Lahue v. Pio Costa

• Decision Date: 08 April 1993
• Citation: 263 N.J.Super. 575,623 A.2d 775
• Parties: Robin A. LAHUE, Plaintiff-Respondent, v. Anthony PIO COSTA, III, Louis Albergato, Jr., as Trustee for the Anthony Pio Costa, IV Trust and Louis Albergato, Jr., as Trustee for the Carmen Pio Costa Trust, Defendants-Appellants. In the Matter of the ESTATE OF Anthony PIO COSTA, II, Deceased. Anthony Pio Costa, III, Appellant.
• Court: New Jersey Superior Court — Appellate Division

Page 575

263 N.J.Super. 575

623 A.2d 775

Robin A. LAHUE, Plaintiff-Respondent, v. Anthony PIO COSTA, III, Louis Albergato, Jr., as Trustee for

the Anthony Pio Costa, IV Trust and Louis

Albergato, Jr., as Trustee for the

Carmen Pio Costa Trust,

Defendants-Appellants.

In the Matter of the ESTATE OF Anthony PIO COSTA, II, Deceased.

Anthony Pio Costa, III, Appellant.

Superior Court of New Jersey,

Appellate Division.

Argued March 15, 1993.

Decided April 8, 1993.

Kevin H. Marino, Newark, for defendants-appellants (Robinson, St. John & Wayne, attorneys, Joseph P. LaSala, Edward A. Hartnett and Mr. Marino, on the brief).

Frederick L. Whitmer, Florham Park, for plaintiff-respondent Robin A. Lahue (Pitney, Hardin, Kipp & Szuch, attorneys, Eileen A. Lindsay and Mr. Whitmer, on the brief).

Deanne M. Wilson, Roseland, for respondent Rosalind Pio Costa (Mound, Cotton & Wollan, Parsippany, attorneys, Ms. Wilson of counsel, Patrice M. Renner, Roseland, on the brief).

Before Judges J.H. COLEMAN, SHEBELL and CONLEY.

The opinion of the court was delivered by

CONLEY, J.A.D.

These three consolidated appeals arise from an oral settlement of five separate pieces of litigation between the parties that plaintiff, Robin A. Lahue, contended defendant, Anthony Pio Costa, III, had agreed to on January 22, 1991, and thereafter reneged on. Plaintiff filed a motion to enforce which, following three days of testimony from the critical players in the negotiations, the trial judge granted. A final judgment enforcing the settlement was entered May 14, 1991. Subsequently, defendant's motion for reconsideration was denied by an order entered September 10, 1991. Defendant appealed both orders (A-1050-91T2) and refused to execute documents needed to effectuate the settlement. A motion to compel execution was granted and an order was entered November 20, 1991. Defendant appealed that order (A-1647-91T2). Defendant's third appeal (A-0076-91T2) is from a probate consent judgment required under the settlement and, as such, entered by the trial court on July 19, 1991. We affirm.

Plaintiff and Anthony Pio Costa, III, defendant are siblings. When their father died in 1974, he left substantial property and business interests to his wife, Rosalind, and his two children. These properties and business interests involve: 1) Anton Company, a partnership in which defendant and plaintiff are equal partners and which owns improved properties, identified as B4, B5, B7, B9, B11 and B14, in an industrial park, and which also owns vacant land in Riverdale, Montville and Mansfield; 2) Windbeam Company, a partnership in which plaintiff and defendant are equal partners and which owned or owns properties that have been or are being condemned by the State; 3) a residuary trust of which the parties are the remaindermen and their mother the income beneficiary, and which owns vacant property in Riverdale, Montville, Mansfield, Pequannock, Denville, Mount Arlington and Roxbury; 4) Pio Costa Enterprises, a partnership in which the residuary trust and Rosalind are equal partners and which, similar to Anton Company, owns buildings, identified as B1, B2, B3, B6, B8, B15, B16, in the same industrial park where the Anton Company properties are located.

Over the years, numerous disputes arose between the parties, leading to the filing of five separate complaints. In June 1987, plaintiff filed an action, Lahue v. Pio Costa, et al., Docket No. C-6805-87 (the Anton case), seeking to dissolve and distribute the assets of the Anton Company. In October 1987, she filed another action, Lahue, et al. v. Pio Costa, el al., Docket No. C-7763-87, seeking to recover damages for Pio Costa's alleged "looting" of a family-owned company. In February 1989, she filed a probate action, In the Matter of the Estate of Anthony Pio Costa, III, Deceased, Docket No. 11216-D, seeking both an accounting of the residuary trust and the removal of defendant as a trustee. In January 1990, defendant filed an action against plaintiff, Albergato, et al. v. Lahue, Docket No. C-43-90, seeking to dissolve a business partnership between them. In August 1990, he filed a second complaint in In the Matter of Anthony Pio Costa, II, Docket No. 11216-D seeking confirmation of a sale of trust property pursuant to a contract with Pio Costa Enterprises. ¹

Serious negotiations over settlement of all of the litigation between the parties began in May 1990 and continued through to the end of November 1990 when a basic agreement to a "global" settlement was sketched out. During these negotiations, defendant was represented primarily by Donald A. Richards, and plaintiff primarily by Kenneth J. Norcross.

The thrust of the global settlement was that "everyone wants to get rid of everyone else." Because of the complexity of the interrelationships between the parties in their various property and business interests, the terms of such a settlement were extensive and complicated by the potential triggering of the Environmental Cleanup Responsibility Act, N.J.S.A. 13:1K-6 to -13 (ECRA), in the event of a transfer of properties or interests in properties. But as crystallized in November 1990, and as described by Mr. Norcross, the terms of such a settlement were:

[Robin] would receive from Windbeam, the Berlin property, that would be in redemnification of all her interests in Windbeam, except for a one--one percent interest as a general partner, because if we had done it for the full interest, that would have been an ECRA trigger. So, I leave her in as a one percent general partner of Windbeam. Tony--Robin would then sell that one percent general partnership interest to Tony and Tony would pay her one dollar. You can now take advantage of the--of the exclusion from ECRA, because you have a sister to brother transfer of that one percent interest. Okay. On--Anton property, and the--the global settlement, Tony was going to receive the 11--no, Tony was going to be redeemed out of Anton and he would receive the Tonyspecial [sic] capital account property. Whatever that--that is. And that would be an ECRA trigger. He would have to take care of that. He would also receive the B9, B--was--is--B7, B9.

....

[Anthony would be] [r]edeemed out of Anton. He would receive fee simple. His--his Tony or special capital account property, whatever that is. He would also receive the B7 and B9 properties. Now, as I just told you, if the B7 and B9 properties had actually physically been transferred, that would have been an ECRA trigger. So, instead of transferring B7, B9 properties, we're going to master lease them from Anton to Tony for a 90-year term, for the rent of $1, that would not be an ECRA trigger. So, Tony would be the master lessee. He would be right, to receive as master lessee, the fee interest, in those properties, upon--ECRA, he would trigger at any time at his option. That's the way to go--

....

The lessor would be the Anton partnership and the lessee at that point would be Tony. That's the situation--will change very quickly, but that's what it would be right at that time. Tony would be redeemed out, except for one percent general partnership interest. That one percent interest would be sold. Robin--Robin for $1. Once again, voiding ECRA. Now, the residuary trust would be bifurcated. We would form two--well, form one new trust called the Robin trust. The Robin trust. Rosalyn [sic] remains as incumbent officiary. And Robin would be the only remainder. Ideal would be she's then going to forfeit her interest in the residuary or the--the--give up her interest in the residuary trust. The Robin trust. The--similarly, the Pio Costa Enterprises, is going to be bifurcated. The way we're going to just do that is form a partnership which the Robin partnership. Now, in this bifurcation, the residuary--oh, sorry. I have to go back. Anton--Tony was also going to get out the Montville and Mansville properties out of Anton. He gets them in fee simple. Those are vacant lands. Not ECRA triggers. Okay.

....

To bifurcate the residuary trust, in that bifurcation, we would send the Riverdale, Denville and Mount Arlington properties over to the Robin trust and fee simple. And the other properties would be--remain in the residuary trust. The other properties being Pequannock and Montvale, to stay in the residuary trust. With respect to the PCE properties, which now we're talking about here, they are these B1, 2, B1, 2, 3, 6, 8, 15, 16, we had similarly--have a master lease concept where the B-1 and B6 properties would be liened by PCE to the Robin partnership. Okay. So the Robin partnership would be the master lessee. Again, to $1 for 90 years. The Robin partnership would have a right to require fee simple title in those properties, upon compliance and ECRA and required subdivision approvals. Because again, PCE is one block and lot. All right. We then enter into a like kind exchange.

....

Now, the Robin partnership and Tony will engage in a like kind of exchange. The Robin partnership were--will transfer the least hold interest on B1 and B6 to Tony and Tony is going to transfer the B7 property to the Robin partnership. And also the B10 property to the Robin partnership. That is, he is going to cause Windbeam to transfer the B10 property down to the Robin partnership. Okay. So then, in the interest of the Robin partnership, go up to Tony and Windbeam and in exchange for the B7 and the B10 property coming down. Okay. Now, the--and this B10 property coming down is also going to be a master lease concept and initially, but again, giving you the right fee simple, when you comply with ECRA.

.... What will happen, when all is said is done is that Robin Anton and the Robin partnership and Robin trust, all of these entities are essentially after everything is gone, Robin, they are--they are entities referred to them generally as Robin. All four Robins [sic] interest. Similarly, Tony is--Tony's trust, Windbeam, PCE, residuary trust, all for Tony. All...