apmaterialfacts

FRAUDULENT CONCEALMENT OF MATERIAL FACTS

The NJ Supreme Court recognizes Fraudulent Concealment as a separate tort action. Tartaglia v. UBS PaineWebber, Inc., et al., 2008 WL 5274869 (N.J. Supreme Court, December 16, 2008).

In a PRECEDENTIAL DECISION, the Superior Court, Appellate Division, in Catena v. Raytheon Company, et al.,(August 18, 2016), held that the Discovery Rule applied to common law fraud claims (Fraudulent Concealment) as well as fraud claims under New Jersey's Consumer Fraud Act (CFA) even if discovered 17 years afterwards and filed 20 years later.

The Catena Court emphasized that the discovery rule "is designed to avoid harsh results that otherwise would flow from mechanical application of a statute of limitations." A party may not benefit from its own fraudulent conduct. Joe D'Egidio Landscaping, Inc. v. Apicella, 337 N.J. Super. 252, 257 (App. Div. 2001).

THE NEW JERSEY CONSUMER'S FRAUD ACT (CATENA RULE)

Legal Argument: Municipal Commercial Liability and the Proprietary Function Doctrine:

I. The Distinction Between Governmental and Proprietary Functions

Under New Jersey law, the Tort Claims Act (TCA) immunities apply only to "governmental functions" (e.g., core duties like police patrols or firefighting). However, when a municipality engages in activities that are traditionally performed by private business, it acts in a proprietary capacity.

The Fact: The City of Asbury Park’s oversight of the Paramount Theater—governed by a management agreement and focused on the commercial redevelopment of the waterfront—is a proprietary function.
The Law: Courts have held that "where a municipality acts in a proprietary capacity... it is subject to the same standards of liability as a private person." Wood v. City of Perth Amboy.

II. The "Shadow Process" as a Market Participant Maneuver

The City’s decision to use Police Director Louis Jordan to conduct an unauthorized approval process was not a legitimate exercise of "police power" for public safety. However, Jordan used prohibited police powers to place the Plaintiff's event as High Priority, conducted an Intelligence Investigation and made recommendations for and to deploy 50 Mutual Aid Officers (Ultra Vires Acts). Also, Jordan's police assessment form was invalid and ruled as non-governmental and was used to forcibly cancel the Plaintiff's event in disguise as a permit process that retained evidence clearly and convincingly prove after the discovery of his legal status.

Ultra Vires Conduct: Because the Superior Court had already stripped Jordan of police power in March 2004, his actions were legally void of governmental authority.
Commercial Pretext: By maintaining this "shadow process," the City acted as a market participant, using administrative machinery as a pretext to break a commercial contract. This was a business decision to control venue operations, not a regulatory decision to protect the public.

III. Commercial Liability Under the New Jersey Consumer Fraud Act (NJCFA)

When a public entity engages in a commercial transaction (like a venue lease or oversight agreement) and utilizes "unconscionable commercial practices," it is liable under N.J.S.A. 56:8-2.

Knowing Omission: The City Manager's failure to disclose Jordan's lack of authority during the September 22, 2004, meeting was a knowing omission of a material fact intended to induce the Plaintiff's reliance.
Commercial Deception: By ratifying a "shadow process" to cancel a contract, the City engaged in a "deception, fraud, [and] false pretense" in the marketplace.

IV. Waiver of Immunity via Willful Misconduct

Pursuant to N.J.S.A. 59:3-14, a public employee is not exonerated from liability if their conduct constitutes "actual fraud, actual malice, or willful misconduct."

The City's effort to taint the claim process (stalling the 2004 notice) and conceal the 2005 acknowledgement proves a deliberate intent to defraud. This willful misconduct removes any "governmental" shield the City might claim as does Breach of Contract and NJ Civil Rights Violations.

V. Conclusion

The City’s actions were proprietary in nature and commercial in intent. Having acted as a commercial manager and a deceptive market participant, the City is subject to treble damages for the insurance claim and what the Plaintiff lost, could have made and the full scope of liability under the NJCFA and common law fraud as well as violations of NJLAD and the NJCRA.

In the case Platinum Links Ent v Atlantic City Surf Pro Baseball Club 2002. 3rd Circuit United States District Court, the Hon Judge Joseph E. Irenas noted that the City's attempt to block the show was based on a "dislike of the message" and an unfair stereotype of rap fans. The ruling emphasized that Officials could not single out rap music for cancellation while allowing other genres.

NJLAD; Using "public safety" as a justification to cancel or restrict a specific genre of music (like rap) after the police and venue has already approved security measures for the event is discriminatory. It is a pretext for bias against the artists, promoter(s) and the audience.

Equitable Estoppel - Equitable Tolling

In the Catena appeal, the Appellate Division's decision reinforces the equitable nature of the Discovery Rule in New Jersey. The Court emphasized that the Discovery Rule "is designed to avoid harsh results that otherwise would flow from mechanical application of a statute of limitations."

In the context of FRAUD ESPECIALLY, "the victim's lack of awareness of the fraud is the wrongdoer's very object. The rule thus prevents the Defendant(s) from benefiting from his own deceit."