April 13, 2011
DOUGLAS Q. LUONG, PLAINTIFF-APPELLANT,
KIEU H. NGUYEN, THANH VAN LE, AND LOAN THIKIEU NGUYEN, DEFENDANTS-RESPONDENTS.
On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-2209-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued December 14, 2010
Before Judges Wefing, Payne and Baxter.
Plaintiff Douglas Q. Luong appeals from an October 14, 2009 Law Division order which, following a proof hearing on liability and damages, dismissed his complaint with prejudice because he failed to prove the elements of his claims. We agree with plaintiff's contention that the judge erred by imposing a heavier burden of proof than required at a proof hearing, and therefore remand for reconsideration of the dismissal in light of the proper burden of proof. Our remand is, however, limited to plaintiff's claims against his former wife, as we are satisfied that the dismissal of Douglas's claims against his exwife's aunt and uncle was appropriate. On remand, the judge should determine the legal issue raised at the proof hearing, but not decided: whether plaintiff's waiver of all damages claims in the property settlement agreement (PSA) at the time of his divorce bars him from instituting this separate action against his former wife for damages in tort.
In the spring of 2002, plaintiff frequented a grocery store in Edison where he met defendant Loan Thikieu Nguyen, who worked there as a cashier. Loan was the aunt of defendant Kieu H. Nguyen. Loan told plaintiff, who was then thirty-two years old and unmarried, that her niece, Kieu, who lived in Vietnam, would be a "very good wife" for him. Plaintiff began telephoning Kieu in Vietnam while Loan and her husband, Thanh, also a defendant, continued to encourage plaintiff's interest in their niece.
Plaintiff called Kieu in Vietnam three to four times a week in the summer of 2002 and visited her in Vietnam. Although they discussed the possibility of getting married, no plans were made. Plaintiff returned to New Jersey and continued to call Kieu several times a week. During those phone calls, she requested that he send her money, which he did, wiring her approximately $200 per week.
In the summer of 2004, Kieu agreed to marry plaintiff. He flew to Vietnam, where the ceremony was performed. Kieu did not immediately return to New Jersey with plaintiff because he had been living in a very small apartment with his brother and sister, and Kieu wanted him to find more suitable accommodations before she moved to New Jersey.
Immediately after plaintiff and Kieu were married, she asked him to begin the application process for her green card. She also demanded that he continue to send her money. According to plaintiff, he sent Kieu approximately $10,000 after they were married and while she was still living in Vietnam.
After nearly two years, Kieu finally agreed to move to New Jersey to live with plaintiff, arriving at Newark Airport on February 19, 2006 accompanied by her aunt and uncle. Until the day Kieu flew to New Jersey in February 2006, the relationship between plaintiff and Kieu was, according to him, "still very good." As soon as he saw her at the airport, however, he could see that Kieu was "act[ing] totally differently. . . . [H]er face looked so different, upset, angry at me." Kieu lived with her aunt and uncle until May 1, 2006 when plaintiff and Kieu moved to their own apartment in Piscataway. In April 2006, approximately one month before they moved to the apartment, the green card for which plaintiff had applied arrived in the mail, and he gave it to Kieu.
According to plaintiff, immediately after she moved in with him, Kieu said she wanted a divorce. She locked herself in the bedroom, giving him no choice but to sleep on the living room sofa. Without any provocation, she routinely screamed at him, threw food on the floor, and, on one occasion, even "dump[ed]" her dinner on the sofa. She refused to engage in sexual relations. Plaintiff testified that Kieu's hostile behavior, and locking him out of their bedroom, continued until November 7, 2006.
On that day, he arrived home from work at approximately 11:00 p.m. and changed into a sweatsuit. He immediately heard the doorbell ring and observed Kieu answer the door. At that moment, a police officer entered the apartment and accused plaintiff of beating Kieu. When he denied having done so, Kieu pointed to a bruise on her body. Despite plaintiff's denials, the officer arrested him and took him to the Piscataway police station. When Kieu failed to appear in court to testify, the charges were dropped.
According to plaintiff, Kieu's false accusation that he had assaulted her, and her cruel behavior toward him, caused him to suffer "emotional distress and depression." He maintained that for a year, he was unable to fall asleep until 2:00 a.m. because of the depression and anxiety that resulted from Kieu's poor treatment of him. He consulted a psychiatrist, who prescribed medication to help him sleep. According to plaintiff, the medication was not helpful.
Although the exact date is not clear from the record, plaintiff filed a divorce complaint in the latter part of 2007 or early in 2008. On July 7, 2008, the parties executed a PSA, in which Kieu acknowledged that her conduct constituted extreme cruelty. She admitted to the following allegations:
a) Wife has at various times and places committed acts of extreme cruelty towards Husband,
b) Husband and Wife constantly bicker and argue,
c) Wife wrongfully called the Piscataway police on Husband on November 7, 2006, which resulted in Husband being arrested and detained,
d) Wife assaulted and battered the husband with a phone on or about May 2006 to November 7, 2006,
e) Wife abandoned the marital home on December 2, 2006,
f) Husband and Wife are unable to come to an agreement on even the simplest matters,
g) Wife refused to agree to Husband's sexual requests,
h) Husband has suffered extreme distress because of all of the above.
The PSA required Kieu to pay plaintiff $2,000 by certified check made payable to him "in consideration of any and all personal property she may have in her possession and in final resolution of any tangible personal property issues." The agreement also contained a section obligating her to pay the sum of $1,810 in a certified check payable to plaintiff's attorneys, Wong & Wong Associates.
Notably, Article XV the PSA included the following general waiver and release of rights:
Except that is herein to the contrary provided [sic], the parties will and do hereby mutually release, remiss and forever discharge each other from any and all actions, suits, debts, claims, demands and obligations whatsoever, both in law and in equity, that either of them ever had, now has or may hereafter have, against the other upon or by reason of any matter, cause or thing up to the date of the execution of this Agreement. It is the intention of the parties that henceforth there will be, as between them, only such rights and obligations as are specifically provided in this Agreement.*fn1
The PSA also provided that its terms "shall be incorporated in any decree or judgment obtained in any matrimonial proceeding between the parties and shall become part of said decree, subject to approval of the Court."
After filing for divorce, but before settling that matter, plaintiff filed the complaint that is the subject of this appeal. In that complaint, he asserted claims of legal and equitable fraud based on allegations that Kieu had induced him into marriage by falsely representing that she loved him and would be a good wife, when her sole purpose was to obtain financial benefit and a green card. He further alleged that Kieu's aunt and uncle conspired with Kieu to defraud him into marriage based on their false representations that she would make a good wife and had affection for him. He also asserted claims of intentional and negligent infliction of emotional distress against all three based on their allegedly false representations to induce him into a loveless marriage, which caused him to suffer severe emotional distress.
On the fraud and conspiracy claims, plaintiff demanded $50,000 restitution,*fn2 punitive damages in the amount of $2,000,000, and unspecified compensatory and consequential damages. On the two emotional distress claims, plaintiff again sought unspecified compensatory, consequential and punitive damages.
All three defendants defaulted, and plaintiff obtained a judgment by default against each, pursuant to Rule 4:43-2(b). The court set the matter down for a proof hearing, to be conducted pursuant to the same Rule. At the proof hearing, defendants were not permitted to present any witnesses; however, the judge permitted Kieu's attorney to cross-examine plaintiff and to present legal argument. In relevant part, Kieu's attorney maintained that because plaintiff had executed a PSA that released Kieu from "any and all actions, suits, . . . [and] claims" that plaintiff "ever had . . . or may hereafter have," plaintiff was barred from instituting the present tort action for damages. The judge made no decision on the issue of waiver, instead commenting that the issue of accord and settlement was not before him and "that may be for an Appellate Court to address."
In an oral decision rendered on October 14, 2009, the judge concluded there was insufficient proof to support Douglas's emotional distress claims. The judge described the elements of such causes of action, and commented that "liability does not extend to mere insults, indignities, threats [and] annoyances," and observed that the "emotional distress must be so severe that no reasonable person could be expected to endure such distress." Beyond commenting that the parties "apparently . . . were not suited" to each other, he made no findings to support his dismissal of plaintiff's intentional and negligent infliction of emotional distress claims. Notably, the judge did not apply the facts to the elements of those causes of action.
He then turned to the fraud claims, concluding that plaintiff was required to prove such claims by clear and convincing evidence, and had not done so. The judge reasoned that plaintiff's proofs were insufficient in terms of quantity, and he also questioned the truth of the facts presented, commenting he did not possess "a clear conviction [of] the truth of the precise facts" to which Douglas had testified. The judge stated:
With regard to the fraud Counts, the equitable fraud and fraud, those need to be proved by clear and convincing evidence. Here I find that there is not clear and convincing evidence.
Clear and convincing evidence requires proof that the result be reached by not merely balancing of doubts or probabilities, but rather by clear evidence that causes one to be convinced that the allegations sought to be true -- to be proved are true. And that clear and convincing evidence --produces in the minds [sic] a firm belief or conviction that the allegation[s] sought to be proved by the evidence are true.
While there are proofs sought --presented by the plaintiff, I don't find that the evidence is so clear, direct, or weighty, in terms of quantity, and convincing as to cause that I am really -- have a clear conviction [of] the truth of the precise facts [at] issue.
Here, [plaintiff is] claiming fraud and equitable fraud. It -- it seems to be a situation of a mail order bride, to some extent, that -- where the relationship did not work out. Plaintiff seems to have excessive claims of damages for the harm that he claims befalled him. He sought damages for the misrepresentations that he said were made to him by the defendants. [(Emphasis added).]
As to plaintiff's claims against Kieu's aunt and uncle, the judge rejected plaintiff's contention that Kieu and her aunt and uncle conspired to arrange the marriage for the sole purpose of obtaining a green card for Kieu, finding that plaintiff "sought out and courted his wife" while she lived in Vietnam, took the time to get to know her, but "apparently they were not suited."
He found that plaintiff was "more than willing to spend the time and the money to seek out the younger wife in Vietnam." He also found there was no false representation by Kieu's aunt and uncle because they likely believed Kieu would be a good wife and, in any event, plaintiff did not rely on their representations when he married Kieu.
On appeal, plaintiff argues he is entitled to a reversal of the October 14, 2009 order dismissing his complaint with prejudice. In particular, he maintains: 1) the judge committed reversible error by imposing a heavier burden of proof than required at a proof hearing; and 2) his proofs entitled him to judgment on his claims of fraud, as well as negligent and intentional infliction of emotional distress, had the correct standard of proof been applied by the court.
In point one, plaintiff contends that because the burden of proof applicable at a proof hearing conducted pursuant to Rule 4:43-2(b) is less demanding than the burden of proof applicable at trial, the judge committed reversible error when he insisted that plaintiff's proofs meet the more demanding standard of a trial. Plaintiff relies upon our observation in Slowinski v. Valley National Bank, 264 N.J. Super. 172, 183 (App. Div. 1993) that a court can require a plaintiff seeking a default judgment "to furnish some proof on the merits of the issues to show entitlement to the relief demanded." Plaintiff argues that our use of the word "some," as well as our recognition in Williams v. Page, 160 N.J. Super. 354, 369 (App. Div. 1978), certif. denied, 78 N.J. 395 (1978), that a trial court has discretion to require a plaintiff seeking a default judgment to prove the right to relief, demonstrate that the quantum of proof must be less than that required at trial.
The trial court has the discretion to require a plaintiff seeking default judgment to prove liability at a hearing. R. 4:43-2(b); Douglas v. Harris, 35 N.J. 270, 276-77 (1961); Heimbach v. Mueller, 229 N.J. Super. 17, 20-21 (App. Div. 1988). At a default hearing, however, the court generally should require only that the plaintiff establish a prima facie case. Kolczycki v. City of E. Orange, 317 N.J. Super. 505, 514 (App. Div. 1999); Heimbach, supra, 229 N.J. Super. at 20; see also Pressler & Verniero, Current N.J. Court Rules, comment 2.2.2 on R. 4:43-2 (2011) (stating that "unless there is intervening consideration of public policy or other requirement of fundamental justice, the judge should ordinarily apply to plaintiff's proofs the prima facie case standard of R. 4:37-2(b) and R. 4:40-1, thus not weighing evidence or finding facts but only determining bare sufficiency").
Thus, judgment against a defaulting defendant generally should be granted unless "some necessary element of plaintiff's prima facie case was missing or . . . plaintiff's claim was barred by some rule of law whose applicability was evident either from the pleadings or from the proofs presented." Heimbach, supra, 229 N.J. Super. at 23-24. In determining whether a plaintiff has established the necessary elements of the claim, the court should "not weigh evidence or find facts but only determin[e] bare sufficiency." Kolczycki, supra, 317 N.J. Super. at 514. That exercise is "mechanical" and "[t]he trial court is not concerned with the worth, nature or extent (beyond a scintilla) of the evidence, but only with its existence, viewed most favorably" to plaintiff. Dolson v. Anastasia, 55 N.J. 2, 5-6 (1969) (discussing analogous burden of proof applicable to motion for involuntary dismissal under R. 4:37-2).
To establish a cause of action for common law fraud, a plaintiff must establish the following five elements: "(1) a material misrepresentation of a presently existing or past fact; (2) knowledge or belief by the defendant of its falsity; (3) an intention that the other person rely on it; (4) reasonable reliance thereon by the other person; and (5) resulting damages." Kaufman v. I-Stat Corp., 165 N.J. 94, 109 (2000) (quoting Gennari v. Weichert Co. Realtors, 148 N.J. 582, 610 (1997)).
At trial, proof of fraud must be established by evidence that is clear and convincing. Stochastic Decisions, Inc. v. DiDomenico, 236 N.J. Super. 388, 395 (App. Div. 1989), certif. denied, 121 N.J. 607 (1990). Our courts have defined "clear and convincing" as: that which "produce[s] in the mind of the trier of fact a firm belief or conviction as to the truth of the allegations sought to be established," evidence "so clear, direct and weighty and convincing as to enable [the factfinder] to come to a clear conviction, without hesitancy, of the truth of the precise facts in issue." [In re Boardwalk Regency Casino License Application, 180 N.J. Super. 324, 339 (App. Div. 1981), mod., 90 N.J. 361 (1982) (quoting Aiello v. Knoll Golf Club, 64 N.J. Super. 156, 162 (App. Div. 1960)).]
Here, the court erred by imposing a greater burden of proof than the prima facie standard. The judge improperly required plaintiff to establish his fraud claims by clear and convincing evidence, which is the standard applicable in an adversarial proceeding such as a trial. See Fox v. Mercedes-Benz Credit Corp., 281 N.J. Super. 476, 484 (App. Div. 1995). The full thrust of the clear and convincing evidence standard is not applicable in a proof hearing, because at a proof hearing only a prima facie showing is required. See Heimbach, supra, 229 N.J. Super. at 23-24.
The judge's consideration of whether plaintiff presented a prima facie case should have been limited to whether plaintiff had presented some evidence to support each of the elements of common law fraud. As the same public policy issues apply to a default judgment for fraud as to defaults in other actions, it is obvious that the full "clear and convincing" standard is inappropriate, because of the overwhelming advantage it would give to a defaulting defendant, who would thereby evade discovery and yet, at the same time, put the plaintiff to an elevated burden of proof.
When entering judgments against defaulting defendants, courts pursue a number of important policies: "to keep the dockets current[,] expedite the disposal of causes[,] [and to] speed litigation to conclusion and to prevent a dilatory defendant from impeding the plaintiff's claim." 46 Am. Jur. 2d, Judgments § 232 (2006).
The effect of a default judgment is that the defendant has admitted the truth of "every allegation of fact in the complaint which was susceptible of proof by legitimate evidence." Heimbach, supra, 229 N.J. Super. at 22. However, the plaintiff must still allege a valid cause of action, and if a complaint on its face fails to do so, a trial court may properly deny a default judgment. In re Estate of Sharp, 151 N.J. Super. 579, 582 (Ch. Div. 1977), mod. 163 N.J. Super. 148 (App. Div. 1978). A trial court may also deny a default judgment if, having chosen to require proof of liability as well as damages, it is clear "either from the pleadings or from the proofs presented" that the plaintiff's claim is "barred by some rule of law[.]" Heimbach, supra, 229 N.J. Super. at 23-24.
However, no reported decision in this State "has approved the entry of a judgment in favor of a defaulted defendant on the ground that the court doubted the credibility of the testimony presented." Id. at 23. But in this case, the trial court repeatedly engaged in precisely such findings of credibility, stating that rather than accept plaintiff's factual allegations as having been admitted by default, that it would find facts. Some examples include: "I think the aunt and uncle believed that she may have made him a good wife." "I think he was looking for a mail order bride." "He seemed to be more than willing to spend the time and the money to seek out the younger wife in Vietnam." Most tellingly, the court stated:
While there are proofs sought - presented by the plaintiff, I don't find that the evidence is so clear, direct, or weighty, in terms of quantity, and convincing as to cause that I am really - have a clear conviction of the truth of the precise facts and issue.
Having concluded that the judge improperly held plaintiff to the clear and convincing evidence standard, we turn to a determination of whether plaintiff's proofs against Kieu appear to establish a prima facie case of fraud. As to the first element, material misrepresentation of a presently existing or past fact, plaintiff presented proof that Kieu materially misrepresented her feelings toward him, because he established that prior to the marriage she professed to love him, but then refused for nearly two years to even move to the United States to live with him, treated him harshly as soon as she arrived in the United States, and one month after he gave her the green card, and they moved in together, she refused, from the very first night and thereafter, to even permit him into the marital bed. By reason of the extreme nature of Kieu's conduct, and the abrupt turnabout of her conduct once she began living with him, plaintiff established that Kieu was aware she had intentionally misrepresented her feelings for him, thereby satisfying the second element.
As to the third element, plaintiff established that Kieu intended him to rely on her false assertion that she loved him because he presented proof that she did not reveal her true lack of love for him until after she had gotten what she wanted from him, namely, a green card and thousands of dollars. As to the fourth element, plaintiff established that in light of their "very good" relationship before Kieu began living with him, it was reasonable for him to rely on her professed love. As for the fifth element, plaintiff's proof of psychiatric care, depression and his need for medication, established damages.
The proof of the abrupt change in Kieu's behavior was uncontradicted, stark and compelling and could therefore enable a factfinder to conclude that she deliberately lied to him, and pretended from the outset to love him, for the mere purpose of extracting a green card and thousands of dollars. These proofs strike us as sufficient to establish a prima facie case, which requires only a determination of "bare sufficiency," with no "weighing of evidence," Kolczycki, supra, 317 N.J. Super. at 514, and no assessment of witness credibility, Heimbach, supra, 229 N.J. Super. at 23. However, for reasons that we shall discuss shortly, we do not reverse the dismissal of plaintiff's fraud claim with instructions that judgment be entered in plaintiff's favor. Instead, we reverse the dismissal and remand for further proceedings.
We turn to the judge's dismissal of plaintiff's intentional, and negligent, infliction of emotional distress claims against Kieu. Our review of the court's decision to dismiss those claims is hampered by the judge's failure to identify the burden of proof he imposed on those claims or to explain why plaintiff did not meet that burden as to Kieu. The judge's mere conclusion, devoid of any explanation of the factors he considered in reaching that conclusion, is insufficient. R. 1:7-4(a); Curtis v. Finneran, 83 N.J. 563, 569-70 (1980).
Moreover, in concluding that plaintiff failed to prove his emotional distress claims, the judge stated: "I find, and I believe, that [plaintiff] sought out and courted his wife who lived in Vietnam. He spent some time to get to know her . . . [b]ut apparently they were not suited." The judge went on to state that "[w]hile there are . . . some circumstantial inferences that I can draw from . . . what happened . . . I don't find the proof sufficient for intentional [or negligent] infliction of emotional distress." As such, it appears that the judge improperly weighed the evidence, and required more than a scintilla of evidence to support plaintiff's emotional distress claims against Kieu. See Kolczycki, supra, 317 N.J. Super. at 514 ("the court should ordinarily apply the prima facie standard to plaintiff's proofs, thus not weighing evidence or finding facts but only determine their sufficiency").
Accordingly, we conclude the judge erred by requiring plaintiff to establish more than a prima facie case at the proof hearing. Although we have concluded the trial judge erred by dismissing plaintiff's complaint with prejudice, we are unwilling to grant plaintiff's request that we conduct our own independent assessment of the record to determine whether plaintiff established a prima facie case. We recognize that we are authorized to exercise original jurisdiction whenever the decision does not require the weighing of evidence or the assessment of witness credibility, but rather requires only a determination of the bare sufficiency of the evidence proffered by the plaintiff in support of his or her claims. See Barsotti v. Merced, 346 N.J. Super. 504, 512 (App. Div. 2001) (observing that when an appellate court exercises its original jurisdiction to decide whether the claim is sufficient to survive a dismissal motion, the appellate court uses the same prima facie standard as a trial court would use when reviewing motions for involuntary dismissal under Rule 4:37-2(b)).
Our reason for declining plaintiff's invitation for an exercise of our original jurisdiction is this: we are reluctant to decide whether the waiver of claims contained in the parties' PSA barred the present action against Kieu. As we have noted, the trial judge heard little argument on that subject, and made no decision concerning it. Unquestionably, a decision on whether plaintiff's claims against Kieu are barred under waiver principles is critical to an appropriate disposition of this matter. An appellate court should generally refrain from deciding such an important threshold issue without the benefit of legal argument. Newman v. Isuzu Motors Am. Inc., 367 N.J. Super. 141, 148 (App. Div. 2004).
Consequently, we vacate the order dismissing plaintiff's complaint against Kieu with prejudice and remand the matter to the Law Division so that the judge can determine whether the provisions of Article XV of the PSA bar plaintiff from seeking damages from Kieu arising out of her conduct during the marriage. Even in the context of a default judgment, such as this, the trial court is obliged to determine whether the "plaintiff's claim was barred by some rule of law whose applicability was evident either from the pleadings or from the proofs presented." Heimbach, supra, 229 N.J. Super. at 23-24. A copy of the PSA was admitted in evidence during the proof hearing and the issue of plaintiff's waiver was squarely presented, but never resolved by the judge.
On remand, if the judge determines that there are no legal impediments barring plaintiff's complaint against Kieu for damages, the judge shall determine whether plaintiff established a prima facie case of negligent or intentional infliction of emotional distress against Kieu. If so, the judge shall enter judgment in plaintiff's favor on those claims, as well as on the fraud claim, which we have already determined was established. However, we affirm the dismissal of plaintiff's equitable fraud claim because he seeks only monetary damages, which are not permitted in a successful equitable fraud claim. See FoontFreedenfeld Corp. v. Electro-Protective Corp., 126 N.J. Super. 254, 257 (App. Div. 1973), aff'd, 64 N.J. 197 (1974).
As to the aunt and uncle, we agree with the judge's conclusion that the proofs were insufficient to establish a prima facie case that they knew of their niece's fraudulent intentions at the time they encouraged plaintiff to marry her. We therefore affirm the dismissal of the fraud claims against them. In light of that conclusion, the dismissal of plaintiff's remaining claims against the aunt and uncle was also appropriate.
Affirmed in part, and reversed and remanded in part for further proceedings consistent with the principles expressed herein.