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Romeo v. KNK Interiors

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


April 10, 2008

DAVID ROMEO, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
v.
KNK INTERIORS, INC. AND KRISTI KLEZCKOWSKI,*FN1 DEFENDANTS-APPELLANTS/CROSS-RESPONDENTS.

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-11876-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted March 5, 2008

Before Judges Lisa and Lihotz.

We review the parties' appeals from an order determining the amount of a default judgment entered in favor of plaintiff. After review, we: (1) affirm the credit provided against the judgment for the value of the returned "antique chair"; (2) reverse and remand for determination of the appropriate credit representing the value of defendant's vehicle seized by and sold to plaintiff at Sheriff's sale; (3) modify the judgment to grant further credit for the sums of $878.90 and $490 based on defendant's performance; and (4) remand for factual determination on issues omitted by the trial court in its determination.

Plaintiff David Romeo entered into an oral agreement with defendant Kristy Klezckowski to provide decorating services. Klezckowski is the president and sole shareholder of defendant KNK Interiors, Inc. (KNK).*fn2 Plaintiff paid defendant $10,639.90 for materials and services. When defendant failed to satisfactorily perform the services, plaintiff filed a complaint alleging breach of contract and consumer fraud.

In separate counts, plaintiff itemized the nature of the damages or relief sought, as follows: $878.90 to reupholster and refinish an "antique chair," along with the return of the chair; $1,859 for fabric to reupholster another chair and its matching ottoman, along with the return of the furniture; $480 for fabric and labor to make a master bedroom duster; $2,250 to construct a kitchen backsplash; $2,181 to make kitchen and laundry room curtains, including fabric and trim; $1,741 for a dust ruffle, coverlet, and shams for a child's bed; $100 to replace unmatching kitchen knobs; $650 to correct work performed on outside railings; $500 to correct carpeting irregularities; and return of the master bath vanity stool, which was to be caned. Plaintiff also sought pre-judgment interest on the monies paid and return of the antique chair or payment of its replacement value stated as "over $20,000."

Defendant did not file an answer. Plaintiff requested entry of default, which was granted by the court on October 26, 2004. Plaintiff's certification of proof of the amount due sought $30,639.90, stating:

No part of the foregoing has been paid or satisfied by the Defendants, and there is due thereon the sum of $10,639.90, the sum of at least $20,000.00 as value of the antique chair, the second chair, the ottoman, the fabric for the second chair and ottoman, and master bath vanity stool.

On November 12, 2004, without a hearing, a default judgment against defendant was entered "in the sum of $30,639.90, interest,* the return of the following: the antique chair, the second chair, the ottoman, the fabric for the second chair and ottoman, and the master bath vanity stool; attorney's fees and costs. *or $10,639.90 and return of [the] listed items within 10 days of today's date[.]" On December 8, 2004, when the items were not returned, plaintiff requested a writ of execution, which was issued in the amount of $32,145.60, inclusive of costs, interest and fees.

On November 2, 2005, as instructed in the writ, the Morris County Sheriff levied upon defendant's Sovereign Bank accounts, securing the amount of $8,951.65. These monies were turned over to plaintiff. In December 2006, the Sheriff seized defendant's 2001 Lexus RX300 and sold it to plaintiff.*fn3

Prior to the Sheriff's sale, defendant filed a motion to vacate the default judgment. In support of that request, defendant generally challenged service of the complaint and presented her claimed meritorious defenses. Defendant argued she had no individual liability because the contract was with the corporation. Also, she returned the antique chair after reupholstering it; completed the duster, kitchen and laundry room curtains, dust ruffle, coverlet and shams; was not contracted to match the kitchen knobs; and satisfactorily completed the work on the railings and carpeting. Additionally, defendant maintained she is entitled to receive credit for the fair market value of the seized Lexus of $12,665.00.

Alternatively, if default was not vacated, defendant requested the judgment be deemed satisfied. Defendant stated she assumed she satisfied the judgment after accounting for the return of the chair and the seizure of her bank accounts. At that point, she believed the parties "were basically even and that the lawsuit would not be pursued." She asked that her Lexus be returned to her in exchange for a payment of $1,688.75.

Plaintiff disputed that the chair was returned. He also argued he was entitled to the full judgment amount because any return occurred beyond the ten days stated in the judgment.

Following oral argument, the court denied defendant's motion to vacate the default judgment and scheduled a plenary hearing to hear testimony and make a determination as to whether the antique chair and other items were returned by defendants to plaintiff, the value of such items for the purpose of crediting the judgment amount, and the fair market value of the 2001 Lexus RX300 levied upon and sold at Sheriff's sale to plaintiff for the purposes of crediting the judgment amount.

The proof hearing was held on March 14, 2007. Defendant testified she returned the chair in March 2006, after completing all refinishing and reupholstering. She sought credit for $20,000, the value of the antique chair, $878.90 for the deposit plaintiff paid to refurbish the chair; $90 for the duster fabric, and $390 for labor to complete the duster, which was provided to plaintiff, and $2,181 for the material, trim, and labor on the kitchen and laundry room curtains. Defendant stated plaintiff never complained about the knobs, the railings or the carpet.

Defendant also described the Lexus's condition as good, admitted the car traveled 134,000 miles, and was last serviced in July 2006. Defendant introduced evidence of the vehicle's Kelly Blue Book "value" of $12,665.

Plaintiff's wife, Elisa Romeo, testified. She admitted the chair was returned and the work completed, but the arms came off when she lifted it to carry it into her home. She agreed defendant prepared the duster and the kitchen (but not the laundry room) curtains. Plaintiff did not testify.

The trial court acknowledged there was no evidence that formally valued the antique chair. However, based upon the evidence presented, the judge concluded the chair was returned to plaintiff and determined the value of the chair, based on the judgment, at $20,000. As a result, defendant was afforded a credit against the $30,639.90 judgment of $20,000. The judge concluded the Lexus credit was $5,300. No additional credit for performance of the contract was stated. Accordingly, the prior judgment was vacated, deemed satisfied pursuant to Rule 4:50-1(e), and plaintiff was ordered to pay defendant $3,611.75.

On appeal, defendant seeks additional credits against the judgment. She argues the proven fair market value of the Lexus was $12,665 and there was no evidence of the $5,300 value utilized by the court. Also, she cites as error the trial court's failure to allow credit for performance of the other provisions of the contract. Plaintiff's cross-appeal challenges the calculated credit applied for return of the antique chair.

We do not disturb the factual findings of the trial judge unless there is a showing of clear injustice. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). Here, the unequivocal testimony by defendant and Elisa Romeo verified the reupholstered antique chair was returned in March 2006. The trial judge made this finding. He also noted plaintiff had certified to the contrary and chose not to testify at the plenary hearing. We infer from the trial judge's comments that he rejected plaintiff's argument that the delay in compliance with the November 12, 2004 order should not result in a penalty to defendant and further found that defendant satisfactorily proved she completed the work, and plaintiff failed to prove damage to the property or any resultant diminishment of its value.

We reject plaintiff's argument that the court "arbitrarily" assigned the chair's value at $20,000. The statement of value appears in plaintiff's complaint at paragraph 103.b. and in plaintiff's certification supporting entry of default at paragraphs 9 and 64.b. Concluding the finding is supported by sufficient credible evidence, we affirm the trial court's use of a $20,000 credit as the ascribed value for the antique chair.

With respect to fixing the applicable credit for the seized Lexus, "the court has equitable authority to preclude unjust enrichment in the form of windfall or double recovery" to a creditor. Smith v. Lopez, 304 N.J. Super. 26, 32 (Ch. Div. 1996). Plaintiff was obligated to make a good faith effort to obtain the highest possible price for the car. Arguably, the use of a Sheriff's sale evinces a commercially reasonable disposition of the debtor's property. See e.g., N.J.S.A. 12A:9-610(b) (every aspect of a secured party's disposition of a debtor's collateral, "including the method, manner, time, place and terms must be commercially reasonable"). However, in the case before us, we have no evidence of the circumstances of that sale and only can confirm that the vehicle was sold to plaintiff. We find no evidence to support the trial judge's determination that the value of the Lexus was $5,300. Nothing shows the sale was an arm's length transaction with competitive bidding or even the amount of plaintiff's asserted bid. Plaintiff neither testified at the plenary hearing nor submitted a certification attesting to these facts. The Sheriff's affidavit of service after the sale reports only that the vehicle was sold to plaintiff. Therefore, the trial judge's comment that he did "hear testimony that the value more accurately should have been $5,300[,]" is unsubstantiated. This assertion was offered by plaintiff's counsel during oral argument in the prior motion hearing.

The only evidence of the Lexus's value is found in defendant's testimony introducing the Kelly Blue Book "value" of $12,665. The document marked into evidence was not provided in the record on appeal. We cannot discern exactly what was considered in this valuation.

Our rules permit introduction of "[m]arket quotations, tabulations, lists, directories, or other published compilations, generally used and relied upon by the public or by persons in particular occupations." N.J.R.E. 803(c)(17). Courts have determined that market compilations, such as Kelly's Blue Book, are published for use by persons engaged in the valuation of used automobiles, and, therefore, are generally considered useful, reliable and admissible to prove the value of used vehicles. See State v. Lungsford, 167 N.J. Super. 296, 303 (App. Div. 1979) (court reviews the hearsay exception embraced by N.J.R.E. 63(30), the predecessor of N.J.R.E. 803(c)(17)); see also Bishop v. GMC, 925 F. Supp. 294 (D.N.J. 1996) (to determine whether plaintiff met the threshold jurisdictional amount in controversy, reference to N.A.D.A. Official Used Car Guide to value automobiles was accepted); In re Maddox, 194 B.R. 762, 764 (Bankr. D.N.J. 1996) (use of the N.A.D.A. Used Car Guide wholesale value was appropriate reference for valuation of an automobile).

Plaintiff was well aware that the proof hearing was to determine "the fair market value of the 2001 Lexus RX300 levied upon and sold at Sheriff's sale to plaintiff for the purposes of crediting the judgment amount." He offered nothing to contradict plaintiff's proffer.*fn4 Therefore, we reverse the finding that the credit for the seized Lexus is $5,300 and remand to the trial court to determine the appropriate credit, based upon the evidence of the Lexus's fair market value presented at the plenary hearing.

Finally, the return of items to plaintiff's possession requires corresponding credits against the default judgment. Morsemere Fed. Sav. & Loan Ass'n v. Nicolaou, 206 N.J. Super. 637, 645 (App. Div. 1986). Plaintiff in his brief concedes defendant is entitled to receive a credit for completion of the bedroom duster of $480. Plaintiff's wife testified the antique chair had been reupholstered, warranting further credit of $878.90.

Although it is undisputed that defendant completed the kitchen curtains, defendant also stated she completed the laundry room curtains, as well and satisfied other provisions of the agreement. Unfortunately, the trial judge made no findings of fact or credibility assessments with respect to these issues. When a trial court's decision is not accompanied by the requisite findings of fact and conclusions of law, the remedy is to remand the matter to correct the deficiency. We are mindful of the cost of further litigation, the limited factual disputes, and the relatively small sum at issue. We remand only for the trial court to provide factual findings on the evidence presented. We do not suggest that any further hearing is necessary.

Thus, we affirm the conclusion to credit the judgment with $20,000, representing the value of the antique chair. We remand for a determination of the appropriate credit for the fair market value of the Lexus. We modify the judgment to allow credits for the completed work totaling $1,358.90. And, we remand for additional findings on the issue of whether credits are due for other completed items, based on the evidence presented.

Affirmed in part, modified in part and remanded to the trial court to provide additional factual findings consistent with this opinion.


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