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Anthony Degonge v. John J. Schultz

July 30, 2012

ANTHONY DEGONGE, PLAINTIFF-APPELLANT,
v.
JOHN J. SCHULTZ, DEFENDANT-RESPONDENT, AND OTTHECK GROUP, LTD., INC., DEFENDANT.



On appeal from the Superior Court of New Jersey, Chancery Division, Atlantic County, Docket No. C-14-11.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted July 17, 2012

Before Judges Sabatino and Kennedy.

Anthony DeGonge appeals from an August 12, 2011 order of the Chancery Division granting summary judgment in favor of defendant John J. Schultz and dismissing plaintiff's complaint.*fn1

We affirm.

On May 15, 2005, plaintiff was assaulted and injured by several individuals while in the parking lot of a nightclub in Atlantic City. The nightclub and parking lot were operated by Ottheck Group, Ltd. (Ottheck), a corporation whose sole shareholder was Schultz. Schultz owned the real estate upon which the nightclub and adjacent parking lot were situated and Ottheck leased the real estate from Schultz pursuant to a written lease.

On February 5, 2007, plaintiff filed a complaint in the Law Division against Schultz, Ottheck, and others, alleging that their negligence and "wanton and willful" misconduct proximately caused his injuries. On July 25, 2008, Schultz and Ottheck filed an amended answer and third party complaint against Carman Corporation (Carman). The third party complaint asserted that Ottheck "was dissolved pursuant to the statutes of New Jersey" on June 19, 2006, and alleged that prior to plaintiff's injuries, Carman had been retained to procure insurance coverage for Schultz and Ottheck but had negligently failed to obtain insurance or, alternatively, allowed coverage to lapse. Consequently, according to the third party complaint, Schultz and Ottheck "had no insurance coverage" on the date plaintiff was injured.

On March 9, 2009, Carman filed a motion for summary judgment, on notice to all counsel, seeking to dismiss the third-party complaint. In its statement of material facts submitted pursuant to Rule 4:46-2(a), Carman asserted that Ottheck and Schultz had been notified in 2003 that their insurance coverage would expire on December 29, 2003, and their policy of insurance "will not be renewed." Counsel for Ottheck and Schultz on April 14, 2009, executed a stipulation dismissing the third party complaint with prejudice.

Thereafter, Schultz moved to dismiss the complaint against him "individually" and to dismiss the second count of the complaint which sought punitive damages. On November 19, 2009, the motion judge denied summary judgment dismissing the complaint against Schultz individually, but granted summary judgment dismissing the second count of the complaint for punitive damages.

Plaintiff had opposed Schultz's summary judgment seeking to dismiss the complaint against him in his individual capacity.

Plaintiff asserted that there was sufficient evidence in the record to establish that Schultz "actually operated" the nightclub in his individual capacity, and also to "pierce the corporate veil." The motion judge observed that he would not deny the motion on the "piercing the corporate veil" theory because the facts pertaining to that issue were not sufficient at that point to warrant submitting it to a jury. He did, however, rule that there was sufficient evidence for a jury determination on whether Schultz "was, actually, in his individual capacity, an operator of the club" and, consequently, denied Schultz's motion.

On January 13, 2010, on application of the plaintiff, the trial court entered an order dismissing the complaint with prejudice against Schultz. The order of dismissal recited that it was "without prejudice to plaintiff's right on appeal" with respect to an order entered on November 19, 2009, "granting judgment to [d]efendant Schultz on [p]laintiff's application to pierce the corporate veil[.]" Ottheck subsequently failed to appear for trial and, following a proof hearing, the court entered judgment against Ottheck on February 22, 2010, for $2,114,162.24. Plaintiff did not thereafter appeal from the "judgment" referenced in the stipulation of dismissal.*fn2

On February 4, 2011, plaintiff filed a second action against Schultz and Ottheck. The complaint, which was filed in the Chancery Division, asserted that Ottheck "sold all or substantially all of its assets" on September 27, 2005, for $7 million and thereafter filed a certificate of dissolution on June 19, 2006, but "did not make adequate provision for payment of creditors such as plaintiff" pursuant to statute. The complaint averred that Schultz "as sole shareholder of Ottheck received assets" exceeding plaintiff's personal injury judgment against Ottheck and ...


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