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Laverty v. AGTO

August 10, 2010


On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket No. L-2880-06.

Per curiam.


Submitted: June 29, 2010

Before Judges Stern and Wefing.

In these consolidated appeals, defendant AGTO, LLC and intervenor Jubilo, Inc. state in their notices of appeal that they appeal from post judgment orders of May 21, 2009 and June 3, 2009. The former, entered after a two-day post judgment plenary hearing, provides that "AGTO, LLC continues as the owner of the modular restaurant building located at 1007 Memorial Drive, Asbury Park, New Jersey," but that "plaintiff as executing creditor shall not be permitted to remove the building" from that location "without further order of the court." The order further provides for a conference on June 3, 2009, "to address whether the building can be moved, how it is to be removed and who else may have an interest in this so they can be noticed."

Although the June 3 order is included in appellant's notice of appeal, no party has provided a copy of the order to us. Neither does any party refer to the June 3 proceedings or any order of that day in their procedural history or in their brief.*fn1

The appeal involves a dispute as to ownership of a modular building purchased by AGTO and installed by plaintiff on land at 1007 Memorial Drive in Asbury Park. Ownership affects plaintiff's ability to levy against AGTO for the judgment plaintiff obtained against it.

Antonio Perez and Augustin Quirch are the principals of AGTO which had entered into a franchise agreement to operate a Checkers Restaurant at 1007 Memorial Drive in Asbury Park. The real property is owned by intervenor Jubilo of which Perez and his wife are principals. Quirch has no interest in Jubilo. The lease executed by Jubilo, as landlord, and AGTO, as tenant, was never submitted to Checkers for approval, as required by the franchise agreement. The lease purported to transfer the building to Jubilo. Plaintiff installed the modular building to be used as the restaurant and obtained a default judgment of $113,496.17 plus costs against AGTO for the balance due on their agreement.

AGTO and Jubilo state that "on May 21, 2009[,] the trial court issued a ruling that the restaurant building--although situated and constructed on land owned by Jubilo--was an asset of AGTO, which could be sold and removed to satisfy the plaintiff's judgment." Of course, as noted above, the order provided no such thing, at least, about "removal." However, as gleaned from a case information statement, although not addressed in the briefs, it appears that the June 3 order permitted the sale of the building at a Sheriff's sale, if not removal of the modular building from its location, in order to satisfy plaintiff's judgment against AGTO. The trial court had prevented such a sale until the issue of ownership and whether the modular building was to be deemed real estate could be resolved.

After the post-judgment plenary hearing, Judge Karen Suter filed a comprehensive written opinion and found that the building was owned by AGTO. The judge found that "the lease between Jubilo and AGTO was abandoned ab initio by the conduct of the parties [to the lease] and that the modular building continues to be owned by AGTO." This flowed from the conduct of the purported landlord Jubilo and purported tenant AGTO, including--among other things--AGTO's depreciation of the building and its failure to pay rent, and Jubilo's failure to collect rent, AGTO's failure to contribute to property taxes, without adverse consequences, and from Jubilo's failure to act as if it had an ownership interest in the building, e.g., having no insurance on the premises while AGTO had coverage. Furthermore, Jubilo did not assert any of the landlord's rights against its tenant for non-payment of its rent. As already noted, the critical finding, independent of the ability to remove the modular building, is that "AGTO continues as the owner of the modular building and Laverty has a valid judgment against AGTO [and] . . . may look to the building to satisfy its debt."

Based on our review of the record, we cannot interfere with these findings. Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474 (1974).

Defendant and Jubilo insist that the building now belongs to Jubilo irrespective of the ability to remove it from the land. They are correct that the lease provides that the premises became "the property of the Landlord herein immediately upon the issuance of a certificate of occupancy to the structure by the City of Asbury Park." But this contention overlooks the trial court's finding that it abandoned the lease from the outset.

AGTO and Jubilo also argue that the trial court refused to permit them "to present evidence or elicit testimony on the issue of whether the building was so attached to the realty that it became part and parcel of Jubilo's property." They assert the judge precluded the presentation of experts ready to testify on the subject. Plaintiff disputes this, and raises procedural issues with respect to the contention, including improper reliance on facts outside the record and the absence of a motion for reconsideration. We understand, however, that that may have been the subject of the June 3 proceedings and nothing about those proceedings is embodied in the record. AGTO and Jubilo simply cannot benefit by bringing us an interlocutory appeal, ...

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