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STATE COURT CASES CIVIL PROCEDURE � VACATING DEFAULT JUDGMENT � SERVICE � LANDLORD/TENANT 07-2-3287 Weekes, etc., et al. v. Sheppard, et ux., App. Div. (per curiam) (3 pp.) The court reverses the Law Division judge’s denial of defendants’ motion, pursuant to R. 4:50-1, seeking to vacate a default judgment in the amount of $750,000 that was entered against them in favor of their former tenants for injuries arising from their exposure to lead paint. The judgment is void as a result of improper service, as service was not made on a competent member of defendants’ household, but on their adult son, who was visiting briefly during the Christmas holidays, and who did not inform them of the papers he received. Moreover, the defendants filed a timely motion to vacate the default judgment, and have a potentially meritorious defense � that they promptly cured any lead paint violations found by inspectors to exist on the premises. [Decided March 22, 2006.] CONSTRUCTION � STATE COLLEGE CONTRACTS LAW 43-2-3259 Hall Bldg. Corp. v. Kean University, et al., App. Div. (Coburn, P.J.A.D.) (10 pp.) Pursuant to the State College Contracts Law, the defendant invited bids for construction of a multimillion-dollar renovation of its East Campus and Recital Hall. Plaintiff submitted the lowest bid, and Otto Building Co. the next lowest bid; each filed objections to the other’s bid. The university’s vice president for administration and finance, Connelly, disagreed with plaintiff’s objections to Otto’s bid and rejected plaintiff’s bid based on what he determined to be a deficiency in its response to one specification that he considered unwaivable. On the day after plaintiff filed its appeal, a letter was issued to Otto advising that its bid would be submitted to the board of trustees for approval. A stay was denied by the Appellate Division, but granted by the Supreme Court. The appellate panel reviews the apparent two-step process used in approvals by the defendant � the preliminary approval by Connelly and the subsequent approval by the board of trustees, and notes that nothing in the State College Contracts Law expressly or impliedly permits a board of trustees to delegate to an administrator its authority to decide among bidders. It questions Kean’s procedure, but finds it prudent to remand so that Kean’s attorney can determine whether the board of trustees wants the opportunity to render a final decision before further court involvement. Although not resolving the issue of whether plaintiff’s bid really was deficient, the panel discusses the issue and indicates that it might not have been. [Decided March 20, 2006.] CONTRACTS � FRAUD � RICO � MATRIMONIAL MATTERS � AMENDING PLEADINGS 11-3-3288 Wade v. Rinkleur & Assocs., Inc. v. Baldinger, Law Div. � Hunterdon Cy. (Buchsbaum, J.S.C.) (8 pp.) Plaintiff filed suit against defendant seeking repayment on an alleged loan. The defendant provided account management and/or financial services to the law firm of the third-party defendant, an attorney who defendant alleges colluded with plaintiff to defraud it by making a false claim of a loan from plaintiff to defendant. Defendant moves to amend its answer to assert a counterclaim against plaintiff and to amend its third-party complaint to assert a pattern of behavior constituting violations of New Jersey’s Racketeer Influenced and Corrupt Organizations statute (RICO); inter alia, defendant alleges that the plaintiff participated with the third-party defendant-attorney in an attempt by the latter to defraud his ex-wife of equitable distribution by giving plaintiff title to his properties. The court denies the motion, finding that the essential elements of a RICO claim are not present in this claim, and concluding that mere complaints about misconduct related to a matrimonial action trivialize the statute; they do not violate it. “In its haste to accuse plaintiff and the third-party defendant of unfathomable evils, defendant has failed to recognize the statutory purpose [of RICO] and improperly confused wrongful conduct with conduct that subverts enterprises through racketeering” and organized crime. The court does permit third-party defendant to amend his counterclaim to include an assertion that the contract at issue between the parties violates the Retail Installment Sales Act. [Decided March 17, 2006.] CORPORATIONS � DISPUTES � VALUATION OF INTEREST 12-4-3289 DelPrete v. Falciglia, Chancery Div. � Bergen Cy. (Doyne, J.S.C.) (12 pp.) In this “difficult, well-litigated and too-long protracted matter,” the plaintiff was previously awarded the value of his 30 percent contractual interest in the parties’ company as if he had separated from it on the date of his discharge, which the former judge found to be wrongful. The court declines the invitation for a “do-over” from counsel for both sides, and will not abandon the position taken by the former judge (now retired), nor will it significantly change the remedy she imposed. Recognition of reality, however, influences the decision on how best to implement her construct. Although hindsight provides for great clarity, it would be inequitable to simply ignore what has occurred subsequent to the date the former judge chose for valuation of the company. The court declines plaintiff’s application to reject the evaluator’s figure as “off the wall” and to fashion a new remedy using either of the two proposals plaintiff presents. The court is satisfied that the evaluator’s “fair value” figure � as opposed to his “fair market value” figure � is the appropriate valuation to be used, and that prejudgment interest should be added. The judge also discusses apportionment of costs. [Decided Feb. 17, 2006.] [Original opinion, related to 12-4-3290 below.] CORPORATIONS � DISPUTES � VALUATION OF INTEREST � PRE-JUDGMENT INTEREST 12-4-3290 DelPrete v. Falciglia, Chancery Div. � Bergen Cy. (Doyne, J.S.C.) (7 pp.) Although the court rejects most of defendant’s arguments on his motion seeking reconsideration of the court’s disposition of the valuation issues in this corporate dissolution/wrongful-termination matter, it does grant the motion with respect to defendant’s argument � presented for the first time � that it would be plainly wrong to award prejudgment interest on that part of the judgment that, presumably, would not have been available to the plaintiff as interest-producing income since 2001 (the year of valuation). Although defendant should have raised this argument in his prior papers, and the court could reject the argument for defendant’s failure to have done so, the court chooses to exercise its discretion and issues a formula to modify the final judgment where the interests of justice and good logic suggest, or dictate. [Decided March 17, 2006.] [Opinion on motion for reconsideration of 12-4-3289 above.] CORPORATIONS � REDEMPTION AGREEMENTS 12-4-3276 Pedicini v. CEPS Construction Co., Inc., et al., Chancery Div. � Somerset, Hunterdon and Warren Counties (Williams, P.J.Ch.) (30 pp.) In another chapter of plaintiff’s attempt to enforce a redemption agreement amongst the defendant-corporation’s shareholders, the court grants in part, and denies in part, defendants’ motion to dismiss plaintiff’s second amended complaint, which they assert contradicts the Appellate Division decision in this case.* The court grants the motion insofar as it seeks to dismiss (1) the inclusion of additional parties; (2) the claims against the corporate entity of one of the individual defendants; and (3) the contribution and indemnification claim. The court denies, without prejudice, the motion insofar as it seeks to dismiss the monetary damage claims pursuant to the Oppressed Minority Shareholder Act. Plaintiff is collaterally estopped from arguing the enforceability of the alleged oral redemption agreement in pursuit of his oppressed minority shareholder claims; however, he may argue that he erroneously thought there was an enforceable agreement in place as part of his minority shareholder claim. He may not argue that his reliance on the judicially unenforceable agreement was reasonable. To simplify the pending trial, the court bifurcates the liability and damages claims. [Decided March 17, 2006.] [*For the related Appellate Division opinion see DDS No. 12-2-2320 in the Dec. 19, 2005, Unpublished Opinions column.] CRIMINAL LAW AND PROCEDURE � JURY CHARGES 14-2-3240 State v. Perez, App. Div. (per curiam) (12 pp.) The appellate court reverses defendant’s drug convictions, agreeing with him that the trial judge’s final jury instructions, although not the subject of objection, were deficient to such a degree as to constitute plain error. First, a charge on identification was clearly required, as the entire defense rested on misidentification. Additionally, the charge on reasonable doubt was incomplete, as it omitted the important comparison between reasonable doubt and the preponderance burden of proof in civil cases. [Decided March 16, 2006.] CRIMINAL LAW AND PROCEDURE � JURY INSTRUCTIONS � LESSER-INCLUDED OFFENSES � ARMED ROBBERY � ASSAULT � KIDNAPPING 14-2-3282 State v. McConnell, App. Div. (per curiam) (8 pp.) In this armed robbery prosecution, the judge was mistaken in denying defense counsel’s request that the jury be charged on the lesser-included offenses of aggravated and simple assault. Although the circumstantial evidence of theft, when combined with the direct evidence that the armed intruders used force on the restaurant’s employees or threatened such use, was sufficient to support defendant’s conviction for armed robbery, the inference that a robbery was occurring was permissible, but not mandatory; the jury was free to reject it. Under the circumstances, the court’s “all-or-nothing” charge precluded the jury’s consideration of the lesser crimes, and required it to either convict defendant of armed robbery, or acquit him altogether. It is just this draconian choice that the submission of lesser-included offenses to the jury is designed to avoid. Further, the court erred in denying defendant’s motion for a directed verdict or acquittal on the kidnapping charge. Similarly, defendant’s conviction for false imprisonment must be reversed since the conduct providing its basis, like the conduct underlying the kidnapping conviction, was merely incidental to the underlying substantive offense of armed robbery. [Decided March 21, 2006.] CRIMINAL LAW AND PROCEDURE � JUVENILES � WAIVER TO ADULT COURT 14-2-3251 State v. Brandecker, App. Div. (per curiam) (12 pp.) Although rejecting the juvenile defendant’s contentions of error in his robbery prosecution in adult court, the appellate court finds two deficiencies in the proceedings that compel a remand: (1) the “form” nature of the prosecutor’s “check-marked” statement of reasons for the waiver decision; and (2) the failure of the record to support a conclusion that the trial judge exercised any judicial oversight of the reasons for waiver, as required by State v. J.M. [Decided March 17, 2006.] CRIMINAL LAW AND PROCEDURE � PRETRIAL INTERVENTION 14-3-3283 State v. Rodriguez, Law Div. � Essex Cy. (Vena, J.S.C.) (9 pp.) The prosecutor’s decision to reject the defendant’s admission into a pretrial intervention program was based on consideration of all of the relevant factors. However, it also considered an inappropriate factor � an inference that the defendant was involved in an ongoing criminal activity � that was arbitrary, irrational and an abuse of discretion. The decision is, therefore, reversed and remanded to the prosecutor’s office for review without consideration of the barrier to admission imposed by R. 3:28, Guideline 3(i) (denial based on nature of offense). [Decided March 13, 2006.] DEBTOR/CREDITOR � CREDIT CARDS � DEFAULT JUDGMENTS � ARBITRATION 15-2-3277 Discover Bank v. Kassem, App. Div. (per curiam) (4 pp.) The judge below aptly denied defendant’s motion to vacate a default judgment obtained against him by plaintiff with respect to defendant’s debt on a revolving credit card, finding that defendant had failed to establish either excusable neglect or a meritorious defense; the purported “arbitration award” entered in Florida, absolving defendant of his debt to Discover card, was a sham and null and void, as (1) the entity purporting to arbitrate the dispute between plaintiff and defendant lacked authorization to do so under the terms of the credit card agreement; and (2) the “arbitration” was conducted without notice to, or the participation of, the plaintiff. [Decided March 21, 2006.] DEBTOR/CREDITOR � PERSONAL LOANS � LIMITATIONS 15-2-3245 Flynn v. Sevastakis, et al., App. Div. (per curiam) (9 pp.) In 1988, the plaintiff and his then-wife loaned $15,000 to defendants � plaintiff’s sister and her then-husband � so that the husband could purchase a fishing boat and go into his own business. The hope was that the business would be successful so that the loan could be repaid, plaintiff advising his sister to “Get it back to us when you can.” Unfortunately, the business failed, and the boat was sold to the husband’s partner for $1,000. Over the ensuing years, plaintiff asked if the loan could be repaid, but was always told that defendants did not have the money. Although they promised to pay him out of the proceeds of sale of their home when they divorced, they did not do so. Plaintiff asked an attorney friend to write a demand letter in 2004. The issue at the bench trial was whether plaintiff’s loan was a “pay when able” loan or a “payable on demand” loan. If the former, the statute of limitations began to run when defendants sold their home; if the latter, then the statute of limitations had long run by the time suit was instituted. On the facts here, which could have supported a decision either way, the appellate panel declines to disturb the trial judge’s determination that the loan was a demand loan, and thus, time-barred. [Decided March 17, 2006.] EDUCATION � CHILD-CARE CENTERS � LICENSURE � ABBOTT FUNDING 16-2-3246 N.J. Dept. of Human Svcs. v. Love Center Day Care, App. Div. (per curiam) (12 pp.) The appellate court reverses the final administrative agency decision by the petitioner, the Department of Human Services (DHS), revoking the respondent’s child-care center license without a hearing. Based on “information” received, the DHS charged that respondent had submitted a fraudulent child-care inspection/measurement report. It also found that respondent was using an unauthorized trailer as a classroom in violation of building and fire codes. Although petitioner advised respondent that it had a right to a hearing, and respondent timely requested a hearing, the petitioner found “no material issues in dispute,” and did not transfer the matter to the Office of Administrative Law. The commissioner then granted the attorney general’s motion for summary disposition. The appellate court rejects petitioner’s assertion that no evidentiary hearing is necessary if there is no dispute as to any material fact; the respondent has an express statutory right to a hearing pursuant to N.J.S.A. 30:5B-10 and N.J.S.A. 52:14B-11. Moreover, the court finds that there are material issues in dispute. [Decided March 17, 2006.] FAMILY LAW � ALIMONY 20-2-3247 Citkowicz v. Citkowicz, App. Div. (per curiam) (10 pp.) The appellate panel affirms the Family Part judge’s two post-judgment orders (1) fixing alimony arrears for the summer months of 1995 through 2003 when plaintiff, a teacher, did not make the $150 per week alimony payment required by the parties’ agreement and the judgment of divorce; and (2) denying plaintiff’s motion to terminate alimony entirely, due to his retirement. As to the first contention, the panel rejects plaintiff’s assertion that laches barred defendant’s motion seeking the alimony arrears. The parties’ agreement is entitled to enforcement, as it was a comprehensive document in which various trade-offs were made and defendant reasonably relied on the expectation of the fixed-alimony amount for the specified duration, waiving any claims to plaintiff’s pension and any increase in alimony. As to the second contention, plaintiff voluntarily accepted his employer’s early-retirement package with awareness of his responsibilities under the agreement and the obligation he purposefully negotiated and undertook. His attempt to terminate alimony brings him to the court with unclean hands. [Decided March 17, 2006.] FAMILY LAW � CHILD SUPPORT 20-2-3234 Campbell v. Campbell, App. Div. (per curiam) (9 pp.) The Family Part judge aptly (1) decided that the emancipation of the parties’ daughter established a prima facie case for downward modification of plaintiff’s child support obligation; but (2) reduced the weekly obligation by only three dollars. Contrary to plaintiff’s assertions, the judge did consider his pay stubs, but did so against the information provided in plaintiff’s own certified statement of anticipated income. The judge properly determined that plaintiff failed to carry his burden of persuasion concerning a loss in overtime pay, and denied his motion without prejudice to renew with additional documentation from his employer. [Decided March 16, 2006.] 20-2-3260 Walsh v. Walsh, App. Div. (per curiam) (7 pp.) Rejecting the defendant-father’s contention that the change of circumstances he showed warranted a complete recalculation of child support, the court affirms the Family Part order awarding him a one-time, minimal lump-sum reduction of the child support fixed by the parties’ judgment of divorce, since the parties’ daughter did not return to plaintiff’s home from college during the summer months of 2004, but, instead, spent that time either abroad or at school. [Decided March 20, 2006.] FAMILY LAW � CHILD SUPPORT � PAROCHIAL SCHOOL TUITION 20-2-3261 Makara v. Marino, App. Div. (per curiam) (5 pp.) The Family Part judge justly (1) denied the plaintiff-mother’s application seeking to compel the defendant-father to pay a proportionate share of the Catholic school tuition for their 7-year-old son; and (2) permitted defendant, the noncustodial parent, to claim the child as an exemption on his income tax returns for years ending in odd numbers. As to the former issue, the judge found that there was no articulated reason under the guidelines for the child to attend private or parochial school, other than the mother’s own wishes; and that, while she had the right to make that choice, she must bear the cost. As to the income tax exemption, the judge’s decision was equitable and within her discretion, where she was offsetting monies that had been paid to plaintiff for day care that never was obtained, and that defendant would never otherwise recoup. [Decided March 20, 2006.] FAMILY LAW � CHOICE OF LAW � CHILD SUPPORT 20-2-3278 Carey, etc. v. Carey, App. Div. (per curiam) (13 pp.) The Family Part judge did not err by declining to enforce the property settlement and support agreement’s child-support provision or by interpreting the PSA under New Jersey, as opposed to Pennsylvania, law. Although PSA provisions incorporating foreign law as to issues of alimony and equitable distribution are more readily recognized and enforced, the rights of resident children cannot be terminated or circumscribed contrary to the law and public policy of New Jersey. The judge properly determined that child support for the children did not terminate at age 18, since they were attending college. The judge also properly denied defendant’s claim for a credit in the form of a child-support reduction for his assuming a “secret debt” incurred by plaintiff, because (1) New Jersey does not permit an equitable distribution credit to be taken against child support; and (2) the debt was incurred by the plaintiff for family expenses, rather than personal financial enhancement. Further, the judge appropriately calculated defendant’s child-support obligation according to the guidelines, made the increase retroactive to the date of plaintiff’s initial motion for modification, and calculated arrearages accordingly. [Decided March 21, 2006.] FAMILY LAW � CLAIMING CHILD AS TAX EXEMPTION 20-2-3291 Harris v. Kelly, App. Div. (per curiam) (4 pp.) The panel reverses that portion of a Family Part order that permitted plaintiff to claim the parties’ minor child as a tax exemption in 2005, and provided for alternating the exemption years thereafter. The matter is remanded for the analysis required by Gwodz v. Gwodz, as the Family Part judge did not consider any of the factors set forth in that case. [Decided March 22, 2006.] FAMILY LAW � DOMESTIC VIOLENCE 20-2-3262 Schmidt v. Bailey, App. Div. (per curiam) (6 pp.) The evidence supports the entry of a final restraining order against defendant based on his “assault” on plaintiff during an altercation he had with his 10-year-old son after baseball practice when he, irate over his son’s behavior in throwing down his water bottle and refusing to pick it up, grabbed the boy by the collar, bruising his throat, and refused the plaintiff-mother’s entreaties to let the boy go. During the physical struggle over the boy, plaintiff’s hand was cut. Even once plaintiff got the boy into her car, defendant proceeded to reach in through the car window, and ripped his son’s shirt. The judge found that plaintiff herself had suffered an injury, and that defendant should have “backed off” when the plaintiff tried to intervene, and was reckless in continuing to escalate the physical argument with plaintiff over the son. [Decided March 20, 2006.] FAMILY LAW � VISITATION 20-2-3292 McGrath v. McGrath, App. Div. (per curiam) (7 pp.) In a matter that is but “one skirmish in a long and bitter series of disputes” between plaintiff and defendant, his former wife, the court affirms the Family Part judge’s order regarding parenting time and denying plaintiff’s application for one week of compensatory parenting time relative to a missed visit, when plaintiff wanted to take his son on an annual fall vacation at a time when the boy was scheduled to be in school. Although the judge noted that plaintiff had been able to take his son to Disney World in November in the past, he rejected plaintiff’s assertion that this right should be made permanent, noting that, as the boy got older, it would be more difficult for him to miss school. The appellate panel is troubled by the parties’ actions in annually subjecting their son (and his school) to this conflict, and suggests that, absent the school’s written approval, neither party should be able to take the boy on a vacation that would cause him to miss school. [Decided March 22, 2006.] INSURANCE � HEALTH � MANAGED-CARE AGREEMENTS 23-2-3248 Jersey Shore University Med. Ctr., etc. v. Oxford Health Plans, Inc., App. Div. (per curiam) (13 pp.) The court reverses the dismissal of plaintiff’s complaint against defendant, alleging breach of the parties’ letter of agreement (LOA) requiring plaintiff to participate in defendant’s product networks, provided, however, that each such commercial product shall have a benefit design incorporating managed-care features. The LOA explicitly stated that it would not apply to any auto insurance product, workers’ compensation product, government product (such as Medicare or Medicaid) or any product that did not contain the managed-care benefit design. Any grievances were to be arbitrated. When defendant refused to cover substantial bills submitted by plaintiff for almost $800,000 in hospital charges rendered to four car accident victims, plaintiff threatened to arbitrate. Plaintiff argued that the patients were covered under health insurance products, and that these were not “auto claims,” as argued by defendant. The motion judge dismissed plaintiff’s complaint, finding that it had waived or was otherwise estopped from asserting its right to sue, and that the matters should have been arbitrated. The panel disagrees, noting that waiver is an intentional relinquishment of a known right; that it must be clearly, unequivocally and decisively shown; and that neither occurred here. Estoppel has no application on these facts. The matter is remanded so that the trial judge may determine whether the four claims are, or are not, subject to arbitration. [Decided March 17, 2006.] INSURANCE � HOMEOWNERS’ COVERAGE � ASSAULT 23-3-3293 Catenacci v. Gonzalez v. Anderocci, et al., Law Div. � Hunterdon Cy. (Buchsbaum, J.S.C.) (12 pp.) The plaintiff was at a party at the home of the third-party defendants, the Anderoccis, who were in Florida at the time and knew nothing about the party. Plaintiff alleged that he attempted to come to the aid of the Anderoccis’ daughter when defendant Gonzalez assaulted her, and defendant Gonzalez punched him in the face, causing a broken nose and chipped teeth. In this opinion, the court grants the motion for summary judgment filed by the third-party defendant Allstate, concluding that it owed no coverage to plaintiff or the defendant Gonzalez under the homeowners’ policy issued to Gonzalez’s parents, as Gonzalez’s actions were clearly intentional and not an accidental occurrence, or in self-defense. The court also grants summary judgment to the Anderoccis, concluding that they, as the owners of the home where the party took place, owed absolutely no duty to indemnify defendant Gonzalez, where they did not know him; did not know he was coming to their home; did not know about the party, as they were out of state; and provided no alcohol, or even ice, which was used in the course of the party. [Decided March 10, 2006.] INSURANCE � PIP COVERAGE � DISCOVERY 23-2-3294 Cunningham v. N.J. Mfrs. Ins. Co., App. Div. (per curiam) (6 pp.) In this PIP coverage dispute, the trial judge mistakenly exercised his discretion when he compelled (1) the deposition of the defendant-insurance carrier’s in-house counsel; and (2) production of defendant’s training materials regarding its claims-handling policies. Although plaintiff asserted that she was trying to discern defendant’s motive for denying her claim, such information was not relevant, nor likely to lead to the discovery of relevant information. Having reached this conclusion, the appellate court does not reach defendant’s further assertion that the testimony of the attorney may be shielded through application of the attorney-client privilege. [Decided March 22, 2006.] INSURANCE � SUBROGATION � AGENCY � NEGLIGENT ENTRUSTMENT 23-2-3264 N.J. Citizens United, et al. v. Hernandez, et al., App. Div. (per curiam) (10 pp.) The plaintiff-insurer, as subrogee of its insured, sought property damages and sued (1) defendant, the registered owner of an automobile; (2) Alvarez, the prospective purchaser of the vehicle; and (3) Flores, the operator of the vehicle at the time it hit plaintiff’s insured’s lawfully parked motor vehicle. The trial judge found defendant liable to plaintiff on the basis of agency and negligent entrustment; however, the appellate panel disagrees. The undisputed testimony was that Flores was not defendant’s employee, nor was she on a mission for him at the time of the accident; therefore, the presumption of agency was overcome. Moreover, since defendant never entrusted his vehicle to Flores, he cannot have negligently entrusted the vehicle to her; and there is a complete lack of evidence that he knew that Alvarez was going to permit the vehicle to be driven by anyone else. Judgment in favor plaintiff is reversed. [Decided March 20, 2006.] INSURANCE � VERBAL THRESHOLD 23-2-3265 Hernandez v. Perez, et ux., et al., App. Div. (per curiam) (6 pp.) Reversing the dismissal of plaintiff’s complaint, the panel disagrees with both of the motion judge’s conclusions and finds that plaintiff’s proofs were sufficient to withstand summary judgment, in that she (1) did establish, through positive MRI and EMG/NCV tests, physical examinations, and her expert’s findings, a genuine issue of material fact as to whether she sustained objective permanent injury in the subject accident; and (2) provided a sufficient Polk comparative analysis, deemed necessary because of a pre-existing lower back condition from a prior accident. [Decided March 20, 2006.] 23-2-3266 Cordasco, et vir. v. Eddy, App. Div. (per curiam) (7 pp.) Highlighting the deficiencies in plaintiff’s expert’s report, the appellate court agrees with the trial judge’s conclusions that plaintiff (1) did not prove that she sustained permanent injuries in the subject accident; and (2) did not satisfy the requirements of Polk v. Daconceicao by producing adequate proof to support her claim that the accident aggravated a pre-existing herniated disc in her neck. [Decided March 20, 2006.] 23-2-3279 Rogers v. Puma, et al., App. Div. (per curiam) (9 pp.) Reversing the grant of summary judgment to the defendants, the appellate court agrees with the plaintiff that he provided sufficient evidence from which a jury could find that he suffered a qualifying permanent injury to his knee caused by the subject motor vehicle accident. From the evidence, the jury could have found that the knee injury was a new injury; but, even if the jury found that the injury was an exacerbation of plaintiff’s pre-existing chondromalacia, his proofs met the comparative-analysis requirement of Polk, which the motion judge construed too narrowly. [Decided March 21, 2006.] 23-2-3295 Brown, et vir. v. Ritterman, App. Div. (per curiam) (7 pp.) The dismissal of plaintiff’s automobile negligence action is reversed, the appellate panel agreeing with plaintiff that she presented sufficient evidence from which a jury could find that she suffered a qualifying permanent injury caused by the accident. While plaintiff did not deny the existence of pre-existing pathology, she claimed aggravation of a pre-existing cervical injury and pre-existing right carpal tunnel syndrome; she also claimed a new left-sided carpal tunnel syndrome injury as a result of the subject accident. Although the judge acknowledged plaintiff’s proofs, he found that her injuries were not serious enough to carry her over the verbal threshold, a requirement that no longer exists. [Decided March 22, 2006.] LABOR AND EMPLOYMENT � DISABILITY AND RACE DISCRIMINATION 25-3-3296 Lowe-Surge v. Hagedorn Gero-Psychiatric Hospital, et al., Law Div. � Hunterdon Cy. (Buchsbaum, J.S.C.) (15 pp.) The court grants defendants’ motion for summary judgment, concluding that plaintiff has first, and most critically, not provided evidence that she was terminated from her position as a nurse administrator with the defendant-hospital; rather, the facts clearly indicate that she resigned. Therefore, even if she could prove that she was discriminated against based on race or the perception of disability, she cannot establish a prima facie case of discriminatory termination. Nevertheless, for the sake of completeness, the court addresses the merits of plaintiff’s discrimination claims, and concludes that her proofs also fail in that regard. [Decided March 10, 2006.] LABOR AND EMPLOYMENT � RETALIATION � DISCOVERY � INTENTIONAL TORTS � OPEN PUBLIC MEETINGS ACT 25-2-3267 Russo v. Atlantic City Bd. of Education, et al., App. Div. (per curiam) (17 pp.) Prior to his employment as a truant officer with the respondent Board of Education, plaintiff served as a board member, and was instrumental in its hiring of the district’s first African-American superintendent. Plaintiff asserted that this hiring was opposed by many members of the community, and that he was retaliated against during his employment for his role in the hiring. The court reviews the procedural history of the case and concludes that it was a manifest denial of justice under the circumstances presented to deny plaintiff the right to depose the defendants and a board member where, inter alia, although an intermediate discovery deadline had passed, the discovery end date had not expired. Moreover, there was no prejudice to defendants. Thus, the grant of summary judgment to the defendants on plaintiff’s retaliation, civil rights and discrimination claims is reversed. Additionally, the trial court erred in dismissing plaintiff’s intentional tort claims (intentional infliction of emotional distress and defamation) because plaintiff failed to file the required Tort Claims Act notice with the board; that requirement is only effective as to causes of action after June 29, 2004, and plaintiff’s claims predated this requirement. The judge did, however, appropriately dismiss plaintiff’s claim of Open Public Meetings Act violations, as there is no private right in an individual to seek damages for a violation of the act’s provisions. [Decided March 20, 2006.] LABOR AND EMPLOYMENT � UNEMPLOYMENT COMPENSATION 25-2-3297 Santiago v. Bd. of Review, etc., et al., App. Div. (per curiam) (6 pp.) The claimant � a former life skills trainer working with brain-damaged individuals � was justifiably denied unemployment benefits because he left work voluntarily without good cause attributable to the work, where he failed to exhaust all reasonable opportunities to resolve his problems about his evaluation with his employer before leaving. [Decided March 22, 2006.] LAND USE � COLLATERAL ESTOPPEL 26-2-3249 Yadav, et ux. v. Twp. of West Windsor, App. Div. (per curiam) (6 pp.) This appeal is the most recent installment in more than 20 years of litigation between the plaintiffs and the defendant-municipality arising from plaintiffs’ efforts to obtain major subdivision approval. In this opinion, the appellate court upholds the trial judge’s dismissal of plaintiffs’ current Superior Court complaint, based on his finding that, because the actions alleged mirrored those filed in related federal court actions, which were on appeal at the time, collateral estoppel precluded the plaintiffs from proceeding. Both state and federal courts have ruled on the merits of the plaintiffs’ constitutional arguments, and have issued final judgments based on those rulings, finding, inter alia, that (1) the municipality did not violate any of plaintiffs’ civil rights in making the original resolution subject to certain conditions; (2) the municipality did not err in determining that the original approval expired after three years; and (3) plaintiffs’ civil rights were not violated in the municipality’s denial of subsequent subdivision applications. [Decided March 17, 2006.] LAND USE � SITE-PLAN APPROVAL � BUILDING PERMITS 26-2-3236 Whala v. Town of Kearny, et al., App. Div. (per curiam) (8 pp.) The lower court properly dismissed the complaint of plaintiff, who claimed that the defendant Jeffrey Family Associates 188, L.L.C. � owner of a nearby property leased to a competing pizzeria � obtained a building permit to renovate its premises without obtaining the requisite site-plan approval from the planning board. The court accepted the certification of the municipal construction code official who noted that, because the use of the building (retail space) and parking requirements did not change, site-plan approval was not required. Changes were to the interior of the building only � a reconfiguration of partitions � and the existing footprint remained the same. The lower court also properly denied defendant’s motion for counsel fees, concluding that plaintiff’s application, although not successful, was not frivolous. [Decided March 16, 2006.] LANDLORD/TENANT � SECURITY DEPOSITS 27-2-3280 Johnston v. Camiolo, App. Div. (per curiam) (5 pp.) The court reverses the tenancy court judge’s order assessing damages against the plaintiff-landlord as a result of his failure to comply with the provisions of the security deposit statute, agreeing with plaintiff that the tenancy judge erred in awarding the tenant a doubling of the full amount of the initial security deposit, rather than a doubling of the net amount wrongfully withheld. The amount of the security deposit must be set off against the damages owed by the tenant for unpaid rent, as well as a bank surcharge. [Decided March 21, 2006.] PARENT/CHILD � TERMINATION OF PARENTAL RIGHTS 28-2-3237 Div. of Youth and Family Svcs. v. D.L.; I/M/O Guardianship of D.D.L., a Minor, App. Div. (per curiam) (20 pp.) The trial court correctly terminated the parental rights of appellant to his 6-year-old son on a record that included evidence of the child being born with drugs in his system and both parents’ involvement in the “drug culture.” Additionally, appellant was sometimes homeless, failed to appear for psychological evaluations and case management conferences, and failed to vacate the default that had been entered against him, despite being given a second opportunity by the trial judge to undergo the required evaluations and tests. Appellant finally moved to vacate the default judgment three months after his rights had been terminated. Although the judge acknowledged appellant’s love for his child, and his attempts to better himself, he correctly found the best interests of the child in permanency and stability to be paramount. [Decided March 16, 2006.] 28-2-3268 N.J. Div. of Youth and Family Svcs. v. T.B.; I/M/O Guardianship of S.R.B., et al., Minors; one added caption, App. Div. (per curiam) (5 pp.) The trial court correctly terminated the parental rights of appellants to their 2-year-old twin daughters on a record that included evidence of the mother’s long history of involvement with the Division of Youth and Family Services and her chronic substance abuse problems, and the father’s criminal history, incarceration and complete inability to see any connection between the mother’s drug addiction and her inability to care for her daughters. Inter alia, the judge did not deny the appellant-mother due process when he permitted her defense counsel to appear by telephone on the last day of trial. Counsel was ill, and the judge was within his discretion to choose not to grant counsel an adjournment, and to proceed via telephone. [Decided March 20, 2006.] 28-2-3269 N.J. Div. of Youth and Family Svcs. v. E.T.; I/M/O Guardianship of A.T., a Minor, App. Div. (per curiam) (5 pp.) The trial court correctly terminated the parental rights of appellant to her 2-year-old son on a record that included evidence that appellant was in custody in a youth house while pregnant, and returned there from the hospital after the baby was born, and never had custody of the child, nor any bond with him. [Decided March 20, 2006.] PARENT/CHILD � TERMINATION OF PARENTAL RIGHTS � KINSHIP LEGAL GUARDIANSHIP 28-2-3298 Div. of Youth and Family Svcs. v. E.G.; I/M/O Guardianship of E.G., Jr., a Minor, App. Div. (per curiam) (20 pp.) Because the panel agrees with appellant, the father of the 2-year-old boy in question, that (1) the Division of Youth and Family Services presented insufficient credible evidence to establish clearly and convincingly the four prongs of the “best interest” test; and (2) the court failed to give adequate consideration to the alternative of kinship legal guardianship, the court reverses the termination of appellant’s parental rights and remands for further proceedings. [Decided March 22, 2006.] PENSIONS � TEACHERS’ PENSION AND ANNUITY FUND 56-2-3270 Barone, et al. v. Bd. of Trustees, T.P.A.F., App. Div. (per curiam) (17 pp.) Citing case law, statutes and code provisions, the appellate court affirms the final decision of the respondent board of trustees of the Teachers’ Pension and Annuity Fund denying the claims of petitioners � spouse-beneficiaries of teachers who had enrolled in TPAF � seeking entitlement both to pension and full group life insurance death benefits following the deaths of their spouses prior to retirement, but after submission of applications for that status. Full death benefits to members covered by contributory group insurance would have constituted three-and-one-half times final salary; the effect of the board’s decision was to reduce those benefits to seven-sixteenths of final salary. [Decided March 20, 2006.] PHYSICIAN/PATIENT � HOSPITAL PRIVILEGES � EXPERT TESTIMONY � INFORMED CONSENT 29-2-3238 Carr, et ux. v. Brezel, M.D., et al., App. Div. (per curiam) (22 pp.) The credible evidence supports the grant of summary judgment to the defendant-hospital in plaintiff’s case for the sequelae of a percutaneous gastrojejunostomy tube placement (PGTP) by the defendant-physician (with whom plaintiff settled). During the procedure, the tube was advanced through plaintiff’s transverse colon into the greater curvature of the stomach, producing a large tear in the gastric wall and hemorrhage from the gastroepiploic artery, resulting in acute peritonitis and a severe abdominal compartment syndrome. At the time of plaintiff’s injury, the subject procedure was not on his credentialed list of privileges; however, at the end of the year, a new privilege list was provided that did list the procedure he had performed on plaintiff in January. The chairman of the Radiology Department testified that the physician was, in fact, qualified to perform the procedure when he did, and that the privilege to perform a PGTP was subsumed in the privilege to perform a percutaneous nephrostomy, which was on the prior privileges list. Without an expert to assess blame on the hospital in any way, the judge had no choice but to grant its motion for summary judgment. The panel also disagrees with plaintiff’s claim that Howard v. UMDNJ, decided after the grant of the motion, supports a claim for lack of informed consent on the circumstances of this case; and, even if it did, plaintiff’s claim fails to satisfy Howard‘s first prong because no expert testimony was presented that the physician’s lack of privileges to perform the procedure � especially in light of his extensive experience in interventional radiology � could have substantially increased plaintiff’s risk of injury from the procedure. [Decided March 16, 2006.] PRODUCT LIABILITY � AUTOMOBILES � SEAT BELTS � EXPERT OPINION � WITNESS SEQUESTRATION 32-2-3239 Deinert v. Chevrolet Div. of G.M., et al., App. Div. (per curiam) (22 pp.) The plaintiff claimed that a defect in the seat belt buckle of her 1991 Chevrolet Blazer allowed her to be ejected from her vehicle when she lost control on ice, and the vehicle struck some trees and a telephone pole prior to overturning. After a 12-day trial, the jury found that plaintiff was wearing her seat belt at the time of the accident, but that it was not defectively manufactured, resulting in a “no cause” verdict against defendant General Motors. The panel affirms the trial judge’s denial of plaintiff’s motion for a new trial, rejecting her contentions that (1) the judge did not follow appropriate procedures (voir dire, striking testimony) with respect to a sequestration order violation; and (2) the judge erred in denying her an opportunity to depose defendant’s expert after his report was provided “on the eve of trial.” As to the first contention, the judge agreed that the witnesses’ violations of the sequestration order were “patent and obvious,” but found that they did not, separately or collectively, “amount to a significant prejudice to the conduct of a fair trial.” The panel finds that there was no violation in the first instance, as sequestration orders do not apply to expert witnesses. As to the second contention, defendant was forced to seek its expert at the zero hour because of the submission of a late supplemental report by plaintiff’s expert. Although the panel is somewhat troubled by the preclusion of the deposition of the defense expert, and the judge’s failure to give plaintiff a brief additional period to obtain a rebuttal expert, it affirms because any error was harmless under the circumstances. [Decided March 16, 2006.] REAL ESTATE � DISCHARGE OF MORTGAGE � ESTATES 34-4-3281 Kielty, etc. v. Arena, et al., Chancery Div. � Somerset, Hunterdon and Warren Counties (Williams, P.J.Ch.) (7 pp.) The plaintiff � son and administrator of his mother’s estate � seeks the discharge of a mortgage executed by the decedent to defendant, which plaintiff asserts was paid off eight years ago. The mother died in 2000. Defendant could not be located, and plaintiff’s counsel submitted a certification of diligent inquiry, after which he was permitted service by publication. Defendant never responded. Plaintiff relates conversations he had with his mother regarding her regular payment of the mortgage that, on its face, was to be paid in full as of June 1990; however, since he submits no financial records or cancelled checks, he has not provided satisfactory proof that the mortgage was paid to satisfy subsection (a) of N.J.S.A. 2A:51-1. The judge finds, however, that the special circumstances in this matter satisfy subsection (c) of that statute, as the defendant has no further interest in the mortgage. Eight years have passed since plaintiff claims his mother paid off the loan, and defendant has never sent a letter seeking further payment, or filed a foreclosure complaint. Although the statute of limitations to institute a foreclosure action is 20 years, the court notes that, even if defendant or his heirs were to attempt to foreclose at this point, their action would likely be barred by laches. [Decided March 10, 2006.] REAL ESTATE � “TIME OF THE ESSENCE” CLOSING DATES � DAMAGES � HOLDING DEPOSIT MONIES � DEPOSITING FUNDS IN COURT 34-3-3300 CCLLGG, LLC v. Orange St. Development, et al. v. Bassetti, Law Div. � Hunterdon Cy. (Buchsbaum, J.S.C.) (5 pp.) The plaintiff’s attorney retained two deposits made by the defendants, asserting that each of them breached their respective contracts by failing to close on “time of the essence” closing dates. In this opinion, the court denies the defendants’ motions, filed pursuant to R. 4:57-1, seeking an order that plaintiff’s attorney deposit the monies with the court. Defendants make unsupported assertions that they are concerned that plaintiff may dispose of the monies and then file bankruptcy, or that they are concerned with the “whereabouts” of the funds. However, “the parties miss the point.” The rule provides for voluntary deposits by a party that is a stake holder, such as an insurance company that is willing to offer its entire policy amount. Nothing in the rule states that it can be used to impose any involuntary deposits in an ongoing dispute. Although a writ of attachment might have provided the aid defendants seek, no party has applied for same, nor set forth the statutory grounds for such a writ. [Decided March 17, 2006.] WILLS, ESTATES AND TRUSTS � UNDUE INFLUENCE � ATTORNEYS’ FEES 38-4-3301 Blumeling, etc. v. Stalker, etc., et al., Chancery Div. � Bergen Cy. (Doyne, J.S.C.) (15 pp.) Although finding that none of the exceptions to the American Rule codified in R. 4:42-9 apply, the court reviews exceptions created by case law and holds that an individual who commits the pernicious tort of undue influence should be burdened with the adversary’s legal fees associated with the prosecution of such a case. [Decided March 17, 2006.] FEDERAL COURT CASES ATTORNEY/CLIENT � INTELLECTUAL PROPERTY � BANKRUPTCY 04-7-3241 Jazz Photo Corp., etc. v. Dreier L.L.P., etc., et al., U.S. Dist. Ct. (Debevoise, U.S.S.D.J.) (18 pp.) The plaintiff, through its liquidating trustee, sues defendants for legal malpractice in a patent infringement action (the “Fuji” action) that resulted in a verdict of approximately $30 million against plaintiff for reselling “refurbished” Fuji disposable cameras. In this opinion, the court rejects plaintiff’s claim that defendants committed malpractice in failing to challenge, in the Fuji action, the retroactive application of the Federal Circuit’s decision in the related administrative matter of Jazz Photo Corp. v. International Trade Commission (the ITC decision). Reviewing the ITC decision, the court notes that it could be argued that the Federal Circuit Court’s ruling regarding the first-sale doctrine and exhaustion most likely decided an issue of first impression, whose resolution was not clearly foreshadowed. It could also be argued that the circuit court simply reapplied the Boesch rule. Assuming that the ITC decision was “new law,” the question then becomes whether Chevron Oil Co. v. Huson precluded its application in the Fuji action. Noting developing case law, the court finds that prospective-only application of the rule would have been impermissible under the case law developed after Chevron. Thus, defendants could not have committed malpractice for failing to argue an inapplicable rule of law. [Filed March 16, 2006.] BANKRUPTCY � REFERENCE OF DISPUTES TO BANKRUPTCY COURT 42-7-3254 Wanland & Assocs., Inc. v. Nortel Networks Ltd., et al., U.S. Dist. Ct. (Cooper, U.S.D.J.) (5 pp.) The judge previously found that the nonparty NorVergence is a debtor in a federal bankruptcy proceeding with many adversary proceedings against it, and that NorVergence agreed to indemnify and holds the defendant-movants harmless for claims arising out of the use of its allegedly faulty products. The plaintiff’s claims here involve such products and the filing of this lawsuit triggered the indemnity agreement. Because the outcome of the action directly impacts NorVergence’s liabilities and will affect its creditors, it is “related to” the bankruptcy matter, and the judge reaffirms her order referring the action to the Bankruptcy Court, rejecting the arguments of movant-defendants that the Bankruptcy Court lacks the authority to issue a final judgment in noncore proceedings and will be limited to submitting proposed findings of fact and conclusions of law to this court, increasing the burden on the litigants and wasting judicial resources. [Filed March 17, 2006.] CIVIL RIGHTS � MALICIOUS PROSECUTION � FALSE ARREST 46-7-3302 Pittman v. McDuffy, et al., U.S. Dist. Ct. (Martini, U.S.D.J.) (6 pp.) The court grants the defendants’ motion for summary judgment and dismisses the complaint of plaintiff, who alleged malicious prosecution, false arrest and First Amendment violations stemming from his arrest for criminal trespass, a charge of which he was later acquitted. Inter alia, it is clear that the police officers had probable cause to arrest defendant, where (1) they found him standing in the area of a house from which a complaint of a prowler had been made; (2) he fled when he saw the officers approach, and hid in some nearby bushes; and (3) a neighbor issued a description matching plaintiff’s. [Filed March 21, 2006.] CIVIL RIGHTS � POLICE ACTION � LIMITATIONS 46-8-3242 Akinola v. Doe 1, etc., et al., Third Cir. (per curiam) (5 pp.) The plaintiff filed a complaint pursuant to 42 U.S.C. � 1983 alleging claims of false arrest and imprisonment against the municipal police defendants and a claim of malicious prosecution against the county prosecutor, all arising out of a search of his car, confiscation of more than $2,000 in cash, and a charge (later “no-billed” by the grand jury) of receiving stolen property. The circuit panel concludes that the District Court properly dismissed plaintiff’s complaint as time-barred, and dismisses his appeal from that order as groundless, rejecting his contention that he did not file sooner because he did not know about the “no-bill,” despite making numerous inquiries while he was incarcerated on unrelated charges. Plaintiff’s action was filed four years after accrual; if he had exercised due diligence, he would have learned of the “no-bill” prior to the expiration of the two-year limitations period. Moreover, plaintiff cannot succeed on his malicious-prosecution claim because the forfeiture proceeding did not terminate in his favor, his motion for the return of the money having been denied. [Filed March 15, 2006.] CONSTRUCTION � SCHOOL PROJECTS � EXPERT EVIDENCE � LEGAL MALPRACTICE 43-7-3284 D&D Assocs., Inc. v. Bd. of North Plainfield, et al., U.S. Dist. Ct. (Cooper, U.S.D.J.) (15 pp.) In this suit the plaintiff � former general contractor on several school construction and renovation projects for defendants � alleges breach of the parties’ contract and various claims for tortious interference, libel, conversion, fraudulent inducement and violation of civil rights. In this opinion, the District Court affirms the magistrate judge’s grant of the motion of the attorney for the school board, precluding the admission of the plaintiff’s expert report asserting that the attorney committed legal malpractice with respect to his representation of the board, specifically in connection with the preparation and review of bid documents. The expert contended that the attorney should have advised the board to delay the award of contracts and/or the issuance of a notice to proceed, which presumably would have avoided the delays that caused the problems between the parties. The magistrate judge aptly determined that the expert was asked to provide an opinion on the specifics of the entire contract bidding process, but determined that he was not qualified to render such an opinion because he did not possess specialized knowledge or expertise in construction and public bidding law. Moreover, the magistrate judge found that, beyond the qualifications of the expert himself, the opinion that the attorney provided bad advice to his client, the board, did not “fit” the underlying causes of action asserted by the plaintiff; the report merely reiterated the plaintiff’s allegations, and failed to establish damages. [Filed March 20, 2006.] CONSTRUCTION � SUBCONTRACTORS � ATTORNEY’S FEES � INDEMNIFICATION � NEGLIGENT MISREPRESENTATION 43-7-3285 Konover Constr. Corp. v. East Coast Constr. Svcs. Corp., et al., U.S. Dist. Ct. (Irenas, U.S.S.D.J.) (8 pp.) Plaintiff, the general contractor on a hotel project, entered into a subcontract with defendant for the provision of all of the wood frame and rough carpentry for the project. A dispute soon arose whereby plaintiff claimed various deficiencies in defendant’s performance, which defendant blamed on plaintiff’s failure to pay; defendant either withdrew from or abandoned the project, after which plaintiff sent a final letter of default termination, and followed with this lawsuit. In this opinion, the court grants plaintiff’s motion for summary judgment in part, and denies it in part, as follows: (1) The court dismisses defendant’s claim for attorneys’ fees in the counterclaim, as the subcontract does not contain a fee-shifting provision applicable to claims brought by defendant under the subcontract, although it does provide that defendant may be liable for attorneys’ fees incurred by plaintiff in any proceeding against defendant. Moreover, New Jersey law would not support an award of attorneys’ fees to defendant should it prevail on its claims against plaintiff. (2) The court dismisses the counterclaim for indemnification against any claims brought against defendant by its sub-subcontractors, as such indemnification is not provided for in the subcontract or the common law. Defendant’s liability appears to stem from contract-based claims brought by its own subcontractors and suppliers; should these claims be successful, defendant’s remedy against plaintiff would lie in a claim for breach of contract, not indemnification. (3) The court denies the motion for summary judgment with respect to plaintiff’s claims of negligent misrepresentation, as it is not yet possible to determine whether plaintiff’s alleged damages were the result of defendant’s alleged breach of contract, or misrepresentations. [Filed March 20, 2006.] CRIMINAL LAW AND PROCEDURE � SEVERANCE � OUTRAGEOUS GOVERNMENT CONDUCT DEFENSE 14-7-3306 U.S. v. Dentico, et al., U.S. Dist. Ct. (Martini, U.S.D.J.) (8 pp.) The court grants three defendants’ motions to sever certain counts of the complaint in this multidefendant RICO and non-RICO criminal case; denies the motion to sever brought by another defendant; and denies the motion of yet another defendant to dismiss the indictment, or, in the alternative, for a hearing based on his allegation of alleged outrageous government conduct. A large portion of the government’s case against this last defendant will apparently come from tape recordings gathered by a cooperating witness, who defendant alleges the FBI permitted to participate in numerous crimes. He argues that the government’s assisting and sanctioning of the cooperating witness’s conduct was so extensive and widespread that it amounted to outrageous government conduct. The court discusses the only Third Circuit case that actually sustained the use of this defense, and distinguishes it from the facts here, finding that the conduct was not “shocking,” “outrageous” or clearly intolerable,” as required. [Filed March 20, 2006.] DEBTOR/CREDITOR � FRAUDULENT CONVEYANCES 15-7-3272 U.S.A., et al. v. Chang, et al., U.S. Dist. Ct. (Brown, U.S.D.J.) (12 pp.) The judge grants summary judgment to the plaintiffs � the federal government and the Small Business Association (SBA) � on their complaint seeking partial satisfaction of judgments against defendant Chang from fraudulent transfers made to his children and a friend from the two corporate defendants. The court finds that (1) the proceeds of the sale of the Maxwell House Plant in Hoboken, distributed by the defendant River Road Realty Development to the two corporations, were at all times under the exclusive control and possession of the defendant Chang, and the corporations were therefore merely alter egos of the defendant; (2) the transfers were made after defendant’s obligation to the SBA arose; (3) defendant made the transfers without receiving a reasonably equivalent value in exchange; and (4) defendant was insolvent at the time of the transfers or became insolvent as a result of the transfers. [Filed March 20, 2006.] DEBTOR/CREDITOR � MORTGAGES � PREPAYMENT PENALTIES � DISPUTES � ARBITRATION 15-7-3273 Salvadori v. Option One Mortgage Corp., etc., U.S. Dist. Ct. (Wolfson, U.S.D.J.) (12 pp.) The court grants defendant’s motion and dismisses the complaint of plaintiff, a residential mortgage borrower who has challenged a prepayment penalty arising out of the parties’ loan transaction in related state court proceedings. Plaintiff’s claims, including his newly pleaded federal claims under the Federal Trade Commission Act, are “disputes” expressly covered by the parties’ agreement to arbitrate, which will be enforced by the court. The court rejects plaintiff’s arguments that the arbitration agreement is unenforceable because it violates the N.J. Truth in Consumer, Contract, Warranty and Notice Act, the Federal Trade Commission Act and because it represents an unconscionable business practice. Because defendant made attempts to have plaintiff arbitrate his claims before resorting to this action to compel, the court awards costs and expenses to defendant, limited to those incurred in compelling arbitration of the claims. [Filed March 16, 2006.] INSURANCE � DENIAL OF DISABILITY BENEFITS � VETERANS � SOVEREIGN IMMUNITY 23-7-3303 Dambach v. U.S.A., et al.; two other captions, U.S. Dist. Ct. (Brown, U.S.D.J.) (5 pp.) The court dismisses plaintiffs’ separate complaints alleging that the Department of Veterans’ Affairs engaged in tortious and unconstitutional conduct in its repeated denial of the plaintiff’s claim for disability benefits, finally paying those benefits after nine years of plaintiff’s effort. Plaintiffs’ claims are based on defendants’ alleged deprivation of their property rights without due process. In FDIC v. Meyer, the Supreme Court addressed a similar constitutional tort claim and held that the federal government maintains sovereign immunity against such claims; therefore, the court has no jurisdiction to hear this case. [Filed March 21, 2006.] INSURANCE � TRANSPORT OF CARGO � COVERAGE FOR PROPERTY DAMAGE 23-7-3255 Hartford Fire Ins. Co. v. Chata Coating and Laminating, Inc., et al., etc., U.S. Dist. Ct. (Simandle, U.S.D.J.) (7 pp.) This declaratory judgment action involves a claim by defendant Chata Coating for water damage to machinery being transported by the plaintiff’s insured, defendant-third-party plaintiff, Brida. Brida was allegedly negligent in failing to properly tarp the machinery. Plaintiff denied coverage for Chata’s claim because the policy did not cover wetness, dampness or rust, a fact that had clearly been communicated to the insurance agency and the insured, and the court granted summary judgment to the plaintiff on that basis. The court here denies the motion brought by the third-party defendant-insurance agency, seeking reconsideration of the summary judgment order. Although the movant now argues that the court overlooked evidence that superior coverage was available to the insured from plaintiff, and the plaintiff was negligent in failing to advise the agency that more comprehensive motor truck cargo policy coverage was available, the court notes that movant previously argued that such coverage was not available, and the court relied on that representation in reaching its decision. Additionally, there is no issue of fact regarding this issue, as the evidence shows that Brida would not even have qualified for the superior coverage. [Filed March 15, 2006.] INTELLECTUAL PROPERTY � PATENT INFRINGEMENT � INEQUITABLE CONDUCT 53-7-3256 Ortho-McNeil Pharmaceutical, Inc., et al. v. American Pharmaceutical Partners, Inc.; one other caption, U.S. Dist. Ct. (Brown, U.S.D.J.) (14 pp.) The court grants the plaintiffs’ renewed motion for summary judgment of no inequitable conduct. The court had previously partially granted plaintiffs’ motion for summary judgment that the patent at issue (for levofloxacin) was not unenforceable based on the inequitable conduct committed by the plaintiff-patentees, based on the Gerster ’85 reference. The court denied that part of the motion seeking summary judgment of no inequitable conduct based on certain undisclosed toxicity data, the court finding that a genuine issue of material fact existed as to the materiality of such data. The court notes the judge’s discussion of certain toxicity tests in a related case in the West Virginia District Court, upheld by the Federal Circuit panel, and holds that the patent applicants did not act inequitably in failing to disclose certain toxicity data relating to levofloxacin and ofloxacin. Defendants have proffered no evidence to show that the plaintiffs intended to deceive the Patent and Trademark Office by representing that levofloxacin was less toxic than ofloxacin. [Filed March 17, 2006.] JURISDICTION � DIVERSITY � STANDING 24-7-3257 Lyden v. Tiger, et al., U.S. Dist. Ct. (Greenaway, U.S.D.J.) (9 pp.) The court grants defendants’ motion to dismiss plaintiff’s amended complaint alleging, inter alia, tax evasion, discrimination in real estate sales, cheating and the filing of false documents with the county hall of records and courts, all with respect to Elizabeth Tiger’s rights arising out of her divorce settlement with one of the defendants. The plaintiff requests, inter alia, that the court prosecute defendants for tax evasion, arrest defendants for death threats and attempted murder, and award plaintiff $100 million for pain and suffering. First, the court does not have jurisdiction over plaintiff’s claims because (1) diversity jurisdiction is lacking, as all parties are citizens of New Jersey; and (2) plaintiff’s claims do not arise under the Constitution or laws of the United States, with the possible exception of the tax-evasion claim; and there, plaintiff attempts to create a private cause of action where such a claim may only be brought by the federal government. Second, plaintiff had not established that he has standing to pursue his claims regarding the swindling of Elizabeth Tiger, because he is not the party harmed. [Filed March 17, 2006.] LABOR AND EMPLOYMENT � FAMILY AND MEDICAL LEAVE ACT 25-7-3243 Hewett v. Willingboro Bd. of Education, et al., U.S. Dist. Ct. (Simandle, U.S.D.J.) (17 pp.) The court considers the narrow question of whether the Family and Medical Leave Act imposes individual liability on employees of public agencies, and holds that, because the plain language of the statute so provides, defendants’ motion for partial judgment on the pleadings is denied; the court permits plaintiff to proceed with her claims against the executive director of Human Resources and Administrative Services, and the superintendent of the Willingsboro public schools, in their individual capacities. [Filed March 15, 2006.] LABOR AND EMPLOYMENT � LABOR-MANAGEMENT REPORTING AND DISCLOSURE ACT 25-7-3286 Wiggins v. United Food and Commercial Workers Union, etc., et al., U.S. Dist. Ct. (Simandle, U.S.D.J.) (14 pp.) This case arose out of a vote on a two-year extension of a collective-bargaining agreement governing the relationship between defendants Heinz North American Pennsauken and the United Food and Commercial Workers union. Plaintiff alleged that defendants � his union and his employer � violated his rights under the Labor-Management Reporting and Disclosure Act. He claimed he did not receive adequate notice of a meeting at which plant reorganization was discussed and voted on. Because plaintiff’s complaint suffers from both procedural and substantive defects, the court grants the defendants’ summary judgment motions. Inter alia, the court notes that (1) plaintiff failed to file an internal grievance, as required by union bylaws; (2) his claims are time-barred, as they accrued when he was aware of the facts giving rise to his cause of action � when he filed his complaint with the National Labor Relations Board, not when his NLRB appeal was denied; (3) plaintiff’s claims fail as neither the law, nor the union rules or regulations, require that a collective-bargaining agreement be submitted to the union membership for approval; and, in any event, there is no indication that plaintiff was discriminated against with respect to his ability to participate in the meeting; (4) there is no indication that plaintiff’s right to express his views and opinions regarding the union elections and officers was compromised by the union; (5) the claims against the employer fail because plaintiff may not sue his employer under sections 101(a)(1) and (2) of the LMRDA, which regulates only the relationship between the union and its members; and (6) the claims against the union under 29 U.S.C. � 501(a), which imposes liability on individual union officers for breaches of fiduciary duty, but does not impose that duty on labor organizations themselves, fails. [Filed March 20, 2006.] LABOR AND EMPLOYMENT � RETALIATION � FREE SPEECH 25-7-3304 Ruiz v. Morris Cy. Sheriff’s Dept. et al., U.S. Dist. Ct. (Debevoise, U.S.S.D.J.) (8 pp.) The plaintiff, a corrections officer at a county jail, alleges that his free speech rights were violated, and that he was retaliated against in violation of the New Jersey Law Against Discrimination and his civil rights, all because of his union activity, his public opposition to attempts to privatize and change staffing levels at the jail, and his attempts to assist minority and perceived homosexual members of the union. In this opinion, the court denies the motion of defendant Corrente, the warden at the jail, seeking to dismiss the plaintiff’s NJLAD claim. Reviewing the evidence proffered by plaintiff, the court determines that plaintiff has shown that he was engaged in protected activity known by the employer; the defendants’ actions alleged by plaintiff clearly fall under the definition of adverse employment actions; and that factual questions exist as to the individual defendant’s knowledge and participation in these actions. [Filed March 21, 2006.] NEGLIGENCE � ACCOUNTANTS � NEGLIGENCE PER SE � BANKRUPTCY 31-7-3258 Chelsea Check Cashing, L.P., etc., et al. v. Toub, et al., U.S. Dist. Ct. (Rodriguez, U.S.S.D.J.) (6 pp.) The plaintiffs, through their bankruptcy trustees, sued defendants, an accountant and his accounting firm, alleging negligence, negligence per se and breach of contract for defendants’ failure to uncover certain “out-of-trust” transactions, and a complete lack of internal cash-flow management controls, which were exacerbating plaintiffs’ serious financial problems, and should have been a red flag to the defendants. In this opinion, the court denies plaintiffs’ motion for reconsideration of its order granting partial summary judgment to the defendants on plaintiffs’ claim that a violation of the American Institute of Certified Public Accountants’ Guidelines constituted negligence per se. Plaintiffs’ claim that the negligence per se claim with respect to violations of N.J.S.A. 17:15A-38 should not have been dismissed is without merit, as the court did not address the N.J. statute in its order. [Filed March 15, 2006.] PENSIONS � OVERFUNDING OF PLANS � COLLATERAL 56-7-3244 Frank Briscoe Co., Inc. v. Travelers Indemnity Co., et al., U.S. Dist. Ct. (Greenaway, U.S.S.D.J.) (33 pp.) In this lengthy contract litigation arising out of the parties’ 1982 agreement for the disposition of collateral (ADC), the court grants defendant’s motion for partial summary judgment on its pension plan counterclaim and on plaintiff’s defenses to the remaining counterclaims. With respect to the pension plan counterclaim, defendant asserted that plaintiff’s plan was overfunded � which was an intangible asset of plaintiff and, hence, an item of defendant’s collateral under the ADC � and that plaintiff intentionally diverted the overfunding, constituting misappropriation. Under the law of the case, the court agrees with defendant; the court has consistently held throughout this litigation that all assets in excess of those needed to satisfy the plan liabilities must be considered collateral. Further, the court agrees that plaintiff’s actions constituted diversion. The court also denies plaintiff’s cross-motion asking the court to (1) defer consideration of the motions currently before it until the resolution of certain of plaintiff’s in limine motions; (2) take judicial notice of changes in the inflation rate; and (3) strike the report of defendant’s expert. [Filed March 15, 2006.] PENSIONS AND EMPLOYEE BENEFIT PLANS � ERISA � FIDUCIARY DUTY � SECURITIES � DIRECTED TRUSTEES 56-7-3305 In re RCN Litigation, U.S. Dist. Ct. (Chesler, U.S.D.J.) (19 pp.) The court grants the motion of defendant Merrill Lynch Trust Company FSB and dismisses the complaint of plaintiffs, current or former participants in RCN Corporation’s Savings and Stock Ownership Plan � an employee pension benefit plan within the meaning of the Employee Retirement Income Security Act � of which defendant was trustee. Plaintiffs claim that defendants breached their fiduciary duties, inter alia, by continuing to offer RCN common stock as a plan investment option for participant contributions, using RCN securities for employer contributions to the plan, and maintaining heavy investment in RCN securities when the stock was no longer a prudent investment for the plan. The court finds sufficient cause to dismiss the complaint under Rule 12(b)(6), concluding that (1) the plan’s governing documents demonstrate that defendant acted as a directed trustee, with limited fiduciary duty; (2) discretionary authority over the investment of funds was expressly vested in the committee and the plan’s participants; (3) defendant had no duty to question or disregard the investment directions provided by the plan’s named fiduciaries; and (4) plaintiffs’ complaint fails to state (a) a claim against defendant for co-fiduciary liability or (b) that defendant operated under an actionable conflict of interest. [Filed March 22, 2006.] PUBLIC EMPLOYEES � ELIGIBILITY � DISCRIMINATION BASED ON MILITARY SERVICE 33-7-3275 Hart v. Hillside Twp., et al., U.S. Dist. Ct. (Greenaway, U.S.D.J.) (26 pp.) The court grants summary judgment to the defendant-municipality in this action arising out of plaintiff’s unsuccessful attempt to gain the position of firefighter. Plaintiff asserted that he was bypassed on the eligibles list because of his membership in the National Guard; however, the N.J. Department of Personnel found his allegations of discrimination unsupported by the record, and denied his bypass appeal. In this federal suit, plaintiff asserted, inter alia, that defendants violated the Uniformed Services Employment and Re-employment Rights Act and the New Jersey Law Against Discrimination. In granting defendants’ motion for summary judgment, the court notes that it was plaintiff that initially raised the issue of his military service in the interview process, not the defendants. Moreover, every witness deposed in this case asserted that the military service was viewed as a positive attribute, not a negative one. The court rejects plaintiff’s assertion that questioning about the time his military commitment would require was akin to the inappropriate questioning of a woman about her plans to have a family. Even if plaintiff could show that a genuine issue of material fact existed as to whether his military service was a substantial or motivating factor in the defendants’ decision, the defendants have proffered sufficient evidence to show why plaintiff was not selected, irrespective of his military duties, including (1) his taking the interview too casually, and not wearing a suit; (2) his using inappropriate words and the racial slur “gook” in the interview; (3) his not appreciating the significance of his criminal history; (4) his terrible driving record; and (5) his seeming immaturity. [Filed March 17, 2006.]

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