STATE OF NEW JERSEY VS. RICKY BOOKER(12-10-0744, UNION COUNTY AND STATEWIDE)
A-2573-14T3
| N.J. Super. Ct. App. Div. | Aug 3, 2017Background
- Lewis previously owned and operated a laundry/dry-cleaning property later sold to Hull; contamination (PCE/TCE) was discovered after Hull owned it.
- Hull sued Lewis in 2004; in 2008 they settled: Lewis paid Hull $290,000 and Hull agreed to remediate the property and indemnify/hold Lewis harmless for contamination claims. The suit was dismissed with prejudice.
- NJDEP later issued deficiency notices requiring remediation; Hull refused to remediate and transferred the property; Lewis undertook remediation and sued Hull for breach of the settlement agreement.
- Trial court granted summary judgment finding Hull breached the settlement by refusing to remediate; judge awarded Lewis $290,000 plus attorneys’ fees (total judgment $335,570). Hull appealed.
- Hull later sought to vacate judgment under Rule 4:50 based on evidence (from malpractice discovery) that Lewis may have concealed insurance coverage before the 2008 settlement, arguing he was fraudulently induced to settle and that he should keep the $290,000.
- The trial court (on remand) denied Rule 4:50 relief; the Appellate Division affirmed, holding that even if Lewis had been non‑forthcoming about insurance, Hull chose to rescind (refuse performance) and therefore could not retain the settlement proceeds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether summary judgment for breach of the settlement was improper | Lewis: Hull unequivocally refused to perform; breach as a matter of law | Hull: Settlement induced by fraud (Lewis concealed insurance), creating fact issue | Affirmed: Hull clearly refused performance; summary judgment proper |
| Whether Hull can retain the $290,000 if he was fraudulently induced to settle | Lewis: If Hull rescinds, he must return funds; Lewis is entitled to return of $290,000 | Hull: Even if misled, he should be allowed to keep settlement funds (collateral source/windfall arguments) | Affirmed: Fraud victim must choose rescission or affirm; Hull rescinded by refusing performance and cannot keep funds |
| Whether alleged nondisclosure of insurance warrants relief under Rule 4:50 | Lewis: Any nondisclosure was irrelevant to relief sought; Hull had no equitable basis to retain funds | Hull: Newly discovered evidence shows Lewis had insurance, so settlement induced by fraud; judgment should be vacated | Affirmed denial of Rule 4:50: assuming nondisclosure, Hull still not entitled to retain settlement proceeds; no abuse of discretion in denial |
| Whether collateral source rule or windfall concerns bar returning settlement funds to Lewis | Lewis: Return of funds is not a windfall; disposition between Lewis and insurer is a separate matter and Hull lacks standing | Hull: Returning funds would give Lewis a double recovery or unjust windfall | Rejected: Collateral source rule inapplicable; Hull lacks standing to contest insurer/insured allocation; returning funds prevents Hull’s unjust enrichment |
Key Cases Cited
- Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (summary judgment standard review)
- Townsend v. Pierre, 221 N.J. 36 (appellate review standard for summary judgment)
- Merchants Indem. Corp. v. Eggelston, 37 N.J. 114 (fraud remedies: injured party must rescind or affirm and if rescinding must return what received)
- Isko v. Planning Bd. of Livingston, 51 N.J. 162 (correct result will be affirmed if supported by right reasons)
- Perreira v. Rediger, 169 N.J. 399 (collateral source rule prevents double recovery; scope discussed)
- Hodgson v. Applegate, 31 N.J. 29 (Rule 4:50 discretionary standard; relief addressed to trial court discretion)