COMEGNO LAW GROUP, PC VS. JOHN PHILLIPS, JR. (DC-002307-15, CAMDEN COUNTY AND STATEWIDE) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4908-17T1
COMEGNO LAW GROUP, PC,
Plaintiff-Respondent,
v.
JOHN PHILLIPS, JR.,
Defendant,
and
THE JOHN "JACK" PHILLIPS
FAMILY FOUNDATION LTD.,
Intervenor-Appellant.
______________________________
Submitted May 7, 2019 – Decided May 22, 2019
Before Judges Fisher and Enright.
On appeal from Superior Court of New Jersey, Law
Division, Camden County, Docket No. DC-2307-15.
Kit Applegate, attorney for appellant.
Saldutti Law Group, attorneys for respondent (Thomas
B. O'Connell, on the brief).
PER CURIAM
Plaintiff filed this suit against only defendant John Phillips, Jr., in March
2015. Two months later, plaintiff obtained a default judgment against Phillips
in the amount of $11,132.18. More than two years after entry of judgment,
plaintiff levied on a bank account owned by The John "Jack" Phillips Family
Foundation Ltd., which objected and submitted evidential materials to the court
showing a distinction between it and Phillips, the judgment debtor. Plaintiff
responded with materials suggesting that the Foundation should not be entitled
to rely on its corporate veil.
The judge heard argument on whether plaintiff could levy against the
Foundation's bank account. Without conducting an evidentiary hearing, the
judge ruled against the Foundation and entered an order that required th e
turnover of the levied funds – less $1000 – to plaintiff.
The Foundation appeals, arguing that: plaintiff was wrongfully permitted
to execute on its property because it is not the judgment debtor; any questions
about the legitimacy of the Foundation's corporate veil and its liability for
Phillips' debt may only be pursued in a separate lawsuit; and, even if these
questions were a proper subject in this civil action, plaintiff failed to prove by
clear and convincing evidence that the Foundation's corporate veil should be
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brushed aside. We agree that any arguments about the Foundation's corpora te
veil or its liability for Phillips' debt are matters to be pursued by way of a
separate action.
Like any other person or entity, the Foundation was entitled to due
process, which would include the right to have the civil claim against it set forth
in a complaint, the right to be personally served with that complaint, the right to
file a responsive pleading, the right to discovery, and all the other rights
delineated in our court rules prior to the entry of a judgment against it. See
Nelson v. Adams, 529 U.S. 460, 465-66 (2000). The proceedings in the trial
court short-circuited all these rights. Indeed, it seems as though the mechanism
employed in the trial court required that the Foundation disprove its liability
rather than requiring plaintiff to prove its entitlement to relief. And, even if
these questions were properly entertained in this civil action, the parties'
submissions generated genuine factual disputes that could not be resolved
without exploration at an evidentiary hearing.
The order under review is reversed and the matter remanded for entry of
an order lifting the levy on the Foundation's bank account; the court is also
empowered to enter other relief necessary to undo the actions taken against the
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Foundation. The Foundation's liability for the default judgment entered against
plaintiff may only be pursued in a separate civil action.
Reversed and remanded. We do not retain jurisdiction.
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