On appeal from Superior Court of New Jersey, Law Division, Hunterdon County, Docket No. L-000178-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Skillman, Yannotti and Espinosa.
Plaintiff Phil Besler appeals from an order granting summary judgment to defendants Horseshoe Bend, LLC (Horseshoe Bend) and Frenchtown Run, LLC (Frenchtown Run) (collectively, the entities), dismissing his claims against them, discharging a lis pendens on certain properties owned by those defendants, and denying his motion for summary judgment. We affirm.
In August 2003, plaintiff loaned $800,000 to defendant Richard Coluccio (the Besler loan). This amount was to be part of a total investment of $1.4 million for Coluccio and defendant James A. D'Angelo, Jr. to purchase a 50% interest in an entity that would purchase property for a new project. Besler previously loaned money to Coluccio and D'Angelo. Because one of those loans was not fully repaid, Besler did not want to loan the sum to D'Angelo but was willing to make a personal loan to Coluccio.
As part of this transaction, Coluccio executed a mortgage note (the Note) that identified the holder of the note as Besler and the maker of the note as Coluccio, a mortgage and security agreement between Richard Coluccio as mortgagor and Phil Besler as mortgagee (the Agreement), and a guaranty and suretyship agreement in which he personally guaranteed the loan. Coluccio executed each of these documents individually, with no indication that he was acting as an agent for any entity.
In the Agreement, Coluccio warranted that he "presently possesse[d] an unencumbered fee simple title to the Mortgaged Property" and "that this Mortgage is a valid and enforceable first lien on the Mortgaged Property . . . ." However, the Agreement stated that the purpose of the loan was "for acquisition of" the mortgaged property, and the description of the mortgaged property revealed the property was owned, not by Coluccio, but by Joseph and Susan Clinton. Coluccio never personally purchased the "Mortgaged Property" and the mortgage was never recorded.
Instead, approximately one and one-half years later, in January 2005, the mortgaged property was acquired by Horseshoe Bend and Frenchtown Run. In two transactions conducted on the same day, Horseshoe Bend acquired property for $5,765,295 (Horseshoe Bend property) and Frenchtown Run acquired property for $634,705 (Frenchtown Run property). The property was encumbered at the closing by a mortgage held by Wilmington Trust for $6.3 million.*fn1
At the time, both Horseshoe Bend and Frenchtown Run were owned by three members: FCP Group, LLC (25% share); FCP Group, LP (25% share); and JAD, Jr., Inc. (JAD) (50% share). FCP Group, LLC and FCP Group, LP were owned solely by Frank C. Palopoli, Sr. and members of his immediate family.
Horseshoe Bend's operating agreement was executed on August 14, 2003.*fn2 It was incorporated almost one year later, on July 1, 2004. Frenchtown Run's operating agreement was signed on January 3, 2005, and reflected identical ownership; it was incorporated on January 23, 2007, over three years after Besler's loan to Coluccio.
JAD was incorporated on October 24, 2003, approximately two months after Besler's loan, solely to invest in the Frenchtown Run Project. Coluccio gave the proceeds of the Besler loan to D'Angelo, JAD's sole shareholder, to fund the capital contribution of JAD into Horseshoe Bend and Frenchtown Run. However, Coluccio was later granted a fifty percent interest in JAD because he had raised the $1.4 million that permitted JAD to be an equal partner in the project, and eventually became 100% owner of JAD. The Besler loan of $800,000 was part of the $1.4 million investment.
Besler and Palopoli were each unaware of the other's involvement at the time of the Besler loan. Indeed, neither Coluccio nor D'Angelo ever told Palopoli about the Besler loan or mortgage.
The operating agreements for both Horseshoe Bend and Frenchtown Run provided that no member was authorized to encumber the assets of the company without the unanimous agreement of the respective members. Such unanimous consent was ...