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Schwarzwaelder v. Hoak

Superior Court of New Jersey, Appellate Division

September 19, 2013

DOUGLAS C. SCHWARZWAELDER, Individually and derivatively on behalf of GREENFIELD MARKET SOLUTIONS, LLC, Plaintiffs-Respondents,


Submitted September 3, 2013

On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-4191-07.

Dennis E. Block, attorney for appellants.

Ladov Law Firm, P.C., attorneys for respondent Douglas C. Schwarzwaelder (Joshua B. Ladov, of counsel and on the brief).

Respondents Greenfield Market Solutions, LLC, and Tyrone Clark have not filed a brief.

Before Judges Alvarez and Maven.


Steven R. Hoak and Elite Producers Group, Inc. (Elite), appeal from a September 14, 2012 Law Division order denying reinstatement of a matter "dismissed without prejudice" approximately four years earlier. The dismissed action was one of at least two proceedings now pending involving Hoak, Elite, plaintiff Douglas C. Schwarzwaelder, Tyrone Clark, and Brokers Choice of America, Inc. Other plaintiffs in this proceeding, Peak Performance Marketing, Inc. and Stellar Performance Marketing, Inc., do not appear to be involved in opposing either the application or the appeal. We hesitate in making the assertion, because, as we discuss below, it is not entirely clear from the record that all the relevant parties were served with the application to reinstate, only Schwarzwaelder appeared in opposition to it, and only Schwarzwaelder has responded to the appeal. We vacate the order and remand for further proceedings in accordance with this opinion.

Because of the somewhat unusual nature of the application and the confused state of the record on appeal, we sketch out the procedural history with some trepidation.[1] All the named plaintiffs in this proceeding were originally represented by one attorney, who, in 2008, entered into a settlement and stipulation of dismissal with the named defendants: Tyrone Clark, Brokers Choice of America, Inc., and Linda Lewis. The stipulation, filed April 11, 2008, was signed only by plaintiffs' attorney and counsel for all the named defendants. We cannot discern from the record why the matter, if settled, was dismissed without prejudice. We cannot discern from the record why Linda Lewis was not included in the stipulation.[2]

Along with the motion to reinstate the action that resulted in the order now being appealed, counsel for Hoak and Elite submitted his own lengthy certification in violation of Rule 1:6-6. See Higgins v. Therber, 413 N.J.Super. 1, 21 n.19 (App. Div. 2010), aff'd, 205 N.J. 227 (2011); Gonzalez v. Ideal Tile Importing Co., 371 N.J.Super. 349, 358-59 (App. Div. 2004), aff'd, 184 N.J. 415 (2005). In Hoak's own lengthy supporting certification, he recounts an extensive history of litigation between the parties. He claims that hundreds of thousands of dollars in commissions may have been wrongfully paid to Schwarzwaelder, with the collusion and participation of Clark, and, possibly, the attorney who represented all the plaintiffs in the 2008 dismissed proceeding. Hoak states that he was not informed of the prospect of settlement by counsel, and, in fact, learned of the pertinent information giving rise to his claims related to the commissions only in 2012, when he obtained his file from the attorney. He also asserts that the attorney who settled the matter in 2008 filed suit against him five months later without any prior notice that he would not be representing him in the future.

Adding to the confusion, although the motion to reinstate was served on three attorneys, the certification of mailing does not indicate which attorneys represented each party. If nothing else, numerically it does not appear that all parties in interest, including at least the defendants involved in the initial litigation, were served. In any event, Schwarzwaelder's attorney, who was served, objected to reinstatement.

We are aware from the transcript of oral argument on the motion to reinstate that there is at least one other lawsuit pending between these parties but we do not know, for example, if Hoak has brought an action against the attorney handling the 2008 litigation. Furthermore, Schwarzwaelder's brief on appeal focuses on Hoak's factual allegations. To summarize, Schwarzwaelder's argument is that Hoak was well aware of potential claims long before the attorney's file was turned over in 2012. He contends that the judge fully and properly made findings of fact, reached conclusions of law, and "made a proper record in denying the appellant's request to vacate."

We recite the court's entire statement of reasons rendered from the bench immediately after oral argument:

THE COURT: Here's . . . the problem. It appears that Mr. Block has ferreted out certain -- he asserts certain elements of what may or may not have been fraud, what may or may not have been professional malpractice, what may or may not have been . . . the incompatibility of the docking phase between Sileas Two and Moon Mission 12.
The problem is this matter has languished for four years. Settlement was entered more than four years ago, and based upon part of what [counsel for Schwarzwaelder] argues in his papers that . . . Mr. Hoak and his client still have communication and some business relationship, I didn't realize the business relationship was your client was getting sued by him, but there's communication.
I'm not going to disturb, nor am I going to reopen this closed case. It's been . . . moribund for four years. The difficulty, [Hoak's counsel is] in a tough position with regard to this old case, and that is that certain records, certain discovery, certain testimony might not be available to him because it has to do with business relationships which are now 12 years old, as I understand.
And, certain payments that were or weren't made I was not -- and perhaps I didn't read it carefully enough, but I was not aware of that detail, [] and thank you for filling me in, of Mr. Hoak being sent out on his own and then nothing having been done and then a settlement [being] entered. However, what -- and what the Court thinks about is if I -- far too much time has elapsed for me to disrupt a settlement and for me to reopen the case, however if and when you refile, [counsel for Hoak], make sure it's -- I don't know what my docket numbers are, but if you ask downstairs, they know. Make sure that I handle it, because when the applications seeking to dismiss for the Entire Controversy Doctrine --
[COUNSEL FOR HOAK]: Well, Judge, now . . . that develops another issue.
THE COURT: But if it's --
[COUNSEL FOR HOAK]: There is --
THE COURT: -- not in paper before me, it won't matter.
[COUNSEL FOR HOAK]: It's -- well, let me take you to the next step. There is paper before you. There is another case that's with your esteem[ed] colleague Judge Silverman Katz in which there has been an amended complaint, third-party complaint, and cross -- and a counterclaim --
[COUNSEL FOR HOAK]: -- that was referenced in all the moving papers. It's Docket 5340-11, okay, in which Judge Katz in July allowed an amendment and a third-party complaint. Basically, --
THE COURT: [Counsel for Hoak], I can't deal with that. The only thing --
THE COURT: -- that's in front of me now is this and your application reopen the complaint and set aside the settlement's denied.
Now, if sort of on the . . . basis of -- sorry --
THE CLERK: That's okay.
THE COURT: -- management of the case, I don't wish to discuss that.

Rule 1:7-4(a) requires a court, when rendering a decision, to "find the facts and state its conclusions of law thereon . . . on every motion decided by a written order that is appealable as of right . . . ." The judge's determination in this case, basically that too much time had passed for the matter to be reopened, did not include findings of fact and conclusions of law. A decision that complied with the rule would have been particularly helpful in these circumstances for purposes of appellate review because the record does not otherwise establish whether all the necessary parties were served and does not explain parallel litigation. Moreover, the facts are very much in dispute, legal issues may result from the stipulation of dismissal having been made "without prejudice, " and the entire controversy doctrine may be applicable. It is critically important, and a critical requirement for fair consideration of the issues on appeal, that a decision with regard to reinstatement be comprehensive and thorough. See Ronan v. Adely, 182 N.J. 103, 110-11 (2004). Accordingly, the matter must be remanded.

We stress that on remand, proper service must be made on all interested parties of the scheduled date for argument. If a party is not served, some explanation must be filed with the return of service by way of certification or affidavit. A detailed explanation should be given to the judge on remand of the history of the litigation between the parties, including any litigation parallel to this lawsuit. We do not reach the other issues raised by plaintiffs, in light of our remand. The order is vacated, and the matter is remanded for reconsideration of the motion upon proper notice to interested parties and issuance of a decision which complies with Rule 1:7-4(a). We do not retain jurisdiction.

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