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Marro v. Condit

August 17, 2007

LAWRENCE A. MARRO, INDIVIDUALLY AND DERIVATIVELY AS A SHAREHOLDER OF CONDIT IMPORTS, INC. T/A CONDIT TOYOTA, PLAINTIFF-APPELLANT,
v.
LARRY R. CONDIT AND CONDIT IMPORTS, INC. T/A CONDIT TOYOTA, CHRIS PREZIOSI AND ALBERT PREZIOSI, DEFENDANTS-RESPONDENTS.



On appeal from Superior Court of New Jersey, Law Division, Sussex County, L-0791-01.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted December 6, 2006

Before Judges A. A. Rodríguez, Collester and Sabatino.

Plaintiff Lawrence A. Marro appeals from a judgment entered in the Law Division in favor of defendants Larry R. Condit and Condit Imports Inc. based on the trial judge's grant of defendants' R. 4:37-2(b) motion for dismissal of plaintiff's second amended complaint as well as defendants' counterclaim for specific performance. We affirm.

Plaintiff initiated this action by a verified complaint filed in the Chancery Division and an order to show cause seeking restraints on defendant Condit from selling Condit Toyota and its assets to defendants Chris and Albert Preziosi. Both plaintiff's application for interim relief and defendants' motion to dismiss the complaint for failure to state a claim pursuant to R. 4:6-2(e) were denied on June 29, 2001 by the Chancery judge, who also transferred the action to the Law Division. Thereafter, plaintiff filed two amended complaints, the second of which alleged the following grounds for relief:

(1) breach of a shareholder agreement by Condit when he sold the assets of Condit Toyota to the Preziosis; (2) violation by Condit of his fiduciary duties as a majority shareholder and president of Condit Imports, Inc.; (3) common law fraud; (4) shareholder oppression in violation of N.J.S.A. 14A:12-7(1)(3); and (5) failure to pay plaintiff the fair market value for his shares in Condit Toyota pursuant to N.J.S.A. 14A:11-2. The defendants denied liability and filed a counterclaim for specific enforcement of an option agreement giving Condit the right to purchase plaintiff's shares in the Toyota franchise at their book value. On February 16, 2005, defendants moved for summary judgment pursuant to R. 4:46-1, but the motion was denied by the Law Division judge on May 17, 2005, on grounds there existed a genuine issue of material fact as to the date plaintiff signed the "option letter."

On September 19, 2005, a jury trial began before a different judge, Judge James A. Farber. After two days of trial, plaintiff completed his case on September 21, 2005. Defendants then moved for a judgment pursuant to R. 4:37-2(b), which was granted by Judge Farber. The judge then dismissed the complaint and directed specific performance of the option agreement. This appeal followed.

A motion for involuntary dismissal at the end of a plaintiff's case will not be granted unless, viewing the evidence most favorable to plaintiff and giving plaintiff the benefit of all favorable inferences, a prima facie case for recovery has not been presented. Pitts v. Newark Bd. of Educ., 337 N.J. Super. 331, 340 (App. Div. 2001). In considering a motion for involuntary dismissal under R. 4:37-2(b), our Supreme Court has directed that, "the trial court is not concerned with the worth, nature or extent (beyond a scintilla) of the evidence, but only its existence, viewed most favorably to the party opposing the motion." Dolson v. Anastasia, 55 N.J. 2, 5-6 (1969). See also Zive v. Stanley Roberts, Inc., 182 N.J. 436, 441-42 (2005). Absent unusual circumstances, involuntary dismissal will be denied if the plaintiff's case raises a credibility question to be submitted to the jury. Caliguire v. City of Union City, 104 N.J. Super. 210, 217 (App. Div. 1967), aff'd, 53 N.J. 182 (1969). See also Ferdinand v. Agricultural Ins. Co. of Watertown, 22 N.J. 482, 494-95 (1956); Zucker v. Silverstein, 134 N.J. Super. 39, 50 (App. Div. 1975).

The proofs set forth on plaintiff's case-in-chief were as follows. Defendant Condit was the principal owner of the Condit Ford/Lincoln/Mercury dealership, a Ford leasing company, a truck dealership, and an auto body shop. Plaintiff Marro began employment with Condit Ford, Inc. in 1989 as the controller of the company. He routinely handled the administration and business functions of the office including budgeting and reconciliation of accounts. He also served as treasurer of Condit Ford and Vice President of Condit Auto Lease Corporation. In the early 1990s defendant Condit became interested in acquiring a local Sussex County Toyota dealership that had been in bankruptcy. Marro and John Mathews, another Condit employee, expressed an interest in participating in the dealership purchase. Defendant agreed, and to that end the corporation known as Condit Imports, Inc. was formed and incorporated on August 9, 1994. Condit was the president and director of the company known as Condit Imports and Marro was the treasurer.

In July 1994, Marro purchased for $25,000 eighteen shares of stock in Condit Imports, which totaled 3.6 percent of the total outstanding corporate stock. Marro testified that he purchased the shares in Condit Imports with the intention of participating in a long-term investment with a share of corporate profits and securing a long-term management position within the organization. Mathews purchased thirty-six shares, comprising 7.2 percent of the outstanding stock. The remaining 446 shares or 89.2 percent of the common stock were held by Larry R. Condit after his corporate contribution of over $600,000. The purchase of the Toyota dealership was completed in February 1995.

Marro testified Condit told him that his investment would be protected by a shareholder's agreement. When one was not presented to him, he asked Condit about it. Then Condit presented him with a letter dated October 6, 1994, purportedly from Marro to Condit stating the following:

Dear Larry:

In consideration of valuable benefits and other considerations you have provided me, the purpose of this letter is to present and confirm my offer to allow you (or Condit Imports, Inc. (the "Corporation"), if you prefer), to purchase any and all shares of stock I may own in the Corporation at any time, at a price equal to the greater of (a) the total of my original investment to acquire the stock, or (b) the prevailing net book value of my ...


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