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Cillo v. Phoenix Consultants Group

August 26, 2008


On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Middlesex County, Docket No. DC-8491-05.

Per curiam.


Argued January 7, 2008

Before Judges Parrillo and Graves.

Plaintiff Michael Cillo appeals from an order dated December 18, 2006, denying his motion for reconsideration of summary judgment orders dismissing his complaint against defendants Phoenix Consultants Group, Inc. (Phoenix), a corporation specializing in creating custom computer software, and Dennis Woolbert, a principal and employee of Phoenix. We affirm.

According to plaintiff, he "had an interest in creating a computer program that would correlate changes in the stock market with planetary factors," and there is no dispute that plaintiff paid Phoenix the sum of five thousand dollars on August 11, 2004, as a "Deposit for [the] Program." Plaintiff also made a "Final Payment" to Phoenix on December 12, 2004, in the amount of one thousand two hundred fifty dollars. In his complaint, plaintiff alleged (1) misrepresentations by defendants regarding the "completion time, complexity and function" of the computer program; (2) intentionally false representations by defendants that its services were progressing satisfactorily; (3) breach of contract; (4) breach of warranty; (5) negligence; (6) detrimental reliance by plaintiff "upon the actions and/or inactions" of defendants; and (7) violations of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 to -20. On the other hand, defendants maintain they designed the software program plaintiff requested and they "provided [p]laintiff with a fully functional calculation engine pursuant to the terms of the contract between the parties."

Following oral argument on September 8, 2006, the court rendered a written decision on October 2, 2006, granting defendants' summary judgment motions. The court's findings and conclusions included the following:

The [c]omplaint in this matter arises out of an agreement entered into between Cillo and [Phoenix] to develop a computer program creating a Calculation Engine based upon formulas, stock data and planet location.

The [d]efendants argue that the [p]laintiff has failed [to] provide proof of genuine issues of material fact. The [d]efendants assert that [p]laintiff has neither provided proof regarding the specificity of an error in the code, nor has [p]laintiff provided any expert report stating the failure of the code. Defendants also maintain that at no time has [p]laintiff brought any proofs of evidence which justify piercing the corporate veil to hold Woolbert personally liable. The [p]laintiff responds to [d]efendants argument by stating that the computer program never worked because the program was not capable of creating charts and graphs. Plaintiff also claims that the corporate veil should be pierced to hold [d]efendant Woolbert personally liable because he was engaging in consumer fraud and threatening to violate the parties' confidentiality agreement by posting [p]laintiff's computer program on the internet if the [p]laintiff did not succumb to [d]efendant Woolbert's financial demands.

The [c]court finds no material issues of fact which would prevent the [c]court from resolving the issues in this case as a matter of law. The [p]laintiff has failed to provide any proof of genuine issues of material fact. On February 17, 2006[,] the Honorable James F. Hyland entered an [o]rder requiring the [p]laintiff to fully respond to the [i]nterrogatory questions propounded upon [p]laintiff by [d]efendants. At that time, [p]laintiff was required by the [c]court to define the specification in full detail including formulas as to what was required to be programmed by Phoenix, as well as any specific errors that had occurred with the program. Plaintiff asserted that he does not know [of] any errors and has refused to answer the questions claiming for the second time a proprietary information defense in direct violation of the order of February 17, 2006. Prior to this [o]rder on December 24, 2005, the [d]efendant, at [p]laintiff's request, provided [p]laintiff with the full code of the program (in paper form). To date, the [p]laintiff has not represented with any specificity any error with the code, nor has the [p]laintiff provided any expert report alleging the failure of the code.

In his motion for reconsideration, plaintiff claimed the computer software program designed by defendants never worked as it was supposed to because it was not capable of creating charts and graphs [T]o this date the program that was developed by the defendant[s cannot] produce charts and graphs and this fact can be readily proven by the [p]laintiff at the time of trial by way of showing the program. Furthermore, the defendant will be incapable of making the program chart or graph thereby proving that the program is not capable of such functionality. Your Honor is placing a rather extreme burden on the [p]laintiff in suggesting that the [p]laintiff should evaluate the volumes of pages of programming that was prepared by the defendant[s] and identify where specifically the charting and graphing has gone awry. The [p]laintiff has no knowledge as to why the program [cannot] chart. Plaintiff merely maintains that the defendant promised it would work in such a manner and it has failed to do so. This the [p]laintiff can prove. As this was an expressed material [term] of a contract, the defendant's failure to do so at a very minimum does place the defendant in breach from a contractual perspective.

In reply, defendants' attorney produced an e-mail plaintiff sent to defendants on September 29, 2004, which reads as follows: "The graphs are too much of a problem. I think they're always going to be problematic. Let's eliminate the graphs and just give me the dates when the hits occur." And defendants' attorney argued:

[T]o say that the program doesn't work . . . or it never worked, Mr. Cillo never told Phoenix or Dennis Woolbert exactly what was wrong with that. He never had an expert look over the computer papers . . . the programming code. He never even tried out the program.

. . . There is no genuine issue of material fact. It's . . . my client's position, and it has been his position all along, that he's delivered to the plaintiff exactly what was bargain[ed] for . . . . Mr. Cillo has received the benefit of the bargain. He ...

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