VINCENT M. YACAVINO, Sr. v. DIEGO VISCEGLIA, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5198-03T35198-03T3

A-5213-03T3

VINCENT M. YACAVINO, Sr.,

Plaintiff-Appellant/

Cross-Respondent,

v.

DIEGO VISCEGLIA, JOHN VISCEGLIA,

GARDEN STATE BUILDINGS, a Partnership,

and SUMMIT ASSOCIATES LIQUIDATING

TRUST,

Defendants-Respondents/

Cross-Appellants,

and

The ESTATE of VINCENT VISCEGLIA,

Defendant-Respondent.

_____________________________

VINCENT M. YACAVINO, Sr.,

Plaintiff-Appellant/

Cross-Respondent,

v.

DIEGO VISCEGLIA,

Defendant-Respondent/

Cross-Appellant,

and

The ESTATE of VINCENT VISCEGLIA and

ANNA VISCEGLIA,

Defendants-Respondents.

_____________________________

VINCENT M. YACAVINO, Sr.,

Plaintiff-Appellant/

Cross-Respondent,

v.

DIEGO VISCEGLIA, JOHN VISCEGLIA,

GARDEN STATE BUILDINGS, and

SUMMIT ASSOCIATES LIQUIDATING TRUST,

Defendants-Respondents/

Cross-Appellants.

_____________________________

MARIA V. YACAVINO, VINCENT M.

YACAVINO, Jr., and NINA C.

YACAVINO, individually and

derivatively on behalf of NIN-VIN Ltd.,

a Limited Partnership, and MARIA V.

YACAVINO, as Co-Executrix of the ESTATE

of AMERICO PESCE,

Plaintiffs-Appellants/

Cross-Respondents,

v.

GARDEN STATE BUILDINGS, a

Limited Partnership, DIEGO R.

VISCEGLIA, JOHN VISCEGLIA,

JOYCE VISCEGLIA, JANICE VISCEGLIA,

VINCENT D. VISCEGLIA, ELIZABETH

VISCEGLIA, LAUREN VISCEGLIA, LORI

VISCEGLIA, JOHN VISCEGLIA II,

KATHERINE VISCEGLIA, KRISTINA

VISCEGLIA, JAMES GAPSTUR, ISABELLE

V. GAPSTUR, JOHN CARLOS GAPSTUR,

ALYCIA GAPSTUR, and VINCENT M.

YACAVINO, Sr.,

Defendants-Respondents/

Cross-Appellants,

and

The ESTATE of VINCENT VISCEGLIA and

ANNA VISCEGLIA,

Defendants-Respondents.

_____________________________

VINCENT M. YACAVINO, Sr.,

individually and on the behalf

of NIN-VIN LTD., a Limited

Partnership, and VINCENT M.

YACAVINO, Sr., custodian

for VINCENT M. YACAVINO, Jr.,

and NINA YACAVINO,

Plaintiffs-Appellants/

Cross-Respondents,

v.

DIEGO VISCEGLIA, JOHN VISCEGLIA,

JOYCE VISCEGLIA, JANICE VISCEGLIA,

VINCENT DANIEL VISCEGLIA, ELIZABETH

VISCEGLIA, LAUREN VISCEGLIA, LORI

VISCEGLIA, JOHN VISCEGLIA II,

KATHERINE VISCEGLIA, KRISTINA

VISCEGLIA, GARDEN STATE BUILDINGS, a

Limited Partnership, CHARLES REID,

KEVIN KILCULLEN, DRINKER, BIDDLE,

& REATH, L.L.P., ISABELLE GAPSTUR,

SAI MANAGEMENT, INC., NIN-VIN LTD.,

a Limited Partnership, SUMMIT

ASSOCIATES LIQUIDATING TRUST, DIEGO R.

VISCEGLIA, Trustee, and JOHN B. VISCEGLIA,

Trustee,

Defendants-Respondents/

Cross-Appellants,

and

The ESTATE of VINCENT VISCEGLIA, ANNA

VISCEGLIA, STEVEN LEVITT, and FOX,

ROTHCHILD, O'BRIEN & FRANKEL, L.L.P.,

Defendants-Respondents.

_____________________________

 

Argued March 21, 2006 - Decided

Before Judges Axelrad, Payne and Sabatino.

On appeal from Superior Court of New Jersey,

Law Division, Somerset County, Som-L-1374-03, Som-L-1366-03, Som-L-1378-03, Som-L-1379-03, and Som-L-1380-03.

Vincent M. Yacavino, Sr., appellant/cross-

respondent, argued the cause pro se.

William C. Slattery, argued the cause for

appellants/cross-respondents Maria V.

Yacavino, Vincent M. Yacavino, Jr., and

Nina Yacavino.

Charles A. Reid, III argued the cause for

respondents/cross-appellants Garden State

Buildings, Summit Associates Liquidating

Trust, SAI Management, Inc., Diego R.

Visceglia, John Visceglia, Joyce Visceglia,

Janice Visceglia, Vincent D. Visceglia, Elizabeth Visceglia, Lauren Visceglia, Lori Visceglia, John Visceglia II, Katherine Visceglia, Kristina Visceglia, Isabelle V. Gapstur, James Gapstur, John Carlos Gapstur, Alycia Gapstur, Charles A. Reid, III, and Drinker Biddle & Reath L.L.P (Drinker Biddle & Reath, attorneys; Mr. Reid and Daniel Carroll, of counsel; Michael C. Zogby on the brief).

Thomas A. Cunniff argued the cause for

respondents Estate of Vincent Visceglia, Anna Visceglia, Steven C. Levitt and Fox Rothschild LLP (Fox Rothschild LLP attorneys; Mr. Cunniff and Jonathan D. Weiner, of counsel and on the brief).

Edward S. Nathan, attorney for respondent Kevin Kilcullen, joins in the brief of respondents/cross-appellants.

PER CURIAM

Plaintiffs Vincent Yacavino, his wife Maria and their children Nina and Vincent, Jr. are the recipients of multi-million-dollar fortunes as the result of the beneficence of Maria's father, Vincent Visceglia, who immigrated to the United States from Italy in 1924, amassed considerable wealth from real estate development, and died at the age of ninety-nine in 2004. However, plaintiffs claim an entitlement to more, which they allege would have been theirs but for the fraudulent conduct of, among others, Maria's brothers, Diego and John, and a breach of contract by Vincent Visceglia and his wife Anna to provide additional inter vivos and posthumous gifts. In four suits by Vincent Yacavino, an attorney admitted to practice in New Jersey, the first of which was filed in 1996, and in one action instituted on behalf of Maria and the children, the Yacavinos have determinedly sought recovery on various legal theories from family members, including Vincent and Anna Visceglia, Diego, John, and Maria's sister Isabelle Gapstur, as well as businesses owned by family members and certain attorneys retained by the family and its businesses.

Eventually, virtually all of plaintiffs' claims were dismissed as duplicative, unsupported in law or fact or barred by the statute of limitations. However, summary judgment on liability was entered in plaintiffs' favor on their claim of entitlement to payments on a promissory note given by Garden State Buildings (GSB), a limited partnership in which Diego and John were general partners, to Summit Associates, Inc. (SAI), a family real estate business, to finance GSB's purchase of a building owned by SAI at the time of SAI's liquidation. A bench trial on damages was then held in the year 2002 before Judge Harriet Derman, who managed the actions throughout much of their pendency. At its conclusion, she awarded Vincent $191,334.04, Maria $904,468.62, Vincent, Jr. $909.109.44, and Nina $909,110.08. In consolidated appeals, plaintiffs claim that the damage awards are insufficient and assert various errors occurring in all actions. A cross-appeal has been filed from the damages award.

Proceedings at the trial level and on appeal have been immensely and unnecessarily complicated by the multiplicity of interconnected actions filed by Vincent Yacavino and on behalf of his wife and children. Their nature and procedural course, as well as their underlying facts, are briefly outlined.

Vincent Visceglia was a real estate developer with extensive holdings in Middlesex County. He was aided in his endeavors by his sons Diego, a lawyer, and John. His daughters Maria Yacavino and Isabelle Gapstur never participated in the operation of the family businesses. Nonetheless, for many years they and their immediate families were the objects of their father's generosity, receiving cash, securities and various interests in the businesses that Vincent Visceglia controlled.

Until 1975, Vincent Visceglia was in partnership with his brother Frank in the ownership of an entity known as Peddie Buildings. Diego and John were active in the partnership, and Maria held a gifted interest in it, acquired prior to her marriage to Vincent Yacavino. At the time that the partnership was allegedly dissolved, a proposal was made by Vincent, Diego and John Visceglia to purchase Maria's share for two million dollars. Plaintiffs claim without substantive proof that Maria's share was worth four million dollars, and that at the time of the purchase, Vincent Visceglia agreed to "make it up" to Maria, presumably by inter vivos gifts and in his will - an agreement that he allegedly failed to honor. Plaintiffs characterize that and subsequent expressions of donative intent to constitute a contract, the breach of which gave rise to a cause of action for breach of contract. Plaintiffs also claim fraud by Vincent Visceglia, Diego and John in an alleged surreptitious continuation of the partnership, the valuation of its holdings and the purchase of Maria's ownership interest.

After Vincent Visceglia and his brother's business interests were split, Vincent formed SAI, which owned property in Raritan Center. Shares of common and preferred stock were issued as part of the capitalization for that enterprise. Maria and the Yacavino children were each given 146 shares of second preferred stock by Vincent Visceglia as gifts during the years 1982 to 1984. Vincent Yacavino received 106 shares as a gift from his father-in-law. Thereafter, a determination was made to liquidate the company and to sell its assets, said to consist of property in Raritan Center known as Building 468, to GSB, the limited partnership controlled by Diego and John. GSB financed its purchase by giving a twenty-year note secured by an unrecorded mortgage to SAI in the principal amount of $2.37 million, with monthly payments of $22,871 and a ten-percent rate of interest. A plan was drawn up whereby the family would exchange their shares of preferred stock for cash and shares of the promissory note given by GSB. Vincent and Maria Yacavino consented to the plan of liquidation. Although the par value of Summit's second preferred stock was $1,000 per share, with a liquidation preference equal to par, an appraiser commissioned by Diego in connection with the potential liquidation of the company appraised the fair market value at $375 per share.

Plaintiffs claim that they were tricked into accepting the lesser amount as the redemption price upon SAI's liquidation, and that the price was inadequate. They claim that, unknown to them, the majority of SAI's assets were sold to GSB and to a family-owned limited partnership known as NIN-VIN at prices below fair market value. Plaintiffs claim that if fair market values had been realized, sufficient funds would have existed to pay the full $1,000 par value of the second preferred shares, or more.

Commencing in 1984, SAI's liquidation was accomplished by the Summit Associates Liquidating Trust (SALT). Diego and John were trustees of SALT, and have been accused by plaintiffs of mismanagement, requiring an accounting. On January 16, 1986, SALT assigned 65.98 percent of its interest in the 468 note to Vincent Visceglia in return for his 3,894 shares of second preferred stock in Summit Associates. Vincent's interest was valued at $1,460,250. SALT also made direct assignments of a 1.355 percent interest in the note to Maria and each of her children and of a 0.98 percent interest to Vincent Yacavino as required by the liquidation plan. Additionally, gifts of assignments of interest in the note with a total value of $1.140 million were made by Vincent Visceglia to Maria and her children in 1986, 1987 and 1988.

In 1993, as the result of a business downturn, SALT authorized GSB to suspend payments on the note for one year, commencing on July 1, 1993, to avoid liquidation. Nonetheless, partial payments to the Yacavinos were made by Diego and, later, by GSB commencing in the latter part of 1993 and continuing through 1997, but the checks were not negotiated by the Yacavinos. Although plaintiffs received recoveries on the notes following trial, they dispute the court's evidentiary findings as to payments made and owing to them.

In 1984, a limited partnership known as NIN-VIN, Ltd. was established. Vincent Visceglia, a general partner, maintained a fifty-percent interest in it, half of which he later assigned to his wife Anna. Maria and Isabelle were named as limited partners with thirty-percent and twenty-percent interests, respectively. The entity owned and operated two warehouses purchased, allegedly at a "substantial discount," from SAI at the time of its liquidation. Although defendants allege that the differential was made up by granting Maria and Isabelle shares in NIN-VIN, plaintiffs alleged fraud on SAI's part in concealing its ownership of the buildings and in this sale transaction. They also alleged mismanagement of NIN-VIN by Diego and John.

On October 25, 2000, Judge Derman appointed Raymond Ciccone, a forensic accountant and CPA, as Special Fiscal Agent to review the books and records of NIN-VIN, investigate plaintiffs' charges of mismanagement, and file a report. Ciccone found no impropriety. Later, on December 10, 2001, Lawrence Orloff was appointed by the court as Special Master to oversee the liquidation of the entity. Plaintiffs' claims against NIN-VIN were settled, and the causes of action regarding it were dismissed by consent order on January 20, 2004.

As stated previously, plaintiffs allege that in 1975, Vincent Visceglia orally promised to "make up" the shortfall in Maria's recovery on the purchase of her share of the Peddie Buildings business. Plaintiffs claim that further written promises of gifts in a total amount that, by one account exceeded $9 million, were made by Vincent in 1987. Primary evidence in this regard consisted of a memo dated April 28, 1987 and letters dated May 27, 1997 and June 8, 1987. Plaintiffs assert that the promises constituted a binding contract between them and the senior Visceglias by which they were entitled to the inter vivos or testamentary assignment of interests in notes, payment of interest, the transfer of real property, and a fifty-percent share of Vincent Visceglia's interest in NIN-VIN. Plaintiffs claim that consideration by them for the contract consisted not only of Maria's 1975 agreement to accept less for her property interest in the Peddie Buildings, but also Maria's 1987 agreement to exchange a Bricktown bayfront lot gifted by her father for an oceanfront lot gifted to Isabelle that adjoined the parents' house and, because of the difference in value of the two lots, to accept a twenty percent reduction in her interest in the parents' Short Hills residence, which was initially planned to pass equally to her and Isabelle. Plaintiffs further claim that the parents restricted the Yacavinos' ability to sell the oceanfront lot, and when they finally lifted the restrictions, the requirements of the Coastal Areas Facilities Recovery Act, N.J.S.A. 13:19-1 et seq., (passed while the restrictions were in place), made the lot unbuildable, thereby reducing its value and creating an additional detriment to plaintiffs. Maria also claims as consideration for the donative contract her agreement to reallocate to her children $200,000 previously gifted to her by her father.

Inter vivos gifts by Vincent Visceglia to the Yacavinos ceased in 1988. Whereas the Yacavinos allege that the cessation, together with the failure to make proper provision by will, constituted a breach of contract, defendants dispute the existence of a contract and claim that Vincent Visceglia's gifting habits changed as the result of concerns regarding the depletion of his assets precipitated by his attorney's letter of October 17, 1988 and regarding the Yacavinos' spending habits and invasion of capital as reflected in Visceglia's letters dated June 30, 1987, October 30, 1987, November 13, 1987, December 21, 1987 and January 11, 1988.

Vincent Visceglia died on January 17, 2004, but he had been incompetent for a substantial period before that date. A power of attorney had been granted by him to Anna in 1995, and thereafter, she acted on his behalf. In 1993, a trust for the benefit of Vincent and Anna was established, with Diego, Isabelle and attorney Steven Levitt as trustees. The Visceglia's homes at the shore and in Short Hills were placed in the trust, as well as other property. Plaintiffs claim that the trust was established as the result of a conspiracy between Diego and Isabelle to cause their parents to breach their contract with plaintiffs to provide further gifts and that transfer of property to the trust was fraudulent. They also claim that Vincent Visceglia was incompetent to execute the trust documents. Defendants contend that the trust was established upon the advice of the Visceglias' attorney to avoid impoverishing Anna should Vincent die.

These facts led to the commencement of the following actions.

1. The 468 note case

The first action, the "468 note case," filed by Vincent Yacavino in Middlesex County in October 1996 against GSB and its general partners Diego and John, and characterized by him as a "dry run," sought recovery on that portion of the 1982 note in the amount of $2.370 million given by GSB to SAI in which he had an interest as the result of assignments from Vincent Visceglia and SALT. In the second count of his complaint, Yacavino, as a preferred stockholder in Summit Associates, sought an accounting from Diego and John as directors of SALT. That count was dismissed with prejudice as time barred by Judge Mark Epstein on February 20, 1997, who construed the count as relating to the conduct of SAI and held that Yacavino's right to inspect the books and records of SAI pursuant to N.J.S.A. 14A:5-28 had expired.

A motion by plaintiff to amend the complaint to assert claims of fraud in the liquidation of Summit Associates and the valuation of its stock was denied without prejudice by Judge Douglas Wolfson on December 19, 1997. In a subsequent written decision issued on January 12, 1998 in connection with plaintiff's motion for leave to appeal, Judge Wolfson stated:

Plaintiff seeks to amend his Complaint to allege a fraud claim as a result of the 1984 liquidation of Summit Associates. The proposed Amended Complaint essentially claims that plaintiff was a preferred stockholder in a now defunct corporation and that the payment made to him in consideration of his shares was significantly less than par value. Plaintiff claims that assets of that corporation were sold at less than fair market value prior to its liquidation. After having reviewed the motion papers and supplemental briefs regarding damages, I find that plaintiff has failed to allege his fraud count with sufficient particularity, has failed to allege any cognizable damage as a result of the events alleged in his proposed fraud count, and has not pursued his claim with due diligence.

Judge Wolfson found additionally that, by the amendment, plaintiff was improperly seeking to reintroduce into the litigation issues that were already dismissed with prejudice by Judge Epstein.

In further explanation of his ruling, Judge Wolfson noted that plaintiff owned shares of preferred stock in SAI with a par value of $1,000 for which he received only $375 per share at time of dissolution in 1984. At the time, SAI's assets, allegedly consisting of one piece of real property, were stated to have been $2,213,820.54. However, it was plaintiff's position that SAI was worth far more as the result of its ownership of two additional pieces of warehouse property with an assessed value of at least $16,532,700 that were sold at less than fair market value to NIN-VIN. However, as Judge Wolfson noted, plaintiff's immediate family owned a thirty-percent interest in NIN-VIN, and as a consequence, he was benefited, not damaged, by the sale. The judge found that plaintiff's additional claims of fraud in connection with SAI's liquidation were not supported by any facts.

In explaining his conclusion that plaintiff had not acted with due diligence, Judge Wolfson stated that, although the alleged fraud occurred in 1985, plaintiff claimed that he was unaware of its existence until August 1997 when he learned from James Gapstur, the husband of Maria's sister Isabelle, that SAI may have sold property for less than fair market value to third parties. This discovery led plaintiff to research the Edison township tax records and the Middlesex County deed office on August 22, 1997 and to learn of the sales to NIN-VIN. Although the judge recognized the potential applicability of the discovery rule to fraud claims, he found it inapplicable in this instance to preserve a cause of action for fraud that did not result in damages.

We denied plaintiff's motion for leave to appeal on February 8, 1998. A motion for reconsideration based upon the alleged receipt of new evidence of fraud regarding the alleged sale of undervalued property by SAI to GSB and NIN-VIN was denied on October 9, 1998.

The remainder of the action on the note continued as we have described. On August 10, 2000, in response to a motion for summary judgment by GSB, Judge Derman issued an opinion in which she instead granted partial summary judgment in favor of plaintiffs on their note claim. In doing so, she validated the acknowledged assignments given to plaintiffs by SALT and by Vincent Visceglia. Further, she rejected a claim by GSB that it was entitled to a reduction in interest payable because plaintiffs had failed to mitigate their damages by negotiating checks issued by Diego and GSB in partial payment of GSB's indebtedness. Judge Derman found it to be "well settled" that the holder of a promissory note has the right to demand payment in strict compliance with its terms, and such payment was not received. Additionally, she found that plaintiffs might have compromised their right of recovery if they had accepted the partial payments. Thus she found that "plaintiffs are entitled to the interest on the outstanding indebtedness for the entire period, without reduction." The court's decision applied, as well, to note claims found in counts 1, 3 and 4 of the action instituted on behalf of Maria Yacavino.

A bench trial occurred in February 2002, and on June 18, 2002, the judge determined that defendants had met their burden of proving that Garden State had paid all interest on the note through 1992, but that the plaintiffs were owed interest outstanding from 1993 until the note's maturity in 2002, largely in accordance with the calculations made by the court's expert, Ciccone. The judge found additionally after a careful review of the evidence that no rights to unpaid and accrued interest had been gifted by Vincent Visceglia, despite language in a May 27, 1987 letter from Vincent Visceglia to Maria that plaintiffs contended provided support for their interest claim. In a later opinion, Judge Derman held that the ten-percent contractual rate of interest applied to the outstanding balance owed by GSB until the date of judgment, not the date of maturity, and that interest in accordance with court rule applied thereafter.

Motions for reconsideration and a new trial were denied.

2. The contract case

In February 1997, plaintiff filed a second action in Middlesex County against Vincent, Anna and Diego Visceglia, alleging a breach of contract by Vincent and Anna to transfer their interest in certain notes to the Yacavinos, to pay interest accruing on non-transferred notes, and to transfer property either during the parents' lifetime or by will following death. In a second count, plaintiff alleged that if Anna had not consented to the property transfers, then Vincent and Diego were liable to plaintiff for fraud as the result of their assurances of Anna's consent. In an third count, plaintiff demanded punitive damages.

Although Vincent Yacavino was denied discovery of his in-law's wills during their lifetimes, in December 1997, Michael Backer was appointed by Judge Wolfson to examine in camera the wills executed by Vincent and Anna Visceglia from 1984 to date and such other documents as he deemed necessary "in order to determine, viewing the evidence in the light most favorable to the plaintiff, whether the Wills evidence a contract to make a will in favor of the plaintiff."

The special master's report was filed on October 26, 1998. In it, Backer concluded that the documents provided to him, consisting of wills, codicils, a trust agreement, federal gift tax returns and other extrinsic documents, when viewed in a light most favorable to plaintiffs, did not provide the requisites of a binding contract to make a will in favor of either Vincent or Maria Yacavino under the evidentiary requirements established by the Uniform Probate Code as adopted in New Jersey in N.J.S.A. 3B:1-4. After discussing an April 28, 1987 unsigned memo from "Dad" to Maria and Isabelle "via [Diego]" regarding "Shore lots/houses," an unsigned letter purportedly from Vincent Visceglia to Maria dated May 27, 1987 referencing gifts from 1986 through 1998 in the amount of $1,842,125 and an unsigned June 8, 1987 letter from "Dad" to Maria, enumerating existing and future gifts of $9,448,125 and requesting a budget for the Yacavinos' upkeep in an amount not to exceed $100,000 per year, Backer observed:

[A]lthough Vincent Visceglia (and, perhaps, Anna Visceglia, though no writings from her were included in the materials presented to me) once may have intended to make additional gifts during his lifetime and, possibly, bequests under his Will, he was free to change that intention at any time . . . .

Summary judgment was granted to defendants in this action for the reasons expressed in Judge Derman's written opinion of July 28, 2000, which we discuss in greater detail in connection with the resolution of the action brought on behalf of Maria and her children.

3. Summit Associates (Bergen County) case

Within weeks of our denial of Vincent Yacavino's motion for leave to appeal from Judge Wolfson's order denying leave to assert claims in the note case of fraud in transactions involving the liquidation of SAI, on February 20, 1998, Vincent Yacavino filed a complaint in Bergen County against Diego, John, SALT and GSB in which he again alleged fraud in the valuation of his shares of SAI at the time of its liquidation. As evidence of the fraud, plaintiff claimed that, in August 1997, he learned that SAI "indeed owned many more pieces of real estate than the sole piece of real estate represented by Diego," some of which were sold by SAI to GSB, allegedly at prices below fair market value. In addition to fraud, plaintiff asserted causes of action based upon breach of fiduciary duty, self-dealing, and minority shareholder oppression pursuant to N.J.S.A. 14A:12-7. Punitive damages were sought.

The case was consolidated with the note action pending in Middlesex County and dismissed with prejudice by Judge Wolfson on June 12, 1998 as redundant of claims that plaintiff had unsuccessfully sought to assert by amended complaint in the note case and as barred by the relevant statutes of limitation, N.J.S.A. 14A:6-12 and N.J.S.A. 2A:14-1. Counsel fees in the amount of $6,000 were awarded to defendants pursuant to N.J.S.A. 2A:15-59.1 upon the court's determination that plaintiff's suit was frivolous. Motions for reconsideration of dismissal of claims of fraud with respect to SAI, GSB and NIN-VIN were denied on October 9, 1998 and February 19, 1999.

4. Maria Yacavino's and children's' case

At oral argument on the motion to dismiss the Summit Associates (Bergen County) case, Yacavino stated:

The reason that I'm representing myself is because I'm being threatened to be buried in legal fees. Now my wife and children will start a suit for these identical causes of action. The jury - and if you consolidate the case, the jury is going to hear these complaints and these causes of action presented by their attorney.

Shortly after this statement was made, on June 30, 1998, Maria, represented by independent counsel, filed a twenty-three count complaint in Middlesex County on her own behalf and on behalf of Nina and Vincent, Jr. against GSB, Diego, John, SALT, Vincent and Anna Visceglia, Maria's sister Isabelle and her family, and Vincent Yacavino alleging, among other things, fraud in the dissolution of SAI, fraud in SAI's concealment and sale of property to GSB at less than market value, mismanagement by Diego and John of NIN-VIN to plaintiffs' disadvantage, underpayment to Maria by $2 million of her interest in Peddie Buildings, and breach by Vincent and Anna Visceglia of their agreement to make testamentary dispositions and other gifts. No wrongful conduct was alleged against Vincent Yacavino.

In March 1999, an amended complaint was filed in which Maria asserted additional claims on behalf of NIN-VIN and the estate of Amergo Pesce, for which she served as a co-executrix. Among other relief, Maria sought the dissolution of NIN-VIN and the appointment of a guardian ad litem for Vincent Visceglia. Vincent Yacavino answered the complaints and filed cross-claims that eventually were either dismissed or consolidated with existing claims in other suits. The remaining defendants sought summary judgment on various of the counts.

In an order accompanied by a comprehensive revised written opinion dated July 28, 2000, Judge Derman granted defendants' motion directed to counts 2, 4, 5, 6, 7, 8, 9 and part of 12 (as to SAI) as well as to the entirety of the contract case. After finding an ample opportunity for discovery had been afforded plaintiffs in connection with their actions, the judge first addressed plaintiffs' claims of breach of contract by Vincent and Anna Visceglia to give or will property as set forth in count 1 of the contract action and counts 4 through 6 of Maria's action. The judge commenced by reviewing the documentary evidence adduced by plaintiffs in support of the contract claims and by defendants in seeking to defeat it. In that regard, the judge found of particular significance a letter dated January 11, 1988 from Vincent Visceglia to Maria, in which he stated, in part:

[Diego] has explained to me the anxieties you feel. You must understand that your decisions in 1975 and thereafter are responsible for the condition you now find yourselves in. No one forced you to sell out. It was mutually agreed. The $2,000,000 paid was fair and agreed by all. You did not invest wisely over the years, invaded the principal, refused to live within your means, and now you suffer the consequences.

* * *

As a follow up to mine of Dec. 21, 1987, and previous letters, please know that I cannot stand by and allow you to dissipate such large sums of principal when you and I know fully well the consequences[.] I, therefore, recommend the following. [L]et's prepare a workable financial sound budget plan so that you can and do live for 1988 and future years, and turn over all bonds, notes and other instruments to me for safe keeping, and I will disburse the income regularly. If we do not resolve this matter satisfactorily, I have no other alternative but to suspend future gifts, amend my estate planning and rethink how will the distribution to your family be handled.

After her review of the documents, Judge Derman found that plaintiffs' evidence was inadequate as a matter of law to establish the existence of various alleged completed inter vivos gifts, finding a lack of explicit and convincing evidence of donative intent, as well as absence of evidence of delivery and irrevocable relinquishment of ownership by Vincent Visceglia. Additionally she found insufficient evidence to establish the existence of a contract to make future inter vivos gifts, finding the absence of a meeting of the minds, a lack of consideration or grounds to establish a promissory estoppel, and a failure with respect to the real estate ("except, perhaps, as to NIN-VIN") to meet the requirements of the statute of frauds. N.J.S.A. 25:1-13. The judge also found plaintiffs' claims, which accrued in January 1989 when Vincent Visceglia ceased making gifts, to be barred by the six-year statute of limitations of N.J.S.A. 1A:14-1, since Vincent Yacavino's contract action was not filed until March 25, 1997 and Maria's action was not filed until June 30, 1998. As a final matter, the judge dismissed as premature plaintiffs' claim based upon an alleged contract to make a will since at the time neither Vincent nor Anna Visceglia was deceased and none of the theories permitting suit for an anticipatory breach could be sustained. The judge relied as well upon the report of Special Master, Michael Backer, who found that plaintiffs could not satisfy the statutory requirements for a contract to make a will. Summary judgment was therefore granted on count 1 of the contract action and counts 4 through 6 of Maria's action.

The judge turned next to claims arising from the liquidation of SAI as set forth in counts 2, 9 and part of 12 of Maria's complaint, although she noted that Vincent Yacavino had previously been precluded on three occasions from pursuing such claims. The judge found that all claims emanating from the liquidation of SAI commencing in 1984, including breach of fiduciary duty, fraud, self-dealing, and breach of any rights under the Oppressed Minority Shareholder statute, N.J.S.A. 12:12-7, were barred by the relevant six-year statutes of limitation contained in N.J.S.A. 14A:6-12(5) and N.J.S.A. 2A:14-1. After finding commonality of interest between plaintiffs, Judge Derman also agreed with Judge Wolfson that plaintiffs could not benefit from the discovery rule, despite the alleged discovery by Vincent Yacavino on August 22, 1997 of SAI's possession of additional assets and evidence of self-dealing, and found independently that reasonable diligence had not been demonstrated. Consequently, she declared summary judgment to be warranted. Claims asserted on behalf of the estate of Amergo Pesce were also dismissed on this ground.

In count 2 of Vincent Yacavino's contract action, he had alleged fraud on the part of Vincent and Diego Visceglia in entering into an agreement to which they knew Anna Visceglia did not consent. A similar claim was asserted by Maria. However, Judge Derman found that although the genesis of the fraud claim arose from this conduct, deposition testimony had revealed that both Maria and Vincent Yacavino had not relied upon any representation by either Vincent or Diego Visceglia, but instead had independently confirmed the alleged promises with Anna on more than one occasion. The absence of reliance as the result of independent investigation, the court found, precluded the fraud claim. The court dismissed counts 2 and 3 (punitive damages) of Vincent Yacavino's contract claim on that basis.

A further claim had been asserted by Maria against Diego and Isabelle for tortious interference with their contractual interests arising out of the formation of the trust funded in part with the senior Visceglia's real property. The court found in this regard that the absence of proof of an enforceable contract precluded this cause of action. Although Maria may have had a reasonable expectation of economic advantage, the court found "it was through gifts, and the law with respect to the requirement of donative intent and delivery cannot be circumvented through a secondary claim of tortious interference, especially when the donor has seen fit to revoke the gift and transfer the subject of the potential gift to a trust." The absence of proof of a reasonable probability that plaintiffs would have received the promised benefit and of malice were also cited as grounds for dismissal of counts 7 and 8 of Maria's complaint.

As a consequence of the court's rulings and the order embodying them, entered on July 28, 2000, at that time, only count one of the note case and counts in Maria's case pertaining to the GSB note and to NIN-VIN survived. Following consolidation, the note claims were resolved together; the NIN-VIN claims were settled.

An order denying Maria's application for the appointment of a guardian ad litem for Vincent Visceglia was denied by order dated September 8, 2000 on the ground that his rights were protected by his wife Anna, to whom Vincent had given a general durable power of attorney in 1993. A motion for reconsideration was subsequently denied.

5. The Peddie Buildings case

On June 25, 2001, Vincent Yacavino filed a fifth action, consisting of a 108-page, thirty-one count complaint, on his own behalf and on behalf of NIN-VIN and his two children and against defendants Diego and John Visceglia and their families, Isabelle Gapstur, Vincent and Anna Visceglia, GSB, SALT, NIN-VIN and SAI Management, Inc., the entity that managed NIN-VIN, lawyers Charles Reid and Kevin Kilcullen, and their law firm, Drinker Biddle, and lawyer Steven Levitt and his law firm Fox Rothschild. The complaint recited all of the conduct that had previously formed the basis for plaintiffs' claims against family members, and it alleged fraud in the 1975 sale of Maria's interest in the Peddie Buildings partnership and in subsequent transactions; misconduct in the liquidation of SAI; attorney malpractice and breach of fiduciary duty arising from the liquidation of SAI, the drafting of the Visceglias' wills, and the representation of NIN-VIN; conspiracy; and breach of the Visceglias' contract to make a will. The actions were fully consolidated by order dated November 26. 2001.

On June 3, 2002, after trial of plaintiffs' damage claims in the note case had taken place, Judge Derman issued a further opinion in which she set forth the basis for the dismissal of the Peddie Buildings case in its entirety on grounds of res judicata, collateral estoppel, statute of limitations, lack of standing with respect to the Peddie Buildings claims, the absence of any duty by the attorneys to plaintiffs or of any breach of duty, the insufficiency of allegations of fraud, failure of allegations to sustain a cause of action, and mootness arising from the prior trial in the note case. Causes of action that duplicated existing claims in other suits were dismissed on that ground. Judge Derman also denied plaintiff's motion for the appointment of a receiver and independent counsel to represent SALT, thereby disqualifying Charles Reid, who served as counsel for GSB, SALT, SAI and Maria's siblings and their families and denied plaintiff's motions to amend his Peddie Building complaint. She also denied defendants' motion seeking an injunction against future litigation. Sanctions for frivolous litigation were imposed upon Vincent Yacavino in the amount of $35,000, representing counsel fees incurred by defendants. An order that incorporated the court's rulings was entered on June 20, 2002.

We have been informed that, upon the death of Vincent Visceglia, plaintiffs filed a sixth action in Essex County that has been stayed pending resolution of this appeal.

I.

On appeal, plaintiff Vincent Yacavino has presented the following arguments for our consideration:

I. Note Case

A. The Court Erred Dismissing Count 2 of the Note Case and Abused Its Discretion on the Subsequent Request.

B. The Court Abused Its Discretion Denying Motion to Amend.

C. The Court Abused Its Discretion on Discovery on the Note Claim.

D. The Court Erred and Abused Its Discretion at the Bench Trial.

1. The Court Denied VY a Jury Trial.

2. The Court Erred and Abused Its

Discretion Quashing Trial Subpoenaes.

3. The Court Erred and Abused Its Discretion by Admitting Inadmissible Evidence.

E. The Court's Bench Trial Findings Are Not Supported By Substantial Credible Evidence.

1. Accrued Interest.

2. Payment.

II. Contract Case

A. The Court Abused Its Discretion on Discovery.

B. The Court Erred Dismissing the Case On Summary Judgment and Denying the Subsequent Motion and Request.

III. Summit Associates Case

A. The Court Erred and Abused Its Discretion Dismissing the Complaint and Levying Sanctions.

B. The Court Erred and Abused Its Discretion Denying Motions for Reconsideration and Requests.

IV. Maria's Case

A. The Court Abused Its Discretion on Discovery.

B. The Court Erred and Abused Its Discretion Finding That VV Was Competent in August 1993 and Denying the Related Motion for Reconsideration.

C. The Court Erred Dismissing VY's Cross-Claims.

V. Peddie Buildings Case

A. The Court Abused Its Discretion Denying VY's Request to Make a Motion to Amend.

B. The Court Erred Dismissing the Complaint and Levying Sanctions on VY and Denying the Related Motion for Reconsideration.

1. Peddie Buildings claims.

2. SAI claims.

3. Contract, Mutual Wills, and Related

Fraud claims.

4. Miscellaneous claims.

C. The Court Erred Denying The Motion To Appoint a Receiver and Independent Counsel for SALT.

In addition to the foregoing, counsel for Maria Yacavino and the children has presented the following arguments:

I. The Court Below Erred in Not Allowing Plaintiffs Discovery in Order to Respond to Defendants' Motions for Summary Judgment.

II. The Court Below Erred in Holding that Plaintiffs' Claims Were Barred by Collateral Estoppel and the Statute of Limitations.

III. The Court Below Erred in Not Awarding Plaintiffs the Liquidation (Par) Value for the SAI First Preferred Shares as a Matter of Law.

IV. The Court Below Erred in Finding that - Except for the "Conceded Assignments" - There Was Not a Valid Gift.

V. The Court Below Erred in Finding that - Except for the "Conceded Assignments" - There Was Not a Valid Contract.

VI. The Court Below Erred in Finding that GSB Had Paid All of the Principal and Interest Due on the Note Prior to January 1, 1993.

VII. The Court Below Erred in Summarily Finding that Vincent Visceglia Was Competent on August 11, 1993, and that the Inter Vivos Trust Was Thus Valid.

VIII. The Court Below Erred in Denying Plaintiffs Leave to Amend Their Complaint to Allege Fraud in Connection with Peddie.

II.

We start our analysis with some preliminary observations: First, it is clear to us that the Yacavinos had a unity of interest throughout the course of this litigation. Vincent Yacavino asserted causes of action that sometimes benefited only his wife Maria. At other times, the actions benefited the Yacavino family as a whole. Similarly, in Maria's action, her husband was a nominal defendant. However, no affirmative claims were asserted against him, and the causes of action asserted by her arose out of the same facts and sought to achieve the same results as causes of action that he asserted in other law suits. Although various judges have found Vincent Yacavino to have had too close a personal interest in the litigation to proceed on an objective basis and have counseled him to obtain representation, there is no doubt that he was and remains a man of both business and legal acumen, fully capable of counseling his family in their relationships with the Visceglias.

Second, by the time the first of these actions was filed in 1996, a principal actor in the underlying business and estate proceedings likely was not competent. Further, as the result of the lapse of time, documents relating to the subject transactions inevitably have been lost or discarded. As a consequence, at best only an incomplete record presently exists, thereby prejudicing the parties' abilities both to prosecute and defend the actions. We do not raise these circumstances to cast aspersions on plaintiffs' timing or motives. However, we find them relevant to our consideration of the merits of their claims.

Third, two of the transactions giving rise to plaintiffs' complaints consisted of ones in which the actual or potential inadequacy of compensation was known to the Yacavinos at the time the transactions occurred. Vincent Yacavino alleges that at the time of the purchase of Maria's interest in the Peddie Buildings, he was told that the interest was worth $4 million, not the $1.8 million offered or the $2.0 million that Maria accepted. Similarly, when SAI was liquidated in 1984, plaintiffs were aware of the par and liquidation values of their preferred shares. They nonetheless accepted less than par as compensation without demanding any proofs that the amounts were adequate.

Fourth, plaintiffs' causes of action arising out of these transactions and others were expressed seriatim in suits filed in 1996, 1997, two in 1998, and in 2001. In the circumstances, we find that it is not unfair to view the sequentially- and at times duplicatively-asserted claims, arising from a common nucleus of fact - essentially, the alleged fraud of Diego and John and the breach of contract of Vincent Visceglia - as constituting amendments to initial pleadings whose recognition is subject to the same discretionary considerations as would exist if only one action had been filed.

Fifth, in large measure, plaintiffs' method of operation in filing the complaints was to broadly assert claims of suspected but ill-defined and unverified fraud and then to seek discovery that would render those claims actionable. Further, plaintiffs' allegations, particularly those contained in the Peddie Buildings case, are extraordinarily diffuse, unorganized, repetitive, and rambling, making their rational evaluation difficult if not impossible.

Sixth, we view the work of Judges Epstein, Wolfson and Derman as manifesting careful attention to facts and law and a meticulous exploration of the issues presented to them. Despite the difficulties occasioned by the litigation and its manner of presentation, including the often emotional and sometimes threatening remarks of Vincent Yacavino directed to the court, we find evidence to be commendably absent of the bias or impatience that could understandably have arisen from continued management and disposition of these unnecessarily complicated matters.

III.

Turning specifically to the merits, we affirm orders by Judges Epstein, Wolfson and Derman that resulted either in the dismissal of plaintiffs' causes of action as time-barred or the denial on that basis of motions to permit the assertion of causes of action premised upon fraud and associated theories arising out of the purchase of Maria's interest in the Peddie Buildings in 1975, the alleged sale by SAI of property to GSB and to NIN-VIN at less than market values, and the valuation of the parties' preferred shares in SAI at less than prime at the time of its liquidation in 1984 and the transfer of shares in 1986.

The statute of limitations on actions for tortious injury to property is generally six years following accrual. N.J.S.A. 2A:14-1. Statutory provisions that provide for the liability of corporate directors in certain circumstances contain the same limitations period. N.J.S.A. 14A:6-12. The date of accrual in such circumstances is the date upon which the right to institute an action first arises. Holmin v. TRW, Inc., 330 N.J. Super. 30, 35 (App. Div. 2000), aff'd, 167 N.J. 205 (2001). Because at least ten years elapsed between the accrual of plaintiffs' causes of action and the institution of the first suit by Vincent Yacavino, the claims are statutorily barred.

As the motion judges recognized, the discovery rule, an equitable device, may be invoked so as not to "unrealistically limit" the time in which an action can be brought in those cases in which "the wronged party neither knew nor had reason to know he or she had been wronged" in time to assert a cause of action within the applicable limitation period. Holmin, supra, 330 N.J. Super. at 48. The discovery rule is available in actions for fraud if circumstances warrant. Id. at 47-49. However, in a case such as this in which evidence of active concealment of the alleged fraud does not exist, the period of limitations begins to run "when plaintiff should have discovered the fraudulent scheme." Simplon v. Widger, 311 N.J. Super. 379, 391 (App. Div. 1998) (quoting B.F. Hirsch, Inc. v. Enright Refining Co., 577 F. Supp. 339, 344 (D.N.J. 1983), aff'd in part, vacated in part on other grounds, 751 F.2d 628 (3d Cir. 1984)). However, successful invocation of the rule is conditioned upon a party's compliance with "an affirmative duty to use reasonable diligence to investigate a potential cause of action," and it is inapplicable when evidence demonstrates that plaintiffs "had 'reason to know' of their injuries." County of Morris v. Fauver, 153 N.J. 89, 110 (1998).

Here, plaintiffs knew or had reason to know that Peddie Buildings and SAI, the entities being liquidated or otherwise terminated, had property holdings of significant value. They knew as well that their interests were being valued at amounts that were acknowledged to be low, and in the case of SAI, at an amount that was vastly below par. They had the ability to determine the true value of their assets from public, corporate or partnership records. They did not do so. In this circumstance, we find no error in the refusal by the trial judges to employ the equitable remedy of the discovery rule to preserve plaintiffs' claims.

On appeal counsel for Maria argues that there is no statute of limitation for liquidation claims grounded in trust, citing the concurring opinion of Justice Hehr in State v. Fid. Union Trust Co, 25 N.J. 387, 404 (1957). The narrow issue in that case was whether the State could assert its claims of escheat to assets of a liquidated company then held by the successor. Id. at 390. The Court concluded that the State could do so. Id. at 398. However, it also concluded that where the fourteen-year period necessary for the presumption of abandonment to apply had not ended, there was no presumption of abandonment, and the State had no present right to escheat the property. Id. at 399-400. The concurring opinion upon which Maria relies recites that generally the statute of limitations does not apply to implied and constructive trusts. Id. at 403. However, the exception is based upon principles of equity, and in the proper circumstances, laches may bar the cause of action. Id. at 403-04. Here, the equities do not favor either Maria or the other plaintiffs, who all signed full releases of their claims against SALT and its directors in 1984 and 1986. Moreover, plaintiffs did not act in a timely fashion after payments on the note ceased in 1993, but instead waited until August 1997 to conduct the investigations that allegedly resulted in discovery of evidence of fraud.

Assuming, contrary to our determination, that the claims arising from the Peddie Buildings and SAI transactions were not time-barred, we are equally satisfied that plaintiffs were afforded adequate discovery, that the trial judges did not abuse their discretion in failing to authorize additional discovery, and that their refusal to recognize causes of action that were inadequately supported in fact did not, in the circumstances, constitute error.

In this regard, we note at the outset that claims of fraud must be specifically pleaded, R. 4:5-8; Levinson v. D'Alfonso & Stein, 320 N.J. Super. 312, 315 (App. Div. 1999); Rego Indus., Inc. v. Am. Modern Metals Corp., 91 N.J. Super. 447, 456 (App. Div 1966). This is so because fraud is simply a conclusion of law, and thus the pleadings must state the facts that are relied upon to provide a foundation for the action. Kadison v. Horton, 142 N.J. Eq. 223 (E. & A. 1948). Here, plaintiffs worked backward, postulating fraud and then seeking the opportunity to prove it after litigation had commenced, utilizing the litigation as the means for effecting discovery and investigation that could have occurred in support of plaintiffs' claims. In these circumstances, we can find no abuse of discretion on the part of the trial judges in declining to permit additional discovery beyond the broad discovery that was permitted and in dismissing or refusing to permit amendment to claim fraud in connection with the Peddie and SAI transactions, particularly in view of the absence from the existing record of any palpable indicia of fraudulent conduct.

IV.

Plaintiffs also allege abuse of discretion by Judge Derman in limiting discovery in the note case and in the claims advanced on Maria's behalf in that regard, error in the grant of summary judgment against them on their claims that the senior Visceglias breached their contract to make inter vivos gifts and a will in the Yacavino's favor, and further error in the court's determinations following entry of summary judgment.

Plaintiffs' pleadings state that the Vincent and Anna Yacavino breached their contract to transfer, during their lives or by will, their interests in "certain notes," "certain real properties" and "certain interest in a certain partnership." What they referred to was a "deal" that Vincent Visceglia allegedly offered to the Yacavinos at a meeting in the summer of 1986 at which Diego was also in attendance. At that time, Vincent Visceglia allegedly stated that he and Anna intended to give Maria and her family $1,842,125 of the amounts due to Vincent and Anna under the 468 note in payments spread out over thirteen years so as to take advantage of available gift tax exclusions. If one of the senior Visceglias died before the gifts were completed, the survivor would continue the gifts, and if both died, the ungifted balance would be totaled and paid pursuant to the terms of the decedent's will. The terms of the gift were set forth in documents such as a memorandum from Vincent Visceglia to Diego dated December 16, 1986, an unsigned copy of which was introduced as an exhibit at trial, and in a letter from Vincent to Maria dated July 7, 1987, which was also offered in evidence in unsigned form. Plaintiffs note that delivery of the gifts occurred in 1986, 1987 and 1988, and that the existence of the gifts in the two earlier years were documented in the Visceglias' gift tax returns. Plaintiffs also claim entitlement to the interest on portions of the note that had not been assigned as the result of a notation in a postscript contained in a May 27, 1987 letter from Vincent to Maria, which provided for periodic vesting of the gift and stated: "Meanwhile, they will receive interest of [sic] any sum yet to be assigned to each party."

Additionally, it was proposed that if Isabelle and Maria exchanged lots at the shore, thereby giving Maria possession of the more valuable ocean front lot adjoining the Visceglias' shore home, the Visceglias would convey the shore house to Maria, reserving a life estate, but in compensation to Isabelle, would reduce Maria's share of the Short Hills residence from 50% to 30%. Maria's interest in the shore lot allegedly could not be transferred without the senior Visceglias' consent. As a final matter, plaintiffs allege the existence of an agreement to leave the balance of Vincent Visceglia's 50% interest in NIN-VIN to Maria and Isabelle, to be equally shared by the two.

The alleged contracts were not performed. No inter vivos assignments of the 468 note were made personally by the Visceglias after 1988, GSB has declined to recognize the alleged contract to assign, and the executors of the estate of Vincent Visceglia have declined to total the remaining assignments and effect payments representing them. The shore house was not deeded to the Yacavinos. On August 11, 1993, Vincent Visceglia signed a durable power of attorney naming Anna to act on his behalf. Thereafter, on that date, Anna signed documents that conveyed the Short Hills and shore houses to a trust, also established that day, for the support of the senior Visceglias and provided that upon the death of the two Visceglias and the termination of the trust, its assets would be divided equally between, if living, Maria, Isabelle, each Visceglia grandchild and a nephew, John Pesce, thereby providing a one-fourteenth interest to each and increasing the interest of Diego's and John's families in the two properties from zero to a total of fifty percent.

We are satisfied that neither Judge Wolfson nor Judge Derman abused their discretion in denying further discovery in connection with the contract claims. As we have noted, the discovery that occurred in these proceedings was, in general, very extensive. Additionally, in connection with plaintiffs' claims of breach of a contract to make a will, Judge Wolfson took the commendable step of appointing a special master and directing that he review all relevant documents to determine whether the contractual claim could be supported. Full opportunity to contest the master's findings was provided by provisions for objection and in camera review of documents by the court.

As a final matter, we find that Vincent Yacavino has provided no foundation for any claim of prejudice as the result of the denial of further discovery, and that he has failed to specify the nature or relevance of documents he was unable to obtain or testimony by witnesses whose depositions he claims he was barred from taking or whose testimony at deposition was limited, contrary to law. While R. 4:10-2 permits discovery generally of anything relevant to a claim or defense or that may lead to discoverable material, a proponent must show how discovery will be "useful," and relevance is essentially established on a "case-by-case" basis. Myers v. St. Francis Hosp., 91 N.J. Super. 377, 386 (App. Div. 1966). In spite of its broad scope generally, discovery "is not unbridled and not unlimited," Berrie v. Berrie, 188 N.J. Super. 274, 282 (App. Div. 1983). In no case, should a party be permitted to launch a discovery "fishing expedition" to establish otherwise factually unsupported allegations. Axelrod v. CBS Pubs., 185 N.J. Super. 359, 372 (App. Div. 1982).

We also find no abuse of discretion on Judge Derman's part in denying discovery on the issue of Vincent Visceglia's mental competence on August 11, 1993 when he executed the durable power of attorney or holding a hearing on his competence before entertaining the motions for summary judgment that resulted in her opinion of July 28, 2000. As we noted at the outset, Judge Derman found evidence of a donative intent on the part of Vincent Visceglia as the result of alleged oral statements, a history of prior gift-giving and evidence provided by correspondence and memoranda in the period from April 28, 1987 through June 8, 1987 setting forth a future gift-giving plan. However, as the result of later correspondence in 1987 and 1988 suggesting a change in intent, Judge Derman found that unequivocal evidence of an intent to provide future inter vivos and testamentary gifts had not been produced. The evidence upon which the parties relied in establishing intent ended in 1988 at a time when Vincent Visceglia's mental status was not in question. Thus, further discovery in this regard was not necessary.

Turning to the merits, we are satisfied that the court's order of summary judgment on the contract claims constituted a proper application of the standards set forth in Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995), and we affirm it substantially for the reasons set forth in Judge Derman's July 28, 2000 opinion.

Judge Derman prefaced her opinion with a review of the evidence, holding that although evidence of donative intent may have been expressed in documents generated in 1986 and 1987, by the latter part of 1988, Vincent Visceglia's prior donative intentions changed as the stated result of his reaction to the Yacavinos' inability to curb their living expenses and their invasion of capital, as set forth in correspondence dated June 30, 1987, October 30, 1987, undated correspondence inquiring as to the fate of prior gifts, and additional correspondence dated November 13, 1987, December 21, 1987, and particularly, the January 11, 1988 letter that we have previously quoted. She also noted the letter from Vincent Visceglia's attorney, Milton H. Stern, dated October 17, 1988 stating in part:

I am writing to urge you not to make any more gifts of your liquid assets to your children or grandchildren. In my opinion, by continuing your gifts, you will be seriously jeopardizing Anna's income and financial security if she survives you.

The judge then found insufficient evidence of completed gifts, noting the heavy burden of proof imposed upon plaintiffs in this regard, and the necessity of establishing an unequivocal donative intent, actual or symbolic delivery of the subject matter, and irrevocable relinquishment of ownership and dominion over the gifted property. She found in this regard that evidence of Vincent Visceglia's intent was equivocal, and the absence of any evidence of delivery or relinquishment.

Judge Derman also found evidence of a donative contract to be lacking, noting a lack of definite terms, absence of evidence of a meeting of the minds, lack of consideration or evidence to support a promissory estoppel, and in connection with an alleged contract to convey real estate, a failure comply with the Statute of Frauds. The judge also found any action for breach of a contract to make a will not to be ripe because both senior Visceglias remained living and because plaintiffs did not fall within any of the legal exceptions that would make their action timely. Additionally, she found on the basis of the analysis of the special master that plaintiffs could not demonstrate compliance with N.J.S.A. 3B:1-4.

Significantly, Judge Derman also found any claim for breach of a donative contract to have accrued in January 1989 when the gifting program terminated, and thus to be barred by the statute of limitations. We find no error in those determinations.

We find it notable that, on appeal, counsel for Maria fails to address the documents that post-date the letters upon which plaintiffs rely, the advice given by Vincent Visceglia's attorney to him regarding the preservation of assets, the absence of any evidence of delivery or relinquishment after the gifts from the Visceglias ceased in 1988, noncompliance with the Statute of Frauds, and noncompliance with N.J.S.A. 3B:1-4. Counsel also fails to address the court's statute of limitations determination. As a consequence, the order of summary judgment on the contract claims is affirmed.

V.

On appeal, Maria also challenges a trust agreement entered on August 11, 1993 that changed the disposition of the shore and Short Hills homes from that previously expressed in Vincent Visceglia's will. In this regard, Maria posits that when Diego and John learned that the Yacavinos might sue on the note, they caused SALT, of which they were trustees, to grant GSB, which they owned, a moratorium on the payment of the note. Then, according to Maria, they conspired with Anna to dissipate Vincent Visceglia's estate. This was done by causing Vincent to execute a durable power of attorney granting extensive powers to Anna and containing a succession provision that such power would devolve upon Diego if for any reason (even temporarily), Anna ceased to act, and then by Anna's execution of the trust document. However, Maria claims, Vincent was not competent to execute the power of attorney when he did. The briefing submitted on her behalf does not discuss the fact that Vincent Yacavino acknowledged his father-in-law's competence as late as 1996 in a statement to Judge Epstein. It further does not discuss the fact that Vincent had been advised by his own attorney to make provision for his wife, and that the Yacavinos sought by their legal actions to seriously erode the funds available for Anna's and Vincent's support, thereby rendering protective action entirely reasonable.

In a separate opinion issued on July 28, 2000 that addressed plaintiffs' motion for the appointment of a guardian ad litem on behalf of Vincent Visceglia and denied the motion, Judge Derman held as a matter of law that Vincent was competent in August 1993 to execute the general durable power of attorney at issue, that Vincent was aware at that time of the conflicts of interest raised by granting powers in the fashion that was proposed, and he nonetheless agreed to waive such conflicts. She based her conclusion that Vincent was competent at the time in part on the certification of Steven Levitt, who prepared the power at Vincent's request and explained its operation to him, upon the certifications of two summer associates at Levitt's firm who witnessed the discussions and the execution of the document, and on the certification of Anna Visceglia who stated that in 1993, because her husband's health and memory were beginning to be affected by his advanced age of eighty-eight, they had discussed the execution of such a document, and that Vincent understood the nature of the powers that he was conferring upon her.

Maria claims that additional discovery should have been permitted on the issue of competence, and that a hearing on the issue should have been held. However, our review of the record satisfies us that an appropriate opportunity for discovery was provided, and that the testimony and other evidence that resulted, which was based solely upon recall of Vincent's status at a much earlier time, lacked the factual specificity that would have called into question the certifications by Levitt and the summer associates given contemporaneously with the execution of the power of attorney. We thus reject plaintiffs' arguments in this regard.

VI.

The note case, tried before Judge Derman between February 25 and 28, 2002, resulted in an opinion on June 18, 2002 and in an award of damages in plaintiffs' favor. However, Vincent Yacavino claims error in denying discovery, in denying a jury trial, in quashing trial subpoenae, in admitting inadmissible evidence, and in the court's findings of fact with respect to accrued interest and payment, which he states were not supported by adequate credible evidence. Counsel for Maria argues that the court erred in finding that all principal and interest due on the note prior to January 1, 1993 was paid.

We find insufficient merit in the argument by Vincent Yacavino of the denial of adequate opportunities for discovery to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). Plaintiff omits any explanation as to why his numerous depositions of the parties and the other discovery he obtained in his several suits was insufficient to permit full exploration of the issues presented at trial, which were the amount of payments made to Vincent Visceglia and to plaintiffs under the note, and whether Vincent intended to gift accrued interest on unassigned portions of the note. We emphasize in this regard that when Yacavino was able to justify his discovery requests, those requests were authorized.

We also agree that Judge Derman did not commit reversible error in denying a jury trial in this case, an issue that she fully addressed in her June 28, 2000 opinion by noting that the matters, although instituted in the Law Division, were primarily equitable in nature, and that a court of equity may properly adjudicate an ancillary legal claim without providing the claimant with a jury trial. We affirm her determination for the reasons stated there. Although the damage claims asserted following entry of summary judgment in plaintiffs' favor on the note case could independently be viewed as "legal," they represent a small fraction of the claims initially asserted and cannot be viewed in a fashion independent from the case as a whole, which clearly was primarily equitable in its nature. The court's action in conducting a bench trial was thus proper. Weinisch v. Sawyer, 123 N.J. 333, 344 (1991); Shaner v. Horizon Bancorp, 115 N.J. 433, 450-55 (1989); see also Eckerd Drugs of N.J., Inc. v. S.R. 215, Rite-Aid Corp., 170 N.J. Super. 37, 38 (Ch. Div. 1979) (finding it inefficient and unnecessary to subject a small segment of a case to a jury's consideration).

Vincent Yacavino also claims that the court abused its authority in quashing subpoenae that he sought to serve on Diego and John, attorney Kilcullen, the Drinker, Biddle firm, and custodians of SALT, Summit Associates and GSB's records, including former in-house accountant Kathy Weilkopolski. Defense counsel had objected to the subpoenae on the grounds that the requests were overbroad, that the judge and her predecessors had "repeatedly found" plaintiff was not entitled to the information, that the information was irrelevant to the narrow issues presented, and that much of the information that had not previously been disclosed in extensive discovery was protected by the attorney-client privilege.

On February 15, 2002, Judge Derman quashed the subpoenae, but excepted from her order any documents not previously disclosed that concerned "the portion of the note of [GSB] which was owed to Summit Associates in the face amount of $2,370,000 and which was owned by Mr. Visceglia and assigned to the plaintiffs." Further, Diego and John were directed to appear for trial to testify on the issues of interest payments. However, the subpoenae respecting Kilcullen and Drinker Biddle were quashed on the basis of the attorney-client privilege and plaintiff's failure "to satisfy his burden to breach such protections." In partial response to the court's ruling, a few additional documents were produced, and testimony by Kilcullen was offered as to the documents, if required. However, Kilcullen did not offer to provide testimony on the factual reasons why Vincent Visceglia had no intention to include pre-assignment interest in his gifts, and Vincent Yacavino's attempt to obtain such testimony was denied.

Although we find no abuse of discretion by Judge Derman, even if we were to do so, we can find no evidence of damage to plaintiff as the result of the court's actions, since all of the relevant evidence regarding post-assignment payments that plaintiff sought was produced during the course of trial, and there is no evidence that the court relied in any respect on statements of Kilcullen in her ruling that Visceglia had not gifted to the Yacavinos any pre-assignment interest payments.

Further, we are satisfied that Judge Derman's determination that pre-assignment interest payments were not gifted by Visceglia to the Yacavinos was fully supported by the evidence, as was her determination of the amount of the interest payments that were owed. In this regard, the judge properly placed the burden on defendants to prove payments on the note, Crown Capital Corp. v. Broderick 130 N.J.L. 198, 199 (Sup. Ct. 1943), and on plaintiffs to prove, by "explicit and convincing evidence," Vincent's intent to gift plaintiffs any interest, Czoch v. Freeman, 317 N.J. Super. 273, 283 (App. Div.), certif. denied, 161 N.J. 149 (1999). As we have noted elsewhere in this opinion, the record does not support a claim that, at any point after 1988, Visceglia intended further gifts to the Yacavinos, whom he regarded as profligate.

In reaching her conclusions with respect to interest owed on the portions of the note that were the subject of gifts to plaintiffs, Judge Derman relied in part on circumstantial evidence to draw inferences of payment. However, that fact creates no error. Kita v. Borough of Lindenwold, 305 N.J. Super. 43, 50 (App. Div. 1997); Jochim v. Montrose Chem. Co., 3 N.J. 5, 8 (1949). Although plaintiffs point to examples of shortcomings or arguable inconsistencies among some of the defendants' proofs, we find that the evidence, taken as a whole, substantially supports the court's conclusions. We will not disturb them. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am, 65 N.J. 474, 484 (1974).

We decline to address the remaining issues raised by plaintiffs, finding them to have insufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

VII.

As a final matter, we reject the arguments raised by defendants in their cross-appeal. In this regard, we affirm Judge Derman's conclusion that, because the Yacavinos were entitled to be paid in strict accordance with the terms of the note from GSB, any claim that they failed to mitigate damages by cashing checks issued by Diego in partial payment of indebtedness during the period in which a moratorium on payment was in effect must be denied. Indeed, defendants do not challenge the legal principle that Judge Derman expressed, nor do they contest her conclusion that if the Yacavinos had accepted the partial payments, they might have compromised their right to receipt of the remainder.

We further find no error in the court's determination to continue the ten percent rate of interest on the outstanding loan balance to the date of judgment, rather than to the maturity date of the instrument, June 2002. Musto v. Vidas, 333 N.J. Super. 52, 74 (App. Div.), certif. denied, 165 N.J. 607 (2000). The "'equitable purpose of prejudgment interest is to compensate a party for lost earnings on a sum of money to which it was entitled, but which has been retained by another.'" N. Bergen Rex Transp., Inc. v. Trailer Leasing Co., 158 N.J. 561, 575 (1990) (citations omitted); see also Shadow Lawn Savs. & Loan Ass'n v. Palmarozza, 190 N.J. Super. 314, 318 (App. Div 1983).

Affirmed.

 

The actions were initially docketed as Mid-L-10196-96, Ber-L- 1860-98, Mid-L-3072-97, Mid-L-6574-98, and Mid-L-6252-01. The Bergen County action was transferred to Middlesex County, consolidated with Mid-L-3072-97, and dismissed. All actions in Middlesex were transferred to Somerset County upon the transfer of Judge Harriet Derman to that county.

Because of the commonality of interest properly found by Judge Derman in her opinion of July 28, 2000 to exist between the Yacavinos, they will be referred to as "plaintiffs" unless further identification is required.

We have denied a motion to supplement the record with opinions pertaining to In re Yacavino, 184 N.J. 389 (2005).

This interest was divided among immediate family members. Vincent Yacavino possessed a one-percent interest.

Vincent Visceglia and SALT were later added as parties.

Prior to trial, Ciccone issued a report in which he expressed the opinion that SAI, SALT and Vincent Visceglia had received all interest payments due them, although some payments were received after interests in the notes were assigned. In her opinion, Judge Derman found a $40,000 discrepancy in interest payments to Vincent Visceglia. However, she also found that he did not intend the amount to be payable to plaintiffs.

The property to which reference was made appears to have included the building for which GSB gave the note. As we have stated, plaintiff and his family acquired a substantial interest in that note.

Pesce owned first preferred stock in SAI.

Judge Derman stated that, at the time, depositions had been conducted of Maria, Anna, Isabelle, Vincent Yacavino, Diego, John, and Mario Tamasi, the accountant for GSB. Diego and Vincent Yacavino had been deposed twice. Although Vincent Visceglia was not capable of giving a deposition or answering interrogatories, answers had been provided on his behalf by Diego. In addition, a Special Master had been appointed to review documentary evidence to determine whether a donative contract had been formed by Vincent Visceglia, and various other documentary discovery had occurred.

In reliance on the determination of Judge Wolfson, Judge Derman also premised her decision on grounds of collateral estoppel. Although the order entered by Judge Wolfson dismissed claims without prejudice and thus was not final in nature, his subsequent decision, rendered while Vincent Yacavino's motion for leave to appeal was pending before us, suggested finality.

Maria's counsel argues that the statute of limitations was tolled by defendants' fraud. However, the cases upon which counsel relies are factually distinguishable from the present one, in which grounds to question the adequacy of the plaintiffs' monetary recovery existed from the outset, means for discovering the true facts existed, and Vincent Yacavino possessed the ability to conduct the necessary investigation into those facts.

Tax records with respect to Peddie Buildings were available to the Yacavinos for inspection pursuant to N.J.S.A. 42:2A-9 (eff. April 1, 1985). Prior to that date, disclosure would have occurred in accordance with the partnership agreement, which is not a part of the record on appeal.

Vincent Visceglia's August 15, 1985 will had provided that upon the death of the senior Visceglias, Maria would receive the shore house, a fifty-percent interest in the Short Hills house, and a portion of a credit shelter trust. As the result of the execution of a first codicil to the will on August 5, 1986, Maria's share in the trust was increased, and her share of the residuum of the estate was increased from sixty percent to eighty percent. A second codicil was executed on June 6, 1987 that reduced Maria's interest in the Short Hills house to thirty percent and increased Isabelle's interest to seventy percent.

These claims were set forth in counts 4, 5 and 6 of Maria's complaint and count 1 of the contract claim.

Kilcullen was the Visceglias' business attorney commencing in 1982 and had drafted the 1986 assignment of interest in the 468 note from SALT to Vincent Visceglia. Levitt was the partner under whom Kilcullen worked while both were with the law firm of Hannoch Weisman. Kilcullen had previously described Visceglia's intent to limit the powers granted under the initial assignment, by which SALT retained broad rights to allow extensions of time for payment and other matters. As Kilcullen stated in a certification, Vincent viewed the assignments "more as a form of profit sharing and never as something that would impose a legal obligation on the family-owned businesses."

(continued)

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58

A-5198-03T3

July 21, 2006