On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-7442-02.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Wefing, Parker and Yannotti.
Defendant David F. Bolger, individually and as sole trustee of the David F. Bolger Revocable Trust, appeals from an order entered by the Law Division on December 7, 2007, imposing sanctions against respondents Barry W. Sirota and Jay Joseph Friedrich pursuant to the frivolous litigation rule, Rule 1:4-8. For the reasons that follow, we affirm.
In July 2000, the County of Bergen and West Bergen Mental Healthcare entered into a one-year agreement, which provided that West Bergen would acquire a two-family residence to house individuals with a history of mental illness, and the County would pay West Bergen $240,000 with monies obtained in a federal grant. Initially, West Bergen planned to acquire property in Ridgewood but later identified another property located at 190 Madison Avenue in Midland Park. The Bolger Trust apparently owned both properties. The County approved the change in August 2001, and extended the contract through December 31, 2001. West Bergen thereafter purchased the Midland Park property.
In September 2002, plaintiff filed an action in the Law Division seeking a declaratory judgment and damages against West Bergen; Bolger, individually and as trustee of the Bolger Trust; the Borough of Midland Park; and the New Jersey Department of Human Services (DHS). Plaintiff alleged that the Midland Park property was located in a zone for single-family residences and was a non-conforming two-family house. Plaintiff claimed that West Bergen's acquisition of the property was a change of use that required municipal approval and a certificate of occupancy (CO). Plaintiff demanded a judgment requiring West Bergen to seek municipal approvals and a CO.
Plaintiff also alleged that Bolger made improper use of the Bolger Trust, "thereby denying the beneficiaries of the Trust true earnings on its assets by wrongfully purchasing and selling" the property for his own purposes. Plaintiff asserted that he believed "said purchase was ultra-vires the power of the Trust." Plaintiff sought an order compelling, among other things, Bolger to produce the trust agreement for inspection and comply with applicable municipal law.
By letter dated September 30, 2002, Bolger's counsel provided Sirota, who was then plaintiff's attorney, notice that plaintiff's claims against Bolger were frivolous. Counsel stated that if the complaint was not withdrawn as to Bolger, he would seek sanctions, attorneys' fees and costs against plaintiff pursuant to N.J.S.A. 2A:15-59.1 and against Sirota pursuant to Rule 1:4-8. Plaintiff did not withdraw his claims.
On November 6, 2002, the trial court entered a case management order that, among other things, dismissed the claims against the DHS without prejudice. On that same date, Bolger filed a motion to dismiss the claims against him pursuant to Rule 4:6-2(e). Bolger also moved for the imposition of sanctions, attorneys' fees and costs pursuant to Rule 1:4-8 and N.J.S.A. 2A:15-59.1.
By order entered on November 22, 2002, the court dismissed the claims against Bolger without prejudice for failure to state a claim upon which relief can be granted and for lack of standing. On that date, the court entered an order denying, without prejudice, the motion by Bolger for the imposition of sanctions, attorneys' fees and costs.
On December 31, 2002, plaintiff filed a motion for leave to file an amended complaint. The court granted the motion by order entered on January 10, 2003. Plaintiff filed an amended complaint asserting claims against West Bergen, the Borough, Bolger, and the Attorney General of New Jersey.
In the second count of the amended complaint, plaintiff alleged that Bolger "aided and facilitated" West Bergen's purchase and use of the property in defiance of state and local law. Plaintiff asserted "upon information and belief" that Bolger "used his influence with local officials" to permit West Bergen's "improper use" of the property.
Bolger's counsel sent a letter dated January 23, 2003 to Sirota stating that the claims against his client in the amended complaint were frivolous and if the claims were not withdrawn, he would seek sanctions, attorneys' fees and costs pursuant to ...