September 8, 2008
URSULA MAITA AND ROBERT MAITA, PLAINTIFFS-RESPONDENTS,
VINCENZO LOFARO A/K/A VINCENT LOFARO AND COLLEEN LOFARO, DEFENDANTS-APPELLANTS.
On appeal from Superior Court of New Jersey, Law Division, Sussex County, Docket No. L-631-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued August 20, 2008
Before Judges Miniman and Lihotz.
Defendant*fn1 Vincenzo Lofaro appeals from a judgment entered in favor of plaintiff*fn2 Ursula Maita following a bench trial on November 30, 2007. Additionally, defendant appeals from an order that dismissed his counterclaim. Defendant maintains the trial court failed to make findings of fact to support the entry of judgment or the dismissal of the counterclaim, and erred in denying his motion to dismiss. We affirm the trial court's determination that defendant owed plaintiff an obligation to repay certain monies, obviating the necessity of a new trial. However, the trial judge failed to engage in the requisite factfinding when fixing the amount of the indebtedness due. Accordingly, we reverse and remand for additional factfinding on that issue. Finally, we affirm the dismissal of the counterclaims.
Defendant and Robert Maita (Maita) owned and operated adjacent livestock farms in Somerset County. In 2001, plaintiff and defendant commenced an extramarital relationship. During their time together, plaintiff spent in excess of $300,000 to purchase various farm equipment, supplies, and vehicles for defendant's farm operation or his personal use. Plaintiff testified defendant promised to reimburse the funds. However, each time she requested repayment, defendant offered excuses, was "crying the blues" or suggested he would pay her in the near future.
On June 3, 2006, following the termination of their affair, and while the Maitas were engaged in a divorce proceeding, plaintiff sent defendant an itemization of his debt and a letter demanding repayment of $300,125.18. At trial, plaintiff produced that list, which had been modified by her handwritten notations and stated the total expended for defendant's benefit was $302,858.74. Additionally, plaintiff presented receipts, credit card statements and cancelled checks evincing the purchased items, including pick-up trucks, a dump truck, tractors, a Volvo, livestock, animal medications, an all-terrain vehicle (ATV), guns, wagons, a motorcycle, and a laptop computer. The compilation acknowledged defendant gave plaintiff a $5,000 down payment for a truck, $900 for the ATV, and $800 in cash.
After reviewing plaintiff's list, defendant agreed plaintiff had advanced monies or allowed him to use her credit cards for purchases totaling $270,000. Defendant explained he repaid the $270,000 by making weekly cash payments obtained from the sale of his livestock. Defendant asserted he gave plaintiff money whenever she asked, and always paid in cash. Defendant had no receipts or other documentary support, but for a handwritten list of payments he stated he made on the Ford F-450 red pick-up truck (Ford).
Additionally, defendant argued many items on plaintiff's list were gifts to him and his family. These included the ATV, the computer, an MP3 player, a television, medical bills, I-PODS, and mattresses. Also, defendant asserted, and plaintiff agreed, that the title to the Ford, for which plaintiff expended $50,988.80, and the Volvo automobile, for which she expended $18,000, were transferred to defendant with the notation "gift" written on the title. Plaintiff responded that she used the notation to avoid defendant's payment of sales tax on the transfer. Finally, defendant explained plaintiff reclaimed the Mahindra tractor*fn3 and, he presumed, took the ATV from his farm.
Alternatively, defendant argued plaintiff never expected repayment. Her demand came when Maita sought $150,000 as his equitable distribution share of the dissipated funds during the matrimonial matter. In support of his counterclaim for unjust enrichment, conversion and breach of contract, defendant testified he provided feed, livestock, and farming services to Maita but was not paid. Maita denied these claims.
Finally, Colleen Lofaro (Lofaro) offered testimony to support her counterclaim against plaintiff for intentional infliction of emotional distress. Lofaro stated plaintiff sent her a letter and she received several other letters anonymously. The crude correspondence discussed defendant's alleged extramarital affairs with several women. Lofaro asserted that her receipt of these letters caused back and neck pain, and sleep loss. She provided no evidence of medical treatment.
The trial judge credited plaintiff's testimony and found defendant was not truthful. He determined $50,000 of the items plaintiff listed were gifts to defendant and entered judgment for the balance in the amount of $252,858.74, together with costs of suit and interest. The trial judge dismissed the counterclaims.
On appeal, defendant argues the trial court's decision failed to include supportable findings for its conclusion, and further, that the judge erred in denying defendant's motion to dismiss (1) for failing to state a cause of action, and (2) based on the entire controversy doctrine.
Our scope of review of the findings of fact made in a non-jury matter is limited. Berberian v. Lynn, 355 N.J. Super. 210, 216 (App. Div. 2002), aff'd as modified, 179 N.J. 290 (2004). We defer to factual findings "when the evidence is largely testimonial and involves questions of credibility," Cesare v. Cesare, 154 N.J. 394, 412 (1998) (quoting In re Return of Weapons to J.W.D., 149 N.J. 108, 117 (1997)), as credibility is always for the factfinder to determine. Ferdinand v. Agric. Ins. Co. of Watertown, N.Y., 22 N.J. 482, 492 (1956). However, the factual findings by a trial judge, including credibility determinations, must be supported by adequate, substantial and credible evidence in the record. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974).
On the issue of whether defendant was indebted to plaintiff, the trial judge viewed the disposition as a determination of credibility. The issue presented was not whether plaintiff and defendant had an oral agreement for repayment or whether the specific items listed by plaintiff were for defendant's benefit. The only issue for determination was whether defendant had repaid plaintiff. Plaintiff presented documentation of all her expenses. Defendant admitted he received $270,000 of the items listed and that the arrangement with plaintiff required his payment. Defendant broadly asserted he repaid the $270,000 in cash.
The trial court made these findings:
I considered all the testimony at the time of trial and I believe Mrs. Maita to be more credible than Mr. Lofaro. Mr. Lofaro would want me to believe that he repaid 270 some odd thousand dollars without a receipt, in cash, without documenting the source of those funds in any way whatsoever. There's nothing to suggest that he had the ability over a period of time to even pay that amount of money from his . . . failed farm enterprise.
I don't believe his testimony. I had the opportunity to observe him in court. He appears to be a rather shaky individual in terms of his testimony and appearance while answering questions. His testimony doesn't have the ring of truth.
In discussing defendant's counterclaim the trial judge added to these findings:
With regard to Mr. Lofaro's counterclaim, . . . Mr. Lofaro claims that he performed some work on the Maita farm that he expected to be compensated for. And secondly[,] that he had a source of animal feed, that is stale bread, that he would pick up from bakers, most of which was carted away by him for free, some of which he was actually paid for to cart away. This bread was used as animal feed on both farms.
I'm satisfied that there was no agreement for him to receive any compensation for that -- that animal feed, the bread. That getting rid of the bread, as it was molding in his barn, was as much in his interest as the interest of the Maitas, and that he was doing it as a favor much in the same way that the Maitas extended favors to him on his farm, in terms of lending equipment and things of that nature.
I further find his claim is frivolous, it's contrived and it's made solely for the purpose of trying to advance a defense in this case and to have some type of offset. It's contrived for the purpose of this litigation and one need only look at him as he testified to know that he was lying as he testified before the [c]court.
Accordingly no cause of action is entered as a judgment on him on that counterclaim.
We can infer from these findings that the trial judge rejected defendant's contention of repayment as claimed. These findings adequately support that defendant owed an obligation to plaintiff. However, as to the amount of the debt due, the trial judge's findings are flawed, specifically with regard to the gifted transfers to defendant or his family. Faced with the competing contentions, the trial judge merely stated the gifted items totaled $50,000, nothing more.
We conclude the decision on the amount of the debt, as rendered, was so "'manifestly unsupported by . . . competent, relevant and reasonably credible evidence as to offend the interests of justice.'" Leimgruber v. Claridge Assocs., Ltd., 73 N.J. 450, 456 (1977) (quoting Fagliarone v. Twp. of No. Bergen, 78 N.J. Super. 154, 155 (App. Div. 1963)). It is impossible to discern which items were found to be gifts and which of defendant's assertions was accepted or rejected. The trial judge made no findings regarding the Mahindra tractor, the Ford truck, or the ATV.
Rule 1:7-4(a) denotes a trial court's obligation to make findings of facts and state conclusions of law "by an opinion or memorandum decision, either written or oral, . . . in all actions tried without a jury . . . ." Our cases have repeatedly stressed the importance of a trial judge's responsibility to provide findings and conclusions to assure informed appellate review. Rosenberg v. Bunce, 214 N.J. Super. 300, 303 (App. Div. 1986). Without findings relevant to the legal standards, the litigants and the reviewing court "can only speculate about the reasons" for the decision. Rosenberg, supra, 214 N.J. Super. at 304.
The oft cited instruction by the Supreme Court regarding trial court factfinding bears repeating:
[T]he failure to perform that duty "constitutes a disservice to the litigants, the attorneys and the appellate court." Kenwood Assocs. v. Bd. of Adj. Englewood, 141 N.J. Super. 1, 4 (App. Div. 1976). Naked conclusions do not satisfy the purpose of [Rule] 1:7-4. Rather, the trial court must state clearly its factual findings and correlate them with the relevant legal conclusions.
[Curtis v. Finneran, 83 N.J. 563, 569-70 (1980).]
Omission of this duty is particularly problematic where the trial court decision is bottomed on credibility, yet the court fails to distinguish the specific disputed testimony credited.
The trial court must remedy its failure. The judge must specifically articulate detailed findings to support its determination of the gifted items. The court must list not only the items deemed to be gifts and why, but also must state why specific assertions were accepted or rejected. Also, the findings must include a determination of whether property was reclaimed by plaintiff, and if so, the amount credited to reduce defendant's debt. In making these findings, the trial judge must provide the reasons supporting any determination, with references to the witnesses' testimony. Foley, Inc. v. Fevco, Inc., 379 N.J. Super. 574, 588-89 (App. Div. 2005); Barnett & Herenchak, Inc. v. State of N.J., Dep't of Transp., 276 N.J. Super. 465, 470-73 (App. Div. 1994).
We are satisfied that the trial court's dismissal of the counterclaims was adequately supported by the factual finding grounded in the record. Neither defendant nor Lofaro proved the asserted causes of actions required.
Next, we address defendant's claim of error in denying his motion to dismiss. First, we discern no error in the denial of the Rule 4:37-2 motion at the conclusion of plaintiff's case.
R. 2:11-3(e)(1)(E). Second, we reject defendant's argument that plaintiff's pursuit of his obligation to her was barred by the entire controversy doctrine because it was "ripe at the time of the antecedent divorce proceedings and should have been raised therein instead of in a separate lawsuit."
The context of this argument is as follows. In the divorce matter, Maita named defendant as a co-respondent. N.J.S.A. 2A:34-15; R. 5:4-2(b). At trial, plaintiff's counsel used defendant's deposition testimony taken in the matrimonial proceeding for impeachment purposes. The court denied defendant's application stating defendant was named in the matrimonial proceeding solely regarding Maita's cause of action for adultery.
Under the entire controversy doctrine, a party is required to bring all possible claims in one proceeding. McNeil v. Legislative Apportionment Comm'n, 177 N.J. 364, 395 (2003), cert. denied, 540 U.S. 1107, 124 S.Ct. 1068, 157 L.Ed. 2d 893 (2004). As an equitable doctrine its application is flexible with a case-by-case appreciation to ensure fairness to the parties. DiTrolio v. Antiles, 142 N.J. 253, 272-73 (1995).
"The equitable nature of the doctrine bars its application where to do so would be unfair in the totality of the circumstances and would not promote any of its objectives, namely, the promotion of conclusive determinations, party fairness, and judicial economy and efficiency." Pressler, Current N.J. Court Rules, comments 3.2 on R. 4:30A (2008).
We agree with the trial judge that the doctrine did not bar plaintiff's suit. The possible issues in the divorce were whether plaintiff dissipated marital funds in which Maita had an equitable interest. The question of whether plaintiff loaned or gifted the monies to defendant or whether she received repayment were not relevant or determined. Maita's claim was distinctly different and defendant suffered no prejudice by not being named as a party in the matrimonial action.
Affirmed in part, reversed in part and remanded to the trial judge for factfinding and assessment of the evidential basis for the conclusions reached as to the nature and amount of the debt owed by defendant to plaintiff. We do not retain jurisdiction.