DAWN MARIE MASTIN VS. 74-76 & 78-80 CARMER AVE. ASSOCIATES, LLC (C-000046-17, BERGEN COUNTY AND STATEWIDE) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE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.
A-5196-17T1
2
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.
A-5196-17T1
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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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"[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
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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
A-5196-17T1
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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,
A-5196-17T1
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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.").
A-5196-17T1
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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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