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Satellite Entertainment Center, Inc. v. Keaton

February 04, 2002


On appeal from Superior Court of New Jersey, Law Division, Passaic County, PAS-L-7745-97.

Before Judges Pressler, Wefing and Lesemann.

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


Argued December 4, 2001

In this appeal from a judgment based on a jury verdict, plaintiff argues that there are legal issues which warrant a reversal of that judgment. However, the fact is that the trial turned almost entirely on credibility issues, there were ample bases for the jury to reach the conclusions it did, and there is no basis for reversal. Accordingly, the judgment is affirmed in all respects, including the provisions thereof relating to plaintiff's complaint, those relating to defendant's counterclaim, and the trial court's denial of pre-judgment interest.

The essential characters in this drama are Morris Winograd, principal of the plaintiff corporation, Satellite Entertainment, Inc.,*fn1 who is an accountant and insurance broker, and also operates a bar and restaurant in Jersey City known as Wynny's, and defendant John Keaton, who worked most of his life as a mechanic but began operating a barbecue restaurant in Jersey City in 1993. Winograd and Keaton had known each other for many years and had a business and semi-friendly relationship. Keaton said that from the time when he was a young man, he had obtained his insurance from Winograd and over the years, the two had numerous contacts. Keaton said he thought the two had a good relationship.

As Keaton described his entry into the barbecue business, in August 1993, he realized he "was getting up in age and I knew they did not hire mechanics" of that age. He also knew how to barbecue ribs and, with the encouragement of his daughter, he opened discussions with George Williams, who owned premises at 547 Martin Luther King Drive in Jersey City. Those discussions evolved into a six year lease under which Keaton occupied a portion of the premises for his barbecue business. The premises also included a bar and dance hall and a second-floor apartment in which Williams resided. The lease ran from 1993 to 1999, with a monthly rental of $700. Keaton then opened his restaurant whose "specialty was in barbecue ribs," and he continued to operate that business from 1993 until the end of 1995.

In March 1995, Winograd loaned Keaton a sum of money, and Keaton signed a note acknowledging that debt. The amount of the loan was disputed. The note is in the face amount of $6,000, and it says nothing about interest rate. Winograd said that Keaton had asked him for the loan so he could purchase ribs in large quantities and in that way save money. Winograd said further that he delivered the money, $6,000, to Keaton, in cash.

Keaton testified that he signed the note before any of the information (including the face amount) had been inserted. He said further that the amount paid to him was just $5,000, and he further testified that in September 1995, he repaid that entire $5,000 to Winograd, in cash. Winograd, on the other hand, insisted that he had advanced $6,000 to Keaton and claimed that in September 1995, Keaton repaid him just $1,500. Thus, Winograd maintained that $4,500 remained owing on the note, while Keaton maintained that the note had been repaid in full.

That promissory note — which is not reproduced in either party's appendix — formed the subject matter of Winograd's complaint against Keaton. On that complaint, the jury returned a verdict of $1,000 in favor of Winograd, which would seem to indicate it had accepted Winograd's testimony that the loan had been for $6,000, but it had also accepted Keaton's testimony that he had repaid $5,000 to Winograd. That last conclusion seems particularly likely since, at trial, Keaton presented two apparently independent witnesses to corroborate his repayment of the note, one of whom was a teacher in a Jersey City high school who said she personally counted out the $5,000 in cash presented by Keaton and turned it over to Winograd.

While Keaton was operating his barbecue restaurant, the owner of the real property, George Williams, told Keaton that he was having financial trouble. He asked if Keaton was interested in buying the property and when Keaton replied that he was not in a position to do so, Williams suggested that Keaton make an effort to find some other interested purchaser. Keaton thought of Winograd — indeed, he testified that Winograd was the only person he knew who might be in a position to buy the property — and he mentioned the possibility to Winograd. Winograd expressed interest. Although the chronology becomes somewhat confusing, what is clear is that Williams died at some point after his discussion with Keaton about purchasing the property, and at some time thereafter, Keaton began making his rental payments to an entity known as Mercury Capital, which may have been Williams' mortgagee. Eventually, however, Winograd purchased the property and determined to renovate the entire premises, including that portion occupied by Keaton's barbecue restaurant as well as the adjacent restaurant and bar. His plan was to open and operate a new, more elaborate restaurant and bar to be known as Wynny's.

According to Keaton, in or about September 1995, Winograd raised the question of buying out Keaton's business, and asked him for a price. Keaton said he answered by naming a price of $175,000. He said Winograd responded positively to that price and told Keaton that he would pay it. According to Keaton, Winograd also said he wanted Keaton out of the property by the end of 1995, and he wanted Keaton to help him establish and run his new enterprise. Keaton said he agreed to do so. Keaton did in fact vacate the premises by December 1995, and, beginning in or around January 1996, Winograd began renovations and also began paying Keaton a weekly salary for his services respecting Winograd's new bar and restaurant.

Keaton presented a number of witnesses to corroborate what he described as Winograd's promise to pay him $175,000 for his business. One was Rolanda Taylor, a bartender employed by Winograd, who testified that on two occasions, she heard Winograd agree to pay Keaton that amount. The first time, she said, was in May 1996, when Keaton asked Winograd, "is he still going to pay him the hundred and seventy-five thousand for his business"? She said Winograd replied, "Yes, you're going – – I already told you that I was going to pay you. I already told you seven times I was going to pay you." The second occasion, she said, was in April 1997, at a final meeting, when Winograd terminated his relationship with Keaton, Taylor and some others who had been operating Winograd's bar and restaurant. She said at that meeting, Keaton had reminded Winograd of his obligation to pay him $175,000, and, she said, Winograd replied, "I heard you, I told you I was going to pay you, and he walked out the door."

A second witness presented by Keaton was Dolores Boyce, the high school teacher referred to above, who said that when she counted out the $5,000 which Keaton repaid to Winograd under the original promissory note, she also heard Keaton ask Winograd to bring him his $175,000 note, to which Winograd replied, "I will." Finally, in addition to supporting testimony from his daughter, Keaton also presented the testimony of Maribelle Bonilla, who had worked as a bartender during the early days when Wynny's was beginning its operations. She too described the final meeting in April 1997, at which Winograd terminated a number of employees, including Ms. Bonilla. She said that, at the meeting, "John Keaton approached him [Winograd] and asked him about his business. He [Keaton] said he [Winograd] owed him a hundred and ...

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