Daily Decision Service Alert: Vol. 22, No. 125 - June 28, 2013
STATE COURT CASES
BANKING AND FINANCIAL INSTITUTIONS
06-2-0456 Capital One N.A. v. Finmar Associates, App. Div. (per curiam) (11 pp.) Defendant obtained a loan from North Fork Bank secured by a commercial mortgage and personal guarantees, but failed to make any payment. Plaintiff, which had acquired North Fork Bank through a merger, filed a complaint alleging, inter alia, breach of contract for default of payment obligations. Eventually, default judgment was entered, the judge finding that Capital One had standing to enforce the note and defendants failed to satisfy the requisites of Rule 4:43-3. Defendants appeal the denial of their motion pursuant to Rule 4:50-1 to vacate the default judgment and for permission to file an answer to assert both excusable neglect and Capital One's alleged lack of standing. The panel affirms, finding that defendants are not entitled to relief because they have not shown that the failure to answer or otherwise appear and defend was excusable under the circumstances and they have not shown a meritorious defense since Capital One has standing because it was vested with the right to sue on the instruments without having to present a separate assignment of the instruments by virtue of the merger.
11-2-0457 I/M/O Petition of Thomas-United Inc. v. Atlantic Cape Community College, App. Div. (per curiam) (29 pp.) Plaintiff Thomas-United, Inc., the second lowest bidder, appeals from the final decision of the Atlantic Cape Community College Board of Trustees awarding its kitchen installation contract to Todd Devin Food Equipment, Inc., the lowest bidder, for the Caesar Entertainment Wing for Hospitality & Gaming Studies Food Service Equipment Project notwithstanding that Devin had submitted an incomplete New Jersey Department of Treasury, Division of Property Management and Construction Form 701 for Uncompleted Contracts (Form 701) that left blank the line certifying the amount of uncompleted contracts. The panel reverses, concluding that ACCC erred by determining that Devin's bid deviation was an immaterial and waivable defect, and by accepting a post-opening submission from Devin of a properly completed Form 701.
20-2-0458 N.B. v. A.B., App. Div. (per curiam) (7 pp.) Defendant appeals from the final restraining order entered in favor of plaintiff pursuant to the Prevention of Domestic Violence Act. The panel affirms, concluding that A.B.'s conduct on February 25, 2012, coupled with what the trial court viewed as an on-going, tumultuous relationship since the inception of the marriage was sufficient to engender the conclusion that a final restraining order was necessary and appropriate. The panel says the court was free to treat A.B.'s blanket assertion that he never struck his wife as not credible and it declines to second-guess that eminently supportable conclusion.
27-2-0459 Pollock v. Coachman Manor, LLC, App. Div. (per curiam) (9 pp.) Plaintiff appeals from the grant of summary judgment dismissing her personal injury complaint against defendants Coachman Manor, LLC, and Siyata Associates, LLC, which owned the apartment complex where plaintiff lived (collectively, "defendant landlord"). Plaintiff filed a complaint against defendant landlord alleging negligence arising from the malfunction of her oven, which caused her to suffer burn injuries in February 2009. Plaintiff argues on appeal that the two complaints she made to the defendant landlord during 2006 and 2007 were sufficient to support the application of res ipsa loquitur, and that the motion judge erred in concluding otherwise. While plaintiff was not required to exclude all other possible causes of the incident, she was required to establish that it is more probable than not that defendant's conduct, or the manner in which the oven was maintained, were proximate causes of the accident. This was not done here. The prior incidents did not satisfy plaintiff's burden of producing evidence reducing the likelihood of other causes of the incident so that the greater probability of fault lies at defendant's door.
04-2-0460 Abulkhair v. Smith, App. Div. (per curiam) (7 pp.) Plaintiff appeals from separate Law Division orders that consolidated plaintiff's two legal malpractice actions, denied his motion to have the trial judge recuse herself, and dismissed the complaints with prejudice. Plaintiff claimed that because the judge's spouse was a partner in the law firm that had represented a defendant in one of the actions out of which plaintiff's legal malpractice case arose, she had a conflict. After denying plaintiff’s motion to recuse herself, finding any connection between the underlying action and pending malpractice case was too remote to pose a conflict, the judge attempted to address an application defendants had filed based on plaintiff's failure to file an affidavit of merit. Plaintiff interrupted her and ultimately left the courtroom. The judge entered an order denying defendants' motion to dismiss the complaints based on the affidavit-of-merit statute but provided plaintiff an additional sixty days to file an affidavit of merit. When plaintiff did not do so, defendants filed a motion to dismiss with prejudice. On the return date of defendants' motion, plaintiff did not appear. The judge granted defendants’ motion. The appellate panel affirms the dismissal of plaintiff’s complaint. Plaintiff had no right to refuse to participate in court proceedings after the trial judge properly declined to recuse herself.
WORKERS’ COMPENSATION AND OTHER COMPENSATION SYSTEMS
39-2-0461 Peterson v. Home Depot Supply, App. Div. (per curiam) (12 pp.) Peterson appeals from the Judge of Compensation's decision to dismiss his claim petition for workers' compensation benefits. Peterson alleged that, as a result of his employment with Home Depot Supply, he suffered from multiple permanent orthopedic and neurological injuries. The court granted Home Depot's motion to implead Peterson's previous employer, M. Bernstein & Sons. The JOC dismissed Peterson's claim petition against Bernstein for failure to sustain his burden of proof. The claim against Home Depot was also dismissed. The appellate panel affirms the JOC’s finding that there was no objective medical evidence of occupational disease. The judge accepted defendants’ experts’ opinions that Peterson's back injuries were not work related, but rather due to the aging process and genetics. The panel rejects Peterson's arguments that the judge improperly rejected the medical opinions of his experts and should have disregarded defendants’ experts’ testimony.
WORKERS’ COMPENSATION AND OTHER COMPENSATION SYSTEMS
39-2-0462 Robinson v. Tishman Construction Corp. of New Jersey, App. Div. (per curiam) (13 pp.) Plaintiff appeals from an order that granted summary judgment to defendant Tishman Construction Corp. of New Jersey and dismissed his negligence action as barred by the immunity provision of the Workers' Compensation Act (the Act). Plaintiff filed two Employee Claim Petitions seeking workers' compensation benefits. The first named Tishman, the construction manager of the site, as a respondent. The second named Air Joy Heating and Cooling, Inc., the heating, ventilation, and air conditioning subcontractor for which plaintiff worked directly, as a respondent. Both Tishman and Air Joy paid workers' compensation benefits to him as part of a settlement agreement. Plaintiff explicitly sought workers' compensation benefits from Tishman, alleging that Tishman was his employer. On appeal, he nonetheless contends that he is permitted to pursue a negligence action against Tishman because Tishman was not his employer. Summary judgment is affirmed in favor of Tishman. The appellate panel finds Tishman was plaintiff's employer at the time of the accident and therefore entitled to immunity under the Act for any alleged negligence.
14-2-0463 State in the Interest of K.B., App. Div. (per curiam) (15 pp.) K.B., a 16-year-old juvenile at the time of the offense, appeals from an adjudication of delinquency for an offense that, if committed by an adult, would have constituted aggravated sexual assault. The panel finds that even if K.B. were put on notice of a charge under N.J.S.A. 2C:14-2(a)(7), the evidence was insufficient to support a conviction of that offense since the fact that the victim was 14 years old and a virgin is insufficient to render her "helpless," "mentally incapacitated," or "incapable of providing consent" under the statute. As to the charge under 2C:14-2(a)(5), the panel says the statutory elements of penetration, physical force and coercion have been met but that it is not convinced that the State carried its burden or that the judge made adequate findings that K.B. was "aided or abetted by one or more other persons" as additionally required for a conviction under 2C:14-2(a)(5). It finds that the record supports a guilty adjudication beyond a reasonable doubt as to the lesser-included offense of second-degree sexual assault, N.J.S.A. 2C:14-2(c)(1), and remands for a new disposition.
14-2-0464 State v. Muhammad, App. Div. (per curiam) (20 pp.) Plaintiff, convicted of first degree murder, weapons offenses and hindering prosecution, appeals his convictions and his sentence. The panel affirms the convictions but remands for entry of an amended judgment reflecting that defendant must serve 85% of the life sentence, which is presumed to be 75 years, or 63 years and nine months, without parole, the correct NERA sentence.
CRIMINAL LAW — DRUNK DRIVING — DISCOVERY
14-2-0465 State v. Wolfe, App. Div. (Koblitz, J.A.D.) (10 pp.) We affirm a drunk driving conviction where defendant unsuccessfully sought to block admission of his Alcohol Influence Report (AIR), a report generated by an Alcotest breathalyzer device, because the state did not provide complete discovery after it was requested. During trial, the municipal court required defense counsel to specify the grounds for his objection to the admissibility of the AIR, and the state was then allowed to cure the deficiencies in the foundational evidence pointed out by defense counsel. We interpret Rule 7:7-7(h) to allow this midtrial discovery where defendant alleges no prejudice and the state did not intend to mislead the defense. [Approved for publication.]
FEDERAL COURT CASES
ADMINISTRATIVE LAW — CIVIL SERVICE COMMISSION
01-8-0466 United States of America v. State of New Jersey, Third Cir. (Fuentes, C.J.) (4 pp.) In this matter alleging that the New Jersey Civil Service Commission's selection process for police sergeant positions had a disparate impact on African American and Hispanic applicants in violation of Title VII of the Civil Rights Act of 1964, which resulted in a consent decree, the Third Circuit affirms the District Court's denial of the motions filed by a group of Paterson police officers to intervene as of right, for discovery, and for a preliminary injunction, concluding that the decree represents a settlement that is fair, adequate, reasonable and consistent with law, and the objectors' motion to intervene was untimely and therefore properly denied. [Filed June 10, 2013]
42-7-0467 In re Band B Construction, LLC, Dist. Ct. (Shipp, U.S.D.J.) (7 pp.) Bond Safeguard Insurance Co. appeals an Order Approving the Trustee's Settlement, which memorialized a hearing before the Bankruptcy Court. The Settlement Order approved a settlement between the Trustee and the Ocean County Utilities Authority ("OCUA"). Bond Safeguard executed performance and payment bonds relating to a contract between the Debtor and OCUA. The Debtor filed for Chapter 7 relief. Bond Safeguard alleges that it was advised by OCUA that $600,000 remains in the OCUA contract, but the lowest bid to complete the OCUA Contract is $1,000,000 and Bond Safeguard is expected to cover the difference. The settlement called for OCUA to reject the contract and OCUA would pay the Trustee $5,645.27 in retainage and $61,680 for work performed by the Debtor ("Settlement Funds"). Bond Safeguard’s objection was overruled and the Bankruptcy Court approved the proposed settlement. Bond Safeguard argues that it has "priority in the funds," and the "funds are not property of the estate and should not be paid to the Trustee." The Settlement Order is affirmed in part and modified so that a statutory trust is imposed upon the Settlement Funds. The Settlement Order is reversed in part and remanded so that the Bankruptcy Court may determine to what extent, if any, Bond Safeguard's equitable subrogation rights have accrued. To the extent those rights have accrued, Bond Safeguard is entitled to payment from the Settlement Funds. [Filed May 31, 2013]
42-6-0468 In the Matter of Yampell, Bankruptcy Ct. (Wizmur, U.S.B.J.) (10 pp.) The debtor seeks to avoid, pursuant to 11 U.S.C. § 522(f), several liens asserted against his principal residence (the Fenwick Road property) and a second property.(the Peyton Avenue property). Here, the tax liens sought to be avoided must be characterized as statutory liens, and not judicial liens. The debtor may not use section 522(f) to avoid statutory tax liens. The debtor’s motion to avoid the two tax liens is denied. The debtor listed the Fenwick Road property as his principal residence and appropriately claimed a homestead exemption on that property pursuant to section 522(d)(1). Accordingly, he would not also be entitled to a homestead exemption for the Peyton Avenue property. He has not asserted any other basis to support entitlement to an exemption in the Peyton Avenue property. Since the debtor is not entitled to an exemption under section 522(d), there cannot be impairment, and relief under section 522(f) would not otherwise be available to the debtor. Because the liens on this property are not avoidable, they remain enforceable and will survive the debtor’s discharge in bankruptcy. The debtor’s motion with respect to the judicial liens is granted as to his principal residence and denied as to his second parcel of real property. [Filed May 31, 2013]
11-7-0469 Jackson Hewitt, Inc. v. Luke, Dist. Ct. (Linares, U.S.D.J.) (8 pp.) This action arises out of an alleged franchise relationship between the parties. Jackson Hewitt maintains that Luke failed to remit specific payments to Jackson Hewitt pursuant to the terms of the franchise agreement, and, as a result, Jackson Hewitt terminated the franchise agreement. Before the Court is Plaintiff/Counterclaim-Defendant Jackson Hewitt. Inc.’s motion to dismiss Defendant/Counterclaimant Terry Luke’s (“Luke”) Counterclaims. In the alternative, Jackson Hewitt moves for a more definite statement. In addition, Jackson Hewitt requests that the Court strike Luke’s demand for a jury trial in light of relevant provisions of the franchise agreement. The Court finds dismissal of the Counterclaim appropriate and, accordingly. denies as moot Jackson Hewitt’s motion for a more definite statement. In addition, the Court finds it would be premature to strike Luke’s jury demand. [Filed June 4, 2013]
53-7-0470 Astrazeneca LP v. Breath Limited, Dist. Ct. (Bumb, U.S.D.J.) (22 pp.) In this patent infringement action, the Court issued a Bench Opinion and Order of Judgment, resolving the case in favor of defendants. The Court addressed the parties’ dispute as to whether certain kit claims and counterclaims remained in the case. The Court found that AstraZeneca had withdrawn these kit claims and issued covenants not to sue, which appeared to moot defendants’ counterclaims for a declaratory judgment that the kit claims are invalid. Defendant Apotex now argues that AstraZeneca could not withdraw the kit claims because Apotex had proved the invalidity of the kit claims at the preliminary injunction stage and at trial. AstraZeneca and Apotex filed motions asking the Court to amend or correct its Opinion. AstraZeneca has failed to show that it could not reasonably be expected to resume its enforcement efforts against Apotex. Moreover, a case or controversy remains because the covenant does not cover Apotex’s current ANDA. Thus, Apotex’s counterclaims survived AstraZeneca’s issuance of the covenant not to sue. Reconsideration is necessary to correct a clear error of law and to prevent manifest injustice. The Court again finds, as a matter of law, that the kit claims are invalid and enters judgment in favor of Apotex on its counterclaims relating to the kit claims. The Court dismisses without prejudice defendants’ counterclaims of invalidity. [Filed May 31, 2013]
LABOR AND EMPLOYMENT
25-8-0471 Chrystal v. New Jersey Department of Law and Public Safety, Division of State Police, Third Cir. (Van Antwerpen, C.J.) (10 pp.) Appellant appeals from the District Court order entering summary judgment in favor of appellee in this action claiming that he was improperly denied promotion in the New Jersey State Police. Appellant had previously filed an action in state court alleging that he had been improperly denied promotion from Sergeant to Sergeant First Class in violation of the Uniform Service Employment and Reemployment Rights Act and the New Jersey Law Against Discrimination which resulted in a judgment in favor of appellant and an award of damages. In that action, appellee's unopposed motion in limine to prohibit introduction of any evidence of a failure to promote from SFC to Lieutenant was granted. Appellant then filed this action seeking relief for the failure to promote from SFC to Lieutenant. He appeals the District Court's grant of summary judgment finding that the action is barred by New Jersey‘s entire controversy doctrine. The Third Circuit affirms, finding that appellant had ample time to amend his original complaint to raise his SFC-to-Lieutenant promotion claim in the state action but his only response came over a month after the motion in limine had been granted, via his request that the state court vacate the order. Accordingly, he had ample opportunity to have fully litigated the claim in the first action but he chose not to. [Filed June 12, 2013]
LABOR AND EMPLOYMENT
25-7-0472 Ramirez v. Gromitsaris, Dist. Ct. (Pisano, U.S.D.J.) (3 pp.) Plaintiff brings this action against defendants alleging violations of the Fair Labor Standards Act (“FLSA”), as well as various state law claims. Defendants filed a motion for partial dismissal of Plaintiff’s complaint. The third count of the complaint alleges that Defendants failed to account in writing for payments made to Plaintiff pursuant to New Jersey’s Wage Payment Law (“WPL”). Defendant argues that dismissal of these counts are warranted because, as to the third count, there is no private right of action for statutory penalties under the WPL and, as to the other counts, they are preempted by the FLSA. The Court agrees. Thus, Plaintiff’s third count fails and is dismissed. Plaintiff’s sixth count is for restitution and the seventh count is for unjust enrichment. The common law causes of action in counts six and seven also must be dismissed. These claims are based exclusively on Defendants’ alleged failure to pay the minimum wage and/or overtime. Plaintiff does not make any independent factual allegations in support of these claims but, rather, these claims are based on the same facts and circumstances of Plaintiffs FLSA claim. Consequently, these claims are preempted by the FLSA. Because the Court concludes that allowing Plaintiff to amend these claims would be futile, the dismissal of counts three, six and seven is with prejudice. [Filed June 3, 2013]
LABOR AND EMPLOYMENT — DISCRIMINATION — JURISDICTION
25-7-0473 Yan v. Franklin Credit Management Corp., Dist. Ct. (Hochberg, U.S.D.J.) (8 pp.) Plaintiff, who is of Chinese ancestry and suffers from end-stage renal failure, filed this discrimination and breach of contract action in state court after he was terminated from his employment. Among his claims was that he was only able to receive $400,000 in life insurance although he was entitled to $500,000 because of defendant's actions and he sought consequential damages of $100,000. Defendants removed the case on the basis that that claim was one for benefits under a plan covered by ERISA and that his state law claim was completely preempted. Plaintiff submitted an amended complaint that deleted the allegations relating to the life insurance policy, leaving only state law claims, and filed a motion to remand. Defendants asserted a counterclaim against plaintiff under the federal Computer Fraud and Abuse Act. The court grants the motion to remand, concluding that although plaintiff is clearly seeking a state forum and there is a pending federal counterclaim, principles of economy, convenience, fairness, and comity weigh in favor of remand where the litigation is still in a very early stage, as plaintiff amended his complaint shortly after the case was removed, and remand will not be unfair to the parties. The court denies plaintiff's request for attorney fees. [Filed June 14, 2013]
04-8-0474 Drazin v. Horizon Blue Cross Blue Shield of New Jersey Inc., Third Cir. (Jordan, C.J.) (9 pp.) This dispute arises out of the settlement and dismissal of several related class action lawsuits filed by rival firms regarding BCBS's and Aetna's alleged failure to provide health insurance coverage for the treatment of eating disorders. David Mazie filed the Beye action during the phase-out period of his employment with Nagel Rice and starting his own firm. Nagle Rice then filed the DeVito and Drazin actions. DeVito settled and shortly thereafter a settlement was reached in Drazin, modeled on the DeVito settlement. Mazie opposed the settlements. Beye was then dismissed because Mazie no longer had a client who wished to litigate. The court awarded Nagel $2,196,580 in fees as counsel who had achieved the successful result for the class and denied Mazie's claim for 50% of the fee awarded to Nagel. Mazie appeals. The Third Circuit affirms, finding that the District Court correctly concluded that because Drazin was brought primarily under ERISA, this is a fee-shifting case, and it properly assessed whether Mazie had achieved some degree of success on the merits on behalf of the Drazin class by litigating the duplicative Beye action and, after answering that question in the negative, properly denied Mazie's request for attorney fees. [Filed June 11, 2013]
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