M.F. VS. JONAH (L-5473-12, HUDSON COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE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-1076-19
M.F., B.U., S.B., C.L.,
J.B., and B.L.,1
Plaintiffs-Respondents,
v.
JONAH (Jews Offering New
Alternatives for Healing f/k/a
Jews Offering New Alternatives
to Homosexuality), ARTHUR
GOLDBERG, ALAN DOWNING,
and ALAN DOWNING LIFE
COACHING, LLC,
Defendants-Appellants,
ELAINE BERK and JEWISH
INSTITUTE FOR GLOBAL
AWARENESS,
Appellants.
_____________________________
Argued May 11, 2021 – Decided July 6, 2021
1
We use initials and titles for plaintiffs and certain individuals to protect their
privacy interests.
Before Judges Gilson, Moynihan, and Gummer.
On appeal from the Superior Court of New Jersey, Law
Division, Hudson County, Docket No. L-5473-12.
Michael P. Laffey argued the cause for appellants
(Messina Law Firm, P.C., attorneys; Michael P. Laffey,
on the briefs).
Bruce D. Greenberg argued the cause for respondents
(Lite DePalma Greenberg, LLC, attorneys); Luke A.
Barefoot, Lina Bensman, and Thomas S. Kessler
(Cleary Gottlieb Steen & Hamilton) of the New York
bar, admitted pro hac vice, attorneys; and Scott D.
McCoy (Southern Poverty Law Center) of the Alabama
bar, admitted pro hac vice, attorney (Bruce D.
Greenberg, on the briefs).
Samuel Colabella argued the cause for amicus curiae
coalition of psychologists and psychotherapists
(Gruber, Colabella, Liuzza, Thompson & Hiben,
attorneys; Mark Gruber and Samuel Colabella, on the
brief).
Ronald D. Coleman argued the cause for amicus curiae
Family Research Council and New Yorkers for
Constitutional Freedoms (Dhillon Law Group, Inc.,
attorneys; Ronald D. Coleman, on the brief).
PER CURIAM
This appeal arises out of plaintiffs' efforts to enjoin defendants from
engaging in or promoting conversion therapy intended to change a person's
sexual orientation. Appellants Arthur Goldberg, Elaine Berk, and the Jews
Offering New Alternatives for Healing (JONAH) (collectively, defendants)
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appeal from a June 10, 2019 order enforcing a prior order and settlement
agreement under Rule 1:10-3.2 The trial court found that defendants had
violated the court's prior post-trial permanent injunction order and the parties'
related settlement agreement. Accordingly, the trial court imposed further
injunctive relief and awarded plaintiffs damages and attorneys' fees. Defendants
challenge the June 10, 2019 order on numerous grounds. We discern no merit
in defendants' arguments and affirm.
I.
In November 2012 plaintiffs filed suit, alleging that defendants had
engaged in deceptive and fraudulent practices by referring plaintiffs to
conversion therapy, which defendants represented could reduce or eliminate
plaintiffs' "same-sex attractions." Plaintiffs asserted that defendants had made
false representations about the nature and origin of homosexuality and the
effectiveness of conversion therapy services, and they had suffered financial and
emotional harm from purchasing and engaging in services offered by or through
defendants. Plaintiffs contended that defendants' practices violated the New
Jersey Consumer Fraud Act (the CF Act), N.J.S.A. 56:8-1 to -20.
2
Elaine Berk was not originally named as a defendant in the lawsuit brought by
plaintiffs. Nevertheless, through a settlement agreement, Berk agreed that she
would be subject to restrictions under the order granting injunctive relief.
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Following several years of litigation and a trial, a jury found that JONAH
and Goldberg had engaged in unconscionable business practices in violation of
the CF Act. In December 2015, the parties entered into a confidential settlement
agreement (the Settlement Agreement).
Under the Settlement Agreement, the parties consented to submit an order
to be entered by the trial court. Accordingly, on December 18, 2015, the trial
court entered an order granting permanent injunctive relief and awarding
attorneys' fees to plaintiffs (the Injunction Order). The Injunction Order
directed, among other things, that JONAH dissolve and defendants immediately
cease engaging in or promoting conversion therapy or related commerce "in or
directed at New Jersey."
Specifically, the Injunction Order provides, in relevant part:
1. JONAH, Inc. shall permanently cease any and all
operations . . . ;
2. JONAH, Inc. shall permanently dissolve as a
corporate entity and liquidate all its assets, tangible or
intangible, . . . ;
3. . . . Defendants are permanently enjoined from
engaging, whether directly or through referrals, in any
therapy, counseling, treatment or activity that has the
goal of changing, affecting or influencing sexual
orientation, "same sex attraction" or "gender
wholeness," or any other equivalent term, whether
referred to as "conversion therapy," "reparative
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therapy," "gender affirming processes" or any other
equivalent term ("Conversion Therapy"), or
advertising, or promoting Conversion Therapy or
Conversion Therapy-related commerce in or directed at
New Jersey or New Jersey residents (whether in person
or remotely, individually or in groups, including via
telephone, Skype, email, online services or any delivery
medium that may be introduced in the future, and
including the provision of referrals to providers,
advertisers, promoters, or advocates of the same) . . . ;
[and]
4. Plaintiffs' counsel is awarded attorneys' fees and
expenses in the amount of three million five hundred
thousand U.S. dollars ($3,500,000) . . . ;
Under the Settlement Agreement, plaintiffs agreed to accept a
substantially reduced fee award and defendants waived their right to appeal the
jury verdict or Injunction Order. Defendants also agreed that if they breached
the Injunction Order or the Settlement Agreement and failed to cure any breach
within thirty days, they would have to pay "Breach Damages."
Among other things, the Settlement Agreement provided Berk was bound
by the terms of the Injunction Order; Goldberg and Berk were to resign from all
positions they held with conversion therapy-related organizations; and they were
not to hold any future positions in organizations engaged in or promoting
conversion therapy.
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In March 2018, plaintiffs filed a motion to enforce litigants' rights under
Rule 1:10-3, arguing that defendants had violated and continued to violate the
Injunction Order and Settlement Agreement. After defendants submitted
opposing papers and the trial court heard oral argument, on the record, the court
found defendants had breached the Settlement Agreement and Injunction Order
by making referrals to conversion therapy providers and receiving referral fees
for conversion therapy services.
On May 15, 2018, the court issued an order (1) finding that defendants
had breached paragraph three of the Injunction Order and paragraph six of the
Settlement Agreement; (2) granting defendants thirty days from the date of oral
argument to cure the breaches as permitted under the Settlement Agreement; and
(3) allowing plaintiffs to engage in discovery related to the alleged breaches,
including whether the Jewish Institute for Global Awareness (JIFGA) was an
alter ego or continuation of JONAH.
Approximately a year later, in March 2019, plaintiffs filed a second
motion to enforce litigants' rights based on the discovery they had received. In
support of their motion, plaintiffs submitted documents showing that JONAH
had continued to operate under the new name JIFGA. In addition, plaintiffs
submitted documents showing that Goldberg and Berk had continued to refer
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individuals to conversion therapists and had received, through JIFGA, referral
fees.
The court heard oral argument on plaintiffs' second motion on June 7,
2019. Three days later, on June 10, 2019, the trial court issued an order and a
written opinion granting plaintiffs' motions to enforce litigants' rights.
The trial court found that Goldberg and Berk had violated the Injunction
Order and Settlement Agreement by establishing JIFGA, which was a successor
in interest and continuation of JONAH. The trial court also found that Goldberg
and Berk had continued to engage in conversion therapy and had promoted
conversion therapy-related commerce. Furthermore, the court found those
violations were willful and uncured.
In the June 10, 2019 order, the trial court directed that (1) JIFGA was
subject to a permanent injunction, requiring it to permanently cease operations
and dissolve as a corporate entity; (2) defendants were to pay plaintiffs the
Breach Damages as set forth in the Settlement Agreement; (3) defendants were
to disgorge all monies "received in connection with their facilitation of
[c]onversion [t]herapy"; and (4) Goldberg and Berk were "permanently enjoined
from incorporating or serving as officers, directors or trustees" for any
tax-exempt entity incorporated or having operations in New Jersey. The trial
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court also permitted plaintiffs to move for counsel fees and costs in connection
with the Rule 1:10-3 motions.
Defendants moved for reconsideration and to stay the June 10, 2019 order
pending an appeal. On July 11, 2019, the trial court heard argument on the
motions and entered two orders: (1) an order granting, in part, reconsideration
and modifying paragraph eight of the June 10, 2019 order to permit Goldberg to
remain co-president of Congregation Mount Sinai in Jersey City, president of
New Jersey Hebrew Free Loan, and a board member of a condominium
association; and (2) an order granting, in part, the stay pending appeal.
Meanwhile, plaintiffs filed a motion for attorneys' fees and costs. On September
30, 2019, the court entered an order granting that motion.
Defendants now appeal from the June 10, 2019 order. The Family
Research Council, the New Yorkers for Constitutional Freedoms, and "a
coalition of psychologists and psychotherapists" filed amicus curiae bri efs in
support of certain of defendants' positions on appeal.
II.
Defendants make nine main arguments on this appeal. They contend (1)
the trial court erred in finding that they had made referrals for conversion
therapy; (2) JIFGA's crowdfunding website did not violate the permanent
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injunction; (3) the permanent injunction is limited to defendants' conduct in New
Jersey; (4) defendants cured any alleged breach relating to the receipt of referral
fees by refunding those fees; (5) the trial court erred in finding that Goldberg
violated the permanent injunction by participating in a "Journey Into Manhood"
weekend; (6) the trial court erred in ordering defendants to pay damages; (7) the
trial court improperly barred defendants from holding positions with non-profit
organizations; (8) the trial court erred in finding that Berk violated the
permanent injunction; and (9) the trial court erred in holding that JIFGA was a
continuation of JONAH.
Three amici filed two briefs in support of defendants' positions. The
coalition of psychologists and psychotherapists argues that the trial court based
its decision on a flawed understanding of therapeutic practices. The Family
Research Council and New Yorkers for Constitutional Freedoms argue that (1)
the trial court erred in ruling that the CF Act applies to conduct outside of New
Jersey; (2) banning advocacy related to conversion therapy is an
unconstitutional prior restraint on speech; and (3) the ban on defendants'
incorporation of or service with corporations in New Jersey is an
unconstitutional restriction on defendants' rights of free association and due
process.
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We are not persuaded by any of these arguments. The arguments by
defendants and the amici can be consolidated into four issues: (1) whether
defendants breached the Injunction Order and Settlement Agreement; (2)
whether defendants cured all violations by refunding referral fees; (3) whether
the trial court erred in ordering defendants to pay damages; and (4) whether the
trial court erred by barring defendants from incorporating or serving in
leadership positions with non-profit organizations in New Jersey.
1. Defendants' Breaches
Defendants do not and cannot challenge the Injunction Order or the
Settlement Agreement. Indeed, defendants waived their right to appeal the
underlying jury verdict as part of the Settlement Agreement. Instead, defendants
appeal from the June 10, 2019 order enforcing the Injunction Order and
Settlement Agreement.
Rule 1:10-3 allows litigants to enforce court orders. In re Adoption of
N.J.A.C. 5:96 & 5:97, 221 N.J. 1, 17 (2015). "The scope of relief in a motion
in aid of litigants' rights is limited to remediation of the violation of a court
order." Abbott ex rel. Abbott v. Burke, 206 N.J. 332, 371 (2011). Nevertheless,
if a court determines that parties have disobeyed an order, the court has
discretion and flexibility in fashioning an appropriate remedy to compel
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compliance. In re N.J.A.C. 5:96, 221 N.J. at 17-18; Milne v. Goldenberg, 428
N.J. Super. 184, 198 (App. Div. 2012).
Courts have broad discretion when assisting litigants seeking to enforce
orders securing their rights. See In re N.J.A.C. 5:96, 221 N.J. at 17.
Accordingly, a court is not required to hold an evidentiary hearing on a Rule
1:10-3 motion unless there are material factual disputes concerning the parties'
"compliance with the order or ability to comply." State Dep't of Env't Prot. v.
Mazza & Sons, Inc., 406 N.J. Super. 13, 29 (App. Div. 2009). The moving party
is not required to establish willful disobedience when seeking to enforce an
order. In re N.J.A.C. 5:96, 221 N.J. at 17. Nevertheless, coercive relief is
permissible when there is a showing of willful non-compliance. Id. at 18.
Furthermore, the court has "discretion [to] make an allowance for counsel fees
to be paid by any party to the action to a party accorded relief" in accordance
with Rule 1:10-3. Consequently, a fee award is permissible where a party's
violation of the court order was willful. Hynes v. Clarke, 297 N.J. Super. 44,
57 (App. Div. 1997).
We review an order enforcing litigants' rights for an abuse of discretion.
Wear v. Selective Ins. Co., 455 N.J. Super. 440, 458-59 (App. Div. 2018) (citing
Barr v. Barr, 418 N.J. Super. 18, 46 (App. Div. 2011)). Accordingly, we reverse
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such orders only if they lack a rational explanation, depart from established
policies, or rest on an impermissible basis. Id. at 459. An award of counsel fees
under Rule 1:10-3 is also reviewed for an abuse of discretion. Ibid. (quoting
Packard-Bamberger & Co. v. Collier, 167 N.J. 427, 444 (2001)).
We generally defer to a trial court's factual findings so long as those
findings are supported by substantial credible evidence. N. Jersey Media Grp.,
Inc. v. State, Off. of Governor, 451 N.J. Super. 282, 295-96 (App. Div. 2017)
(quoting Zaman v. Felton, 219 N.J. 199, 215 (2014)); P.T. v. M.S., 325 N.J.
Super. 193, 219 (App. Div. 1999). We give less deference, however, when no
witness testified, and the matter was heard on the papers. N.J. Div. of Child
Prot. & Permanency v. J.D., 447 N.J. Super. 337, 350 (App. Div. 2016) (citing
N.J. Div. of Youth & Fam. Servs. v. G.M., 198 N.J. 382, 396 (2009)).
The trial court found that defendants had violated the Injunction Order
and Settlement Agreement in three main ways: (1) establishing and operating
JIFGA; (2) operating a crowdfunding website run by JIFGA; and (3) continuing
to make referrals for conversion therapy. The trial court's findings are supported
by the record. Moreover, any one of these violations supports the relief granted
by the trial court.
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A. JIFGA
The trial court found that JIFGA was a successor in interest to and
continuation of JONAH. The facts and law support that finding.
Courts consider various factors in determining whether an entity is a
successor in interest to and continuation of a predecessor corporation. Those
factors include continuity of ownership, management, personnel, physical
location, assets, and general business operations. Ramirez v. Amsted Indus.,
Inc., 86 N.J. 332, 342 (1981); 160 W. Broadway Assocs., LP v. 1 Mem'l Drive,
LLC, 466 N.J. Super. 600, 611 (App. Div. 2021) (quoting Woodrick v. Jack J.
Burke Real Est., Inc., 306 N.J. Super. 61, 73 (App. Div. 1997)); Arevalo v.
Saginaw Mach. Sys., 344 N.J. Super. 490, 503-04 (App. Div. 2001). The court
can also consider whether the new entity effectively holds itself out as a
successor in interest to the prior entity. Marshak v. Treadwell, 595 F.3d 478,
490 (3d Cir. 2009) (citation omitted). It is not necessary to establish all these
factors; rather, the critical issue is whether the factors demonstrate that the new
entity was intended to carry on the operations of the old entity. Woodrick, 306
N.J. Super. at 74 (citations omitted).
The trial court found that JIFGA and JONAH had the same cofounders
and codirectors – Goldberg and Berk; JIFGA was reachable at the same phone
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number and email addresses as JONAH; and JIFGA continued JONAH's primary
purpose of promoting conversion therapy through referrals to therapists.
Moreover, while not cited in the trial court's June 10, 2019 written decision, the
record demonstrates JIFGA and JONAH occupied the same office space. Those
findings are supported by the record.
B. JIFGA's Crowdfunding Website
The trial court found that the crowdfunding website run by JIFGA violated
the Injunction Order because it raised money for projects promoting conversion
therapy and JIFGA retained four percent of the money collected for those
projects. The record establishes that the programs promoted on the
crowdfunding website included a video series on "reparative therapy ," that is,
conversion therapy, and that the video series was for sale. Those undisputed
facts establish that JIFGA's crowdfunding website was promoting conversion
therapy-related commerce in or directed at New Jersey or New Jersey's
residents.
Defendants argue that the crowdfunding website did not violate the
Injunction Order or Settlement Agreement because it was used by third parties
to raise funds. That argument ignores the undisputed fact that JIFGA retained
four percent of all the funds raised.
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Defendants and amici also contend that "the trial court's ban on advocacy
relating to so-called 'conversion therapy' is an unconstitutional form of prior
restraint of speech." We disagree. The restrictions imposed in the Injunction
Order and Settlement Agreement were an outgrowth of the jury verdict finding
that defendants had violated the CF Act by engaging in unconscionable
commercial practices, specifically, through the promotion and provision of
conversion therapy. 3 Accordingly, defendants, including Berk, settled that case
by agreeing to the limitations placed on them in the Injunction Order and
Settlement Agreement. Such litigation-based restrictions do not violate First
Amendment rights. See LaManna v. Proformance Ins. Co., 184 N.J. 214, 224
(2005) (recognizing parties may waive constitutionally guaranteed rights by
agreement); Midland Funding, L.L.C. v. Giambanco, 422 N.J. Super. 301, 310
(App. Div. 2011).
Furthermore, no constitutional argument was raised before the trial court.
Consequently, we decline to address these new arguments on appeal. Nieder v.
Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973). Moreover, to the extent that
3
We note that in 2020, the Legislature enacted N.J.S.A. 45:1-54 to -55, which
outlawed the provision of conversion therapy to individuals under the age of
eighteen. In doing so, the Legislature aptly stated our State's well-reasoned
public policy: that "[b]eing lesbian, gay, or bisexual is not a disease, disorder,
illness, deficiency, or shortcoming." N.J.S.A. 45:1-54(a).
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amici's arguments go beyond those made by defendants, we disregard those
arguments. Bethlehem Twp. Bd. of Educ. v. Bethlehem Twp. Educ. Ass'n, 91
N.J. 38, 48-49 (1982).
C. The Continued Referrals for Conversion Therapy
The trial court found that Goldberg and Berk violated the Injunction Order
and Settlement Agreement by continuing to refer people to conversion therapy.
The record supports that finding. From late December 2015 to late May 2018,
there were numerous email exchanges in which Goldberg, and to a lesser extent
Berk, communicated with people seeking conversion therapy and therapists
providing conversion therapy. They also followed up to ensure that they
received referral fees.
For example, in an email dated December 31, 2015, Berk informed a
therapist who provided conversion therapy services that she and Goldberg were
"no longer allowed to legally offer any advice or suggestions to individuals
concerning reparative therapy" but they "[were] currently starting a new
organization which we will announce soon." Thereafter in March 2016,
Goldberg and Berk announced the formation of JIFGA, which promoted, among
other things, "morality in sexual relations."
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In an email dated March 19, 2016, Goldberg directed a recipient of
conversion therapy to JIFGA's website. In an email dated August 3, 2017,
Goldberg gave the contact information of three therapists who provided
conversion therapy services and encouraged the email recipient to "check our
new websites," including the crowdfunding website. Berk was copied on that
email. In an email dated January 29, 2018, Goldberg introduced himself to a
conversion therapy provider, stating that "[a]fter the demise of JONAH, I
created the Jewish Institute for Global Awareness (www.jifga.org) as well as a
crowd-funding project, www.fundingmorality.com to assist those who are
involved in Biblically correct activities."
Defendants argue that the record is ambiguous and, in some cases,
contested regarding whether they referred individuals for conversion therapy, as
opposed to other types of therapy. In addition, defendants contend that their
referrals did not violate the Injunction Order or Settlement Agreement because
the referrals were made to individuals outside of New Jersey to therapists
outside of New Jersey.
Amici amplify those arguments. The coalition of psychologists and
psychotherapists contends that the court erred by assuming that defendants'
referrals were for conversion therapy, arguing that therapists treat individuals
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for a variety of issues. The Family Research Council and New Yorkers for
Constitutional Freedoms argue that the court erred in finding that the CF Act
applies to conduct outside the State of New Jersey. The facts established by the
record refute all these arguments.
The record is clear and undisputed that many of defendants' referrals for
conversion therapy were made from New Jersey. For example, an individual
sent an email to the JONAH website on January 5, 2016, asking for help "to take
the homosexuality out of my life." Goldberg responded using his JONAH email
address, asking where the individual was from, and asking to speak with the
individual by phone. Similarly, in an email exchange on May 4, 2016, an
individual asked Goldberg for the name of a female therapist to treat a "girl with
active [same-sex attraction]." Using his JONAH email address, Goldberg
responded with the name and contact information of a counselor who "deal[t]
with such issues." These emails, and others like them, were all sent from the
JONAH website set up and operated in New Jersey.
Moreover, we note that the trial judge had extensive experience with
defendants because he had presided over a multi-year litigation, a three-week
trial, and multiple post-verdict motions. The trial judge was, therefore, amply
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qualified to draw inferences from the evidence and to make factual findings
based on his knowledge of the issues and the parties.
We also reject defendants' and the amici's geographic argument
concerning the CF Act. As already noted, defendants waived their right to
appeal the jury verdict. In doing so, they also waived their right to argue that
their unconscionable business practices should be restricted only in New Jersey.
Nevertheless, even if we were to consider this geographic issue, we would
reject it on two independent grounds. First, the Injunction Order does not have
a geographic limitation on the prohibition against defendants engaging in
referrals for conversion therapy. The language in the Injunction Order was
negotiated and agreed to by defendants and their counsel. The Injunction Order
states, in relevant part: "Defendants are permanently enjoined from engaging,
whether directly or through referrals, in . . . ('Conversion Therapy'), or
advertising, or promoting Conversion Therapy or Conversion Therapy-related
commerce in or directed at New Jersey or New Jersey residents."
The qualifying phrase "in or directed at New Jersey or New Jersey
residents" refers only to the last antecedent and does not modify the phrase
concerning the injunction on referrals. This interpretation is consistent with the
last antecedent rule, "a principle of statutory construction that holds that, unless
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a contrary intention otherwise appears, a qualifying phrase within a statute refers
to the last antecedent phrase." State v. Gelman, 195 N.J. 475, 484 (2008); see
also Alexander v. Bd. of Rev., 405 N.J. Super. 408, 417 (App. Div. 2009).
Second, the undisputed facts in the record establish a clear connection
between defendants' activities and New Jersey. Actions pursued under the CF
Act require some nexus with New Jersey, through either the perpetrator or the
victim of the alleged fraud, or the location of the transaction. Real v. Radir
Wheels, Inc., 198 N.J. 511, 514, 527 (2009) (holding CF Act applied to internet
transaction between New Jersey seller and out-of-state purchaser); Smith v. Alza
Corp., 400 N.J. Super. 529, 551-52 (App. Div. 2008) (finding CF Act applicable
in action between New Jersey packager and Alabama plaintiff because "New
Jersey [was] the site of the alleged deceptive practice").
The record establishes that Goldberg and Berk principally operated out of
New Jersey. For example, the two entities that they set up – JONAH and JIFGA
– were both located and operated in New Jersey. Moreover, the record contains
multiple examples of Goldberg and Berk engaging in communications while
they were in New Jersey. Accordingly, the broad reach of the CF Act was not
exceeded. See Real, 198 N.J. at 522 (noting that the CF Act has an "intentionally
broad" reach, but "is not without boundaries").
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2. Defendants Did Not Cure All Violations by Refunding Some
Referral Fees
The Settlement Agreement allows defendants thirty days to cure any
breach. When plaintiffs filed their first motion to enforce litigants' rights, the
trial court found violations but gave defendants an opportunity to cure.
Defendants then refunded some referral fees.
After conducting discovery, plaintiffs filed their second motion to enforce
litigants' rights. Defendants argued that they had cured the violations by
refunding referral fees. The trial judge rejected that argument. The record
amply supports the trial judge's factual findings that the refunds were not
complete, and that defendants did not cure all the violations.
By establishing JIFGA and its crowdfunding website, Goldberg and Berk
violated the Injunction Order and the Settlement Agreement. Moreover,
Goldberg and Berk continued to refer individuals for conversion therapy and the
refund of some of the referral fees did not cure those breaches. Finally, even
though some fees were refunded, the record supports the trial court's conclusion
that not all referral fees were refunded.
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3. The Trial Court Did Not Err in Ordering Defendants to Pay
Damages
In the Settlement Agreement, defendants acknowledged that plaintiffs
were entitled to $3,500,000 in attorneys' fees and costs. The parties then agreed
that plaintiffs would accept $400,000, but if defendants breached the Settlement
Agreement or Injunction Order, defendants would have to pay the remaining fee
award. In addition, Berk agreed that if she breached, she would pay plaintiffs
$400,000. Those damages were defined in the Settlement Agreement as "Breach
Damages" and "Berk Breach Damages."
After finding that Goldberg and Berk both willfully violated the
Injunction Order and Settlement Agreement, the trial court awarded plaintiffs
the "Breach Damages" and the "Berk Breach Damages." We discern no error in
that ruling.
Defendants argue that the award is excessive since it is in the millions of
dollars. The short and complete answer to that contention is that defendants
agreed that those would be the damages if they breached the Injunction Order or
Settlement Agreement. Moreover, defendants agreed that plaintiffs were
entitled to $3,500,000 in costs and fees based on the jury verdict.
In addition, the trial court had the authority to enforce the terms of the
Settlement Agreement in the context of plaintiffs' Rule 1:10-3 motion because
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the Settlement Agreement was expressly intertwined with the court's Injunction
Order. See Wasserman's Inc. v. Twp. of Middletown, 137 N.J. 238, 252-53
(1994) (citation omitted) (explaining stipulated damages clauses are
presumptively reasonable and enforceable). In that regard, the facts here are
distinguishable from our holding in Haynoski v. Haynoski, 264 N.J. Super. 408,
414 (App. Div. 1993). Haynoski involved a private settlement agreement not
incorporated into a court order or judgment before the aggrieved party brought
a Rule 1:10 application. Ibid. In contrast, the Injunction Order here resulted
from the jury verdict in favor of plaintiffs and the Settlement Agreement. The
Settlement Agreement expressed the parties' consent to the entry of the
Injunctive Order; thus our decision in Haynoski, which disallowed counsel fees
on a motion to enforce an unincorporated settlement agreement, is inapplicable.
Ibid.In addition to the Breach Damages, the trial court also properly awarded
plaintiffs attorneys' fees and costs in connection with the Rule 1:10-3 motions.
Rule 1:10-3 expressly authorizes the trial court to make a fee award. Moreover,
where a party's violation of the order is willful, a fee award is also permissible.
Hynes, 297 N.J. Super. at 57; In re N.J.A.C. 5:96, 221 N.J. at 18 (allowing
sanctions when a party willfully failed to comply with a court order).
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4. The Ban on Incorporating or Leading Non-Profits
The trial court barred Goldberg and Berk "from incorporating or serving
as officers, directors or trustees . . . of any tax-exempt entity incorporated in or
having any operations in New Jersey." Defendants argue that the court erred
because the additional prohibition is not limited to organizations that are
connected to conversion therapy and it violates their constitutional rights to free
association. Amici also contend that the bars are unconstitutionally restrictive.
In its opinion on plaintiffs' second motion, the trial court reviewed the
record and found that defendants breached the permanent injunction through
their incorporation and operation of JIFGA. As a partial remedy for that breach,
the court enjoined Goldberg and Berk from serving as directors or officers of
any tax-exempt entity incorporated in New Jersey. After defendants moved for
reconsideration, the court modified the limitation and allowed Goldberg to
continue to serve as a president and board member of three specific
organizations.
We reject defendants' and amici's arguments that the limitations are not
directly related to Goldberg and Berk's prior breaches of the Injunction Order
and Settlement Agreement. To the contrary, the trial court designed that
restriction to prevent Goldberg and Berk from further violating the Injunction
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Order and Settlement Agreement. That ruling is consistent with the CF Act,
which expressly allows injunctive relief. N.J.S.A. 56:8-8. Accordingly, we
discern no abuse of discretion, nor do we find that the court exceeded its
authority under Rule 1:10-3.
Furthermore, as already noted, the constitutional arguments were not
raised before the trial court, and we therefore decline to address them for the
first time on appeal. Nieder, 62 N.J. at 234.
In summary, we affirm the trial court's June 10, 2019 order. To the extent
that we have not expressly addressed certain arguments raised by defendants and
amici, we deem them to be of insufficient merit to warrant discussion in a written
opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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