Opinion
DOCKET NO. A-5757-13T3
12-04-2015
WSFS CREDIT CORPORATION, Plaintiff, v. PATRICK DIPAOLO, Defendant. PATRICK DIPAOLO, Third-Party Plaintiff/Respondent, v. DAN SALOMON, Third-Party Defendant/Appellant, and RICHARD SULLIVAN, TRADELEASE CORP. and LUC LEASING CORP., Third-Party Defendants.
Donna L. Thompson, attorney for appellant. Vincent J. D'Elia, attorney for respondent (Mr. D'Elia and Michael G. Cassidy, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Fisher and Rothstadt. On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-5564-02. Donna L. Thompson, attorney for appellant. Vincent J. D'Elia, attorney for respondent (Mr. D'Elia and Michael G. Cassidy, on the brief). PER CURIAM
A few days before the calendar date for the disposition of this appeal, respondent moved to file a brief and appendix out of time. We granted the motion on November 4, 2015 — eleven months after appellant filed his brief and appendix — even though we had granted five extensions in the past.
In this appeal, third-party defendant Dan Salomon seeks our review of a June 30, 2014 judgment entered at the conclusion of a proof hearing, as well as other interlocutory orders and rulings along the way to that judgment. After closely examining the convoluted record, we vacate the judgment and remand for further proceedings.
I
An understanding of our decision requires consideration of the lengthy and somewhat foggy procedural circumstances. To paraphrase Lewis Carroll, we will start at the beginning, go on until we come to the end, and then stop.
On June 6, 2002, more than a dozen years ago, plaintiff WSFS Credit Corporation filed a complaint against defendant Patrick DiPaolo; WSFS alleged DiPaolo entered into "a closed-end motor vehicle lease . . . of a 1997 Porsche 911 Turbo" that required sixty monthly payments in the amount of $2619.54, a total of $157,172.40. The complaint alleges that when the lease came to an end in April 2002, DiPaolo still owed one payment, as well as attorneys' fees; WSFS demanded a $6154.89 judgment and return of the vehicle.
DiPaolo answered and filed a counterclaim, alleging he had paid the lessor, LUC Leasing Corp., the sum necessary to give him ownership of the vehicle. DiPaolo also filed a third-party complaint against Tradelease Corp. and its principals, Richard Sullivan and Dan Salomon, who arranged for the refinancing of the transaction in 2000. Apparently, the total payoff due WSFS at that time was $115,459.42, which was to be conveyed by delivery of a $95,389.88 check and release of a certificate of deposit held by WSFS as security. DiPaolo's position in this litigation is that Salomon converted the $95,389.88 check provided to him for payoff of the indebtedness to WSFS. In 2004, Salomon pleaded guilty to third-degree theft and was sentenced to a five-year probationary term; he was also ordered to pay $49,647.03 in restitution.
According to DiPaolo, the disposition of this civil suit was thereafter delayed for numerous reasons, some caused by bankruptcy proceedings and others caused by illnesses. DiPaolo also attributes some of these delays to what he claims were the "erroneous dismissals of the case" by the clerk's office. Erroneous or not, the last of these dismissals seemed to have occurred in 2007; Salomon's attorney at the time, John Dell'Italia, Esq., closed his file after so advising Salomon. Nothing appears to have occurred in the matter until DiPaolo successfully moved for reinstatement sometime in September 2010.
A further significant amount of time appears to have elapsed before DiPaolo moved for summary judgment in October 2012. No opposition was filed. On November 16, 2012, the summary judgment motion was granted without explanation on the issue of liability; the judge also scheduled the matter for a proof hearing. The hearing was adjourned, however, and the motion judge retired before it could be rescheduled.
Another judge scheduled a proof hearing for May 13, 2013. Neither Salomon nor an attorney on his behalf appeared, and the matter was adjourned to June 4, 2013. At that time Salomon appeared without counsel, explaining his uncertainty about the matter's status because he had been advised by his attorney years earlier of its dismissal. During a lengthy discussion on the record, Salomon also asserted he had not received the earlier summary judgment papers or the November 16, 2012 order. The matter was then adjourned to June 28, 2013, so Salomon might retain counsel.
Salomon retained Donna Thompson, Esq., who had also represented him much earlier in the suit. The day before the proof hearing, Thompson filed a motion on Salomon's behalf, seeking reconsideration of, or relief from, the November 16, 2012 summary judgment order. When the parties and their attorneys appeared for the proof hearing the next day, the judge postponed the matter to August 2, 2013, and entered an order that required DiPaolo's attorney to provide Thompson with a copy of his summary judgment motion papers; the judge additionally ordered Thompson to produce Dell'Italia, Salomon's prior attorney, as well as his file, for the August 2 hearing.
On September 13, 2013, the judge heard the lengthy testimony of Dell'Italia regarding: his involvement in this lawsuit as it wound down to a dismissal in 2007; his notification to Salomon that the matter had been dismissed; and his lack of involvement or his receipt of any motions or notices regarding the case thereafter. Seven days later, the parties provided additional materials for the judge's consideration and argued further regarding the merit, or lack of merit, in Salomon's motion for relief from the summary judgment order. For the reasons expressed by the judge at that time, the motion to vacate or reconsider the summary judgment order was denied. The order entered on October 25, 2013, also contained a rider that further explained the judge's determination.
At the time he ruled on the motion for relief from the summary judgment order, the judge also declared that Thompson would not be able to represent Salomon at the proof hearing because of "a conflict or a potential conflict of interest involving one of her other clients who may have to testify at that hearing." The October 25, 2013 order also memorialized the rejection of Salomon's other requests that: the judge recuse himself; counsel for DiPaolo be disqualified; and Thompson not be disqualified from further representing Salomon. With regard to Thompson's disqualification, the judge noted that even Thompson had recognized a conflict much earlier in the proceedings in the event a Lakeland Bank representative was called to testify.
Lakeland Bank, which apparently financed some aspect of the lease.
The day before the proof hearing, DiPaolo's attorney advised the court that a Lakeland representative would not be called to testify, consequentially alleviating the conflict that caused Thompson's disqualification. On the same day, Thompson advised that a potential substitute attorney had decided against becoming involved and Salomon was unprepared to proceed on his own behalf; it would appear that when so communicating with the court Thompson was unaware of what plaintiff's attorney had advised the court about Lakeland. At the proof hearing, the judge swore in his law clerk who had telephoned Thompson concerning plaintiff's attorney's correspondence with the court; the law clerk testified that she called Thompson and advised her of the previous day's correspondence of plaintiff's attorney, but Thompson said "she was not prepared for a proof hearing" that day. The judge proceeded with the proof hearing without any appearance from Salomon or an attorney on his behalf.
The judge heard the testimony of DiPaolo and a representative of LUC Leasing and received various exhibits. The proceeding ended with open questions about the damages to which DiPaolo might be entitled; the judge scheduled the continuation of the matter for a few weeks later to resolve those uncertainties.
The record on appeal, however, does not disclose whether any subsequent proof hearings occurred. Nor does the record offer any clue as to what — if anything — occurred for the eight months following the November 1, 2013 proof hearing. Instead, the next event, according to the record on appeal, was the entry of a judgment on June 30, 2014, in favor of DiPaolo and against Salomon, in the amount of $756,196.45; a ledger was attached, reflecting the judge's calculations. According to this ledger, the judge awarded DiPaolo the equivalent of fifty-eight monthly payments on the lease, $36,000 in the rental of a substitute vehicle, lost interest, and other items, for a total of $219,194.43; he also awarded prejudgment interest on these amounts and then trebled the sum for a total compensatory award of $686,196.45. The judge then awarded $70,000 in counsel fees. The record on appeal contains no rationale for the judge's findings and determinations on the amount of the judgment; the judgment itself — other than referring in the preamble to the earlier rulings described above and the other events leading up to the November 1, 2013 proof hearing — is silent as to whether the judge placed his findings on the record on some occasion after November 1, 2013. The only explanation for the quantification of damages would appear to be the ledger appended to the judgment.
II
In appealing, Salomon lodges a number of complaints about the earlier decisions that: reinstated the third-party action; granted summary judgment in DiPaolo's favor; and denied his application to vacate or otherwise grant relief from the summary judgment order. Salomon also argues that the judge should have recused himself and disqualified DiPaolo's attorney. Although DiPaolo correctly observes that Salomon did not refer to the orders memorializing those interlocutory rulings in his notice of appeal — usually a fatal defect, Rule 2:5-1(f)(3)(A); Sikes v. Twp. of Rockaway, 269 N.J. Super. 463, 465-66 (App. Div.), aff'd o.b., 138 N.J. 41 (1994) — we will consider the merit of these interlocutory orders since the issues were fully briefed by both sides and no prejudice has been shown. See Ridge at Back Brook, L.L.C. v. Klenert, 4 37 N.J. Super. 90, 97 n.3 (App. Div. 2014); N. Jersey Neurosurgical Assoc. v. Clarendon Nat'l Ins. Co., 401 N.J. Super. 186, 196 (App. Div. 2008).
After this appeal's calendar date — and as a response to the argument, contained in DiPaolo's late brief on the merits, regarding the scope of this appeal in light of the content of the original notice of appeal — Salomon moved for leave to file an amended notice of appeal to incorporate the earlier interlocutory orders as subjects for our review. For the reasons set forth above, we have granted that motion.
Having taken a broad view of the scope of Salomon's appeal, we find no merit in his arguments about these earlier orders that would warrant further discussion in a written opinion. R. 2:11-3(e)(1)(E). We add only — to the extent Salomon presented a legitimate contention that the November 16, 2012 summary judgment should have been vacated because of a lack of notice — that the reasons given by the judge in denying relief also demonstrate summary judgment was properly granted based on Salomon's conceded theft of funds due to WSFS from DiPaolo and would have been properly granted again if the earlier order was vacated. That is, the judge examined the moving papers, as well as the papers submitted by Salomon to show a meritorious defense, US Bank Nat'l. Ass'n v. Guillaume, 209 N.J. 449, 468-69 (2012), and properly found no meritorious defense on the question of whether Salomon misappropriated funds provided by DiPaolo to pay WSFS. The only question — which could not be answered until there was a proof hearing — was the amount to which DiPaolo was damaged, including the claim that any damage should be trebled pursuant to the Consumer Fraud Act, the elements of which had not yet been established. Accordingly, even if the judge utilized the liberal standard applied in such matters, Marder v. Realty Constr. Co., 84 N.J. Super. 313, 319 (App. Div.), aff'd, 43 N.J. 508 (1964), and vacated the summary judgment previously entered, the natural course of events would have led to the re-entry of summary judgment and the scheduling of a proof hearing.
We should add, however, that we do not view the entry of summary judgment on November 16, 2012, as disposing of Salomon's liability pursuant to the Consumer Fraud Act, the RICO Act or any other statutory basis for liability. Instead, the judge at the time, who did not explain the grounds for his ruling, likely left those questions for resolution at the proof hearing he scheduled.
III
Of greater merit are Salomon's arguments regarding: the disqualification of Thompson; the commencement of the proof hearing on November 1, 2013 in his and his attorney's absence; and the calculation of damages. We need only briefly comment on these issues and why there is a need for further proceedings.
First, we express no view on the decision to disqualify Thompson. She was potentially conflicted from further representing Salomon because it was anticipated that Lakeland, another client, would provide a representative to testify against Salomon. The problem was not with the judge's ruling about Thompson's conflict but with what happened on the eve of the proof hearing.
As explained above, on the day before the hearing, the judge was advised by DiPaolo's attorney that he would not call a Lakeland representative to testify. This alleviated the conflict that required Thompson's disqualification, but it did so only at the last minute, and Thompson's response that she was not prepared to proceed was certainly justified and should have compelled an adjournment of the proof hearing. Although this called for a discretionary ruling, no party would have been harmed by another brief delay. To be sure, the grant or denial of an adjournment of a hearing rests in the sound discretion of the trial court, Kosmowski v. Atlantic City Med. Ctr., 175 N.J. 568, 575 (2003); Smith v. Smith, 17 N.J. Super. 128, 131 (App. Div. 1951), certif. denied, 9 N.J. 178 (1952), but in this particular circumstance we conclude the judge abused his discretion in proceeding with the hearing in Salomon's absence.
We find no merit in the judge's repeated assertion that the absence of Salomon or an attorney on his behalf was "tactical" or part of a plan to delay the proceedings. As the record in this matter reveals, most of the reasons for the fact that we are still dealing with a lawsuit filed thirteen years ago — in which Salomon pleaded guilty to a theft of the funds in question eleven years ago — lie at DiPaolo's doorstep. Besides the many delays that occurred in the trial court, we noted at the outset of this opinion that DiPaolo sought, obtained and ignored five extensions to file his brief in this appeal, finally doing so only after the matter was calendared for disposition by this court.
It is also noteworthy that after determining the administration of justice could not be delayed for another brief period of time, the judge did not enter judgment until eight months after the proof hearing. --------
We also vacate the June 30, 2014 judgment because, contrary to Rule 1:7-4(a), the judge expressed no findings or rationale to support the quantum of damages imposed. See Curtis v. Finneran, 83 N.J. 563, 569-70 (1980). As we said in Kenwood Assocs. v. Bd. of Adj. Englewood, 141 N.J. Super. 1, 4 (App. Div. 1976), a trial judge's failure to make such findings "constitutes a disservice to the litigants, the attorneys and the appellate court." See also Gnall v. Gnall, 222 N.J. 414, 428 (2015). Here, the judge only attached to the judgment a list of the damages found. He did not explain how each number was derived, although as to the principal sum, the judge appears to have awarded the entire amount due on the lease; it is not clear, however, how that could possibly constitute a proper amount of damages since DiPaolo always had possession of, and ended up with title to, the vehicle. The judgment also: fails to account for how — or if — the restitution Salomon has paid pursuant to the judgment of conviction was applied; does not explain why Salomon should bear the cost of another leased vehicle; and does not provide a reason why the damages should have been trebled. There is also no explanation as to why counsel fees were awarded or how the amount of $70,000 was fixed. At best, the list attached to the judgment contains only "naked conclusions" which do not comport with the requirements of Rule 1:7-4(a). Curtis, supra, 83 N.J. at 570; see also Kas Oriental Rugs, Inc. v. Ellman, 407 N.J. Super. 538, 562-63 (App. Div.), certif. denied, 200 N.J. 476 (2009). Without exhausting the many ways in which the judge's conclusions were insufficiently explained, we simply vacate the judgment and remand for a proof hearing at which Salomon must be given a full and fair opportunity to participate. At the conclusion of that proof hearing, the judge must provide a rationale for any items of damages awarded in the manner required by Rule 1:7-4(a).
IV
The judgment of June 30, 2014 is vacated and the matter remanded for further proceedings in conformity with this opinion. The earlier interlocutory orders of which Salomon complains are affirmed. We do not retain jurisdiction. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION