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Newman v. Defazio

Superior Court of New Jersey, Appellate Division

November 18, 2013

JOSEPH J. NEWMAN, CHAPTER 7 TRUSTEE FOR JOSEPH RUIS, [1] Plaintiff,
v.
EDWARD DEFAZIO, HUDSON COUNTY PROSECUTORS OFFICE, Defendant-Appellant.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted November 7, 2013

On appeal from the Department of Law and Public Safety, Office of the Attorney General, Docket No. 10-44941.

Donato J. Battista, Hudson County Counsel, attorney for appellant (Michael L. Dermody, First Assistant County Counsel, on the briefs).

John J. Hoffman, Acting Attorney General, attorney for respondent State of New Jersey (Lisa A. Puglisi, Assistant Attorney General, of counsel; Brian P. Wilson, Deputy Attorney General, on the brief).

Before Judges Fasciale and Haas.

PER CURIAM

Appellant Hudson County (the County) appeals from the November 28, 2012 final agency decision of the Department of Law and Public Safety, Office of the Attorney General (Department), declining to provide the County with a defense or indemnification in connection with a bankruptcy proceeding involving an individual who had been prosecuted by the County Prosecutor's Office (HCPO) over eighteen months earlier. Because the record supports the Department's determination that the HCPO's participation in the bankruptcy matter did not trigger the State's obligation to defend or indemnify the County, we affirm.

We discern the following facts from the record before us. On June 30, 2009, the HCPO arrested and charged Joseph Ruis with first-degree money laundering, N.J.S.A. 2C:21-25; third-degree promoting prostitution, N.J.S.A. 2C:34-1b(2); third-degree conspiracy to promote prostitution and distribute cocaine, N.J.S.A. 2C:5-2, N.J.S.A. 2C:34-1b(2), N.J.S.A. 2C:35-5a(1), and N.J.S.A. 2C:35-5b(1); and first-degree leading a narcotics trafficking network, N.J.S.A. 2C:35-3.[2]

Following Ruis' arrest, a number of items, including approximately $300, 000 in cash and bank accounts, cars, computers, and other personal property, were seized by the HCPO. On September 24, 2009, the HCPO filed a separate civil complaint for forfeiture of this property pursuant to N.J.S.A. 2C:64-1 to -9. The complaint also sought an order requiring Ruis to forfeit his title to real property, including a condominium he allegedly used when he committed the alleged offenses.

On April 6, 2010, Ruis was indicted on the charges discussed above. On June 11, 2010, he entered into a plea agreement and pled guilty to an amended charge of second-degree money laundering.[3]

On June 22, 2010, Ruis and the HCPO entered into a consent judgment of forfeiture under which Ruis agreed to forfeit over $300, 000 and the other items of personal property previously seized to the HCPO. He also agreed to transfer title to the real property to the County. On June 23, 2010, a second consent order was entered under which Ruis agreed to forfeit an additional $10, 000.27 to the HCPO.

On November 9, 2010, the trial court sentenced Ruis to five years in prison. On that same date, Ruis filed a voluntary petition for bankruptcy under Chapter 7 of the bankruptcy code in the United States Bankruptcy Court, District of New Jersey. See 11 U.S.C.A. § 301.

On May 25, 2012, the Chapter 7 Trustee filed a "verified adversary complaint for recovery of property of the estate" and the Hudson County Prosecutor was named as the defendant. The complaint alleged that, in his bankruptcy petition, Ruis asserted the HCPO owed him $300, 000 on a "book account for . . . goods sold and/or services rendered to" the HCPO. The complaint sought to require the HCPO to "satisfy the amount owed under the Account." The complaint raised no allegations of misconduct, tortious or otherwise, on ...


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