SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2447-19

EXCEL PHARMACY, INC.,

Plaintiff-Appellant,

v.

VALERIE ORTIZ and HEALTH

SMART PHARMACY &

CONVENIENCE STORE, LLC,

Defendants-Respondents.

Argued March 22, 2021 – Decided May 14, 2021

Before Judges Sabatino, Currier and DeAlmeida.

On appeal from the Superior Court of New Jersey, 

Chancery Division, Hudson County, Docket No. C000120-18.

Keith J. Roberts argued the cause for appellant (Brach 

Eichler, LLC, attorneys; Keith J. Roberts, of counsel 

and on the briefs; Richard B. Robins, on the briefs).

Raymond J. Seigler argued the cause for respondent 

Valerie Ortiz (Chasan Lamparello Mallon & Cappuzo, 

PC, attorneys; Raymond J. Seigler, of counsel and on 

the brief).

NOT FOR PUBLICATION WITHOUT THE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.
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Nirmalan Nagulendran argued the cause for respondent 

Health Smart Pharmacy & Convenience Store, LLC

(Miller, Meyerson, & Corbo, attorneys; Nirmalan 

Nagulendran and Gerald D. Miller, on the brief). 

PER CURIAM

Plaintiff Excel Pharmacy, Inc. appeals from the Law Division order 

denying its motion to vacate the settlement agreement it reached with 

defendants. We affirm.

Plaintiff is a pharmacy located in Jersey City. Defendant Valerie Ortiz 

was employed by plaintiff as a pharmacist from February 2014 to January 2018. 

When Ortiz began her employment, she and plaintiff entered into an 

employment agreement (Agreement). The Agreement included non-competition 

and non-solicitation provisions that applied during and after Ortiz's 

employment. Pertinent to this litigation, for two years after the termination of 

her employment, Ortiz was

not in any capacity (whether in the capacity as a 

Pharmacist, officer, director, partner, manager, 

consultant, agent or owner) . . . [to] advise, manage,

render or perform services to or for any person or entity 

which is engaged in a business competitive to that of

[plaintiff] . . . within ten miles of [plaintiff].
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On January 11, 2018, plaintiff's owner advised Ortiz she was terminating 

her employment for reasons unrelated to this lawsuit. The termination became 

effective January 31, 2018. 

Defendant Health Smart Pharmacy & Convenience Store, LLC is a 

pharmacy also located in Jersey City, less than a mile from plaintiff. Health 

Smart is owned by Ortiz's sister, Vea Cayaba-Wong. 

In August 2018, plaintiff filed a verified complaint and order to show 

cause in the Chancery Division alleging Ortiz had violated the restrictive 

covenants in the Agreement by opening, working at, and owning Health Smart.

Plaintiff asserted Health Smart was owned by Ortiz's sister as a "straw person" 

and that Ortiz conspired to open the competing pharmacy before she was 

terminated. 

In opposing the application, Ortiz submitted an affidavit in which she 

denied violating the Agreement and asserted plaintiff's claims about her 

involvement with Health Smart were "wholly untrue." Ortiz further alleged that 

plaintiff itself violated the Agreement when it did not give her a promised 

ownership share in May 2016 and consistently failed to pay her the specified 

salary and percentage of net profits. Ortiz contended plaintiff owed her between 

$100,000 and $200,000 for her share of net profits under the Agreement. 
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Ortiz's sister submitted an affidavit on behalf of Health Smart stating Ortiz 

was not employed by Health Smart as a pharmacist or in any other capacity. 

Within a week after defendants' submissions, the parties, with counsel, 

reached a settlement and placed its terms on the record on August 27, 2018.1 

The parties agreed to a mutual release of all claims arising out of the Agreement

and stipulated that the restrictive covenants would remain in place until May 1, 

2019. This was a reduction of the temporal terms originally established in the 

Agreement.2 

Plaintiff's counsel specifically requested Ortiz testify that she understood 

the restrictive covenants would remain in effect until May 2019. Ortiz agreed. 

Plaintiff's counsel emphasized that was "the important bargain[ed-] for 

consideration to make the case go away." 

In April 2019, plaintiff filed a second order to show cause, alleging Ortiz 

had violated the settlement agreement. An affidavit was later provided in May,

from Ricardo Valeroso who described a conversation he had with Ortiz in June 

1 The parties never signed a written settlement agreement. Correspondence 

between counsel reflects an agreement on the essential terms but a dispute 

regarding its effective date. 

2 The initial restrictive covenant regarding the non-competition clause was in 

effect until January 31, 2020. 
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2018 in which Ortiz told him she had "a new pharmacy" called Health Smart. 

According to Valeroso, Ortiz stated the pharmacy was "under her sister's name

because it was unethical for [Ortiz] to own the pharmacy because she had been 

the pharmacist for Excel Pharmacy which was nearby Health Smart Pharmacy." 

On May 31, 2019, plaintiff issued a subpoena to McKesson Corporation, 

a pharmaceutical supplier, for all records and communications related to or 

arising out of contracts between McKesson and Health Smart. In response, 

McKesson produced: (1) a certificate from the New Jersey Division of 

Consumer Affairs (DCA), Board of Pharmacy, licensing "Health Smart 

Pharmacy & Convenience Store LLC Valerie Joanne Ortiz" to operate as a 

pharmacy effective April 11, 2018; and (2) various emails between Ortiz and 

McKesson in May 2018 related to Health Smart's credit application and plans to 

open the business. 

Plaintiff also submitted an Open Public Records Act (OPRA), N.J.S.A. 

47:1A-1 to -13, request with the DCA on August 20, 2019 for "all documents 

and filings for" Health Smart. The records produced included: (1) an application 

for a permit to operate a pharmacy submitted by Cayaba-Wong on January 24, 

2018; the typewritten application listed Minh Tran as the pharmacist-in-charge,

while a handwritten notation listed Ortiz on the permit application as a 
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pharmacist to be employed by Health Smart and as the pharmacist-in-charge; 

(2) photographs taken of the Health Smart premises during the DCA's inspection 

on March 26, 2018 including a picture of a sign in Health Smart's window listing 

Ortiz as the pharmacist-in-charge; (3) a DCA inspection report issued March 29, 

2018 designating Ortiz as the recipient for the "Pharmacy Permit/CDS License 

Approval Letter"; (4) a Health Smart Pharmacy Personnel Identification Form 

indicating Ortiz was employed as a "consultant" and worked forty hours a week; 

(5) an agreement dated May 1, 2018 in which Ortiz agreed to sublease the ground 

floor of a building—Health Smart's place of business—to her sister; (6) a Notice 

of Change of Pharmacist-in-Charge for Health Smart designating Ortiz as the 

outgoing pharmacist-in- charge as of April 15, 2018 and Minh Tran as the 

incoming pharmacist-in-charge as of April 16, 2018; Cayaba-Wong is listed as 

the permit holder of Health Smart; and (7) a certificate of formation for Health 

Smart as an LLC listing Cayaba-Wong as its registered agent and sole member 

and manager. 

After reviewing this documentation, plaintiff no longer desired to enforce 

the settlement agreement. Instead, it filed a motion to vacate the settlement 

agreement and for leave to file an amended complaint. Plaintiff asserted 

defendants purposely deceived it regarding Ortiz's involvement with Health 
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Smart and it would not have consented to the settlement agreement if it knew

Ortiz was violating the restrictive covenants. 

Defendants opposed the motion. Ortiz submitted an affidavit in which she 

denied misleading the court or violating the Agreement. While she 

acknowledged "assist[ing] [her] sister when [her sister] initially opened [Health 

Smart][,]" she asserted this assistance ended before plaintiff filed its initial law 

suit in August 2018. Ortiz stated she never owned Health Smart and was never 

employed by the business. She further explained she did not believe she violated 

the Agreement because she was never compensated by Health Smart.

Ortiz also explained why her name appeared on the documentation 

produced by McKesson and the DCA. She stated she originally leased a space

in May 2017 to allow her brother to open a business, but he returned to the 

Philippines after his application for a business visa was denied in February or 

March 2018. Ortiz further stated that once Health Smart became operational, 

her sister began renting the space directly from the property owner. 

Ortiz explained that her name appeared on certain forms because she 

attended the March 2018 inspection of Health Smart when her sister and other 

employees were unable to be present. Ortiz stated she informed the inspector 

she was not employed by Health Smart. According to Ortiz, the inspector told 
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her to put her name on Health Smart's permit application anyway because she 

was present during the inspection. The inspector "told [her] that the paperwork 

had to be put in [her] name . . . however, the owner could just call the Board of 

Pharmacy before the license was issued, so that the correct name (Minh Tran) 

could be put on the license." 

Ortiz further stated that:

During the inspection, [the inspector] also advised me 

that in order for the process to move forward, he had to 

put my name on the application form. That is why my 

name was hand-written by [the inspector] and Ms. 

Tran's name is typed. [The inspector] also instructed 

me to print out a piece of paper with my name and 

Pharmacist in Charge and put it on top of Minh Tran's 

name so that he could take a picture of it.

Cayaba-Wong also submitted an affidavit essentially corroborating the 

statements made by Ortiz. She conceded that Ortiz assisted her "initially" when 

she opened the pharmacy, but the "assistance ended prior to the commencement 

of the lawsuit." She stated further that Ortiz was never an employee or 

pharmacist at Health Smart and Ortiz was not compensated for her "assistance."

Ortiz's sister explained that Ortiz was not listed anywhere in the 

paperwork when Cayaba-Wong filed the pharmacy permit application with the 

Board of Pharmacy in February 2018.
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Cayaba-Wong also advised that the initial inspection of the new pharmacy 

was scheduled for March 23, 2018. Although Cayaba-Wong and Tran waited at 

the pharmacy for the inspector to arrive, he never appeared. The inspector then 

rescheduled the appointment for March 26, but neither Cayaba-Wong or Tran 

were available to meet him that day. Therefore, Cayaba-Wong asked Ortiz to 

show the inspector the proposed pharmacy.

According to Cayaba-Wong, she later contacted the Board of Pharmacy 

regarding the proper name for the pharmacist on the license. She stated she was 

told to fill out a "Notice of Change of Pharmacist in Charge" form. She did so 

and she later received two licenses in the mail – one listed Tran's name, the other 

listed Ortiz. Defendants' opposition included a copy of the license from the 

DCA issued April 11, 2018 and listing Minh Tran as the pharmacy license 

holder. 

Additionally, defendants included an affidavit from Valeroso in which he 

stated he was "correct[ing] material inaccuracies" in the earlier certifications he 

had provided to plaintiff. He stated the conversations he described earlier 

between he and Ortiz "did not occur as written" and he was "pressured to sign" 

them by plaintiff's owner, who was aware the certifications "had information 

that was completely untrue. . . ." 
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In a reply certification, plaintiff's owner contended Valeroso's statements 

were "fabricated" and "obvious retaliation for a recent failed real estate 

transaction between us and because I refused to loan him money." 

The Chancery Division judge issued an oral decision on September 27, 

2019 denying plaintiff's motion to vacate the settlement agreement. The judge 

noted plaintiff could only rescind the settlement agreement with clear and 

convincing proof that the settlement was achieved fraudulently. 

The judge stated: "Although plaintiff submits evidence that might support 

an allegation, those assertions [were] quite clearly refuted with substantial 

evidence and explanation by defendants." Therefore, "[a]t best, because the 

competing affidavits submitted, and the speculation of plaintiff in particular, 

. . . the evidence [was] [] in equipoise and insufficient to permit a conclusion 

that [was] based on the higher standard of proof, clear and convincing evidence." 

A memorializing order was entered the same day.

On January 14, 2020, the court entered a consent judgment that dismissed 

the case with prejudice but preserved plaintiff's right to appeal the denial of its 

motion to vacate the settlement agreement. 

On appeal, plaintiff contends defendants' material misrepresentation that 

Ortiz did not violate the Agreement induced plaintiff to settle the case. Plaintiff 
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asserts the court erred in concluding it did not show clear and convincing

evidence of the misrepresentation and fraud in the settlement of the initial 

lawsuit.

The decision to vacate a judgment or order lies within the sound discretion 

of the trial judge, guided by principles of equity. Hous. Auth. of Town of

Morristown v. Little, 135 N.J. 274, 283 (1994). Accordingly, we will only 

reverse a trial court's ruling on a motion to vacate where there is an abuse of 

discretion because its "'decision [was] made without a rational explanation, 

inexplicably departed from established policies, or rested on an impermissible 

basis.'" U.S. ex rel. U.S. Dep't of Agric. v. Scurry, 193 N.J. 492, 504 (2008) 

(alteration in original) (quoting Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 

571 (2002)). 

As stated, plaintiff asserts it demonstrated by clear and convincing 

evidence that Ortiz made a material misrepresentation regarding her compliance 

with the Agreement's non-competition provisions. Plaintiff asserts the 

documents produced by McKesson and the DCA "unquestionably prove[]" Ortiz 

violated the Agreement. We disagree.

There is a strong public policy in favor of enforcing settlement 

agreements, which is "based upon 'the notion that the parties to a dispute are in 
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the best position to determine how to resolve a contested matter in a way which 

is least disadvantageous to everyone.'" Brundage v. Est. of Carambio, 195 N.J. 

575, 601 (2008) (quoting Peskin v. Peskin, 271 N.J. Super. 261, 275 (App. Div.

1994)). Accordingly, courts "strain to give effect to the terms of a settlement 

wherever possible." Jennings v. Reed, 381 N.J. Super. 217, 227 (App. Div.

2005) (citation omitted). 

Settlement agreements will only be vacated upon a showing of "'fraud or 

other compelling circumstances.'" Brundage, 195 N.J. at 601 (quoting 

Pascarella v. Bruck, 190 N.J. Super. 118, 125 (App. Div. 1983)). Moreover, a 

party alleging fraud bears the burden of proving such fraud through clear and 

convincing evidence. Nolan by Nolan v. Lee Ho, 120 N.J. 465, 472 (1990). 

To establish a claim of common law fraud, a party must demonstrate the 

following elements: "(1) a material misrepresentation of a presently existing or 

past fact; (2) knowledge or belief by the defendant of its falsity; (3) an intention 

that the other person rely on it; (4) reasonable reliance thereon by the other 

person; and (5) resulting damages." Allstate New Jersey Ins. Co. v. Lajara, 222 

N.J. 129, 147 (2015) (citation omitted). Where, as here, a party seeks an 

equitable remedy in lieu of monetary damages, the party need not prove the

defendant's scienter. Id. at 148. 
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The Chancery Division did not misapply its discretion in finding plaintiff 

did not present clear and convincing evidence that defendants acted fraudulently 

in the procurement of the settlement agreement. Although plaintiff submitted 

some evidence in support of its motion, defendants countered that evidence with 

their own documentation and explanations. 

Ortiz explained why she was present during the inspection and why there 

were handwritten notations on the permit application. The document changing 

the pharmacist in charge from Ortiz to Tran corroborated her explanation of the 

events. These explanations were not contradicted. 

Moreover, in short order, within days after defendants submitted 

opposition to the initial order to show cause, the parties reached a resolution of 

their issues with the assistance of counsel. The settlement was placed on the 

record. The transcript reflects the parties all desired a mutual release of any and 

all claims arising out of the Agreement. To secure the mutual release of claims, 

plaintiff was willing to reduce the length of the Agreement's non-competition 

and non-solicitation provisions from two and three years respectively, to only 

an additional six months. 

Plaintiff did not provide any evidence to support its contention that it 

relied upon Ortiz's assertion that she had not violated the Agreement in deciding
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to settle. In fact, to the contrary, counsel stated during the settlement proceeding

that the important consideration for resolving the dispute was that, going 

forward, Ortiz comply with the restrictive covenants until May 2019. Plaintiff

has not presented any evidence that Ortiz did not comply with the restrictions 

during the pertinent time period.

Many factors go into a party's decision to settle a dispute. Here, plaintiff 

did not present any of its reasons for settlement when counsel placed the terms 

of the settlement agreement on the record, other than its demand that Ortiz 

comply with the restrictive covenants until May 2019. It is as likely as any other 

reason that plaintiff was willing to reduce these restrictive covenants in 

exchange for Ortiz's agreement not to pursue her counterclaims. Without 

anything more presented in the record, the Chancery judge could not find 

plaintiff relied on Ortiz's denial of any violation in making the decision to settle 

its claims. 

We are satisfied the court's determination that the evidence was "in 

equipoise" was supported by the record and not a mistaken exercise of 

discretion. Plaintiff's evidence was insufficient to support a clear and 

convincing conclusion of fraud to overturn the settlement agreement. 

Affirmed.