Opinion
DOCKET NO. A-5077-11T3
05-08-2013
JALIL JONES, an infant by his Guardian Ad Litem, Wadia Hill And WADIA HILL, individually, Plaintiffs, v. RUTH BEY AND PUBLIC SERVICE ELECTRIC & GAS COMPANY, Defendants.
John D. North argued the cause for appellant Wells Fargo, N.A., as successor to Wachovia Bank, N.A., as assignee of Ann J. Herrera, the State of Georgia Conservator for Jalil Nagee Jones (Greenbaum, Rowe, Smith & Davis, LLP, attorneys; Mr. North, of counsel and on the brief; Robert J. Flanagan, III, on the brief). Gerald J. Gunning argued the cause for respondent Richard J. Weiner, Esq., and Weiner & Strauss, as successors to the firm of Weiner & Gall (Stein, McGuire, Pantages, Gigl, LLP, attorneys; Mr. Gunning, of counsel and on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Harris and Hayden.
On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-10777-96.
John D. North argued the cause for appellant Wells Fargo, N.A., as successor to Wachovia Bank, N.A., as assignee of Ann J. Herrera, the State of Georgia Conservator for Jalil Nagee Jones (Greenbaum, Rowe, Smith & Davis, LLP, attorneys; Mr. North, of counsel and on the brief; Robert J. Flanagan, III, on the brief).
Gerald J. Gunning argued the cause for respondent Richard J. Weiner, Esq., and Weiner & Strauss, as successors to the firm of Weiner & Gall (Stein, McGuire, Pantages, Gigl, LLP, attorneys; Mr. Gunning, of counsel and on the brief). PER CURIAM
Appellant Wells Fargo, N.A., as successor to Wachovia Bank, N.A., as assignee of Ann J. Herrera, the State of Georgia Conservator for Jalil Nagee Jones, appeals from the Law Division's May 4, 2012 order denying its motion for relief in aid of litigant's rights under Rule 1:10-3. We reverse and remand for further proceedings.
We take judicial notice of the fact that Wachovia Bank, N.A. merged with Wells Fargo, N.A. in 2008. N.J.R.E. 201(b)(1). See Order Approving the Acquisition of a Bank Holding Company (Fed. Reserve Oct. 12, 2008), available at http://www.federalreserve .gov/newsevents/press/orders/orders20081012a1.pdf.
I.
This opinion picks up where our earlier (related) opinion in Wachovia Bank, N.A. v. Weiner, No. A-3981-10 (App. Div. Feb. 10, 2012) ends. In Wachovia Bank, we outlined the litigational history of the matter as follows:
The genesis of this case is found in the Law Division action filed in the Essex Vicinage in 1996: Jalil Jones, an Infant by his Guardian Ad Litem, Wadia Hill[] and Wadia Hill, Individually v. Ruth Bey, and Public Service Electric & Gas Company, Superior Court of New Jersey, Law Division, Essex County, Docket No. ESX-L-10777-96 (the personal injury action). Defendant Weiner & Gall was the attorney of record and defendant Richard J. Weiner, Esq. was
individually assigned to represent the plaintiffs in the personal injury action.
On March 20, 2001, the Law Division entered an order (the Jones order) approving a structured settlement in favor of the minor, Jalil Jones (Jones), pursuant to Rule 4:44-3. A separate order approved a structured settlement in favor of Wadia Hill (Hill) individually.
The Jones order entered judgment in favor of the minor in the amount of $4,500,000. This amount was expressly ordered to be satisfied in the following manner:
a. The amount of $2,366,667.00 shall be paid by the defendant PSE&G, to procure a lifetime annuity for infant plaintiff, Jalil Jones;
b. The amount of $2,133,333.00 shall be paid to Jalil Jones, an infant by his guardian ad litem, and Weiner & Gall, Attorneys and shall be distributed as follows: $647,156.96 shall be paid for the benefit of the infant Jalil Jones and held in accordance with the dictates of the appropriate authorities in the State of Georgia;[] $129,895.72 shall be paid to satisfy the Medicaid lien of the State of New Jersey; $1,227,300.00 shall be distributed to the firm of Weiner & Gall on account of legal fees; and
$128,980.32 shall be paid to the firm of Weiner & Gall on account of expenses.On April 10, 2001, a check in the amount of $647,156.96 was issued from an attorney trust account entitled, "Richard J. Weiner, P.C. Trust Account," payable to "Wadia Hill, as guardian for infant Jalil Jones." At that time Hill had not qualified to serve as Jones's guardian under Georgia law. On April 11, 2001, this check was deposited in a guardianship account at Wachovia's predecessor, First Union National Bank. The guardianship account was entitled, "Gdnship of Jalil N. Jones, Wadia Hill Guardian." On the same day, Hill withdrew $350,000 from this account and thereafter deposited that sum in her personal "CAP Account" at an affiliate of First Union National Bank. She then paid Weiner $280,000 from her personal account.
[Id. at 2-3.]
Wadia Hill is Jalil Jones's mother.
Wadia Hill is also referred to in the record as Wadia Hill-Muhammad and as Wadia Sharon Hill.
During the spring of 2001, Hill and Jones relocated from New Jersey to Georgia.
In brief, we declared that Wells Fargo's predecessor lacked standing "to pursue assigned causes of action in its two-count complaint to recover at least $647,156.96 from [Richard J. Weiner and his affiliated law firms] for the supposed improper disbursement of settlement proceeds" intended for a minor. Id. at 2. Although in possession of an assignment of rights executed by Ann J. Herrera, the minor's court-appointed conservator in Georgia, we declared that Wachovia's pursuit, in a separate lawsuit, of Weiner and his affiliated law firms was barred. In dicta, however, we wrote:
We cannot help but be struck by the incongruity of allowing an alleged wrongdoer to not be held accountable to an injured party — particularly a minor such as Jones — if at fault. We conclude that the interests of effective judicial administration would be appropriately served by allowing Herrera to substitute for Wachovia pursuant to Rule 4:34-3 as the plaintiff rather than requiring Wachovia to file a separate motion in aid of litigant's rights against defendants in the personal injury action. See Marshall v. Raritan Valley Disposal, 398 N.J. Super. 168, 176-79 (App. Div.), certif. denied, 196 N.J. 592 (2008). Although such a motion by Wachovia, as assignee of the Jones order, in the personal injury action pursuant to Rule 1:10-3 would not suffer the same standing defect as here, we do not dictate one course of action or another.
[Id. at 15.]
After we issued Wachovia Bank, Wells Fargo elected to chart its course in the present action rather than enlist Herrera to pursue claims in the separate tort action. To that end, Wells Fargo filed a motion in aid of litigant's rights in the Law Division, which was denied on several grounds.
The motion judge, without extensive explanation, found "that Wachovia/Wells Fargo failed to provide this Court with any proof of an assignment of the Jones personal injury order." Accordingly, the judge concluded, "Wachovia/Wells Fargo is not the recipient of such an assignment and, therefore, is not the assignee of the Jones order."
Additionally, the judge held that because Weiner and his affiliated law firms were not "defendants in the personal injury action," as noted in Wachovia Bank, "the instant motion is not in accordance with the Appellate Division's decision and, therefore, is procedurally deficient in the eyes of this Court, as there is no judgment against Weiner or the firm, nor is there a pending cause of action."
Finally, the motion judge noted,
And while the Court might note that the actions of Mr. Weiner, while they might be questioned, certainly, he still is entitled to due process and with regard to litigation and the procedures pursuant to the rules of court and, therefore, for all of the foregoing reasons, the motion in aid of litigant's rights is hereby denied.This appeal followed.
II.
A.
We start with a clarification of our opinion in Wachovia Bank. We held that one way to vindicate the rights of the aggrieved parties would be to allow the Georgia conservator to substitute as plaintiff in Wachovia Bank "rather than requiring Wachovia to file a separate motion in aid of litigant's rights against defendants in the personal injury action." Id. at 15. In the present case, the motion judge and respondents question what we meant by "defendants in the personal injury action"? There are only two possibilities. Either we were denoting the initial defendants in the personal injury action, or we were referring to Weiner and his affiliated law firms, which were defendants in Wachovia Bank.
Throughout the entire Wachovia Bank opinion we referred to Weiner and his affiliated law firms as defendants. More important, Section III of the Wachovia Bank addressed the "manifest injustice" that could result from the alleged wrongs of the attorney, not the personal injury defendants. Although hindsight reveals an ambiguity, when we noted that Wachovia could file a "separate motion in aid of litigant's rights against defendants in the personal injury action," we were clearly only referring to Weiner and his affiliated law firms.
B.
Rule 1:10-3 states, in pertinent part, as follows:
Notwithstanding that an act or omission may also constitute a contempt of court, a litigant in any action may seek relief by application in the action. A judge shall not be disqualified because he or she signed the order sought to be enforced. If an order entered on such an application provides for commitment, it shall specify the terms of release provided, however, that no order for commitment shall be entered to enforce a judgment or order exclusively for the payment of money, except for orders and judgments based on a claim for equitable relief including orders and judgments of the Family Part and except if a judgment creditor demonstrates to the court that the"The scope of relief in a motion in aid of litigants' rights is limited to remediation of the violation of a court order." Abbot ex rel. Abbott v. Burke, 206 N.J. 332, 371 (2011). "Relief under R. 1:10-3, whether it be the imposition of incarceration or a sanction, is not for the purpose of punishment, but as a coercive measure to facilitate the enforcement of the court order." Ridley v. Dennison, 298 N.J. Super. 373, 381 (App. Div. 1997). The Rule may be deployed in any number of ways, but always subject to the principled discretion of the court.
judgment debtor has assets that have been secreted or otherwise placed beyond the reach of execution. The court in its discretion may make an allowance for counsel fees to be paid by any party to the action to a party accorded relief under this rule.
The court order that Wells Fargo seeks to enforce through assignment is the March 20, 2011 Law Division order approving a structured settlement pursuant to Rule 4:44-3. As noted, this order required certain things to be done by the parties, and also commanded Weiner and his then-law firm to, at least, perform one thing: hold $647,156.96 for the benefit of the minor "in accordance with the dictates of the appropriate authorities in the State of Georgia." Wells Fargo's allegations may still have a tort-like claim subsumed within them, but at their core those claims are rooted in noncompliance of a court order, nothing more and nothing less. We do not pass upon the allegations because, as noted by the motion judge, "Mr. Weiner, . . . certainly, he still is entitled to due process." Nevertheless, Wells Fargo alleges noncompliance with the March 20, 2001 order, and it too is entitled to due process to test the accuracy and provability of its allegations in the Law Division, as well as to argue for an appropriate remedy if it prevails.
Respondents argue that because they were not parties in the personal injury litigation, they are not subject to a Rule 1:10-3 remedy. We do not read the rule so narrowly, because to do so would eviscerate its salutary purpose of guaranteeing compliance with a court order, thereby rendering participants within the jurisdiction of the court immune to enforcement proceedings. Furthermore, the inclusion in a court order of duties to be performed by parties' attorneys is both routine and unremarkable. Attorneys are regularly ordered to hold or disburse litigants' funds in escrow, to preserve challenged discovery materials, or to otherwise perform acts that advance the litigation towards its eventual resolution. In this case, pursuant to Rule 4:44-3, respondents were given the task — nay, the order — of ensuring the distribution of a portion of a minor's settlement proceeds in a lawful and appropriate fashion. Whether they succeeded or not is the gravamen of the motion, and Rule 1:10-3 is the proper means of confirming compliance with the court's order.
C.
We next address the motion court's conclusion that Wells Fargo was not the recipient of an assignment permitting it to stand in the shoes of either the minor or the minor's Georgia conservator. Our review of the record plainly demonstrates that, pursuant to Georgia law, the conservator who sought to recover misdirected settlement proceeds from Wachoiva, settled that dispute and assigned her rights to pursue Weiner and his affiliated law firms as follows:
Herrera hereby assigns and conveys to Wachovia Bank any claim, right or action she has or may have on behalf of Jones against Richard J. Weiner, former attorney for Jones and Hill-Muhammad in the Jones Case, and Richard J. Weiner's law firm . . . that represented Jones in the Jones Case . . . including without limitation those claims relating to the Jones Settlement Payments or Guardianship Accounts.Given this broad language, the motion judge erred in concluding that no assignment had been provided. Although in Wachovia Bank we rejected an assignment based upon tort principles pursuant to Village of Ridgewood v. Shell Oil Co., 289 N.J. Super. 181, 195 (App. Div. 1996), such considerations are not present where only the question of enforcement of an order is presented.
[Emphasis added.]
D.
For all of the foregoing reasons, we are satisfied that Wells Fargo may pursue Rule 1:10-3 remedies in the Law Division. That having been said, we do not agree with Wells Fargo that the crafting of such remedies will simply, and immediately, order respondents to turn over $647,156.96 to it. We concur with the motion judge's proper concern for the due process rights of all parties, and anticipate that respondents will launch a proper defense to the allegations arrayed against them. We do not draw the contours of how that will be litigated in the Law Division, but for illustrative purposes only, we conceive that the motion court will permit managed discovery and ultimately conduct a plenary evidentiary hearing to determine the proper manner of implementing Rule 1:10-3 in light of the facts of this case.
Respondents' argument that the assignment is only to be performed in Georgia is meritless. R. 2:11-3(e)(1)(E).
Some of the defenses available to Weiner and his affiliated law firms may be laches and substantial compliance. We mention these as examples only, for the purpose of warranting that respondents not be held accountable under Rule 1:10-3 on a theory of strict liability.
Reversed and remanded for further proceedings in accordance with this opinion. We do not retain jurisdiction.
We decline to address the question of reallocation of attorney's fees under Rule 1:10-3 until the Law Division completes its review of what happened in this case.
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I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION