Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Thor 725 8TH Avenue LLC v. Goonetilleke

United States District Court, D. New Jersey

October 17, 2019

THOR 725 8TH AVENUE LLC, Plaintiff,


          Hon. Madeline Cox Arleo, United States District Judge

         THIS MATTER comes before the Court by way of Plaintiff Thor 725 8th Avenue LLC's (“Plaintiff”) Motion for Summary Judgment against Defendants Shanthioa (also known as Martin) Goonetilleke (“Martin”), Marie Goonetilleke (“Marie”), Jennifer Goonetilleke (“Jennifer”) and Brooke Gooetilleke (“Brooke”), [1] ECF No. 64. Defendants Jennifer and Brooke (together, the “Daughters”) cross move for summary judgment against Plaintiff, and on their crossclaims against Martin and Marie. ECF No. 71. For the reasons that follow, Plaintiff's motion is granted, and the Daughters' motion is denied.

         I. Undisputed Facts

         This is an action to set aside the transfer of a family home to the children of judgment debtors the day after the judgment was rendered.

         Martin is the former lessee of commercial premises owned by Plaintiff, located at 725 8thAvenue in Manhattan, New York. To obtain favorable lease terms, he and Marie executed a personal guaranty in favor of Plaintiff. Def.'s Statement of Material Facts (“SOMF”) ¶¶ 1-2, ECF No. 74.3. In 2014, Plaintiff sued Martin and Marie in the United States District Court for the Southern District of New York, seeking damages for breach of the personal guaranty. Id. On October 2, 2015, that District Court granted Plaintiff's motion for summary judgment and awarded Plaintiff $2, 067, 288.99 in damages. Id. ¶ 12.

         On October 3, 2015, Martin and Marie entered into a contract to sell their home, a single-family residence located at 278 McCloud Drive in Fort Lee, New Jersey (the “House”) to their Daughters. Id. ¶ 13.[2] The contract recited a purchase price of $440, 000, of which $185, 000 was a “gift of equity.” Id. ¶¶ 16, 23. Marie unilaterally determined the purchase price of the House. Id. ¶¶ 14-15. In connection with this transfer, Jennifer applied for a mortgage and obtained two appraisals of the House, one dated October 22, 2015 valuing it at $730, 000, the second dated November 20, 2015, valuing it at $670, 000. Id. ¶¶ 18-20.

         On Friday, December 18, 2015, the New York District Court entered final judgment of $2, 505, 325.73, including attorney's fees and interest, against Martin and Marie. Id. ¶ 21. The following Monday, December 21, 2015, the sale of the House to Jennifer and Brooke closed. Id. ¶ 22. Martin and Marie continued to live in the House after the transfer.[3] Id. ¶ 28. Martin and Marie admit that they were insolvent at the time they sold the House to Jennifer and Brooke. Ans. ¶ 24, ECF No. 10. Jennifer and Brooke were unaware of the New York litigation at the time of the transfer. Pl.'s Response to Daughters' SOMF ¶ 26, ECF No. 77.[4] Prior to the transfer, Jennifer made some mortgage payments on behalf of her parents. Def's SOMF ¶ 27. Brooke also testified that she “had known that our parents had lost all their money. That there was nothing left.”[5]Id. ¶ 26.

         II. Procedural History

         Plaintiff docketed the New York District Court judgment in the Superior Court of New Jersey on February 4, 2016. Id. ¶ 30. On January 17, 2017, Plaintiff brought this fraudulent conveyance action against all Defendants, asserting that the transfer of the Home was fraudulent: (1) in violation of N.J.S.A. § 25:2-25, because it was made with “actual intent to hinder, delay or defraud” (Count I), Compl. ¶¶ 29-33, ECF No. 1; (2) in violation of N.J.S.A. § 25-2:27, as Plaintiff was a present creditor at the time of the transaction (Count II), Compl. ¶¶ 34-37; and (3) in violation of N.J.S.A. § 25:2-3, the general fraudulent conveyance provision (Count III), Compl. ¶¶ 38-39. Plaintiff seeks a judgment voiding and setting aside the transfer of the House, a levy of execution against the House, and an award of interest, costs and attorney's fees. Id. ¶¶ 33, 37, 39.

         All Defendants answered the Complaint on March 9, 2017. ECF No. 10. On August 4, 2017, the Daughters obtained separate counsel from their parents, ECF No. 18, and on December 14, 2017, the Daughters filed eight crossclaims against their parents, Crossclaims, ECF No. 34. On January 17, 2018, the Daughters also brought a counterclaim against Plaintiff, asserting a single quite title cause of action. ECF No. 42.

         The Daughters allege that their maternal grandmother wanted to provide them with financial assistance, including a desire to “set aside money for wedding dowries.” Crossclaims ¶¶ 4-6. Beginning in 2003, and until her death in 2008, they allege that she regularly sent Martin money for that purpose. Id. ¶¶ 7, 9. She allegedly sent more than $1.1 million in total. Id. ¶ 8. Rather than set the money aside, the Daughters allege that “Martin and/or Marie withdrew the funds and utilized them for their own purposes.” Id. ¶ 11.

         As against their parents, Jennifer and Brooke assert crossclaims of (1) wasting another's property or inheritance (Crossclaim I), id. ¶¶ 31-34; (2) negligence (Crossclaim II), id. ¶¶ 35-38; (3) common law fraud (Crossclaim III), id. ¶¶ 39-43; (4) common law conversion (Crossclaim IV), id. ¶¶ 44-48; (5) breach of contract (Crossclaim V), id. ¶¶ 49-52; (6) breach of fiduciary duty (Crossclaim VI), id. ¶¶53-59; (7) estoppel (Crossclaim VII), id. ¶¶ 60-64; and (8) a claim for indemnification and contribution under the New Jersey Joint Tortfeasors Contribution Act, N.J.S.A. § 2A:53A, et seq. (Crossclaim VIII), id. ¶¶ 65-66. The Daughters seek compensatory and punitive damages, interest, costs and attorney's fees.

         Martin and Marie answered the crossclaims on March 19, 2018, largely admitting the factual allegations against them, although Marie denied that she withdrew any of the grandmother's funds. Ans. to Crossclaims ¶¶ 1-5, ECF No. 48. Martin admitted all allegations in Crossclaims I, II, IV, and VI, Marie admitted all allegations in Crossclaims II and VI. Id. ¶¶ 6-9, 15-18, 24-28.

         Plaintiff filed its motion for summary judgment on February 15, 2019, seeking judgment on all counts of its Complaint. ECF No. 64. The Daughters sought summary judgment on their crossclaims and counterclaim the same day. ECF No. 71. As against their parents, the Daughters only seek judgment on Crossclaims I, II, IV and VI against Martin, and on Crossclaims II and VI against Marie. Def. Mem. at 6, ECF No. 71.1.

         III. Legal Standard

         Pursuant to Federal Rule of Civil Procedure 56(c), a motion for summary judgment will be granted if the pleadings, depositions, answers to interrogatories, and admissions on file, together with available affidavits, show that there is no genuine dispute as to any material fact and that the moving party is entitled to judgment as a matter of law. See Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 247 (1986); Celotex Corp. v. Catrett, 477 U.S. 317, 322 (1986). “[S]ummary judgment may be granted only if there exists no genuine issue of material fact that would permit a reasonable jury to find for the nonmoving party.” Miller v. Ind. Hosp., 843 F.2d 139, 143 (3d Cir. 1988). All facts and inferences must be construed in the light most favorable to the non-moving party. Peters v. Del. River Port Auth., 16 F.3d 1346, 1349 (3d Cir. 1994).

         IV. Discussion

         A. The Daughters' Procedural Arguments

         The Daughters present two procedural arguments in opposition to Plaintiff's motion for summary judgment. First, they argue that Bank of America (the “Mortgagee”), the holder of the note on Jennifer's mortgage on the House, is a necessary party to this action and Plaintiff's failure to join it should result in dismissal under Federal Rule of Civil Procedure 19. Second, they argue that Plaintiff's failure to file a notice of lis pendens concerning the House should also result in dismissal. The Court disagrees as to both points.

         The Mortgagee is not a necessary party to the suit, as this action cannot impair its superior interests in the House. Under Federal Rule of Civil Procedure 19(a)(1), a person who is subject to service of process and whose presence would not deprive the court of subject matter jurisdiction “must be joined as a party” if either the court could not accord complete relief among the existing parties in their absence, or if

that person claims an interest relating to the subject of the action and is so situated that disposing of the action in the person's absence may . . . as a practical matter impair or impede the person's ability to protect the interest.

Fed. R. Civ. P. 19(a)(1)(B)(i). Consideration of a Rule 19 motion is a two-step inquiry, requiring the Court to first determine whether a party is necessary under the relevant provision of Rule 19, and then to determine whether joinder is feasible. Gen. Refractories Co. v. First State Ins. Co., 500 F.3d 306, 312 (3d Cir. 2007). In a diversity action, “the question of whether a party is necessary or indispensable is a question of federal law, ” but determined by reference to the interests of the parties under state law. Huber v. Taylor, 532 F.3d 237, 247 ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.