KOMATSU FINANCIAL LIMITED PARTNERSHIP v. T. FIORE RECYCLING CORP

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

KOMATSU FINANCIAL LIMITED

PARTNERSHIP,

Plaintiff-Respondent,

v.

T. FIORE RECYCLING CORP.,

T. FIORE DEMOLITION, INC.,

and THEODORE FIORE,

Defendants-Appellants,

August 28, 2015

Argued March 18, 2015 Decided

Before Judges Fuentes, Ashrafi and Kennedy.

On appeal from Superior Court of New Jersey, Law Division, Essex County, Docket No. L-6406-13.

Joseph A. Bottitta argued the cause for appellant (Genova Burns, LLC, attorneys; Mr. Bottitta of counsel and on the brief, Michael C. McQueeny, on the brief).

Daniel C. Green argued the cause for respondent (Vedder Price, PC, attorneys; Mitchell D. Cohen, of counsel and on the brief).

PER CURIAM

On December 23, 2013, the Law Division granted plaintiff Komatsu Financial Limited Partnership's (Komatsu) motion for the entry of Judgment by Confession against defendant T. Fiore Recycling Corp., T. Fiore Demolition, Inc., and Theodore Fiore (Fiore) in the amount of $2,120,086.69. On January 15, 2014, Fiore filed a motion for reconsideration seeking to amend the judgment to reflect the proceeds received by Komatsu from the sale of the equipment. The court granted Fiore's motion and entered an order dated February 18, 2014, amending the Judgment by Confession to reflect Fiore's indebtedness to Komatsu was $1,723,457.10, plus attorneys' fees, costs, and post-judgment interest.

Fiore now appeals from the February 18, 2014 order, arguing the court erred by denying its motion to conduct discovery to allow Fiore the opportunity to present evidence at a plenary hearing to prove it was entitled to a set off because Komatsu did not sell the equipment in a commercially reasonable manner. Komatsu argues we should dismiss Fiore's appeal because it agreed to waive the right to appeal as part of the Settlement Agreement, by Confession of Judgment, Voluntary and Forbearance Agreement.

We agree with Komatsu's argument and dismiss Fiore's appeal as a matter of law. The following brief recitation of the salient facts will inform our legal analysis.

On or about November 11, 2011, Fiore entered into four conditional sales contracts with Binder Machinery Company, Inc., each titled a Security Agreement Conditional Sales Contract, through which Fiore agreed to pay a total of $1,370,000, plus interest and ancillary costs, as more particularly described in the four agreements.1 On that same day, Binder Machinery Company, Inc., for "good and valuable consideration" assigned, sold, and transferred to Komatsu "all of its right, title, and interest in and to these four conditional sales contracts." This made Komatsu "the proper party in-interest."

On April 11, 2012, the parties entered into ten lease agreements for the lease of ten pieces of equipment.2 Fiore also executed and delivered to Komatsu guaranties, which absolutely and unconditionally guaranteed the payment and satisfaction of all indebtedness and other obligations to Komatsu. It is undisputed Fiore defaulted under the four conditional contracts and ten leases by failing to make payments as they became due.

Because Fiore did not want the default to paralyze its business operations, on May 15, 2013, Fiore negotiated an agreement with Komatsu through which it would continue to use the equipment. In this Settlement Agreement, Fiore admitted it owed Komatsu $3,869,567.20 as of May 15, 2013, plus future default interest, attorneys' fees, and costs. Fiore stipulated the Settlement Agreement was binding and enforceable.

Contemporaneously with the Settlement Agreement, Komatsu required Fiore to execute a Stipulation for Order of Possession and Voluntary Surrender Agreement. The Order of Possession and Voluntary Surrender Agreement required Fiore to "immediately and voluntarily turn over to Komatsu . . . possession of and control over [the equipment]" in the event it failed to comply with the Settlement Agreement. Fiore also entered into a specific agreement that addressed Komatsu's substantive and procedural rights to regain possession of the collateral and thereafter dispose of it to recover the loss. In this respect, the Order of Possession and Voluntary Surrender Agreement provided, in relevant part

(iii) Komatsu may sell all or any portion of the Collateral from time to time on such terms and for such prices as Komatsu deems advantageous, at public or private sale on such notice, if any, as Komatsu deems suitable;

(iv) Komatsu intends to dispose of the Collateral pursuant to and in accordance with the terms and conditions of the Uniform Commercial Code and to apply the proceeds thereof to Fiore Recycling's obligations to Komatsu under the Contracts.

. . . .

(vi) Fiore Recycling has no defense with respect to any of their obligations due to Komatsu, nor shall Fiore Recycling assert any objection or defense to Komatsu's actions with respect to the Collateral and hereby expressly waives any right to redeem and acknowledges it has no legal or equitable interest therein. Fiore Recycling hereby waives any and all rights it has or may claim to have under the Uniform Commercial Code with respect to the Collateral, Komatsu's rights relating to Fiore Recycling's default, and Komatsu's enforcement of its security interests in and to the Collateral;

(vii) The voluntary turnover of the Collateral to Komatsu is not in full satisfaction of Fiore Recycling's Obligations to Komatsu under the Contracts, and Fiore Recycling shall remain liable to Komatsu for any deficiency balance remaining due to Komatsu following Komatsu's liquidation of all or any of the Collateral;

(viii) The voluntary surrender and turnover of the Collateral is not intended to be in satisfaction of Fiore Recycling's obligations to Komatsu under the Contracts except to the extent the proceeds from the disposition of any of the Collateral, after application of all expenses relating to said disposition, are applied to the satisfaction of said indebtedness and to the extent provided for by the Sale Agreement;

(ix) Fiore Recycling hereby renounces its right to notification of disposition of the Collateral under the Uniform Commercial Code;

(x) Fiore Recycling hereby waives its right to redeem the Collateral under the Uniform Commercial Code;

A separate agreement entitled Settlement Agreement, Confession of Judgment, Voluntary and Forbearance Agreement, described the terms of the Forbearance Payments. The following two paragraphs are dispositive of the issues raised by Fiore in this appeal

3.3 Upon the occurrence of an uncured Forbearance Event of Default, Komatsu may (i) file the [Judgment by Confession] with any court with jurisdiction over Fiore Recycling and/or the Collateral and Leased Equipment so that Judgment may be entered immediately in the amounts set forth in the [Judgment by Confession] in accordance with the terms herein and in the [Judgment by Confession]. (ii) file the [The Order of Possession and Surrender Agreement] with any court with jurisdiction over Fiore Recycling and/or the Collateral and Leased Equipment for entry thereof, and (iii) pursue any or all of its other rights and remedies under this Agreement, the Contracts, and/or under law and/or at equity. The remedies set forth herein and in the Contracts shall be cumulative to the extent permitted by law and may be enforced as Komatsu deems fit.

. . . .

3.5 The Judgment shall become final for all purposes immediately upon entry, and each Debtor waives any right to appeal or seek review of the Judgment by a higher court.

[(Emphasis added).]

Komatsu argues Fiore waived its right to appeal the entry of the Judgment by Confession. Fiore notes, however, that another panel of this court denied Komatsu's motion to dismiss the appeal based on paragraph 3.5 of the Settlement Agreement, Confession of Judgment, Voluntary and Forbearance Agreement. According to Fiore, Komatsu is now barred by the law of the case doctrine from arguing Fiore waived its right to appeal. We reject this argument.

An interlocutory order entered by a panel of this court denying a dispositive motion in a pending appeal, does not preclude the panel entrusted to decide the entire appeal from reexamining that same dispositive issue and, after full briefing and oral argument, reaching a different result. We also have another legally independent basis to reject this argument. Fiore raised this argument for the first time in its reply brief. Such a practice has long been criticized as improper by the Supreme Court, State v. Smith, 55 N.J. 476, 488 (1970), and has been continuously frowned upon by this court. State v. Lenihan, 427 N.J. Super. 499, 504 n.2 (App. Div. 2012), aff'd, 219 N.J. 251 (2014).

Rule 2:8-2 authorizes this court to dismiss an appeal "at any time on its own motion or that of a party[.]" We sometimes dismiss appeals due to mootness, lack of standing, or when procedural defects make it impossible for us to review the issues on their merits. See Hitchman v. Nagy, 382 N.J. Super. 433, 440 (App. Div.), appeal dismissed, 186 N.J. 600 (2006); In re Zakhari, 330 N.J. Super. 493, 494 (App. Div. 2000). A dismissal under Rule 2:8-2 is not intended to constitute an adjudication on the merits, only the determination that for a procedural or jurisdictional reason, the appeal should not be ultimately decided on the merits. Pressler & Verniero, Current N.J. Court Rules, comment 1.1 on R. 2:8-2 (2014).

The right to appeal from final decisions of the Law and Chancery Divisions of the Superior Court is guaranteed by our Constitution. N.J. Const. art. VI, 3, 2. However, this right can be waived by competent adults or legal entities, provided the waiver is the product of a voluntary and knowing decision. Mt. Hope Dev. Assocs. v. Mt. Hope Waterpower Project L.P., 154 N.J. 141, 147 (1998) (citing Miranda v. Arizona, 384 U.S. 436, 86 S. Ct. 1602, 16 L. Ed. 2d 694 (1966) (allowing waiver of privilege against self-incrimination); Sexton v. Newark Dist. Tel. Co., 84 N.J.L. 85, 101 (Sup. Ct. 1913) (allowing waiver of right to trial by jury), aff'd, 86 N.J.L. 701 (E. & A. 1914)).

Parties may agree to waive their right to appeal. Allstate Ins. Co. v. Sabato, 380 N.J. Super. 463, 471-72 (App. Div. 2005). In Harmina v. Shay, 101 N.J. Eq. 273 (E. & A. 1927), the Court of Errors and Appeals dismissed an appeal where the parties had agreed the trial court's findings would be "final." The Court reasoned

The general rule, however, is that a party may, by express agreement or stipulation before trial, or judgment, waive his right to appeal, and such agreements or stipulations will be enforced by dismissal of the appeal taken out in violation thereof, or by refusing to pass upon questions covered by the waiver. The intention and agreement to waive the right of appeal must be clear and there must be a sufficient consideration. Such agreements are upheld upon the ground of public policy in encouraging litigants to accept as final decisions of courts of original jurisdiction.

[Id. at 274.]

We reached a similar conclusion in N.J. Mfrs. Ins. Co. v. Travelers Ins. Co., 198 N.J. Super. 9, 13 (App. Div. 1984), (holding that waiver of appeal provision in inter-company arbitration agreement is valid and enforceable).

Here, two sophisticated commercial entities, represented by counsel, negotiated a settlement agreement that explicitly waived the right to seek appellate review of the trial court's decision. We discern no legal reasons not to uphold the agreement as written.

Affirmed.

1 Agreement/Account No. 777-0146157-000 was for a Komatsu "Crawler Dozer" with a listed price of $225,000, which increased to $245,331.60 to reflect finance charges; Agreement/Account No. 146157-001 was for Komatsu "Crawler Dozer" with a listed price of $507,600, which increased to $568,354.80, to reflect finance charges; Agreement/Account No. 146157-002 was for a Komatsu "Wheel Loader" with a listed price of $432,400.40, which increased to $484,221.40, to reflect finance charges; and Agreement/Account No. 146157-003 was for a Komatsu "Articulated Truck" with a listed price of $205,000, which increased to $224,849.44, to reflect finance charges.

2 The equipment described in the ten leases are similar to the equipment described in the Conditional Sale Contracts.