PIERS VAUGHAN VS. PAUL SIEGEL (DJ-048972-12, HUDSON COUNTY AND STATEWIDE) ( 2018 )

NOT FOR PUBLICATION WITHOUT THE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-4681-16T2
PIERS VAUGHAN,
Plaintiff-Respondent,
v.
PAUL SIEGEL,
Defendant-Appellant,
and
THE GLOBECON GROUP, LLC,
Defendant.
________________________________
Submitted December 12, 2018 – Decided December 24, 2018
Before Judges Alvarez and Mawla.
On appeal from Superior Court of New Jersey, Law
Division, Hudson County, Docket No. DJ-048972-12.
Paul E. Siegel, appellant pro se.
Joseph A. Molinaro, attorney for respondent.
Respondent Department of Labor and Workforce
Development has not filed a brief.
PER CURIAM
Defendant Paul Siegel appeals from a June 5, 2017 order, which vacated
a judgment entered in favor of plaintiff Piers Vaughan, for unpaid wages totaling
$24,430, with certain conditions. We reverse and order the judgment reinstated.
The following facts are taken from the record. Plaintiff was an executive
employee for the Globecon Group, LLC (Globecon) from April 2005 to
November 2009. Defendant was the Chief Executive Officer, Managing
Director, Chairman, and an owner of Globecon.
On December 9, 2009, plaintiff filed a claim with the Department of Labor
and Workforce Development (Department) for $24,430, representing thirteen
weeks of unpaid wages. On December 18, 2009, the Department investigated
Globecon and transmitted a letter to defendant and Globecon, stating they were
in violation of N.J.S.A. 34:11-4.1, and that defendant was personally liable for
plaintiff's wages as the employer.
A hearing was scheduled, but defendant's attorney adjourned it. A second
hearing was scheduled for August 4, 2011, but neither defendant nor his counsel
appeared. Plaintiff appeared and offered proof of his wage claim. As a result,
the Department awarded plaintiff $24,430 in damages against Globecon and
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defendant as its principal. On August 23, 2011, defendant requested a new
hearing date, because he had been on a business trip and then on vacation. The
Department rescheduled the hearing, and in its letter stated "[b]ecause of the
amount of notice . . . grant[ed] [to] both parties, no adjournment will be granted
[to] either party."
A re-hearing occurred on December 5, 2011. Again, plaintiff appeared
and presented proofs, but defendant did not appear. As a result, the Department
reinstated the judgment against defendant on December 8, 2011.
Plaintiff located a bank account belonging to defendant and sought to
collect the judgment. The court entered an order on October 14, 2016, for the
turnover of funds from defendant's account. On October 28, 2016, defendant
filed a motion in the Law Division seeking to vacate the judgment and the
turnover order. However, the motion was denied without prejudice due to
procedural deficiencies.
On April 6, 2017, defendant sought the same relief, this time by filing an
order to show cause. He claimed the judgment lien was impeding his efforts to
short sell his property and avoid a foreclosure. Plaintiff consented to releasing
the lien on the property.
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Defendant also claimed the judgment should be vacated because of
insufficient service of process. Specifically, he alleged the summons and
complaint regarding the wage proceedings were improperly served on a student
intern at the business, and not on defendant personally or another officer of
Globecon. Thus, defendant argued the Department lacked personal jurisdiction
and violated due process.
On June 5, 2017, the motion judge entered an order and concluded
defendant was not afforded due process. Although the judge did not cite the rule
under which the relief from the judgment was granted, he found:
Pursuant to R[ule] 4:4-4, service on a corporation is
only proper to an officer, director, trustee or managing
general agent, or any person authorized by appointment
or by law to receive service of process on behalf of the
corporation. The complaint was improperly served
upon . . . a [twenty-two-]year-old student intern. The
plaintiff or [the Department] has not provided proof of
service upon [defendant], individually. Globecon and
[defendant] were not properly served.
The motion judge vacated the judgment on the condition defendant post a
bond of $24,430, pursuant to N.J.S.A. 34:11-63. This appeal followed.
I.
As a general proposition we defer to "factual findings supported by
adequate, substantial, credible evidence." Ricci v. Ricci, 448 N.J. Super. 546,
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564 (App. Div. 2017) (internal quotations and citation omitted). However, we
do "not accord the same deference to a trial judge's legal determinations. . . .
Rather, all legal issues are reviewed de novo." Id. at 565 (citing Reese v. Weis,
430 N.J. Super. 552, 568 (App. Div. 2013)).
Generally, a court's determination under Rule 4:50-1 warrants substantial
deference and should not be reversed unless it results in a clear abuse of
discretion. Hous. Auth. of Morristown v. Little, 135 N.J. 274, 283 (1994). An
abuse of discretion occurs when a decision is "made without a rational
explanation, inexplicably depart[s] from established policies, or rest[s] on an
impermissible basis." U.S. Bank Nat'l Bank Ass'n v. Guillaume, 209 N.J. 449,
467-68 (2012) (quoting Iliadis v. Wal-Mart Stores, Inc., 191 N.J. 88, 123 (2007)
(internal quotations omitted)).
On appeal, defendant claims: (1) because he was denied due process as a
result of the improper service of process, and because the judge vacated the
judgment, he should not have been required to post a bond; (2) the statute of
limitations expired on plaintiff's wage-collection action; (3) plaintiff cannot
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initiate an action for unpaid wages because he is an officer of Globecon; and (4)
defendant challenges a post-appeal order denying his request for a stay.1
II.
We glean from the motion judge's order that he vacated the judgment
against defendant by relying on Rule 4:50-1. The rule provides various avenues
for relief from a judgment, or order, and, in relevant part, reads:
On motion, with briefs, and upon such terms as are just,
the court may relieve a party . . . from a final judgment
or order for the following reasons: (a) mistake,
inadvertence, surprise, or excusable neglect; . . . (d) the
judgment or order is void; . . . or (f) any other reason
justifying relief from the operation of the judgment or
order.
[R. 4:50-1.]
"The rule is designed to reconcile the strong interests in finality of judgments
and judicial efficiency with the equitable notion that courts should have
authority to avoid an unjust result in any given case." Guillaume, 209 N.J. at
467 (citations and internal quotations omitted).
Although we can understand the judge's innate desire to assure defendant
received due process, we are constrained to conclude his reliance on Rule 4:4-4
1
We decline to address defendant's fourth argument because it falls outside the
scope of the appeal.
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to find service of process was improper, and thereby required relief from the
judgment, was incorrect as a matter of law. As we have previously stated,
[t]he court rules expressly apply only to the Supreme
Court, the Superior Court, the Tax Court, the
surrogate's courts and the municipal courts. . . .
Clearly, the Legislature may provide for service by
administrative agencies in any manner that meets
fundamental procedural due process, namely "notice
reasonably calculated, under all the circumstances, to
apprise interested parties of the pendency of the
action."
[Shannon v. Acad. Lines, Inc., 346 N.J. Super. 191, 196
(App. Div. 2001) (citing R. 1:1-1; quoting Mullane v.
Cent. Hanover Bank & Trust Co., 339 U.S. 306, 314
(1950)).]
The process for filing a wage claim with the Department and serving
summons upon a defendant is set forth in N.J.S.A. 34:11-59, which provides:
Upon the filing of claim, the department shall
issue a summons returnable between the hours of nine
o'clock in the forenoon and three o'clock in the
afternoon, both inclusive, which shall also specify a
certain time and place for the appearance of the
defendant, not less than five nor more than fifteen days
from the date of such process, which summons shall be
served at least five days before the time of appearance
mentioned therein, by reading the same to the defendant
and delivering to him a copy thereof if he shall be found
and if not found by leaving a copy thereof in his house
or with some other person of his family over the age of
fourteen years.
[N.J.S.A. 34:11-59.]
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N.J.S.A. 34:11-60 states that service of process is to be made "either by a
constable or a process server of the department."
Due process is accorded where a party receives adequate notice and is able
to "participate in the adjudicative process at the administrative level and in []
court." Dep't of Labor v. Pepsi-Cola Co., 336 N.J. Super. 532, 536 (App. Div.
2001). "Notice is defined by the Due Process Clause of the Fourteenth
Amendment to the United States Constitution and Article 1, Paragraph 1 of the
New Jersey State Constitution." Ibid.Due process is a flexible concept that calls for
such procedural protections as fairness demands. . . .
The essential components of due process are notice and
an opportunity to be heard. . . . Thus, a party's due
process rights are not violated if it is held liable for a
judgment arising out of an action in which it
participated or had the opportunity to be heard.
[Mettinger v. Globe Slicing Mach. Co., 153 N.J. 371,
389 (1998) (citations omitted).]
Here, we have little doubt defendant had adequate notice and participated
in the adjudicative process. Plaintiff submitted a sworn certification by the wage
collection referee who presided over the case at the administrative level. The
certification explained the Department had issued a summons and complaint to
defendant, individually and on behalf of Globecon, to answer plaintiff's claim.
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The certification averred "[a]fter receiving this notice, an individual identifying
himself as defendant's attorney called and requested an adjournment." Thus,
defendant had notice of plaintiff's claim and had engaged counsel.
Furthermore, defendant participated in the proceedings before the
Department. He sent a letter to the Department, dated December 9, 2009,
explaining he could not produce the documents it requested in response to
plaintiff's claim. Moreover, the record contains extensive case notes
documenting communication by defendant regarding plaintiff's claim.
Defendant communicated directly with the Department regarding adjournments
due to his vacation and a business trip, and in response, the Department
adjourned the hearings at defendant's request on more than one occasion.
Therefore, defendant clearly had notice and opportunities to participate in the
adjudicative proceedings and due process was not violated.
III.
We next address defendant's argument the statute of limitations on
plaintiff's claim has expired, and that plaintiff was not qualified to seek unpaid
wages. We reject both contentions.
Defendant argues because plaintiff filed his complaint in December 2009,
and the order vacating the judgment was entered in December 2015, the wage
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claim exceeded the two-year statute of limitations, codified in N.J.S.A. 34:11-
4.1. This is incorrect. A claim for additional wages is a breach of contract
claim, which is subject to a six-year statute of limitations. Troise v. Extel
Commc'ns, Inc., 345 N.J. Super. 231, 237 (App. Div. 2001); see also N.J.S.A.
2A:14–1. Moreover, the record reflects the complaint was filed one month after
plaintiff ceased working for defendant. Thus, the claim was not brought outside
of the statute of limitations.
Defendant asserts plaintiff could not pursue a wage claim because he was
an officer of Globecon. He cites N.J.S.A. 34:11-4.1, and suggests plaintiff
should also be considered an employer who "is as much liable for any claim
against . . . as [Globecon] could be."
N.J.S.A. 34:11-4.1 sets forth certain definitional language under the Wage
Payment Law and states:
As used in this act:
a. "Employer" means any individual, partnership,
association, joint stock company, trust,
corporation, the administrator or executor of the
estate of a deceased individual, or the receiver,
trustee, or successor of any of the same,
employing any person in this State.
For the purposes of this act the officers of a
corporation and any agents having the
management of such corporation shall be deemed
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to be the employers of the employees of the
corporation.
b. "Employee" means any person suffered or
permitted to work by an employer, except that
independent contractors and subcontractors shall
not be considered employees.
c. "Wages" means the direct monetary
compensation for labor or services rendered by
an employee, where the amount is determined on
a time, task, piece, or commission basis
excluding any form of supplementary incentives
and bonuses which are calculated independently
of regular wages and paid in addition thereto.
d. "Commissioner" means the Commissioner of
Labor.
We do not read the definitional section of the statute as barring wage
claims by an officer of a company. Moreover, the record amply supports the
conclusion plaintiff was an employee who reported to defendant, who was an
owner of Globecon, and that the employer was responsible for the satisfaction
of unpaid wages.
The June 5, 2017 order is reversed, and the December 8, 2011 judgment
against defendant in favor of plaintiff for unpaid wages is reinstated.
Reversed.
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