Jovich v. Kassay

Full title: WALTER JOVICH, Plaintiff-Appellant, v. RICHARD KASSAY and JOAN KASSAY…

Court: SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION

Date published: Apr 27, 2012

DOCKET NO. A-3775-10T2 (App. Div. Apr. 27, 2012)

Opinion

DOCKET NO. A-3775-10T2

04-27-2012

WALTER JOVICH, Plaintiff-Appellant, v. RICHARD KASSAY and JOAN KASSAY, Defendants-Respondents.

Ira J. Metrick argued the cause for appellant. Paul J. Nemergut, III argued the cause for respondent (Nemergut & Duff, attorneys; Mr. Nemergut, on the brief).

PER CURIAM

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

Before Judges Grall and Skillman.

On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-5908-03.

Ira J. Metrick argued the cause for appellant.

Paul J. Nemergut, III argued the cause for respondent (Nemergut & Duff, attorneys; Mr. Nemergut, on the brief). PER CURIAM

This is an appeal from an order denying a motion to vacate a default judgment.

Defendants contracted with plaintiff to frame a new home they were constructing in Howell for $64,000. When plaintiff completed his work, defendants refused to pay the alleged balance of $18,500 due under the contract.

On December 4, 2003, plaintiff filed this action for recovery of that balance. On December 29, 2003, defendants filed a counterclaim for breach of the contract based on plaintiff's alleged failure to perform his contractual obligations in a workmanlike manner and for violations of the Consumer Fraud Act.

The case initially came on for trial in July 2006, but a mistrial was declared after the courts were closed due to the Legislature's failure to adopt a budget. After another trial date was adjourned due to the illness of one of the defendants, the case was rescheduled for trial on April 16, 2007. However, plaintiff failed to appear on that date. The trial court gave plaintiff's counsel a week to locate plaintiff, and when he was unable to do so, the court dismissed plaintiff's complaint without prejudice.

This dismissal left defendants' counterclaim unadjudicated. The trial court ordered defendants to wait at least forty-five days before seeking a default judgment on the counterclaim.

After passage of that period, on June 7, 2007, the court entered an order suppressing plaintiff's answer and defenses to the counterclaim, and a proof hearing was scheduled for October 19, 2007. Neither plaintiff nor his counsel appeared at the hearing. Based on the evidence presented at that hearing, the trial court entered a judgment in defendants' favor awarding them $183,923.40¹ in damages, $17,500 in counsel fees and $5,000 in costs for a total of $206,423.34.

1 Because the court found violations of the Consumer Fraud Act, it trebled the breach of contract damages, which totaled $61,307.80.

In April 2008, plaintiff filed a motion to vacate the default judgment. Plaintiff alleged in his certification in support of this motion that he had failed to appear for trial because he was too sick to participate in a trial and was in Bulgaria for treatment and that his attorney had assured him he would be able to obtain an adjournment. Plaintiff also alleged that upon his return from Bulgaria, he had provided his attorney with documentation of the medical treatment he received there, but that he had not heard further from his attorney regarding the case. Plaintiff further alleged that he was unaware the trial court had dismissed his complaint and was unaware defendants were pursuing a counterclaim against him. Plaintiff also claimed that he first became aware of the default judgment on April 9, 2008, when he received a call from his real estate broker advising him that she had received a letter from plaintiff's attorney indicating that there was a judgment against him and that there could not be a closing on property he was selling until that judgment was satisfied.

The trial court concluded that there should be a plenary hearing regarding plaintiff's motion to vacate the default judgment. On October 18, 2010, the court held a hearing at which plaintiff, the attorney who represented him at the time of the scheduled trial in April 2007, David Parinello, and another attorney who also represented plaintiff in connection with the case, Vincent Halleran, all testified.

Based on the evidence presented at that hearing, Judge Bauman issued a comprehensive oral opinion on February 25, 2011 denying plaintiff's motion to vacate the default judgment. The judge found plaintiff's testimony that he was unaware of the dismissal of his complaint in April 2007 to be incredible:

Parinello told Judge Cavanagh [on the April 16, 2007 trial date] that he really didn't know where [plaintiff] was. The Court does not find [plaintiff] credible when he testified that he told Parinello prior to April 16, 2007 that he would be in Bulgaria partaking of mineral water treatment. The more likely scenario is that upon his return to New Jersey he called Parinello on April 25, 2007 and met with Parinello at some point thereafter at which point Parinello explained that because he could not account for [plaintiff's] whereabouts before [the trial court] his complaint was dismissed.
The Court simply did not and does not believe [plaintiff's] testimony that he told
Parinello where he was going and why before Parinello's two court appearances in April 2007. It is inconceivable that Parinello would not have explained that situation to Judge Cavanagh straightaway.

The judge also found Parinello's testimony that he was solely responsible for not moving to reinstate plaintiff's complaint and to vacate the default judgment and that he did not advise plaintiff of defendants' counterclaim and the default judgment entered on that counterclaim to be incredible:

While Parinello for whatever reason is willing to accept responsibility for not reinstating Jovich's complaint and vacating the default judgment, the question is whether ultimate responsibility rests on his shoulders alone.
. . . .
From April 2007 to April 2008 [plaintiff] was silent as to what, if anything, he did to address the [defendants'] counterclaim. Parinello testified that the fault again was his. He claimed that he never explained to [plaintiff] about the counterclaim or its import. The Court finds that utterly unworthy of belief.

The judge further found that plaintiff took active steps to prevent satisfaction of the default judgment by fraudulently conveying properties he owned to his friends and employees:

. . . [Plaintiff] appears to have embarked on a scheme to avoid having any record of any property on which the [defendants] could attach to satisfy their judgment against him. At the hearing he acknowledge[d] having conveyed two lots to
employees of his which were later deeded back to him. He excused what may very well have been fraudulent conveyances by claiming these transfers were a "mistake". Indeed he testified as to various questionable real estate transactions in which he either falsely listed his home address or employed various aliases to include "V Jurek" (phonetic) "Walter" or "Walter Orrick" (phonetic). His invariable response was that these omissions and misstatement were clerical in nature.
. . . .
Not only do such transactions impact adversely on [plaintiff's] credibility[,] it also implies that he was well aware of the [defendants'] counterclaim and sought to transfer these properties out of his name so as to evade any remedies the [defendants] may have had as judgment creditors. . . .

Based on these factual findings, the trial court concluded that plaintiff had not shown the excusable neglect required to vacate the default judgment.

Plaintiff then retained new counsel and submitted a motion for reconsideration supported by certifications that contained various factual allegations for which no supporting evidence had been presented at the plenary hearing on plaintiff's motion to vacate the default judgment. After hearing argument, the trial court denied this motion by an oral opinion issued on April 1, 2011, stating in part:

[T]he purpose of having the hearing, any hearing, where there are conflicting facts and competing certifications, is for a Court
to not only hear the testimony of the witnesses, but to observe the manner in which the witnesses testify. This is all part of the format by which courts can assess credibility issues that can't necessarily be addressed on paper. That was the whole purpose of having the hearing.
Mr. Parinello testified. Your client testified. The defendant[s] testified. Mr. Halleran testified. The Court had an opportunity not simply to hear what these witnesses had to say, to the extent they corroborated or contradicted anything in prior written submissions, but also the manner in which they testified.
And the Court made a determination of credibility. That was the whole purpose of the hearing, was to see and hear and observe how the witnesses testified. And the Court made a finding that your client was not credible for all the reasons I set forth in my opinion.

On appeal, plaintiff argues that he "should not be penalized for the negligence of his attorney." This argument assumes, contrary to the trial judge's factual findings based on the evidence presented at a plenary hearing, that plaintiff did not become aware of the April 2007 dismissal of his complaint or the October 2007 default judgment entered against him until April 2008 because his attorney failed to inform of those developments in the case. We are satisfied based on our review of the record that Judge Bauman's findings are supported by substantial credible evidence and therefore must be accepted by this court. See Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484 (1974). Those factual findings provide an adequate foundation for the conclusion that plaintiff failed to show the excusable neglect required to vacate the default judgment. Therefore, we conclude, substantially for the reasons set forth in Judge Bauman's February 25 and April 1, 2011 oral opinions, that he did not abuse his discretion in denying plaintiff's motion.

Plaintiff also argues that Judge Bauman abused his discretion in denying his motion for reconsideration before returning Parinello's file to him. This argument is clearly without merit. R. 2:11-3(e)(1)(E). We only note that plaintiff's then counsel indicated in open court on June 6, 2008, before the hearing on the motion to vacate the default judgment, that he had a copy of that file, and that Judge Bauman indicated that he had returned his copy of the file to plaintiff's then counsel, who was a different counsel than the one who represented him on the motion for reconsideration. In any event, there is no basis for concluding that anything in the Parinello file, which Judge Bauman had already seen, and some of the contents of which were introduced at the hearing, could have been used by plaintiff's counsel to persuade the judge to grant reconsideration.

Finally, plaintiff argues that the trial court should not have granted a judgment in excess of the cost to correct any defects in plaintiff's work. Although plaintiff moved to vacate the default judgment in its entirety based on excusable neglect, he did not move in the alternative for a reduction in the amount of that judgment for the reasons now advanced in his appellate brief. See Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973). Therefore, this argument is not properly before us.

Affirmed.