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Cando A. Jovanov v. Vincent Moschillo

November 15, 2012


On appeal from Superior Court of New Jersey, Law Division, Passaic County, Docket No. L-4450-10.

Per curiam.


Argued January 25, 2012

Before Judges Graves and Koblitz.

Plaintiff Cando Jovanov appeals from a January 28, 2011 order granting summary judgment to defendant Vincent Moschillo.

The trial court concluded the action commenced by Jovanov was barred by the entire controversy doctrine. We agree and affirm.

Plaintiff Jovanov, defendant Vincent Moschillo (Vincent),*fn1 and his brother Mark Moschillo (Mark) were business associates in connection with the Sunrise Gentlemen's Club (the Club), the sole asset of the Linvas Corporation (Linvas). After a breakdown in communication, Mark commenced an action against Jovanov on September 16, 2008 (the prior action), alleging improper conduct by Jovanov in violation of the Oppressed Shareholder Statute, N.J.S.A. 12A:12-7. Mark stated in his complaint that he owned fifty percent of Linvas and requested that the trial court award him Jovanov's one-half interest.

In a counterclaim filed against Mark, Jovanov asserted that he was the sole owner of Linvas. According to Jovanov, Mark's claim of an ownership interest was the result of a forged contract. Jovanov further stated that a power of attorney given to Mark and Vincent dated December 13, 2006, "was not intended to empower [them] to transfer any ownership interest in the corporation and/or the Club." Jovanov claimed that Mark "and/or his counterpart" Vincent "forged" his signature on a contract for the sale of fifty percent of the stock of Linvas, and that Mark "and his counterpart" Vincent used his absence to "usurp his authority" and to retain "the bulk of business profits for their personal gain." Jovanov also asserted that he did not receive the proceeds of a check from a mortgage loan closing on August 17, 2007. Jovanov did not name any additional interested parties in his counterclaim.*fn2

The prior action was tried for eight days and involved testimony from fourteen witnesses. Although Vincent was not a party to the litigation, he was an important witness. Both sides acknowledged that Vincent functioned as the primary manager of the Club for several months in 2007.

The proofs in the prior action addressed the mortgage loan closing, and established that Mark had loaned Jovanov $125,000 "to extricate himself from litigation with his prior business associate." On December 13, 2006, Jovanov executed a power of attorney granting authority to Vincent and Mark to carry out "any transaction pertaining to the management of Sunrise Cocktail Lounge owned by Linvas." Jovanov executed a second power of attorney on August 13, 2007, authorizing Vincent to attend the August 17, 2007 closing of the mortgage loan and "to sign on [his] behalf any and all loan documents, including, but not limited to Notes, Mortgages, [and] Security Agreements . . . in reference to [the] loan."

At the closing, Jovanov's attorneys issued a check made payable to Jovanov in the amount of $62,136.78 representing the net proceeds of the loan and handed it to Vincent. Vincent deposited the check into the account of "Cando Jovanov DBA Sunrise Gentlemens Club." During the trial, Vincent testified that he deposited the check at Jovanov's request. Moreover, the cancelled check confirmed the deposit to Jovanov's account occurred on August 20, 2007.

At the conclusion of the trial, the court ordered Jovanov to pay Mark "$25,000 to terminate any and all interest Mark Moschillo may have in Linvas," $28,775.92 for "renovations" and "rehabilitation of the liquor license," and $17,000 "for five months of management fees earned by him and/or his [brother] Vincent." Jovanov appealed the decision and we remanded the matter to the trial court for further proceedings. Moschillo v. Jovanov, No. A-3500-09 (App. Div. Dec. 29, 2010). On July 22, 2011, the remand court determined the documents that Mark relied on to establish his ownership interest in Linvas were authentic, and the court ordered Jovanov to sell his shares to Mark.

While Jovanov's appeal was pending, he initiated this lawsuit against Vincent on September 7, 2010. This case arises from the same transactional facts and circumstances that were present in the prior action. Jovanov alleged in count one of his complaint that Vincent "failed and refused" to provide him the mortgage loan closing check in the amount of $62,136.78. In count two, Jovanov sought treble damages in the amount of $186,410.34 and attorney's fees "pursuant to the Fraud Statute applicable in this case." Vincent filed an answer and thereafter moved for summary judgment on the grounds that Jovanov's complaint was barred by the entire controversy doctrine and collateral estoppel. The trial court granted the motion after hearing oral argument.

In an oral decision on January 28, 2011, the trial court stated, "The essential consideration [in an entire controversy case] is whether distinct claims are aspects of a single larger controversy because they arise from inter-related facts." The court determined the check for $62,136.78 was a part of the "underlying transaction" that was resolved in the initial ...

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