REGINA LONGMUIR v. KICKIN' IT, INC.

NOT FOR PUBLICATION WITHOUT THE
                      APPROVAL OF THE APPELLATE DIVISION
     This opinion shall not "constitute precedent or be binding upon any court."
      Although it is posted on the internet, this opinion is binding only on the
        parties in the case and its use in other cases is limited. R. 1:36-3.




                                       SUPERIOR COURT OF NEW JERSEY
                                       APPELLATE DIVISION
                                       DOCKET NO. A-0980-16T1

REGINA LONGMUIR and
DOUGLAS A. LONGMUIR, JR.,

        Plaintiffs-Respondents,

v.

KICKIN' IT, INC., n/k/a
ROCKY MARCIANO WORLD
FOUNDATION, INC., t/a
BULLYING... WE'RE KICKIN'
IT,

        Defendants,

and

GINA MARIE RAIMONDO and
THOMAS RAIMONDO,

     Defendants-Appellants.
______________________________

              Submitted January 9, 2018 – Decided April 17, 2018

              Before Judges Sumners and Moynihan.

              On appeal from Superior Court of New Jersey,
              Law Division, Monmouth County, Docket No.
              L-2868-14.

              Garland & Mason, LLC, attorneys for appellants
              (Gary L. Mason, on the brief).
            Vincent E. Halleran, Jr., attorney for
            respondent (Jeffrey R. Pocaro, on the brief).

PER CURIAM

       Defendants Gina Marie Raimondo (G.M. Raimondo) and Thomas

Raimondo (T. Raimondo) (collectively defendants) appeal from a

July 19, 2016 judgment in the amount of $35,0101 entered after a

bench trial, and an October 31, 2016 order denying their motion

for a new trial.    On appeal they argue:

            [POINT I]

            THE TRIAL COURT'S VERDICT WAS AGAINST THE
            WEIGHT OF THE EVIDENCE AND REPRESENTS A CLEAR
            MISCARRIAGE OF JUSTICE.

              A. THE TRIAL COURT APPLIED THE WRONG BURDEN
                 OF PROOF, WHICH CONSTITUTES REVERSIBLE
                 ERROR AND MUST RESULT IN THE JUDGMENT
                 BEING REVERSED.

              B. THE TRIAL COURT DID NOT IDENTIFY ANY
                 FACTS WHICH WOULD PROVE FRAUD, BY CLEAR
                 AND CONVINCING EVIDENCE, FOR THE PURPOSE
                 OF PIERCING THE CORPORATE VEIL AND
                 HOLDING G.[M.] RAIMONDO AND T. RAIMONDO
                 PERSONALLY LIABLE FOR [KICKIN' IT,
                 INC.'S] DEBT.


We are constrained to reverse and remand this case because the

trial judge applied the incorrect standard of proof.




1
    The court did not award attorneys' fees and court costs.


                                  2                            A-0980-16T1
      "Final determinations made by the trial court sitting in a

non-jury case are subject to a limited and well-established scope

of review."    D’Agostino v. Maldonado, 
216 N.J. 168, 182 (2013)

(quoting Seidman v. Clifton Sav. Bank, S.L.A., 
205 N.J. 150, 169

(2011)).    "[W]e do not disturb the factual findings and legal

conclusions of the trial judge unless we are convinced that they

are   so   manifestly   unsupported       by   or   inconsistent    with   the

competent, relevant and reasonably credible evidence as to offend

the interests of justice."      Seidman, 
205 N.J. at 169 (quoting In

re Tr. Created by Agreement Dated Dec. 20, 1961, ex rel. Johnson,


194 N.J. 276, 284 (2008)).      To the extent that the trial court’s

decision constitutes a legal determination, we review it de novo.

Manalapan Realty, LP v. Twp. Comm. of Manalapan, 
140 N.J. 366, 378

(1995).

      Both parties in their merits briefs agree the trial involved

the only remaining count of an amended complaint alleging fraud

in the inducement.      That allegation stems from two checks paid to

Kickin' It, Inc.,2 by plaintiffs totaling $35,010.                 The judge,

after making extensive findings of fact, concluded the advanced

funds were a loan that was not repaid to plaintiffs, and that it



2
  One check for $20,010 was payable to plaintiff, Douglas A.
Longmuir, Jr.; the other for $15,000 was specifically endorsed to
Kickin' It, Inc.

                                      3                               A-0980-16T1
was not "an investment in the sense that the [plaintiffs] . . .

expect[ed] anything other than to be paid their money back."        In

holding defendants liable for the loan, the judge was

          satisfied that [plaintiffs had] shown by a
          preponderance    of    the    evidence    that
          [defendants] were involved in a plan, the plan
          not to use [the] money specifically for
          Kickin[’] It, Inc., but the plan was to use
          this money to . . . fuel whatever expenses
          that the daughter, [G. M. Raimondo], may have
          incurred as a result of her pursuing this . .
          . tenuous business plan of hers, Kickin['] It,
          Inc.[3]

He further found "the money was used for [G.M. Raimondo's] own

personal gain," and that T. Raimondo "should be held accountable,"

citing to evidence of his involvement in the business.

     "[A] corporation is an entity separate from its stockholders.

In the absence of fraud or injustice, courts generally will not

pierce the corporate veil to impose liability on the corporate

principals."   Lyon v. Barrett, 
89 N.J. 294, 300 (1982).   "Although

a corporation and its stockholders are usually treated as separate



3
  We do note that this and some other language in the judge's oral
decision could lead to confusion as to the judge's determination.
At one point he stated, "And the representations or the position
of the plaintiff[s] is that, hey we gave this money over to [G.M.
Raimondo], she said she had intentions on using this money to kick
off her business." At another, he said, "I understand that this
was a lousy business deal for [plaintiffs]." Although we do not
believe, from an overall reading of the judge's decision, that the
judge found plaintiffs' payment was an investment – not a loan –
the judge can clarify that issue on remand.

                                 4                           A-0980-16T1
entities, 'a court of equity is always concerned with substance

and not merely form, and thus, it will go behind the corporate

form where necessary to do justice.'"           Hartford Fire Ins. Co. v.

Conestoga Title Ins. Co., 
328 N.J. Super. 456, 459 (App. Div.

2000) (quoting Walensky v. Jonathan Royce Int'l, Inc., 
264 N.J.

Super.   276,    283   (App.   Div.   1993)).     Courts   will   disregard

corporate, legal singularity and hold individual principals liable

if they use the corporation as their alter ego and abuse the

corporate form in order to advance their personal interests.            Sean

Wood, LLC v. Hegarty Grp., Inc., 
422 N.J. Super. 500, 517 (App.

Div. 2011) (citing Casini v. Graustein, 
307 B.R. 800, 811 (Bankr.

D.N.J. 2004)). "[W]hen the corporate fiction is a mere simulacrum,

an alter ego or business conduit of an individual, it may be

disregarded in the interest of securing a just determination of

an action."     Coppa v. Taxation Div. Dir., 
8 N.J. Tax 236, 249 (Tax

1986) (quoting Iron City Sand & Gravel Div. of McDonough Co. v.

W. Fork Towing Corp., 
298 F. Supp. 1091, 1098-99 (N.D.W. Va. 1969),

rev'd on other grounds 
440 F.2d 958 (4th Cir. 1971)).4


4
 In Coppa, two individuals purchased a boat in their corporation’s
name, 
8 N.J. Tax at 239, and claimed they were exempt under the
New Jersey Sales and Use Tax Act, 
N.J.S.A. 54:32B-1 to -55, because
the boat was not purchased for personal use, and their company was
a "distinct legal entity" with a "bona fide intention to conduct
a chartering business," id. at 242-44. The court disregarded the
corporate form, finding the individuals "continuously used the


                                      5                             A-0980-16T1
     The burden of proof is on the party seeking to pierce the

corporate veil.    Richard A. Pulaski Constr. Co. v. Air Frame

Hangars, Inc., 
195 N.J. 457, 472 (2008); Verni ex rel. Burstein

v. Harry M. Stevens, Inc., 
387 N.J. Super. 160, 199 (App. Div.

2006).   That burden is by clear and convincing evidence.        See

United Food & Commercial Workers Union v. Fleming Foods E., Inc.,


105 F. Supp. 2d 379, 388 (D.N.J. 2000) (quoting Kaplan v. First

Options of Chicago, Inc., 
19 F.3d 1503, 1521 (3d Cir. 1994))

(recognizing the equitable alter ego concept "should be utilized

by the courts only on clear and convincing evidence[5] of 'fraud,

illegality or injustice, or when recognition of the corporate

entity would defeat public policy or shield someone from public

liability for a crime,'" in an alter ego veil-piercing case).    The

issue is one for the factfinder, "unless there is no evidence




vessel for their personal convenience and benefit for almost six
years. This unity of ownership and unity of interest now militate
against supporting the corporate fiction of [the corporation]."
Id. at 248-49.
5
  Fraud must be proved by clear and convincing evidence. See
Gennari v. Weichert Co. Realtors, 
148 N.J. 582, 611 (1997)
(affirming a finding of no common law fraud where trial court
applied clear-and-convincing standard); Bears v. Wallace, 
59 N.J. 444, 450 (1971) (stating that fraud must generally be proved by
clear and convincing evidence); Pahy v. Pahy, 
107 N.J. Eq. 538,
540 (E. & A. 1931) ("[F]raud is a fact that will never be presumed,
but must always be clearly and convincingly proved.")

                                6                           A-0980-16T1
sufficient to justify disregard of the corporate form."     Verni,


387 N.J. Super. at 199.

     The judge, in applying the preponderance of the evidence

standard, set plaintiffs' bar too low.   We therefore remand the

case, not for a new trial, but for a reapplication of the facts

to the proper burden of proof.      On remand, the court should

separately consider whether plaintiffs have proved their cause of

action on the sole remaining count, and then determine whether

they met their burden to pierce the corporate veil.   Because the

application of the proper burden of proof may or may not result

in the same findings of fact, we do not retain jurisdiction.    The

stay previously entered by the trial court is continued.

     Remanded.




                                7                          A-0980-16T1