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Jpmorgan Chase Bank, N.A v. Jeffco Cinnaminson Corporation D/B/A Stan Esposito Fine Cars and Paul T. andrews

March 27, 2012


On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-002840-09.

Per curiam.


Submitted March 7, 2012

Before Judges J. N. Harris and Haas.

This appeal concerns a national bank's alleged imperfect release of security interests in two high performance automobiles -- a Ford GT40 (the Ford GT) and a Ferrari Scaglietti (the Ferrari) -- held as collateral, without first waiting for two payoff checks to clear. Plaintiff JPMorgan Chase Bank, N.A. (JPMorgan) irreversibly released its liens and returned the title papers for the automobiles to the owner's consignee, only to learn just days later that both checks were dishonored for insufficient funds. Defendants Jeffco Cinnaminson Corporation (Jeffco) and Paul T. Andrews claim that JPMorgan's precipitous conduct resulted in the impairment of collateral, which requires the discharge of their obligations to the bank.

Jeffco and Andrews appeal from the December 10, 2010 judgment entered in favor of JPMorgan for $305,215.33 plus $40,822.52 in reallocated attorneys fees and costs. We reverse and remand for further proceedings.



We begin with familiar principles of law:

Our review of the meaning of a statute is de novo, and we owe no deference to the interpretative conclusions reached by the trial court . . . . Zabilowicz v. Kelsey, 200 N.J. 507, 512-13 (2009); see also Manalapan Realty, L.P. v. Twp. Comm., 140 N.J. 366, 378 (1995). In determining whether summary judgment was properly granted based on the record, we apply the same standard governing the trial court --we view the evidence in the light most favorable to the non-moving party. See Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995); see also R. 4:46-2(c). [Wilson ex rel. Manzano v. City of Jersey City, ___ N.J. ___, ___ (2012)(slip op. at 5).]

Here, the Law Division granted summary judgment against Jeffco and Andrews, the non-moving parties. With these principles in mind, we turn to the facts, viewing them in the light most favorable to those defendants.


In late 2005, Jeffco and Andrews applied to JPMorgan, through the Jim Golden Ford-Lincoln-Mercury car dealership, for a loan to pay for Jeffco's acquisition of the Ford GT. On December 6, 2005, Jeffco and Andrews signed a document entitled, "Promissory Note and Security Agreement -- Consumer Paper," in favor of JPMorgan in the amount of $177,373, which referred to Andrews as a "co-borrower." In a separate disclosure entitled, "Cosigner Notice," Andrews was advised that he was "being asked to guarantee [the] debt," and he signed the document above a line labeled, "Cosigner's Signature."

In July 2006, a similar transaction occurred involving the Ferrari. On July 27, 2006, Jeffco and Andrews signed a document entitled, "New Jersey Retail Installment Contract," in favor of Ferrari Maserati of Central N.J. agreeing, as "Buyer and Co-Buyer," to pay a total of $255,507 for the Ferrari. Andrews again signed a separate "Cosigner Notice," which contained the identical boilerplate language as the December 2005 disclosure. The retail installment sale contract evidenced by these instruments was assigned to JPMorgan.

In due course, both automobiles were entrusted to automobile dealer Alfred Sciubba for the purpose of finding a buyer for each vehicle. Andrews and Sciubba had known each other for several years and previously engaged in similar arrangements. The record does not contain any writings evidencing the nature of the bailment and it appears that Sciubba and Andrews transacted business mostly through oral handshake agreements. Sciubba owned and operated a specialty car business at a number of locations under the trade name Auto Toy Store, which, among other things, sold motor vehicles on consignment.

At his deposition, Sciubba testified that he regularly accepted consignments from Andrews's personal stock of automobiles, but that the placements of the Ford GT and Ferrari were not true consignments because the vehicles were owned by Jeffco, and Sciubba claimed to have a part ownership interest in Jeffco. Andrews disputes this. However, according to Sciubba, because he was tasked to sell his own automobiles -- albeit titled in the name of Jeffco -- these were not consignment transactions, at least as far as he was concerned.

In general, when Sciubba (or his staff) sold a consigned automobile, it was his responsibility, through the Auto Toy Store, to obtain clear title for the buyer. If the automobile had been financed and there was a lien on the title, it was Sciubba's responsibility to forward the unpaid balance due on the indebtedness to the creditor, usually a bank or credit union. In return, the creditor endorsed the lien paid and returned the title papers to Sciubba, who would then obtain new title papers and forward them to the buyer. ...

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