Hyland v. Simmons

• Decision Date: 26 August 1977
• Citation: 378 A.2d 260,152 N.J.Super. 569
• Parties: William F. HYLAND, Attorney General of the State of New Jersey, Plaintiffs, v. Leonard W. SIMMONS, Defendant.
• Court: New Jersey Superior Court

Page 569

152 N.J.Super. 569

378 A.2d 260

William F. HYLAND, Attorney General of the State of New Jersey, Plaintiffs, v. Leonard W. SIMMONS, Defendant.

Superior Court of New Jersey, Chancery Division.

Aug. 26, 1977.

Calvin J. Hurd, Elizabeth, for defendant.

Steven B. Sacharow, Deputy Atty. Gen., for plaintiff (William F. Hyland, Atty. Gen., attorney).

DREIER, J. C. C., Temporarily Assigned.

This case presents novel issues respecting the remedies available to representatives of the public against officials alleged to have violated the public trust, here by accepting illicit payments in return for the exercise of corrupt influence in the course of official duties.

The complaint, filed by the Union County Prosecutor and the Attorney General as coplaintiffs, alleged that defendant, while councilman of the Borough of Roselle, "did demand, solicit and receive the sum of $10,000" from individuals acting on behalf of the Jersey Laminating & Finishing Company and its successor, Chelsea Industries, Inc. (hereinafter "Jersey Laminating") in return for the exercise of his influence respecting a zoning variance in which these companies had a direct interest. The payments were allegedly made to defendant in four installments, beginning in December 1968 and ending in April 1969. The relief sought was the imposition of a constructive trust in the amount of the alleged bribes, and punitive damages.

At the trial the principal witnesses against defendant were Miki Berger and Gerald Laurence. Berger was the principal of Jersey Laminating and Laurence was the principal of a contractor which had constructed several buildings for Jersey Laminating, and was to construct a new warehouse if the disputed variance could be obtained. Both freely admitted making the payments to defendant. The money was initially advanced by Laurence to Berger, and was repaid by Berger's authorization of excessive progress payments on a construction project then underway. Vivid descriptions were given by the two witnesses of three payments made directly to defendant at his dry cleaning establishment, and one payment made by leaving an envelope containing money in the pocket of a jacket delivered personally to defendant ostensibly for cleaning.

The testimony of these witnesses was corroborated by photostatic copies of certain dated receipts from Berger to Laurence for "loans" in the amount of each payment. Although there were certain discrepancies in the testimony of the two witnesses as to the dates these receipts were given, the overall effect of their testimony was devastating to defendant.

The dates and amounts of the payments were: December 13, 1968, $2,000; March 26, 1969, $3,000; April 3, 1969, $3,000 and April 25, 1969, $2,000. Plaintiff introduced for additional corroboration certain bank records of defendant. On January 20, 1969 defendant deposited $1,800 to his business bank account; on April 9, 1969 defendant opened a safe deposit box, and on the latter date he also opened a savings account in the amount of $2,900. This savings account was not disclosed to plaintiff during discovery, nor was the interest from this account reported on defendant's tax returns. There is a further record that six days after the fourth payment, on May 1, 1969, defendant visited the safe deposit box, although, of course, there is no record of what transpired. Also, a few days after a later visit to the safe deposit box, defendant on October 29, 1969 deposited $1,200 in cash into his business bank account. The deposits of $1,800 and $1,200 were by far the largest deposits ever made in defendant's bank account during the period in question. During the jury trial defendant could offer no explanation of either deposit, although, as noted later in this opinion, a fully credible and innocent explanation of the $1,800 deposit was later offered by defendant and accepted by the court.

Defendant denied the occurrences, including all meetings with the witnesses, and presented extensive character evidence concerning a career of dedicated public service. The court, after receiving an advisory verdict from the jury, the use of which is explained hereafter, entered a compensatory judgment against defendant in the sum of $10,000 and, after taking further testimony, entered a punitive award against defendant in the additional sum of $10,000.

Defendant now moves, first to reopen the judgment (R. 4:49-1), and second, to be relieved from the judgment (R. 4:50-1). The court was urged at oral argument to exercise its prerogative under R. 4:49-1 to "open the judgment if one has been entered, * * * amend findings of facts and conclusions of law or make new findings and conclusions, and direct the entry of a new judgment." These motions, therefore, necessitate a brief recitation of certain pretrial and trial dispositions.

On motion of defendant the court struck the Union County Prosecutor as a plaintiff in the action inasmuch as it was clear that he had not pursued the cause (although an assistant prosecutor assisted the Deputy Attorney General throughout the trial). In an action of this type the Attorney General has the inherent authority to maintain the suit as a defender of the public interest. Public Service Coord. Transport v. State, 5 N.J. 196, 208-209, 74 A.2d 580 (1950). It cannot be seriously disputed that the public has an interest here which is in need of adequate representation, but the prosecutor was an unnecessary party plaintiff. His presence, however, in no way prejudiced defendant.

Defendant also moved for a dismissal based upon the running of the statute of limitations. Defendant's theory was and is that the conduct attributed to defendant was framed in the language of N.J.S.A. 2A:93-4 and 2A:93-6, and therefore the action was in reality one for a forfeiture, governed by the limitation periods set forth in N.J.S.A. 2A:14-10. This act provides that:

All actions at law brought for any forfeiture upon any penal statute made or to be made, shall be commenced within the periods of time prescribed: * * *.

The statute then recites four periods of time for the commencement of such actions, depending upon whether the recovery is limited to the State or to other entities. The maximum time permitted under any provision is two years.

The argument misconceives the nature of the remedy pursued by plaintiff. N.J.S.A. 2A:14-10 is expressly confined to forfeitures upon a penal statute and, although the language of the complaint is framed in terms similar to certain penal statutes, the resemblance goes no further. Plaintiff's action is for the imposition of a constructive trust grounded in the equitable principle that one should not be permitted to profit from his own wrongdoing. Whenever title to property is acquired by fraud, duress or undue influence, or is acquired or retained in violation of a fiduciary duty, a constructive trust may be impressed in appropriate circumstances. D'Ippolito v. Castoro, 51 N.J. 584, 588, 242 A.2d 617 (1968); Hirsch v. Travelers Ins. Co., 134 N.J.Super. 466, 470, 341 A.2d 691 (App.Div.1975). There is no statute authorizing the suit in this instance. ¹ Rather, the remedy is one conceived of by common law and endorsed by our Supreme Court in Driscoll v. Burlington Bridge Commission, 8 N.J. 433, 86 A.2d 201 (1952):

The citizen is not at the mercy of his servants holding positions of public trust nor is he helpless to secure relief from their machinations except through the medium of the ballot, the pressure of public opinion or criminal prosecution. He may secure relief in the civil courts either through an action brought in his own name * * * or through proceedings instituted on his behalf by the Governor, * * * or by the Attorney General.

That the shortcomings of some public officers may not make them accountable in our criminal courts does not mean that their nefarious acts cannot be successfully attacked through the processes of the civil law. (at 476, 86 A.2d at 222)

See also, Jersey City v. Hague, 18 N.J. 584, 597, 115 A.2d 8 (1955); Restatement, Restitution, § 197, Comment (a). The above authorities establish clearly that the instant cause of action is independent from any past criminal proceeding against defendant, regardless of its outcome.

It is well established that since this is a purely equitable action, ² the general statute of limitations is not applicable. Colton v. Depew, 60 N.J.Eq. 454, 458-459, 46 A. 728 (E. & A. 1900). As noted by the Appellate Division in State, by Parsons v. Standard Oil Co., 5 N.J.Super. 460, 68 A.2d 499 (Ch.Div.1949), mod. on other grounds, 5 N.J. 281, 74 A.2d 565 (1950);

(T)he rule has been familiar to us that if the subject matter in controversy in a Court of Chancery is of an equitable nature, not cognizable in a court of law, statutes of limitations although not ignored have no obligatory application, but the court will instead apply the doctrine of laches according to its discretion, regulated by the peculiar circumstances and by the pertinent precedents. (5 N.J.Super. at 468, 68 A.2d at 503)

There was a passage of 51/2 years between the date of the last payment (April 1969) and the discovery of the payments by the State (October 1974), and nearly seven years until filing of the complaint in March 1976. Whether or not the defense of laches would bar a cause of action requires an examination of the circumstances of each case. Kohler v. Barnes, 123 N.J.Super. 69, 80, 301 A.2d 474 (Law Div. 1973); Donnelly v. Ritzendollar, 14 N.J. 96, 107-108, 101 A.2d 1 (1953). Laches embodies more than a mere delay or lapse of time. "There must be a delay for a length of time which, unexplained and unexcused, is unreasonable under the circumstances and has been prejudicial to the other party." West Jersey Title, etc., Co. v. Industrial Trust Co., 27 N.J. 144, 153, 141 A.2d 782, 787 (1958); 30A C.J.S. Equity § 116.

There is no basis for a finding that the elements of laches are present in this case, for it is...