Farris v. County of Camden

61 F.Supp.2d 307

Rahn J. FARRIS, Plaintiff, v. COUNTY OF CAMDEN, Camden County Democratic Committee, George E. Norcross, III, Louis Bezich, Joseph Benton, Thomas Mitchell, John Adler, Jack Gallagher, Gallagher Associates, Inc., Judy Palombi and Phyllis Pearl, Defendants.

No. CIV. A. 97-5069.

United States District Court, D. New Jersey.

August 20, 1999.

COPYRIGHT MATERIAL OMITTED

COPYRIGHT MATERIAL OMITTED

Jerald R. Cureton, Darryl S. Caplan, Anthony Valenti, Cureton, Caplan & Clark, Mt. Laurel, NJ, for Plaintiff, Rahn J. Farris.

Walter F. Timpone, John T. Coyne, McElroy, Deutsch & Mulvaney, Morristown, NJ, for Defendant, County of Camden.

William M. Tambussi, Brown & Connery, Westmont, NJ, for Defendants, the Camden County Democratic Committee and George E. Norcross, III.

Anthony J. Zarrillo, Jr., Zarrillo & Zappacosta, Cherry Hill, NJ, for Defendant Louis Bezich.

William A. Garrigle, Garrigle, Palm & Thomasson, Cherry Hill, NJ, for Defendant, Thomas A. Mitchell.

Scott A. Krasny, John Stuart Furlong, Furlong & Krasny, West Trenton, NJ, for Defendant, Judy Palombi.

John B. Kearney, Kearney, Castillo & Blake, P.C., Haddon Heights, NJ, for Defendant, Phyllis Pearl.

OPINION

ORLOFSKY, District Judge.

                       TABLE OF CONTENTS
I.  INTRODUCTION .......................................................................... 311
II. BACKGROUND ............................................................................ 313
III. LEGAL STANDARD GOVERNING MOTIONS FOR SUMMARY JUDGMENT ................................ 320
IV.  DISCUSSION ........................................................................... 321
     A. Defendants' Motions for Summary Judgment .......................................... 321
        1. Norcross's and the CCDC's Motion for Summary Judgment and Application
             of the Coconspirator Exception to the Hearsay Rule set forth in
             Rule 801(d)(2)(E) of the Federal Rules of Evidence ........................... 321
           a. Counts IX and X, Tortious Interference ...................................... 321
           b. Counts XII and XIV, Conspiracy to Tortiously Interfere ...................... 328
           c. Count XIII, Conspiracy to Defraud ........................................... 330
           d. Counts XV, XVI, XVII, XVIII, and XIX Conspiracy to Extort
               Blackmail and Deprive Farris of his Real Property........................... 331
           e. The Motion for Sanctions Pursuant to 28 U.S.C. § 1927 and the
               Court's Inherent Power ..................................................... 331
        2. Camden County's Motion for Summary Judgment .................................... 335
           a. Count I, Rescission or Reformation on the basis of Economic
                Duress .................................................................... 335
           b. Count II, Rescission or Reformation on the Basis of Fraud and
                Misrepresentation ......................................................... 339
           c. Count III, Rescission or Reformation on the Basis of Unconscionability ...... 341
           d. Count IV, Breach of the Original 1300 Building lease ........................ 343
           e. Count V, Breach of the Original 1350 Building Lease ......................... 344
           f. Count VI, Common Law Fraud .................................................. 345
           g. Count VII, Breach of Contract/Conversion .................................... 346
           h. Count XI, Breach of Duty of Good Faith and Fair Dealing ..................... 347
           i. Count XIII, Conspiracy to Defraud ........................................... 349
           j. Counts XVII and XIX, Conspiracy to Extort, Blackmail and Deprive
                 Farris of his Real Property .............................................. 349
        3.  Mitchell's Motion for Summary Judgment ........................................ 350
           a.  Count VI, Common Law Fraud ................................................. 350
           b.  Count VIII, Tortious Interference with Contract and Prospective
                Economic Advantage ........................................................ 351
           c.  Count XII, Conspiracy to Tortiously Interfere and Defraud .................. 354
           d.  Counts XV and XVIII, Conspiracy to Extort, Blackmail and Deprive
                Farris of his Real Property ............................................... 354
V. CONCLUSION ............................................................................. 355

I. INTRODUCTION

This diversity case presents novel issues of law arising out of the application of the Federal Rules of Evidence to state law causes of action at the summary judgment stage of the litigation. Specifically, in determining whether Plaintiff, Rahn J. Farris, has produced enough evidence to avoid the entry of summary judgment for Defendants, George E. Norcross, III, and the Camden County Democratic Committee, I must rule on the admissibility of hearsay statements under the coconspirator exception to the hearsay rule set forth in Rule 801(d)(2)(E) of the Federal Rules of Evidence. The application of the coconspirator exception in this case is further complicated by the denial by the alleged declarants, Defendants, Thomas A. Mitchell, Judith Palombi, and Phyllis Pearl, that they made the statements Plaintiff seeks to introduce against Norcross and the Camden County Democratic Committee. Because this Court's determination of the admissibility of these alleged coconspirators' statements turns on the credibility of the declarants and the witnesses offering their alleged statements, I hold that, prior to resolving the motion for summary judgment, I must conduct a hearing pursuant to Rule 104(a) of the Federal Rules of Evidence,¹ to take testimony and to assess the credibility of the witnesses.

This case also presents a novel issue of New Jersey state law involving whether a chairman of a county political committee can, as a matter of law, conspire with the county political committee, a legal entity which is a creature of New Jersey statute. For the reasons that follow, I hold that just as an authorized agent of a private corporation cannot conspire with the corporation that employs him, so too, a chairman of a county political committee cannot conspire with the county political committee itself.

On October 6, 1997, Plaintiff, Rahn J. Farris, filed a thirty-five count civil complaint in this Court alleging federal and pendent state law claims against Defendants, County of Camden, Camden County Democratic Committee, George E. Norcross, III, Louis Bezich, Joseph Benton, Thomas Mitchell, John Adler, Jack Gallagher, Gallagher Associates, Inc., Judy Palombi and Phyllis Pearl. On December 8, 1998, Defendants, Norcross and the Camden County Democratic Committee, moved for the imposition of sanctions and attorneys' fees against counsel for Plaintiff, pursuant to 28 U.S.C. § 1927 and the Court's inherent powers. Curiously, no such relief was sought pursuant to Rule 11 of the Federal Rules of Civil Procedure. Shortly thereafter, on February 5, 1999, Norcross and the Camden County Democratic Committee moved for summary judgment on all claims. Similarly on April 30, 1999, and May 10, 1999, respectively, Defendants, the County of Camden and Thomas A. Mitchell, moved for summary judgment on all claims asserted against them. Because Plaintiff voluntarily dismissed his federal causes of action on December 14, 1998, this Court's jurisdiction is based upon 28 U.S.C. §§ 1332 and 1367.²

For the reasons set forth below, I shall deny the motion of Defendants, Norcross and the Camden County Democratic Committee, for sanctions and attorneys' fees because they have failed to make the requisite showing that counsel for Plaintiff acted in bad faith in filing the Complaint and in conducting discovery. I shall, however, grant the motion of Norcross and the Camden County Democratic Committee for summary judgment on Plaintiff's claims for civil conspiracy to defraud, extort political contributions, blackmail, and to tortiously interfere with Plaintiff's real property. Insofar as Norcross and the Democratic Committee seek summary judgment on Plaintiff's claims for tortious interference with Plaintiff's contract and prospective economic advantage, and for civil conspiracy to so tortiously interfere and to defraud, I shall deny the motion for summary judgment without prejudice to the right of Norcross and the Committee to renew this motion at the conclusion of a pre-trial hearing conducted pursuant to Rule 104(a) to determine the admissibility of the alleged coconspirator statements under Rule 801(d)(2)(E) of the Federal Rules of Evidence.

In addition, I shall deny the motion for summary judgment of the County of Camden on Plaintiff's claims for: (1) rescission or reformation of the renegotiated leases between Plaintiff and the County of Camden on the basis of economic duress, equitable fraud, and unconscionability; (2) breach of the original lease covering Plaintiff's building located at 1300 Admiral Wilson Boulevard; and (3) breach of the covenant of good faith and fair dealing. I shall grant the County of Camden's motion for summary judgment on Plaintiff's claims for breach of the original lease covering Plaintiff's property located at 1350 Admiral Wilson Boulevard, common law fraud, and civil conspiracy.

Finally, I shall deny the motion for summary judgment of Defendant, Thomas A. Mitchell, on Plaintiff's claims for common law fraud and civil conspiracy to defraud. I shall, however, grant Mitchell's motion for summary judgment on Plaintiff's claims for tortious interference with Plaintiff's contract and prospective economic advantage, and civil conspiracy.

II. BACKGROUND

Plaintiff, Rahn J. Farris ("Farris"), a citizen of the Commonwealth of Pennsylvania, was...