Court Opinion

ID: 4428495
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:07:48.464855+00
Date Added: 2024-06-11T14:50:48.853935
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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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                                        3
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.

                                                                       A-4908-17T1
                                        4