Commerce Bancorp v. Interarch, Inc.
417 N.J. Super. 329
| N.J. Super. Ct. App. Div. | 2010Background
- Commerce indemnified defendants for the DiMaria judgment in 2002 after due diligence and external counsel advice.
- The indemnification covered compensatory damages and costs but excluded punitive damages.
- Shareholders later filed derivative suits; the Special Litigation Committee concluded the Board may not have been fully informed.
- In 2008 Commerce filed a declaratory judgment and breach of contract action seeking to set off the indemnification against amounts owed.
- The trial court held 14A:3-5(2) ant presumption applied only to criminal proceedings, barring indemnification after an adverse civil judgment.
- The appellate court reversed, holding the anti-presumption applies to civil and criminal proceedings and remanded to dismiss Commerce’s action.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Does the anti-presumption in 14A:3-5(2) apply to civil proceedings as well as criminal? | Commerce: applies only to criminal proceedings. | Hill/InterArch: applies to both civil and criminal proceedings. | Anti-presumption applies to both civil and criminal |
| Does the evidence of a civil judgment bar indemnification despite the statute’s anti-presumption? | Civil judgment does not create a presumption against indemnification. | Judgment may preclude indemnification under statutory standards. | No automatic bar; analysis under statute required |
Key Cases Cited
- State v. Gandhi, 201 N.J. 161 (2010) (statutory interpretation and use of extrinsic sources)
- In re Marvin, 97 N.J. Super. 62 (App.Div. 1967) (construction of statutory text and equities)
- Raybestos-Manhattan, Inc. v. Glaser, 156 N.J. Super. 513 (App.Div. 1978) (persuasive authority on statutory interpretation)
- Miller v. Estate of Sperling, 166 N.J. 370 (2001) (avoid absurd results in statutory interpretation)
- U.S. Nat'l Bank of Or. v. Indep. Ins. Agents of Am., Inc., 508 U.S. 439 (1993) (utilization of punctuation in statutory interpretation)
- State v. Sutton, 132 N.J. 471 (1993) (statutory construction principles)
- Moore v. Magor Car Corp., 27 N.J. 82 (1958) (punctuation as a guide to legislative intent)