SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5027-17T1

NORTH MILL EQUIPMENT

FINANCE, LLC, as servicer 

for EFS CREDIT TRUST,

Plaintiff-Respondent,

v.

CINEMACAR LEASING, INC., 

d/b/a CINEMACAR LEASING 

and CINEMACAR II, INC.,

Defendants-Appellants/

Third-Party Plaintiffs,

v.

PARAMOUNT EXPORTS INC., 

and SAMUEL MASSY as 

guarantor,

Defendants/Third-Party

Defendants.

______________________________

Argued December 4, 2019 – Decided February 5, 2020

Before Judges Koblitz, Whipple, and Mawla.

NOT FOR PUBLICATION WITHOUT THE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.
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A-5027-17T1

On appeal from the Superior Court of New Jersey, Law 

Division, Bergen County, Docket No. L-2358-16.

Thomas A. Lodato argued the cause for appellants.

Rafael J. Corbalan argued the cause for respondent 

(Kaufman, Semeraro & Leibman, LLP, attorneys; 

Rafael J. Corbalan, on the brief).

PER CURIAM

Defendants Cinemacar Leasing and Cinemacar II appeal from the May 25, 

2018 judgment after a bench trial finding both jointly and severally liable for 

damages stemming from the breach of their contractual obligation to properly 

record and perfect plaintiff's lien. We affirm.

We discern the following facts from the record. Plaintiff North Mill 

Equipment Finance, LLC, is a servicer for EFS Credit Trust1 which finances 

commercial vehicle purchases. On October 27, 2014, plaintiff executed a 

Security Agreement with Paramount Exports Inc., signed by Paramount's

president Samuel Massy as personal guarantor, to finance Paramount's purchase 

of a Volvo truck from defendants. Plaintiff provided $52,389.36 to Paramount,

and payments of $1,455.26 were to be made by Paramount over a term of thirty1 We refer to North Mill Equipment Finance, LLC and EFS Credit Trust as one 

plaintiff.
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six months. The Security Agreement provided plaintiff would maintain first lien 

priority on the Volvo. 

Prior to the execution of the Security Agreement, on October 16, Guy 

Carnazza, president and owner of both defendants Cinemacar Leasing and 

Cinemacar II, had signed a dealer agreement with plaintiff on behalf of 

Cinemacar Leasing regarding the Volvo purchase by Paramount. Paragraph four 

of the agreement states, in pertinent part:

If the [e]quipment is a vehicle, also enclosed is a copy 

of the completed and executed application to title the 

[e]quipment in the [c]ustomer's name with you as the 

sole lienholder which the undersigned will promptly 

process and have the original Certificate of Title 

delivered to you as soon as available.

The dealer agreement required that, in the event of a breach, "the undersigned, 

upon your demand, will refund to you all amounts paid by you to the 

undersigned in connection with the equipment and this transaction, together with 

interest thereon at a rate of [eighteen percent] per annum or . . . the highest 

legally permissible interest rate." The agreement required Cinemacar Leasing 

to perfect the first priority lien by properly recording it with the Department of 

Motor Vehicles for the State of New York (DMV). In addition to the dealer 

agreement, Carnazza signed a Titling Responsibility Acknowledgement wherein 
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A-5027-17T1

he accepted the responsibility for any service and/or titling fees necessary to retitle the vehicle.

On July 6, 2015, the Volvo was labeled abandoned, and secured by the 

Monroe County Sheriff's Department in Monroe, Michigan. On September 2, 

2015, the Volvo was sold for storage and towing costs. The "Notice of 

Abandoned Vehicle" from the Monroe County Sheriff's Office showed their 

search for the titleholder of the Volvo revealed only the previous owner of the 

Volvo, GG Barnett Transport, Inc., in Beaver Dam, Wisconsin. 

In March 2016, plaintiff filed a complaint against defendants alleging 

Cinemacar Leasing and Cinemacar II were liable for $39,861.99 plus eighteen 

percent interest. Defendants filed an answer and asserted a third-party

complaint against Paramount and Massy. 

In June 2017, plaintiff filed an amended complaint adding Paramount and 

Massy as direct defendants. Plaintiff's amended complaint asserted breach of 

contract claims on two separate accounts; a claim for unjust enrichment against 

Cinemacar Leasing and Cinemacar II for accepting the financing and failing to 

properly perfect plaintiff's lien; a breach of the implied covenant of good faith 

and fair dealing; and allegations plaintiff was injured by all defendants' failure 

to honor their express representations. Plaintiff sought joint and several
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liability. The complaint also sought judgment against Massy pursuant to his

personal guarantee of the security agreement. Neither Paramount nor Massy 

answered the complaint, and default judgment was entered against them on or 

around October 3, 2017. 

On February 27, 2018, the court conducted a bench trial. Joseph Littier, 

Senior Vice President of plaintiff North Mill, testified plaintiff viewed 

Cinemacar Leasing and Cinemacar II as the same company, and had received no 

notice of the Volvo being abandoned or sold several months later. Littier 

attributed the lack of notice to plaintiff's lien not being recorded, and asserted

had plaintiff received notice, it would have worked with the towing company to 

get the equipment back. He further testified plaintiff was denied the opportunity 

to mitigate its damages because it was cut out of the chain of title. 

Carnazza testified, admitting that both Cinemacar II and Cinemacar 

Leasing have the same address and operate out of the same location, and that he 

is sole owner of both entities. He explained Cinemacar II is a used car sales 

dealership and Cinemacar Leasing is a leasing company. Although Carnazza 

signed the dealer agreement as the President of Cinemacar Leasing, he did not 

notice Cinemacar Leasing was the signatory to the agreement when he signed it 

and had he noticed, "[he] would have said something." 
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Carnazza asserted a Notice of Lien form, the document that would have 

effectuated the creation of the lien in favor of plaintiff, instructed that five 

dollars must be made payable to the Commissioner of Motor Vehicles, and that 

one can verify online if the lien was recorded through the DMV website. The 

form also stated that "[l]iens will not be recorded if information is illegible, 

incorrect, or incomplete." 

Additionally, Carnazza testified the lien form and the accompanying five 

dollar check were hand-delivered to the DMV in Albany, New York, but that he 

could not check if the lien was recorded because only the holder of the lien, with 

a lien filing code, could utilize the DMV website to verify if the lien had been 

recorded. However, a question on the lien form asking whether a New York

Certificate of Title has been issued to the borrower was left blank, and 

defendants produced no copy or record of the five-dollar payment. 

The court issued a written opinion in March 2018, finding a valid 

agreement between the parties, and that Cinemacar Leasing and Cinemacar II 

jointly and severally had the obligation under the agreement to properly record 

the lien. In reaching this conclusion, the court noted that the parties performed 

under the terms of both the dealer agreement and the Security Agreement for 

months preceding the abandonment of the vehicle. The court also found that 
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whether Cinemacar II or Cinemacar Leasing were substituted on two of the 

documents, it did not render the contract void, as the entities are closely related;

owned solely by Carnazza; are in the same building; and in any case, endeavored 

to perform under the terms of the contract. The court also found defendants 

breached a duty under the contract by failing to properly record and perfect

plaintiff's lien on the Volvo in accordance with terms of the agreement. The 

court entered judgment in favor of plaintiff and found defendants jointly and 

severally liable for $39,861.99. Final Judgment was entered on May 25, 2018. 

This appeal followed.

Our review of a trial court's fact-finding in a non-jury case is limited. 

Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150, 169 (2011). "The general 

rule is that findings by the trial court are binding on appeal when supported by 

adequate, substantial, credible evidence." Ibid. (quoting Cesare v. Cesare, 154 

N.J. 394, 411-12 (1998)). "[We] should not disturb the 'factual findings and 

legal conclusions of the trial judge unless [we are] convinced that they are so 

manifestly unsupported by or inconsistent with the competent, relevant and 

reasonably credible evidence as to offend the interests of justice.'" Cesare, 154 

N.J. at 412 (quoting Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 

N.J. 474, 484 (1974)). "However, '[a] trial court's interpretation of the law and 
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the legal consequences that flow from established facts are not entitled to any 

special deference[,]'" and is subject to de novo review. Mountain Hill, L.L.C. 

v. Twp. Comm. of Middletown, 403 N.J. Super. 146, 193 (App. Div. 2008)

(alteration in original) (citation omitted). "[F]or mixed questions of law and 

fact, we give deference . . . to the supported factual findings of the trial court, 

but review de novo the [trial] court's application of any legal rules to such factual 

findings." State v. Harris, 181 N.J. 391, 416 (2004) (citing State v. Marshall, 

148 N.J. 89, 185 (1997)).

On appeal, defendants contend the trial court erred by imposing joint and 

several liability on Cinemacar Leasing because Cinemacar Leasing had no 

involvement in the financing deal at issue, and the trial court should have found

plaintiff failed to mitigate its claimed damages.

Defendants assert that while Cinemacar Leasing and Cinemacar II share 

the same owner, have similar names, and have the same business address, the 

two are separate and unrelated corporations that serve distinct functions because

Cinemacar II sells vehicles while Cinemacar Leasing leases vehicles. 

Defendants assert that Cinemacar Leasing only sells vehicles "when they come 

back off-lease." Defendants argue Cinemacar II is the only party to a dealer 

agreement with plaintiff. We disagree.
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Carnazza testified he signed the dealer agreement on behalf of Cinemacar 

Leasing. The trial court found the substitution of Cinemacar Leasing and 

Cinemacar II on two of the documents did not render the contract void because 

the companies are closely related, owned solely by Mr. Carnazza, are located in 

the same building, and endeavored to perform under the terms of the contract. 

Ordinarily, "[w]here two corporations are owned and operated by the same 

individuals, their existence as separate entities will not be disregarded if no 

deception, fraud or other wrongdoing is shown." Pachman, Current N.J. Statutes 

Title 14A Corporations § 14A:5 cmt. 6(c)(8) (2019). However, the power to 

pierce the corporate veil "will be invoked to prevent an independent corporation 

from being used to defeat the ends of justice, to perpetrate a fraud, to accomplish 

a crime, or otherwise to evade the law." Tung v. Briant Park Homes, Inc., 287 

N.J. Super. 232, 239-40 (App. Div. 1996) (citation omitted). Although piercing 

the corporate veil often arises in cases where a parent corporation is held liable 

for its wholly owned subsidiary, New Jersey courts will also pierce the veil of a 

corporation when justice requires. See Stochastic Decisions, Inc. v. 

DiDomenico, 236 N.J. Super. 388 393-94 (App. Div. 1989). "[T]he party 

seeking an exception to the fundamental principle that a corporation is a separate 
10 A-5027-17T1

entity [is charged with] the burden of proving the court should disregard the 

corporate entity." Tung, 287 N.J. Super. at 240. 

Under certain circumstances, veil piercing is appropriate where the 

corporations are closely identified and there is ambiguity about the manner and 

capacity in which the various corporations and their representatives are acting. 

In Stochastic Decisions, 236 N.J. Super. at 395, we affirmed the trial court's 

decision to pierce the corporate veil because there was a pervasive commingling 

of corporate assets and identities. There, we found there was no reason to limit 

the application of veil piercing to parent-subsidiary relationships where the 

corporate defendants commingled funds and operated in each other's names. 

Ibid.

Also, in Stochastic Decisions, we endorsed the Massachusetts Supreme 

Court's decision in My Bread Baking Co. v. Cumberland Farms, Inc., 353 Mass. 

614 (1968), where the court pierced the veils of several closely held 

corporations, finding them liable for conversion. Id. at 394. There, the court 

reiterated the well-established rule that common ownership and management, 

standing alone, will not give rise to common liability, but held:

[A]dditional facts may be such as to permit the 

conclusion that an agency or similar relationship exists 

between the entities. Particularly is this true (a) when 

there is active and direct participation by the 
11 A-5027-17T1

representatives of one corporation, apparently 

exercising some form of pervasive control, in the 

activities of another and there is some fraudulent or 

injurious consequence of the inter-corporate 

relationship, or (b) when there is a confused 

intermingling of activity of two or more corporations 

engaged in a common enterprise with substantial 

disregard of the separate nature of the corporate 

entities, or serious ambiguity about the manner and 

capacity in which the various corporations and their 

respective representatives are acting. In such 

circumstances, in imposing liability upon one or more 

of a group of "closely identified" corporations, a court 

"need not consider with nicety which of them" ought to 

be held liable for the act of one corporation "for which 

the plaintiff deserves payment."

[My Bread Baking Co., 353 Mass. at 619.]

Here, there is no dispute that plaintiff viewed Cinemacar Leasing and 

Cinemacar II as the same entity. Indeed, the companies have similar names, are 

located in the same building, and share the same owner and president. The trial 

court's findings that the companies are "closely related" is supported by 

Carnazza's testimony that he signed the dealer agreement under Cinemacar 

Leasing, and the titling agreement under Cinemacar II. Based on these facts, at 

the very least there existed a "serious ambiguity about the manner and capacity 

in which the various corporations and their representatives were acting." Where 

companies act with such disregard to their separate identities, this court "need 
12 A-5027-17T1

not consider with nicety which of them ought to be held liable for the act of one 

corporation for which the plaintiff deserves payment."

Moreover, Carnazza admitted he signed the dealer agreement on behalf of 

Cinemacar Leasing. Carnazza's testimony that he did not notice Cinemacar 

Leasing was the signatory to the agreement, and had he noticed, "[he] would 

have said something[,]" does not relieve the company of its obligations to 

perform under the contract, as "in the absence of fraud, one who does not choose 

to read a contract before signing it cannot later relieve himself of its burdens." 

Moreira Constr. Co. v. Moretrench Corp., 97 N.J. Super. 391, 394 (App. Div. 

1967); see also Wade v. Park View Inc., 25 N.J. Super. 433, 440 (Law Div. 

1953) (noting "the well[-]settled principle that affixing a signature to a contract 

creates a conclusive presumption, except as against fraud, that the signer read, 

understood and assented to its terms"). 

We also reject defendants' contention the trial court erred by not finding 

that plaintiff failed to mitigate its damages. First, defendants argue that 

plaintiff's damages could have been reduced substantially had plaintiff 

recovered the Volvo through a replevin action. Second, defendants contend that 

plaintiff could have prevented the loss of that collateral by recording the lien. 
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In breach of contract claims "[i]t is well-settled that injured parties have 

a duty to take reasonable steps to mitigate damages." Ingraham v. Trowbridge 

Builders, 297 N.J. Super. 72, 83 (App. Div. 1997) (alteration in original)

(quoting McDonald v. Mianecki, 79 N.J. 275, 299 (1979)). Damages which the 

injured party "might have avoided with reasonable effort without undue risk, 

expense, burden, or humiliation will be considered either as not having been 

caused by the defendant's wrong or as not being chargeable against the 

defendant." 11 Williston on Contracts § 64:31 (4th ed. 2018). Whether or not 

a plaintiff has made reasonable efforts to mitigate its damages is a question for 

the trier of fact. Ingraham, 297 N.J. at 84. "Thus, the proper standard in a nonjury case regarding the judge's decision on mitigation of damages 'is whether the 

judge's findings are supported by sufficient, credible evidence in the record.'" 

Ibid. (citation omitted). We have held however:

[W]here both the plaintiff and the defendant have had 

equal opportunity to reduce the damages by the same 

act and it is equally reasonable to expect a defendant to 

minimize damages, the defendant is in no position to 

contend that the plaintiff failed to mitigate. Nor will 

the award be reduced on account of damages the 

defendant could have avoided as easily as the plaintiff 

. . . [.] The duty to mitigate damages is not applicable 

where the party whose duty it is primarily to perform 

the contract has equal opportunity for performance and 

equal knowledge of the consequences of the 

performance. 
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[Id. at 83-84 (citations omitted).]

The injured party is not responsible for losses when "the defendant [itself] 

prevents the [injured party] from taking the steps necessary to avoid them." 11 

Corbin on Contracts § 1039 (Interim ed. 1964). Generally, in contract actions 

the burden of proof on avoidable consequences rests upon the party breaching 

the contract. Ingraham, 297 N.J. at 83 (citations omitted). 

Defendants' arguments, that plaintiff should have mitigated its damages 

by recovering the Volvo through a replevin action or recording the lien itself, 

both lack merit. The contention that plaintiff should have recovered the Volvo 

through replevin makes little sense because plaintiff never received notice of the 

vehicle being towed. After the Volvo was abandoned and recovered by the 

Monroe County Sheriff's Department, plaintiff had no recorded lien, and the 

police who recovered the vehicle identified the prior owner, GG Barnett 

Transport, Inc., as the current owner/lienholder. The lack of notice was a result 

of defendants' failure to properly record the lien, and had plaintiff received 

notice, they would have worked to get the equipment back. Since defendants

did not fulfill the contractual obligation of recording the lien, resulting in 

plaintiff not being notified, plaintiff is not responsible for the losses as "the 
15 A-5027-17T1

defendant [itself] prevent[ed] [plaintiff] from taking the steps necessary to avoid 

them." 

Affirmed.