January 30, 2009
COAST AUTOMOTIVE GROUP, LTD., TAMIM SHANSAB, AND SHANSAB REALTY, INC., PLAINTIFFS-APPELLANTS,
ASPEN KNOLLS AUTOMOTIVE GROUP, LLC, ASPEN KNOLLS CORPORATION, ROBERT MAZZUOCCOLA, 247 ROUTE 37 EAST HOLDING COMPANY, LLC, B&S LENDER, LLC, VOLKSWAGEN OF AMERICA, AUDI OF AMERICA, VW CREDIT, INC., AND PORSCHE CARS NORTH AMERICA, DEFENDANTS-RESPONDENTS, AND SALVATORE RUTIGLIANO AND PAUL REYNOLDS, DEFENDANTS.
On appeal from the Superior Court of New Jersey, Chancery Division, Ocean County, Docket No. C-314-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted December 15, 2008
Before Judges Carchman, R. B. Coleman and Sabatino.
According to our most recent opinion addressing this contentious litigation between plaintiffs Coast Automotive Group, Ltd., Tamim Shansab and Shansab Realty, Inc. and defendants, Aspen Knolls Automotive Group, LLC (Aspen Knolls), Robert Mazzuoccola, 247 Route 37 East Holding Company, LLC, B&S Lender, LLC, Volkswagen of America (VW), Audi of America (Audi), VW Credit, Inc. (VW Credit) and Porsche Cars North America, Inc. (Porsche), this appeal represents the ninth or tenth appeal by these and related parties. Here plaintiffs appeal from a July 6, 2007 order of the Chancery Division dismissing plaintiffs' multi-count complaint seeking, among other things, relief under the New Jersey Fraudulent Transfer Act (the Act), N.J.S.A. 25:2-20 to -34. The trial judge dismissed the action with prejudice. We affirm.
We need not overburden this record with yet another recitation of the extensive factual and procedural background of this litigation as it is described in its various stages in our earlier opinion in VW Credit, Inc. v. Coast Auto. Group, 346 N.J. Super. 326 (App. Div.), certif. denied, 172 N.J. 178 (2002), then in our later unpublished opinion in Coast Auto. Group v. Aspen Knolls Auto. Group, No. A-1769-03 (App. Div. July 29, 2005), certif. denied, 185 N.J. 391 (2005), and most recently, in our unpublished opinion in Coast Auto. Group v. Aspen Knolls Auto. Group, No. A-1348-06 (App. Div. April 1, 2008), certif. denied, 196 N.J. 347 (2008). In this latter opinion, we affirmed the September 27, 2006 final judgment entered on behalf of Coast obligating defendant Aspen Knolls to pay $251,302.09 plus interest to Coast and $324,092.60 plus interest to Shansab Realty, Inc.
Aspen Knolls appealed the judgment on November 1, 2006, and in response, plaintiffs filed two actions, the first seeking, among other things, injunctive relief pending satisfaction of the final judgment, and the second, the subject of this appeal, a fraudulent transfer action against Aspen Knolls, Porsche, VW, Audi and VW Credit. The action also sought an injunction against the transfer of franchises as well as the appointment of a receiver.
At the February 2, 2007 hearing on plaintiffs' various new claims, Aspen Knolls posted a supersedeas bond, R. 2:9-6, in the approximate amount of $720,000, representing the amount of the judgment plus two years of interest, which was approved by the judge as to form and substance. Thereafter, consistent with the applicable rule, the judge entered a stay of the judgment pending appeal. R. 2:9-5(a). Notwithstanding the posting of the bond and the stay, plaintiffs pursued its fraudulent transfer action and on July 6, 2007, the judge entered an order dismissing the action with prejudice. The relevant portions of the order provided:
1. The motions to dismiss are GRANTED.
2. This action is hereby DISMISSED in its entirety.
3. Except as set forth in paragraphs 4 and 5 below, this dismissal is with prejudice.
4. Plaintiffs may apply to vacate the with prejudice dismissal of this action only if:
(i) An order shall have been entered and is in effect vacating the stay of execution of the September 27, 2006 Judgment in OCN-C-171-02 (the "Judgment"), which stay was entered by this Court by Ordered dated February 2, 2007 (the "February 2, 2007 Order"); and
(ii) The Supersedeas Bond dated January 31, 2007 and posted in OCN-C-171-02, together with any other collateral posted with the Court or pursuant to Court order, is insufficient to satisfy the amount then due under the Judgment; and
(iii)The Judgment has not been otherwise satisfied, vacated, or stayed.
On appeal, plaintiffs assert that because Aspen Knolls has not satisfied the judgment, the dismissal of the fraudulent transfer action was premature, the fraudulent transfer action was consistent with our July 29, 2005 decision, and the judge should have stayed the action rather than dismiss it.
We have carefully reviewed the briefs and considered the arguments of the parties, and we are satisfied that plaintiffs' arguments are without merit. R.2:11-3(e)(1)(E).
We note that the procedures outlined in R. 2:9-5(a) and R. 2:9-6 entitling a judgment debtor to stay proceedings upon the posting of a bond sufficient to satisfy the judgment in full together with interests and costs and subject to approval from the court were designed to avoid the continued litigation that ensued here. Upon the posting of the bond, plaintiffs' cause of action was no longer viable nor necessary.
As to plaintiffs' argument that the dismissal should properly have been without prejudice, we conclude that the judge appropriately exercised his discretion in dismissing the complaint with prejudice. As he astutely observed, although the action was couched as an action to protect the judgment, the real purpose was to relitigate issues regarding the transfer of franchises that had long been resolved. In sum, Judge Foster well understood that he was not deciding the motion to dismiss in a vacuum. He was intimately familiar with the long and tortured history of this litigation and would not tolerate yet another attempt to resurrect issues that had been resolved. He properly denied the request to dismiss without prejudice and imposed reasonable conditions for reinstatement of the complaint, if such action becomes necessary in the future.
We affirm substantially for the reasons set forth in Judge Foster's oral opinion of May 25, 2007.
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