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Cillo v. Phoenix Consultants Group

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


August 26, 2008

MICHAEL CILLO, PLAINTIFF-APPELLANT,
v.
PHOENIX CONSULTANTS GROUP, INC. AND DENNIS WOOLBERT, DEFENDANTS-RESPONDENTS.

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

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

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 has received a working calculation engine that he paid for . . . .

. . . [A]s to any issues of consumer fraud, first, Your Honor, there has to be an ascertainable loss. There is no ascertainable loss here, because the plaintiff received the benefit of the bargain. . . . Now, if the plaintiff still insists on charts and graphs, well . . . there's his e-mail and there's his statements to the defendant, which contradict that.

On appeal, plaintiff presents the following arguments:

POINT I

THE STATUTORY DEFENSES RELIED UPON BY THE TRIAL JUDGE IN SUPPORT OF HIS RULING WERE NOT APPLICABLE TO THE CIRCUMSTANCES OF THIS CASE.

POINT II

PLAINTIFF'S CLAIMS OF CONSUMER FRAUD SHOULD NOT HAVE BEEN DISMISSED ON SUMMARY JUDGMENT AS THERE WERE VARIOUS GENUINE ISSUES OF MATERIAL FACT TO BE DETERMINED BY THE FACTFINDER AT TRIAL.

POINT III

EVEN IF THE PLAINTIFF'S CONSUMER FRAUD CLAIMS WERE ADJUDICATED BY WAY OF DISMISSAL, THE PLAINTIFF'S BREACH OF CONTRACT CLAIMS SHOULD HAVE SURVIVED.

POINT IV

THE INDIVIDUAL DEFENDANT, DENNIS WOOLBERT, SHOULD NOT HAVE BEEN DISMISSED FROM THE LAWSUIT AS PERSONAL LIABILITY COULD ATTACH.

After reviewing these contentions in light of the record and the applicable law, we are satisfied plaintiff's arguments do not warrant extended discussion. R. 2:11-3(e)(1)(E). We affirm substantially for the reasons stated by Judge LeBlon in his written decision on October 2, 2006, and his oral decision on December 18, 2006, with only the following comments.

A summary judgment motion should 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 "[b]are 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, Judge LeBlon concluded plaintiff's evidence was insufficient to defeat defendants' summary judgment motions. In response to defendants' request for admissions, plaintiff admitted "that formulas provided to [d]efendant [were] theor[ies] with no factual basis." Additionally, when asked whether he admitted "there is no basis in mathematical fact for formulas regarding planetary trajectories," plaintiff stated: "I am not an expert and cannot give E.O."; and when asked whether he admitted that the "purpose of [the] program was to project stock market pricing for monetary gain," plaintiff stated:

"Purpose was to test for (prove) planetary relationships first."

Moreover, plaintiff failed to provide an expert report to support his claims and, in our view, expert testimony was necessary to establish the existence of a defect in the computer program designed and developed by defendants. See, e.g., Lauder v. Teaneck Volunteer Ambulance Corps, 368 N.J. Super. 320, 332 (App. Div. 2004) ("[T]he locking mechanism of [a gurney that collapsed] is sufficiently complex to require expert testimony."). Without expert testimony, we agree that plaintiff's conclusory assertions were insufficient to require resolution by the factfinder.

Affirmed.

20080826

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