-->
Menu

Bits & Pieces

Smith v. Cardella Trucking Co., Inc.

Supreme Court, Appellate Division, Second Department, New York.

James SMITH, et al., plaintiffs-respondents,

v.

CARDELLA TRUCKING CO., INC., appellant,

v.

Pierpont Morgan Library, defendant-respondent.

 

July 10, 2013.

 

Pillinger Miller Tarallo, LLP, Elmsford, N.Y. (C. William Yanuck of counsel), for appellant.

 

Blank & Star, Brooklyn, N.Y. (Helene Blank and Scott Star of counsel), for plaintiffs-respondents.

 

Nicoletti Hornig & Sweeney, New York, N.Y. (Barbara A. Sheehan and Val Wamser of counsel), for defendant-respondent.

 

*1 In an action to recover damages for personal injuries, etc., the defendant Cardella Trucking Co., Inc., appeals, as limited by its brief, from so much of an order of the Supreme Court, Kings County (Graham, J.), dated September 20, 2011, as denied those branches of its cross motion which were for summary judgment dismissing the cause of action alleging common-law negligence insofar as asserted against it, and the defendant Pierpont Morgan Library’s cross claim for common-law indemnification or contribution against it.

 

ORDERED that the order is affirmed insofar as appealed from, with one bill of costs to the respondents appearing separately and filing separate briefs.

 

The injured plaintiff was a laborer employed by nonparty F.J. Sciame Construction Co., Inc. (hereinafter Sciame), which was retained by the defendant Pierpont Morgan Library (hereinafter the Library) as the construction manager for a project involving renovations at the Library. The injured plaintiff and his fellow laborers were responsible for cleaning up the construction debris created by all of the subcontractors and placing the debris into wheeled carts. The defendant Cardella Trucking Co., Inc. (hereinafter Cardella), leased debris carts to Sciame for use at the job site. Cardella employees also came to the job site three times a week to empty the filled debris carts into a Cardella truck. The injured plaintiff was injured when a debris cart he was pushing tipped over and trapped his hand between the cart and a doorway. The plaintiffs commenced this personal injury action against Cardella and the Library.

 

The Supreme Court properly denied that branch of Cardella’s motion which was for summary judgment dismissing the cause of action alleging common-law negligence insofar far as asserted against it. Cardella failed to establish its prima facie entitlement to judgment as a matter of law by eliminating all issues of fact as to whether it supplied the allegedly defective debris cart (see generally Halvorsen v. Baybrent Constr. Corp., 33 A.D.3d 862, 863–864, 827 N.Y.S.2d 61; Urbina v. 26 Court St. Assocs., LLC, 12 A.D.3d 225, 226, 784 N.Y.S.2d 524; Greco v. Archdiocese of N.Y., 268 A.D.2d 300, 301, 702 N.Y.S.2d 29). Failure to make such a showing required the denial of the motion, regardless of the sufficiency of the opposing papers (see Winegrad v. New York Univ. Med. Ctr., 64 N.Y.2d 851, 853, 487 N.Y.S.2d 316, 476 N.E.2d 642).

 

In view of the foregoing, the Supreme Court also properly denied that branch of Cardella’s motion which was for summary judgment dismissing the Library’s cross claim for common-law indemnification or contribution against it (see Posa v. Copiague Pub. School Dist., 84 A.D.3d 770, 774, 922 N.Y.S.2d 499; Greco v. Archdiocese of N.Y., 268 A.D.2d 300, 301–302, 702 N.Y.S.2d 29).

 

MASTRO, J.P., HALL, LOTT and SGROI, JJ., concur.

Fourteen Florence Street Corp. v. Armenia Coffee Corp.

Superior Court of New Jersey,

Appellate Division.

FOURTEEN FLORENCE STREET CORPORATION, a New Jersey Corporation, Mecca & Son Trucking Company, Inc., a New Jersey Corporation, and Helen Mecca, Plaintiffs–Respondents/Cross–Appellants,

v.

ARMENIA COFFEE CORP., a New Jersey Corporation, Regal Trading, Inc ., a New York Corporation, Joseph Apuzzo, Jr., and Joseph Apuzzo, Sr., Defendants–Appellants/Cross–Respondents,

and

Hudson’s Coffee, Inc., a New Jersey Corporation, James Capozzi, Sidney Abramowicz, Coffee Trade Services, Inc., a New Jersey Corporation, and Dennis Putis, Fredrick Kappler and Javier Mora, (a.k.a. San Franciso Group), Defendants.

 

Argued Nov. 28, 2012.

Decided July 11, 2013.

 

On appeal from the Superior Court of New Jersey, Chancery Division, Hudson County, Docket No. C–265–04.

James F. Keegan argued the cause for appellant/cross-respondent Armenia Coffee Corp. (Bendit Weinstock, attorneys; Mr. Keegan and Sherri Davis Fowler, on the briefs).

 

Dewey Golkin (Law Offices of Jeffrey Golkin) of the New York bar, admitted pro hac vice, argued the cause for appellants/cross-respondents Joseph Apuzzo, Sr., Joseph Apuzzo, Jr. and Regal Trading, Inc. (Jeffrey Golkin and Mr. Golkin, attorneys; Messrs. Golkin, on the briefs).FN1

 

FN1. The Golkin attorneys state in a footnote in their brief that they are joining in the briefs of appellant/cross-respondent, Armenia Coffee Corp.

 

Richard W. Wedinger argued the cause for respondents/cross-appellants (Barry, McTiernan & Wedinger, attorneys; Mr. Wedinger, Patricia S. Casamento and Matthew P. Mann, on the briefs).

 

Before Judges SIMONELLI, KOBLITZ and ACCURSO.

 

PER CURIAM.

*1 This is a fraud action involving the control of a now-defunct coffee roaster, Hudson’s Coffee, Inc. (Hudson’s). Defendants Armenia Coffee Corp. (Armenia), Joseph Apuzzo, Jr. (Apuzzo, Jr.), Joseph Apuzzo, Sr. (Apuzzo, Sr.) (collectively the Apuzzos), and Regal Trading, Inc. (Regal) appeal from a final judgment following a bench trial adjudging them liable to plaintiffs Fourteen Florence Street Corporation (Fourteen Florence), Mecca & Son Trucking Company, Inc. (Mecca Trucking), and Helen Mecca (collectively plaintiffs, the Meccas, or the Mecca Entities) for damages of $685,216.20 and pre-judgment interest. Plaintiffs cross-appeal from the denial of their claims for punitive damages and attorneys’ fees.

 

The trial court determined that the Apuzzos, through their control of both Hudson’s and its green coffee supplier Armenia, created a fraudulent security interest in Hudson’s assets. After Hudson’s had become insolvent and owed hundreds of thousands of dollars in back rent to the Meccas, who had sued to evict Hudson’s, the Apuzzos, acting through Armenia, repossessed virtually all of Hudson’s machinery, equipment, inventory, and finished goods thus putting those assets beyond the Meccas’ reach with the intent to defraud them. The court found that the Apuzzos thereafter transferred Hudson’s assets to Regal, a corporation they owned, which continued the business of Hudson’s pursuant to a de facto merger. The Apuzzos then liquidated Hudson’s in a bankruptcy proceeding.

 

Because there are ample facts in the record to support the trial judge’s conclusions, we affirm the judgment against the Apuzzos, Armenia, and Regal but reverse one aspect of the damage award and remand for reconsideration and any recalculation of pre-judgment interest. We affirm the court’s denial of punitive damages but reverse the court’s denial of attorneys’ fees limited to one aspect of plaintiffs’ claim.

 

A brief procedural history will be helpful to an understanding of the issues. Plaintiffs filed their fraud action in December 2004. In November 2005, Hudson’s filed a Chapter 7 bankruptcy petition. In February 2006, the bankruptcy trustee removed the fraud action to bankruptcy court. Thereafter, the Mecca Entities, the Apuzzos, and Armenia all filed proofs of claim. In May 2007, the bankruptcy court entered an order permitting the Mecca Entities to intervene as co-plaintiffs with the trustee. The trustee then filed an amended complaint that included plaintiffs’ claims as well as a cross-claim against plaintiffs for amounts Hudson’s had paid them prior to Armenia’s repossession and Hudson’s petition.

 

In September 2008, the trustee settled its claims with plaintiffs. The settlement provided for a remand to State court of plaintiffs’ “particularized” claims against defendants with plaintiffs being free to bring any other claims by amendment in the State court action. Plaintiffs settled the trustee’s cross claims against them with a payment of $45,000, and received assignment of allowed claims against Hudson’s estate under $20,000. The bankruptcy court approved the settlement by order of September 17, 2008.

 

*2 Armenia appealed that order to the district court contending that remand to State court was improper. The district court affirmed the order, rejecting Armenia’s claim. The court termed the situation

 

somewhat atypical, because the alleged “superseding complaint” was filed by the Trustee on behalf of the Debtor’s Estate, whereas the state court complaint was filed by the Mecca Entities against, among others, the Debtor. Because the interests of the Trustee and the Mecca Entities are not completely aligned, it is difficult to justify stripping the Mecca Entities of their claims merely because the Debtor filed for bankruptcy, and the Trustee filed a complaint on behalf of the Estate. In any event, Armenia does not provide any cases in which a removed complaint filed by one party was superseded by the filing of a Trustee’s complaint in Bankruptcy Court, and the Court is unable to otherwise identify any.

 

The district court also rejected Armenia’s claim that the bankruptcy court failed to determine whether the remaining state claims were “ ‘particularized’ “ to plaintiffs or “ ‘core’ claims” belonging in bankruptcy. It thus held that the bankruptcy court did not err in remanding plaintiffs’ original complaint to State court.

 

Following reinstatement of the state action, the Assignment Judge entered an order for the voluntary dismissal without prejudice of plaintiffs’ claims against Hudson’s in accordance with the federal court order approving the bankruptcy settlement. The order also allowed defendants to file a motion for summary judgment if they contended plaintiffs’ claims were barred by virtue of that bankruptcy settlement. Defendants thereafter made such a motion. The Assignment Judge found that issues of fact precluded summary judgment and so denied the motions, subject to defendants’ right to renew them after plaintiffs had presented their proofs at trial.

 

We draw the following facts from the record. James Capozzi and Sidney Abramowitz were coffee traders employed by Armenia before leaving to start their own company, Coffee Trade Services (Coffee Trade). In 1997, Capozzi and Abramowitz began to organize a new roast coffee business, which they would eventually call Hudson’s. Although still operating Coffee Trade, Capozzi and Abramowitz began to purchase equipment for Hudson’s, which they stored in Jersey City in a building owned by Fourteen Florence, one of the Meccas Entities, pursuant to an oral understanding with plaintiffs.

 

The Meccas, friends of Capozzi’s, eventually agreed to invest $300,000 in Hudson’s in return for a one-third interest in the new company, the other two-thirds to be owned one-third each by Coffee Trade, and investors known as the San Francisco Group. The Meccas’ investment was to be comprised of cash, trucking services and the forbearance of rent at the property where Hudson’s had been storing its equipment and where it would eventually produce coffee.

 

Although Hudson’s evidently did business from sometime in 1997, there was no certificate of incorporation filed until May 1999. In that certificate, Capozzi was listed as director and registered agent. Capozzi was also Hudson’s president and treasurer, and had control over the corporate books and records. No stock was issued. Capozzi and the Meccas also eventually formalized a five-year lease between Hudson’s and Fourteen Florence back-dated to January 1998, which memorialized the terms of the arrangement by which they had begun operating. Hudson’s agreed to pay Fourteen Florence a yearly rental of $4.00 per square foot for 13,936 square feet, or $4,645.33 per month. The lease also recognized that an additional 4680 square feet was to be added to the size of the leasehold at the same charge per square foot. Beginning in January 2001, however, rent would increase by $.25 per square foot. Additionally, the tenant would be responsible for tax increases above the 1998 levels and could exercise a five-year extension at its option.

 

*3 Hudson’s expanded its space in the building and the rent increased several times accordingly. Beginning in March 1999, the actual rented space increased to 23,296 square feet, for a monthly rental of $7,765.33. Eleven months later, in February 2000, the rented space climbed to 34,612 square feet, for $11,537.33 per month.

 

In May 2000, the Meccas, having become increasingly concerned about their investment, were looking to be bought out. Capozzi approached Apuzzo, Jr., at Armenia, which had been providing Hudson’s with its supply of coffee beans, to see if the Apuzzos were interested in taking the Meccas’ place. Armenia was one of the largest coffee importers in the United States. Apuzzo, Jr. was president and his father, Apuzzo, Sr. was chairman, and, although they had no ownership in Armenia, they operated it for three Panamanian companies as a means of distributing Columbian coffee in the United States. The Apuzzos agreed to invest in Hudson’s, but asked Capozzi not to tell plaintiffs of their involvement because some of Armenia’s customers might see it as a conflict.

 

In June 2000, Capozzi informed Michael Mecca, Helen Mecca’s son and vice-president of Mecca Trucking, that Hudson’s had found a replacement for the Meccas. Hudson’s agreed to repay them the balance of their capital contributions, which the Meccas valued at about $360,000, and to start paying monthly rent going forward. Capozzi understood that the Apuzzos were paying $600,000 into Hudson’s for the Meccas’ share. Although Apuzzo, Jr. testified that Armenia wired $150,000 into Hudson’s account, Hudson’s bank records listed the amount as only $124,990.

 

The parties still had no written agreements as to ownership in Hudson’s prior to the Apuzzos’ involvement. Rather, the first time the parties documented their relationship was in a shareholders’ modification and consent agreement among Apuzzo, Jr., Capozzi, and Abramowitz (both individually and as a representative of Coffee Trade) dated February 8, 2001. According to that agreement, Apuzzo, Jr., made a $600,000 contribution in return for a one-third interest in Hudson’s. He also became a director. The modification further provided that certain payments to Hudson’s “had already been advanced toward this dollar amount and that the balance will be paid out based on cash flow demands.” The February 2001 modification also indicated that two-thirds of Hudson’s was then owned by Coffee Trade, although Capozzi testified that the San Francisco Group still owned one-third at that time, even though Hudson’s had yet to formally issue any stock.

 

Prior to the February 2001 modification, Capozzi had maintained control over Hudson’s bank account which was the only account used or applied to Hudson’s debts. Shortly after the February 2001 modification, Apuzzo, Jr. began handling the books at Armenia’s New York offices. A New York bank account for Hudson’s was opened, with Apuzzo, Jr. having authority to sign checks. Shortly thereafter, Hudson’s maintained only one account, the one Apuzzo, Jr. controlled.

 

*4 According to the minutes from Hudson’s March 2001 board of directors’ meeting, the Apuzzos, Capozzi, and a representative of the San Francisco Group met to discuss various company matters. Apuzzo, Jr., Capozzi, and the representative of the San Francisco Group were confirmed as directors. The minutes then related that “the issuance of the shares were delivered and signed by all parties for Armenia Coffee, Coffee Trade Services and San Francisco and agreed to proportionately,” and that Apuzzo, Jr. was “representing Armenia.” Capozzi, describing the one-third ownership share of the “Apuzzo group,” testified that he understood that at that point Armenia was represented on Hudson’s board. In any event the “original share book” was to be kept at Armenia. The minutes further stated that the “execution of the Shareholders’ Agreement of Hudson’s Coffee was distributed and signed by all parties,” and that future agenda items were to be submitted to Apuzzo, Jr. in advance. Among matters decided were that rent would be “delayed until more funds from [the] business became available,” and that no more money would be put into Hudson’s.

 

In December 2001, the parties entered into another shareholders’ modification agreement. The parties’ interests were stated as 41.5% for Apuzzo, Jr., 41.5% for Coffee Trade, and 17% for the San Francisco Group. According to the modification, Apuzzo, Jr., had advanced or contributed a total of $500,000 for his 41.5% interest, and “payments to Hudson[‘s] have already been advanced toward this dollar total.” The agreement was to be governed by New York law, and the integration clause included language to the effect that it “sets forth the entire agreement and understanding of the parties hereto and supersedes any and all written or oral agreements or representations between the parties hereto relating to the transactions contemplated by this agreement or related documents.” No further explanation appears for the changes in the ownership proportions of Coffee Trade and the San Francisco Group other than that it was “for consideration received.”

 

In February 2002, Capozzi (on behalf of Hudson’s), a representative of the San Francisco Group, Abramowitz (on behalf of Coffee Trade), and Apuzzo, Jr. signed another shareholders’ modification. It recited that Apuzzo, Jr., had advanced to, or on behalf of, Hudson’s, a total of $560,000, and owned 51.5% of the company. As in the prior modifications, it represented that “payments to Hudson [‘s] have already been advanced toward this dollar total.” Distributions were to be made only by majority vote of the shareholders and agreement by the board, and while Apuzzo, Jr ., continued to have a seat on the board, other members were to be elected by majority vote of the shareholders.

 

According to Capozzi’s testimony, the $560,000 sum reflected in that modification was once again to be in addition to the earlier amounts Apuzzo, Jr. had previously contributed, thereby bringing Apuzzo, Jr.’s putative investment to $1.66 million, for a 51.55% ownership in Hudson’s. Apuzzo, Jr. testified that he had made contributions to Hudson’s in February 2001 of $600,000 and in February 2002 of an additional $560,000, for a total of $1.16 million, in return for 51.5% of Hudson’s stock, but he insisted that the change anticipated by the December 2001 modification agreement for his payment of $500,000 in exchange for a 41.5% interest was never consummated. That testimony was at odds with his deposition in which he had acknowledged the December 2001 modification agreement. Apuzzo, Jr. had also testified at deposition that both he and Apuzzo, Sr. contributed sums to Hudson’s in exchange for later acquiring shares. He subsequently maintained at trial that all sums advanced by Apuzzo, Sr. were loans and were not in exchange for any interest in Hudson’s. He also pegged the amount that he and Apuzzo, Sr. “invested, loaned and have now lost” at $1.180 million.

 

*5 Although Capozzi remained Hudson’s president after the Apuzzos became involved in Hudson’s, he testified that Apuzzo, Jr. handled all matters of income and expense, that Apuzzo, Jr. never provided him an accounting, and that he did not know what the company was doing in sales or how it was spending its funds. Neither did he know how much money Apuzzo, Jr. had actually contributed to Hudson’s. Capozzi testified that he was not denied access to the books, he simply relied on Apuzzo, Jr. to keep him informed.

 

As of May 2002, Hudson’s balance sheet reflected total assets of $1,424,485, of which $234,679 represented cash, accounts receivable and inventory. Its then current liabilities (accounts payable, expenses and loans) totaled $1,332,365. Hudson’s “paid-in capital” statement as of May 31, 2002, listed “Apuzzo’s” contribution as $560,000, while Coffee Trade and San Francisco Group’s combined contribution totaled $627,450.63.

 

On May 31, 2002, Capozzi wrote to Michael Mecca to confirm that Hudson’s owed approximately $252,095 in back rent and that the current monthly rent was $16,429, with the lease due to expire on January 3, 2003. Hudson’s did not renew its lease at the end of 2002. Nevertheless, it remained in the property and, according to Michael Mecca, continued in a month-to-month tenancy pending negotiations. The Meccas proposed a new lease by which rent would increase to $4.75 per square foot per year for the 46,388 square feet leased, plus taxes and insurance. Although the parties never signed the proposed lease, beginning in January 2003, the Meccas began billing Hudson’s monthly rent of $18,361.91, plus an increased share of taxes, in accordance with the terms they had proposed. According to the proposed lease, effective January 2005, rent would increase again to $5.50 per square foot, or $21,261.16 monthly.

 

As with the allegations that his father had invested in Hudson’s, Apuzzo, Jr. also denied that Armenia had ever acquired an ownership interest in the company, notwithstanding the reference in the March 2001 Hudson’s minutes to “issuance of shares” to the Armenia representative, or Capozzi’s contrary understanding. Instead, he maintained that along with having sold Hudson’s coffee, Armenia, like Apuzzo, Jr. and his father, had loaned Hudson’s money and purchased equipment for it beginning in April 2000.

 

On February 15, 2003, Capozzi, on behalf of Hudson’s, signed a note to Armenia to repay with interest the principal amount of $560,000. Interest installments of $28,000 were due each year on the anniversary of the note, with the first payment due in February 2004. That same date Capozzi also signed an agreement giving Armenia a security interest in Hudson’s property as described in an attached schedule. The security interest covered past credit and extended to future advances and loans, and covered collateral that essentially represented all of Hudson’s assets. Armenia never recorded a UCC filing statement of its security interest. Capozzi also personally guaranteed the note and security agreement. He testified that he gave the personal guarantees as a favor to Apuzzo, Jr., who had asked him to do so because Apuzzo, Jr. “was under a lot of pressure at Armenia,” and both Apuzzos were Capozzi’s friends.

 

*6 Armenia’s records for the period beginning April 2000, indicated regular amounts extended to Hudson’s for coffee sales, but also referenced such things as “customer advance,” “purchase of equipment,” “advance (loan)” and “advance/loan (Mecca).” They also recorded various payments by Hudson’s. In August 2003 alone, Hudson’s made payments to Armenia totaling approximately $350,000, but, according to Apuzzo, Jr., those payments were not payment on the note. Further, although it had made a $107,731.50 back payment to the Meccas in January, Hudson’s had continued to be behind in its rent throughout 2003. According to Hudson’s own records, as of April 30, 2003, it owed $283,530.87 for “rent and contributions,” and owed Mecca Trucking an additional $6150. On November 24, 2003, counsel for the Meccas wrote to Hudson’s that it owed $390,000 in back rent and that if Hudson’s failed to vacate by December 31, 2003, it would be deemed a willful holdover tenant and liable for double rent.

 

According to Capozzi, by February 2004, Hudson’s was not selling sufficient coffee and was “losing money every day,” although he admitted that the influx of Apuzzo, Jr.’s money and his having not declared a default when Hudson’s missed the February 2004 $28,000 interest payment on the note were helping Hudson’s to stay in business. Negotiations with the Meccas for a new lease had been continuing, however, and during the negotiations Hudson’s had made some good faith back rent payments. Nevertheless, on June 30, 2004, counsel for the Meccas wrote to Hudson’s to advise that the landlord was terminating the tenancy, and gave it until July 31 to vacate. Capozzi testified that when he approached Apuzzo, Jr. about the rent owed to the Meccas, Apuzzo, Jr. told him that he should “stay out of it, [and] that it was being resolved.”

 

The parties did not resolve the tenancy matter, however, and on July 21, 2004, Fourteen Florence filed an eviction action. Michael Mecca testified that although they had filed for eviction, plaintiffs still hoped to get Hudson’s to agree to a new lease.

 

At about that same time, Apuzzo, Jr. authorized repossession of the collateral under the security agreement to Armenia. Apuzzo, Jr. testified that Armenia determined to exercise its rights because Hudson’s had not made the $28,000 payment under the note and could no longer pay for the coffee it needed. Although he later maintained that Armenia was only protecting itself, Apuzzo, Jr. acknowledged that given the ongoing disputes over the tenancy, he was concerned that if Hudson’s were evicted the equipment would have been in the hands of the landlord.

 

Armenia gave Hudson’s no written notice prior to repossessing the equipment. Instead, on August 24, 2004, a Saturday, Capozzi received a call from one of Hudson’s employees about the property. When he went to the building, people were “dissembling the plant” by removing Hudson’s equipment and Capozzi called the police. Apuzzo, Jr., Abramowitz, and a representative of the San Francisco Group, along with other Hudson’s employees, were present. Cappozi testified that he had assumed that when Apuzzo, Jr. had told him he would take care of the rent dispute, he meant that they would come to an agreement, and not that Apuzzo, Jr. intended to take the equipment out of the leasehold.

 

*7 Apuzzo, Jr. acknowledged that Armenia repossessed most of Hudson’s assets, including the operating equipment, inventory and the finished goods on hand. The only items left behind were certain packing machines, bins, conveyors, and an afterburner, which Apuzzo, Jr. testified were too big and “cumbersome” to remove. A crane would have been necessary to remove the afterburner, which was on the roof.

 

Apuzzo, Jr. testified that he had not given Capozzi advance notice of the repossession because Capozzi would not have been in favor of that course. Apuzzo, Jr. also testified, however, that he had spoken to Abramowitz and the representative of the San Francisco Group, both of whom were Hudson’s employees, in advance. Moreover, he told the representative of the San Francisco Group, a fellow director of Hudson’s, that Armenia was going to “perfect its security agreement against Hudson’s for non-performance.” Apuzzo, Jr. admitted they did not discuss the possibility of Hudson’s instead obtaining a loan to pay the $28,000 interest installment due.

 

Prior to the repossession, the value of Hudson’s equipment and machinery, according to its records, was $1,283,238. On October 18, 2004, Armenia sold the repossessed equipment to Regal for $599,500 pursuant to a written agreement. The agreement recited that the machinery component had been appraised at $576,000 in July 2004.

 

The Apuzzos owned Regal, which had been an investment company not in the business of roasting coffee. After the repossession, Hudson’s employees, Abramowitz and the representative of the San Francisco Group went to work for Regal. By the time of trial, Regal was a successful coffee roaster with sales in excess of $5 million using the equipment repossessed from Hudson’s. Regal also was making timely payments to Armenia in accord with their sales agreement.

 

After Armenia had repossessed the equipment and Hudson’s had effectively abandoned the leasehold, Fourteen Florence and Hudson’s settled. The Meccas dismissed the tenancy action, although preserving other claims. Plaintiffs subsequently received a quote of $90,800 to remove the machinery Hudson’s and Armenia abandoned and to repair the damage done to the premises by Armenia’s repossession. According to the estimate, there was no market for the remaining machinery, all of which would likely have to be scrapped.

 

Following the repossession, Hudson’s immediately ceased operations and its remaining employees were let go. Nevertheless, Apuzzo, Jr. testified that he did not know the particular date on which Hudson’s had become insolvent, and could not recall why he had waited almost a year after the repossession before filing the bankruptcy petition.

 

According to a summary of transactions between Armenia and Hudson’s from 2000 thru 2004, when Hudson’s executed the $560,000 security agreement and balloon note to Armenia in February 2003, it owed Armenia $552,537.66. As of April 3, 2003, the amount owed had risen to $572,049.74, and by the end of Hudson’s fiscal year on May 31, 2004, Hudson’s owed Armenia $596,548.20. Armenia’s ledgers indicated additional 2003 and 2004 advances or payments on behalf of Hudson’s, bringing Hudson’s total debt to Armenia to $1,071,171.59. Apuzzo, Jr. testified at deposition that all of the sums Hudson’s owed to Armenia were for product, but at trial corrected his testimony by adding that the amounts also reflected sums owed on loans he and his father had advanced to the company. In reviewing the Armenia records, Apuzzo, Jr. could not say why none of the money Hudson’s paid was ever classified as payment toward the $28,000 annual interest payment, which payment might have avoided repossession.

 

*8 Apuzzo, Jr. acknowledged that he was Hudson’s board chairman, and that Hudson’s corporate documents were kept in the same New York location that served as the offices for Armenia and Regal. He also acknowledged that Hudson’s net sales went from about $30,000 in 2000 to $400,000 by the end of 2001, before eventually rising to over $1 million prior to repossession of the equipment in 2004. Between March 2001 and August 2004, Hudson’s sales increased but its overall financial picture did not improve. Apuzzo, Jr. maintained throughout his testimony that the fact that $560,000 was the amount in both the February 2002 modification agreement and the February 2003 security agreement was merely coincidence.

 

Apuzzo, Jr. also acknowledged having used Hudson’s funds in connection with one of his private race cars, but maintained that the money was spent to advertise Hudson’s on the body of the car. Capozzi, however, testified that he never authorized the purchase of racing equipment with Hudson’s funds, and, according to him, race car driving was one of Apuzzo, Jr.’s hobbies. Although the Hudson’s checks at issue were written for items such as “shop rental,” Apuzzo, Jr. maintained that those personal expenses were paid by Hudson’s in lieu of Hudson’s paying him for advertising space. Apuzzo, Jr. estimated such advertising charges at $25,000, but had no photos of the car to illustrate the advertising.

 

After Hudson’s filed for bankruptcy in November 2005, plaintiffs filed three separate proofs of claim: one for $13,593 on behalf of Mecca Trucking; one for $77,770 on behalf of Helen Mecca; and one for $552,232 on behalf of Fourteen Florence, for a total of $643,595 on behalf of the Meccas. Armenia’s proof of claim against Hudson’s was calculated by adding cash advances, accounts payable from coffee sales, “purchase accruals,” and a $350,000 loan to Hudson’s (for a total of $1,071,171.59), and then subtracting all credits, including the money received from the sale to Regal of the repossessed assets, for a balance of $351,671.59. The Apuzzos filed a joint claim for $1,085,000.

 

In May 2006, the bankruptcy court issued a notice of abandonment of the property left in the leasehold. Plaintiffs maintained that was the point when Hudson’s stopped accruing rent. Michael Mecca testified that Hudson’s had accrued rent prior to January 2003 of $433,351.53, and between January 2003 and May 2006 of $801,418, for a total of approximately $1,234,769, of which it had paid $404,000, leaving a balance due for unpaid rent of $830,769. Michael Mecca testified that the Meccas’ contribution for their original one-third share of the coffee venture consisted of approximately $187,311.97 in rent forbearance, $29,700 in trucking services, and $170,000 in cash, for a total of about $386,000 between 1997 and May 2000. He conceded that rent accruing until the date Hudson’s was incorporated was the obligation of the joint venture that became Hudson’s. Hudson’s had made payments to the Meccas on account of the Meccas’ capital contributions, however, eventually paying a total of $210,000. The Meccas maintained that they were still owed $177,178. Accordingly, the Meccas claimed a total due of approximately $1,007,947, which they supported with the testimony of an accounting expert, Leonardo Scheinder.

 

*9 The judge concluded on the basis of the facts adduced at trial that defendants Apuzzo, Sr., Apuzzo, Jr., Armenia, and Regal committed a fraudulent transfer of assets from Hudson’s through Armenia to Regal, and that Regal continues the business of Hudson’s pursuant to a de facto merger with that entity. Specifically, the trial court agreed with plaintiffs that Armenia’s security agreement was a fraudulent attempt by the Apuzzos to secure their own investments in Hudson’s. The judge found that the shareholders’ agreements “were nothing more than a sham,” and that the Apuzzos controlled and manipulated Hudson’s books to reflect contributions to the company never made. Thus although Hudson’s books reflect contributions by the Apuzzos of $1,660,000, the court found proof of only $624,821. The judge found that plaintiffs proved that Armenia’s records “do not accurately reflect the amount loaned to Hudson’s and deposited in his account,” and that “advances” and “loans” to Hudson’s on Armenia’s books, were either never deposited into Hudson’s account or not in the amounts claimed. The judge found that Apuzzo, Jr., used $25,178.28 of Hudson’s assets to fund his racing hobby, and rejected Apuzzo, Jr.’s claim that the race car was used for advertising as “totally preposterous.” The court also rejected Apuzzo, Jr.’s contention that it was only coincidence that the value of Hudson’s assets, claimed to be $560,000, matched his claimed capital contributions.

 

In support of its conclusion that Apuzzo, Sr., Apuzzo, Jr., Armenia, and Regal were liable for fraudulently transferring the insolvent Hudson’s assets to Regal, the court found that the Apuzzos were insiders of Hudson’s and Armenia and owned Regal, which at the time of the transfer was an investment company but which after the transfer entered the coffee business using Hudson’s equipment, inventory and key employees; that Apuzzo, Jr., Hudson’s chairman, retained control of the property after the transfers to Armenia and Regal; that the transfer was concealed, accomplished when Hudson’s was closed and without informing Capozzi, Hudson’s president, in advance; that prior to the transfer, Hudson’s was sued by plaintiffs for back rent; that the transfer included all of Hudson’s assets with any real value; that Hudson’s, through Apuzzo, Jr., removed the assets; that the value of the consideration received by Hudson’s as evidenced by the $560,000 security agreement was reasonably equivalent to the $576,000 at which the equipment had been recently appraised; that Hudson’s was insolvent at the time of the transfer, and filed for bankruptcy thereafter; that the transfer occurred shortly after a substantial debt was incurred in the form of the back rent that as of July 2004 had resulted in a complaint for eviction; and that Hudson’s transferred its essential assets to a lienor, Armenia, who then transferred the assets to Regal, an entity wholly owned by insiders of Hudson’s.

 

There was no dispute that Hudson’s assets would have been available to the Meccas but for the conveyance. The court concluded that the clear intent of that transfer was to keep Hudson’s assets out of the hands of its landlord, the Meccas. The court found that the Apuzzos “blatantly breached” their duties to Hudson’s.

 

*10 As directors and officers of Hudson’s, the Apuzzos were privy to all the details surrounding the Corporation’s insolvency, assets and inventory. It was a breach of their duty to Hudson’s to take Hudson’s equipment, inventory, and employees and transfer it to Regal. These acts were deliberately done; they were against the interests of Hudson’s and done in bad faith and without regard to the duties owed to Hudson’s Coffee.

 

The fraudulent transfer of Hudson’s assets to escape the liabilit[ies] of Hudson’s establishes that Armenia and Regal are the successor companies and are liable for Hudson’s debt to plaintiffs.

 

Finding that the Apuzzos controlled Hudson’s, Armenia, and Regal, all of which they used for their own purposes in furthering their fraudulent scheme, the court determined to pierce the corporate veil.

 

Following several post-trial motions, the court entered an amended final judgment in favor of plaintiffs against defendants, jointly and severally, for $685,216.20, consisting of $177,178 remaining due on their capital contribution, $417,238.20 in back rent, $90,800 for property damage to the premises, and prejudgment interest of $204,720.06, for a total judgment of $889,936.26. The court denied plaintiffs’ request for punitive damages and attorneys’ fees and defendants’ request for new trial. This appeal followed.

 

Preliminarily, defendants assert that plaintiffs lacked standing to pursue the claims they prevailed on at trial as a result of the bankruptcy proceedings and their settlement with the bankruptcy trustee. No extended discussion on this point is necessary. As have the other three courts that considered this argument, we reject it.

 

Defendants contend that the claims on which plaintiffs prevailed were general claims belonging to the bankruptcy trustee. The settlement agreement between plaintiffs and the trustee remanding those claims to State court, however, specifically noted that they “are not core claims, but are instead particularized claims of the Mecca Entities over which this Court does not have subject matter jurisdiction.” The bankruptcy judge approved that settlement over Armenia’s objection after two hearings. Differentiating between general and particularized claims of creditors is an everyday issue in bankruptcy court and we defer to that court’s significant expertise in the area. See Cohen v. Dir., Div. of Taxation, 19 N.J. Tax 58, 64 (Tax 2000) (deferring to the significant expertise of the bankruptcy court on the issue of dischargeability). Moreover, the district court affirmed that order rejecting these same arguments and specifically noting the unfairness of stripping plaintiffs of their claims against the Apuzzos, as well as against Armenia and Regal, entities the Apuzzos controlled, merely because the Apuzzos had put Hudson’s into bankruptcy. That decision is preclusive here. Watkins v. Resorts Int’l Hotel & Casino Inc., 124 N.J. 398, 406 (1991).

 

The trial court’s factual findings underscore the soundness of those rulings. As the court found, this was not a case in which a struggling Hudson’s withdrew its own property to avoid it falling into the landlord’s hands. The judge found that the Apuzzos wrongfully employed Armenia’s fraudulent security interest to surreptitiously remove all of Hudson’s property having any value before plaintiffs could lock them out. Accordingly, the trial court was correct in concluding that plaintiffs had standing because their injuries were personal to them and not general claims belonging to all creditors. See Koch Ref. v. Farmers Union Cent. Exch., Inc., 831 F.2d 1339, 1348 (7th Cir.1987) (“[a] cause of action is ‘personal’ if the claimant himself is harmed and no other claimant or creditor has an interest in the cause.”), cert. denied, 485 U.S. 906, 108 S.Ct. 1077, 99 L. Ed.2d 237 (1988).

 

*11 Defendants next claim the court erred in finding that Armenia’s repossession of Hudson’s assets and transfer to Regal amounted to a fraudulent conveyance under New Jersey’s Uniform Fraudulent Transfer Act (UFTA), N.J.S.A. 25:2–20 to –34. They contend that the court’s finding that Armenia gave equivalent value in return for the property transferred precluded it from concluding that the transaction constituted a fraudulent transfer. We disagree.

 

The purpose of the UFTA is to stop a debtor from deliberately cheating a creditor by placing property beyond his or her reach. Gilchinsky v. Nat’l Westminster Bank N.J., 159 N.J. 463, 475 (1999). By establishing a fraudulent conveyance claim a creditor is allowed to “undo” a wrongful transaction “so as to bring the property within the ambit of collection.” Ibid. The statute provides that:

 

A transfer made or obligation incurred by a debtor is fraudulent as to a creditor, whether the creditor’s claim arose before or after the transfer was made or the obligation was incurred, if the debtor made the transfer or incurred the obligation:

 

a. With actual intent to hinder, delay, or defraud any creditor of the debtor; or

 

b. Without receiving a reasonably equivalent value in exchange for the transfer or obligation, and the debtor:

 

(1) Was engaged or was about to engage in a business or a transaction for which the remaining assets of the debtor were unreasonably small in relation to the business or transaction; or

 

(2) Intended to incur, or believed or reasonably should have believed that the debtor would incur, debts beyond the debtor’s ability to pay as they become due.

 

[N.J.S.A. 25:2–25.]

 

Thus, transfers are fraudulent as to a present or future creditor if either the debtor made the transfer with intent to defraud, or the transfer was made without receiving a reasonably equivalent value in exchange for the transfer, and the debtor intended to incur, or believed, or reasonably should have believed, that it would incur debts beyond its ability to pay as they became due. These inquiries are fact sensitive, and the burden of proving intent is on the party seeking to set aside the conveyance. Gilchinsky, supra, 159 N.J. at 476.

 

Because intent is generally not susceptible to direct proof, courts look to factors commonly referred to as “badges of fraud,” or circumstances that “so frequently accompany fraudulent transfers that their presence gives rise to an inference of intent.” Id. at 476–77. The UFTA has codified eleven badges of fraud:

 

In determining actual fraud under [N.J.S.A. 25:2–25(a) ] consideration may be given, among other factors, to whether:

 

a. The transfer or obligation was to an insider;

 

b. The debtor retained possession or control of the property transferred after the transfer;

 

c. The transfer or obligation was disclosed or concealed;

 

d. Before the transfer was made or obligation was incurred, the debtor had been sued or threatened with suit;

 

*12 e. The transfer was of substantially all the debtor’s assets;

 

f. The debtor absconded;

 

g. The debtor removed or concealed assets;

 

h. The value of the consideration received by the debtor was reasonably equivalent to the value of the asset transferred or the amount of the obligation incurred;

 

i. The debtor was insolvent or became insolvent shortly after the transfer was made or the obligation was incurred;

 

j. The transfer occurred shortly before or shortly after a substantial debt was incurred; and

 

k. The debtor transferred the essential assets of the business to a lienor who transferred the assets to an insider of the debtor.

 

[N.J.S.A. 25:2–26.]

 

Courts attempting to determine actual intent to defraud must balance the factors listed in N.J.S.A. 25:2–26, as well as weigh any other factors relevant to the transaction. Gilchinsky, supra, 159 N.J. at 477. The Supreme Court has cautioned courts against giving “controlling weight” to the absence of a particular factor. “The proper inquiry is whether the badges of fraud are present, not whether some factors are absent.” Ibid.

 

The trial court made extensive findings detailing the many badges of fraud present in this transaction. First, Apuzzo, Jr., who engineered Armenia’s security interest in Hudson’s essential assets and then surreptitiously orchestrated the execution on those assets, was unquestionably an insider. N.J.S.A. 25:2–22(b)(1) and (3) (defining “insider”). So was his father Apuzzo, Sr. N.J.S.A. 25:2–22(b)(6). The transfer of the assets was also to insiders, first to Armenia, an entity controlled by the Apuzzos, and then to Regal, a corporation owned by them. N.J.S.A. 25:2–26(a). Second, because the Apuzzos transferred Hudson’s assets to their wholly owned corporation, they retained possession of them after the transfer. N.J.S.A. 25:2–26(b). Third, the execution on Hudson’s assets was conducted on a day the business was closed and concealed from Capozzi, Hudson’s president, because Apuzzo, Jr. knew he would object. N.J.S.A. 25:2–26(c). Fourth, the Meccas had filed a complaint to evict Hudson’s prior to the transfer. N.J.S.A. 25:2–26(d). Fifth, the transfer was of substantially all of Hudson’s assets having any value. N.J.S.A. 25:2–26(e). Sixth, by Armenia’s executing on the assets and transferring them to Regal, defendants effectively prevented them from being seized by the Meccas. N.J.S.A. 25:2–26(g). Seventh, the consideration received by Hudson’s, in the form of the reduction of its debt to Armenia, was reasonably equivalent to the value of the assets seized by Armenia and transferred to Regal. N.J.S.A. 25:2–26(h). Eighth, Hudson’s was insolvent at the time of the transfer. N.J.S .A. 25:2–26(i). Ninth, the transfer occurred shortly after Hudson’s had incurred a substantial debt to the Meccas in the form of back rent which the Meccas were demanding. N.J.S.A. 25:2–26(j). Tenth, all of Hudson’s essential assets were transferred to a lienor, Armenia, who transferred them to Regal, an insider. N.J.S.A. 25:2–26(k). We have no reason to disturb those factual findings of the trial court, which rested in part upon its evaluation of the credibility of the testimony presented, particularly that of Apuzzo, Jr., Capozzi, and Michael Mecca. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). Our review convinces us that the court’s findings are amply supported by the record.

 

*13 According to our Court, while the presence of a single badge of fraud “may cast suspicion on the transferor’s intent, the confluence of several in one transaction generally provides conclusive evidence of an actual intent to defraud.” Gilchinsky, supra, 159 N.J. at 477. As it is clear to us that the trial court found actual intent to defraud on the facts adduced at trial, pursuant to N.J.S.A. 25:2–25(a), defendants’ argument that Hudson’s receipt of reasonably equivalent value for the goods transferred precludes liability under N.J.S.A. 25:2–25(b), is of no consequence. To the extent that defendants attempt to transmogrify that single finding into an acceptance of their argument that Armenia possessed a valid security interest in Hudson’s assets, that effort is unavailing. The trial court found that the security agreement was a fraudulent attempt by the Apuzzos to secure their own investments in Hudson’s, plainly rejecting Apuzzo, Jr.’s testimony that it was simply coincidence that his $560,000 capital contribution matched precisely the amount of Armenia’s alleged security interest.

 

Defendants also claim the court erred in finding Armenia and Regal liable to plaintiffs under a successor liability theory. Although the general rule is that an acquiring corporation does not become responsible for the debts and liabilities of the seller in an asset acquisition, there is a well-recognized exception for transactions entered into fraudulently in order to escape responsibility for such debts and liabilities. Ramirez v. Amsted Indus., Inc., 86 N.J. 332, 340–41 (1981). We agree with the trial judge that the exception applies here.

 

The evidence fully supports the court’s conclusion that Armenia, at the direction of Apuzzo, Jr. with the assistance of Apuzzo, Sr. and having the intent to defraud the Meccas, acquired the equipment through a fraudulent security agreement obtained by Apuzzo, Jr. and then funneled that equipment to Regal, a corporation wholly owned by father and son. Following the repossession of its machinery, equipment, inventory, and finished goods, Hudson’s no longer had the ability to remain in business. As owners of Regal, the Apuzzos got the benefit of essentially all of Hudson’s remaining assets that, up until that time, had been used by the company that Apuzzo, Jr. had been effectively controlling. Regal also acquired Hudson’s key personnel. See Woodrick v. Jack J. Burke Real Estate, Inc., 306 N.J.Super. 61, 76–77 (App.Div.1997) (in determining that successor company should be liable for debts of former company, court considered whether former company ceased to exist, the degree to which management over the two companies remained the same, and the extent to which the former’s employees continued with the successor), certif. granted, 153 N.J. 214, and appeal dismissed, 157 N.J. 537 (1998). Because the Apuzzos effectively controlled both Armenia and Regal, their fraudulent intent may be imputed to the corporations. See Francis v. United Jersey Bank, 162 N.J.Super. 355, 367–68 (Law Div.1978) (under precursor to UFTA, court imputes to corporation fraudulent intent of individuals who were “controlling forces” of corporation), aff’d, 171 N.J.Super. 34 (App.Div.1979), aff’d o.b., 87 N.J. 15 (1981). Thus, under the circumstances we have no hesitation in concluding that Armenia and Regal were appropriately held liable to plaintiffs as successor corporations having participated in transfers intended to defraud. Woodrick, supra, 306 N.J.Super. at 73.FN2

 

FN2. The plaintiffs would similarly be entitled to recover directly against Armenia and Regal under the UFTA on a civil conspiracy theory. See Banco Popular N. Am. v. Gandi, 184 N.J. 161, 177–78 (2005) (recognizing that under the UFTA, “a creditor in New Jersey may bring a claim against one who assists another in executing a fraudulent transfer” where the creditor satisfies both the UFTA and the agreement and knowledge aspects of civil conspiracy).

 

*14 The Apuzzos similarly argue that the trial court erred in finding them personally liable to plaintiffs. Specifically, they contend there was no evidence that they had breached any fiduciary duties to Hudson’s.

 

A corporation is a separate entity from its stockholders, and “in the absence of fraud or injustice,” courts do not typically impose liability on the principals. Lyon v. Barrett, 89 N.J. 294, 300 (1982). Nevertheless, a court will pierce the corporate veil in order to “prevent an independent corporation from being used to defeat the ends of justice.” N.J. Dept. of Envtl. Prot. v. Ventron Corp., 94 N.J. 473, 500 (1983). Equitable principles allow courts to treat the corporation and individual as one where the individual has acted fraudulently to use the corporation to advance his or her own interests.   Sean Wood, L.L.C. v. Hegarty Grp., Inc., 422 N.J.Super. 500, 517 (App.Div.2011). Moreover, when a corporation becomes insolvent, as the court found Hudson’s was, a “quasi-trust” relationship exists between the officers and directors, and the corporate creditors. Portage Insulated Pipe Co. v. Costanzo, 114 N.J.Super. 164, 166 (App.Div.1971). In such a case, the officers and directors not only have a duty to refrain from preferring one creditor over another, they “have a special duty not to prefer themselves.” Ibid.

 

Here, as already noted, Apuzzo, Jr. was Hudson’s controlling director long before the repossession by Armenia, having possession of Hudson’s corporate books and checking account. The court found that he used Hudson’s funds to pay for his personal car racing hobby. As Armenia’s president, Apuzzo, Jr., directed the repossession of Hudson’s assets without informing Hudson’s president. Given the court’s findings on fraudulent intent, the evidence also supported the judge’s decision to hold Apuzzo, Jr. personally liable. Not only did he effectively control Hudson’s prior to the repossession and conceive and orchestrate it, but as an officer in Armenia he funneled the proceeds to Regal and ultimately presumably profited as half-owner of that corporation.

 

The trial court termed Apuzzo, Sr. as an officer and director of Hudson’s; that was not correct. Nevertheless, Apuzzo, Sr. certified that he was a Hudson’s shareholder, although his son testified that he had been mistaken in his belief. Hudson’s president, Capozzi, also believed that Apuzzo, Sr. had received Hudson’s stock, although there was apparently no evidence of Apuzzo, Sr. actually having been issued shares. Notwithstanding, Apuzzo, Jr. certified that he and his father had contributed over $1 million to “capitalize the struggling operations” of Hudson’s, and he testified at deposition that his father had contributed to the Apuzzos’s purchase of additional Hudson’s shares. Capozzi testified that Apuzzo, Sr. had attended most of Hudson’s meetings and had told Capozzi that he contributed money to the company. Minutes of a March 2001 board meeting listed Apuzzo, Sr. as present, which Apuzzo, Jr. corroborated. Further, Apuzzo, Sr. testified at deposition that “we owed rent to Mecca,” evidently addressing Hudson’s unpaid rent, and said that the Meccas convinced Capozzi to “take on additional space when we couldn’t pay for the space we had.” (Emphasis added). Apuzzo, Sr. was also formerly the chairman of Armenia at the time of the repossession, and was a fifty-percent owner of Regal, presumably profiting equally with his son by ultimately obtaining Hudson’s equipment and inventory.

 

*15 We are satisfied that the evidence established Apuzzo, Sr. not only as an authority figure in Armenia, but also as one very involved with the decision-making at Hudson’s, who was aware of the debt to plaintiffs and who performed as though he had a substantial stake in the outcome, all indicia of more than just an ordinary ownership interest in Hudson’s. See Sean Wood, supra, 422 N.J.Super. at 518–19 (in deciding if a person is a corporate alter ego, court considers individual’s actual relationship to the finances and control of the company, and the lack of formal ownership is not dispositive). As our Court noted in Banco, the UFTA was designed to permit recovery not just from debtors, but from others who aid in hindering proper collection efforts. Banco, supra, 184 N.J. at 177. The Legislature preserved related causes of action, and under N.J.S.A. 25:2–32, unless superseded by portions of the Act, “ ‘the principles of law and equity, including the law merchant [ ] and the law relating to principal and agent, estoppel, laches, fraud, misrepresentation, duress, coercion, mistake, insolvency, or other validating or invalidating cause’ “ are deemed to supplement it. Ibid. (quoting the statute) (footnote omitted). Thus, even though Apuzzo, Sr. did not have the same fiduciary duty or authority as his son to operate Hudson’s, he could still be found liable to plaintiffs under principles of civil conspiracy where he “assist[ed] another in executing a fraudulent transfer,” where the evidence showed that he understood the general objectives of the scheme, and where the proofs established that he affirmatively or tacitly agreed to play a part in furthering them. Id. at 177–78.

 

The settlement with the bankruptcy trustee preserved plaintiffs’ conspiracy claims for reinstatement here, and plaintiffs’ amended complaint alleged a civil conspiracy including Apuzzo, Sr. We conclude that there is sufficient support in the record for the court’s conclusion that Apuzzo, Sr. was aware of, furthered, and willingly participated in Apuzzo, Jr.’s plan, and thus is personally liable for assisting him in hindering plaintiffs’ collection efforts, albeit for reasons slightly different than those expressed by the trial court. See El–Sioufi v. St. Peter’s Univ. Hosp., 382 N.J.Super. 145, 169 (App.Div.2005) (noting that “a correct result, even if predicated on an erroneous basis in fact or in law, will not be overturned on appeal”).

 

Defendants challenge the damage award contending that any recovery was limited to the amount of the appraisal of the equipment repossessed, or $599,500, minus any setoffs, pursuant to the statutory limitations of N.J.S.A. 25:2–29 and –30. N.J.S.A. 25:2–29 makes the UFTA remedies “subject to the limitations in [N .J.S.A. 25:2–30].” Under N.J.S.A. 25:2–30(b), where a transfer is voidable under N.J.S.A. 25:2–29(a), “the creditor may recover judgment for the value of the asset transferred, as adjusted under subsection c. of this section, or the amount necessary to satisfy the creditor’s claim, whichever is less.” Defendants contend that because Regal subsequently paid $599,500 to Armenia for the equipment, the amount of plaintiffs’ recovery under the UFTA was also limited to $599,500, or, in other words, the damage award of $685,216.20 exceeds the UFTA limit by $85,716.20. We disagree.

 

*16 Under N.J.S.A. 25:2–30(c), upon which, as noted, N.J.S.A. 25:2–30(b) is made expressly conditional, the court may adjust the value of the repossessed asset as the equities demand:

 

c. If the judgment under subsection b. of this section is based upon the value of the asset transferred, the judgment shall be for an amount equal to the value of the asset at the time of the transfer, subject to adjustment as the equities may require.

 

[N.J.S.A. 25:2–30(c).]

 

Here, the court credited plaintiffs’ testimony that they had obtained an estimate of $90,800 for the costs of removing the equipment that Hudson’s had abandoned in the leasehold, including erecting a crane to remove the afterburner from the roof, and making necessary repairs. Adding the $90,800 to the amount realized on the sale of the repossessed equipment, $599,500, equals $690,300, or approximately $5000 more than the court awarded ($690,300–$685,216.20). Thus, the court’s award was not invalid for exceeding the amount permitted under N.J.S.A. 25:2–29 and –30.

 

Further, the security agreement blanketed all Hudson’s assets, including inventory, which Apuzzo, Jr. acknowledged Armenia repossessed as well. Although the record does not include a specific value for the inventory Armenia seized, it is undisputed that Armenia took Hudson’s green coffee inventory and finished goods. Apuzzo, Jr. already had possession of Hudson’s books and contracts, which presumably included Hudson’s customer lists. Although it is impossible to know with certainty the value of the additional inventory and account assets Armenia repossessed, it seems clear that they represented at least some credible value, if only because in a short time Regal, theretofore an investment company, was transformed into a successful coffee concern. Whatever the value of those additional assets, it could be properly added to the amount of any judgment for purposes of N.J.S.A. 25:2–30, thereby further undercutting defendants’ claims.

 

We reject defendants’ argument that they were entitled to off-sets under N.J.S.A. 25:2–30(a) and (d). Under section (a), a transfer is not voidable pursuant to N.J.S.A. 25:2–25(a) against someone who takes in good faith and gives a reasonably equivalent value, or against any subsequent transferee. Under section (d), a good-faith transferee is entitled to a reduction in the judgment to the extent of value given the debtor. Thus, defendants assert that Armenia was entitled to an off-set of $560,000 because of the court’s finding that it had given reasonably equivalent value, while Regal was entitled to an off-set of $599,500, the full amount it allegedly paid Armemia for the repossessed equipment. As the trial court found that the Apuzzos did not act in good faith, neither Armenia nor Regal, the corporations they controlled and through which they acted to engineer the fraud, has any statutory entitlement to an off-set. Even where an off-set is otherwise appropriate, a court will deny the off-set if to award it would be inequitable. Panetta v. Panetta, 370 N.J.Super. 486, 501 (App.Div.2004) (plaintiff denied off-set for equitable reasons), certif. denied, 182 N.J . 427 (2005).

 

*17 We likewise reject defendants’ argument that there was no support for the award of $177,178 regarding plaintiffs’ alleged capital contribution. Michael Mecca testified that the Meccas’ contribution for their original one-third share of the coffee venture consisted of approximately $187,311.97 in rent forbearance, $29,700 in trucking services, and $170,000 in cash, for a total of about $386,000. Hudson’s repaid about $210,000, leaving a balance of approximately $177,178, or the amount the court awarded.

 

The award for back rent, however, cannot stand for two reasons. First, the court erred in using the terms of the unsigned January 2003 lease as a basis to calculate plaintiffs’ rental damages beyond the expiration of the written lease. When the parties’ original lease expired in January 2003, Hudson’s became a holdover tenant:

 

Whenever a tenant whose original term of leasing shall be for a period of one month or longer shall hold over or remain in possession of the demised premises beyond the term of the letting, the tenancy created by or resulting from acceptance of rent by the landlord shall be a tenancy from month to month in the absence of any agreement to the contrary.

 

[N.J.S.A. 46:8–10.]

 

Accordingly, it was error to calculate plaintiffs’ rental damages using the terms of the unsigned January 2003 lease. S.D.G. Corp. v. Inventory Control Co., 178 N.J.Super. 411, 414 (App.Div.1981) (after termination of a commercial five-year lease tenant’s status became that of a month-to-month tenant on the same terms as set forth in the lease).

 

Second, the court failed to award any amount of back rent for the period of June 2000 through December 2002. Michael Mecca and plaintiffs’ expert testified that the rent forbearance component of plaintiffs’ capital contribution was calculated through May 2000. Michael Mecca testified that the rent due for the period from June 2000 through December 2002 was $433,351.53, plus approximately $33 per month in taxes. The court expressed no reason why plaintiffs were to be denied back rent for the June 2000–December 2002 period, or explained how the record indicated plaintiffs had been otherwise paid that rent.

 

Because we cannot calculate the rent and taxes due from the materials in the record, and any recalculation must take into account the capping provisions of N.J.S.A. 25:2–29 and –30, we reverse the back-rent component and remand to the trial court for recalculation of the damage award.

 

We reject defendants’ argument that the court erred in awarding damages jointly and severally against defendants. The facts established that in their personal capacities the Apuzzos acted jointly and with a common purpose and intent to defraud plaintiffs. As the controlling and representative powers in Armenia and alter egos and owners of Regal, the Apuzzos’s fraud would similarly make the corporate defendants jointly liable here. See Bd. of Educ. of Asbury Park v. Hoek, 38 N.J. 213, 238 (1962) (“Proof of a conspiracy makes the conspirators jointly liable for the wrong and resulting damage.”); see also Sean Wood, supra, 422 N.J.Super. at 517–18 (individual’s use of company as his alter ego and abuse of corporate form entitled plaintiff to hold individual and corporate defendants jointly liable). Nothing in Rule 4:42 governing judgments and orders prevented the order the court entered here, and defendants cite no authority to support their assertion that the court erred in making the judgment joint and several.

 

*18 On their cross-appeal, plaintiffs contend that the court erred in denying punitive damages. We disagree. Pursuant to the Punitive Damages Act, N.J.S.A. 2A:15–5.9 to –5.17, a plaintiff having made a specific prayer in the complaint may be awarded punitive damages where the defendant’s acts or omissions were motivated by actual malice or accompanied by a wanton and willful disregard for foreseeable victims. The defendant’s conduct must be more than just intentionally wrongful; it must be spiteful or done with an evil motive. Nappe v. Anschelewitz, Barr, Ansell & Bonello, 97 N.J . 37, 49–50 (1984). Not all acts of fraud warrant punitive damages, which are reserved for those cases manifesting truly egregious conduct. Jugan v. Friedman, 275 N.J.Super. 556, 572 (App.Div.), certif. denied, 138 N.J. 271 (1994). Applying those standards, we agree with the trial court that defendants’ fraudulent conduct, while wrongful, was not so egregious as to warrant punitive damages.

 

Plaintiffs also challenge the court’s denial of counsel fees. They contend that they were entitled to recover their counsel fees against the Apuzzos for having to protect their interests against third parties in this action, the tenancy action, and the bankruptcy court.

 

As the trial court correctly noted, New Jersey abides by the American rule that each side bears its own litigation expenses. Id. at 573. An exception, however, exists in situations where the commission of a tort proximately causes litigation with parties other than the tortfeasor. Under those circumstances, a “plaintiff is entitled to recover damages measured by the expense of that litigation with third parties.” Ibid.

 

Plaintiffs’ claims against the Apuzzos, Armenia and Regal in this action were intertwined with their claims against Hudson’s. Plaintiffs’ success on the merits of their UFTA claims depended on their success in proving fraud among all defendants, in piercing the corporate forms, and in showing that the Apuzzos were the alter egos of the corporate defendants. Accordingly, we agree with the trial court that having successfully made that showing, plaintiffs may not now contend that the Apuzzos, Armenia and Regal were not the actual tortfeasors but third parties. Jugan, supra, 275 N.J.Super. at 573; see also DiMisa v. Acquaviva, 198 N.J. 547, 550, 555 (2009) (reversing the applicability of the third-party exception, in part because of the “identity of interest” between a corporation and its principal).

 

Similarly, in the tenancy matter, Hudson’s was the tenant and the only defendant, as well as the party in this action through which plaintiffs accused defendants of perpetrating their fraud. Hudson’s was not a “third-party” to either action. Ibid. While the original lease appears to provide for counsel fees in the event of breach and the parties’ settlement of the tenancy matter purported to preserve all claims “based upon the lease,” the Apuzzos, Armenia and Regal were not obligated on the lease. Accordingly, we agree that fees could not be properly awarded for the tenancy action.

 

*19 We do not, however, reach the same conclusion with regard to the proceedings in the bankruptcy court. Once the automatic stay was entered and the state action dismissed, plaintiffs filed a declaratory judgment complaint in the bankruptcy court in order to dispose of the property Hudson’s abandoned, and separate proofs of claim. The trustee filed an amended bankruptcy complaint in which plaintiffs were permitted to join in certain of the trustee’s claims against Regal and Armenia, but by which the trustee also asserted claims against plaintiffs for preference payments.

 

Ultimately, plaintiffs were successful in settling the trustee’s claims and in getting the bankruptcy court to approve the reinstatement of this action. But Hudson’s bankruptcy filing was what necessitated plaintiffs having to assert their damage claim in that proceeding and then defend it against the trustee, and those actions are hallmarks of the third-party exception:

 

One who through the tort of another has been required to act in the protection of his interests by bringing or defending an action against a third person is entitled to recover reasonable compensation for loss of time, attorney fees and other expenditures thereby suffered or incurred in the earlier action.

 

[Restatement (Second) of Torts § 914(2) (1979) (quoted by DiMisa, supra, 198 N.J. at 554).]

 

See also Ventron, supra, 94 N.J. at 505 (where seller of real estate defrauded developer into buying polluted property, developer’s damages could include attorney’s fees in defending State’s remediation claims); Jugan, supra, 275 N.J.Super. at 573 (in action to collect on judgment, the plaintiffs could recover counsel fees made necessary in litigation to set aside judgment debtor’s improper transfers). It was defendants’ tortious conduct vis-a-vis Hudson’s that proximately caused plaintiffs to have to litigate with the trustee, who was otherwise a “stranger” to the fraud action plaintiffs had filed. DiMisa, supra, 198 N.J. at 554 (“It is only the requirement of litigation against a stranger that calls the [third-party] exception into play.”).

 

Because we conclude that plaintiffs’ attorneys’ fees incurred in litigation with the bankruptcy trustee were proximately caused by defendants’ torts, we find the court erred in denying plaintiffs damages measured by the expense of that litigation with the third-party bankruptcy trustee. Accordingly, we reverse the denial of attorneys’ fees to plaintiffs limited to fees incurred in the bankruptcy proceeding.

 

Having considered the parties’ remaining arguments in light of the record, we have concluded that plaintiffs are without sufficient merit to warrant discussion in a written opinion. R. 2:11–3(e)(1)(E).

 

We affirm the judgment against the Apuzzos, Armenia, and Regal but reverse the back-rent component of the damage award and remand for reconsideration and any recalculation of pre-judgment interest. We affirm the court’s denial of punitive damages but reverse the court’s denial of attorneys’ fees limited to fees plaintiffs incurred in the bankruptcy court.

 

*20 Affirmed in part; reversed in part; and remanded.

 

© 2024 Central Analysis Bureau