Jugan v. Friedman

Jugan v. Friedman, 275 N.J. Super. 556, 573, 646 A.2d 1112 (App.Div.), certif. denied, 138 N.J. 271, 649 A.2d 1291 (1994) was a collection action in which the plaintiff sought to recover the punitive damages he had been awarded as part of his medical malpractice claim against the defendant physician. Id. at 559-61, 646 A.2d 1112. When the plaintiff initially attempted to collect the punitive damage award, he discovered defendant had transferred all of his assets to his wife and children. Id. at 560-61, 646 A.2d 1112. The plaintiff then instituted an action against the defendant, his wife, and children, seeking the location of defendant's assets, payment of the punitive damages out of the fraudulently transferred property, and additional damages, interest, and costs. Id. at 561, 646 A.2d 1112. In Jugan, the trial court awarded the plaintiff $ 150,000 in unpaid punitive damages from the malpractice award and ordered it collected from the cash surrender value of a life insurance policy the defendant had purchased with the money he received upon liquidating his assets. Id. at 562-63, 569-70, 646 A.2d 1112. The trial court rejected plaintiff's claim that the defendant's interference with the plaintiff's ability to collect upon the original judgment was an independent tort for which plaintiff should have been awarded additional damages, as well as attorney fees and costs. Id. at 563-64, 646 A.2d 1112. The Court affirmed the trial court's ruling that plaintiff could satisfy his claims against the defendant from the cash surrender value of the life insurance policy based upon the physician's fraudulent dissipation of his assets. Id. at 570-71, 646 A.2d 1112. The Court also held that while plaintiff could not recover from defendant the litigation expenses he incurred in establishing defendant had engaged in fraudulent transfers, plaintiff could recover the fees incurred in connection with his action against the third-party recipients of the fraudulently transferred assets. Id. at 573, 646 A.2d 1112. The Court stated, "if the commission of a tort proximately causes litigation with parties other than the tortfeasor, the plaintiff is entitled to recover damages measured by the expense of that litigation with third parties." Ibid. In Jugan, the Court expressly stated the plaintiff could not recover from the defendant-tortfeasor the costs of litigating against the defendant.