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Bernoskie v. Zarinsky

July 10, 2007


On appeal from Superior Court of New Jersey, Law Division, Union County, Docket No. L-1111-00.

The opinion of the court was delivered by: Grall, J.A.D.



Argued May 22, 2007

Before Judges Skillman, Holston, Jr. and Grall.

This appeal is from a post-judgment order in a civil action denying defendant's motion for return of funds plaintiff collected on a judgment that was reversed on appeal because the trial court erred in concluding that the statute of limitations was equitably tolled. See Bernoskie v. Zarinsky, 383 N.J. Super. 127, 141 (App. Div.), certif. denied, 186 N.J. 604 (2006). We hold that defendant is entitled to restitution and remand for further proceedings.

The facts pertinent to our decision are as follows. Forty years after the death of plaintiff Elizabeth Bernoskie's husband, a jury returned a verdict requiring defendant Robert Zarinsky to pay $2,500,000 on plaintiff's wrongful death claim and $7,000,000 on her survivorship claim. See id. at 134. The judge awarded pre-judgment interest in the amount of $1,307,561.60.

Subsequently, defendant moved for a stay of judgment pending appeal. The judge denied that motion. The denial was based on the judge's finding that defendant made "no proffer that . . . a bond or cash deposit is or can be posted" and did not show good cause for relaxation of the obligation to secure the judgment. See R. 2:9-6. The order denying defendant's stay was entered on October 10, 2003.

Plaintiff's attorney sought discovery and learned of an account in defendant's name with a balance of $154,033.58. The account was held by T. Rowe Price. On February 6, 2004, plaintiff obtained an order requiring T. Rowe Price to surrender the funds and all interest accrued to the date of surrender. On February 20, 2004, defendant moved before this court for a stay pending appeal. By letter dated February 27, 2004, T. Rowe Price complied with the order and sent plaintiff's attorney a check in the amount of $154,143.25. On March 11, 2004, plaintiff's attorney filed a response to defendant's motion for a stay with this court. On March 18, 2004, the motion panel denied defendant's application for a stay as moot.

On February 10, 2006, this court issued its decision on the merits of defendant's appeal from the judgment. Bernoskie, supra, 383 N.J. Super. at 127. Because the delay between plaintiff's husband's death and the trial impaired defendant's ability to present a defense, we reversed the judgment and dismissed the complaint. Id. at 135-47.*fn1 The Supreme Court denied plaintiff's petition for certification on April 13, 2006. 186 N.J. 604.

Defendant moved before the trial court for an accounting and return of the funds T. Rowe Price surrendered pursuant to the trial court's order. In opposition to that motion, plaintiff's attorney provided an accounting, in which he explained that he had deducted expenses in the amount of $6,183.26 and a counsel fee of $50,653.33 from the $154,143.25 and forwarded the remaining $97,306.66 to plaintiff. He also reported that he had recovered an additional $810.38 held by the Unclaimed Property Division of the Department of Treasury, from which he deducted expenses of $442.25 and a counsel fee of $122.71 and forwarded the remaining $245.52 to plaintiff. From the counsel fees he had retained, the attorney paid a fee of $16,884.44, one-third, to the attorney who referred plaintiff's case to him.

The judge denied defendant's motion for return of funds. In an oral opinion of May 12, 2006, the court reasoned that defendant's failure to post the security needed to secure a stay of the judgment precluded his recovery of the funds plaintiff obtained pursuant to a judgment and order. This appeal followed.

This court's decision in Bruns v. Mattocks, 6 N.J. Super. 174, 176-77 (App. Div.), certif. denied, 4 N.J. 456 (1950), required the trial court to grant restitution to the extent permitted by the equities. In addition, that decision permitted the court to treat the attorney, who accepted fees from the funds recovered on the judgment, as a party for purposes of defendant's motion. See ibid.

The rule enunciated in Bruns is clear. "What has been given or paid under the compulsion of a judgment the court will restore when its judgment has been set aside and justice requires restitution." United States v. Morgan, 307 U.S. 183, 197, 59 S.Ct. 795, 802, 83 L.Ed. 1211, 1221 (1939); see Bruns, supra, 6 N.J. Super. at 177 (quoting Morgan). "A person who has conferred a benefit upon another in compliance with a judgment, or whose property has been taken thereunder, is entitled to restitution if the judgment is reversed or set aside, unless restitution would be ...

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