TOWNSHIP OF MAPLEWOOD VS. TWC2168 LLC (C-000181-19, ESSEX COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3105-19
TOWNSHIP OF MAPLEWOOD
and BOARD OF HEALTH OF
THE TOWNSHIP OF
MAPLEWOOD,
Plaintiffs-Respondents,
v.
TWC2168 LLC, DANIEL
FAINMAN, and TETIANA
BERRIORS,
Defendants-Appellants.
___________________________
Submitted February 22, 2021 – Decided April 27, 2021
Before Judges Currier and DeAlmeida.
On appeal from the Superior Court of New Jersey,
Chancery Division, Essex County, Docket No.
C-000181-19.
Joseph Rakofsky, attorney for appellants.
Bendit Weinstock, PA, attorneys for respondents
(Joseph H. Tringali, on the brief).
PER CURIAM
Defendants TWC2168, LLC (TWC), Daniel Fainman, and Tetiana
Berriors appeal from the March 2, 2020 order of the Chancery Division
permanently enjoining them from operating a massage business without a
permit. We affirm.
I.
The following facts are derived from the record. The municipal code of
plaintiff Township of Maplewood prohibits the operation of a massage business
in the township without a permit issued by plaintiff Township of Maplewood
Board of Health (Board).
In 2019, Fainman was the sole member of TWC, which operated an
unpermitted massage business under the tradename TWC Healthclub (the Club)
in a commercial building in Maplewood. On February 12, 2019, he applied to
the Board on behalf of TWC for a permit to operate a massage business at its
existing location. The Board denied the permit because of Fainman's criminal
history and allegations of sex trafficking and prostitution at the Club.
A March 27, 2019 certificate of amendment for TWC named Berriors as
the sole member of the entity. That same day, Berriors applied to the Board on
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behalf of TWC seeking a permit to operate a massage business at the Club's
existing location. She identified Fainman as the manager of the Club.
Robert D. Roe, the Health Officer for Maplewood, determined that the
second application was incomplete. It appears that one element missing was a
license from the New Jersey Board of Massage and Bodywork Therapy (State
Board) for TWC to be a massage and bodywork employer. Berriors applied for
the State license on April 3, 2019. According to Roe, in April 2019, Fainman
withdrew the second application by taking it from Roe's desk during a meeting.
However, defendants produced a transcript of a May 16, 2019 telephone
conversation between Roe and Berriors suggesting the second application was
pending at that time. The transcript provides in relevant part:
BERRIORS: I just want to let you know that [the]
[S]tate [B]oard already approved the business, and I
just want to find out if I can pick up [the] permit
tomorrow.
ROE: Yeah. Mr. Fainman was here. He gave me the
number, and I'll call him just to confirm what you're
saying, and if everything is good, I will issue the
permit.
BERRIORS: Okay. So tomorrow, I can come and pick
[it] up, right?
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ROE: Yes.1
At the time of the conversation, the State Board had not issued a massage a nd
bodyworker employer license to TWC. The license was issued by the State
Board to TWC more than two weeks later on May 31, 2019.
No further action was taken by Roe on the second application. There is
no evidence in the record that Berriors came to Roe's office on the day after the
telephone call to pick up a permit. Nor did defendants produce evidence that
any further inquiry was made by Berriors, Fainman, or anyone else on behalf of
TWC to determine if Roe had concluded that "everything is good" and issued
the permit to operate a massage business.
In June 2019, Maplewood police received a tip that prostitution was taking
place at the Club. The next month, they received a report of an intoxicated
woman in her undergarments walking in and out of the Club in the area of other
commercial tenants. Responding officers saw evidence of ongoing prostitution
activities at the Club. A July 10, 2019 police undercover operation at the Club
resulted in Fainman's arrest for promoting prostitution. A woman at the facility
was also arrested and charged with prostitution. 2
1
Although the transcript was not authenticated or formally admitted into
evidence, plaintiffs have not contested its accuracy.
2
This appeal does not involve the criminal charges.
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In August 2019, Maplewood police received a call from a citizen who was
concerned that her cousin was being forced to engage in illegal activity at the
Club. Officers could not locate anyone at the Club meeting the description given
by the caller. Later that month, an investigator with the New Jersey Division of
Consumer Affairs met with Roe and informed him that the agency was
investigating TWC's alleged employment of unlicensed massage and
cosmetology professionals at the Club.
On September 6, 2019, plaintiffs filed a verified complaint and order to
show cause in the Chancery Division, alleging defendants were operating a
massage business at the Club without a permit. Plaintiffs also alleged that
defendants' conduct constituted a nuisance and public endangerment that
threatened to harm the health, safety, and general welfare of persons who enter
and patronize the Club. Plaintiffs sought immediate, temporary, and permanent
restraints against defendants' continued violation of the municipal code.
On September 11, 2019, the Chancery Division entered an order to show
cause temporarily restraining defendants from operating a massage business at
the Club without a permit. On October 10, 2019, the trial court issued an oral
opinion continuing the restraints against defendants and setting a discovery
schedule. An October 24, 2019 order memorializes the court's decision.
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Plaintiffs subsequently moved pursuant to Rule 1:10-3 to enforce litigant's
rights. The motion was supported by a police report stating that on October 18,
2019, a plain clothes officer entered the Club and spoke with a TWC employee
who informed him the facility was open and offering massages for $100.
On November 22, 2019, the trial court, although postponing a decision on
plaintiffs' motion, entered an order continuing the restraints on defendants and
authorizing Roe to post signs at the Club informing the public that TWC is
prohibited from operating as a massage business.
On December 5, 2019, plaintiffs supplemented their motion to enforce
litigant's rights. They submitted a police report stating that an undercover
officer visited the Club on December 3, 2019, and was offered a massage by a
TWC employee for a "donation" of $100. In addition, Roe certified that shortly
after he posted signs at the Club as permitted by the court, he returned to the
facility to discover the signs had been obscured by holiday decorations.
On December 23, 2019, the court entered an order continuing the prior
restraints and directing defendants to lock the exterior doors of the Club to the
public, thereby ceasing all business operations at the facility.
On January 14, 2020, the court issued an oral opinion addressing both
plaintiffs' request for final restraints and their motion to enforce litigant's rights.
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The decision was based on the verified complaint, the exhibits attached thereto,
and deposition transcripts. The court found that plaintiffs proved that they did
not issue TWC a permit to operate a massage business. The court rejected
defendants' argument that Roe orally granted a permit during the May 16, 2019
telephone conversation with Berriors. The court noted that during that call, Roe
stated that he would issue a permit "if everything is good" after he confirmed
that the State Board had issued a massage and bodywork employer license to
TWC. The court found that defendants offered no proof that Roe confirmed the
issuance of such a license and determined that issuance of a municipal permit to
operate a massage business was warranted.
The court also found that notwithstanding the absence of a permit,
defendants continued to operate a massage business at the Club. In addition, the
court concluded defendants continued to operate that business in violation of
several of its orders restraining that activity. Based on these findings, the court
determined plaintiffs were entitled to permanent restraints against defendants'
operation of a massage business at the Club without a permit.
Before entry of a written order, defendants moved for reconsideration.
The court denied their motion in an oral opinion concluding they had merely
reiterated the arguments presented at the final hearing and no grounds for
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reconsideration existed. In addition, the court rejected Fainman's argument that
the verified complaint against him should have been dismissed because he is not
a principal of TWC.
A March 2, 2020 order memorializes the court's decision. The order: (1)
permanently enjoins defendants from operating a massage business at the Club
without a permit; (2) directs defendants to permanently lock the exterior doors
of the Club to ensure it remains closed to the public for all unpermitted business;
(3) permits Roe to post signs alerting the public to the fact that the Club is not
permitted to provide massage services without a permit; and (4) prohibits
defendants from removing or obscuring those signs.
This appeal follows. Defendants argue the trial court: (1) abused its
discretion by considering the police report detailing the undercover operation
that resulted in a criminal charge against Fainman; (2) denied Fainman due
process by adjudicating plaintiffs' claims before his criminal charges had been
resolved; (3) erred by not dismissing Fainman as a defendant; (4) made an
unsupported finding that Roe had not verbally issued a permit to TWC; (5)
impermissibly limited discovery and the cross-examination of Roe (not raised
below); (6) erroneously found permanent injunctive relief was warranted (not
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raised below); and (7) failed to recognize plaintiffs' attorneys had a conflict of
interest (not raised below).
II.
"Our review of '[f]inal determinations made by the trial court sitting in a
non-jury case . . . [is] limited and well-established.'" Balducci v. Cige, 456 N.J.
Super. 219, 233 (App. Div. 2018) (alterations in original) (quoting Seidman v.
Clifton Sav. Bank, 205 N.J. 150, 169 (2011)). The trial court's findings of fact
are "binding on appeal when supported by adequate, substantial, credible
evidence." Ibid. (quoting Cesare v. Cesare, 154 N.J. 394, 411-12 (1998)). "[W]e
do not disturb the factual findings and legal conclusions of the trial [court]
unless we are convinced that they are so manifestly unsupported by or
inconsistent with the competent, relevant and reasonably credible evidence as to
offend the interests of justice." Ibid. (alterations in the original) (quoting In re
Forfeiture of Pers. Weapons & Firearms Identification Card Belonging to F.M. ,
225 N.J. 487, 506 (2016)).
In addition, "[a]s a general rule, courts exercising their equitable powers
are charged with formulating fair and practical remedies appropriate to the
specific dispute." Kay v. Rosefielde, 223 N.J. 218, 231 (2015). "While
equitable discretion is not governed by fixed principles and definite rules,
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'[i]mplicit [in the exercise of equitable discretion] is conscientious judgment
directed by law and reason and looking to a just result.'" Ibid. (quoting In re
Est. of Hope, 390 N.J. Super. 533, 541 (App. Div. 2007)) (alteration in original).
The standards for granting preliminary injunctive relief are well
established: (1) whether a party would suffer irreparable harm if relief is not
granted; (2) whether the claim rests on settled law and has a reasonable
probability of success on the merits; and (3) whether the balance of hardships to
parties demonstrates that greater harm would result from not issuing the stay
than if it were issued. Garden State Equality v. Dow, 216 N.J. 314, 320 (2013)
(citing Crowe v. De Gioia, 90 N.J. 126 (1982)). These factors also bear upon
requests for permanent injunctive relief. See e.g., Murray v. Lawson, 136 N.J.
32, 50-51, cert. granted, judgment vacated on other grounds, 513 U.S. 802(1994); Horizon Health Center v. Felicissimo, 135 N.J. 126, 139 (1994).
Having carefully considered defendants' arguments in light of the
applicable legal standards, we affirm the March 2, 2020 order. The trial court's
findings of fact are based on substantial credible evidence and its decision to
grant permanent injunctive relief is supported by the record and legally sound.
Defendants' primary argument is that the trial court erred when it found
plaintiffs had not issued TWC a permit to operate a massage business. They
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base their argument on the premise that Roe orally issued the permit during the
May 16, 2019 telephone call with Berriors. However, as the trial court correctly
found, Roe told Berriors he intended to issue a permit to TWC if he confirmed
that the State Board had issued TWC a massage and bodywork employer license
and determined "everything is good." This is not a statement that Roe had issued
TWC a massage permit. To the contrary, Roe stated that he intended to issue a
permit if certain conditions were met. As the trial court found, the record
contains no evidence that Roe confirmed issuance of the State Board license,
determined that "everything is good," or issued TWC a permit. Notably,
defendants produced no evidence that Berriors attempted to pick up a permit
after the telephone call, as she suggested she would, or that anyone inquired on
behalf of TWC about whether Roe had issued a permit.
We find no merit in Fainman's argument the trial court deprived him of
due process by deciding plaintiffs' request for relief prior to resolution of the
criminal charge pending against him. The trial court's decision is based solely
on plaintiffs' allegation that TWC was operating a massage business without a
municipal permit authorizing it to do so. The court did not consider plaintiffs'
allegations that the Club posed a public nuisance because, among other things,
it was the locus of acts of prostitution. Nor did the court make any findings
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regarding the events at the Club on the night that an undercover police operation
resulted in Fainman being arrested and charged with promoting prostitution.
The charge against Fainman was not relevant to the issue decided by the court,
was not the basis of any relief granted by the court, and was not explored at the
final hearing.
We also are not persuaded by Fainman's argument the trial court should
have dismissed the allegations against him because he is not a principal of TWC.
Fainman first raised this argument in his motion for reconsideration. Prior to
that time, Fainman was the only active participant in the proceedings among the
defendants. On the day that the court considered plaintiffs' order to show cause,
Fainman stated on the record that he was appearing on behalf of TWC and
Berriors, to whom he had just spoken on the telephone. In addition, it is
undisputed that Fainman, the recent prior owner of TWC, had been hired by
Berriors as the manager of the Club. He offered no evidence suggesting that
anyone other than he had control over the operation of what the court found to
be an unpermitted massage business.
Finally, the record supports the trial court's award of permanent injunctive
relief. The evidence establishes that defendants operated a massage business
without a permit, an act that threatens the public safety and the health and
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welfare of patrons of the Club. Defendants subsequently defied a series of trial
court orders to cease operations of their unpermitted business. Although the
court gradually increased the restraints on defendants, they continu ed their
defiant behavior. The court's final order, which included the padlocking of the
Club to protect the public safety and ensure compliance with the court's decision,
was warranted.
To the extent we have not specifically addressed any of defendants'
remaining claims, we conclude they lack sufficient merit to warrant discussion
in a written opinion. R. 2:11-3(e)(1)(E).3
Affirmed.
3
Defendants raised several arguments for the first time on appeal. We do not
consider questions not presented to the trial court "unless the questions . . . go
to the jurisdiction of the trial court or concern matters of great public interest."
Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) (quoting Reynolds
Offset Co., Inc. v. Summer, 58 N.J. Super. 542, 548 (App. Div. 1959)). To the
extent we do not address those arguments, we have determined that they do not
satisfy the standards for appellate review.
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