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Mskp Oak Grove, LLC v. Carol Venuto

August 8, 2011

MSKP OAK GROVE, LLC,
PLAINTIFF,
v.
CAROL VENUTO, ET AL.,
DEFENDANTS.



The opinion of the court was delivered by: Honorable Jerome B. Simandle

OPINION

SIMANDLE, District Judge:

I.INTRODUCTION

This matter comes before the Court on Defendants‟ motion to dismiss for failure to state a claim pursuant to Rule 12(b)(6) and for failure to join a necessary party under Rule 12(b)(7) and on Defendants‟ motion for more definite statement, pursuant to Rule 12(e). [Docket Item 5.] Plaintiff, MSKP Oak Grove, LLC, filed a Complaint seeking recovery through three theories under New Jersey state law: fraudulent conveyance, improper distribution of corporate assets, and unjust enrichment. [Docket Item 1.] Each of these theories is based on Plaintiff‟s allegation that a New Jersey Corporation, Hollywood Tanning Systems, Inc., fraudulently and improperly distributed assets to its shareholders, Ralph A. Venuto, Sr., now deceased, and Defendants Carol Venuto, Ralph A. Venuto, Jr., Carol Rebbecchi, and Richard P. Venuto. Consequently, Plaintiff alleges Hollywood failed to make payment on a previous judgment entered in Plaintiff‟s favor against Hollywood in the amount of $411,573.45.

Defendants now move to dismiss the Complaint pursuant to Fed. R. Civ. P. 12(b)(6) for failure to state a claim upon which relief may be granted, arguing that the Complaint fails to meet federal pleading standards under both Rule 8(a) and Rule 9(b). Defendants also move for dismissal under Rule 12(b)(7) for failure to join a necessary party, alleging that Plaintiff‟s failure to name Hollywood Tanning Systems, the transferor of the assets in question, as a defendant in the Complaint is a material deficiency. Additionally, the parties submitted supplemental briefing on a recently-decided case involving many of the same Defendants as the instant action, AMC v. HTS, et al., No. L-5169-10 (N.J. Sup.Ct. L. Div. June 10, 2011). [Docket Items 9 & 10].

For the reasons set forth below, the Court will grant Defendants‟ motion to dismiss without prejudice for failure to state a claim. Because Defendants‟ motion to dismiss the Complaint is granted on Fed. R. Civ. P. 12(b)(6) grounds, the Court need not address Defendants‟ motion to dismiss under Rule 12(b)(7) or for a more definite statement pursuant to Rule 12(e).

II.BACKGROUND

Factual material in the pleadings is limited; however, Plaintiff‟s factual allegations are as follows:

Plaintiff, MSKP Oak Grove, LLC, is a limited liability company incorporated in Delaware. Compl. ¶1. Defendants are the shareholders of Hollywood Tanning Systems, Inc., a New Jersey corporation. Id. at ¶11.

On May 19, 2009, a judgment unrelated to claims alleged in the present case was entered against Hollywood Tanning Systems, a non-party in the present case, and in favor of MSKP Oak Grove, LLC in the amount of $411,573.45. Id. at ¶6. On or about July 30, 2009, the Clerk of the Superior Court of New Jersey recorded this judgment. Id. at ¶7. As of yet, no portion of that judgment has been paid. Id. at ¶8.

At some time unspecified in the Complaint, Hollywood Tanning Systems distributed its assets to its shareholders, named as Defendants Carol F. Venuto, individually and as executor of the Estate of Ralph A. Venuto Sr., deceased, Ralph A. Venuto Jr., Carol Rebbecchi, and Richard P. Venuto. Id. at ¶¶11-12. Plaintiff alleges that this distribution of Hollywood Tanning Systems‟ assets to its shareholders constituted fraudulent conveyance and was "fraudulent within the meaning of N.J.S.A. 25:2-25 and N.J.S.A. 25:2-27." Id. at ¶12. The cited sections of the N.J. Stat. Ann. are subsections of the New Jersey Uniform Fraudulent Transfer Act. In addition, Plaintiff claims this distribution of assets to shareholders "without paying or providing for the claim of plaintiff" constituted improper distribution of corporate assets in violation of N.J. Stat. Ann. § 14A:14-21(1). Id. at ¶¶13-14. Finally, Plaintiff alleges that "Defendants will be unjustly enriched if they are permitted to retain the assets of Hollywood Tanning Systems, Inc. which should have been but were not set aside for creditors of Hollywood Tanning Systems, Inc." Id. at ¶16.

III.DISCUSSION

A.Standard of Review

Pursuant to Rule 8(a)(2), a complaint need only contain "a short and plain statement of the claim showing that the pleader is entitled to relief." Specific facts are not required, and "the statement need only "give the defendant fair notice of what the . . . claim is and the grounds upon which it rests.‟" Ericson v. Pardus, 551 U.S. 89, 93 (2007) (citations omitted). However, while a complaint is not required to contain detailed factual allegations, the plaintiff must provide the "grounds" of his ...


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