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Allison-Williams Co. v. Viasource Funding Group


February 15, 2008


On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, L-149-05.

Per curiam.


Argued January 22, 2008

Before Judges Lintner, Parrillo and Graves.

This appeal is from a Law Division order, crafted by counsel improperly designated as a "Final Judgment" in which partial summary judgment was entered dismissing certain aspects of plaintiffs' complaint and defendant's counterclaim.*fn1 Because the order is interlocutory, we dismiss the appeal as improvidently filed.

This is a breach of contract case in which plaintiffs, Allison-Williams Company, Thomas Hughes Allen, and Craig Lawrence Seitel sought damages, including a $5,000,000 break-up fee from defendant ViaSource Funding Group, LLC, arising out of a securitization agreement by which plaintiffs would seek investors to purchase certain assets in the form of life insurance policies owned by defendant.*fn2

On October 11, 2006, the judge announced his ruling from the bench. The judge found there was a jury question respecting plaintiffs' breach of contract claim and damages. However, the judge struck the provision of the agreement under which plaintiffs sought a $5,000,000 break-up fee, determining that it constituted a disproportionate penalty and was unenforceable.

The judge dismissed defendant's counterclaims for unjust enrichment, misappropriated trade secrets, interference with prospective business relationships, and breached confidentiality. He also dismissed plaintiffs' claim that they were entitled to attorney fees. Finding that both plaintiffs' and defendant's fraud and misrepresentation causes of action presented a jury question, the judge denied summary judgment on those claims.

Prior to giving his ruling, the judge advised counsel that he was going to announce how the case was going to be tried. He expected to finish the case he was currently trying and would therefore be able to preserve the preemptory trial date scheduled for the matter. He invited counsel "to try to craft an order consistent with [his] ruling . . . [o]therwise the tape of [the] proceedings [would] be the road map" by which the case would be tried.

A consent order was submitted and signed by the judge on November 6, 2006. It recited that the plaintiffs' claims and defendant's counter-claims that were dismissed on partial summary judgment were dismissed with prejudice. It then stated:

12. The parties hereby stipulate, and it is ordered, that any and all claims remaining between them after the substantive rulings . . . of this Final Judgment be and are hereby dismissed . . . without prejudice. This includes without limitation, the plaintiffs' claim for recovery sounding in quantum meruit, estoppel and for actual or expectation damages for breach of contract and the defendant's Counterclaims under Counts One, Two and Four.

13. This Judgment is final in character, as it disposes of any and all claims between the parties either by way of substantive ruling or by dismissal without prejudice. No costs are awarded to any party by this Final Judgment.

Plaintiffs filed a notice of appeal on December 20, 2006.

An appeal as a matter of right may be taken to the Appellate Division only from "final judgments." R. 2:2-3(a)(1). Where an order does not qualify as a final judgment, a party is required to seek leave to appeal. R. 2:2-4; R. 2:5-6(a). Granting leave is within our exclusive authority as an exercise of our discretion "in the interest of justice." R. 2:2-4. Such interlocutory adjudications are appealable only on leave granted pursuant to R. 2:5-6. It is within our exclusive prerogative to determine whether extraordinary circumstances are present warranting a piecemeal appeal. See, e.g., Fu v. Fu, 309 N.J. Super. 435, 439-40 (App. Div. 1998), rev'd on other grounds, 160 N.J. 108 (1999); Hallowell v. Am. Honda Motor Co., 297 N.J.

Super. 314, 318 (App. Div. 1997); DeFelice v. Beall, 274 N.J. Super. 592, 595 n.1 (App. Div.), certif. denied, 138 N.J. 268 (1994); Kurzman v. Appicie, 273 N.J. Super. 189, 191-92 (App. Div. 1994); Procanik v. Cillo, 226 N.J. Super. 132, 143 n.4 (App. Div.), certif. denied, 113 N.J. 357 (1988); DiMarino v. Wishkin, 195 N.J. Super. 390, 395-96 (App. Div. 1984).

Under R. 4:42-2 an order may be treated as a final order where it is "subject to process to enforce a judgment pursuant to R. 4:59 [and] . . . the trial court certifies that there is no just reason for delay of such enforcement" under three types of circumstances. There must be either a "complete adjudication of a separate claim," R. 4:42-2(1); a "complete adjudication of all the rights and liabilities asserted . . . as to any party," R. 4:42-2(2); or "a partial summary judgment or other order for payment," R. 4:42-2(3). Claims remaining after denial of summary judgment, which are thereafter dismissed without prejudice with leave of court under R. 4:37-2(a), do not qualify as an adjudication on the merits. See Scalza v. Shop Rite Supermarkets, Inc., 304 N.J. Super. 636, 639 (App. Div. 1997). Rule 4:42-2 limits those orders that may be certified by the trial court as final to those "susceptible to enforcement," thus "exclud[ing] orders dismissing as to particular parties, denying summary judgment, and indeed, the whole panoply of orders which, if final, would confer no enforcement rights under R. 4:59." Pressler, Current N.J. Court Rules, comment 2 on R. 4:42-2 (2008).

We recently pointed out that there is a "recurrent problem of a litigant securing a certification of finality from a trial court under circumstances that do not qualify for such certification in order to circumvent this court's exclusive authority to determine whether leave should be granted to appeal an interlocutory order." Janicky v. Point Bay Fuel, Inc., 396 N.J. Super. 545, 547 (App. Div. 2007). Here, the parties did not even get the required certification of finality from the judge. Indeed, the judge never made any such ruling. The parties simply submitted an order that they designated as final judgment, which was interlocutory. The consent order under appeal fails to qualify as a final judgment by any rationale, real or imaginary. It does not completely adjudicate a separate claim nor adjudicate all the rights and liabilities of any one party nor is it a partial summary judgment ordering payment. It recites those aspects of each party's causes of action that were dismissed on partial summary judgment with prejudice, and dismissed the remaining claims without prejudice, reserving them for future litigation.

It is axiomatic that an order that is interlocutory does not qualify as a final judgment simply because the parties call it a final judgment. Our calendar is not subject to such whims. "'[I]f we treat every interlocutory appeal on the merits just because it is fully briefed, there will be no adherence to the Rules, and parties will not feel there is a need to seek leave to appeal . . . .'" Vitanza v. James, __ N.J. Super. ___, (App. Div. 2008) (slip op. at 5) (quoting Parker v. City of Trenton, 382 N.J. Super. 454, 458 (App. Div. 2006)). Therefore, we decline to consider the contention raised by the parties in this appeal.


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