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Benjamin v. Garden Operations Corp.

Superior Court of New Jersey, Appellate Division

December 13, 2013

ROBERT BENJAMIN AND DLC SERVICES CORP., Plaintiffs-Respondents,
v.
GARDEN OPERATIONS CORP., GARDEN OPERATIONS LIMITED PARTNERSHIP, THIRD TORO FAMILY LIMITED PARTNERSHIP, HELMER TORO, and H&H BAGELS, Defendants-Appellants, and AMY TORO, Defendant.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted September 17, 2013

On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5446-09.

Miller, Meyerson & Corbo, attorneys for appellants (Gerald D. Miller, of counsel and on the briefs; Savio D. Figaro, on the briefs).

Friedrich & Friedrich, LLC, attorneys for respondents (Jay Joseph Friedrich, on the brief).

Before Judges Reisner, Alvarez and Ostrer.

PER CURIAM

Defendants Garden Operations Corporation, Garden Operations Realty Limited Partnership (GOR), Third Toro Family Limited Partnership (Third Toro), [1] Helmer Toro (Toro), H&H Bagels and Sixth Toro Family Limited Partnership (Sixth Toro LP), appeal four orders: an April 15, 2011 order denying defendants' motion for summary judgment; a June 10, 2011 order granting plaintiffs Robert Benjamin and DLC Services Corp.'s (DLC) cross-motion to strike defendants' answer and counterclaims and suppress their affirmative defenses; the August 5, 2011 order denying reconsideration of the June 10, 2011 order; and the December 2, 2011 final judgment holding Toro personally liable for certain outstanding sums due plaintiffs. For the reasons that follow, we affirm.

Preliminarily, we note that multiple motions were made in this case, decided by several judges, and defendants have not provided the complete record regarding these applications. While the appeal was pending, defendants failed to comply with several requests for items that were missing from their appendix, in violation of Rule 2:6, and which were necessary to our consideration of the issues raised on appeal.

In any event, for twenty-five years, Benjamin, DLC's principal, negotiated leases with Toro for bakery equipment used in the production of bagels. When Toro and his various business entities failed to make payment on account of twenty-two separate leases, Benjamin and DLC filed suit. After a two-day proof hearing that ended on December 2, 2011, judgments were entered as follows: $1, 280, 047 against Sixth Toro LP;[2] $131, 892 against GOR;[3] $1, 411, 939 against Toro; and, against all active defendants, $163, 037.48 in attorney's fees.[4]

The dismissal with prejudice of defendants' pleadings resulted from their failure to comply with discovery orders. Despite the dismissal, Toro, by consent, was permitted to fully participate in the proof hearing, effectively converting it to something akin to a trial. Toro was permitted to cross-examine Benjamin, he testified on defendants' behalf, and moved documents into evidence.

At the proof hearing, the parties established that when the leases at issue were first signed, Sixth Toro LP operated a retail bagel store in New York. It leased its equipment from DLC, and sold its merchandise under the trade name, "H&H Bagels."

It was not disputed that twenty-one of the twenty-two leases in dispute, all dated between December 2005 and June 2009, were between DLC as lessor and Sixth Toro LP as lessee. The twenty-second lease was between DLC and GOR.

Each lease consisted of the actual rental agreement, a schedule of equipment, an option to purchase rider, and a bill of sale. Every agreement included this choice of law provision:

25. This lease shall be construed under the laws of the State of New York and shall not become effective until accepted by LESSOR at its above office and upon such acceptance shall, subject to Paragraph 16 thereof, inure to and bind the parties, their successors, legal representatives and assigns. No provision hereof which may be construed as unenforceable shall in any way invalidate any other provision hereof, all of which shall remain in full force and effect.

The leases consist of three-page preprinted forms, bearing signature lines at the end of the document for the "lessor" and "lessee." A signature line is stamped on the bottom of the first page as follows: LESSOR: DLC SERVICES CORP LESSEE: THE SIXTH TORO FAMILY LTD PTR

by: Robert L Benjamin, by: Sixth Toro Corp, GP Helmer Toro, Pres Pres The twenty-second lease provides: LESSOR: DLC SERVICES CORP LESSEE:
by: Robert L Benjamin, by: GARD OPER CORP, GP Helmer Toro, Pres Pres

Generally, following the first three pages of each lease, a schedule of the items covered by the lease in letter form was inserted between the first three pages and the guaranty. Following that is an additional page containing a "guaranty, " which calls for signature by either Sixth Toro Corp., or GOR, and "Helmer Toro, President" of the relevant entity and "INDIVIDUALLY and as an OFFICER of THE SIXTH TORO FAMILY LIMITED PARTNERSHIP." The twenty-second lease contains a guaranty which calls for signature in a slightly modified fashion: "GARD OPER CORP GP, [GOR] Helmer Toro, President, AND INDIVIDUALLY." To illustrate, the guaranty for Lease No. 71217 states:

GUARANTY

This guarantee is made a part of the Lease Agreement between
DLC SERVICES CORP., AS LESSOR AND THE SIXTH TORO FAMILY LIMITED PARTNERSHIP, AS LESSEE, dated
02/01/07
In consideration of the Leasing of Equipment listed in the face of the Lease Agreement or upon any Schedule Attached Thereto of a Lease Agreement No. 71217, to the above named:
THE SIXTH TORO FAMILY LIMITED PARTNERSHIP
We (I) hereby guarantee the punctual payment of the rental stipulated and the performance of the covenants set forth in the foregoing to ...

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