Bergen County Superior Court Judge Robert Wilson entered a default judgment, ordering Gregory Stenstrom of Glen Mills, Pennsylvania, and his business, Marque Star Holdings LLC, to pay $5.9 million to Michael Lukacs of Franklin Lakes, New Jersey, and his company, LD Management LLC, on Monday.

Stenstrom, reached by phone, declined to comment on the case.

Wilson awarded damages of $1.9 million for breach of contract and breach of the implied covenant of good faith and fair dealing, $3.9 million for violation of the New Jersey Consumer Fraud Act, and $93,814 for violation of the New Jersey Computer Related Offenses Act.

"If you're not happy with a business relationship, the law doesn't allow you to hijack someone's internet to use as leverage or ransom to resolve a dispute," said Bradley Rice of Nagel Rice in Roseland. He and his father and law partner, Jay Rice, represented Lukacs and the company.

Work Dispute

Stenstrom was hired to design and install a computer network and create an internet connection. He claimed he was not paid for certain aspects of the job, while Lukacs claimed some of Stenstrom's work was incomplete, faulty or not done in a workmanlike manner.

Stenstrom started work in January 2021. On Sept. 21, 2021, Stenstrom cut off the internet connection used by Lukacs. When a representative of Lukacs contacted Stenstrom, he replied that the internet access would not be restored until the ransom was paid.

Stenstrom also said that if the $40,000 was not paid, the internet connection at the property would no longer be functional, according to court documents.

Jay Rice of Nagel Rice. Courtesy photo

Lukacs filed suit in November 2021. Stenstrom and his company were personally served, according to court documents, but he did not respond.

Lukacs moved for a default against Stenstrom and his company in January 2022, and Superior Court Judge Mary Thurber entered default against them on June 24.

On Aug. 10, Stenstrom wrote to Thurber, saying he contacted six attorneys, but none was willing to represent him. On Aug. 11, he filed a pro se motion to vacate the default against him.

Stenstrom wrote in the motion that he was unable to respond earlier because he was severely ill from COVID-19, and was "in a fight for his life during which his blood oxygen plummeted to as low as 50% and regularly in the 65%-75% range, resulting in extended periods of hypoxia [and] diminished mental capacity."

But on Sept. 12, Lukacs' lawyers at Nagel Rice opposed the motion for vacation of default. In a court document, Bradley Rice wrote that Stenstrom failed to demonstrate excusable neglect or a meritorious defense.

"The motion fails to identify a single defense to the claims made against the default defendants, including even a denial of the extortion scheme perpetrated against plaintiffs or the unauthorized throttling of plaintiffs' Internet connectivity," Rice wrote.

Rice added that Stenstrom also failed to make a showing of excusable neglect, since he alleges he was incapacitated until March, but the default judgment was not entered until June 24. In addition, Stenstrom cannot seek relief on behalf of his corporation because the rules of court require corporations to be represented by an attorney, Rice wrote.

Wilson entered the final judgment by default, and set the amount of damages following a hearing on Monday.

"You get paid for doing the work right, and when certain work wasn't done right, it became an issue of what can we do to get it fixed," Rice said. "We're not going to pay you for bad work. [Stenstrom's] response was to take the entire system hostage and demand a ransom payment. He was doing work on it, but you're not entitled to hijack someone's system, even if you're doing work on it."