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Connell v. East River Sav. Bank (Riverbank America)

November 21, 1995


On appeal from Superior Court of New Jersey, Chancery Division, Hudson County.

Approved for Publication, November 21, 1995.

Before Judges Michels, Baime and Villanueva. The opinion of the court was delivered by Baime, J.A.D.

The opinion of the court was delivered by: Baime

The opinion of the court was delivered by BAIME, J.A.D.

This appeal and cross-appeal arise out of a judgment entered in favor of East River Savings Bank (East River) and Trust Company of New Jersey (Trust Company) in a suit brought by Murray Connell, Connell Contracting, Inc., Eastern Security Management, Inc. and Anthony Dell'Aquila for alleged violations of the Bank Holding Company Act, 12 U.S.C.A. §§ 1971 to 1978 (the Act). The Act prohibits banks from engaging in certain anti-competitive tying arrangements and enables an injured party to recover treble damages and counsel fees. Plaintiffs claimed that East River and Trust Company issued a loan commitment that contained anti-competitive conditions barred by the Act and that these conditions caused plaintiffs to reject the commitment, thus preventing them from developing a large tract of waterfront property in Hoboken. Specifically, the conditions precluded Dell'Aquila from pursuing litigation involving a neighboring development in which the banks had an alleged interest, required him to provide an easement that would benefit the neighboring development, and provided the banks with rights of first refusal to lease office space for banking use and to finance later construction on the Hoboken property. Following a protracted non-jury trial, Judge Tarleton found that the litigation and easement conditions violated the Act, but that plaintiffs rejected the loan offer for entirely different reasons and, therefore, suffered no compensable injury.

Dell'Aquila appeals, contending that the trial Judge erred by (1) finding no causation of injury, (2) failing to award nominal damages and attorneys' fees, (3) relying on deposition testimony which was adduced by an improper hypothetical question, (4) excluding evidence of East River's subsequent loan commitment, (5) basing his Conclusion on hearsay evidence, and (6) adopting a Conclusion that could not reasonably have been reached on the evidence. East River cross-appeals, claiming that the trial Judge erred by (1) holding it responsible for Trust Company's violations of the Act, (2) finding that the loan commitment contained illegal tying arrangements, and (3) dismissing its common law defenses. Trust Company also cross-appeals, arguing that the trial Judge erred by (1) rejecting its claim of judicial estoppel, (2) holding that plaintiffs were bank "customers" under the Act, (3) finding it responsible despite its "secondary" participation, (4) finding that it had a relationship beyond that of creditor-debtor with the neighboring developer, (5) concluding that it had violated the Act by including illegal conditions in the loan commitment, (6) dismissing its common law defenses, and (7) refusing to award attorneys' fees under N.J.S.A. 2A:15-59.1.

The record contains substantial credible evidence supporting the Chancery Division's finding that Dell'Aquila rejected the loan offer for business reasons wholly unrelated to the illegal conditions contained in the commitment. Defendants' violation of the Act did not cause any injury to the plaintiffs. We thus affirm the Chancery Division's judgment for the reasons expressed by Judge Tarleton in his thorough oral opinion. All but one of the contentions advanced in the cross-appeals are alternative arguments for sustaining the Chancery Division's judgment and, therefore, need not be addressed. The one remaining argument - that dealing with attorneys' fees under the frivolous litigation statute - is clearly without merit. R. 2:11-3(e)(1)(E).


We need not recount the facts at length. The trial spanned some two and one-half years and generated a transcript of approximately 16,000 pages. We would be remiss were we to fail to note the excellent quality of the copious briefs submitted, which exhaustively recite and analyze the parties' factual contentions. Our brief recitation is intended merely to highlight the facts critical to Judge Tarleton's ultimate Conclusion.

Between 1977 and 1987, Dell'Aquila acquired or obtained options to purchase six parcels of waterfront property in Hoboken. On July 31, 1987, Dell'Aquila agreed to join with Connell as co-venturers for the development of these tracts and in purchasing the Bethlehem Shipyards for this purpose. Connell was to pay Dell'Aquila $1,000,000 and secure financing of $19,000,000 by August 14 and an additional $75,000,000 by August 30. Dell'Aquila was to contribute his property. The parties set September 30 as the closing date.

Connell enlisted an investment banker, Lewis Ranieri, to secure the necessary financing. Ranieri retained Mabon Nugent, an investment bank, for this purpose. The agreement was extended until December 24 on the condition that Connell and Ranieri procure a loan of $85,000,000, instead of the $75,000,000 initially agreed upon. A Mabon Nugent team consisting of Michael Joseph, Roderick O'Connor, and Stephen Fuchs began an intensive search for financing.

After an abortive attempt to secure the loan from another financial institution, attention focused upon East River. Following a series of meetings with East River's representatives, Alvin Dworman, Shepard Forest, and Frances D'Loren, Connell sent East River a $200,000 good faith deposit. However, once it became clear that Connell would be unable to obtain a requested letter of credit in the amount of $15,000,000 or equity financing in the sum of $20,000,000, East River apprised the prospective borrowers that it would not lend the full $85,000,000 requested. Connell continued his efforts to obtain financing elsewhere.

East River remained interested in the proposed development and subsequently consulted with Siggi Wilzig, chairman of the board and president of Trust Company. Wilzig had prior dealings with Dell'Aquila and agreed to participate in the loan to the extent of $5,000,000. Wilzig also had a banking relationship with a competing developer, the team of Daniel Gans and George Vallone, who were attempting to develop a site adjacent to that of Dell'Aquila.

The exact parameters of Wilzig's relationship with Gans and Vallone can fairly be characterized as murky. At one point, Wilzig was apparently offered a one-third equity interest in their development, but William Zeckendorf, a New York participant in the venture, refused to deal with Wilzig. In any event, Trust Company extended credit to Gans and Vallone, and Wilzig participated in many meetings with them, including one in which they advised Wilzig of "access" problems relating to their proposed development. Wilzig suggested obtaining an easement ...

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