MERSHAD HAGIGI, M.D. v. DIAGNOSTIC IMAGING AFFILIATES, LLC

NOT FOR PUBLICATION WITHOUT THE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

DR. MERSHAD HAGIGI, M.D.,

Plaintiff-Respondent,

v.

DIAGNOSTIC IMAGING AFFILIATES, LLC,

AMERICAN IMAGING OF EDISON, LLC,

BABER K. ESKAR, ROHIT GUPTA, FAISAL

PARACHA, JAYNE FOGARI, AMERICAN IMAGING

OF WEST ORANGE, LLC, AMERICAN IMAGING

OF UNION CITY, LLC, AMERICAN IMAGING OF

ELIZABETH, LLC and AMERICAN IMAGING OF

JERSEY CITY, LLC,

Defendants,

and

REHAN "RAY" ZUBERI, HUMARA PARACHA,

a/k/a HUMARA ZUBERI and NAWAB ZUBERI,

Defendants-Appellants.

_______________________________________

January 10, 2017

Submitted November 16, 2016 Decided

Before Judges Simonelli and Carroll.

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-8715-14.

Law Office of Jarred S. Freeman, LLC, attorneys for appellants (Jarred S. Freeman, on the briefs).

Marino, Mayers & Jarrach, LLC, attorneys for respondent (Joseph A. Marino, on the brief).

PER CURIAM

Defendants Rehan Zuberi, Humara Paracha, and Nawab Zuberi (collectively, defendants) appeal from that part of the August 7, 2015 Law Division order, which granted their motion to vacate default judgment conditioned on the posting of a bond for the full amount of the judgment within sixty days. For the following reasons, we affirm.

We derive the following facts from the record. Defendants are principals of defendant Diagnostic Imaging Affiliates, LLC (DIA). Pursuant to an employment contract, plaintiff Mershad Hagigi, M.D. became employed by DIA as a radiologist and medical director, effective December 31, 2013, at a salary of $260,000 for the first year, or $5000 per week. Plaintiff was also entitled to severance pay if the employment contract was terminated without cause.

In June 2014, the Attorney General for the State of New Jersey ordered DIA to cease operations due to alleged fraudulent practices. At that time, plaintiff was owed three weeks back pay in the amount of $15,000, plus severance pay in the amount of $65,000, for a total of $80,000.

Plaintiff filed a five-count complaint against defendants and others, seeking compensatory and punitive damages, interest, and attorney's fees and costs of suit. On September 28, 2014, defendants were personally served with the summons and complaint. On January 8, 2015, the court entered default against defendants for failure to plead or otherwise defend. On February 9, 2015, the court entered default judgment against defendants in the amount of $101,070.14 plus costs of suit. The judgment was recorded as a lien on February 25, 2015.

After discovering that liens were placed on their bank accounts, on July 8, 2015, defendants filed a motion pursuant to Rule 4:50-1(a) to vacate default judgment based on excusable neglect. Each defendant certified that they neglected to timely file an answer to the complaint because they: (1) were dealing with other court matters with more serious consequences; (2) had to defend against complex criminal charges with numerous co-defendants; (3) had to defend against ongoing civil lawsuits involving the same or related conduct; and (4) were unable to afford an attorney to defend this matter because their assets were frozen. Defendants also asserted lack of privity of contract as a meritorious defense.

The motion judge struggled to find excusable neglect, but nevertheless vacated the default judgment in the interest of justice. However, the judge conditioned vacatur on the posting of a bond in the judgment amount and payment of plaintiff's attorney's fees within sixty days. The judge reasoned that vacatur without the bonding condition would prejudice plaintiff by causing him to lose priority as a judgment creditor to others who were suing defendants. The judge entered an order on August 7, 2015, memorializing her decision.1

On appeal, defendants contend there were no extraordinary or unusual circumstances to require the posting of a bond as a condition to vacating the default judgment.2 We disagree.

"When relief is given from a default judgment, the court is required to do so 'upon such terms as are just.'" Davis v. DND/Fidoreo, Inc., 317 N.J. Super. 92, 101 (App. Div. 1998) (quoting R. 4:50-1), certif. denied, 158 N.J. 686 (1999). "Two concerns arise: providing reasonable security to the plaintiff; and providing compensation to the plaintiff for the fees and costs incurred in obtaining and defending the default judgment." Ibid.

Terms for relief from a default judgment "may include a requirement that the defaulting party post a bond in the amount of the default judgment as a condition of vacatur." Reg'l Constr. Corp. v. Ray, 364 N.J. Super. 534, 541 (App. Div. 2003). "[T]he imposition of terms pursuant to [Rule] 4:50-1, while discretionary, . . . will be sustained only when reasonably proportionate to the prejudice suffered by plaintiff[]" and "should be invoked when necessary to relieve the plaintiff of any attending prejudice." Id. at 543. The imposition of a bond as a condition for Rule 4:50-1 relief

should not be imposed unless it can be shown that (a) the delay caused by defendant's dilatory conduct will jeopardize plaintiff's ability to ultimately obtain satisfaction of the judgment or will cause plaintiff to lose some priority as a judgment creditor and (b) it appears reasonably probable that plaintiff will ultimately obtain a judgment when the merits are considered.

[Id. at 544.]

Here, the circumstances justified the imposition of a bonding requirement as a condition to vacate the default judgment. Plaintiff has demonstrated prejudice beyond the incurring of attorney's fees and expenses. Defendants are defending other criminal and civil lawsuits and their dilatory conduct in this matter will jeopardize plaintiff's ability to ultimately obtain satisfaction of the judgment and cause him to lose some priority as a judgment creditor. Further, the bonding requirement is reasonably proportionate to the prejudice plaintiff suffered, and it appears reasonably probable that plaintiff may ultimately obtain a judgment when the merits are considered. Accordingly, imposition of the bonding requirement was proper under the circumstances of this case.

Affirmed.

1 Defendants subsequently filed a motion for reconsideration, which the judge denied in an October 8, 2015 order. Although defendants listed this order in their amended notice of appeal filed on November 25, 2015, they did not address this issue in their merits brief. All issues as to that order, therefore, are deemed waived. N.J. Dep't of Envtl. Prot. v. Alloway Twp., 438 N.J. Super. 501, 505-06 n.2 (App. Div.), certif. denied, 222 N.J. 17 (2015).

2 In support of this argument, defendants rely on federal district court opinions and opinions from other jurisdictions, none of which are binding on us. See Lipkowitz v. Hamilton Surgery Ctr., LLC, 415 N.J. Super. 29, 36 (App. Div. 2010); Young v. Prudential Ins. Co. of Am., 297 N.J. Super. 605, 622 (App. Div.), certif. denied, 149 N.J. 408 (1997); R. 1:36-3. Defendants also rely on New Jersey trial court opinions, which do not constitute precedent and are not binding on us. S & R Assocs. v. Lynn Realty Corp., 338 N.J. Super. 350, 355 (App. Div. 2001).