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Clifton Beale Consulting, LLC v. Peregrine Financial Group

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


June 26, 2007

CLIFTON BEALE CONSULTING, LLC AND CLIFTON BEALE - PARTNER & INDIVIDUAL, PLAINTIFFS-APPELLANTS,
v.
PEREGRINE FINANCIAL GROUP, INC., PEREGRINE EXCHANGE, INC., REBECCA J. WING, ESQ., KAPITAL MANAGEMENT CO., L.P., KAPITAL TRADING GROUP, LLC, JOHN NICK KONTOROUSIS, GEORGE NICK KONTOROUSIS, DEFENDANTS-RESPONDENTS, AND COMMERCE BANK, N.A.*FN1, DEFENDANT.

On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-3651-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted March 13, 2007

Before Judges Payne and Lihotz.

Plaintiffs Clifton Beale (Beale) and Clifton Beale Consulting, LLC, appeal from the following Law Division orders:

(1) March 8, 2005, which dismissed plaintiffs' complaint against defendant Peregrine Financial Group, Inc. (Peregrine), with prejudice; (2) January 13, 2006, which granted summary judgment as requested by defendants Kapital Management (KM), Kapital Trading Group, LLC (KTG), John Nick Kontorousis and George Nick Kontorousis (Kontorousis) and dismissed plaintiffs' complaint with prejudice; (3) January 13, 2006, which denied plaintiffs' motion for summary judgment; and (4) February 3, 2006, which denied plaintiffs' motion for reconsideration of the January 13, 2006 order.*fn2 We affirm.

In January 2003, Beale initiated a proceeding before the Commodity Futures Trading Commission (CFTC) against KTG, Kontorousis, and Peregrine, alleging fraud and seeking a return of two investments that totaled $37,000. The CFTC was created by Congress as part of the 1974 amendments to the Commodity Exchange Act (CEA), 7 U.S.C.A. § 1. Under the CEA, any person complaining of a violation by a registered commodity futures broker may apply to the CFTC for an order directing the broker to pay reparations to the complainant.

Beale's submissions in the CFTC proceeding included two checks as exhibits: one to KTG for $30,000 and the other to KM for $7,000. The parties made an election to utilize the agency's "voluntary decisional procedure," which provided an expedited disposition, but required the parties to waive the right to: present evidence in an oral hearing; receive a decision containing specific written findings of fact upon which the final decision was based; and appeal the final decision to the Commissioner or the United States Court of Appeals, pursuant to section 14(e) of the Commodity Exchange Act, 7 U.S.C.A. § 18(e). 17 C.F.R. § 12.100(b); see also 17 C.F.R. § 12.106(d).

On February 6, 2004, the CFTC issued a one paragraph final decision in favor of Beale, stating, in pertinent part:

Beale has established that George Nick Kontorousis violated Sections 4(a) and 4b(a)(i) of the Commodity Exchange Act; that Kontorousis' violations proximately caused $30,000 in damages; that Kapital Trading Group, LLC is liable for Kontorousis' violations pursuant to Section 2(a)(1)(A) of the Act; and that Peregrine Financial Group, Inc. is jointly and severally liable as the guarantor of Kapital Trading Group.

Additionally, the CFTC found "Beale [] failed to establish that he [was] entitled to an award to recover the $7,000 payment that he made directly to [KM.]" On February 4, 2004, Peregrine, in compliance with the final CFTC decision, repaid Beale.

On June 30, 2004, Beale, as a self-represented litigant, filed a complaint in the Law Division on behalf of "Clifton Beale Consulting, LLC, and Clifton Beale, as Partner & Individual," that sought recovery of the $7,000 not awarded in the CFTC arbitration, stating:

The main basis and thrust of this civil action is to address matters ignored and wrongfully set aside without comment or action [by the CFTC]. . . . The [CFTC] purposely and obviously ignored evidence . . . [constituting] fraud on the court for the better part of 2 to 2 1/2 years without being made to perform as promised for financial enhancement and enjoyment as expected and deserved of the injured parties being [p]laintiffs.

The series of trial court orders now appealed resulted from various motions filed by defendants. By order dated January 2, 2005, Judge Colalillo dismissed Wing from the litigation after determining plaintiffs failed to establish the requisite personal jurisdiction. In that same hearing, Peregrine's motion to dismiss was heard. After the motion judge concluded the CFTC proceeding was "a final binding arbitration," she dismissed the action against Peregrine, determining that litigation on the same claims was precluded. The order of dismissal was entered on March 8, 2005. Additionally, the motion judge dismissed the corporate plaintiff from the litigation, as it was not represented by counsel, citing Rule 1:21-1(c).

KM and KTG filed for summary judgment on January 13, 2006. Judge Fernandez-Vina concluded the corporate plaintiff lacked standing to assert the claims alleged, and, relying on the principles of res judicata as to Beale, granted summary judgment to the moving defendants. Plaintiffs' motion for reconsideration was thereafter denied on February 3, 2006.

In a disjointed, rambling brief, which contains no point headings, notwithstanding the requisites of Rule 2:6-2(a)(5), plaintiffs suggest that each judge erred in determining that the doctrine of res judicata precluded plaintiffs' causes of action against the various defendants. Before addressing this issue, we note that plaintiffs' argument alleging error by the motion judge in dismissing Wing from the litigation is not properly before us. Plaintiff's notice of appeal did not include the January 7, 2005 order within the scope of plaintiffs' appeal as required by Rule 2:5-1(f)(3)(A). We therefore decline to discuss this matter further. See e.g., Sikes v. Twp. of Rockaway, 269 N.J. Super. 463, 465-66 (App. Div. 1994).

The doctrine of res judicata "contemplates that when a controversy between parties is once fairly litigated and determined it is no longer open to relitigation." Lubliner v. Bd. of Alcoholic Beverage Control, 33 N.J. 428, 435 (1960). Where the second action is no more than a repetition of the first, the first suit stands as a barrier to the second. Culver v. Ins. Co. of N. Amer., 115 N.J. 451, 460 (1989). Application of the doctrine requires that:

(1) the judgment in the prior action must be valid, final, and on the merits; (2) the parties in the later action must be identical to or in privity with those in the prior action; and (3) the claim in the later action must grow out of the same transaction or occurrence as the claim in the earlier one. [Watkins v. Resorts Int'l Hotel & Casino, Inc., 124 N.J. 398, 412 (1991) (citations omitted).]

Based upon our study of the record, we are satisfied that Judges Colalillo and Fernandez-Vina properly applied these principles. The decision in the CFTC proceeding, which involved identical parties and the same transaction presented in the matter at hand, resulted in a valid, final, binding judgment on the merits. See 17 C.F.R. § 12.106(d) ("a final decision shall be recognized as a final order of the Commission for all other purposes including the judicial enforcement of an award made in connection with the final decision"). That judgment precludes plaintiffs' current suit, which is an attempt to relitigate a perceived unsatisfactory result. The trial court's grant of summary judgment and/or dismissal of the complaint was appropriate as defendants were entitled to judgment as a matter of law. R. 4:46-2(c).

Affirmed.


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