NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3235-17T3
THE CHURCH INSURANCE
COMPANY OF VERMONT,
Plaintiff-Appellant/
Cross-Respondent,
v.
THEOPHILUS EJIM,
Defendant-Respondent/
Cross-Appellant,
and
GRACE CHURCH USA,
Defendant-Respondent.
_____________________________
Argued March 27, 2019 – Decided April 10, 2019
Before Judges Alvarez and Nugent.
On appeal from Superior Court of New Jersey, Law
Division, Mercer County, Docket No. L-2274-16.
James P. Manahan argued the cause for appellant/cross-
respondent (Bernstein & Manahan, LLC, attorneys;
James P. Manahan on the briefs).
Robert P. Casey argued the cause for respondent/cross-
appellant (Lenox Law Firm, LLC, attorneys; Robert P.
Casey, on the brief).
PER CURIAM
Plaintiff, The Church Insurance Company of Vermont, appeals from a
$9185 judgment entered against it as a sanction for pursuing a frivolous claim
against defendant, Theophilus Ejim. Ejim cross-appeals from the same order,
contending the judgment was inadequate. Because the judgment was final, and
because the Law Division judge who entered it did not make adequate findings
of fact and conclusions of law as required by Rule 1:7-4, we vacate the order
and remand for further proceedings.
To provide context for the issues raised on this appeal, we briefly
summarize the facts of a Chancery Division action – between plaintiff's insured
and Ejim – from which no appeal has been taken. Ejim had been a founder and
long-term member of IGBO Community Church U.S.A., Inc. (IGBO), when he
left as the result of a factional split within the church. In a series of transactions
that pre-dated and post-dated Ejim's departure from IGBO, Ejim transferred
approximately $250,000 from IGBO bank accounts to a bank account in the
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2
name of Grace Church, USA. Although Ejim incorporated this entity, he
acknowledged during court proceedings that no church is associated with it.
IGBO filed a chancery action and obtained interim relief restraining the
bank from disbursing any funds from the Grace Church account. The Chancery
Division action concluded after the court entered summary judgment for IGBO,
finding Ejim had committed the tort of conversion and breached his fiduciary
duty to IGBO. The court dismissed Ejim's counterclaim seeking involuntary
dissolution of IGBO or, alternatively, indemnification. The Chancery Division
judge also rejected Ejim's defense of unclean hands. The judge granted IGBO's
summary judgment motion on November 14, 2017.
That brings us to the Law Division action that is now before us. Plaintiff
issued a Fidelity Bond to IGBO to cover, among other losses, "theft and
conversion of assets including bank funds by a member or employee." When
IGBO asserted a claim against the Bond based on Ejim's conversion of the funds
in the IGBO accounts, plaintiff paid IGBO the $100,000 limits of its Fidelity
Bond, but required IGBO to file a criminal complaint against Ejim. In
November 2016, a year before the pending Chancery Division action concluded,
plaintiff filed this subrogation action against Ejim and Grace Church USA.
A-3235-17T3
3
Ejim and Grace Church filed an answer, affirmative defenses, and a
counterclaim. The counterclaim's first count stated in relevant part:
1. On information and belief, the Plaintiff, in
processing a claim by its insured, [IGBO], required its
insured to file a Criminal Complaint against the
Defendant Ejim knowing that the funds which were
allegedly misappropriated or converted were being held
in a bank account under Court Order.
2. Such conduct on behalf of the plaintiff
constituted a frivolous action that directly and
proximately has caused the Defendant Ejim to suffer
damages.
The second count of the counterclaim stated in pertinent part:
2. In Paragraph [three] of its Complaint, the
Plaintiff alleges that its insured submitted a claim, the
date of which pre-dated its coverage.
3. In Paragraph [five] of its Complaint, the Plaintiff
states that it paid that claim to its insured in the amount
of One Hundred Thousand Dollars ($100,000.00)
knowing that the funds that were allegedly converted
and/or misappropriated were being held in a bank
account under Court Order.
4. Such action by the Plaintiff constitutes frivolous
conduct that directly and proximately has caused the
Defendants to sustain damages.
One month after the Chancery Division judge entered summary judgment
in favor of IGBO for Ejim's conversion of IGBO funds, the same judge decided
and granted Ejim's motion for summary judgment in this, the Law Division
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4
action. In a statement of reasons appended to the order granting Ejim and Grace
Church USA summary judgment, the judge noted that the motion had been
unopposed. In granting the motion, the court explained: "The court has resolved
the Chancery Division matter and, as part of its determination, has ordered the
funds to be returned to IGBO. . . . Based on the court's decision in the chancery
matter, plaintiff no longer has a subrogation claim against Theophilus Ejim and
Grace Church U.S.A."
Following the summary judgment dismissal of plaintiff's Law Division
complaint, Ejim filed a motion seeking attorney's fees and costs from plaintiff
as a sanction for plaintiff filing a frivolous complaint. Ejim supported the
motion with his attorney's certification.
The attorney cited Ejim's answer, affirmative defenses, and counterclaim,
in which Ejim made the following allegations. First, plaintiff stated it was
authorized to transact business in New Jersey, but it had never been so
authorized. Second, IGBO's loss had not occurred within the policy period.
Third, the funds IGBO allegedly lost "were secured in a bank account, under
[c]ourt [o]rder." Ejim contended that based on these facts plaintiff's subrogation
claim was frivolous. Ejim claimed he had so informed plaintiff in his cover
letter serving his answer, affirmative defenses, and counterclaim. The cover
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5
letter contained this statement: "[a]dditionally, please note that this
correspondence is also intended to provide [twenty-eight]-Day Notice to you
pursuant to Rule 1:5-2 to withdraw the Complaint."
In response to Ejim's motion for sanctions, plaintiff sent him a letter
asserting that his motion was frivolous. Plaintiff asserted Ejim's motion for
sanctions was frivolous because the Chancery Division judge had not
determined that plaintiff's complaint was frivolous. Plaintiff also asserted Ejim
had incurred no fees or costs following the grant of summary judgment to Ejim
"that would be cause for any award or remedy against [p]laintiff." When Ejim
refused to dismiss his motion, plaintiff filed a cross-motion seeking counsel fees
and costs for having to respond to Ejim's allegedly frivolous motion.
The motion and cross-motion were decided by a Law Division judge.
Following oral argument, the judge declined to address Ejim's argument that
plaintiff was not authorized to do business in New Jersey and thus had no
standing to bring its subrogation action. The judge found plaintiff's subrogation
claim was no longer viable after the Chancery Division judge granted summary
judgment to Ejim on December 14, 2017. The judge found, however, that
plaintiff should have known its complaint had no merit as of November 14,
2017, when the Chancery Division entered summary judgment in the underlying
A-3235-17T3
6
action in favor of IGBO. The judge denied plaintiff's cross-motion, permitted
the parties to supplement the record regarding Ejim's counsel fees through the
date of oral argument, and entered the $9185 order of judgment for Ejim,
"representing sanctions pursuant to N.J.S.A. 2A:15-59.1." These appeals
followed.
On appeal, plaintiff argues the Law Division judge failed to make required
findings of fact and conclusions of law. Plaintiff notes the judge did not explain
the basis for the $9185 judgment. Ejim counters that he proved plaintiff's
conduct was frivolous and the Law Division judge acted appropriately in so
finding. He claims the documentation he submitted to the court amply supported
the final judgment. In support of his cross-appeal, he argues that plaintiff's
subrogation complaint was frivolous from its inception; consequently, the court
should have awarded him the attorney's fees he incurred from the action's
inception through its conclusion. Plaintiff responds that Ejim's cross-appeal is
devoid of factual support and unsupported by legal precedent. He insists his
matter should be remanded and the trial court directed to make appropriate
findings of fact and conclusions of law.
We begin our analysis by noting that the Law Division's order of judgment
awarding Ejim fees was final for purposes of appeal. An order is generally
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7
considered a final judgment appealable as of right if it "dispose[s] of all issues
as to all parties." Scalza v. Shop Rite Supermarkets, Inc., 304 N.J. Super. 636,
638 (App. Div. 1997) (citing Hudson v. Hudson, 36 N.J. 549, 553 (1962)).
Because the order here was final, it was appealable as of right. R. 2:2–
3(a)(1). When issuing orders appealable as of right, trial courts must issue
opinions. Rule 1:7–4 mandates that a trial court, "by an opinion or memorandum
decision, either written or oral, find the facts and state its conclusions of law
thereon . . . on every motion decided by a written order that is appealable as of
right." The trial court must clearly state its factual findings and correlate them
with relevant legal conclusions so the parties and appellate courts may be
informed of the rationale underlying the decision. Monte v. Monte, 212 N.J.
Super. 557, 565 (App. Div. 1986). "In the absence of reasons, we are left to
conjecture as to what the judge may have had in mind." Salch v. Salch, 240 N.J.
Super. 441, 443 (App. Div. 1990). Furthermore, such an omission "imparts to
the process an air of capriciousness which does little to foster confidence in the
judicial system." Twp. of Parsippany-Troy Hills v. Lisbon Contractors, Inc.,
303 N.J. Super. 362, 367 (App. Div. 1997).
Here, the Law Division judge who disposed of the final motion and cross-
motion merely made several conclusory statements. The judge provided no
A-3235-17T3
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analysis of the parties' arguments, made no findings of fact with explanations
supported by the motion record, and stated no conclusions of law supported by
precedent. For that reason, we vacate the order and remand for the Law Division
judge to make findings of fact and conclusions of law.
On remand, the judge shall address all arguments of all parties, including
Ejim's claim that plaintiff had no standing to file its subrogation claim because
it was not registered to do business in New Jersey. Plaintiff does not dispute
that it was doing business in the State without registering. The judge shall also
make findings of fact and conclusions of law concerning the reasonableness of
any fee award. Packard-Bamberger & Co., Inc. v. Collier, 167 N.J. 427 (2001).
The Law Division judge's order of judgment for Ejim is vacated and this
matter is remanded for further proceedings consistent with this opinion. We do
not retain jurisdiction.
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THE CHURCH INSURANCE COMPANY OF VERMONT VS. THEOPHILUS EJIM (L-2274-16, MERCER COUNTY AND STATEWIDE)
Combined Opinion