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FARRIS v. COUNTY OF CAMDEN
August 20, 1999
RAHN J. FARRIS, PLAINTIFF,
COUNTY OF CAMDEN, CAMDEN COUNTY DEMOCRATIC COMMITTEE, GEORGE E. NORCROSS, III, LOUIS BEZICH, JOSEPH BENTON, THOMAS MITCHELL, JOHN ADLER, JACK GALLAGHER, GALLAGHER ASSOCIATES, INC., JUDY PALOMBI AND PHYLLIS PEARL, DEFENDANTS.
The opinion of the court was delivered by: Orlofsky, District Judge.
I. INTRODUCTION .................................................................. 311
II. BACKGROUND .................................................................... 313
III. LEGAL STANDARD GOVERNING MOTIONS FOR SUMMARY JUDGMENT ......................... 320
IV. DISCUSSION .................................................................... 321
A. Defendants' Motions for Summary Judgment ................................... 321
1. Norcross's and the CCDC's Motion for Summary Judgment and Application
of the Coconspirator Exception to the Hearsay Rule set forth in
Rule 801(d)(2)(E) of the Federal Rules of Evidence .................... 321
a. Counts IX and X, Tortious Interference ............................... 321
b. Counts XII and XIV, Conspiracy to Tortiously Interfere ............... 328
c. Count XIII, Conspiracy to Defraud .................................... 330
d. Counts XV, XVI, XVII, XVIII, and XIX Conspiracy to Extort,
Blackmail and Deprive Farris of his Real Property................... 331
e. The Motion for Sanctions Pursuant to 28 U.S.C. § 1927 and the
Court's Inherent Power ............................................. 331
2. Camden County's Motion for Summary Judgment ............................. 335
a. Count I, Rescission or Reformation on the basis of Economic
Duress ............................................................. 335
b. Count II, Rescission or Reformation on the Basis of Fraud and
Misrepresentation .................................................. 339
c. Count III, Rescission or Reformation on the Basis of Unconscionability
d. Count IV, Breach of the Original 1300 Building lease ................. 343
e. Count V, Breach of the Original 1350 Building Lease .................. 344
f. Count VI, Common Law Fraud ........................................... 345
g. Count VII, Breach of Contract/Conversion ............................. 346
h. Count XI, Breach of Duty of Good Faith and Fair Dealing .............. 347
i. Count XIII, Conspiracy to Defraud .................................... 349
j. Counts XVII and XIX, Conspiracy to Extort, Blackmail and Deprive
Farris of his Real Property ........................................ 349
3. Mitchell's Motion for Summary Judgment .................................. 350
a. Count VI, Common Law Fraud ........................................... 350
b. Count VIII, Tortious Interference with Contract and Prospective
Economic Advantage ................................................. 351
c. Count XII, Conspiracy to Tortiously Interfere and Defraud ............ 354
d. Counts XV and XVIII, Conspiracy to Extort, Blackmail and Deprive
Farris of his Real Property ........................................ 354
V. CONCLUSION .................................................................... 355
This diversity case presents novel issues of law arising out of
the application of the Federal Rules of Evidence to state law
causes of action at the summary judgment stage of the litigation.
Specifically, in determining whether Plaintiff, Rahn J. Farris,
has produced enough evidence to avoid the entry of summary
judgment for Defendants, George E. Norcross, III, and the Camden
County Democratic Committee, I must rule on the admissibility of
hearsay statements under the coconspirator exception to the
hearsay rule set forth in Rule 801(d)(2)(E) of the Federal Rules
of Evidence. The application of the coconspirator exception in
this case is further complicated by the denial by the alleged
declarants, Defendants, Thomas A. Mitchell, Judith Palombi, and
Phyllis Pearl, that they made the statements Plaintiff seeks to
introduce against Norcross and the Camden County Democratic
Committee. Because this Court's determination of the
admissibility of these alleged coconspirators' statements turns
on the credibility of the declarants and the witnesses offering
their alleged statements, I hold that, prior to resolving the
motion for summary judgment, I must conduct a hearing pursuant to
Rule 104(a) of the Federal Rules of Evidence,*fn1 to take
testimony and to assess the credibility of the witnesses.
This case also presents a novel issue of New Jersey state law
involving whether a chairman of a county political committee can,
as a matter of law, conspire with the county political committee,
a legal entity which is a creature of New Jersey statute. For the
reasons that follow, I hold that just as an authorized agent of a
private corporation cannot conspire with the corporation that
employs him, so too, a chairman of a county political committee
cannot conspire with the county political committee itself.
On October 6, 1997, Plaintiff, Rahn J. Farris, filed a
thirty-five count civil complaint in this Court alleging federal
and pendent state law claims against Defendants, County of
Camden, Camden County Democratic Committee, George E. Norcross,
III, Louis Bezich, Joseph Benton, Thomas Mitchell, John Adler,
Jack Gallagher, Gallagher Associates, Inc., Judy Palombi and
Phyllis Pearl. On December 8, 1998, Defendants, Norcross and the
Camden County Democratic Committee, moved for the imposition of
sanctions and attorneys' fees against counsel for Plaintiff,
pursuant to 28 U.S.C. § 1927 and the Court's inherent powers.
Curiously, no such relief was sought pursuant to Rule 11 of the
Federal Rules of Civil Procedure. Shortly thereafter, on February
5, 1999, Norcross and the Camden County Democratic Committee
moved for summary judgment on all claims. Similarly on April 30,
1999, and May 10, 1999, respectively, Defendants, the County of
Camden and Thomas A. Mitchell, moved for summary judgment on all
claims asserted against them. Because Plaintiff voluntarily
dismissed his federal causes of action on December 14, 1998, this
Court's jurisdiction is based upon 28 U.S.C. § 1332 and
For the reasons set forth below, I shall deny the motion of
Defendants, Norcross and the Camden County Democratic Committee,
for sanctions and attorneys' fees because they have failed to
make the requisite showing that counsel for Plaintiff acted in
bad faith in filing the Complaint and in conducting discovery. I
shall, however, grant the motion of Norcross and the Camden
County Democratic Committee for summary judgment on Plaintiff's
claims for civil conspiracy to defraud, extort political
contributions, blackmail, and to tortiously interfere with
Plaintiff's real property. Insofar as Norcross and the Democratic
Committee seek summary judgment on Plaintiff's claims for
tortious interference with Plaintiff's contract and prospective
economic advantage, and for civil conspiracy to so tortiously
interfere and to defraud, I shall deny the motion for summary
judgment without prejudice to
the right of Norcross and the Committee to renew this motion at
the conclusion of a pre-trial hearing conducted pursuant to Rule
104(a) to determine the admissibility of the alleged
coconspirator statements under Rule 801(d)(2)(E) of the Federal
Rules of Evidence.
In addition, I shall deny the motion for summary judgment of
the County of Camden on Plaintiff's claims for: (1) rescission or
reformation of the renegotiated leases between Plaintiff and the
County of Camden on the basis of economic duress, equitable
fraud, and unconscionability; (2) breach of the original lease
covering Plaintiff's building located at 1300 Admiral Wilson
Boulevard; and (3) breach of the covenant of good faith and fair
dealing. I shall grant the County of Camden's motion for summary
judgment on Plaintiff's claims for breach of the original lease
covering Plaintiff's property located at 1350 Admiral Wilson
Boulevard, common law fraud, and civil conspiracy.
Finally, I shall deny the motion for summary judgment of
Defendant, Thomas A. Mitchell, on Plaintiff's claims for common
law fraud and civil conspiracy to defraud. I shall, however,
grant Mitchell's motion for summary judgment on Plaintiff's
claims for tortious interference with Plaintiff's contract and
prospective economic advantage, and civil conspiracy.
Plaintiff, Rahn J. Farris ("Farris"), a citizen of the
Commonwealth of Pennsylvania, was the owner of two commercial
buildings located at 1300 and 1350 Admiral Wilson Boulevard,
Camden, New Jersey (hereinafter the "1300 Building," and the
"1350 Building," respectively). See Local Rule 56.1 Statement
of Material Facts of George E. Norcross, III, and the Camden
County Democratic Committee (filed Feb. 5, 1999), ¶ 3
(hereinafter, "CCDC's R. 56.1"); see also Complaint, ¶ 18;
Deposition of Rahn J. Farris (dated Aug. 4, 1998) at 15, 90. In
August, 1989, the County of Camden (the "County" or "Camden
County") leased 20,000 square feet of the 1300 Building from
Farris for the purpose of operating and housing the County's
Reach Program, which was operated by an employee of the County,
William Maguire ("Maguire"). See Farris Dep. (Aug. 4, 1998) at
219-20, 222-23. The lease term on the 1300 Building was from
October 1, 1989, to July 31, 1992, with monthly rental payments
of $25,000, resulting in an annual rental payment of $300,000.
See Plaintiff's Exhibits in Opposition of Motion for Sanctions
(filed Jan. 20, 1998) ("Pl. Sanction Opp."), Exh. 8 (1300
In March, 1990, the County leased an additional 7500 square
feet in the 1300 Building from Farris for the purpose of
operating the County's Division for Children. See Pl. Sanctions
Opp., Exh. 9 (Additional 1300 Building Leases); see also Farris
Dep. (Aug. 4, 1998) at 223. These additional leases provided for
monthly rental payments at a rate of $12 per square foot. See
Sanctions Opp., Exh. 9. Defendant, Judith Palombi ("Palombi"),
was the director of the County's Division for Children, and her
office was located in the 1300 Building. See Palombi's Local
Rule 56.1 Statement of Material Fact (filed Apr. 30, 1999), ¶ 4.
In December, 1989, the County leased 20,000 square feet in the
1350 Building in order to house the County's Business Incubator
Program. See Certification of Anthony Valenti, Esq. (filed Apr.
30, 1999), Exh. 12 (Internal County Memorandum from Thomas A.
Mitchell to Stephen R. Sasala (dated June 6, 1991)). The 1350
Building lease called for a rental payment of $12.00 per square
foot, which corresponded to a $20,000 per month rental payment,
or an annual rental payment of $240,000. See id. The term of
the 1350 Building lease ran from December 1, 1989, to November
30, 1992. See id. The County and Farris dispute whether or not
the County officially took possession of the 1350 Building
because, although the director of the Business Incubator program,
Ben Smallwood, had entered the premises,
the County had terminated the funding for the program before it
officially began to operate. See id.; see also Farris Dep.
(Aug. 4, 1998) at 227-30.
In October, 1991, Farris and the County entered into a new
lease on the 1350 Building which superceded the original lease
executed in December, 1989. See Valenti Cert., (1999), Exh. 13
(1350 Building Lease (dated Oct. 10, 1991)). In December, 1991,
Defendant, Thomas Mitchell ("Mitchell"), Assistant County
Counsel, assured Farris that, notwithstanding the termination of
Ben Smallwood's program, the County intended to reenter the
premises in January, 1991. See Farris Dep. (Aug. 4, 1998) at
230; See Deposition of Thomas A. Mitchell (dated Dec. 10, 1998)
Farris hired Mark Willis ("Willis") as building manager for
both the 1300 and the 1350 Buildings. See Deposition of Mark
Willis (dated Sept. 17, 1998) at 58. Farris gave Willis "full
responsibility for the day to day operations of the buildings[,]
and [Willis] was responsible for such items as collecting rent,
paying expenses, maintenance and receiving the mail." See
Plaintiff's Local Rule 56.1 Statement of Material Facts (filed
Feb. 5, 1999) at 9; Willis Dep. (Sept. 17, 1998) at 11-12.
In the fall of 1991, "Farris was mailed 10 tickets to a
political fundraiser [sic]" which requested that he make a
$10,000 political contribution. See Farris Dep. (Aug. 4, 1998)
at 196-99; see also Pl. R. 56.1 at 9. The parties dispute
whether the political fund-raiser was for the benefit of
Congressman Robert Andrews' re-election campaign. Farris
disregarded the solicitation. About a month later, Farris
received a similar solicitation in the mail. See Pl. R. 56.1 at
9. Farris testified at his August 12, 1998, deposition that
Maguire told him the tickets were sent by Defendant, George E.
Norcross, III ("Norcross"), the Chairman of Defendant, Camden
County Democratic Committee (the "CCDC"). See Farris Dep. (Aug.
4, 1998) at 195.
Farris testified that, in September or October, 1991, Maguire
"advised [him] that Norcross wanted to meet him and [Maguire] set
up a meeting with Norcross for the next day[.]" See Farris Dep.
at 190; see also CCDC R. 56.1, ¶ 5. Farris testified that,
"[a]t the meeting, Norcross discussed the tickets and questioned
how he could get Farris to be a team player." See Pl. R. 56.1
at 10. Specifically, Farris testified:
I walked in his office . . . And he said to me,
something to the point of "How do I get you to be a
I said, "If you're talking about the tickets, I'd
love to be a team player, but I can't afford the
tickets at this point in time." He told me how
important it was that tickets be sold to get their
candidate wherever that candidate is going . . . And
I told him, "I put too much money in my building and
I really couldn't afford it." He said, "How much do
you owe on your building?" Somehow a number,
seven-fifty, seven hundred thousand came up . . . And
his remark to me was, "I'll buy your building for
seven hundred thousand." I said, "I can't sell you
the building. I have more [in] liens [than] . . .
that. I couldn't sell it, and I'm not here to sell
the building." At that point in time, he just put his
hands on his desk. He said, "This meeting's over."
See Farris Dep. (Aug. 4, 1998) at 191-92.
When Farris returned to his office at the 1300 Building after
his meeting with Norcross, "Maguire was already there waiting."
See Pl. R. 56.1 at 10; see also Farris Dep. (Aug. 4, 1998) at
193. Willis arrived at Farris's office also. See Willis Dep.
(Sept. 24, 1998) at 146. Farris and Willis testified that Maguire
was aware of the outcome of Farris's meeting with Norcross, even
without having been told by Farris. See Farris Dep. (Aug. 4,
1998) at 193; Willis Dep. (Sept. 24, 1998) at 146. Willis further
testified that Maguire stated that Farris "was going to start
trouble with [Norcross.]" See Willis Dep. (Sept. 24, 1998) at
Willis also testified that Palombi "was aware of [Farris's]
meeting with Norcross and what had transpired." See Pl. R. 56.1
at 11; see also Willis Dep. (Sept. 24, 1998) at 115. According
to Willis, Palombi also stated that she had a letter from
Norcross stating that if Farris did not make the requested
political contributions the County was going to move out of the
1300 Building. See Willis Dep. (Sept. 24, 1998) at 116-22.
Palombi testified that she did have conversations with Willis
and Farris regarding political fund-raisers. See Deposition of
Judith Palombi (dated Dec. 28, 1998) at 86-87. Palombi, however,
denied receiving a letter from Norcross about Farris's failure to
make political contributions. See id. at 117. Palombi
I know there was no letter, absolutely no letter. I
have no idea what Mark Willis is talking about when
he mentions a letter regarding Mr. Norcross. I have
never had . . . a letter from George Norcross
involving any fund-raising requesting that I have
anything to do with Rahn Farris or Mark Willis,
Willis testified that shortly after Farris's meeting with
Norcross the County began to withhold rent due under the 1300 and
the 1350 Building leases. See Willis Dep. (Sept. 24, 1998) at
39-40. Willis further testified that Maguire stated that
"Norcross had directed the rents be held up. . . ." See Pl. R.
56.1 at 11; Willis Dep. (Sept. 24, 1998) at 155.
Stephen R. Sasala ("Sasala"), the County Administrator for
Camden County from April 1, 1991, to March 31, 1994, testified
that, in 1991, the Board of Chosen Freeholders decided to
renegotiate a number of the County's leases. See Deposition of
Stephen R. Sasala (dated Nov. 13, 1998) at 20, 22. Sasala, who
had been appointed County Administrator by the Board when it was
controlled by the Republican Party, testified:
[The decision to renegotiate Farris's leases was
made] in 1991 when the Republicans controlled the
freeholder board, but it certainly carried over into
1992 [after the Democrats gained control of the
Id. at 22. Sasala further testified:
Q. [By Mr. Zarrillo] And the reason that you
understood why the Republican administration wanted
to renegotiate the leases was?
A. To consolidate county office space.
Q. Was there anything about the amounts of money
being paid on those leases that was a motivating
factor, as far you know?
A. I believe there was also at the time an
understanding that the leases were excessive, and
that they wanted to cut the amount on a per square
Q. In 1992 there was a transition to a Democratic
freeholder board. Correct?
Q. Were you aware of the rationale as to why the
freeholder board wanted to continue the process of
renegotiating leases that was begun in the Republican
administration . . . ?
A. Basically because they were inflated leases, they
were very expensive . . .
Sasala testified that Mitchell and Defendant, Joseph Benton
("Benton"), were directed to conduct the actual renegotiations
with Farris. See id. at 25. In March, 1992, Benton "contacted
Farris and advised him that he had to renegotiate all of his
leases with the County[.]" See Pl. R. 56.1 at 12; see also
Farris Dep. (Aug. 12, 1998) at 331-32; Deposition of Joseph
Benton (Dec. 9, 1998) at 70-73, 106. Farris testified that Benton
stated that "[i]t was in [his] best interest . . . to renegotiate
with the County, or they're [sic] going to move, and [Farris was]
going to be out a
lot of money." See Farris Dep. (Aug. 12, 1998) at 332. Farris
further testified that Benton offered him "five dollars a square
foot." Id. at 331. Benton, however, testified that he offered
Farris four to five dollars less per square foot than the
existing rental rate. See Benton Dep. at 70-73, 106.
After speaking with Benton, Farris contacted Mitchell. See
Farris Dep. (Aug. 12, 1998) at 332. Farris testified:
Tom Mitchell got back to me in a couple of days. He
said, "They want to renegotiate with you." I said,
"Why?" He said, "Because that's what George
[Norcross] wants to do."
Id. Mitchell testified, however, that he did not tell Farris
that Norcross directed that Farris's leases be renegotiated.
See Mitchell Dep. at 103-04.
Regarding the renegotiations, Sasala testified that Farris
complained to him that he thought that his leases with the County
were being renegotiated because he had failed to make political
contributions. See Sasala Dep. at 26-28. Sasala further
[Farris] called me and pleaded with me and said he
could not get [the rent] paid and was there anything
I could do about it.
I recall having a conversation with [Defendant, Louis
Bezich ("Bezich")]. And his response was "I'll take
care of it."
Q. [By Mr. Zarrillo] . . . During the course of this
conversation with Mr. Bezich, do you recall him
saying to you that the checks were on his desk for
A. That sounds familiar. I think so . . . I believe
the checks were cut[.]
Through the renegotiations with Farris, the County was seeking
the inclusion of two specific terms in the renegotiated lease for
the 1300 Building. First, the County was seeking a
downward-spiraling, reduced rental rate. See Sasala Dep. at 24.
Sasala testified that the rental provision, which reduced the
rent per square foot by $.25 each year for the first three years
of the lease, was his idea. See id. at 95-96. Second, the
County was seeking a clause in the renegotiated leases that
permitted the County to terminate the lease on thirty-days notice
to Farris. See Mitchell Dep. at 222. Sasala testified that the
thirty-day termination provision "was tied into the county having
maximum flexibility, because there was some discussion [about
consolidating office space] in the RCA building[,]" located in
Camden, New Jersey. See Sasala Dep. at 98-99.
During the renegotiations of Farris's leases with the County,
Farris testified that the County was withholding rent due under
the original 1350 Building lease. See Farris Dep. (Aug. 4,
1998) at 231; Willis Dep. (Sept. 22, 1998) at 146-47. Farris
further testified that Mitchell and Benton represented to him
that, if he did not agree to the County's terms in the
renegotiated leases, the County would vacate the 1300 Building,
immediately relocate to the RCA building, and withhold the back
rent indefinitely. Specifically, Farris testified:
My leases were not up in the  building until
August[, 1992]. I was renegotiated in March and
April[, 1992]. And as far as I was concerned, I was
forced to sign that lease, "Or we're moving to the
RCA Building and you will not get your money."
See Farris Dep. (Aug. 12, 1998) at 335.
Sasala testified that the County could not immediately relocate
its offices to the RCA building in April, 1992. See Sasala Dep.
at 64-66. Farris testified that after he agreed to the County's
terms in the renegotiated 1300 Building leases, Mitchell
apologized to him for misleading him about the availability of
the RCA building. See Farris Dep. (Aug. 4, 1998) at 30-32.
Mitchell denied making any such apology. See Mitchell Dep. at
While Farris and the County were renegotiating the 1300
Building lease, Farris was being solicited for political
contributions. Willis testified that he "received a phone call
from Defendant, Phyllis Pearl [(`Pearl')]." See Pl. R. 56.1 at
15. "Pearl advised that she was from Jack Gallagher Associates
and was calling on behalf of Rob Andrews for Congress." Id.
Willis testified that "Pearl referenced the tickets that were
mailed to Farris and his `conflict with the County.'" Id.
(quoting Willis Dep. (Sept. 24, 1998) at 92-95). "Pearl requested
that Farris make a $3,000 contribution and advised if she got a
check for $3,000 that day, she could have Farris's rent paid by
the end of the day." Id. Willis testified that "Pearl followed
up a couple days later in person." Id. Farris did not make the
contribution. See id.
Pearl testified at her February 25, 1999, deposition that she
did make fund-raising calls for the CCDC, but that she did not
solicit a $3000 contribution from Farris, promising to have his
overdue rent paid. See Deposition of Phyllis Pearl (dated Feb.
25, 1999) at 66, 84, 90. Specifically, Pearl testified:
Q. [By Mr. Valenti] Do you know if you ever spoke to
Mark Willis on the phone?
A. I have no idea. I'd say no. I mean, he never
identified himself. You know, I call an office. I
don't know who I'm talking to. I ask for the person I
need to speak to, they say, they're not here. I hang
Q. Do you have any specific recollection of speaking
to anyone at Admiral Wilson Boulevard in response to
a call that you were placing for the CCDC?
Q. You've never said to anyone that their
contribution would be noticed by the party?
A. . . . I would probably say to somebody, I'm sure
people will notice if you're helpful. That's probably
the words I would use
Q. [Did you ever speak] with Judy Palombi concerning
any rent issues with Admiral Wilson Boulevard?
Id. at 66-67, 88-90. Pearl further testified that she did not
"fund-raise" on behalf of Congressman Andrews. See id. at 103.
In February, 1992, Farris made a $1,500 contribution to the
CCDC. See Exhibits in Support of Brief of Summary Judgment on
Behalf of Norcross and the CCDC, Exh. R, (Check (dated Feb. 25,
1992)). Farris testified that Theresa Kirby, a loan officer at
Commerce Bank, had convinced him to make the contribution. See
Farris Dep. (Aug. 12, 1998) at 499. The contribution was for the
purchase of three tickets to a roast held by the CCDC in
Norcross's honor. See id.; see also Exhibits in Support of
Brief of Summary Judgment on Behalf of Norcross and the CCDC,
Exh. R, (Check (dated Feb. 25, 1992)).
Farris and Willis testified that, even after Farris agreed to
the renegotiated lease terms for the 1300 Building, "the County
continued to withhold the rent that it owed Farris" on the 1350
Building. See Pl. R. 56.1 at 15. Both Farris and Willis
repeatedly telephoned Bezich, the Chief Operating Officer and
Treasurer of Camden County, inquiring about the overdue rent.
See id. at 15-16; see also See Deposition of Louis Bezich
(dated Feb. 23, 1999) at 35-38. Bezich testified that he had no
recollection of receiving any such calls. See Bezich Dep. at
66. Willis also repeatedly called Mitchell to inquire about the
rent. See id. at 16. Willis secretly tape recorded a number of
his telephone conversations with Mitchell. See id.; see also
Pl. Sanctions Opp. Exh. 13 (Transcript of Tape Recorded
On April 1, 1992, at the same time that Farris and the County
were renegotiating the 1300 Building lease, Mitchell, on behalf
of the County, informed Farris by letter that the County was
terminating the 1350 Building lease. See Valenti Cert., Exh. 15
(Letter to Farris from Mitchell (dated Apr. 1, 1992)). At the
time, the County was withholding the rent due for the months of
January, February, and March, 1992. See Farris Dep. (Aug. 12,
1998) at 361, 392.
All of Farris's leases with the County contained a provision
entitled "Obligation Subject to the Availability and
Appropriation of Funds." See Valenti Cert., Exh. 13, ¶ 27. The
provision provided, in relevant part:
"[I]t is mutually understood and agreed between the
parties that all financial obligations undertaken by
the [County] under [the 1350 Building] lease
including, but not limited to rent, are made subject
to the availability and appropriation of sufficient
funds by the by the Board of Chosen Freeholders . .
Id. Exercising this provision, the County terminated the 1350
Building lease, effective May 31, 1992. See Valenti Cert., Exh.
14; see also Certification of John T. Coyne, Esq. (filed Apr.
30, 1999), Exh. E. In April, 1992, the County remitted to Farris
the rent due under the 1350 Building lease for the months of
January, February, and March, 1992. See Compl., ¶ 62.
In November, 1992, Farris and the County entered into another
lease for the 1350 Building. See Valenti Cert., Exh, 17. The
renegotiated 1350 Building lease contained the reduced rental
rate and thirty-day termination provisions that the County had
required in the renegotiation of the 1300 Building lease. See
id. Farris testified that, prior to entering into the
renegotiated 1350 Building lease, "[i]n the fall of 1992, [he]
was visited by Stephen Umbrell, the Executive Vice President of
Commerce Bank." See Pl. R. 56.1 at 19; see also Valenti
Cert., Exh. 16 (Certification of Rahn J. Farris (dated Jan. 29,
1999), ¶ 3). At the time, Commerce Bank held notes secured by
mortgages on the 1300 and 1350 Buildings. See, e.g., Farris
Dep. (Aug. 12, 1998) at 387. "Mr. Umbrell requested that Farris
execute an assignment of lease payments for the 1350 Building in
favor of Commerce Bank." See Pl. R. 56.1 at 19. "Farris advised
Umbrell that Camden County had vacated the building and that
there was no longer a tenant in the 1350 building." Id. Umbrell
insisted, and Farris acquiesced in executing an assignment of
rents in favor of Commerce Bank. See id. The County, after
entering into the renegotiated lease with Farris, made its rental
payments "directly to Commerce Bank" under the assignment of
lease payments. Id.
On February 2, 1994, unable to make the payments on the
mortgages covering the 1300 and 1350 Buildings, as well as the
commercial loans Farris had obtained for unrelated business
ventures, and judgment liens filed by numerous creditors, Farris
filed for bankruptcy. See Valenti Cert., Exh. 14 (Discharge of
Debtor (dated June 2, 1997)). On June 2, 1997, Farris's debts
were discharged by order of the United States Bankruptcy Court
for the Eastern District of Pennsylvania. See id.; see also
County of Camden v. Rahn J. Farris, Civil Action No.
97-3297(SMO), unpubl. slip op. (D.N.J. Jun. 29, 1998).
On October 6, 1997, Farris filed a thirty-five count
Complaint*fn3 in this Court alleging both federal and pendent
state law causes of action against Defendants, Camden County,
Norcross, the CCDC, Louis Bezich, Thomas Mitchell, Judy Palombi,
and Phyllis Pearl. See Compl., ¶¶ 6-17.*fn4
On December 14, 1998, Magistrate Judge Joel B. Rosen granted
Farris's motion to voluntarily dismiss Counts XX through XXXV of
the Complaint, namely, Farris's claims for violations of the
Racketeer Influenced and Corrupt Organizations Act,
18 U.S.C. § 1962, and its New Jersey analogue, N.J. Stat. Ann. § 2C:41-2.
See Order of Mag. Judge Rosen (filed Dec. 14, 1998). Farris's
remaining counts include claims for: (1) rescission or
reformation of the renegotiated 1300 and 1350 Building leases on
the basis of economic duress, fraud, misrepresentation, and
unconscionability, Counts I-III; (2) breach of the original 1300
and 1350 Building leases, as well as the renegotiated 1300
Building lease, Counts IV-V, VII, XI; (3) common law fraud
against the County, Bezich, Mitchell, and Palombi, Count VI; (4)
tortious interference with contract and prospective economic
advantage against Bezich, Mitchell, and Palombi, Count VIII; (5)
tortious interference with contract and prospective economic
advantage against Norcross and the CCDC, Counts IX-X; (6) civil
conspiracy to tortiously interfere and defraud against Norcross,
the CCDC, Bezich, Mitchell, and Palombi, Count XII; (7) civil
conspiracy to defraud against Camden County, Norcross, and the
CCDC, Count XIII; (8) civil conspiracy to tortiously interfere
against Norcross, the CCDC, and Pearl, Count XIV; and (9) civil
conspiracy to extort political contributions and to deprive
Farris of his real property against Norcross, the CCDC, Bezich,
Mitchell, Palombi, Pearl, and the County, Counts XV-XIX. See
Compl, Count I-XIX.
On December 8, 1998, Norcross and the CCDC moved, pursuant to
28 U.S.C. § 1927 and the Court's inherent powers, for the
imposition of sanctions and attorneys' fees against counsel for
Farris, contending that Farris's claims against Norcross and the
CCDC lacked an arguable basis in law and fact, and that counsel
for Farris had misrepresented the facts of the case in Farris's
Rule 26 initial disclosures. See Notice of Motion (filed Dec.
8, 1998). While that motion was pending, on February 5, 1999,
Norcross and the CCDC also moved for summary judgment on all
claims asserted against them. See Notice of Motion (filed Feb.
5, 1999). Farris opposed the motion on the merits and filed an
application pursuant to Rule 56(f) to adjourn Norcross's and the
CCDC's motion until the conclusion of discovery.*fn5 See Rule
56(f) Certification of Jerald R. Cureton, Esq. (filed Feb. 5,
After the close of discovery, on April 22, 1999, Mitchell filed
a Notice of Intent to submit a dispositive motion. See Notice
of Intent (filed Apr. 22, 1999). Subsequently, on May 10, 1999,
Mitchell filed a motion for summary judgment on all claims. See
Notice of Motion (filed May 10, 1999). Likewise, on April 30,
1999, Camden County filed a motion for summary judgment on all
claims asserted against it.*fn6 See Camden
County's Notice of Motion (filed Apr. 30, 1999). Farris opposed
both motions contending that genuine disputed issues of material
fact exist, precluding the entry of summary judgment in favor of
Mitchell and the County.
III. LEGAL STANDARD GOVERNING MOTIONS FOR SUMMARY JUDGMENT
"On a motion for summary judgment, the court must determine
whether the evidence shows that `there is no genuine issue as to
any material fact and that the moving party is entitled to
judgment as a matter of law.'" Abraham v. Raso, 183 F.3d 279,
287 (3d Cir. 1999) (citing Fed.R.Civ.P. 56(c)). "Any factual
dispute invoked by the nonmoving party to resist summary judgment
must be both material in the sense of bearing on an essential
element of the plaintiff's claim and genuine in the sense that a
reasonable jury could find in favor of the nonmoving party."
Id. (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242,
248-251, 106 S.Ct. 2505, 91 L.Ed.2d 202 (1986)). In opposing
summary judgment, a party "must do more than simply show that
there is some metaphysical doubt as to material facts,"
Matsushita Elec. Indus. Co. v. Zenith Radio Corp.,
475 U.S. 574, 586, 106 S.Ct. 1348, 89 L.Ed.2d 538 (1986), but a court
should not prevent a case from reaching a jury simply because the
court favors one of several reasonable views of the evidence.
Abraham, 183 F.3d at 287. "[T]he judge's function is not
himself to weigh the evidence and determine the truth of the
matter but to determine whether there is a genuine issue for
trial." Anderson, 477 U.S. at 249, 106 S.Ct. 2505; see also
Abraham, 183 F.3d at 287. "Thus, while the nonmoving party must
present enough evidence to demonstrate a dispute is genuine, all
inferences in interpreting the evidence presented by the parties
should be drawn in favor of the nonmoving party." Abraham, 183
F.3d at 287 (citing Boyle v. County of Allegheny Pa.,
139 F.3d 386, 393 (3d Cir. 1998)). "Cases that turn crucially on the
credibility of witnesses' testimony in particular should not be
resolved on summary judgment." Id.
If the nonmoving party fails to oppose the motion by written
objection, memorandum, affidavits and other evidence, the Court
"will accept as true all material facts set forth by the moving
party with appropriate record support." Anchorage Assocs. v.
Virgin Islands Bd. of Tax Rev., 922 F.2d 168, 175 (3d Cir. 1990)
(quoting Jaroma v. Massey, 873 F.2d 17, 21 (1st Cir. 1989)).
Even where the non-moving party has failed to establish a triable
issue of fact, summary judgment will not be granted unless
"appropriate." Fed. R.Civ.P. 56(e); see Anchorage Assocs., 922
F.2d at 175. Rule 56(e) of the Federal
Rules of Civil Procedure requires that the case be evaluated on
its merits, with summary judgment being granted for the movant
only if they are entitled to a judgment as a matter of law. See
Anchorage Assocs., 922 F.2d at 175.
A. Defendants' Motions for Summary Judgment
1. Norcross's and the CCDC's Motion for Summary Judgment and
Application of the Coconspirator Exception to the Hearsay Rule
set forth in Rule 801(d)(2)(E) of the Federal Rules of
a. Counts IX and X, Tortious Interference
In Count IX of the Complaint, Farris alleges that Norcross
"directed, encouraged, and otherwise caused Defendant Camden
County to breach its lease agreements with Plaintiff by failing
to make rent payments for months at a time and by vacating the
1350 Building prior to the end of the 1350 Building Lease." See
Compl., ¶ 139. Farris also alleges in Count IX that Norcross
"directed, encouraged, and otherwise caused Defendant Camden
County to engage in coercive and fraudulent tactics so as to
cause Plaintiff to enter the [renegotiated leases]." Id., ¶
140. Farris alleges that the "actions of Norcross were
intentional and malicious and were engaged in for various reasons
including to facilitate a scheme to acquire Plaintiff's 1300
Building, to coerce and encourage Plaintiff into making political
contributions, and to retaliate against Plaintiff's prior
failures to make contributions . . ." Id., ¶ 141. In Count X,
Farris makes the same allegations against the CCDC. See id.,
In support of their motion for summary judgment, both Norcross
and the CCDC contend that "plaintiff has no evidence whatsoever
that Norcross or the [CCDC] interfered in any way with [Farris's]
lease agreements with the County of Camden." See Norcross's and
the CCDC's Brief in Support of Motion for Summary Judgment (filed
Feb. 5, 1999) ("CCDC's Brief") at 19. In addition, in response to
Farris's contention that the hearsay statements of County
employees are sufficient to create a dispute of material fact,
Norcross and the CCDC contend that these statements are
inadmissible to prove that Norcross and the CCDC tortiously
interfered with Farris's leases with the County. See Reply
Brief of Norcross and the CCDC (filed Feb. 5, 1999) at 6-11.
Under New Jersey law, "[t]o state a claim for tortious
interference with business relationships, a plaintiff must allege
that: (1) it had a continuing or prospective economic
relationship or reasonable expectation of economic advantage; (2)
the defendant knew of such relationship of expectancy; (3) the
interference and harm inflicted were done intentionally and with
"malice" in the sense of conduct that is wrongful and without
justification or excuse; (4) if not for the interference, it was
reasonably probable that plaintiff would have realized its
economic advantage; and (5) the plaintiff was injured as a result
of defendant's conduct." Eli Lilly and Co. v. Roussel Corp.,
23 F. Supp.2d 460, 493-94 (D.N.J. 1998) (citing Fineman v. Armstrong
World Indus., Inc., 980 F.2d 171, 186 (3d Cir. 1992)); see
Varrallo v. Hammond, Inc., 94 F.3d 842, 848 (3d Cir. 1996);
Printing Mart-Morristown v. Sharp Electronics Corp., 116 N.J. 739,
751-52, 563 A.2d 31 (1989); see also Lightning Lube, Inc.
v. Witco Corp., 4 F.3d 1153, 1167 (3d Cir. 1993); Lithuanian
Commerce Corp. v. Sara Lee Hosiery, 179 F.R.D. 450, 482-83
In response to this contention, Farris contends that the
statements of Mitchell, Palombi, Maguire and Pearl, are
admissible to prove that Norcross and the CCDC tortiously
interfered with Farris's leases with the County. See
Plaintiff's Brief in Opposition to Norcross's and the CCDC's
Motion for Summary Judgment (filed Feb. 5, 1999) at 30-31, 33-34.
Specifically, Farris contends that "[t]he testimony of Willis and
Farris is that they were informed by Maguire, Palombi[,] and
Mitchell, on various occasions that the withholding of rents and
the renegotiation of [Farris's] leases [were] at the direction of
Norcross because Farris failed to make the [political]
contributions requested of him." Id. at 31. Norcross and the
CCDC contend to the contrary that the statements of Palombi,
Mitchell, and Maguire, are inadmissible hearsay. See Reply
Brief of Norcross and the CCDC at 6-11.
It is well settled that, in opposing a motion for summary
judgment, "[a] plaintiff . . . must point to admissible evidence
that would be sufficient to show all elements of a prima facie
case under applicable substantive law." Clark v. Modern Group
Ltd., 9 F.3d 321, 326 (3d Cir. 1993) (citation omitted).
Consistent with this well settled principle of law, in Philbin
v. Trans. Union Corp., 101 F.3d 957 (3d Cir. 1996), the Third
Circuit noted that "a hearsay statement that is not capable of
being admissible at trial should not be considered on a summary
judgment motion[.]" Blackburn v. United Parcel Service, Inc.,
179 F.3d 81, 95 (3d Cir. 1999) (construing Philbin, 101 F.3d at
961 n. 1). When a party seeking to avoid summary judgment has
pointed to arguably hearsay evidence in the record, a District
Court "must first determine whether any [of the non-moving
party's] evidence . . . is admissible, based as it is on hearsay
and, in some instances, multiple hearsay." Blackburn, 179 F.3d
at 95 (citing Philbin, 101 F.3d at 961 n. 1). "Then, [a
District Court] must determine whether the hearsay evidence that
might be admissible at trial is sufficient to defeat [the moving
party's] summary judgment motion or whether judgment [should]
properly [be] entered in favor of [the moving party]." Id.
As a preliminary matter, I note that Farris contends that any
statements made by Palombi, Mitchell, and Maguire, made within
the scope of their employment, are admissible against the County
as admissions by a party opponent under Rule 801(d)(2)(D) of the
Federal Rules of Evidence. See Plaintiff's Brief in Opposition
to Norcross's and the CCDC's Motion for Summary Judgment (filed
Feb. 5, 1999) at 33. Building on this contention, Farris argues
that these statements are also admissible against Norcross and
the CCDC under Rule 801(d)(2)(E) because he has alleged that
Norcross, the CCDC, and the County are coconspirators. Id.
These contentions are without merit in light of this Court's
conclusion that as a matter of law the County cannot conspire
with Norcross and the CCDC to tortiously interfere with Farris's
leases, to extort political contributions, to interfere with
Farris's real property, or to defraud. See § IV.A.2.f-j
Therefore, because Rule 801(d)(2)(D) cannot serve as a basis
for the admissibility of Mitchell's, Palombi's and Maguire's
statements against Norcross and the CCDC, Farris must demonstrate
that these statements satisfy the requirements of Rule
801(d)(2)(E),*fn7 independent of the County's alleged role as a
In addition, because Farris has not alleged that Maguire was a
party to the civil conspiracy to tortiously interfere with his
contractual and prospective contractual relationship with the
County, Rule 801(d)(2)(E) cannot serve as the basis for the
admissibility of Maguire's hearsay statements.*fn8 Farris has
failed to assert an alternative basis for the admissibility of
Maguire's statements, either under Rule 801, as non-hearsay, or
the exceptions to the hearsay rule in Rules 803 and 804. See
note 6 and accompanying text. Therefore, because Maguire's
statements are clearly hearsay "that is not capable of being
admissible at trial, [his alleged statements shall] not be
considered [in resolving this] . . . summary judgment motion[.]"
Blackburn, 179 F.3d at 95 (citing Philbin, 101 F.3d at 961 n.
Turning to the alleged statements of Palombi and Mitchell,
Farris contends that these statements, as well as those of
Phyllis Pearl, are admissible under Rule 801(d)(2)(E) of the
Federal Rules of Evidence. The specific statements at issue are
set forth below.
Willis testified at his September 22, 1998, deposition that:
Late, I believe in '91ish, certainly early '92ish[,
Farris received tickets to a political fund raiser].
[When] all that had started to surface, [Palombi]
came in and made a representation that certainly it
would be in our best interest to buy tickets. She had
a letter that . . . she read . . . to me. She said it
was from the chairman. And I joked with her, Frank
Sinatra, and she said, "No George Norcross."
She basically said they were going to move from the
facility . . . It was basically that, she read the
letter, that they would virtually move from the
building . . . if Rahn didn't contribute. [After] she
read it, she folded the letter up, I remember she put
it inside a day planner. We sat there and talked.
She basically made it very clear. The only time she
used [Norcross's] name was for that particular
letter. She's been to headquarters, they're expecting
Rahn to put out, it was kind of unavoidable. She was
making it very clear that those tickets on Rahn's
desk weren't going to go away, I mean they just
weren't going to go away . . . In terms of the
tickets she made it very clear that it was in Rahn's
interest just to buy them.
Q. [By Mr. Timpone] She said it was in Rahn's best
interest to buy the tickets?
Q. Did she link the continuing idea of the County
Q. Did she explain to you how your contributions to
the fund . . . would stop [her] Program from moving
A. She just basically made it very clear at that
point in time we'd be on-board. . . .
Q. Did she say if you don't buy these tickets, [her
program] would move [out of the 1300 Building]?
See Willis Dep. (Sept. 22, 1998) at 116-126.
Q. [By Mr. Tambussi] Tell me what Phyllis Pearl said?
A. [By Mr. Willis] Regarding the collection of our
rent, that $3000 could facilitate the rent . . .
Q. When did Phyllis Pearl tell you?
Q. In person or on the telephone?
A. Once in person, once on the phone.
Q. What did she say to you?
A. It was a follow-up of our conversation on the
phone regarding the $3000.
Q. So she called you first?
A. It was a solicitation on the phone first . . .
Basically identified who she was, where she was from.
[She said she was Phyllis Pearl] [f]rom Jack
Gallagher Associates. And she was calling on behalf
of Rob Andrews for Congress . . . She basically was
aware of the tickets that were mailed to us . . .
I don't remember the exact pitch. She caught me off
guard . . . She was aware . . . or our difficulty [in
collecting the money owed from the County].
And she immediately solicited, . . . "Would it be
possible to get a check made out on behalf of Rob
She basically said to me, "If I get the $3000 today,
I could get your rent by the end of the day[.]" . . .
That was as best I could tell you the statement she
made to me.
Q. Do you have any facts that George Norcross
directed her to make that call?
Q. Do you have any facts . . . that any member of the
[CCDC] directed Phyllis Pearl to make that call?
See id. at 90-103. Willis further testified that Pearl met him
at his office a short time after her telephone solicitation to
see "if [Farris had] decided he would give the $3000 for
support of Rob Andrews[.]" Id. at 106.
In addition, Farris testified that Mitchell stated that
Norcross was behind the County's failure to pay his overdue rent.
See Farris Dep. (Sept. 16, 1998) at 52-53. Specifically, Farris
Q. [By Mr. Zarrillo] Did anyone tell you that Mr.
Bezich was not signing your [rent] checks because of
your failure to make political contributions?
Q. Tell me the exact details of that conversation
with Mr. Mitchell?
A. I said, "What does [Sasala] mean it's a political
thing?" And [Mitchell] said to me, "Number 1, Lou
Bezich doesn't have enough brains to not sign your
check on his own, he got that from Mr. Norcross . . .
[M]aybe the next time they want you to give it might
be easier to give."
Q. And he attributed the failure to make the check
payment to Mr. Norcross?
See Id. Farris also testified that Mitchell stated to him that
Norcross had directed the County to renegotiate Farris's leases.
See Farris Dep. (Aug. 12, 1998) at 332.
Before I can consider whether this conflicting deposition
testimony constitutes a genuine disputed issue of material fact,
sufficient to warrant the denial of Norcross's and the CCDC's
motion for summary judgment, I must first determine whether the
statements attributable to Palombi, Pearl, and Mitchell are
admissible under the Federal Rules of Evidence. Blackburn, 179
F.3d at 95. Farris contends that these statements are admissible
under Rule 801(d)(2)(E) of the Federal Rules of Evidence, as
"statement[s] by a coconspirator of a party during the course and
in furtherance of the conspiracy[.]" See Fed. R. Ev.
Rule 801(d)(2)(E) provides, in relevant part:
A statement is not hearsay if . . . [t]he statement
is offered against a party and is . . . (E) a
statement by a coconspirator of a party during the
course and in furtherance of the conspiracy. The
contents of the statement shall be considered but are
not alone sufficient to establish . . . the existence
of the conspiracy and the participation therein of
the declarant and the party against whom the
statement is offered under subdivision (E).
See Fed. R. Ev. 801(d)(2)(E). The current rule is the result of
an amendment in 1997 adopted to conform the rule to the United
States Supreme Court's decision in Bourjaily v. United States,
483 U.S. 171, 107 S.Ct. 2775, 97 L.Ed.2d 144 (1987). See Fed.
R. Ev. 801, Advisory Committee Note to 1997 Amendment. The
Advisory Committee Note to the 1997 Amendment states:
First, the amendment codifies the holding in
Bourjaily by stating expressly that a court shall
consider the contents of a coconspirator's statement
in determining "the existence of the conspiracy and
the participation therein of the declarant and the
party against whom the statement is offered."
According to Bourjaily, Rule 104(a) requires these
preliminary questions to be established by a
preponderance of the evidence. Second, the amendment
resolves an issue on which the Court had reserved
decision. It provides that the contents of the
declarant's statement do not alone suffice to
establish a conspiracy in which the declarant and the
defendant participated. The court must consider in
addition the circumstances surrounding the statement,
such as the identity of the speaker, the context in
which the statement was made, or evidence
corroborating the contents of the statement in making
its determination as to each preliminary question.
In United States v. Ellis, 156 F.3d 493 (3d Cir. 1998), the
Third Circuit discussed the requirements for satisfying Rule