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Kenneth Repetti v. John R. Vitale

September 9, 2011


On appeal from the Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-508-08.

Per curiam.


Argued May 18, 2011

Before Judges Lihotz and J. N. Harris.

Plaintiff Kenneth Repetti appeals from a July 14, 2010 order granting judgment for defendants and dismissing his second amended complaint with prejudice. Plaintiff also appeals from the order denying his request for reconsideration.

Plaintiff filed a single count complaint alleging defendants Dr. John R. Vitale, his wife Nina Vitale, various corporate entities owned by the couple, including Dr. Vitale's dental practice titled John R. Vitale at Port Liberte, P.A., John R. Vitale, D.M.D., P.A. (a defunct professional association) and Vital Cash, L.L.C. (an ATM machine business owned by Nina and their two sons) entered into a fraudulent scheme or conspiracy to prevent assets from being attached in satisfaction of two judgments plaintiff had obtained against Dr. Vitale. The parties agreed to a trial "on the papers," that is, plaintiff submitted his case through documentation; thereafter, defendants were deemed to have moved for an involuntary dismissal. The court granted defendants' motion, concluding plaintiff failed to state a claim for relief. On appeal, plaintiff argues the trial court erred in its legal conclusions. We disagree and affirm.

In 1998, plaintiff lent Dr. Vitale $80,000 and $100,000, with the expectation of repayment along with twenty percent interest. In 2000, when Dr. Vitale defaulted, plaintiff sued and recovered two judgments in the United States District Court for the Southern District of New York.

In his pursuit of satisfaction of these judgments, plaintiff initiated this action on April 2, 2008. Plaintiff's second amended eight-paragraph complaint*fn1 stated Dr. Vitale and Nina engaged in a scheme and conspiracy to borrow money [] from other persons based on the credit and income of defendant [Dr.] Vitale, and with those borrowed mon[ies] acquired assets and diverted those assets and a substantial portion of the income generated from his dental practice to defendant, Nina Vitale, by placing those substantial assets in her name and paying her a salary out of [a] portion [of] his income.

According to the complaint, as a direct result of the fraudulent scheme and conspiracy aforesaid, plaintiff has been unable to collect on his judgment since legal title to said assets, such as [the family residence located on] Old Chester Road, Gladstone, New Jersey, the shares of stock of John R. Vitale at Port Liberte, a substantial portion of the income from the dental practice of Dr. John R. Vitale, and a one- third interest in Vital Cash, LLC, have been transferred to defendant, Nina Vitale.

In a ruling on defendants' pre-trial motion to dismiss for failure to state a claim for relief, the motion judge concluded that a liberal reading of these assertions, Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 772 (1989), suggested claims for conspiracy to divert assets, Banco Popular, N.A. v. Gandi, 184 N.J. 161, 175 (2005), and conspiracy to commit fraud implicating the New Jersey Uniform Fraudulent Transfer Act (UFTA), N.J.S.A. 25:2-25.

On September 23, 2008, defendants filed an answer to the second amended complaint and itemized affirmative defenses believed to warrant dismissal of the action. These included plaintiff's failure to state a claim upon which relief could be granted and that the action was barred by the applicable statute of limitations. On January 22, 2009, plaintiff moved for summary judgment, which was met by defendants' cross-motion for summary judgment. Judge Ciccone was assigned to review the matter and denied the cross-motions, finding disputed issues of material fact were presented. At the conclusion of discovery, plaintiff reasserted his prior claims, moving for summary judgment, prompting defendants to respond with a cross-motion for summary judgment. Judge Ciccone denied the cross-motions, except she concluded any claim under the UFTA was time-barred and, therefore, dismissed. The judge made clear plaintiff's common law claims for fraud were not similarly barred.*fn2

The action was assigned for trial. On December 17, 2009, the parties stipulated plaintiff would submit his case, consisting of documentary evidence, deposition transcripts and a legal memorandum, "on the papers." The parties agreed that upon plaintiff's submission, "[d]efendants shall be deemed to have moved for judgment in [their] favor . . ., dismissing the [s]econd [a]mended [c]omplaint, pursuant to R[ule] 4:40-1." The stipulation provided for submission of "rebuttal" evidence and the court's final disposition.

Plaintiff marked into evidence a list of twenty documents, all of which previously had been submitted in support of the motion to dismiss. These included his judgments, excerpts from depositions of Dr. Vitale and Nina, deeds, tax returns, loans by Dr. Vitale on behalf of the corporate defendants to other creditors and corporate status reports.

In his deposition, Dr. Vitale explained that in 1996, following entry of his Chapter 7 bankruptcy discharge, he borrowed $80,000 from Raymond Rothschild using his newly incorporated dental practice as collateral. He gave the money to his brother Anthony, who used it as a down payment and obtained a mortgage to buy a residence for Dr. Vitale and Nina. Nina believed the purchase price was $429,000. Three and one-half years later, Anthony transferred the realty to Nina. The stated consideration in the May 2000 deed was $1.00; however, Nina obtained a mortgage with Washington Mutual to satisfy Anthony's mortgage. The loan documents are not in the record so it is unclear what representations were made to support the borrowing. The record does include a January 14, 2004 Form HUD-1 from Nina's mortgage refinance of the same realty, reflecting satisfaction of Washington Mutual's obligation totaling $397,151.87. Further, the condominium in which Dr. Vitale's dental practice operated was transferred to Nina. This realty was encumbered by two personal loans in the principal amount of $500,000. Also, in 2004, Dr. Vitale borrowed ...

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