KYUNG JA AHN v. MICHELLE Y. CHAE

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R.1:36-3.

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

KYUNG JA AHN,

Plaintiff-Respondent,

v.

MICHELLE Y. CHAE and KUN H. KWAK,

Defendants-Appellants.

_______________________________

November 9, 2016

Submitted September 27, 2016 Decided

Before Judges Fasciale and Gilson.

On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-4304-12.

Richard S. Mazawey, attorney for appellants.

Hilberth & McAlvanah, P.A., attorneys for respondent (Thomas R. Hilberth, on the brief).

PER CURIAM

Defendants Michelle Chae and Kun Kwak appeal from a November 19, 2014 judgment awarding plaintiff Kyung Ja Ahn $156,955.53. The judgment was entered following a proof hearing to establish damages after defendants' answer was suppressed with prejudice for failure to provide discovery. We affirm because there was substantial credible evidence to support the amount of the judgment.

Plaintiff filed a complaint against defendants on June 4, 2012. Plaintiff alleged that she had befriended defendant Chae who then induced her to enter into service agreements and powers of attorney with defendant Kwak. Kwak was Chae's boyfriend. Under the service agreements, Kwak was to assist plaintiff with various financial matters, including the collection of plaintiff's alimony income. Plaintiff went on to allege that Kwak convinced her to turn over other income to defendants so that they could invest and manage that income for plaintiff. In that regard, plaintiff contended that defendants collected over $214,000 of her alimony and other income. Plaintiff also alleged that defendant Chae had agreed to hold plaintiff's jewelry in a safe deposit box for her, but defendants later sold the jewelry without plaintiff's authorization or knowledge.

In her complaint, plaintiff asserted claims against defendants for conversion, breach of fiduciary duties, intentional misrepresentation, breach of the implied covenant of good faith and fair dealing, unjust enrichment, fraud, and conspiracy. Defendants were served with the complaint and they filed a joint answer on October 4, 2012. In their answer, defendants admitted that they had entered into service agreements with plaintiff. They also admitted that they had prepared an accounting showing that they had collected over $209,000 of plaintiff's alimony and income, and as of June 28, 2011, they were holding over $136,000 belonging to plaintiff.

After defendants served their answer, plaintiff served discovery demands on defendants. Defendants, however, did not respond. Accordingly, plaintiff moved to strike defendants' answer for failure to provide discovery. On August 28, 2013, the court granted that motion and entered an order striking defendants' answer without prejudice.

Thereafter, defendants retained new counsel and, in September 2013, defense counsel informed the court and plaintiff's counsel that discovery responses would be provided and a motion to restore the answer would be filed. When neither of those submissions were made, plaintiff moved to strike defendants' answer with prejudice. In response, defendants finally served some discovery responses in February 2014, but plaintiff contended that the responses were materially deficient and again moved to strike defendants' answer with prejudice.1

The court found that defendants' discovery responses were "wholly inadequate[,]" and on September 5, 2014, entered an order striking defendants' answer with prejudice. In entering that order, the court found that defendants had "delay[ed] and obfuscat[ed]" the case and had failed to comply with a prior court order. Thus, the trial court stated

Defendants have failed to comply with a Court Order. . . . The conduct of the Defendants in this litigation has frustrated the Court Rules and has improperly delayed the rights of Plaintiff[] to seek adjudication in a reasonably efficient manner. Defendants and [their] counsel have had one full year to simply provide discovery. [They have] steadfastly refused to do so, despite Court Order. Under these circumstances striking the defenses is appropriate.

Defendants never moved to restore their answer, and the matter proceeded to a proof hearing on damages, which was conducted on October 30, 2014. At the hearing both parties were represented by counsel. The court heard testimony from plaintiff and considered documents submitted into evidence by plaintiff. The documentary evidence included plaintiff's judgment of divorce, the service agreements between plaintiff and defendant Kwak, an accounting prepared by defendant Kwak, and documents showing that defendants sold plaintiff's jewelry and received $11,000.

Based on the evidence, the court found that defendants owed plaintiff $156,955.53. The court reached that judgment by finding that (1) defendants' own accounting showed that as of June 28, 2011, they were holding $136,955.53 of plaintiff's alimony and income; (2) defendants thereafter paid $16,200 of plaintiff's expenses, leaving a net balance of $120,755.53; (3) to that amount the court added $11,000 for the jewelry, bringing the total to $131,755.53; and (4) the court found that defendants were entitled to some fees for their services, but reduced the $53,200 defendants had taken to $28,000, leaving plaintiff entitled to a reimbursement of $25,200. The judgment thus consists of the $120,755.53, plus $11,000, plus $25,200, for a total judgment of $156,955.53.

Defendants appeal from the judgment and contend that the trial court erred by allowing hearsay testimony from plaintiff during the proof hearing and by entering the judgment without competent evidence to support the award of $156,955.53. We disagree.

Initially, we clarify what issues are before us on this appeal. At the conclusion of their brief, defendants requested "that this Court reverse and remand this matter back to the trial court level for a trial on liability and damages, or in the alternative, for a proof hearing where cross-examination is done on liability and damages." Defendants, however, did not appeal from the September 5, 2014 order striking their answer and effectively entering default on liability. In their notice of appeal, defendants listed the November 19, 2014 judgment as the only order being appealed. An appeal is limited to the order or judgment identified in the notice of appeal. 1266 Apartment Corp. v. New Horizon Deli, Inc., 368 N.J. Super. 456, 459 (App. Div. 2004). Moreover, nowhere in their brief on this appeal did defendants present arguments, or any citation of law, on why the September 5, 2014 order should be reversed. As a consequence, defendants have also effectively abandoned that argument on this appeal. See El-Sioufi v. St. Peter's Univ. Hosp., 382 N.J. Super. 145, 155 n.2 (App. Div. 2005) (citing In re Certification of Need of Bloomingdale Convalescent Ctr., 233 N.J. Super. 46, 48 n.1 (App. Div. 1989)).

Therefore, the only issues before us are defendants' contentions regarding the November 19, 2014 judgment. A good portion of defendants' brief is devoted to arguing that the trial court abused its discretion by not allowing defense counsel to cross-examine plaintiff on liability. Since defendants had defaulted on liability, the trial court did not abuse its discretion in precluding such cross-examination. We note, however, that the trial court did allow defense counsel to cross-examine plaintiff on damage issues, which was proper. See Chakravarti v. Pegasus Consulting Grp., Inc., 393 N.J. Super. 203, 211 (App. Div. 2007) (noting that "the right to challenge a plaintiff's showings in a proof hearing by way of cross-examination and argument should not ordinarily be precluded.").

Following the entry of a default, a plaintiff seeking unliquidated damages should ordinarily be required to establish those damages at a proof hearing. Id. at 210. A judgment entered after a contested proof hearing is subject to limited review. See Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150, 169 (2011) (explaining that "[f]inal determinations made by the trial court sitting in a non-jury case are subject to a limited and well-established scope of review"). The question on appeal is whether there was substantial credible evidence to support the judgment. Ibid. The question of what proofs are necessary is inherently within the trial court's discretion. Chakravarti, supra, 393 N.J. Super. at 210. Moreover, questions concerning the admissibility of evidence are also subject to an abuse of discretion standard of review. State v. Brown, 170 N.J. 138, 147 (2001).

Our review of the testimony and evidence submitted during the proof hearing satisfies us that the judgment was based on substantial credible evidence. Plaintiff testified as to the nature of her relationship with defendants. She also explained that she had entrusted monies to defendants to manage. Plaintiff also submitted documents, including defendants' own accounting, showing that defendants had received over $209,000 from plaintiff and owed her over $120,000. The court also found that defendants were entitled to a reasonable fee ($28,000), but required defendants to reimburse $25,200 in excessive fees. All of those findings were based on competent evidence submitted during the proof hearing. Accordingly, applying our standard of review, we discern no error or abuse of discretion.

Defendants' principal argument concerning the judgment is that plaintiff's testimony "was not credible[.]" In a proof hearing, however, it is the province of the trial judge to make credibility determinations. Thus, "[d]eference to a trial court's fact-findings is especially appropriate when the evidence is largely testimonial and involves questions of credibility." In re Return of Weapons to J.W.D., 149 N.J. 108, 117 (1997) (citing Bonnco Petrol, Inc. v. Epstein, 115 N.J. 599, 607 (1989)). Here, the trial judge relied on plaintiff's testimony. We discern no error or abuse of discretion in the court's decision to rely on plaintiff's testimony.

Defendants also argue that plaintiff offered hearsay testimony. Defendants, however, failed to identify the specific hearsay testimony to which they object. A review of the record confirms that to the extent that plaintiff offered hearsay testimony, there was other evidence that corroborated her testimony in support of the offer of proofs supporting the judgment. Thus, we find no abuse of discretion in the trial court's decision to allow plaintiff's testimony.

Affirmed.

1 Plaintiff also moved to vacate a dismissal that had been entered due to inactivity in the matter. In an order entered on September 5, 2014, the trial court granted that motion, and restored the matter for a proof hearing.