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Hartford Accident and Indemnity Co. v. Baker

Decided: November 1, 1985.

THE HARTFORD ACCIDENT AND INDEMNITY COMPANY, PLAINTIFF,
v.
JOHN A. BAKER, DEFENDANT



Newman, J.s.c.

Newman

OPINION

The issue presented to this court for resolution is whether a motion to amend a complaint that timely sought only the enforcement of a foreign judgment may properly be granted where the proposed amendment seeks to introduce the substantive counts of fraud contained in the foreign complaint when the statute of limitations for fraud has expired. Plaintiff, Hartford Accident and Indemnity Company, moves for such an amendment.

The facts pertinent to this motion are not in dispute. Defendant, John A. Baker, is a New Jersey resident and was employed in New York by Lutheran Medical Center, a division of Health and Hospitals Corporation. Baker was a purchasing agent at the medical center. Christian Elia, a co-worker at the center and co-defendant in the New York action, was an assistant chief engineer. Baker and Elia allegedly engaged in a fraudulent scheme whereby they created fictitious requisitions and

submitted fictitious purchase orders for payment by the accounting department. According to Hartford, these activities took place from September 1978 until February 28, 1979. Baker, however, entered into a written agreement with the Attorney General of the State of New York on January 19, 1979, in which he was granted transactional immunity from criminal prosecution. Subsequent to January 19, 1979, he acted as an undercover agent to assist in the investigation of crimes against Health and Hospitals Corporation.

In August 1982, Hartford, as assignee of the rights of its insured, Health and Hospitals Corporation, filed a civil action against Baker in the State of New York and obtained a default judgment in the amount of $78,705.56 on December 13, 1984. This judgment is currently being appealed in New York on jurisdictional grounds.

In February 1985, Hartford filed a complaint in New Jersey seeking only to enforce the default judgment obtained in New York under the full faith and credit clause of the United States Constitution. U.S. Constitution, Art. IV, Section 1. This motion was stayed pending the outcome of the New York action. In August 1985, Hartford moved to amend its complaint to include the allegations of fraud pled in the New York action and to have the amended complaint relate back under R. 4:9-3. The issue for determination by this court is whether the timely filing of a complaint seeking enforcement of a foreign judgment may properly be amended to include substantive allegations that might otherwise be barred by the relevant limitations statute.

Hartford contends that Baker knew of the claims against him for several years; at the very latest, he knew of the New York action in July 1983. Hartford admits that should the New York judgment be vacated, the complaint as originally filed in New Jersey may prove deficient. It therefore seeks to amend the complaint only to introduce precisely the same allegations contained in the New York complaint. Hartford maintains there

would be no undue prejudice to Baker in allowing this amendment since he did know about the complaint and action filed in New York. Indeed, it asserts that failure to permit the proposed amendment would unfairly benefit Baker from his unresponsiveness to the judicial proceeding filed against him. Hartford also asserts that the proposed amendments to the New Jersey complaint arose out of the same conduct, transaction or occurrence and should relate back to the original complaint filed in New Jersey.

Baker answers that the statute of limitations had expired in December 1984 as to the allegations of fraud. In response to Hartford's assertions, he argues that any permitted amendment would nonetheless be purposeless since the statute of limitations had run as to the proposed amendment. Baker alternatively contends that the proposed amendment raises allegations foreign to the complaint originally filed in New Jersey, and relation back should not be permitted.

The statute of limitations for the filing of an action seeking enforcement of a foreign judgment is 20 years. N.J.S.A. 2A:14-5. The New York default judgment was rendered against defendant in January 1985. The request for enforcement of that judgment in New Jersey ...


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