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Delareto v. Totaro

September 29, 2010

ANTHONY L. DELARETO, PLAINTIFF-APPELLANT,
v.
JOHN TOTARO, DEFENDANT-RESPONDENT.



On appeal from Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-835-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted August 31, 2010

Before Judges Simonelli and Waugh.

Plaintiff Anthony Delareto appeals from the July 17, 2009 Law Division order granting summary judgment to defendant John Totaro and from the August 28, 2009 order denying his motion for reconsideration. We affirm.

The following facts are derived from evidence submitted by the parties in support of, and in opposition to, the summary judgment motion, viewed in a light most favorable to the plaintiff. see Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

Plaintiff owns a business known as "Somers Point Florist." According to plaintiff, in 1999, he began the process of purchasing commercial property located in Somers Point (the property), where he would relocate his florist. Plaintiff formed a business relationship with Donald Kelly to purchase the property, which would also house Kelly's business known as "Kelly's All Pro Landscaping." Plaintiff claimed that they agreed that he would own a two-thirds interest in the business to be formed, and Kelly would own one-third.

In order to obtain a mortgage for the purchase, the bank required a $50,000 capital contribution. Plaintiff claims that he lacked sufficient funds for his two-thirds share of that amount, so defendant agreed to loan him $16,666, but would not assert an ownership interest in the newly-formed business. Plaintiff concedes there are no documents evidencing this alleged loan agreement. However, he claims that he and defendant did not formalize their agreement because they were involved in a romantic relationship.

Contrary to plaintiff's claim that defendant would have no ownership interest in the business, on January 18, 2000, he, defendant, and Kelly executed a Limited Liability Company Operating Agreement (the operating agreement) forming MacArthur Park, LLC (MPLLC) for the purpose of purchasing the property. Upon executing the operating agreement, the parties each made a one-third capital contribution of $16,667 and became one-third owners of MPLLC. Defendant also became MPLLC's managing partner.

As to any prior agreements between the parties, the operating agreement contained the following integration clause:

This Agreement (including all exhibits, schedules and other attachments hereto and all other agreements referred to herein) incorporates and embodies the entire understanding and agreement between the parties hereto with reference to the subject matter hereof and to any of the matters hereinbefore discussed or mentioned in reference to the subject matter hereof; all prior promises, representations, agreements, understandings and arrangements thereto being herein merged.

The operating agreement also prohibited any amendment unless "in writing with the consent of a [m]ajority of the [m]embers."

In addition to the operating agreement, the parties' one-third ownership interests are reflected in a notarized Affidavit of Ownership of MPLLC, and in MPLLC's federal and state income tax returns for the years 2000 through 2007. Also, Kelly confirmed that he, plaintiff, and defendant formed MPLLC; each owned a one-third interest; and plaintiff never told him that he and defendant had some other agreement relating to MPLLC. Kelly also explained that plaintiff did not own two-thirds of MPLLC and that, as he understood it, the two-thirds figure stems from plaintiff's payment of two-thirds of MPLLC's carrying charges because his florist business occupied more square footage than Kelly's landscaping business.

Plaintiff claims that despite defendant's inclusion in the operating agreement, defendant had no ownership interest in MPLLC; rather, defendant agreed to accept repayment of the loan and not assert an ownership interest. Plaintiff explains that defendant was included in the operating agreement because the bank ...


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