Court Opinion

ID: 4199965
Source: CourtListenerOpinion
Date Created: 2017-08-30 14:09:47.093727+00
Date Added: 2024-06-11T14:41:30.293017
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NOT FOR PUBLICATION WITHOUT THE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-2898-14T1

NORTH JERSEY MEDIA GROUP, INC.,

        Plaintiff-Appellant,

v.

IC SYSTEM SOLUTIONS, INC., COMPUTER
NETWORK SOLUTIONS, LLC, PHILIP NOLAN,
NANCY NOLAN, and THE ESTATE OF PETER
VAN LENTEN, JR.,

     Defendants-Respondents.
______________________________________

              Argued December 7, 2016 – Decided August 30, 2017

              Before Judges Accurso and Manahan.1

              On appeal from Superior Court of New Jersey,
              Law Division, Bergen County, Docket No. L-
              2791-13.

1
  Hon. Carol E. Higbee participated in the panel before whom this
case was argued. The opinion was not approved for filing prior
to Judge Higbee's death on January 3, 2017. Pursuant to
R. 2:12-2(b), "Appeals shall be decided by panels of 2 judges
designated by the presiding judge of the part except when the
presiding judge determines that an appeal should be determined
by a panel of 3 judges." The presiding judge has determined
that this appeal shall be decided by two judges.
         Samuel J. Samaro argued the cause for
         appellant (Pashman Stein, attorneys; Mr.
         Samaro and Adam B. Schwartz, on the brief).

         John R. Dineen argued the cause for
         respondents IC System Solutions and Philip
         and Nancy Nolan (Netchert, Dineen &
         Hillmann, attorneys; Mr. Dineen and Matthew
         P. Posada, on the brief).

         Giuseppe Franzella argued the cause for
         respondent Computer Network Solutions
         (Lazer, Aptheker, Rosella & Yedid, PC,
         attorneys; Christina M. Rosas, on the
         brief).

         Respondent Laurie Van Lenten, on behalf of
         the Estate of Peter Van Lenten, Jr., joins
         in the brief of respondents.

PER CURIAM

    Plaintiff North Jersey Media Group, Inc. appeals from the

entry of summary judgment dismissing its complaint for fraud,

consumer fraud, unjust enrichment, civil conspiracy and

conversion against defendants Computer Network Solutions, LLC,

IC System Solutions, Inc., Philip Nolan, Nancy Nolan and the

Estate of Peter Van Lenten, Jr.       North Jersey also appeals from

the denial of a discovery motion and a motion to amend its

complaint.

    Because we find the motion record on summary judgment

reveals material facts in dispute and that viewing the facts

most favorably to North Jersey makes clear it has produced

sufficient evidence to put its claims of fraud, consumer fraud,

                                  2                          A-2898-14T1
unjust enrichment and civil conspiracy before a jury, we reverse

the order of summary judgment on those counts.   We also conclude

the trial court mistakenly exercised its discretion in denying

North Jersey's discovery motion and direct the court to consider

North Jersey's motion to amend its complaint on remand.   We

affirm the grant of summary judgment dismissing North Jersey's

claim for conversion.

     We present the facts in the light most favorable to North

Jersey and give it the benefit of all favorable inferences in

support of its claim.   R. 4:46-2(c); Brill v. Guardian Life Ins.

Co. of Am., 142 N.J. 520, 540 (1995).   North Jersey is a media

company publishing daily and weekly newspapers and maintaining

two news sites.   Computer Network Solutions is a technology

company providing equipment and services designed to "maintain

and safeguard" their customers' "business-critical IT

operations."   Philip Nolan is a fifty percent owner of Computer

Network Solutions.2   Nolan and his wife, Nancy, created IC

2
  Nolan apparently sold his interest in Computer Network
Solutions to his partner, Alan Cook, for $2,000,000 in 2013.
Cook sold Computer Network Solutions for $10,000,000 to another
entity in 2014 during the pendency of this suit. The trial
court denied North Jersey's motion to amend its complaint to add
Cook as a defendant when it granted summary judgment to all
defendants, deeming the motion moot. In light of our
disposition of the appeal, we vacate that order and remand the
motion for consideration on the merits.

                                3                         A-2898-14T1
System, a smaller company offering the same products and

services as Computer Network Solutions.   The two companies share

office space, refer business back and forth and frequently work

projects together.

     In 2009, North Jersey fired its Vice President of

Information Technology, Peter Van Lenten, Jr.,3 who had been with

the company for over twenty years.   In the wake of Van Lenten's

firing, North Jersey discovered the hard drive had been removed

from Van Lenten's office computer, his administrative assistant

had a brand new company laptop she was not authorized to possess

and North Jersey could not figure out why it made three large

payments to IC System totaling over $130,000.4

3
  Van Lenten died in 2010 before North Jersey instituted this
action.
4
  When Bryan Shaughnessy, a network analyst responsible for
networking at North Jersey, inquired about the payments with
Phil Nolan, Nolan told him that $77,195.49 was for a two-year
Network and Security Monitoring contract and $44,298 was for an
annual On-Demand Hardware Support contract. Shaughnessy replied
that Nolan's network and security monitoring equipment "was
taken off line long ago" and that North Jersey had not
"corresponded with [Computer Network Solutions'] technical
people in possibly several years in regards to the [n]etwork and
[s]ecurity [m]onitoring," and asked whether Nolan could explain
why North Jersey "is paying for a service when it is clearly not
in use." Shaughnessy also wrote he was "shocked to see" that
North Jersey was paying for on-demand hardware support for the
network for which Shaughnessy was responsible and asked if Nolan
could tell him "if [North Jersey] has ever utilized this support
(any dates/examples)?" Nolan never responded. At deposition,
                                                      (continued)

                               4                           A-2898-14T1
    Those irregularities precipitated its investigation into

Van Lenten's management of North Jersey's multi-million-dollar

technology budget and his relationship with Phil Nolan, a

principal of both IC System and Computer Network Solutions.

What it found prompted this lawsuit.

    North Jersey learned that Van Lenten had over the course of

several years regularly evaded company policy that all contracts

over $10,000 be reviewed by North Jersey's legal department, and

that he purchased millions of dollars of goods and services from

IC System and Computer Network Solutions on North Jersey's

behalf without written contracts.   North Jersey also learned

that Van Lenten had a close personal relationship with Nolan.

The two met weekly for drinks, paid for by Nolan, had lunch

together at least three times a month and met for dinner four

times a year.   Nolan's companies also paid for a couple of

expensive, out-of-state fishing trips for Van Lenten.   Following

its investigation, North Jersey instituted this suit alleging

(continued)
Nolan asserted he contacted either Van Lenten or Joe Cuervo,
described in the papers as Van Lenten's "right-hand man," about
Shaughnessy's email, who told him they would "look into it or
don't worry about it or something to that effect." North Jersey
asserts that explanation was false as Van Lenten had been fired
six months before Nolan's email exchange with Shaughnessy and
Cuervo had left North Jersey to take a job with Nolan eighteen
months before.

                                5                        A-2898-14T1
Van Lenten abused his position of trust and breached his

fiduciary duties to allow IC System and Computer Network

Solutions to steal more than a million dollars from the company.

    Specifically, North Jersey alleged that IC System and

Computer Network Solutions swindled it in connection with at

least four different projects undertaken at Van Lenten's

request: a security camera upgrade at North Jersey's printing

facility; the sale and installation of LibertyNet software;

payment card scanning; and network security and monitoring.

North Jersey put forth the following facts in support of those

claims in opposition to defendants' summary judgment motions.

Security Camera Upgrade

    Although Nolan and IC System had no experience installing

security cameras and Computer Network Solutions had never

performed a camera installation on the scale North Jersey

required, Van Lenten hired them for a project to install thirty

new cameras, ten in the press room and twenty in the mailroom in

North Jersey's Rockaway facility at a cost of $109,865 and

eighteen Pelco brand cameras and associated equipment outside

the building and in specified common areas for $172,000.     Van

Lenten also authorized a purchase order for spare cameras and

accessories as well as a Pelco Constant Scan Camera and an

                               6                           A-2898-14T1
annual maintenance contract for the camera system at a cost of

$33,000 per year.

    North Jersey's facility manager, Frank Devetori, certified

that he was the one who advised his superiors that the security

camera system in Rockaway was outdated and should be replaced.

He researched options for upgrades and obtained a quote from a

vendor the company had previously used for security camera work.

Although Devetori claimed the security cameras were his

responsibility, he averred that Van Lenten took over the

project, shutting Devetori out, and brought in Computer Network

Solutions and IC System to do the work without soliciting other

bids.   Devetori claimed Computer Network Solutions and IC System

performed the work on nights and weekends, a highly unusual

practice for such planned upgrades, which he posits was done to

avoid his observation of the project.

    When Devetori reviewed the bills for the project after Van

Lenten was fired, he was shocked.   Based on the quote he

received from the company's former vendor, he expected the

project to cost less than half of what Computer Network

Solutions and IC System billed North Jersey.   He also certified

that North Jersey did not get everything it paid for.     He could

only account for half the Pelco cameras Computer Network

Solutions and IC System claimed to have installed and none of

                                7                           A-2898-14T1
the spares and accessories beyond the Constant Scan Camera.

Devetori also claimed that he was responsible for maintenance of

the system, and that neither Computer Network Solutions nor IC

System ever serviced the camera system to his knowledge.

    Yigal Rechtman, a certified public accountant and certified

fraud examiner specializing in information technology, retained

by North Jersey to provide expert testimony in the matter,

reviewed the invoices Computer Network Solutions and IC System

submitted to North Jersey against Computer Network Solutions'

purchase orders for the equipment.   Corroborating Devetori's

certification that North Jersey only received half of the Pelco

cameras it paid for, Rechtman could only find purchase orders

for eight Pelco cameras and associated equipment.

    Rechtman also found that Van Lenten authorized payment of

IC System's invoice for $35,174.90 for a replacement camera that

should have been included in the supposed spare-parts

maintenance plan for which North Jersey paid $36,230.16.     He

also reported that Van Lenten repeatedly "modified the budget

coding for the account associated with the payment for the

purported service" and that such conduct is consistent with

attempts to conceal payments and "avoid budgetary outliers, as

would be the case in a purchasing fraud."

                               8                           A-2898-14T1
    Jeffrey Zwirn, the expert North Jersey retained to testify

on the design and installation of electronic security and video

surveillance systems, inspected the Rockaway facility and

reviewed schematics provided by Computer Network Solutions and

IC System.     He concluded, among other things, that neither

Company had the required New Jersey licenses for design and

installation of a closed-circuit camera surveillance system like

the one they designed and installed for North Jersey, and that

Computer Network Solutions used unlicensed electricians on the

project.     Zwirn claimed the outside wiring for the cameras was

improperly performed and that instead of installing what they

represented would be provided, Computer Network Solutions and IC

System installed lower cost or substandard cameras and

equipment.     He also concluded that the cameras intended for the

press room were never installed as the room was not even wired

for cameras.

LibertyNet

    Phil Nolan testified at deposition that Van Lenten

approached him about purchasing document management software

called LibertyNet, for North Jersey.     IC System was a designated

reseller of the software and the LibertyNet logo was on IC

System's stationery.    LibertyNet was proposed for use in North

Jersey's human resources department.     After trying the software,

                                  9                        A-2898-14T1
however, the human resources department rejected it and had it

removed from its computers.   Van Lenten bought the software from

IC System after its rejection at a cost of $84,800.    North

Jersey also contends that documents produced by IC System show

that it paid LibertyNet only $12,383 for the same software it

sold to North Jersey for $84,800.

    North Jersey never issued a written purchase order for the

LibertyNet software.   Instead, Nolan testified that Van Lenten

gave him "a verbal purchase order."     North Jersey contends Van

Lenten circumvented North Jersey policy that no invoice be paid

for new products without a written purchase order, and further

deceived the company by having Nolan disguise the purchase by

sending five monthly invoices, each for $16,960, for "LibertyNet

Maintenance HR Project."

    Rechtman, North Jersey's fraud examiner, opined that

spreading the payment over several months and mischaracterizing

the purchase as "maintenance," "indicate that Van Lenten was

intentionally attempting to conceal the purchase of the

software."   He claimed that use of such an "expense smoothing

technique," by which "colluding parties . . . conceal the

magnitude of the billing for budgetary supervisory oversight" is

"common in purchasing fraud schemes."

                               10                          A-2898-14T1
    Cuervo, a former North Jersey employee who was working for

Computer Network Solutions at the time the suit was pending in

the trial court, testified at deposition that he executed the

LibertyNet licensing agreement on behalf of North Jersey three

months after the human resources department rejected the

software.   Although aware that the agreement required review by

the legal department, Cuervo testified he signed the documents

without such review at Van Lenten's direction.   Although North

Jersey claimed the LibertyNet software was never used by anyone

at North Jersey, Cuervo claimed he worked with North Jersey's

Weekly Division to try and implement it there.   Notwithstanding

the human resources department's rejection of the software and

North Jersey's claim it was never used elsewhere in the company,

Van Lenten authorized annual payments to IC System for

"maintenance" of the software for three years at a cost of

$34,000.

Payment Card Scanning

    Nolan testified at deposition that Van Lenten contacted him

to inquire as to whether IC System could perform payment card

scans for North Jersey to detect weaknesses in the company's

network that might expose the credit card information of its

subscribers to hackers.   Nolan was not familiar with the

technology but his partner Cook advised that Computer Network

                               11                           A-2898-14T1
Solutions could perform them.   Computer Network Solutions,

however, had never before performed such scans and has only ever

performed them for North Jersey.     North Jersey claims the reason

for that is "that it is completely unnecessary to hire an

outside vendor to perform the scans if the company has its own

IT department, as [North Jersey] does."

    Cuervo acknowledged at deposition that it might be possible

for "a low-level clerk [to] actually do the scans" today, but

North Jersey could not perform the scans itself in 2007, when

Van Lenten first inquired about the service, because Qualys, the

software provider, "would not work with [North Jersey] directly"

because it was "going strictly through [its] reseller market."

North Jersey, however, produced evidence that it purchased the

Qualys software for the scans in 2007 directly from Qualys for

$2,145, and that Computer Network Solutions charged North Jersey

$10,543 to run the scans that year.

    Bryan Shaughnessy, North Jersey's network analyst, averred

that he could have run the scans for North Jersey in 2007 as he

did for the company in 2008, for a fraction of the cost charged

by Computer Network Solutions and IC System.     Shaughnessy also

claimed that while Computer Network Solutions performed the

scans for North Jersey in 2007, he was unaware "of any [payment

card] scanning performed by [IC System] – who billed [North

                                12                         A-2898-14T1
Jersey] for this service – in 2008."    Shaughnessy claimed that

by 2008, he "was in charge of any running [of] the [payment

card] scanning and . . . did so without any assistance from

[Computer Network Solutions] or [IC System]."     IC System claims

it ran or directed the scans for North Jersey in 2008, for which

it received payment authorized by Van Lenten for $8715.15.

Network Security and Monitoring

    IC System billed North Jersey approximately $75,000 per

year between 2005 and 2008 to monitor its network and detect

security intrusions.   Computer Network Solutions installed two

"Intruder Detector Systems" machines, which Cook claimed cost

between $15,000 to $20,000 each.     Notwithstanding that the

purchase of the machines was a one-time cost passed along to

North Jersey in the first year of the project, Cook admitted at

deposition that IC System continued to charge North Jersey

$70,000 each year thereafter.

    Shaughnessy claimed the system, which was supposed to

provide notification to North Jersey whenever its network and

servers were experiencing problems, "never worked."     He averred

"recall[ing] several instances when [North Jersey's] servers

went down and the monitoring service did not know about it."

Shaughnessy believed that both Computer Network Solutions and

Van Lenten had largely abandoned the project shortly after its

                                13                         A-2898-14T1
installation and that Computer Network Solutions "was simply

billing [North Jersey] for nothing."   He also certified that the

"System Administration and Network Monitoring" service for which

IC System charged North Jersey $5000 per month between November

2003 and May 2007 was simply "another ineffective service

provided by [Computer Network Solutions]."

    Shaughnessy further claimed the "Extended Network Services

with On-Demand Spares" for which North Jersey paid Computer

Network Solutions and IC System approximately $31,500 in 2007

and $44,000 annually in 2008 and 2009, as authorized by Van

Lenten did not even exist.   Specifically, Shaughnessy certified

that the "service literally could not have been in existence

without [him] knowing about it," and he was thus "certain [North

Jersey] was not using this service and [IC System] and [Computer

Network Solutions] were providing nothing to [North Jersey] in

return for the $44,000 annual payment."

    Nolan acknowledged the service was "kind of a unique

opportunity that [North Jersey] came to [him] with, what is

considered emergency service over and above what a standard

maintenance contract would be" and not offered to other

customers.   He agreed that the service "was being used without

[Shaughnessy] knowing it," but claimed that was because Van

Lenten had lost confidence in Shaughnessy's ability to restore

                               14                         A-2898-14T1
the network in the event of an emergency.   Nolan admitted he

kept no written list of the "spares" IC System maintained for

North Jersey and was not aware of whether any "spares" were used

or whether IC System or Computer Network Solutions actually

performed any emergency maintenance or repairs to North Jersey's

network during the period the company billed North Jersey for

the service.   Cook likewise testified at deposition that he did

not have a list of the "spares" Computer Network Solutions

maintained for North Jersey pursuant to this contract and could

not identify any emergency maintenance or repairs to North

Jersey's network during the period the company billed North

Jersey for the service.

    Having reviewed the depositions of Nolan, Cook and Cuervo,

Rechtman, North Jersey's fraud expert, opined that none could

clarify or describe the nature of these different monitoring

services, and that Computer Network Solutions and IC System's

failure to produce any evidence of "on-going exception reports

or notices of downed servers between the years 2007 and 2009"

suggests that although the "Intruder Detector" devices were

installed, they were not "deployed or used in a meaningful way."

Rechtman concluded that the network monitoring Computer Network

Solutions and IC System claim to have done is not supported by

the evidence, and that Van Lenten should have been aware that he

                               15                        A-2898-14T1
was overpaying for services not being provided by Computer

Network Solutions and IC System and not utilized by North

Jersey.

Evidence of Motive or Intent to Collude

     Although acknowledging it was not successful within the

discovery the trial court allowed in demonstrating any direct

benefit to Van Lenten from the many improvident payments he

authorized to Computer Network Solutions and IC System,5 North

Jersey claims it produced direct evidence of the collusive

scheme in the form of email exchanged between Van Lenten and

Nolan.    North Jersey points in particular to exchanges between

the two in connection with a $2,000,000 upgrade to North

5
  While the judge was especially critical on that point, North
Jersey points out that the judge denied its motion to compel
discovery of IC System and the Nolans, stating "[t]he current
request is unreasonable given the time constraints of the
discovery end date [sixty days remained]. Extensive discovery
has been provided as the Defendant is aware of its discovery
obligations and failure to produce may result in preclusion at
the time of trial." The judge denied plaintiff's motion for
reconsideration but extended discovery for four months. Given
that the extension provided the parties six more months of
discovery, the judge's reason for denying the request in the
first instance, the nearness of the discovery end date, no
longer had any vitality. Failure to consider the motion on its
merits was thus a mistaken exercise in discretion. See State in
Interest of A.B., 219 N.J. 542, 554 (2014). Accordingly,
plaintiff's motion to compel discovery from IC System and the
Nolans should be considered on its merits on remand.

                                16                         A-2898-14T1
Jersey's entire computer system IC System proposed to North

Jersey in September 2008.

    Following Van Lenten's review of the first of three

proposals IC System prepared for the upgrade, he sent the

following email to Nolan with a copy to Cook:

           Hope your [sic] having fun getting sunburn
           on the top of your head. Now that we're
           going to move forward I'm digging into some
           of the details in the proposals. I just
           reviewed the desktop piece and have some
           concerns, I've highlighted them in red.
           Next week when you have some time let's get
           Montoya on the phone and go over the issues
           for clarity or reconciliation so we're all
           on the same page. I'll send the other 2
           stages when I'm done going through them.
           Have fun, don't drink too much.

Twenty-two minutes later, Van Lenten sent a second email to

Nolan, this time with no copy to Cook:

           Need to clean up the typo's [sic] and
           misspellings as well as adjust the numbers.
           This can't be sloppy. This is not a
           criticism, the Finance guys don't know what
           they're doing so it's the only thing they
           can focus on to bust balls.

Nineteen   minutes   later,   Van   Lenten   sent   yet   a   third   email,

again, only to Nolan:

           Probably 100K in more room. Please strip my
           comments about money from the documents
           before sharing with Tom. Also need to talk
           about transfer of knowledge, licensing and
           maintenance.

                                    17                            A-2898-14T1
After this exchange, Nolan sent revised proposals to Van Lenten,

which contained approximately $150,000 in increased costs.

North Jersey contends these emails "demonstrate that Van Lenten

was not an IT executive interested in protecting his employer

and obtaining the best possible prices" but was instead

colluding with Nolan and Cook to swindle North Jersey.

    North Jersey contends that any doubt as to whose interests

Van Lenten was promoting are put to rest by another exchange

between Cook and Van Lenten several weeks later.   On December 3,

2008, Cook sent Van Lenten an email with an attached PowerPoint

entitled "Business Impact of Infrastructure," along with a note,

saying: "[I] [j]ust did this for another client.   Would

something like this be helpful to you?"   Van Lenten replied:

         Good stuff, if they had the attention span
         of more than 5 seconds it would work but
         I'll try. Hoping for the best, meeting with
         the family on Tuesday to pitch it.
         Hopefully great holiday for all.

    The trial judge assessed these proofs and the other

evidence adduced on the motions and concluded that North

Jersey's lawsuit was "clearly a classic example of 'buyer's

remorse,'" premised on the "baseless conclusions" of its "self-

proclaimed expert."   He found "[t]he record [is] devoid" of any

complaints by North Jersey over the several years that the

parties did business that defendants overcharged or failed to

                               18                          A-2898-14T1
provide the equipment or services sold, and characterized "the

instant litigation" as "then based on an inference upon another

unrelated inference."   We highlight a few of the findings.

    The judge dismissed the evidence that Van Lenten had not

negotiated the prices for the equipment and services it

purchased from defendants or sought competitive proposals from

other vendors, finding there was "no evidence that Van Lenten

was required to do so as Vice President of IT" and concluded

that North Jersey "cannot recover" for its "own improvident

conduct."   The judge was critical of the certification of North

Jersey's long-serving facility manager Frank Devetori, in which

Devetori asserted that North Jersey did not get all the cameras

it paid for, stating "[t]he mere assertion by a witness that he

now cannot find something sold years earlier is insufficient as

a basis for an assertion that it was not tendered."   The judge

dismissed what Devetori characterized as Van Lenten's highly

unusual act of having all the camera work done on nights and

weekends, which Devetori surmised as having been done to

preclude him from any involvement, as a "net suspicion, not

within the personal knowledge of the affiant."

    The judge also concluded he need not consider the proofs

offered by Jeffrey Zwirn, the expert North Jersey retained to

testify on the design and installation of electronic security

                               19                          A-2898-14T1
and video surveillance systems.     Although acknowledging that

Zwirn was "qualified to opine on the characteristics of security

systems, and the appropriateness of Defendants' actions in

regard thereto," the judge found Zwirn's opinion "as regards the

issue of fraud" a net opinion and thus dismissed his entire

opinion as inadmissible.   The judge thus failed to consider

Zwirn's opinion that neither Computer Network Solutions nor IC

System had the necessary New Jersey licenses to design and

install the sort of closed circuit camera monitoring system they

provided to North Jersey,6 that defendants could not have

installed the cameras they promised for the press room, as it

was not even wired for cameras, that the outdoor wiring was

improperly installed and that defendants had used unlicensed

electricians to perform the work, as bearing on North Jersey's

claims of fraud, consumer fraud, unjust enrichment and civil

conspiracy.

6
  The judge found the installation of the cameras "was performed
under the direct control and supervision of [North Jersey's] IT
director who merely used co-defendants to assist in the project"
and concluded that "[t]he mere assisting in the installation of
security cameras by or at the direction of [North Jersey's] IT
director did not require a license and is not an unlawful
practice under the NJCFA [New Jersey Consumer Fraud Act]." The
judge's factual conclusion of defendants' role in the security
camera upgrade appears at odds with Cook's deposition testimony,
included in the motion record, that "[t]he role of [his]
organization was to supply the cameras, the engineering, the
design, and the installation."

                               20                           A-2898-14T1
    The judge similarly dismissed the expert opinion of North

Jersey's certified public accountant and certified fraud

examiner Yigal Rechtman.   Although finding that Rechtman is

"arguably qualified to offer an opinion as to fraud and

fraudulent billing," the judge dismissed his opinions as to Van

Lenten's frequent overrides of management controls in purchasing

equipment and services from Computer Network Solutions and IC

System and those entities unusually high profits from their

sales to North Jersey as "conjecture" and not providing

sufficient information as to how he reached his conclusions.

    The judge specifically dismissed Rechtman's conclusions

that Computer Network Solutions and IC System's "unreasonable

profits in the range of 200% to 415%," which were "four times as

high as [Computer Network Solutions] own gross profit margin, of

about 50%" and well exceeding the 35% for the industry based on

the NAICS [North American Industry Classification System] code

for "computer and computer peripheral equipment and software

merchant wholesalers," as "speculative," and concluded that

fraud "is simply not a legitimate inference to be drawn from the

mere existence of a large profit."

    The judge concluded

         The undisputed evidence, viewed in the light
         most favorable to [North Jersey], only
         demonstrates that the Defendant vendors were

                               21                          A-2898-14T1
         comfortable and friendly with Van Lenten;
         that [North Jersey] paid large sums of money
         for services that, in retrospect, it wishes
         it had not, and which may not have been
         needed; that the Defendants obtained very
         high profits from [North Jersey] in their
         business transactions; and that, in
         hindsight, Van Lenten's purchasing decisions
         were impecunious.

The judge found "[t]he only matter in dispute was the unfounded

conjecture that Defendants engaged in a fraudulent scheme."      He

concluded that "[t]here is no provision in the laws of New

Jersey that allows for an argument that Defendants [Computer

Network Solutions and IC System] took advantage of [North

Jersey] by getting too good of a deal when they negotiated at

arms' length with the Plaintiff."

    In our view, the last sentence highlights the problem here.

The judge assumed in deciding the motion that the transactions

between North Jersey and IC System were "negotiated at arms'

length," when the premise of North Jersey's case was that the

relationship between Van Lenten and Nolan and his companies was

not an arms' length one.   Because the court assumed the

transactions plaintiff complained of were legitimate, it did not

view the competent evidence in the light most favorable to North

Jersey, the non-moving party, nor accord it the legitimate

inferences to be drawn from those facts.   R. 4:46-2(c).    Doing

so mandates reversal of the motions.

                               22                          A-2898-14T1
    We, of course, review summary judgment using the same

standard that governs the trial court.    Murray v. Plainfield

Rescue Squad, 210 N.J. 581, 584 (2012).    Thus, we consider

"whether the competent evidential materials presented, when

viewed in the light most favorable to the non-moving party, are

sufficient to permit a rational factfinder to resolve the

alleged disputed issue in favor of the non-moving party."       Brill

supra, 142 N.J. at 540.   Applying that standard here, we

conclude summary judgment was inappropriate on North Jersey's

claims of fraud, consumer fraud, unjust enrichment and civil

conspiracy.

    We turn first to the trial judge's decision striking

plaintiff's expert reports as net opinions.    See Estate of

Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 384-85

(2010) (noting a court confronted with an evidentiary question

on summary judgment must resolve that question before ruling on

summary judgment and appellate review follows in the same

sequence).    As previously noted, the trial court found both

experts qualified to provide expert testimony in the case,

although noting Rechtman as only "arguably" so.    We agree that

both experts were qualified to offer opinions in this matter,

Zwirn on electronic security and video surveillance systems and

Rechtman as a CPA and Certified Fraud Examiner.    See Agha v.

                                23                          A-2898-14T1
Feiner, 198 N.J. 50, 62 (2009) (noting an expert "must 'be

suitably qualified and possessed of sufficient specialized

knowledge to be able to express [an expert opinion] and to

explain the basis of that opinion'" (quoting State v. Moore, 122

N.J. 420, 458-59 (1991))).

    We reject, however, the trial court's conclusion that the

expert reports were net opinions.   Zwirn's opinions that

defendants were not qualified or licensed to install the

surveillance camera system; the system was not installed

correctly and the equipment provided was substandard or not as

represented; maintenance and spare parts for new cameras under

manufacturer's warranty were not consistent with industry

practice; the pricing grossly exceeded industry standards and

defendants' own established gross profit margins; and the press

room was not wired for cameras were not "'based merely on

unfounded speculation and unquantified possibilities,'"

Townsend v. Pierre, 221 N.J. 36, 55 (2015) (quoting Grzanka v.

Pfeifer, 301 N.J. Super. 563, 580 (App. Div. 1997), certif.

denied, 154 N.J. 607 (1998)), but on facts in the record, his

personal observations and the type of information commonly

relied on by experts forming opinions on the same subject, see

N.J.R.E. 703; Polzo v. Cty. of Essex, 196 N.J. 569, 583 (2008).

                              24                            A-2898-14T1
    We reach a similar conclusion with regard to Rechtman's

report.   His opinions that Van Lenten had not followed internal

management controls in approving purchases from Computer Network

Solutions and IC System; agreed to purchase products that were

not needed, and in at least one instance, the company had

rejected; failed to obtain the best prices for goods and

services; failed to ensure Computer Network Solutions and IC

System were capable of handling projects assigned to them and

purchased goods and services from defendants at grossly inflated

rates, are all grounded in the facts and explained in his

report.   To the extent the court believed that particular

conclusions of either expert were not justified, it was free to

conduct a N.J.R.E. 104 hearing, and might have been advised to

do so before rejecting wholesale the reports of qualified

experts, who defendants had elected not to depose.   See Kemp v.

State, 174 N.J. 412, 426-27 (2002).

    Having considered the reports of plaintiff's experts and

reviewed the voluminous record on summary judgment, we are

convinced that the competent proofs on the motion, viewed in the

light most favorable to plaintiff and according it all

reasonable inferences, establish that plaintiff put forth

sufficient proofs on its claims of fraud, consumer fraud, unjust

enrichment and civil conspiracy to have survived summary

                               25                          A-2898-14T1
judgment.7   See In re Estate of DeFrank, 433 N.J. Super. 258, 266

(App. Div. 2013) ("'[T]he cases are legion that caution against

the use of summary judgment to decide a case that turns on the

intent and credibility of the parties.'") (quoting McBarron v.

Kipling Woods, L.L.C., 365 N.J. Super. 114, 117 (App. Div.

2004)).   We do not suggest that a jury will find, at this late

date, that Van Lenten colluded with defendants to bilk North

Jersey out of millions of dollars in the course of providing it

IT equipment and services.   It may well conclude, as the trial

judge did, that plaintiff failed to have adequate controls over

its purchasing in place and the case is only one of "buyer's

remorse."    But it is for the jury, and not the trial judge, to

determine what evidence is credible, what inferences should be

drawn and whether defendants breached any duty owing to

plaintiff resulting in damages.      See Scully v. Fitzgerald, 179

N.J. 114, 130 (2004).

     Because it is not the judge's function on summary judgment

to weigh the evidence and determine the truth of the conflicting

claims but only to identify the existence of such genuine

disputes, Brill, supra, 142 N.J. at 540, we reverse the grant of

7
  In the course of the panel's questions to plaintiff's counsel
at oral argument regarding the basis for its conversion claim,
counsel conceded summary judgment on that claim was appropriate.
We agree and affirm the trial court's order in that respect.

                                26                          A-2898-14T1
summary judgment and remand the case for trial.   North Jersey's

discovery motion is to be considered on the merits as is its

motion to amend its complaint to add an additional party.     We do

not retain jurisdiction.   Because the judge who heard the matter

has already weighed the evidence and expressed his views of the

credibility of plaintiff's experts, the matter should be

reassigned to another judge on remand.   See In re Guardianship

of R.G. and F., 155 N.J. Super. 186, 195 (App. Div. 1977).

    Affirmed in part; reversed in part and remanded.

                               27                          A-2898-14T1