Court Opinion

ID: 8211862
Source: CourtListenerOpinion
Date Created: 2022-10-05 14:05:04.923089+00
Date Added: 2024-06-11T16:42:06.418320
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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.

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-3395-20

GREENSTAR, LLC,
HOMETOWN COFFEE,
LLC, RAM DONUT CORP.,
DOLOMA, INC., MANI
DIVISION, RAM, INC.,
WILLIAMSTOWN DONUT,
LLC, WINSLOW DONUTS,
LLC, and DASHARATH PATEL,

          Plaintiffs-Appellants,

v.

ALBERT K. MARMERO,
ESQUIRE and LONG,
MARMERO & ASSOCIATES,
LLP,

     Defendants-Respondents.
____________________________

                   Submitted September 14, 2022 – Decided October 5, 2022

                   Before Judges Vernoia and Natali.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Gloucester County, Docket No. L-1384-18.

                   John C. Penberthy, III, attorney for appellants.
            Marmero Law, LLC, attorneys for respondents (Albert
            K. Marmero, on the brief).

PER CURIAM

      In this appeal, plaintiffs challenge a Law Division order granting summary

judgment to defendants that dismissed their breach of contract, conversion,

breach of fiduciary duty, and unjust enrichment claims as barred by the statute

of limitations, and a separate order denying their motion for reconsideration.

Before us, plaintiffs contend the court improperly granted summary judgment

as a material factual issue existed regarding the commencement of the

limitations period. Second, plaintiffs claim the court erred in denying their

reconsideration application primarily by misapplying applicable case law and

failing to consider relevant evidence. We disagree with all these arguments and

affirm.

                                        I.

      Viewed in the light most favorable to plaintiffs, Brill v. Guardian Life Ins.

Co. of Am., 142 N.J. 520, 540 (1995), the pertinent facts are as follows.

Plaintiffs entered into an Asset Purchase Agreement on January 20, 2009, in

which they agreed to sell their nine Dunkin' Donuts franchises for a total amount

of $5,375,000. Prior to the August 17, 2009 closing, the buyers provided

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plaintiffs with $850,000, and later tendered an additional $762,500. The balance

of $3,762,500 was satisfied by a note held by plaintiffs, as reflected in the

settlement statement prepared the same day of the closing.

      The settlement statement also identified a $65,800 line item entitled

"Radiant Escrow." In their complaint, plaintiffs alleged defendants "received

[those] funds . . . in trust . . . which were later to be distributed to [plaintiffs] . . .

because [plaintiffs] were required to purchase a radiant point of sale system for

[b]uyers." They further averred that the escrowed funds "would come back to

[plaintiffs] once the closing transpired and [b]uyers . . . purchased the system

with their own funds." Defendants' alleged failure to distribute the $65,800 is

the subject of the complaint and this appeal.

      Over two years after the closing, on October 12, 2011, plaintiffs' former

counsel, Anthony Tabasso, Esquire, wrote to defendant Albert Marmero,

Esquire, then-counsel for the buyers. In that letter, Tabasso referenced two prior

communications between him and Marmero regarding the escrowed funds.1

Specifically, Tabasso confirmed that Marmero previously informed him that he

distributed those funds at closing. Tabasso also claimed that Marmero's prior

1
   More specifically, Tabasso's October 12, 2011 letter referred to an initial
correspondence by him to Marmero and a response by Marmero on May 11,
2011. Neither of these communications is contained in the record.
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representation was inaccurate, as the settlement statement evidenced that

defendant did not distribute the escrowed funds on August 17, 2009. As he

explained:

             With the exception of the $594.40 fee paid to your firm,
             each of the remaining disbursements mentioned above
             is listed as a separate item on the settlement sheet,
             payable from seller's funds (see lines 810, 1303, 1304,
             and 1305). However, each of these charges is listed in
             addition to the $65,800.00 charge listed at line 1113,
             "Radiant Escrow." The Radiant Escrow was to be held
             against the potential contingency where Dunkin' could
             have required the buyer to replace the radiant heat
             system in one of the transferred locations. The Radiant
             Escrow is entirely separate and distinct from the
             charges you list, and all of the foregoing charges were
             combined in line 1400 to arrive at the seller's total
             settlement charges. Even if the Radiant Escrow funds
             were disbursed as you state, this would leave an excess
             of $65,800.00 on the settlement sheet. While it appears
             correct that my clients brought check no. 1090 in the
             amount of $74,120.63 with them to closing, this does
             not address the separate amount of the Radiant Escrow,
             which was deducted from the proceeds of the sale. Had
             that amount not been deducted, my clients would only
             have needed a check for $8,320.63 to complete
             closing.2

2
  Tabasso's characterization of the escrowed funds as a "contingency" is slightly
inconsistent with plaintiffs' description of those funds in their complaint as a
"deposit." That discrepancy has no effect on our analysis as Tabasso's
characterization of the funds as a contingency would not toll or otherwise extend
the accrual date beyond October 12, 2011, at the latest.
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      The letter concluded, "[t]o summarize, line 1113 represented an escrow.

As such, your firm is required to hold it until the buyer[s] authorized release. It

is imperative that this sum be accounted for immediately. . . . In the meantime,

my clients reserve all of their rights and remedies."

      On December 3, 2018, over nine years after the transaction closed and

over seven years after Tabasso's October 12, 2011 letter, plaintiffs filed a

complaint, which, as noted, alleged that defendants breached the Asset Purchase

Agreement by failing to distribute the radiant escrow funds contrary to their role

as designated closing agents for the sale, converted the escrowed funds to their

benefit, breached their fiduciary duty owed to plaintiffs by using the escrowed

funds to their own end, and unjustly enriched themselves by retaining the

escrowed funds.

      After the close of discovery, defendants moved for summary judgment

and argued that all of plaintiffs' claims were barred by the applicable six -year

statute of limitations provided for in N.J.S.A. 2A:14-1.        They specifically

contended that "[a]ny and all disputes concerning the agreement to sell

[p]laintiff's businesses involving [d]efendants accrued on August 17, 2009."

Additionally, they maintained that based on Tabasso's October 12, 2011 letter,

"the latest the [p]laintiff[s] could have been aware of any such claim [was] on

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October 12, 2011." Plaintiffs failed to file timely opposition to defendants'

motion.

      The court granted defendants' application and stated its reasons on the

record in an oral opinion. The court first noted that plaintiffs failed to oppose

defendants' motion.     Notwithstanding that procedural infirmity, the court

considered the matter on the merits and concluded that plaintiffs ' claims were

time barred.

      As to the accrual date, the court found that any cause of action related to

the escrowed funds accrued "when settlement was made on August 17, 2009."

In the alternative, the court relied on Tabasso's October 12, 2011 letter and

explained "the last possible accrual date that plaintiffs could allege was October

12, 2011" and, thus, even affording plaintiffs that later accrual date, the action

was barred by the six-year limitations period.

      Three days after the court dismissed their claims, plaintiffs filed

opposition to defendants' summary judgment motion and also moved for

reconsideration one day later.    In their Rule 4:46-2(b) counterstatement of

material facts, plaintiffs admitted that the closing occurred on August 17, 2009,

qualified, however, by a statement, without record or documentary support, that

"the transaction was not completed until December 12, 2013." According to

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plaintiffs, it was on this later date that an unidentified "agreement [to] pay off

the [n]ote(s) to plaintiffs was signed." Notably, the record does not include a

copy of the note or further details of the referenced agreement.

      Plaintiffs also asserted it was at this time that "[p]laintiffs realized that the

deposit had not been accounted for nor returned per the August 17, 2009

settlement statement" and they did not receive an accounting from defendants

until February 2014. The 2014 accounting referenced is based on a series of

emails between Marmero and plaintiffs' former counsel, Brian Fleischer,

Esquire.

      Plaintiffs maintained that "Marmero[] admit[ted] in his email to Brian

Fleischer dated February 11, 2014 . . . that there were additional legal 'expenses'

not on the HUD-1 settlement statement which Marmero prepared and for which

he applied to the radiant escrow deposit." Plaintiffs thus argued that "[t]he

statute of limitations would have been tolled until [p]laintiffs became aware of

the discrepancy" in February 2014.

      In counsel's certification in support of plaintiffs' reconsideration motion,

he explained why plaintiffs failed to provide timely opposition to defendants'

motion. Counsel certified that as he was preparing opposition to defendants'

application, he "had to verify [documents] from third parties," which "took more

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                                          7
time than [he] had," and "[he] should have requested an extension to answer the

motion but did not." He added that "[p]laintiffs . . . should not be penalized

because [he] misread the docket regarding the hearing date." As to the merits,

plaintiffs' counsel again asserted that plaintiffs "did not find out about what

happened to the [escrowed] funds until February of 2014." Based on this

assertion, he claimed "[t]here are obviously material issues of fact that can only

be discerned from a trial."

      Further, in his accompanying letter brief, plaintiffs' counsel asserted that

the 2014 emails between Marmero and Fleischer constituted new evidence as

they "came to [his] attention only a few weeks ago and [he] had to verify this

with other counsel previously involved." Defendants filed an opposition to

plaintiffs' motion for reconsideration and a cross-motion for sanctions and

attorneys' fees pursuant to Rule 1:4-8.

      After hearing oral argument, the court denied the parties' motions,

provided its reasoning on the record in an oral opinion the same day, and entered

a conforming order. The court rejected plaintiffs' argument that counsel's failure

to oppose the summary judgment motion provided a basis for reconsideration

and characterized the argument as "quite disingenuous," explaining it could

"think of no rational reason why an attorney would think" that the motion would

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                                          8
be heard at the time of trial. The court also noted that plaintiffs' counsel had not

communicated with the court regarding the scheduling of the hearing or

requested an extension.

      The court also rejected plaintiffs' argument that the 2014 emails

constituted newly discovered evidence. The court noted that the emails had

"been known to [plaintiffs] . . . or [their] legal representatives . . . for seven

years" and plaintiffs failed to request discovery from defendants. Relying on

Del Vecchio v. Hemberger, 388 N.J. Super. 179, 189 (App. Div. 2006), and

Hinton v. Meyers, 416 N.J. Super. 141, 150 (App. Div. 2010), the court

explained that plaintiffs' application improperly relied on "unraised facts that

were known to the movant prior to entry of judgment." Finally, the court

expressed "great doubt" as to whether the emails in question would have

changed his determination regarding the statute of limitations defense.

      As noted, the court also denied defendants' cross-motion for sanctions and

attorneys' fees and explained that plaintiffs "had at least a good faith basis to

file the litigation." This appeal followed.

                                        II.

      Before us, plaintiffs argue the motion record revealed a material issue of

fact regarding the accrual date of the six-year statute of limitations and as such

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the court erred by granting defendants' application. Specifically, they claim

Tabasso's 2011 correspondence did not put them on notice that defendants used

the escrowed funds to pay their legal fees, and they did not become aware of

defendants' misappropriation until February, 2014. Plaintiffs acknowledge their

failure to raise the issue in opposition to defendants' summary judgment motion

but assert that the court should have "prob[ed] into the dispute" once it "was

brought to the court's attention in the reconsideration [motion]." Plaintiffs'

arguments are without merit.

      We "review[] de novo the . . . entry of summary judgment," Manahawkin

Convalescent v. O'Neill, 217 N.J. 99, 115 (2014), applying "the same standard

as the trial court," Conley v. Guerrero, 228 N.J. 339, 346 (2017). Summary

judgment is appropriate if the record demonstrates there is "no genuine issue as

to any material fact challenged and that the moving party is entitled to a

judgment or order as a matter of law." R. 4:46-2(c); Ben Elazar v. Macrietta

Cleaners, Inc., 230 N.J. 123, 135 (2017). When determining whether there is a

genuine issue of material fact, we must consider "whether the competent

evidential materials presented, when viewed in the light most favorable to the

non-moving party, are sufficient to permit a rational factfinder to resolve the

alleged disputed issue in favor of the non-moving party." Brill, 142 N.J. at 540.

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      Rule 4:46-2(a) requires that a motion for summary judgment be supported

by a statement of material facts which "cit[es] to the portion of the motion record

establishing [each] fact or demonstrating that [each fact] is uncontroverted." R.

4:46-2(a). "[A] party opposing a motion for summary judgment [must] 'file a

responding statement either admitting or disputing each of the facts in the

movant's statement.'" Claypotch v. Heller, Inc., 360 N.J. Super. 472, 488 (App.

Div. 2003) (quoting R. 4:46-2(b)).

      Breach of contract, conversion, breach of fiduciary duty, and unjust

enrichment claims are all governed by a six-year statute of limitations. N.J.S.A.

2A:14-1; O'Keefe v. Snyder, 83 N.J. 478, 489 (1980) ("The fulcrum on which

the outcome turns is the statute of limitations in N.J.S.A. 2A:14-1, which

provides that an action for replevin of goods or chattels must be commenced

within six years after the accrual of the cause of action."); Dynasty Bldg. Corp.

v. Ackerman, 376 N.J. Super. 280, 286-87 (App. Div. 2005) (applying a six-year

statute of limitations to claims of conversion and breach of fiduciary duty);

Kopin v. Orange Prods., Inc., 297 N.J. Super. 353, 373-74 (App. Div. 1997)

(finding N.J.S.A. 2A:14-1's six-year limitations period applicable to quasi-

contract claims, including unjust enrichment); Est. of Ahrens v. Edgewater

Colony, Inc., 267 N.J. Super. 83, 88 (App. Div. 1993) (noting that claims

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alleging conversion of stock shares are generally covered by the six-year statute

of limitations of N.J.S.A. 2A:14-1); Iwanowa v. Ford Motor Co., 67 F. Supp. 2d

424, 473 (D.N.J. 1999) ("The statute of limitations in New Jersey for claims

sounding in restitution/unjust enrichment or quantum meruit is six years.").

      The statute of limitations for any claim does not begin to run until the

claim has accrued. "[F]or purposes of determining when a cause of action

accrues, . . . the relevant question is when did the party seeking to bring the

action have an enforceable right." Metromedia Co. v. Hartz Mountain Assocs.,

139 N.J. 532, 535 (1995) (quoting Andreaggi v. Relis, 171 N.J. Super. 203, 235-

36 (Ch. Div. 1979)). In most contract actions it is "presume[d] that the parties

to a contract know the terms of their agreement and a breach is generally obvious

and detectable with any reasonable diligence." Cnty. of Morris v. Fauver, 153

N.J. 80, 110 (1998).

      Here, the record fully supported the court's order granting defendants

summary judgment. It was undisputed that the sale of the nine Dunkin' Donuts

franchises closed on August 17, 2009.      At that time, or shortly thereafter,

plaintiffs knew, or with any semblance of diligence should have known, that the

escrowed funds belonged to them and had not been distributed from Marmero's

trust account. Further, there was no competent evidence presented to the motion

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                                      12
court, or us, that would create a material and genuine factual question that

defendants' obligation to distribute the escrowed funds was excused by any

provision of the Asset Purchase Agreement, or any statement or action of the

buyers or defendants, thereby rendering their 2018 claims timely filed.

      Even if plaintiffs' claims did not accrue on or about the closing date,

plaintiffs were clearly aware of actionable claims related to the purported

improper retention of the escrowed funds on October 12, 2011, when Tabasso

wrote to Marmero, over seven years before they filed their complaint. In that

letter, plaintiffs' counsel took the position that the $65,800 should have been

held in escrow, confirmed that Marmero told him, incorrectly, that he had

distributed the funds, explained how the settlement statement verified that the

$65,800 had not been distributed to plaintiffs, demanded an accounting, and

reserved all of plaintiffs' rights and remedies.

      Finally, we reject plaintiffs' argument that the 2014 emails between

Marmero and Fleischer created a material and genuine dispute of fact. Initially,

we note that the 2014 emails were improperly introduced for the first time in

plaintiffs' motion for reconsideration. Even if the 2014 emails were properly

presented to the court in opposition to defendants' summary judgment motion,

we find no support for plaintiffs' contention that these emails constituted their

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first notice that they had potential claims against defendants related to the

escrowed funds. Viewed in the light most favorable to plaintiffs, the 2014

emails include Marmero's explanation as to how he accounted for and distributed

the escrowed funds.     If we were to accept plaintiffs' claim that Marmero

improperly used the funds, by that point, plaintiffs had known since 2011, at the

latest, that they had a right to the escrowed funds and that Marmero failed to

distribute the $65,800 to them.

                                       III.

      Finally, we address defendant's motion for reconsideration under Rule

4:49-2. A motion for "[r]econsideration is a matter within the sound discretion

of the [c]ourt, to be exercised in the interest of justice." Cummings v. Bahr, 295

N.J. Super. 374, 384 (App. Div. 1996) (first alteration in original) (quoting

D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)). In determining

whether such an abuse has taken place, a reviewing court should be mindful that

reconsideration is not to be utilized by a party just because of their

"dissatisfaction with a decision of the [c]ourt." Capital Fin. Co. of Del. Valley,

Inc. v. Asterbadi, 398 N.J. Super. 299, 310 (App. Div. 2008) (alteration in

original) (quoting D'Atria, 242 N.J. Super. at 401).

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                                       14
      Reconsideration is appropriate when (1) "the [c]ourt has expressed its

decision based on a palpably wrong or irrational basis," or (2) "it is obvious that

the [c]ourt either did not consider, or failed to appreciate the significance of

probative, competent evidence." Ibid. (alterations in original) (quoting D'Atria,

242 N.J. Super. at 401). "[T]he magnitude of the error cited must be a game-

changer for reconsideration to be appropriate." Palombi v. Palombi, 414 N.J.

Super. 274, 289 (App. Div. 2010). "[I]f a litigant wishes to bring new or

additional information to the [c]ourt's attention which it could not have provided

on the first application, the [c]ourt should, in the interest of justice (and in the

exercise of sound discretion), consider the evidence." D'Atria, 242 N.J. Super.

at 401-02. Nonetheless, because "motion practice must come to an end," the

court must both be "sensitive and scrupulous in its analysis of the issues [on]

reconsideration." Ibid.

      Here, plaintiffs argue that the court erred in denying their motion for

reconsideration because the court: (1) erred by failing to consider the 2014

emails submitted by plaintiffs in their May 17, 2021 untimely opposition; (2)

improperly relied on Del Vecchio and Hinton; (3) incorrectly ruled on

defendants' statute of limitations defense without requiring defendants to submit

"all of the evidence [they] controlled"; and (4) failed to provide latitude to

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plaintiffs with respect to their belated filing in light of the COVID-19 pandemic.

We reject all of these arguments as we are satisfied that the court did not abuse

its considerable discretion in denying plaintiffs' application.

      As already explained, the 2014 emails are immaterial as to whether

plaintiffs had knowledge of their potential claims on or before October 12, 2011.

Further, when reviewing those exhibits, again provided for the first time on

reconsideration, the court expressed its "great doubts" that they would have

altered the court's initial decision. We find no error with that discretionary

decision and reject plaintiffs' claims that the court failed to consider probative,

competent evidence.

      We are also satisfied that the court had a rational basis to determine that

the 2014 emails did not constitute newly discovered evidence, and accurately

applied Del Vecchio and Hinton, which relied on the principle that facts that

were known yet unraised prior to the entry of a challenged order are insufficient

to support a grant of reconsideration. See also Palombi, 414 N.J. Super. at 289

(concluding that facts known to the movant prior to the entry of the order were

not an appropriate basis for reconsideration). Finally, we find nothing in the

record to support plaintiffs' contention, raised for the first time before us, that

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the COVID-19 pandemic in any way impacted their ability to discover relevant

evidence or adhere to the court's procedural rules.

      To the extent we have not addressed any of plaintiffs' remaining

arguments it is because we conclude they are without sufficient merit to warrant

discussion in a written opinion. R. 2:11-3(e)(1)(E).

      Affirmed.

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