Court Opinion

ID: 4199247
Source: CourtListenerOpinion
Date Created: 2017-08-26 02:16:45.268733+00
Date Added: 2024-06-11T14:41:19.461517
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NOT FOR PUBLICATION WITHOUT THE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-3204-15T4

GIGI K COLLECTIONS, INC.
and GIGI K NYC,

        Plaintiffs-Appellants,

v.

UNITED MERCHANT SERVICES,

     Defendant-Respondent.
_________________________________

              Submitted May 16, 2017 – Decided August 24, 2017

              Before Judges Reisner and Sumners.

              On appeal from Superior Court of New Jersey,
              Law Division, Bergen County, Docket No. DC-
              14792-15.

              Foley & Foley, attorneys for                 appellant
              (Timothy J. Foley, on the brief).

              Budd Larner PC, attorneys for respondent
              (Philip C. Chronakis, on the brief).

PER CURIAM

        In   this   commercial     business    dispute,     plaintiffs     Gigi    K

Collections, Inc. and Gigi K NYC (collectively, Gigi) appeal from

a Special Civil Part order dismissing their complaint and entering
judgment for defendant United Merchant Services (UMS).                   For the

reasons that follow, we affirm.

       We discern the following facts from the evidence adduced at

the one-day bench trial.         Gigi operates retail-clothing stores in

New York City.          To allow its customers to purchase merchandise

with credit cards, Gigi contracted with UMS to obtain Point of

Service (POS) credit-card processing equipment.                   As part of the

contract, UMS would also provide related services – charge the

customers' credit card accounts, collect the money from the credit

card company, retain a processing fee, and deposit the remaining

proceeds in Gigi's bank account.

       In accordance with the parties' contract, Gigi emailed UMS

that   it   was    providing     thirty   days'     notice   to   terminate     the

contract, and that        it did not wish to renew the contract because

the parties could not agree on renewal terms.                      Thereafter, a

dispute arose and Gigi filed suit in the Special Civil Part

alleging that UMS "breached their agreement[] with [Gigi] by

failing     to    pay   [Gigi]   monies       due   to   [Gigi]   by   virtue    of

transactions effectuated on [Gigi's] credit card machines[,]" and

UMS "improperly converted [Gigi's] funds, and has failed to return

them to [Gigi] after demand[.]"

       According to the testimony of Gigi's owner, Gigi Kwon, she

continued to use the credit card machines supplied by UMS during

                                          2                               A-3204-15T4
the thirty-day time span after the termination notice, and expected

UMS to pay Gigi for the credit card purchases.                     Kwon stated,

however, that, despite obtaining approval for the purchases from

the credit card companies, UMS failed to pay Gigi for the purchases

processed through UMS.          She contended that in order for Gigi to

be paid by UMS for approved credit card purchases, the credit card

machines would "batch" the transactions by totaling all of the

signed credit card receipts at the end of each day.                 Gigi relied

upon UMS' records to attempt to prove that UMS owed it $9,300.86

in unpaid credit card transactions.               Kwon admitted that she was

unaware if UMS received payment for the transactions in dispute.

     UMS presented the testimony of Seng Yung Lee, who managed

Gigi's    accounts     with    UMS.    Lee   maintained     that    UMS     ceased

processing Gigi's credit card transactions upon receipt of Gigi's

written    notice,     which   terminated    the    parties'   contract.          He

testified that when Gigi complained about not receiving payment

for credit card purchases, Gigi declined UMS' proposal to reprocess

American     Express    transactions       that    UMS   claimed    were     never

processed.

     Following the trial, the judge entered an order that same day

dismissing Gigi's complaint with prejudice, and attached a written

statement of reasons.          The judge found both witnesses credible,

but determined there was no evidence to support Gigi's allegation

                                       3                                   A-3204-15T4
that UMS breached their contract by collecting and retaining the

proceeds from the credit card purchases of Gigi's customers.                The

judge noted:

             Ms. [Kwon]'s proofs establish that her
             company's failure to batch sales caused her
             losses. Mr. Lee's testimony established that
             Ms. [Kwon] declined to take the opportunity
             to recoup at least the [American Express]
             losses a year ago and that, contrary to
             [Gigi's] allegations, [UMS] did not collect
             and retain [Gigi's] sales proceeds.

             On these facts, established by a preponderance
             of the evidence, this [c]ourt cannot find that
             [UMS]   breached    the   agreement   and   is
             responsible to [Gigi] for damages.

This appeal ensued.

      Before us, Gigi argues that the trial judge erred in his

assessment of the evidence.      In particular, Gigi contends that UMS

prematurely terminated their contract by not processing Gigi's

credit card transactions upon receipt of Gigi's thirty-day notice

that it was not renewing the contract.          UMS' conduct constituted

a   breach   of   contract   resulting   in   losing   credit   card     sales

proceeds.     Gigi maintains that it was not obligated to batch each

day's receipts because it was done automatically by UMS' equipment.

In addition, Gigi argues that its refusal to accept UMS' offer to

re-process American Express transactions related to a "discounted

settlement offer," which under N.J.R.E. 408 was not admissible to

prove liability or damages.

                                    4                                  A-3204-15T4
     Our standard of review of the trial court's determinations

following a non-jury trial is a limited one.          Petrozzi v. City of

Ocean City, 433 N.J. Super. 290, 316 (App. Div. 2013), certif.

denied, 217 N.J. 623 (2014) (citing Rova Farms Resort, Inc. v.

Inv'rs Ins. Co., 65 N.J. 474, 484 (1974)). We must "give deference

to the trial court that heard the witnesses, sifted the competing

evidence, and made reasoned conclusions."         Griepenburg v. Twp. of

Ocean, 220 N.J. 239, 254 (2015) (citing Rova Farms Resort, Inc.,

supra, 65 N.J. at 483-84).         Reviewing courts "should 'not disturb

the factual findings and legal conclusions of the trial judge'

unless convinced that those findings and conclusions were 'so

manifestly unsupported by or inconsistent with the competent,

relevant   and   reasonably    credible    evidence   as    to   offend    the

interests of justice.'"       Ibid. (quoting Rova Farms Resort, Inc.,

supra, 65 N.J. at 484).        Review on appeal "does not consist of

weighing evidence anew and making independent factual findings;

rather, our function is to determine whether there is adequate

evidence to support the judgment rendered at trial."                Cannuscio

v. Claridge Hotel & Casino, 319 N.J. Super. 342, 347 (App. Div.

1999) (citing State v. Johnson, 42 N.J. 146, 161 (1964)).

     We,   however,   owe     no    deference   to    the   trial     court's

"interpretation of the law and the legal consequences that flow

from established facts."      Manalapan Realty, L.P. v. Twp. Comm. of

                                       5                              A-3204-15T4
Manalapan, 140 N.J. 366, 378 (1995) (citations omitted). We review

such decisions de novo.     30 River Court E. Urban Renewal Co. v.

Capograsso, 383 N.J. Super. 470, 476 (App. Div. 2006) (citing Rova

Farms Resort, Inc., supra, 65 N.J. at 483-84; Manalapan Realty,

supra, 140 N.J. at 378).

     Guided by these principles, Gigi's complaint was properly

dismissed.      Although we have some reservations concerning the

trial judge's finding that Gigi caused its own losses because it

failed to batch its credit card transactions, we nevertheless

conclude there is sufficient credible evidence to support the

trial judge's order entering judgment in favor of UMS.          Gigi did

not allege that UMS was negligent in failing to process Gigi's

credit   card    transactions,   but    claimed   that   UMS   improperly

converted its funds.       However, Gigi presented no evidence to

support its allegation that UMS collected Gigi's credit card sales

proceeds and failed to give it to Gigi.

     Moreover, we do not view          the judge's admission of UMS'

proposal to re-process the American Express purchases as evidence

of a settlement offer in violation of N.J.R.E. 408.            Under the

rule, "offers of compromise or any payment in settlement of a

related claim, shall not be admissible to prove liability for, .

. . or amount of the disputed claim."        N.J.R.E. 408.     Here, UMS'

proposal was not a settlement offer, but was evidence of Gigi's

                                   6                              A-3204-15T4
failure to mitigate its damages.              A party alleging a breach of

contract has "a common law obligation to take reasonable steps to

mitigate their damages."         State v. Ernst & Young, L.L.P., 386 N.J.

Super. 600, 617-18 (App. Div. 2006) (citations omitted).                         The

doctrine of mitigation of damages embodies the principle that a

claimant should not be entitled to damages that reasonably could

have been avoided.         Covino v. Peck, 233 N.J. Super. 612, 617 (App.

Div. 1989) (citing Ostrowski v. Azzara, 111 N.J. 429, 437 (1988)).

The   judge    properly     considered     Gigi's    refusal     to   accept    UMS'

proposal      to   re-process   American      Express     purchases    by    Gigi's

customers, and reasonably determined that Gigi failed to fulfil

its obligation to mitigate its damages. See Ingraham v. Trowbridge

Builders,     297   N.J.    Super.   72,     84   (App.   Div.   1997)   (quoting

Fanarjian v. Moskowitz, 237 N.J. Super. 395, 406 (App. Div. 1989)

("the proper standard in a non-jury case regarding the judge's

decision on mitigation of damages 'is whether the judge's findings

are supported by sufficient, credible evidence in the record.'").

      Affirmed.

                                         7                                  A-3204-15T4