Court Opinion

ID: 6496525
Source: CourtListenerOpinion
Date Created: 2022-06-29 20:11:31.754543+00
Date Added: 2024-06-11T08:48:30.177348
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NOT FOR PUBLICATION WITHOUT THE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-2777-20

JOAN MARIE GRANATO and
NEW JERSEY ADULT MEDICAL
DAY CARE, INC.,

          Plaintiffs-Respondents,

v.

ALEX KRUTYANSKY, NEW
JERSEY ADULT MEDICAL DAY
CARE CENTER II, INC., and NEW
JERSEY ADULT MEDICAL DAY
CARE CENTER III, INC.,

          Defendants-Appellants.

                   Argued May 19, 2022 – Decided June 20, 2022

                   Before Judges Haas and Alvarez.

                   On appeal from the Superior Court of New Jersey,
                   Chancery Division, Bergen County, Docket No.
                   C-000286-19.

                   Saadia Shapiro (Shapiro & Associates, PLLC) of the
                   New York bar, admitted pro hac vice, argued the cause
                   for appellants (Shapiro & Associates, PLLC, attorneys;
                   Miro Lati, Saadia Shapiro, David Podell, and David
            Szalyga (Shapiro & Associates, PLLC) of the New
            York bar, admitted pro hac vice, on the briefs).

            Brian M. Block argued the cause for respondents
            (Mandelbaum Barrett, PC, attorneys; Raj Gadhok, of
            counsel and on the brief; Brian M. Block, on the brief).

PER CURIAM

      Defendant Alex Krutyansky appeals from a final judgment and a

subsequent award of counsel fees to plaintiff Joan Marie Granato after a two-

day bench trial. The judge determined that Krutyansky had no ownership or

other beneficial interest in New Jersey Adult Medical Day Care, Inc.

(NJAMDC), a business exclusively owned by Granato. For the reasons st ated

in the thorough, cogent, and thoughtful decisions rendered by the Honorable

James J. DeLuca, J.S.C., we affirm. We add the following comments.

      Judge DeLuca issued several written opinions, including a June 29, 2020

decision that Krutyansky could not own an interest in NJAMDC because he had

not complied with the adult day care center regulatory scheme. The final

judgment relied on the earlier decision that Krutyansky had no ownership

interest in NJAMDC because he did not submit to the licensure process found

in N.J.A.C. 8:43F-2.12, N.J.A.C. 8:43F-2.11, and N.J.A.C. 8:43F-6.3, which

included undergoing a criminal background check. It also restrained Krutyansky

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from using names similar to NJAMDC's or otherwise interfering with Granato's

conduct of the business.

      The parties' dispute began in 2013, when Granato attempted to transfer an

ownership interest to Krutyansky, contingent upon his compliance with the

licensure requirements. That effort failed because Krutyansky would not submit

to a background check. The parties subsequently had disagreements, including

one over Krutyansky's unauthorized withdrawal of funds from the business, and

entered into a mediation agreement in 2017. The mediation agreement provided

that if NJAMDC was not sold by January 1, 2019, the parties could reinstate the

litigation. When the business did not sell, Krutyansky filed suit in the Law

Division. Granato filed suit in Chancery, and the matters were consolidated for

decision leading to the orders now being appealed.

      Krutyansky raises the following points: 1

1
   Although the order awarding $8,480.50 payable by Krutyansky to Granato is
listed on the notice of appeal, no relevant argument is made in Krutyansky's
brief. Therefore, we will leave the award undisturbed. The counsel fees related
to the court's ruling that Granato incurred fees in order to enforce a prior restraint
issued against Krutyansky.

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POINT I

EVEN ASSUMING ARGUENDO THAT NEITHER
PARTY BREACHED THE 2018 SETTLEMENT,
DEFENDANT'S 33.4% RIGHT TO NJADMC SALE
PROCEEDS IS NOT AFFECTED.

POINT II

IN     DENYING      THE     DEFENDANT'S
COUNTERCLAIM FOR CONVERSION, THE
LOWER COURT REASONED THAT IT WAS
REJECTING AN ATTEMPT TO CONVERT A
BREACH OF CONTRACT CLAIM INTO A
CONVERSION CLAIM, HOWEVER THE LOWER
COURT    ERRED   IN   NOT    ADDRESSING
PLAINTIFF'S       CONVERSION         OF
KRUT[Y]ANSKY'S SHARES IN NJAMDC.

POINT III

THE LOWER COURT[] ERRED IN DISMISSING
DEFENDANTS'     UNJUST     ENRICHMENT
COUNTERCLAIM WITHOUT ADDRESSING THAT
PLAINTIFF   GRANATO    WAS    UNJUSTLY
ENRICHED    BY   "GIVING"   DEFENDANT
KRUT[Y]ANSKY'S   NJAMDC    SHARES   TO
HERSELF.

POINT IV

THE DEPARTMENT OF HEALTH DETERMINES
LICENSING   AND    CANNOT   DETERMINE
OWNERSHIP OF KRUT[Y]ANSKY'S SHARE
CERTIFICATES AND BY DOING SO DENIED
KRUT[Y]ANSKY'S OWNERSHIP RIGHTS WHICH
CONSTITUTES AN ILLEGAL TAKING UNDER
THE US CONSTITUTION.

                                          A-2777-20
                   4
POINT V

NEW JERSEY LAW IS AMBIGUOUS WITH THE
DEFINITION OF "OWNERSHIP" AND WHETHER
AN INDIVIDUAL CAN BE AN EQUITY OWNER OF
A   HEALTH    CARE   FACILITY   WITHOUT
OBTAINING AN OPERATOR'S LICENSE AND
WITHOUT HOLDING AN ADMINISTRATIVE
POSITION.

    A.     Ownership Requirements.

    B.     Administration of Adult Day Care Facility.

    C.     Administrator's      Appointment        &
           Responsibilities.

    D.     Ownership & Conviction.

POINT VI

WHEN MR. KRUT[Y]ANSKY'S SIGNIFICANT
ROLE IN THE FACILITY'S GROWTH IS TAKEN
INTO ACCOUNT, THE FACT THAT AN
ASSISTANT ADMINISTRATIVE POSITION DOES
NOT REQUIRE A LICENSE, AS WELL AS THE
FACT THAT OUR CLIENT INVESTED HIS OWN
MONEY INTO THE ESTABLISHMENT OF THE
FACILITY ALL INDICATE THAT KRUT[Y]ANSKY
IS ENTITLED TO HIS OWNERSHIP IN EQUITY OR
OTHERWISE EVEN ASSUMING ARGUENDO HE
LACKS AN OFFICIAL POSITION.

    A.     Scope of Administration, Definitions, and
           Administrative Positions.

    B.     Split   Function     in    Administrative
           Capacities.

                                                        A-2777-20
                          5
For the reasons stated by Judge DeLuca, these claims of error do not warrant

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

      We do wish to comment on Krutyansky's contention that there is some

ambiguity in the regulatory scheme and that an individual can acquire an

ownership interest in adult day care facilities in this state without completing

licensure requirements such as background checks. A license holder is defined

as "the individual or entity that has legal ownership and responsibility for all

operations and management of the [adult day care] facility." N.J.A.C. 8:43F-

1.2. According to N.J.A.C. 8:43F-2.10, titled "Ownership," an adult day care

license holder has "responsibility for the management, operation, and financial

viability of the facility."   "No facility shall be owned or operated by any

individual who does not receive clearance from the Criminal Background

Investigation Unit . . . ." N.J.A.C. 8:43F-2.11(b).

      Proposed ownership changes must be reported to the Department of

Health (DOH). N.J.A.C. 8:43F-2.12(a). "Prior to transferring ownership of a

facility, the prospective new owner shall submit an application" to DOH.

N.J.A.C. 8:43F-2.12(b).       "The review of an application for a transfer of

ownership shall include . . . clearance from the Department's Criminal

Background Investigation Unit." N.J.A.C. 8:43F-2.12(c). "When a transfer of

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                                        6
ownership application has been reviewed and deemed acceptable, an approval

letter from [DOH] shall be sent to the applicant along with licensure application

forms."   N.J.A.C. 8:43F-2.12(d).     The final licensure application must be

submitted to DOH after the transaction transferring ownership "has been

completed[.]" See N.J.A.C. 8:43F-2.12(e).

      We see no ambiguity in the regulatory scheme governing adult day care

facilities. The regulations explicitly require prospective owners to obtain DOH

approval before any transfer of ownership. Krutyansky never completed the

process or submitted to a criminal background check, and thus failed to meet the

requirements for ownership-licensure. See N.J.A.C. 8:43F-2.11(b). He was

never approved, and therefore could not be an owner.

      Additionally, for the first time on appeal, defendants contend that a

regulatory taking of Krutyansky's ownership interest occurred. This argument

is premised on the notion that the State cannot require licensure before

ownership, and that Krutyansky owned shares in NJAMDC. Because he had no

property interest, and the State can regulate the acquisition of an ownership

interest, no taking occurred.

      Affirmed.

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