On appeal from the Superior Court of New Jersey, Law Division, Bergen County.
Petrella, Bilder and Brochin. The opinion of the court was delivered by Brochin, J.A.D.
[245 NJSuper Page 542] In this case we hold that a jury verdict in a criminal case finding a defendant guilty of arson is not a final judgment of conviction and is therefore not admissible in a civil case to prove that the defendant committed the arson.
Plaintiffs Nicholas and Carmella Sassano leased premises in a building which they owned to defendant BLT Discovery, Inc. for the operation of a nightclub. Fire damaged the building. The Sassanos alleged that two of BLT's employees, Robert Guastella, BLT's president and the owner of seventy percent of BLT's capital stock, and Roger Wasyluk, BLT's nightclub manager, had intentionally set the fire. To recover for the damage to their building, the Sassanos sued BLT, Guastella, Wasyluk, and New Jersey Property-Liability Insurance Guaranty Association, the statutory successor to BLT's fire insurer.
BLT, Guastella, and Wasyluk denied responsibility for the fire. BLT crossclaimed against Insurance Guaranty Association, demanding indemnification for its fire losses in accordance with the terms of its policy. Insurance Guaranty Association disclaimed liability because of Guastella's and Wasyluk's alleged arson and crossclaimed against Guastella and Wasyluk.
While the Sassanos' civil suit was pending, Guastella and Wasyluk were indicted and tried for arson. A jury found them both guilty. Before sentencing, Guastella died, and the prosecutor administratively dismissed the indictment against him. Wasyluk was sentenced and, while the present civil suit was awaiting trial, he appealed his conviction. In an unreported decision, this court reversed Wasyluk's arson conviction and remanded the case for a new trial on the ground that the trial court had erroneously precluded the defendants from arguing for an interpretation of the evidence which, if accepted by the jury, would have created a reasonable doubt about the defendants' guilt. Subsequent to the entry of final judgment in the present civil suit, the trial court dismissed the indictment against Wasyluk on the prosecutor's motion because there was "insufficient admissible evidence to enable a conviction beyond a reasonable doubt."
In the present civil action, BLT moved before trial to strike Insurance Guaranty Association's arson defense. A judge other than the one who later presided at the trial heard the motion.
He assumed for the purpose of the motion that Guastella and Wasyluk had intentionally set the fire. But he held that, so long as none of the proceeds benefited the arsonists, Insurance Guaranty Association was obligated to compensate BLT in order to avoid harm to BLT's creditors and to its thirty-percent stockholder who was not implicated in setting the fire. Pursuant to an order entered on BLT's motion, an appraisal of BLT's fire loss was conducted in accordance with the terms of its insurance policy. BLT's personal property destroyed by the fire was assessed at $102,784.00 and its property "improvements and betterments" destroyed by the fire, at $77,105.00. The assessment of BLT's entire fire loss totaled $179,889.00.
At the civil trial, a jury was waived. The trial judge recognized that the pendency of Wasyluk's appeal from his criminal conviction precluded use of that conviction as proof that he was responsible for setting the fire. See Sorbello v. Mangino, 108 N.J. Eq. 292, 295, 155 A. 6 (Ch. 1931); cf. State v. Eddy, 189 N.J. Super. 22, 458 A.2d 522 (Law Div.1982) (holding that conviction on appeal is not admissible to impeach witness's credibility). However, the judge accepted the guilty verdict against Guastella as a "conviction," and held that, for purposes of the present case, Guastella's estate and BLT were estopped from denying that he had set the fire. The trial judge also held that, because the fire had been caused by the misconduct of a BLT employee, BLT's lease with the Sassanos required it to compensate them for the fire damage.
The trial judge found the amount of the fire damage sustained by the Sassanos was $185,000, the cost of repairing their building. He required Insurance Guaranty Association to pay the Sassanos the fire insurance proceeds which would otherwise have been payable to BLT under its policy. The trial judge also ruled that Guastella's estate was liable to indemnify Insurance Guaranty Association for its payments under the policy. The Sassanos' claim against Wasyluk was dismissed with prejudice because no admissible evidence was offered at trial to show that he had caused the fire. Insurance Guaranty Corporation
had earlier dismissed its crossclaim against Wasyluk ...