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Sanford Canter v. Lakewood of Voorhees

June 28, 2011

SANFORD CANTER, PLAINTIFF-RESPONDENT,
v.
LAKEWOOD OF VOORHEES, D/B/A LAKEWOOD OF VOORHEES ASSOCIATES, LP, SENIORS MANAGEMENT-NORTH, INC. AND OZAL OF LAKEWOOD, INC., DEFENDANTS-RESPONDENTS, AND SENIORS HEALTHCARE, INC., DEFENDANT-APPELLANT, AND ABE STEINMAN, PHILIP STEINMAN, STEVEN LAZOVITZ, ESTATE OF JOE ABRAMSON, STUART LICHT, FRANK BURSTEIN, BARRY ABRAMSON, ALEX MAKRIS MEDICAL DIRECTOR, JUDY ZUGGY DIRECTOR OF NURSING, VIRGINIA EUSEBIO EMPLOYEE, DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-2981-08.

The opinion of the court was delivered by: Simonelli, J.A.D.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

APPROVED FOR PUBLICATION

Argued May 4, 2011

Before Judges Cuff, Sapp-Peterson and Simonelli.

The opinion of the court was delivered by SIMONELLI, J.A.D.

This is a nursing home negligence action arising from injuries sustained by plaintiff Sanford Canter at the Lakewood of Voorhees Nursing Home, a New Jersey licensed long-term care facility (the nursing home). By leave granted, defendant Seniors Healthcare, Inc. (SHI) appeals from the denial of its motions for partial summary judgment and reconsideration on the issue of whether corporate veil-piercing principles apply to a New Jersey limited partnership, or alternatively, whether thereis a genuine issue of material fact as to whether plaintiff established the veil-piercing factors.

We hold that equitable principles, such as veil piercing, may apply to a New Jersey limited partnership but in limited circumstances, such as where a limited partner takes or attempts action not within the safe harbor of N.J.S.A. 42:2A-27b, or dominates and uses the limited partnership to perpetrate a fraud, injustice, or otherwise circumvent the law. Because the record does not establish such circumstances, we reverse.

We begin by explaining the relationship between the various entities and individuals involved in this matter. Defendant Lakewood of Voorhees Associates LP (Lakewood) is a limited partnership formed in 1978 pursuant to the New Jersey Uniform Limited Partnership Law (1976) (NJULPL), N.J.S.A. 42:2A-1 to -73. At its inception, Lakewood was capitalized with at least $600,000. Lakewood owns and operates the nursing home.

SHI is a Pennsylvania corporation incorporated in 1996. It is a limited partner of Lakewood and holds an 84.12% interest in the partnership. It also is the sole shareholder of defendant Ozal of Lakewood, Inc. (Ozal) and defendant Seniors Management-North, Inc. (SMN).

Ozal is a New Jersey corporation incorporated in 1999. Ozal is Lakewood's general partner and holds a 1% interest in the partnership.

SMN is a New Jersey corporation incorporated in 2000. SMN provides accounting, billing, group purchasing, support and professional-consulting services to the nursing home pursuant to a management agreement. Its employee, Cherly Carnes, is the nursing home's administrator who controls the nursing home's day-to-day operations. SMN has no ownership interest in Lakewood, but receives a management fee pursuant to the management agreement. SMN also manages nine other nursing homes in New Jersey, Pennsylvania and the District of Columbia.

Defendant Steven Lazovitz is Ozal's sole director. He is also a director, officer and majority shareholder of SHI. He is a former general and limited partner of Lakewood and former officer of SMN. Lazovitz executed the original management agreement on behalf of Lakewood when he was the general partner.

Lenard Brown and Robert Sall are directors and employees of SHI and former officers of SMN. SMN paid the salaries of Brown, Sall and Lazovitz until they were placed on SHI's payroll. SHI pays their salaries ...


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