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Pear Street, LLC v. 818 Pear Street

January 4, 2011


On appeal from the Superior Court of New Jersey, Chancery Division, Cumberland County, Docket No. C-30-07.

Per curiam.


Submitted: December 15, 2010 - Decided: Before Judges Axelrad and Lihotz.

The issue on appeal involves the validity of a deed in which the grantee, now deceased, stamped the grantor's signature to effectuate the transfer. Following a bench trial, the Chancery judge upheld the validity of the deed. The grantor appeals. We affirm.

On September 12, 2007, plaintiff Pear Street, LLC (Pear Street or grantor) filed suit against defendants, 818 Pear Street, LLC (818 Pear Street or grantee), Interstate Net Bank (the Bank) and William J. Lemons, Executor of the Estate of Angelo Rodriguez (the executor), seeking to invalidate a deed from plaintiff to 818 Pear Street, as well as the encumbering mortgage provided to the Bank. The grantee and the executor filed an answer and counterclaim against the grantor, its sole member, Carol Rodriguez, and her husband Angel,*fn1 seeking repayment of rents collected by them on the subject property. The Bank filed an answer and cross-claim against 818 Pear Street and the executor, seeking to have the mortgage declared valid and enforceable and, if the grantor succeeded in its underlying suit, seeking contribution and indemnification from them. Pear Street, Carol and Angel filed answers to the counterclaim. 818 Pear Street and the executor also filed an answer to the Bank's cross-claim.

On May 4, 2009, 818 Pear Street and the executor were relieved from further participation in the suit, agreeing to be subject to the court's declaration as to the validity of the subject deed.*fn2

Plaintiff moved for summary judgment on June 9, 2009, seeking to have the deed and mortgage cancelled. The Bank filed opposition. Plaintiff's motion was denied on July 14, 2009.

A trial was conducted on July 14 and 15, 2009. The court issued a written decision on September 15, 2009, holding that the deed and mortgage were valid and enforceable. A final judgment was entered on October 14, 2009.

On December 14, 2009, plaintiff filed a motion seeking a stay of execution of that part of the final judgment requiring it discharge the notice of Lis Pendens, which was granted by the Chancery judge on January 22, 2010, pending appeal. Pear Street and Carol appealed (collectively referred to as appellants when appropriate).

Carol and Angel purchased the property located at 818 Pear Street in Vineland on October 27, 1998. On November 9, 2005, Carol formed Pear Street, in which she was the sole member. On November 30, 2005, Carol and Angel transferred the property to Pear Street. At trial, Carol testified that her son Angelo had been in the business of purchasing cheap homes to fix up and resell. Carol owned a business called Andesco, in which Angelo had an interest, which was used to facilitate Angelo's purchase of the homes. Angelo ran day-to-day operations and was given the authority to use Carol's signature stamp to write checks.

Carol acknowledged that she and Angel would often loan Angelo large sums of money for business dealings and personal reasons. In 2006, Carol gave Angelo permission to allow his employees, who were working on a nearby house, to stay at the subject property. At some point, Carol also allowed Angelo to rent out the property and retain the proceeds to pay his bills. Angelo assumed responsibility for insuring the property and paying for utilities. The real estate bills were also sent directly to Angelo. Unfortunately, Angelo committed suicide on or around February 16, 2007.

The primary factual dispute at trial concerned a deed dated December 2005, transferring ownership of the subject property from Pear Street to 818 Pear Street, a business in which Angelo was the sole member. The deed was recorded and filed in the Cumberland County Clerk's office on December 27, 2005, despite not having been dated and acknowledged by a notary public.

Theresa DeGarmo, Angelo's administrative assistant at the time the deed was executed, testified that Angelo used his mother's signature stamp to sign the deed and transfer the property to his company. When Angelo asked DeGarmo to witness him stamp his mother's signature, DeGarmo telephoned Carol and received permission to do so. DeGarmo testified Carol told her that Angelo had her authority to use the signature stamp to transfer the property. DeGarmo explained that she witnessed the signature as a convenience so Angelo did not have to bring the deed to his mother to sign. She also testified that although she was a notary public, she did not notarize the deed because the parties did not sign the document in her presence.

It was DeGarmo's understanding that Carol was transferring the property to Angelo so he could obtain financing from the Bank. Angelo ultimately obtained a $740,000 credit line secured, in part, by the subject property. The Bank's representative testified that the Bank had relied on Angelo's ...

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