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Adams Associates, L.L.C., As Assignee of Eastern Savings v. Frank Pasquale Limited Partnership and Frank Pasquale

January 14, 2011

ADAMS ASSOCIATES, L.L.C., AS ASSIGNEE OF EASTERN SAVINGS BANK, FSB, PLAINTIFF-APPELLANT,
v.
FRANK PASQUALE LIMITED PARTNERSHIP AND FRANK PASQUALE, INDIVIDUALLY, DEFENDANTS-RESPONDENTS, AND THE STATE OF NEW JERSEY, DEFENDANT.
ADAMS ASSOCIATES, LLC, AS ASSIGNEE OF EASTERN SAVINGS BANK, FSB, PLAINTIFF-APPELLANT,
v.
FRANK PASQUALE LIMITED PARTNERSHIP AND FRANK PASQUALE, DEFENDANTS-RESPONDENTS, AND MRS. FRANK PASQUALE AND FRANK PASQUALE, JR., DEFENDANTS.



On appeal from the Superior Court of New Jersey, Chancery Division, Hudson County, Docket No. C-34-08 (consolidating Chancery Division Docket No. F-18132-05 and Law Division Docket No.L-3222-07).

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted November 15, 2010 - Decided Before Judges Lisa, Reisner and Alvarez.

This appeal is from judgments in two related actions which were consolidated in the trial court. The dispute arose out of a fraudulent mortgage obligation entered into by Frank A. Pasquale, purporting to be acting in the capacity of general partner of Frank Pasquale Limited Partnership, the owner of a commercial property in Hoboken. Frank A. Pasquale misrepresented his status and utilized forged documents to obtain the mortgage loan. His father, Frank F. Pasquale, was the principal of Pasquale Limited Partnership, and he was unaware of his son's misdeeds.

The mortgage went into default, prompting a foreclosure action that resulted in a default judgment. When the father learned of the fraud, he moved to vacate the judgment. After conducting a plenary hearing, Judge Gallipoli granted the motion.

In the other action, plaintiff, Adams Associates, L.L.C., which had taken an assignment of the mortgage from the mortgagee, sued father and son for money damages. Judge Gallipoli granted summary judgment in favor of plaintiff as to the son and entered a money judgment against the son. But the judge granted summary judgment in favor of the father and the partnership.

Plaintiff appeals from both the vacation of the foreclosure judgment and the dismissal of its action for money damages against the father and the partnership. Plaintiff presents these arguments:

POINT I

THE TRIAL COURT INCORRECTLY DETERMINED THAT EASTERN SAVINGS BANK FAILED TO OBTAIN IN PERSONAM JURISDICTION OVER THE FRANK PASQUALE LIMITED PARTNERSHIP.

POINT II

THE TRIAL COURT INCORRECTLY DETERMINED THE EXISTENCE OF EXCUSABLE NEGLECT AS A BASIS FOR VACATING THE FINAL JUDGMENT OF FORECLOSURE.

POINT III

THE TRIAL COURT FAILED TO PROPERLY APPLY EQUITABLE PRINCIPLES IN APPORTIONING THE LOSS UNDER THE DOCTRINE OF AVOIDABLE CONSEQUENCES.

POINT IV

THE TRIAL COURT FAILED TO ADDRESS ADAMS'S ENTITLEMENT TO RELIEF UNDER RELEVANT PROVISIONS OF N.J.S.A. 12A:3-406 AND FURTHER URSURPED [SIC] THE JURY FUNCTION IN DETERMINING A RESOLUTION OF A FACTUAL DISPUTE.

POINT V

THE TRIAL COURT IMPROPERLY DETERMINED FACTUAL ISSUES RELATING TO ACTS OF RATIFICATION.

POINT VI

THE TRIAL COURT INCORRECTLY DETERMINED THAT THE PURCHASER OF A DULY RECORDED MORTGAGE INSTRUMENT IS NOT OFFERED THE PROTECTIONS OF THE RECORDING STATUTE.

We reject these arguments and affirm.

I In 1969, Frank F. Pasquale (Senior) and his wife, Josephine, purchased property in Hoboken known as 1024-25 Adams Street. Senior operated a manufacturing business known as Spin-Tech at this location, and also rented five units (studios/offices) situated on the top floor.

Shortly before Josephine's death in 1994, Senior, acting on his attorney's estate planning advice, created the Frank Pasquale Limited Partnership (partnership) into which he transferred ownership of the Adams Street property. Senior formed a corporation, Frank Pasquale Manufacturing, Inc., to act as general partner, and appointed himself individually as the limited partner. Senior assigned a percentage of the capital and profits of the partnership to trusts in the names of each of his three children, Frank A. (Junior), James and Carla. Senior did not designate any of his children as a ...


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