GLENN ROTHENBERG v. BREVARD FINANCIAL LTD.

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

GLENN ROTHENBERG,

Plaintiff-Respondent,

v.

BREVARD FINANCIAL, LTD., VINOD

K. WADHWA, VEENA WADHWA,

Defendants,

and

STEVEN PASTERNAK,

Defendant-Appellant.

_____________________________________

July 10, 2015

Submitted March 10, 2015 Decided

Before Judges Hayden and Sumners.

On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-280-10.

Steven Pasternak, appellant pro se.

Mackevich, Burke & Stanicki, attorneys for respondent (Jason L. Pressman, on the brief).

PER CURIAM

Plaintiff Glenn Rothenberg filed a multi-count complaint to recover money he invested with defendants Brevard Financial, Ltd., Vinod K. Wadhwa (Mr. Wadhwa), Veena Wadhwa (Ms. Wadhwa), and Steven Pasternak. A jury returned a verdict against Pasternak in favor of Rothenberg in the amount of $325,000, which was trebled to $975,000 pursuant to the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20. The jury also returned a verdict against Mr. Wadhwa's estate1 and Brevard Financial, jointly and severally, in favor of Rothenberg in the amount of $650,000, which was trebled to $1,950,000 pursuant to the CFA. Attorney's fees in the amount of $82,629.86, were imposed against all three defendants. Pasternak seeks to vacate the judgment against him. We affirm.

I

We glean the following facts and procedural history from the record. Rothenberg is a dentist who treated Mr. Wadhwa. Mr. Wadhwa advised Rothenberg that he was a well-known and wealthy Wall Street investor operating through his company Brevard Financial. Mr. Wadhwa later introduced Pasternak to Rothenberg as Brevard Financial's Vice-President and attorney. Both Mr. Wadhwa and Pasternak solicited money from Rothenberg to invest in Nigerian oil contracts and a "loot fund" in Spain, which investments allegedly involved sending money to have millions of dollars released from foreign governments and accounts. Mr. Wadhwa claimed that he could triple Rothenberg's investment.

Finding Pasternak and Mr. Wadhwa convincing, Rothenberg gave them money for the investments. Mr. Wadhwa would show Rothenberg documents purporting progress in the investments and would request additional money to release the funds, or to complete a deal. Rothenberg admittedly failed to keep track of all the money he gave to Pasternak and Mr. Wadhwa. According to Rothenberg, in response to his questions concerning the fact that he was not receiving any return on his money despite promises of an imminent release of funds, Pasternak and Mr. Wadhwa provided copies of documents allegedly from the Nigerian courts or governmental officials to authenticate their scheme.

For example, Rothenberg was provided a document purporting to be an "Affidavit of Claim" from a "Supreme Court of Justice" in Nigeria that indicated $105,500,000 was owed to Brevard Financial. Rothenberg was also provided a document allegedly signed on behalf of the then-President of Nigeria, ordering the transfer of $405,500,000 to Brevard Financial. Rothenberg believed the documents were authentic based on his Internet research confirming the officials' names.

Pasternak also signed an agreement assigning his interest in a money judgment he had won in litigation. Rothenberg contacted the court and received confirmation that there was such a matter pending and that Pasternak was involved in the matter.

Despite these written guarantees and assurances, at some point, Rothenberg demanded his money back as he failed to receive any return on his investments. To mollify Rothenberg's concerns, Pasternak drafted a "General Release" (Release), that provided Rothenberg would release all claims he may have against Pasternak, Mr. Wadhwa and Brevard Financial in exchange for $650,000 from an unidentified "purchaser," as well as $65,000 from Brevard Financial. The Release also provided that plaintiff "ha[d] no claims against the individuals: [Mr.] Wadhwa and/or Steven Pasternak." Rothenberg signed the Release but Pasternak did not. However, Rothenberg never received any money pursuant to the Release or any of the other promises of payment.

Consequently, Rothenberg filed a civil complaint against defendants, which proceeded to a jury trial with Pasternak, representing himself pro se, as the only defendant who had not either defaulted or settled. In his defense, Pasternak called Ms. Wadhwa to testify regarding her own investments with Brevard Financial and the money her husband sent to Nigeria. Ms. Wadhwa also stated that Mr. Wadhwa spent a lot of time trying to get money returned from Nigeria.

Following Ms. Wadhwa's testimony, Pasternak unsuccessfully moved for a Rule 4:37-2(b) involuntary dismissal of all claims against him. He argued that there was no proof he had breached any contract, including the Release, as he did not sign it, but even if it applied to him, the Release should bar claims against him. He also asserted Rothenberg failed to prove any fraud was committed by him as he did not have any of the money and in fact lost some of his own money in the transaction. The trial judge denied the motion finding there were questions of fact for the jury to decide as to all the claims.

In response to the court's ruling, Pasternak decided not to testify, but submitted into evidence his Certified Statement of Uncontested Facts and, with Rothenberg's consent, unauthenticated copies of checks endorsed by Pasternak and deposited into Brevard Financial's bank account to show that he was putting money into Brevard Financial as well.

The jury found that Rothenberg had proven by a preponderance of the evidence that he had entered into at least one binding contract with Pasternak, which was breached by Pasternak, and that Pasternak s breach constituted a proximate cause of the damages incurred by Rothenberg. The jury awarded $6000 as compensatory damages for this breach of contract claim.

The jury also found that Rothenberg had proven by a preponderance of the evidence that Pasternak had purposely converted Rothenberg's property, and that Pasternak s conversion of that property constituted a proximate cause of the damages incurred by plaintiff. The jury awarded $68,466 in compensatory damages. In addition, the jury found that Rothenberg had proven both his consumer fraud claim by a preponderance of the evidence and his common law fraud claim by clear and convincing evidence, awarding him $325,000 in compensatory damages for each claim.

At the post-trial hearing to mold the verdict and enter judgment, the judge incorporated the $6000 and $68,466 damage awards into one $325,000 award, which was trebled pursuant to the CFA to $975,000. Attorney s fees and costs in the amount of $82,629.86 made the total judgment against Pasternak $1,057,629.86. The order also provided that any payment by Mr. Wadhwa's estate or Brevard Financial would be credited against the judgment against Pasternak. This appeal followed.

II

In his pro se appeal, Pasternak's primary issue, as it was throughout the trial, involves his defense that the Release precludes liability against him. We are not persuaded.

Initially, we agree with Rothenberg's assertion that, to the extent it seeks to overturn any part of the jury's verdict as against the weight of the evidence, this appeal is procedurally barred by Rule 2:10-1, because Pasternak did not file a Rule 4:49-1 motion for a new trial below. Rule 2:10-1 provides: "the issue of whether a jury verdict was against the weight of the evidence shall not be cognizable on appeal unless a motion for a new trial on that ground was made in the trial court." R. 2:10-1. However, given that the trial court addressed the question whether the Release bars liability against Pasternak, and for completeness, we will address the issue as well.2

Specifically, the trial judge rejected Pasternak s argument that the Release should relieve him from liability. In addressing Pasternak, the judge stated in pertinent part

[T]he jury found that you defrauded [Rothenberg]. And for whatever you want to argue, even if this agreement, this so-called [R]elease is, you know, arguably somehow valid under the circumstances, which I find it is not, it doesn t excuse the fraud. . . . You say it does. You got a pass, you re out of here. Even though you ve never given any money or if you did, it was nominal, to [Rothenberg]. So, sir, your application to . . . enforce the . . . release document [is] denied. Because I find that the condition precedent to its enforceability never happened. He never got paid. The reason he signed the [R]elease was he was going to get paid. That was the whole thing. And it never happened.

We agree with the judge that the Release does not protect Pasternak from liability. More importantly, Pasternak cannot enjoy the Release's benefit as a matter of law because Rothenberg was never paid the $650,000 in exchange for the release of claims. See Sipko v. Koger, Inc., 214 N.J. 364, 380 (2013) (noting "[i]n general, contracts are enforceable only if they are supported by consideration."). However, Rothenberg did not offer the Release as a binding contract, but as proof of the amount had he contributed to the scheme and was owed to him by the defendants.3

Moreover, even if we view Pasternak's motion through the lens of a Rule 4:49 motion, there is no clear and convincing "miscarriage of justice" in the jury's verdict. See R. 4:49-1(a); Dolson v. Anastasia, 55 N.J. 2, 6-7 (1969). With regard to Pasternak, Rothenberg provided unrefuted testimony that he handed cash to Pasternak in furtherance of the money schemes; that he was barraged by calls from Pasternak soliciting money; that Pasternak drafted the Release; and that Pasternak gave Rothenberg a copy of a document assigning Pasternak's rights to a judgment in litigation as a means of authenticating the deal. We are convinced there is no miscarriage of justice.

We next address Pasternak's argument thatit was error for the trial judge to give the jury an adverse inference Clawans charge over his objection. In State v. Clawans, the Supreme Court upheld the notion that a party's failure to produce a witness at trial may give rise to an inference that the witness' testimony would have been unfavorable to that party. Clawans, supra, 38 N.J. 162, 170 (1962). The Court held that a trial judge may provide an adverse inference charge after considering and making findings on the following circumstances

(1) that the uncalled witness is peculiarly within the control or power of only the one party, or that there is a special relationship between the party and the witness or the party has superior knowledge of the identity of the witness or of the testimony the witness might be expected to give; (2) that the witness is available to that party both practically and physically; (3) that the testimony of the uncalled witness will elucidate relevant and critical facts in issue [;] and (4) that such testimony appears to be superior to that already utilized in respect to the fact to be proven.

[State v. Hill, 199 N.J. 545, 561 (2009) (quoting State v. Hickman, 204 N.J. Super. 409, 414 (App. Div. 1985), certif. denied, 103 N.J. 495 (1986)).]

 
These essential principles also apply to civil trials. Nisivoccia v. Ademhill Associates, 286 N.J. Super. 419, 425 (App. Div. 1996) (citing Clawans, supra, 38 N.J. at 171).
Here, the judge gave the jury the following Clawans charge

Now, Mr. Pasternak elected not to testify in this case. You may, emphasize may, draw the inference that if he had testified his testimony would be harmful to him or not advancing his claims in this case, his cause of action in this case. That is what is called a permissive inference. You are not required to draw any inferences, however, the law allows you to exercise your discretion to draw such an inference if you so desire.

Pasternak contends this charge should not have been given to the jury because (1) Rothenberg entered Pasternak's Certified Statement of Uncontested Facts into evidence, thus his testimony would have been duplicative, and (2) Rothenberg could have called him as a witness. We conclude there was no error in giving the charge.

Before trial, Rothenberg's counsel indicated he would not call Pasternak as a witness. Instead, counsel indicated he would use against Pasternak on cross-examination the fact that Pasternak was disbarred from the practice of law in New Jersey due to fraud and misappropriation of funds.4 Thus, Pasternak was aware plaintiff was not going to call him as a witness. Pasternak decided not to testify on his own behalf at the conclusion of Rothenberg's case in chief and without prior notice. Pasternak's decision was likely a calculated move to avoid the jury hearing that he was a disbarred New Jersey attorney.

The Clawans charge properly conveyed the law to be applied where Pasternak did not testify on his behalf. Courts have recognized that an adverse inference charge can have a decisive impact upon a jury's determination in a civil case, and thus, when used improperly, can "create[] a substantial danger of unfair prejudice." Washington v. Perez, 219 N.J. 338, 357 (2014) (quoting Morris v. Union Pac. R.R., 373 F.3d 896, 903 (8th Cir. 2004)). Those concerns do not apply here, however, as Pasternak chose not to testify. See Gonzalez v. Safe & Sound Sec. Corp., 185 N.J. 100, 118 (2005) (upholding the use of a Clawans charge where the plaintiff refused to testify).

Indeed, as to whether the person was within the power of the party to produce, the trial judge found "certainly Mr. Pasternak had the right to call himself." The consideration that Pasternak's testimony would have been superior was also met as the judge noted Pasternak had asserted during his closing statement that he was also a victim and was innocent of any wrong doing; thus cross-examination on Pasternak s intent would have been superior to Pasternak s Certified Statement of Uncontested Facts. Furthermore, on the particular facts presented, and given the strength of plaintiff's evidence, if it was error to provide an adverse inference charge, that error was harmless and does not require reversal. R. 2:10-2.

Lastly, we do not address the other arguments raised by Pasternak, as they lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed.

1 Prior to trial, Mr. Wadhwa died, and his estate as well as Brevard Financial defaulted. Ms. Wadhwa settled all claims against her, however.

2 After the jury verdict, Pasternak informed the court orally that he would be filing a Rule 4:49 motion, but Pasternak's submission was deficient as it lacked a Notice of Motion. In response to the court's inquiry that his post-trial submission was non-compliant with the court's order that he file a Rule 4:49 motion, Pasternak advised the court that he would still make the argument orally during the post-trial hearing.

3 Apparently, the jury accepted this contention. The trial judge noted that it was "ironic" that the jury imposed damages of $325,000 against Pasternak as "325 is half of the 650," which was the amount in the Release. Thus, it appears that the jury also rejected Pasternak's argument that the Release should bar all claims against him and used the Release to assess damages against the defendants as Rothenberg had intended.

4

At this pre-trial conference, the trial judge reserved on the issue of whether he would allow the use of Pasternak s disbarment on cross-examination, but then after hearing plaintiff s testimony and prior to when he thought Pasternak would be testifying, the judge decided to raise the issue outside the presence of the jury. The judge questioned Rothenberg and Pasternak about Pasternak s representation that he was the attorney for Brevard Financial and his drafting of legal documents on Brevard Financial s behalf, including the Release. In response to the judge's request that he explain how he could prepare the Release and be disbarred as an attorney, Pasternak incredulously explained that he had only drafted legal documents that he was going to sign himself despite the fact that only Rothenberg signed the Release. In turn, the judge intimated that Pasternak's conduct may be reported to the appropriate authorities.