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Escoett v. Aldecress Country Club

Decided: September 20, 1957.

JAY ESCOETT, PLAINTIFF-APPELLANT,
v.
ALDECRESS COUNTRY CLUB, A CORPORATION OF THE STATE OF NEW JERSEY, ET AL., DEFENDANTS-RESPONDENTS



Freund, Cafiero and Artaserse. The opinion of the court was delivered by Cafiero, J.s.c. (temporarily assigned). Artaserse, J.s.c. (temporarily assigned) (dissenting).

Cafiero

[46 NJSuper Page 346] Plaintiff appeals from the dismissal of his amended complaint with prejudice by the trial court, which based its action on the grounds that plaintiff (a) failed to prosecute this action for over six months; (b) was adjudged guilty of contempt; (c) violated a court order; (d) had unclean hands; (e) was not a fit and proper party to be the representative of defendant corporation, Aldecress Country Club, in this derivative shareholders' action.

Plaintiff alleges that the court abused its discretion in denying his application for adjournment of defendants' motion to dismiss the amended complaint with prejudice.

The parties have been in litigation since December 29, 1953. On that date plaintiff, who was a member of the defendant Aldecress Country Club, filed a complaint on behalf of himself and all other members who desired to join the proceedings (to date none have), alleging that the individual defendants were diverting club assets to their own private profit and benefit, and demanding an accounting. The complaint was dismissed as being defective in that it failed to allege the plaintiff had sought aid from the membership body as required by R.R. 4:36-2 and was not properly verified; but, on certification, the Supreme Court reversed, Escoett v. Aldecress Country Club , 16 N.J. 438 (1954).

On January 18, 1955, on remand, the parties consented to the entry of an order giving plaintiff discovery of the corporate defendant's (Aldecress Country Club) records, upon terms which can be stated briefly thus:

(a) Plaintiff was to amend his complaint (which was done).

(b) Defendants were to answer the amended complaint within 30 days after delivery to each of them, or to their attorneys, of copies of the accountant's final report provided for in paragraph (d), to follow.

(c) There was not to be any examination of parties or witnesses prior to filing of answer.

(d) The accounting firm of Ernst & Ernst was authorized to inspect the books and records of the Aldecress Country Club, and make an accounting report to the plaintiff for the period from June 1, 1946 to December 31, 1953, and to simultaneously deliver their report to the attorneys for the respective parties.

(e) The parties to the action were to refrain from publishing, sending or circulating any communication which may be scandalous or scurrilous in character, and from any unseemly conduct during the pendency of this action.

The discovery proceeded, but the examination was not completed by reason of the fact that the accounting firm stopped its investigation on July 1, 1956 when plaintiff failed to pay the balance of the $27,000 bill rendered for their services up to that date.

In June 1956 plaintiff was found guilty of contempt for violating the court's order by sending certain communications to club members. He appealed pro se , and after his appeal was dismissed because of his failure to file a brief in time, he sought ...


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