MOGEN DAVID CASKET COMPANY, INC. v. JAMIE GIBBONS, Individually, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1096-04T21096-04T2

MOGEN DAVID CASKET COMPANY, INC.,

Plaintiff-Appellant,

v.

JAMIE GIBBONS, Individually, and

JAMIE GIBBONS D/B/A ATLANTIC

RETINNING AND METAL REFINISHING, INC.,

Defendants-Respondents.

____________________________________________________

 

Argued October 12, 2005 - Decided January 20, 2006

Before Judges Stern and Sapp-Peterson.

On appeal from the Superior Court of New

Jersey, Law Division, Essex County,

Docket No. L-1902-03.

Gilbert L. Offenhartz of the New York bar,

admitted pro hac vice, argued the cause for

appellant (Profita & Associates, attorneys;

Mr. Offenhartz, on the brief).

No brief submitted on behalf of respondents.

PER CURIAM

Plaintiff, Mogen David Casket Company, appeals from an "amended order of final judgment," entered on October 8, 2004, which denied an amendment to a final judgment entered on August 24, 2004. The August 24, 2004 judgment concluded "that plaintiff is not entitled to any damages as a result of the illegal distraint and conversion" by defendant as the court had found at the bench trial. The order of October 8, 2004 in essence denied plaintiff's application for punitive damages.

On this appeal, plaintiff argues that we "should reverse that part of the judgment below as declined to award punitive damages to the appellant" and that "[t]he court below committed error when it failed to award punitive damages to appellant although stating in its Amended Order of Final Judgment that Plaintiff was entitled to damages and holding that a bifurcated trial should have been held with respect to punitive damages."

The facts are as follows. Plaintiff, a manufacturer and distributor of coffins, contracted with DBF Woodworking Company (DBF) located in Newark for the "final completion and packaging" of wooden caskets. Plaintiff purchased the coffin wood components from a distributor in Romania and had these components shipped directly to DBF. The defendants, Janie Gibbons and Atlantic Retinning and Metal Refinishing, Inc., leased space in its building to DBF. When the caskets were not completed in a timely manner, on February 5, 2003, plaintiff's vice-president, attorney Gilbert Offenhartz, went to DBF's shop to retrieve his goods and was advised by the landlord's president, Jamie Gibbons, that tenant DBF was in arrears of its rent, defaulted under its lease, was dispossessed as a tenant, and that defendant landlord had sold the wood left in the shop to reduce DBF's rent obligation.

After verbal confrontations ensued, plaintiff brought this action against the defendants in the Law Division sounding in replevin seeking return of its property. It also sought $22,500 in damages for the reasonable value of its goods.

Before the return date of the Order to Show Cause, the parties agreed that Gibbons would return to the plaintiff the caskets and wood on defendants' premises in exchange for plaintiff's attorney "holding in escrow" $4,500 to protect defendants on their claims (ultimately embodied in a counterclaim in this suit), alleging that plaintiff was responsible for the rent and obligations of DBF.

An amended complaint was filed about four months later. It sought compensatory and punitive damages, attorney's fees and costs. In the first count, plaintiff alleged that "Defendants wrongfully and unlawfully took possession of the goods and converted them," that the act of conversion "was actuated by actual malice and accompanied by a wanton and willful disregard of the rights of the Plaintiff," and defendants were aware that "there was a substantial likelihood that their actions would cause damage to the Plaintiff." The second count of the amended complaint also sought compensatory damages for illegal distraint of plaintiff's property.

Plaintiff insisted that it did not sublease any space from DBF, that no tenancy existed between it and defendants, and that its property was illegally converted and distrained by defendants. The trial judge found for plaintiff on its action, concluding that there was "a technical conversion or distraint of goods," from February 5 to March 19, 2003. The court dismissed the defendants' counterclaim for rent, but found no damages suffered by plaintiff. According to the judge:

[W]hat concerns me is that plaintiff has presented absolutely no proof of damages flowing from such conversion other than perhaps, nominal, in that there's been no proofs that not having possession of these casket parts from when he wanted them that it cost him anything. There's no testimony that delayed orders he had, and he could have filled it and made profit and sold these 50 caskets.

In fact, the testimony by the plaintiff is, in fact, that when he finally did get them, he entered into a yearly contract to have them stored by [another] for a nominal sum and there was no testimony that they're not still there or what happened to them. There's just no proofs presented that by not having possession of the casket parts that he, in fact, was damaged in any respect, other than having the refusal of giving them back to him when he wanted them. That's, basically, all his proofs are.

The judge also noted that plaintiff "may have got[ten] the benefit that he didn't have to pay the nominal cost of storage because defendants still had them," and:

Now, clearly, I think what's being offered in the way of punitive damages is that the legal cost to litigate this matter was pursued and, therefore, since the defendants didn't have a good defense to converting these goods, the punitive damages should be the cost of the value of this law suit.

The Court would be more of a mind to consider legal costs if, in fact, once the order to show cause was dropped and the party got back his goods, which was, apparently, according to the plaintiff's documents, within three weeks of getting counsel to write a letter and an agreement was reached. I think counsel wrote a letter February 24. Plaintiff says that he got the goods back March 19th. So, within three or four weeks.

If the plaintiff had dropped their complaint and allowed to proceed on only the counterclaim which I find it didn't have testimony to support it, I may be more inclined that if they had to defend against the counterclaim, that they owed the [$6,200] and now they were demanding at least at trial, [$4,500] for three months, I'd be more inclined to say that, perhaps, attorney's fees in the nature of punitive should be allowed.

But the fact that the plaintiff wanted to keep its [sic], after getting back the goods, they, in fact, filed an amended complaint in June of this year, and they wanted to continue their suit for conversion and for the wrongful distraint of goods after a lessee defaults. You know, wrongful distraint of goods belonging to another after a lessee default.

The fact that they wanted to keep it going, I think [weighs] against awarding attorney's fees or punitive damages in that if, as soon as they got the goods back, they were willing to drop any court process and not incur attorney's fees and only because the defendant insisted on pursuing on its counterclaim, they remained and had to litigate this case, I may think otherwise.

The fact they reached agreement to put the money in escrow that was something that was voluntarily agreed upon by both sides after advice of counsel. It wasn't that the Court ordered them to because there was some, I'd say insincere certification by the defendant that they could reasonably prove this. It never got that far. So if you wanted to put the defendant's feet to the fire, perhaps, you should have gotten them to submit certifications or affidavits to the Court and to see if they did it in good faith or bad faith. But you just agreed to put the [$4,500 in escrow]. Then you both agreed to keep the case going.

So, in short, this is what the Court's going to do. I'm going to find that the plaintiff is not entitled to any damages. They proved they're entitled to the return of their [$4,500 held in escrow].

The court also denied plaintiff's subsequent motions to amend the judgment to award punitive damages and counsel fees. The judge wrote on the order:

Punitive damages must be pled and a bifurcated trial held on such cause of action, and evidence of compliance with frivolous litigation[,] Rule 1:4-8 not shown for sanctions.

Plaintiff argues that defendants are obligated for punitive damages in light of the frivolous nature of their conduct by "forc[ing] litigation upon appellant in matters in which respondent could not possibly prevail, and in which the attorney for respondent knew he could never prevail." Plaintiff also asserts entitlement to such damages because of defendant's "attempted extortion" "for maliciously converting appellant's goods and for maliciously causing the appellant to institute litigation as well as for maliciously defending against it with an 'insincere certification by defendant' and by interposing an absolutely frivolous counterclaim against which appellant then had to defend."

Contrary to the endorsement on the post-judgment order, plaintiff sought punitive damages in the amended complaint. Before us, plaintiff does not seek compensatory damages, and under Nappe v. Anschelewitz, Barr, Ansell, and Bonello, 97 N.J. 37, 51 (1984), "punitive damages may be assessed . . . whether or not compensatory damages are awarded, at least where some injury, loss or detriment to the plaintiff has occurred." Here, in denying punitive damages, the judge expressly found defendants "illegally converted and distrained the property of the Plaintiff," and the order denying amendment of the judgment expressly states "that Plaintiff is entitled to damages as a result of the illegal distraint and conversion," although none were awarded (and no compensatory damages are now sought).

The Punitive Damages Act, N.J.S.A. 2A:15-5.9 to -.17, provides guidelines for determining whether punitive damages may be awarded. The statute provides:

a. Punitive damages may be awarded to the plaintiff only if the plaintiff proves, by clear and convincing evidence, that the harm suffered was the result of the defendant's acts or omissions, and such acts or omissions were actuated by actual malice or accompanied by a wanton and willful disregard of persons who foreseeably might be harmed by those acts or omissions. This burden of proof may not be satisfied by proof of any degree of negligence including gross negligence.

b. In determining whether punitive damages are to be awarded, the trier of fact shall consider all relevant evidence, including but not limited to, the following:

(1) The likelihood, at the relevant time, that serious harm would arise from the defendant's conduct;

(2) The defendant's awareness of reckless disregard of the likelihood that the serious harm at issue would arise from the defendant's conduct;

(3) The conduct of the defendant upon learning that its initial conduct would likely cause harm; and

(4) The duration of the conduct or any concealment of it by the defendant.

[N.J.S.A. 2A:15-5.12.]

N.J.S.A. 2A:15-5.12(c) provides guidelines by which the trier of fact is to determine the amount of punitive damages to be awarded.

The Act is designed to punish a wrongdoer and deter future such misconduct. See N.J.S.A. 2A:15-5.10. Thus, under the Act, punitive damages may be awarded if the plaintiff proves that the defendant caused harm and the harm suffered resulted from defendant's actual malice or wanton and willful disregard of plaintiff's rights. N.J.S.A. 2A:15-5.12(a). Nothing in the statute refers to or considers as material or relevant the actions of the plaintiff. Nevertheless, here the trial judge addressed the plaintiff's claim for punitive damages as though it were an application for attorney fees and costs, premised on frivolous litigation engaged in through counsel, and did not assess either defendant's conduct on the merits or plaintiff's claims that the defendant acted in a wantonly malicious manner. To the contrary, the court essentially held that the plaintiff was not entitled to punitive damages because it did not drop the suit after the defendant returned the goods in exchange for $4,500 placed in escrow pending the outcome of the litigation.

We decline to award punitive damages, as requested by plaintiff. Most of the tapes of the trial were destroyed and the trial transcript could not be transcribed. As a result, we do not have enough of the record (beyond the judge's opinion) to evaluate the claim for punitive damages, even if we could properly exercise original jurisdiction. Moreover, defendant has not appeared before us to detail reasons why punitive damages are not warranted, and did not have the opportunity to address that question in the trial court. Accordingly, we remand for further consideration of the claim for punitive damages.

Finally, we note that plaintiff submitted two orders with its post-judgment motions - one motion to "Amend the Judgment re Punitive Damages" and the other "to Amend Judgment as to [A]ward [D]amages" in the form of counsel fees and disbursements. The judge denied the "order granting sanctions," relating to counsel fees. He also denied the motion to amend the final judgment, and did so by crossing out the provisions plaintiff submitted and inserting his above-quoted reasons for denying the motion. But the form of order as submitted by plaintiff is entitled "amended order of final judgment" and, due to the crossing out of the submitted provisions, the so-called amended judgment eliminates the award of costs as provided in the original "order of final judgment." We agree with plaintiff that there appears to be no intent to vacate the award of costs to plaintiff, and the matter should be clarified on the remand.

 
The matter is remanded for further proceedings consistent with this opinion.

As we herein develop, we do not necessarily believe the trial judge intended to treat the order as an amended final judgment as opposed to an order denying plaintiff's motion to amend the final judgment.

As defendants have not responded, we recite the facts from the pleadings and papers presented by plaintiff. Both Gibbons, individually, and Atlantic Retinning and Metal Refinishing Inc., were named as defendants. We hereinafter refer to them collectively as "defendant" or "landlord" without prejudice to any distinctions the record may permit on the remand we hereinafter order. Gibbons was the president of Atlantic which leased all or part of the building, and DBF had a sublease.

In his certification in support of his verified complaint and order to show cause, Offenhartz acknowledged that Gibbons told a police officer who Offenhartz called to the scene that he "would not sell the coffins until after he spoke with his lawyer," but he subsequently refused to return the casket wood notwith-

standing written and oral communications.

Defendants asserted that Offenhartz had promised to pay the rent while the plaintiff's property was stored there. They also claimed the casket parts were such an inconvenience that the premises could not be leased.

(continued)

(continued)

11

A-1096-04T2

January 20, 2006