First Fidelity Bank v. Southeastern Insurance Group

601 A.2d 1212, 253 N.J. Super. 439, 1991 N.J. Super. LEXIS 310
CourtNew Jersey Superior Court Appellate Division
DecidedJune 24, 1991
StatusPublished

This text of 601 A.2d 1212 (First Fidelity Bank v. Southeastern Insurance Group) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
First Fidelity Bank v. Southeastern Insurance Group, 601 A.2d 1212, 253 N.J. Super. 439, 1991 N.J. Super. LEXIS 310 (N.J. Ct. App. 1991).

Opinion

YANOFF, J.S.C.

(temporarily assigned) (retired, on recall).

Involved here is R. 4:48-4, not yet interpreted by decision. The Rule reads:

If a judgment is recovered against 2 or more persons, one of whom, liable thereon secondarily or equally with any other, satisfies the judgment, or when bail in a civil action is compelled to pay a judgment against a defendant, the person paying the judgment may on motion and notice to the other persons in interest, excluding the judgment creditor, apply to the court, for an order allowing him the full benefit and control of the judgment and any outstanding execution. The court may make such order, on terms, and may direct that new execution issue for the purpose of compelling payment or contribution by any party liable in the amount fixed by the court.

Since the Rule contains no directives as to resolutions of issues when a dispute arises as to the relief requested, this opinion deals with that problem.

On June 29, 1990, an Order for Summary Judgment, for $3,300,000 plus interest, attorneys’ fees and costs,1 was entered in favor of plaintiff, First Fidelity Bank, N.A., N.J. (“First Fidelity”), against Robert Pershes (“Pershes”), Robert A. Beck II (“Beck”), Ronald Prupis (“R. Prupis”), Carol B. Shible (“Shible”), Leonard Bellezza (“Bellezza”), William D. Lipkind (“Lip-kind”), Ernest J. Sabato (“Sabato”), Harry Olstein (“Olstein”), William Paulus, Jr. (“Paulus”), and Neil Prupis (“N. Prupis”).

Bellezza, Olstein and Paulus (sometimes referred to as “Group”) settled with First Fidelity for $3,310,000, and First Fidelity issued its warrant for Satisfaction of Judgment. Uncertainty as to whether the Judgment was satisfied by payment of less than its full amount has been resolved.

Defendants’ liability was created by their guaranty of the indebtedness to Fidelity of Southeastern Insurance Group, Inc. (“SIG”). The settling defendants now seek, under the quoted Rule, to enter judgment summarily against the others.

I directed entry of judgment, with right to issue execution, but disposition of proceeds stayed to permit the non-settling [442]*442defendants to develop their positions. Defendant Beck has produced extensive documentation in which he asserts that his guarantee to Fidelity was induced by the fraud of Group; that he was induced to assume the position of President of SIG by misrepresentation by Group as to the assets of SIG; that Group and other defendants improperly mulcted the assets of SIG, causing it to become insolvent; that Bellezza and Paulus used corporations known as Chief Structures, Inc. (“Chief”), and Construction Performance Corporation (“CPC”) as instrumentalities to profit in violation of Florida law. Alleged also are other claims of fraud and illegality which need not be specified.

Suffice it, that Beck’s position is supported by evidence which raises issues of fact. The principle, now classic, is that, if the papers in opposition to a motion for summary judgment raise a fact question, the motion must be denied. Pressler, Current N.J. Court Rules, Comment R. 4:46-2 (1991). Since Group seeks, in effect, summary disposition of a claim, even though not under R. 4:46-1, the inquiry must be whether a fact question has been raised.

In opposition to a full hearing, the moving parties assert that the Beck allegations of fraud and misconduct are not credible. But when statements in opposition to a summary judgment motion are appropriately verified, it is not for the motion judge to pass on veracity. Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67, 110 A.2d 24 (1954); Bilotti v. Accurate Forming Corp., 39 N.J. 184, 188 A.2d 24 (1963); Slohoda v. United Parcel Serv, Inc., 193 N.J.Super. 586, 475 A.2d 618 (App.Div.1984).

Group argues also that “Beck Has No Standing To Assert An Action For Fraudulent Inducement Against Group”, relying upon the standard definition of fraud in Jewish Center of Sussex Cty. v. Whale, 86 N.J. 619, 432 A.2d 521 (1981). The “standing” contention is basically that the alleged fraud of Group did not cause Beck to sign the guaranty. However, Beck asserts the contrary, claiming that had not members of

[443]*443Group misled him as to the financial condition of SIG, he would not have signed. As to this claim, the language in Grow Farms Corp. v. Nat’l State Bank, Elizabeth, 167 N.J.Super. 102, 400 A.2d 535 (L.Div.1979) is dispositive:

Since 1789, when Pasley [sic] was decided, it has been recognized that an action for fraud and deceit will lie against a defendant where it is shown that plaintiff was induced by defendant’s misrepresentation to deal with a third party. This is true even though plaintiff had no dealings with defendant. See Prosser on Torts (4 ed. 1971), Sec. 105 at 685. In the instant case it has been alleged by plaintiff that it is in the class of individuals defendant intended to influence by its conduct. Id. at 107-108, 400 A.2d 535.

Rosenblum v. Adler, 93 N.J. 324, 461 A.2d 138 (1983) held that a claim for negligent misrepresentation would lie against public accountants even in the absence of privity. Beck’s position here is comparable, except that the claim is intentional instead of negligent misrepresentation. Thus, from the standpoint of substantive law, Beck’s position is sound.

Required now is determination of the procedure applicable under R. 4:48-4.

I have concluded that the Rule is the vestigial remnant of the writ of scire facias. DELUXE BLACK’S LAW DICTIONARY 1346 (6th ed. 1979) defines Scire Facias as: “In practice. A judicial writ, founded upon some matter of record, such as a judgment or recognizance and requiring the person against whom it is brought to show cause why the party bringing it would not have advantage of such record,” ...

In 79 C.J.S., Scire Facias, Sec.3 at 458, it is stated:

Scire facias has, in some cases, many qualities of an original writ and sometimes it partakes of the nature of a writ of summons. It may also be considered as being in the nature of an order or rule to show cause. Id. at 459.
A scire facias is in the nature of an action or suit for the reason, and at least to the extent, that the defendant may plead to the writ. Ibid.
Further: Generally the issues in scire facias proceeding are formed in the same manner as prevails in other civil cases. Id. at 466. (Emphasis supplied.)

The problem which the Rule addresses is the consequences of a warrant of satisfaction. Since a warrant extinguishes a [444]

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Related

Grow Farms Corp. v. Nat'l State Bank, Elizabeth
400 A.2d 535 (New Jersey Superior Court App Division, 1979)
Jewish Center of Sussex Cty. v. Whale
432 A.2d 521 (Supreme Court of New Jersey, 1981)
Thomas v. Gardner
455 A.2d 533 (New Jersey Superior Court App Division, 1983)
Breuer v. Montvale
151 A.2d 53 (New Jersey Superior Court App Division, 1959)
Slohoda v. United Parcel Serv., Inc.
475 A.2d 618 (New Jersey Superior Court App Division, 1984)
Ehnes v. Weldon
80 A.2d 123 (New Jersey Superior Court App Division, 1951)
Judson v. Peoples Bank & Trust Co. of Westfield
110 A.2d 24 (Supreme Court of New Jersey, 1954)
Bilotti v. Accurate Forming Corp.
188 A.2d 24 (Supreme Court of New Jersey, 1963)
H. Rosenblum, Inc. v. Adler
461 A.2d 138 (Supreme Court of New Jersey, 1983)
Duke Power Co. v. Somerset County Board of Taxation
15 A.2d 460 (Supreme Court of New Jersey, 1940)
Cusano v. Rubolino
39 A.2d 906 (Supreme Court of Pennsylvania, 1944)
Coleman & Stahl v. Weimer
86 Pa. Super. 303 (Superior Court of Pennsylvania, 1925)
Brady v. Tarr
21 A.2d 131 (Superior Court of Pennsylvania, 1941)
Rosenthal v. Crimlisk
84 Pa. Super. 426 (Superior Court of Pennsylvania, 1924)
Castner v. Styer
23 N.J.L. 236 (Supreme Court of New Jersey, 1852)
Forest v. Price
37 N.J.L. 177 (Supreme Court of New Jersey, 1874)
Hartman v. Alden
34 N.J.L. 518 (Supreme Court of New Jersey, 1870)

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601 A.2d 1212, 253 N.J. Super. 439, 1991 N.J. Super. LEXIS 310, Counsel Stack Legal Research, https://law.counselstack.com/opinion/first-fidelity-bank-v-southeastern-insurance-group-njsuperctappdiv-1991.