Matthew Zucaro & Apk Auto Repair Corp. v. Law Office of Michael Botton, LLC
| Decision Date | 23 May 2018 |
| Docket Number | DOCKET NO. A-1921-16T3 |
| Parties | MATTHEW ZUCARO and APK AUTO REPAIR CORPORATION, Plaintiffs-Appellants, v. THE LAW OFFICE OF MICHAEL BOTTON, LLC, MICHAEL BOTTON, ESQ., and SANTANDER BANK, N.A. f/k/a SOVEREIGN BANK, N.A., Defendants-Respondents. |
| Court | New Jersey Superior Court — Appellate Division |
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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.
Before Judges Yannotti, Carroll and Mawla.
On appeal from Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-2829-14.
Darryl T. Garvin argued the cause for appellants.
Milton Bouhoutsos, Jr., argued the cause for respondents The Law Office of Michael Botton, LLC and Michael Botton, Esq.
Michael D. Malloy argued the cause for respondent Santander Bank, N.A. f/k/a Sovereign Bank, N.A. (Finestein & Malloy, LLC, attorneys; Michael D. Malloy and Corrine LaCroix Tighe, on the brief).
This appeal has its genesis in a business dispute between Jason McGee and Matthew Zucaro. The two men had previously formed a business relationship involving auto sales, repairs, and towing. While they acted as partners in these ventures, Zucaro formed a corporation, APK Auto Repair Corporation, which handled the repair work, and McGee formed APK Auto Brokers, Inc., which engaged in auto sales.
As of March 2011, and at all times relevant to this appeal, APK Auto Repair Corporation was the exclusive towing licensee for the Borough of Seaside Heights (Borough). Following the extensive damage caused by Superstorm Sandy in late October 2012, APK Auto Repair towed and stored approximately 300 vehicles, purportedly at the direction of Borough officials. APK Auto Repair billed Seaside Heights for its services. Although it engaged in negotiations with the Borough, the bill remained unpaid. Consequently, pursuant to a contingent fee agreement, Zucaro and McGee retained attorney Michael Botton to represent them and APK Auto Repair Corporation in a lawsuit against Seaside Heights to recover their outstanding fees and other damages.
On July 1, 2013, the lawsuit settled for $250,000. Botton received and deposited the settlement check into his attorney trust account on July 3, 2013.
On July 23, 2013, McGee went to Botton's law office and requested immediate distribution of the net settlement proceeds in the form of two checks, one payable to "APK Auto Repair" for $3471.851 and the other to "APK Auto" for $159,977.30. Botton issued the checks to McGee in accordance with his instructions. McGee then took the $159,977.30 check to Santander Bank and deposited it into a bank account for McGee's corporation, APK Auto Brokers, Inc. Upon deposit, a Santander employee purportedly endorsed the back of the check "APK Auto." Santander accepted the check for deposit, as McGee was an authorized signatory on both the APK Auto Brokers, Inc. and APK Auto Repair Corporation bank accounts. According to Zucaro, neither he nor APK Auto Repair Corporation ever received any part of the settlement proceeds.
The relationship between McGee, Zucaro, and their businesses unraveled, and McGee commenced an action against Zucaro that wastried separately in the Chancery Division.2 Zucaro and APK Auto Repair Corporation (collectively, "plaintiffs") filed a third-party complaint (the "complaint") against Botton and Santander Bank. Specifically, plaintiffs sued Botton for legal malpractice, negligence, and breach of contract. They also asserted claims against Santander for conversion and breach of warranty under the Uniform Commercial Code (UCC), as well as simple negligence. Plaintiffs' claims against Botton and Santander were transferred to the Law Division and are the subject of the present appeal.
Santander filed a motion to dismiss, arguing that discovery was unnecessary to resolve plaintiffs' claims against it. Santander contended liability for conversion under N.J.S.A. 12A:3-420 attaches only where payment is obtained for "a person not entitled to enforce the instrument." Here, in contrast, McGee was an authorized signatory on the bank's accounts for both APK Auto Repair Corporation and APK Auto Brokers, Inc., and hence he was entitled to endorse and deposit checks into both accounts and to withdraw funds from them.
With respect to the remaining counts, Santander argued plaintiffs' UCC breach of warranty claim was "amorphous" becauseit did not "identify what warranty [was] breached." Further, Santander argued plaintiff could not bring a separate claim for common law negligence because the UCC provides an exclusive remedy where a check has been converted.
On February 6, 2015, the trial court granted Santander's motion and dismissed plaintiffs' claims with prejudice. The memorializing order was unaccompanied by any oral explanation or written statement of reasons.
A period of discovery ensued with respect to plaintiffs' claims against Botton, following which Botton filed a motion for summary judgment. The trial court granted the motion on July 22, 2016, finding plaintiffs' breach of contract claim was "necessarily transformed into a professional negligence claim." The court concluded plaintiffs' failure to serve an expert report was fatal to their claim of professional negligence, and the common knowledge exception did not apply to excuse such failure.3
On appeal, plaintiffs challenge the February 6, 2015 order that dismissed their claims against Santander Bank. They alsochallenge the July 22, 2016 order entering summary judgment in favor of Botton. Having considered plaintiffs' appellate arguments in light of the record and applicable legal principles, we find they lack sufficient merit to warrant extended discussion. R. 2:11-3(e)(1)(E). We add the following comments.
Santander moved to dismiss plaintiffs' claims on the basis that they failed to state a claim upon which relief could be granted. R. 4:6-2(e). Such a motion "may not be denied based on the possibility that discovery may establish the requisite claim; rather, the legal requisites for plaintiffs' claim must be apparent from the complaint itself." Edwards v. Prudential Prop. and Cas. Co., 357 N.J. Super. 196, 202 (App. Div. 2003). On appeal of a motion to dismiss for failure to state a claim under Rule 4:6-2(e), we apply a plenary standard of review and owe no deference to the trial court's conclusions. Rezem Family Assocs., LP v. Borough of Millstone, 423 N.J. Super. 103, 114 (App. Div. 2011).
It is true, as plaintiffs contend, that in deciding the motion to dismiss, the judge made no findings. Rule 1:7-4(a) clearly states that a trial See Shulas v. Estabrook, 385 N.J. Super. 91, 96 (App. Div. 2006) (). "Meaningful appellate review is inhibited unless the judge sets forth the reasons for his or her opinion." Strahan v. Strahan, 402 N.J. Super. 298, 310 (App. Div. 2008) (quoting Salch v. Salch, 240 N.J. Super. 441, 443 (App. Div. 1990)). The failure to provide findings of fact and conclusions of law "constitutes a disservice to the litigants, the attorneys and the appellate court." Curtis v. Finneran, 83 N.J. 563, 569-70 (1980) (quoting Kenwood Assocs. v. Bd. of Adjustment of Englewood, 141 N.J. Super. 1, 4 (App. Div. 1976)). We have recently stressed the continued importance of this requirement. Estate of Doerfler v. Federal Ins. Co., ___ N.J. Super. ___, ___ (App. Div. 2018) (slip op. at 5-6).
Ordinarily, the lack of findings of fact and conclusions of law would prevent any meaningful review, and we would be constrained to remand to the trial court for a sufficient statement of reasons. In this case, however, our plenary standard of review allows us to render a decision without the necessity of remanding the matter to the trial court.
Granting every indulgence to the facts stated in plaintiffs' complaint, and after carefully considering their arguments, we fail to see any viable cause of action against Santander Bank. It is undisputed that the bank's records list both Zucaro and McGee as "authorized signers" on the accounts for APK Auto RepairCorporation and APK Auto Brokers, Inc. These proofs clearly defeat a claim for conversion under the UCC.
"The common law tort of conversion is defined as the 'intentional exercise of dominion or control over a chattel which so seriously interferes with the right of another to control it that the actor may justly be required to pay the other the full value of the chattel.'" Bondi v. Citigroup, Inc., 423 N.J. Super. 377, 431 (App. Div. 2011) (quoting Chicago Title Ins. Co. v. Ellis, 409 N.J. Super. 444, 454 (App. Div. 2009)).
With respect to checks and other negotiable instruments, the UCC, as codified in New Jersey at N.J.S.A. 12A:3-420(a), provides "[a]n instrument is . . . converted if it is taken by transfer . . . from a person not entitled to enforce the instrument or a bank makes or obtains payment with respect to the instrument for a person not entitled to enforce the instrument or receive payment." (Emphasis added). See also Kuhn v. Tumminelli, 366 N.J. Super. 431, 444-45 (App. Div. 2004) ().
As noted, the record indisputably establishes that APK Auto Repair Corporation and APK Auto Brokers, Inc. both maintained accounts at Santander Bank, and both McGee and Zucaro wereauthorized to endorse checks drawn on those accounts. Thus, McGee had the authority to endorse the settlement check on behalf of either corporation....
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