On appeal from the Superior Court of New Jersey, Law Division, Camden County, L-1383-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Lisa, Reisner and Alvarez.
Defendant J.E.G. appeals from a February 2, 2007 trial court order granting summary judgment to the State and imposing $72,500 in civil penalties and $48,500 in counsel fees under the Insurance Fraud Prevention Act, N.J.S.A. 17:33A-1 to -30. He also appeals from a June 24, 2005 order dismissing his counterclaim against the State*fn1 and from orders dated September 23, 2005 and October 31, 2005, denying his motions for reconsideration.
We affirm the order dismissing defendant's counterclaim. We reverse the order granting summary judgment on the State's penalty claim, vacate the monetary judgment, and remand this matter to the trial court to hold an evidentiary hearing on whether the State waived civil penalties as part of a plea bargain resolving related criminal charges against defendant. If the State did not waive the civil penalties, the court must nonetheless reconsider the amount imposed, employing the standards set forth in Kimmelman v. Henkels & McCoy, 108 N.J. 123 (1987).*fn2
This case has a long and complicated history which includes two prior remands from this court to the trial court. We set forth the history in some detail in our previous opinion in State v. J.E.G., Docket No. 1274-03 (App. Div. September 24, 2004). To summarize, defendant pled guilty to second-degree theft by deception, N.J.S.A. 2C:5-1, 2C:20-4, in connection with a series of staged automobile accidents and fraudulent insurance claims.
Defendant made his plea agreement with the Attorney General's Office of Insurance Fraud. As part of the plea agreement, which was signed on September 25, 2002, the parties clearly agreed that civil penalties under the Insurance Fraud Prevention Act would be resolved as part of the criminal plea agreement. The State's attorney also made a representation to that effect to the judge at the plea hearing. To that end, the State agreed to resolve its civil penalty claim for $50,000, an amount defendant was then willing to pay as part of a global resolution of the State's criminal and civil charges against him. In fact, in a later certification, Janice Lucas, a civil investigator employed by the Office of the Insurance Fraud Prosecutor, attested that her office gave to the criminal prosecutor in charge of the criminal case a copy of a proposed consent order to be used to resolve the civil penalties.
After the plea allocution, but before sentencing, defendant began cooperating with a different agency of the Attorney General's Office. During the course of that cooperation he put his life in jeopardy and rendered very valuable assistance to the State. As a result, the State eventually agreed to recommend to the judge in the theft by deception case that defendant receive a probationary sentence, provided defendant continued his cooperation.
However, when defendant appeared for sentencing on September 19, 2003, the judge questioned whether there was in fact a binding agreement for a probationary sentence and questioned the legality of sentencing defendant to probation for a second-degree crime. The State had refused to enter into a new plea agreement to allow defendant to plead to a third-degree crime. As a result, despite his extensive cooperation with the State, at peril to his life and safety, defendant was sentenced to seven years in prison. At that same sentencing hearing, defendant declined to pay the $50,000 civil penalty since he was clearly not getting the benefit of his plea agreement.
At the end of the sentencing hearing, the State's criminal attorney specifically asked the judge to also impose the civil penalty, arguing that "Your Honor certainly has the jurisdiction as a superior court judge to impose [the civil penalty]." Defense counsel did not object but asked for a hearing on defendant's ability to pay. After the judge requested briefing on the issue of the penalty amount, the State sent the court and defense counsel a letter on October 17, 2003, withdrawing "its request that civil insurance fines, pursuant to N.J.S.A. 17:33A-5, be imposed as part of the defendant's sentence for his conviction" and indicating that the State would "consider pursuing any such fines in a separate civil proceeding." Defendant appealed the seven-year sentence.
While the appeal was pending, the State filed a civil complaint on March 8, 2004, seeking penalties for violations of the Insurance Fraud Prevention Act. By this time, defendant was incarcerated and pro se; he was served with the complaint in prison, and attempted to file a pro se answer on or about September 29, ...