GONZALO CHIRINO v. PROUD 2 HAUL, INC. ( 2019 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0703-15T2
GONZALO CHIRINO, FELIX
D. JAY, ANDREW ANKLE,
GARY JOSEPHS, RENE CAMPBELL,
ASTON HEMLEY and MARYAN VASYUTA, APPROVED FOR PUBLICATION
Plaintiffs-Respondents, April 25, 2019
v. APPELLATE DIVISION
PROUD 2 HAUL, INC., and IVANA
KOPROWSKI,
Defendants-Appellants.
________________________________
Argued March 16, 2017 – Decided November 30, 2017
Before Judges Alvarez, Accurso, and Manahan.1
(Judge Accurso dissenting).
On appeal from Superior Court of New Jersey,
Law Division, Hudson County, Docket No.
L-6191-11.
Frank G. Capece argued the cause for
appellants (Garrubbo & Capece, PC, attorneys
Mr. Capece, of counsel; James J. Seaman, on
the briefs).
David Tykulsker argued the cause for
respondents (David Tykulsker & Associates,
attorneys; Mr. Tykulsker, on the brief).
1
Judge Manahan did not participate in oral argument. He joins
the opinion with counsel's consent. R. 2:13-2(b).
The opinion of the court was delivered by
ALVAREZ, P.J.A.D.
Plaintiffs are members of a certified class of truck owner-
operators who deliver sealed containers originating at the Port
of New Jersey to customers in the northeast. Defendant Proud 2
Haul, Inc. (P2H) is the company through which orders are placed,
registered with the Federal Motor Carrier Safety Administration,
and subject to Truth in Leasing (TIL) regulations, 49 C.F.R. pt.
376, in conjunction with the Motor Carrier Act (MCA), 49 U.S.C.
§§ 13901, 13902, 14102, and 14704. Defendant Ivana Koprowski is
P2H's principal. Plaintiffs' complaint, in broad terms, sought
damages for defendants' failure to have lease agreements in place,
as required by federal law, enumerating deductions to be taken
from their payments. See § 49 C.F.R. 376.12. Over the course of
nine months, plaintiffs were granted several orders awarding
partial summary judgment. On the day scheduled for trial on the
remaining issues, the parties settled the matter, preserving
defendants' right to appeal some of the relief awarded by the
orders. For the reasons that follow, we affirm.
2 A-0703-15T2
Section 1B of the parties' settlement agreement2 reads in
pertinent part that defendants would appeal:
[O]n a specific and delineated set of issues
concerning the court's previous decision
awarding damages under the [MCA] in its
decisions of November 15, 2013; paragraph 2
of the decision of December 20, 2013; February
14, 2014; February 28, 2014 and paragraph 5
of the decision of July 11, 2014 ("the
Appealable Orders").
In paragraph 7, the settlement agreement further states:
Defendants shall limit their appeal to the
Appealable Orders and shall limit the issues
raised to
a. [W]hether proof of "exact
damages" sustained by each
plaintiff as opposed to a fair and
reasonable estimate is required for
monetary compensation under the
[MCA], and
b. [W]hether [d]efendants were
required to have a written lease
with the plaintiffs during the
period from June 4, 2012, to March
31, 2014.
We briefly describe the relevant circumstances. Plaintiffs'
causes of action arise in part from a November 19, 2010 lease
agreement between them and P2H. That agreement provided that P2H
2
Plaintiffs filed a motion to dismiss defendants' point one on
the basis that the scope of the appeal exceeded the issue as framed
in the settlement agreement. We agree, albeit for different
reasons, and address the relief sought by way of motion in this
opinion.
3 A-0703-15T2
would reimburse taxes included in the price of diesel fuel for
plaintiffs' trucks. Defendants initially claimed the agreement
was void because it was entered into in error, later withdrawing
that defense. The fuel taxes, like the other charges at issue,
were not reimbursed and were actually deducted from the agreed-
upon percentage of gross receipts paid to plaintiffs for making
their deliveries.
As a convenience, P2H supplied plaintiffs with a Wright
Express (WEX) Gas credit card that most owner-operators used to
make their fuel purchases. The trucks run only on diesel fuel,
however, the drivers were also permitted to use the card to
purchase gasoline for their personal vehicles.
The remaining issues on appeal arise from a June 2012
agreement P2H entered into with Trucking Support Services, LLC,
doing business as Contracts Resource Solutions (CRS). According
to Koprowski, she entered into the arrangement to insure the
drivers were considered independent contractors, and not
defendants' employees. In accord with the agreement, CRS assumed
responsibility for much of the paperwork generated by the
deliveries, and the owners, in turn, entered into separate
agreements leasing their equipment to CRS. Only P2H accepted and
placed delivery orders. CRS in turn assigned the services and
equipment it leased from the drivers to P2H. Plaintiffs' complaint
4 A-0703-15T2
alleged that defendants violated the TIL laws by virtue of the
arrangement with CRS, in addition to violating the Wage Payment
Law, N.J.S.A. 34:11-4.1, and engaged in acts of conversion and
fraud.
Turning to the orders, the November 15, 2013 partial summary
judgment enforced the lease agreement between the parties
requiring reimbursement of the fuel taxes, and held that defendants
violated its terms. Damages were calculated at $382,753.68. The
court found defendants breached their contracts with plaintiffs,
in violation of 49 C.F.R. § 376.12(h). The court's damage
calculation was based on WEX records subpoenaed by plaintiffs.
The court also awarded prejudgment interest of $18,663.17,
$275,463.30 in attorney's fees, and $8,896.62 in costs.
Plaintiffs had difficulty obtaining the documents necessary
to resolve the issue, as defendants' records suffered damage after
Sandy, and therefore only WEX itself had a complete account of the
charges. The WEX records, however, do not distinguish between
diesel and gasoline purchases.
Furthermore, the records did not include diesel purchases
made by drivers who elected not to use the WEX card. That
calculation was resolved by way of the settlement, and defendants
agreed to be liable for 69.70% of the amount plaintiffs' expert
determined was owed.
5 A-0703-15T2
In the trial court brief in opposition to plaintiffs' motion
for summary judgment, defendants denied that they were bound by
the lease term providing for reimbursement. They did not, however,
argue that the judge's quantification of damages was erroneous,
as a result of the possible inclusion of personal gasoline
purchases made on the WEX card, or for any other reason.
They did not argue that the TIL regulations require damages
to be exact. That argument was raised months later in the
litigation, only with regard to plaintiffs' claim that
$4,481,747.37 was due and owing in total to plaintiffs for other
monies withheld from their pay. The argument was never raised
with regard to the damage calculation for WEX users until the
appeal was taken.
The trial court granted plaintiffs partial summary judgment
on December 20, 2013, finding in Paragraph 2 that defendants were
in violation of "49 C.F.R. § 376.12(a) as of May 27, 2012, by
failing to have in place a written lease agreement with each owner-
operator." The judge denied reconsideration of his decision on
February 14, 2014.
In his reconsideration opinion, the judge observed that
"defendants have abandoned their prior legal theory (that
conforming leases with the 'owner' – meaning the owner-operators
- were in existence) in favor of a new theory based on further
6 A-0703-15T2
legal research by defense counsel in the 'definition' section of
the TIL regulation." In addition to further research conducted
after the initial motion decision, defendants also consulted with
an "unidentified expert." The judge refused to grant relief based
on a new legal theory after "more than nine months on various
motions for summary judgment."
Defendants' new legal theory was that the members of the
class were not the owners of the equipment as defined in TIL
regulations, rather, that CRS was the owner. Despite his rejection
of the argument because it could have been made earlier, the judge
went on to address its merits. Defendants' new position hinged
on their definition of "owner" as a person or entity having
exclusive right to use of the equipment as found in the TIL
regulations. The judge rejected the theory.
The judge was unconvinced by the argument because of the
agreement between CRS and defendants. Paragraph 9 of the "Master
Equipment Lease and Service Agreement" between CRS and P2H states:
The parties expressly recognize, agree and
warrant that CRS shall have no responsibility
for the operation or direction of the
equipment or the operations of the owners-
operators or their drivers during the term of
the relationship between the owners-operators
and motor carrier as set forth in this
agreement. Motor carrier understands and
agrees that it would be solely responsible for
dispatching the owner-operators and
equipment. Motor carrier represents and
7 A-0703-15T2
warrants that it shall comply with the federal
leasing regulations with respect to owners-
operators provided to motor carrier that have
elected CRS settlement processing and related
services. Motor carrier agrees to defend,
indemnify and hold CRS harmless for any
claims, suits, or actions, including
reasonable attorney fees, incurred by CRS as
a result of 1) the lack of sufficient
insurance coverage by the motor carrier as
required by paragraph 4(b) of this agreement
during the term of this relationship between
owner-operators; 2) any liability directly
attributable to the exercise of the motor
carrier's operational and directional
responsibilities (including, but not limited
to, any suits of discrimination, harassment,
or other work place issues); 3) any action(s)
by the owner-operator or their drivers that
results in property damage, personal injury
or death due to operation of the equipment;
4) any loss or damage to the cargo, products
or goods transported by the owner-operator for
the motor carrier.
In accord with that paragraph, plaintiffs used the equipment
at only P2H's direction, thus in the judge's view P2H was required
to comply with federal regulations even "with respect to owner-
operators provided to motor carriers that here elected CRS
settlement processing and related services."
The judge also opined that Paragraph 9 made it abundantly
clear that CRS was not acting as the owner of the equipment. It
acted solely as an administrative intermediary between the motor
carrier and the owner-operators who made up the class of
plaintiffs.
8 A-0703-15T2
Furthermore, paragraph 1 of the agreement each owner-operator
entered into with CRS states:
During the term of this agreement, owner-
operator shall provide CRS, and any authorized
motor carrier with whom CRS may contract, with
transportation-related services and that the
equipment set forth below or in Schedule 1
("Equipment"). It is acknowledged and
understood that the equipment and driver
services provided by owner-operator under this
agreement shall in turn be leased to the motor
carrier identified in Schedule 2 (the "motor
carrier"). The parties understand and agree
that CRS shall sublease the equipment to motor
carrier during the term of this agreement[.]
The subleasing of the equipment through CRS was not exclusive,
however. Since the owner-operators retained the ability to lease
to others, CRS could not step in their shoes for purposes of
determining their rights and P2H's responsibilities under 49
C.F.R. § 376.2(d)(2). Thus, CRS was not the owner-operator of the
equipment because it did not have the right to exclusive use.
Nothing in the agreement between CRS and the owner-operators forbid
them from entering into agreements with other motor carriers.
Additionally, paragraph 6 of the agreement between P2H and
CRS provided that P2H retains the "exclusive right to contract
with owner-operators under the terms and upon such conditions as
may be mutually agreed to between the motor carrier and owner-
operators." In other words, regardless of the agreement with CRS,
P2H had the right to directly contract with the owner-operators.
9 A-0703-15T2
The court also considered the "animating purpose of the TIL
regulations [was] to protect the individual drivers from large
trucking companies that possess an unfair advantage in bargaining
power[,]" citing in support of that conclusion Port Drivers Fed'n
18, Inc. v. All Saints Express, Inc., 757 F. Supp. 2d 443, 451
(D.N.J. 2010). The TIL regulations were not intended to allow for
a "corporate intermediary" to be interjected between a motor
carrier and owner-operators. To do so would effectively eliminate
the motor carrier's obligation to comply with the MCA. In
conclusion, the judge said:
The court's initial finding that P2H violated
the TIL regulations by not having a lease in
place with the respective owner of each piece
of equipment remains unchanged. The owner-
operators, who are the members of the class,
are the only 'owners' the court finds satisfy
the TIL regulation definitions. [CRS's] 'use'
of the equipment, if any, is not exclusive and
therefore does not satisfy the definition set
forth in 49 C.F.R. § 376.2(d)(2). Defendants
argument that [CRS] should be considered the
'owner' and that the actual title-holders
should be set aside while they are still
engaged in the operation of their equipment
does not comport with the TIL regulations or
their animating purpose. No genuine issue of
material fact exists. As a matter of law,
plaintiffs remain entitled to summary
judgment.
49 C.F.R. § 376.12 requires that licensed motor carriers have
a written lease agreement with each owner-operator of equipment
providing services. Since the court found the agreement between
10 A-0703-15T2
defendants and CRS was not equivalent to a lease between a motor
carrier and an owner-operator, it followed that no lease was in
place at all.
The court declined to outright nullify the contract between
P2H and CRS because the latter was not a party to the litigation.
The court denied reconsideration of the December 20 order on
February 14, 2014.
On February 28, 2014, the court quantified the damages
attributable to P2H's failure to have written lease agreement at
$4,481,747.37, the amount deducted from the owner/operators gross
for certain items such as workers' compensation premiums.
Prejudgment interest of $92,296.37, attorney's fees totaling
$96,990.70, and costs of $4,276.27 were also granted.
Finally, on July 11, 2014, the court held defendants in
violation of the MCA by virtue of their failure to have a lease
agreement in place with plaintiffs during the first quarter of
2014. Damages were not fixed at that time, as the court concluded
the issue was not ripe for summary judgment and deferred it to
trial.
On appeal, defendants raise the following points:
Point I
THE QUANTUM OF FUEL TAX DAMAGES AWARDED BY THE
TRIAL COURT WAS EXCESSIVE, CONTRARY TO THE
"EXACT DAMAGES" SUSTAINED STANDARD AS PER 49
11 A-0703-15T2
U.S.C.A. § 14704(a) AND SO MUST BE VACATED AND
REMANDED.
Point II
IT WAS ERROR FOR THE TRIAL COURT TO RULE THAT
ONLY OWNER OPERATOR DRIVERS COULD ENTER INTO
A WRITTEN LEASE AGREEMENT FOR THEIR TRUCK
EQUIPMENT WITH THE MOTOR CARRIER IN
CONTRAVENTION OF THE TIL REGULATION DEFINITION
OF "OWNER," 49 C.F.R. § 376.2(d).
I.
In reviewing summary judgment awards, we employ the same
standard as did the trial court. W.J.A. v. D.A., 210 N.J. 229,
237 (2012). We determine if a "genuine issue of material fact"
remains, and "if none exists, then decide whether the trial court's
ruling on the law was correct." Id. at 237-38. We "view the
evidence in the light most favorable to the non-moving party and
analyze whether the moving party was entitled to judgment as a
matter of law." Id. at 238 (citing Brill v. Guardian Life Ins.
Co. of Am., 142 N.J. 520, 523 (1995)).
II.
Defendants did not raise the issue of the accuracy or
completeness of the WEX fuel records when the November 15, 2013,
partial summary judgment was granted. Their argument that the
"proper measure of damages for [] violation of the [TIL]
regulations is the exact amount defendant overcharged or withheld
12 A-0703-15T2
for each violation[,]" was in fact made long after that issue had
been addressed by the trial judge, and only on appeal.
There can be no doubt that the "exact damages" argument was
raised approximately nine months later in the motion decided July
11, 2014 — but about other losses. By then, the only outstanding
question was whether defendants were liable, and if so, to what
extent, for damages owed to class members on remaining deductions,
such as for workers' compensation. The obligations based on the
WEX records had already been decided months earlier. Defendants
did not even mention those damages at that time. See Brinker v.
Namcheck, 577 F. Supp. 2d 1052, 1055 (W.D. Wis. 2008). No Brinker
argument was made regarding reimbursement for fuel taxes based on
the WEX records until this appeal.
Defendants contend that regardless of when they asserted the
claim, their right to challenge the judge's decision was preserved
in the settlement agreement. But the agreement does not entitle
them to make points on appeal not presented to the trial court.
Defendants cannot, by agreement with plaintiffs, expand the
universe of procedural options available upon appellate review.
Defendants have the right to challenge the judge's decision on the
issue of fuel taxes owed to class members, but not with new
arguments.
13 A-0703-15T2
Generally, we "decline to consider questions or issues not
properly presented to the trial court when an opportunity for such
a presentation is available." State v. Witt, 223 N.J. 409, 419
(2015) (quoting State v. Robinson, 200 N.J. 1, 20 (2009)).
However, this limitation is "subject to finite, qualified
exceptions." Robinson, supra, 200 N.J. at 20. We address trial
errors if they are "of such a nature as to have been clearly
capable of producing an unjust result," or if it is in "the
interests of justice" to do so. Ibid. We may also address an
issue not brought to the trial court's attention if it is
jurisdictional in nature or substantially implicates the public
interest. N.J. Div. of Youth & Family Servs. v. M.C. III, 201
N.J. 328, 339 (2010).
Defendants' argument regarding the Brinker methodology does
not fit into any exception. That the parties agreed defendants
could appeal the award does not compel us to consider the facts
and the theory defendants now advance, which plaintiffs never had
the opportunity to refute. See Witt, supra, 223 N.J. at 419
(finding "it would be unfair, and contrary to our established
rules," to decide an issue when the respondent was "deprived of
the opportunity to establish a record that might have resolved the
issue"). Defendant did not make this argument initially when
14 A-0703-15T2
partial summary judgment was ordered, thus we will not reach it
at this time.
III.
Defendants' second point, that the partial summary judgment
with regard to the definition of "owner" in the MCA was error,
encompasses the remaining orders on appeal. Defendants contend
that "owner," pursuant to 49 C.F.R. § 376.2(d), includes CRS. They
argue that CRS was an entity that "without title, has the right
of exclusive use of equipment . . ."
49 C.F.R. § 376.11(a) states that an "authorized carrier" may
perform transportation "in equipment it does not own" only if
there is a "written lease granting the use of the equipment and
meeting the requirements contained in § 376.12." 49 C.F.R. §
376.12(a) further requires that "[t]he lease shall be made between
the authorized carrier and the owner of the equipment." CRS did
not have the right to "exclusive use" of plaintiff's equipment.
Thus, the agreement through the intermediary corporation did not
satisfy the lease requirement in the TIL regulations.
In the most literal sense, the agreements are devoid of any
language that makes CRS's relationship to plaintiffs exclusive,
one prohibiting them from entering into contractual arrangements
with other motor carriers. In fact, the contract allowed for
15 A-0703-15T2
direct arrangements to be made between the owner-operators and
P2H.
The agreement with CRS was entered into solely for P2H's
convenience, not either at the instigation of the plaintiffs or
to their benefit. If CRS agreed that P2H had the absolute right
to contract directly with plaintiffs, even during the lease term,
CRS did not have the exclusive right to the equipment. CRS did
not have title to, the right to exclusive use, or lawful possession
of plaintiff's equipment. Hence, it was not an owner under 49
C.F.R. § 376(d). By employing plaintiff's equipment and services
through contracts with CRS that essentially created a wall between
the owner-operators and the motor carrier, as a matter of law,
defendants violated 49 C.F.R. §§ 376.11 and 376.12.
Defendants contend that a 1961 report, Lease And Interchange
Of Vehicle By Motor Carriers, 84 M.C.C. 247 ex parte no. M.C. 43
supports their position that the primary purpose for the TIL
regulations is to protect the public, not the owner-operators.
The trial court disagreed, as do we.
The regulations themselves, which followed the ICC report by
eighteen years, clarify that the TIL regulations are intended to
protect individual drivers from large trucking concerns, because
the companies possess an unfair advantage. Port Drivers Fed'n 18,
Inc., 757 F. Supp. 2d at 451; see also Operator Indep. Drivers
16 A-0703-15T2
Ass'n v. Comerica Bank, 636 F. 3d 781, 795-96 (6th Cir.
2011)(describing the difficulties faced by owner-operators that
the regulations were promulgated to remedy); Owner-Operator Indep.
Drivers Ass'n v. Swift Transp. Co., 367 F. 3d 1108, 1110 (9th Cir.
2004)("A primary goal of this regulatory scheme is to prevent
large carriers from taking advantage of individual owner-operators
due to their weak bargaining position.") In light of that context,
and the agreements between defendants, CRS, and plaintiffs, we
conclude that defendants' second point also lacks merit.
Affirmed.
17 A-0703-15T2
_________________________________
ACCURSO, J.A.D., dissenting.
I have no quarrel with the majority's rejection of
defendants' argument that CRS was the owner of the trucks
belonging to members of the class under 49 C.F.R. § 376.2(d).
But I cannot agree that because defendants failed to catch an
obvious error in the calculation of the fuel tax damages awarded
on partial summary judgment, they were thereafter barred from
attempting to correct the mistake. Because I think that result
inconsistent with the interlocutory nature of the order and
unjust, I respectfully dissent from that aspect of the
majority's decision.
The issue on appeal relating to the fuel tax damages is a
narrow one. The leases in effect between the parties from
November 19, 2010 through May 26, 2012, made defendant P2H
responsible to "pay all fuel taxes." Every week, defendants
deducted the drivers' fuel purchases from their pay, without
remitting the fuel taxes. Accordingly, among the damages
plaintiffs sought in this case was reimbursement for the fuel
taxes defendants wrongfully charged plaintiff drivers.
Calculation of those fuel taxes turned out to be difficult
for two reasons; Super Storm Sandy destroyed most of defendants'
records, and the drivers no longer had the weekly settlement
sheets defendants provided them or receipts for fuel purchases.
Plaintiffs took a two-pronged approach to dealing with those
proof problems. They subpoenaed Wright Express for the records
of fuel purchases by those drivers paying for fuel with a WEX
card. For those drivers who instead paid cash for fuel, class
counsel turned to an accountant who calculated the fuel tax owed
the remaining members of the class by making estimates and
assumptions based on available data.
It is undisputed that the trucks driven by the class
operate only on diesel fuel. Defendants, however, did not limit
the drivers to diesel fuel purchases with their WEX cards.
Accordingly, some drivers used their WEX cards to buy gasoline
for their personal vehicles. In its subpoena to Wright Express,
class counsel sought records of all fuel purchases for the years
in question. Using the WEX records, class counsel calculated
the amount defendants owed those drivers using WEX cards by
applying the tax rates in effect in the state where the fuel was
purchased multiplied by the number of gallons purchased, without
differentiating between gasoline and diesel fuel purchases.
When plaintiffs moved for partial summary judgment in 2013
for defendants' failure to pay fuel taxes for those drivers
using WEX cards, discovery was still ongoing. Defendants
opposed the motion but did not challenge class counsel's
2 A-0703-15T2
calculation of the fuel tax charges for those drivers. The
court thus treated the calculation as undisputed and entered
partial summary judgment for plaintiffs in the sum of
$382,753.68.
Defendants appear not to have realized that the $382,753.68
included fuel taxes for gasoline purchases (which defendants had
no obligation to pay) until almost a year later, when they were
opposing plaintiffs' motion for summary judgment on liability
and damages for fuel taxes to class members who made their fuel
purchases in cash, not using a WEX card. Defendants argued the
point to the court, among others, in attempting to establish the
existence of factual disputes precluding summary judgment.
Although the court entered a judgment for liability on the non-
WEX card claims, it declined to fix damages on the motion.
Agreeing with defendants that the facts underlying plaintiffs'
damage claim were in dispute, the court left the claims for fuel
tax damages arising out of cash purchases by the non-WEX card
users for trial.
Based on the court having denied summary judgment on
damages for fuel taxes on cash purchases, defendants moved for
reconsideration of another order on damages entered months
before, contending the plaintiffs' calculations were erroneous
and contrary to law. Defendants argued that plaintiffs were
3 A-0703-15T2
required to prove the actual amount of their damages and that
projections, estimates and imputations were insufficient. In
their brief in support of that motion, defendants footnoted the
policy permitting drivers to use their WEX cards to purchase
gasoline for their personal vehicles. The court denied the
motion, and the parties subsequently settled their claims with
an agreement that defendants would pay 69.70% of what
plaintiffs' expert claimed was owed the drivers paying cash for
fuel, and could appeal the $382,753.68 judgment for fuel taxes
owed drivers using WEX cards based on plaintiffs' failure to
prove the "exact damages" sustained by those drivers.
In refusing to consider the claim on the merits, the
majority acknowledges that defendants finally woke to the
inexactness of the damage calculation for the WEX card users and
raised it to the trial court in July 2014, when they opposed
plaintiffs' damages calculation for fuel taxes owed the non-WEX
card users; a fact borne out by the motion transcript. It also
acknowledges the parties settled the case with an express
agreement permitting defendants to challenge the WEX card
calculation on appeal. Relying on State v. Witt, 223 N.J. 409(2015), and State v. Robinson, 200 N.J. 1 (2009), the majority
nevertheless refuses to consider the merits of defendants'
argument on the WEX card calculation because they failed to make
4 A-0703-15T2
the argument to the trial court when the court entered partial
summary judgment on the WEX card claim.
Witt and Robinson, criminal cases dealing with suppression
motions, are neither controlling nor instructive here. In both
those cases, the Court was addressing the failure of defendants
to preserve an issue for appellate review; in Witt the
lawfulness of a traffic stop, 223 N.J. at 418-19, and in
Robinson, the use of a "flash bang" device in connection with a
knock-and-announce warrant, 200 N.J. at 18-22, neither ever
raised to the trial court. Defendants raised the issue of the
accuracy of the WEX fuel records to the trial court here. The
majority holds, however, that defendants' failure to do so until
after partial summary judgment had already been entered
precludes our review of the issue. I disagree.
As the Court explained in Lombardi v. Masso, 207 N.J. 517(2011), "[i]t is well established that 'the trial court has the
inherent power to be exercised in its sound discretion, to
review, revise, reconsider and modify its interlocutory orders
at any time prior to the entry of final judgment.'" Id. at 534(quoting Johnson v. Cyklop Strapping Corp., 220 N.J. Super. 250,
257 (App. Div. 1987), certif. denied, 110 N.J. 196 (1988)).
Rule 4:42-2, which governs reconsideration of interlocutory
orders, see R. 1:7-4(b), provides that "any order . . . which
5 A-0703-15T2
adjudicates fewer than all the claims as to all the parties
shall not terminate the action as to any of the claims, and it
shall be subject to revision at any time before the entry of
final judgment in the sound discretion of the court in the
interest of justice."
Although defendants' failure to have timely realized that
plaintiffs' calculation of fuel taxes for those drivers using
WEX cards overstated the damages by including purchases of
gasoline as well as diesel fuel is certainly not laudatory, it
is not an incomprehensible error. Discovery was still ongoing,
the records belonged to a third party, and class counsel
represented in its statement of undisputed material facts that
those records were confined to diesel fuel purchases, a
statement defendants allege they only subsequently discovered
was demonstrably false.1
On appeal, defendants have submitted a supplemental
appendix, using the same WEX card records submitted by
plaintiffs on the motion, along with additional records obtained
from Wright Express that break down the fuel purchases between
diesel fuel and gasoline. Defendants claim a comparison of the
1
Defendants nowhere suggest the error was anything other than
inadvertent.
6 A-0703-15T2
documents demonstrates plaintiffs overstated their damages by
more than $20,000 by including purchases of gasoline.
Plaintiffs make no response to any of defendants'
particularized claims. Instead, they contend only that they
based their calculation of "the amount of the fuel tax each
Class member paid" on "the information WEX provided," and that
the court should not consider the argument that they improperly
included the fuel taxes on gasoline purchased for the class
members' personal use because defendants never raised that
particular argument when they were arguing the need to prove
exact damages in the trial court. Pointedly, plaintiffs do not
represent on appeal that their damage calculation was limited to
the fuel tax charges on purchases of diesel fuel.
Because defendants raised the issue of plaintiffs' need to
establish actual, "exact" damages on their fuel tax claims under
the TIL regulations when successfully defending against summary
judgment on damages for the non-WEX fuel purchases, and then
moved for reconsideration of a prior order on damages on the
same grounds, that issue was properly preserved for appellate
review, notwithstanding that defendants failed to make the
argument on the initial motion on the WEX card purchases. See
Docteroff v. Barra Corp. of Am., Inc., 282 N.J. Super. 230, 237
(App. Div. 1995) ("[W]e need not get caught up in the question
7 A-0703-15T2
concerning the extent to which plaintiffs have shifted gears or
changed their position regarding the appropriate statute of
limitations. Because the issues before the trial judge dealt
with whether the suit was timely and what the controlling
limitations period was, we will consider the same issues as
presented to us, regardless of whether plaintiffs' principal
theory has changed."). We may thus consider whether the proofs
plaintiffs presented on the motion for partial summary judgment
for fuel taxes owed the WEX card users was sufficient to
establish their damages. See Lombardi, supra, 207 N.J. at 542.
Given plaintiffs' acknowledgment that WEX card users could
and did use their cards for personal gasoline purchases and what
could be termed, at best, an ambiguity as to whether the WEX
records on which plaintiffs based their damages were limited to
diesel fuel purchases or included gasoline purchases for which
no fuel taxes were due, I would vacate the order for partial
summary judgment and remand for a proper calculation of damages.
See Ziegelheim v. Apollo, 128 N.J. 250, 264 (1992) ("Summary
judgment should not be granted when the moving party
demonstrates through its own submissions that there is a genuine
dispute over material fact, regardless of the presence or
absence of submissions by the opposing party.").
8 A-0703-15T2
The "special power afforded to judges over their
interlocutory orders derives from the fact that cases continue
to develop after orders have been entered." Lombardi, supra,207 N.J. at 536. That was clearly the case here, where the
court entered a whole series of partial summary judgments on
discrete issues over the course of discovery. Although
defendants did not raise the error in plaintiffs' calculation of
the fuel tax damages for WEX users until well after partial
summary judgment had been entered on the claim, and never did so
in as clear a fashion as they have on appeal, they plainly
challenged the accuracy of the fuel tax calculations for all
fuel purchases, whether paid for in cash or with a WEX card,
before trial and entry of final judgment. Accordingly, I think
we are obliged to consider the issue on the merits.
Affirming the judgment without substantive review in these
admittedly unusual circumstances raises the unpalatable specter
of permitting a likely erroneous damage calculation to stand
because defendants failed to catch the error before entry of an
interlocutory order for partial summary judgment. Because I
think that result inconsistent with the nature of the order and
unjust on the facts presented, I respectfully dissent.
9 A-0703-15T2