On appeal from the Superior Court, Law Division, Bergen County.
Approved for Publication March 31, 1995
Before Judges Gaulkin, Baime and A.a. Rodriguez. The opinion of the court was delivered by Gaulkin, P.j.a.d.
The opinion of the court was delivered by: Gaulkin
In this action initiated by The Valley Hospital (Valley), Midlantic National Bank (Midlantic) was granted partial summary judgment "as to liability" against Richard J. Lipari, April Lipari, John J. Lipari and Elizabeth M. Lipari (the Liparis) on claims asserted against them as alleged guarantors of obligations owed to Midlantic by Nationwide Adjustment Corporation (Nationwide). Midlantic was also awarded partial summary judgment against Nationwide and the Liparis for attorneys fees and costs of $108,530.15. Nationwide and the Liparis appeal. *fn1
Valley contracted with Nationwide, a debt-collection agency, to collect delinquent patient accounts. Monies collected by Nationwide were deposited in a trust account maintained by Nationwide at Midlantic. Checks received on delinquent accounts would be endorsed with both Nationwide and Valley endorsements and deposited into the Midlantic account. After the checks cleared, Nationwide would remit the full amount to Valley, which would then return a percentage to Nationwide as its collection fee.
Valley employed Gerald F. Juliano as its Director of Patient Accounting. According to Valley, Juliano stole checks from Valley and delivered them to persons at Nationwide, who fraudulently endorsed them with a Valley endorsement, deposited them into the Midlantic trust account and ultimately distributed the proceeds to Juliano and the Nationwide malefactors. Juliano pled guilty to federal criminal charges arising out of his participation in that scheme; at his deposition in this matter, Juliano identified Richard J. Lipari and Raymond De Filippis as Nationwide participants in the scheme, but whether or not they participated has not been adjudicated in this litigation.
In this action, Valley sought compensatory and punitive damages against Juliano, Nationwide, Richard J. Lipari and Raymond De Filippis, and others, for their alleged participation in the check diversions. Valley also joined Midlantic, seeking recovery for Midlantic's payments to Nationwide on false, forged or fraudulent Valley endorsements. Among a variety of crossclaims and counterclaims, Midlantic sued Nationwide for breach of its guarantees of prior endorsements and warranties of good title, see N.J.S.A. 12A:3-417, 4-207, and sued the Liparis on personal guarantees they had given Midlantic for "the payment, when due, of each and every obligation ... owing to Midlantic by Nationwide."
On Midlantic's motion for partial summary judgment, the Law Division determined that the Liparis were liable to Midlantic under their personal guarantees for all monies to be found due and owing to Midlantic by Nationwide. On Midlantic's later motion, the court awarded the $108,530.15 attorneys fees against Nationwide, and also imposed that obligation against the Liparis as guarantors. Those determinations are the subjects of the appeal. *fn2 After the appeal was filed, Valley settled and dismissedits claims against Midlantic, Nationwide, Richard J. Lipari and Raymond De Filippis.
Commencing in 1980, the Liparis executed and delivered a succession of personal guarantees to Midlantic, the last group dated April 1, 1986. Midlantic Branch Manager Galioto described the guarantees as having been given "in connection with the ongoing business operations of Nationwide," but April Lipari's answering certification set forth - without subsequent contradiction - that they had been given to secure "a $100,000.00 annually renewable line of credit account that Nationwide has with Midlantic." The April 1, 1986 guarantees all utilized a Midlantic printed form, which stated in relevant part:
For Valuable Considerations, and to induce you to loan money and extend credit in reliance hereon, I hereby guarantee, unconditionally, the payment, when due, of each and every obligation, direct or contingent, now existing or hereafter arising, owing to you by Nationwide Adjustment Corporation hereinafter called the Borrower.
The Guaranty is a continuing guaranty, and shall remain in force until revoked by notice in writing to you, and revocation hereof shall not prejudice your claim hereunder with respect ...