NOT FOR PUBLICATION WITHOUT THE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.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4774-14T2
KRONER, INC.,
Plaintiff-Respondent,
v.
M&B 21 HARRISON GROUP, LLC,
STUART ADLER, and ALISA ADLER,
Defendants-Appellants,
and
275 HARRISON AVENUE ASSOCIATION,
INC., 277 HARRISON AVENUE
CONDOMINIUM ASSOCIATION,
JORAM RADOS, and DANIEL BODNER,
Defendants.
________________________________________________________________
Argued June 21, 2016 – Decided June 16, 2017
Before Judges Espinosa and Kennedy.
On appeal from the Superior Court of New
Jersey, Chancery Division, Hudson County,
Docket No. F-11141-13.
Kenneth P. Traum argued the cause for
appellants.
Kevin J. Bloom argued the cause for
respondent (Law Offices of Abe Rappaport,
attorneys; William J. Fishkin, on the
brief).
PER CURIAM
Defendants M&B 21 Harrison Group, LLC (M&B), Stuart Adler and
Alisa Adler appeal from two orders: (1) an order entered April 11,
2014 that granted summary judgment to plaintiff Kroner, Inc., and
transferred the matter to the foreclosure unit as an uncontested
matter, and (2) an order entering final judgment, dated May 15,
2015. We affirm.
I.
In December 2007, M&B executed a mortgage note to Kroner for
the principal amount of $1,956,000, with monthly payments to
commence on February 1, 2008 until its maturity date of January
1, 2009. The note was secured by a mortgage to Kroner; the
mortgaged premises consisted of twenty-one residential condominium
units located in Jersey City.
A complaint in foreclosure was filed in March 2013, alleging
that M&B defaulted on January 1, 2009 by failing to pay off the
loan in full according to the terms of the note.1 M&B filed a
contested answer and counterclaim. Kroner filed an answer to the
counterclaim and subsequently moved successfully to amend the
1
The complaint also named 275 Harrison Avenue Association, Inc.
(275 Harrison), as a defendant, based upon its filing a claim of
lien against M&B. 275 Harrison filed a non-contesting answer to
the complaint. Default and final judgment were entered against
275 Harrison, which is not a party to this appeal.
2 A-4774-14T2
complaint to add Stuart Adler, Alisa Adler, Joram Rados and Daniel
Bodner2 as defendants based upon an Indemnity and Guaranty
Agreement they executed at the time the note and mortgage were
executed.
Cross-motions for summary judgment were filed. By order
dated April 11, 2014, the court granted Kroner's motion and denied
the motion filed by M&B, Stuart Adler and Alisa Adler.
In June 2014, M&B filed a Chapter 11 petition for bankruptcy
in the United States Bankruptcy Court for the Eastern District of
New York. See 11 U.S.C.A. § 301. In September 2014, M&B filed a
complaint in the bankruptcy action against Kroner, Daniel Bodner,
Hagit Bodner and Rados. The complaint alleged various forms of
misconduct by the Bodners and Rados, including fraud and breaches
of fiduciary duties, and sought the equitable subordination of the
debt to Kroner and the claims made by Rados and Daniel Bodner, the
recharacterization of the debt as a capital contribution by Daniel
Bodner in M&B, and compensatory and punitive damages. In December
2014, M&B's case was dismissed with prejudice with the consent of
M&B.
2
Default was entered against both Rados and Bodner; final
judgment was entered against them. They are not parties to this
appeal.
3 A-4774-14T2
The Chancery Division entered final judgment in May 2015
against M&B, 275 Harrison Avenue Condominium Association, Stuart
Adler, Alisa Adler, Rados and Daniel Bodner for the sum of
$1,300,173.41 plus interest and taxed costs, and a counsel fee of
$7500. The order further directed that the mortgaged premises be
sold at a sheriff's sale to satisfy the sum due. Defendants moved
unsuccessfully to vacate the judgment.
The sheriff's sale occurred on September 24, 2015. Kroner
was the successful bidder, buying the property for $441,000.
On appeal, defendants argue summary judgment should not have
been entered against them as there were genuine issues of fact and
law. They argue further that the trial court failed to make the
requisite findings of fact required by Rule 1:7-4 and that,
therefore, the final judgment must be vacated and the matter
remanded to the trial court. We are not persuaded by these
arguments.
II.
In reviewing a summary judgment decision, we consider the
evidence "in a light most favorable to the non-moving party," and
determine "if there is a genuine issue as to any material fact or
whether the moving party is entitled to judgment as a matter of
law." Rowe v. Mazel Thirty, LLC, 209 N.J. 35, 38, 41 (2012)
(citing Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 529
4 A-4774-14T2
(1995)). We need not accept the trial court's conclusions of law,
which we review de novo. Davis v. Devereux Found., 209 N.J. 269,
286 (2012).3
To defeat a motion for summary judgment, the opponent must
"'come forward with evidence' that creates a genuine issue of
material fact." Horizon Blue Cross Blue Shield of N.J. v. State,
425 N.J. Super. 1, 32 (App. Div.) (quoting Brill, supra, 142 N.J.
at 529), certif. denied, 211 N.J. 608 (2012). "An issue of fact
is genuine only if, considering the burden of persuasion at trial,
the evidence submitted by the parties on the motion, together with
all legitimate inferences therefrom favoring the non-moving party,
would require submission of the issue to the trier of fact." R.
4:46-2(c).
Defendants contend that summary judgment was improperly
granted because they brought facts to the trial court's attention
regarding the conduct of Rados and Daniel Bodner that warranted
an equitable remedy in their favor rather than a judgment against
them. Defendants asserted there was a breach of fiduciary duty,
a breach of the covenant of good faith and fair dealing and that
3
Because we apply the same standard as the trial judge in
reviewing a summary judgment motion and review conclusions of
law de novo, defendants' argument that reversal is warranted
based on the trial judge's failure to make findings required by
Rule 1:7-4 lacks sufficient merit to warrant discussion. R.
2:11-3(e)(1)(E).
5 A-4774-14T2
equitable estoppel should have applied to preclude summary
judgment.
Both the Statement of Undisputed Material Facts submitted by
plaintiff and the Counterstatement of Material Facts submitted by
defendants lacked specific references to the record, excluding
pleadings, required by Rule 4:46-2(a). Nonetheless, defendants
admitted the essential facts regarding the Note and Mortgage,
including the following:
The obligation in the Note and/or Mortgage
contained an agreement that if any
installment payment of interest and
principal, taxes and/or insurance premiums
should remain unpaid, the whole principal
sum with all unpaid interest, should, at the
option of Plaintiff, become immediately due
and payable.
Defendants averred additional material facts through the
certification of Alissa Adler. Among the assertions made were:
Plaintiff failed to give defendants adequate notice that Hagit
Bodner, a shareholder of Kroner, was married to Daniel Bodner.
Plaintiff permitted defendants to make payments on the Note upon
the sale of each of the units secured by the Mortgage, rather than
pursuant to the schedule in the Note and never advised that this
arrangement was unacceptable. Adler also cited provisions in the
Mortgage regarding an Event of Default, the circumstances under
6 A-4774-14T2
which Kroner could declare the debt immediately due, and asserted
that Kroner never notified defendant that it was in default.
The thrust of defendants' argument is that Daniel Bodner, a
member of M&B, had an undisclosed conflict of interest because his
wife was the managing partner of Kroner. Defendants also argue
that, despite the provisions of the Note calling for regular
payments, the course of conduct of the parties – that payments
were made only when a unit was sold "should have precluded, on an
estoppel basis the entry of summary judgment."
Accepting these factual assertions as true, they do not
present a genuine issue of fact. Even if Kroner permitted
defendants to make payments that failed to comply with the strict
terms of the Note, that did not estop Kroner from seeking the
relief granted in this action. Defendants' argument is effectively
precluded by Section VI, Paragraph M of the Note, which states:
The failure of Lender to insist upon strict
performance of any term hereof shall not be
deemed a waiver of any of the obligations of
Borrower or any of the rights or remedies of
Lender hereunder. Lender may waive any
Event of Default or performance of Borrower
without waiving any other Event of Default
or performance of Borrower. Lender may
remedy any Event of Default without waiving
the Event of Default remedied. No delay in
performance of any right or remedy of Lender
shall be construed as a waiver of such right
or remedy. Acceptance of any payment after
the occurrence of an Event of Default shall
not be deemed to waive or cure such Event of
7 A-4774-14T2
Default. Acceptance by Lender of any
partial payment or partial performance by
Borrower shall not be deemed a waiver of
full payment or full performance. No
extension of time for the payment of any
amounts due under this Note made by
agreement with any Person now or hereafter
liable for the payment of this Note shall
operate to release, discharge, modify,
change or affect the original liability of
Borrower hereunder, either in whole or in
part, unless agrees otherwise in writing.
Defendants' conflict of interest argument fares no better.
In their brief, defendants contend that Bodner's failure to
disclose his marriage to Hajit Bodner constituted a violation of
"his fiduciary responsibilities to [M&B] and its members."
(Emphasis added). Significantly, the breach of fiduciary duty
alleged is that of a member of M&B to the entity and its members.
The merit or lack of merit of such a claim has no bearing on
whether Kroner had the right to foreclose on the property here.
The relationship between Kroner and M&B was that of lender and
borrower.
The Affiliated Business Arrangement Disclosure Statement made
by Kroner to M&B included the following:
This is give you notice that Kroner, Inc.
has a business and personal relationship
with some of the members of [M&B], because
of this relationship, this referral may
provide Kroner, Inc. with financial or other
benefits.
8 A-4774-14T2
Defendants contend this disclosure was inadequate; that
Kroner had a duty to disclose the Bodners' marriage and that the
failure to make this disclosure should have precluded summary
judgment. We disagree.
Whether Kroner had a duty to disclose the specifics of the
Bodners' marriage is a question of law, Carter Lincoln-Mercury,
Inc., Leasing Div. v. EMAR Group, Inc., 135 N.J. 182, 194 (1994),
to be determined in light of the factual circumstances, United
Jersey Bank v. Kensey, 306 N.J. Super. 540, 553-56 (App. Div.
1997), certif. denied, 153 N.J. 402 (1998).
Generally, a duty to disclose arises in three types of
transactions: (1) "fiduciary relationships such as principal and
agent or attorney and client," (2) situations in which there is
either trust or confidence that is either expressly stated or
necessarily implied, and (3) "contracts or transactions which in
their essential nature, are 'intrinsically fiduciary.'" Id. at
551. "[C]reditor-debtor relationships rarely give rise to a
fiduciary duty." Id. at 552. Defendants have provided no factual
basis for finding a duty to disclose more than what was provided
in the Affiliated Business Arrangement Disclosure Statement under
any of these categories. This argument therefore fails to provide
a basis for reversing the order granting summary judgment.
Affirmed.
9 A-4774-14T2