Opinion
DOCKET NO. A-3252-11T3
05-14-2014
ANTHONY VITELLA, JOSEPH VITELLA, and T.J.'S MILLSTONE, INC., Plaintiffs-Appellants, v. CAREVA, INC., THOMAS LUCHENTO, CAROL LUCHENTO and GARY LUCHENTO, Defendants-Respondents, and WILLIAM B. KING, BEILAT SANTORE, & COMPANY and RICHARD SANTORE, Defendants.
R. James Kravitz argued the cause for appellants (Fox Rothschild L.L.P., attorneys (Mr. Kravitz, of counsel and on the brief; Heather M. Kumor, on the brief). Michael D. Schottland argued the cause for respondents (Lomurro, Davison, Eastman & Munoz, P.A., attorneys; Mr. Schottland, of counsel; Michael J. Fasano, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Messano, Sabatino and Hayden.
On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-3037-08.
R. James Kravitz argued the cause for appellants (Fox Rothschild L.L.P., attorneys (Mr. Kravitz, of counsel and on the brief; Heather M. Kumor, on the brief).
Michael D. Schottland argued the cause for respondents (Lomurro, Davison, Eastman & Munoz, P.A., attorneys; Mr. Schottland, of counsel; Michael J. Fasano, on the brief). PER CURIAM
Plaintiffs Anthony (Anthony) and Joseph Vitella (Joseph), and their company, TJ's Millstone, Inc., (collectively, plaintiffs), filed suit against Thomas Luchento (Thomas), Carol Luchento (Carol), Careva, Inc. (Careva), a company owned by Carol, and William B. King, the Luchentos' accountant and Carol's brother. Plaintiffs alleged defendants committed fraud by misrepresenting sales generated by the restaurant that they purchased from Careva, known as Luchento's. Plaintiffs also alleged equitable fraud and sought rescission of the sales contract, as well as alleging breach of contract against Careva and professional negligence against King.
To avoid confusion, it is necessary to use first names of family members. We apologize for this informality.
In amended complaints, plaintiffs added real estate broker Richard Santore, his firm Bielat Santore & Company, and Gary Luchento, the son of Thomas and Carol, as defendants. Carol, Careva and Gary filed a single responsive pleading. Thomas filed a separate answer.
Plaintiffs ultimately settled their disputes with King, Santore, and Bielat Santore & Company. The amended complaint alleged that Thomas and Carol fraudulently conveyed their house to Gary. This claim was apparently severed from trial.
The matter proceeded to trial, and the jury returned a verdict of no cause of action. Plaintiffs' motion for a new trial was denied. The judge subsequently entered final judgment dismissing plaintiffs' claims and discharging the lis pendens that had been filed against defendants' property. This appeal followed.
Before us, plaintiffs argue that an eighteen-day adjournment in the middle of trial, alone, or in combination with the allegedly improper closing argument of Thomas's defense counsel, created such prejudice that a new trial is warranted. Having reviewed the record and applicable legal principles, we affirm.
I.
A.
At trial, both plaintiffs testified, as did Anthony's accountant, David Gerstley, the restaurant's landlord, Barry Bloom, and Jay Levine, a certified public accountant who qualified as an expert on damages. Additionally, on their case in chief, plaintiffs called Carol, Thomas, Santore and King as witnesses.
Careva owned Luchento's, which Thomas and Carol had operated since 1991. Due to family and health issues, they decided to sell the restaurant and retire to Florida; they signed a listing agreement with Santore in June 2006, offering the restaurant for sale at $1.25 million.
Anthony and Joseph had owned more than a dozen restaurants together during the prior thirty years. Santore introduced Anthony to Luchento's in July or August 2007, when the sales price had been reduced to $900,000. Santore provided Anthony with the restaurant's 2005 and 2006 tax returns, both of which showed gross sales of approximately $1.6 million each year.
Thomas testified that in September 2007, Anthony requested a profit and loss statement for the first nine months of 2007. In early October, King supplied Santore with a profit and loss statement, and he in turn gave it to plaintiffs. The projected gross sales for the year were approximately $1.55 million.
Anthony claimed he never asked for the document and both plaintiffs denied seeing it; Joseph also asserted that had they seen the estimate of sales, they would not have purchased Luchento's. Nonetheless, around October 2007, plaintiffs lost interest and pursued the purchase of another restaurant. When that opportunity failed to bear fruit, in March 2008, plaintiffs again expressed interest in purchasing Luchento's.
The restaurant's 2007 tax return had not yet been filed, but Thomas had a year-end profit and loss statement showing gross sales of approximately $1.57 million. According to Thomas, Anthony said, "I'd like it to be more," because he needed to show a higher figure to his accountant, his attorney and his brother. Thomas also claimed that Anthony asked if he could prepare a profit and loss statement showing higher gross sales; Anthony accepted Thomas's suggestion that the gross sales figure should include tips customers placed on their credit cards, even though those monies were distributed to the wait staff.
Thomas admitted that he obtained the amount of tip monies from Carol, included it in a new profit and loss statement for 2007 and faxed it to Santore. Thomas testified that changing the gross sales figure was a "mistake," but Anthony "had a reason," so he went along with the scheme. On March 25, 2008, before receiving the amended profit and loss statement which now reflected gross sales of $1.8 million, plaintiffs signed a letter of intent to buy Luchento's for $700,000.
Anthony acknowledged receiving the revised profit and loss statement from Santore but denied ever asking Thomas to falsify the report. Gerstley told Anthony to verify the figures with the Luchentos' accountant. Anthony claimed that at an April 2008 meeting in King's office, King "verified" the altered gross sales figure.
King denied that the false report was discussed at the meeting, further noting that since he prepared the 2007 projection report, he would have known the $1.8 million gross sales figure was inflated. Thomas denied that the meeting concerned the profit and loss statement, and an e-mail from Santore to Thomas outlining numerous agenda items for the meeting did not include any discussion of gross sales figures. In any event, after plaintiffs received the profit and loss statement, the purchase price for the restaurant was reduced even further, to $650,000. The parties entered into a contract for sale in July 2008, and the closing occurred on September 2, 2008.
Plaintiffs never asked for any information concerning 2008 sales prior to closing, which took place just thirteen days before the extension for filing the 2007 business tax returns was to expire. Additionally, plaintiffs never sought any information to support the year-end 2007 figures, such as sales tax paid by Luchento's or supporting documents for the tax returns.
Plaintiffs testified that they immediately realized sales were much lower than they had been led to believe. Anthony asked for a copy of the now-filed 2007 tax return, but Thomas refused to provide it. In December, plaintiffs filed suit. Sometime in April 2009, plaintiffs closed the restaurant and sold the equipment for $50,000.
The 2007 tax return, which was provided in discovery, showed Luchento's had gross sales of $1,570,165.
Meanwhile, on December 2, 2008, Thomas and Carol transferred their house to Gary for one dollar, reserving a life estate for themselves. Both testified that the transfer had been "in the works" for a while, since they had planned to retire to Florida after they sold the business.
At trial, defendants presented testimony from several employees and customers who stated that the restaurant drastically changed for the worse immediately after plaintiffs took over. Charles J. Heuser, Jr., a certified public accountant and expert in restaurant transactions, detailed the reasons for his conclusion that plaintiffs had not conducted appropriate due diligence prior to purchasing the restaurant. Richard Koenig, an executive vice president at Hopewell Valley Community Bank, which loaned plaintiffs the full purchase price for the restaurant, detailed the terms of the loan and confirmed that the bank relied on the false profit and loss statement in approving the loan.
Trial began on October 31, 2011. By Wednesday, November 9, plaintiffs' case was almost complete; Joseph had not finished cross-examination, and Bloom had yet to testify. Although it is not entirely clear when and under what circumstances it occurred, the transcript of the proceedings on November 9 reveals that the judge had informed the attorneys that after Thursday, November 10, the case would need to be adjourned until Monday, November 28. This was occasioned by the judge's prearranged vacation plans and the annual Judicial College and Thanksgiving recess. However, two jurors expressed personal problems with that date, so the judge indicated the trial would resume on November 29.
Plaintiffs' attorney originally indicated that the November 29 resumption date was fine, since one of his clients was unavailable on November 28. However, when court reconvened on November 10, plaintiffs objected to the adjournment. Counsel argued, "[T]he concern that my clients have is that three weeks from now, my case is going to be old in the memories of the jury, and . . . we're going to come back in three weeks, the defendants are going to put on their case, and the jury likely will forget about what I did three weeks ago."
The judge disagreed with plaintiffs' counsel's assessment, noting that the jurors appeared to be very involved in the case. He also noted that the adjournment included only ten trial days. However, plaintiffs' counsel suggested that another judge complete the trial, noting that "all of the key witnesses have now testified." Although defendants opposed that idea, the judge agreed to discuss the possibility further with the civil presiding judge.
The record contains no indication as to whether the presiding judge considered it feasible to have another judge complete the trial, or if plaintiffs subsequently withdrew the request.
When court again reconvened on November 10, the trial resumed and plaintiffs completed their case that day. In dismissing the jurors at the start of the continuance, the judge told them not to "discuss this case amongst yourselves, with anyone else, or let anyone discuss it with you." Plaintiffs' counsel did not request any further instruction, and when trial resumed on November 29 before the same judge, no further instructions were requested or given.
C.
Thomas's counsel delivered the first summation, which was quite long. When he concluded, plaintiffs' counsel lodged objections outside of the jury's presence and asked for curative instructions. In particular, he objected to defense counsel's intimation that Anthony was purposely absent from trial on the day one of the waitresses he fired was scheduled to testify for defendants. Plaintiffs' counsel also objected to defense counsel's characterizations of Anthony's credibility and counsel's use of the term "bank fraud" in describing plaintiffs' dealings with their lender.
The summation covers eighty-seven pages of trial transcript.
Defense counsel actually said: "And I'm not accusing him of [bank fraud]. Why? He didn't have the intent to steal money from them and not pay it back. I may not like what Tony Vitella did to the Luchentos, but I'm not saying it was bank fraud. Why? Because it wouldn't be fair."
The judge indicated "there are a number of things I wasn't fond of in this summation." He agreed to give a curative instruction about defense counsel's use of the term "bank fraud." However, plaintiffs' counsel said he did not "want to . . . make it worse by [having the judge go] into it." He asked that the judge only tell the jurors to "disregard [defense counsel's] comments about [that]." The judge agreed to give a charge and asked plaintiff's counsel to "write it out" and show it to defense counsel. The judge also concluded that his general closing instructions would appropriately focus the jury's attention on the evidence.
No proposed written instruction was ever provided to the judge, and a specific instruction telling the jury to disregard defense counsel's reference to "bank fraud" was never included in the final charge to the jury.
During argument of plaintiffs' new trial motion, their counsel acknowledged that he did not submit a proposed curative instruction because if the judge "mention[ed] [bank fraud], it [was] only going to get worse."
D.
Plaintiffs moved for a new trial. Counsel argued that Thomas's counsel's summation "vilified" his clients. Plaintiffs also contended that the mid-trial adjournment "created fertile ground for the jury to be misled."
In a thoughtful oral opinion in which he discussed applicable precedent, the judge concluded that plaintiff did not demonstrate "there was [a] clear and convincing miscarriage of justice under the law." See R. 4:49-1(a) (providing that "[t]he trial judge shall grant the motion [for a new trial] if, having given due regard to the opportunity of the jury to pass upon the credibility of the witnesses, it clearly and convincingly appears that there was a miscarriage of justice under the law").
The judge further disagreed that "the break [in trial] created . . . prejudice to any party." The judge stated that "despite how many witnesses came in to testify," the case was about the "profit and loss statement that was essentially the basis for the fraud." He said, "[I]t really came down to who the jury was going to believe," Anthony or Thomas.
The judge noted defense counsel's summation comments were "aggressive." However, the judge specifically concluded that "having sat here through the entire trial, listened to all the evidence . . . , I can't find that they did not have at least some basis in the evidence of the case — certainly as to how the case was presented." The judge denied the motion.
II.
Turning to the arguments plaintiffs now raise, it is well-accepted that "[t]he granting of a continuance is a matter exclusively within the province and sound discretion of the trial judge and should not be upset unless it appears from the record that [the party] suffered [a] manifest wrong or injury." In re Elizabeth Educ. Ass'n., 154 N.J. Super. 291, 299 (App. Div. 1977) (emphasis added) (second alteration in original), certif. denied, 77 N.J. 492 (1978); accord State v. Lamb, 125 N.J. Super. 209, 213 (App. Div. 1973).
Plaintiffs cite no reported New Jersey case, and we found none in our research, regarding the prejudicial effect of a mid-trial continuance of a civil trial. Plaintiffs cite to two reported federal cases, neither of which support their argument that a mid-trial continuance lasting several days should "bear with it a presumption of prejudice."
In Hamilton v. Vasquez, 17 F.3d 1149 (9th Cir. 1994), prospective jurors were advised there would be a two-week recess during the winter holidays, and another week was added when a juror advised she was unavailable the week prior. Id. at 1159. After the jury had deliberated for two and one-half days, trial was adjourned for three weeks. Ibid. The defendant claimed the adjournment violated his right to due process because it was unjustified, and the court did not properly admonish the jury. Ibid. The court disagreed, finding that the adjournment was pre-planned, there was a legitimate reason for it, and the defendant failed to show that the adjournment rendered his trial unfair. Ibid.
In United States v. Smith, 44 F.3d 1259, 1267 (4th Cir.), cert. denied, 514 U.S. 1113, 115 S. Ct. 1970, 131 L. Ed. 2d 859 (1995), a criminal defendant's trial was interrupted for thirty-two days, initially due to the judge's vacation, and then due to the defendant's unanticipated surgery. The defendant moved for a mistrial, claiming that the break came just after the government had finished its case, giving the jury a long time to contemplate the government's position without hearing "any countervailing argument." Ibid. The trial judge denied the mistrial motion and the Fourth Circuit affirmed, finding that the judge took "repeated steps to mitigate the potential for prejudice," and the defendant suffered no actual prejudice. Id. at 1268-69.
Plaintiffs acknowledge that neither the Hamilton nor Smith court found actual prejudice was occasioned by the long continuances. However, they argue that the judge in this case did not take steps to mitigate possible prejudice, such as making transcripts of the pre-continuance testimony available to the jury.
The short and dispositive retort to that argument is that plaintiffs never suggested or requested any particular relief. They never asked for the judge to provide specific instructions to the jury either before or after the continuance; they never objected to the instructions the judge did give. Plaintiffs never asked that any transcripts be provided.
Plaintiffs claim that the judge denied their request to allow a different judge to preside over the remainder of the trial. However, when he ruled on plaintiffs' motion for a new trial, the judge explicitly stated that he gave the parties the option of having another judge continue the trial and "no one took [him] up on that offer."
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Most importantly, plaintiffs have failed to demonstrate that they "suffered [a] manifest wrong or injury" as a result of the continuance. In re Elizabeth Educ. Assoc., supra, 154 N.J. Super. at 299. When arguing against the continuance, plaintiffs' counsel conceded that "all of the key witnesses" had already testified. In other words, plaintiffs' and defendants' versions of the critical events were already before the jury prior to the break. In denying plaintiffs' motion for a new trial, the judge properly recognized that the entire case turned on the jury's assessment of the credibility of Anthony and Thomas, both of whom testified during plaintiff's case in chief and before the continuance.
Plaintiffs also argue that the Thomas's counsel's summation comments, taken in conjunction with the continuance, resulted in prejudice that requires reversal. We again disagree.
"In general, [the court] afford[s] counsel broad latitude in closing arguments." Tartaglia v. UBS PaineWebber, Inc., 197 N.J. 81, 128 (2008) (citation omitted). However, counsel "may not use disparaging language to discredit the opposing party, or witness, or accuse a party's attorney of wanting the jury to evaluate the evidence unfairly, of trying to deceive the jury, or of deliberately distorting the evidence." Rodd v. Raritan Radiologic Assocs., P.A. 37 3 N.J. Super. 154, 171 (App. Div. 2004) (citations omitted); accord Szczecina v. PV Holding Corp., 414 N.J. Super. 173, 178 (App. Div. 2010) ("[I]t is improper for an attorney to make derisive statements about parties, their counsel, or their witnesses.").
"To remedy the prejudice caused by untrue statements or inferences, trial courts may, depending on the severity of the prejudice, issue a curative instruction or grant a mistrial." Bender v. Adelson, 187 N.J. 411, 433 (2006). However, when summations remarks "cross the line beyond fair advocacy and comment, and have the ability or 'capacity' to improperly influence the jury's 'ultimate decision making,' the trial judge must take action." Risko v. Thompson Muller Auto. Group, Inc., 206 N.J. 506, 522 (2011) (quoting Bender, supra, 187 N.J. at 416, 435). On appeal, we defer to the discretion of the trial judge who has the "feel of the case." Khan v. Singh, 397 N.J. Super. 184, 202 (App. Div. 2007) (citation omitted).
A trial court shall grant a party's motion for a new trial if the comments were so prejudicial that "it clearly and convincingly appears . . . there was a miscarriage of justice under the law." Bender, supra, 187 N.J. at 431 (citing R. 4:49-1(a)). We apply a similar standard, deferring to the trial court's assessment of those factors "which are not transmitted by the written record." Dolson v. Anastasia, 55 N.J. 2, 7 (1969).
We agree with the trial judge's characterization of defense counsel's summation. It was indeed "aggressive," and it asserted repeatedly in many ways and forms that Anthony lacked credibility. At times, the statements may have crossed the line separating proper comment on the evidence from derisive invective directed at a party. See e.g., Geler v. Akawie, 358 N.J. Super. 437, 467 (App. Div.) (recognizing the impropriety of attacks upon a "litigant's character or morals" or "wholesale disparagement through an unrestricted deluge of epithets") (citations omitted), certif. denied, 177 N.J. 223 (2003).
However, we cannot conclude that the summation, when viewed in its totality, and whether considered alone or in conjunction with the trial continuance, was so egregious that the result was a miscarriage of justice under the law. R. 4:49-1(a).
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION