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First Pennsylvania Bank, N.A v. Michael W. Lloyd

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


June 9, 2011

FIRST PENNSYLVANIA BANK, N.A., PLAINTIFF-RESPONDENT,
v.
MICHAEL W. LLOYD, DEFENDANT-APPELLANT.

On appeal from the Superior Court of New Jersey, Law Division, Cape May County, Docket No. L-538-90.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted May 18, 2011

Before Judges Lihotz and J. N. Harris.

Defendant, Michael W. Lloyd, appeals from the April 29, 2010 order permitting respondent Buckeye Retirement Co., LLC (Buckeye) to revive a December 1990 judgment, and from the August 27, 2010 order denying reconsideration. We affirm both orders.

I.

This is not the first time this court has addressed aspects of the 1990 judgment. In First Pennsylvania Bank, N.A. v. Michael W. Lloyd, No. A-0402-06 (App. Div. Dec. 11, 2007), we affirmed the Law Division's declination to vacate the 1990 judgment and its enforcement of a post-judgment discovery order. The facts undergirding that matter and the instant appeal are virtually identical, and have not changed in the interim, except for Buckeye's effort to revive the judgment:

In a collection action in the Law Division, Cape May County, judgment by confession was entered against Lloyd and in favor of First Pennsylvania Bank in the amount of $627,548.18 on June 22, 1990 on the first three counts of First Pennsylvania's complaint. Thereafter, on December 3, 1990, a default judgment was entered against Lloyd and in favor of the Bank on the fourth count of the same complaint in the amount of $100,000 plus interest of $7,535.79, representing the amount of a promissory note given by Lloyd and payable on demand. Following the entry of judgment, the loan was assigned, in connection with a December 2002 asset sale agreement, by First Union National Bank, a successor to First Pennsylvania,[] to The Cadle Company, which in turn assigned the loan to Buckeye Retirement Co., LLC, Ltd.

In 2004, Buckeye instituted two state court actions on the note, one in New Jersey and one in Pennsylvania, both of which were dismissed without prejudice. Learning that the obligation on the note had been reduced to judgment, Buckeye then obtained an assignment on the judgment from First Union and, later, from its successor, Wachovia Bank, N.A. When Buckeye sought to enforce an order permitting discovery of Lloyd's assets, Lloyd moved pursuant to R. 4:50-1 to vacate the judgment, alleging payment, but failing to provide satisfactory proof of same. The judge did not accept Lloyd's argument, and denied Lloyd's motion, while enforcing his discovery obligations. [First Pa. Bank, N.A. v. Michael W. Lloyd, supra, slip op. at 2-3.]

Lloyd's arguments in the first appeal were the following:

(1) that the assignment of the judgment to Buckeye was "fraudulent" and that Buckeye lacks standing to seek its enforcement; (2) a verbal settlement between Buckeye and Lloyd in the prior Pennsylvania action bars Buckeye's enforcement action; (3) Buckeye is estopped from enforcing the judgment because it failed to timely inform Lloyd that it held that judgment; (4) the trial judge should have addressed Lloyd's claims of fraud and found it to exist; (5) the court erred in failing to find the assignments to be void; and (6) a plenary hearing should have been held. [Id. at 3.]

We rejected these claims, concluding "[i]n large measure, . . . Lloyd's arguments . . . lack sufficient merit to warrant extended discussion in a written decision. R. 2:11-3(e)(1)(A) and (E)." Id. at 4.

In March 2010, Buckeye filed a motion seeking an order to revive the 1990 judgment pursuant to N.J.S.A. 2A:14-5. Lloyd opposed the revival, arguing that the 1990 judgment was illegal for a variety of reasons. The Law Division granted the revival application, writing: "[t]he defense to this motion was in disregard of the decision of the Appellate Division . . . [and] [t]his [c]court relies on and is bound by the decision of the Appellate Division."

Subsequently, in August 2010, in deciding Lloyd's motion for reconsideration, the Law Division stated:

We don't go back to the beginning of time each time a matter comes before the [c]court, and some time there has to be judicial rest or peace and quiet and something ends, and the Appellate Division rendered its opinion in this matter. This matter came on before this [c]court and the [c]court indicated that the, that the judgment should be revived. The [c]court sees no basis for making a change in that judgment.

Arguments are not something that you keep in a bag and you pull them out like Christmas gifts, and you do one at a time and you say, 'Now I'm going to give you this gift, [c]court, and why don't you act on this gift,' and then things go on for some period of time, and then that argument doesn't work. So then you pull out another gift from the bag and say, 'Well, how about we try this gift. Does that work for you? And let's, let's try that.' The way it works is that you present your issues before the [c]court at an appropriate time, and the [c]court gives its consideration to those issues. And so the motion for reconsideration is denied in this, in this matter.

This appeal followed.

II.

Lloyd presents four points for our consideration:

POINT I: THE LOWER COURT ERRED BY FAILING TO FOLLOW KRONSTADT V. KRONSTADT, 238 N.J. SUPER. 614 (APP. DIV. 1990).

POINT TWO: THE LOWER COURT ERRED BY NOT ALLOWING LLOYD TO BRING THE MUTUAL GENERAL RELEASE AS PROOF TO DEFEAT THE REVIVAL OF THE DEFAULT JUDGMENT.

POINT THREE: THE LOWER COURT ERRED BY NOT ALLOWING LLOYD TO BRING THE SEC FEDERAL STAY AS PROOF TO DEFEAT THE REVIVAL OF THE DEFAULT JUDGMENT.

POINT FOUR: THE LOWER COURT ERRED BY NOT ALLOWING LLOYD TO BRING THE SATISFACTION OF THE JUDGMENT AS PROOF TO DEFEAT THE REVIVAL OF THE DEFAULT JUDGMENT.

We do not find any of these arguments persuasive.

In Kronstadt v. Kronstadt, 238 N.J. Super. 614, 616-18 (App. Div. l990), we outlined the prerequisites for reviving judgments: (1) the judgment is valid and subsisting; (2) it remains unpaid in full; (3) there is no outstanding impediment to its judicial enforcement, e.g., a stay, a pending bankruptcy proceeding, an outstanding injunctive order, or the like; and (4) the action to revive was commenced within twenty years after the date the judgment was entered. See also Adamar of N.J., Inc. v. Mason, 399 N.J. Super. 63 (App. Div. 2008). From our review of the record, Buckeye satisfied each element of Kronstadt, and Lloyd has not demonstrated any infirmity to bar revival of the 1990 judgment.

Lloyd's arguments on appeal all rely upon supposed happenings in the distant past, long before he initially applied to vacate the judgment. For example, Lloyd seeks to resurrect the effect of the 1990 SEC federal stay that we found unavailing in the 2007 appeal.*fn1 He also asserts that in 1990 he transferred assets to Buckeye's predecessor in satisfaction of the claim, and in 1998 he received a full release. We note that except for the 1990 SEC federal stay issue, none of these other circumstances were presented when Lloyd sought to vacate the judgment four years earlier pursuant to Rule 4:50.

Lloyd is barred from now raising these moribund defenses because of the failure to timely assert them in the Rule 4:50 proceedings and the ensuing appeal. The related preclusionary principles of res judicata and the entire controversy doctrine bar Lloyd's advancement of claims that either were decided against him (the 1990 SEC federal stay claim) or were capable of being advanced, but lack a reasonable explanation for being withheld (the transfer, satisfaction, and release claims). That Lloyd seeks to raise these defenses as part of a Kronstadt revival application does not relieve him of the effects of such preclusionary doctrines, particularly where those defenses, if satisfactorily proven, would have warranted complete relief in the Rule 4:50 proceeding.

Under principles of res judicata, any issues that Lloyd could have pursued on the original Rule 4:50 application and appeal, whether asserted or not, may not be re-litigated now. See McNeil v. Legislative Apportionment Comm'n, 177 N.J. 364, 395 (2003), cert. denied, 540 U.S. 1107, 124 S. Ct. 1068, 157 L. Ed. 2d 893 (2004); Innes v. Carrascosa, 391 N.J. Super. 453, 488-89 (App. Div.), certif. denied, 192 N.J. 73 (2007). This preclusionary doctrine involves elements that are all present here: common parties, common subject matters, common issues and common evidence, as well as a final determination rendered in the first action on the merits. See Velasquez v. Franz, 123 N.J. 498, 505-06 (1991).

Correlatively, the entire controversy doctrine requires litigants in a civil action to raise all affirmative claims arising from a single controversy that each party might have against another party, including counterclaims and cross-claims.

R. 4:30A. It is an equitable preclusionary device, intended to prevent fractionalized litigation by requiring the assertion of all claims arising from a single controversy in a single action. Prevratil v. Mohr, 145 N.J. 180, 190 (1996). The reasons behind the doctrine are threefold: "(1) the need for complete and final disposition through the avoidance of piecemeal decisions; (2) fairness to parties to the action and those with a material interest in the action; and (3) efficiency and the avoidance of waste and the reduction of delay." DiTrolio v. Antiles, 142 N.J. 253, 267 (1995) (citing Cogdell v. Hosp. Ctr., 116 N.J. 7, 15 (1989)).

Since Lloyd failed to adequately explain why he omitted advancing the transfer, satisfaction, and release defenses, it was entirely understandable, and appropriate, for the Law Division to refuse to consider them on the revival application, as well as on the motion for reconsideration. We see no warrant to intervene to change the ultimate result that the Law Division reached. Both motions were properly decided.

Affirmed.


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