected the appeal as untimely. Plaintiff filed a complaint in the Tax Court. Here, the court concludes that the Board correctly rejected plaintiffs late attempt to appeal the denial of farmland assessment for his property for tax year 2011. Plaintiff received notice of each step of the proceedings but did not file an appeal by the April 1 statutory deadline. No statutory provision authorizes the Board to accept late challenges to the denial of farmland assessment for good cause or any other reason. Nor does applicable case law support plaintiffs position. Defendants motion for summary judgment is granted. The complaint is dismissed.
FEDERAL COURT CASES
42-6-8945 In re Jack H. Boyajian, Debtor, Bankruptcy Ct. (Stern, U.S.B.J.) (31 pp.) Debtor-defendant Jack Boyajian filed a Chapter 7 bankruptcy petition in August 2009. The trustee filed the immediate adversary proceeding in January 2010, seeking the denial of a bankruptcy discharge for the Debtor, based upon 11 U.S.C. § 727 (a)(2) through (a)(5). The court notes thatBoyajian, well educated in finance and law, has been an active and apparently sophisticated businessman. He operated in the real estate marketplace as a broker, developer and converter of cooperative apartments to condominiums, and as a nationwide debt collector, commercially and through his law practices. Boyajian attributes his bankruptcy to overextension in real estate development and the markets crash. Boyajian has scheduled an enormous amount of debt (disputed or otherwise), bulking up to $39,640,342. Yet his estate will have no assets to distribute to creditors. The court finds the Debtor has, without justification, failed to keep or preserve adequate records required by the Bankruptcy Code so as to garner a discharge in bankruptcy. The Debtors effort to cure his recordkeeping failure by submitting, years post-petition, financial information, including a raft of tax returns, will not be permitted. Discharge is denied this debtor. [Filed January 31, 2013]
LABOR AND EMPLOYMENT EMPLOYEE BENEFITS
25-7-8946 Dunn v. Johnson & Johnson, U. S. Dist. Ct. (Shipp, U.S.M.J.) (14 pp.) Dunn, formerly employed as a warehouse technician and who operated a forklift, seeks the continued payment of long term disability benefits under the Johnson & Johnson long term disability plan. The court concludes that there is a reasoned basis for defendants' determination, based on substantial evidence in the record and in consideration of Dunn's limitations, that she could perform sedentary work and therefore is not totally disabled under the terms of the plan. Therefore, defendants' decision to terminate benefits is not arbitrary or capricious and their motion for summary judgment is granted. [Filed January 13, 2013]
LABOR AND EMPLOYMENT EMPLOYEE BENEFITS
25-7-8947 McCann v. Unum Provident, U. S. Dist. Ct. (Cooper, U.S.D.J.) (35 pp.) Plaintiff, a physician hired to serve in a hospital's two-year graduate trainee physician program, doctor filed this breach of contract action alleging that he purchased a supplemental long-term disability insurance policy from defendant, that defendant determined that he was totally disabled under the policy and began making payments, and thereafter determined that he was no longer totally disabled and terminated his benefits. He seeks payment for his allegedly past-due benefits and reinstatement of his monthly benefit payments. The court finds that the policy is a part of the Residents' Supplemental Disability Insurance Plan, that the RSDP was either established or maintained by the hospital to provide long term disability benefits to participants, such as McCann and therefore is an employee welfare benefit plan. Accordingly, count I of the complaint is governed by ERISA and defendant's motion for summary judgment is granted. The court also rejects plaintiff's claim that the ERISA safe harbor provision removes the policy, and thus removes count I, from the sphere of ERISA's coverage. [Filed January 31, 2013]
PRODUCTS LIABILITY JURISDICTION AND SERVICE OF PROCESS
32-7-8948 Catalini v. Gleason Consumer Products Co, Dist. Ct. (Martini, U.S.D.J.) (10 pp.) Plaintiffs commenced this products liability action in state court. The Gleason Defendants removed the action on the basis of diversity and then filed a motion to dismiss for lack of personal jurisdiction. Plaintiffs rely on the stream-of-commerce theory to assert personal jurisdiction over the nonresident Gleason Defendants. The Court finds the Gleason Defendants purposefully availed themselves of the privilege of conducting business in New Jersey. First, the Gleason Defendants are the manufacturer of the hand truck which caused Plaintiffs claimed injuries. Second, the Gleason Defendants shipped over 34,000 similar hand trucks directly to Home Depot with the understanding that they would be sold in Home Depots located in four states, including New Jersey. In addition, the Gleason Defendants shipped 330 hand trucks directly to Home Depot retail locations in New Jersey. Finally, Plaintiff purchased the hand truck from a Home Depot in New Jersey, and suffered injuries in this state. The Court has personal jurisdiction over the Gleason Defendants and they have failed to present any compelling arguments showing why the exercise of jurisdiction over them would be unreasonable. The motion to dismiss for lack of personal jurisdiction is denied. [Filed January 28, 2013]