Justia New Jersey Supreme Court Opinion Summaries

This appeal arose from a conflict among the three members of IE Test, LLC (IE Test). After a dispute between defendant Kenneth Carroll and the other members, Patrick Cupo and Byron James, IE Test filed an action to expel Carroll, pursuant to the Limited Liability Company Act (LLCA). In 2004,Carroll and Cupo formed Instrumentation Engineering, LLC. Carroll owned a fifty-one percent interest in Instrumentation Engineering, and Cupo owned the remaining forty-nine percent. James was employed by Instrumentation Engineering, initially as Business Development Manager and later as Vice President. Carroll, Cupo, and James entered into a preliminary agreement stating intention to enter into an operating agreement for IE Test. Carroll claimed that Instrumentation Engineering owed substantial sums to him and his companies, and that became a point of contention among Cupo, James, and Carroll soon after they agreed to share ownership of IE Test. Carroll acknowledged that IE Test had no legal obligation to repay him for losses sustained because of Instrumentation Engineering's bankruptcy, but pressed for compensation that would allow him to recover some of his lost investment. By early 2010, Cupo and James were actively pursing a strategy to use the LLCA to expel Carroll as a member of the LLC. The trial court found in IE Test's favor on its claim based on subsection 3(c), reasoning that the "not reasonably practicable" language imposed a less stringent standard than did subsection 3(a). The trial court granted IE Test's motion for partial summary judgment and expelled Carroll as an LLC member. Carroll appealed. In an unpublished opinion, an Appellate Division panel affirmed, construing N.J.S.A.42:2B-24(b)(3), and its counterpart provision in the Revised Uniform Limited Liability Company Act (RULLCA), N.J.S.A.42:2C-46(e), to mandate that a trial judge engage in predictive reasoning in order to evaluate the future impact of an LLC member's current conduct. The panel found that Carroll's relationship with Cupo and James never recovered from Carroll's demand that he be compensated in a manner that permitted him to recoup his lost investment. The Supreme Court reversed. Applied to the record of this case, the standard of subsection 3(c) did not warrant a grant of partial summary judgment expelling Carroll from IE Test. View "IE Test, LLC v. Carroll" on Justia Law

In 1995, Jazz Photo Corp., one of several commercial entities (collectively referred to as the Jazz Entities), entered into a factoring agreement with Rosenthal & Rosenthal, Inc. Jazz Photo sold Rosenthal its accounts receivable in return for cash. Five years later, Vanessa Benun, the daughter of Jack Benun, a principal of the Jazz Entities, guaranteed Jazz Photo's obligations under that agreement. At that time, Benun also executed a mortgage on real property she owned in Monmouth County as security for her personal guaranty. In March 2005, another of the Jazz Entities, Ribi Tech Products, LLC entered into a factoring agreement with Rosenthal. Benun personally guaranteed Ribi Tech's obligations to Rosenthal. In March 2007, Riker, Danzig, Scherer, Hyland & Perretti, L.L.P. (Riker), a law firm providing legal services to Jack Benun and the Jazz Entities, obtained a third mortgage from Benun on the same real property. This mortgage was executed in favor of Riker to secure Jack Benun's personal debt under a letter agreement. When Benun executed the mortgage, Jack Benun owed Riker $1,679,701.33 in unpaid legal fees, and the letter agreement reflected his obligations to Riker and Riker's promise to provide continuing legal representation. Riker's mortgage was recorded on April 13, 2007. Rosenthal received actual notice of the Riker mortgage in August 2007. Despite notice of the Riker mortgage, Rosenthal continued to make advances to the Jazz Entities that totaled millions of dollars. In September 2009, Jazz Products filed for bankruptcy. The Jazz Entities defaulted on their obligations to Rosenthal, owing Rosenthal close to $4 million. Benun, in turn, defaulted on her personal guaranty to secure the debt. After Riker recorded its mortgage on the Monmouth County property, it continued to perform legal services for Jack Benun, and his unpaid legal fees ballooned to over $3 million. Jack Benun, and the Jazz Entities defaulted on their obligation to Riker and Benun defaulted on her guaranty. Rosenthal filed a foreclosure complaint against Benun, her husband, and Riker. Benun and her husband did not respond, and Rosenthal requested that a default judgment be entered against them. Riker answered, disputing the priority of Rosenthal's mortgages. Later, both Rosenthal and Riker filed cross-motions for summary judgment regarding the priority of their respective mortgages. The trial court granted Rosenthal's motion, determining that the dragnet clauses in the Rosenthal mortgages were fully enforceable. With regard to priority, the trial court held that Riker's argument that its mortgage displaced the two Rosenthal mortgages was legally flawed because the firm accepted a mortgage on the property with knowledge of two prior mortgages, each securing an obligation of up to $1 million, and with knowledge of the anti-subordination clauses. The court concluded that there was no convincing justification for rewarding Riker a superior priority. Riker appealed, and the Appellate Division reversed. The Supreme Court affirmed the Appellate Division, finding that Rosenthal had advance notice of the law firm's intervening lien but nonetheless proceeded to make optional advances to the commercial entities. "Having done so, its mortgages securing those optional future advances were subordinated to the law firm's intervening lien." View "Rosenthal & Rosenthal, Inc. v. Benun" on Justia Law

Plaintiff Lamar Williams worked and owned a car in Alaska. In February 2010, he arranged through his employer to have the car shipped to New Jersey by defendant American Auto Logistics. After the car arrived, Williams visited the American Auto Logistics facility in New Jersey to pick it up. Williams inspected the car, found no apparent damage, and drove away. On leaving the facility, however, he heard swishing noises in the back of the car. He found water in the trunk and returned to the facility, where defendant's employees removed the accumulated water and offered a small amount of money for water damage. Williams rejected the offer. Williams sought out a mechanic who estimated the repairs would cost more than $10,000. He called American Auto Logistics and offered to settle for less than that amount, but the company rejected the offer and refused to pay anything for the damage. American Auto Logistics followed up by sending Williams a letter that disclaimed any responsibility and claimed the car was not damaged during shipping. Williams was twice denied his right to a jury trial by a trial court in the Special Civil Part. On both occasions, the trial court relied on Rule 4:25-7, prescribing certain pre-trial procedures, and sanctioned Williams for failure to comply by denying his right to a jury. In this appeal, the issue before the New Jersey Supreme Court was whether a litigant could lose his constitutionally protected right to a jury trial as a sanction for failure to comply with procedural rules. The case also presented a question about the court rules applicable to the Superior Court's Law Division, Special Civil Part. The Court held trial courts could not deprive civil litigants of their constitutionally protected right to a jury trial as a sanction for failure to comply with a procedural rule. The Court further instructed that Rule 4:25-7 did not apply to proceedings in the Special Civil Part. View "Williams v. American Auto Logistics" on Justia Law

In this appeal, the issue this case presented for the Supreme Court's review was one of first impression: whether an indigent parent who faces termination of her parental rights in a contested private adoption proceeding has a right to appointed counsel. "Because of the nature of the right involved - the invaluable right to raise a child - and the risk of an erroneous outcome without the help of an attorney, we hold that indigent parents are entitled to appointed counsel in a contested private adoption matter under the due process guarantee of the State Constitution." View "In the Matter of the Adoption of a Child by J.E.V. & D.G.V." on Justia Law

Officer Cohen observed a vehicle approaching from about a quarter-mile away. The vehicle was traveling with its high beams on at a normal speed in a well-lit, residential area. The vehicle obeyed the stop sign at the intersection of New York Avenue and Adams Street. Using the strobe light attachment on his flashlight, Officer Cohen signaled to the driver to pull over. Officer Cohen intended to educate the driver on the proper use of high beams. As Officer Cohen approached the driver's side of the vehicle, and instead of a warning to turn off her high beams, instructed her to produce her license, registration, and insurance cards. With the driver's-side window down, Officer Cohen could smell burnt marijuana. He then walked around the vehicle, asked defendant, the front passenger, to roll down the window, and detected a stronger odor of burnt marijuana. Officer Cohen asked defendant and the rear passenger whether they had any controlled dangerous substance on them, and both replied, No. While engaged in this exchange, Officer Cohen noticed inside the vehicle a hollowed-out cigar, which, from his experience and training, he knew was used as a receptacle for marijuana. Based on this observation, Officer Cohen told defendant to step out of the car. In response, defendant indicated that he had a gun under his jacket. The officer ordered defendant to keep his hands up while he retrieved the weapon. Defendant was placed under arrest, and the driver was later issued a ticket for a violation of the high-beam statute. Defendant was later charged with unlawful possession of a .40 caliber handgun, receiving stolen property (the handgun), possession of hollow-nose bullets, and possession of a large-capacity magazine. Defendant filed a motion to suppress the handgun, the bullets, and the magazine on the ground that the police did not have a constitutionally permissible basis for stopping the car in which he was a passenger. The court granted the motion, observing that the high-beam statute presupposed that the offending driver's high beams were on when his vehicle approaches an oncoming vehicle. Here, Officer Cohen testified that he did not observe any other vehicle traveling in the opposite direction toward defendant's vehicle. The court also concluded that the stop could not be justified based on the community-caretaking exception to the warrant requirement. The Appellate Division affirmed, and the State appealed. Finding no reversible error, the Supreme Court affirmed both the trial court's and Appellate Division's judgments. View "New Jersey v. Scriven" on Justia Law

Defendant Robert Stein was charged with DWI and careless driving after a motor vehicle accident in Wayne Township. The municipal court found defendant guilty of DWI and careless driving. The court based its DWI finding on breathalyzer readings and the arresting officers' observations of defendant at the time of his traffic stop. The court sentenced defendant, as a third-time DWI offender, to incarceration for a term of 180 days in the county jail and loss of his license for a period of ten years. After a trial de novo on the record, the Law Division also convicted defendant of DWI and careless driving, based on the breathalyzer readings and, separately, on observational evidence. The court imposed the same sentence as did the municipal court. Additionally, the Law Division ruled that the municipal prosecutor was not required to provide discovery of the names of the neighboring police officers or the videotapes that defendant requested. The Appellate Division affirmed. Defendant appealed, and the Supreme Court affirmed in part and reversed in part. In accordance with Rule 7:7-7(b), the municipal prosecutor was required to provide defendant with the names of the police officers from the adjacent jurisdiction who were present at the DWI accident scene. Defendant, however, did not seek relief from the court pursuant to Rule 7:7-7(j). Here, the discovery issue was never truly placed before the municipal court. The court could not grant relief on an issue of which it was unaware. Defendant could not raise the purported discovery violation for the first time on appeal and therefore the issue was waived. Furthermore, the Court held that pursuant to Rule 7:7-7(b), the municipal prosecutor was required to provide the requested videotapes that may have recorded defendant's appearance, behavior, and motor skills. Such information, if available, was clearly relevant to a DWI defense. The Court could not determine from the record whether any such videotape ever existed or existed at the time of defendant's discovery request. Therefore, the case was remanded to the Law Division to conduct a hearing to address that issue. View "New Jersey v. Stein" on Justia Law

Defendant Stephen Scharf was convicted of first-degree purposeful and knowing murder of his wife Jody, who fell to her death off a cliff at the Palisades. Defendant defended the charge by claiming the death was an accident. At trial, the court allowed the State to present, in rebuttal to the defense of accident, hearsay statements, under N.J.R.E. 803(c)(3) and (c)(4), from Jody s friends and her therapist. The witnesses claimed that Jody repeatedly told them of her fear of defendant, particularly after she had served him with a divorce complaint, and told them that she had declined defendant's request to go to the Palisades cliffs with him shortly before her death. On appeal, the Appellate Division reversed the conviction, concluding that the trial court erred in admitting the hearsay statements. The State appealed, raising the issue of whether the trial court erred in admitting the statements, and if the evidence was admissible, whether the evidence, cumulatively, constituted an abuse of the trial court's discretion that caused defendant's trial to be unjust. Finding that the Appellate Division erred in reversing the trial court's judgment of conviction, the Supreme Court reversed, and the matter remanded for consideration of defendant's unaddressed appellate arguments. View "New Jersey v. Scharf" on Justia Law

In 2013, the State Board of Nursing invoked N.J.A.C. 13:37-1.3(c)(2) to deny accreditation to the Licensed Practical Nurse to Registered Nurse Bridge Program (Bridge Program), a nursing program instituted by Eastwick College (Eastwick). Interpreting the term graduating class in N.J.A.C. 13:37-1.3(c)(2) to include all graduates of the program who took the licensing examination during a given calendar year, regardless of the year a particular student graduated from the program, the Board found that Eastwick's Bridge Program's first and second graduating classes failed to achieve the 75% pass rate mandated by the regulation. Eastwick appealed the Board's determination, challenging the methodology used by the Board to calculate the pass rate of the Bridge Program's graduates on the licensing examination. Eastwick contended that only students who graduated during a specific calendar year and took the licensing examination in that year should be included in that year's graduating class. Using that methodology, Eastwick argued that its second graduating class had a pass rate in excess of 75%, and that the Board improperly declined to accredit its nursing program. An Appellate Division panel affirmed the Board's determination denying accreditation. Based on the plain language of N.J.A.C. 13:37-1.3(c)(2), the New Jersey Supreme Court concluded that the Board's construction of its regulation was plainly unreasonable, and accordingly held that the Board improperly denied accreditation to Eastwick's Bridge Program. The Court therefore reversed the Appellate Division's judgment affirming the Board's action, and remanded this matter for further proceedings. View "In the Matter of the Revocation or the Suspension of the Provisional Accreditation of and/or the Imposition of Probation on Eastwick College LPN-to-RN Bridge Program" on Justia Law

Defendants Lixandra Hernandez and Jose G. Sanchez were charged in a State Grand Jury indictment with second-degree conspiracy to distribute more than five ounces of cocaine, first-degree distribution of more than five ounces of cocaine, second-degree distribution of cocaine within 500 feet of a public park, and third-degree possession of cocaine. The cooperating witness (the Witness) in defendants' case assisted the State in a number of drug investigations and prosecutions. In discovery, defendants were given the agreements between the State and the Witness in this case and in unrelated cases, and the State has represented that it would provide the defense with any known material false statements made by the Witness in those cases. Defendants nevertheless insisted that they were entitled to every statement made by the Witness in each case in which he has cooperated with the State, whether those statements are contained in a transcribed interview, recorded drug transaction, investigative report, or memorandum between members of the prosecutorial team. The trial court determined that such information, regardless of its lack of relevance, was discoverable under our court rules. The Appellate Division affirmed. After its review, the Supreme Court held that the discovery ordered by the trial court and Appellate Division exceeded the limits of Rule3:13-3(b) and was not supported by New Jersey jurisprudence. "Although our discovery rule generally requires that the State provide all evidence relevant to the defense of criminal charges, it does not open the door to foraging through files of other cases in search of relevant evidence. . . . The discovery order here requires disclosure of information not mandated by our discovery rule - information that has no ostensible relevance to the case to be tried." Accordingly, the Court reversed the judgment of the Appellate Division and remanded for further proceedings. View "New Jersey v. Hernandez" on Justia Law

This appeal as of right arose from defendants' alleged breach of a settlement agreement executed by defendants and one of the plaintiffs in this action, Globe Motor Company (Globe), to resolve prior litigation between the parties. Shortly after defendants sent two checks totaling $75,000 to plaintiffs to settle the earlier action, a Trustee appointed to represent the estate of an insolvent Minnesota entity brought an adversary proceeding against plaintiffs. The Trustee demanded that plaintiffs disgorge the settlement funds, on the ground that those funds had belonged to the bankrupt entity, not to defendants, and that the transactions were therefore voidable under provisions of the United States Bankruptcy Code, 11 U.S.C.A. 544 and 548. Plaintiffs paid $22,500 to resolve the bankruptcy Trustee's claim. Plaintiffs filed this action against defendants, seeking to recover the money that they paid to settle the bankruptcy proceeding as well as attorneys' fees and costs. The motion judge entered summary judgment for plaintiffs on their breach of contract claim. An Appellate Division panel affirmed that determination, with one judge dissenting. After its review, the New Jersey Supreme Court held that the motion judge improperly granted summary judgment in plaintiffs' favor. The Court concluded that the record did not establish plaintiffs' right to judgment as a matter of law. The case was remanded for further proceedings. View "GlobeMotor Company v. Igdalev" on Justia Law