SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2014-16T1

W. JAMES MAC NAUGHTON,

Plaintiff-Appellant,

v.

SHAI HARMELECH, USA

SATELLITE & CABLE, INC.,

CABLE AMERICAN, INC., and

NORTH AMERICAN CABLE

EQUIPMENT COMPANY, INC.,

Defendants-Respondents,

and

RUSSIAN MEDIA GROUP, LLC,

Defendant.

________________________________

Argued April 30, 2018 – Decided

Before Judges O'Connor and Vernoia.

On appeal from Superior Court of New Jersey, 

Law Division, Sussex County, Docket No. L0442-12.

W. James Mac Naughton, appellant, argued the 

cause pro se.

Lynette Siragusa argued the cause for 

respondents Shai Harmelech, USA Satellite & 

Cable, Inc., and Cable America, Inc. 

NOT FOR PUBLICATION WITHOUT THE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.

August 9, 2018
A-2014-16T1

2

(Siragusa Law Firm, LLC, attorneys; Lynette 

Siragusa, of counsel and on the brief; 

Robert D. Bailey, on the brief).

Joseph D. Cronin argued the cause for 

respondent North American Cable Equipment 

Company, Inc. (The Cronin Firm, attorneys; 

Joseph D. Cronin and Benjamin E. Smith, on 

the brief).

PER CURIAM

Plaintiff W. James Mac Naughton appeals from a December 22, 

2016 order granting summary judgment to defendants Shai 

Harmelech, USA Satellite & Cable, Inc., and Cable America, Inc.1 

We affirm. 

I

Plaintiff, an attorney, represented defendants in 

litigation in the United States District Court for the Northern 

District of Illinois in 2009. Harmelech is the president of 

Cable America, Inc., and vice president of USA Satellite & 

Cable, Inc. Defendants fell behind on the payment of 

plaintiff's fees and, as a result, in August 2009, the parties 

executed a promissory note and security agreement. The security 

agreement states in pertinent part:

 

1 On October 12, 2016, the court dismissed the complaint against 

defendant North American Cable Equipment, Inc., with prejudice; 

plaintiff does not appeal from that order. In 2014, plaintiff 

settled and dismissed his complaint against defendant Russian 

Media Group, LLC. The term "defendants" in this opinion refers 

only to the remaining defendants, unless stated otherwise. 
A-2014-16T1

3

As security for performance of the 

obligation, [defendants] give[] [plaintiff] 

a security interest in all of the 

[defendants'] right, title, and interest in 

any and all real or personal property 

wherever located (the "Property). 

[Defendants] authorize[] [plaintiff] to sign 

[defendants'] name to any UCC-1 or other 

documents reasonably necessary to perfect 

the security interest in the Property. . . .

[Defendants] will not sell, lease or 

otherwise transfer the Property nor allow 

anyone else to obtain a security interest or 

line upon it during the term of this 

Security Agreement. 

Defendants did not pay in accordance with the terms of the 

promissory note. Defendants asserted plaintiff's purported 

security interest was meaningless as a matter of law and, thus, 

plaintiff did not in fact have an interest in their property. 

In response, in October 2009, plaintiff filed an action in the 

United States District Court for the District of New Jersey to 

collect his unpaid fees, which were approximately $66,000. In 

the fourth count of that complaint, plaintiff sought a judgment 

declaring his security interest in defendants' property valid. 

Defendants moved to dismiss the complaint on the ground it 

failed to state a claim upon which relief can be granted. See

Fed. R. Civ. P. 12(b)(6). On September 22, 2010, District Judge 

Peter G. Sheridan held the parties' August 12, 2009 agreement 

did not create a security interest in either defendants' real or 
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personal property. Judge Sheridan explained that the 

description of the collateral in the agreement was 

"supergeneric" and, for that and other reasons, dismissed the 

fourth count of the complaint. 

In his second amended complaint2, plaintiff included a count 

that sought reformation of the language in the security 

agreement. In that count, plaintiff acknowledged Judge Sheridan 

had ruled he did not have a security interest in defendants' 

real or personal property and that the "effect of these rulings 

is that plaintiff does not have the enforceable 'secured 

promissory note' the parties agreed to on August 11, 2009." 

However, plaintiff alleged the defective description of the 

property in the original agreement was a mutual mistake, and 

sought reformation of the security agreement "nunc pro tunc to 

express the parties' intention that defendants have pledged all 

of their personal and real property as security for payment of 

their obligations to [me] and that [I] may enforce that security 

interest by all available legal means. . . ." 

While the action was still pending and the question of 

whether he was entitled to reformation of the security agreement 

remained unresolved, on June 20, 2011, plaintiff created and 

 

2 For reasons unnecessary to detail, after filing a first 

amended complaint, defendants consented to plaintiff filing a 

second amended complaint.
A-2014-16T1

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executed his and defendants' signatures to an amended security 

agreement. The new agreement states plaintiff has an interest 

in various properties, which are described in more detail than 

in the original agreement. Plaintiff maintained the amended 

security agreement cured the "supergeneric" defect found by 

Judge Sheridan. 

Significantly, according to the amended security agreement, 

plaintiff acquired an interest in any judgments USA Satellite & 

Cable, Inc. (USA) obtained against North American Cable 

Equipment, Inc., (North American). Plaintiff inserted such 

language into the amended security agreement because he had 

become aware USA had or was about to recover a judgment from 

North American. Plaintiff wanted to recover this asset, a form 

of personal property, from USA in order to pay down defendants' 

debt. 

Plaintiff believed he had the authority to create and 

execute defendants' signatures to the amended security agreement 

because the original security agreement included the following 

language: "[Defendants] authorize[] [plaintiff] to sign 

[defendants'] name to any UCC-1 or other documents reasonably 

necessary to perfect the security interest in the Property 

. . . ." 
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The amended security agreement includes similar language, 

and also states the "description" of the property in the amended 

security agreement perfects plaintiff's interest in defendants' 

property. The amended security agreement states: 

[Defendants] agree[] and understand[] that 

the . . . amended description is reasonably 

necessary to perfect [plaintiff's] security 

interest in the Property and [defendants] 

ha[ve] therefore authorized [plaintiff] to 

sign [defendants'] name to this [amended 

agreement]. . . . 

Except as expressly modified herein, the 

Promissory Note and Security Agreement dated 

August 12, 2009 continues in full force and 

effect. 

Months later, plaintiff filed a motion for leave to file a 

third amended complaint to add a count permitting him to enforce 

the amended security agreement, so that he could "take 

possession of all of [defendants'] property [as] described in 

the . . . amended security agreement." On March 30, 2012, 

District Judge Esther Salas issued an opinion denying 

plaintiff's motion. 

Judge Salas observed plaintiff's claim was based on his 

assertion he had the right to unilaterally amend the original 

security agreement, but that plaintiff "failed to direct this 

court to any case law in support of his contention that he is 
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entitled to unilaterally amend the central agreement[,] . . . 

much less after that agreement has been deemed invalid." 

The judge further commented that Judge Sheridan had 

"already found the Security Agreement to be invalid and any 

efforts to change the terms of that agreement to circumvent this 

court's ruling flies in [the] face of notice, fair play, and 

finality." However, given the nature of the motion, Judge Salas 

ultimately declined "to take a position on the validity of this 

legal theory." She denied the motion on procedural grounds, 

finding plaintiff "acted with undue delay, bad faith, and [that] 

such an amendment would place undue burden on defendants." 

Plaintiff did not seek leave to file any additional complaints 

in the federal action, making the second amended complaint the 

final, operative complaint in that action.

When Judge Salas denied his motion for leave to file a 

third amended complaint, plaintiff filed a complaint in the Law 

Division. The only relief he sought in that complaint was an 

order declaring he had a "duly perfected security interest in 

all of defendants' property as described in the . . . amended 

security agreement. . . ." However, that Law Division complaint 

was amended three times. The third amended complaint, the last 

complaint filed in the Law Division, does not seek the relief 

plaintiff requested in his original complaint. 
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The third amended complaint alleges that: (1) defendants 

breached the amended security agreement by assigning certain 

assets to third parties; (2) defendant Harmelech tortiously 

interfered with plaintiff's contractual rights by directing USA 

to assign the North American judgment to a third party; and (3) 

defendants' assignment of the North American judgment to the 

third party constituted a conversion of plaintiff's property. 

Meanwhile, the federal action proceeded simultaneously with 

the action filed in the Law Division. In 2016, plaintiff filed 

a motion in the federal action seeking summary judgment on the

count in his second amended complaint that sought reformation of 

the language in the original security agreement that Judge 

Sheridan had found invalid. Defendants crossed moved to dismiss 

such count. 

In that motion, plaintiff argued the subject language in 

the original agreement was the result of a unilateral mistake, 

see St. Pius X House of Retreats, Salvatorian Fathers v. Diocese 

of Camden, 88 N.J. 571, 577 (1982) (noting the grounds 

justifying reformation of an instrument are either mutual 

mistake or unilateral mistake by one party and fraud or 

unconscionable conduct by the other). 

For reasons we need not detail here, Judge Kevin McNulty 

rejected plaintiff's claim the language in the original 
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agreement was the result of a unilateral mistake, and determined 

the language could not be reformed. Among other things, the 

judge found, "[plaintiff] drafted this security agreement and 

pressed it upon defendants; the responsibility for its defects 

is his, and he cannot show that the equities tip in his favor." 

The judge granted defendants' motion for partial summary 

judgment and entered an order dismissing the count seeking 

reformation of the original security agreement. Plaintiff did 

not appeal from Judge McNulty's order. 

Months later, defendants prevailed on a motion for summary 

judgment in the Law Division. The court entered an order on 

December 22, 2016 dismissing the complaint against defendants

with prejudice. It is this order plaintiff challenges on 

appeal. 

In their motion for summary judgment in the Law Division, 

defendants pointed out that Judge Sheridan had found the 

original security agreement invalid, because the description of 

the property in such agreement was so defective it failed to 

convey to plaintiff an interest in any of defendants' property. 

Defendants also noted Judge McNulty subsequently determined the 

defective language in the original agreement could not be 

reformed. Defendants argued the amended security agreement is

also invalid because, although the description of the property 
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in such agreement is more detailed, Judge McNulty's ruling 

precluded plaintiff from reforming the language in the original 

security agreement. 

Defendants also noted - and plaintiff did not deny - that 

he had stated in a letter to defense counsel that Judge 

McNulty's decision "is binding on the parties in [the Law 

Division] and adjudicates all of the issues arising out of the 

same facts." 

In his opposition to defendants' summary judgment motion, 

plaintiff did not dispute that, as a result of Judge Sheridan's 

ruling, the language in the original security agreement failed 

to provide him with an interest in defendants' property. 

However, he contended the other terms in the original security 

agreement were still valid and, because the original agreement 

allegedly gave him the authority to change such document, the 

amended agreement he created is valid. 

Plaintiff also argued Judge McNulty did not rule upon his 

ability to create the amended security agreement and thus such 

agreement exists and is binding. That is, plaintiff contends 

the federal court neither adjudicated nor ruled he did not have 

the authority to unilaterally change the original agreement. 

The Law Division judge determined Judge McNulty essentially 

found the amended agreement unenforceable, and that such 
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decision is binding pursuant to the doctrine of collateral 

estoppel, see In re Estate of Dawson, 136 N.J. 1, 20 (1994), 

thereby precluding re-litigation of such issue. The Law 

Division judge reasoned that, because the amended security 

agreement does not give plaintiff a security interest in 

defendants' property and the claims plaintiff asserts in the 

third amended complaint depend upon the agreement's validity, 

plaintiff's claims fail as a matter of law. 

II

On appeal, plaintiff asserts the following arguments for 

our consideration:

POINT A: JUDGE MCNULTY DID NOT SPECFICALLY 

HOLD THE AMENDED [SECURITY AGREEMENT] WAS 

INVALID.

POINT B: JUDGE MCNULTY DID NOT HAVE 

JURISDICTION TO RULE THE AMENDED [SECURITY 

AGREEMENT] WAS INVALID. 

POINT C: THE DISMISSAL OF THE REFORMATION 

CLAIM DOES NOT COLLATERALLY ESTOP THE 

AUTHORITY CLAIM BECAUSE THE TWO CLAIMS ARE 

NOT IDENTICAL.

POINT D: IT WOULD BE UNFAIR TO COLLATERALLY 

ESTOP PLAINTIFF'S CLAIMS ARISING OUT OF THE 

[SECURITY AGREEMENT]. 

POINT E: PLAINTIFF'S CLAIMS BASED ON THE 

NON-ASSIGNMENT CLAUSE CANNOT BE BARRED BY 

INVALIDATING THE [SECURITY AGREEMENT].
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We review a trial court's decision on summary judgment "de 

novo, employing the same standard used by the trial court." 

Tarabokia v. Structure Tone, 429 N.J. Super. 103, 106 (App. Div. 

2012) (citing Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 

N.J. Super. 162, 167 (App. Div. 1998)). However, we give "no 

deference to the trial judge's conclusions on issues of law." 

DepoLink Court Reporting & Litig. Servs. v. Rochman, 430 N.J. 

Super. 325, 333 (App. Div. 2013). We also "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." Mem'l Props., LLC v. Zurich Am. Ins. Co., 210 N.J. 512, 

524 (2012) (citing Brill v. Guardian Life Ins. Co. of Am., 142 

N.J. 520 (1995)). 

After reviewing the record, the parties' arguments, and the 

applicable legal principles, we conclude plaintiff's arguments 

are without sufficient merit to warrant discussion in a written 

opinion. R. 2:11-3(e)(1)(E). However, we make the following 

comments. 

As found by Judge McNulty, the language in the original 

security agreement that purportedly gave plaintiff an interest 

in defendants' property was not amenable to being altered or 

reformed. Therefore, even if the original security agreement 

gave plaintiff the authority to unilaterally change the terms of 
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such agreement, as a matter of law Judge McNulty's decision 

precludes him from doing so. 

Further, we reject as unsupported the premise the original 

security agreement provided plaintiff license to change its 

terms. That agreement authorized plaintiff to sign defendants' 

name to any UCC-1 or other document reasonably necessary to 

perfect the security interest in the property as defined by such 

agreement. However, Judge Sheridan found the definition of 

property in the original agreement too indefinite to be binding; 

therefore, the property in which plaintiff can perfect a 

security interest cannot be ascertained under the terms of the 

original security agreement. 

Last, plaintiff's authority to sign documents is limited to 

signing those which are reasonably necessary to perfect his 

security interest in the property defined by the original 

security agreement, not alter the terms of the original 

agreement and to unilaterally define the property in which 

plaintiff has a security interest. 

Affirmed.