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Estate of Adiguzelli v. Adiguzelli

December 13, 2007


On appeal from Superior Court of New Jersey, Chancery Division, Sussex County, Docket No. C-9-98.

Per curiam.


Argued October 23, 2007

Before Judges Coburn, Grall and Chambers.

The litigation that led to this appeal and cross-appeal involves a dispute over real estate and business interests of members of the Adiguzelli family. The defendants, Mehmet and Turgay Adiguzelli, are brothers. Their father and mother, Ayas and Yurdanur Adiguzelli, and their sisters, Halime, Samime and Nur Adiguzelli, are the plaintiffs. Ayas Adiguzelli died after filing the complaint, and his estate was substituted as a plaintiff. Questions of liability and damages were bifurcated and tried to the court.

Defendants appeal from the judgments on liability and damages, which establish their liability for conversion of their parents' business interests and award damages. Plaintiffs' cross-appeal from the judgment dismissing, as time-barred, their claim based on wrongful appropriation of real estate held in trust for the entire family. We affirm substantially for the reasons stated by Judge MacKenzie in written decisions dated November 15, 2001, January 22, 2002, April 3, 2002 and April 1, 2005, and the writing appended to the amended judgment dated June 3, 2005.

Substantial credible evidence in the record supports the following factual findings. In 1976, Ayas Adiguzelli went into the business of slaughtering animals and selling the meat to select customers. In 1979, he opened a store in Brooklyn, New York, where he offered the meat to retail customers. In 1980, he purchased property in Fredon, New Jersey, where he established a home for his family and a slaughterhouse for his business. Ayas formed one partnership for operation of the meat market, in which his wife Yurdanur and his son Mehmet each had a fifty percent interest. He formed a second partnership for the slaughterhouse, ownership of which was divided forty-five percent to Ayas, forty percent to Ayas's son Turgay, and fifteen percent to Ayas's son Mehmet. During the 1980s, Ayas purchased additional real estate in both New York and New Jersey. He placed title to the seven properties in his sons' names, but he considered the property as being held by his sons for the benefit of the entire family.

The Adiguzelli family lived together in Fredon until 1989 or 1990, when Mehmet expelled his parents and sisters from the family home. Despite the dramatic expulsion, the members of the family continued to have dinner together regularly, every "two weeks or so."

After the expulsion, Ayas limited his participation in the partnerships to work at the slaughterhouse, but he and his wife continued to receive income from the partnerships. The tax returns for the meat market reflected defendants' mother's ownership interest through tax year 1990. The individual tax returns filed by Ayas and Yurdanur reflected income from the partnerships in 1990 and 1991. On February 24, 1992, the accountant who prepared business and family tax returns did not include a "K-1" partnership form with the return he prepared for defendants' parents. That was the first information they received that indicated a change in the partnerships.

Without notice to plaintiffs, defendants had incorporated the partnerships. On January 4, 1991, defendants incorporated Halal Meat Market, Inc. The assets of the meat market partnership were transferred to that corporation, and defendants are the sole shareholders. On January 9, 1992, defendants incorporated Halal Packing Inc. Defendants transferred the assets of the slaughterhouse partnership to the corporation, and they are the sole shareholders.

In September 1992, Ayas started up a new business involving animal hides. According to Ayas, he was disappointed in that business.

Plaintiffs filed their complaint alleging fraud and misappropriation, breach of fiduciary duty and unjust enrichment concerning defendants on February 19, 1998. Defendants answered on March 11, 1998. They asserted defenses based on laches and the statute of limitations.

At the conclusion of plaintiffs' case on liability, defendants moved to dismiss their claims as time-barred. The judge permitted defendants to present their case before arguing the fact-sensitive motion.

At the conclusion of the trial on liability, the judge, accepting defendants' argument, concluded that after Mehmet's 1989 expulsion of plaintiffs from the family residence, plaintiffs could no longer have entertained a reasonable belief that defendants held either the real property or the partnerships in ...

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