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Daibes Oil, LLC v. Karki Enterprises


July 20, 2010


On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-118-07.

Per curiam.


Submitted July 6, 2010

Before Judges Cuff and Lisa.

Plaintiff leased a gas station in Absecon to defendant, Karki Enterprises, Inc., of which defendant Yogendra KC (KC) was the principal. Plaintiff sued defendants, alleging breach of contract for failing to pay for gasoline delivered. Plaintiff claimed that $228,725.99 was due. In addition to compensatory damages, plaintiff also sought other forms of relief, including punitive damages, treble damages under the Consumer Fraud Act, interest, and attorney's fees.

Prior to institution of the civil action, plaintiff caused a municipal court complaint to be signed against KC, charging him with theft of $228,725.99 by failure to make required disposition of property received, in violation of N.J.S.A. 2C:20-9. KC was arrested, taken into custody, and held for a short period of time before making bail. Because this was an indictable offense, it was referred to the Atlantic County Prosecutor. After reviewing the matter, the prosecutor administratively dismissed the charge seventeen days after the complaint had been filed.

In addition to their answer, defendants filed a counterclaim and third-party complaint. Relevant to this appeal, the counterclaim included claims for abuse of process and malicious prosecution. Defendants served plaintiff with extensive discovery demands, prompting a motion by plaintiff for a protective order. Defendants cross-moved for dismissal of the complaint and suppression of plaintiff's answer to the counterclaim for failure to respond to the discovery requests. On June 8, 2007, Judge Perskie granted plaintiff's motion and denied that of defendants.

After the discovery end date (as once extended), defendants moved for summary judgment on the abuse of process and malicious prosecution claims contained in their counterclaim. By order of June 6, 2008, after hearing oral argument on that date, Judge Perskie entered an order denying the motion.

The case then went to trial. Based upon the jury's verdict, final judgment was entered on March 26, 2009 in favor of plaintiff against defendants as follows: (a) for breach of contract, $205,225; (b) prejudgment interest of $22,237.89; counsel fees pursuant to Rule 4:21A-6(c) of $750; and (d) costs to be taxed.

Defendants appeal from the orders of June 8, 2007 and June 6, 2008, as well as the March 26, 2009 final judgment.*fn1 They argue that the judge mistakenly exercised his discretion in granting plaintiff's motion for a protective order and denying defendants' motion for dismissal of the complaint and suppression of the answer to the counterclaim. They further argue that no material facts were in dispute at the time of their summary judgment motion, and they were entitled to judgment as a matter of law for abuse of process and malicious prosecution. We reject these arguments and affirm.

Defendants served their initial discovery demands on plaintiff soon after issue was joined. Plaintiff's counsel complained by letter to defendants' counsel that the demands were unduly burdensome, and suggested that counsel confer to resolve the dispute. Defendants' counsel responded negatively. Plaintiff then moved for the protective order, which was met by defendants' motion to dismiss the complaint and suppress the answer to the counterclaim.

Judge Perskie issued a written decision. He noted that "[d]efendants propounded nearly 300 hundred [sic] discovery demands on Plaintiff (150 requests to admit, 68 interrogatories with numerous subparts, and 61 notices to produce.)" He further noted plaintiff's contentions that some of the requests for admissions called for admission of legal conclusions, dealt with matters not within the personal knowledge of plaintiffs, or contained multiple statements making it impossible to admit or deny. Further, plaintiff complained that many of the interrogatories were overbroad and the majority had well over five subparts. And, many of the items demanded in the notices to produce were either not relevant or otherwise improper. The judge accepted those arguments. He concluded: "The amount of discovery requested for this kind of matter is overwhelming and overly burdensome. Also, much of the requested information is relevant [sic] and/or protected. Accordingly, Plaintiff's motion is granted; Defendants' cross-motion is denied." The judge continued by directing defendants "to redraft their discovery requests to a reasonable number of requests, with the requests leading to information that could lead to discoverable evidence."

Trial judges are afforded very broad discretion in ruling on discovery motions. Payton v. N.J. Tpk. Auth., 148 N.J. 524, 559 (1997). An appellate court will not interfere with those decisions except upon a showing of a clear abuse of discretion. Ibid. That standard is not met here. We have reviewed the initial discovery requests, and we are satisfied that Judge Perskie acted within his discretion in finding them overbroad and unduly burdensome. The remedy he selected was entirely appropriate and reasonable, namely directing defendants to revise the discovery requests to a more manageable and reasonable level. Therefore, there was no mistaken exercise of discretion, and we will not reverse on this basis.

Perhaps more significant is what followed in the course of this litigation. As directed, defendants prepared and served on plaintiff a set of revised discovery requests. Although they contend plaintiff failed to respond or failed to respond appropriately, defendants concede that they never sought further relief from the court because of any such deficiency. Therefore, we are at a loss to understand why we should find that defendants were prejudiced at trial because of inadequate discovery as a result of the June 8, 2007 order. Indeed, the thirty-six revised requests for admissions are included in the appendix and, from the colloquy at the summary judgment motion hearing, it appears that plaintiff had not responded and those matters would be deemed admitted.

We now turn to defendants' summary judgment motion. A motion for summary judgment must be granted 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). In deciding on the motion, the trial court must grant all favorable inferences of fact to the non-moving party. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 536 (1995). On this basis, the court must decide whether the evidential materials "are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Id. at 540. If instead "the evidence 'is so one-sided [that one party must prevail as a matter of law],'" such that "there exists a single, unavoidable resolution of the alleged disputed issue of fact" the court should "not hesitate to grant summary judgment." Ibid. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S.Ct. 2505, 2512, 91 L.Ed. 2d 202, 214 (1986)). An appellate court applies the same standard as the trial court upon review of a grant or denial of summary judgment. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998).

Judge Perskie was of the view that whether plaintiff, in causing the criminal complaint to be issued, was acting in the good faith belief that there was probable cause that KC committed the crime of theft, was a material fact in dispute that required resolution by the jury. Indeed, the jury, after hearing all of the evidence presented by both sides and after being appropriately charged on the claims of abuse of process and malicious prosecution, found that defendants did not carry their burden of proof and returned a no cause of action verdict on those claims.*fn2

Matters dealing with state of mind and intent are typically not a proper subject for resolution through summary judgment. See Costello v. Ocean County Observer, 136 N.J. 594, 615 (1994). Issues of this nature usually require consideration by the jury. In response to defendants' summary judgment motion, Munir Daibes, the managing member of plaintiff, certified that, because defendants sold all of the gasoline his company delivered to them and kept the proceeds for themselves personally, he contacted law enforcement authorities because he believed "what they did was criminal." We find no error in the judge's finding that a material fact was in dispute with respect to these claims that required submission to the jury. Indeed, as we have stated, the jury was unconvinced that defendants proved all of the facts necessary to establish each element of these causes of action.


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