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Hong's Merchandising Group, Inc. v. Park

Superior Court of New Jersey, Appellate Division

November 15, 2013

HONG'S MERCHANDISING GROUP, INC., HONG'S SEAFOOD CO. a/k/a HONG'S FISH, Plaintiffs-Appellants,
v.
YOUNG JOON PARK, individually and in his Capacity as President of 2053 P&S RESTAURANT, INC., Defendant-Respondent, and MIN J. RHEE, individually, and POONG LIM, LLC, a limited liability corporation, Defendants.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 23, 2013

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-5608-12.

Walter M. Luers argued the cause for appellants.

Thomas A. Lodato argued the cause for respondent (Alampi & DeMarrais, attorneys; Mr. Lodato, on the brief).

Before Judges Fuentes, Simonelli and Haas.

PER CURIAM

Plaintiffs Hong's Merchandising Group, Inc. and Hong's Seafood Co. appeal from the December 7, 2012 Law Division order, which dismissed plaintiffs' complaint with prejudice pursuant to Rule 4:6-2(e). Plaintiffs also appeal from the February 8, 2103 order, which denied their motion for reconsideration. We reverse and remand for further proceedings.

Defendant 2053 P&S Restaurant, Inc. (P&S) owed approximately $74, 000 for goods purchased from plaintiffs. On September 22, 2008, plaintiffs filed a complaint against P&S to collect the amount due (the 2008 action). Prior thereto, on August 15, 2008, P&S entered into a contract to sell its assets to defendants Min J. Rhee and Poong Lim, LLC (Lim). The transaction closed on October 1, 2008, two days before plaintiffs served the complaint on P&S.

In December 2008, the parties mediated the 2008 action and settled for $85, 000 in November 2009. After P&S failed to pay, plaintiffs sought entry of a final judgment in the amount of $91, 195. There is no dispute that prior to entry of the final judgment on December 21, 2009, plaintiffs received documents relating to the sale of P&S's assets (the closing documents), which revealed that Rhee and Lim purchased all of P&S's assets, there were no net proceeds, and P&S had no assets to satisfy P&S's debt to plaintiffs. Plaintiffs did not seek to amend the complaint to join Park, Rhee or Lim, nor did they file and serve an amended certification identifying Park, Rhee and Lim as potentially liable parties, as required by Rule 4:5-1(b)(2). Instead, plaintiffs proceeded to obtain the final judgment.

Nearly three years later, in July 2012, plaintiffs filed a motion for leave to amend the 2008 action to add claims against Park, Rhee and Lim. The court denied the motion because final judgment had been entered long ago. Plaintiffs did not appeal from that decision.

On July 19, 2012, plaintiffs filed a complaint against Park, Rhee and Lim, alleging they had engaged in a fraudulent transfer of P&S's assets in order to evade paying P&S's debt to plaintiffs (the 2012 action). Plaintiffs specifically identified the transactional facts in the 2008 action as the basis for the 2012 action. Plaintiffs also specifically alleged that they had received the closing documents on December 21, 2009, and the documents revealed that P&S had sold all of its assets to Rhee and Lim and had no assets to satisfy the judgment.

Park filed a motion to dismiss the complaint with prejudice pursuant to Rule 4:6-2(e) based on the entire controversy doctrine.[1] Rhee and Lim joined in the motion at oral argument without objection. In a December 7, 2012 order and written opinion, the trial judge granted the motion and dismissed the 2012 action with prejudice as to all defendants. The judge found that plaintiffs were on notice in 2009 that defendants were indispensable parties, and they failed to show any compelling reason for failing to pursue claims against defendants at that time. The judge concluded that the entire controversy doctrine espoused in Rule 4:30A barred the 2012 action.

In a February 8, 2013 order and written opinion, the judge denied plaintiffs' motion for reconsideration. The judge found that plaintiffs had not presented anything new and failed to demonstrate any error in the ...


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