Township of Wayne v. Messercola

• Decision Date: 23 March 1992
• Docket Number: Civ. A. No. 91-692 (AJL).
• Citation: 789 F. Supp. 1305
• Parties: TOWNSHIP OF WAYNE, a Municipal Corporation of the State of New Jersey, Plaintiff, v. Louis MESSERCOLA, Thomas Acquaviva, Paul Cavaliere, Jr., Raymond McGrogan, Fair Lawn-McBride Associates, McBride Enterprises, Inc., Keljed/McBride, Rene Spiropoulos and John Doe, Defendants.
• Court: U.S. District Court — District of New Jersey

789 F. Supp. 1305

TOWNSHIP OF WAYNE, a Municipal Corporation of the State of New Jersey, Plaintiff, v. Louis MESSERCOLA, Thomas Acquaviva, Paul Cavaliere, Jr., Raymond McGrogan, Fair Lawn-McBride Associates, McBride Enterprises, Inc., Keljed/McBride, Rene Spiropoulos and John Doe, Defendants.

Civ. A. No. 91-692 (AJL).

United States District Court, D. New Jersey.

March 23, 1992.

Steven Gerber, Gerber & Solomon, Wayne, N.J., for plaintiff.

John J. Barry, Clapp & Eisenberg, Newark, N.J., for defendant Paul Cavaliere, Jr.

J. Fortier Imbert, Asst. U.S. Atty., U.S. Atty's Office, Newark, N.J. for intervenor.

OPINION

LECHNER, District Judge.

This is an action brought by the Township of Wayne ("Wayne") against defendants Louis Messercola ("Messercola"), Thomas Acquaviva ("Acquaviva"), Paul Cavaliere, Jr. ("Cavaliere"), Raymond McGrogan ("McGrogan"), Fair Lawn-McBride Associates ("Fair Lawn-McBride"), McBride Enterprises, Inc. ("McBride Enterprises"), Keljed/McBride, ("McBride") (Fair Lawn-McBride, McBride Enterprises and McBride are collectively referred to as the "McBride Defendants"), Rene Spiropoulos ("Spiropoulos") and John Doe, a fictitious defendant ("Doe").¹ See Complaint, filed 20 February 1991. On 25 June 1991 the First Amended Complaint was filed against Messercola, Acquaviva, Cavaliere, Spiropoulos, Point View Hills Corp. ("Point View"), Harry Stanford ("Stanford"), Jack Finkelstein ("Finkelstein") and Sam Siflinger ("Siflinger") (collectively, the "Defendants").² The First Amended Complaint alleges claims for violations of the federal Racketeer Influenced and Corrupt Organizations Act ("RICO"), 18 U.S.C. § 1961 et seq. and the New Jersey RICO Act, N.J.S.A. 2C:41-1 et seq., for conspiracy to violate federal and state RICO acts and for common law conspiracy and breach of fiduciary duty of honesty, loyalty and trust. First Amended Complaint, 6-25 (the "Amended Complaint"). Jurisdiction is alleged pursuant to 28 U.S.C. § 1331, 18 U.S.C. § 1964 and 28 U.S.C. § 1367, supplemental (pendant) jurisdiction.

Currently before the court is the motion of Wayne for partial summary judgment pursuant to Fed.Rule Civ.P. 56(b) against Cavaliere on Count Seven and Count Eight of the Amended Complaint.³ For the reasons set forth below, the motion for partial summary judgment is granted; damages are awarded against Cavaliere in the amount of $184,370.

Facts and Procedural History

The facts of this case surrounding bribe payments by Fair Lawn-McBride to Messercola relating to a real estate development project for Calvin Klein Cosmetics Corporation (the "Calvin Klein Project") are not disputed. From 1 January 1986 through 8 September 1988, Messercola was mayor of Wayne. Gerber Aff., Ex. B, Transcript of plea hearing of Messercola, dated 20 June 1990 (the "Messercola Plea Tr.") at 17. During that same time, Messercola was also employed as a sales manager by a private company whose offices were located in New York. Id. at 18.

During the period beginning 1985 through 1987 McBride Enterprises and its affiliate, Fair Lawn-McBride, were the developers of an office and distribution center on or off Barbour Pond Road in Wayne. Velie Aff., ¶ 2. During the summer of 1986 Messercola discussed with an associate of Fair Lawn-McBride whether Fair Lawn-McBride would be interested in developing the Calvin Klein Project in Wayne. Messercola Plea Tr. at 17. The proposed project was the development of an office, manufacturing and warehouse facility for Calvin Klein Cosmetics Corporation. Id.; Velie Aff., ¶ 2. Fair Lawn-McBride indicated it was interested in developing the Calvin Klein Project. Messercola Plea Tr. at 18.

Messercola agreed to assure the Calvin Klein Project would be approved by Wayne for the payment of a bribe. Id. at 18-19. Fair Lawn-McBride and Messercola also agreed that the bribe would not be a direct cash payment from Fair Lawn-McBride to Messercola. Id. at 18. They agreed to disguise the bribe by having Fair Lawn-McBride enter a brokerage agreement with a third person and have the bribe pass to the third person in the form of a commission (the "Commission Agreement"). Id. at 19. In December 1986 Wayne approved the Calvin Klein Project with the assistance of Messercola. Id.

In 1986 Cavaliere learned of the agreement between Fair Lawn-McBride and Messercola regarding the bribe and the Commission Agreement.⁴ Gerber Aff., Ex. A, Transcript of Cavaliere Plea Hearing, dated 28 January 1991 (the "Cavaliere Plea Tr.") at 20. Cavaliere agreed to serve as the conduit who would pass the bribe to Messercola. Id. Subsequently, Cavaliere redrafted and signed the Commission Agreement. Velie Aff., Exs. A, B. Cavaliere also telephoned Messercola in his New York office from Cavaliere's New Jersey office to make arrangements regarding the Commission Agreement. Cavaliere Plea Tr. at 21.

The Commission Agreement holds Cavaliere out as the real estate broker who introduced Calvin Klein Cosmetics Corporation to Fair Lawn-McBride. Id. at 21; Velie Aff., Ex. B at 1. The Commission Agreement provided for payment of $273,000 in commission to Cavaliere, payable in two equal installments on 15 January 1987 and 15 September 1987. Velie Aff., Ex. B at 1. On 28 January 1987 and 13 October 1987 Cavaliere received payments of $136,500 each from Fair Lawn-McBride. Id., Exs. D, F. Of the $273,000, Cavaliere kept $96,000 for himself and delivered the remaining $177,000 to Messercola. Cavaliere Plea Tr. at 21; Messercola Plea Tr. at 20.

Count One of the Amended Complaint alleges a claim for RICO violations against Messercola, Acquaviva, Cavaliere, Spiropoulos, Point View, Siflinger, Stanford and Finkelstein. Amended Complaint at 6-13. Count Two of the Amended Complaint alleges a claim for conspiracy to violate RICO against Messercola, Acquaviva, Cavaliere, Spiropoulos, Point View, Siflinger, Stanford and Finkelstein. Id. at 13-14. Count Three of the Amended Complaint alleges a claim for breach of the common law fiduciary duty against Messercola and for aiding and abetting of the breach of fiduciary duty against Spiropoulos and Point View. Id. at 14-15.

Count Four of the Amended Complaint alleges a common law claim for conspiracy to breach fiduciary duties against Messercola, Spiropoulos and Point View. Id. at 15-16. Counts Five and Six of the Amended Complaint allege common law claims for breach of fiduciary duty, aiding and abetting of the breach of fiduciary duty and conspiracy against Messercola and Acquaviva. Id. at 16-19.

Counts Seven and Eight, the relevant counts in this motion, are against Messercola and Cavaliere. Count Seven of the Amended Complaint alleges a common law claim for breach of fiduciary duty and aiding and abetting for accepting bribes with respect to the Calvin Klein Project. Id. at 19-20. Count Eight of the Amended Complaint alleges a common law claim for conspiracy to breach a fiduciary duty. Id. at 20-21.

Counts Nine and Ten allege common law claims for breach of fiduciary duty and conspiracy to breach a fiduciary duty against Messercola, Acquaviva, Stanford, Finkelstein and Siflinger. Id. at 21-23. Counts Eleven and Twelve allege claims for N.J.S.A. 2C:41-2 and 2C:5-1 against Messercola, Acquaviva, Spiropoulos, Cavaliere, Point View, Stanford, Finkelstein and Siflinger. Id. at 23-25. As previously stated, the claims against Acquaviva, Spiropoulos, Point View, Siflinger and Finkelstein have been dismissed. See supra p. 1306 n. 2.

On 17 April 1991 Wayne approved a bond ordinance for the issuance of $8,000,000 in bonds for the acquisition of High Mountain Park in Wayne. Opp. Brief, Ex. C. This property was owned by Fair Lawn-McBride or its affiliates. Id. at 3.

Also on 17 April 1991 Wayne approved the settlement of the federal and state claims against the McBride Defendants. Opp. Brief, Ex. B. On 6 May 1991 Wayne entered a settlement agreement with the McBride Defendants (the "McBride Settlement Agreement"). O'Brien Aff., Ex. B. Under the McBride Settlement Agreement, the McBride Defendants paid Wayne $150,000 for the release of all claims asserted against them in this action and an action brought in state court.⁵ Id., § 3.1. The $150,000 settlement payment was allocated as follows: "one-third ( 1/3 ) of such amount represents reimbursement to WAYNE for professional fees and related litigation expenses in its actions and two-thirds ( 2/3 ) of such amount is payment for alleged common law compensatory damages." Id., § 3.3.

The McBride Settlement Agreement provided, in pertinent part:

The claims released by Wayne are limited only to those stated in its Complaint filed in the state action and federal action and any other claim for damages or relief that could arise from the common operative set of facts set forth in those actions.

...

... Wayne hereby RELEASES the Released Parties from the claim or obligation as defined in paragraph 4.2.E. of this Agreement. This Release is absolute and unqualified with respect to the claim or obligation ... but it does not affect or constitute a release of any other claims or obligations not mentioned....

4.5. The Releasor specifically reserves any and all rights which Releasor may have against each and every Third Party ... and nothing herein shall be construed to fully or partially release any Third Party.

Id. §§ 4.2-4.5. The McBride Settlement Agreement defines Third Party as "any other person(s), firm(s), corporation(s), partnership(s) and/or other entities who are not named or otherwise described in "D" below but who are or may be claimed to be responsible for the same damage or injury to Wayne for which this Release is given."⁶ Id. at 5.

Discussion

Wayne moves for partial summary judgment on Counts Seven and Eight against Cavaliere on the ground that Cavaliere aided and abetted Messercola's breach of fiduciary duty. Moving Brief at 9-16. Wayne argues that as an aider and abettor Cavaliere is liable to it for damages. Id. at 18-19; Reply Brief at 9-13.

Cavaliere concedes...