MICHAEL ERDHEIM v. ROGER MAGGIO

 
(NOTE: The status of this decision is .)

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0168-08T10168-08T1

MICHAEL ERDHEIM,

Plaintiff-Appellant/

Cross-Respondent,

v.

ROGER MAGGIO,

Defendant-Respondent/

Cross-Appellant.

________________________________________________________________

 

Argued April 22, 2009 - Decided

Before Judges Stern, Rodr guez and Espinosa.

On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-5748-07.

Michael Erdheim, appellant/cross-respondent, argued the cause pro se.

Diana Sherwood argued the cause for respondent/cross-appellant (Puglisi and Sherwood, LLC, attorneys; Ms. Sherwood, on the brief).

PER CURIAM

Plaintiff appeals from an order granting summary judgment to defendant, dismissing plaintiff's complaint with prejudice, as well as the denial of his motion to suppress defendant's answer. Defendant cross-appeals from the dismissal of his counterclaim for alleged overpayments on the subject loan and for counsel fees. We affirm in part and reverse and remand in part.

It is undisputed that plaintiff Michael Erdheim loaned defendant Roger Maggio $20,000 on August 24, 1998, and that defendant made substantial payments thereafter. Neither the loan nor its terms were memorialized in a written agreement. The parties do not agree regarding terms that would be standard in a conventional loan, i.e., the term of repayment, the amount and frequency of payments on the loan, and how interest was to be computed. While the parties agree that defendant would pay ten percent interest on the loan, they disagree as to whether the interest was simple or compound interest.

Defendant borrowed the money to purchase a cooperative apartment located in Fort Lee. He admits that the loan was to be secured by life insurance and a security interest in the apartment. Pursuant to this agreement, defendant added plaintiff as a beneficiary to receive $40,000 of the proceeds from his life insurance policy in August 1998 and filed a U.C.C. filing statement reflecting plaintiff's security interest in December 1999. Plaintiff executed a U.C.C. termination statement in December 2002 so that defendant could refinance the apartment. Before removing the lien, defendant told plaintiff he would grant him a new U.C.C. lien. However, defendant's co-operative board later advised him that the security interest was not permitted by the board's governing rules. In May 2007, defendant removed plaintiff as a beneficiary on his life insurance policy because he believed he had fully repaid the loan.

The only records regarding payment were produced by defendant. In April 2007, defendant provided plaintiff with a list of payments (the "Erdheim Conversion") prepared by the financial manager for defendant's company. After the complaint was filed, defendant provided plaintiff with an accounting of payments made on the loan (the "accounting") prepared by Frank Baglieri, a certified public accountant. The accounting is detailed, including check numbers, amounts, the dates checks were actually deposited, reductions for principal and interest, and subtotals of the outstanding principal. Copies of the front and back of each cancelled check listed, with dated processing stamps, were provided to support the calculations. Baglieri certified that the accounting was accurate, based on defendant's view of the loan terms.

The accounting lists eighty-eight payments to plaintiff made between November 1998 and May 2007, totaling $30,938.10 ($21,069.07 in principal and $9869.03 in interest). Defendant contends that these payments reflect an overpayment of $1069. Plaintiff has disputed twelve of these transactions, for a total of $11,611.20 in challenged payments.

The "Erdheim Conversion" is plainly incomplete on its face as it lists no payments for 1999, only one payment in 2000 and only one payment in 2001. It is, however, undisputed that defendant made twenty-three payments totaling $6580.20 during the period from February 1999 through December 2001, none of which were included in the "Erdheim Conversion." Defendant later explained that his financial manager was not working for defendant during the entire repayment period and was unaware of repayment records kept by a former employee that were stored in a separate file. The accounting also includes a $500 payment made after the "Erdheim Conversion" was prepared, that plaintiff has not disputed. Therefore, plaintiff does not dispute that he received $7320.20 more in repayments than that reflected in the "Erdheim Conversion." Nonetheless, plaintiff relies upon the "Erdheim Conversion" as a purported admission by defendant that he owed plaintiff $13,086.

Plaintiff filed this complaint, alleging that defendant failed to repay a loan (count one) and committed fraud (count two). The complaint demanded compensatory damages of $17,552.41 and, in violation of Rule 4:5-2, punitive damages of $75,000. Before filing an answer, defendant sent plaintiff a Rule 1:4-8 notice of frivolous litigation filing letter, as well the accounting.

Defendant filed an answer and counterclaim for overpayment on the loan and for counsel and expert fees. Plaintiff filed an answer to the counterclaim.

Plaintiff filed a motion to suppress defendant's answer for failure to provide discovery, and, approximately two weeks later, defendant provided discovery responses. Defendant filed a cross-motion for summary judgment. Plaintiff sent a supplemental certification in support of his suppression motion, asking that it be considered a motion to compel more specific answers. However, neither party asked for an extension of the August 21, 2008 discovery end date. Defendant submitted a reply in support of his cross-motion.

In summary, the motions before the judge were plaintiff's motion to suppress defendant's answer for failure to provide discovery and defendant's cross-motion for summary judgment, seeking the dismissal of the complaint and judgment in defendant's favor on the counterclaim. At oral argument, defense counsel also advised the court that a frivolous litigation claim had been asserted in the counterclaim. Defendant requested leave to submit a certification for counsel fees. In a written opinion, the motion judge granted defendant's summary judgment motion and denied plaintiff's motion to suppress the answer and counterclaim for failure to provide discovery or, in the alternative, to compel discovery.

Plaintiff did not move for summary judgment as to defendant's claims. However, the judge dismissed the counterclaim, stating in a written opinion,

Defendant's counter-claim is also dismissed. The overpayment of $1,069.00 was voluntarily made to completely discharge this matter. The defendant's actions waived making it a claim in this litigation. Additionally legal fees and costs are not recoverable in civil cases pursuant to N.J. Ct. R.: 4:42-9(a). The court, therefore, rejects defendants claim for these items. The court, while troubled by plaintiff's claims does not find the litigation frivolous. The pro-se plaintiff is afforded the benefit of the doubt that he honestly believed he was still owed something on this debt and that he was somehow harmed by the defendant's representations.

Plaintiff raises the following points on appeal:

POINT I

THE GRANTING OF SUMMARY JUDGMENT BELOW BY ORDER DATED AUGUST 15, 2008, THE DATE OF ORAL ARGUMENT OF BOTH MOTIONS WAS SUBSTANTIVE AND PROCEDURAL ERROR AND SHOULD BE REVERSED.

A. DEFENDANT'S CROSS-MOTION WAS PROCEDURALLY DEFECTIVE AND SHOULD HAVE BEEN DENIED.

B. DEFENDANT'S WILFUL DEFINANCE [SIC] OF DISCOVERY PRECLUDED THE GRANTING OF SUMMARY JUDGMENT IN THE LOWER COURT.

C. PLAINTIFF'S DOCUMENTED AND CORROBATIVE [SIC] PROOF OF DISUTED [SIC] PAYMENTS BELOW PRECLUDED THE GRANTING OF SUMMARY JUDGMENT TO DEFENDANT.

POINT II

THE LOWER COURT ERRED IN ITS DENIAL OF PLAINTIFF'S SUPRESSION [SIC] MOTION.

In his cross-appeal, defendant argues that "The Trial Court Erred in Denying Defendant's Counsel Fee Application Without Providing Defendant Opportunity to File It's [sic] Motion Under R. 1:4-8" and that the trial court erred by not finding in defendant's favor on his counterclaim.

We affirm the grant of summary judgment in part. We reverse and remand the dismissal of part of plaintiff's claim as well as defendant's counterclaim.

I.

We first address plaintiff's appeal from the order granting summary judgment to defendant. On appeal, we review the summary judgment motion de novo, Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998), to determine "whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue[s] in favor of the non-moving party." Spinks v. Twp. of Clinton, 402 N.J. Super. 465, 473 (App. Div. 2008) (quoting Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995)), certif. denied, 197 N.J. 476 (2009).

To grant the non-moving party all favorable inferences from the evidence does not mean that any challenge to the evidence will suffice. An opponent may not prevail merely by discrediting the credibility of the movant's evidence. Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 256-57, 106 S. Ct. 2505, 2514, 91 L. Ed. 2d 202, 217 (1986). Similarly, "'conclusory and self-serving assertions' in certifications without explanatory or supporting facts will not defeat a meritorious motion for summary judgment." Hoffman v. Asseenontv.Com, Inc., 404 N.J. Super. 415, 425-26 (App. Div. 2009) (citation omitted); accord Brae Asset Fund, L.P. v. Newman, 327 N.J. Super. 129, 133-34 (App. Div. 1999). E.g., Puder v. Buechel, 183 N.J. 428, 440-41 (2005) (defendant's self-serving assertions that she accepted settlement offer "because the trial court purportedly intimated to her attorney" that it would rule against her was insufficient to overcome summary judgment motion where trial court stated on record that it had not decided the issue); Cokus v. Bristol Myers Squibb Co., 362 N.J. Super. 366, 381-82 (Law Div. 2002) (no issue of fact presented by plaintiff's allegation that lacked factual support in record), aff'd, 362 N.J. Super. 245 (App. Div.), certif. denied, 178 N.J. 32 (2003). A party does not create a genuine issue of fact simply by offering a sworn statement, particularly if it conflicts with prior statements. Carroll v. N.J. Transit, 366 N.J. Super. 380, 388 (App. Div. 2004) ("[W]here plaintiff's contradiction is unexplained and unqualified, he 'cannot create an issue of fact simply by raising arguments contradicting his own prior statements and representations.'") (citation omitted); see also Shelcusky v. Garjulio, 172 N.J. 185, 201-02 (2002).

"The very object of the summary judgment procedure . . . is to separate real issues from issues about which there is no serious dispute." Shelcusky, supra, 172 N.J. at 200-01. It remains the court's function "to determine whether there is a genuine issue for trial." Brill, supra, 142 N.J. at 540; see also R. 4:46-2(c). That determination "does not require a court to turn a blind eye to the weight of the evidence; the 'opponent must do more than simply show that there is some metaphysical doubt as to the material facts.'" Big Apple BMW, Inc. v. BMW of N. Am., Inc., 974 F.2d 1358, 1363 (3d Cir. 1992) (quoting Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 586, 106 S. Ct. 1348, 1356, 89 L. Ed. 2d 538, 552 (1986)), cert. denied, 507 U.S. 912, 113 S. Ct. 1262, 122 L. Ed. 2d 659 (1993); see also Triffin v. Am. Int'l Group, Inc., 372 N.J. Super. 517, 523-24 (App. Div. 2004).

What is required of the party opposing summary judgment is affirmative evidence which shows that there is a genuine issue for trial. Anderson, supra, 477 U.S. at 256-57, 106 S. Ct. at 2514, 91 L. Ed. 2d at 216-17. "Competent opposition requires `competent evidential material' beyond mere `speculation' and `fanciful arguments.'" Hoffman, supra, 404 N.J. Super. at 426 (citation omitted).

Plaintiff's opposition largely fails because it rests upon assertions that lack support in the record or, in some instances, are dispositively refuted by the evidence. He presented no records of his own to show what amounts were paid and what amount is due on the loan. His opposition consists of reliance upon the patently inaccurate "Erdheim Conversion" document as an admission that defendant owed him $13,086, unsupported argument that defendant's expert improperly calculated the loan debt, and challenges to twelve transactions that he contends plaintiff counted erroneously as loan payments.

No genuine issue of fact is presented by plaintiff's attack upon defendant's expert. Plaintiff contends that the accounting is flawed because interest was to be compounded, not simple interest, and because he claims that defendant agreed to make monthly payments of principal and interest. However, he presents no rebuttal expert or, indeed, any evidence to show that either the method or any of the factual premises relied upon by Baglieri was incorrect.

Plaintiff's reliance upon the "Erdheim Conversion" document as establishing an admission that defendant owed him $13,000 is similarly unavailing. That document is incomplete on its face as it lists no payments for 1999, only one payment in 2000 and one in 2001. The accounting prepared by defendant's accountant lists twenty-five payments made from 1998 through 2001 that were not included in the "Erdheim Conversion" document. Plaintiff has disputed only two of the twenty-five payments: check # 2185 for $300 and check # 2921 for $182.80. Plaintiff has not disputed that he received additional payments of $7320.20 that were not included in the "Erdheim Conversion" document. We decline to "turn a blind eye" to the fact that the "Erdheim Conversion" lacks any meaningful evidential value as an "admission" that defendant owed plaintiff $13,000. No genuine issue of fact is created by plaintiff's argument regarding this document.

We turn then to plaintiff's challenges to twelve specific transactions. As a preliminary matter, we are constrained to note that, although plaintiff is a former attorney, his arguments regarding these transactions are conclusory, confusing and, on occasion, simply mistaken. His challenges can be broadly characterized as either a denial that he received the funds from the transaction or a claim that, although received, the funds were due for other debts that defendant owed to him.

Plaintiff claims that he did not receive cash payments of $100 on July 25, 2003, and $80 on October 31, 2003, as well as the proceeds from Checks # 1001, 2921, 3250 and 3302. Checks # 1001, 3250 and 3302 were either made payable to cash or to defendant. Defendant has maintained that these proceeds and the cash payments were, nevertheless, received by plaintiff. There is no documentary evidence that establishes one version of these events to the exclusion of the other.

Although plaintiff acknowledged receipt of Check # 2185 for $300, he states that it "represented, to my recollection a birthday gift from the defendant as a 'thank you' for enabling him to purchase his co-operative apartment. I am looking for the thank you birthday card sent by defendant with the Check." Plaintiff did not provide any supplemental information, not even an indication of when his birthday is. In reply, defendant did not deny that the check was a birthday gift. In short, no evidence contradicts plaintiff's assertion.

As a result, a credibility issue is central to the determination of whether the $180 in cash payments and the proceeds from Checks # 1001, 2185, 3250 and 3302 were all loan repayments received by plaintiff. According plaintiff all favorable inferences that can be drawn from the evidence, a genuine issue of material fact exists that precludes summary judgment as to these disputed payments totaling $1,428.40.

In denying that he received the proceeds from check # 2921, plaintiff offers only the bare assertion: "clearly, to my recollection, not a payment to me." This contention is entirely discredited by the documentary evidence. Check # 2921, dated November 9, 2000, was made payable to "Michael Erdheim" for $182.80. The endorsement reflects that it was deposited in an inmate's account for the named payee while plaintiff was incarcerated. Plaintiff's bare denial, unsupported by any evidence in the record, fails to create a genuine issue of fact as to this check.

Plaintiff also disputes checks # 132, 182, 214, 1323, and 4155. He does not deny that he received the proceeds from these checks but claims that the payments were made for an outstanding balance of $15,000 in legal services performed sometime prior to July 1993. Plaintiff states that defendant paid him a $40,000 fee through two $20,000 checks. Although he admits receiving both checks, plaintiff claims, inexplicably, that he only received $25,000, and that defendant still owed him $15,000, which was not repaid until after January 2004. No documents have been presented regarding this alleged debt for legal services.

Check # 132 is not included in the accounting. Since defendant did not contend that this check constituted payment of the loan in the summary judgment motion, it need not be reviewed here.

The remaining checks, # 182, 214, 1323 and 4155, were each payable to Michael Erdheim for $2,000 and negotiated by him. While plaintiff has presented no evidence to support his contention that the $8,000 in proceeds he received were to pay for legal services rendered more than a decade earlier, the memos on the checks provide support for defendant's claim that these were loan repayments. The memo on check # 182 states "principal payment loan for" the address of the property purchased with the loan. The memo on check # 214 states "RHM principal payment." Although the memo on check # 4155 is partially illegible, it includes the words "principal payment." Therefore, plaintiff's unsubstantiated claim that these checks were for some other purpose fails to create a genuine issue of material fact.

In summary, we affirm the grant of summary judgment in part, dismissing all of plaintiff's claims regarding payment of the loan with prejudice except for the claim that plaintiff did not receive loan repayments totaling $1,428.40 represented by cash payments, checks payable to cash or the defendant in repayment of the loan, and the $300 alleged to be a "birthday gift."

II.

The order entered by the court reflected a ruling that plaintiff's "motion to suppress defendant's answer with prejudice" was denied. Rather than deny defendant's motion for summary judgment on the counterclaim, the court's written opinion states that the defendant's counterclaim is dismissed and sets forth reasons for a dismissal on the merits.

No summary judgment motion was filed seeking the dismissal of the counterclaim. The only motion before the trial court regarding the dismissal of defendant's pleadings was a motion to suppress the answer. As there had not been a prior motion or order suppressing the answer without prejudice, the relief available based upon the motions before the court was a suppression without prejudice, not a dismissal of the counterclaim on substantive grounds. See R. 4:23-5. Therefore, to the extent that the trial court's ruling can be construed as a dismissal of defendant's counterclaim with prejudice, it is reversed and the counterclaim is remanded for trial.

III.

The remaining arguments advanced by the parties lack sufficient merit to warrant discussion in a written opinion, R. 2:11-3(e)(1)(E), except for the following brief comments.

The court did not err in dismissing plaintiff's fraud claim. As the motion judge observed, plaintiff presented no evidence that he actually and reasonably relied on defendant's statements or suffered damages. Because plaintiff failed to present any evidence as to these essential elements of common law fraud, Gennari v. Weichert Co. Realtors, 148 N.J. 582, 610 (1997), summary judgment was appropriate.

Defendant argues the trial court erred by denying his request for counsel and accountant fees absent a prior motion under Rule 1:4-8(b), which provides in part that an "application for sanctions under this rule shall be by motion made separately from other applications." There was no separate motion here. On remand, this matter can be addressed through the filing of a motion pursuant to Rule 1:4-8(b).

 
In summary, we affirm the order granting summary judgment to defendant in part, reversing only as to plaintiff's claim for $1,428.40; we reverse the dismissal of defendant's counterclaim and application for counsel fees, and remand for further proceedings consistent with this opinion.

Defendant consistently stated that the interest was ten percent per annum, to be calculated as simple interest. Plaintiff has contended both that interest was to compound annually and that interest "was to be compounded monthly subject to Defendant's payments or lack of payments." No documentation has been provided to support either view.

The subsequent accounting includes two additional payments in November 1998 and November 2000 totaling $482.80, which plaintiff does dispute.

Plaintiff sometimes refers to this check, erroneously, as # 4255.

Plaintiff was disbarred from practice as an attorney in New York in July 1993. In re Erdheim, 600 N.Y.S.2d 3 (App. Div. 1993).

Defendant's proofs regarding check # 1323 are somewhat inconsistent. Although it is not listed in the accounting, both parties appear to understand that the defendant has claimed it to be a loan payment. It was produced in discovery and defendant has responded to plaintiff's challenge both in a reply certification in the summary judgment motion and on appeal.

(continued)

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A-0168-08T1

 

July 20, 2009