Homonoff v. Forte
| Decision Date | 16 January 2013 |
| Docket Number | PC-2008-6628,PC-2008-1467 |
| Parties | MARVIN HOMONOFF, in his capacity as the Temporary Custodian of the Estate of Edward Voccola v. PATRICIA A. FORTE and RED FOX REALTY, LLC MARVIN HOMONOFF, in his capacity as the Temporary Custodian of the Estate of Edward Voccola v. PATRICIA A. FORTE |
| Court | Rhode Island Superior Court |
DECISION
This matter arises before the Court from two consolidated actions, both initiated before the death of Edward E. Voccola ("Decedent"). Decedent filed the verified complaint in the initial action, PC-2008-1467, on March 12, 2008. The complaint was amended on June 2011, requesting that the Court grant injunctive relief restraining and enjoining Patricia A. Forte ("Forte") and Red Fox Realty, LLC (collectively, "Defendants") from alienating their interest in the disputed properties (Count I); declare the deeds executed on May 31, 2007 null and void and appoint a commissioner to re-convey the properties to the Estate (Count II); impose a constructive trust over the properties for the benefit of the Estate (Count III); award compensatory and punitive damages to the Estate for breach of duty of good faith, duty of loyalty, and duty to act in the best interest of theshareholder (Count IV); and compel an accounting for all monies received and expended in connection with the land in dispute (Count V). Defendants reply denying the allegations in the complaint and arguing that the deeds were valid. The Defendants also filed a counterclaim, demanding reimbursement for sums expended for taxes, maintenance, insurance, and other charges on the properties totaling $250,000.
In the second matter, initiated October 17, 2008, Decedent filed an eleven count Complaint, along with Lakeview Realty, Inc., Capitol City Investments, Inc., City View Realty, Inc., and West Side Investments, Inc., as co-plaintiffs, against Forte and West Fountain Investments, Inc. as Defendants. In that case, PC-2008-6628, Decedent demanded that Forte discharge a mortgage deed encumbering undeveloped real estate in North Kingston, Rhode Island, owned by Lakeview Realty and identified as Assessor's Plat 63, Lots 13, 17, and 18 (Count I); and that Forte discharge two mortgage deeds and a secured promissory note encumbering property owned by Decedent and located at 165 Glen Hills Drive, Cranston, Rhode Island (Count II). Decedent also demanded judgment against West Fountain Investments for compensatory and punitive damages for slander of title (Count XI) arising from West Fountain Investments' recordation of assignments of mortgages from Redbrook Investments.1 Additionally, Capitol City Investments demanded judgment ofcompensatory damages in excess of $5000 for Forte's failure to discharge mortgages on properties at 400 and 403 West Fountain Street, Providence (Count III); City View Realty demanded judgment of compensatory damages in excess of $5000 for Forte's failure to discharge mortgages on property at 361 West Fountain Street, Providence (Count IV); West Side Investments demanded judgment of compensatory damages in excess of $5000 for Forte's failure to discharge mortgages on property at 23 Penelope Place, Providence (Count V); 257 Dean Street, Providence (Count VI); 32 Cargill Street, Providence (Count VII); 14 Cargill Street, Providence (Count VIII); and 26 Cargill Street, Providence (Count IX). Decedent additionally requested that the Court appoint a commissioner with power and authority to execute all discharges and releases on Forte's behalf (Count X).
Decedent died on June 25, 2010. (Ex. 25; SOF, ¶ 3.) On April 11, 2011, Marvin H. Homonoff, in his capacity as Temporary Custodian of the Estate of Edward Voccola (Estate), filed a motion for substitution and a motion to consolidate. On April 18, 2011, an order entered granting both motions. The Estate was substituted as plaintiff in both cases and the cases were consolidated. In July 2012, the matters proceeded to a non-jury trial. Jurisdiction is pursuant to R.I.G.L. 1956 § 8-2-14.
This case, and the dispute from which it arises, involves the Decedent; corporations in which the Decedent was the sole shareholder and properties owned by Decedent's corporations; and Decedent's five children: Forte, Edward R. Voccola. Barbara Voccola,Stephen T. Voccola, and Paul Voccola.2 Decedent was the sole shareholder in certain Rhode Island Corporations, including Lakeview Realty, Inc., Capitol City Investments, Inc., City View Realty, Inc., and West Side Investments, Inc. (Ex. 1, Complaint, Voccola v. Voccola, C.A. No. 2005-1303, ¶¶ 6-9; Ex. 6, at 2; Complaint, Voccola v. Forte, P.C. No. 2008-6628, ¶ 2.) Each of the corporations owned real estate in Providence, Rhode Island. (Agreed Statement of Facts ("SOF"), ¶ 14; Ex. 28; Ex. 29.) Specifically, Lakeview Realty owned undeveloped real estate in North Kingston, Assessor's Plat 63, Lots 13, 17, and 18; Capitol City Investments owned property at 400 West Fountain Street and 403 West Fountain Street; City View Realty owned property at 361 West Fountain Street; and West Side Investments owned property at 23 Penelope Street, 14 Cargill Street, 26 Cargill Street, 32 Cargill Street, and 257 Dean Street. (SOF, ¶ 14; Ex. 28; Ex. 29; Complaint, Voccola v. Forte, P.C. No. 2008-6628, ¶¶ 10-14.) Decedent individually owned property at 165 Glen Hills Drive, Cranston, Rhode Island. (Complaint, Voccola v. Forte, P.C. No. 2008-6628, ¶¶ 15-16.)
Although there was a lifetime of history relating to the interrelationship between the Decedent and his children, this particular saga began in 2005 when Decedent filed a complaint against two of his children, Stephen and Barbara, seeking to revoke a purported gift of stock to Redbrook Investments. (Ex. 1, Complaint, Voccola v. Voccola, C.A. No. 2005-1303.) Decedent alleged that on September 22, 1996, while incarcerated, he was fraudulently and deceitfully induced to execute a gift of stock transferring all his interest in Redbrook Investments to four of his five children: Forte, Paul, Barbara, and Stephen. Id. ¶¶ 18-20, 24-25. The Decedent's son Edward was not part of the transfer and was estranged from his father for most of his adult life. See id. Decedent alleged that his childrenrepresented to him he would be unable to obtain a loan to pay a criminal penalty to the United States Government unless he executed the gift to them. Id. ¶ 14. After the execution of the purported gift, Redbrook Investments secured a loan for the benefit of Decedent in the amount of $208,000. Id. ¶ 15. The Decedent received the loan proceeds. See id. ¶ 16. He was required to execute a promissory note and mortgage deeds secured by his real estate. Id. Accordingly, Jere Realty Co., Inc., a corporation owned solely by the Decedent, executed a promissory note in favor of Redbrook Investments in the amount of $208,000 to obligate Jere Realty Co. to repay Redbrook Investments for the loans extended for Decedent's benefit. (Ex. 2, Memorandum in Support of Motion to Discharge Mortgages, Voccola v. Voccola, C.A. No. 2005-1303, at 2-3, 4.) In addition, Lakeview Realty, Capitol City Investments, City View Realty, and West Side Investments executed mortgage deeds in favor of Redbrook Investments. Id. at 3. Each of those mortgages stated, in pertinent part, that they were to "secure the payment of Two Hundred Eight Thousand and 00/100 ($208,000.00) Dollars payable as provided in a certain negotiable promissory note of even date herewith." Id.
Upon his release from prison, Decedent sought to regain control of Redbrook Investments and to have the mortgages that had been recorded discharged. (Ex. 1, Complaint, Voccola v. Voccola, C.A. No. 2005-1303, ¶ 20.) In the 2005 four count complaint, Decedent requested a declaration that the purported deed of gift was invalid and unenforceable. Id. He also sought injunctive relief to compel his children to return control of Redbrook Investments, to turn over all books and financial records of the corporation, and to discharge the mortgages recorded on property owned by Decedent and his corporations; an accounting of all profits, income, and expenses derived by Redbrook Investments; and damages. Id. ¶¶ 23-37. Case No. 2005-1303 was dismissed by stipulation on April 13, 2007,and refiled on May 11, 2007. (Ex. 5; SOF, ¶ 12.) In March 2007, in consideration of resolving the 2005 litigation, the Decedent and four of his five children—Barbara, Stephen, Paul, and Forte—executed a Settlement Agreement (the "Settlement Agreement"). (Ex. 6.) The Parties to the Settlement Agreement provided that the business property owned by Redbrook Investments would be sold and the proceeds from the sale would be used for the benefit of the Decedent during his lifetime. Id. All of the shareholders, including Forte, agreed. Id.
The Settlement Agreement provided that Decedent would dismiss all claims which had been or could have been raised in No. 2005-1303. Id. Forte, although not a party to the 2005 action, signed the Settlement Agreement in March 2007. Id. Forte asserted during this trial that she did not read the Settlement Agreement. (Forte Testimony, July 16, 2012.) She testified that she signed the Settlement Agreement after having a two minute conversation with her brother Stephen. Id. Under the terms of the Settlement Agreement, in exchange for Decedent's dismissal of all claims, Paul, Stephen, Barbara, and Forte agreed to discharge and release all mortgages and promissory notes which they held individually referencing Decedent or his corporations.3 (Ex. 6, at 2.) The Settlement Agreement further provided that if any party to the Settlement Agreement refused to execute documents required to dischargethe mortgages, then Forte would be granted the power of attorney to act on that party's behalf, and to perform all acts, including executing documents, necessary to release and discharge any mortgages or promissory notes. Id.
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