JAKE BALL TRUST et al v. DURST
Filing
148
OPINION FILED. Signed by Chief Judge Jerome B. Simandle on 11/30/15. (js)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
JAKE BALL TRUST, et al.,
HONORABLE JEROME B. SIMANDLE
Plaintiff,
Civil Action
No. 12-5255 (JBS/AMD)
v.
MATTHEW DURST, et al.,
OPINION
Defendant.
APPEARANCES:
Vincent D’Elia, Esq.
THE D’ELIA LAW FIRM, LLC
13000 Lincoln Drive West
Suite 300
Marlton, NJ 08053
Attorney for Plaintiffs Steven Durst and Reuben Durst
John A. Yacovelle, Esq.
8438 Mackall Rd.
St. Leonard, MD 20685
Attorney for Defendant Matthew Durst
Louis A. Modugno, Esq.
William F. O’Connor, Jr., Esq.
MCELROY, DEUTSCH, MULVANEY & CARPENTER, LLP
1300 Mt. Kemble Ave.
P.O. Box 2075
Morristown, NJ 07962
Attorneys for Defendant Halloran & Sage, LLP
Christopher Philip Leise, Esq.
Jason Aaron Landro, Esq.
Nancy L. Siegel, Esq.
WHITE & WILLIAMS LLP
457 Haddonfield Rd.
Cherry Hill, NJ 08002
Attorneys for Defendant Kelley Galica-Peck
SIMANDLE, Chief Judge:
INTRODUCTION
This matter comes before the Court on motions for summary
judgment by Defendants Matthew Durst, Halloran & Sage, LLP (“H &
S”), and Kelley Galica-Peck [Docket Items 123, 124, and 125],
and by H & S’s motion to strike Plaintiffs’ Late Amendment to
Discovery Responses. [Docket Item 135.] The instant matter
arises out of Matthew Durst’s action as Trustee on behalf of the
Jake Ball Trust. Plaintiffs in this action, Steven and Reuben
Durst, bring claims of breach of fiduciary duty against Matthew
Durst and allege legal malpractice on the part of H & S and
Peck, stemming from Peck’s representation of Matthew Durst and
Reuben Durst as co-trustees of the Jake Ball Trust.
For the reasons discussed below, the Court will grant H &
S’s motion to strike Plaintiffs’ late discovery responses and
grant Matthew Durst, H & S, and Kelley Galica-Peck’s respective
motions for summary judgment in their entirety.
BACKGROUND 1
A. Facts
1
Plaintiffs have failed to meaningfully comply with L. Civ. R.
56.1. Plaintiffs’ responsive 56.1 statements address each
paragraph of the movants’ statements, as required by the Rule,
but do not include citations to affidavits or other evidence in
the record. Instead, Plaintiffs include in their papers a
“Certification of Steven Durst in Opposition to Motion for
Summary Judgment Filed on Behalf of Matthew Durst” and
“Certification of Steven Durst in Opposition to: 1. Motion for
2
On November 29, 2004, Steven Durst, a sophisticated real
estate developer, established the Jake Ball Trust, a revocable
inter vivos trust (“the Trust”) for his benefit and the benefit
of his children, nieces, and nephews, and named his brothers
Matthew and Reuben Durst as co-trustees. 2 (H & S SMF [Docket Item
123-1] ¶¶ 1-2, 16, Ex. A, Ex. E.) Steven, as grantor, retained
the ability to direct investments and distributions from the
Trust. (Id. ¶ 3, Ex. B at Art. III.) The brothers agreed among
themselves that Matthew alone would “run the operations”
associated with maintenance of the Trust. (Id. Ex. J at 45-46;
M. Durst SMF [Docket Item 125-1] ¶¶ 2-3, Ex. 2.) Reuben took on
no trust responsibilities. (M. Durst SMF ¶ 2, Ex. 2.) Reuben
Summary Judgment Filed on Behalf of Defendant, Kelley Peck; and
2. Motion for Summary Judgment Filed on Behalf of Defendant,
Halloran & Sage, LLP,” which consist mostly of unsupported legal
argument with a few citations to attached exhibits. [Docket
Items 142-2 and 142-18.] These certifications run afoul of L.
Civ. R. 7.2, which restricts such submissions to “statements of
fact within the personal knowledge of the signatory” and permits
the Court to disregard arguments of fact and law. Accordingly,
the Court deems the facts as set forth in Matthew Durst [Docket
Item 125-1], H & S [Docket Item 123-1], and Kelley Galica-Peck’s
[Docket Item 124-2] 56.1 statements undisputed for purposes of
the instant summary judgment motions. L. Civ. R. 56.1(a) (“[A]ny
material fact not disputed shall be deemed undisputed for
purposes of the summary judgment motion.”).
2 The Amended Complaint refers to Steven Durst as the “Grantor
and Trustee” of the Jake Ball Trust. (O’Connor Cert. Ex. A, ¶
1.) However, the record is clear that Steven Durst is only the
grantor of the Trust, not a trustee. (Ex. A, Jake Ball Trust
Agreement; Ex. I, Second Amendment and Restatement; Ex. J,
Reuben Durst Deposition; Ex. K, December 2007 Agreement.) The
Court finds that Steven is not a co-trustee of the Trust with
brothers Matthew and Reuben.
3
formally delegated his authority as co-trustee to Matthew Durst
“to perform all ministerial tasks associated with the investment
and management of the Jake Ball Trust, as well as all
distribution decisions, that are within my power to delegate.”
(H & S SMF ¶ 19, Ex. G.) These day-to-day tasks included, inter
alia, handling the Trust checkbook, paying Trust bills, signing
for million dollar loans on behalf of the Trust, and later
filing the state court litigation.(Id. Ex. D, 112:18-113:10; M.
Durst SMF Ex. 2.)
Among other assets, Steven Durst transferred to the Trust a
10% ownership interest in Goodmill LLC (“Goodmill”), an entity
formed with his employer Bruce Goodman in 2005 to construct,
lease, and operate a shopping center in Millville, New Jersey
(“the Millville Asset”). (Id. ¶¶ 4-17.) Steven Durst signed the
Goodmill, LLC Operating Agreement on or about November 15, 2005
with his brother Matthew’s name as “Trustee under the Jake Ball
Trust Agreement.” (Id. at ¶¶ 4-9.) Relevant to this litigation
is a single provision of the Operating Agreement: Section 7.04,
which provided Bruce Goodman the opportunity to buy out the
Trust’s ten percent interest if Steven Durst ever ceased to be
employed by him. (Id. ¶ 13, Ex. R at 18.) The effect of Section
7.04 could totally wipe out the value of the Trust’s interest in
the Millville Asset. (Id. ¶ 14, Ex. A.) Steven Durst testified
that he signed the Operating Agreement without reading it first,
4
and that he was “stuck” with Section 7.04 once it was signed.
(Id. ¶¶ 10, 15, Ex. C, Ex. D.) Neither H & S, R & C, nor KelleyGalica Peck were involved with the Trust at the time Steven
Durst signed the Operating Agreement. (Id. ¶¶ 18, 40, Ex. F.)
Matthew Durst was not aware of the Operating Agreement or its
specific provisions when Steven Durst signed his name to the
document. (Plaintiffs’ Ex. L at 83:11-84:6.)
In late 2006, Matthew Durst retained Kelley Galica-Peck, an
attorney at H & S, to represent him in Trust matters as a
trustee of the Trust. (H & S SMF ¶ 18, Ex. F.) Reuben Durst
never relied on advice given to Matthew Durst or the Trust. (Id.
¶ 53, Ex. L.)
Between May and December of 2007, Steven Durst decided to
convert the Jake Ball Trust to an irrevocable trust. (Id. ¶ 21,
Ex. C.) As part of the plan to make the trust irrevocable, the
Trust retained Paul Ruby, an appraiser of the firm Parker
Benjamin, to value the Trust’s 10% interest in the Millville
Asset. (Id. ¶ 22, Ex. H.) The appraiser ultimately valued the
asset at $841,000, but did not explicitly account for the
potential impact of Section 7.04 of the Operating Agreement.
(Id. Ex. N.) There is a dispute over when Ruby’s valuation was
finalized and communicated to Peck, H & S, the Trustees, and
Steven Durst. (Compare Pl. SMF Ex. C with Ex. J.)
Steven Durst
himself valued the Millville Asset at $600,000 as of December
5
21, 2007 in an agreement signed with Matthew and Reuben Durst
setting the terms of the Trust’s conversion from revocable to
irrevocable. (H & S SMF ¶ 32, Ex. K.)
In consideration for converting the Trust, the Trust gave
Steven Durst a promissory note in the amount of $500,000,
secured by a collateral assignment of the Trust’s membership
interest in the Millville Asset. (Id. ¶¶ 34-35, Ex. K at 1.21.3.) The Trust was converted to an irrevocable Trust by
execution on December 24, 2007, of the Second Amendment and
Restatement of Jake Ball Trust Agreement. (Id. ¶ 25, Ex. I.)
Again, the Second Amendment and Restatement names Steven Durst
the “Grantor” and Reuben and Matthew Durst as the Trustees.
(Id.) As with the Goodmill Operating Agreement, Steven Durst
testified that he signed the conversion agreement without
reading it first. (Id. ¶ 33, Ex. D.) Peck and H & S never filed
a UCC-1 Statement to perfect Steven Durst’s security interest in
the Millville Asset. (Id. ¶ 49, Ex. A.)
In May 2010, Steven Durst was terminated by Bruce Goodman,
and Goodman advised that he was exercising the buy-out option of
the Trust’s interest in the Millville Asset reserved in the
Operating Agreement. (Id. ¶¶ 36-37, Ex. L.) To protect the
Trust’s asset, Matthew Durst, as trustee for the Trust, filed a
lawsuit against Goodmill, LLC and Bruce Goodman in the Superior
Court of New Jersey in August 2010 to litigate the validity of
6
Section 7.04 of the Operating Agreement. (Id. ¶ 38, Ex. L.) If
the provision was valid and enforceable, the Trust would lose
its 10% interest in the Millville Asset. (Id.)
In October 2010, Peck left H & S and joined the R & C law
firm as counsel. (Id. ¶ 39, Ex. F.) Shortly thereafter, Matthew
Durst retained R & C to represent him in Trust matters as a
trustee of the Trust. (Id. ¶ 41, Ex. F.)
Matthew Durst settled the state court litigation on October
13, 2011 on behalf of the Trust. (Id. ¶ 42.) Both Matthew Durst
and Bruce Goodman testified on the record in the state court
litigation that Matthew had the authority to enter in the
agreement. (Id. Ex M. at 10:15-22.) The Second Amendment and
Restatement of the Trust empowers Trustees “to compromise and
settle claims.” (Id. Ex. I.) As part of the settlement, the
Trust conveyed its 10% interest in the Millville Asset to
Goodman. (Id. ¶ 43, Ex. A.) Goodman was aware of the collateral
assignment in favor of Steven Durst when he took the Trust’s 10%
interest, and that Steven Durst would have the right to try and
take it back. (Id.
¶ 44, Ex. M.) Steven Durst has made no claim
against his security interest. (Id. ¶ 45, Ex. C.)
Steven Durst and Reuben Durst objected to the terms of the
state court litigation settlement and moved to intervene and set
aside the settlement. (Op. Partial Summary Judgment [Docket Item
64] at 4.) The state court permitted Steven and Reuben Durst to
7
conduct limited discovery before ultimately deciding to enforce
the settlement on April 26, 2012. (H & S SMF Ex. M.)
Disagreement over the state court settlement led to a
“falling out” between Steven Durst and Matthew Durst and a
decision by Matthew to resign as co-Trustee. (Id. Ex. A ¶ 30.)
On November 28, 2011, Peck filed a petition to the Connecticut
Probate Court on behalf of Matthew Durst seeking approval of his
final accounting so Matthew could resign. (M. Durst SMF Ex. 14.)
Steven Durst objected to the accounting. (Id.) In December 2011,
Matthew Durst transferred $35,000 from the Trust to an escrow
account at R & C to preserve Trust assets and to cover future
legal fees and expenses associated with the accounting. (Op. R &
C Summary Judgment [Docket Item 98] at 4.) Upon order from the
Probate Court, the escrow was later closed and R & C issued a
check to the Trust. (Id.) The Probate Court ultimately approved
most of Matthew Durst’s accounting on May 24, 2013, choosing not
to rule on “some portions of the account [that] could result in
res judicata or collateral estoppel regarding tangential issues”
in the instant New Jersey case. (M. Durst SMF Ex. 14.)
B. Procedural History
Steven and Reuben Durst and the Jake Ball Trust filed the
instant action against Matthew Durst in Cumberland County
Superior Court on May 17, 2012. [Docket Item 1-2.] Plaintiffs
Steven and Reuben Durst sought injunctive relief and damages
8
against Defendant Matthew Durst for misappropriation of assets,
self-dealing, failure to provide annual accountings, and
misrepresentation regarding delivery of trust assets. Defendant
Matthew Durst filed a motion to dismiss in state court. The
state court granted the motion to dismiss with regard to the
Jake Ball Trust and denied the remainder of the motion. With the
Jake Ball Trust eliminated as a party, diversity jurisdiction
existed, and Matthew Durst removed the instant action to the
District of New Jersey. [Docket Item 1.] Plaintiffs filed an
Amended Complaint on February 15, 2013 adding claims for legal
malpractice against Halloran & Sage, LLP, Robinson & Cole, LLP,
and Kelley Galica-Peck. [Docket Item 24.]
On August 5, 2013, the Court granted Defendant Matthew
Durst’s motion for partial summary judgment, concluding that
Plaintiffs are “collaterally estopped from arguing that the
settlement entered into by Matthew Durst in Durst v. Goodmill,
LLC, et al., No. C27-10, Superior Court of New Jersey Cumberland
County Chancery Division, was unfair or inequitable” and that
“$600,000 was an unfair valuation of the property at 1600 West
Hunting Park.” [Docket Item 65.]
On July 25, 2014, Magistrate Judge Ann Marie Donio denied
Plaintiffs’ motion for leave to file a second amended complaint,
by which Plaintiffs sought to assert a legal malpractice claim
against John A. Yacovelle and the Law Office of John A.
9
Yacovelle arising out of Yacovelle’s involvement in the
settlement of the state court litigation. [Docket Item 82.]
Judge Donio reasoned that, in light of this Court’s decision on
Defendant Matthew Durst’s motion for partial summary judgment
holding that Plaintiffs were collaterally estopped arguing that
the settlement of the New Jersey state court litigation was
unfair, Plaintiffs “cannot allege cognizable, proximately caused
damages resulting from Yacovelle’s alleged malpractice.” [Docket
Item 82 at 11-12.] There was no appeal from Judge Donio’s order.
On January 13, 2015, the Court granted Defendant Robinson &
Cole, LLP’s motion for summary judgment, concluding that R & C
could not be liable for Peck’s conduct before she joined the
firm, and that R & C was not liable for any alleged malpractice
during her employment because Plaintiffs had not proffered
evidence of causation or damages. [Docket Item 99.] The Court
further found that Plaintiffs could not prove damages for Peck
or R & C’s conduct related to the conveyance of the Millville
Asset or the state court settlement agreement because this
Court’s decision on Defendant Matthew Durst’s motion for partial
summary judgment held that they were collaterally estopped
arguing that the settlement was unfair.
On April 10, 2015, Judge Donio denied Plaintiff’s third
motion for leave to file a second amended complaint, by which
Plaintiffs sought to add the Parker Benjamin appraisers as
10
additional defendants. [Docket Item 115.] There was no appeal
from Judge Donio’s order.
Plaintiffs then sought reconsideration of the four
preceding motions on August 10, 2015. [Docket Item 122.] The
Court declined to revisit the disposition of the earlier motions
for summary judgment and motions to amend the complaint because
Plaintiffs’ request was untimely and lacked merit. [Docket Item
147.]
Pursuant to Judge Donio’s Scheduling Order, all discovery
is now closed. [Docket Item 116.] Fact discovery closed on May
11, 2015, and expert discovery ended on July 31, 2015. [Id.] On
that same date, the parties were to exchange written statements
identifying opinion testimony to be presented at trial. [Id.]
Defendants all filed their instant dispositive motions on August
14, 2015, as directed. [Docket Items 123, 124, and 125.] On
August 17, 2015, Plaintiffs served a Certification from Steven
Durst dated July 18 purporting to be an amendment to their
December 23, 2014 written discovery responses regarding the
amount of Plaintiffs’ damages (“the August 17 Certification”).
[Docket Item 133-7.] Defendant H & S moved to strike the late
discovery amendment on August 28, 2015 [Docket Item 133] and
Plaintiffs opposed. [Docket Item 140.] The Court now considers H
& S’s motion to strike Plaintiffs’ late discovery amendments and
11
motions for summary judgment by Defendants Matthew Durst, H & S,
and Kelley Galica-Peck.
STANDARD OF REVIEW
Federal Rule of Civil Procedure 56(a) generally provides
that the “court shall grant summary judgment if the movant shows
that there is no genuine dispute as to any material fact” such
that the movant is “entitled to judgment as a matter of law.”
FED. R. CIV. P. 56(a). A “genuine” dispute of “material” fact
exists where a reasonable jury’s review of the evidence could
result in “a verdict for the non-moving party” or where such
fact might otherwise affect the disposition of the litigation.
Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 248 (1986).
Disputes over irrelevant or unnecessary facts, however, fail to
preclude the entry of summary judgment. Id.
Conclusory, self-
serving submissions cannot alone withstand a motion for summary
judgment. Gonzalez v. Sec’y of Dept. of Homeland Sec., 678 F.3d
254, 263 (3d Cir. 2012) (internal citations omitted).
In evaluating a motion for summary judgment, the Court must
view the evidence in the light most favorable to the non-moving
party, and must provide that party the benefit of all reasonable
inferences.
Scott v. Harris, 550 U.S. 372, 378 (2007); Halsey
v. Pfeiffer, 750 F.3d 273, 287 (3d Cir. 2014).
However, any
such inferences “must flow directly from admissible evidence
[,]” because “‘an inference based upon [] speculation or
12
conjecture does not create a material factual dispute sufficient
to defeat summary judgment.’”
Halsey, 750 F.3d at 287 (quoting
Robertson v. Allied Signal, Inc., 914 F.2d 360, 382 n. 12 (3d
Cir. 1990); citing Anderson, 477 U.S. at 255).
DISCUSSION
A. Disregarding Plaintiffs’ New Allegations
At the outset, the Court will not address the allegations
first raised in Plaintiffs’ briefing, in the certifications of
Steven Durst in opposition to Defendants’ summary judgment
motions, and in the August 17 Certification raising claims that
were not plead in the Amended Complaint. Bell v. City of
Philadelphia, 275 F. App’x 157, 160 (3d Cir. 2008) (“A plaintiff
may not amend his complaint through arguments in his brief in
opposition to a motion for summary judgment.”) (citation and
internal quotation omitted). Plaintiffs’ belated attempts to
drum up issues of material fact by raising new claims regarding
John Yacovelle’s conduct in the state court litigation, the
amount due on Steven Durst’s $500,000 Note from the Trust, and a
potential lawsuit against the Parker Benjamin appraisers cannot
withstand summary judgment. Specifically, the following aspects
of Plaintiffs’ opposition to summary judgment will be
disregarded because they are not material to the claims and
defenses that are actually in dispute under the pleadings:
Steven Durst's estimations of the current value of the Millville
13
Asset (Pl. Opp. at 3; August 17 Cert. [Docket Item 133-7]); the
terms of any potential and rejected settlement offers in the
state court litigation (Id. at 4); any potential misconduct on
the part of John Yacovelle during the state court litigations
(Id.); the amount due on the promissory note issued to Steven
Durst (Id.); the amount of any legal fees due to Fred Santarelli
stemming from Steven Durst’s employment suit against Bruce
Goodman (Durst Cert. in Opp. to Matthew Durst MSJ ¶¶ 27-28, 32,
56-58); and any potential negligence on the part of the Parker
Benjamin appraisers (Durst Cert. in Opp. to H & S and Peck MSJ
¶¶ 12-19, 32-34, 41-42). These new allegations do not generate a
dispute material to the existing claims in this case. Moreover,
these new allegations will not be deemed to form the basis for
some sort of unarticulated motion to amend the pleadings; no
such motion has been made, and the time for amending pleadings
and completing discovery expired months ago in this 2 ½-year-old
case.
B. H & S’s Motion to Strike Plaintiffs’ Late Discovery
Amendment
As a preliminary matter, H & S moves to strike Plaintiffs’
August 17 Certification. After Defendants submitted their
motions for summary judgment, Plaintiffs served a certification
from Steven Durst purporting to amend Plaintiffs’ responses to
interrogatories and requests for document production. In the
14
certification, Steven Durst provided a new calculation of
damages allegedly suffered by the Trust because of the acts of
Peck, H & S, and R & C. The certification was signed July 18,
2015, and not served on Defendants until August 17, 2015.
Defendants argue that this amendment to Steven Durst’s
prior interrogatory answers is an improper attempt to extend the
discovery deadlines set by Judge Donio’s April 10, 2015
Scheduling Order, which closed fact discovery on May 11 and
expert discovery on July 31, required the parties to submit
their proposed opinion testimony for trial on July 31, and made
dispositive motions due August 14. Pursuant to Fed. R. Civ. P.
6(b), any request to extend a Court-ordered deadline after it
has passed must be made on motion and demonstrate that the party
acted because of excusable neglect. Specifically, parties
seeking to modify a scheduling order must show good cause. Fed.
R. Civ. P. 16(b)(4). Defendants argue that Plaintiffs have not,
and cannot, show either excusable neglect or good cause for
their delay because the amended damages calculations pertain
only to items of which Plaintiffs were already aware when
Defendants served their initial and second requests for
information in the winter of 2014 – 2015 and deposed Steven
Durst on February 3, 2015. What makes Plaintiffs’ submission
even more egregious, according to Defendants, is that the August
17 Certification was signed before the deadline for dispositive
15
motions but not served until after Plaintiffs had already
received Matthew Durst, H & S, and Peck’s motions for summary
judgment.
In response, Plaintiffs argue that this amendment to Steven
Durst’s answers to interrogatories is merely an attempt to
comply with Fed. R. Civ. P. 26(e), which imposes on litigants a
duty to supplement and correct disclosures and discovery
responses as new material comes to light. According to
Plaintiffs, Steven Durst was unaware of the “ongoing nature of
his rising damage claim” until he reviewed the expert report of
Frederic Jacob, Esq., served on June 25, 2013. (H & S SMF Ex.
N.) His August 17 Certification, served within 8 weeks of the
expert report, was thus a timely supplemental disclosure
accounting for new information that was not otherwise known to
the party, pursuant to Fed. R. Civ. P. 26(e)(A).
Plaintiffs’ assertion that he was unaware of the nature of
his damages is wholly inconsistent with the thrust of his
Certification – that he is “familiar with the valuation of real
estate” (August 17 Cert. ¶ 1) and that his “experience and
training has given [him] insight into the value and cost of real
estate and real estate investments.” (Id. ¶ 5.) Plaintiffs
further argue that Defendants cannot be prejudiced by their
amended responses because “[t]hey clearly know of Defendant’s
extensive experience in the real estate industry.” (Pl. Opp.
16
Mtn. to Strike at 5.) But Plaintiffs cannot have it both ways
with their amended discovery responses; they cannot both claim
that the ongoing nature of the Trust’s damages was unknown to
Steven Durst at the time that he submitted his initial discovery
responses and testified under oath at his deposition, and that
his expertise leads to a reliable calculation of damages. If, as
seems likely, Plaintiffs knew their discovery needed to be
amended shortly after they were made, Plaintiffs were obligated
to supplement their responses far sooner when they did. Worse
for Plaintiffs’ case is the fact that H & S’s requests for
production of documents related to damage claims during fact
discovery went unanswered. (H & S SMF ¶¶ 10-12.) The Rules do
not anticipate that a party can neglect to produce responsive
documents during discovery and then “supplement” the nonresponse during post-discovery summary judgment motion practice.
That would be as unfair as it is inefficient. Courts in this
District have routinely stricken amendments after the close of
discovery when the purportedly new information was responsive to
earlier discovery requests and within the proponent’s control.
See Wilczynski v. Redling, No. 12-4335, 2014 WL 5361916 at *6
(D.N.J. Oct. 21, 2014); Carita v. Mon Cheri Bridals, LLC, No.
10-2517, 2012 WL 2401985, at *5 n. 4 (June 25, 2012).
Even if this information were truly unknown until Steven
Durst received Jacob’s expert report at the end of June,
17
Plaintiffs’ two-month delay cannot be timely enough to satisfy
Rule 26. Parties generally have a 30-day window to respond to
discovery requests. See Fed. R. Civ. P. 33(b)(2)
(interrogatories); Fed. R. Civ. P. 34(b)(2) (production of
documents); Fed. R. Civ. P. 36(a)(3) (requests for admission).
The Rules cannot contemplate a window to supplement longer than
the initial window to respond. While Fed. R. Civ. P. 26(e) does
not outright define what is “timely” for the purposes of the
Rule, courts acknowledge that supplementation to correct a “true
error” is distinct from supplementation as gamesmanship,
especially when supplementation is in opposition to a summary
judgment motion. See 8A Charles Alan Wright & Arthur R. Miller,
Federal Practice and Procedure §2049.1 (3d ed.). “Counsel’s duty
under Fed. R. Civ. P. 26(e)(2) to correct materially incomplete
or erroneous information should not be misused to circumvent
deadlines.” Hioutakos v. SimplexGrinnell LP, No. 10-cv-4505,
2014 WL 1255197 at *3 (D.N.J. March 26, 2014). Delaying service
of this supplement until after summary judgment motions were
submitted, especially noting that a month lapsed between when
Steven Durst executed the certification and when it was sent to
Defendants, further confirms that this is not seasonable
supplementation of discovery under Rule 26(e)(2)..
Further, even if this were a proper amendment, Plaintiffs
have offered an insufficient explanation for the discrepancy
18
between the $4,493,500 figure cited in the August 17
Certification and the earlier $2,450,000 amount sworn to during
Steven Durst’s deposition. (Compare H & S SMF Ex. E with H & S
SMF ¶ 8.) The Third Circuit permits trial judges to disregard an
affidavit that contradicts earlier sworn testimony. Jiminez v.
All American Rathskeller, Inc., 503 F.3d 247, 253 (3d Cir.
2007). Such a “sham affidavit” cannot raise a genuine issue of
material fact to defeat summary judgment. Id. Just as Plaintiffs
cannot raise new claims for relief in their opposition to
summary judgment, so too are they precluded from asserting new
sources of damages that were previously known to the affiant.
Defendant’s motion to strike Plaintiffs’ late amendment to
discovery responses is granted.
C. Matthew Durst’s Motion for Summary Judgment
At this stage in the litigation, the following breach of
fiduciary duty claims from the Amended Complaint remain against
Defendant Matthew Durst, arising from his actions as a coTrustee of the Trust: self-dealing and misappropriation of Trust
assets; mismanagement of the State Court Litigation; failure to
provide annual accountings; and wrongful diversion of funds into
Peck’s escrow account. Because Plaintiffs have failed to show
that a genuine dispute of fact exists as to each of these
claims, the Court will grant Matthew Durst’s motion for summary
judgment in its entirety.
19
As a co-Trustee of the Jake Ball Trust, Matthew Durst acted
as a fiduciary and owed the Trust a duty of loyalty and a duty
to exercise reasonable skill and care. F.G. v. MacDonell, 696
A.2d 697, 704 (N.J. 1997) (citing Restatement (Second) of Trusts
§§ 170, 174). “A breach of trust occurs if the trustee,
intentionally or negligently, fails to do what the fiduciary
duties of the particular trusteeship require or does what those
duties forbid.” Restatement (Third) of Trusts § 93 (2012). A
fiduciary is liable for harm resulting from a breach of his or
her duties. MacDonell, 696 A.2d at 704. Thus, in order to show
that Matthew Durst breached his duties owed to the Trust,
Plaintiffs must show both that Matthew acted in his own selfinterest or failed to exercise reasonable skill in the
administration of his Trust activities and that the Trust was
harmed by his failures.
a. Self-dealing and misappropriation of Trust assets
Plaintiffs allege in the Amended Complaint that Matthew
Durst engaged in self-dealing and misappropriation of Trust
assets when, as Trustee, he issued checks for non-Trust related
purposes and set aside a disproportionate amount of Trust money
for his son, Matthew Jr., to the detriment of the other
beneficiaries.
(H & S SMF Ex. A, ¶ 21.) Plaintiffs focus in
particular in their opposition to summary judgment on a dispute
over $22,000 worth of checks written by Matthew Durst, which
20
they contend were not truly for Trust purposes because proper
documentation has not yet been produced. Matthew Durst argues
that summary judgment is appropriate because each of the
challenged payments were for Trust purposes, and that the
factual issues Plaintiffs raise are speculative and insufficient
to raise a genuine dispute.
Plaintiffs first allege that Matthew Durst engaged in selfdealing and misappropriation of Trust funds by making
unauthorized distributions on behalf of his son, Matthew Jr.
Specifically, Plaintiffs argue that $79,553.22 in Trust funds
spent according to the Accounting submitted by Matthew Durst in
the Connecticut Probate Court for Matthew Jr.’s running camps,
running shoes, Dell laptop, and expenses while enrolled at the
University of Delaware exceed the terms of the Trust. (See
Connecticut Probate Court Accounting [Docket Items 144-1, 144-2,
and 144-3].)
The Second Amendment and Restatement of the Trust empowers
the Trustees to make distributions to the beneficiaries to
provide for their “education, maintenance in health and
reasonable comfort, or support in the accustomed manner of
living.” (H & S SMF Ex. I at 2.) Additionally, Steven Durst and
Matthew Durst agreed that Steven was “fine with” the Trust
covering $30,000 a year for Matthew Jr.’s education. (M. Durst
SMF Ex. 6, 110:24-111:5.) The Accounting submitted to the
21
Connecticut Probate Court shows that the Trust distributed
$79,553.22 on Matthew Jr.’s behalf between October 2006 and
September 2011, with the first payments for University of
Delaware expenses coming in 2009 at the start of Matthew Jr.’s
freshman year and ending partway through his third year in the
fall of 2011. (Accounting at 25-26.) Therefore, these challenged
payments were both within the express terms of the Trust – for a
beneficiary’s education and lifestyle - and the bounds of
$30,000 per academic year (or $90,000 for three full academic
years) contemplated by Steven and Matthew Durst. Plaintiffs
cannot show that Matthew Durst misappropriated Trust funds by
making these distributions. Accordingly, the Court grants
summary judgment to Matthew Durst on claims regarding
distributions made on behalf of Matthew Jr.
Next, Plaintiffs allege that Matthew Durst violated the
terms of the Trust when he distributed a disproportionate amount
of Trust money to his son, Matthew Jr., to the detriment of the
other beneficiaries. The Second Amendment and Restatement of the
Jake Ball Trust makes clear that the first priority
beneficiaries of the Jake Ball Trust are the children of Steven
Durst. (H & S SMF Ex. I at 3.) Nonetheless, Plaintiffs cannot
dispute that the terms of the Trust provide that distributions
be made also to “the descendants of [Steven Durst’s] siblings”
and that shares may be distributed “without requirement of
22
equality . . . .” (Id. at 2.) Plaintiffs have provided no
evidence that the $79,553 spent on Matthew Jr. in any way
prejudiced the priority beneficiaries identified in Paragraph 19
of the Amended Complaint. (Id. Ex. A.) Accordingly, the Court
grants summary judgment to Matthew Durst on claims regarding
disproportionate Trust payments made for Matthew Jr.
Finally, Plaintiffs contend that $20,000 worth of checks
issued by Matthew Durst to himself as reimbursements constitute
a misappropriation of Trust funds because he has not provided
adequate documentation to prove that they were legitimate Trust
expenses. In their opposition to summary judgment, Plaintiffs
argue that Matthew Durst “has never shown that he actually paid
any of the bills that he reimbursed himself $22,000.” (Pl. Opp.
at 7.) But the record now before the Court does not support
Plaintiffs’ contention. Matthew Durst produced cancelled Jake
Ball Trust checks in response to Plaintiffs’ discovery requests
and provided further backup checks, bills, and invoices after
questions about certain payments arose at his deposition. (M.
Durst SMF Ex. 8, 9, 10, 11.) These explanations confirm that the
challenged payments reimbursed legitimate Trust-related
expenses. Plaintiffs’ hypothesis that Matthew Durst might “have
gone to neighbors and asked for invoices and then wrote a check
to himself for the amount of the invoice” (Pl. Opp. at 7) rather
than pay them himself cannot contradict the evidence on the
23
record. “The mere existence of a scintilla of evidence in
support of the plaintiff’s position will be insufficient” to
withstand summary judgment. Anderson v. Liberty Lobby, Inc., 477
U.S. 242, 252 (1986). Accordingly, Matthew Durst is entitled to
summary judgment on claims regarding the $22,000 checks.
b. Mismanagement of the state court litigation
Next, Plaintiffs argue that Matthew Durst breached his
fiduciary duty owed to the Trust and exceeded his authority as a
co-Trustee when he allegedly rejected Bruce Goodman’s initial
offer to settle the state court litigation, unilaterally settled
the case for $80,000, and conveyed the Millville Asset to
Goodman as part of the settlement. (H & S SMF Ex. A, ¶ 22.) The
parties do not dispute that Matthew Durst never consulted with
his co-Trustee Reuben Durst about the state court litigation,
but do disagree over whether he was required to do so. The
parties disagree about the extent to which Reuben Durst’s
December 29, 2007 letter (H & S SMF Ex. G) to Matthew Durst
delegating authority over all “ministerial” Trust matters
continued to control after the Trust became irrevocable, and if
so, whether it would cover the conduct of the state court
litigation.
However, regardless of whether Matthew Durst exceeded his
authority by settling the state court litigation, Plaintiffs’
claim fails as a matter of law because Plaintiffs are precluded
24
from proving damages in connection with the settlement. This
Court has already held that the state court litigation
settlement was fair and equitable. [Docket Item 64 at 19.] Even
if Matthew Durst could not unilaterally bind the Trust to the
settlement, the Trust suffered no harm as a matter of law from
entering a deal adjudged fair by the New Jersey state Chancery
Court. Accordingly, Matthew Durst is entitled to summary
judgment on claims that he mismanaged the state court litigation
exceeded his authority to settle the matter.
c. Failure to provide annual accountings
Plaintiffs also allege in the Amended Complaint that
Matthew Durst breached his fiduciary duty as Trustee by failing
to provide Steven Durst with annual accountings. (H & S SMF Ex.
A, ¶ 26.) However, Plaintiffs have since acknowledged that the
terms of the Trust never required annual accountings. (M. Durst
SMF Ex. 12 at 214:7-12.) Moreover, Steven Durst has conceded
that he never requested an accounting of the Trustees between
2004, when the Trust was formed, and 2010. (H & S SMF, Ex. D at
113:21-114:21; M. Durst SMF Ex. 13 at 132:16-23.) Nor can Steven
Durst claim to have suffered damages because of a lack of
information regarding Trust activities. Steven and Matthew Durst
had such regular contact during that time period that formal
accountings were unnecessary. (M. Durst SMF Ex. 12 at 215:4-10;
Ex. 13 at 132:16-23.) Accordingly, the Court grants Matthew
25
Durst’s motion for summary judgment as to Plaintiffs’ claims
regarding annual accountings.
d. Wrongful diversion of funds to R & C escrow account
Finally, Plaintiffs contend that Matthew Durst harmed the
Trust when he “wrongfully diverted” $35,000 from the Trust
account and deposited it in an escrow account with Kelley
Galica-Peck and R & C. (H & S SMF Ex. A, ¶ 35.) The Court has
already determined that Plaintiffs are unable to prove damages
proximately caused by this transfer. [Docket Item 99.]
Consistent with an order from the Connecticut Probate Court, the
escrow was closed and R & C issued a check to the Trust in the
amount of $33,605, withholding only funds expressly approved by
the Probate Court. Plaintiffs have not shown that the Trust was
unable to meet any of its obligations while the funds were
escrowed. Therefore, the Court will grant Matthew Durst’s motion
for summary judgment as to Plaintiffs’ claim based on the
allegedly improper transfer and escrow of $35,000 in Trust
funds.
D. H & S’s Motion for Summary Judgment
Plaintiffs also allege legal malpractice committed by H & S
stemming from the law firm’s representation of Matthew Durst as
a co-Trustee of the Trust beginning in late 2006, when Matthew
Durst retained Kelley Galica-Peck, until October 2010, when she
left H & S to join R & C. Plaintiffs contend in the Amended
26
Complaint that the following actions taken by Peck, while
employed by H & S, constitute actionable malpractice:
misrepresentation of the value of the Millville Asset;
neglecting to make Steven Durst aware of the potential impact of
Section 7.04 of the Operating Agreement; failing to include in
the Second Amendment and Restatement of the Trust a requirement
for annual accountings and a provision that Steven Durst retain
the power to name and change Trustees; transferring the
Millville Asset from Steven Durst to the Trust in exchange for
the $500,000 Note; and failing to perfect Steven Durst’s
collateral interest in the Millville Asset. As noted above, the
Court will not address additional instances of malpractice
charged in the expert report of Frederick Jacob that were not
plead in the Amended Complaint.
To recover for legal malpractice, a plaintiff must prove
(1) the existence of an attorney-client relationship creating a
duty of care by the defendant attorney, (2) the breach of that
duty by the defendant, and (3) proximate causation of the
damages claimed by the plaintiff. Jerista v. Murray, 883 A.2d
350, 359 (N.J. 2005) (citing McGrogan v. Till, 771 A.2d 1187,
1193 (N.J. 2001)). An attorney’s negligent conduct is a
proximate cause if it is a substantial contributing factor in
causing the loss. Froom v. Perel, 872 A.2d 1067, 1076 (N.J. App.
Div.), certif. denied, 883 A.2d 106 (N.J. 2005) (internal
27
citations omitted). In a legal malpractice case, “the measure of
damages is ordinarily the amount that the client would have
received but for his attorney’s negligence.” Garcia v. Kozlowv,
Seaton, Romanini & Brooks, P.C., 845 A.2d 602, 611 (N.J. 2004).
A plaintiff’s malpractice claim “must be sustained by a
preponderance of the competent, credible evidence and is not
satisfied by mere conjecture, surmise or suspicion.” 2175
Lemoine Ave. Corp. v. Finco, Inc., 640 A.2d 346, 352 (N.J. App.
Div. 1994).
1. Valuation of the Millville Asset, the impact of
Section 7.04, and the $500,000 Note
Plaintiffs contend that Peck and H & S committed legal
malpractice by misrepresenting the value of the Trust’s 10%
interest in the Millville Asset when they ignored Section 7.04
of the Operating Agreement and neglected to warn Steven Durst of
its potential impact. (H & S SMF Ex. A, ¶ 42(c).) Plaintiffs
argue that the Trust relied on Peck’s omission and her incorrect
valuation of the Millville Asset when Steven Durst decided to
convert the Trust to an irrevocable one. Specifically,
Plaintiffs argue that if Peck had notified Steven Durst of the
potential for Section 7.04 to wipe out the value of the
Millville Asset, the Trust would not have issued him the
$500,000 Note and security agreement and he would have been able
to negotiate with Goodman to amend the Operating Agreement. In
28
response, Defendants argue that Steven Durst did not, and could
not have, relied on Peck and H & S’s advice regarding the
Operating Agreement. Moreover, they argue that Plaintiffs’ point
about renegotiating the Operating Agreement is mere conjecture
insufficient to show proximate cause as a matter of law.
Finally, Defendants argue that Steven Durst cannot contend that
the Trust would not have incurred liability on the $500,000 but
for Peck’s advice failing to take into account Section 7.04.
Plaintiffs’ malpractice allegations regarding Peck’s
failure to warn Steven Durst about Section 7.04 of the Operating
Agreement and any effect it might have on the valuation of the
Millville Asset fail for lack of proximate causation. Plaintiffs
cannot claim that they relied on Peck and H & S’s advice (or
lack thereof) when issuing the $500,000 Note and converting the
Trust for three reasons. First, it is undisputed that both coTrustees admitted that the Trust never actually relied on the
valuation advice at the time the conversion agreement was
executed. Co-Trustee Reuben Durst has never personally relied on
advice from Peck in the administration of any Trust matters. (H
& S SMF Ex. J at 65:12-16) Co-Trustee Matthew Durst believed the
Millville Asset to be valued at $600,000 at the time of the
conversion agreement, not the $841,000 figure provided by Peck’s
appraiser. (Id. Ex. T at 61:20-62:1.) The Trust cannot have
29
suffered damages because of Peck and H & S’s advice if its
Trustees took no action in reliance on the advice.
Second, Steven Durst cannot have reasonably relied on
Peck’s valuation advice to his detriment when he decided to
convert the Trust to an irrevocable one because he is charged
with knowledge of Section 7.04 himself. Steven Durst describes
himself as a knowledgeable and sophisticated real estate
businessman. (Id. Ex. E at 94:25-96:1.) It is undisputed that
Steven Durst signed the Operating Agreement in 2005, long before
Peck and H & S were involved with the Trust. (Id. Ex. F.) “A
party who enters into a contract in writing . . . is
conclusively presumed to understand and assent to its terms and
legal effect.” Rudbart v. N. Jersey Dist. Water Supply Comm’n,
605 A.2d 681, 685 (N.J. 1992). Steven Durst cannot complain that
years later, Peck did not inform him about a contract he himself
signed, because knowledge of the provision and its potential
impact on the value of the Millville Asset is presumed, even if
he chose not read the contract before signing. Riverside
Chiropractic Group v. Mercury Ins. Co., 961 A.2d 21, 27 (N.J.
App. Div. 2008). As a real estate professional with extensive
experience in the real estate industry, it would not have been
reasonable for him to rely on valuation that he should have
known did not account for the potential impact of Section 7.04.
30
Third, Plaintiffs cannot claim to have relied on Peck and H
& S’s valuation advice in “conveying” the Millville Asset to the
Trust as part of the December 2007 conversion agreement because
the Trust already owned the asset. Plaintiffs’ assertion that
the Trust issued the $500,000 Note in exchange for the Millville
Asset is not supported by any facts in the record. Steven Durst
executed the Operating Agreement in 2005 using Matthew Durst’s
name as a Trustee of the Jake Ball Trust, thereby transferring
the Millville Asset to the Trust and binding the Trust to the
terms of the agreement years before it executed the Note.
Nor can Plaintiffs successfully argue that Peck is
responsible for any purported damages to the Trust because if
Peck had warned Steven Durst about the potential impact of
Section 7.04 of the Operating Agreement, he could have
renegotiated the agreement’s terms with Bruce Goodman before the
Trust issued Steven the $500,000 Note. In a transactional legal
malpractice claim, a plaintiff must show that an attorney’s
malpractice was a substantial factor in the loss of a benefit
from a transaction. Froom, 872 A.2d at 1077. In other words, the
plaintiff must show that, even in the absence of attorney
negligence, the other parties to the transaction would have
agreed to a deal advantageous to the plaintiff. Id. Here, the
record does not support Plaintiffs’ claim that Steven Durst
could have convinced Goodman to change the terms of the
31
Operating Agreement two years after the fact. Steven Durst never
drafted an alternative version of Section 7.04, let alone
presented one to Goodman for him to accept or reject. (H & S SMF
Ex. D.) Steven Durst himself acknowledged in sworn testimony
that it would be “pure conjecture” to predict how Goodman would
have reacted to a request to change the provision. (Id.) “Mere
conjecture” is not sufficient to defeat summary judgment. 2175
Lemoine Ave. Corp., 640 A.2d at 352.
Furthermore, fatal to Plaintiffs’ claims regarding the
allegedly erroneous valuation of the Millville Asset is the fact
that Plaintiffs cannot prove damages. As Plaintiffs have
repeatedly declined to engage their own valuation expert,
Plaintiffs have provided no evidence that Peck’s valuation was
actually incorrect. Moreover, as this Court previously held in
granting Matthew Durst’s partial summary judgment motion [Docket
Item 65], Plaintiffs are precluded from arguing that the state
court litigation settlement was unfair. Even if Plaintiffs could
establish the breach of a duty owed by Peck and H & S in the
context of the valuation of the Millville Asset, Plaintiffs
cannot show that they were damaged when the asset was later
transferred to Goodman for $80,000 in the state court settlement
because the Court must assume that the settlement was fair and
equitable.
32
Because Plaintiffs can prove neither causation nor damages
with respect to their claims that Peck and H & S committed
malpractice by providing an erroneous valuation of the Millville
Asset and failing to warn Steven Durst about the potential
impact of Section 7.04 of the Operating Agreement, the Court
grants H & S’s motion for summary judgment as to this claim.
2. Accountings and ability to change trustees
Next, Plaintiffs contend that Peck and H & S committed
malpractice when they represented to Plaintiffs that the
Trustees would be required to provide the Grantor, Steven Durst,
with annual accountings and that Steven Durst would retain the
right to name and remove Trustees of the Jake Ball Trust, but
failed to include provisions to that effect in the Second
Amendment and Restatement of the Jake Ball Trust Agreement. (H &
S SMF Ex. A, ¶¶ 42(a) and (b).)
As with their other claims, the record includes no proof of
damages. Even assuming arguendo that Plaintiffs were not
precluded from arguing that the Trust was damaged by an unfair
state court settlement, Plaintiffs have not shown how the
absence of annual accountings or Steve’s ability to name new
Trustees harmed the Trust. Without damages, Plaintiffs’ claim
fails as a matter of law and H & S is entitled to summary
judgment.
33
3. Failing to perfect collateral security interest in
Millville Asset
Plaintiffs allege that Plaintiffs were further harmed when
Peck and H & S failed to perfect Steven Durst’s security
interest in the Millville Asset by recording a UCC-1 statement.
(H & S SMF Ex. A, ¶ 47.) According to Plaintiffs’ expert
Frederick Jacob, if Peck and H & S had recorded the security
interest, it would have prevented Matthew Durst from conveying
the Millville Asset as part of the state court settlement, and
the Trust would not have been damaged by a settlement exchanging
the Millville Asset for less than its alleged worth. (H & S SMF
Ex. N at 6.)
This argument fails as a matter of law. Plaintiffs cannot
claim damages for two reasons. First, Peck and H & S’s failure
to record a UCC-1 statement did not wipe out Steven Durst’s
collateral interest in the Millville Asset; it merely changed
the order of priority of the rights of purchasers and creditors
of the property. See Shaw Mudge & Co. v. Sher-Mart Mfg. Co.,
Inc., 334 A.2d 357, 322 (N.J. App. Div. 1975) (“Thus, while a
debtor’s rights in collateral may be voluntarily or
involuntarily transferred . . . such transfer would still be
subject to a security interest.”). All parties involved in the
state court litigation recognized that Goodman would take the
Millville Asset subject to Steven Durst’s collateral assignment
34
and the possibility that he might sue to enforce it. (O’Connor
Cert. Ex. M, 16:24-17:6, 26:23-27:4.) Just because Steven Durst
has taken no action to collect on his security interest does not
mean that he cannot. (H & S SMF Ex. D at 210:16-24.) Plaintiffs
have suffered no harm because Steven Durst can still enforce his
rights as to the $500,000 Note, albeit as against a different
party.
Second, even if this failure to record constituted a breach
of duty, Plaintiffs again cannot prove damages. Steven Durst has
admitted that he has suffered no individual damages in this
case. (Id. Ex. D at 210:25-211:16; T214:25-215:3.) Nor can
Plaintiffs argue that the Trust suffered damages from the
alleged failure to perfect Steven Durst’s security interest
because they are precluded from arguing that the state court
settlement was unfair. Whether or not Peck and H & S recorded
Steven Durst’s security interest is immaterial because the Trust
was not harmed when Matthew Durst conveyed the Millville Asset
to Bruce Goodman as part of the state court settlement.
Accordingly, the Court grants H & S’s motion for summary
judgment in its entirety.
E. Kelley Galica-Peck’s Motion for Summary Judgment
Kelley Galica-Peck also moves for summary judgment on all
malpractice claims against her on the grounds that if neither of
her employers can be found liable for legal malpractice, neither
35
can she. Peck argues that she is entitled to summary judgment
for the same reasons as R & C in this Court’s opinion granting
summary judgment [Docket Items 98, 99] and H & S, described in
Part C above, because at all times she was acting within the
scope of her employment. Plaintiffs fail to respond to this
argument.
An employer will be vicariously liable for the wrongful
acts of his or her employees if at the time, the employee was
acting within the scope of his or her employment. Carter v.
Reynolds, 815 A.2d 460, 463 (N.J. 2003). In order for an act to
be found within the scope of the actor’s employment, it must be
of the kind that the agent or servant is employed to perform,
occurring within the authorized time and space limits of the
employee’s duties, and it must be motivated, at least in part,
by a purpose to serve the employer. Id. at 464 (citing
Restatement (Second) of Agency § 220). In particular, a law firm
will be liable for the wrongful acts of an employee of the firm
who was acting in the ordinary course of the firm’s business.
Licette Music Corp. v. Sills, Cummis, Zuckerman, Radin,
Tischman, Epstein & Gross, P.A., No. A-6595-06T2, 2009 WL
2045259, at *8 (N.J. App. Div. July 16, 2009) (citing
Restatement (Third) of the Law Governing Lawyers § 58 (2000)).
An employee will be individually liable for his or her conduct
if he or she was not acting within the scope of employment. Id.
36
Peck argues that she was acting within the scope of her
employment with H & S and R & C at all times that she was
representing Matthew Durst as a co-Trustee of the Jake Ball
Trust. The undisputed record reflects that all of Peck’s
allegedly wrongful conduct was in furtherance of her
representation of Matthew Durst, occurred during her employment
with the Defendant law firms, and was performed at least in part
to bring business to her employers. Plaintiffs point to nothing
in the record showing that proximate causation or damages can be
traced to Peck’s conduct where this Court found that they could
not for R & C, her employer. Similarly, Plaintiffs have done
nothing to distinguish Peck’s conduct from H & S’s with regards
to the valuation of the Millville Asset, the absence of an
accountings provision in the Trust, or the failure to perfect
the collateral security interest in the Millville Asset, making
summary judgment appropriate for one party but not the other.
Accordingly, the Court will grant Peck’s motion for summary
judgment in its entirety.
37
CONCLUSION
In light of the foregoing, the Court will grant Defendants
Matthew Durst, H & S, and Kelley Galica-Peck’s motions for
summary judgment and enter judgment in favor of Defendants on
all of Plaintiffs’ claims. An accompanying Order will be
entered.
November 30, 2015
Date
s/ Jerome B. Simandle
JEROME B. SIMANDLE
Chief U.S. District Judge
38
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