34 LABEL STREET ASSOCIATES VS. RICHARD CECEREÂ (L-0496-12, ESSEX COUNTY AND STATEWIDE)Â (CONSOLIDATED)

NOT FOR PUBLICATION WITHOUT THE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 NOS. A-0836-14T1
A-0183-15T1
A-0307-15T1
34 LABEL STREET ASSOCIATES,
Plaintiff-Respondent,
v.
RICHARD CECERE,
Defendant-Appellant.
———————————————————————————
Argued October 17, 2017 – Decided December 4, 2017
Before Judges Reisner, Hoffman, and Gilson.
On appeal from Superior Court of New Jersey,
Law Division, Essex County, Docket No. L-0496-
12.
Marlo J. Hittman argued the cause for appellant
Richard Cecere in A-0836-14 and A-0307-15
(Cozzarelli & Hittman, LLC, attorneys; Ms.
Hittman and Frank J. Cozzarelli, on the
briefs).
Stephen N. Dratch argued the cause for
appellants Cozzarelli Law LLP and Frank J.
Cozzarelli in A-0183-15 (Franzblau Dratch, PC,
attorneys; Mr. Dratch, on the brief).
Richard D. Trenk argued the cause for
respondent (Trenk, DiPasquale, Della Fera &
Sodono, PC, attorneys; Mr. Trenk, of counsel;
Henry M. Karwowski and Jessica A. Buffman,
on the brief).
PER CURIAM
To quote one of our earlier opinions: "This is a convoluted
commercial landlord/tenant" dispute. Defendant Richard Cecere,
individually and through a corporation he controlled, leased
portions of property owned by plaintiff 34 Label Street Associates
(34 Label). The dispute among the parties has engendered several
lawsuits and multiple appeals.
In this consolidated opinion, we address three appeals: two
filed by Cecere, and one filed by Cecere's lawyers, Cozzarelli
Law, LLP and Frank J. Cozzarelli (collectively, Cozzarelli).
Cecere appeals from three judgments, entered after two
trials, that (1) awarded 34 Label monetary damages for Cecere's
repeated breaches of a ground lease, and (2) rescinded the lease
because Cecere failed to pay the judgments, failed to comply with
the terms of the ground lease, and failed to comply with court
orders. We affirm the judgments entered on August 25, 2014,
September 8, 2014, and August 26, 2015, because the facts found
at trial established that Cecere materially breached the ground
lease from 2007 until 2015, and intentionally failed to cure those
breaches. Therefore, rescission was an appropriate equitable
remedy.
2 A-0836-14T1
Cozzarelli appeals from partial judgments that extinguished
a mortgage and security interest that it took in one of Cecere's
leased properties. Cozzarelli obtained that mortgage and security
interest after judgment had been entered against Cecere for breach
of that lease. Cozzarelli also appeals from an August 28, 2015
order denying its motion to intervene in the lawsuit between 34
Label and Cecere. We affirm the July 23, 2015 partial judgment,
the August 6, 2015 amended partial judgment, and the August 28,
2015 order, because the trial court acted within its discretion
in denying Cozzarelli the right to intervene due to its failure
to make a timely application.
I.
34 Label owns real property in Montclair. It leased portions
of that property to Cecere and R.C. Search Co., Inc. (R.C. Search),
a company wholly owned and controlled by Cecere.
The disputes giving rise to these appeals concern a lease for
property on which Cecere operated a restaurant (the Restaurant
Property). Cecere initially leased the Restaurant Property under
a ten-year lease. In 2002, 34 Label and Cecere entered into a
ninety-nine-year ground lease for the Restaurant Property (the
Ground Lease). Thereafter, Cecere operated a restaurant on the
property until 2012, and he continued to occupy the property until
34 Label took possession in September 2015.
3 A-0836-14T1
Cecere prepaid the full rent of $387,199.20 when the Ground
Lease was executed in 2002. It was the parties' intent to transfer
ownership of the Restaurant Property to Cecere. In that regard,
the Ground Lease provided:
It is the Lessor's intent to deed to the Lessee
the entire premises, Fee Simple, referred to
above (property) upon the Lessee's obtaining
subdivision approval as described in the
attached exhibit A.
The Ground Lease also provided that, pending the subdivision,
Cecere was required to pay his proportional share of the property
taxes, and 100 percent of any increase in the taxes resulting from
improvements to the Restaurant Property. Cecere was also required
to pay his proportional share of other expenses. Finally, the
Ground Lease required Cecere to obtain $2 million in insurance and
name 34 Label as an additional insured party.
Since executing the Ground Lease, Cecere has failed to satisfy
several obligations. Cecere has not paid any taxes or expenses
under the Ground Lease since 2007. Cecere also failed to obtain
insurance. Finally, Cecere never obtained subdivision approval.
These failures, as well as disputes over other leases between 34
Label, Cecere, and his company, R.C. Search, resulted in three
lawsuits.
4 A-0836-14T1
A. The First Lawsuit
Separate from the Restaurant Property, in 1993, 34 Label
leased an office to R.C. Search (the Office Property). In 1996,
34 Label also leased a garage unit to Cecere (the Garage Property).
When Cecere stopped making tax and expense payments for the
Restaurant Property, he and R.C. Search also stopped paying rents
for the Office and Garage Properties. Accordingly, 34 Label
brought a summary disposition action against Cecere and R.C. Search
for possession of the Office and Garage Properties. The Special
Civil Part granted 34 Label possession, and we affirmed that order.
34 Label St. Assocs. v. R.C. Search Co., No. A-4556-08 (App. Div.
Apr. 8, 2010).1
B. The Second Lawsuit
In 2009, Cecere and R.C. Search sued 34 Label, its principal,
Howard Silver, and its accountant, Emer Featherstone. Cecere and
R.C. Search claimed that they were overcharged for rents on the
Office Property and that Silver and Featherstone engaged in fraud.
34 Label filed a counterclaim seeking to recover past due rents
for the Office and Garage Properties and past due taxes and
expenses for the Restaurant Property.
1
Cecere appealed from the judgment for possession of the Garage
Property, but that appeal was dismissed for failure to prosecute.
34 Label St. Assocs. v. Cecere, No. A-0574-09, order entered on
June 10, 2010.
5 A-0836-14T1
On January 5, 2011, the trial court entered an order directing
Cecere to file an application to subdivide the Restaurant Property.
The court also ordered Cecere to "diligently pursue" the
subdivision application to conclusion. Cecere failed to comply
with that order.
Thereafter, all of the claims by Cecere and R.C. Search were
dismissed, and in March 2011, the trial court entered a judgment
in favor of 34 Label (the March 2011 Judgment). Under the March
2011 Judgment, R.C. Search was ordered to pay $190,501.32 for
unpaid rents on the Office Property, and Cecere was ordered to pay
$22,126.51 for unpaid rents on the Garage Property and $149,468.96
for unpaid taxes and expenses on the Restaurant Property. The
trial court also denied 34 Label's application for attorney's
fees.
In May 2011, shortly after the entry of the March 2011
Judgment, Cecere gave Cozzarelli a mortgage and security interest
in the Restaurant Property for $350,000 that Cecere owed to
Cozzarelli for legal services.
Cecere and R.C. Search appealed from the March 2011 Judgment,
and 34 Label cross-appealed from the denial of its application for
attorney's fees. We affirmed the March 2011 Judgment against
Cecere and R.C. Search for the unpaid rents on the Office and
Garage Properties, and for the unpaid taxes and expenses on the
6 A-0836-14T1
Restaurant Property. We reversed the portion of the March 2011
Judgment denying 34 Label's application for attorney's fees and
remanded that part of the case for further proceedings. R.C.
Search Co., Inc. v. Silver, No. A-4332-10 (App. Div. July 19,
2012).2
Thereafter, Cecere did not pay any portion of the March 2011
Judgment. He also failed to pay the taxes and other property
expenses that continued to accrue under the Ground Lease.
C. The Third Lawsuit
In January 2012, while the March 2011 Judgment was pending
appeal, 34 Label sued Cecere for his continued breaches of the
Ground Lease. 34 Label also asserted a claim for rescission.
The third lawsuit was stayed for several months when Cecere
filed for bankruptcy. In June 2014, after Cecere's bankruptcy
case was dismissed, the trial court found Cecere in contempt for
his failure to file a subdivision application as required by the
January 5, 2011 order. Cecere finally filed the subdivision
application in May 2014.
In June 2014, the trial court conducted a four-day bench
trial on the claims in the third lawsuit. After hearing the
2
Cecere has filed a separate appeal from the order that granted
34 Label attorney's fees following the remand proceedings. That
appeal is addressed in a separate opinion. R.C. Search Co., Inc.
v. Silver, No. A-4512-14 (App. Div. Dec. 4, 2017).
7 A-0836-14T1
evidence, the trial court issued an oral decision on July 11,
2014. The court found that Cecere (1) failed to pay any of the
March 2011 Judgment; (2) failed to pay the ongoing expenses,
including taxes, for the Restaurant Property under the Ground
Lease; (3) failed to obtain insurance as required by the Ground
Lease; and (4) failed to comply with the January 5, 2011 order
that required him to file for subdivision of the Restaurant
Property. The court also found that 34 Label paid all of the
taxes and expenses on the Restaurant Property since 2007.
Thus, the trial court found that Cecere breached the Ground
Lease in three material respects, by failing to (1) pay taxes and
expenses, (2) obtain insurance, and (3) diligently pursue a
subdivision of the Restaurant Property.
Turning to 34 Label's claim for rescission, the court decided
it would give Cecere one last chance to cure his defaults.
Accordingly, the court directed that Cecere would have until
January 1, 2015, to cure his defaults, either by paying what he
owed and subdividing the property, or by selling the property.
The court embodied its rulings in a judgment filed on August
25, 2014 (the August 2014 Judgment). The August 2014 Judgment
ordered Cecere to pay 34 Label $163,510.62 plus interest and costs,
which was the amount of unpaid taxes and fees accrued on the
Restaurant Property since the March 2011 Judgment. The August
8 A-0836-14T1
2014 Judgment also ordered a conditional rescission, which
provided that if Cecere failed to pay the judgments owed to 34
Label and failed to obtain subdivision approval for the Restaurant
Property, the court would conduct further hearings to implement
the rescission of the Ground Lease.
On September 8, 2014, the August 2014 Judgment was amended
to include $13,542.46 in additional property taxes accrued through
August 31, 2014. Thus, the monetary judgment increased to
$177,053.08. Cecere moved for reconsideration, but the court
denied that application in an order entered on September 19, 2014.
On October 8, 2014, Cecere filed a notice of appeal from the
August 2014 Judgment, and the September 8, 2014 amended judgment.
Thereafter, Cecere filed an amended notice of appeal, adding the
September 19, 2014 order denying his motion for reconsideration.
In November 2014, the Montclair Planning Board denied
Cecere's subdivision application. The Planning Board issued a
resolution finding that the application was incomplete primarily
because Cecere failed to explain how he would provide parking for
the restaurant if the property was subdivided and the Ground Lease
ended.
By January 2015, Cecere had failed to satisfy the conditions
imposed by the court in the August 2014 Judgment. In that regard,
Cecere had not paid any of the monetary judgments entered against
9 A-0836-14T1
him, continued to fail to pay new taxes and expenses on the
Restaurant Property, and had not subdivided the Restaurant
Property. Therefore, 34 Label filed an order to show cause seeking
rescission of the Ground Lease. The trial court entered an order
on January 13, 2015, scheduling a hearing on rescission and related
damages for February 6, 2015.
In response, Cecere filed an emergent motion for leave to
appeal, arguing that the trial court did not have jurisdiction
because of the pending appeal. In a January 30, 2015 order, we
denied the motion and explained that the trial court had
"continuing jurisdiction to enforce judgments and orders."
Following the denial of Cecere's emergent motion, the trial
court ordered him to allow 34 Label to inspect the Restaurant
Property to evaluate the improvements that he made. Cecere never
allowed that inspection. As a result, the trial court found Cecere
in contempt and entered an order barring him from presenting a
claim based on his improvements to the Restaurant Property. The
court entered that sanction because of "Cecere's history of
intentional non-compliance with court orders and the apparent
inadequacy of monetary sanctions[.]" That order did not preclude
Cecere from using an expert to appraise the property, but he
ultimately chose not to present an expert at trial.
10 A-0836-14T1
In March 2015, Cozzarelli assigned its rights under the
mortgage and security agreement to an entity known as "Ice Pick,
Inc." An associate of Cozzarelli, who works at the law firm, owns
Ice Pick.
A trial on the remedy of rescission and related damages began
in July 2015. 34 Label presented an expert on the fair market
rental value of the Restaurant Property. After counsel for Cecere
cross-examined 34 Label's expert for approximately six hours, the
court took a lunch break. Following the lunch break, counsel for
Cecere announced that Cecere had discharged her. The trial court
denied an application for a mistrial, but granted a continuance
to allow Cecere to either retain new counsel or proceed self-
represented.
At that time, the trial court entered a partial judgment
granting 34 Label immediate possession of the property. In
awarding immediate possession, the trial court noted "the long and
tortured history of this case and Cecere's continuous use of delay
tactics and flouting of court orders." The partial judgment,
entered on July 23, 2015, also extinguished Cozzarelli's mortgage
and security interest in the Restaurant Property. On August 5,
2015, Cozzarelli filed a motion to intervene. The following day,
the court issued an amended partial judgment, and an opinion
explaining its ruling. Thereafter, on August 28, 2015, the trial
11 A-0836-14T1
court entered an order denying Cozzarelli's motion to intervene.
Cozzarelli filed a motion with us for a stay, which we denied.
In the meantime, on August 17, 2015, the rescission trial
resumed, with Cecere representing himself. 34 Label presented its
accountant who testified as to the amount of property taxes and
expenses that 34 Label had paid on the Restaurant Property. The
trial court found the accountant to be credible.
On August 26, 2015, the trial court entered a judgment
rescinding the Ground Lease, and entered a monetary judgment to
restore the parties to their status quo as much as possible (the
August 2015 Judgment). When the Ground Lease was executed in
2002, Cecere prepaid rent of $387,199.20. Using evidence submitted
by Cecere, the court found that the present value of Cecere's
prepaid rent (as of 2015) was $531,663.22. The court found that
34 Label was entitled to $716,481 for Cecere's use and possession
of the Restaurant Property. The court also awarded 34 Label
$49,530.23 in other expenses. Accordingly, the court found that
34 Label was entitled to rents and expenses totaling $766,011.23,
and Cecere was entitled to reimbursement of his prepaid rent in
the present value of $531,633.22. Offsetting those two amounts,
the court entered a net judgment in favor of 34 Label for
$234,348.01.
12 A-0836-14T1
In addition, the court found that the March 2011 and August
2014 Judgments established the correct amount of taxes and expenses
owed by Cecere to 34 Label for the time between October 2007 and
August 2014. In that regard, the court found that the rent
credited to 34 Label did not include property taxes and expenses.
Thus, the August 2015 Judgment left the March 2011 and August 2014
Judgments "in full force and effect[.]"
On September 2, 2015, 34 Label executed the writ of possession
and took possession of the Restaurant Property.
As already noted, Cecere and Cozzarelli have filed three
separate appeals. In A-0836-14, Cecere appeals from the August
2014 Judgment, the September 8, 2014 amended judgment, and the
September 19, 2014 order denying reconsideration. In A-0307-15,
Cecere appeals from the August 2015 Judgment. In A-0183-15,
proposed intervenor, Cozzarelli, appeals from the July 23, 2015
partial judgment, the August 6, 2015 amended partial judgment, and
the August 28, 2015 order denying his motion to intervene.
II.
In his appeals, Cecere primarily contends that rescission was
an improper remedy and challenges, on various grounds, the August
2015 Judgment granting rescission. Cecere also challenges the
adequacy of the trial court's factual findings throughout the
litigations, arguing that (1) the trial court erred in admitting
13 A-0836-14T1
expert testimony on behalf of 34 Label; (2) the trial judge should
have recused herself; (3) 34 Label frustrated the subdivision
process; (4) the trial court lacked jurisdiction to issue the
August 2015 Judgment; (5) the trial court exceeded its authority
by holding Cecere in contempt; (6) the trial court's findings were
not based on adequate credible evidence; and (7) the trial court
improperly restrained Cecere from use of his assets.
Cozzarelli makes six arguments on appeal: (1) the trial court
lacked personal jurisdiction over it; (2) it should have been
allowed to intervene; (3) the trial court lacked jurisdiction
after Cecere appealed the August 2014 Judgment; (4) it had viable
defenses to the extinguishment of its mortgage; (5) any claims
against it should have been dismissed due to 34 Label's violation
of Rule 4:5-1; and (6) 34 Label's claims for payments made after
May 5, 2011, lack priority over its mortgage.
These arguments lack merit and, for the reasons set forth
below, we reject them. We will first address Cecere's arguments,
focusing principally on rescission. We will then address
Cozzarelli's arguments.
A. The Judgment of Rescission
We begin our analysis with the August 2015 Judgment granting
rescission, because that was the final judgment entered against
Cecere.
14 A-0836-14T1
As an equitable remedy, rescission lies within the inherent
discretion of the trial court. First Am. Title Ins. Co. v. Lawson,
177 N.J. 125, 140 (2003). Accordingly, we review an equitable
judgment granting rescission for abuse of discretion. Sears Mortg.
Corp. v. Rose, 134 N.J. 326, 353-54 (1993); Civil S. Factors Corp.
v. Bonat, 65 N.J. 329, 333 (1974).
Moreover, the trial court's factual findings will be upheld
if they are supported by substantial credible evidence in the
record. MacKinnon v. MacKinnon, 191 N.J. 240, 253-54 (2007)
(citing N.J. Div. of Youth & Family Servs. v. M.M., 189 N.J. 261,
279 (2007)). Such deference is especially appropriate "when the
evidence is largely testimonial and involves questions of
credibility." Cesare v. Cesare, 154 N.J. 394, 412 (1998).
The remedy of rescission is rooted in considerations of
equity. Rutgers Cas. Ins. Co. v. LaCroix, 194 N.J. 515, 527
(2008). Where monetary damages alone will not satisfy the injury
sustained by the aggrieved party, courts can look to the equitable
remedy of rescission to provide adequate relief. Ibid.
Accordingly, our Supreme Court has explained:
Rescission remains a form of equitable relief
in whatever setting its need arises, and
courts wielding that remedy retain the
discretion and judgment required to ensure
that equity is done. In furtherance of that
objective, a court may shape the rescission
remedy in order to serve substantial justice.
15 A-0836-14T1
[Id. at 528-29.]
Ordinarily, rescission serves as a remedy for fraud, mistake,
or misrepresentation. E. Newark Realty Corp. v. Dolan, 15 N.J.
Super. 288, 292-93 (App. Div. 1951). Nevertheless, rescission can
be granted even in the absence of fraud, mistake, or
misrepresentation. See ibid. ("The equitable remedy of
cancellation of documents is generally based on fraud or mistake
in the inception of the document, but on occasion the remedy is
applied even though fraud and mistake are absent.").
Where a party materially breaches a contract and there is no
adequate monetary remedy, rescission may be appropriate.
Contracts may be rescinded where there is "original invalidity,
fraud, failure of consideration or a material breach." Farris v.
Cty. of Camden, 61 F. Supp. 2d 307, 336 (D.N.J. 1999) (quoting
Notch View Assocs. v. Smith, 260 N.J. Super. 190, 197 (Law Div.
1992)). The trial court should mold the rescission remedy to
restore the parties to the positions that they would have been in
had the contract never been formed, and to prevent the breaching
party from gaining a benefit. LaCroix, supra, 194 N.J. at 527
(citing Bonnco Petrol, Inc. v. Epstein, 115 N.J. 599, 612 (1989)).
In short, as an equitable remedy, the availability of rescission
16 A-0836-14T1
depends on the totality of the circumstances in a given case.
Lawson, supra, 177 N.J. at 143.
Here, the factual findings of the trial court support the
equitable remedy of rescission. In that regard, Cecere materially
breached the Ground Lease and those breaches could not be remedied
by monetary judgments. Specifically, the trial court conducted
two trials and made the following factual findings, many of which
were not in dispute:
1. Cecere had been in breach of the Ground
Lease since 2007, when he stopped paying taxes
and expenses on the Restaurant Property;
2. Two judgments were entered against Cecere
in 2011 and 2014, but he failed to pay either
judgment;
3. Cecere also continued to occupy the
Restaurant Property, but continued to fail to
pay the newly accruing property taxes and
expenses; and
4. Cecere initially refused to obey the
order requiring him to seek subdivision of the
Restaurant Property; was found to be in
contempt of that order; and ultimately failed
to get the subdivision because he had no plan
regarding parking accommodations for the
restaurant.
In light of those findings, the trial court determined that
Cecere would never comply with his obligations under the Ground
Lease. Indeed, the trial court stated: "[I]t's clear to this
[c]ourt based upon the testimony of Mr. Cecere, his demeanor, his
17 A-0836-14T1
attitude which this [c]ourt had the ability to observe firsthand
over the period of . . . a full day of testimony that [Cecere] has
no intention of making those payments."
The trial court initially entered conditional rescission and
gave Cecere an additional six months to avoid rescission by
complying with his obligations. It was only after Cecere failed
to satisfy the conditions imposed by the court that the trial
court, after a further trial, entered a final judgment of
rescission. Those facts and proceedings support the equitable
remedy of rescission.
We also hold that the factual findings made during the 2015
rescission trial were supported by substantial credible evidence.
The court determined that the present value of the rent that Cecere
paid in 2002 was $531,663.22. In making that finding, the court
relied on evidence submitted by Cecere. The court also found that
34 Label was entitled to compensation from Cecere for use and
possession of the Restaurant Property from 2002 to 2015. The
court based that finding on expert testimony, which it found to
be credible. Accordingly, the court found that 34 Label was
entitled to rents and expenses totaling $766,011.23. Offsetting
those two amounts, the court entered a net judgment in favor of
34 Label for $234,348.01. In addition, the court found that the
March 2011 and August 2014 Judgments established the correct amount
18 A-0836-14T1
of taxes and expenses owed by Cecere to 34 Label through August
2014. All of the court's findings are supported by substantial
credible evidence in the record and we find no basis to disturb
those findings. Moreover, the court's rulings restored the parties
to their original positions in light of the rescission. See
LaCroix, supra, 197 N.J. at 527.
Cecere makes a series of arguments challenging the remedy of
rescission. None of those arguments are persuasive.
First, Cecere contends that rescission requires findings of
clear and convincing evidence and that the trial court failed to
apply such a standard. In making that argument, Cecere relies on
a case that discusses proving fraud by clear and convincing
evidence. See Armel v. Crewick, 71 N.J. Super. 213, 217 (App.
Div. 1961) (stating that a "court of equity has frequently applied
the 'clear and convincing' quantum to averments of fraud"). Here,
however, 34 Label's claim was not based on equitable fraud.
Instead, the claim was based on material breaches of the Ground
Lease, which Cecere refused to cure. Consequently, clear and
convincing evidence was not required. Even if we were to apply
that standard, it has been met. Cecere himself acknowledged that
he was not paying the taxes and that he had not obtained insurance.
Those admissions clearly and convincingly established the breaches
of the Ground Lease.
19 A-0836-14T1
Second, Cecere argues that rescission was barred by judicial
estoppel and the entire controversy doctrine. 34 Label never took
a position that estopped it from seeking rescission. See Kimball
Int'l, Inc. v. Northfield Metal Prods., 334 N.J. Super. 596, 606
(App. Div. 2000) ("A threat to the integrity of the judicial system
sufficient to invoke the judicial estoppel doctrine only arises
when a party advocates a position contrary to a position it
successfully asserted in the same or a prior proceeding.").
Instead, 34 Label initially tried to enforce the lease, but even
after judgments were entered against Cecere, he continued to breach
the Ground Lease. Consequently, 34 Label did not change its
position; rather, Cecere refused to comply with court judgments.
For similar reasons, the entire controversy doctrine does not
apply against 34 Label. See Oliver v. Ambrose, 152 N.J. 383, 392
(1998) ("For over sixty years, it has been established in New
Jersey that the entire controversy doctrine requires the mandatory
joinder of all claims to a single transaction."). 34 Label only
sought rescission after Cecere failed to comply with the March
2011 Judgment that ordered him to pay the taxes and expenses for
the Restaurant Property. Moreover, Cecere continued to possess
the Restaurant Property, but refused to pay the ongoing property
taxes and expenses.
20 A-0836-14T1
Third, Cecere argues that rescission was barred by the statute
of limitations and the doctrine of laches. Cecere never asserted
those defenses before the trial court. Therefore, he waived them.
See Pressler & Verniero, Current N.J. Court Rules, cmt. 1.2.1 on
R. 4:5-4 (2018) ("While the rule does not expressly so state, it
is clear that ordinarily an affirmative defense that is not pleaded
or otherwise timely raised is deemed to have been waived."); see
also Triffin v. Am. Int'l Grp., Inc., 372 N.J. Super. 517, 520
(App. Div. 2004) (declining to consider an issue on appeal because
appellant failed to properly raise it before the trial court).
Even if we considered these arguments substantively, however,
they lack merit. The applicable statute of limitations for claims
of rescission is six years. N.J.S.A. 2A:14-1. Cecere breached
the Ground Lease in 2007, and 34 Label obtained a judgment in
March 2011. After Cecere refused to pay that judgment, 34 Label
filed its claim for rescission in 2012. All of that took place
within the applicable six years. Cecere's claim for laches fails
for the same reasons. In short, 34 Label acted timely in
responding to Cecere's ongoing breaches of the Ground Lease.
Fourth, Cecere contends that there is no such thing as
conditional rescission. That argument lacks merit because by
putting conditions on the rescission, the trial court was giving
Cecere one last opportunity to cure his long-standing material
21 A-0836-14T1
breaches of the Ground Lease. As already explained, it is within
the court's discretion to mold the rescission remedy to provide
adequate relief based upon the totality of the circumstances. See
Lawson, supra, 177 N.J. at 143. Cecere's continued non-compliance
with both the requirements of the Ground Lease and court judgments
demonstrates that the trial court acted within its discretion in
granting conditional rescission.
B. Cecere's Other Arguments on Appeal
Cecere also makes a series of arguments to challenge the
adequacy of the trial court's factual findings. Having found that
rescission was an appropriate remedy, and that it was correctly
implemented, we will briefly analyze why we reject the remainder
of his arguments.
Cecere contends that the trial court improperly relied upon
certain evidence. Specifically, he contends that the trial court
should not have admitted and relied upon expert testimony of
Charles Blau regarding the fair rental value of the Restaurant
Property, and a summary document of the expenses incurred by 34
Label. We review such evidentiary issues for abuse of discretion.
Brenman v. Demello, 191 N.J. 18, 31 (2007). Having evaluated the
court's evidentiary rulings in light of the applicable rules of
evidence, we find no such abuse.
22 A-0836-14T1
Next, Cecere argues that the judge who conducted the 2015
rescission trial was biased and should have recused herself. In
support of this argument, Cecere cites nothing that would
demonstrate any biased or improper conduct by the trial judge.
Instead, Cecere simply points to statements that the judge made
based on the facts presented during the litigation. The judge did
not engage in conduct warranting recusal. See Panitch v. Panitch,
339 N.J. Super. 63, 68-71 (App. Div. 2001) (reviewing the denial
of a motion for recusal for abuse of discretion, and stating that
a judge's comments do not, by themselves, require recusal). Here,
we find no abuse of discretion. Indeed, Cecere's arguments are
based on factual assertions not supported by the record.
Cecere also contends that 34 Label frustrated his efforts to
subdivide the property. Here again, the record does not support
his contention. As part of Cecere's subdivision application, the
Montclair Planning Board requested that he clarify how he would
provide parking for the restaurant if the property was subdivided
and the Ground Lease ended. Cecere asserted that he could continue
to use the garage as permitted under the Ground Lease. Counsel
for 34 Label informed the Planning Board that if the property was
subdivided, the Ground Lease would no longer exist and, therefore,
Cecere would not have access to the parking garage. The trial
23 A-0836-14T1
court reviewed this issue and found that 34 Label did not act
improperly. That finding is amply supported by the record.
Cecere argues that the trial court lacked jurisdiction to
conduct the rescission trial in 2015, while his appeal from the
August 2014 Judgment was pending. That argument fails because the
rescission trial was a proceeding to enforce the August 2014
Judgment. Consequently, the trial court had "continuing
jurisdiction to enforce judgments and orders . . . ." R. 2:9-
1(a). Indeed, we clarified that point in denying Cecere's emergent
motion seeking leave to appeal the January 13, 2015 order to show
cause.
Further, as the procedural history of this case unfolded, it
now can be argued that the August 2014 Judgment was an
interlocutory judgment. That judgment was specifically
conditioned on certain events taking place before January 2015.
The judgment also provided that the court would conduct further
proceedings regarding rescission if those conditions were not met.
Consequently, when Cecere failed to comply with the August 2014
Judgment, the court conducted further proceedings, including
another trial, to implement rescission of the Ground Lease. Thus,
although Cecere now has the right to appeal the August 2014
Judgment, that right arose after the August 2015 Judgment granting
rescission was entered. We have not required Cecere to amend his
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notice of appeal and have already addressed and rejected his
arguments challenging the August 2014 Judgment, as well as the
September 8, 2014 amended judgment and September 19, 2014 order
denying reconsideration.
Cecere also claims that the trial court improperly held him
in contempt twice; once in June 2014, and again in May 2015. We
review a trial court's order of contempt for abuse of discretion.
Gonzalez v. Safe & Sound Sec. Corp., 368 N.J. Super. 203, 209
(App. Div. 2004), rev'd on other grounds, 185 N.J. 100 (2005).
Given the detailed factual findings regarding Cecere's actions,
we find no such abuse.
Both times the trial court held Cecere in contempt, it noted
that he had ignored clear prior court orders. Indeed, Cecere was
first found in contempt after he failed to comply with the January
5, 2011 order directing him to submit an application for
subdivision. The second time Cecere was held in contempt, the
court stated that it was imposing contempt because of his blatant
disregard of discovery obligations to his adversary, including his
deliberate refusal to provide 34 Label access to the Restaurant
Property, and his long-standing history of "flouting" court
orders. Those sanctions were appropriate given Cecere's prior
actions and refusal to obey prior court orders.
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Finally, Cecere's remaining arguments lack sufficient merit
to warrant discussion in a written opinion and, therefore, we
reject them without further comment. R. 2:11-3(e)(1)(E).
C. Cozzarelli's Appeal
Only one of the issues that Cozzarelli raises on appeal is
properly before us: whether the trial court correctly denied its
request to intervene. We hold that the trial court did not abuse
its discretion in denying Cozzarelli's belated motion to
intervene. See Town of Phillipsburg v. Block 1508, Lot 12, 380
N.J. Super. 159, 172 (App. Div. 2005) (reviewing a trial court's
denial of permissive intervention pursuant to Rule 4:33-2 for
abuse of discretion). Lacking status as a party, Cozzarelli does
not have standing to make its other arguments. Williams v. State,
375 N.J. Super. 485, 530 (App. Div. 2005) (recognizing that
intervenors are not parties in the action until a motion to
intervene is granted). Moreover, by failing to timely intervene,
Cozzarelli effectively waived its right to challenge the trial
court's ruling that extinguished its mortgage. J.L.B. Equities
v. Dumont, 310 N.J. Super. 366, 374 (App. Div. 1998).
Rule 4:33-1 governs applications for intervention as of
right, and Rule 4:33-2 addresses permissive intervention. Both
rules require a "timely application." Here, the trial court found
that Cozzarelli's motion to intervene was not timely.
26 A-0836-14T1
Specifically, the trial court found that Cozzarelli had notice of
the rescission claim starting in 2012, but waited until August
2015, to seek intervention. In making that determination, the
trial court relied on the following factual findings.
Cozzarelli represented Cecere in the lawsuit that resulted
in the March 2011 Judgment. Cozzarelli then took the mortgage and
security interest in the Restaurant Property in May 2011. Notably,
the mortgage and security agreement both required Cecere to be in
compliance with his obligations under the Ground Lease.
Cozzarelli, however, knew that Cecere was in breach of those
obligations and had been in continuous breach since 2007.
Cozzarelli was also on notice when 34 Label filed the third
lawsuit in 2012 seeking rescission of the Ground Lease. Despite
knowing that 34 Label sought rescission, Cozzarelli chose not to
intervene at that time.
Cozzarelli continued to delay even after the trial court
entered the August 2014 Judgment. That judgment granted 34 Label
conditional rescission and spelled out the exact conditions that
needed to be met within six months. It is undisputed that those
conditions were not satisfied by January 2015. Thereafter, the
trial court conducted proceedings to implement the final
rescission. Those proceedings included a trial in July 2015,
during which an associate of Cozzarelli Law represented Cecere.
27 A-0836-14T1
Accordingly, from January 2012 through July 2015, Cozzarelli
had actual notice that 34 Label was seeking rescission of the
Ground Lease. An obvious component of rescission would be the
extinguishment of any interest in the Restaurant Property
transferred by Cecere, including Cozzarelli's mortgage and
security interest. Nevertheless, Cozzarelli did not move to
intervene until August 2015. Based on those facts, the trial
court acted well within its discretion in denying Cozzarelli's
motion to intervene.
On appeal, Cozzarelli suggests that there are differences
between Cozzarelli Law, associates of the firm, and Frank J.
Cozzarelli in his individual capacity. Whatever distinctions
there may be for other purposes, the individuals and entities with
a mortgage and security interest in the Restaurant Property
indisputably knew in January 2012 that 34 Label was seeking
rescission of the Ground Lease. Thus, they are all precluded by
the trial court's judgments.
While we need not address Cozzarelli's other arguments, we
note that even if we were to reach them, they lack merit. The
court clearly had jurisdiction over Cecere and the Ground Lease.
Consequently, when the court granted rescission, it had the
jurisdiction and authority to extinguish Cecere's property
interests under the Ground Lease and any interest that Cecere had
28 A-0836-14T1
transferred, including the mortgage and security interest
transferred to Cozzarelli, which were subsequently transferred to
Ice Pick.
Having carefully reviewed this entire record, and the myriad
of arguments put forward both by Cecere and Cozzarelli, we see no
viable defense that Cozzarelli could have asserted to the
extinguishment of the mortgage and security interest in the
Restaurant Property.
Finally, as our prior analysis has established, given the way
the mortgage and security interest were created, and Cozzarelli's
clear notice of the rescission claim, 34 Label had no obligation
to identify, much less move to join, Cozzarelli. Thus, we see no
violation of Rule 4:5-1.
In summary, we affirm the judgments and orders entered on
August 25, 2014, September 8, 2014, September 19, 2014, July 22,
2015, August 6, 2015, August 26, 2015, and August 28, 2015.
Affirmed.
29 A-0836-14T1