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First Fidelity Bank v. Southeastern Insurance Group

Decided: June 24, 1991.

FIRST FIDELITY BANK, PLAINTIFF,
v.
SOUTHEASTERN INSURANCE GROUP, DEFENDANT



Yanoff, J.s.c. (temporarily assigned) (retired, on recall).

Yanoff

YANOFF, J.S.C.

Involved here is R. 4:48-4, not yet interpreted by decision. The Rule reads:

If a judgment is recovered against 2 or more persons, one of whom, liable thereon secondarily or equally with any other, satisfies the judgment, or when bail in a civil action is compelled to pay a judgment against a defendant, the person paying the judgment may on motion and notice to the other persons in interest, excluding the judgment creditor, apply to the court, for an order allowing him the full benefit and control of the judgment and any outstanding execution. The court may make such order, on terms, and may direct that new execution issue for the purpose of compelling payment or contribution by any party liable in the amount fixed by the court.

Since the Rule contains no directives as to resolutions of issues when a dispute arises as to the relief requested, this opinion deals with that problem.

On June 29, 1990, an Order for Summary Judgment, for $3,300,000 plus interest, attorneys' fees and costs,*fn1 was entered in favor of plaintiff, First Fidelity Bank, N.A., N.J. ("First Fidelity"), against Robert Pershes ("Pershes"), Robert A. Beck II ("Beck"), Ronald Prupis ("R. Prupis"), Carol B. Shible ("Shible"), Leonard Bellezza ("Bellezza"), William D. Lipkind ("Lipkind"), Ernest J. Sabato ("Sabato"), Harry Olstein ("Olstein"), William Paulus, Jr. ("Paulus"), and Neil Prupis ("N. Prupis").

Bellezza, Olstein and Paulus (sometimes referred to as "Group") settled with First Fidelity for $3,310,000, and First Fidelity issued its warrant for Satisfaction of Judgment. Uncertainty as to whether the Judgment was satisfied by payment of less than its full amount has been resolved.

Defendants' liability was created by their guaranty of the indebtedness to Fidelity of Southeastern Insurance Group, Inc. ("SIG"). The settling defendants now seek, under the quoted Rule, to enter judgment summarily against the others.

I directed entry of judgment, with right to issue execution, but disposition of proceeds stayed to permit the non-settling

defendants to develop their positions. Defendant Beck has produced extensive documentation in which he asserts that his guarantee to Fidelity was induced by the fraud of Group; that he was induced to assume the position of President of SIG by misrepresentation by Group as to the assets of SIG; that Group and other defendants improperly mulcted the assets of SIG, causing it to become insolvent; that Bellezza and Paulus used corporations known as Chief Structures, Inc. ("Chief"), and Construction Performance Corporation ("CPC") as instrumentalities to profit in violation of Florida law. Alleged also are other claims of fraud and illegality which need not be specified.

Suffice it, that Beck's position is supported by evidence which raises issues of fact. The principle, now classic, is that, if the papers in opposition to a motion for summary judgment raise a fact question, the motion must be denied. Pressler, Current N.J. Court Rules, Comment R. 4:46-2 (1991). Since Group seeks, in effect, summary disposition of a claim, even though not under R. 4:46-1, the inquiry must be whether a fact question has been raised.

In opposition to a full hearing, the moving parties assert that the Beck allegations of fraud and misconduct are not credible. But when statements in opposition to a summary judgment motion are appropriately verified, it is not for the motion judge to pass on veracity. Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67, 110 A.2d 24 (1954); Bilotti v. Accurate Forming Corp., 39 N.J. 184, 188 A.2d 24 (1963); Slohoda v. United Parcel Serv, Inc., 193 N.J. Super. 586, 475 A.2d 618 (App.Div.1984).

Group argues also that "Beck Has No Standing To Assert An Action For Fraudulent Inducement Against Group", relying upon the standard definition of fraud in Jewish Center of Sussex Cty. v. Whale, 86 N.J. 619, 432 A.2d 521 (1981). The "standing" contention is basically that the alleged fraud of Group did not cause Beck to sign the ...


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