IN THE UNITED STATES DISTRICT COURT 

FOR THE DISTRICT OF NEW JERSEY 

MSKP OAK GROVE, LLC, 

 Plaintiff, 

 v. 

CAROL VENUTO, individually and 

as executrix of the Estate of 

RALPH A. VENUTO, Sr., et al., 

 Defendants. 

 

HONORABLE JEROME B. SIMANDLE 

Civil Action 

No. 10-6465 (JBS/JS) 

OPINION

 

 

APPEARANCES: 

Robert A. Vort, Esq. 

2 University Plaza, Suite 101 

Hackensack, NJ 07601 

 Attorney for Plaintiff 

Dimitri Luke Karapelou, Esq. 

LAW OFFICES OF DIMITRI L. KARAPELOU, LLC 

Two Penn Center 

1500 JFK Boulevard, Suite 920 

Philadelphia, PA 19102 

 Attorney for Defendants 

SIMANDLE, Chief Judge: 

I. INTRODUCTION 

 This matter comes before the Court on a motion for judgment 

on the pleadings by Defendants Carol Venuto, Ralph A. Venuto, 

Jr., Carol Rebbecchi, Richard P. Venuto, and Hollywood Tanning 

Systems, Inc. (“HTS”). [Docket Item 41.] In this action, 

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Plaintiff MSKP Oak Grove, LLC (“MSKP”) asserts claims under the 

New Jersey Uniform Fraudulent Transfer Act, N.J.S.A. § 25:2-20 

et seq. (“NJUFTA”), arising from an allegedly fraudulent 

transfer of assets through which Defendants intended to avoid 

payment to certain creditors, including Plaintiff. Plaintiff is 

a commercial landlord to which HTS is indebted by a 2009 

judgment in the amount of $411,573.45. Plaintiff alleges that 

following an asset purchase agreement with another corporation, 

Tan Holdings, LLC, in 2007, HTS fraudulently distributed $16 

million to its shareholders, Defendants Carol and Ralph A. 

Venuto, Sr.,1

 Ralph A. Venuto, Jr., Carol Rebbecchi, and Richard 

P. Venuto (“the Shareholders”), and rendered HTS without 

sufficient assets to satisfy future obligations to creditors, 

including HTS’s obligation to Plaintiff relating to a defaulted 

lease agreement. 

 In the instant motion, Defendants assert that they are 

entitled to judgment on the pleadings as to Plaintiff’s NJUFTA 

claims because Plaintiff’s claims are time-barred by the 

NJUFTA’s four-year statute of repose in N.J.S.A. § 25:2-31. The 

parties agree that Plaintiff timely filed its initial Complaint, 

but dispute whether the Amended Complaint was filed more than 

four years after the allegedly fraudulent transfer. In the 

 

1

 Because Ralph A. Venuto, Sr. died prior to the initiation of 

this action, Plaintiff names his estate as a defendant, 

represented by Defendant Carol Venuto as executrix. 

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event the Amended Complaint was filed more than four years after 

the allegedly fraudulent transfer, Plaintiff maintains that the 

Court must allow the Amended Complaint to relate back to the 

timely filing of the original Complaint pursuant to New Jersey 

Court Rule 4:9-3. The outcome turns on whether the NJUFTA 

statute of repose prohibits relation back, and if not, whether 

Plaintiff has demonstrated that the Amended Complaint should 

relate back under New Jersey Court Rule 4:9-3. 

 For the reasons discussed below, the Court will deny 

Defendants’ motion for judgment on the pleadings because the 

Amended Complaint relates back and is timely. 

II. BACKGROUND 

A. Facts 

 The Court accepts as true the following facts in 

Plaintiff’s Amended Complaint for purposes of Defendants’ motion 

for judgment on the pleadings. Prior to the events alleged in 

this action, Defendant HTS was a New Jersey corporation that 

operated tanning salons and sold franchises and tanning 

equipment to independent tanning salons. (Am. Compl. ¶¶ 7-8.) 

In 2003, HTS leased a commercial retail space in a shopping 

center in Florida from TSO Oak Grove, LLC (“TSO”), a predecessor 

in interest to Plaintiff MSKP. (Id. ¶ 19.) In 2004, TSO 

consented to HTS’s request to sublease the space to a franchisee 

of HTS (a non-party entity known as Altamonte Chick Shades, 

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Inc.), though HTS remained liable on the lease in the event of 

Altamonte’s default. (Id. ¶ 21.) Plaintiff acquired the 

landlord’s rights under the lease agreement in January 2007. 

(Id. ¶ 23.) 

 On April 18, 2007, HTS entered into an asset purchase 

agreement with non-party Tan Holdings, LLC, in which Tan 

Holdings acquired almost all of HTS’s assets in exchange for $40 

million, 25% of the issued and outstanding preferred units of 

Tan Holdings, and certain contingency payments depending on Tan 

Holdings’ future earnings. (Id. ¶¶ 9-10, 12.) HTS remained 

liable on its lease with Plaintiff despite the sale to Tan 

Holdings. (Id. ¶ 21.) 

 On June 22, 2007, the asset purchase agreement closed 

between HTS and Tan Holdings, and HTS ceased operations shortly 

thereafter. (Id. ¶¶ 14-15.) After the closing, HTS used “much 

of” the $40 million acquisition price to settle all thenoutstanding debts owed to creditors; Tan Holdings did not assume 

liability for HTS’s debts that were due and owing at the time of 

the closing. (Id. ¶¶ 13, 16.) The remainder was distributed to 

the shareholders “at or subsequent to the closing of title on 

June 22, 2007” in the aggregate amount of approximately $16 

million. (Id. ¶ 17.) 

 After HTS paid the company’s debts that were due and owing 

at the time of the closing, and subsequently distributed the $16 

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million to its shareholders, HTS’s remaining assets were the 25% 

ownership stake in Tan Holdings and the possibility of 

additional payments based upon Tan Holdings meeting certain 

earnings thresholds. In support of Plaintiff’s fraudulent 

transfer claim, Plaintiff alleges that following the shareholder 

distribution, HTS’s remaining assets were “insufficient to 

satisfy claims against [HTS], such as the claim of Plaintiff[,]” 

and were “not liquid” and “speculative.” (Id. ¶¶ 38, 40.) 

Plaintiff also implies that HTS’s 25% ownership in Tan Holdings 

had minimal real value, alleging that Tan Holdings did not 

succeed after the acquisition; in May 2009 it turned over its 

assets to its creditors. (Id. ¶ 37.) 

 On July 3, 2008, Plaintiff notified HTS that Altamonte, its 

sublettor franchisee, had defaulted on its lease. (Id. ¶ 24.) 

Plaintiff sued HTS and Altamonte in Florida state court to 

recover damages for breach of the lease. (Id. ¶ 25.) Plaintiff 

subsequently won a judgment against HTS for $411,573.45, which 

was recorded in the Superior Court of New Jersey on July 30, 

2009 and remains unpaid. (Id. ¶¶ 26-28.) In addition to 

Plaintiff, at least 14 other landlord creditors have sought to 

collect on various liabilities of HTS after the shareholder 

distribution. (Id. ¶ 39.) 

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B. Procedural history 

 Plaintiff filed the original Complaint in this action on 

December 13, 2010, naming only the individual shareholders as 

defendants. [Docket Item 1.] Defendants moved to dismiss the 

Complaint for failure to state a claim and for failure to join a 

necessary party, namely HTS, which the Court granted on August 

8, 2011, dismissing the Complaint without prejudice to Plaintiff 

filing a motion to amend and to join the new party. [Docket 

Items 11 & 12.] Plaintiff subsequently filed an Amended 

Complaint on November 14, 2011. [Docket Item 24.] The Amended 

Complaint asserted six counts against Defendants: Counts One 

through Four involved claims under the NJUFTA, Count Five sought 

to recover under a theory of improper distribution under 

N.J.S.A. § 14:6-12(1)(c), and Count Six sought to recover under 

a theory of unjust enrichment.2 Defendants again moved to 

dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 

12(b)(6). The Court denied Defendants’ motion as to the first 

three counts, holding that Plaintiff had sufficiently alleged a 

fraudulent transfer under three subsections of the NJUFTA, but 

granted Defendants’ motion as to Counts Four, Five, and Six. 

MSKP Oak Grove, LLC v. Venuto, 875 F. Supp. 2d 426, 443 (D.N.J. 

2012). Following entry of an Order granting in part and denying 

 

2

 This Court exercises diversity jurisdiction over Plaintiff’s 

state law claims pursuant to 28 U.S.C. § 1332. 

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in part Defendants’ motion to dismiss [Docket Item 34], 

Defendants filed an Answer to the Amended Complaint on July 13, 

2012. [Docket Item 40.] 

 On July 18, 2012, Defendants filed the instant motion for 

judgment on the pleadings due to untimeliness [Docket Item 41], 

which Plaintiff opposes [Docket Item 46.] In January, 2013, the 

Court issued an Order [Docket Item 59] staying all scheduling 

deadlines and administratively terminating the instant motion 

without prejudice until factual findings were issued in a 

related case pending before Judge Noel Hillman, Rowen Petroleum 

Properties, LLC v. Hollywood Tanning Sys., Inc., 899 F. Supp. 2d 

303 (D.N.J. 2012). 

 Following Rowen’s dismissal, on March 5, 2014, the Court 

relisted for consideration Defendants’ motion for judgment on 

the pleadings and permitted the parties to submit supplemental 

briefing regarding a related New Jersey state court case, GS 

Partners, LLC v. Carol Venuto, et al., No. C-12044 (N.J. Super. 

Ct. Ch. Div. Nov. 8, 2012), in which another of Defendants’ 

creditors asserted similar claims against Defendants3

 under the 

NJUFTA based on the same allegedly fraudulent transfer at issue 

in the present action. In GS Partners, the Chancery Division 

granted defendants’ motion for summary judgment on the grounds 

 

3

 All Defendants in the present action were named in GS Partners 

with the exception of HTS. 

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that plaintiff’s claims against Defendants were barred by the 

NJUFTA four-year state of repose. On April 28, 2014, the New 

Jersey Superior Court Appellate Division reversed the Chancery 

Division’s dismissal of plaintiff’s claims under the NJUFTA, 

finding that although the NJUFTA is a state of repose, 

plaintiff’s amended complaint could relate back to the filing of 

its initial complaint.4

 See GS Partners, No. C-12044, 2014 WL 

1660586 (N.J. Super. Ct. App. Div. Apr. 28, 2014). With all 

permitted supplemental briefing complete, Defendants’ instant 

motion for judgment on the pleadings is ripe for adjudication. 

III. STANDARD OF REVIEW 

 A defendant may move to dismiss a complaint before or after 

filing an answer. Fed. R. Civ. P. 12(b)(6) and (c); see also 

Borough of Sayreville v. Union Carbide Corp., 923 F. Supp. 671, 

675 (D.N.J. 1996). A motion made before an answer is filed is a 

motion to dismiss pursuant to Fed. R. Civ. P. 12(b)(6). A 

motion made after an answer is filed is a motion for judgment on 

the pleadings pursuant to Fed. R. Civ. P. 12(c). See Fed. R. 

Civ. P. 12(h)(2) (“Failure to state a claim upon which relief 

can be granted . . . may be raised . . . by a motion under Rule 

12(c).”). 

 

4

 Defendants advise they intend to file a petition for 

certification in the New Jersey Supreme Court. 

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 The differences between Rules 12(b)(6) and 12(c) are purely 

procedural, and the pleading standards of Rule 12(b)(6) are 

applied for both. Turbe v. Gov’t of the Virgin Islands, 938 

F.2d 427, 428 (3d Cir. 1991). Thus, the Court must “accept all 

factual allegations as true, construe the complaint in the light 

most favorable to the plaintiff, and determine whether, under 

any reasonable reading of the complaint, the plaintiff may be 

entitled to relief.” Fleisher v. Standard Ins. Co., 679 F.3d 

116, 120 (3d Cir. 2012). The complaint must contain “sufficient 

factual matter, accepted as true, to state a claim to relief 

that is plausible on its face.” Ashcroft v. Iqbal, 556 U.S. 

662, 678 (2009) (internal quotation marks omitted). “A claim 

has facial plausibility when the plaintiff pleads factual 

content that allows the court to draw the reasonable inference 

that the defendant is liable for the misconduct alleged.” Id. 

 As applied to the present motion, the Court accepts the 

factual content of the Amended Complaint as true and determines, 

with reference to the Complaint, the Amended Complaint, and the 

court’s docket including prior motion practice whether the 

Amended Complaint relates back to the original Complaint under 

New Jersey’s law regarding statutes of repose and New Jersey 

Court Rule 4:9-3. 

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IV. DISCUSSION 

 Defendants argue that Plaintiff’s three remaining NJUFTA 

claims under §§ 25:2-25(a), 25:2-25(b)(1), and 25:2-27(a) are 

time-barred pursuant to the NJUFTA’s four-year statute of 

repose. It is undisputed that Plaintiff’s original Complaint 

was filed within four years of the allegedly fraudulent 

transfer. However, Defendants argue that Plaintiff’s claims 

under the NJUFTA are not viable because Plaintiff’s Amended 

Complaint was not filed until November 14, 2011, nearly five 

months after the expiration of the Act’s four-year limitation 

period on June 22, 2011, and should not be permitted to relate 

back to the filing of the original Complaint. Plaintiff’s 

Amended Complaint does not specify the exact date of the 

fraudulent transfer at issue and Plaintiff contends that 

discovery is necessary to determine the date. However, for the 

purposes of this motion, the Court will assume that the transfer 

occurred on June 22, 2007.5

 The parties agree that the NJUFTA is a statute of repose 

and that New Jersey law should apply in determining whether 

relation back is permitted. Defendants rely primarily on 

 

5

 Plaintiff alleges that the transfer occurred “at or subsequent 

to the closing of title on June 22, 2007.” (Am. Compl. ¶ 17.) 

If the allegedly fraudulent transfer occurred after that date, 

the limitations period would extend correspondingly. In basing 

its analysis on the June 22, 2007 date, the Court considers the 

earliest date by which the limitations period could have run: 

June 22, 2011. 

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Greczyn v. Colgate-Palmolive, 183 N.J. 5 (2005), for the 

proposition that under New Jersey law, relation back is only 

permitted after the expiration of a statute of repose when a 

fictitious party is named in the original complaint and 

plaintiff later amends the complaint to substitute a lateridentified party. Because fictitious party practice is 

inapplicable here, Defendants argue that relation back is not 

allowed and Plaintiff’s claims under the NJUFTA must fail. 

 As noted above, all four individual defendants were named 

in the original Complaint which included NJUFTA allegations 

against them, while HTS was prominently mentioned but not 

originally named as a defendant. 

 Plaintiff counters that the New Jersey Supreme Court would 

allow relation back in this instance, rejecting Defendants’ 

interpretation of Greczyn and maintaining that a statute of 

repose does not categorically proscribe relation back. 

Plaintiff notes support for its position in the Appellate 

Division’s decision in GS Partners, where plaintiff’s amended 

complaint was similarly filed beyond the NJUFTA’s four-year 

period, and the court allowed the amended complaint to relate 

back to the original complaint, which was timely filed. GS 

Partners, 2014 WL 1660586, at *2-4. 

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A. NJUFTA as a statute of repose 

 As noted, the parties agree that § 25:2-31 is a statute of 

repose. As a point of distinction, “a statute of limitations is 

a procedural device that operates as a defense to limit the 

remedy available from an existing cause of action.” Matter of 

Princeton-New York Investors, Inc., 199 B.R. 285, 293 (Bankr. 

D.N.J. 1996), aff’d, 219 B.R. 55 (Bankr. D.N.J. 1998) 

(hereinafter “Princeton I”) (quoting First United Methodist 

Church v. U.S. Gypsum Co., 882 F.2d 862, 865-66 (4th Cir. 

1989)). In contrast, a statute of repose “creates a substantive 

right in those protected to be free from liability after a 

legislatively-determined period of time.” Id. Statutes of 

repose extinguish a cause of action unless the action is brought 

within a specific time period, “barring [] the right to bring an 

action rather than the remedy prescribed.” Id. at 293 n.4. 

 “[T]he determination that a statute of limitations is a 

statute of repose must be clear from either the plain language 

of the statute or the legislative intent.” In re Sharps Run 

Associates, L.P., 157 B.R. 766, 784 (Bankr. D.N.J. 1993). 

Section 25:2-31 (“Extinguishment of cause of action”) provides 

in pertinent part: 

A cause of action with respect to a fraudulent transfer or 

obligation under this article is extinguished unless action 

is brought: 

a. Under subsection a. of § 25:2-25, within four years 

after the transfer was made or the obligation was incurred 

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or, if later, within one year after the transfer or 

obligation was discovered by the claimant; 

b. Under subsection b. of § 25:2-25 or subsection a. of § 

25:2-27, within four years after the transfer was made or 

the obligation was incurred . . . . 

N.J.S.A. § 25:2-31. The use of the term “extinguished” 

manifests legislative intent to eliminate a cause of action 

after a predetermined time period, a distinctive characteristic 

of a statute of repose.6

 

 The statutory language and legislative history of § 25:2-31 

suggest that the NJUFTA was intended to be a statute of repose. 

If the four-year limitation period has expired, a claimant’s 

 

6

 In the New Jersey Senate Labor, Industry and Profession’s 

Committee Statement Report which accompanied the enactment of 

the NJUFTA, the statute was referred to as one of limitations 

but clearly suggests a statute of repose: “The bill also 

provides a statute of limitations that bars the right rather 

than the remedy on expiration of the statutory periods 

prescribed.” 1988 N.J. Sess. Law Serv. 74 (West) (emphasis 

added). Further, New Jersey courts and courts applying New 

Jersey law have consistently found that, in enacting the NJUFTA, 

the New Jersey Legislature intended to create a statute of 

repose. See, e.g., SASCO v. Zudkewich, 166 N.J. 579, 582 (2001) 

(referring to § 25:2-31 as a statute of limitations, but not 

deciding the issue of distinction from a statute of repose); In 

re G-I Holdings, Inc., Civ. 04-3423, 2006 WL 1751793, at *8 n.18 

(D.N.J. June 21, 2006) (“It is hardly surprising that the 

Supreme Court in SASCO referred to the statute of limitations 

when the legislature used the same terminology but clearly 

meaning it was a statute of repose.”); Del Mastro v. Grimado, 

No. L-2746-10, 2013 WL 4746486, at *8 n.7 (N.J. Super. Ct. App. 

Div. Sept. 5, 2013) (noting that the legislative history 

mistakenly refers to § 25:2-31 as a statute of limitations and 

that the use of that label is a misnomer); Intili v. DiGiorgio, 

300 N.J. Super. 652, 661 (Ch. Div. 1997) (dismissing a 

fraudulent transfer claim that was filed beyond the four-year 

limitation period of § 25:2-31 because the “[New Jersey] 

Legislature’s purpose would be frustrated if § 25:2-31’s time 

limitations were relaxed”).

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ability to bring a cause of action with respect to a fraudulent 

transfer is extinguished. The only exception to the four-year 

limitation period provided by the New Jersey Legislature 

establishes a one-year limitation period from the time the 

claimant first discovers the fraudulent transfer, for a claim 

arising under § 25:2-25a, if such period is later than the fouryear period.7

 Plaintiff does not invoke the one-year discovery 

rule in this case. 

B. Whether the NJUFTA permits relation back 

 Next, the Court considers whether NJUFTA’s statute of 

repose precludes relation back to the filing of the original 

Complaint. 

 

7

 Moreover, many New Jersey courts and courts applying New Jersey 

law have held that § 25:2-31 is a statute of repose. See 

Princeton I, 199 B.R. at 293 n.4 (finding § 25:2-31 to be a 

statute of repose because it “embodies the most distinctive 

characteristic of a statute of repose, the barring of the right 

to bring an action rather than the remedy prescribed”); In re 

Buildings by Jamie, Inc., 230 B.R. 36, 45 (Bankr. D.N.J. 1998) 

(relying on Princeton I’s determination that § 25:2-31 is a 

statute of repose in holding that a Chapter 7 Bankruptcy 

trustee’s actions were not barred by the NJUFTA’s four-year 

limitation period); G-I Holdings, Inc., 2006 WL 1751793, at *7 

(holding that § 25:2-31 is a statute of repose and therefore not 

subject to equitable tolling); In re NJ Affordable Homes Corp., 

Civ. 05-60442, 2013 WL 6048836, at *30 (Bankr. D.N.J. Nov. 8, 

2013) (acknowledging that § 25:2-31 is commonly held to be a 

statute of repose); Intili, 300 N.J. Super. at 661 (giving 

accord to Princeton I’s determination that § 25:2-31 is a 

statute of repose). 

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 The parties agree that this Court must apply New Jersey law 

to determine whether the NJUFTA permits relation back.8 “A 

federal court under Erie is bound to follow state law as 

announced by the highest state court.” Wayne Moving & Storage 

of N.J., Inc. v. Sch. Dist. of Phila., 625 F.3d 148, 154 (3d 

Cir. 2010) (quoting Sheridan v. NGK Metals Corp., 609 F.3d 239, 

253 (3d Cir. 2010)). The New Jersey Supreme Court has not 

considered whether the extinguishment provision of the NJUFTA 

permits an amended complaint to relate back to the date of the 

original complaint. “When the state’s highest court has not 

addressed the precise question presented, [we] must predict how 

the state’s highest court would resolve the issue.” Id. 

(quoting Orson, Inc. v. Miramax Film Corp., 79 F.3d 1358, 1373 

n.15 (3d Cir. 1996)). “[W]e must consider relevant state 

precedents, analogous decisions, considered dicta, scholarly 

works, and any other reliable data tending convincingly to show 

how the highest court in the state would decide the issue at 

 

8

 “A federal court sitting in diversity must apply state 

substantive law and federal procedural law.” Chamberlain v. 

Giampapa, 210 F.3d 154, 158 (3d Cir. 2000). “Statutes of 

limitations are treated as substantive rules of decision for 

purposes of [Erie].” In re TMI, 89 F.3d 1106, 1112 n.5 (3d Cir. 

1996). Further, “[b]ecause the relation back doctrine also 

determines ‘the timeliness of action,’ state law governs whether 

a new state claim will relate back to the original state cause 

of action.” In re Sharps Run Associates, L.P., 157 B.R. 766, 

779 (D.N.J. 1993). 

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hand.” Id. (quoting Covington v. Cont’l Gen. Tire, Inc., 381 

F.3d 216, 218 (3d Cir. 2004)). Moreover, 

[w]here an intermediate appellate state court rests its 

considered judgment upon the rule of law which it 

announces, that is a datum for ascertaining state law which 

is not to be disregarded by a federal court unless it is 

convinced by other persuasive data that the highest court 

of the state would decide otherwise. 

Id. (quoting Sheridan, 609 F.3d at 254). 

 Because the New Jersey Supreme Court has not considered 

whether the NJUFTA permits relation back, “[w]e begin our 

analysis with intermediate state court judgments and grant them 

‘significant weight in the absence of an indication that the 

highest state court would rule otherwise.’” Id. (quoting Orson, 

79 F.3d at 1373 n.15). 

 The Court finds the Appellate Division’s decision in GS 

Partners to be particularly instructive because it addressed a 

factual and procedural scenario nearly identical to the present 

matter and involved similar claims under the NJUFTA against the 

same Defendants based on the same allegedly fraudulent transfer. 

In GS Partners, the court found that the allegedly fraudulent 

transfer to defendants occurred on June 22, 2007. GS Partners, 

2014 WL 1660586, at *2. Plaintiff filed its original complaint 

on June 20, 2011, within four years of the transfer date. Id. 

However, plaintiff’s amended complaint was filed on February 2, 

2012, over four years after the transfer at issue. Id. 

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Defendants filed a motion for summary judgment on the grounds 

that plaintiff’s claims were barred by the NJUFTA’s statute of 

repose. Id. 

 The Chancery Division found that the NJUFTA claims 

satisfied the requirements of New Jersey Court Rule 4:9-3 for 

relation back,9 but nonetheless held that relation back did not 

apply because plaintiff’s claims were time-barred by § 25:2-31. 

Id. Like Defendants here, the Chancery Division relied on 

Greczyn v. Colgate-Palmolive as controlling precedent with 

respect to the relation back of an amended complaint beyond the 

limitation period of a statute of repose. Id. at *3. The 

Chancery Court interpreted Greczyn as holding that relation back 

 

9

 Rule 4:9-3 provides: 

Whenever the claim or defense asserted in the amended 

pleading arose out of the conduct, transaction or 

occurrence set forth or attempted to be set forth in the 

original pleading, the amendment relates back to the date 

of the original pleading; but the court, in addition to its 

power to allow amendments may, upon terms, permit the 

statement of a new or different claim or defense in the 

pleading. An amendment changing the party against whom a 

claim is asserted relates back if the foregoing provision 

is satisfied and, within the period provided by law for 

commencing the action against the party to be brought in by 

amendment, that party (1) has received such notice of the 

institution of the action that the party will not be 

prejudiced in maintaining a defense on the merits, and (2) 

knew or should have known that, but for a mistake 

concerning the identity of the proper party, the action 

would have been brought against the party to be brought in 

by amendment. 

N.J. Rule 4:9-3 (emphasis added). 

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is only permitted under the NJUFTA in the context of fictitious 

party practice. Id. 

 In Greczyn, plaintiff was injured when she tripped and fell 

on a stairway in a building nine years after its completion. 

Greczyn, 183 N.J. at 7. The statute of repose that protects 

designers and builders, N.J.S.A. § 2A:14-1.1, has a ten-year 

period of limitation in which a plaintiff can bring a claim. 

Id. Plaintiff’s initial complaint was timely filed, but named 

several fictitious defendants, identified as the designers of 

the stairway. Id. One year after the expiration of the tenyear period, plaintiff amended her complaint upon learning the 

designer’s identity. Id. at 7-8. In opposition to a motion for 

summary judgment by the named designer, plaintiff argued the 

amended complaint should relate back to the filing of the 

original complaint, which was within the ten-year period. Id. 

at 8-9. The New Jersey Supreme Court agreed, holding that 

because Greczyn’s complaint was filed within the ten-year 

period, permitting relation back of an amended complaint in the 

context of fictitious party practice would not conflict with the 

legislative intent to “limit the time within which a cause of 

action may arise against an architect or builder.” Id. at 17-19 

(emphasis in original). Further, the Supreme Court held that 

“[e]ven statutes of repose . . . ‘need not necessarily be 

construed rigidly’” and that “our ‘approach to [statutes of 

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repose] has evolved to one that recognizes that their 

applications depends on statutory interpretation focusing on 

legislative intent and purposes.’” Id. at 18 (quoting LaFage v. 

Jani, 166 N.J. 412, 421-22 (2001) (quotation omitted)). Thus, 

relying exclusively on its interpretation of Greczyn, the 

Chancery Division in GS Partners held that plaintiff’s claims 

under the NJUFTA were barred and could not relate back to the 

date of the original complaint. 

 The Appellate Division reversed and permitted relation 

back. Importantly, the Appellate Division did not read Greczyn 

as announcing the sole exception (fictitious party practice) by 

which a plaintiff can invoke the doctrine of relation back to 

salvage a cause of action otherwise time-barred by a statute of 

repose. Rather, the Appellate Division found that Greczyn “is 

better understood as consistent with permitting relation back 

under Rule 4:9–3, provided that the claims asserted in the 

amended pleading arose out of the same ‘conduct, transaction or 

occurrence’ as alleged in the timely-filed pleading and are 

against the same parties.” GS Partners, 2014 WL 1660586, at *4. 

The Appellate Division went on to state that “[a]s in Greczyn, 

allowing relation back in such circumstances does not violate 

the legislative intent of N.J.S.A. [§] 25:2-31.” Id. 

 As discussed by the Appellate Division in GS Partners, the 

court reached a similar result in In re Sharps Run Associates, 

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L.P., 157 B.R. 766 (Bankr. D.N.J. 1993), even without the 

benefit of Greczyn. There, the court was asked to determine 

whether N.J.S.A. § 42:2A-46(a) prohibited relation back under 

Fed. R. Civ. P. 15(c). Similarly, § 46(a) contains a one-year 

period of limitation as to the liability of a partner who 

receives a return of his contribution to the partnership. The 

court allowed relation back, indicating that while the time bar 

appeared to be a statute of limitations, “[e]ven assuming, 

arguendo, that § 46(a) is a statute of repose, the outcome would 

remain unchanged.” Sharps Run, 157 B.R. at 785. 

 The Appellate Division also found its reading of Greczyn to 

be consistent with “[t]he doctrine of substantial compliance 

[which] allows for the flexible application of a statute in 

appropriate circumstances.” GS Partners, 2014 WL 1660586, at *4 

(quoting Negron v. Llarena, 156 N.J. 296, 304 (1998)). In 

Negron, the New Jersey Supreme Court held that a plaintiff had 

substantially complied with the Wrongful Death Act’s statute of 

limitations when plaintiff brought a wrongful death action 

against doctors in New Jersey state court beyond the applicable 

limitations period following the dismissal of the same timelyfiled complaint in federal court for lack of diversity 

jurisdiction. Negron, 156 N.J. at 305-06. The Appellate 

Division in GS Partners held that “[t]here is as much reason in 

this case to permit relation back of the February 2012 filing of 

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an amended complaint in the same court as there was to permit an 

otherwise time-barred filing in Negron in a different court.” 

GS Partners, 2014 WL 1660586, at *4. Accordingly, the Appellate 

Division held that § 25:2-31 did not prevent plaintiff’s amended 

complaint from relating back to the date of the original 

complaint. Id. 

 This Court agrees with the Appellate Division’s reading of 

Greczyn and finds the Appellate Division’s holding in GS 

Partners to be highly persuasive. Thus, the Court holds that 

the statute of repose in N.J.S.A. § 25:2-31 does not preclude 

the possibility of relation back if N.J. Ct. R. 4:9-3 is 

satisfied. 

C. Whether the Amended Complaint relates back to the filing 

date of the Complaint under N.J. Ct. R. 4:9-3 

 As in GS Partners, Plaintiff’s Amended Complaint did not 

change the nature of Plaintiff’s claims or add any parties not 

already on notice as to Plaintiff’s claims;10 the Amended 

 

10 Although the Amended Complaint added HTS as a defendant, all 

four shareholders of HTS were named in the original Complaint. 

Under New Jersey law, “[r]elation-back depends upon whether the 

newly added party has demonstrated a sufficient identity of 

interest to justify treating it and the originally named party 

as a single legal entity.” Otchy v. City of Elizabeth Bd. of 

Educ., 325 N.J. Super. 98, 108 (App. Div. 1999) (holding that a 

sufficient identity of interest is established when the added 

party “would not be prejudiced by having to defend an action 

which it ‘knew or should have known’ would have been brought 

against it but for the error of identification”). Here, the 

Court is satisfied that there is a sufficient identity of 

interest between Defendant HTS and its four individual 

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Complaint simply added factual support for the allegations in 

the original Complaint. Furthermore, it cannot be said that 

allowing relation back in this instance would frustrate the 

purpose of § 25:2-31 because the “chief consideration underlying 

[statutes of repose] is said to be fairness to a defendant.” 

Sharps Run, 157 B.R. at 785 (quoting Rosenberg v. Town of North 

Bergen, 61 N.J. 190, 201 (1972)). “The elements of fairness 

include not having to defend against stale claims and the 

security of knowing that past obligations have been wiped 

clean.” Id. 

 Allowing relation back here would not be unfair or 

prejudicial to any defendant, including HTS. Like the parties 

identified in the original complaint and given adequate notice 

in Greczyn, here the individual shareholder Defendants were 

named in the original Complaint before the four-year limitation 

expired. Upon service of the original Complaint, Defendants 

were aware that a judgment had been entered in favor of 

Plaintiff and against HTS, that the judgment remained unpaid, 

and that prior to the entry of judgment, HTS distributed assets 

to its shareholders. While the original Complaint’s allegation 

 

shareholder Defendants and HTS cannot argue that it lacked 

notice of Plaintiff’s claims because the timely-named 

shareholder Defendants are the sole shareholders of HTS. Thus, 

HTS would not be prejudiced by its addition to the litigation 

because HTS “knew or should have known” action would be brought 

against it when the original Complaint was filed. 

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that “Hollywood Tanning Systems, Inc. distributed its assets to 

its shareholders” was initially insufficient for the purposes of 

stating a claim under the plausibility pleading standard, 

Plaintiff’s original Complaint was sufficient to put Defendants 

on notice as to the essential NJUFTA claims which were repeated 

in the Amended Complaint. The nature and scope of Plaintiff’s 

claims were adequately set forth in the original Complaint and 

belied any expectation of repose by the defendants. Indeed, the 

original defendants, in seeking to dismiss the Complaint while 

still within the four year limitations period, argued for 

dismissal to join their corporation as a necessary party – HTS – 

since HTS was the transferor of the assets in question. Thus, 

all of the HTS shareholders acknowledged prior to the expiration 

of the four-year period that Plaintiff was in fact accusing them 

and HTS in connection with the fraudulent or improper 

distribution of HTS assets to the shareholders in violation of 

the NJUFTA at N.J.S.A. § 25:2-25 & 27, as alleged in the First 

Count of the Complaint. This is not surprising, since the 

original Complaint specifically named Hollywood Tanning Systems, 

Inc. and accused it of distributing its assets to the 

shareholder defendants in violation of N.J.S.A. § 25:2-25 & 27. 

(See Compl. [Docket Item 1] ¶¶ 9-12.) The Complaint just didn’t 

name HTS as a defendant. 

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 The dismissal of the initial Complaint was without 

prejudice because it appeared likely that Plaintiff could cure 

the deficiencies in pleading, or at least should have that 

opportunity. As for the failure to name a necessary party, 

Plaintiff added HTS as a defendant, as the four defendant 

shareholders indeed had called for in their original motion. 

The amended claims against the original defendants were likewise 

not new; they were simply further explication of the manner of 

the alleged fraud in the distribution of HTS assets to them as 

shareholders, in accordance with the specificity required by 

Rule 9(b), Fed. R. Civ. P. 

 There is likewise no doubt that HTS knew, through its sole 

shareholders, within the limitations period, that the action was 

also intended to be brought against it, as required by Rule 4:9-

3, supra. Not naming HTS as a defendant, while naming the HTS 

shareholders who allegedly controlled and received the 

fraudulent distribution at issue, is the type of “mistake 

concerning the identity of the proper party” that Rule 4:9-3 

requires for relation back. Moreover, under New Jersey law, 

“[r]elation-back depends upon whether the newly added party has 

demonstrated a sufficient identity of interest to justify 

treating it and the originally named party as a single legal 

entity.” Otchy v. City of Elizabeth Bd. of Educ., 325 N.J. 

Super. 98, 108 (App. Div. 1999); see also Walters v. Breathless 

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2000, A-5235-08T1, 2010 WL 4103683, at *8 (N.J. Super. Ct. App. 

Div. July 23, 2010) (finding sufficient identity of interest for 

purposes of relation back where newly added party was original 

party’s principal shareholder). Likewise, under Fed. R. Civ. P. 

15, courts in the Third Circuit have found sufficient identity 

of interest between a closely held corporation and its principal 

shareholders to permit relation back. See Singletary v. 

Pennsylvania Dep’t of Corr., 266 F.3d 186, 197 (3d Cir. 2001) 

(“Identity of interest generally means that the parties are so 

closely related in their business operations or other activities 

that the institution of an action against one serves to provide 

notice of the litigation to the other.”) (quotation omitted); 

Bechtel v. Robinson, 886 F.2d 644, 653 (3d Cir. 1989) (allowing 

amendment adding corporation as a party to relate back to 

original filing of complaint against corporation’s principal 

shareholder and executive under Fed. R. Civ. P. 15); Seber v. 

Daniels Transfer Co., 618 F. Supp. 1311, 1313-14 (W.D. Pa. 1985) 

(permitting amendment adding both the sole shareholder and the 

chief operating officer of closely held corporation to relate 

back to the filing of the original complaint which named only 

the corporation). Thus, there could be no surprise to HTS or 

its defendant shareholders when HTS was formally named as a 

defendant in the Amended Complaint, and there is sufficient 

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identity of interest between HTS and its sole shareholders to 

permit relation back. 

 Relation back under New Jersey Court Rule 4:9-3 is to be 

liberally allowed. Notte v. Merchants Mut. Ins. Co., 185 N.J. 

490, 499 (2006) (quoting Harr v. Allstate Ins. Co., 54 N.J. 287, 

299-300) (1969)). For the reasons explained above, the Amended 

Complaint clearly satisfies Rule 4:9-3, and the claims against 

Defendants are timely by virtue of relation back to the 

Complaint. 

 Furthermore, consistent with the Appellate Division’s 

consideration of the doctrine of substantial compliance, the 

Court agrees that there is as much reason to allow relation back 

here as there was in Negron. “Courts invoke the doctrine of 

substantial compliance to ‘avoid technical defeats of valid 

claims.’” Negron, 156 N.J. at 305 (quoting Cornblatt v. Barrow, 

153 N.J. 218, 240 (1998)). In order to prove substantial 

compliance, the following factors must be met: “(1) the lack of 

prejudice to the defending party; (2) a series of steps taken to 

comply with the statute involved; (3) a general compliance with 

the purpose of the statute; (4) a reasonable notice of 

petitioner’s claim[;] and (5) a reasonable explanation why there 

was not a strict compliance with the statute.” Id. (quoting 

Bernstein v. Bd. of Trustees of Teachers’ Pension & Annuity 

Fund, 151 N.J. Super 71, 76-77 (App. Div. 1977)). Plaintiff 

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filed the original Complaint on December 13, 2010, within the 

four-year limitation period of § 25:2-31 such that Defendants 

had no expectation of repose when timely served with the 

original Complaint. The Court did not file its opinion on 

Defendants’ first motion to dismiss until August 8, 2011. 

Assuming the transfer happened on June 22, 2007, the Court’s 

opinion was entered eight months after the filing of the 

original Complaint and two months after the four-year statute of 

repose had already expired. Plaintiff promptly filed a motion 

to amend the complaint once the Court filed its Opinion. Had 

the Court entered its Opinion two months earlier, it is likely 

that Plaintiff would have equally promptly amended its Complaint 

so as to comply with § 25:2-31. Therefore, it is clear that 

Plaintiff acted promptly and diligently in filing the Amended 

Complaint and Defendants were not prejudiced by any undue delay. 

Only the fortuity of the time it took to brief, argue, and 

decide the dismissal motion – the motion, after all, that 

pointed out that HTS was a necessary party - caused this delay, 

not the Plaintiff. 

 Finally, having found persuasive the Appellate Division’s 

holding in GS Partners, the Court must consider any indications 

that the New Jersey Supreme Court would rule otherwise. 

Precedents involving equitable tolling when no complaint was 

filed within the limitation period shed little light upon the 

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present case. As discussed above, many New Jersey courts and 

courts applying New Jersey law have held that the NJUFTA is a 

statute of repose, and some have indicated that it is therefore 

not subject to equitable tolling. See, e.g., Princeton I, 199 

B.R. at 293 n.4; In re Buildings by Jamie, Inc., 230 B.R. at 45; 

G-I Holdings, Inc., 2006 WL 1751793, at *7; In re NJ Affordable 

Homes Corp., 2013 WL 6048836, at *30; Intili, 300 N.J. Super. at 

661. However, none of these cases involved relation back and 

nearly all address fraudulent transfer claims in the bankruptcy 

context. For example, in Princeton I and Buildings by Jamie, 

the courts were asked to determine whether a bankruptcy 

trustee’s actions were time-barred under § 25:2-31. Princeton 

I, 199 B.R. at 287-289; Buildings by Jamie, 230 B.R. at 45. 

Similarly, in G-I Holdings, the court heard an appeal from a 

bankruptcy court decision allowing for the commencement of an 

adversary proceeding challenging an allegedly fraudulent 

transfer. G-I Holdings, 2006 WL 1751793 at *1. The court held 

that equitable tolling, as a matter of law, is not applicable to 

a statute of repose such as § 25:2-31. Id. at *7. However, 

this holding does not address, nor should it be applied to, the 

facts of the present action, which involves relation back of an 

amended complaint to a timely-filed initial complaint. 

 The only relevant New Jersey cases identified by the 

parties addressing § 25:2-31 outside the bankruptcy context are 

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SASCO and Intili. SASCO addressed when the four-year limitation 

period began to run. SASCO, 166 N.J. at 582. Intili did not 

allow equitable tolling because the original complaint was not 

timely filed within the four-year limitation period of § 25:2-

31. Intili, 300 N.J. Super. at 577-78. Accordingly, the 

parties have not identified, nor has the Court found, any 

indication that the New Jersey Supreme Court would not permit 

Plaintiff’s Amended Complaint to relate back to the date of its 

original Complaint for the purposes of claims under the NJUFTA. 

V. CONCLUSION 

 For the reasons discussed above, the Court concludes that 

the New Jersey Supreme Court would permit Plaintiff’s Amended 

Complaint to relate back to the date of the original Complaint, 

and the Court will deny Defendants’ motion for judgment on the 

pleadings. An accompanying Order will be entered. 

 September 5, 2014 s/ Jerome B. Simandle 

Date JEROME B. SIMANDLE 

 Chief U.S. District Judge

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