March 12, 2019
appeal from the Superior Court, Appellate Division, whose
opinion is reported at N.J.Super. (App. Div. 2017).
J. De Groot argued the cause for appellants (Robert J. De
Groot and Garrubo & Capece, attorneys; Robert J. De
Groot, of counsel and on the brief, Frank Capece, of counsel,
and Oleg Nekritin, on the brief).
Tykulsker argued the cause for respondents (David Tykulsker
& Associates, attorneys; David Tykulsker, of counsel and
on the brief).
appeal as of right, the Court considers whether the challenge
to a fuel tax damages award by defendants Proud 2 Haul, Inc.
(P2H), and its principal, Ivana Koprowski, is barred because
first raised on appeal.
are members of a certified class of truck owner-operators who
contracted with P2H to deliver sealed containers from the
Port of New Jersey to customers in the northeastern United
States. P2H was the entity through which customers placed
their orders. It was registered with the Federal Motor
Carrier Safety Administration and subject to both the federal
Motor Carrier Act (MCA) and the federal Truth in Leasing
(TIL) regulations, 49 C.F.R. §§ 376.1 to .42.
supplied plaintiffs with credit cards that plaintiffs used to
purchase diesel fuel for their trucks and gasoline for their
personal vehicles. The November 19, 2010 lease agreements
between plaintiffs and P2H provided that P2H would reimburse
plaintiffs for the taxes included in the price of diesel fuel
they purchased for their trucks. In June 2012, P2H entered
into an agreement with Trucking Support Services, doing
business as Contracts Resource Solutions (CRS), under which
CRS leased the trucks from the owner-operators. CRS in turn
assigned the services and equipment it leased from the
owner-operators to P2H.
complaint alleged in pertinent part that defendants violated
the TIL regulations by virtue of their arrangement with CRS,
violated New Jersey's Wage Payment Law, and engaged in
acts of conversion and fraud. The trial court granted
plaintiffs partial summary judgment on their claim that
defendants violated the lease agreements by failing to
reimburse plaintiffs' diesel fuel taxes. On November 15,
2013, the court entered an order awarding plaintiffs $382,
753.68 in damages. Defendants did not argue that the
court's quantification of those damages was erroneous.
December 20, 2013, the trial court entered an order granting
plaintiffs partial summary judgment on their claim that,
after May 27, 2012, defendants were in violation of the TIL
regulations by failing to have written lease agreements with
plaintiffs, contrary to 49 C.F.R. § 376.12(a).
Defendants moved for reconsideration of that order based on a
new legal theory that CRS, not plaintiffs, was the
"owner" of the equipment as that term is defined in
49 C.F.R. § 376.2(d)(2) because CRS had the exclusive
right to use of the equipment. The trial court denied
reconsideration. It held that CRS was not the
"owner" of the trucks under the TIL regulations
because plaintiffs retained the ability to lease their trucks
to others, including P2H. CRS thus did not have the right to
exclusive use of the trucks. The trial court found that
allowing a corporate intermediary like CRS to be interjected
into the relationship plaintiffs and P2H would undermine the
TIL regulations and the MCA. On February 28, 2014, the court
awarded plaintiffs $4, 481, 747.37 in damages on that claim.
The parties later settled the matter, preserving
defendants' right to appeal some of the relief awarded by
the trial court.
Appellate Division majority affirmed. __ N.J.Super.__, __
(App. Div. 2017) (slip op. at 17). First, recognizing that
defendants failed to challenge the court's calculation of
the $382, 753.68 damage award at trial, the panel majority
declined to consider that issue on appeal. Id. at__
(slip op. at 12-15). The majority found that defendants'
argument did not fit into any of the exceptions to the
general rule that an appellate court will decline to consider
issues not presented to the trial court when the opportunity
for such a presentation was available. Id.__at (slip
op. at 14). The panel majority also rejected defendants'
contention that the settlement agreement preserved their
right to challenge the $382, 753.68 damage award, reasoning
that an agreement between the parties cannot expand the
universe of procedural options available on appellate review.
Id. at__ (slip op. at 13).
the majority held that CRS was not the "owner" of
the trucks under the TIL regulations, 49 C.F.R. §
376.2(d), because it did not have the right to exclusive use
of the trucks. Id. at__(slip op. at 15-17). The
agreements were devoid of any language that made CRS's
relationship to plaintiffs exclusive because they did not
prohibit plaintiffs from entering into contractual agreements
with other motor carriers and, in fact, allowed for direct
arrangements to be made between plaintiffs and P2H.
Id. at (slip op. at 15-16). The majority stressed,
in reaching that holding, the purpose of the TIL regulations
-- to protect individual truck drivers from large trucking
concerns because the companies possess an unfair advantage.
Id. at__ (slip op. at 16-17).
Accurso dissented in part. Judge Accurso agreed that CRS was
not the "owner" of the trucks under 49 C.F.R.
§ 376.2(d) but would have vacated the November 15, 2013
order and remanded for the trial court to recalculate the
$382, 753.68 damage award. Id. at__ (slip op. at 1,
8) (Accurso, J.A.D., dissenting).
appealed as of right, based on the Appellate Division
dissent. See R. 2:2-1(a)(2).
The judgment of the Appellate Division is affirmed
substantially for the reasons expressed in ...