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Halpern v. Tannenbaum

Decided: September 9, 1985.

ELI B. HALPERN, M.D., P.A. PENSION TRUST, ELI B. HALPERN, M.D., P.A., PROFIT SHARING TRUST AND ELI B. HALPERN, M.D., TRUSTEE, PLAINTIFF,
v.
PHILIP B. TANNENBAUM AND RUTH TANNENBAUM, HIS WIFE, NEW YORK ASSOCIATES LIMITED PARTNERSHIP KENTUCKY, A LIMITED PARTNERSHIP & RONBOB, INC., DEFENDANTS



Haines, A.j.s.c.

Haines

Halpern and others have sued Tannenbaum and his fellow defendants for monies loaned and now move for summary judgment. No defenses were raised as to the plaintiffs' claim (except contentions regarding interest, which are not material for present purposes). However, the defendants have filed a counterclaim for damages resulting from the late delivery of loan documents from plaintiffs to defendants with respect to a transaction unrelated to the plaintiffs' claim. The counterclaim is contested and cannot be the subject of a summary judgment. The defendants argue that a final summary judgment cannot or should not be entered for the plaintiffs until the counterclaim has been adjudicated, or, alternatively, that execution on any such judgment, if entered, should be stayed.

The New Jersey courts have not addressed these issues, unless Elliot-Lewis Corp. v. Graeff, 11 N.J. Super. 567 (Law Div.1951), may be so considered. In that case, a summary judgment was entered in favor of the plaintiff for money damages while a counterclaim survived. The court enjoined the plaintiff "from taking any steps to secure satisfaction of its summary judgment until after the counterclaim is tried and the

issues therein determined." Id. at 570. There was no explanation for this ruling.

Our Civil Practice Rules do not require this result. An earlier version of those Rules prevented the entry of judgment on the admitted portion of a particular claim in suit when the balance of the claim was denied. R.R. 4:58-4; Paolocci v. 358 Market Street, Inc., 66 N.J. Super. 411 (Law Div.1961). R.R. 4:58-2 however, permitted the entry of a final judgment on a claim, no part of which was disputed. Id. at 420. Our present Rules permit the entry of a final summary judgment in both circumstances. R. 4:46-2 now provides:

R. 4:42-2 provides:

In any action the trial court may direct the entry of final judgment upon less than all of the claims as to all parties only upon a complete adjudication of a separable claim or upon complete adjudication of all of the rights and liabilities asserted in the litigation as to any party, or where a partial summary judgment or other order for payment of part of a claim is awarded. In any such case, a final judgment shall be entered only upon the trial court's certification that there is no just reason for delay. In the absence of such direction and determination any order or other form of decision, however designated, which adjudicates less than all the claims shall not terminate the action as to any of the claims, and the order or other form of decision is subject to revision at any time before the entry of judgment adjudicating all the claims.

It is therefore apparent that in New Jersey, a counterclaim does not bar the entry of a summary judgment, which may be a final judgment if the court so certifies. The fact that plaintiffs are entitled to the entry of summary judgment in the amount of $74,116.17 ($64,471.88 principal plus $9,644.29 interest) is clear. They are also entitled to counsel fees in an amount to be fixed. The question is whether that judgment should be made final by certification of the court or whether some in-between treatment of the judgment is permissible. The counterclaim cannot be dismissed in response to the plaintiff's summary judgment

motion and must be tried. It cannot be characterized as sham. In the event the defendants succeed in obtaining a judgment on their counterclaim, it cannot be determined whether it will be less than the amount of the plaintiffs' judgment. Insufficient facts have been presented for that purpose.

Plaintiffs' judgment is based upon a simple loan transaction evidenced by a promissory note secured by a mortgage. No defense to the claim based upon the note has been raised. Under these circumstances, plaintiffs, except for the existence of the unrelated counterclaim, would be entitled to a final judgment upon which they could obtain execution. At the same time, the defendants, while lacking a defense to the entry of judgment for the plaintiffs on the note, are entitled to setoff the amount of any recovery on the counterclaim against that judgment, leaving the final amount thereof in question. Beneficial Finance Co. of Atlantic City v. Swaggerty, 86 N.J. 602 (1981). Certification of the plaintiffs' summary judgment as final commences the 45-day time for appeal running. The counterclaim may not be resolved within that time. It is not in the interest of the parties, or the appellate courts, that an appeal be taken in a matter of this kind until all issues have been determined. Leonardis v. Bunnell, 164 N.J. Super. 338 (App.Div.1978), certif. den. 81 N.J. 265 (1979). On the other hand, a judgment which is not final does not create a lien upon the real property of the defendants. Newstead Bldrs. v. First Merchants Nat'l. Bank, 146 N.J. Super. 295 (App.Div.1977). Logically, therefore, only a final judgment may be the subject of a writ of execution. Pressler, Rules Governing the Courts of the State of New Jersey, R. 4:59-1(a), Comment 2, citing Newstead, ...


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