Valle v. North Jersey Auto. Club

• Decision Date: 25 July 1977
• Citation: 74 N.J. 109,376 A.2d 1192
• Parties: Elmo G. VALLE and Odette Schielke, Plaintiffs-Respondents-Cross-Appellants, v. NORTH JERSEY AUTOMOBILE CLUB, a Mutual Association incorporated in accordancewith Title 15 of the Law of the State of New Jersey, Plaintiff-Respondent, and Floyd Hughes, Alexander Patterson, Peter Calcia and Carleton H. Ritter, Defendants-Appellants, and Walter D. Van Riper, Auto Club Agency of Hudson County, a corporation of theState of New Jersey, Donald Hughes, Alexander Patterson, Jr., and WilliamHollritt. William RICCARDO, Plaintiff-Intervenor-Cross-Appellant, v. James T. WHITE, Defendant.
• Court: New Jersey Supreme Court

Page 109

74 N.J. 109

376 A.2d 1192

Elmo G. VALLE and Odette Schielke, Plaintiffs-Respondents-Cross-Appellants, v. NORTH JERSEY AUTOMOBILE CLUB, a Mutual Association

incorporated in accordancewith Title 15 of the Law

of the State of New Jersey, Plaintiff-Respondent,

and

Floyd Hughes, Alexander Patterson, Peter Calcia and Carleton

H. Ritter, Defendants-Appellants,

and

Walter D. Van Riper, Auto Club Agency of Hudson County, a

corporation of theState of New Jersey, Donald

Hughes, Alexander Patterson, Jr., and

WilliamHollritt.

William RICCARDO, Plaintiff-Intervenor-Cross-Appellant, v. James T. WHITE, Defendant.

Supreme Court of New Jersey.

Argued May 23, 1977.

Decided July 25, 1977.

Albert S. Gross, Hackensack, for appellants Hughes, Patterson, Calcia and Ritter (Gross, Demetrakis & Sinise, Hackensack, attorneys).

Howard Stern Paterson, for cross-appellants Valle and Schielke (A. Crew Schielke, Jr., Paterson, attorney).

John B. Hall, Paterson, for cross-appellant Riccardo (Davies, Davies & Hall, Paterson, attorneys).

James E. Flynn, Bayonne, for respondent (James P. Dugan, Bayonne, attorney).

PER CURIAM.

In this derivative action the trial court held, 125 N.J.Super. 302, 310 A.2d 518 (Ch.Div.1973), that defendants-appellants, directors of the North Jersey Automobile Club (Club), were jointly and severally liable for damages totalling $87,540 covering a period from 1965 to 1971. This spanned the time from when plaintiff-intervenor Riccardo became a member of the Club to when an insurance agency, originally acquired in 1951 by these directors for their own interest, was turned over to the Club. The trial judge further ordered a partial revision of the Club's election procedures. This determination was modified by the Appellate Division, 141 N.J.Super. 568, 359 A.2d 504 (1976), with respect to the amount the defendants-appellants were to be surcharged, specifically by increasing the amount of the judgment against them to $200,916.

While the general rule in derivative actions is that a plaintiff must be a shareholder at the time of the transaction of which he complains, N.J.S.A. 14A:3-6; R. 4:32-5; see 3B Moore's Federal Practice, § 23.1.01 et seq. (2d ed. 1976), the court below accomplished its modification of the trial court's judgment by applying the "continuing wrong" exception to this requirement. 141 N.J.Super. at 578-82, 359 A.2d 504. The effect was to expand the period over which damages were to be computed by moving the beginning point back from 1965, when Riccardo's membership commenced, to 1951, when the insurance company was acquired. In all other respects the trial court's judgment was affirmed.

The case is here as of right because of Judge (now Justice) Handler's partial dissent in the Appellate Division, 141 N.J.Super. at 582, 359 A.2d 504, R. 2:2-1(a)(2). Plaintiffs cross-appeal under R. 2:3-4, seeking additional counsel fees and further revision of the Club's election procedures. The dissenting judge would have affirmed the trial court's judgment in toto. On the damages issue which occasioned his partial dissent, Judge Handler reasoned that equitable considerations, including inter alia the staleness of the claim and consequent difficulties of proof, "underscore(d) the essential fairness of the award and the decision to delimit the period of recovery." 141 N.J.Super. at 585, 359 A.2d at 512. We modify the judgment of the Appellate Division substantially for the reasons explicated in the dissenting opinion...