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LPD, Inc. v. Palace Diamond Center

February 19, 2009


On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-133-05.

Per curiam.


Submitted November 13, 2008

Before Judges Parrillo, Lihotz and Messano.

Following a non-jury trial, judgment was entered in favor of plaintiff, LPD Inc., against defendants Palace Diamond Center, Inc. (Palace), Jewel Source, Inc. (Jewel), Robil Akdemir, and Yetkin Pashalian, "jointly and severally," in the amount of $44,557.50. Defendants' counterclaims were dismissed.

On appeal, defendants challenge various procedural and evidential rulings made by the trial judge, and further contend that the judge's factual findings, legal conclusions, and award of damages were unsupported by the credible evidence in the record. Palace and Akdemir additionally argue that there was no evidence that they were liable to plaintiff, and thus, their motion for judgment following the close of all evidence was wrongfully denied.

We have considered these arguments in light of the record and applicable legal standards. We reverse the judgment with respect to Palace and Akdemir and remand the matter to the trial judge for the entry of an amended judgment dismissing plaintiff's claims against those two defendants. In all other respects, we affirm.


In its verified complaint, plaintiff, a New York corporation, alleged that it sold Palace and Jewel $77,836 worth of jewelry and that they had failed to pay the "outstanding invoice."*fn1 Attached to its complaint was a "signed debt memorandum, the use of which [wa]s typical in the industry[,]" reflecting defendant's obligation. Plaintiff further alleged that Palace and Jewel, as well as their respective "principals," Akdemir and Pashalian, remitted checks in payment, but these checks were subsequently dishonored. Plaintiff sought 1) the appointment of a statutory receiver for Palace and Jewel because both were "insolvent"; 2) judgment on its open book account with Palace and Jewel; 3) punitive damages against Palace based upon fraud; 4) punitive damages or "treble damages for each dishonored check" against Jewel, Pashalian, and Akdemir based upon fraud.*fn2 Defendants filed a single answer with counterclaims against plaintiff alleging conversion, fraud, and promissory estoppel.*fn3

It is unclear from the record how much discovery ensued, though it was apparently limited in scope. Trial commenced with plaintiff's president, Manny Pollak, as its first witness. He testified that plaintiff was a wholesale jewelry company that both sold and bought diamonds, precious stones and jewelry. He knew defendants, also in the wholesale jewelry industry, and had business dealings with them for several years. As of April 23, 2003, Jewel owed plaintiff $77,836 on an outstanding book account. Pollak claimed Pashalian signed a memo that day (the April memo) reflecting the amount due as the result of a "conglomeration" of transactions that had taken place between plaintiff and Jewel. Pollak also claimed that the parties continued to transact business after April 2003, and that defendants owed more money to plaintiff as a result. He identified a series of subsequent memos detailing these transactions that continued throughout the balance of 2003. In some cases, Pollak identified credits that were given to Jewel because various items were returned or because Jewel had performed "labor," such as the polishing, cleaning or setting of specific stones. In each case, however, Pollak dealt only with Jewel and Pashalian, or on limited occasions, someone he knew represented Jewel. Pollak also identified a series of checks he claimed were payments forwarded by Jewel, or on its behalf, by Palace or Akdemir. All of these were returned because of insufficient funds.

On cross-examination, Pollak denied that he ever supplied Jewel with stones on consignment, insisting instead that Pashalian always "bought [the] merchandise," with "[c]ash, check, [] labor, or exchange of goods." Referencing the April memo, the following exchange took place between defense counsel and Pollak:

Q: And what proof do you have, what documentation do you have that came to that amount of money [that Pashalian] owed you?

A: Memos. We destroyed all the memos. We made the memo ...

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