07-4-4126 Hermanns v. Hermanns, N.J. Chancery Div. (Contillo, P.J. Ch.) (23 pp.) Plaintiff sought to amend his complaint to add claims in his action against his father over a family company. Defendant father was sole shareholder of family company. Plaintiff served as company president. Plaintiff alleged he quit teaching and began working at family company at father’s request and that father repeatedly assured him that he had “sweat equity” in the company and a “secure job.” In 2016, father told plaintiff that he had Alzheimer’s and both met with father’s attorney to discuss transferring ownership of company to plaintiff. The process ended with plaintiff ousted from company. Plaintiff sought to supplement his allegations seeking declaratory judgment and injunctive relief by adding a claim for unjust enrichment and asserting he was promised lifetime employment and “sweat equity.” Plaintiff argued there was no prejudice to defendant since the new allegations arose from the same facts and events. Defendant argued that plaintiff’s new claims were futile since his allegation of an oral agreement to inherit the business was not cognizable in New Jersey and plaintiff failed to plead the elements of a claim for unjust enrichment. The court allowed the amendment asserting a promise of lifetime employment and claiming unjust enrichment but denied the claim of a right to “succeed” to the business. [Filed Aug. 23, 2017]
07-5-4135 Conley v. Twp. of Ocean, Tax Ct. (Sundar, J.T.C.) (5 pp.) Township moved to dismiss plaintiff’s complaint as untimely. County Board of Taxation issued a judgment dated Feb. 28, 2017, affirming a property assessment and noting that the mailing date was March 14, 2017. All state offices were closed on March 14, 2017, due to a declaration of a state of emergency due to a winter storm. Plaintiff filed a complaint on May 2, 2017, which was one day beyond the 45-day deadline if the time limit was counted from March 14, 2017. The assistant tax administrator testified that the County Tax Board was open on March 14 and employees were present. However, the employees who reported to work that day were not the employees responsible for picking up the mail bin and delivering it to the post office. Thus, the court could not make a “reasonable inference” that the mail placed in the mail bin was delivered to the post office on that day and that the date given was the date on which the judgment was actually mailed. The start date for the 45-day appeal period could not be deemed to be March 14, 2017. [Filed Aug. 24, 2017]
11-2-4127 Levin v. Bd. of Tr. of Ocean Cnty. Bus. Ass’n, N.J. Super. App. Div. (per curiam) (15 pp.) Plaintiffs appealed the grant of summary judgment in favor of defendant in plaintiffs’ action to compel defendant to reinstate plaintiffs in defendant’s private business association. Plaintiffs further appealed the denial of their motion to enforce litigant’s rights. Plaintiffs retained the services of Adam Safeguard & Inquiry Systems, another member of defendant’s association. When plaintiffs failed to pay, Adam Safeguard initiated defendant’s grievance procedures, after having filed suit in court. Plaintiffs contended the grievance process should be delayed pending disposition of the lawsuit. Defendant subsequently terminated plaintiffs’ membership, and plaintiffs filed the present action. After plaintiffs settled their dispute with Adam Safeguard, the trial court ordered the parties to engage in defendant’s grievance process. However, the grievance committee recommended the termination of plaintiffs’ membership. Thereafter, the parties cross-moved for summary judgment, which the trial court granted in defendant’s favor. On a first appeal, the court ordered a new grievance procedure, finding plaintiffs were not afforded the right to confront the grievant or a hearing before defendant. The trial court ordered a new grievance committee, which also concluded that plaintiffs violated defendant’s bylaws and recommended rejection of their reinstatement, to which defendant concurred. Defendant then filed the present summary judgment motion, to which plaintiffs cross-moved to enforce litigant’s rights. The trial court granted defendant’s motion and denied plaintiffs’ cross-motion. On appeal, plaintiffs contended they were not provided a fair and impartial hearing because defendant had a conflict of interest in deciding whether plaintiffs should be reinstated, and further argued that Adam Safeguard’s refusal to participate effectively ended the grievance. The court rejected both of plaintiffs’ arguments, noting that defendant honored all of the procedural requirements set forth by the trial court for the hearing it ordered, and that the members of the second grievance committee were neither defendants nor members of the original grievance committee.
11-2-4117 Gigi K Collections, Inc. v. United Merchant Services, N.J. Super. App. Div. (per curiam) (7 pp.) The parties executed a contract whereby respondent provided point of service credit-card processing equipment and other related services. In accordance with the parties’ contract, appellant provided notice of termination that it did not wish to renew the contract because the parties could not agree on renewal terms. Appellant subsequently filed suit alleging respondent breached their agreement by failing to pay monies due, improperly converting fund, and failing to return funds after demand. Respondent argued it ceased processing transactions upon receipt of the written notice to terminate. The trial court dismissed the complaint finding no evidence supported the allegations that respondent breached their contract by collecting and retaining the proceeds from the credit card purchases. The trial judge noted that appellant’s losses were caused by its failure to batch sales and respondent did not collect or retain sales proceeds. On appeal, the court affirmed holding appellant presented no evidence to support its allegation that respondent collected credit card sales proceeds and failed to return to appellant. Further, appellant failed to mitigate its damages by refusing to re-process the purchases. Accordingly, the court affirmed.
13-2-4154 Rauch v. Rauch, N.J. Super. App. Div. (per curiam) (22 pp.) Plaintiffs appealed multiple orders in their legal and equitable actions for a claimed ownership interest in defendants’ business. Plaintiffs worked at the nursing home owned by their parents and substantially improved the business. In 2009, son and father orally agreed that parents would give plaintiffs a 50 percent equity interest in the business. In 2010, plaintiffs asked parents to sign a “Director Agreement” giving son exclusive authority to make certain business decisions and when it was not signed, plaintiffs contended they were fired and defendants asserted plaintiffs simply failed to return to work. After numerous motions and hearings, the trial court dismissed all of the claims except promissory estoppel and unjust enrichment and granted defendants’ motion in limine precluding plaintiff’s expert from testifying on any matter not related to the reasonable value of plaintiffs’ services. At trial, the expert acknowledged that he had no information on the value of plaintiff’s services and the trial court granted defendants’ motion for a directed verdict. Trial court properly found that there was no enforceable contract because essential terms were missing from the agreement, including assumption of debts and treatment of encumbrances. The court properly found that the measure of damages on the promissory estoppel claim was the value of plaintiffs’ services and properly denied expectation damages.
12-2-4155 North Jersey Media Grp., Inc. v. IC System Solutions, Inc., N.J. Super. App. Div. (per curiam) (27 pp.) During an internal investigation conducted after it fired the vice president of information technology, appellant media company discovered decedent had purchased millions of dollars of goods and services from respondent-companies without written contracts. Appellant further learned that decedent had a close personal relationship with respondent-Nolan. Following its investigation, appellant instituted this suit alleging fraud, consumer fraud, unjust enrichment, civil conspiracy and conversion. Upon motion, the trial court granted respondents summary judgment concluding the proofs and other evidence provided showed appellant was “clearly a classic example of ‘buyer’s remorse,’” premised on the “baseless conclusions” of its “self-proclaimed expert.” The trial court further dismissed the evidence of negotiated prices for equipment and services and concluded appellant could not recover for its “own improvident conduct.” On appeal, the court reversed dismissal for all counts, excluding conversion, finding appellant revealed material facts in dispute and had produced sufficient evidence, including competing expert opinions, to put forth its claims. The court noted that the trial judge assumed that the transactions between the parties were “negotiated at arms’ length,” when the premise of appellant’s case was that the relationship between decedent and respondents was not an arms’ length one. Because the trial court assumed the transactions appellant complained of were legitimate, it did not view the competent evidence in the light most favorable to appellant, nor accord it the legitimate inferences drawn from those facts. Finally, the court held it was the role of the jury to determine the truth of the conflicting claims and therefore reversed summary judgment.
15-2-4128 Deutsche Bank Nat’l Trust Co. v. Choi, N.J. Super. App. Div. (per curiam) (12 pp.) Appellant executed a promissory note and mortgage secured by his real property; the note and mortgage was subsequently assigned to respondent. Upon appellant’s failure to make payments, respondent initiated the underlying foreclosure complaint. Respondent made multiple attempts to personally serve appellant and ultimately caused notice of the complaint to be published in the newspaper. Respondent moved for entry of default judgment attaching a supporting application detailing service attempts. Prior to entry, appellant moved to vacate the default judgment contending that the attempts to personally serve him were insufficient and that the service by publication was defective. The chancery court denied the motion finding respondent provided adequate proof of its diligent efforts to locate and personally serve appellant and that service by publication was proper under Rule 4:4-5(a)(3). As appellant offered no meritorious defense, the court entered final judgment in favor of respondent. On appeal, the court affirmed holding appellant was properly served by publication and appellant had no meritorious defense to vacate the default judgment. The court noted that respondent made multiple attempts to find and personally serve appellant, as well as timely filing his notice of diligent inquiry under Rule 4:43-1. Further, there was no genuine dispute of material fact that would warrant a plenary hearing with regard to service. Accordingly, the court affirmed denial of appellant’s motion to vacate.
15-2-4156 Wells Fargo Bank, N.A. v. Bischoff, N.J. Super. App. Div. (per curiam) (5 pp.) Appellants execute a note and mortgage in favor of non-party Wells Fargo Bank West, N.A. secured by their real property. Subsequently, Wells Fargo West consolidated into, and became part of, respondent who became holder of the note and mortgage. Upon appellants’ default on the loan, appellant instituted the underlying foreclosure complaint. A default was entered when appellants failed to respond and respondent moved for entry of default. Appellants opposed and cross-moved to dismiss the complaint. Treating the motion as a request to vacate a default, the Chancery Division denied the motion concluding appellants failed to show good cause to vacate the default. A final judgment of foreclosure was entered. On appeal, appellants claimed respondent lacked standing to sue because it did not own the note or possess the mortgage when it filed the foreclosure action. The court affirmed holding respondent filed papers establishing that appellants executed a promissory note and mortgage in favor of Wells Fargo West. Upon consolidation, respondent stood in the shoes of Wells Fargo West with regard to both the note and the mortgage and had the right to enforce the mortgage. Suser v. Wachovia Mortg., FSB, 433 N.J. Super. 317, 321 (App. Div. 2013) Accordingly, appellants standing argument lacked merit and the court declined to issue additional discussion regarding appellants other arguments. Affirmed.
39-2-4129 Detres v. Workforce Logistics Corp., N.J. Super. App. Div. (per curiam) (26 pp.) Insurer appealed order of the Division of Workers’ Compensation denying insurer’s motion for summary judgment regarding insurance coverage. Temporary labor company sent worker to automotive parts distributor’s Jersey City facility where worker was hit by a truck and filed a worker’s compensation claim against company and parts distributor. Insurer issued a workers’ compensation policy to labor company that provided coverage only for two locations in New York. Company denied the claim and insurer denied that it provided coverage in New Jersey. After worker’s accident, company added New Jersey locations to its insurance policy. Compensation judge found that insurer was required to provide coverage because the amended policy listed the same policy period as the original policy, which time included the worker’s accident. Insurer argued the parties intended the amended policy to take effect two months after the accident. The court agreed with the compensation judge that the amended policy clearly showed that the coverage included the New Jersey locations for the term of the original policy. Insurer argued that company misrepresented that it only did business in New York but fraudulent statements in a worker’s compensation insurance policy application could not be used to void the policy. Insurer argued that New York law had to apply but the court disagreed.
39-2-4130 Moore v. Bd. of Review, Dept. of Labor, N.J. Super. App. Div. (per curiam) (10 pp.) Claimant appealed the denial of her unemployment benefits claim based on her leaving work voluntarily without good cause. Claimant resigned her job and moved out of state. She, her son and grandchildren packed up and left her home in the middle of the night because of death threats made by mother of the children. Son had custody of the children and they all lived with claimant. The children’s mother had lived with claimant on and off before the children were born. The tribunal relied on the fact that the children’s mother had never lived with claimant on a permanent basis and found that claimant did not qualify for benefits under N.J.S.A. 43:21-5(j) because she was not a victim of domestic violence. Claimant appealed and the board affirmed the tribunal’s decision. The court noted that recent amendments to the Act expanded the definition of those protected to include a person subjected to domestic violence by any person who “was at any time a household member.” Claimant clearly qualified under that definition and the Board misinterpreted the Act when it found that claimant did not qualify as a victim of domestic violence. The court remanded the case for the Board to consider whether the police report she submitted was sufficient documentation under N.J.S.A. 43:21-5(j)(2).
25-2-4136 In the Matter of Ah’Kaleem Ford, N.J. Super. App. Div. (per curiam) (9 pp.) Following his arrest for simple assault, petitioner, a corrections officer employed by Hudson County, was issued a preliminary notice of disciplinary action charging him with insubordination, conduct unbecoming an officer, neglect of duty and other sufficient cause. The county conducted a departmental hearing and issued a final notice suspending petitioner from duty pending the outcome of his charge of simple assault. Despite the charge being ultimately dismissed, the county maintained petitioner’s suspension for six month and required he pass a psychological “fitness for duty” test. During the test, the county’s psychologist found petitioner uncooperative and defiant and determined he was unfit to perform the duties of a corrections officer. As a result, the county terminated petitioner form his position; the commission upheld the decision and denied reconsideration. The commission determined that N.J.S.A. 40A:14-149.2 was not applicable to county corrections officers. However, the commission did select a new psychologist to furnish petitioner with a fitness for duty evaluation and held that if petitioner was fit for duty, he would be reinstated immediately. In his appeal, petitioner argued the commission erred in finding the statutory provision did not apply to him. The court affirmed holding the commission did not violate legislative policy and the record contained substantial evidence to support its findings. Further, the commission did not clearly err in reaching its conclusion and therefore the decision did not warrant a different result.
25-2-4118 Kieffer v. Budd, N.J. Super. App. Div. (per curiam) (14 pp.) The parties executed an employment agreement whereby appellant would employ respondent as vice-president once he became a shareholder and owned at least twelve shares of common stock. The parties further executed a stock restriction agreement, and appellant’s board issued a resolution electing respondent to the board and appointing him vice-president. As business declined, respondent accepted a salary decrease intending to be temporary, but received alleged loans in order to pay personal expenses. Following a dispute about his salary, respondent resigned; respondent further rejected appellant’s offer to redeem his shares of stock and instituted the underlying minority shareholder oppression and breach of contract matter. The trial court determined that respondent was an oppressed shareholder and appellant depleted corporate funds that otherwise would have been available to fund activities which would increase the corporation’s sales and productivity. The trial court further determined appellant breached the parties’ employment agreement by failing to pay the appropriate salary. On appeal, appellant argued the trial court erred in determining respondent’s length of employment and finding a breach of the employment agreement. The court affirmed holding the record amply supported the length of respondent’s employment and that salary payments made were not in accordance with the employment contract. Further, respondent’s termination of employment less than twelve months later entitled him to the stock value pursuant to the stock restriction agreement. Accordingly, the court affirmed.
25-2-4131 Bender v. Twp. of N. Bergen, N.J. Super. App. Div. (per curiam) (13 pp.) In 2007, appellant, a retired police officer for respondent, filed a workers’ compensation claim for work-related psychiatric, orthopedic, and internal injuries; respondent filed an answer asserting the statute of limitations as a defense. During the trial, the parties offered competing testimony and medical evidence, including treatment for appellant’s orthopedic injuries. The compensation judge dismissed concluding appellant failed to file a petition within the two-year statute of limitations and therefore the claim was barred. On appeal, the court affirmed in part holding petitions based on occupational disease were barred if not filed within two years of the date appellant discovered the nature of the disability and the relationship to employment. N.J.S.A. 34:15-34 By his own testimony, appellant was aware as early as 2002 of the relationship between the psychological symptoms he was experiencing and his employment. As well, given his claim history, appellant was very familiar with the compensation process. Therefore, the record was clear that, in advance of the expiration of the applicable statute of limitations, appellant knew the nature of his disability and its relationship to his employment. However, the court remanded to determine the basis by which the compensation judge decided the compensability of the orthopedic injuries claim. On remand, the compensation judge shall make particularized findings and determine whether appellant had filed his orthopedic injuries claim within the appropriate statute of limitations.
20-2-4132 Accoo v. Miranda, N.J. Super. App. Div. (per curiam) (9 pp.) Plaintiff appealed from the orders denying her application to increase child support and modify custody and parenting time for the parties’ daughter. The parties were awarded joint legal custody, with plaintiff award primary physical custody; defendant was granted parenting time on alternate weekends and Thursday on off weeks. Plaintiff later obtained a FRO against defendant, but was unsuccessful in modifying defendant’s parenting time, although defendant was ordered to provide plaintiff 24 hours’ confirmation of visitation time. After defendant’s application for reduction of child support was denied, plaintiff, asserting a “substantial change in circumstances,” applied for an increase in child support, a reduction in defendant’s parenting time to one weekend per month with no overnight, and an award of sole legal and physical custody. Plaintiff asserted that defendant failed to follow court orders obligating he ensure his daughter’s participation in extracurricular activities, and noted he had missed parenting time on 38 occasions and had accumulated $12,000 in child support arrears. Defendant counterclaimed again for a reduction in child support and modification of parenting time. The trial court denied plaintiff’s request for increased child support and approved defendant’s request for a reduction; the trial court also denied plaintiff’s request for sole legal custody, and granted defendant’s request for make-up parenting time during the summer. On appeal, plaintiff argued that the trial court erred in denying her requests and disproportionately granting defendant’s requests without oral argument, a plenary hearing, or consideration of their daughter’s best interests. The court agreed, finding that the trial court failed to make findings of fact or conclusions of law as required by court rule. Accordingly, the court reversed and remanded for additional findings by the trial court.
20-2-4133 Fenzi v. Ballan, N.J. Super. App. Div. (per curiam) (5 pp.) Plaintiff appealed child custody order. The unmarried parties had one child and defendant relocated to Georgia with the child. Plaintiff then sought custody of the child and the court awarded joint legal custody and sole residential custody to defendant. Plaintiff argued the trial court erred in failing to analyze “cause” for the child’s removal as required by N.J.S.A. 9:2-2 and that defendant failed to satisfy her burden under Baures v. Lewis, 167 N.J. 91. Defendant argued that the trial court was correct and that because plaintiff agreed to a consent order to domesticate the custody order in Georgia, he waived his right to appeal the N.J. order. The court noted that since the case had been decided, the N.J. Supreme Court had abandoned the Baures standard in favor of a best interest analysis. Additionally, since plaintiff’s complaint sought an initial custody determination and was not a relocation case to which Baures might apply, the trial court appropriately used the best interest analysis.
20-2-4137 Drees v. Drees, N.J. Super. App. Div. (per curiam) (17 pp.) Defendant appealed the order entering the Amended Dual Final Judgment of Divorce. The parties married in 2001, had two children and plaintiff filed for divorce in 2012. After extensive negotiations, they reached settlement on all but three issues and the terms of the settlement were placed on the record. The issues submitted to the court for resolution were an e-trade account and plaintiff’s pendente lit support. After a hearing, the court signed the AFJD and awarded plaintiff $25,000 towards attorney fees. Defendant asserted the trial court erred in entering the AFJD without having resolved the issue of the parenting coordinator fees. Trial court properly refused to consider defendant’s dispute with the parenting coordinator because coordinator was not a party to the litigation, he had commenced a separate civil action against defendant and the dispute was irrelevant to the outstanding issues before the court. The judgment setting the alimony duration at seven and one-half years was reasonable despite defendant’s insistence on seven years. The AFJD incorporated the retirement account terms that the parties placed on the record and both parties were present at the hearing and were represented by counsel.
20-2-4138 Dressner v. Dressner, N.J. Super. App. Div. (per curiam) (10 pp.) The parties divorced pursuant to a property settlement agreement which included custody, alimony and child support orders. Following termination from his employment and efforts to obtain comparable employment, appellant moved to suspend his alimony payments and to terminate his child support obligation. The Family Part judge found that appellant had made a prima facie showing of a change in circumstance and terminated his alimony obligation as of the date of the order. However, the judge denied termination of child support but modified the amount in accordance with the child support guidelines. On appeal, appellant challenged the designation that respondent was the parent of primary residential custody, not adjusting child support for controlled expenses, failing to terminate child support and alimony as the date of his motion, and not awarding attorney fees. The court affirmed holding N.J.S.A. 2A:17-56.23a prohibited retroactive modification of a child support obligation to a date prior to the mailing of the notice of motion for such modification. Further, retroactivity is left to the sound discretion of the trial judge. Here, although the notice was mailed nineteen months prior to the order, the family part court did not violate the statutory provisions by failing to order the obligation modified retroactively nor was there any abuse of discretion in such decision. Moreover, the court affirmed denial of attorney fees as both parties had acted in good faith in pursuing their positions, despite respondent not disputing appellant’s change in circumstances. Accordingly, the court affirmed.
20-2-4145 Besen v. Weiss, N.J. Super. App. Div. (per curiam) (26 pp.) The parties acrimonious divorce was finalized pursuant to a dual Judgment of Divorce which incorporated a settlement agreement resolving all matters in connection with their marital relationship. Appellant filed a complaint in the Law Division predicated on the tort of intentional infliction of emotional distress, aiding the commission of a tort, and civil conspiracy alleging respondent intentionally or recklessly engaged conduct designed to undermine his relationship with his children. The Law Division transferred the case to the Chancery Division, Family Part who granted respondent’s motion to dismiss as a matter of law under Rule 4:6-2(e) and awarded her counsel fees under Rule 5:3-5(c). Respondent cross-appealed arguing the trial court erred in denying her application for sanctions and that the amount of attorney fees awarded was arbitrarily determined. The court affirmed concluding the matter was uniquely related to and arose out of a family or family-type relationship and therefore transfer was proper under Rule 5:1-2(a). Additionally, when a claim for intentional infliction of emotional distress were based on interference with a former spouse’s relationship with the children, public policy required that the suit must be brought before the Family Part in accordance with the best interests of the children. Moreover, dismissal was appropriate as appellant failed to set forth a legally cognizable claim. The court further affirmed the award of attorney fees noting the judge properly analyzed the nine factors listed in Rule 5:3-5(c). Finally, the court affirmed denial of sanctions as appellant did not file his complaint in bad faith.
20-2-4146 Dimacale v. Dimacale, N.J. Super. App. Div. (per curiam) (12 pp.) Plaintiff appealed the trial court’s orders relating to child custody over two Christmas vacations. The divorced parties shared joint legal custody of the children and the Parenting Schedule Plan delineated each parents’ time on Christmas Eve and Christmas Day. Defendant notified plaintiff that the children would visit their maternal grandmother from Dec. 17, 2014, to Dec. 23, 2014. Plaintiff sought an application to prevent the visit because she did not trust her mother. The court denied the motion. Defendant notified plaintiff that the children would visit their maternal grandmother from Dec. 19, 2015, to Dec. 27, 2015. Plaintiff again sought to prevent the children going on the trip and the court denied the motion. Plaintiff appealed both orders. The court noted the issues were not moot as they were capable of repetition. The court agreed that defendant failed to show that the 2014 visit to the grandmother was contrary to the children’s best interests. However, the 2015 trip violated the Parenting Schedule Plan since it deprived plaintiff of her Christmas Eve overnight with the children.
20-2-4147 R.P.B. v. D.R., N.J. Super. App. Div. (per curiam) (21 pp.) Defendant appealed the FRO entered against her. Plaintiff contractor worked for defendant and dated her for about three months. He testified that after the parties ended their relationship, he cancelled a pending construction project at defendant’s home but she called and emailed him insisting that he do the project and left cash at his residence. He returned the money and told her to leave him alone. Defendant called him approximately 30 times in the following two weeks. She sent him 45 emails over a five-day period that accused him of hacking and monitoring her electronic devices, complaining because he did not respond to her messages and admitting that she trespassed on his property. Plaintiff asserted that he was afraid. Defendant testified that she contacted him because she believed he installed spyware on her computer. She testified that she had taken her computer to experts but none of them testified at the hearing. The trial judge found plaintiff credible and awarded the FRO. Defendant contended the evidence was insufficient and that the court should have adjourned to give her the opportunity to present her computer experts. The court found that there was sufficient evidence in the record to support the trial judge’s findings and defendant never asked for an adjournment.
20-2-4148 Taylor v. Jones, N.J. Super. App. Div. (per curiam) (11 pp.) Plaintiff appealed the denial of his motion for reconsideration in a nondissolution case. Unmarried parents lived together before child was born and then separated. Disagreements over parenting philosophies led to disputes over custody and parenting time and the parties filed dueling applications. After mediation failed, the trial court ordered shared legal and physical custody with defendant the parent of primary residence and a detailed shared parenting plan. The judge imputed income to both parents in setting child support. The trial judge denied plaintiff’s motion for reconsideration challenging defendant’s dependent care deduction and plaintiff’s imputed income. Plaintiff raised the same arguments on appeal and the court affirmed for the reasons given by the trial court, i.e. defendant was entitled to a dependent care deduction for her son who was in college and the job category used for imputing income to plaintiff was based on his past employment history and if the trial court had used the job category plaintiff argued for, there would have been no material difference in the imputed median income.
20-2-4149 Wisoff v. Wisoff, N.J. Super. App. Div. (per curiam) (21 pp.) The parties divorced pursuant to a comprehensive and detailed property settlement agreement resolving all ancillary issues of parenting, child support, alimony and equitable distribution. The PSA addressed reduction in support and emancipation as well as precluding modifications not expressly provided. Subsequently, the parties executed a consent order deviating from the PSA and providing for a recalculation upon appellant’s retirement. Upon termination from his employment, appellant moved for a modification as he was unable to secure comparable pay. The trial court declined to order discovery, denied modification of his domestic support obligations, and awarded respondent attorneys’ fees. The trial judge concluded the parties were bound by the arbitration order previously entered and should be precluded from relitigating the same issue absent an additional change in circumstances. On appeal, the court reversed holding the arbitrator did not address the amount of child support as that issue was not raised and a change of circumstances existed in accordance with Lepis v. Lepis, 83 N.J 139 (1980). Further, the court found the trial judge erred by not considering evidence of his change of employment as permitted under the PSA’s provisions for modification. Because the trial judge should have directed discovery in conformity with Lepis, a remand for such purpose was required. The court advised the trial court to consider the pertinent prevailing circumstances, including the parties’ agreement to pay a fixed amount, regardless of a change in circumstances, as noted in Morris v. Morris, 263 N.J. Super, 237 (App. Div. 1993). Accordingly, the court reversed and remanded for further proceedings.
28-2-4157 Dep’t of Community Affairs v. Hansen House, LLC, N.J. Super. App. Div. (per curiam) (19 pp.) Housing facility for recovering addicts appealed the decision holding that it operated as an unlicensed boarding house. DCA responded to a complaint, inspected the house and issued a notice of violation. Housing facility argued that it operated as a single housekeeping unit and the relationship among its residents was akin to a family. Facility also argued that the enforcement violated the Fair Housing Act because DCA had exempted another addict recovery facility. ALJ found that other recovery facility was governed by its residents, unlike this one which had paid staff. Facility argued that the FHA applied since it served individual with a “handicap” and that it made a reasonable request for an accommodation from DCA and that DCA violated the APA by adopting standards set out in a memo. The court agreed with the DCA that the facility met the statutory definition of a “boarding house.” Facility failed to demonstrate that exemption from the statute was necessary to afford the residents an “equal opportunity to use and enjoy a dwelling.” Facility did not show that the financial burden of compliance would undermine its therapeutic operations and it did not request an exception as required by the regulations. The case was remanded for facility to request an exception.
29-2-4119 Trepkau v. St. Clare’s Hosp., N.J. Super. App. Div. (per curiam) (12 pp.) Plaintiff appealed the dismissal of his medical malpractice and ordinary negligence complaint against emergency room nursing staff. Plaintiff experienced dizziness while being treated in the emergency room, asked for a wheelchair to access a bathroom, it was denied and he fell. After an off-the-record conference, the trial judge dismissed the complaint for failure to satisfy the affidavit of merit requirement. Defendant asserted the trial judge put plaintiff on notice of deficiencies in his expert’s affidavit of merit but defendant did not identify those deficiencies nor discuss the factual or legal basis for the trial judge’s alleged concerns. Plaintiff sent defense counsel a second affidavit of merit and moved to file an amended complaint. The trial judge dismissed the complaint with prejudice for failure to satisfy the affidavit of merit requirement and denied the motion to amend. Plaintiff argued the trial court failed to conduct a Ferreira conference and improperly dismissed the ordinary negligence count. The court agreed and reversed for the trial court to conduct a Ferreira conference and to permit discovery. The trial judge erred in dismissing the ordinary negligence count because he did not state any reasons for the decision and a cause of action against nurses could be maintained if the negligence asserted fell within the purview of the common knowledge doctrine.
31-2-4158 Morales v. Sussex Cnty. Community College, N.J. Super. App. Div. (per curiam) (18 pp.) Appellant, a landscaping employee of respondent-Carroll, sustained serious injuries during his second season performing landscaping services at the campus of respondent-SCCC. Appellant advanced two theories of liability against respondent-SCCC: (1) negligent training; and (2) creation of a dangerous condition. On motion, the law division granted summary judgment to respondent-SCCC and dismissed the amended complaint. Appellant argued on appeal that respondent-SCCC assumed a duty to train him. He produced sufficient evidence to prove negligent training as well as a dangerous condition on the premises. Respondent-SCCC further appealed from the order denying its motion to vacate dismissal of its cross-claim against respondent-Carroll. On appeal, the court affirmed summary judgment but reversed denial of the motion to vacate. Although the issue of causation is ordinarily left to the factfinder, the court concluded that no reasonable factfinder could find that appellant had proven causation by a preponderance of the evidence in this matter. Here, there was no evidence that negligent training was a proximate cause of the accident or that any training would have prevented the accident. More importantly, it was undisputed that the unexpected mechanical failure of the left rear axle was the cause of the accident, and its cause was unknown. In light of this appellant cannot demonstrate how any alleged overuse or misuse due to negligent training played a role in the axle’s failure or the accident itself. Finally, the court held due process mandated reversal of the law division’s denial to vacate dismissal of respondent-SCCC’s cross-claim.
31-2-4120 Losada v. Princeton University, N.J. Super. App. Div. (per curiam) (9 pp.) Appellant filed suit for damages arising from personal injuries she sustained from a fall that occurred on respondent’s property as she left her child’s swim meet. Respondent moved for, and was granted, summary judgment arguing it was immune from liability pursuant to the Charitable Immunity Act (CIA). On appeal, appellant contended that the judge erred by not recognizing that respondent’s renting of its facility to defendant was not part of its pursuit “of educational objectives it was organized to advance” and therefore was not entitled to charitable immunity. The court affirmed holding the CIA provided immunity to any “nonprofit corporation … organized exclusively for religious, charitable or educational purposes” where the injured person was a beneficiary, to whatever degree, of the works of such nonprofit corporation. When determining whether a party was a beneficiary, the court looks first to whether the institution was engaged in a charitable objective and, second, if the injured party was a direct recipient of those good works. Here, respondent rented out its pool to another entity which used the facility for educational purposes. Further, appellant was a beneficiary of those educational purposes as a spectator and mother of a participant in an educational endeavor taking place on the premises. As appellant was a beneficiary “to some degree”, the court affirmed concluding respondent was immune from liability under the CIA.
52-2-4139 Ganzweig v. Twp. of Lakewood, N.J. Super. App. Div. (per curiam) (14 pp.) Pursuant to the Open Public Records Act, respondent requested copies of audio and visual recordings of a nonparty’s traffic stop. Appellant denied the request stating the records were “criminal investigatory records under OPRA, which ‘means a record which is not required by law to be made, maintained or kept on file that is held by a law enforcement agency which pertains to any criminal investigation or related civil enforcement proceeding.’ N.J.S.A. 47:1A-1.1.” Respondent filed the underlying complaint and the trial judge determined appellant violated OPRA and directed the release of the police records. The two issues on appeal were whether the recordings constituted an official record legally required to be maintained, and whether the reports should be provided. The court determined appellant failed to give particularized reasons as to why the records pertained to a criminal investigation and therefore were required to be turned over under OPRA. However, the court remanded to determine whether appellant’s press release of the traffic stop met the requisite disclosure requirements as no information regarding the stop or the persons arrested was released. Further, the court directed the trial court to consider whether the common law argument regarding the release of information was applicable in order to create a full record. Accordingly, the court affirmed in part and remanded in part.
35-5-4140 Oliveira v. Twp. of Edison, Tax Ct. (per curiam) (14 pp.) Plaintiff owned the subject residential lot which was classified and taxed as vacant land for tax year 2016 as the property was undergoing renovations. Defendant subsequently performed an inspection and added a partial assessment based on the “total improvement value.” Plaintiff filed the underlying complaint contesting the assessment as excessive of the true or assessable value of the property given the property was not substantially complete. On motion, the court denied plaintiff summary judgment concluding the assessment was lawful and that material issues of fact remained as to whether the discrete areas were substantially complete. The court noted it has recognized the validity of imposing partial assessments as of the assessment date. In re New York State Realty & Terminal Co. 21 N.J. 90,99 (1956) Further, the court found that an assessor can validly place an added partial assessment based on the underlying reasons that all taxable property must be assessed and taxed so that they equally bear the tax burden. Moreover, the court found the property to may be “substantially complete” as the first floor was ready for its intended use as a residence with fully functional utilities in place and plaintiff was legally permitted to occupy, reside in, and use that portion. However, summary judgement was not appropriate as the issue of any materiality was whether the lack of the flooring on the foyer and main entrance, the alleged lack of gutters, walkaway to the front entrance door, and landings in front of the exterior doors, rendered the first floor as not substantially complete for the purposes of the added assessment. Accordingly, the court determined the added partial assessment was valid but genuine issues of material fact existed prohibiting the grant of summary judgment. [Filed Aug. 24, 2017]
14-2-4121 Allah v. N.J. State Parole Bd., N.J. Super. App. Div. (per curiam) (6 pp.) Plaintiff appealed the final administrative action of the parole board that revoked his parole and set a 14-month future eligibility term. Plaintiff was previously sentenced to 12 years’ incarceration and a five-year mandatory parole period following his release from custody. Plaintiff agreed that during his parole he would refrain from the purchase, use, possession, distribution, or administration of any narcotics and that he would successfully complete a drug treatment program. Plaintiff entered an in-patient drug treatment program shortly after his release, but was discharged after he tested positive for marijuana twice and committed several infractions. Plaintiff was ordered to appear at a probable cause hearing to determine whether he committed a parole violation. At the hearing, plaintiff declined counsel and waived the probable cause hearing, electing to have a parole violation hearing instead. Plaintiff admitted to mariuana use but sought leniency. The parole officer and hearing officer both recommended revocation of parole, and a panel of the board agreed, implementing the hearing officer’s recommended establishment of a 14-month FET. On appeal, plaintiff argued that the board’s decision was arbitrary and capricious, contending that the evidence was insufficient to support revocation of his parole. The court rejected plaintiff’s argument, noting that he agreed to the conditions of his parole barring him from narcotics use and requiring him to complete drug treatment. The court also found that plaintiff was afforded due process, as he was entitled to counsel and a probable cause hearing, but voluntarily waived both.
14-2-4141 State v. Nathaniel Harvey, N.J. Super. App. Div. (per curiam) (21 pp.) After being twice convicted by a jury and sentenced to death for murder, respondent filed a pro se petition for post-conviction relief alleging the ineffective assistance of counsel during the second trial. The PCR court denied respondent’s petition without an evidentiary hearing. However, the Supreme Court summarily remanded the matter for an evidentiary hearing and ordered the PCR court to consider the petition anew. The PCR judge determined defense counsel was ineffective as counsel, among other things, should have demanded all additional discovery related to hair evidence and retain an expert to challenge the state’s scientist. As a result, the PCR judge found that there was reasonable probability that but for these deficiencies the result of the trial would have been different. On appeal, the court affirmed holding respondent demonstrated counsel made errors so serious that counsel was not functioning as the counsel guaranteed by the Sixth Amendment and that he suffered prejudice due to counsel’s deficient performance. Strickland v. Washington, 466 U.S. 668, 104 S. Ct. 2052, 80 L. Ed. 674 (1984). The court noted the PCR judge cited specific shortcomings that demonstrated counsel’s performance was deficient, including the failure to seek discovery on critical issues, as well as the inability to consider the significant implication of what was actually contained in some of the discovery respondent did receive. Further, respondent’s counsel’s errors were sufficiently serious so as to undermine confidence that his second trial was fair, and that the jury properly convicted him. Accordingly, the court affirmed the grant of the PCR petition and remanded for further proceedings.
14-2-4150 State v. Sharon Bowen, N.J. Super. App. Div. (per curiam) (18 pp.) Charged with controlled dangerous substance offenses, appellants moved to suppress the wiretap evidence on which the charges were largely based. The trial court denied the motions. Thereafter, appellants negotiated guilty pleas and received the bargained-for sentences. On appeal, appellants argued the trial court erred in denying suppression as suppression of all intercepted communications was required upon the determination of a minimization violation as well as insufficient evidence. The court affirmed the convictions and sentences holding appellants failed to preserve appeal when entering their guilty pleas. Further, neither exception to waiver–unlawful search and seizure, entry of conditional plea–were applicable as appellants sought to suppress recorded statements rather than physical evidence and appellants did not enter a conditional plea. Moreover, the court affirmed holding the trial court carefully analyzed the aggravating and mitigating factors upon which it based its decision for sentencing. The court noted the sentencing was in accordance with the parties’ plea agreement in light of all the other evidence placed on the record. As such, there was no indication the trial court believed it was only bound by the state’s sentencing recommendation as it also considered letters received on behalf of appellant. Accordingly, appellants’ sentences were not manifestly excessive nor did it “shock the judicial conscience.” However, the court remanded in order to apply the correct gap-time credits.
14-2-4151 State v. James D. Dixon, N.J. Super. App. Div. (per curiam) (8 pp.) Following a bench trial, appellant was found guilty of, among other things, robbery, burglary, aggravated assault, and false imprisonment. Ultimately, appellant was sentenced to an aggregate 20-year term of imprisonment. Prior to trial, respondent tendered a plea offer to third-degree burglary and sentence recommendation with dismissal of remaining charges. Appellant petitioned for post-conviction relief claiming ineffective assistance of counsel as his attorney discouraged him from accepting the plea offer and advising that respondent lacked evidence of assault as the victim could not recollect the incident. Because the PCR court did not decide whether counsel was ineffective in this respect, the court initially remanded the matter for the PCR court to address this particular allegation. On remand, the PCR court found defense counsel had not been ineffective without holding an evidentiary hearing. In the instant appeal, the court again remanded holding appellant presented a prima facie claim of ineffective assistance of counsel and asserted facts in support thereof. As such, the PCR court was required to hold an evidentiary hearing under State v. Preciose, 129 N.J. 451, 462 (1992). The court found appellant supplied facts mandating an evidentiary hearing to allow appellant the opportunity to demonstrate that a favorable plea offer was made, the advice his counsel gave respecting his sentencing exposure upon conviction at trial was seriously deficient, and appellant could have entered a guilty plea in accordance with the plea offer had he been correctly advised. Accordingly, the court remanded for an evidentiary hearing.
14-2-4159 State v. Ewing, N.J. Super. App. Div. (per curiam) (10 pp.) Defendant appealed his conviction for second-degree unlawful possession of a handgun. Defendant entered a negotiated plea deal after his motion to suppress was denied. He appealed the denial of the motion to suppress arguing troopers lacked reasonable suspicion or probable cause to stop his vehicle. Troopers on patrol saw a parked car that was suspicious because of where and how it was parked – randomly on the side of the road in what was not a parking space in a deserted residential area. Troopers saw two people in the car duck out of view when the troopers pulled up. Troopers suspected that they were concealing something. Troopers approached the car and told drive to exit. Driver got out, stating “I have a gun” and trooper recovered a handgun from defendant’s waistband. The trial judge found the troopers credible. The court found that the troopers had probable cause for arrest once defendant voluntarily stated “I have a gun” and defendant made the statement before he exited the vehicle.
11-8-4134 7 Eleven Inc. v. Sodhi, 3rd Cir. (Fuentes, U.S.C.J.) (7 pp.) Appellant operated six 7-Eleven convenience stores subject to franchise agreements with appellee. As part of these agreements, appellant agreed that he was “solely responsible, and must pay, all other taxes, including sales, inventory, payroll, occupancy, business and income taxes and personal property taxes related to the stores.” Appellant further agreed that appellee could terminate the franchise agreements if he materially breached them. Following an audit and further investigation, appellee issued a noncurable notice of material breach and termination asserting appellant intentionally failed to report merchandise sales, secretly used cash illicitly siphoned from the store to pay workers, and failed to pay applicable sales and payroll taxes. Appellee sought declaratory relief that the agreements were properly terminated; the district court granted appellee’s motion for summary judgment and held that the franchise agreements were properly terminated. On appeal, the court affirmed initially holding appellant failed to cite any precedent requiring district courts to hold oral argument in particular cases. Second, the district court properly considered “materials in the record” when basing its decision on appellee’s supplemental notice to terminate, despite not being part of the operative complaint. Finally, the court concluded appellant admitted to his failure to pay taxes in violation of the franchise agreements, and offered no evidence that such failure was cured. As such, appellee had good cause to terminate the agreement. [Filed Aug. 24, 2017]
12-8-4142 Mark IV Transp. & Logistics v. Lightning Logistics, Inc., 3rd Cir. (Vanaskie, U.S.C.J.) (9 pp.) Appellant appealed the dismissal of its motion to pierce defendant corporation’s corporate veil and impose alter ego liability and establish personal jurisdiction over Tennessee defendants. Appellant New Jersey corporation provided delivery services to defendant Tennessee LLC that was owned and operated by Tennessee residents. Appellant was not paid and sued corporate defendant in December 2009. The corporation was administratively dissolved by Tennessee in April 2010. Appellant filed an amended complaint adding corporation’s owners as defendants. The District Court entered default judgment against corporation and appellants sought to impose personal liability on corporation’s owners as alter egos of corporation. District Court found that appellant failed to present sufficient evidence to warrant piercing the corporate veil. The court found that Tennessee law governed appellant’s alter ego theory and under Tennessee law, owners or other agents of an LLC had no personal liability for the debts or obligations of the corporation unless it was a sham or a dummy. The court found that although the corporation did operate informally and owner did draw on corporation’s line of credit, the equities did not require the court to disregard the corporate status. [Filed Aug. 25, 2017]
15-7-4160 Harris v. Wells Fargo Bank, N.A., D.N.J. (Salas, U.S.D.J.) (15 pp.) Plaintiff executed a note and mortgage in favor of defendant-World Savings Bank, secured by her real property. Following default on the loan, defendant-Wells Fargo Bank instituted a foreclosure complaint, seeking to enforce the note and mortgage and foreclose upon the property. Upon motion, the state court entered final judgment of foreclosure in favor of defendant-Wells Fargo. Plaintiff subsequently filed the underlying complaint against defendant-Wells Fargo relating to the purported securitization of the loan and alleging, among other things, violations of the Real Estate Settlement Procedures Act, negligent misrepresentation, and negligence. Defendant moved to dismiss for lack of subject matter jurisdiction and failure to state a claim. Additionally, defendant argued plaintiff’s complaint was barred by the Rooker-Feldman doctrine, the Younger doctrine, the Colorado River doctrine, and the Entire Controversy doctrine. Although the court found subject matter jurisdiction as plaintiff’s rescission issue was never adjudicated, it nevertheless granted dismissal under the Entre Controversy Doctrine holding each claim arose from the same set of operative facts giving rise to the state foreclosure action and concerned issues previously adjudicated in that action namely, the validity of the loan. Further, the court noted plaintiff voluntarily withdrew her motion for failure to rescind the loan during the foreclosure action. Thus, because plaintiff knew about her rescission claim before entry of final judgment, she cannot raise it in this matter. Accordingly, the court granted dismissal for failure to state a claim. [Filed Aug. 28, 2017]
22-7-4152 B. v. Horizon Blue Cross Blue Shield of N.J., D.N.J. (Cecchi, U.S.D.J.) (20 pp.) Plaintiff brought the underlying action under 29 U.S.C. §1132(a)(1)(B) of the Employee Retirement Income Security Act of 1974 claiming defendant wrongfully denied her benefits in violation of an ERISA-covered health plan to which she was a covered dependent. The parties each moved for summary judgment; the court determined without oral argument that each motion was granted in part and denied in part. Despite the notice-prejudice rule, the court granted defendant summary judgment for that coverage to which plaintiff had not yet exhausted her administrative remedies. However, the court granted plaintiff summary judgment for those claims where the administrator denied coverage without explaining its implicit rejection noting such denial was arbitrary and capricious. The court found that the reviewer’s findings report stated there was “no indication” that plaintiff could not be treated at a lower level of care yet plaintiff’s treating physician found any such discharge would result in plaintiff quickly decompensating. As a result, the court remanded the matter for defendant to conduct further administrative review with respect to such claims. Finally, the court found that plaintiff’s request to deem evidence as part of the administrative record that was not before plaintiff was inappropriate and the court will not consider such evidence. [Filed Aug. 25, 2017]
53-7-4143 Horizon Pharma, Inc. v. Dr. Reddy’s Lab. Inc.,D.N.J. (Chesler, U.S.D.J.) (5 pp.) Plaintiffs moved to stay the action pending appeal. Plaintiffs held the patents for a drug and sued various pharmaceutical companies that had filed ANDA applications to produce generic versions. The first round of litigation involved two patents, the trial judge entered final judgment in favor of plaintiffs and defendants appealed. During that litigation, nine additional patents related to the drug issued and were listed in the Orange Book and resulted in the present cases. Six of those patents descended from one of the patents at issue in the first round of litigation. Plaintiff argued that the issues regarding the two patents under appeal overlapped substantially with the issues regarding the nine patents in the present cases and that the present cases should be stayed until the pending appeals were resolved. Defendants offered to agree to a partial stay in regard to the six patents that descended from the patent under appeal if plaintiffs would agree that the outcome of the appeal was “binding.” Plaintiffs refused and the court agreed that the contingency offered was so vague that the court had no idea of its meaning. The court ordered a stay as to the six patents that descended from the patent under appeal but not as to the other three. [Filed Aug. 25, 2017]
25-7-4122 Bd. of Trustees, Local 888 Pension Fund v. Fixture Hardware Mfg. Corp., D.N.J. (Vazquez, U.S.D.J.) (11 pp.) Plaintiff moved for default judgment in its action asserting violations of ERISA and seeking to recover the amounts due for withdrawal liability, interest, liquidated damages, attorney fees and costs. Plaintiff determined that defendant effected a “complete withdrawal” from the fund in 2015 and sent a demand for payment of the withdrawal liability. Defendant did not respond. Plaintiff filed a complaint, defendant did not respond and default was entered. The court found that it had jurisdiction, that defendant was properly served and that plaintiff plausibly pled a cause of action for withdrawal liability and equitable relief. The court also found that plaintiff submitted adequate proof of damages for withdrawal liability, interest on the withdrawal liability, liquidated damages and costs but not as to attorney fees. The declaration of counsel in support of its requests for fees and costs did not specify any of the tasks completed by the attorneys. [Filed Aug. 22, 2017]
27-7-4123 Norton v. Stop and Shop Store #830, D.N.J. (Wolfson, U.S.D.J.) (29 pp.) Plaintiff moved for remand and defendant moved for partial dismissal of plaintiff’s action asserting violations of the CEPA, breach of implied covenant of good faith, intentional and negligent infliction of emotional distress, assault and battery, negligent supervision and punitive damages from an alleged assault and battery by a co-worker. The action was removed to federal court based on defendant’s assertion that plaintiff’s CEPA complaint was preempted by §301 of the LMRA. The court noted that the courts had found that CEPA claims were separate and distinct from the terms of labor contracts and not preempted by §301. In this case, the CEPA claim involved factual questions as to defendants’ actions and motivations and not an interpretation of the CBA. To the extent plaintiff’s claims for shift reduction required reference to the CBA, that did not render the claim “inextricably intertwined” with the CBA. The court found that plaintiff’s claim for breach of implied covenant of good faith and fair dealing was preempted by §301 because his reliance on the CBA to assert the claim meant the claim was “inextricably intertwined” with the CBA. However, since plaintiff withdrew that claim, the court declined to exercise supplemental jurisdiction. [Filed Aug. 22, 2017]
31-8-4161 In re Paulsboro Derailment Cases, 3rd Cir. (Melloy, U.S. C.J.) (23 pp.) Plaintiffs appealed the dismissal of their action for lack of federal jurisdiction. Plaintiffs, people who drove through a chemical cloud and first responders, sued for injuries suffered from exposure to airborne chemicals after railroad cars derailed on a bridge and released vinyl chloride. Expert witnesses contested the concentration of vinyl chloride exposure and whether a one-time acute exposure increased a person’s risk of cancer. The district court concluded that punitive damages were not available since there was no evidence that any railroad employee believed the bridge was unsafe and the bridge had been repeatedly inspected. The district court granted summary judgment against plaintiffs because their claims were incapable of reaching the amount in controversy jurisdictional threshold. One plaintiff sought no medical care for two of her children and alleged that one child developed an “aggressive cough.” She alleged she suffered persistent minor respiratory symptoms. The court found that her possible compensatory damages could not reach the jurisdictional level. First responders also alleged minor symptoms that, if compensable, were below the $75,000 threshold. Additionally, plaintiffs’ negligence claims only asserted negligence or gross negligence and failed to satisfy the test for punitive damages. [Filed Aug. 28, 2017]
50-7-4162 Christian v. BT Group, PLC, D.N.J. (McNulty, U.S.D.J.) (16 pp.) The underlying securities class action was brought on behalf of purchasers of the securities of defendants. Plaintiffs alleged violations of the Securities Exchange Act, Private Securities Litigation Reform Act, and of the Securities and Exchange Commission rules arguing defendant misstated annual earnings and failed to disclose improper accounting practices. Before the court was competing motions for appointment as lead plaintiff and appointment of its counsel as lead counsel. The moving parties did not dispute that the Pension Fund was the presumptive lead plaintiff as it suffered the largest losses and otherwise satisfied Rule 23 requirements. At issue was whether the Classen Plaintiffs submitted sufficient proof that the Pension Fund was subject to a unique defense likely to become a major focus of the case as it proceeded. Further the Classen Plaintiffs argued there could be a standing issue as the Pension Fund sold all its shares thereby not being damaged by the alleged fraud. The court found that the allegations presented in the complaint showed a progressive revelation of a problem that turned out to be more serious than first believed. The court concluded the Pension Fund was, therefore, not likely to be subject to a unique loss causation defense that would become a major focus of the case. Further, the court noted that the Pension Fund was the kind of institutional investor that Congress specifically intended to encourage to serve as lead plaintiff when it enacted the PSLRA. As the Pension Fund suffered the greater dollar loss, the court appointed it to be lead plaintiff and employ selection of counsel. [Filed Aug. 28, 2017]
50-7-4153 In Re PTC Therapeutics, Inc. Securities Litigation, D.N.J. (McNulty, U.S.D.J.) (39 pp.) Defendant drug company and its founder moved to dismiss stockholders’ securities class action. Drug was company’s only opportunity to generate revenue during the class period. Company conducted a Phase 2b clinical trial of the drug, “corrected” the result to show statistical significance and filed an NDA. The FDA refused to file the NDA because the trial did not achieve statistical significance. The company conducted an ACT DMD trial which showed disappointing results except for one subgroup. In conference calls and at healthcare conferences, company emphasized the subgroup, said the “totality of the data” “confirmed” the clinical benefit of the drug and did not report that 60 percent of the patients reported no statistically significant benefit. Company submitted a second NDA which the FDA found not sufficiently complete to permit review. The class action complaint alleged company knowingly or recklessly made false and misleading statements to investors about the drug’s review timeline, the risks of the ACT DMD study and the ACT DMD study results. The court granted the motion to dismiss as to the timeline and the risks of the ACT DMD study statements but denied the motion as to the statements about the study results because they omitted facts which made the disclosures misleading and the statements did not qualify for safe harbor protection. [Filed Aug. 28, 2017]
14-8-4124 U.S. v. John L. Knight, 3rd Cir. (McKee, U.S.C.J.) (8 pp.) Appellant was charged with being a felon in possession of a weapon. His sentence was based, in part, on the Probation Department’s determination that appellant’s prior convictions–including one for aggravated assault and two for first-degree robbery–qualified as “crimes of violence” under U.S.S.G. §2K2.1(a)(2). The district court determined that appellant’s prior robbery convictions were crimes of violence under §4B1.2(a)(1), but the aggravated assault conviction was not. The district court ultimately sentenced appellant to 55 months’ imprisonment. On appeal, appellant challenged only the determination that his prior robbery convictions qualified as a crime of violence. The court affirmed holding the sentencing guidelines defined “crime of violence” as “any offense…punishable by imprisonment for a term exceeding one year, that…has as an essential element the use, attempted use, or threatened use of physical force against the person of another.” Subsequently the court clarified that “use of force did not require that the person employing force directly apply harm to the victim.” United States v. Chapman, —F.3d —, No 16-1810, 201 WL 3319287 (3d Cir. Aug. 4, 2017). Here, appellant admitted in his plea colloquy for robbery that a threat to use a deadly weapon occurred. The court concluded the threat of immediate use of a deadly weapon encompassed “physical force” under the statute. Accordingly, appellant’s robbery convictions qualified as a crime of violence and the court affirmed sentencing. [Filed Aug. 23, 2017]
14-8-4125 U.S. v. Machado, 3rd Cir. (Vanaskie, J.) (7 pp.) Defendant appealed from his sentence imposed following his conviction after a guilty plea to illegally re-entering the U.S. after a prior removal due to an aggravated felony conviction. After first illegally entering the U.S. in 1994, defendant was removed upon a conviction on three offenses, including discharging a firearm. Defendant returned to the U.S. and was convicted in 2011 for attempted possession of drugs, and removed from the U.S. again. Since then, defendant re-entered and was removed from the U.S. a further four times. Defendant was most recently convicted again in 2013 for possession of narcotics in a school zone; defendant was further indicted by a federal grand jury for illegally re-entering the county, to which defendant pleaded guilty. The probation office calculated defendant’s offense level at 17 and his criminal history category at IV; accordingly, defendant’s sentencing guideline range was 37 to 46 months. At his sentencing hearing, defendant sought a downward variance or a sentence concurrent to his state incarceration, on the basis that he had already served significant time on his state sentence and would be detained for an additional time pending his deportation. The district court ultimately imposed a 46-month sentence, running concurrently with his state sentence from the date of sentencing. On appeal, defendant contended that his sentence was substantively unreasonable. The court rejected defendant’s contention and affirmed his sentence, finding that the district court thoroughly analyzed defendant’s circumstances, and concluded that a sentence at the upper end of the guideline range was necessary to deter defendant from continuing to illegally re-enter the U.S., as the facts suggested that defendant’s border crossings were not related to gainful work or family but rather to the drug trade. [Filed August 23, 2017]