New Jersey Attorney Law Review Blog

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A reasonable person would conclude a book named "Hot Chicks With Douchebags" is meant to be satirical, and, while some would consider it vulgar, it is not an assertion of fact, the trial judge said.

Citing passages from the book as examples, the trial judge remarked that a reasonable person would not believe that "in 1981 archaeologist Renee Emile Bellaqua uncovered in a cave in Gali Israel a highly controversial Third Century religious scroll suggesting that the 'douchey/hotty' coupling was a troublesome facet in early social religious structures" or that "Jean-Paul Sartre stated 'man is condemned to be douchey because once thrown into the world he is responsible for every douchey thing that he does.'"

One has to wonder whether the attorney defending "Hot Chicks With Douchebags" was able to keep a straight face while announcing his client's name during his opening appearance before the trial judge at the motion hearing. "Good morning Your Honor. I represent Hot Chicks With Douchebags."

Labels: Bergen County Attorneys in Hackensack, Bergen County Court, Bergen County lawyers, Hot Chicks With Douchebags Claim, New Jersey defamation suit, New Jersey law on defamation, New Jersey libel suit

In an important decision that provides guidelines for retiring judges seeking future employment in the legal profession, on September 24, 2008 the New Jersey Supreme Court ordered that a new trial must be conducted because of the appearance of impropriety created by a then soon-to-be retiring Chancery Court trial judge who, before the case had been concluded, began negotiating employment with an attorney appearing before him whose firm represented one of the litigants in the same case. DeNike v. Cupo (A-61-07, September 24, 2008).

In so ruling, the New Jersey Supreme Court reversed the decision of the lower court (Appellate Division) which had determined that the trial judge's conduct, although inappropriate, did not influence the outcome of the case because the trial judge already had issued his substantive rulings in several written opinions and that his remaining functions as the presiding judge in this case were "ministerial."

The NJ Supreme Court concluded that the public trust in the judicial system would be compromised in the absence of a new trial. Specifically, the NJ Supreme Court held:

Judges must avoid actual conflicts as well as the appearance of impropriety to promote confidence in the integrity and impartiality of the Judiciary. Unfortunately, the negotiations between trial judge and lawyer in this case created an appearance of impropriety. Stated simply, the conduct here fell far short of the high standards demanded of judges and fellow members of the legal profession and had the capacity to erode the public's trust. Because any lesser remedy would allow reasonable doubts to linger about the fairness of the outcome of the case, the judgment of the Appellate Division is reversed and the matter is remanded for a new trial.

Although there was no evidence that this respected trial judge acted out of actual bias in favor of the firm whom he was in the midst of negotiating terms of employment, the NJ Supreme Court was of the opinion that the appearance of impropriety generated by these employment negotiations and the prospect of a financial relationship between the law firm and the judge raises doubts about those decisions and the judge's impartiality in general.

Regrettably, from the standpoint of a knolwedgeable, objective observer, the brief negotiations toward the end of the litigation could reasonably have infected all that occurred beforehand. As a result, a full trial is required to restore public confidence in the integrity and impartiality of the proceedings, to resolve the dispute in particular, and to promote generally the administration of justice.

Recognizing that the existing Rules of Professional Conduct and Code of Judicial Conduct do not specifically provide instructions for post-retirement employment discussions between judges facing mandatory retirement and private employers in the legal profession, the NJ Supreme Court offers the following guidelines:

1. Judges may not discuss or negotiate for employment with any parties or attorneys involved in a matter in which the judge is participating personally and substantially. If the subject is raised in any fashion, judges should put a halt to the conversation at once, rebuff any offer, and disclose what occurred on the record.

2. Judges who engage in retirement discussions while still on the bench - with attorneys who do not have a matter pending before them - must proceed in a way that minimizes the need for disqualification and upholds the integrity of the courts. To that end, judges should delay starting any discussions until shortly before their planned retirement, and should discuss post-retirement employment opportunities with the fewest possible number of of prospective employers.

3. Judges must disqualify themselves from matters involving parties or attorneys with whom they have discussed future employment, whether or not those discussions lead to a future relationship.

4. Judges should wait a reasonable period of time before discussing employment with an attorney or law firm that has appeared before the judge.

The NJ Supreme Court referred the matter to the Professional Responsibility Rules Committee and the Advisory Committee on Extrajudicial Activities for their recommendations.

Labels: Bergen County attorneys, Bergen County lawyers, judicial impropriety, New Jersey Supreme Court, NJ Supreme Court decisions

A bank employee who misappropriates a customer's cash deposit can expose the bank to a claim under the New Jersey Consumer Fraud Act, a NJ appeals court ruled in Lee v. First Union National Bank, et al., App. Div., Case No.: 09-2-1547.

In this case, the plaintiff, an existing customer of First Union National Bank, alleged she paid $2,000 in cash to a bank employee who worked in the bank's brokerage services unit which was supposed to be used to purchase shares of a mutual fund. Instead of depositing these funds into her brokerage account, the plaintiff claimed the bank's employee misappropriated her $2,000 cash tender for his own personal use which resulted in an overdraft in her checking account. The bank covered the shortfall by taking money from plaintiff's checking account and liquidating some of the mutual fund shares.

Plaintiff's complaint alleged violation of the Consumer Fraud Act (CFA) and common-law conversion. The trial judge granted summary judgment in favor of the bank and its brokerage arm, holding that the CFA was not applicable to a sale of securities and the count for misappropriation was barred by the two-year statute of limitations under the Blue Act, N.J.S.A. 49:3-71(g).

On appeal, the New Jersey Appellate Division reversed on the following grounds: (1) The transaction is not exempt from the CFA prohibition on deceptive sales practices because the claim relates to misrepresentation as to performance of services and not the nature or existence of the security; (2) N.J.S.A. 49:3-71(g) is not applicable because the gravaman of this count of the complaint concerns the unlawful "taking, detaining, or converting of personal property," which is subject to the six-year statute of limitations.

Labels: bank fraud, New Jersey bank attorney, New Jersey bank attorneys, New Jersey bank lawyers, New Jersey banking law, New Jersey Consumer Fraud Act, NJ banking lawyers, NJ Consumer Fraud Act

Banks beware! In a case of first impression, a New Jersey appeals court held that a bank that pursues criminal charges against an innocent third party whose identify is stolen and used to defraud the bank can be sued civilly for negligence and malicious prosecution.

In this particular case, Brunson v. Affinity Federal Credit Union, A-4439-06, the bank employed a fraud and loss prevention specialist (Mr. Wilcox) who happened to be a certified fraud examiner. According to the appellate record, an imposter posing as the plaintiff Brunson opened an Affinity account in Brunson's name using Brunson's social security number and an out-of-state driver's license bearing Brunson's date of birth and a Paterson, NJ address (misspelled with two "t's".) Within days of opening this account, the imposter successfully cashed $9,506 in phony checks drawn against a corporation known as Viva International Group.

The bank's fraud and loss prevention specialist Wilcox was provided with surveillance tapes and still photographs depicting the imposter as a black male about five feet six inches tall. Wilcox verified that Viva International Group did not employ anyone named "Brunson" on its payroll nor was there any "Brunson" authorized to sign company checks. Wilcox also learned that Brunson had a criminal record. Hastily reaching the conclusion that Brunson was responsible for this fraud, Wilcox filed two criminal complaints against Brunson for uttering a forged document and for theft by deception and testified before the grand jury that ultimately indicted Brunson. Critically, Wilcox didn't bother to review police photographs of Brunson to compare against the surveillance images maintained by the bank, nor did he show the bank's tellers who dealt with the imposter a photo of Brunson to confirm the identification. Had he taken these extra precautions, Wilcox would have learned that Brunson is six foot three, nine inches taller than the imposter.

Brunson, a New York City resident, was arrested in Virginia, was extradited to New Jersey and was released after spending 13 days in jail. The charges were ultimtaely dropped.

At the trial level, the Superior Court judge dismissed Brunson's suit against Affinity and Wilcox on motion practice without the case having reached a jury, labeling the incident as an innocent mistake and finding that Wilcox did not willfully withhold or misrepresent information in his grand jury testimony. Brunson timely appealed the granting of summary judgment in defendants' favor, arguing that there were disputed factual issues and that a grand jury indictment did not preclude a claim for malicious prosecution.

The appeals court agreed with Brunson, ruling that financial institutions and fraud investigators have a duty to "pursue with reasonable care their responsibility for protecting not only their own customers, but non-customers who may be victims of identity theft." In the absence of any reported New Jersey legal precedent supporting a duty of care in this particular setting, the 3-judge appellate panel was persuaded to follow the holding of the Alabama Supreme Court in similar decision where that court ruled that a bank could be liable for the false arrest of someone whose stolen identity was used to open an account. Patrick v. Union State Bank, 681 So.2d 1364 (Ala. 1995).

The New Jersey Appellate Division concluded that the trial court erroneously granted summary judgment in favor of Affinity and Wilcox, noting that the facts surrounding whether Wilcox had probable cause to file criminal complaints against Brunson were in dispute, and that the mere existence of a grand jury indictment against Brunson does not bar Brunson's claim for malicious prosecution.

"Because of the foreseeability of harm, fairness and public policy require financial institutions to be accountable when they negligently put individuals at risk by failing to exercise reasonable care in undertaking investigations of fraud claims," the Appellate Panel remarked ... [even when the person is not an account holder].

Only a civil jury can determine "whether the grand jury would have indicted plaintiff [Brunson] if it had been presented with photographs of the imposter along with the disparity in their [physical] descriptions," the 3-Judge Appellate Panel concluded. In remanding the case back to the trial court for further proceedings, Brunson will have to demonstrate the following elements to sustain a civil claim for malicious prosecution arising out of a criminal prosecution: (i) the ciminal proceeding was instituted by the defendant, (ii) the criminal proceeding was actuated by malice, (iii) there was no probable cause for the proceeding, and (iv) the proceeding was terminated in his favor.

Labels: Negligence by Banks, New Jersey attorneys, New Jersey banking litigation, New Jersey law firm, New Jersey lawyers, NJ attorneys, NJ Banking, NJ banking attorneys, NJ banking lawyers, NJ lawyers

It was undisputed that Dryvit did not comply with R. 4:5-1(b)(2) by informing Simmermon or the Court in its initial answer. or by way of a subsequent amended certification, that the subject matter of Simmermon's lawsuit was also the subject of the previously filed and existing nationwide class action suit in Tennessee.On March 25, 2003, 1 year after filing its answer in the New Jersey case, 11 months after preliminary approval of the nationwide class action settlement, 6 months after the opt-out deadline had expired, and 2 months after the Tennessee court entered its final approval of the settlement, Dryvit's counsel first sent a letter to Simmermon's counsel informing him of the nationwide class action settlement and that it was Dryvit's position that because Simmermon did not opt-out of the settlement that he was "barred and enjoined" from continuing his litigation against Dryvit in New Jersey. It was not until some 2 months later on May 30, 2003 that Dryvit's counsel finally notified the trial court about the Tennessee class action settlement and that it barred Simmermon from proceeding with his claims in New Jersey.

Labels: civil litigation New Jersey, complex litigation attorneys nj, new jersey attorneys class action, New Jersey lawyers construction litigation, NJ Supreme Court decisions

Richard A. Pulaski Construction Co., Inc. v. Air Frame Hangars, Inc. (A-40-07, July 1, 2008).

The New Jersey Supreme Court leaves open the question of whether New Jersey common law recognizes a prima facie tort claim. The legal definition of "prima facie" is evidence sufficient in law to establish a fact unless rebutted.

In this case the New Jersey Supreme Court had to decide whether New Jersey common law provides a remedy for misconduct that did not meet the traditional standards of a tort cause of action (i.e., such as fraud). This was not the first time the Court confronted this issue, for 10 years earlier in Taylor v. Metzger, 152 N.J. 490 (1998), the Court expressly declined to recognize a prima facie tort claim under New Jersey common law. However, in Taylor the Court noted that a leading treatise (Restatement) explained that such a cause of action encompasses the intentional, willful and malicious harms that "fall within the gaps of the law" and have been most frequently permitted only in limited situations in which a plaintiff would have no other cause of action.

The facts of the Pulaski case are quite complex, and must be abbreviated for purposes of this article. In simple terms, the defendant Air Frame Hangars ("Air Frame") entered into a lease with Mercer County for the development of "condominium-style" aircraft hangars. Air Frame retained Pulaski to perform certain site development work for the construction of these aircraft hangers. It was undisputed that Pulaski faithfully and dutifully performed its contractual services and that Air Frame failed to pay Pulaski all amounts due under their contract.

Pulaski proceeded to file a construction lien claim with the Mercer County Clerk's office in August 1997; the lien was subsequently ruled to be defective because the lien specified the wrong property address location. After Pulaski filed the construction lien claim but before it was declared defective, the parties engaged in a series of settlement discussions. When those discussions failed, in October 1997 Pulaski filed a demand for arbitration as required under the terms of the parties' written contract. While the arbitration was pending, in February 1998 Pulaski filed a separate lawsuit against Air Frame and Mercer County. The parties agreed to dismiss that lawsuit without prejudice with the applicable statutes of limitations period tolled (or preserved) pending the outcome of the arbitration.

In April 1999, Pulaski obtained a favorable arbitration award and thereafter filed a separate suit in the Superior Court of New Jersey to confirm the arbitration award. Prior to the conclusion of Pulaski's lawsuit to confirm the arbitration award and before Pulaski's construction lien was declared "defective", Air Frame sold 9 of its 9 aircraft hangers to various third party purchasers. In connection with each aircraft hangar sale Air Frame's principal (Mr. Ritterson) executed and delivered to each purchaser an Affidavit of Title affirmatively representing that he, as principal of Air Frame, was not aware of any adverse claims or liens against each particular aircraft hangar. Mr. Ritterson's representations were untruthful because Air Frame was in the midst of litigating its disputes with Pulaski.

The trial court determined that Ritterson's misrepresentations were deliberately intended to close title on the properties without having to pay Pulaski's unpaid lien claim. Not surprisingly, the evidence at trial revealed that Air Frame was insolvent. Refusing to let Air Frame and Ritterson "get away with it", the trial court concluded that Pulaski established a prima facie tort claim and entered judgment in Pulaski's favor in the amount of $105,932 plus an additional $39,000 in prejudgment interest and counsel fees. On defendant's appeal, the Appellate Division affirmed the trial court's opinion.

The New Jersey Supreme Court reversed the Appellate Division's decision and remanded the matter to the trial court with instructions to enter judgment in defendant's favor. In declining to address the utlimate issue (whether NJ common law recognizes a prima facie tort claim), the Court explained that Pulaski had other remedies that were available to him to redress his monetary loss:

"At its core, plaintiff's complaint is for breach of contract. It sought to prosecute that claim against Air Frame by demanding contract arbitration, procuring an arbitration award in its favor, and seeking to enforce its construction lien. Although plaintiff's construction lien was procedurally defective, plaintiff nevertheless had a judgment entered in its favor and against Air Frame for the amount of the arbitration award. Thus, plaintiff had successfully prosecuted a traditional cause of action at law for its breach of contract claim and was awarded a judgment in the full amount it sought."

The Court further stated that a defendant's insolvency does not in-and-of-itself give rise to a prima facie tort claim. "Stated differently, a prima facie tort may be triggered by the absence of a cause of action, but not by the lack of an effective remedy," the Court remarked. Lastly, the Court held that an unperfected construction lien claim is a "nullity" and cannot serve as an independent basis to support a prima facie tort claim.

Despite the apparent malicious conduct of Air Frame and its principal Ritterson the justices unanimously concluded that because Pulaski had other remedies available Pulaski could not satisfy the Restatement test for establishing a prima facie tort regardless whether or not New Jersey common law supports this cause of action.

Apparently for this unscrupulous business owner "crime does pay." It is rather surprising that the New Jersey Supreme Court, long a zealous victims rights advocate, saw fit to reverse the Appellate Division thus allowing the defendants, in the trial court's words, "to get away with it."

Labels: breach of contract attorneys New Jersey, New Jersey attorneys, New Jersey civil litigation attorneys, New Jersey common law, New Jersey law firm, New Jersey lawyers, NJ attorneys, NJ Supreme Court