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Freemotion Fitness Financing Services v. Total Health & Fitness

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


August 25, 2008

FREEMOTION FITNESS FINANCING SERVICES, PLAINTIFF-RESPONDENT,
v.
TOTAL HEALTH & FITNESS, L.L.C. A/K/A HOPEWELL VALLEY'S HEALTH & FITNESS CENTER A/K/A BACK TO WELLNESS, L.L.C., DEFENDANT-APPELLANT.

On appeal from Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-2128-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted July 28, 2008

Before Judges Graves and Yannotti.

Defendant Total Health & Fitness, L.L.C. a/k/a Hopewell Valley's Health & Fitness Center a/k/a Back to Wellness, L.L.C. (Total Health) appeals from an order dated July 24, 2007, which denied its motion for reconsideration of a summary judgment order entered in favor of plaintiff Freemotion Fitness Financing Services (Freemotion) on June 8, 2007. We affirm.

On August 16, 2006, plaintiff filed a complaint alleging defendant owed "the sum of $70,055.00 on a certain book account." Plaintiff further alleged it "sold and delivered goods" (namely, fitness equipment) to defendant based upon its promise "to pay the agreed amount." In its answer filed November 27, 2006, defendant denied it owed any money to plaintiff, and it asserted a counterclaim for damages "[a]s a result of the breach or purported breach of contract by the plaintiff." In its answer to defendant's counterclaim, plaintiff denied it breached the contract and it alleged defendant's counterclaim was frivolous.

In a motion for summary judgment filed on February 12, 2007, plaintiff alleged (1) "[d]efendant executed a Financing Application to obtain . . . equipment from [p]laintiff"; (2) "[d]efendant accepted and signed for the delivered goods and merchandise," as evidenced by bills of lading documenting delivery of the equipment and acceptance by defendant on December 17, 2003; and (3) "[d]efendant [was] not entitled to any additional credits or set-offs and there now remains due and owing the sum of $70,055.00."

On March 16, 2007, summary judgment was entered in favor of plaintiff in the amount of $70,055. However, in a letter to the court dated March 19, 2007, defendant's attorney explained that plaintiff's motion was unopposed because of "some personal and staff problems" that he was experiencing, and he submitted a consent order that vacated the summary judgment order. After the consent order was signed by the court, plaintiff resubmitted its motion for summary judgment, and defendant responded by filing a brief as well as a certification by Carol Gronczewski, "a principal for the defendant." Gronczewski certified that "[a]t this juncture there has been no meaningful discovery." Moreover, according to Gronczewski, defendant's employee David Giordano "had absolutely no authority to bind the defendant company and enter into a contract for the goods and/or merchandise of the plaintiff."

On June 8, 2007, the trial court issued an oral decision granting plaintiff's motion for summary judgment. Its decision included the following:

This matter arises from the plaintiff's claim that the plaintiff is owed $70,055 from the defendant for goods sold and delivered and of services rendered by the plaintiff to the defendant. . . . Discovery end date in this matter has already passed. It [ended] April of 2007.

Plaintiff now requests that the [c]court grant the motion for summary judgment and dismiss the counterclaim. In opposition, defendant's counsel states that no interrogatories have been propounded on either party. There's been no demand for the production of documents and no oral depositions have occurred.

With regard to the defendant's argument that discovery has not taken place, that is really on the defendant. The [c]court has already stated that the discovery period has already ended in this matter. The parties did not avail themselves of discovery during the discovery period. That is the fault of the parties. It is not justification for denial of the motion for summary judgment.

Here, it's quite clear . . . there is a contract for the goods that were delivered by the plaintiff to the defendant, and that the defendant did not pay for the goods. The only allegation of the certification is that Giordano was not authorized to enter into the contract, but there [are] no other facts in support of that position.

With regard to the defective nature of the equipment, there is no specification about how the equipment was defective. Certainly bare conclusions without factual support cannot defeat summary judgment. Instead, evidence submitted must be admissible, competent, non-hearsay evidence[.] Brae Asset Fund, LP v. Newman, 327 N.J. Super. 129 (App. Div. 1999).

On June 27, 2007, defendant filed a motion for reconsideration. In a supporting certification, Robert Peterson, who described himself as "the defendant in the within matter," acknowledged that although Giordano was "an employee" and "our former manager," "[h]e never had any percentage of the business nor was he ever a vice president. At best, he was a manager personal trainer, who was not authorized to purchase any equipment nor enter into any financing agreement without the consent of [Total Health]." Peterson also alleged "Giordano may have received a 'kickback,' compensation or other personal benefit from the plaintiff as an inducement to enter into, on our behalf, a contract for equipment that was not needed," and he stated: "we believe that we were overcharged and paid too much for the equipment." Finally, Peterson contended that "[a]s far as the defective nature of the equipment it has come to my attention that the monitors on the gym equipment and other electronics attached thereto 'blew out' or have otherwise failed." On the other hand, Peterson admitted "we have been making payments on this contract," but he claimed "the value of the equipment, because of the inflated price, [was] no where near $70,000.00 but probably closer to $30,000.00."

In an oral decision on July 24, 2007, the trial court denied defendant's motion for reconsideration:

[Rule 4:49-2] lists three elements in order for a motion for reconsideration to be successful, (1) it must be made within 20 days of entry of the order of judgment, (2) the motion must state the basis for reconsideration, and (3) the motion must specify which cases or facts the [c]court erred in regards to or [overlooked] . . . .

The defendant argues that the [c]court erred in [its] belief that the defendant was making [its] conclusions regarding the defective nature of the equipment. The defendant argues that it need not prove the defective nature of the equipment through pleadings alone. Defendant states it has recently learned that the equipment has been malfunctioning and there are no replacement parts available.

Defendant further argues that the motion should be granted since Giordano . . . misrepresented his status and ownership percentage in the company. . . .

The plaintiff argues that the defendant has stated that Giordano lacks the authority to enter into the contract, but does not explain why he lacks that authority. Plaintiff states that the possibility of an illegal kickback is insignificant in light of plaintiff's evidence of delivery, receipt and acceptance and defendant's failure to include evidence that a material issue of fact exists.

The [c]court finds that defendant has failed to provide any legal basis to overturn the [c]court's June 8th decision. Defendant makes the same arguments . . . that were made in opposition to the motion for summary judgment and is claiming that formerly available evidence was unavailable at the time of the earlier motion and should now be considered.

Under all the circumstances the [c]court agrees with the plaintiff, and the [c]court denies the motion for reconsideration. Defendant raises the following issue on appeal:

POINT I

WHERE DISCOVERY IS NOT COMPLETE AND NO FACTS HAVE YET BEEN ADDUCED REGARDING THE VALIDITY OF THE CONTRACT, THE CASE IS NOT RIPE FOR SUMMARY JUDGMENT.

Having reviewed the record in light of the applicable law and the parties' arguments on appeal, we affirm substantially for the reasons set forth in Judge Innes's oral decisions on June 8 and July 24, 2007. We add only the following comments.

Summary judgment will be granted "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits . . . show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law."

R. 4:46-2(c). In determining whether summary judgment is precluded by the existence of a "genuine issue" of material fact, a motion judge must "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). "'The papers supporting the [summary judgment] motion are closely scrutinized and the opposing papers indulgently treated.'" Lopez v. Swyer, 115 N.J. Super. 237, 241 (App. Div. 1971) (quoting Judson v. Peoples Bank & Trust Co., 17 N.J. 67, 75 (1954)), aff'd, 62 N.J. 267 (1973). A meritorious motion for summary judgment will not, however, be defeated by "bare conclusions" unsupported by a factual basis. U.S. Pipe & Foundry Co. v. Am. Arbitration Ass'n, 67 N.J. Super. 384, 399-400 (App. Div. 1961).

In the present matter, we agree defendant's "bare conclusions" were insufficient to defeat plaintiff's motion for summary judgment. Although both Gronczewski and Peterson certified Giordano did not have authority to enter into a contract on behalf of defendant, it is undisputed that (1) Giordano was defendant's former employee and manager who listed himself on plaintiff's Financing Application as a vice president and twenty-five percent owner of the company, (2) the fitness equipment was delivered, received and accepted by defendant on December 17, 2003, and (3) defendant made payments to plaintiff after it received the equipment. Moreover, defendant's claim that Giordano "may" have received "kickbacks" for entering into a contract on defendant's behalf, and that the equipment delivered by plaintiff was "defective," are based on hearsay and speculation unfounded on facts in the record.

Finally, defendant argues that "[a]lthough summary judgment may be granted at any time after the expiration of 20 days from service of the moving party's pleadings" the "better practice" is to wait until the party's have been afforded "ample opportunity" for discovery. In the present appeal, discovery ended on April 26, 2007, and plaintiff's motion for summary judgment was granted on June 8, 2007. Defendant admits it pursued "no discovery whatsoever" in the intervening eight months between being served with plaintiff's complaint on August 31, 2006, and the expiration of the discovery period on April 26, 2007. Moreover, defendant has not demonstrated it filed "a certification of good cause with its first pleading" challenging the track assignment for discovery purposes, see 4:5A-2(b), or that it made a motion seeking extension of the discovery period, see 4:24-1(c). Thus, this is not a case where summary judgment was improvidently granted prior to the completion of discovery. Cf. Laidlow v. Hariton Mach. Co., Inc., 170 N.J. 602, 619 (2002); Wilson v. Amerada Hess Corp., 168 N.J. 236, 253 (2001); Davila v. Continental Can Co., 205 N.J. Super. 205, 207-08 (App. Div. 1985). Furthermore, because the trial court did not err in granting plaintiff's motion for summary judgment, it did not err in denying defendant's motion for reconsideration.

Affirmed.

20080825

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