DANNY J. O'SHEA v. ACCORD ENTERPRISES LLC

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

 

 

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

DANNY J. O'SHEA,

Plaintiff-Appellant/

Cross-Respondent,

v.

ACCORD ENTERPRISES, LLC, and

GARY GOODMAN, individually and in

his capacity as an officer of

ACCORD ENTERPRISES, LLC,

Defendants-Respondents/

Cross-Appellants.

_________________________________________________________

Argued telephonically October 9, 2013 Decided February 6, 2014

 

Before Judges Messano, Sabatino, and Hayden.

 

On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-12385-10.

 

William Strazza argued the cause for

appellant/cross-respondent.

 

Leonard A. Peduto, Jr., argued the cause for respondents/cross-appellants(Kozyra & Hartz, LLC, attorneys; Mr. Peduto and Barry A. Kozyra, on the brief).

PER CURIAM

Plaintiff Danny O'Shea appeals from the May 11, 2012 Law Division order granting summary judgment to defendants Accord Enterprises, LLC (Accord) and Gary Goodman (Goodman) (collectively defendants), and the July 13, 2012 order awarding defendants partial counsel fees. Defendants cross-appeal, arguing the trial court erred in not awarding full counsel fees. For the reasons that follow, we reverse the grant of summary judgment, vacate the fee award, and remand for further proceedings.

Viewed most favorably to plaintiff, see Rule 4:46-2(c), Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995), the summary judgment motion record discloses the following facts. Plaintiff and defendants both invested in real estate ventures with a woman known as Antoinette "Dina" Hodgson. Hodgson managed and funded real estate acquisitions and attracted investors by offering short-term investments with high rates of return. Ultimately, an investigation uncovered that Hodgson was actually orchestrating a massive Ponzi scheme. In December 2010, she was convicted of, among other things, wire fraud, and sentenced to a term of federal incarceration. Hodgson is not a party to the instant action.

Plaintiff first met Hodgson in 2007. He then made a number of investments with her, secured by promissory notes. When an investment matured, plaintiff rolled the capital and interest into new investments with Hodgson.

Goodman met Hodgson in 2008. Goodman also made a number of investments with Hodgson secured by promissory notes. Goodman established Accord for the purpose of paying Hodgson, and for receiving returns on his investments with her.

In May or June 2009, plaintiff told Hodgson that he wanted to research and identify the distressed properties to be used as the investment vehicles for his direct investments. Hodgson provided plaintiff with a list of distressed property investment opportunities. From that list, plaintiff selected a property in Fairfield to invest in directly. Hodgson informed plaintiff that she would not handle this investment, and offered to put plaintiff in direct contact with someone who could.

On June 5, 2009, Hodgson called plaintiff and put him on the phone with an individual she identified as Gary Goodman. Goodman advised plaintiff that he could handle the investment for the Fairfield property, but a full cash offer of $161,000 was required. Goodman then told plaintiff that he would "flip" the property within six months, and the return would be approximately $24,000. Goodman instructed plaintiff to wire the required sum to Accord and provided Accord's account information and a fax number. The fax number belonged to an accounting firm where Goodman was once part-owner and a partner. Goodman left that firm in 1999, but the firm continued to bear his name, and Goodman still utilized that firm to perform accounting work.

On June 8, 2009, plaintiff, as instructed, wired $161,000 to Accord and sent a fax to the number supplied by Goodman to confirm the contents of their conversation and agreement. Plaintiff produced a copy of the fax he sent, but there was no time stamp on the fax or a receipt confirming that it was received.

Plaintiff never met Goodman, never spoke with him to confirm receipt of the funds or fax, and did not contact Goodman to discuss the progress of the investment. Eventually, plaintiff discovered that Goodman never acquired the Fairfield property, and Goodman refused to return the $161,000 to plaintiff upon demand.

In contrast, Goodman contended that he did not speak with plaintiff on June 5, 2009, had never spoken with plaintiff, and never received the June 8, 2009 fax sent by plaintiff. Goodman acknowledged, however, receiving plaintiff's $161,000 wire transfer to Accord. According to Goodman, Hodgson owed him that exact amount. Upon receipt of the money, Goodman alleged he contacted Hodgson to inquire why he received a wire from plaintiff. Hodgson purportedly told him that plaintiff owed her $161,000, so she instructed plaintiff to send the money he owed her directly to Goodman at Accord in satisfaction of her debt to Goodman.

On December 1, 2010, plaintiff filed a complaint against defendants for breach of contract, fraud, misrepresentation, and violation of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 to -20. Defendants answered by denying all allegations except for admitting the receipt of plaintiff's wire to Accord. Upon completion of discovery, defendants filed a motion for summary judgment, which plaintiff opposed.

On May 11, 2012, the trial judge granted defendants' motion for summary judgment. In the judge's statement of reasons, he noted that "[t]he parties dispute the credibility of [p]laintiff's testimony regarding transmission of the fax and concerning [p]laintiff's intent in submitting the $161,000 wire transfer to Goodman's Accord account." The judge also pointed out that the parties disputed whether Goodman and plaintiff ever spoke. Nonetheless, the judge concluded that there was no issue of material fact that "the individual identified as Gary Goodman by Hodgson [was] not the same Gary Goodman . . . defending the underlying action." The judge reasoned that plaintiff "relie[d] solely on allegations rather than admissible evidence to dispute Goodman's statement that he never engaged [plaintiff] in the manner disputed."

On May 31, 2012, defendants moved for $12,450.21 in counsel fees pursuant to Rule 1:4-8, N.J.S.A. 2A:15-59.1(b)(2), and Rule 4:42-8, claiming that plaintiff's litigation had been frivolous. On July 13, 2012, the judge granted defendants' motion in part, awarding one-third, or $4150.03, of the requested amount of counsel fees. The judge found that "[p]laintiff continued throughout the course of discovery to have a good faith belief in the merits of the lawsuit." However, the judge ultimately concluded, in his discretion, that plaintiff should pay one-third of defendants' counsel fees. This appeal and cross-appeal ensued.

On appeal, plaintiff asserts that the trial court erred in granting summary judgment when there was a clear dispute of material fact, which must be decided by a jury. He also argues that the trial court's order for plaintiff to pay part of defendants' counsel fees was a clear abuse of discretion because the judge found that plaintiff had not acted in bad faith. Defendants cross-appeal, contending that the judge abused his discretion in not awarding the full amount of their attorneys' fees.

In reviewing a grant of summary judgment, we apply the same standard as the trial judge in determining whether there are any genuinely disputed issues of material fact sufficient to warrant resolution of the issues by the trier of fact. Tarabokia v. Structure Tone, 429 N.J. Super. 103, 106 (App. Div. 2012) (citing Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998)), certif. denied, 213 N.J. 534 (2013). "While 'genuine' issues of material fact preclude the granting of summary judgment, . . . those that are 'of an insubstantial nature' do not." Brill, supra, 142 N.J. at 530 (citations omitted). We must first determine whether the moving party has demonstrated that there are no genuine disputes as to material facts, and then decide "whether the motion judge's application of the law was correct." Atl. Mut. Ins. Co. v. Hillside Bottling Co., 387 N.J. Super. 224, 230-31 (App. Div.), certif. denied, 189 N.J. 104 (2006). In doing so, we view the evidence in a "light most favorable to the non-moving party." Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 329 (2010) (citing Brill, supra, 142 N.J. at 540). Because our review of issues of law is de novo, we accord no special deference to the motion judge's legal conclusions. Zabilowicz v. Kelsey, 200 N.J. 507, 512 (2009).

In determining whether genuine issues of disputed facts exist, we bear in mind that credibility determinations must "'be made by a jury and not the judge.'" Mayo, Lynch & Assocs., Inc. v. Pollack, 351 N.J. Super. 486, 495 (App. Div. 2002) (quoting Brill, supra, 142 N.J. at 540). Indeed, "[t]he cases are legion that caution against the use of summary judgment to decide a case that turns on the intent and credibility of the parties." McBarron v. Kipling Woods L.L.C., 365 N.J. Super. 114, 117 (App. Div. 2004) (holding that summary judgment was inappropriate where a trier of fact could believe an oral contract was formed based on the credibility of the parties); see also Shebar v. Sanyo Bus. Sys. Corp., 111 N.J. 276, 291-92 (1988) (holding that a factual dispute existed where a party contended he was not informed that he was waiving future claims, which involved intent and credibility); Shanley & Fisher, P.C. v. Sisselman, 215 N.J. Super. 200, 213-14 (App. Div. 1987) (holding that a factual dispute existed where defendant's claim of duress could only be evaluated based on the credibility of defendant's testimony).

The question of whether Goodman spoke with plaintiff and agreed to invest his money was a disputed issue of fact. Plaintiff fervently insisted that he did, and Goodman vehemently denied ever speaking to plaintiff. Thus, there is an issue of credibility that must be decided by a jury.

Indeed, looking at the evidence in the light most favorable to plaintiff, a jury could conclude that Goodman agreed to invest money for plaintiff. First, Hodgson introduced plaintiff to Goodman, and Goodman admits that he knew and was regularly investing with Hodgson at that time. Second, plaintiff's fax to Goodman was sent to a number belonging to Goodman's old firm, a firm he still has regular contact with, and which continues to bear his name. Third, and most importantly, Goodman admits that he received plaintiff's wire transfer.

After according plaintiff all favorable inferences that can be drawn from the evidence, a genuine issue of material fact exists that precludes summary judgment in this case. Consequently, we reverse the order granting summary judgment and remand for trial. As we have reversed the judge's order, the award of counsel fees is also vacated.

Reversed and remanded for further proceedings. We do not retain jurisdiction.