STATE COURT CASES
ADMINISTRATIVE LAW — MEDICAID
01-2-1262 B.D. v. New Jersey Dep’t of Human Services, Division of Medical Assistance and Health Services, App. Div. (per curiam) (34 pp.) Appellants appeal from the final decision of the Department of Human Services terminating them from the New Jersey FamilyCare Medicaid program. The panel affirms, finding, inter alia, that under AA FY2010 and Guaman, the commissioner of DHS had the authority to close new parent/caretaker NJFC applications retroactive to Feb. 28, 2010; DMAHS did not treat appellants differently than other similarly situated recipients or from each other, determining everyone’s ineligibility as of the date their change in unearned income occurred, not the date they reported it, and transferring them to the appropriate AFDC-related Medicaid program for which they were eligible at that time, and, when their eligibility for those programs ended, properly terminating them from NJFC because CHIP was closed to new applicants. [Decided Sept. 9, 2013.]
ADMINISTRATIVE LAW — UNEMPLOYMENT COMPENSATION
01-2-1263 Tarnowski v. Board of Review, App. Div. (per curiam) (8 pp.) Appellant challenges the Board of Review’s decision deeming him ineligible for unemployment benefits based on the administrative determination that he was terminated for severe misconduct. The panel holds that appellant was subject to the “severe misconduct” standard added with the amendment to N.J.S.A. 43:21-5(b) because his absences extended until after the amendment was effective and the termination occurred after the effective date. However, because the board failed to consider whether his actions were intentional, deliberate, or malicious, pursuant to the first prong of the standard set in Silver v. Board of Review, which was decided after the board’s determination, the panel reverses and remands. [Decided Sept. 9, 2013.]
ALTERNATIVE DISPUTE RESOLUTION — ARBITRATION
03-2-1291 Vanderslice v. Stewart, App. Div. (per curiam) (6 pp.) This matter involves the failure of defendants Harold Stewart, Camden County and Camden County Fire Police Department (collectively, the county) to timely file a demand for a trial de novo following a nonbinding arbitration. Plaintiff filed a complaint, alleging that he had sustained personal injuries in an automobile accident. Nonbinding arbitration resulted in a determination that the county was 100 percent liable to plaintiff, who was entitled to $90,000 for noneconomic damages and $55,970 for lost wages. The time to file a demand for a trial de novo expired 30 days later. The trial judge denied plaintiff’s motion to confirm the arbitration award and enter judgment and granted defendants’ cross-motion to permit a late filing. Because the judge erroneously applied the substantial compliance standard, which applies to the failure to serve a demand, instead of the extraordinary circumstances standard, which applies to the failure to timely file a demand, and because there were no extraordinary circumstances presented, the appellate panel reverses. As to plaintiff, the no-cause judgment dismissing his complaint is vacated. The orders denying plaintiff’s motion to confirm the arbitration award and enter judgment and granting the county’s cross-motion to permit a late filing are reversed. The matter is remanded to the Law Division for entry of an order confirming the arbitration award for plaintiff and entering judgment. [Decided Sept. 11, 2013.]
BUSINESS ENTITIES
12-2-1230 Gruber v. Xactis Corp., App. Div. (per curiam) (16 pp.) In this action arising out of defendant’s solicitation of and plaintiffs’ investment in defendant-corporation, defendants appeal from the judgment entered in favor of plaintiffs and the denial of their motion for reconsideration. The panel affirms, finding, inter alia, that the judge fully explained his findings that underpinned his legal conclusions; there was ample support for the judge’s conclusion that plaintiffs had established the elements of fraud by clear and convincing evidence; the judge did not apply inappropriate definitions, standards or criteria as his findings were solidly tethered to the evidence and the finding of fraud was based on the misrepresentations that induced plaintiffs to invest their money; the judge did not err in not permitting defendant to present a particular witness after properly finding that the proffer was irrelevant to the case; and the judge did not err in concluding that defendant and his wife engaged in a civil conspiracy after finding that plaintiffs’ money was diverted from defendant-corporation to pay for defendant’s and his wife’s personal expenses. [Decided Sept. 5, 2013.]
12-2-1278 Goret v. H. Schultz & Sons Inc., App. Div. (per curiam) (21 pp.) Plaintiff-minority shareholders in defendant, a family-owned and -operated close corporation, filed this action asserting, inter alia, that the company and its majority shareholders breached their fiduciary duty to plaintiffs and violated New Jersey’s minority shareholder oppression statute, N.J.S.A. 14A:12-7(a)(c). Plaintiffs appeal from the trial court finding that defendants did not engage in oppressive conduct and by only requiring the company to provide them with information concerning major business decisions until the company is able to resume paying dividends. Defendants cross-appeal from the finding that Robert Schultz breached his fiduciary duty by failing to inform plaintiffs of an offer to purchase real estate corporate owned by the corporation for $7.4 million. The panel affirms the trial court’s determinations regarding oppression — including that the majority’s refusal to buy out the minority shareholders was a permissible exercise of business judgment — holding that its findings were supported by substantial credible evidence in the record. The panel also affirms the ruling on defendants’ cross-motion except that it remands for entry of a modified judgment to delete language indicating that the duty to inform plaintiffs of a major business decision would cease on the resumption of payment of shareholder dividends. [Decided Sept. 10, 2013.]
CIVIL PROCEDURE
07-2-1292 Allen v. Gabriel, App. Div. (per curiam) (5 pp.) Allen, an inmate at New Jersey State Prison, appeals from the denial of his motion to set aside default in his suit alleging medical malpractice, entered after the court determined that he had failed to present proof of service, and the denial of his motion for reconsideration. The panel affirms the denial of his motion to vacate default since the record contains no proof that any of the named defendants were properly served in the malpractice action. It dismisses that portion of the appeal challenging the denial of his motion for reconsideration, which did not include a copy of the transcript as required by Rule 2:5-3, as so procedurally deficient that it prohibits meaningful review. [Decided Sept. 11, 2013.]
CIVIL PROCEDURE — ATTORNEY FEES
07-2-1243 Moran v. Constantine, App. Div. (per curiam) (9 pp.) Plaintiffs appeal from the order finding them and their attorneys jointly and severally liable to ClearOne Communications for attorney fees under the Frivolous Litigation Statute. Plaintiffs were injured in an automobile accident on Aug. 14, 2009. They sued the driver of the other vehicle and the owner, listed on the police report as Clear Tone Communications Inc. In the complaint filed Aug. 9, 2011, plaintiffs omitted the “T” in Clear Tone, listing as a defendant “ClearOne Communications Inc.” On Nov. 21, 2011, 28 days after the date of the letter demanding that plaintiffs dismiss the complaint, plaintiffs attempted to file a voluntary dismissal of ClearOne from the action. The trial court stamped the document as “received but not filed,” because of pending motions filed by ClearOne. The next day, plaintiffs filed an amended complaint that eliminated ClearOne as a defendant. The appellate panel finds the award of fees must be reversed because ClearOne failed to comply with the “safe harbor” provision of Rule 1:4-8(b)(1). ClearOne filed its motion for sanctions 21 days after sending the notice demanding the complaint be withdrawn. Plaintiffs attempted to submit the voluntary dismissal 28 days after ClearOne’s demand letter was mailed — within the time allotted by the rule. Thus, the award of attorney fees to ClearOne’s attorneys was a mistaken exercise of discretion. [Decided Sept. 6, 2013.]
CRIMINAL LAW
14-2-1236 State v. R.F., App. Div. (per curiam) (17 pp.) Tried by a jury, defendant R.F. appeals from his conviction of six counts of first-degree aggravated sexual assault and one count of second-degree endangering the welfare of a child. He also appeals from the sentence imposing a 34-year term of imprisonment. The appellate panel affirms defendant’s conviction. Although the panel does not find defendant’s sentence excessive, the panel vacates certain aspects of the conviction consistent with certain concessions made by the state on appeal. The panel vacates the $12,000 Sex Crime Treatment Fund fine, as the law mandating such fine did not become effective until well after the time defendant committed the offenses for which he was convicted. The panel also reduces the 30-year period of parole supervision to 10 years to reflect the two consecutive sentences imposed. The panel remands to the sentencing court to amend the judgment of conviction. [Decided Sept. 5, 2013.]
14-2-1253 State v. Nelson, App. Div. (per curiam) (10 pp.) Defendant, convicted of sexual assault and criminal restraint, appeals from the denial of his petition for postconviction relief on the basis of ineffective assistance of counsel arising out of trial counsel’s failure to give earlier notice to the court of his intention to pursue a diminished-capacity defense, appellate counsel’s failure to raise trial counsel’s ineffectiveness, and PCR counsel’s failure to marshal evidence in support of his claim of diminished capacity. The panel reverses, finding that where it is undisputed that defendant had suffered multiple blows to his head inflicted by a baseball bat prior to the assault, he proffered testimony that after the injury he was observed to be more agitated, angry and irrational and he began to stutter, defendant made a prima facie showing of ineffective assistance, which at least required an evidentiary hearing. [Decided Sept. 6, 2013.]
EDUCATION
16-2-1244 Bethlehem Twp. Education Ass’n v. Bd. of Educa. of Bethlehem Twp., App. Div. (per curiam) (9 pp.) Plaintiff, the collective-bargaining agent that represents all certified teaching staff members, cafeteria workers and bus drivers employed by defendant, appeals from the dismissal, as untimely under N.J.A.C. 6A:3-1.3(i), of its complaint alleging that defendant’s June 2010 decision to begin the 2011-12 school year on Aug. 24, 2011, to align with that of North Hunterdon High School, violated a statutory entitlement, created by the statutory scheme of the education laws and prior Department of Education commissioner decisions, benefiting 10-month certificated teaching staff members in that the school year runs between Sept. 1 and June 30 and may not commence prior to Sept. 1. Plaintiff did not file its complaint until June 3, 2011. The panel affirms, finding that, in contending that the 90-day limit in 6A:3-1.3(i) does not apply to a claim based on a statutory entitlement, plaintiff misconstrues Lavin v. Hackensack Bd. of Educa., there is no statutory basis prohibiting the board’s action, and plaintiff’s petition was procedurally barred under 6A:3-1.3(i). [Decided Sept. 6, 2013.]
ELECTION AND POLITICAL LAW
21-2-1231 Adair v. City of Wildwood, App. Div. (per curiam) (13 pp.) Defendant Gary DeMarzo appeals from an order requiring him to resign from either his position as a police officer or as an elected commissioner. This case arises from earlier litigation between DeMarzo and Wildwood. DeMarzo, a police officer in Wildwood, was elected commissioner in 2007. DeMarzo was sworn in while on an unpaid leave of absence from the police force. Wildwood sued to compel DeMarzo to choose which position he would retain. The trial court agreed that the common-law doctrine of incompatibility applied but fashioned a series of orders restricting DeMarzo’s actions as commissioner. The Appellate Division reversed and ordered DeMarzo to choose one of the positions. Richard Adair, a Wildwood resident and a lieutenant in the Wildwood Police Department, filed an application for an order to show cause and complaint against Wildwood and DeMarzo, seeking to compel DeMarzo to immediately choose between serving as commissioner or as a police officer, and to enjoin him from further action in either capacity until he did so. Adair was seeking to enforce the prior order and prevent the ongoing violation of Wildwood’s citizens’ right to unbiased elected officials. DeMarzo did not comply with the Appellate Division’s order to extricate himself from the conflicts caused by his dual positions. Wildwood had the ability to enforce the order even while the petition for certification to the Supreme Court was pending. [Decided Sept. 5, 2013.]
21-2-1293 In re Contest of the Nov. 6, 2012, Election Results for the City of Hoboken, Public Question No. 2, App. Div. (per curiam) (10 pp.) Cheryl Fallick appeals from a Jan. 11, 2013, trial court order denying her motion to intervene in an election contest, and from a March 5, 2013, trial court order deciding the merits. The March 5 order revoked the certification of election issued for Hoboken Public Question No. 2 (the public question) at the Nov. 6, 2012, general election, based on the court’s finding that a sufficient number of legal votes were rejected to justify invalidating the election results. The public question, which if approved would have modified the local rent-control ordinance in a manner favoring landlords, was defeated by 52 votes out of approximately 16,000 votes cast. The trial judge found that, as a result of emergency directives that the Secretary of State issued to accommodate voters displaced by Superstorm Sandy, 114 Hoboken voters cast provisional ballots that did not include the public question. Those voters were also not given notice that provisional ballots cast outside Hoboken would not include local public questions. The trial court treated these incomplete ballots as constituting the “rejection” of legal votes on the public question, because legal voters, casting legal votes, were deprived of the opportunity to vote on the public question. Given the importance of this public question to both landlords and tenants in Hoboken, and the extreme closeness of the vote on the issue, the appellate panel affirms, concluding that the trial judge’s resolution of the election contest was consistent with the underlying purpose of the election laws. [Decided Sept. 11, 2013.]
ENVIRONMENTAL LAW
17-2-1264 In the Matter of Authorization for Freshwater Wetlands Statewide General Permit 6, App. Div. (per curiam) (46 pp.) In these consolidated actions, appellants Residents for Enforcement of Existing Land Use Code, Susan Tierney, and the Pond Run Watershed Association appeal from administrative decisions by respondent New Jersey Department of Environmental Protection in connection with its grant of a general freshwater wetlands permit and transition area waivers to respondent Care One Inc., which seeks to expand its assisted-living facility. The department and CareOne seek dismissal of Docket No. A-2231-08, which concerns the department’s 2008 permit and related approvals, arguing that the issue is moot because the 2008 permit was superseded by the subsequent modifications that are the subject of the appeal in Docket No. 3400-10. Instead, the appellate panel dismisses the appeal in Docket No. A-3400-10 as interlocutory because there was no final administrative action. The panel affirms the administrative agency action in Docket No. A-3837-09, which concerns the acting commissioner’s denial of the appellants’ request for an adjudicatory hearing. The panel reverses the administrative agency actions in Docket No. A-2231-08, finding the department’s use of and reliance on the Nonstructural Strategies Points System (NSPS) in connection with its evaluation of CareOne’s applications was impermissible because the NSPS procedure was not the subject of formal rulemaking. The panel reverses the department’s approval of the applications, as well as its issuance and modification of permits and related approvals. The matter is remanded. [Decided Sept. 9, 2013.]
FAMILY LAW
20-2-1232 Gemignani v. Gemignani, App. Div. (per curiam) (12 pp.) Plaintiff appeals from the denial of her motion for reconsideration of the order reducing defendant’s child-support obligation. The panel reverses and remands, finding that the provisions of the parties’ PSA regarding the calculation of child support had become obsolete by the time defendant made his motion for a downward modification of his obligation and, therefore, defendant had to show a right to such relief under Lepis, which required him to make a prima facie showing of changed circumstances after which the court could order discovery, further financial disclosure by the parties, and a plenary hearing. Here, the motion judge erroneously relied on the PSA and was not guided by Lepis and denied plaintiff discovery. The panel therefore reverses and remands. It also reverses the award of attorney fees to defendant, finding no basis for the judge’s finding that plaintiff had acted in bad faith. [Decided Sept. 5, 2013.]
20-2-1245 Wilson v. Cunningham, App. Div. (per curiam) (5 pp.) Plaintiff and defendant are the unmarried parents of a 15-year-old child who resides with plaintiff in Newark. Defendant, who resides in Burlington County, appeals from the denial of his motion to transfer venue from Somerset County, where the parties formerly resided, to Burlington County. The panel affirms, citing Rule 4:3-3 and the Intercounty Child Support Case Management Policy, Administrative Directive # 3-05 (Jan. 31, 2005), and finding no reason to reverse the trial court’s exercise of its discretion. [Decided Sept. 6, 2013.]
20-2-1265 Groninger v. Groninger, App. Div. (per curiam) (7 pp.) Defendant appeals from an order compelling him to pay 50 percent of his daughter’s college tuition and expenses and to reimburse plaintiff for out-of-pocket college expenses, and denying his request to modify his child-support obligation. The panel reverses and remands the order regarding college expense because the court erred in compelling defendant to pay 50 percent of the college expenses without having addressed the factors enunciated in Newburgh v. Arrigo. The panel affirms the refusal to modify defendant’s child-support obligation, concluding that the trial judge did not abuse her discretion in finding that defendant failed to show a substantial change of circumstances as required by Lepis. [Decided Sept. 9, 2013.]
20-2-1279 Frangella v. Frangella, App. Div. (per curiam) (19 pp.) Defendant appeals from the denial of his motion for reconsideration of the trial court’s order directing that he maintain the $3 million insurance on his life that he had at the time the parties entered into their property settlement and support agreement — a $2 million policy with his mother as beneficiary and a $1 million policy with his mother and the parties’ three children as beneficiaries — but change the beneficiaries so that plaintiff was a 50 percent beneficiary of the total and the parties’ three children would be joint beneficiaries of the other 50 percent. Construing the terms of an outline of economic settlement that the parties agreed to in mediation before entering the PSSA, and the PSSA, the panel affirms, finding that the judge did not err in denying defendant’s motion for reconsideration, finding that defendant presented factual assertions in support of his motion that he could have presented initially but did not. The panel also finds no error in the trial judge’s ultimate interpretation of the agreement since, while there is ambiguity in the PSSA’s insurance provision, when the provision is read together with the outline, the negotiation history, and the surrounding circumstances, the panel also concludes that the PSSA required defendant to maintain, for the benefit of plaintiff and the children, the full amount of insurance in force at the time. [Decided Sept. 10, 2013.]
FAMILY LAW — CONSTITUTIONAL LAW
20-2-1246 In the Matter of the Seizure of Firearms or Weapons from Molnar, App. Div. (per curiam) (5 pp.) Christian Molnar appeals from a consented-to order of the Family Part that revoked until further order of the court his “Firearms Purchaser Identification Cards and any other licenses, permits, or authorization for the use, possession or ownership of weapons/firearms in the State of New Jersey.” The order further provided that Molnar would sell his weapons/firearms to a firearms dealer licensed in New Jersey within 90 days of the entry of the order on July 11, 2012. On appeal, Molnar argues that the order “must be modified to properly embody the spirit of the parties’ agreement” because of what he claims are conflicting provisions of New Jersey firearm statutes. He further raises, for the first time on appeal, a contention that N.J.S.A. 2C:25-29(b) is unconstitutional as being violative of the Second Amendment. The appellate panel affirms, finding that to the extent Molnar may still have the opportunity to attack (or obtain clarification of) the consent order in question, he must first seek relief from that order in the Family Part. As for Molnar’s constitutional challenge to N.J.S.A. 2C:25-29(b)’s supposed infringement on his constitutional right to keep arms as defined by current Second Amendment jurisprudence, the appellate panel finds the argument has no merit because Second Amendment rights are not immune from “reasonable limitations.” [Decided Sept. 6, 2013.]
FAMILY LAW — DOMESTIC VIOLENCE
20-2-1233 A.L.P. v. D.F., App. Div. (per curiam) (7 pp.) Defendant appeals from the issuance of a final restraining order against him under the Prevention of Domestic Violence Act. The panel affirms, deferring to the factual findings of the Family Part judge regarding plaintiff’s credibility, a predicate act of assault and a history of domestic violence and that defendant’s behavior required the protection of an FRO. [Decided Sept. 5, 2013.]
20-2-1247 S.L. v. R.W., App. Div. (per curiam) (5 pp.) Plaintiff appeals from the dismissal of her complaint under the Prevention of Domestic Violence Act and vacation of a temporary restraining order. The panel affirms, noting that the trial judge was in the best position to assess the parties’ disparate versions of events and finding that the judge’s assessment of who and what to believe is unassailable. [Decided Sept. 6, 2013.]
LABOR AND EMPLOYMENT
25-2-1248 In the Matter of Sweeney, City of Hoboken, App. Div. (per curiam) (4 pp.) Thomas Sweeney was removed from his public employment on Oct. 29, 2010. He appeals from the final determination of the Civil Service Commission denying his request for a hearing of his appeal, and his request for reconsideration. On Nov. 5, 2010, Sweeney was served with an amended preliminary notice of disciplinary action charging him with violations of N.J.A.C. 4A:2-2.3(a), including incompetency, inefficiency, or failure to perform duties; inability to perform duties; conduct unbecoming a public employee; and misuse of public property, including a motor vehicle. On Sept. 21, 2011, Sweeney filed a major disciplinary appeal form with the commission for the first time. Sweeney averred that it was his understanding that “union counsel” would be filing a timely direct appeal with the Office of Administrative Law and that his union misled him into believing that a timely appeal had been filed. The commission rejected Sweeney’s appeal, notwithstanding his claim that he had not been personally served with the final notice of disciplinary action. The commission rejected Sweeney’s contentions on the ground that the statutory 20-day appeal-filing period is jurisdictional and cannot be relaxed or waived. The commission rejected Sweeney’s application for reconsideration, which was based largely on his claim that the city’s failure to personally serve him with a final notice of disciplinary action tolled his time for an appeal. The appellate panel affirms, finding the commission’s reasons for rejecting the appeal were not arbitrary, capricious or unreasonable. [Decided Sept. 6, 2013.]
25-2-1249 Solimando v. Mayor and Council of the Borough of Emerson, App. Div. (per curiam) (8 pp.) In this action in lieu of prerogative writs, plaintiff appeals from an order granting partial summary judgment to defendants upholding George Buono’s promotion to lieutenant; and an order of no cause of action entered after a bench trial upholding Donald Rossi’s promotion to captain. Defendants asserted that the promotions were in accordance with newly adopted ordinances. Plaintiff argued that the promotions occurred before the effective date of the ordinances and were therefore invalid because the council failed to apply the pre-existing criteria. The appellate panel finds the judge appropriately concluded that the mayor and council complied with the requirements of N.J.S.A. 40:49-2, regarding the passage of municipal ordinances, and determined that the ordinances governed the promotions. The panel affirms the judge’s determination that the mayor and council followed the established criteria for the promotion process and that the borough’s actions were not arbitrary, capricious or unreasonable. [Decided Sept. 6, 2013.]
25-2-1280 Garlanger v. Board of Review, App. Div. (per curiam) (13 pp.) Petitioner Joseph Garlanger appeals from the final decision of the Board of Review, affirming the decision of an Appeal Tribunal, denying Garlanger’s claim for unemployment benefits. Garlanger was employed by Pride Industries Inc. for approximately 10 months. His employment was terminated for violating the company’s standards of conduct, including workplace violence. Petitioner argues his actions cannot constitute misconduct as they were a result of mental illness and thus do not satisfy the legal definition of misconduct. He argues the New Jersey Administrative Code, as well as prior case law, require an element of deliberation, willfulness or intent to be present in order for an action to constitute misconduct, and the presence of petitioner’s disorders rendered him incapable of the requisite mental state to commit misconduct. The cases cited by petitioner are not relevant here because in each instance, statutory exceptions existed that allowed for disparate treatment toward those afflicted with mental conditions. New Jersey does not have such a statutory exception. Also, petitioner never established a causal link between his actions and his mental illness. The appellate panel affirms, finding no abuse of discretion with the examiner’s finding that petitioner’s actions amounted to severe misconduct. [Decided Sept. 10, 2013.]
LANDLORD/TENANT LAW
27-2-1282 Patel v. Ryan, App. Div. (per curiam) (4 pp.) Plaintiff-landlord appeals from a Special Civil Part order dismissing his complaint against defendant-tenant, seeking alleged unpaid rent, late and other claimed fees and costs, following a hearing, during which the judge concluded a dispute existed regarding the leasehold’s habitability and the tenant had escrowed the rent and sought a hearing. On confirming with plaintiff that the rent had been escrowed and that a Marini hearing was pending, the judge dismissed plaintiff’s complaint. Further, regarding the security deposit, the judge found defendant’s and her sister’s testimony that the entire $1,300 was paid credible and plaintiff’s contrary assertions not credible. The judge specifically rejected plaintiff’s assertion, noting the lease states the security deposit was received, and based on the accepted testimony of defendant and her witness. The record supports these findings, which the appellate panel declines to disturb. [Decided Sept. 10, 2013.]
LEGAL PROFESSION — LEGAL MALPRACTICE — EXPERTS
04-3-1266 Napoleon v. Colicchio, Law Div. — Hudson Co. (Sarkisian, J.S.C.) (26 pp.) In this legal-malpractice action arising out of defendants’ involvement in a series of actions arising out of the administration of the estate of plaintiff’s father, the remaining defendants move for summary judgment based on a variety of arguments but focusing mainly on the sufficiency of plaintiff’s two expert reports. The court holds that the reports are barred as net opinions and, because plaintiff cannot establish a standard of care and deviation therefrom without an expert, it grants summary judgment in favor of all defendants. [Filed Sept. 6, 2013.]
RESIDENTIAL AND COMMERCIAL REAL ESTATE
34-2-1250 Gino’s 2002 Irrevocable Trust v. Putnam at Deptford, L.L.C., App. Div. (per curiam) (11 pp.) In this foreclosure action, defendant Putnam at Deptford, L.L.C., a developer of homes, appeals from an order of the Chancery Division granting summary judgment to plaintiff and also transferring title to the subject property to plaintiff. Defendant challenges the court’s ruling primarily on the ground that the court did not have the authority to transfer title in the property to plaintiff. Defendant argues accurately that default on a mortgage does not entitle the mortgagee to take title in the property without a foreclosure judgment and a sheriff’s sale. The appellate panel reverses the part of the order transferring title, finding neither the mortgage nor any other document provided for a transfer of title to plaintiff without normal foreclosure proceedings and a sheriff’s sale. The panel rejects defendant’s additional argument that the court improperly entered summary judgment in favor of plaintiff on the question of defendant’s default on the mortgage and loans. Defendant did not present sufficient evidence to refute the essential facts regarding the mortgage and defendant’s defaults under its terms. [Decided Sept. 6, 2013.]
RESIDENTIAL AND COMMERCIAL REAL ESTATE — BANKING
34-2-1267 Deutsche Bank National Trust Company v. Lankenau, App. Div. (per curiam) (7 pp.) Defendants appeal from an order denying their motion to vacate a foreclosure judgment, and an order denying reconsideration. In September 2010, plaintiff’s servicer served the NOI to foreclose on defendants and provided defendants with plaintiff’s name, address, and phone number. In February 2011, defendants filed an answer to plaintiff’s complaint. Plaintiff properly served defendants with the summary judgment motion, the judge verified with defense counsel that defendants would not be opposing the motion, the judge granted the motion and the matter proceeded to the Office of Foreclosure without objection, resulting in the foreclosure judgment. Plaintiff established the validity of the note and mortgage, and it is uncontested that defendants have defaulted on their mortgage payments since 2010. As a result, defendants are not entitled to relief pursuant to Rule 4:50-1(a). Moreover, defendants are unable to show, on the merits, that they are entitled to vacate the judgment pursuant to Rule 4:50-1(d) where plaintiff produced proof that it acquired the loan and obtained the assignment prior to obtaining the foreclosure judgment. Finally, defendants are not entitled to relief pursuant to Rule 4:50-1(f) because defendants have not shown any exceptional circumstances. [Decided Sept. 9, 2013.]
34-2-1268 Lynx Asset Services v. Bowers, App. Div. (per curiam) (9 pp.) Defendant appeals from an order denying her motion to dismiss plaintiff’s residential foreclosure complaint. The order denied defendant’s second motion to vacate a foreclosure judgment and set aside a sheriff’s sale. The court entered the judgment on Nov. 23, 2010. Defendant filed her first motion to vacate on Dec. 6, 2011, after the property was sold. Defendant’s motion to vacate the judgment is untimely. Defendant has not shown excusable neglect. The judge found that defendant received proper notice of the complaint on June 21, 2009. Plaintiff provided no credible reason for ignoring the complaint and waiting to vacate the unopposed judgment of foreclosure. Moreover, defendant filed her second motion to vacate the judgment 34 months after service of the complaint and 17 months after entry of the judgment. Even if defendant showed excusable neglect, defendant is unable to show, on the merits, that she is entitled to vacate the judgment. Plaintiff produced proof that Wachovia obtained the note and assignment of the mortgage before Wachovia filed the complaint. Thus, Wachovia had standing to file the complaint. Standing issues aside, plaintiff had a legal right to enforce the note, pursuant to the Uniform Commercial Code, at the time its assignor obtained the judgment. [Decided Sept. 9, 2013.]
34-2-1269 TD Bank, N.A. v. Buccolo, App. Div. (per curiam) (8 pp.) Appellant Bruce Buccolo, individually and as executor of the estate of his father, Joseph Buccolo, appeals from the order of the Chancery Division denying his motion to vacate a judgment of default. Judge Klein’s order denying Bruce’s motion to vacate default based on improper service was entered on April 23, 2010. Not only has appellant failed to notice that he appeals from that order, but he has failed to provide a copy of the transcript of the April 23, 2010 proceeding, as required by Rule 2:5-3. Thus, this issue is not properly before the court. Appellant’s remaining arguments challenge T.D. Bank’s standing to bring this action. Although T.D. Bank was not the original mortgagee, T.D. Bank acquired Commerce in a merger. Under the Banking Act of 1948, T.D. Bank is vested with the right to sue on instruments previously held by the acquired bank without presenting a separate assignment of the instruments. The appellate panel finds no abuse of discretion in Judge Klein’s decision to deny appellant’s motion to vacate the final judgment. [Decided Sept. 9, 2013.]
RESIDENTIAL AND COMMERCIAL REAL ESTATE — MUNICIPALITIES
34-3-1295 Klee’s Bar Inc. v. Borough of Seaside Heights, Law Div. — Ocean Co. (Troncone, J.S.C.) (14 pp.) In this declaratory judgment action, plaintiffs seek to have the court strike down the borough ordinance that purports to lease parking spaces located on municipal roadways to adjoining property owners. The court grants the relief sought, finding that the parking program constitutes a leasing of parking spaces and is therefore subject to the Local Land and Building Law, and that Sections B(1) and (2) of the borough’s general parking regulations are void and ultra vires because the local governing body did not make a finding that the lands in question are not needed for public use and do not comply with the competitive bidding procedure required by the LLBL. [Filed Sept. 6, 2013.]
TAXATION
35-5-1234 Burucuoglu v. Borough of Paramus, Tax Ct. (Nugent, J.T.C.) (26 pp.) This is the court’s decision following a trial challenging the 2010 and 2011 tax assessments on plaintiff’s property in Paramus. The court finds that plaintiff has produced sufficient evidence to overcome the presumption of validity attached to the assessment for both tax years. Plaintiff has raised a debatable question as to whether the assessment accurately reflects the true market value. As to plaintiff’s expert’s valuation, absent a description of the comparable properties, or market support for the expert’s conclusions, the court is unable to conclude that the interior condition of the comparable homes compares to the subject and thereby rejects the comparable sales since they are not reliable indicators of value. The court rejects plaintiff’s conclusions of value. The court also rejects defendant’s value conclusion reached by the sales comparison approach as unsupported by credible evidence. As to defendant’s cost approach, the methodology used disregarded consideration for depreciation and was therefore flawed. Concluding that neither party has proved by a preponderance of the evidence that relief is warranted, the court enters judgment affirming the assessments. [Decided Aug. 27, 2013.]
35-5-1251 Kennel v. Director, Division of Taxation, Tax Ct. (Brennan, J.T.C.) (8 pp.) Plaintiff, believing that the property tax rebate program had been canceled for tax year 2010 based on news reports, failed to file a timely application. After learning that he was mistaken, he filed an application after the filing deadline. He challenges the director’s denial of the application. The Tax Court affirms, finding that (1) denial of a PTR application is not an unlawful governmental taking because it is a denial of a tax benefit, not a taking of private property and requiring taxpayers to fully pay their property tax bills before being able to request relief under the PTR program is not a violation of the Fifth Amendment Takings Clause nor the analogous provision in the state constitution; and (2) the director had no discretion to make an exception for plaintiff because he did not show that he was unable to timely file due to medical issues or that he had unsuccessfully attempted to timely file — plaintiff’s mistaken belief as to the program’s viability was not a valid reason to excuse compliance with the statutory filing requirement. [Filed Aug. 1, 2013.]
TORTS
36-2-1252 Espinoza v. General Growth Properties, App. Div. (per curiam) (10 pp.) Plaintiffs, a minor and her father, appeal from orders granting summary judgment in favor of defendants Bridgewater Commons Mall and ThyssenKrupp Elevator Corporation and dismissing plaintiffs’ personal-injury complaint, filed after the minor was injured while riding an ascending escalator when a metal panel presumably fell off the side of the escalator and lacerated her right shin. The panel affirms as to ThyssenKrupp, finding that the negligence claim against it fails as a matter of law because plaintiffs failed to provide expert testimony linking the displaced panel to ThyssenKrupp’s negligence or excluding other possible causes. It affirms as to Bridgewater Commons, finding that there is nothing in the record to establish that the incident was the fault of either the mall or ThyssenKrupp other than the occurrence of the incident itself and that the evidence of multiple users of the escalator militated against res ipsa loquitor’s applicability. [Decided Sept. 6, 2013.]
TORTS — BUSINESS TORTS
36-2-1235 Del Mastro v. Grimado, App. Div. (per curiam) (39 pp.) In 2005, plaintiff Rhonda Del Mastro secured a judgment against defendant Philip Grimado. While attempting to obtain payment, plaintiff learned Grimado had closed his business, defendant Internal Concepts Inc. (ICI). Thereafter, he became an employee of defendant Precisions Devices Associates Inc. (PDA), which was owned by defendant David McKee. After Grimado closed ICI, PDA changed its business model and began servicing ICI’s former customers. Plaintiff initiated this action under the Uniform Fraudulent Transfer Act (UFTA), seeking to set aside and avoid what she maintained was a fraudulent transfer by Grimado of his business interest. Here, plaintiff appeals from the judgment dismissing her complaint. The appellate panel finds that the judge erred in his evaluation of the facts presented by plaintiff. Although the judge considered and found certain badges of fraud, the court’s analysis omitted others that appear applicable. Significantly, the trial judge failed to consider plaintiff’s evidence of the transfer of ICI’s client list, which was a corporate asset as a matter of law. The judgment is vacated, plaintiff’s complaint is reinstated, and the matter is remanded for a new trial to consider whether the transfer of ICI’s customer list was accompanied by badges of fraud such that the facts clearly and convincingly show the transfer was a fraudulent one under the UFTA. Further, plaintiff’s motion for sanctions due to spoliation of evidence must be considered anew. [Decided Sept. 5, 2013.]
TRUSTS AND ESTATES
38-3-1283 Mills v. Snyder, Law Div. — Bergen Co. (Doyne, A.J.S.C.) (27 pp.) After the death of Joseph R. Mills, Joseph D. Mills sought to probate a 2007 will rather than the 2009 will submitted to probate. That action resulted in a settlement among the deceased’s five adult children, including Joseph D, which was confirmed in a court order. The settlement included a release. Joseph D. filed a motion for damages and relief in a second probate action filed by McCann, as co-administrator of the state, seeking relief pertaining to administration of the estate. That motion was later deemed withdrawn. Joseph D. then filed this action seeking to set aside and vacate the settlement. Defendants have filed motions to dismiss. Plaintiff moves to transfer venue to Morris County and for injunctive relief. The court grants the motions to dismiss, finding that the settlement to which plaintiff agreed compels dismissal since his claims are subject to the release in the settlement, his obstinacy in failing to execute the release does not trump its provisions, there is nothing that underlies the alleged fraud regarding the fees awarded to McCann that was before plaintiff in 2013 that was not before him in 2011 and thus the complaint with respect to allegations of fraud is time-barred and precluded by the failure to perfect the appropriate appeal, there has been no presentation of judicial bias compelling a transfer of venue to Morris County. Plaintiff’s motion for an injunction is denied as he has failed to show a reasonable probability of success on the merits. Despite the notice of frivolous litigation served on plaintiff, no fees or sanctions are imposed against him. However, fees are awarded against his attorney for his having pursued the frivolous fraud claims of his previously pro se client after having assumed his representation and for his having used an internal court memorandum that was inadvertently disclosed to plaintiff. [Decided Sept. 9, 2013.]
FEDERAL COURT CASES
ADMINISTRATIVE LAW
01-7-1296 Montes v. Commissioner of the Social Security Administration, U.S. Dist. Ct. (Simandle, U.S.D.J.) (38 pp.) The court reviews the final decision of the commissioner of the Social Security Administration denying plaintiff’s application for disability insurance benefits under Title II of the Social Security Act and supplemental security income under Title XVI of the act. Plaintiff was 35 years old when he filed his application for disability insurance benefits, alleging disability due to HIV positive status, asthma, Anxiety Disorder, Major Depressive Disorder, and a history of drug and alcohol dependence. Plaintiff alleges that the administrative law judge (ALJ) made four errors in determining plaintiff is not disabled: (1) the ALJ erred in concluding plaintiff’s HIV is asymptomatic, (2) the ALJ erred by finding plaintiff does not meet or equal the listings under step three of the five-step disability analysis, (3) the ALJ erred by rejecting the opinions of plaintiff’s treating physician and therapist, and (4) the ALJ erred by relying on an incomplete hypothetical question. The court vacates the ALJ’s decision and remands the matter to allow the ALJ to develop his reasoning and analysis as to plaintiff’s symptoms, namely involuntary weight loss, and ability to maintain social functioning at step three. [Filed July 31, 2013.]
BANKRUPTCY
42-6-1254 In re Innovation Fuels Inc., U.S. Bank. Ct. (Steckroth, U.S.B.J.) (30 pp.) The individual defendants and CSFB/NYSCRF New York Co-Investment Program Fund 2005 move to dismiss the amended complaint of the Chapter 7 trustee for the estates of Innovation Fuels Inc. and IFI Newark Inc. The trustee alleges that within the one-year time period prior to the debtors’ filing, the debtors transferred $252,217.75 to Square 1 Bank and Citizens Bank for interest payments on loans guaranteed by the fund. It is also alleged that the debtors made payments of $45,132.50 to defendant Henri Arif. These transfers are the focus of the trustee’s avoidance claims. The primary issues are (1) whether New Jersey or Delaware law is controlling in the court’s determination of the state law claims; (2) whether the claim asserted by count I is one for breach of fiduciary duty or “deepening insolvency,” a cause of action not recognized under Delaware law; and (3) whether the amended complaint contains sufficient allegations to survive a motion to dismiss. The claims against the individual defendants, as officers and directors of the debtors, for breach of fiduciary duty address the internal affairs of the debtors. Delaware is the state of incorporation of Innovation and IFI is the wholly owned subsidiary of Innovation. The court will therefore apply Delaware law in its determination of the state law claim based on the internal affairs of the debtors. The remaining claims are subject to the bankruptcy code. The court further grants defendants’ motion to dismiss, finding the amended complaint does not sufficiently plead the cause of action. [Filed July 22, 2013.]
42-6-1271 In re Little, U.S. Bank. Ct. (Wizmur, U.S.B.J.) (4 pp.) In this letter to a pro se litigant, the court explains, in response to his inquiry, that the Deptford municipal court was not precluded from arresting him for unpaid municipal court fines by his Chapter 7 bankruptcy filing because it appears that the debt in question arose postpetition, and as such, was not subject to the automatic stay provisions of 11 U.S.C. § 362. [Filed Aug. 6, 2013.]
42-6-1272 In re The Russ Companies Inc., U.S. Bank. Ct. (Steckroth, U.S.B.J.) (13 pp.) Defendant-law firm moves to dismiss the adversary complaint filed by the Chapter 7 trustee for the debtors seeking avoidance of preferential transfers paid to the firm for the benefit of David Moll, formerly a vice president for the debtors and with whom the debtors had entered into a settlement in a dispute regarding outstanding severance payments, and recovery of the voidable transfers. The court denies the motion, finding that the trustee has adequately pleaded that the transfers were of property in which the debtors held an interest where he alleges that the funds were transferred from the debtors’ disbursement account; the trustee has adequately pleaded that the payments were made on account of an antecedent debt; § 550(d)’s provision limiting the trustee to a single satisfaction does not preclude the trustee from pursuing a separate action against Moll since the limit applies to the amount of a recovery, not to the number of parties; and preference exceptions listed under § 547(c) cannot be used to dismiss a plaintiff’s complaint under Rule 12(b)(6). [Filed Aug. 6, 2013.]
CIVIL PROCEDURE
07-7-1237 Braun v. Schwartz, U.S. Dist. Ct. (Manion, U.S.M.J.) (11 pp.) Defendant Weingarten, who had filed a complaint against plaintiff Braun in a New York state court, and who alleges that Braun filed this action in bad faith to deprive the New York court of jurisdiction by asserting baseless federal securities claims, moves for sanctions against Braun pursuant to Rule 11 and against his counsel pursuant to Rule 11, 28 U.S.C. § 1927, and the court’s plenary authority to sanction attorney conduct. The court denies the motion, deeming it premature because defendant’s motion to dismiss is still pending and resolution of that motion will impact whether sanctions are appropriate. [Filed Aug. 5, 2013.]
CIVIL PROCEDURE — CLASS ACTIONS
07-7-1297 Fitzgerald v. Gann Law Books Inc., U.S. Dist. Ct. (McNulty, U.S.D.J.) (10 pp.) Defendants filed a motion to dismiss the complaint, which is pleaded as a class action. Plaintiff, on behalf of himself and others similarly situated, alleges that defendants have “caused to be sent thousands of unsolicited fax advertisements without proper opt-out notices,” in violation of the Telephone Consumer Protection Act (TCPA). The only private cause of action explicitly provided for in TCPA is a state-court right of action, which is available only “if otherwise permitted by the laws or rules of court of a State.” And under the “law or rules” of New Jersey, a TCPA claim cannot be maintained in state court as a class action. Defendants maintain that New Jersey state law also operates to bar a TCPA claim from being maintained as a class action here in federal court. Plaintiff responds that, in federal court, the appropriateness of class action treatment is governed solely by Rule 23 and a state-law prohibition of private TCPA class actions has no force in federal court. Applying Supreme Court precedent, the court agrees that Rule 23, not state law, governs the viability of a class action brought under TCPA in federal court. The court reaches the same result as to a supplemental claim brought under New Jersey state law. Defendants’ motion to dismiss is denied. [Filed July 29, 2013.]
CIVIL PROCEDURE — DISCOVERY
07-7-1255 The Katiroll Company Inc. v. State Farm Fire and Casualty Company, U.S. Dist. Ct. (Shipp, U.S.D.J.) (7 pp.) Appellant, The Katiroll Company Inc. (TKRC), appeals from two letter orders entered by Magistrate Judge Bongiovanni on Dec. 5, 2012, and Feb. 11, 2013. The letter orders arose from discovery issues regarding a declaratory judgment action that was consolidated with an underlying tort action. The December order held that State Farm Fire and Casualty Company was not required to tum over the tort action’s claim file that was prepared to aid Kati Roll and Platters Inc., Niraj Jivani, and Rasik Jivani (the insureds) in their defense against TKRC’s tort claims. The February order denied TKRC’s request to compel State Farm to respond to its contention interrogatory. The court affirms the findings and determinations of Judge Bongiovanni. The file for the tort action, which is currently pending, is separate from the claim file being prepared for the coverage action and was created by State Farm to assist with the defense of the insureds. Therefore, a sufficient factual basis exists for the December order and the decision falls within the magistrate judge’s discretion when deciding nondispositive matters. In addition, the December order is not contrary to law. The court also finds that TKRC failed to demonstrate that the denial of its request to compel State Farm to respond to its interrogatory was clearly erroneous or contrary to law. [Filed July 29, 2013.]
CIVIL PROCEDURE — JURISDICTION AND SERVICE OF PROCESS
07-7-1238 Franklin Mutual Insurance Company as Subrogee of Willis v. Broan-Nutone, L.L.C., U.S. Dist. Ct. (Hillman, U.S.D.J.) (4 pp.) Plaintiff filed an amended complaint alleging the court has diversity jurisdiction over this matter. Plaintiff alleged that it is a New Jersey corporation with its principal place of business in New Jersey and that defendant Broan-Nutone is a limited liability company whose members are Nortek Inc., a Delaware corporation with its principal place of business in Rhode Island, and Nutone Inc. a Delaware corporation with its principal place of business in Ohio. Plaintiff also alleged that the amount in controversy exceeded $75,000. Defendant filed a motion for summary judgment. In its opposition, plaintiff argued that the court lacks subject-matter jurisdiction because although plaintiff believed at the time of filing that the amount in controversy exceeded $80,000, it subsequently determined through the discovery process that its recoverable claim is only $71,913.16. Plaintiff filed an affidavit from one of its retained attorneys, in which he indicates that plaintiff believed the amount in controversy exceeded the $75,000 jurisdictional threshold at the time of the commencement of this action, and he points to no subsequent revelations indicating that the required amount was not in controversy at the time. The court finds it has subject-matter jurisdiction based on diversity of citizenship and an amount in controversy in excess of the jurisdictional threshold. [Filed July 23, 2013.]
CIVIL PROCEDURE — RES JUDICATA
07-7-1256 Radovich v. YA Global Investments, L.P., U.S. Dist. Ct. (Cavanaugh, U.S.D.J.) (10 pp.) Cobalis Corporation, a specialty pharmaceutical company of which plaintiffs are the principals, sold convertible debentures in a structured private investment in public entities transaction to defendant YA. The debentures were secured by Cobalis’ assets pursuant to a security agreement that was guaranteed by an asset pledge agreement of plaintiffs’ common stock. YA was given the right to control the issuance and delivery of all shares convertible under the securities purchase agreement, debentures and warrants. YA filed an involuntary petition against Cobalis in the bankruptcy court for the Central District of California and Cobalis instituted an adversary proceeding against YA (formerly known as Cornel Capital Partners), asserting, inter alia, breach of contract premised on breach of the securities purchase agreement and the debenture agreement. It was dismissed with prejudice. In this action, plaintiffs allege that they were induced to enter into contracts with defendants through defendants’ fraudulent statements and promises and that had they known of defendant’s intention to profit from the sale of Cobalis stock in the near term, they would never have entered into the pledge and escrow agreements and could have sold that stock in an orderly fashion. They assert claims for, inter alia, fraudulent inducement, fraud, and breach of contract. The court grants defendants’ motion to dismiss, concluding that this action is barred by the doctrine of res judicata, finding that the California action resulted in a final judgment on the merits, plaintiffs are again relying on the same facts and theories to attempt to state a claim on which relief can be granted, and plaintiffs are in privity with Cobalis. [Filed Aug. 5, 2013.]
CIVIL RIGHTS
46-7-1285 Mugavero v. Town of Kearny, U.S. Dist. Ct. (Martini, U.S.D.J.) (5 pp.) Defendants Kearny, Kearny Police Department and John Dowie, chief of police, and Police Officer Paul Berchefski filed a motion for summary judgment in this matter arising from the issuance of a parking ticket (summons) to plaintiff Sonia Mugavero. Officer Berchefski was in the process of issuing the summons when plaintiff returned to her vehicle and expressed her dissatisfaction. The summons contains an illustration depicting the outline of a penis. Defendants dispute plaintiff’s assertion that Officer Berchefski stated “You should have been white, you Puerto Rican spic.” Plaintiff filed suit asserting that the officer’s actions violated her constitutional rights under the Fourteenth Amendment. It is undisputed that Officer Berchefski began issuing the summons for an admittedly illegally parked vehicle without knowledge of its owner’s identity. There is no suggestion that the officer began to issue the summons based on plaintiff’s ethnicity or gender. The issuance of the summons cannot support plaintiff’s assertion that her Fourteenth Amendment rights were violated. The court also rejects plaintiff’s assertion that “the service of the Summons, containing a drawing of a penis, was an act of harassment, sexual harassment and intimidation which, coupled with the verbal slurs, constitute a constitutional violation.” Plaintiff failed to demonstrate that her constitutional rights were violated. Her § 1983 claim fails as a matter of law. [Filed July 30, 2013.]
CIVIL RIGHTS — CIVIL PROCEDURE
07-7-1239 Mansaray v. Pumphrey, U.S. Dist. Ct. (Simandle, U.S.D.J.) (9 pp.) In this 42 U.S.C. § 1983 action asserting violation of plaintiffs’ civil rights arising out of their arrest and detention, the court grants defendants’ unopposed motion to dismiss the complaint pursuant to Rule 16(f) for plaintiffs’ repeated failure to comply with the court’s scheduling orders and defendants’ discovery requests, finding that plaintiffs have missed a series of discovery deadlines, have failed to provide certifications to their answers to interrogatories, and plaintiffs’ counsel has informed the court that his clients have not responded to his repeated requests to cooperate with the litigation and apparently have no desire to pursue the action. [Filed Aug. 5, 2013.]
CONSUMER PROTECTION
09-7-1298 Farley v. GameStop Corp., U.S. Dist. Ct. (Kugler, U.S.D.J.) (10 pp.) Defendants, a retail company that sells pre-owned video games for lower prices than new video games, move to dismiss this complaint filed by customers who purchased pre-owned games from defendants, alleging that defendants violated the New Jersey Consumer Fraud Act by selling the games without the single use downloadable content serial code available for each game, which are included in the purchase of new games and which the video game boxes from the manufacturer say are available. Plaintiffs allege that DLC is an integral feature of video games and that because of defendants’ deceptive practices, two of them actually spent more, rather than saving money, by purchasing pre-owned because they separately purchased the DLC for their games. The court denies defendants’ motion, finding that plaintiffs have standing to sue because they have adequately alleged that they suffered economic injuries; have pleaded their CFA claim with the requisite particularity and were not required to allege a date, place or time to meet Rule 9(b)’s heightened standards; and have alleged sufficient facts to state a CFA claim as they have adequately alleged a knowing omission, an ascertainable benefit-of-the-bargain loss, and a causal relationship between defendants’ unlawful conduct and their ascertainable loss. Plaintiffs also have adequately pleaded unjust enrichment. [Filed Aug. 7, 2013.]
CONSUMER PROTECTION — JURISDICTION
09-7-1257 Roma Pizzeria v. Harbortouch, U.S. Dist. Ct. (Pisano, U.S.D.J.) (7 pp.) Plaintiff, which had contracted with defendant to provide credit card and debit processing services, filed this action alleging, inter alia, violation of the New Jersey Consumer Protection Act and breach of contract in state court pursuant to a forum-selection clause in the parties’ agreement giving Hunterdon County exclusive jurisdiction over all cases related to the agreement. Defendant removed the action based on the Class Action Fairness Act of 2005. The court grants plaintiff’s motion to remand the case to Hunterdon County, finding that the parties waived the right to remove the case to federal court in the forum-selection clause. [Filed Aug. 5, 2013.]
CONTRACTS
11-7-1273 Jackson Hewitt Inc. v. Barnes Enterprises Inc., U.S. Dist. Ct. (Cavanaugh, U.S.D.J.) (9 pp.) Defendant Richard Barnes entered into nine agreements to operate Jackson Hewitt franchises in South Carolina, personally guaranteeing the Barnes Enterprises’ performance and obligations under each agreement. After plaintiff declared defendants in breach of their franchise agreement and defendants failed to cure, plaintiff filed this action and now moves for summary judgment as to its claims of breach of contract-unpaid fees, breach of contract, breach of notes, and breach of guaranties. Defendants have cross-moved for summary judgment. The court grants plaintiff’s motion, finding the correct interest rate to be applied is 18 percent as that is the amount specified in the parties’ agreement, not the 3.5 percent pursuant to New Jersey Court Rule 4:42-11(a), but that the calculation of attorney fees should be postponed until the conclusion of the action. Defendants’ motion for summary judgment is denied because, although Customers First (owned by Barnes’ wife and father) may have committed the alleged trademark infringement and may be the appropriate defendants, defendants here are potentially liable as secondary infringers and further, there are genuine disputes as to each count defendants argue in their motion for summary judgment. [Filed Aug. 7, 2013.]
CONTRACTS — FRANCHISES
11-7-1286 Jackson Hewitt Inc. v. Dupree-Roberts, U.S. Dist. Ct. (Walls, S.U.S.D.J.) (16 pp.) In this breach-of-contract action arising out of defendants’ alleged violations of the post-termination provisions of the parties’ franchise agreement, plaintiff moves for entry of default judgment, damages and postjudgment interest, attorney fees and costs, and a permanent injunction. The court grants the motion, finding that plaintiff has established liability for breach of the franchise agreement, personal guarantees and promissory note, and of the covenant not to compete; plaintiff has properly served defendant with process; the clerk has entered default against her; plaintiff will continue to be harmed if default judgment is not entered; and defendant has offered no defense and does not appear to have a meritorious defense. The court grants the money damages requested. [Filed Aug. 7, 2013.]
CREDITORS’ AND DEBTORS’ RIGHTS — CLASS ACTIONS
15-7-1287 Feuerstack v. Weiner, U.S. Dist. Ct. (Dickson, U.S.M.J.) (8 pp.) The present motion in this class action, which alleged violations of the Fair Debt Collection Practices Act (FDCPA), requires the court to determine whether plaintiff should be permitted to amend his complaint to redefine the putative class to include not only consumers in New Jersey, but consumers nationwide. Plaintiffs contended that the claims asserted on behalf of the nationwide class involve the same conduct alleged in the original complaint, which was filed on July 10, 2012, namely the filing of improper collection letters that violate the FDCPA. However, defendant was not on notice that he could be called on to defend against claims on a nationwide basis until Jan. 23, 2013, when plaintiff first filed a motion to amend the complaint, which is beyond the 120-day period provided by Rule 4(m). The court finds that plaintiffs’ amendments expanding the putative class from New Jersey consumers to consumers nationwide do not relate back to the initial complaint because plaintiff failed to satisfy the notice and prejudice requirements of Rule 15(c). Without adequate notice, the expansion of the proposed class would unduly prejudice defendant. Thus, plaintiffs’ motion to amend is denied. [Filed July 30, 2013.]
CRIMINAL LAW — HABEAS CORPUS
14-7-1303 McNeill v. United States, U.S. Dist. Ct. (Martini, U.S.D.J.) (25 pp.) Petitioner was convicted of heroin possession with intent to distribute, being a felon in possession of a firearm, and firearm possession in furtherance of a drug-trafficking crime. Now incarcerated, he moves to vacate, set aside, or correct his sentence, citing ineffective assistance of counsel based on allegedly deficient advice during the plea-bargaining stage, poor strategic decisions at trial, and a failure to renew a motion to suppress. The court grants his motions to supplement, grants in part his motions to amend, and dismisses each ground for relief except for two claims of ineffective assistance of counsel during the plea-bargaining phase of his case. It also grants his request for pro bono counsel and denies his motions for discovery without prejudice. [Filed Aug. 8, 2013.]
EDUCATION
16-7-1288 D.V. v. Pennsauken School District, U.S. Dist. Ct. (Irenas, S.U.S.D.J.) (29 pp.) Plaintiffs B.V., individually and on behalf of her grandson D.V., and T.V., individually, initiated this action against the district alleging discrimination and retaliation in violation of § 504 of the Rehabilitation Act, 29 U.S.C. § 794, Title II of the Americans With Disabilities Act, 42 U.S.C. § 12131, 42 U.S.C. § 1983, Title IX of the Education Amendments of 1972, 20 U.S.C. § 1681, and New Jersey’s Law Against Discrimination, N.J.S.A. 10:5-1. D.V. has autism, generalized anxiety disorder and a learning disability in math. T.V., his uncle, is a public school teacher in New Jersey and is gay. Defendant moves to dismiss pursuant to Rule 12(b)(1) and (6). The motion is granted with respect to Counts III — defendants violated D.V. and B.V.’s rights under the NJLAD by discriminating against D.V. on the basis of his disability — as it is a sweeping legal conclusion that the court is not required to accept as true and it does not identify any allegedly discriminatory actions taken by the district against D.V; IV — defendants violated B.V. and D.V.’s rights under Title IX by taking inadequate action to stop the bullying D.V. was experiencing at school — because B.V. and T.V. do not have standing to assert a personal claim based on the alleged violation of D.V.’s rights and because they have not adequately pleaded that the district was deliberately indifferent to the alleged sexual harassment of D.V.; and V — defendants violated T.V.’s rights under Title IX by discriminating against him on “the basis of his sexual orientation as a result of advocating” for D.V. — because Title IX applies only to students and participants in educational programs. The motion is dismissed with respect to Counts I — defendants reported T.V. to DYFS in retaliation for B.V. and T.V.’s advocating on D.V.’s behalf, in violation of the ADA, the Rehabilitation Act, and § 1983 — because plaintiffs plausibly plead the elements for a retaliation claim and defendants’ qualified immunity claim fails at this stage as the court cannot find that they made a reasonable mistake about the legal constraints on their actions; and II — defendants reported T.V. to DYFS because T.V. is gay, in violation of the NJLAD — because T.V. sufficiently alleges that defendant discriminated against him by reporting him to DYFS as an alleged child abuser because of his sexual orientation. [Filed Aug. 7, 2013.]
16-7-1289 K.L. v. Berlin Borough Bd. of Educa., U.S. Dist. Ct. (Simandle, U.S.D.J.) (17 pp.) K.L. has pending a due process petition concerning her daughter R.L.’s proposed IEP for in-district placement for Extended School Year 2013 and the 2013-14 school year. This action involves the discrete issue of what R.L.’s pendent placement is under the IDEA pending adjudication of the due process petition. The ALJ found that the Orchards Friends School, which R.L. has attended for the last three years and for which the district has paid as part of a settlement with K.L., is not the stay-put placement, rejecting K.L.’s argument to the contrary and that the district should pay for R.L.’s continued placement at Orchards. The court affirms the ALJ’s opinion, finding that case law is clear that once a parent unilaterally removes a child from an existing state program governed by an IEP, the protections of the stay-put provision cease until the parent and the school agree on a new placement, thus here, where R.L. was unilaterally removed from the district by K.L. and the last educational placement of her was the in-district placement pursuant to the IEP then in effect, the district is the stay-put placement. The court holds that this conclusion is not altered by the parties’ settlement, which was only an agreement for reimbursement and not an agreement that Orchards was a proper placement. [Filed Aug. 7, 2013.]
HEALTH LAW — ERISA
22-7-1299 Montvale Surgical Center v. Horizon Blue Cross Blue Shield of New Jersey Inc., U.S. Dist. Ct. (Mannion, U.S.M.J.) (12 pp.) Plaintiff, an ambulatory surgical center that provides services to, inter alia, participants in defendant Novartis’ health-care plan, moves to amend its complaint asserting claims of state law breach of contract and promissory estoppel — filed after defendant HBCBS, Novartis’ plan administrator, denied its claims for reimbursement of manipulation under anesthesia provided to a plan participant on the grounds that the treatment is experimental and investigational and plaintiff has not shown that the service was medically necessary — to include federal claims for violation of ERISA. The court denies the motion, finding that plaintiff has not made a threshold showing that HBCBS acted outside the scope of its decision-making authority under the plan to determine if a procedure is investigational or experimental or is medically necessary and thus not covered, and, therefore, the motion to amend is futile for the purposes of Rule 12(b)(6). [Filed Aug. 8, 2013.]
LABOR AND EMPLOYMENT
25-7-1241 Adami v. Cardo Windows Inc., U.S. Dist. Ct. (Simandle, U.S.D.J.) (29 pp.) This action concerns the classification of plaintiffs, along with other window installers, as independent contractors rather than employees. Plaintiffs allege that the characterization of plaintiffs as independent contractors was unlawful and has resulted in plaintiffs not receiving required overtime compensation, workers’ compensation insurance coverage, and other benefits that are made available to regular employees of defendant Cardo Windows Inc. Plaintiffs bring suit under the Fair Labor Standards Act (FLSA), New Jersey Wage and Hour Law (NJWHL), New Jersey Construction Industry Independent Contractor Act (CIIC), and the Employee Retirement Income Security Act (ERISA), as well as New Jersey common law. The court grants in part and denies in part defendants’ partial motion to dismiss. The following claims are dismissed: counts VI and X for failure to maintain records under the FLSA and NJWHL; counts III and IX for violation of § 502(a)(3) of ERISA; and count XIII for wrongful discharge. The remainder of defendants’ motion to dismiss is denied. [Filed July 23, 2013.]
25-7-1258 Aiellos v. Zisa, U.S. Dist. Ct. (Martini, U.S.D.J.) (5 pp.) In this action alleging that the remaining plaintiffs were retaliated against by defendants Zisa and Padilla and others in the Hackensack Police Department for the exercise of their First Amendment rights, i.e., they were forced to contribute to and support the political campaigns of Zisa and Padilla, pressured to maintain financial support for these campaigns, and that they faced retaliation when they refused to do so, and plaintiff Riotto claims he was suspended, denied a timely hearing, and denied reinstatement, the court denies Padilla’s motion to dismiss the claims against him because (1) the court has already found that plaintiffs stated valid claims of free speech and freedom of association against him under 42 U.S.C. § 1983; (2) the claim for violation of Riotto’s procedural due process rights survives because he sufficiently alleges that he was deprived of a protected property interest in his employment and that he was denied a postsuspension hearing for a year and a half; (3) the court has twice decided that the conspiracy claims are well-pleaded; and (4) because the court finds that plaintiffs have stated valid claims under § 1983, it likewise finds that they have stated a valid claim under the New Jersey Civil Rights Act. [Filed Aug. 6, 2013.]
25-8-1274 Danza v. Fidelity Management Trust Company, Third Cir. (Shwartz, U.S.C.J.) (12 pp.) Plaintiff Nicholas Danza brought suit on behalf of himself and other similarly situated beneficiaries of employee benefit plans against defendants Fidelity Management Trust Company and Fidelity Investments Institutional Operations Company, alleging that they violated provisions of the Employee Retirement Income Security Act of 1974 (ERISA), by charging participants an excessive service fee for reviewing domestic relations orders (DROs). Plaintiff argues that the district court erred in granting defendants’ motion to dismiss. Plaintiff was a participant in a 401(k) retirement plan sponsored by his employer, the Great Atlantic & Pacific Tea Company Inc. (A&P). A&P and Fidelity entered into a trust agreement under which Fidelity agreed to provide recordkeeping and administrative services for the “A&P Plan,” which included the review of DROs for compliance with ERISA and the plan. Schedule B of the trust agreement listed the fees that Fidelity would charge for its services, including fixed fees for DRO services to be paid by plan participants. Plaintiff did not use a DRO generated on the Fidelity website. Rather, he submitted a DRO from an outside firm. Pursuant to the trust agreement, he was charged $1,200 for its review. Plaintiff claims the fee is unreasonable and violates ERISA. The district court granted defendants’ motion to dismiss for failure to state a claim. The court finds Fidelity cannot be held liable as a fiduciary for the challenged conduct. Further, ERISA prohibits none of the alleged transactions. The district court’s dismissal is affirmed. [Filed July 29, 2013.]
25-8-1275 Murray v. Beverage Distribution Center, Third Cir. (Fuentes, U.S.C.J.) (10 pp.) Murray appeals from the district court’s order granting summary judgment to Beverage Distribution Center (BDCI) on the issue of whether BDCI conducted discriminatory hiring practices against Murray. Murray also opposes the district court’s order denying his motion to alter or amend the order granting summary judgment in favor of BDCI. Murray submitted his resume to BDCI through a third party, The WorkPlace Group (WPG), for a project manager position. BDCI contracted with WPG to handle recruiting for open employment positions within BDCI. A WPG recruiter contacted Murray to discuss his candidacy and to complete a required assessment of Murray for the application process. Murray, by his own admission, refused to continue with the application process, asserting that one of the Hiring Managers at WPG had previously discriminated against him. He therefore refused to cooperate with the application process until he was assured that person was not involved in evaluating his candidacy. WPG did not refer Murray to BDCI for consideration for the project manager position. Although the failure to formally apply for a job will not automatically bar a plaintiff from establishing a prima facie case for discriminatory hiring, pursuant to EEOC v. Metal Serv. Co., the applicant must show that he made every reasonable effort to convey his interest in the job to his employer, he was deterred from applying by the employer’s discriminatory practices and would have applied for the position but for those practices, or he had a genuine and real interest in the position but reasonably believed that a formal application would be futile. Murray’s actions do not satisfy this reasonableness standard. BDCI is entitled to judgment as a matter of law. [Filed July 29, 2013.]
LABOR AND EMPLOYMENT — ATTORNEY FEES
25-7-1290 Isaacs v. Quality Auto Center Inc., U.S. Dist. Ct. (Mannion, U.S.M.J.) (6 pp.) In this putative class action alleging violations of the state and federal wage and hour laws, in which defendants moved for sanctions against plaintiff for failure to comply with court orders and the parties subsequently agreed to a consent order that dismissed the class-action claims with prejudice and preserved plaintiff’s individual claims and defendants’ rights to seek fees and costs, defendants now move for sanctions against plaintiff for attorney fees and costs based on the propriety of the class-action claims, failure to withdraw or dismiss the claims earlier, and discovery delays. The court denies defendants’ motion, finding that while plaintiff’s prosecution of the litigation has been far from ideal, this is not the exceptional case that warrants sanctions. [Filed Aug. 8, 2013.]
LABOR AND EMPLOYMENT — DISCRIMINATION
25-7-1276 Mann v. Prince Telecom, U.S. Dist. Ct. (Bumb, U.S.D.J.) (15 pp.) Plaintiff Mann is a black male and an observant Muslim, who was a supervisory employee of Ocean Cable Inc. Mann filed dual complaints of race discrimination with the Pennsylvania Human Relations Commission (PHRC) and the U.S. Equal Employment Opportunity Commission (EEOC) against Ocean Cable. In late 2011, while these complaints were still pending, Ocean Cable employees were informed that defendant Prince Telecom was buying Ocean Cable and all employees would need to apply for positions with Prince Telecom. Defendant did not hire or offer plaintiff employment. Plaintiff’s allegations regarding comments about his race and origin, in combination with allegations that plaintiff’s application was not accepted because he didn’t have his Social Security card while other applications were accepted, are sufficient to infer discriminatory animus. Moreover, Mann claims to be as qualified as other employees, nearly all of whom were hired or considered in good faith, support an inference that Prince Telecom refused to accept Mann’s employment application, or to offer him employment, because of his race. As to his retaliation claims, Mann’s protected activity is too remote in time to support a causal connection through temporal proximity to defendant’s refusal to hire him. However, comments made to plaintiff suggest that defendant learned of plaintiff’s discrimination complaints and reacted negatively. It is plausible that, after learning of plaintiff’s complaints against its predecessor, defendant decided not to offer plaintiff employment. Plaintiff has sufficiently alleged claims for racial discrimination and retaliation under § 1981 and the NJLAD. The motion to dismiss is denied. [Filed July 26, 2013.]
LABOR AND EMPLOYMENT — EMPLOYEE BENEFITS
25-7-1300 EUSA-Allied Aquisition Corp. v. Teamsters Pension Trust Fund of Philadelphia & Vicinity, U.S. Dist. Ct. (Simandle, U.S.D.J.) (15 pp.) Defendant Teamsters Pension Trust Fund of Philadelphia & Vicinity (the fund) filed a motion to vacate an arbitration award. The dispute concerns the meaning of the phrase “the number of years required for vesting under the plan” in the Multiemployer Pension Plan Amendment Act (MPPAA). Here, an arbitrator ruled that the fund, a jointly administered multiemployer defined benefit pension plan, could not demand a withdrawal penalty from plaintiff EUSA-Allied Acquisition Corp. (EUSA) under the MPPAA when EUSA withdrew from the fund after four years and 11 months of making contributions. The “free-look” provision of the MPPAA permits employers to withdraw from a pension plan without liability if withdrawal is made before “the number of years required for vesting under the plan,” or six consecutive plan years, whichever comes first. In this case, the arbitrator found that “the number of years required for vesting” meant “a specific number of consecutive 12 month periods,” and because the Teamsters Pension Plan of Philadelphia & Vicinity (the plan) requires five years of vesting service, EUSA was protected by the “free-look” provision of the MPPAA, as it only had contributed to the plan for four years and 11 months — less than the five years of service required for vesting. The court agrees with the reasoning set forth in the arbitrator’s award and denies defendant’s motion to vacate. [Filed July 30, 2013.]
LABOR AND EMPLOYMENT — SETTLEMENTS
25-7-1301 DaPonte v. Barnegat Twp. School Dist. B.O.E., U.S. Dist. Ct. (Arpert, U.S.M.J.) (11 pp.) In this action alleging wrongful termination and discrimination and seeking compensatory damages for certain economic losses and emotional distress, defendants move to enforce the parties’ settlement after plaintiff refused to execute a general release, instead materially revising its terms. Pro se plaintiff has filed motions to reopen the case and for recusal. The court denies the motion for recusal, finding no evidence to suggest any personal bias on behalf of the court. It grants the motion to enforce the settlement, finding that the parties had agreed to the essential terms of the settlement, which were put on the record, and while the parties’ intention to reasonably negotiate the details of the settlement was certainly contemplated, the right to materially alter the settlement was not, and plaintiff’s proposed terms should not frustrate the overall intent of the parties to be bound by the agreement. [Filed Aug. 8, 2013.]
LABOR AND EMPLOYMENT — WAGES AND HOURS
25-7-1242 Zavala v. Wal-Mart Stores Inc., U.S. Dist. Ct. (Martini, U.S.D.J.) (4 pp.) A group of plaintiffs brought individual, class, and collective action claims against defendant Wal-Mart Stores Inc., asserting violations of the Racketeer Influenced and Corrupt Organizations Act (RICO), the Fair Labor Standards Act (FLSA), and the common law of false imprisonment. The court dismissed all claims except for the individual FLSA claims. Subsequently, a host of plaintiffs settled with Wal-Mart. Wal-Mart now moves without opposition for summary judgment on the individual FLSA claims of 11 plaintiffs (the remaining plaintiffs). Wal-Mart argues that the remaining plaintiffs’ FLSA claims are time-barred. Finding the remaining plaintiffs’ FLSA claims are all untimely, the court grants Wal-Mart’s motion for summary judgment. [Filed July 23, 2013.]
LEGAL PROFESSION
04-7-1277 RD Legal Funding v. Barry A. Cohen P.A., U.S. Dist. Ct. (Linares, U.S.D.J.) (18 pp.) Plaintiff, in the business of providing funding to attorneys and law firms, entered into a master assignment and sale agreement with defendant-law firm pursuant to which defendant agreed to assign certain legal fees receivables, including attorney fees, to plaintiff. The complaint asserts 11 counts arising out of an alleged breach of that agreement with respect to three underlying actions. Defendants move to dismiss pursuant to Rule 12(b)(6). The court declines to abstain on the basis of the Colorado River doctrine, finding that the cited New York state court proceedings are not parallel and that the Colorado River factors weigh heavily toward retaining jurisdiction. The court grants the motion to dismiss without prejudice counts one through six, which assert breach-of-contract claims because plaintiff has failed to cure the pleading deficiencies previously addressed by the court, including that they are overlapping and duplicative and fail to provide defendants with a short and plain statement of the claims in violation of Rule 8(a). The court dismisses the claims of negligence, breach of fiduciary duty, and tortious interference with a contract because plaintiff has no right to bring a tort claim of its assignor and under New Jersey law, a prejudgment tort claim cannot be assigned. The unjust-enrichment claim is dismissed with prejudice because plaintiff concedes that its relationship with defendants is governed entirely by a valid and binding contract. The claim of breach of guaranty against Barry Cohen individually is dismissed without prejudice because the breach-of-contract claims have been dismissed without prejudice. [Filed Aug. 6, 2013.]
RESIDENTIAL AND COMMERCIAL REAL ESTATE — MORTGAGE FORECLOSURES
34-7-1259 The Bank of New York Mellon Trust Co. v. Poczobut, U.S. Dist. Ct. (Chesler, U.S.D.J.) (5 pp.) In this mortgage foreclosure action originally filed in state court and removed by defendants, the court grants plaintiff’s motion to remand, finding that defendants have failed to demonstrate that there is federal-question jurisdiction under 28 U.S.C. § 1331 where the complaint asserts rights and seeks relief under state law and no federal claim or cause of action is pleaded, since the jurisdictional inquiry is limited to the claims and theories asserted in the complaint and jurisdiction will not lie even if a defense to the state law claims relies on federal law. Further, defendants’ attempt at removal on the basis of 28 U.S.C. § 1332(a) is deficient because they fail to establish that there is diversity of citizenship between the parties and, even assuming diversity of citizenship and amount in controversy criteria were satisfied, Poczobut is barred from removing the action on the basis of diversity jurisdiction under the forum defendant rule. [Filed Aug. 5, 2013.]
34-7-1302 Budge v. Arrianna Holding Company, U.S. Dist. Ct. (Cecchi, U.S.D.J.) (6 pp.) Plaintiff owned real estate on which the township issued a tax-sale certificate, which was purchased by Wachovia as the custodian for Phoenix. Wachovia filed a foreclosure complaint and after plaintiff failed to redeem the tax lien, Wachovia sold the tax-sale certificate to defendant Arrianna, which was substituted as plaintiff in the foreclosure action. A final judgment was issued in favor of Arrianna, which was affirmed on appeal. Plaintiff then filed this action alleging that Arrianna improperly filed a motion for final foreclosure when it was not a party to the foreclosure complaint and had no standing to file the motion and that it was substituted without notice to him. Defendants move to dismiss on the basis of the Rooker- Feldman doctrine. The court grants the motion, finding that plaintiff’s dispute was actually litigated in state court and his claims for relief in this action are inextricably intertwined with that underlying the state court adjudication, and thus his claims are precluded by Rooker- Feldman and the court lacks subject-matter jurisdiction. [Filed Aug. 8, 2013.]
TORTS — NEGLIGENCE
36-7-1260 Hehr International Inc. v. Sika Corp., U.S. Dist. Ct. (Hammer, U.S.M.J.) (11 pp.) Plaintiff, which manufactures windows for certain model buses and which had contracted with defendant to supply bonding material and technical instructions for using the adhesive to bond plaintiff’s windows to the window frames of the buses, moves to amend its complaint to cure the deficiencies that led to the dismissal of its common-law negligence claim, filed after the adhesive failed. Plaintiff also moves to amend its damages allegations as to its breach-of-warranty claim. The court denies the motion to amend the negligence claim because the court has already found that New Jersey’s Product Liability Act subsumes the claim and, even if the court construed the pleading as a PLA claim, it is futile because the proposed amendment provides little factual support for the alleged irreparable damage to the windows. The unopposed motion to amend the damages allegations is granted. [Filed Aug. 5, 2013.]