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Deb Associates and Joseph Rolandelli v. Forever Young Medical Daycare

July 5, 2012

DEB ASSOCIATES AND JOSEPH ROLANDELLI, PLAINTIFFS-RESPONDENTS,
v.
FOREVER YOUNG MEDICAL DAYCARE, LLC, DEFENDANT-APPELLANT, AND MARIA KIPNIS, MARINA NABUTOVSKAYA, MARIYA TOLCHEVA, SVETLANA KESTEL, JOSEPH RODRIGUES, ESTATE OF DEAN RICCIARDI, AND SUSAN RICCIARDI, DEFENDANTS.



On appeal from the Superior Court of New Jersey, Chancery Division, General Equity Part, Passaic County, Docket No. C-0112-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 13, 2012

Before Judges Messano and Guadagno.

Defendants Forever Young Medical Daycare LLC (Forever Young), Maria Kipnis, Marina Nabutovskaya, Mariya Tolcheva, Svetlana Kestel, Joseph Rodrigues, the Estate of Dean Ricciardi and Susan Ricciardi (collectively, defendants) appeal from the Law Division's June 14, 2011 order enforcing a settlement reached with plaintiff Deb Associates (Deb) three years earlier, and ordering the immediate retroactive payment of all monies thereunder. We have considered the arguments raised in light of the record and applicable legal standards. We reverse.

I.

This is the second time the matter is before us. The relevant procedural history was set forth in our prior opinion, Deb Associates v. Forever Young Medical Daycare, LLC, No. A-3373-09 (App. Div. Feb. 8, 2011).

On August 10, 2005, [Deb] filed its complaint alleging an interest in Forever Young pursuant to an agreement previously reached with Dean Ricciardi and the subsequent investment of significant sums of money in the senior day care centers operated by defendants. [Deb] sought declaratory relief recognizing its ownership interest in the centers, the creation of equitable and constructive trusts, injunctive relief to block any sale by an individual defendant of his or her interests, compensatory and punitive damages, and counsel fees based upon defendants' intentional and wrongful conduct. . . .

Trial commenced in February 2008 before now-retired judge Joseph J. Riva. The parties reached a settlement that was orally placed on the record on March 3. [Id. at 2-3.]

The settlement provided that Deb would receive a five-percent ownership interest in Forever Young from Tolcheva's share of the business, and equivalent distributions, with the first $400,000 payable as repayment of a loan in monthly installments at an interest rate of five percent. Id. at 3. Deb would also receive a twenty percent ownership interest in a new center Tolcheva was contemplating opening in New Brunswick. Ibid.

The settlement was never reduced to writing despite an exchange of emails and correspondence between the parties' respective attorneys regarding its terms and those of a corollary operating agreement. Id. at 5-6. We are advised that releases were never exchanged. Deb subsequently "moved to enforce the settlement or vacate the dismissal of the litigation and return the matter to the trial calendar." Id. at 7. Central to Deb's argument was the claim that Tolcheva failed to exercise good faith in pursuing the prospective daycare center in New Brunswick. Ibid. Judge Riva held a hearing, took testimony and denied the motion explaining his reasons in a comprehensive written opinion. Id. at 7-8.

In relevant part, Judge Riva determined defendants had not breached the settlement by failing to pursue the new day care facility, which never came to fruition. Id. at 8-9. Deb appealed, and we affirmed substantially for the reasons expressed by Judge Riva. Id. at 9.

Within days of our decision, Deb's counsel sought a check from defendants "for the monthly payments due" under the settlement. Defendants remitted a check in the amount of $3000, the first monthly installment of the loan repayment. Deb's counsel responded on March 16, 2011, noting that defendants were "refusing to make the monthly distribution payments . . . for the period from and after May 1, 2008, notwithstanding the fact that the settlement specifically provide[d] that Deb [wa]s entitled to the economic benefits allotted to it under the Settlement Agreement from and after May 1, 2008." Defense counsel responded on March 21 by rejecting Deb's claim for the immediate payment of all "amounts that would have been paid . . . under the settlement reached in 2008" because Deb had "engaged in lengthy, and plainly frivolous, litigation . . . ."

On March 29, Deb filed a motion in the Law Division to enforce the terms of the settlement. Citing the unexecuted 2008 draft settlement and operating agreements, Deb claimed it was entitled to begin receiving payments by, ...


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