Court Opinion

ID: 4436243
Source: CourtListenerOpinion
Date Created: 2019-09-06 14:06:34.160431+00
Date Added: 2024-06-11T09:24:50.396642
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NOT FOR PUBLICATION WITHOUT THE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-5196-17T1

DAWN MARIE MASTIN,

          Plaintiff-Respondent,

v.

74-76 & 78-80 CARMER
AVE. ASSOCIATES, LLC
and JOSEPHINE RUSSO,

          Defendants-Respondents,

v.

BARTOLOMEO MILAZZO,

          Defendant/Third-Party
          Plaintiff-Respondent,

v.

SALVATORE MILAZZO

          Third-Party Defendant-
          Appellant,

and

THOMAS MILAZZO,
     Third-Party Defendant-Respondent.
__________________________________

           Submitted August 5, 2019 – Decided September 6, 2019

           Before Judges Sabatino and Mitterhoff.

           On appeal from the Superior Court of New Jersey,
           Chancery Division, Bergen County, Docket No. C-
           000046-17.

           Pearce Law LLC, attorneys for appellant (Randy T.
           Pearce and Gregory A. Randazzo, of counsel and on the
           briefs).

           Mc Glone Mc Glone & Belardinelli, attorneys for
           respondent Dawn Marie Mastin (Marianne J. Mc Glone,
           on the brief).

           Strasser & Associates PC, attorneys for respondent
           Bartolomeo Milazzo (David Edwin Mayland, on the
           brief).

           Richard S. Mazawey, attorney for respondents 74-76 &
           78-80 Carmer Associates, LLC, Josephine Russo, and
           Thomas Milazzo.

PER CURIAM

     Third-party defendant Salvatore Milazzo ("Salvatore")1 appeals the trial

court's May 31, 2018 order granting summary judgment in favor of plaintiff,

Dawn Mastin, and third-party plaintiff, Bartolomeo Milazzo ("Bartolomeo").

1
  Because some of the parties share the same last name, to avoid confusion we
refer to the Milazzo parties by their first names. We intend no disrespect.
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That order appointed a receiver to manage a family-owned LLC and its rental

properties, collect and distribute rental income, and prepare the properties for

sale, and denied Salvatore's cross-motion requesting the establishment of a

constructive trust, to preserve his interest in income generated by the properties,

based on an alleged oral agreement. We affirm, substantially for the sound

reasons set forth in Judge Edward A. Jerejian's written opinion, which was

appended to the order. We add only the following comments.

      This case concerns the ownership interests in and management of an LLC,

74-76 & 78-80 Carmer Ave Associates, LLC ("the LLC"), and its assets, two

connected rental properties located at the Carmer Avenue address ("the subject

properties"). The following facts are undisputed. In 1996, third-party defendant

Salvatore, along with his wife Vita and his three children, Thomas, Bartolomeo,

and Josephine Russo, purchased the subject properties. All parties contributed

financially to the purchase. In 2008, Salvatore and Vita voluntarily transferred

their interest to the LLC and the properties to their three children, with each

child taking a one-third interest. That transfer was memorialized in a recorded

deed. Josephine Russo is the managing member of the LLC. The trial judge

found that since the transfer, by his own admission, Salvatore has had no

ownership or management interest in the LLC or the properties.

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                                        3
      In 2015, Thomas' one-third interest in the LLC was conveyed by court

order to the mother of his children, plaintiff Dawn Mastin, to satisfy his

outstanding child support obligations.      Thomas did not appeal that order.

Despite the 2015 court order, the LLC never distributed to plaintiff any of the

LLC's income.     Instead, Josephine Russo wrongfully made distributions to

Thomas Milazzo, who no longer held any ownership interest in the properties.

In addition, Russo and Salvatore diverted the LLC's income to themselves and

third parties without plaintiff's knowledge or consent.

      Consequently, plaintiff filed this action seeking a partition by sale.

Bartolomeo joined in plaintiff's action, and, in addition, he sought the

appointment of a receiver. Plaintiff filed a motion for summary judgment based

on her undisputed one-third ownership of the property, and Bartolomeo sought

summary judgment based on Russo's mismanagement of the LLC. Salvatore

cross-moved for the imposition of a constructive trust, arguing for the first time,

and on the eve of trial, that at the time of the 2008 conveyance, "[i]t was

understood and agreed by all parties that this transfer was solely for the purpose

of allowing for the more effective and efficient management of Salvatore's

Estate upon his death and that the Properties would not be sold or encumbered

while Salvatore and his wife were still alive." Further, Salvatore asserted that

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                                        4
"[i]t was further agreed upon and understood by all parties at that time that

Salvatore alone would continue to maintain and operate the Properties and that

he would continue to receive the benefit of the majority of any income generated

by the Properties . . . ."

      By order and opinion dated May 31, 2018, Judge Jerejian granted

plaintiff's and Bartolomeo's motions for summary judgment and denied

Salvatore's cross-motion seeking the imposition of a constructive trust. This

appeal ensued.

      On appeal, Salvatore argues that the trial court erred in denying his

application for a constructive trust because genuine issues of material fact

existed for trial concerning the parties' course of conduct over the past two

decades, which he claims has a tendency to support his assertions that the parties

all agreed not to encumber or sell the property during his lifetime and that he

was entitled to a majority of the income generated by the LLC until his death.

In addition, Salvatore challenges the judge's authority to appoint a receiver.

      We review a grant of summary judgment de novo. Conley v. Guerrero,

228 N.J. 339, 346 (2017) (citing Templo Fuente De Vida Corp. v. Nat'l Union

Fire Ins. Co. of Pittsburgh, 224 N.J. 189, 199 (2016)).

             [W]hen deciding a motion for summary judgment under
             Rule 4:46–2, the determination whether there exists a

                                                                          A-5196-17T1
                                        5
             genuine issue with respect to a material fact challenged
             requires the motion judge to consider whether the
             competent evidential materials presented, when viewed
             in the light most favorable to the non-moving party in
             consideration of the applicable evidentiary standard,
             are sufficient to permit a rational factfinder to resolve
             the alleged disputed issue in favor of the non-moving
             party.

             [Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520,
             523 (1995).]

"[S]ummary judgment will be granted if there is no genuine issue of material

fact and 'the moving party is entitled to a judgment or order as a matter of law.'"

Conley, 228 N.J. at 346 (citing Templo Fuente, 224 N.J. at 199). In reviewing

a grant of summary judgment, appellate courts consider "whether the evid ence

presents a sufficient disagreement to require submission to a jury or whether it

is so one-sided that one party must prevail as a matter of law." Brill, 142 N.J.

at 536 (quoting Anderson v. Liberty Lobby Inc., 477 U.S. 242, 251-52 (1986)).

If there is no issue of fact, appellate courts give no special deference to the trial

court's rulings on matters of law. Templo Fuente, 224 N.J. at 199.

       In this case, we find no error in Judge Jerejian's rejection of Salvatore's

application for a constructive trust. The establishment of a constructive trust is

required where a party has taken an unconscionable advantage over another by

its acquisition or retention of the property. Borough of W. Caldwell v. Borough

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                                         6
of Caldwell, 26 N.J. 9, 29 (1958). Before a party may claim a right to recovery,

however, there must be clear proof of some wrongful act, such as fraud, mistake,

undue influence or breach of a confidential relationship. Kronisch v. Howard

Sav. Inst., 161 N.J. Super. 592, 606 (App. Div. 1978). The burden of proof to

establish entitlement to a constructive trust is clear and convincing evidence.

Dessel v. Dessel, 122 N.J. Super. 119, 121 (App. Div. 1972).

      In this case, Judge Jerejian correctly found that Salvatore failed to present

any evidence, let alone clear and convincing evidence, of his entitlement to a

constructive trust. In that regard, as the judge found, Salvatore had previously

certified as to his lack of any ownership or management responsibility in this

very litigation. On November 7, 2017, Salvatore filed a certification as a third-

party defendant that states at paragraph two that "I have no interest whatsoever

in 74-76 & 78-80 Carmer Ave, Associates, LLC." In the same certification, he

states at paragraph three that "[the LLC] is owned exclusively by my three

children, Josephine Russo, Bartolomeo Milazzo and Thomas Milazzo, each

having one-third (1/3) interest." Finally, at paragraph four, Salvatore certifies

that "I do not have control over the business records of 74-76 & 78-80 Carmer

Ave, Associates, LLC." In another certification to the court dated April 5, 2018,

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                                        7
Salvatore repeated his attestations that the LLC was owned exclusively by his

three children and that "I have no legal ownership in [the LLC]."

      As the trial court found, these statements under oath are fundamentally

inconsistent with Salvatore's assertion on the eve of trial that he alone maintains

and operates the properties and that he is entitled to divert the LLC's income to

himself. Accordingly, we find that Judge Jerejian appropriately precluded this

last-minute sea change in Salvatore's position.       See McCurrie v. Town of

Kearny, 174 N.J. 523, 533 (2002) (concluding that "judicial estoppel . . .

precludes a party from taking a position contrary to the position he has already

successfully espoused in the same or prior litigation"). From this conclusion, it

inevitably follows that Salvatore, in conveying ownership to his three children

in 2008, did not reserve any beneficial interest to himself. Cf. Moses v. Moses

140 N.J. Eq. 575, 580-81 (E. & A. 1947). As the judge aptly noted, the fact that

Salvatore wrote numerous checks to himself and third parties for his own benefit

constituted wrongful acts, not grounds for establishing a constructive trust in his

favor to remedy an unjust enrichment. See Kronisch, 161 N.J. Super. at 606

("[I]t is well settled that the theory of unjust enrichment or the collateral

principle of constructive trust is predicated upon a finding that one party has

taken unconscionable advantage over another.").

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                                        8
      We also discern no abuse of discretion in the judge's appointment of a

receiver. Although the appointment of a receiver is a "drastic action" that should

be avoided if some less draconian measure would suffice, Roach v. Margulies,

42 N.J. Super. 243, 245 (App. Div. 1956), in this case, Judge Jerejian's finding

that the appointment was necessary is well supported by the record. In that

regard, there is ample evidence (including Salvatore's admissions) that

Josephine Russo and Salvatore Milazzo mismanaged and misappropriated the

LLC's assets over the past two decades.        The pair flouted the court order

conveying Thomas Milazzo's one-third interest in the LLC to plaintiff (for the

benefit of his own children) by failing to make a single distribution to plaintiff,

while wrongfully distributing LLC profits to Thomas. They also diverted at

least $70,000 to Salvatore for his personal use. This gross mismanagement and

abuse of the trust of the other members more than justified the judge's

appointment of the receiver.

      To the extent we have not addressed any of Salvatore's remaining

arguments, we find them to be without sufficient merit to address in a written

opinion. R. 2:11-3(e)(1)(E).

      Affirmed.

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