OLUSEGUN AWONUSI VS. KENNETH YABOH (C-000128-17, HUDSON COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-3023-18T1
OLUSEGUN AWONUSI,
Plaintiff-Respondent,
v.
KENNETH YABOH,
Defendant-Respondent,
and
FAMEK MANAGEMENT CORP.,
Defendant-Appellant.
_______________________________
Submitted February 24, 2020 – Decided March 5, 2020
Before Judges Sabatino and Geiger.
On appeal from the Superior Court of New Jersey,
Chancery Division, Hudson County, Docket No.
C-000128-17.
Alter & Barbaro, attorneys for appellant (Do Kyung
Lee, of counsel and the briefs).
Stephen S. Berowitz, attorney for respondent Olusegun
Awonusi (Stephen S. Berowitz, of counsel and on the
brief).
PER CURIAM
This case arises out of a scheme to transfer an absent owner's title to real
property without his authorization. After a non-jury trial, the court concluded
that defendant Kenneth Yaboh breached his fiduciary duties to the absent owner,
plaintiff Olusegun Awonusi, and defrauded him by transferring Awonusi's
parcel to co-defendant Famek Management Corp. ("Famek"). The court
additionally found that Yaboh and Famek were jointly liable to Awonusi for
conversion, and had been unjustly enriched. The court accordingly rescinded
the property transfer, restored title to Awonusi, and found Yaboh, who had
defaulted in the case, liable for $100,000 in punitive damages.
Famek appeals, contending the trial court misapplied legal and equitable
principles in finding liability and rescinding the transfer. Among other things,
Famek argues it appropriately relied on a power of attorney presented by Yaboh
in acquiring the property. Famek also contends it did not engage in conversion
and was not unjustly enriched. We affirm.
I.
Awonusi is a professor of English linguistics who currently teaches and
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resides in Nigeria. In October 2011, he purchased real property located on Van
Nostrand Avenue in Jersey City, for $100,000. Awonusi intended to stay at the
property when visiting his children in the United States. Because he was living
abroad, Awonusi asked his friend Yaboh to help him find a property and
represent him during the purchase.
Awonusi subsequently entrusted Yaboh to manage the property in his
absence. According to Yaboh, he found a tenant for the first-floor unit and was
responsible for collecting rent, which was to go towards taxes and maintenance.
When Yaboh asked Awonusi for more money to perform additional repairs,
Awonusi sent the requested funds. Yaboh presented Awonusi with a June 28,
2012 letter, purportedly documenting receipt and deposit of this money into an
attorney escrow account. The letter was addressed to Weichert Realtors from
Emmanuella M. Agwu, Esq. 1 However, Yaboh admitted at trial that he forged
the letter and kept the money. Awonusi was unaware of Yaboh's deception at
the time.
1
The record is unclear about the exact nature of Yaboh's arrangement with
Agwu and Weichert Realtors. However, Yaboh testified that "most of the
purchases" related to maintenance of the property were paid through Agwu's
escrow account.
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That same year, Awonusi decided he wanted to sell the Van Nostrand
property and once again enlisted Yaboh to represent him in the transaction.
Awonusi granted Yaboh a power of attorney, witnessed by a Nigerian attorney,
with specific terms limited to a real estate sale. Yaboh later informed Awonusi
that a new power of attorney, signed and notarized at the U.S. Consulate, was
needed.
On January 28, 2013, Awonusi executed this second power of attorney
with substantially the same terms. The document gave Yaboh the authority:
a. To execute contracts, deeds, affidavits, survey
affidavits, RESPA, IRS 1099 and all forms and
documents required in connection with the sale by me
of my real property located and described as follows:
211 Van Nostrand Ave Jersey City 07305, also known
as Lot 4 Block 26401, State of New Jersey.
b. To attend the closing of title and deliver the deed,
affidavit of title, survey affidavit, and other closing
forms and documents;
c. To represent me in all respects at the closing
including but not limited to the negotiation, payment
and settlement of all adjustments, liens, claims and
encumbrances;
d. To receive all proceeds from the sale of the property,
including any refund of escrow funds or other mortgage
payments;
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e. To forward to me all of the funds received from the
sale of the property, after the payment of attorney fees
to my attorney;
f. To do all acts that I might or could have done in the
sale of the property.
In November 2012, unbeknownst to Awonusi, Yaboh used the Van
Nostrand property as collateral for a $35,000 loan from Famek, a New York
corporation solely owned by Frank Emeka. Yaboh testified he needed the
money to fund a separate and personal business matter regarding his gas station.
As a result, the loan was made out to Yaboh's corporation, ETI Petroleum Inc.
("ETI Petroleum"). Yaboh and Emeka struck an oral agreement, providing that,
in exchange for the $35,000 loan, Yaboh would repay Famek $45,000 three
months later. If Yaboh failed to repay in full, Famek would pay Yaboh an
additional $35,000 and the collateral property would be transferred to Famek.
Yaboh characterized the deal as a "hard money" loan. No written loan
agreement was drawn up.
Famek is a real estate and property management company. Its principal,
Emeka, has been in the real estate business for over a decade. Although Emeka
is not a licensed money or mortgage lender, he testified that he sometimes will
loan money to friends and acquaintances in connection with real estate
transactions. Emeka met Yaboh through his friend Brent Blackman, a real estate
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broker with whom he had made previous deals. Emeka did not know Yaboh
prior to their agreement, but testified that he was willing to make the loan
because he trusted his connection, Blackman.
To prove ownership of the property, Yaboh presented Emeka with the
power of attorney, the deed, and a copy of the $100,000 cashier's check made
out to the previous owner's attorney, Michael Werner, Esq., remitted in Yaboh's
name. Based on these three documents, Emeka claimed he was satisfied that
Yaboh was the true owner of the property and had authority to use the property
as security for the loan. Emeka testified that he believed Awonusi was merely
a "straw buyer." He did not attempt to reach out to Awonusi to clarify this
supposed arrangement, testifying at trial that he "wasn't interested in who is the
owner to question it."
When Yaboh attempted to repay the loan on January 23, 2013, his check
bounced. Yaboh then requested the second power of attorney from Awonusi.
On March 7, 2013, Yaboh, ostensibly under the second power of attorney,
transferred Awonusi's property to Famek. The consideration recorded on the
deed was $0.00. No affidavit of title was presented. No contract of sal e was
executed. No formal inspection of the property was conducted. Famek wrote a
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check for the agreed-upon $35,000 payment, made out directly to Yaboh.
Awonusi did not receive any of the money.
After the transfer, Famek learned that Yaboh had failed to pay property
taxes and that a sizable tax lien had been placed on the property. On December
29, 2014, Famek paid off the tax lien, totaling $34,418.98. Famek made various
improvements to the premises and ultimately entered into a contract to sell the
property for $315,000. However, that sale was never consummated.
Meanwhile, frustrated with a lack of communication from Yaboh,
Awonusi made other arrangements to sell the property. On April 20, 2015,
Awonusi executed a power of attorney granting his daughter, Abiodun Awonusi,
authority to effectuate the sale and invalidating the previous power of attorney
granted to Yaboh. Under that power of attorney, Abiodun listed the property
with realtor Sonia Quintero. On December 24, 2015, Quintero received a call
from Emeka, who informed her that he was the owner of the property and had
no intention of selling at that time.
That same day, Awonusi sent an e-mail to Yaboh detailing his
understanding of the events that had transpired with respect to the Van Nostrand
property. He informed Yaboh that he was aware of both the letter from Agwu
forged by Yaboh and the impermissible transfer of the property to Famek.
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Awonusi urged Yaboh to rectify the situation and return to him rightful
ownership of the property. Although Yaboh eventually apologized to Awonusi,
he was unable to recover ownership of the property.
Awonusi filed a five-count amended complaint in July 2018 against
Yaboh and Famek, in the Chancery Division. The complaint alleged fraud as to
Yaboh; fraud as to Famek; breach of fiduciary duty by Yaboh; unjust enrichment
of both defendants; and conversion by both defendants. Awonusi sought to have
the deed signed by Yaboh to Famek declared void and rescinded, and an order
directing Famek to execute a deed returning the property to Awonusi. Awonusi
also sought compensatory damages, punitive damages, attorney's fees, and costs.
Famek answered Awonusi's complaint, but Yaboh did not file an answer.
The court entered default against Yaboh. A non-jury trial was conducted over
two days in November 2018, before Judge Jeffrey R. Jablonski. The court heard
testimony from Yaboh, Awonusi, and Emeka.
Judge Jablonski issued a written opinion on February 8, 2019. The judge
held that: (1) Yaboh had breached his fiduciary duty to Awonusi; (2) Yaboh had
perpetrated a fraud on Awonusi, but Famek had not; (3) Yaboh converted
Awonusi's property and Famek was complicit in this conversion; and (4) both
Yaboh and Famek were unjustly enriched by the conversion.
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Judge Jablonski also made key credibility determinations, finding
Awonusi more credible than Yaboh and Emeka. The judge found Awonusi to
be "most credible" and "inherently believable." In contrast, the judge noted "a
complete lack of credibility" as to Yaboh, and found the circumstances
surrounding the transfer of the deed to Famek "suspicious and similarly
lack[ing] credibility." In light of the testimony of both Yaboh and Emeka, Judge
Jablonski concluded that Famek was not a bona fide purchaser for value.
As a remedy, Judge Jablonski ordered the March 7, 2013 deed void and
rescinded, concluding that rescission was "the only appropriate and equitable
remedy" under the circumstances. While he recognized that Famek had made
investments in the property after obtaining ownership, Judge Jablonski
suggested that the appropriate recourse would be for Famek to attempt to recoup
its losses through a direct suit against Yaboh. The judge awarded $100,000 in
punitive damages against Yaboh but declined to make a similar finding against
Famek. The judge denied Awonusi's claim for compensatory damages,
reasoning that no evidence or testimony had been provided on the issue.
On appeal, Famek argues the trial court erred in holding it was unjustly
enriched, because it paid a total of $104,418.98 for the property, including the
loan to ETI Petroleum, the subsequent payment to Yaboh, and the resolution of
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the outstanding tax lien. In light of its expenditures, Famek contends that the
lower court's finding that it paid "a fraction" of Awonusi's original purchase
price is not supported by the evidence. Famek further maintains that an
application of the doctrine of unjust enrichment was inappropriate, as there were
other remedies available at law.
Famek further argues that the trial court erred by holding that it was
complicit in the conversion of Awonusi's property. Famek claims it exercised
ordinary care in relying on the power of attorney granted to Yaboh. Famek
asserts the trial court's ruling unwisely imposes an elevated standard of care on
buyers conducting real estate transactions with sellers who have granted powers
of attorney to a representative.
II.
In considering Famek's arguments, we are guided by established
principles of appellate review. An appellate court shall "'not disturb the factual
findings and legal conclusions of the trial judge unless [it is] convinced that they
are so manifestly unsupported by or inconsistent with the competent, releva nt
and reasonably credible evidence as to offend the interests of justice[.]'"
Seidman v. Clifton Sav. Bank, 205 N.J. 150, 169 (2011) (quoting In re Trust
Created by Agreement Dated December 20, 1961, 194 N.J. 276, 284 (2008)). In
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a bench trial setting such as this one, we are bound by the judge's factual
findings, so long as they are supported by substantial creditable evidence in the
record. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484
(1974); see also Brunson v. Affinity Fed. Credit Union, 199 N.J. 381, 397
(2009). We afford special deference to the judge's findings about witness
credibility, as the judge had the opportunity to see and hear those witnesses first-
hand. State v. Munez-Valdez, 200 N.J. 129, 141 (2009). We only review de
novo the judge's decisions on questions of law. Manalapan Realty, L.P. v. Twp.
Comm. of Manalapan, 140 N.J. 366, 378 (1995).
Applying these principles here, we reject Famek's arguments and affirm
the trial court's decision, substantially for the sound reasons expressed in Judge
Jablonski's written post-trial decision. We add only a few comments.
As Judge Jablonski aptly found, there is abundant credible evidence that
defendants jointly took part in taking away Awonusi's property without his
knowledge and authorization. The power of attorney Awonusi issued to Yaboh
had specified limitations that were not followed. Awonusi did not authorize the
transfer of his property to pay Yaboh's debts. Although the judge found Yaboh
the more culpable of the two defendants, and for that reason singularly imposed
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punitive damages upon him, the judge also had ample evidence to conclude
Famek was complicit in the wrongful transfer.
We reject, as did the trial judge, Famek's claim that it was entitled to rely
on the power of attorney presented by Yaboh. Because the authority to borrow
is one of the most consequential powers that can be conferred through a power
of attorney, it shall not be inferred in the absence of express authorization
"unless it is necessarily implied by the scope and character of the authority
which is expressly granted." Bank of America, Nat'l Trust & Sav. Assoc. v.
Horowytz, 104 N.J. Super. 35, 38-39 (Cty. Ct. 1968). Just as the power of
attorney in Horowytz did not confer the power to borrow money, the power of
attorney granted to Yaboh did not authorize using Awonusi's property as
collateral for a loan. Furthermore, such authority cannot be reasonably inferred
from the express terms. The power to borrow against the property is not
necessarily implied by the document's directive to execute "all forms and
documents required in connection with the sale." Because Famek's acquisition
of the property was predicated entirely on the improper loan agreement, the
conveyance cannot be valid.
Although Famek maintains that it exercised ordinary care in relying upon
the power of attorney, this claim is unsupported by the record. Emeka testified
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that he believed Yaboh was the true owner of the property based on three
documents: the power of attorney, the deed, and the $100,000 check made out
to the previous owner's attorney, Werner, in Yaboh's name. None of these
documents indicated that Yaboh was the property owner.
The power of attorney, by its own terms, only authorized Yaboh to take
limited actions regarding the sale of the property. The deed names Awonusi as
the grantee; Yaboh's name does not appear anywhere on the deed. Although
Yaboh is the remitter of the cashier's check to the seller's attorney, there is
nothing on the check that connects it to the real estate sale in question, or that
confirms anything beyond the fact that Yaboh was the one who transferred the
payment.
Despite a decade of experience in the real estate business, Emeka took no
reasonable steps to verify Yaboh's claim to the property. He made no attempt
to contact Awonusi to verify his purported "straw man" status and did not
request an affidavit of title prior to completion of the sale.
Emeka exercised a similar lack of care in other aspects of the transaction.
No promissory note was issued for the initial loan to Yaboh. No contract of sale
was executed for the transfer. Emeka did not engage an inspector to evaluate
the premises or check whether there were any liens or encumbrances on the
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property before the conveyance was finalized. The entire transaction was highly
irregular.
We reject Emeka's contention that the trial court imposed a heightened
burden on purchasers who rely on powers of attorney in realty transactions.
Given the peculiar and distinctive factors of this case, and the judge's express
finding that Famek was "complicit" in wrongdoing, Famek's alleged reliance on
the power of attorney is unavailing.
We likewise reject Famek's arguments that it was not unjustly enriched,
and that rescission of the property transfer was unfair. We recognize, as did the
judge, that Famek paid money to extinguish the tax lien and forgave its loan to
Yaboh. But Famek confuses principles of consideration with principles of
unjust enrichment. Famek clearly obtained the parcel and enriched itself "at the
expense of another," namely Awonusi. Callano v. Oakwood Park Homes Corp.,
91 N.J. Super. 105, 108-09 (App. Div. 1966). Awonusi did not receive the fair
and full monetary value of his property. Instead, he was swindled behind his
back.
The judge appropriately exercised his broad equitable authority in
restoring title to its proper owner. The judge also had ample evidence to find
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the element of conversion, which Famek at the very least aided and abetted.
LaPlace v. Briere, 404 N.J. Super. 585, 595 (App. Div. 2009).
All other points raised on appeal lack sufficient merit to warrant
discussion. R. 2:11-3 (e)(1)(E).
Affirmed.
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