On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, L-4990-03 & L-5120-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Axelrad, Payne and Sapp-Peterson.
Paul Izzo appeals from an order of December 1, 2006, entering judgment against him in favor of the Estate of Concetta Izzo in the amount of $112,000 in accordance with a jury verdict, together with court-ordered prejudgment interest. The judgment arose from appellant's default of a stock purchase agreement, entered into with his retiring parents in 1990, to purchase shares of the family business, and the suit to enforce the obligation filed approximately thirteen years later. Appellant challenges the summary judgment ruling holding the stock purchase agreement enforceable, the trial court's ruling excluding hearsay evidence proffered by appellant, and a variety of other rulings made during the trial. He also contends the trial court awarded excessive prejudgment interest on the jury verdict. We are not persuaded by any of appellant's arguments and affirm.
Appellant's father, Louis Izzo, Sr. (Louis, Sr.), founded Door-Master Corp., a cabinet door manufacturing company, around 1966, and operated it as a family business with his wife Concetta. On May 22, 1990, when his parents decided to retire, appellant and his parents agreed that he would take over the business, and the parties executed a stock purchase agreement for appellant to purchase ninety of the 100 outstanding shares of the business for $261,000. The remaining ten shares were owned by appellant and his three siblings, who each held two and one-half shares. The agreement provided for appellant to make periodic payments over the next ten years as follows: $1,000 to be paid at closing, and beginning on July 1, 1990, appellant would pay interest only at 10% per annum on $260,000 by paying $500 per week for 156 weeks, and beginning July 1, 1993, appellant would begin paying the principal and interest in 364 consecutive weekly payments of $1,000. In connection with the purchase, appellant and his parents also executed a Stock Pledge and Escrow Agreement (stock pledge agreement) that required the newly purchased stock to be held in escrow until the debt was fully paid.
Appellant last made a payment to his parents in November 1991. Appellant claimed he told his father at that time that he could not afford the payments and his father could take back the company, to which Louis, Sr. replied, "don't worry about it," and which appellant interpreted as meaning his father forgave the debt. Neither parent filed suit against appellant during their lifetimes nor did they declare a default under the stock pledge agreement.
Louis, Sr. passed away on December 22, 1998. The terms of his will left his entire estate to appellant and his three siblings. Concetta Izzo died on August 26, 2001, expressly acknowledging in her August 11, 2000 will the existence of appellant's $400,000 obligation to her in connection with the purchase of the family's business. The will also contained conditions for satisfaction of the debt, either through sale of the business or direct payments by appellant, which was ultimately expected to be resolved no later than two years from the date of her death. Appellant did not comply with any of the conditions for satisfaction of the debt under the will.
Appellant and his sister, Carol Gutterman, were named as co-executors of their mother's estate. On October 28, 2003, appellant filed a complaint against Gutterman and his brother, Louis Izzo, Jr. (Louis, Jr.), seeking a declaratory judgment that the six-year statute of limitations barred enforcement of the debt arising out of the stock purchase and pledge agreements (Count I) and further alleging tortious interference with prospective economic advantage (Count II).*fn2
On November 5, 2003, Gutterman and Louis, Jr. filed suit against appellant and Door-Master Corporation, individually and on behalf of their mother's estate, seeking damages for breach of contract and fiduciary duty in violation of the stock purchase and pledge agreements.*fn3
By order of April 23, 2004, appellant was removed as co-executor of the Estate of Concetta Izzo, and Joel Kreizman, Esquire was appointed as substitute executor. By order of June 25, 2004, the two Law Division cases were consolidated under Docket No. L-4990-03. By order of September 24, 2004, Judge Gilroy granted appellant's motion for summary judgment in part, dismissing with prejudice Door-Master Corporation as a defendant in counts one and two of the Gutterman complaint filed against appellant (Docket No. L-5120-03), and finding the statute of limitations barred any payments due prior to November 5, 1997. The court denied the portion of appellant's motion seeking to declare unenforceable the balance of the unpaid debt, finding that 138 payments due after that date were not time-barred.
Pursuant to a motion by appellant, by order of December 16, 2005, the court dismissed with prejudice counts one and two of the Gutterman complaint asserting breach of contract against appellant and provided that Kreizman be permitted to file a new complaint on behalf of the Estate by January 6, 2006. Kreizman timely filed an amended complaint in his representative capacity against appellant, seeking judgment of $138,000 for the outstanding 138 payments, together with prejudgment interest (Count One) and an accounting and constructive trust for appellant's sale of Door-Master Corporation (Count Two).*fn4 By order of February 3, 2006, the court denied appellant's motion to dismiss the amended complaint.
The jury trial commenced on October 25, 2006 before Judge Perri. Appellant, Gutterman and Louis, Jr., and the Estate were each represented by independent counsel. Pertinent to this appeal, following a N.J.R.E. 104 hearing, the court ruled as inadmissible hearsay appellant's testimony about the l99l conversation in which his father purportedly forgave the debt. At the close of the Estate's case, appellant moved for involuntary dismissal pursuant to Rule 4:37-3 on the following grounds: (1) the stock purchase agreement was a negotiable instrument and all parties necessary for its enforcement were not before the court; (2) half the value of the Estate belonged to the heirs of Louis, Sr., who had passed away before Concetta Izzo; (3) the Estate of Concetta Izzo was judicially estopped from claiming more than half the payments not barred by the statute of limitations; and (4) Count II was barred by the statute of limitations. Judge Perri denied the motion. At the close of all evidence, appellant moved for a judgment pursuant to Rule 4:40-1 based upon a laches defense, which the court also denied. The court granted Gutterman and Louis, Jr. involuntary dismissal of the matter initially alleged by appellant under Docket No. L-4990-03, finding that claim was governed by New York law and appellant did not have standing to pursue the claim. That determination has not been appealed.
The Estate's case against appellant for a judgment on the indebtedness was submitted to the jury, with the following interrogatories, as recited by the trial court:
Question One: Did Paul Izzo owe any money to Concetta Izzo under the Door-Master stock purchase agreement at the time of Concetta Izzo's death?
Question Two: What amount of money did Paul
Izzo owe under the Door- Master stock purchase agreement at the time of Concetta Izzo's death?
The jury returned a verdict finding that appellant owed his mother $112,000 under the stock purchase agreement at the time of her death. On December 1, 2006, Judge Perri ordered the entry of a judgment of $150,808 in favor of Kreizman, as executor of the Estate of Concetta Izzo, against appellant, which included the $112,000 jury verdict plus $38,808 in interest accrued at 5.5% for 6.3 years (from July 1, 2000 to October 23, 2006). This appeal ensued.
Appellant asserts the following arguments: (1) laches bars enforcement of the stock purchase and stock pledge agreements; (2) the stock purchase agreement was barred entirely by the statute of limitations; (3) the stock pledge agreement was in default from 1991 and its enforcement is barred by the statute of limitations; (4) judicial estoppel precludes the estate of Concetta Izzo from recovery of more than one-half the value of payments not barred by the statute of limitations; (5) the trial court erred by not allowing appellant to testify before the jury regarding Louis, Sr.'s statement to him in November 1991; (6) the stock purchase agreement is a negotiable instrument and all necessary parties for its enforcement were not before the court; (7) even if the stock purchase agreement is not a negotiable instrument, the Estate of Concetta Izzo cannot recover all monies allegedly owed by appellant; (8) Kreizman's amended complaint filed in January 2006 should have been treated as a new complaint for statute of limitations purposes; and (9) the trial court awarded excessive prejudgment interest.
Appellant's first three arguments were rejected by Judge Gilroy in his ruling on the summary judgment motion, and the laches argument was again rejected by Judge Perri when it was renewed by appellant during trial. According to appellant, the subject claim should be barred by the equitable defense of laches because he made his last payment in 1991, his father died in 1998 without taking any steps to sue him for default, and his siblings did not file suit until 2003. He argues he was prejudiced by this ...