January 27, 2011
JOHN H. FRENCH, II AND JOHN H. FRENCH, II BY FEDERAL INSURANCE COMPANY AS SUBROGEE, PLAINTIFFS-RESPONDENTS,
ALL-STOR SELF STORAGE WAREHOUSE, T/A ROUTE 80 SELF STORAGE, BARBARA C. KRUG, AND WHAM SYSTEMS, LTD., DEFENDANTS, AND JOSEPH S. CANOVA, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-5479-07.*fn1
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 5, 2011 - Decided
Before Judges R. B. Coleman and J. N. Harris.
This appeal concerns two default judgments in the aggregate amount of $548,900*fn2 entered in connection with the conversion of plaintiffs' property and the consequent losses incurred when valuable antiques, family heirlooms, and other collectibles were stolen from rented compartments located in a self-storage warehouse in Paterson. Defendant Joseph Canova appeals, contending primarily that there was insufficient evidence of his liability for the conversion of the personality to warrant entry of default judgments against him. We disagree and affirm.
The default judgments (Rule 4:43-2(b)) that were entered against Canova were the product of a single proof hearing, following the entry of defaults (Rule 4:43-1) against him. Canova neither contested the service of the separate complaints upon him nor challenged the notice of the proof hearing. Canova was present for the presentation of evidence at the proof hearing and was allowed by Judge Charles E. Powers, Jr. to participate, in limited fashion, at that proceeding. Although Canova was barred from introducing evidence, he was granted the right to expansively cross-examine all three witnesses who testified: the police detective who investigated the theft; the owner of the goods that were converted, plaintiff John H. French, II; and an appraiser of personal property.
According to the evidence adduced at the proof hearing, several items of personalty -- family silverware, art work, and other valuables -- went missing from French's two storage lockers that were located within the premises of All-Stor Self Storage.*fn3 After an initial police investigation produced neither leads nor suspects, French serendipitously stumbled upon some of his goods that were exposed for sale by an antiques dealer in New York City. French bought the family heirlooms from that dealer so that no one else might acquire them, and contacted the Paterson police detective in charge of the investigation.
Armed with this information, Detective Carmine Pelosi was able to trace how French's property ended up in New York City through solid investigatory techniques. As a result of his investigation, Detective Pelosi opined that Canova -- a customer of the All-Stor Self Storage facility, a frequent visitor to the locale, and a regular bidder on the contents of abandoned storage lockers -- had disabled the security alarms at the facility, entered French's storage lockers, and pilfered belongings. Thereafter, he sold some of the ill-begotten goods to a third person who, in turn, sold the items to the New York City antiques dealer through the internet auction site Ebay.
Detective Pelosi discovered that Canova had been banned by All-Stor Self Storage from its premises based upon the belief that Canova had been tampering with its alarm system. According to the detective, Canova did not deny that he was regularly at the facility, but did not admit either to disarming the alarm system or to stealing French's property. Nevertheless, when presented with the evidence gathered by the police investigation, a Passaic County grand jury indicted Canova, charging him with, among other things, theft and possession of stolen goods.
In due course, the criminal matter was resolved. Although a transcript of Canova's plea allocution appears to have been introduced at the proof hearing, it has not been provided to us on appeal. Nevertheless, there is no dispute concerning the fact that Canova entered a plea of guilty to the theft of French's property, albeit limiting the amount involved to less than $500. See N.J.S.A. 2C:20-2(b)(3) ("Theft constitutes a crime of the fourth degree if the amount involved is at least $200 but does not exceed $500.").
Based upon the evidence presented concerning the stolen goods, Canova's link with the self storage facility, and Canova's plea, Judge Powers determined the following:
From the proofs, to the exclusion of other plausible suspects, Mr. Canova had the ability and the opportunity to purloin Mr. French's valuable items. He was frequently at the storage facility and was alone in the facility when the alarm wires were cut, leading the Court to conclude that he cut them.
When one adds testimony that goods traced from Mr. French had been sold by Mr. Canova to another dealer of items sold on EBay, and Mr. Canova pled guilty to a third [sic] degree crime of possession of stolen property (Mr. French's) in an amount under $500.00, the ineluctable conclusion is that Mr. Canova stole all the items taken from Mr. French's storage space, and is liable on the subrogated portion of the claim, and, as to those items which were not insured, to Mr. French as to the unsubrogated items. [emphasis in the original.]
Turning then to the expert appraisal evidence presented at the proof hearing, the court allocated French's loss between the subrogee insurer -- which paid for the property loss up to the amount of its contract of insurance -- and French, resulting in the entry of the two default judgments. This appeal followed.
We note that on appeal, Canova has attempted to re-argue that he did not commit the theft. His appendix contains several documents*fn4 that were not introduced in the Law Division, and which would have been barred, in any event, due to his default status. Appellate review is not a substitute for the proper presentation of a defense in the Law Division, nor is it the place to submit evidence that was not suitably introduced at the proof hearing.
Our review of the default judgments is limited to matters in the record on appeal. We ordinarily will not consider material that is not in the record by way of adduced proof, judicially noticeable facts, stipulations, admissions, or a recorded proffer of excluded evidence. See R. 2:5-4(a); N.J. Div. of Youth & Family Servs. v. M.M., 189 N.J. 261, 278 (2007); Cipala v. Lincoln Technical Inst., 179 N.J. 45, 52 (2004); Grossv. Borough of Neptune City, 378 N.J. Super. 155, 159 (App. Div. 2005); Darakjian v. Hanna, 366 N.J. Super. 238, 246 (App. Div. 2004). The supplementary materials provided by Canova cannot be the basis for our decision-making.
Additionally, because of his default status, Canova was rightly disqualified by Judge Powers from presenting evidence suggesting that he was not liable for the theft. See Chakravarti v. Pegasus Consulting Group, Inc., 393 N.J. Super. 203, 210-211 (App. Div. 2007) ("Even though a defendant who has defaulted has relinquished the right to present affirmative proofs in the matter, the right to challenge a plaintiff's showings in a proof hearing by way of cross-examination and argument should not ordinarily be precluded."); Innes v. Carrascosa, 391 N.J. Super. 453, 496 (App. Div.) (when faced with a defaulting defendant, trial judge acted reasonably and within his authority to restrict that party's participation in a proceeding including limiting introduction of evidence), certif. denied, 192 N.J. 73 (2007).
In the context of a proof hearing, the trial court is obliged to view a plaintiff's proofs indulgently, and the general practice is "to require only a prima facie case." Heimbach v. Mueller, 229 N.J. Super. 17, 20 (App. Div. 1988); see also Pressler and Verniero, Current N.J. Court Rules, comment 2.2.2 on R. 4:43-2 (2011). A plaintiff is nevertheless required "to furnish proof on the issue of damages as well as liability." Johnson v. Johnson, 92 N.J. Super. 457, 464 (App. Div. 1966); accord Slowinski v. Valley Nat'l Bank, 264 N.J. Super. 172, 183 (App. Div. 1993). In fact, "judgment should not ordinarily be entered without a proof hearing, although the question of what proofs are necessary is inherently within the judge's discretion." Chakravarti, supra, 393 N.J. Super. at 210 (internal citations omitted).
Canova argues that it was unfair for the Law Division to consider his plea of guilty as part of the court's analysis, because he entered the plea solely due to economic constraints and for other personal reasons. Although this argument is not appropriately presented, we note that Judge Powers neither based the final decision solely upon the conviction nor treated it as conclusive evidence of culpability. Moreover, there is nothing in the appellate record to suggest, as a matter of law, that the Law Division was precluded from considering the plea. Cf. R. 3:9-2 (permitting, for good cause shown, a plea to not be evidential in any civil proceeding).
In a civil action, a guilty plea does not automatically invoke principles of collateral estoppel or other issue preclusion doctrines, and does not generally prevent a person from taking a position inconsistent with his guilty plea. State Farm Fire & Cas. Co. v. Connolly, 371 N.J. Super. 119, 125-26 (App. Div. 2004), certif. denied, 192 N.J. 69 (2007). However, another basic rule that emerges from our decisional law is that a criminal conviction may be conclusive proof of commission of a crime, but not of the underlying facts. Allstate Ins. Co. v. Schmitt, 238 N.J. Super. 619, 632 (App. Div.), certif. denied, 122 N.J. 395 (1990); Dep't. of Law & Pub. Safety, Div. of Gaming Enforcement v. Gonzalez, 273 N.J. Super. 239, 245 (App. Div. 1994). The Law Division was obligated to parse all of the evidence presented to it, including the facts of the guilty plea and conviction, but to not unduly rely upon the conviction as proof of conversion. We find that the Law Division fulfilled that obligation in this case, and we have no basis to disturb its conclusions.