Opinion
DOCKET NO. A-0944-13T2 DOCKET NO. A-4367-13T2
01-12-2016
MARIA KRUPP and PROGRESSIVE STEPS, LLC, Plaintiffs-Respondents, v. VINCENZO DEGREGORIO and MARIA-ELENA MACOLINO, Defendants-Appellants, and FILOMENA ANDROVETT, Defendant-Respondent.
Anthony J. Pruzinsky argued the cause for appellant Maria-Elena Macolino in A-0944-13 (Hill Rivkins, LLP, attorneys; Mr. Pruzinsky, on the brief). Vincent DeGregorio, appellant in A-4367-13, argued the cause pro se. Tracy Julian argued the cause for respondents Maria Krupp and Progressive Steps, LLC (Lindabury, McCormick, Estabrook & Cooper, P.C. attorneys; Joseph J. Colao, Jr., of counsel; Ms. Julian, on the briefs).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Messano and Carroll. On appeal from the Superior Court of New Jersey, Chancery Division, Monmouth County, Docket No. C-149-10. Anthony J. Pruzinsky argued the cause for appellant Maria-Elena Macolino in A-0944-13 (Hill Rivkins, LLP, attorneys; Mr. Pruzinsky, on the brief). Vincent DeGregorio, appellant in A-4367-13, argued the cause pro se. Tracy Julian argued the cause for respondents Maria Krupp and Progressive Steps, LLC (Lindabury, McCormick, Estabrook & Cooper, P.C. attorneys; Joseph J. Colao, Jr., of counsel; Ms. Julian, on the briefs). PER CURIAM
These appeals, which we have consolidated for purposes of issuing a single opinion, arise in the context of a dispute between two siblings, plaintiff Maria Krupp, and defendant Vincenzo DeGregorio, who owned equal shares of Progressive Steps, LLC, a company providing therapeutic services to children with disabilities. We set forth in detail the procedural history of the dispute because it is critical to our consideration of the issues raised on appeal.
In September 2010, plaintiff filed suit seeking to dissolve Progressive Steps, or in the alternative, to dissociate defendant from the company. In June 2011, in settlement of the lawsuit, plaintiff and defendant entered into a purchase agreement, whereby plaintiff agreed to pay defendant $900,000, and defendant agreed to resign and convey his interest in Progressive Steps to plaintiff. At the time, plaintiff, defendant and a third sibling, Filomena Androvett, were equal owners of DAK Management, LLC (DAK), a real estate holding company that owned the property housing Progressive Steps.
Although the complaint named Progressive Steps as an additional plaintiff, we use the singular "plaintiff" throughout the opinion when referencing Maria Krupp.
In February 2012, plaintiff moved to enforce the settlement agreement, alleging defendant violated its terms by filing anonymous, baseless complaints with governmental authorities about the operation of Progressive Steps. Plaintiff certified that based upon her investigation, defendant either made the complaints himself, or "'acted in concert'" with his long-time partner and mother of his two children, Maria-Elena Macolino.
We gather that the Chancery judge believed a plenary hearing was necessary. However, the parties continued to negotiate and, before any hearing actually occurred, plaintiff and defendant ostensibly reached a second settlement in November 2012. Plaintiff's counsel drafted and circulated a written proposed consent order.
Notably, the proposed order required Macolino and Androvett to acknowledge that each was an "indispensable" party, pursuant to Rule 4:28-1, though plaintiff had not sought to add either to the litigation. The proposed order had signature lines for plaintiff, with her counsel's name under a signature line next to it, for defendant, with his counsel's name under a signature line next to it, and for Macolino and Androvett, with blank signature lines next to their names. The signature line for defense counsel indicated that he was only representing defendant.
The proposed order also involved resolution of issues that were not encompassed by the original pleadings. For example, the order required DAK's property to be listed for sale, with defendant having the right of first refusal. It also included provisions that directly affected Macolino, including her agreement not to disclose certain information regarding Progressive Steps, and not to file "any further administrative, or other complaints individually, anonymously or in concert with any other individual, against Progressive Steps . . . ."
What transpired thereafter presents the crux of these appeals. On March 13, 2013, defense counsel wrote to plaintiff's counsel stating, "I have reviewed your most recent proposed consent order with Maria-Elena Macolino and [defendant]. They have come to the conclusion that the attached consent order is their final position." He attached a revised proposed consent order (the March 2013 agreement). Less than one week later, plaintiff's counsel responded in an email: "We accept the terms of your latest proposed consent order. I may have some minor suggestions or questions but will otherwise forward pertinent part to [Androvett] and, with your consent, contact [the judge] to obtain a date to file and place on the record."
In April, however, Androvett's counsel proposed changes to the March 2013 agreement. Approximately one month later, defense counsel emailed plaintiff's counsel: "As a result of the changes in the proposed settlement agreement, [defendant] and [Macolino] believe there i[s] no agreement. They reject the changes and find them to be material changes."
Plaintiff moved to enforce the terms of the March 2013 agreement, contending it reflected an enforceable settlement, and served the motion on defense counsel. By letter dated May 29, 2013, defense counsel rejected service on behalf of Macolino, stating, "I do not nor have I ever represented [her]." On May 30, Macolino personally wrote to the judge reiterating that defense counsel did not represent her, and asking the court for "ample time" to review the motion papers and seek counsel. Defense counsel also filed a certification stating that he never represented Macolino. The judge instructed plaintiff's counsel to serve Macolino with the motion directly, which was done.
By letter dated June 17, 2013, Androvett's counsel advised the parties and the court that she was withdrawing her requested changes and now consented to the March 2013 agreement. On June 21, the judge heard oral argument on plaintiffs' motion. Macolino did not respond to the motion in writing or appear at argument. On June 24, the judge placed his oral decision on the record, concluding that the March 2013 agreement was an enforceable settlement. The judge noted that he "set up the motion process and scheduled it . . . so that every[one] would have a fair opportunity to participate." Notably, the judge never mentioned Macolino during the course of his decision. He entered a confirming order (the June 2013 order) prepared by plaintiff's counsel that named only defendant in the caption.
It is unclear from either appellate record whether Macolino was specifically advised of the date set for oral argument.
On June 25, Macolino's counsel wrote to the judge, requesting that any reference to his client be redacted from the March 2013 agreement, since she never was a party to the action or consented to the terms, and had no contractual relationship to plaintiff or Progressive Steps. Counsel for plaintiff and Androvett stated they believed that defense counsel had also represented Macolino throughout the proceedings. However, Androvett's counsel advised that "[i]f the court decides not to enforce the agreement as to Macolino, the provisions . . . pertain[ing] to [her] can be severed so as not to disturb the primary agreement . . . ." Plaintiff's counsel went further, by specifically consenting to the "request to sever [Macolino] from the [March 2013 agreement]." Macolino's counsel circulated a proposed stipulation to remove her from the consent order, but it remained unexecuted.
On July 15, defendant moved for reconsideration of the June order, and Macolino moved to amend so as to explicitly exclude her from the terms of the March 2013 agreement. The judge had by now retired, and the motion was forwarded to his successor, whose chambers rejected Macolino's motion because she was a "non-party." On August 13, the judge wrote to all counsel:
At the August 9, 2013 motion hearing . . . , the court noted that counsel for Ms. Macolino and counsel for Ms. Androvett attempted to file papers but were denied because neither party was a named party in the action. Ms. Macolino appeared in court pro se.Macolino's motion to intervene was granted, and the judge considered oral argument on Macolino's motion to amend and defendant's motion for reconsideration, on September 12. The judge thereafter entered an order denying Macolino's motion to amend. Macolino filed her timely notice of appeal on October 25, 2013.
I am advising all parties who wish to be heard that they shall file a Motion to Intervene returnable on September 12, 2013.
No transcript was provided for the August 9, 2013 proceedings.
In the interim, on October 2, 2013, the judge entered an amended order (the October 2013 order) reiterating her decision regarding Macolino and denying defendant's motion for reconsideration. The October 2013 order further required that, "pursuant to Paragraph 12 of the [March 2013 agreement] enforced by the [prior judge] by [the June 2013 order]," the DAK property be immediately listed for sale with a specific realtor who had been selected by the judge "at a price set by said listing broker."
Defendant did not appeal. However, in April 2014, defendant moved pro se to stay the sale of the DAK property. Plaintiffs filed a cross-motion in aid of litigant's rights seeking to enforce the June 2013 and October 2013 orders. In support, plaintiffs attached a proposed contract for sale between DAK and Table Ventures Realty, LLC. The judge heard oral argument on April 25, 2014 and entered orders the same day: (1) denying defendant's motion for a stay; (2) granting plaintiffs' cross-motion to enforce the June 2013 order; (3) ratifying the contract of sale and permitting the transaction to proceed in due course; (4) granting plaintiff a limited power of attorney to act on behalf of DAK with respect to any and all decisions regarding the sale of the DAK property and to execute any documents necessary to close the sale of the DAK property; and (5) denying plaintiffs' request for a counsel fee award. Defendant filed his notice of appeal on May 22, 2014, seeking review of the June 2013 and April 2014 orders (A-4367-13). This court denied defendant's motion for an emergent stay of the sale of the DAK property.
Plaintiff submitted a fully executed contract shortly thereafter. --------
As to A-0944-13
Macolino argues that, as a non-party to the litigation who was unrepresented by counsel, her due process rights were violated by the second judge's refusal to amend the June 2013 order to reflect that the March 2013 agreement did not apply to Macolino. Only plaintiffs responded to this appeal. They argue we should affirm because the judge properly relied upon defense counsel's "apparent authority" to bind Macolino to the terms of the March 2013 agreement. Having considered these arguments in light of the record and applicable legal standards, we reverse.
We begin with the obvious. Our courts have held that, subject to limited exception, "'[j]udgment[s] or orders normally do not bind non-parties.'" North Haledon Fire Co. No. 1 v. Borough of North Haledon, 425 N.J. Super. 615, 628 (App. Div. 2012) (quoting In Re Application of Mallon, 232 N.J. Super. 249, 254 n.2 (App. Div. 1989)). A non-party cannot be bound by the judgment simply because of a familial relationship with the party. Biddle v. Biddle, 166 N.J. Super. 1, 7 (App. Div. 1979). "A judgment may, however, be binding upon non-parties in other matters if their interests have been represented by a party." North Haledon, supra, 425 N.J. Super. at 628. "Such matters include traditional class actions, suits in which a public officer or agency is authorized by law to represent the public, and actions brought by a taxpayer on behalf of residents, citizens and other taxpayers." Id. at 629.
In rendering her oral decision on Macolino's motion to amend, the second judge stated, "On March 13, 2013, Ms. Macolino was added to the agreement and she signed it." This was clearly error because no one had signed the March 2013 agreement.
We acknowledge that the judge was dealing for the first time with a long, torturous and contentious intra-family dispute that had been previously managed by her predecessor. Nonetheless, the judge required the filing of a motion to intervene before even considering Macolino's motion to amend, reflecting, presumably, the judge's understanding that Macolino was not a party to the lawsuit.
Moreover, there is no basis to conclude that Macolino's interests were essentially defendant's interest, such that her "interest[s] received actual and efficient protection[.]" Id. at 629 (quoting Morris Cnty. Fair Housing Council v. Boonton Twp., 197 N.J. Super. 359, 365 (Law Div. 1984)). The original settlement required defendant to refrain from certain conduct. Macolino was not a party to the litigation nor a party to that settlement. When plaintiffs moved to enforce the settlement, they made allegations that, at best, implied Macolino was acting "in concert" with defendant. However, there was no ability to enforce the original settlement against her, absent her agreement to be bound by the terms of the March 2013 agreement. Presumably plaintiffs would have needed to initiate another action to bring Macolino within the jurisdiction of the court.
Plaintiffs seek to avoid these obvious conclusions by contending that the judge found Macolino was represented by defense counsel during settlement discussions, and therefore the March 2013 agreement was an enforceable settlement. They cite to our decision in Amatuzzo v. Kozmiuk, 305 N.J. Super. 469 (App. Div. 1997), where we said
On a disputed motion to enforce a settlement . . . a hearing is to be held to establish the facts unless the available competent evidence, considered in a light most favorable to the non-moving party, is insufficient to permit the judge, as a rational factfinder, to resolve the disputed factual issues in favor of the non-moving party.
. . . .
Negotiations of an attorney are not binding on the client unless the client has expressly authorized the settlement or the client's voluntary act has placed the
attorney in a situation wherein a person of ordinary prudence would be justified in presuming that the attorney had authority to enter into a settlement, not just negotiations, on behalf of the client.
[Id. at 474-75 (emphasis added).]
In addressing this point during argument on Macolino's motion to amend, the judge said, "Macolino feels that she was not represented, but I find differently . . . . It appears to me, through [the first judge's] decision that I have reviewed, and . . . I also find that she was represented or at least was part of this matter."
However, as we already noted, the first judge never mentioned Macolino in rendering his decision on plaintiff's motion to enforce the settlement that led to the June 2013 order. The proposed order drafted by plaintiff's counsel also never mentioned Macolino in the caption or the body of the order, despite the fact that she would have been an "indispensable party" under the terms of the March 2013 agreement. The record simply does not support a conclusion that, when he entered the June 2013 order, the first judge determined Macolino was represented by defense counsel.
We also reject plaintiff's argument that the second judge's decision implicitly applied Amatuzzo and concluded there was no disputed factual issues regarding Macolino's representation. We acknowledge that defense counsel's correspondence indicated he had discussed the terms of the proposed settlement with defendant and Macolino, and that only the March 2013 agreement was acceptable. However, defense counsel notified plaintiffs when the motion to enforce was filed that he never represented Macolino, and he was not authorized to accept service on her behalf. He later certified that he never represented Macolino. When Macolino was subsequently forced to seek amendment of the June 2013 order, plaintiffs consented to the requested relief. During oral argument before the second judge, plaintiff's counsel only addressed defendant's motion for reconsideration.
In sum, the orders of September 16 and October 2, 2013, denying Macolino's motion to amend, are reversed. The matter is remanded to the trial court for entry of an order clarifying that those terms of the March 2013 agreement that apply to Macolino, and that were enforced by the June 2013 order, are stricken.
As to A-4367-13
Before considering the merits of defendant's appeal, we define what is appropriately before us. Pursuant to Rule 2:4-1(a), "[a]ppeals from final judgments . . . shall be taken within [forty-five] days of their entry." The filing of a timely motion for reconsideration tolls the time period. See R. 2:4-3(e). Defendant filed his motion for reconsideration twenty days after the June 24 order. Therefore, the forty-five-day time period began to run again from entry of the October 2, 2013 order denying the motion for reconsideration. Defendant did not file his appeal within the next twenty-five days, but waited, instead, until May 22, 2014, after his motion for a stay was denied. Accordingly, the only orders under review are the court's April 2014 orders.
In the first six of his seven points, defendant asserts various arguments regarding the original settlement of the litigation and the March 2013 agreement. He claims both were void because they are unconscionable, since he was under financial and emotional duress, there was an inequality of bargaining positions and plaintiff exerted undue duress. As to the original settlement, defendant claims it was void as against public policy and was based upon misrepresentations made by plaintiff. As to the March 2013 agreement, defendant claims that he never accepted its terms, that plaintiff failed to abide by her fiduciary duties and the agreement was against public policy because it allegedly included Macolino. All these arguments lack sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E). As already noted, challenges to the original settlement and the June 2013 order are simply not before us.
In his seventh and final point, defendant asserts that the judge erred in granting that portion of plaintiffs' cross-motion that appointed plaintiff attorney-in-fact to accomplish the sale of the DAK real estate. Defendant argues the cross-motion was supported only by counsel's certification which was not based upon personal knowledge. See R. 1:6-6 ("If a motion is based on facts not appearing of record or not judicially noticeable, the court may hear it on affidavits made on personal knowledge, setting forth only facts which are admissible in evidence to which the affiant is competent to testify.").
Only plaintiffs' notice of cross-motion is included in defendant's appendix; the allegedly offending certifications or affidavits are not. We have refused to review on appeal issues addressed by those parts of a trial record not included in the appendix. Community Hosp. v. Blume Goldfaden, 381 N.J. Super. 119, 127 (App. Div. 2005). Nevertheless, we affirm the order.
The March 2013 agreement, enforced by the June 2013 order, set forth a detailed process for the sale of the DAK property. It provided that defendant had a right of first refusal that "must be exercised within [seventy-two] hours of receipt of a bona fide offer." The October 2012 order provided that the listing price would be set by the realtor selected by the judge. There was, in fact, receipt of a bona fide offer.
During oral argument on plaintiffs' cross-motion, defendant objected to the process contained in the March 2013 agreement, claiming that he never saw the listing for the property. He asked the judge to allow him to "select a realtor that I can trust," and urged the judge not to give plaintiff power of attorney "because [she has] shown nothing but bad faith unilaterally listing the building in the past . . . ." None of these arguments had merit, and the judge concluded defendant's actions had thwarted the sale of the property. Defendant had essentially admitted as much.
"Rule 1:10-3 allows a court to enter an order to enforce litigant's rights commanding a disobedient party to comply with a prior order or face incarceration." Milne v. Goldenberg, 428 N.J. Super. 184, 198 (App. Div. 2012) (citing Saltzman v. Saltzman, 290 N.J. Super. 117, 125 (App. Div. 1996)). "Once the court determines the non-compliant party was able to comply with the order and unable to show the failure was excusable, it may impose appropriate sanctions." Ibid. The scope of relief available under Rule 1:10-3 "is limited to remediation of the violation of a court order." Abbott v. Burke, 206 N.J. 332, 371 (2011). We defer to the exercise of the judge's discretionary decision as to an appropriate remedy. Milne, supra, 428 N.J. Super. at 198-99.
Here, the judge did not mistakenly exercise her discretion by approving the sale of the DAK property and appointing plaintiff as attorney-in-fact to consummate the sale. We therefore affirm.
In sum, in A-0944-13, we reverse and remand the matter to the trial court to enter an order in accordance with our instructions. In A-4367-13, we affirm. I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION