Seidel v. Greenberg

• Decision Date: 24 December 1969
• Parties: , 40 A.L.R.3d 987 Michael SEIDEL, Plaintiff, v. Abraham GREENBERG et al., Defendants.
• Court: New Jersey Superior Court

Page 248

108 N.J.Super. 248

260 A.2d 863, 40 A.L.R.3d 987

Michael SEIDEL, Plaintiff, v. Abraham GREENBERG et al., Defendants.

Superior Court of New Jersey Law Division.

Dec. 24, 1969.

Ashley Goodman, Newark, for plaintiff (Goodman & Goodman, attorneys).

Harvey Weissbard, Orange, for defendants (Querques, Isles & Weissbard, Orange, attorneys).

ACKERMAN, JOHN A., J.S.C.

This matter was tried by the court without a jury. It presents novel questions as to whether the perpetrators of a crime are liable in a civil action for damages to an innocent person who was thereafter subjected to criminal prosecution for the commission of such crime.

I

The facts are not in dispute in any material aspect and the following summary contains the court's findings with reference thereto. On March 20, 1963 a $300,000 fire destroyed the buildings and stock in trade of the Malgreen Lumber and Supply Co. of Newark, New Jersey, and also destroyed adjoining property. Defendants to this action, Abe Greenberg and Manya Greenberg, his wife, were the sole or principal stockholders of said corporation and were the principal officers in charge of its business, which consisted of the operation of a retail lumber yard. It has been established that the Greenberge conspired with one Nathaniel Wallace to have the premises of Malgreen burned to collect the insurance thereon, and that Wallace acted as the 'go between' and arranged for the actual burning of the premises by one Clarence Moore, the 'torch.' Wallace was a carpenter and for a number of years had done business with the Greenbergs and with Malgreen. Some of the conferences between the Greenbergs and Wallace in planning the crime took place in the office at the premises of Malgreen during the period between October 1962 and the time of the fire. Plaintiff Michael Seidel was the company credit manager and bookkeeper and had served as one of its key employees for a number of years. His duties required him to be inside and he was usually in the company's office. Shortly before the fire, negotiations had been entered into, if not completely consummated, between the Greenbergs, who had become progressively less active in the management of the business (it is claimed that Mrs. Greenberg was in Florida from December 1962 until after the fire), and seven key employees, including plaintiff, whereby the net profits of the business for the year starting in January 1963 were to be divided pursuant to a profit-sharing plan under which Abe Greenberg was to receive 20% Thereof and the seven employees 80% Thereof, with plaintiff's share to be 20%.

On June 17, 1963, about three months after the fire, the Greenbergs and plaintiff were arrested and charged with arson to defraud insurance companies and conspiracy to commit arson. Similar charges were filed against Wallace and Moore. ¹ Immediately following is arrest plaintiff was booked, fingerprinted, photographed, detained overnight in jail and released on $10,000 bail fixed by Chief Magistrate Castellano, who scheduled a hearing for June 25, 1963, which date was subsequently postponed until July 9, 1963. Newspaper publicity attended the arrests and preliminary hearing and, among other things, a news article appeared in the Newark Evening News on June 18, 1963, which contained plaintiff's name and his residence address in Newark and his picture, together with an account of his supposed involvement in the arson scheme. The Greenbergs denied any involvement as, of course, did plaintiff. The Greenbergs had their own attorney. Plaintiff had his own attorney, whose services were arranged for, in part at least, by the Greenbergs and the Greenbergs agreed to pay for such counsel. At no time did the Greenbergs admit to plaintiff or to the law enforcement authorities their complicity in the matter.

On July 9, 1963, at the hearing before the chief magistrate, both Wallace and Moore pleaded innocent, waived hearing, and were held over for the grand jury. The attorneys for the Greenbergs and for plaintiff moved to dismiss the complaints against their clients on the ground that the accusations made against them by Wallace and Moore were not admissible in evidence. The chief magistrate announced that he would reserve decision on the motions for several days. News articles to that effect appeared in the Newark newspapers on July 10, 1963. On July 12, 1963 the chief magistrate dismissed the complaints against the Greenbergs and plaintiff. In a Newark Evening News article published on that date the public was advised that the complaints were dismissed because the chief magistrate had ruled that 'the State has failed to produce prima facie evidence in this case and I therefore must dismiss it,' and that 'He said the only way in which the Greenbergs and Seidel were implicated was through remarks made by two prisoners as they were being brought into police headquarters * * *,' and that 'At that hearing Castellano upheld objections to any testimony about statements made to police by the pair involving the Greenbergs because they were not made in the presence of the Greenbergs.'

On December 9, 1963 Wallace and Moore were indicted by the grand jury on charges of arson and burning to defraud insurance companies. Newspaper articles to that effect appeared in the Newark Evening News on December 9 and 10, 1963, which reported the indictments against Wallace and Moore and again recounted the charges against the Greenbergs and plaintiff and the dismissals thereof and the reasons for such dismissals as previously reported. The December 9 article included plaintiff's name and residence address in Newark, as well as those of the Greenbergs, and reported again, with reference to the earlier dismissals, that 'Magistrate Castellano said at the hearing that the State failed to produce 'paima facie' evidence against the three. He observed that the only way that the three were implicated was through remarks made by Wallace and Moore, who told police they had a deal to set the fire. The Magistrate ruled out any statement made to police by Wallace and Moore because they were not made in the presence of the Greenbergs.' Each of the news articles also referred to remarks made by the Essex County prosecutor with respect to the inconclusive nature of the investigation and the effect of the indictments against Wallace and Moore. The news article of December 10, 1963 quoted the prosecutor as stating that 'I don't know that these indictments will end our investigation of the matter,' and that 'the grand jury was restricted from complete investigation because 'certain people' could not be called as witnesses for legal reasons. He declined to name the individuals.'

Wallace and Moore were subsequently convicted of the charges against them. On May 3, 1965 the Greenbergs were indicted on four counts charging them with setting fire to and burning the Malgreen buildings, goods and chattels, while insured, to defraud the insurance companies, of burning the buildings of Malgreen, of burning goods and chattels with intent to injure Malgreen, and of conspiring with Wallace and Moore to set fire to and burn the buildings, goods and chattels at the yard with intent to prejudice and defraud insurance companies. The Greenbergs were tried in the Essex County Court, Law Division, convicted on all counts and sentenced on February 9, 1967. On July 1, 1968 their convictions were affirmed by the Appellate Division of the Superior Court.

In June 1965, shortly after the Greenbergs were indicted but before their trial and convictions, plaintiff instituted this action against the Greenbergs and against Malgreen. The complaint charged the individual defendants with negligence in setting the fire and, alternatively, with committing arson and with 'a willful and malicious tort' and 'willful and deliberate acts against the interest of the plaintiff.' Although not artistically framed, the gravamen of the complaint is that the Greenbergs willfully and deliberately caused the fire, as a result of which plaintiff was arrested on a warrant of the Newark arson squad and charged with having conspired with defendants and others to have caused the fire. It is alleged that plaintiff was booked, fingerprinted, photographed, detained overnight in prison and subsequently released on bail; that his photograph appeared in the Newark Evening News in an article including him in the conspiracy and charging him with the crime of arson; that he was humiliated and degraded, caused to suffer physical and mental pain, loss of income and earnings, caused to have his privacy invaded and his name and reputation scandalized, and caused to incur medical and legal expenses and loss of employment. There were prayers for both compensatory and punitive damages. In a separate count plaintiff alleged that the Greenbergs promised to reimburse him for legal expenses incurred as the result of the charges against him, and he sought recovery of counsel fees in the amount of $2450 expended in connection with the proceedings against him. In another count it was alleged that plaintiff was under a profitsharing agreement with defendant corporation which was negligently or willfully interfered with by the individual defendants, as the result of which plaintiff lost income to which he otherwise would have been entitled.

An answer was filed on behalf of defendants, generally denying the allegations of the complaint and reserving the right to move to strike the complaint on the ground that it failed to state any claim upon which relief could be granted.

At the trial, since the Greenbergs had in the meantime been convicted, plaintiff proceeded on the theory that the Greenbergs were guilty of deliberate and criminal acts in causing the fire rather than that they were guilty of negligence in causing the fire. The claims against Malgreen as a corporate entity were not pursued. Pursuant to Evidence Rule 63(20), evidence of the final judgments adjudging the...