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Group Health Inc. v. Tagayun


March 6, 2009


On appeal from the Superior Court of New Jersey, Law Division, Passaic County, Docket No. DC-016555-06.

Per curiam.


Submitted: January 30, 2009

Before Judges Cuff and C.L. Miniman.

Defendant Myrna B. Tagayun appealed improvidently on January 31, 2008, from an interlocutory order for judgment entered on December 21, 2007, in favor of plaintiff Group Health Incorporated in the sum of $7,594.21 plus costs to be taxed. The interlocutory order became final on February 8, 2008, when defendant's counterclaim was dismissed with prejudice. Despite our reluctance to do so, Grow Co. v. Chokshi, 403 N.J. Super. 443, 459-60 (App. Div. 2008), we elect to treat the appeal as properly filed because the judgment was rendered final so soon after the appeal was filed. We affirm.

In doing so, we do not consider any issues raised by defendant with respect to the dismissal of her counterclaim because she did not file an amended notice of appeal listing the February 8, 2008, order as an order from which appeal was taken. As a consequence, we simply have no jurisdiction to consider these issues. See R. 2:5-1(f)(3)(A); N.J. Div. of Youth & Family Servs. v. K.M., 136 N.J. 546, 562 (1994); State v. Gould, 352 N.J. Super. 313, 318-19 (App. Div. 2002); Kerney v. Kerney, 81 N.J. Super. 278, 281 (App. Div. 1963) ("The general rule has been stated to be that on appeal from only part of a judgment the scope of appellate review is ordinarily limited to that part and does not extend to the part not appealed from.");*fn1 cf. Cent. R.R. Co. of N.J. v. Neeld, 26 N.J. 172, 185-86 (Heher, J., concurring), cert. denied, 357 U.S. 928, 78 S.Ct. 1373, 2 L.Ed. 2d 1371 (1958).

On December 11, 2003, plaintiff and defendant executed a settlement agreement in which "GHI and Dr. Tagayun agree that Dr. Tagayun will pay to GHI in full satisfaction of the Audit, the total sum of Twenty Three Thousand Five Hundred Dollars ($23,500.00)." The audit in question was a review conducted by plaintiff's Special Investigations Unit, which determined that between 1995 and 2001 plaintiff overpaid defendant for the claims her office submitted. The agreement called for defendant to repay the $23,500 amount in twenty-four equal monthly installments of $979.16. The agreement also provided that if payment was not made by the twenty-first of each month, defendant would be in default and the full amount would become immediately payable to plaintiff.

Section III, paragraph 4, "Governing Law," provided that the agreement would be interpreted according to the laws of the State of New York without regard to conflict-of-laws principles. It also required any suit to be brought in New York. Section III, paragraph 10, "Mutual Release," provided: "Each party hereby releases the other from any claim or dispute arising out of the payment[,] submission or non-payment of any claims for services rendered by Dr. Tagayun during the term covered by the Audit."

Plaintiff is a New York corporation that was located in Manhattan at the time the agreement was executed. At that time and thereafter, defendant resided in Clifton and practiced medicine in Maywood. Thus, she was subject to the general jurisdiction of the courts of New Jersey by virtue of her residence and employment and, by virtue of the agreement, stipulated to the exercise of long-arm jurisdiction by the courts of New York.

Both parties agree that defendant made payment each month for sixteen months. Then, in an August 19, 2005, letter to plaintiff, defendant's "Practice Manager," Robert S. Mandell, wrote:

As indicated in our[ letter] to you of August 8, 2005, it is our firm intention to see that your firm is paid the full amount committed to in the Settlement Agreement executed December 11, 2003. By my count, there remains a balance due of Six thousand eight hundred and fifty four dollars and twelve cents ($6,854.12) covering the seven (7) installments for June through December of this year. . . .

So in sum, this reduces to: you've got about seven grand coming. It's going to [be] paid by the end of the year. We're going to start getting you funds in a couple of weeks. We're not going to be able to get you twenty-nine hundred plus by August 29, 2005.

Defendant made a partial payment on September 6, 2005, of $400, which plaintiff applied to the payment due on May 24, 2005. Thereafter, defendant made no further payments.

On October 27, 2006, plaintiff filed a complaint against defendant in the Superior Court, Special Civil Part, Passaic County. The complaint alleged that defendant had failed to make payments under a settlement agreement, leaving a balance due of $7439.44. On December 5, 2006, defendant filed an answer and counterclaim seeking compensatory damages of $351,913.58 and other relief. The counterclaim alleged breach of contract; fraud in the instrument; fraud in the inducement; misrepresentation; breach of duty; breach of fair dealing; unjust enrichment; conspiracy to defraud; and conversion. At the same time, defendant moved to transfer the action from the Special Civil Part to the Law Division. On December 12, 2006, plaintiff cross-moved for summary judgment in the Special Civil Part.

While these motions were pending, defendant removed the case on January 4, 2007, to the United States District Court for the Southern District of New York. On January 22, 2007, a Superior Court judge denied the motion to transfer to the Law Division, noting on the order, "This matter should have been brought in New York." Plaintiff moved in federal court on February 6, 2007, to remand the case to the New Jersey Superior Court and on July 16, 2007, the federal judge granted plaintiff's motion.

On August 24, 2007, the Special Civil Part judge granted plaintiff's December 12, 2006, cross-motion for summary judgment, noting that it was unopposed. Defendant thereafter moved pursuant to Rule 1:7-4(b) to vacate the summary judgment and to dismiss the action as "having been brought in the wrong venue . . . in violation of forum and forum law selection provisions of the Contract and Settlement Agreement between parties." Plaintiff opposed the motion.

The matter was heard on November 16, 2007, and the judge thereafter entered an order vacating the summary judgment, finding as a matter of law that plaintiff had submitted to the jurisdiction of New Jersey courts. Plaintiff then filed motions for summary judgment on its complaint and defendant's counter-claim. In an order dated December 21, 2007, the judge granted plaintiff's motion for summary judgment on the complaint and entered the judgment from which this appeal is taken. He carried the motion to dismiss the counterclaim to January 18, 2008, because plaintiff objected to defendant's attempt to voluntarily withdraw the counterclaim and to give defendant an opportunity to file supporting affidavits regarding plaintiff's alleged fraud. Ultimately, the judge granted the summary-judgment motion to dismiss the counterclaim on February 8, 2008.

Summary judgment is designed to provide a prompt, businesslike and inexpensive method of resolving cases. Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67, 74 (1954). In reviewing a ruling on a summary judgment motion, we apply the same standard as that governing the trial court. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.) (citing Antheunisse v. Tiffany & Co., 229 N.J. Super. 399, 402 (App. Div. 1988), certif. denied, 115 N.J. 59 (1989)), certif. denied, 154 N.J. 608 (1998).

Summary judgment is only appropriate if there is no genuine issue as to any material fact in the record:

The judgment or order sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, 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).]

Brill v. Guardian Life Insurance Co. of America, 142 N.J. 520, 540 (1995), outlined the standard for deciding a summary judgment motion:

[A] determination whether there exists a "genuine issue" of material fact that precludes summary judgment requires the motion judge to 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 fact[ ]finder to resolve the alleged disputed issue in favor of the non-moving party.

Therefore, the motion must be considered on the basis that the non-moving parties' assertions of fact are true and "grant all the favorable inferences to the non-movant." Id. at 536. The determination is whether the evidence "'is so one-sided that one party must prevail as a matter of law'" Id. at 533 (quoting Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 251-52, 106 S.Ct. 2505, 2512, 91 L.Ed. 2d 202, 214 (1986)).

"If there exists a single, unavoidable resolution of the alleged disputed issue of fact, that issue should be considered insufficient to constitute a 'genuine' issue of material fact for purposes of Rule 4:46-2." Brill, 142 N.J. at 540. "However, an opposing party who offers no substantial or material facts in opposition to the motion cannot complain if the court takes as true the uncontradicted facts in the movant's papers." Baran v. Clouse Trucking, Inc., 225 N.J. Super. 230, 234 (App. Div.) certif. denied, 113 N.J. 353 (1988). Assertions that are conclusive and self-serving for the asserting party are insufficient to defeat a summary judgment motion. Puder v. Buechel, 183 N.J. 428, 440-41 (2005).

In this appeal, defendant contends that the court had no subject-matter jurisdiction over this dispute in light of the contractual requirement that suit on the agreement be brought in New York. This claim lacks merit because a forum-selection clause confers personal, rather than subject-matter, jurisdiction on the selected state; here, New York. See Danka Funding Co., LLC v. Sky City Casino, 329 N.J. Super. 357, 369 n.6 (Law Div. 1999) ("operation of a forum selection clause . . . acts to confer personal jurisdiction"). That is, by virtue of the requirement that suit be brought in New York, defendant, a resident of New Jersey, consented to the exercise of in personam jurisdiction by the courts of New York. An agreement to designate a certain state as a "home state" is not determinative of the question of whether subject matter jurisdiction exists in another state. Griffith v. Tressel, 394 N.J. Super. 128, 137 (App. Div. 2007).

Subject-matter jurisdiction itself refers to "the power of a court to hear and determine cases of the class to which the proceeding in question belongs. It solely rests upon the court's having been granted such power by the Constitution or by valid legislation, and cannot be vested by agreement of the parties." State v. Osborn, 32 N.J. 117, 122 (1960). The New Jersey Constitution grants the Superior Court "original jurisdiction throughout the State in all cases." N.J. Const. art. VI, § 3, ¶ 2. If a court should find itself without subject-matter jurisdiction, "it shall on motion or its own initiative order the action transferred to the proper court, there to be proceeded upon as if it had been originally commenced in that court." Rosa v. United Jersey Bank, 167 N.J. Super. 482, 485 (App. Div. 1979) (citing R. 1:13-4(a)). The concept of subject-matter jurisdiction is simply inapplicable here. The Superior Court had subject-matter jurisdiction at all times over this dispute, except of the time period during which it was pending in federal court.

Of course, defendant could have moved to enforce the forum-selection clause and dismiss this action prior to pleading. Instead, she filed an answer and counterclaim and moved to transfer this case to the Law Division. Although she did move to dismiss thereafter, we find no error in the judge's denial of her application. The forum-selection clause was obviously intended to benefit plaintiff with the option of litigating in its home state. It waived its right to do so by suing in New Jersey, undoubtedly because it would ultimately have had to come to New Jersey to collect on any New York judgment as defendant and her assets are located here.

Defendant also argues that an earlier order entered on January 22, 2007, stated "[t]his matter should have been brought in New York" and that such order became the "law of the case" after the federal court remanded the matter to New Jersey. However, the motion judge and the federal district court judge found the notation on the January 22, 2007, order to be a nullity, as at the time, New Jersey had no jurisdiction over the matter since it was pending in the New York federal district court at the time.

Defendant removed the case to the federal district court, and the case was docketed by the federal clerk's Office on January 4, 2007. At that point, the federal court obtained jurisdiction, see 28 U.S.C.A. § 1332(a), and the January 22, 2007, order and the notations on it were of no effect. In any event, the "law of the case" doctrine is discretionary and "merely operates to prevent litigation of a previously resolved issue." In re Estate of Stockdale, 196 N.J. 275, 311 (2008); see also Pressler, Current N.J. Court Rules, comment 4 on R. 1:36-3 (2009). The motion judge did not err in rejecting defendant's claim that the order of January 22, 2007, became the law of this case.

Defendant also attempts to articulate a claim that the New Jersey courts lacked in personam jurisdiction over her because of the forum-selection clause. She misperceives the concept of in personam jurisdiction, which is expanded by a forum-selection clause to a defendant who did not have minimum contacts with the forum, see Blakey v. Cont'l Airlines, Inc., 164 N.J. 38, 66 (2000), as defendant might have argued here with respect to the courts of New York had there been no forum-selection clause and had suit been brought in New York. The concept of in personam jurisdiction also has no application to Group Health, which by necessary implication consented to in personam jurisdiction by the forum in which it elected to sue, New Jersey. In fact, it is this implied consent that permitted defendant to litigate her counterclaim against a New York corporation in New Jersey. It simply has no application here to either party.

Defendant next contends that the policy governing enforcement of settlement agreements is limited to settlements of pending litigation and, she additionally contends that such agreements can be set aside if procured by fraud. It is, of course, true that "[s]ettlement of litigation ranks high in our public policy." Nolan v. Lee Ho, 120 N.J. 465, 472 (1990) (quotation omitted). "'An agreement to settle a lawsuit is a contract which, like all contracts, may be freely entered into and which a court, absent a demonstration of "fraud or other compelling circumstances," should honor and enforce as it does other contracts.'" Columbia Presbyterian Anesthesiology v. Brock, 379 N.J. Super. 11, 16 (App. Div. 2005) (quoting Pascarella v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div.), certif. denied, 94 N.J. 600 (1983)). The rationale behind the policy is that the parties themselves are in the in the best position to know how to resolve a contested matter in a way most beneficial to everyone involved. Jennings v. Reed, 381 N.J. Super. 217, 226-27 (App. Div. 2005). For that reason, courts "strain to give effect to the terms of a settlement whenever possible." Dept. of Pub. Advocate, Div. of Rate Counsel v. N.J. Bd. of Pub. Utils., 206 N.J. Super. 525, 528 (App. Div. 1985).

Here, there was clearly a pending dispute respecting overpayments to defendant that plaintiff intended to recoup. It is of no moment that suit was not brought before the settlement was reached. The policy behind enforcing an agreement to settle a lawsuit applies equally to settlement of disputes prior to suit. See Columbia Presbyterian, supra, 379 N.J. Super. at 13, 17. As a consequence, we do not, as defendant urges, consider Columbia Presbyterian distinguishable on the facts because no pending lawsuit was settled. In fact, the parties in Columbia Presbyterian had settled their difference prior to trial. Id. at 13.

In this case, the plain language of the agreement was as enforceable as any other contract. See id. at 16. Defendant agreed to pay plaintiff $23,500 at the rate of $979.16 per month or face default, upon which the balance became immediately collectible. In return, plaintiff agreed to accept that amount in full satisfaction of the alleged $41,849.59 overpayment revealed by the audit. Clearly, both sides gave and received valuable consideration and the agreement was binding on each party. See, e.g., Cont'l Bank of Pa. v. Barclay Riding Acad., Inc., 93 N.J. 153, 170 ("Valuable consideration may take the form of either a detriment incurred by the promisee or a benefit received by the promissor.") (citation omitted), cert. denied, 464 U.S. 994, 104 S.Ct. 488, 78 L.Ed. 2d 684 (1983).

Plaintiff supported its motion for summary judgment with a certification from Nahari Patel, the manager of its Special Investigations Unit, in accordance with Rule 4:46-2(a), and included as an exhibit a letter from defendant's "Practice Manager" in which he agreed that defendant had not made the required payments. Defendant's opposition papers, other than a certification of service, did not contain any affidavits or certifications contesting any issue of material fact asserted by plaintiff. She did not contest the amount plaintiff claimed was due and owing and agreed that "[t]here's absolutely nothing wrong with the summary judgment argument opposing counsel makes." Although she argued that plaintiff's position was "irrelevant" because of the forum-selection clause, we have already concluded that it was not an impediment to proceeding in New Jersey.

It is, of course, true that a settlement agreement, like any other contract, can be set aside if it was procured through fraud. Columbia Presbyterian, supra, 379 N.J. Super. at 16. However, defendant did not submit competent evidence of such fraud in opposition to the motion for summary judgment. As the motion judge correctly observed,

Fraud has to be [pled] with specificity. In order to upset a settlement four years later, you have the burden of coming forward before you got here and to carry the burden of proving [fraud] . . . . And your obligation is to come in with the right proofs. I don't even have an affidavit. I don't even have a certification. I've got your conclusory statement in a brief.

Clearly, Rule 4:46-5 required defendant to submit an affidavit based on personal knowledge "setting forth specific facts showing that there is a genuine issue for trial," which in this case would have required proof of fraud in the inducement of the contract. No such proof was presented, and judgment was properly entered. Shelcusky v. Garjulio, 172 N.J. 185, 200-01 (2002); Robbins v. City of Jersey City, 23 N.J. 229, 241 (1957); Hoffman v., Inc., 404 N.J. Super. 415, 14-15 (App. Div. 2009); James Talcott, Inc. v. Shulman, 82 N.J. Super. 438 (App. Div. 1964).


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