STATE COURT CASES
ADMINISTRATIVE LAW
01-2-0857 Ballard v. Board of Review, App. Div. (per curiam) (6 pp.) Ballard appeals from the board’s final determination finding that he was disqualified for unemployment benefits because he left his job voluntarily without good cause attributable to the work. The panel affirms, finding that where, as here, a claimant alleges that he resigned involuntarily for medical reasons, he must present evidence showing that the working conditions caused or aggravated a medical condition or will impede a recovery from the condition, which Ballard failed to do. Rather, the evidence shows that he left his job as a bus driver due to stress caused by his perceived but medically unsubstantiated body odor and his concern about its possible impact on his passengers and he failed to tell his employer about the condition or give the employer an opportunity to provide an accommodation. [Decided Aug. 1, 2013.]
BUSINESS ENTITIES — LLCs AND LLPs
12-2-0858 Tutunikov v. Markov, App. Div. (per curiam) (41 pp.) Plaintiffs brought this action as oppressed shareholders under the Business Corporation Act (BCA) and the Limited Liability Company Act (LLCA). Following a bench trial, judgment was entered against defendants. The judge also awarded attorney fees and costs. Defendants appeal, arguing that the judge erred by finding plaintiffs were oppressed shareholders under the BCA, and by extending remedies available in the BCA to plaintiffs’ claims under the LLCA because the BCA does not apply to limited liability companies. Defendants also argue that the judge erred in determining the “fair value” of plaintiffs’ interests in the defendant business entities, and, therefore, his award was too high. Lastly, defendants raise arguments about the scope of the judgment and denial of their application for a payment plan. Given the lack of an oppressed member provision in the LLCA, the BCA’s oppressed shareholder provisions have no application to an LLC. The appellate panel reverses the judgment under review, and remands the matter to the trial court for entry of judgment in plaintiffs’ favor in the amounts set forth, plus an award of prejudgment interest based on the newly calculated judgment amounts. The award of counsel fees and costs is vacated where no attorney fees can be awarded pursuant to the LLCA. [Decided Aug. 1, 2013.]
BUSINESS ENTITIES — PARTNERSHIPS
12-2-0918 Fayed v. Melendez, App. Div. (per curiam) (6 pp.) Plaintiff and defendant entered into a partnership to acquire properties. This appeal involves a dispute regarding the value of the partners’ respective contributions to the partnership. The dispute concerns a property purchased by the partnership on June 30, 2003, for $281,101 and sold on Aug. 3, 2005, for $750,000. The trial court found that plaintiff’s contributions to the property equaled $153,615.74, while defendant’s contributions and improvements to the property amounted to $417,155.08. Offsetting the two, the court determined the monetary value of defendant’s contributions and improvements exceeded plaintiff’s by $263,539.34. Accordingly defendant was entitled to the first $263,539.34 of the net proceeds of the sale ($390,571.58), leaving $127,032.24 to be divided equally by the parties. Absent extraordinary circumstances requiring the invocation of original jurisdiction, intermediate appellate courts do not make factual findings. Instead, appellate courts defer to a trial judge’s findings of fact that are supported by the competent evidence in the record. The trial court’s factual findings here were supported by the record and therefore binding on the court. In the absence of legal error, the appellate panel affirms. [Decided Aug. 7, 2013.]
CIVIL PROCEDURE
07-2-0859 DiFalco v. Merlino, App. Div. (per curiam) (14 pp.) Plaintiff, Joseph DiFalco, appeals from the order that dismissed with prejudice his complaint against defendants Joseph Merlino Jr. and his law firm, Merlino & Gonzalez. The order reflects the judge’s determination that plaintiff failed to join indispensable parties and failed to comply with the entire-controversy doctrine (ECD). With regard to the two actions in question, plaintiff contends that the Merlino action was not a “successive action” because the Hodgson action was based on different operative facts, the relief sought was appreciably different, and the Hodgson action was still pending when he filed his complaint in the Merlino action. He also argues that any failure to comply with Rule 4:5-1(b)(2) was not inexcusable, the Merlino defendants were not substantially prejudiced and the Merlino defendants waived any assertion of the ECD. The appellate panel reverses, finding that any violation of Rule 4:5-1(b)(2) by plaintiff did not cause “substantial prejudice” to the Merlino defendants, and, therefore, dismissal was a mistaken exercise of the judge’s discretion. [Decided Aug. 1, 2013.]
CONSUMER PROTECTION
09-2-0868 Brown v. Lopez, App. Div. (per curiam) (18 pp.) Plaintiff owned a two-family home for many years. In 2005, the mortgagee obtained a judgment of foreclosure. Plaintiff listed the property for sale and hired defendant attorney Stanley Varon. Defendant realtor Jorge Lopez acquired title to the property after entering into a series of agreements with plaintiff. Defendant attorney William Lindsley represented Lopez. Plaintiff gave mortgages to Lopez’s associates, defendants Steven Caraccio and Luis Velasco, to secure preclosing loans allegedly made to plaintiff. At closing, plaintiff signed a use and occupancy agreement. Lopez filed a complaint for possession after plaintiff fell behind in the payments. Plaintiff filed a complaint against defendants alleging, inter alia, violations of the Consumer Fraud Act (CFA). Here, plaintiff appeals from the summary judgment dismissal of her complaint. The appellate panel finds summary judgment should not have been granted dismissing plaintiff’s CFA claims against Lopez, Velasco and Caraccio. Plaintiff was told by Lopez that she was to be his “business partner” and he would arrange financing to rehabilitate the property and pay off liens, after which plaintiff and he would be equal owners. Lopez allegedly enlisted Caraccio and Velasco in a scheme to wrest the property from plaintiff. This fits the definition of an unlawful practice. Nor should summary judgment have been granted in favor of Varon on plaintiff’s legal-malpractice claim. Summary judgment was properly granted to Lindsley. [Decided Aug. 2, 2013.]
CONTRACTS
11-2-0889 Boretsky v. Gruber, App. Div. (per curiam) (7 pp.) Plaintiff Boris Boretsky appeals from an order granting summary judgment to defendants and dismissing the complaint with prejudice. Boretsky is serving a life sentence for the murder of his wife. Prior to her death, Boretsky was a member of a limited liability company, defendant Kingston Hill Homes, L.L.C., along with defendants Andre Gruber and Karl Berkuta. After his arrest, Gruber and Berkuta agreed to provide funds for Boretsky’s defense through a structured buyout of his interest in Kingston. After reviewing Gruber and Berkuta’s projections of Kingston’s anticipated profits, Boretsky’s criminal defense lawyer, Joseph Benedict, agreed to accept a total of $217,000 in full and final payment. This amount was less than the amount agreed on for payment of attorney fees for Boretsky’s defense. The complaint alleges that defendants breached the parties’ agreement, and that he was owed the amount defendants had failed to pay Benedict plus the $50,000 conditional payment on Kingston’s profits. The appellate panel affirms summary judgment in favor of defendants. Although defendants’ unilateral modification of the agreement was perhaps a violation of the parties’ agreement, it did not result in any financial loss to Boretsky. Also, Boretsky’s claim that Kingston generated sufficient profit to trigger his conditional $50,000 payment was not supported by any competent evidence in the record. [Decided Aug. 5, 2013.]
CRIMINAL LAW
14-2-0874 State v. Sharp, App. Div. (per curiam) (8 pp.) New Jersey appeals from the order granting defendant’s motion to compel entry into the Cumberland County pretrial intervention (PTI) program. Prior to August 2011, defendant was convicted three times of driving while intoxicated (DWI). Defendant was also convicted four times of driving when her license was suspended (DWS). After defendant was charged with a fifth DWS, a grand jury indicted her on two counts of fourth-degree operating a motor vehicle during a period of license suspension pursuant to N.J.S.A. 2C:40-26a and b. The appellate panel concludes that the judge erred in finding that the prosecutor’s decision to deny defendant PTI admission was a patent and gross abuse of discretion. The prosecutor appropriately determined that defendant was an unacceptable candidate for PTI admission based on her driving record, which indicated a pattern of antisocial behavior and lack of amenability to rehabilitation. [Decided Aug. 2, 2013.]
14-2-0908 State v. Njango, App. Div. (per curiam) (12 pp.) Defendant, who pleaded guilty to, inter alia, kidnapping, attempted murder, burglary and terroristic threats charged in two indictments arising out of two incidents involving his mother-in-law and estranged wife, appeals from the denial, without a hearing, of his petition for postconviction relief based on his claim that he was under the influence of prescription medication at the time of the plea and that his counsel was ineffective because he misled defendant about the terms of the plea and failed to adequately inform him about the potential defenses of insanity or diminished capacity. Although the panel rejects defendant’s claim regarding the medication because he presents no evidence that they clouded his judgment or impaired his perception, it reverses and remands for an evidentiary hearing, finding that it appears that he had at least a colorable defense to the charges under the first indictment based on a medical report that found that at the time of the first incident he was suffering from dissociative disorder NOS and a major depressive disorder, but there was no mention of that report at the time of the plea or at sentencing and there was no waiver of the insanity defense or any defense based on diminished capacity on the record. Further, there is no way to know if the defense was raised as to the charges in the second indictment or if defendant discussed the issue with counsel. [Decided Aug. 6, 2013.]
14-2-0909 State v. Tepper, App. Div. (per curiam) (15 pp.) A grand jury charged defendant with third-degree possession of a controlled dangerous substance (marijuana) with intent to distribute. Prior to trial, defendant moved to suppress the drug evidence, alleging the warrantless search of her home was unconstitutional. Following an evidentiary hearing, the judge denied defendant’s motion, concluding that police entry into her home was valid under the community caretaking doctrine. In this matter, police first knocked at the front door and received no response. Then, after observing some of the lights were on, they proceeded through an unfenced area to access the back entrance of the home, which was partially open. In State v. Vargas, the Supreme Court set forth a test to determine the validity of police entry into or search of a home without a warrant or consent. The test requires police to “have an objectively reasonable basis to believe that an emergency require[d] immediate action to protect life or prevent serious injury.” Here, the trial judge did not have the benefit of the Vargas test to guide his review of the challenged police conduct. Consequently, the appellate panel reverses and remands to allow the court to consider the matter in light of the court’s recent decision. [Decided Aug. 6, 2013.]
ELECTION AND POLITICAL LAW
21-2-0890 Brennan v. Joint Legislative Committee on Ethical Standards, App. Div. (per curiam) (13 pp.) After defendant voted to dismiss a complaint filed against an assemblyman by plaintiff, his former political opponent, plaintiff filed this action alleging, inter alia, that the committee violated Joint Rule 19 by allowing the chairman to participate in the vote despite plaintiff’s challenge to his qualifications and that the committee violated N.J.S.A. 52:13D-22 by permitting one member, who had recently broken a knee, to participate by speakerphone. He appeals from the trial court’s determination that the committee did not violate Joint Rule 19 regarding his challenge to the chairman’s qualifications; the committee appeals, arguing that the judge erred in her interpretation of 52:13D-22(b). The panel holds that subsection (b) establishes requirements for the eligibility of members and imposes no requirements as to the procedures to be followed by members in conducting business, and that there is no legislative proscription against a member’s participation by telephone. It reverses that part of the order to the contrary. The panel dismisses plaintiff’s appeal regarding Joint Rule 19 because it calls for a judicial interpretation of a legislative rule, a nonjusticiable political question. [Decided Aug. 5, 2013.]
ENVIRONMENTAL LAW
17-2-0920 In re New Jersey Highlands Water Protection and Planning Council February 28, 2012 Decision, App. Div. (per curiam) (17 pp.) In this action in which appellant Greenwich Township argues that the Highlands Water Protection and Planning Council erred in holding that Lopatcong Township did not have to obtain the council’s prior approval before amending its land-use ordinance to permit the siting of asphalt and concrete manufacturing facilities in Lopatcong on property that is in the planning but not the preservation area, the panel affirms, finding that where the council had provided a final consistency review and recommendations report in February 2011 that required Lopatcong to submit a draft municipal ordinance petitioning for plan conformance with respect to its planning area, and adopted Resolution 2011-11 in March approving Lopatcong’s petition with the conditions set forth in the final consistency report, and Lopatcong adopted Ordinance 2011-14 adding the asphalt and concrete manufacturing facilities in November 2011, and then adopted Ordinance 2011-19 titled “Ordinance to Petition the Highlands Council for Plan Conformance for the Planning Area” in December 2011, the land at issue was not yet subject to the regional master plan when Lopatcong adopted the challenged ordinance. Therefore, prior approval was not required. [Decided Aug. 7, 2013.]
FAMILY LAW
20-2-0860 Wheeler v. Wheeler, App. Div. (per curiam) (10 pp.) In this postjudgment matrimonial matter, plaintiff Robert Wheeler appeals from the Family Part order denying his motion to reduce alimony. Robert maintains that the trial court erred by concluding that he voluntarily and willfully changed employment, which resulted in his diminished income. He argues that the judge “fail[ed] to consider the marketplace, Robert’s age, the failing economy or Robert’s true employment prospects under the totality of the circumstances.” The appellate panel rejects these arguments and affirms. The motion judge was required to consider not just whether there was a substantial change since the 2004 divorce judgment, but whether there was a substantial change since the entry of the last order in 2009. The trial judge appropriately found that Robert’s underemployment did not present a prima facie showing of changed circumstance sufficient to justify a modification of the alimony. [Decided Aug. 1, 2013.]
20-2-0869 Karen v. Karen, App. Div. (per curiam) (15 pp.) Defendant appeals from a postjudgment Family Part order terminating plaintiff’s alimony obligation on the basis of cohabitation. Finding that the trial court erred in not ordering a period of discovery and a plenary hearing to determine if defendant was cohabiting, and if she is, whether there are any economic consequences resulting from her cohabitation that warrant an adjustment to plaintiff’s alimony obligation, the panel reverses and remands for further proceedings. [Decided Aug. 2, 2013.]
20-2-0870 New Jersey Division of Youth and Family Services v. T.W., App. Div. (per curiam) (8 pp.) T.W. appeals from the final summary disposition of respondent director of the Division of Youth and Family Services that upheld the division’s determination to substantiate abuse against T.W. in connection with a single incident of discipline of his 7-year-old daughter, Heather. T.W. admits to striking Heather in the face with an open hand. Because T.W.’s act in slapping Heather does not appear to be an example of per se excessive corporal punishment, a hearing is necessary to determine whether T.W.’s actions constituted unreasonable infliction of harm under the circumstances. Finding the matter should not have been resolved in a summary fashion by the director, but required a hearing before the Office of Administrative Law (OAL), the appellate panel reverses and remands for such a hearing. [Decided Aug. 2, 2013.]
20-2-0871 Smith v. Smith, App. Div. (per curiam) (6 pp.) Defendant appeals from the denial of his postjudgment motion to terminate his alimony obligation. The panel affirms, concluding that the judge did not abuse her discretion in determining to substantially reduce but not eliminate defendant’s alimony obligation after considering the parties’ ages (early 70s), their health, defendant’s good faith in retiring, his ability to pay support and plaintiff’s needs and ability to support herself. [Decided Aug. 2, 2013.]
20-2-0891 Licata v. Licata, App. Div. (per curiam) (9 pp.) Plaintiff appeals from the Family Part orders deciding cross-motions regarding postjudgment issues. The parties’ marriage was dissolved by a judgment of divorce from bed and board in 2003, which included a property-settlement agreement (PSA). An absolute judgment of divorce was entered in 2007. Plaintiff argues that the effective date of the agreed-on increased child support should have been March 2007 when the term alimony ended. She contends that she sought enforcement of the PSA, not a retroactive modification of defendant’s child-support obligation. The appellate panel finds plaintiff’s argument on this point unpersuasive. Plaintiff’s own certification acknowledges that she had concerns that if she sought to increase defendant’s child-support obligation, defendant might seek a reduction in his alimony obligation. The record indicates that plaintiff made a calculated decision to withhold the application. The record supports the judge’s application of the doctrine of laches where defendant established that he relied on plaintiff’s nonaction in planning and managing his own financial affairs. The panel reverses and remands the amount of child support and its effective date, which the judge incorrectly calculated, and otherwise affirms. [Decided Aug. 5, 2013.]
20-2-0921 Briseno v. Burton, App. Div. (per curiam) (10 pp.) In this unopposed appeal, defendant appeals from the Family Part order that confirmed a consent order that permitted plaintiff to relocate to Florida with the parties’ children. Defendant seeks to invalidate the consent order on the bases that he signed it while under duress, threats and coercion; that he was not represented by counsel; and that under Rule 4:50-1(f), if the agreement was upheld, the result would be unjust, oppressive and inequitable. The appellate panel finds his arguments unpersuasive. Defendant was well aware of plaintiff’s desire to relocate, he had the proposed agreement for weeks, and he participated in modifying the language. Furthermore, defendant had ample time to consult an attorney. The panel concludes that the trial court’s finding that defendant’s decision to sign the consent agreement was his own decision and was not made under duress is amply supported by the record. Also, this case presents no such exceptional circumstances. The fact that defendant now believes that the terms of the agreement are unfavorable to him does not warrant invalidation of the consent order. [Decided Aug. 7, 2013.]
20-2-0922 Burkett v. Mejia, App. Div. (per curiam) (7 pp.) Defendant appeals from a portion of the Family Part’s postjudgment order in this matrimonial matter requiring him to provide plaintiff with, among other things, his income tax returns each year until he has paid in full his substantial arrearages in alimony and equitable distribution. Defendant argues that that portion of the motion judge’s order is not based on “good cause” and violates defendant’s “legitimate expectation of privacy.” The appellate panel disagrees and affirms. Defendant has the capacity to earn a high income, and his finances are highly sophisticated, with interests in properties in several states. Yet, he has defaulted twice on two agreements he voluntarily entered into with plaintiff for the payment of alimony and equitable distribution. On each occasion, he cited economic circumstances beyond his control that led to his defaults. Plaintiff has no alternative way to monitor defendant’s finances or to determine whether he has the resources to pay the debt he concedes he owes to her. [Decided Aug. 7, 2013.]
20-2-0923 Sodora v. Scarpone, App. Div. (per curiam) (10 pp.) Defendant appeals from a postjudgment order denying reconsideration of prior orders denying his requests to reduce his alimony and child-support obligations and adjust the parenting schedule. Plaintiff cross-appeals from the denial of her cross-motion to reduce certain arrearages to judgment and to compel defendant to pay his share of their daughter’s child-care costs. The panel affirms, finding that (1) the court did not err in denying defendant’s motion to reduce his alimony and child support since modification of support obligations based on changed circumstances is committed to the trial court’s sound discretion and temporary changed circumstances, such as defendant’s recent unemployment, do not warrant modification, and defendant has offered nothing entitling him to relief from the support obligations he voluntarily assumed in the parties’ PSA. The court did not err in denying defendant’s motion to reconsider its March 2012 order reconsidering its order of December 2011 or declining to entertain oral argument on the motion since dissatisfaction with a judge’s decision is not a basis for reconsideration and no new information was presented on the most recent motion for reconsideration. As to the cross-appeal, the panel finds that the court did not err in ordering the parties to cooperate in allowing defendant to assume child-care responsibilities to defray child-care costs. The panel declines to exercise its original jurisdiction and enter judgments against defendant for arrearages and counsel fees he was ordered to pay, finding that a trial court has considerable discretion to choose the manner by which to compel compliance with its orders. [Decided Aug. 7, 2013.]
LABOR AND EMPLOYMENT
25-2-0904 In the Matter of Williams, App. Div. (per curiam) (11 pp.) Richard Williams Jr. appeals from the Civil Service Commission’s action, affirming the decision of the administrative law judge (ALJ) to remove Williams from employment with the Atlantic City Fire Department. Williams’ disciplinary charges arose out of an allegation that while on duty he exposed himself and ejaculated in front of a group of women during an unscheduled tour of the fire station, and improperly allowed the women to wear fire department equipment. The group of women included Candius Williams (no relation), who is involved in a civil suit against Atlantic City for events arising out of the same incident. Williams contends that the ALJ should have recused himself from hearing the case because the ALJ’s son is an associate in the law firm representing Candius in her civil suit. Although an attorney’s claimed conflict of interest is no longer evaluated under the appearance-of-impropriety standard, that standard has never been altered as to judges. The appellate panel finds that an objectively reasonable, fully informed member of the public would perceive that participation by the ALJ in these proceedings calls into question his impartiality and the impartiality of the commission’s decision, as well as the integrity of the proceedings. The panel reverses and remands, finding the employment of the ALJ’s son as an associate in the firm representing Candius, and the lack of recusal of the ALJ irretrievably tainted the action taken by the commission. [Decided Aug. 6, 2013.]
LAND USE AND PLANNING
26-2-0861 Bloomfield Joint Venture v. Planning Bd. of Bloomfield Twp., App. Div. (per curiam) (15 pp.) Plaintiffs, owners of properties located in and near a redevelopment area, appeal from the Law Division judge’s dismissal of their complaint in lieu of prerogative writs contending the board’s grant of preliminary and final site-plan approval, major subdivision approval and exceptions from an approved redevelopment plan to defendant-applicants for a redevelopment project was arbitrary, capricious and unreasonable. The panel affirms, finding that (1) the board did not approve a site plan that impermissibly expanded the designated redevelopment area; (2) the board did not act arbitrarily and capriciously in approving design standards for the roadways that deviated from the general land-use ordinance; (3) the board did not improperly delegate authority to the parking authority to determine the number of parking spaces deemed necessary but decided the issue for itself and the failure of the redevelopment plan to adopt a standard expressly superseding that in the general land-use ordinance did not render the board’s decision arbitrary, capricious and unreasonable; and (4) there is no basis to reverse the trial court order based on plaintiff Bloomfield Daval Corp.’s claim that the proposed realignment of an intersection resulted in a taking of its property without notice or consent where the realignment anticipates that a portion of concrete sidewalk would be reconfigured and defendants presented a deed and survey that show that the area at issue is not part of BDC’s property but rather lies in the public right of way. [Decided Aug. 1, 2013.]
LEGAL PROFESSION
04-3-0924 Gelber v. Heck, Ch. Div. — Bergen Co. (Doyne, A.J.S.C.) (2 pp.) The court denies the motion for reconsideration of its earlier decision in this matter but, in response plaintiff’s counsel’s request that it post an opinion addressing its prior concerns about an apparent lack of candor, the court accepts counsel’s statements that there was never an intention to be less than forthright with the court and so finds. [Decided Aug. 2, 2013.]
LEGAL PROFESSION — MORTGAGE FORECLOSURE
04-2-0905 Deutsche Bank National Trust Co. v. Mazzella, App. Div. (per curiam) (20 pp.) In this foreclosure action, defendant/third-party plaintiff Mazzella appeals from the order dismissing her complaint asserting claims for violation of the Fair Debt Collection Practices Act and the Fair Foreclosure Act and negligence against the law firm of Zucker, Goldberg & Ackerman, which had filed the notice of intent to foreclose notwithstanding an alleged forbearance agreement. The panel affirms in part and reverses and remands in part, finding that there is no private right of action for damages under the FFA and, therefore, this count of the third-party complaint was properly dismissed, but that the facts alleged on the face of the complaint — including the existence of the forbearance agreement, Mazzella’s actual performance under the agreement, ZGA’s service of the NOI, its indication that Mazzella could contact ZGA if she disputed the debt, and ZGA’s alleged failure to respond to Mazzella’s correspondence — when viewed with liberality, sufficiently stated a cause of action for negligence. [Decided Aug. 6, 2013.]
MEDICAL MALPRACTICE — EXPERT WITNESSES
29-2-0872 Kim v. Ahn, App. Div. (per curiam) (21 pp.) In this medical-malpractice action alleging, inter alia, that defendant Ahn, a family practice physician, was negligent, plaintiff appeals from an order barring the testimony of his expert, who was board-certified in internal medicine, and dismissing his complaint against Ahn. The panel affirms the order barring the expert’s testimony because he did not meet the enhanced qualification requirements of the Patients First Act. However, it reverses the order dismissing the complaint and remands to the trial court to permit plaintiff a reasonable amount of time to produce a report by an expert who meets the qualification requirements of N.J.S.A. 2A:53A-41 because defendant’s counsel waited five years to object to the expert despite knowing of the lack of qualifications and because counsel’s conduct during that period induced plaintiff to believe that he could rely on his expert’s testimony to prove his case. [Decided Aug. 2, 2013.]
PUBLIC RECORDS
52-2-0862 Kelley v. Rockaway Twp., App. Div. (per curiam) (9 pp.) In response to a complaint filed by plaintiff alleging denial of his rights under the Open Public Records Act arising out of the defendant’s failure to produce executive session meeting minutes for the township council from Jan. 1, 2009, to the present, on the basis that they had not been produced and approved, the court ordered a schedule for preparation, approval and production of the minutes, subject to lawful redaction. Plaintiff appeals from the denial of his request for attorney fees. The panel affirms, finding that plaintiff prevailed under the Open Public Meetings Act, which does not have a provision for the award of attorney fees to the prevailing party, not the Open Public Records Act. [Decided Aug. 1, 2013.]
TAXATION
35-5-0863 90 Riverdale, L.L.C. v. Borough of Riverdale, Tax Ct. (Bianco, J.T.C.) (18 pp.) This is the court’s opinion after trial, concerning the challenge by plaintiff 90 Riverdale, L.L.C., to the 2009, 2010 and 2011 property tax assessments of its property located in defendant Riverdale. Plaintiff’s expert valued the property under the income capitalization and market approaches. Defendant’s expert concluded separate office and industrial values of the existing improvements on the property using the income capitalization approach only. Although the court accepts as plausible plaintiff’s premise that the building on the property contains an obsolete second-floor office area that impedes the industrial space to below market standards and should be removed, its expert falls short of the mark in providing a reliable opinion of value. No reliable data were provided with which the court could confirm or even recalculate demolition costs or determine the necessity of demolition. The market approach used by plaintiff’s expert also falls short of meeting the burden of proof. As to the borough’s expert, the court is not convinced that his conclusions of separate values for each of the office and industrial uses are justified where the office use of the property is solely appurtenant to the primary industrial use. Valuing the individual components of the property separately resulted in significantly inflated values. Nor is any excess land value justified. The court affirms the property tax assessments. [Decided July 30, 2013.]
35-5-0873 Becker’s Tree Service Inc. v. Director, Division of Taxation, Tax Ct. (DeAlmeida, J.T.C.) (14 pp.) Plaintiff, an S corporation that operates a tree removal, tree trimming, land clearing and recycling business, appeals from the director’s determination that it owes sales and taxes, interest and penalties on the purchase of a hydraulic excavator and skid loader and on certain expense transactions. The court finds that the excavator and the skid loader are equipment used exclusively to sort and prepare solid waste for recycling and thus fall within the exemption in N.J.S.A. 54:32B-8.3a and the director erred in assessing sales and use tax on receipts from their purchase. The court affirms the finding that the expense transactions identified by the auditor and used to formulate an error rate for 2003 are subject to sales tax, rejecting each of plaintiff’s claimed exemptions. [Decided July 2, 2013.]
35-5-0907 Shalom v. City of Long Branch, Tax Ct. (Sundar, J.T.C.) (23 pp.) This is the court’s decision following trial. Plaintiff contests the local property tax assessment for tax year 2012 on the subject property in defendant Long Branch. The court finds that plaintiff’s expert’s designation of 50 percent of the subject property’s size as being surplus land of diminished value is not credible, nor is her conclusion of the per foot square foot value for the same. In addition, the comparable land sales and adjustments are deficient. Plaintiff has failed to persuade the court that the assessment is incorrect. The court affirms the assessment. [Decided Aug. 2, 2013.]
FEDERAL COURT CASES
ALTERNATIVE DISPUTE RESOLUTION
03-7-0875 Bayonne Drydock & Repair Corp. v. Wartsila North America Inc., U.S. Dist. Ct. (Cecchi, U.S.D.J.) (10 pp.) Defendant Patriot Contract Services contracted with plaintiff for repair services to a ship owned by it. Plaintiff subcontracted with defendant Wartsila to perform stern tube seal work on the ship. Patriot withheld partial payment to offset damages it sustained when the stern tube seal work failed and plaintiff filed suit. Plaintiff objects to the report and recommendation of the magistrate judge that defendants’ motion to compel arbitration should be granted and that the complaint should be dismissed without prejudice. The court adopts the report and recommendation, finding that whether Patriot waived its contractual right to arbitration is an issue for the court to determine; that Patriot’s demand for arbitration was timely; that service of Patriot’s cross-claims against defendant Wartsila was not properly effected on Wartsila, Patriot does not have any live cross-claims against Wartsila, and even if the cross-claims had been properly served, they would be subject to arbitration because Patriot directly benefited from the contract between Wartsila and plaintiff. [Filed June 28, 2013.]
03-7-0926 Miller v. Club Demonstrations Services Inc., U.S. Dist. Ct. (Cooper, U.S.D.J.) (2 pp.) In this action alleging violation of the New Jersey Conscientious Employee Protection Act, defendant moves to compel arbitration of the underlying dispute. The court grants the unopposed motion and stays this action until such arbitration has been held. [Filed July 11, 2013.]
BANKING AND FINANCIAL INSTITUTIONS
06-7-0927 Signature Bank v. Check-X-Change, U.S. Dist. Ct. (Salas, U.S.D.J.) (10 pp.) Plaintiff filed a complaint against defendant alleging that plaintiff honored two checks that were drawn from plaintiff’s customer’s bank account and deposited into defendant’s bank account at another bank. Defendant, in response, filed an answer that included a counterclaim and affirmative defenses. Defendant’s counterclaim against plaintiff alleges that plaintiff acted “negligently, carelessly, and recklessly” when it honored the counterfeit checks. Defendant also alleges that plaintiff breached a duty to defendant by not exercising ordinary care in the performance of its banking duties, and, as a proximate result, defendant was “greatly damaged.” Defendant demands damages, interest, cost of suit, attorney fees and other just and proper relief. The counterclaim and affirmative defenses are the subject of this motion. Because defendant’s allegations are merely conclusory as to each element of negligence, the court finds that defendant failed to make a plausible claim for negligence. Accordingly, plaintiff’s motion to dismiss defendant’s counterclaim is granted. The court declines to strike any of defendant’s 31 affirmative defenses. [Filed June 27, 2013.]
BANKRUPTCY
42-7-0894 In re MicroBilt Corp., U.S. Dist. Ct. (Shipp, U.S.D.J.) (28 pp.) Appellant Chex Systems Inc. appeals an order entered by the bankruptcy court that memorialized the bankruptcy court’s oral opinion that adjudicated two motions, each of which sought to settle the terms of a resale agreement between the parties and allow appellee MicroBilt Corp. to assume a resale agreement the parties had previously entered. Chex alleges that the factual findings of the bankruptcy court were clearly erroneous and its legal conclusions constituted manifest errors of law. The court affirms the findings and determinations of the bankruptcy court in part, reverses in part and remands for further proceedings. The bankruptcy court’s determinations regarding the pricing structures are reversed and the matter is remanded. The bankruptcy court’s decision to insert additional pricing terms into the agreement is reversed. [Filed June 26, 2013.]
42-7-0895 In re Paul, U.S. Dist. Ct. (Wolfson, U.S.D.J.) (9 pp.) Debtors John Peter and Marie Elizabeth Paul appeal from the decision of the bankruptcy court denying their motion to reopen their bankruptcy case to seek return of funds in a bank account levied on by Chase Bank USA prior to the filing of the bankruptcy petition. The court determines that although the finds were actually turned over postpetition, the prepetition entry of a turnover order divested debtors of their interest in the funds, and thus the funds were properly not included in the bankruptcy estate. Therefore, the bankruptcy court’s decision that there was no cause to reopen the case is affirmed. [Filed July 9, 2013.]
42-7-0896 In re Purington, U.S. Dist. Ct. (Hillman, U.S.D.J.) (7 pp.) Filo-mena Boccella appeals from the bankruptcy court’s order denying her request to declare that the debt due to her from debtor Purington arising out of a failed home-improvement contract was nondischargeable under 11 U.S.C. § 523(a)(2)(A) and dismissing her complaint with prejudice. The court denies the appeal, finding that Boccella failed to establish that the bankruptcy court applied the wrong legal standard or made clear errors of fact that would support reversal of its decision that she failed to establish the critical element of intent to deceive against the debtor by a preponderance of the evidence. [Filed July 9, 2013.]
CIVIL PROCEDURE
07-7-0876 Sabbagh v. City of Hackensack, U.S. Dist. Ct. (Salas, U.S.D.J.) (5 pp.) This action arises from a zoning dispute between defendants and plaintiff. Plaintiff’s third amended complaint alleges that defendants manipulated Hackensack’s zoning ordinance in unlawful and discriminatory ways that caused plaintiff economic harm. Plaintiff contends that because of plaintiff’s race, religion and political views, Hackensack’s zoning board refused to issue him certificates of occupancy or grant him a use variance. Plaintiff brought suit to recover lost rent and other damages that allegedly stem from the zoning board’s discriminatory and unlawful actions. Defendants moved to dismiss and during oral argument, plaintiff’s attorney voluntarily withdrew plaintiff’s racial discrimination claims. Subsequently, the court dismissed plaintiff’s remaining claims. Now, plaintiff moves for reconsideration, arguing that sustaining the voluntary dismissal of his racial discrimination claims constitutes a “manifest injustice.” The court denies plaintiff’s motion for reconsideration. Plaintiff’s attorney’s unauthorized waiver of plaintiff’s racial discrimination claims does not constitute manifest injustice in part because those claims were weak and supported by scant evidence. [Filed June 28, 2013.]
07-7-0928 Hyman v. West Coast Holdings Group Inc., U.S. Dist. Ct. (Walls, S.U.S.D.J.) (4 pp.) Plaintiffs agreed to make two loans to defendant West Coast. Pursuant to the agreement, plaintiffs forwarded funds to defendant Rust, a Texas attorney, to be held in escrow. When West Coast failed to make payments under the terms of the promissory notes payable to plaintiffs, they filed this action in which they now seek a default judgment. Because there is no docket entry of plaintiffs’ application for entry of default by the clerk, and because without an entry of default, plaintiffs’ motion is procedurally deficient, the court denies their motion. It also rejects plaintiffs’ attempt to circumvent this requirement by attaching a document purporting to be Rust’s withdrawal of the answer that he filed, holding that it will not issue an order withdrawing the answer without a motion to withdraw filed by Rust. [Filed July 11, 2013.]
07-7-0929 Smalls v. Riviera Towers Corp., U.S. Dist. Ct. (Chesler, U.S.D.J.) (3 pp.) After filing this action and an amended complaint, pro se plaintiff filed second and third amended complaints adding additional defendants without obtaining the parties’ consent and without making a motion seeking leave to appeal. She seeks reconsideration of the court’s dismissal of the SAC and the TAC for failure to comply with Rule 15, arguing that the dismissal is inconsistent with the pretrial scheduling order. The court denies the motion, explaining that the scheduling order applies to motions and that if plaintiff wishes to further amend the complaint, she must either obtain defendants’ consent or make a motion for leave to file an amended complaint. [Filed July 11, 2013.]
CIVIL PROCEDURE — JURISDICTION AND SERVICE OF PROCESS
07-7-0877 Howe v. Litwack, U.S. Dist. Ct. (Hillman, U.S.D.J.) (30 pp.) Plaintiff Lauri Howe brings this action primarily against Robert Litwack, who served as a court-appointed receiver for plaintiff’s family’s business in underlying state court proceedings. Plaintiff also brings claims against Litwack’s employer, the law firm of Litwack & Kernan, on the basis of respondeat superior. Plaintiff further asserts claims against Gruccio, Pepper, DeSanto & Ruth, the law firm that represented Litwack during the course of the receivership. Finally, plaintiff asserts claims against Troy Ferus, who Litwack hired as a marketing consultant. Plaintiff asserts claims under the Racketeer Influenced and Corrupt Organizations Act (RICO) and the New Jersey RICO statute. Plaintiff also brings a claim for deprivation of her civil rights under 42 U.S.C. § 1983. Finally, plaintiff asserts additional state law claims for breach of fiduciary duty, aiding and abetting a breach of fiduciary duty, negligence, abuse of process, civil conspiracy, unjust enrichment and respondeat superior. Plaintiff’s federal law claims are barred by the Rooker- Feldman doctrine. Plaintiff no longer maintains a cause of action that independently establishes federal subject-matter jurisdiction. Declining to exercise supplemental jurisdiction, the court dismisses the remaining state law claims without prejudice. [Filed June 30, 2013.]
07-7-0898 Newtechbio Inc. v. Septicleanse Inc., U.S. Dist. Ct. (Shipp, U.S.D.J.) (8 pp.) Plaintiff Newtechbio Inc. filed a complaint against defendant Septicleanse Inc., seeking to enjoin it from selling a competing septic system cleaning product and to cease and desist its allegedly unfair-competition practices. The complaint alleges that defendant engaged in a pattern of unfair competition whereby defendant (1) created fictitious consumer review websites that negatively reviewed plaintiff’s product, thereby negatively affecting plaintiff’s sales; and (2) purchased ads on major search engines that appear when consumers search for plaintiff’s products. Defendant filed a motion to dismiss based on lack of personal jurisdiction. The court denies the motion, finding Septicleanse has the requisite minimum contacts with New Jersey because it has knowingly interacted with New Jersey residents. Also, the 20-plus sales made by Septicleanse to New Jersey residents over the course of a five-month period clearly demonstrate the requisite minimum contacts. Finally, the court’s assertion of personal jurisdiction would not offend traditional notions of fair play and substantial justice. [Filed June 27, 2013.]
CIVIL PROCEDURE — REMOVAL
07-7-0878 Brooks v. Foglio, U.S. Dist. Ct. (Irenas, S.U.S.D.J.) (17 pp.) Plaintiff had flood insurance from Fidelity National Indemnity Insurance Company through the National Flood Insurance Program. After her home was damaged by Hurricane Sandy, she hired a public adjuster, defendant Molette, and filed a claim with Fidelity. Fidelity hired Colonial Claims to adjust the claim and paid plaintiff $80,000. The Foglio defendants were hired to make repairs. Plaintiff then filed this action in state court alleging that she was paid too much money for the damages and asserting claims sounding in contract, fraud and negligence. Colonial Claims filed a motion to remove and a motion to dismiss. Plaintiff has filed a motion to remand and for attorney fees and costs. Because Colonial Claims removed the action without receiving consent from the Foglio and Molette defendants, the court grants the motion to remand. The motion for attorney fees and costs is denied because the Colonial Claims defendants’ arguments for removal under § 1331 may have had merit but for the procedural defect, which required a remand. Therefore, it cannot be said that they lacked an objectively reasonable basis for seeking removal and, thus, attorney fees and costs will not be awarded. [Filed July 2, 2013.]
CIVIL PROCEDURE — VENUE
07-7-0879 Bryan v. Bristol-Myers Squibb Co., U.S. Dist. Ct. (Shipp, U.S.D.J.) (7 pp.) Plaintiff, who is presently incarcerated in South Carolina, is not eligible for parole, and who is projected to be released in 2026, filed this action in New Jersey Superior Court alleging that he suffers serious liver pain and mental distress as a result of taking Buspirone, a drug he alleges was manufactured by defendant. Defendant removed the action and now seeks to transfer venue to the District Court of South Carolina. The court weighs the Jumara private and public factors and concludes that they strongly favor transfer where plaintiff is incarcerated in South Carolina, he ingested the Buspirone there, his medical providers are there, and denying transfer would significantly inconvenience potential witnesses. Defendant’s motion to transfer is granted. [Filed June 28, 2013.]
CIVIL RIGHTS
46-7-0910 Roe v. Rutgers, The State University, U.S. Dist. Ct. (Wigenton, U.S.D.J.) (13 pp.) Defendant moves to dismiss this action filed by the co-guardians of John Roe, a 32-year-old male with severe mental retardation, after defendant Stubblefield, a Rutgers University professor, allegedly sexually molested John while purportedly training him in facilitative communications. The court grants Rutgers’ motion to dismiss, finding that (1) plaintiffs fail to set forth a viable § 1983 claim for violation of plaintiff’s Fourth and Fourteenth Amendment rights since although they assert that Rutgers’ customs and policies were the moving force behind the unconstitutional acts of its agent, they do not demonstrate that Rutgers permitted faculty to sexually assault human research subjects or that it condoned discrimination and thus fail to show that Rutgers acted with deliberate indifference to plaintiffs, and they fail to set forth facts supporting their claims of failure to train, supervise and discipline its employees; (2) plaintiffs fail to establish a viable claim for the intentional torts of sexual assault, assault and invasion of privacy since although Stubblefield was a Rutgers employee, her actions were allegedly intentional and not within the scope of her employment, were not foreseeable, and could not reasonably be actuated by a purpose of serving Rutgers, and to the extent that her actions constituted criminal conduct, Rutgers would not be held vicariously liable for such acts; (3) the negligence claim based on a theory of respondeat superior fails because Stubblefield’s actions were not within the scope of her employment; (4) the claim under the Law Against Discrimination fails because, inter alia, plaintiffs do not allege that Roe was an employee who suffered employment discrimination or that he was denied access to a public place; and (5) plaintiffs do not allege sufficient facts to establish the claim for interference with parental-child rights. Plaintiffs are given 30 days to amend the complaint. [Filed July 9, 2013.]
46-7-0930 Desrivieres v. United States, U.S. Dist. Ct. (Martini, U.S.D.J.) (7 pp.) To break up a fight between two brothers on federal land, National Park Service Ranger Michael Klubek shocked plaintiff Alexandre Desrivieres with a taser. Desrivieres subsequently brought a complaint against defendants Klubek, the United States and the U.S. Department of Interior alleging constitutional violations under the Federal Tort Claims Act, as well as excessive force under Bivens v. Six Unknown Agents of the Federal Bureau of Narcotics. Defendants move for summary judgment. The court finds Desrivieres is judicially estopped from denying the statements he made in his plea allocution. The plea allocution does not provide a blow-by-blow account, but it provides enough information to conclude that Klubek’s response was not excessive. Summary judgment is granted. [Filed June 27, 2013.]
CIVIL RIGHTS — ATTORNEY FEE RECOVERY
46-7-0911 New Jersey Primary Care Association Inc. v. State of New Jersey Department of Human Services, U.S. Dist. Ct. (Bongiovanni, U.S.M.J.) (24 pp.) Plaintiff New Jersey Primary Care Association (NJPCA) filed the underlying complaint against the New Jersey Department of Human Services, alleging violations of the U.S. Constitution and of the federal Medicaid statute. Plaintiff filed a motion for a preliminary injunction and the parties filed cross-motions for summary judgment. The court granted plaintiff’s motion for a preliminary injunction and its motion for summary judgment, and denied defendant’s motion for summary judgment. Defendants’ appeal before the Third Circuit is pending. Plaintiff was granted leave to bring this motion pursuant to 42 U.S.C. § 1988 for attorney fees and costs as the prevailing party. Plaintiff’s motion for attorney fees and expenses is granted in part. [Filed June 28, 2013.]
CIVIL RIGHTS — EXPERT WITNESSES
46-7-0931 Smith v. New Jersey, U.S. Dist. Ct. (Simandle, U.S.D.J.) (17 pp.) In this action asserting claims for violations of 42 U.S.C. § 1983, the New Jersey State Constitution, and the New Jersey Civil Rights Act, arising from the constitutional rights to be free from unlawful arrest, excessive use of force in making an arrest, and warrantless entry into plaintiffs’ home, in which the court has dismissed the § 1983 claims against the state, the state police and the trooper defendant in his official capacity but denied the motion to dismiss as to the trooper in his individual capacity, the court precludes plaintiffs’ expert Timothy Longo’s testimony because he expresses opinions that are simply the application of constitutional law to the facts of the case and thus usurp the province of the court and because he speculates about the police officers’ state of mind in ways that are unhelpful to the fact finder, are not reliable and are not based on specialized knowledge. [Filed July 11, 2013.]
CONSUMER PROTECTION
09-7-0912 In re Front Loading Washing Machine Class Action Litigation, U.S. Dist. Ct. (Hochberg, U.S.D.J.) (20 pp.) In this action filed on behalf of a nationwide class of persons who purchased front-loading automatic washing machines that were marketed and sold by LG, that allegedly have a common drainage defect and a common design defect in the dryer drum and/or door gasket that cause the proliferation of mold and mildew and foul odors, and which asserts claims for, inter alia, violations of the New Jersey Consumer Fraud Act and Magnuson-Moss Warranty Act, and for breach of express and implied warranties and for unjust enrichment under New Jersey law, defendant’s Daubert motion to exclude Drs. Wilson and Yang is denied. Plaintiffs’ motion to exclude defendant’s experts, Drs. Caulfield and Wysocki, is denied. Plaintiff’s motion to exclude defendant’s expert, Dr. Maronick, is granted. Defendant’s motion to strike alleged inadmissible evidence is denied because, inter alia, the sham-affidavit doctrine is not currently appropriate and does not required the court to disregard plaintiffs’ disputed declarations; evidence regarding remedial design defects will be admitted at trial only in a matter consistent with Rule 407 and those rulings will be made at trial; and the Federal Rules of Evidence are not stringently applied during class certification and courts may consider evidence that might later be ruled inadmissible at trial and plaintiffs may rely on challenged documents that may or may not contain hearsay in support of their class certification motion. [Filed July 10, 2013.]
CREDITORS’ AND DEBTORS’ RIGHTS
15-7-0899 Dunn v. Premier Capital Inc., U.S. Dist. Ct. (Hochberg, U.S.D.J.) (12 pp.) In this action asserting claims for violations of the Fair Debt Collection Practices Act and the New Jersey Consumer Fraud Act, filed after defendant sued plaintiff in state court to collect on four student loans that plaintiff maintains have been repaid, the court denies defendant’s motion for summary judgment because (1) the action is not time-barred because it is based on the filing of the state court action against plaintiff, not from the date defendant first contacted her about the loans; (2) the evidence proffered by plaintiff is admissible under the public-records exception to the hearsay rule and even if not admissible, her testimony alone would be enough to present a question of material fact as to whether the loans have been paid, precluding summary judgment; (3) defendant waived the bona fide error exception defense raised for the first time on its motion for summary judgment; and (4) defendant is not entitled to attorney fees because there is no evidence that plaintiff’s FDCPA claim was brought in bad faith. Plaintiff’s motion for summary judgment on her claim under 15 U.S.C. § 1692e(10) is denied because there is a genuine issue of material fact as to whether the loans have been paid. Plaintiff’s motion for summary judgment on defendant’s counterclaims for intentional misrepresentation and negligent misrepresentation is granted because there is no basis for the claims where there are state records providing a basis for plaintiff’s claims that the debt was fully paid. [Filed July 9, 2013.]
15-7-0913 Turner v. Professional Recovery Services Inc., U.S. Dist. Ct. (Schneider, U.S.M.J.) (15 pp.) Plaintiff alleges that defendant violated the Fair Debt Collection Practices Act in its attempts to collect on her credit-card debt. The parties dispute the specifics of defendant’s efforts to recover the debt. The court denies summary judgment on plaintiff’s claim that defendant called her after 9 p.m. in violation of the act because her affidavit is sufficient to create a genuine issue of material fact for the jury to decide. Summary judgment is denied on the claimed violation of § 1692d because a reasonable jury could conclude that the volume and pattern of defendant’s calls were intended to annoy, abuse or harass her. Summary judgment is granted as to the claimed violation of § 1692f because plaintiff does not point to any alleged unfair or unconscionable conduct not addressed by her § 1692c(a)(1) or § 1692d claims, making her claim under § 1692f redundant. [Filed July 9, 2013.]
CRIMINAL LAW — CORRECTIONS
14-7-0917 Hargis v. Aramark Correctional Service, U.S. Dist. Ct. (Simandle, U.S.D.J.) (35 pp.) Plaintiff was a pretrial detainee who was admitted to the Atlantic County Justice Facility in 2009 with a gunshot wound. He alleges that he was forced to live in overcrowded and unsanitary conditions due to a systematic policy of overcrowding pretrial detention facilities and contracted an MRSA infection as a result. The moving defendants’ motion for summary judgment is granted in part and denied in part. Because plaintiff failed to present any evidence from which a rational jury could conclude that the moving defendants had a personal involvement in the alleged constitutional violations, summary judgment is granted as to the claims against them in their individual capacity. However, plaintiff has produced sufficient evidence from which a rational jury could find that he was deprived of his constitutional rights under the Fourteenth Amendment as a result of the county’s custom of prison overcrowding as applied to a detainee with an open gunshot wound, and that it was foreseeable that personal harm would be caused by such policy. Therefore, summary judgment is denied as to the claims against the moving defendants in their official capacities. Defendants Aramark and the Atlantic County Health and Sanitation Department are dismissed without prejudice for failure to serve. Fictitious defendant John Doe Warden/Director is dismissed as plaintiff has failed to amend his complaint to name this fictitious defendant after discovery has been completed. [Filed July 10, 2013.]
ENVIRONMENTAL LAW
17-7-0865 United States v. Pechiney Plastic Packaging Inc., U.S. Dist. Ct. (Bongiovanni, U.S.M.J.) (11 pp.) On Nov. 6, 2009, the United States filed this action seeking to recover costs incurred or to be incurred responding to the release or threatened release of hazardous substances at the Pohatcong Valley Groundwater Superfund Site. On Feb. 22, 2013, the United States filed a motion to amend and supplement its complaint, seeking to add six new defendants to this suit, as well as in rem claims against real estate located in Washington, N.J. Defendant Pechiney Plastic Packaging Inc. (PPPI) filed its opposition to the U.S. motion to amend, as well as its motion for summary judgment. In addition, PPPI moved to stay the U.S. motion to amend, pending the court’s resolution of PPPI’s motion for summary judgment. The court denies PPPI’s motion to stay because it is based on speculative premises, the prejudice to the United States and the proposed new defendants outweighs the prejudice to PPPI, and the stay is contrary to the public interest. [Filed July 2, 2013.]
HEALTH LAW
22-7-0900 Vander-Leeuw v. First Unum Life Ins. Co., U.S. Dist. Ct. (Linares, U.S.D.J.) (24 pp.) Plaintiff, a legal secretary, filed this action after defendant determined that he was no longer entitled to long-term disability benefits under a group disability insurance policy it issued to his employer. The policy confers discretionary authority on defendant to determine eligibility for benefits and interpret its terms and provisions. The court grants summary judgment in favor of defendant, finding that (1) conflict of interest is not a significant factor in this case; (2) substantial evidence supports defendant’s initial determination of benefits due to a total hip replacement and recovery needs; (3) defendant’s discontinuation of benefits was not arbitrary and capricious where defendant conducted a thorough review of the available records and physicians’ statements and none indicated that plaintiff was incapable of typing; and (4) defendant is entitled to reimbursement of LTD benefits paid to plaintiff while he was also receiving Social Security benefits where, inter alia, he executed a benefit payment option form in which he acknowledged the likelihood that he would have to reimburse defendant for overpayment. [Filed July 9, 2013.]
HEALTH LAW — ERISA
22-7-0880 Atlantic Spinal Care v. Highmark Blue Shield, U.S. Dist. Ct. (Linares, U.S.D.J.) (10 pp.) In this action between a health-care provider and an insurance company, filed after defendant paid plaintiff only a fraction of the amount it was seeking for having provided medical services to a plan participant who assigned his rights under the plan to plaintiff, in which plaintiff seeks relief from an alleged disclosure violation pursuant to § 502(a)(1)(A) of ERISA, codified at 29 U.S.C. § 1132(a)(1)(A), defendant moves to dismiss for lack of standing. The court finds that although the complaint, coupled with the actual assignment document, are arguably sufficient to establish plaintiff’s derivative standing by assignment to bring a claim under ERISA, the complaint fails to state a viable claim under ERISA since plaintiff’s standing is premises entirely on the plan participant’s assignment but evidence shows that the plan contained an anti-assignment provision, and although plaintiff argues that defendant has waived its ability to rely on this provision by virtue of the parties’ course of dealing, the complaint contains no facts to support a theory of waiver. However, the dismissal is without prejudice and plaintiff is permitted to file an amended complaint that cures these deficiencies to the extent possible. [Filed July 2, 2013.]
22-7-0881 Martin v. The Prudential Ins. Co. of America, U.S. Dist. Ct. (Salas, U.S.D.J.) (21 pp.) Plaintiff filed a class-action complaint under ERISA, alleging three counts: (1) a claim for wrongful denial of benefits against Prudential, the administrator of his long-term disability plan, under § 502(a)(1)(B) of ERISA, alleging that Prudential underpaid his LTD benefits (count one); (2) a claim for breach of fiduciary duty against Prudential and Saia, his employer, under § 502(a)(3)(A) of ERISA, seeking a declaratory judgment to declare the proper interpretation of the plan and to enjoin defendants’ continued misinterpretation of it (count two); and (3) a claim for breach of fiduciary duty against Prudential and Saia under § 502(a)(3)(A) of ERISA, seeking equitable relief to provide make-whole relief in the form of surcharge and reformation or estoppel (count three). Defendants move to dismiss. The court finds that the limitation period for plaintiff’s claim in count one began when he first learned the amount of his monthly LTD benefits and that, therefore, his claim for benefits is time-barred and that he has not stated a claim for equitable tolling. However, the dismissal is without prejudice to his amending his pleadings to plead the applicability of the equitable tolling doctrine. The court finds that the claims of breach of fiduciary duty in counts two and three are not time-barred and denies defendants’ motions to dismiss those counts. [Filed July 2, 2013.]
22-7-0914 UFCW Local 152 Health and Welfare Fund v. Holiday Shop N Bag at Welsh Road, U.S. Dist. Ct. (Hillman, U.S.D.J.) (11 pp.) Plaintiffs’ unopposed motion for a default judgment is granted in this action arising out of defendants’ failure to remit to plaintiff-fund required payments for the benefit of their employees pursuant to the parties’ collective-bargaining agreement. The court finds that there is nothing in the record to suggest that defendants have a meritorious defense, plaintiffs’ employee beneficiaries will suffer prejudice if judgment is not entered in plaintiffs’ favor because they have no other means by which to obtain the allegedly withheld payments, and where defendants were given the proper time and opportunity to respond or otherwise defend, there is no reasons for the default other than their own conduct. [Filed July 9, 2013.]
INSURANCE LAW
23-7-0882 In re Sun Life Assurance Company of Canada Insurance Litigation, U.S. Dist. Ct. (Martini, U.S.D.J.) (9 pp.) In 1994, Sun Life issued a flexible premium adjustable life insurance policy to the Allan R. Curhan Trust. Mr. Curhan used the brokerage services of the Himmelstein Agency. In 1995, a putative class action was filed against Sun Life that was consolidated with other proceedings by the Judicial Panel on Multidistrict Litigation. In their class-action complaint, the MDL plaintiffs alleged that misleading sales presentations and marketing materials deceived them into purchasing Sun Life insurance policies. A settlement agreement was entered into by Sun Life and the MDL plaintiffs. Although Sun Life’s records indicate notice of the settlement was sent to the trust, Mr. Curhan claims he never received it. Mr. Curhan did not opt out of the settlement. A final order and judgment was entered on Dec. 3, 1998, incorporating the settlement agreement and containing an injunction barring class members who did not timely exclude themselves from the class from filing a lawsuit related to the “released conduct.” After the policy was transferred from the trust to Mrs. Curhan, the premiums were raised and the policy ultimately canceled. Mrs. Curhan filed suit against Sun Life and the Himmelstein Agency. Sun Life maintains that her lawsuit is barred by the injunction. The court agrees. Since the trust did not opt out of the class settlement, it was bound by the settlement, as is the assignee of the policy, Mrs. Curhan. The court grants Sun Life’s motion for an injunction. [Filed July 2, 2013.]
INTELLECTUAL PROPERTY
53-7-0866 Warner Chilcott Company v. Mylan Inc., U.S. Dist. Ct. (Pisano, U.S.D.J.) (10 pp.) This is a Hatch-Waxman patent infringement action in which plaintiff Warner Chilcott Company alleges that defendants Mylan Inc., Mylan Pharmaceuticals Inc. and Famy Care Ltd. and Lupin Ltd. and Lupin Pharmaceuticals Inc. have infringed on U.S. patent 6,667,050. Presently before the court is the parties’ request for claim construction. The court held a Markman hearing and this opinion addresses the proper construction of the disputed claim terms. [Filed July 2, 2013.]
INTELLECTUAL PROPERTY — PATENTS
53-7-0867 Helsinn Healthcare S.A. v. Dr. Reddy’s Laboratories, Ltd., U.S. Dist. Ct. (Arpert, U.S.M.J.) (12 pp.) Plaintiffs sued defendants for patent infringement. Defendants filed separate motions to amend invalidity contentions. Defendant Sandoz seeks leave to supplement its on-sale bar defense and to add a new inventorship defense. Sandoz claims that it was not until document production was complete that it fully appreciated the materiality of documents they claim support their motion. It took Sandoz only two months from that time to move to amend. Furthermore, the court does not have concerns regarding prejudice and delay. Thus, Sandoz’s motion is granted. Defendant Teva also seeks leave to amend its invalidity contentions to include on-sale bar defenses that are substantially identical to Sandoz’s. Teva’s proffered bases for granting leave to amend are likewise substantially the same and Teva’s motion is granted. DRL seeks leave to amend its invalidity contentions as to the obviousness of the patents-in-suit by adding pieces of prior art. The court finds that DRL was diligent in moving to amend in that DRL did not have a complete picture of plaintiffs’ actions until document production was complete. DRL’s motion in this regard is granted. DRL also asks the court to grant it leave to amend its invalidity contentions to incorporate by reference any amendments permitted to Sandoz and/or Teva. DRL’s motion in this regard is denied. [Filed July 2, 2013.]
INTELLECTUAL PROPERTY — TRADE SECRETS
53-7-0932 Events Media Network Inc. v. The Weather Channel Interactive Inc., U.S. Dist. Ct. (Kugler, U.S.D.J.) (8 pp.) In this action alleging that defendants misappropriated information that plaintiff supplied to them pursuant to a license agreement in which plaintiff agreed to provide defendants with access to a continually updated database of schedules for and basic logistical information about various leisure events and attractions through the United States, defendants filed a motion to dismiss claiming that the database cannot qualify as a trade secret under Georgia law (which governs the parties’ agreement) since the information was publicly available and because the agreement permitted defendants to display the information on their websites and because even if a trade secret, plaintiff did not take reasonable efforts to maintain its secrecy. The court denies the motion, holding that plaintiff’s complaint properly states a prima facie claim of misappropriate of trade secrets under the Georgia Trade Secrets Act since a compilation of information such as plaintiff’s database can be a trade secret under Georgia law; plaintiff’s complaint contains sufficient allegations to show that its database may derive economic value from not being generally known to others; and that the limits on disclosure and assurances of confidentiality in the parties’ agreement are sufficient to meet plaintiff’s pleading burden that it took reasonable efforts to maintain the secrecy of its database. [Filed July 12, 2013.]
LABOR AND EMPLOYMENT
25-7-0883 Gerasimov v. Caravan Ingredients Inc., U.S. Dist. Ct. (Martini, U.S.D.J.) (4 pp.) Following a workplace injury, plaintiff contacted the Occupational Safety and Health Administration (OSHA) to report the accident. OSHA conducted an investigation, which resulted in sanctions to his employer, Caravan Ingredients Inc. Plaintiff also filed a petition for workers’ compensation benefits. Plaintiff was subsequently terminated. Plaintiff filed this action alleging wrongful termination, defamation, employment discrimination and retaliation. Defendant filed a motion to dismiss for failure to state a claim. The court dismisses plaintiff’s claims without prejudice, with the exception of his workers’ compensation retaliation claim, which the court dismisses with prejudice. Because plaintiff has opted to pursue this claim administratively, he is barred from pursuing it in court. [Filed July 2, 2013.]
25-7-0884 Lightner v. Local 560, International Brotherhood of Teamsters, U.S. Dist. Ct. (McNulty, U.S.D.J.) (16 pp.) This action arises out of a labor dispute between Local 560, International Brotherhood of Teamsters and County Concrete Corporation. County, which delivers ready-mix concrete to construction sites, pays less in wages and benefits than the prevailing area standard as established by local union collective-bargaining agreements. In April 2010, Local 560 began a campaign that included oral and written communications informing contractors of its dispute with County. This action focuses on the Winter 2013 update letter that Local 560 sent to various contractors in New Jersey. County believed that certain statements in the letter constituted threats to enforce an illegal contractual provision and to conduct a secondary boycott, in violation of the National Labor Relations Act (NLRA). County therefore filed a charge with the National Labor Relations Board (NLRB). When an NLRB officer reasonably believes that a charge is true (i.e., that the NLRA is being violated), the NLRA requires the officer to seek a preliminary injunction, and that is what NLRB has done here. The court finds NLRB does have reasonable cause to believe that the Winter 2013 update letter violates the NLRA. Accordingly, the court grants the NLRB’s petition for a preliminary injunction restraining Local 560 from further violations while the NLRB matter is pending. [Filed June 26, 2013.]
25-7-0885 Yamamoto v. Panasonic Corp. of North America, U.S. Dist. Ct. (Linares, U.S.D.J.) (18 pp.) In this action arising out of plaintiff’s allegedly wrongful termination of plaintiff and alleging that defendant committed interference and retaliation violations of the Family and Medical Leave Act and the New Jersey Family Leave Act, defendant moves for summary judgment as to both counts. Defendants’ motion as to plaintiff’s FMLA and NJFLA retaliation claims is denied because, construing all the facts in the light most favorable to plaintiff, a reasonable trier of fact could conclude that defendant’s stated reason for terminating plaintiff — falsification of time cards — was pretextual. Defendants’ motion is granted as to plaintiff’s interference claim because that claim is duplicative of the retaliation claim. [Filed July 2, 2013.]
25-7-0901 Carroll v. Delaware River Port Authority, U.S. Dist. Ct. (Irenas, S.U.S.D.J.) (7 pp.) In this employment discrimination case, plaintiff, a member of the Pennsylvania Army National Guard and employed by defendant as a police officer, alleges that defendant denied him promotional opportunities on account of his military service, in violation of the Uniformed Services Employment and Reemployment Rights Act. The court grants defendant’s motion to dismiss because the complaint does not allege sufficient facts to put defendant on notice as to the nature of plaintiff’s claim, plaintiff does not allege that the people promoted were not members of his protected class, and his blanket allegation that the people who were promoted were less qualified than he does not necessarily mean that he was qualified for the promotions that he sought and his allegation is merely conclusory. Plaintiff is given leave to file an amended complaint. [Filed July 9, 2013.]
25-7-0902 Rego v. Continential Airlines Inc., U.S. Dist. Ct. (Cooper, U.S.D.J.) (5 pp.) Plaintiff moves for leave to file a first amended complaint in this action asserting claims for violations of the Conscientious Employee Protection Act, breach of contract, and a violation under the New Jersey Constitution. The court denies the motion because the proposed pleadings do not comply with the district court’s prior order in that the proposed amended complaint does not include a statement as to the amount of damages plaintiff seeks and is essentially the same as an amended complaint he filed in state court, notwithstanding the district court’s direction that plaintiff refrain from simply restating the contents of the state pleading because that pleading is insufficient. [Filed July 9, 2013.]
25-7-0915 Averhart v. Communications Workers of America, U.S. Dist. Ct. (Thompson, U.S.D.J.) (5 pp.) Plaintiff initiated a lawsuit in New Jersey Superior Court, and it was removed to federal court. In his complaint, plaintiff alleged that (1) defendants violated the Communication Workers of America’s constitution by failing to organize unorganized members; (2) defendants violated the CWA constitution by failing to fully disclose financial disbursements of union dues; and (3) defendants violated the CWA constitution and Title IV of the Labor-Management Reporting and Disclosure Act (LMRDA) by failing to provide secret ballot voting for the election of officers in 2005 and 2008. Plaintiff initiated a second lawsuit, which named the same defendants as the first action as well as other defendants, whom plaintiff had unsuccessfully sought to add by amendment in the first action. In the second action, plaintiff seeks relief for violations of the LMRDA, the CWA constitution, the Labor Management Relations Act, and state common law. Here, the court denies plaintiff’s motion to consolidate the two actions. First, the court notes that plaintiff appears to be seeking consolidation to circumvent the rules pertaining to amendment. Moreso, consolidation at this time does not promote the interests of judicial economy and justice. [Filed June 27, 2013.]
25-7-0933 New Jersey Building Laborers Statewide Benefit Funds and the Trustees Thereof v. Newark Board of Education, U.S. Dist. Ct. (Cavanaugh, U.S.D.J.) (8 pp.) This matter comes before the court on a motion by the State-Operated School District of the City of Newark (respondent) to vacate an arbitration award and order entered in favor of New Jersey Building Laborers Statewide Benefit Funds and its trustees (petitioners). The award and order found that respondent failed to make required employee benefit contributions to the funds in violation of a collective-bargaining agreement (CBA). The arbitrator entered the award notwithstanding respondent’s absence from the hearing because he found that respondent was given proper notice of the arbitration proceeding and was obligated under the CBA to contribute to the funds. Rejecting respondent’s arguments that petitioners failed to provide it with adequate notice of the claim and the date of the arbitration proceeding, the arbitrator exceeded his power by rendering an award in the absence of an agreement to arbitrate, and the court lacked the authority to confirm the arbitration award, the court denies respondent’s motion to vacate the arbitration award. [Filed June 27, 2013.]
LEGAL PROFESSION — ATTORNEY FEES
04-7-0886 Mullen v. Moravek, U.S. Dist. Ct. (Martini, U.S.D.J.) (3 pp.) Plaintiff, a New Jersey attorney, worked with another New Jersey attorney, Timothy McIlwain. McIlwain had been retained by defendants Matthew Moravek and Sophmatt LLC, New York residents, to represent them in litigation in New Jersey. When he suggested that Mullen be added to the trial team, defendants agreed. McIlwain and Mullen ultimately won a $1.8 million verdict for their clients. McIlwain was paid $250,000 for his work. Mullen was paid $16,500. Mullen filed this action to recover the $100,500 still owed for her work on the trial; McIlwain represents defendants in this proceeding. The court grants Mullen’s motion to disqualify McIlwain, finding that, as the person who hired plaintiff, worked with her throughout the trial, and the one who determined when and how much she was paid, he is a necessary fact witness and his interests are adverse to those of his clients. He is also an indispensible party and relief cannot be granted without him since it appears that it was he, not the clients, who failed to pay Mullen. Because joining McIlwain, a New Jersey resident, would destroy subject-matter jurisdiction, the court dismisses the action, leaving plaintiff to pursue a remedy in state court. [Filed July 2, 2013.]
LEGAL PROFESSION — JUDICIARY
04-7-0903 Kellinger v. City of Englewood, U.S. Dist. Ct. (Martini, U.S.D.J.) (4 pp.) Plaintiff asserts claims under 42 U.S.C. § 1983 and various state laws, alleging, inter alia, that defendant Englewood Municipal Court judge exceeded his authority when he sentenced Kellinger to 10 days in jail for two traffic offenses. Notwithstanding that a Superior Court judge subsequently determined that a term of incarceration was not available for improper passing on the left and failing to yield to a pedestrian and ordered that the jail sentence be expunged, the court grants the judge’s motion to dismiss, finding that the judge is immune from suit since, in sentencing plaintiff, he was acting in a judicial capacity and he did not act in the absence of all jurisdiction. [Filed July 9, 2013.]
RESIDENTIAL AND COMMERCIAL REAL ESTATE
34-7-0887 Donnelly v. Option One Mortgage, U.S. Dist. Ct. (Salas, U.S.D.J.) (34 pp.) Plaintiffs allege that they were victims of a predatory lending scheme perpetrated by, in part, defendants Option One Mortgage and Netco Inc., which acted as the settlement agent for Option One. Defendants filed a motion to dismiss for failure to state a claim. The court grants the motion in its entirety as to Netco. As to Option One, the court grants in part and denies in part the motion to dismiss. Plaintiffs’ allegations that Option One entered into a contract with them that it had no intent of abiding plausibly support an argument that Option One breached its duty of good faith and fair dealing. Because Option One was obligated, through its agent, to forbear the foreclosure agreement pending an event of default, and because plaintiffs argue that Option One continued its foreclosure action even though there was no event of default, Plaintiffs have plausibly argued that Option One breached the forbearance agreement. Because Option One was a party to the forbearance agreement and plaintiffs properly pleaded all required elements of a claim for breach of contract against Option One, that claim is not dismissed. Plaintiff’s remaining claims against Option One are dismissed. [Filed July 1, 2013.]
RESIDENTIAL AND COMMERCIAL REAL ESTATE — MORTGAGE FORECLOSURE
34-7-0888 Sesta v. Bank of America, U.S. Dist. Ct. (Shipp, U.S.D.J.) (6 pp.) In this action originally filed in state court, that court granted the motion of defendants BOA and its president to dismiss for failure to state a claim on which relief could be granted. The Office of the Comptroller of the Currency then removed the case to federal court. Pro se plaintiffs move to recall the BoA president as a defendant. Construing plaintiffs’ motion as a motion to amend, the court denies the motion, finding no good cause to grant it where plaintiffs failed to file a proposed amended complaint and their motion papers do not set forth information sufficient to outline the elements of a claim or permit the court to infer that such elements exist and their assertions, which are largely unintelligible, at best allege that BoA did not provide accurate information to the Office of the Comptroller of the Currency in relationship to potential HAMP refinancing, but HAMP does not provide an independent cause of action and thus plaintiffs’ claims under HAMP are futile and must be dismissed. [Filed June 28, 2013.]
TORTS
36-7-0916 Logue v. Capital Health Systems Inc., U.S. Dist. Ct. (Shipp, U.S.D.J.) (10 pp.) Logue (decedent) sought emergent care from Capital Health Regional Medical Center. Logue was 33 years old and allegedly suffered from depression and a history of substance abuse. Logue was ultimately discharged from the screening center. Later that same day, “MS” from Capital Health MICU was dispatched to Logue’s home after her brother had called on finding her passed out on her bed. Logue died from cardiac arrest due to a drug overdose. Plaintiff alleges several counts of “negligence/professional negligence.” Plaintiff also alleges claims under the Wrongful Death Act. Defendants move to dismiss. Defendants’ challenges to the complaint are predicated on the sufficiency of the plaintiff’s Affidavits of Merit. The court finds plaintiff’s Affidavits of Merit establish that this matter was not frivolously brought. Additionally, the court finds that it is unknown whether the professional defendants are substantially different from the proposed affiants for purposes of plaintiffs cause of action. The court denies the motions to dismiss and will allow the case to move forward with discovery. [Filed June 28, 2013.]