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Friday, July 29, 2011

NOTICE TO THE BAR AMENDMENTS TO RULE 6:7-1 AND APPENDIX XI-H (“EXECUTION AGAINST GOODS AND CHATTELS”)

NOTICE TO THE BAR

AMENDMENTS TO RULE 6:7-1 AND APPENDIX XI-H (“EXECUTION AGAINST GOODS AND CHATTELS”)

On May 17, 2011, the Supreme Court approved changes to Rule 6:7-1(b)(2) and the form Execution against Goods and Chattels, which is Appendix XI-H to the Rules of Court, with those changes to be effective as of May 17, 2011. The amendments to Rule 6:7-1(b)(2) and Appendix XI-H were necessary in order to conform with new federal regulations that went into effect on May 1, 2011, requiring banks and other financial institutions to look back two months and exclude from garnishment any exempt benefits that were electronically deposited during that period. Rule 6:7-1(b)(2) only required a 45-day look back period, thus necessitating the amendments. Accompanying this Notice are the Court’s Order, the amended Rule and amended form.

Questions regarding the amendments to Rule 6:7-1(b)(2) and Appendix XI-H may be directed to Robert D. Pitt, Chief of Special Civil Part Services, in the Civil Practice Division of the Administrative Office of the Courts, P.O. Box 981, Trenton, NJ 08102.

Dated: June 8, 2011

/s/ Glenn A. Grant

Hon. Glenn A. Grant, J.A.D. Acting Administrative Director of the CourtsSUPREME COURT OF NEW JERSEY

It is ORDERED that the attached amendments to Rule 6:7-1(b) and Appendix XI-H of the Rules Governing the Courts of the State of New Jersey are adopted to be effective immediately.

Dated: May 17, 2011

For the Court, /s/ Stuart Rabner Chief Justice

6:7-1.

Requests for Issuance of Writs of Execution; Contents of Writs of Execution and Other Process for the Enforcement of Judgments; Notice to Debtor; Claim for Exemption; Warrant of Removal; Enforcement of Consent Judgments and Stipulations of Settlement in Tenancy Actions

(a) ... no change

(b) Contents of Writs of Execution and Other Process for the Enforcement of Judgments. All writs of execution and other process for the enforcement of judgments shall provide that any levy pursuant thereto shall exclude:

(1) all funds in an account of the debtor with a bank or other financial institution, if all deposits into the account during the 90 days immediately prior to service of the writ were electronic deposits, made on a recurring basis, of funds identifiable by the bank or other financial institution as exempt from execution, levy or attachment under New Jersey or federal law, and

(2) all funds deposited electronically in an account of the debtor with a bank or other financial institution during the [45 days] two months immediately prior to [service of the writ] the account review undertaken by the bank or other financial institution in response to the writ that are identifiable by the bank or other financial institution as exempt from execution, levy or attachment under New Jersey or federal law.

(c) ... no change. (d) ... no change. (e) ... no change.

Note: Source – R.R. 7:11-1; former rule redesignated as paragraph (a) and paragraph (b) adopted and caption amended July 16, 1981 to be effective September 14, 1981; paragraph (b) amended November 1, 1985 to be effective January 2, 1986; caption amended and paragraph (c) adopted November 7, 1988 to be effective January 2, 1989; paragraphs (b) and (c) amended July 14, 1992 to be effective September 1, 1992; caption and paragraph (c), caption and text, amended July 13, 1994 to be effective September 1, 1994; paragraph (a) caption and text amended June 28, 1996 to be effective September 1, 1996; caption amended and paragraph (d) adopted July 18, 2001 to be effective November 1, 2001; paragraph (c) amended September 14, 2004 to be effective immediately; paragraph (a) amended July 27, 2006 to be effective September 1, 2006; caption

amended, former paragraph (b) redesignated as paragraph (c) and amended, former paragraphs (c) and (d) redesignated as paragraphs (d) and (e), and new paragraph (b) caption and text adopted July 23, 2010 to be effective September 1, 2010; subparagraph (b)(2) amended May 17, 2011 to be effective immediately.

DOCKET NO.: JUDGMENT NO.: WRIT NUMBER:

___ DC-______-__ ___ VJ-_______-__ ____

SUPERIOR COURT OF NEW JERSEY SPECIAL CIVIL PART _______________ COUNTY STATE OF NEW JERSEY

EXECUTION AGAINST GOODS AND CHATTELS

DEBTORS:______________________ ______________________

APPENDIX XI-H EXECUTION AGAINST GOODS AND CHATTELS

PLAINTIFF(S) VS.

DEFENDANT(S)

ADDRESS OF FIRST DEBTOR: STREET ADDRESS CITY NJ ZIP

TO: ___________________________________________ COURT OFFICER OF THE SPECIAL CIVIL PART

YOU ARE ORDERED to levy on the property of any of the debtors designated herein; your actions may include, but are not limited to, taking into possession any motor vehicle(s) owned by any of the debtors, taking possession of any inventory and/or machinery, cash, bank accounts, jewelry, electronic devices, fur coats, musical instruments, stock certificates, securities, notes, rents, accounts receivable, or any item(s) which may be sold pursuant to statute to satisfy this execution in full or in part. Any levy pursuant to this writ shall exclude (1) all funds in an account of the debtor with a bank or other financial institution, if all deposits into the account during the 90 days immediately prior to service of the writ were electronic deposits, made on a recurring basis, of funds identifiable by the bank or other financial institution as exempt from execution, levy or attachment under New Jersey or federal law, and (2) all funds deposited electronically in an account of the debtor with a bank or other financial institution during the [45 days] two months immediately prior to [service of the writ] the account review undertaken by the bank or other financial institution in response to the writ that are identifiable by the bank or other financial institution as exempt from execution, levy or attachment under New Jersey or federal law. All proceeds are to be paid to the court officer who shall pay them to the creditor or the attorney for the creditor, or, if this is not possible, to the court. This order for execution shall be valid for two years from this date.

Local police departments are authorized and requested to provide assistance, if needed, to the officer executing this writ. This does not authorize entry to a residence by force unless specifically directed by court order.

Judgment Date Judgment Amount................................................. Costs and Atty. Fees ............................................. Subsequent Costs .................................................. Total...................................................................... Credits, if any ....................................................... Subtotal A............................................................. Interest .................................................................. Execution costs and mileage ................................. Subtotal B ............................................................. Court officer fee.................................................... Total due this date................................................. Date: ________________.................................... Property to be Levied Upon and Location of Same:

CITY ST ZIP CREDITOR’S ATTORNEY AND ADDRESS: ______________________________________ ______________________________________ ______________________________________ CITY NJ ZIP Telephone: ___-__________

_________ $________ $________ $________ $________ $________ $________ $________ $________ $________ $________ $________

Date: ________________

_________________________________ Judge

_________________________________ Clerk of the Special Civil Part

I RETURN this execution to the Court

( ) Unsatisfied ___________________ ( ) Satisfied ( ) Partly Satisfied Amount Collected. . ____________

Fee Deducted. . . . . . ____________ Amount Paid to Atty.____________

______________

Date:

______________________________ Court Officer

[REVISED MAY 17, 2011]

Tuesday, July 26, 2011

ARI MUTUAL INSURANCE V. JORGE A-1256-10T2 June 16, 2011

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-1256-10T2

ARI MUTUAL INSURANCE, CO.,

Plaintiff-Respondent,

v.

ANTONIO JORGE,

Defendant-Appellant,

and

ALLSTATE NEW JERSEY INSURANCE

COMPANY, ZINA TRUCKING, INC.,

Defendants.

Argued June 6, 2011 – Decided June 16, 2011

Before Judges Lisa and Reisner.

On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-3019-10.

Edward Rubenstone of the Pennsylvania bar, admitted pro hac vice, argued the cause for appellant (Lamm Rubenstone, L.L.C., attorneys; Christopher J. Fox and Frank Schwartz, on the brief).

Danielle M. Lozito argued the cause for respondent (Methfessel & Werbel, attorneys; Marc L. Dembling, of counsel and on the brief; Ms. Lozito, on the brief).

PER CURIAM

Defendant Antonio Jorge appeals from two orders dated September 28, 2010, denying his summary judgment motion, and granting summary judgment in favor of plaintiff ARI Mutual Insurance Company (ARI). We affirm.

I

Jorge is the sole owner of Zina Trucking, Inc. In July 2006, he applied to ARI for a commercial insurance policy covering the period August 1, 2006 to August 1, 2007. The first page of the application listed the "named insured and other named insured" as "Antonio Jorge dba [doing business as] Zina Trucking." Under the applicant's name, a box was checked designating the applicant as a "corporation." In the "BUSINESS AUTO SECTION" of the application, the applicant was listed as "Zina Trucking Inc." Accordingly, ARI issued a policy on which the declarations page listed "Zina Trucking Inc[.]" as the named insured. Jorge did not ask ARI to correct the policy to reflect a different named insured.

The policy contained a step-down clause, providing that if a covered person, other than a named insured, was involved in an accident and had other auto insurance, the $1 million in Uninsured Motorists (UM) coverage under the ARI policy would be reduced to the limits of the covered person's own policy. The relevant language is as follows:

. . . if:


(1) An "insured" is not the individual named insured under this policy;


(2) That "insured" is an individual named insured under one or more other policies providing similar coverage; and


(3) All such other policies have a limit of insurance for similar coverage which is less than the Limit of Insurance for this coverage; then the most we will pay for all damages resulting from any one "accident" with an "uninsured motor vehicle" . . . shall not exceed the highest applicable limit of insurance under any coverage form or policy providing coverage to that "insured" as an individual named insured.


On November 27, 2006, about four months after purchasing the policy, Jorge was involved in an accident while driving the Zina truck. Claiming that the accident was caused by a phantom vehicle, he sought UM coverage under the ARI policy. ARI filed a declaratory judgment complaint against Jorge and his personal auto insurer, Allstate New Jersey Insurance company, contending that the $1 million of UM coverage under the ARI policy should be stepped down to $100,000, which was the level of UM coverage available under Jorge's Allstate policy.1

Jorge moved for summary judgment, contending that ARI mistakenly listed Zina Trucking as the named insured in the policy, when he had applied for coverage as the individual named insured. In support of the motion, Jorge filed a certification, attesting that at the time he applied for the ARI policy, he understood that he "would be the named insured under any policy to be issued by ARI pursuant to the Application." He attested that he signed the application in his individual capacity, and he would not have purchased that policy if he "had known that ARI intended to change the named insured from myself to Zina Trucking, Inc." He further stated that he did not receive a copy of the policy document until after he purchased the policy. ARI cross-moved for summary judgment.

At oral argument of the motion, Jorge's counsel agreed that he was not challenging the validity or enforceability of the step-down clause. Rather, he argued that, given the way Jorge completed and signed the application, he had a "reasonable expectation" that he would be the named insured. He also argued that any ambiguity, created by a difference between the application and the policy, should be resolved in the insured's favor. Third, he contended that even if Zina Trucking was the named insured, Jorge should be deemed the "alter ego" of the corporation, because he was its sole shareholder.

In an oral opinion placed on the record on September 24, 2010, Judge Phillip Lewis Paley found that the policy unambiguously listed Zina Trucking Inc. as the named insured. He reasoned that Jorge had a duty to read the policy and ask ARI to correct it if he believed his company should not have been listed as the named insured. He concluded:

[D]efendant's expectation that he was a named insured is unreasonable in light of the plain language of the policy. He was in possession of the insurance policy naming [Zina] Trucking as the named insured for several months before the accident.


I cannot ignore the obligation imposed upon him by law to read the plain language of the policy. While it may be that he had a reasonable expectation of coverage as a named insured when he signed his application, his failure to read and/or protest the plain language of the policy as written until after his accident makes his belief unreasonable.


The judge further found that there was no mutual mistake, and no evidence that ARI committed any fraud or unconscionable conduct. He also concluded that any ambiguity was created by Jorge, who listed Zina Trucking as the insured in filling out the application.

II

Our review of the trial court's summary judgment decision is de novo. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). Using the Brill2 standard, we determine whether, giving the non-moving party the benefit of all favorable inferences, the undisputed material facts entitle the moving party to judgment. SeeEstate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 374 (2010). After reviewing the record, we conclude that Judge Paley correctly granted summary judgment in favor of ARI.

In Pinto v. New Jersey Manufacturers Insurance Co., 183 N.J. 405 (2005), the Supreme Court held that step-down clauses in insurance policies were enforceable. A 2007 statute superseded Pinto by making step-down clauses unenforceable, N.J.S.A.17:28-1.1(f), but Jorge concedes that the statute is not retroactive. See Olkusz v. Brown, 401 N.J. Super. 496, 499 (App. Div. 2008).3

Instead, as in the trial court, he seeks to circumvent Pinto by arguing that: the insurance policy "materially differed" from the application; when read together with the application, the policy should be deemed "ambiguous," and the ambiguity should be construed in Jorge's favor and consistent with his reasonable expectations; the UM/UIM endorsement of the policy defines an insured as a natural person whose "family members" will be covered, thereby misleading Jorge into believing that he was the named insured.

We agree with Judge Paley that these arguments are all without merit. They require no further discussion here, R. 2:11-3(e)(1)(E), and we affirm substantially for the reasons stated in Judge Paley's opinion. We add the following comments.

In completing the insurance application, Jorge did not indicate that he was applying for insurance or signing the form in his individual capacity, as opposed to in his capacity as owner of the business. The application listed "Antonio Jorge dba Zina Trucking" as the named insured, and immediately thereafter indicated that the applicant was a corporation. In a later section of the application, the applicant was listed only as Zina Trucking Inc. The declarations page of the insurance policy unambiguously listed Zina Trucking Inc. as the named insured. See Lehrhoff v. Aetna Cas. & Sur. Co., 271 N.J. Super. 340, 347 (App. Div. 1994) (ordinarily a policy's declarations page "must be deemed to define coverage and the insured's expectation of coverage").

Upon receiving the policy, Jorge did not object or advise his insurance agent that there was a mistake on the declarations page. "'When an insured purchases an original policy of insurance he may be expected to read it and the law may fairly impose upon him such restrictions, conditions and limitations as the average insured would ascertain from such reading.'" Morrison v. Am. Intern. Ins. Co. of Am., 381 N.J. Super. 532, 542 (App. Div. 2005) (quoting Bauman v. Royal Indem. Co., 36 N.J. 12, 25 (1961)).

Nor is the UM/UIM endorsement ambiguous. The relevant portion of the endorsement indicates that "If the Named Insured is designated in the Declarations as . . . An individual" then the insured's family members are also covered by the policy. The next section provides that if the insured is a corporation, the corporation's employees are insured. These sections control who is entitled to UM coverage under the policy. They do not address the level of that coverage. The amount of coverage is separately controlled by the step-down clause. Jorge's reliance on Progressive Casualty Insurance Co. v. Hurley, 166 N.J. 260, 272 (2001), and O'Hanlon v. Hartford Accident & Indemnity Co., 639 F.2d 1019, 1023 (3d Cir. 1981), is misplaced. Those cases deal with whether individual owners of small businesses, or their family members, are entitled to UM coverage; they do not address step-down clauses.

In an argument raised for the first time on appeal, Jorge argues that ARI should be estopped from enforcing the step-down clause because the insurer allegedly did not act promptly in denying coverage beyond that provided under the clause. We decline to consider this argument, because Jorge did not raise it in the trial court. See Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973). Similarly, we will not consider his argument, raised for the first time in a footnote in his reply brief (and not supported by any record evidence), that ARI allegedly failed to counsel him about the step-down clause. See Pinto, supra, 183 N.J. at 417 (prospectively requiring insurers to tell commercial insurance applicants that individual employees must be named insureds to avoid operation of the step-down clause).4

Affirmed.

1 Jorge filed a separate complaint and an order to show cause, seeking UM arbitration.

2 Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

3 The ARI policy was issued, and expired, before the 2007 legislation was passed. See Hand v. Philadelphia Ins. Co., 408 N.J. Super. 124 (App. Div.) (disagreeing with Olkusz on the retroactivity issue, but declining to apply N.J.S.A. 17:28-1.1(f) to the plaintiff's claim because the relevant insurance policy expired before the statute was enacted), certif. denied, 200 N.J. 506(2009).

4 Although Jorge filed suit against ARI to require UM arbitration, he did not sue the insurance agent who allegedly assisted him in filling out the insurance application and allegedly failed to advise him about the step-down clause.


RANGAR ASSOCIATES V. VINCI A-5607-09T4 June 16, 2011

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5607-09T4

RANGAR ASSOCIATES, L.L.C.,

Plaintiff-Respondent,

v.

MATTHEW SALVATORE VINCI, JOHN J.

MONTEFUSCO, JR., and MPA INSURANCE

AGENCY, L.L.C.,

Defendants,

and

ROBERT J. PELLECHIO, JR.,

Defendant-Appellant.

Argued May 3, 2011 – Decided June 16, 2011

Before Judges Wefing, Baxter and Koblitz.

On appeal from Superior Court of New Jersey,

Law Division, Sussex County, Docket No. L-617-06.

Walter G. Luger argued the cause for appellant

(Walter G. Luger & Associates, attorneys; Mr. Luger,

of counsel and on the brief; Vincenzo M. Mogavero,

on the brief).

Philip A. Parziale argued the cause for

respondent.

PER CURIAM

Defendant Robert J. Pellechio, Jr., appeals from a trial court order denying his motion to vacate a default judgment entered against him. After reviewing the record in light of the contentions advanced on appeal, we modify the trial court’s order and, as modified, we affirm it.

Pellechio, together with defendants John J. Montefusco, Jr. and Matthew S. Vinci, was a principal in a limited liability company, MPA Insurance Agency, L.L.C. (“MPA”), which was engaged in selling personal and commercial lines of insurance. Plaintiff Rangar Associates, L.L.C. (“Rangar”) is a limited liability company whose principals are Mark Ranucci and Robert C. Garofalo, Esq. In December 2004, Rangar and MPA formed a new limited liability company, MPA Insurance Agency/South, L.L.C. (“MPA/South”); and in March 2004, Rangar invested $100,000 in MPA/South. According to Rangar's complaint, MPA, in return, was to provide MPA/South with access to insurance carriers, computer software and technology.

In July 2005, the principals of MPA dissolved that entity, and defendant Pellechio thereafter formed his own business, Pellechio Insurance Agency. The record indicates that following that dissolution, defendant Montefusco continued for a period of time to provide insurance services to MPA/South. Eventually a dispute arose between plaintiff and Montefusco with respect to commissions to which plaintiff claimed entitlement, but Montefusco did not pay. In August 2006, Rangar filed suit, seeking damages for what it alleged was MPA’s breach of the operating agreement for MPA/South and commissions plaintiff alleged were due to it. Plaintiff named as defendants MPA and its principals, Montefusco, Vinci and Pellechio.1

Pellechio was served both at his residence and his place of business; on each occasion service was achieved through service on his wife. Pellechio did not file an answer, and default was entered against him on November 28, 2006. On July 31, 2007, the clerk entered a default judgment against Pellechio for $100,000, the damages claimed in plaintiff’s complaint.

Defendant did not formally seek relief from that judgment until May 2010, when, nearly three years after its entry, he filed a motion under Rule 4:50-1(a) to vacate that default judgment. In the interim, plaintiff was contacted on three occasions by different attorneys on behalf of Pellechio with respect to setting aside that default judgment. Defendant supported his motion with certifications denying that proper service had been made. The certifications noted that the return of service indicated service had been achieved at One Wilson Avenue in Randolph while Pellechio lived at One Wilson Avenue in Chester. The certifications also noted a dispute as to the physical description of Mrs. Pellechio, the person upon whom service had been achieved.

In opposing defendant’s motion to vacate the default judgment, plaintiff pointed out that One Wilson Avenue in Randolph is the same location as One Wilson Avenue in Chester; Randolph is merely the address that is used for purposes of mailing. Plaintiff also enclosed a copy of a letter its attorney had received in March 2007, before the default judgment was entered, enclosing a consent order vacating the default. The letter raised no issue with respect to service. Plaintiff also enclosed a copy of a second letter, dated June 4, 2008, from the attorney who filed the motion seeking relief from the default judgment. In that letter, the attorney acknowledged the outstanding judgment, but set forth his position that there was no basis for a judgment against Pellechio, individually. He requested that the judgment be removed. This letter, sent nearly two years before the motion was filed, again raised no question with respect to service.

After hearing oral argument, the trial court denied defendant’s motion, finding that the nearly three-year delay in seeking relief precluded the court from concluding that there was excusable neglect for defendant’s failure to act. This appeal followed.

Defendant presents a variety of arguments on appeal, only one of which, in our judgment, has any legal merit. With respect to the bulk of his contentions, we agree entirely with the trial court that defendant failed to establish that he had acted with reasonable diligence and that any delay on his part was due to excusable neglect.

Defendant brought his motion under subsection (a) of Rule 4:50-1, which permits a trial court to set aside a judgment entered as a result of mistake, inadvertence, surprise, or excusable neglect. Rule 4:50-2 specifies, however, that applications under subsection (a) must be brought within one year of entry of the judgment. Here, the more than three-year delay removed plaintiff from the scope of this subsection of the rule.

In its brief oral opinion, the trial court also noted that to the extent defendant sought relief under any other portion of the rule, he was required to act within a reasonable time of the judgment having been entered. R. 4:50-1(f); R. 4:50-2. Before the trial court and before us, defendant attempted to attribute a large portion of this delay to inaction on the part of the first attorney defendant had retained to set aside the judgment and difficulties the second attorney allegedly experienced in locating plaintiff’s attorney after that attorney relocated his office. Even if we were to assume that those two factors played some role in the delay, defendant was obligated to take reasonable steps to see that his interests were being protected. We agree with the trial court that the record precludes a conclusion that defendant acted with anything approaching reasonable diligence and that the three-year period between entry of the judgment and filing the motion could not be considered a reasonable time in the context of this matter.

We do agree, however, that judgment for $100,000 was improperly entered by the clerk. Under Rule 4:43-2(c), the clerk may, in the event of a default, enter judgment for a sum certain. Plaintiff’s claim for damages, however, cannot be fairly categorized as a book account.

Plaintiff was required to prove its damages at a proof hearing after which the trial court would conclude whether, and to what extent, plaintiff had established that it was entitled to monetary relief, as well as the party against whom relief should be granted. We thus remand this matter to the trial court for further proceedings, which shall include such a proof hearing. The manner and extent to which defendant shall be permitted to participate in that proof hearing is a matter that rests within the discretion of the court presiding over that proof hearing.

We thus affirm the order of the trial court denying defendant’s motion to set aside his default, vacate the judgment that had been entered, and remand the matter to the trial court for further proceedings.

1 The record indicates that Montefusco has filed bankruptcy; it is silent with respect to Vinci.