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MSKP Oak Grove, LLC v. Venuto

United States District Court, D. New Jersey

May 5, 2017

MSKP OAK GROVE, LLC, Plaintiff,
v.
CAROL VENUTO, individually and as executrix of the Estate of RALPH A. VENUTO, Sr., et al., Defendants.

          Robert A. Vort, Esq., Joseph A. Molinaro, Esq., Attorneys for Plaintiff

          Dimitri Luke Karapelou, Esq. Law Offices of Dimitri l. Karapelou, LLC Attorney for Defendants

          OPINION

          JEROME B. SIMANDLE Chief U.S. District Judge.

         I. INTRODUCTION

         This case comes before the Court on motions in limine filed by both parties [Docket Items 232 & 233] in advance of a nonjury trial scheduled for May 15, 2017. The Court finds as follows.

         II. BACKGROUND

         For the purposes of the instant motion, it suffices to recount the following. In this action, Plaintiff MSKP Oak Grove, LLC (“MSKP”) asserts claims under the New Jersey Uniform Fraudulent Transfer Act, N.J.S.A. § 25:2-20 et seq. (“NJUFTA”), arising from an allegedly fraudulent transfer of assets through which Defendants intended to avoid payment to certain creditors, including Plaintiff. Plaintiff is a commercial landlord to which Hollywood Tanning Systems, Inc. (“HTS”) is indebted by a 2009 judgment in the amount of $411, 573.45. Plaintiff alleges that following an asset purchase agreement with another corporation, Tan Holdings, LLC, in 2007, HTS fraudulently distributed $23.9 million to its shareholders, Defendants Carol and Ralph A. Venuto, Sr., [1]Ralph A. Venuto, Jr., Carol Rebbecchi, and Richard P. Venuto (“the Shareholders”) on June 22, 2007, and rendered HTS without sufficient assets to satisfy future obligations to creditors, including HTS's obligation to Plaintiff relating to a defaulted lease agreement.

         The parties now move for orders excluding, or striking their opponents' objections to, certain of the trial exhibits and witnesses identified in the Joint Final Pretrial Order, signed by Magistrate Judge Joel Schneider on January 12, 2017. [Docket Item 226.] These motions are now fully briefed, and supplemented by a joint stipulation of certain facts filed on April 19, 2017. [Docket Item 248.]

         III. STANDARD OF REVIEW

         This Court may hear the present motions in limine because it has the inherent authority to manage cases brought before it. Luce v. United States, 469 U.S. 38, 40 n. 2 (1984). An “in limine ruling on evidence issues is a procedure which should, in the trial court's discretion, be used in appropriate cases.” In re Japanese Elec. Prods. Antitrust Litig., 723 F.2d 238, 260 (3d Cir. 1983), rev'd on other grounds sub nom., Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574 (1986). One such appropriate case is where the court can shield the jury from unfairly prejudicial or irrelevant evidence. See United States v. Romano, 849 F.2d 812, 815 (3d Cir. 1988). The in limine motion then fosters efficiency for the court and for counsel by preventing needless argument at trial. New Jersey Civil Procedure § 16-2:2 (citing Bradley v. Pittsburgh Bd. of Educ, 913 F.2d 1064, 1069 (3d Cir. 1990)). Although pretrial motions in limine are also permissible in a non-jury case, their utility is diminished because the judge determining the admissibility of evidence is also the fact finder, and thus many such objections can be deferred until trial.

         IV. DISCUSSION

         At trial, Plaintiff will be required to prove by clear and convincing evidence the various essential elements of its NJUFTA claims, [2] including that the Shareholders intended to hinder, delay, or defraud MSKP through the Shareholders' distribution of most proceeds from the June, 2007 Tan Holdings transaction to themselves. Plaintiff seeks to do this, in part, by introducing testimony and documentary evidence of Defendants' behavior towards other creditors and in other lawsuits, specifically in connection with suits against HTS by Hadis Nafar, GS Partners, HT of Highlands, and Rowan Petroleum Properties, LLC; and against Hollywood Hands by Warminster Group, L.P.; and against Ralph Venuto, Sr., and other companies he owned. Plaintiff also seeks to use much of this evidence to prove that HTS was insolvent and/or maintained inadequate cash reserves in relation to its business between 2006 and 2010. Also contested in the instant motions are documents relating to the Estate of Ralph Venuto, Sr.; the assets of HTS; Defendants' rebuttal expert report by William Pederson and other documentary evidence from the Orchard Mall case; the admissibility of case law and filings from this case; and a few miscellaneous documents.[3]The parties have supplemented their briefing record with a stipulation of facts [Docket Item 248] by which the parties agree, inter alia, that all of the documents which Plaintiff intends to introduce are authentic and that Defendants reserve their right to challenge their relevance at trial.

         1. Other lawsuits against HTS

         Plaintiff seeks to introduce testimony and documentary evidence regarding a number of other lawsuits by creditors against HTS, including those involving Hadis Nafar, GS Partners, HT of Highlands Ranch, and Rowen Petroleum in the state and federal courts of New Jersey. Plaintiff argues that this evidence will be relevant to prove (i) that HTS was insolvent and maintained inadequate cash reserves, and (ii) that HTS intended to hinder, delay, or defraud creditors by “employing a scorched earth litigation strategy” against all its creditors. Defendants object to this evidence on the grounds that it is irrelevant and that much of it is hearsay. Defendants seek to exclude Plaintiff's Exhibits 16-19, 37-58 & 71.

         At the outset, the Court notes that it appears that the parties have resolved their dispute over whether Plaintiff can call Mr. Federman or a representative from Travelers Insurance. The new stipulations of fact include agreements that the documents which each would be called to authenticate - a lease signed by Ralph Venuto, Sr. and an insurance policy issued to HTS, respectively - are authentic, obviating the need for their testimony at trial. Accordingly, the Court will deny Plaintiff's motion as moot to the extent that it seeks an order overruling Defendants' objections to Mr. Federman and the Travelers Insurance representative.

         Because the parties have framed their arguments about other case evidence in broad terms, the Court too will address the issues ranging from the general to the specific. Under the Federal Rules of Evidence, evidence is only admissible to the extent that it is relevant. Fed.R.Evid. 402. The Rules define relevant evidence as “evidence having any tendency to make the existence of any fact that is of consequence to the determination of the action more probable or less probable than it would be without the evidence.” Fed.R.Evid. 401. This sets a low bar for admissibility, subject to the other Rules of Evidence. United States v. Starnes, 583 F.3d 196, 214 (3d Cir. 2009). However, even where evidence is relevant, it may be excluded where “its probative value is substantially outweighed by a danger of . . . unfair prejudice, confusing the issues, . . . undue delay, wasting time, or needlessly presenting cumulative evidence.” Fed.R.Evid. 403.

         This Court has already determined that evidence of Defendants' conduct in this and other litigations is not probative of their “intent to hinder or delay” creditors within the meaning of the NJUFTA; all parties are bound by the law of the case holding that “what is relevant to Plaintiff's success . . . is only proof of Defendants' intent to defraud or delay creditors by means of a fraudulent conveyance, in this case the shareholder distribution, and not any other conduct.” Opinion dated June 29, 2016 [Docket Item 215] at 31 n. 7. Nevertheless, some items of evidence of these other suits may be probative of HTS's financial condition and whether HTS retained assets after the shareholder distribution that were “unreasonably small in ...


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