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Steven Jecker and Laura Jecker v. Hidden Valley

July 26, 2011


On appeal from the Superior Court of New Jersey, Law Division, Sussex County, Docket No. L-807-07.

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



Submitted April 5, 2011

Before Judges Carchman, Graves and Messano.

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

Following a bench trial, the judge concluded that plaintiffs Steven and Laura Jecker had "failed to prove a cause of action" against defendants Hidden Valley, Inc. (Hidden Valley), Donald Begraft, Daniel Grund and David Baron (collectively, defendants). Plaintiffs now appeal. We have considered the arguments raised in light of the record and applicable legal standards. We affirm for reasons other than those expressed by the trial judge. See El-Sioufi v. St. Peter's Univ. Hosp., 382 N.J. Super. 145, 169 (App. Div. 2005) (noting "that a correct result, even if predicated on an erroneous basis in fact or in law, will not be overturned on appeal").

The litigation had its genesis when plaintiffs filed lawsuits against Hidden Valley and Begraft in 1998.*fn1 Both plaintiffs had been employed by Hidden Valley, a ski resort in Vernon, and alleged that the corporation and Begraft, its sole shareholder and president, breached an employment agreement with Steven, failed to pay Laura sales commissions, and failed to repay loans made to Hidden Valley. The case was tried to a jury and verdicts against Hidden Valley were returned on January 28, 2003.*fn2 Defendants moved for a new trial, and, on December 12, 2003, the judge granted the motion and vacated the verdicts. The parties then agreed to arbitrate their dispute.*fn3

On December 3, 2007, plaintiffs filed this suit alleging that while the underlying dispute was pending, Begraft caused the assets of Hidden Valley to be transferred to Grund, Baron and "certain persons or corporate parties who are partnered with, affiliated with, or controlled by Grund and/or Baron" in violation of "New Jersey's Uniform Fraudulent Transfers Act [(UFTA)]."*fn4 Plaintiffs' complaint sought 1) to set aside the transfers of Hidden Valley's assets; 2) the appointment of a receiver; 3) an accounting; and 4) imposition of a constructive trust.

The case was tried on January 13, 2010. Plaintiffs introduced various documents into evidence and the parties stipulated that plaintiffs' lawsuits were pending when "the sale [of Hidden Valley's assets] took place," and that "there [we]re now no longer sufficient assets belonging to Hidden Valley to satisfy a verdict of $148,000 if that verdict [were] reinstated." Plaintiffs rested without calling any witnesses.

Defendants called Steven as their first witness. The documentary evidence introduced by plaintiffs, or during Steven's testimony, revealed that Hidden Valley entered into a reorganization plan under Chapter 11 of the Bankruptcy Code in 1992. At the time, Begraft was an "80% shareholder" of Hidden Valley, held two mortgages on the property, as well as a "[s]ecured [c]laim, not to exceed $300,000, for financing the

[p]ost-petition operations" of Hidden Valley. The reorganization plan provided that Begraft would continue to maintain his security interests, but that no payments toward principal or interest on the mortgages would be made for two years.

In March 1999, Begraft filed a complaint against Hidden Valley seeking to foreclose on the two mortgages. On April 3, 2007, final judgment was entered in favor of Begraft, the judge finding Begraft was entitled to $6,128,069.80 out of the sale of the mortgaged premises. In July 2007, Begraft entered into a purchase and sale agreement with Hidden Valley Resort Partners, L.L.C. (Resort Partners), of which Grund was a managing member. Pursuant to the terms of the agreement, Begraft assigned his "bidding rights" at the anticipated sheriff's sale to Resort Partners for $2.3 million dollars, $300,000 to be paid at closing, with the balance payable over five years. Begraft agreed to indemnify and hold Resort Partners harmless from plaintiffs' claims. At the same time, Hidden Valley entered into a purchase and sale agreement in which it agreed to convey its good will and personal property to Resort Partners for $100,000.

Begraft was the sole and successful bidder at the sheriff's sale held in August 2007, at which he bid $100.*fn5 On October 16, 2007, Hidden Valley, Begraft, and his related entities assigned "all of the rights and interests necessary to operate and manage what is known as the 'Hidden Valley Resort[']" to Resort Partners and its related entities.*fn6 These transactions in 2007 formed the basis of plaintiffs' UFTA claim.

Steven testified that he was employed by Hidden Valley as its general manager beginning in 1993. Although not specifically engaged to sell Hidden Valley, Steven acknowledged that he and Begraft "always discussed" that possibility. Steven identified a letter he sent to Begraft in December 1997 in which he admitted his goal in taking the position "was to sell the company," and that Hidden Valley "might or might not show profitability in the long run." Steven admitted that he knew Begraft "wanted to sell Hidden Valley and recoup his investments and get out of the ski business." Steven acknowledged that he would earn a commission if the resort were sold, and, that he ...

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