Don’t Count Your Chickens ….

Today’s Star-Ledger contained an obituary of Elizabeth Bernoskie.  She was the widow of Rahway police officer Charles Bernoskie, who was killed in the line of duty in 1958.  Forty years later, Mrs. Bernoskie won a multi-million dollar jury verdict against Robert Zarinsyi for her husband’s death.  Zarinsky unsuccessfully sought a stay of that judgment pending appeal.  Mrs. Bernoskie’s counsel located an account in Zarinsky’s name that contained over $154,000.  Mrs. Bernoskie’s attorney obtained an order requiring that those funds be turned over to her.  The attorney then paid his firm and a referring counsel their attorneys’ fees and reimbursed their expenses.  The rest of the monies went to Mrs. Bernoskie.

Unfortunately for Mrs. Bernoskie, the Appellate Division reversed the jury verdict, holding that the passage of 40 years had wrongly impaired Zarinsky’s ability to present a defense.  The Appellate Division dismissed Mrs. Bernoskie’s complaint.  The Supreme Court denied Mrs. Bernoskie’s petition for certification.

Zarinsky then moved for the return of his money.  Mrs. Bernoskie resisted that.  The Law Division denied Zarinsky’s request, reasoning that since he had not gotten a stay pending appeal he did not have the right to get his money back.  In an opinion by Judge Grall, the Appellate Division reversed.

The general rule is that money collected pursuant to a judgment that is later reversed can be recovered by the party who paid it.  Mrs. Bernoskie was on notice that her collection of Zarinsky’s funds was “at risk” since Zarinsky had appealed.  Judge Grall cited cases both within and outside New Jersey to support this result.

The lesson here: while an appeal is pending, disbursement of funds collected pursuant to the judgment under appeal is at the risk of the collecting party.  If the appeal is successful and the judgment is overturned, the money will have to go back to the party from whom it was collected.