Legal Document: Washington Town Cent Er, Llc Vs Granite Commerci

On August 01, 2023 a MOTION TO STRIKE ANSWER OR MOTION TO STRIKE OR SUPPRESS ANSWER submitted by FERRO, KORY ANN of GREENSPOON MARDER LLP on behalf of WASHINGTON TOWN CENTER, LLC against GRANITE COMMERCIAL PROPERTY MANAGEMENT, LLC, ALEXANDER DICHIARA *LINKED FILING* was filed involving a dispute between Washington Town Center, Llc, and Alexander Dichiara, Granite Commercial Property, for Contract/Commercial Transaction in the District Court of Bergen County.

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BER-L-004071-23 10/18/2023 4:07:35 PM Pglof2 Trans ID: LCV20233151722

GREENSPOON MARDER LLP
Kelly M. Purcaro, Esq. (ID No. 017692009)
Kory Amn Fenn, Esq. (ID No. 065932013)
One Riverfront Plaza
1037 Raymond Blvd., Suite 900
Newark, New Jersey 07102
Tel.: (732) 456-8734 or 8746
Kelly.Purcaro@gmlaw.com
KoryAm.Fero@gmlaw.com
Attorneys for Plaintiff, Washington Town Center, LLC

WASHINGTON TOWN CENTER, LLC, a : SUPERIOR COURT OF NEW JERSEY
New Jersey Limited Liability Company, | LAW DIVISION
BERGEN COUNTY
Plaintiff,
DOCKET NO.: BER-L-004071-23
Vv.
CIVIL ACTION
GRANITE COMMERCIAL PROPERTY
MANAGEMENT, LLC, a New Jersey
NOTICE OF MOTIONTO STRIKE
Limited Liability Company, and DEFENDANTS’ AFFIRMATIVE DEFENSES
ALEXANDER DICHIARA,

Defendants.

George Karousatos, Esq.
Biancamano & Di Stefano, P.C.
Executive Plaza
10 Parsonage Road- Suite 300
Edison, New Jersey 08837

PLEASE TAKE NOTICE that, on Friday, November 3, 2023 at 9:00 in the forenoon or

as soon thereafter
as counsel may be heard, Greenspoon Marder LLP, attomeys
for Plaintiff

Washington Town Center, LLC (“WTC”), shall apply to the Honorable Nicholas Ostuni, J.S.C.,

Superior Court of New Jersey, Law Division, at the Bergen County Justice Center, 10 Main Street,

Flor 4, Hackensack, New Jersey 07601 for an Order pursuant to Rules 4:6-4 and 4:6-5 striking

Defendant Granite Commercial Property Management, LLC and Alexander DiChiara’s

Affirmative Defenses Five, Seven, Nine, Fourteen, Fifteen, Twenty, Twenty-One, Twenty-Two,

Twenty-Three, Twenty-Four, Twenty-Five, Twenty-Six, Twenty-Seven, Twenty-Eight, Twenty-
BER-L-004071-23 10/18/2023 4:07:35 PM Pg2of2 Trans ID: LCV20233151722

Nine, Thirty, Thirty-Two, Thirty-Four, Thirty-Six, Forty, Forty-One, Forty-Five, Forty-Six, and

Forty-Eight.

PLEASE TAKE FURTHER NOTICE that in support of the Motion, WIC will rely upon.

the accompanying letter brief and Certification of Kory Ann Feno with exhibits.

PLEASE TAKE FURTHER NOTICE that a proposed
form of Order is also submitted

herewith.

PLEASE TAKE FURTHER NOTICE that, pursuant to Rule 1:6-2, oral argument is

requested if opposition is filed.

Dated: October 18, 2023 GREENSPOON MARDER LLP
Attorneys for Plaintiff

/s/Kory Am Ferro
Kelly M. Purcaro, Esq. (ID No. 017692009)
Kory Amn Fen, Esq. (ID No. 065932013)
One Riverfront Plaza
1037 Raymond Blvd., Suite 900
Newark, New Jersey 07102
Tel.: (732) 456-8734 or 8746
Kelly.Purcaro@gmlaw.com
KoryAnn.Fero@gmlaw.com.
BER-L-004071-23 10/18/2023 4:07:35 PM Pglof2 Trans ID: LCV20233151722

GREENSPOON MARDER LLP
Kelly M. Purcaro, Esq. (ID No. 017692009)
Kory Ann Ferro, Esq. (ID No. 065932013)
One Riverfront Plaza
1037 Raymond Blvd., Suite 900
Newark, New Jersey 07102
Tel.: (732) 456-8734 or 8746
Kelly.Purcaro@gmlaw.com
KoryAnn.Ferro@gmlaw.com
Attorneys for Plaintiff; Washington Town Center, LLC

' SUPERIOR COURT OF NEW JERSEY
WASHINGTON TOWN CENTER, LLC, a
New Jersey Limited Liability Company, ' LAW DIVISION
'
' BERGEN COUNTY
'
Plaintiff,
' DOCKET NO.: BER-L-004071-23
Vv, '
' CIVIL ACTION

GRANITE COMMERCIAL PROPERTY
[PROPOSED] ORDER ON PLAINTIFF’S
MANAGEMENT, LLC, a New Jersey
MOTION TO STRIKE DEFENDANTS’
Limited Liability Company, and
AFFIRMATIVE DEFENSES
ALEXANDER DICHIARA,

Defendants.

THIS MATTER shaving come before the Court on the application of

Plaintiff Washington Town Center, LLC (“WTC”), by and through its attorneys, Greenspoon

Marder LLP, for an Order striking twenty-four out of fifty of Defendants Granite Commercial

Property Management, LLC and Alexander DiChiara’s (“Defendants”) Separate/A ffirmative

Defenses; and the Court having considered the opposition papers, and for good cause shown;

IT IS on this day of , 2023,
ORDERED that Plaintiff's Motion to Strike Defendants’ Affirmative Defenses is hereby

GRANTED;

IT IS FURTHER ORDERED that Defendants’ Affirmative Defenses numbered Five,

Seven, Nine, Fourteen, Fifteen, Twenty, Twenty-One, Twenty-Two, Twenty-Three, Twenty-Four,

Twenty-Five, Twenty-Six, Twenty-Seven, Twenty-Eight, Twenty-Nine, Thirty, Thirty-Two,
BER-L-004071-23 10/18/2023 4:07:35 PM Pg2of2 Trans ID: LCV20233151722

Thirty-Four, Thirty-Six, Forty, Forty-One, Forty-Five, Forty-Six, and Forty-Eight are hereby

stricken from Defendants’ October 2, 2023 Answer to Complaint, Separate Defenses, Jury

Demand and Certifications;

IT IS FURTHER ORDERED that a copy of this Order shall be deemed served by the

uploading of this Order on eCourts.

HON. NICHOLAS OSTUNI, J.S.C.
BER-L-004071-23 10/18/2023 4:07:35 PM Pglof114 Trans ID: LCV20233151722

WASHINGTON TOWN CENTER, LLC, a : SUPERIOR COURT OF NEW JERSEY
New Jersey Limited Liability Company, | LAW DIVISION
BERGEN COUNTY
Plaintiff,
DOCKET NO.: BER-L-004071-23
Vv.
CIVIL ACTION
GRANITE COMMERCIAL PROPERTY
MANAGEMENT, LLC, a New Jersey
CERTIFICATION OF KORY ANN FERRO
Limited Liability Company, and IN SUPPORT OF PLAINTIFF’
S MOTION
ALEXANDER DICHIARA, TO STRIKE DEFENDANTS’
AFFIRMATIVE DEFENSES
Defendants.

KORY ANN FERRO, hereby certifies as follows:

1 Taman attomey at law of the State of New Jersey and senior counsel at the law

firm of Greenspoon Marder LLP, attomeys for Plaintiff Washington Town Center, LLC in the

within matter. I am one of the attomeys charged
with the care, responsibility, and management

of the within matter, and
am fully familiar
with the facts contained herein.

2. I make this Certification in support of Plaintiff’s Motion to Strike Defendants’

Affirmative Defenses.

3, A true and correct copy of the August 1, 2023 Complaint with Case Information

Statement (Trans ID: LCV 20232231246) is attached hereto as Exhibit A.

4. A tre and comect copy of the Track Assignment Notice (Trans ID:

LCV 20232233073) is attached hereto as Exhibit B.
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5, A true and comect copy of the Summons to Defendant Alexander DiChiara

(“Alex”) and Summons to Defendant Granite Commercial Property Management, LLC

(“Granite”) are attached hereto collectively as Exhibit C.

6. A true and comect
copy of the filed Affidavits
of Service on Alex and Granite are

attached hereto collectively as Exhibit D.

7, A true and correct copy of Defendants’ Answer to Complaint, Separate Defenses,

Jury Demand
and Certifications (Trans ID: LCV20233003542) is attached hereto as Exhibit E.

8. A true and correct copy of the December
24", 2017 Management Agreement is

attached
hereto as Exhibit F.

9, A true and correct copy of Granite’s Responses to Plaintiff's First Request for

Admissions is attached hereto as Exhibit G.

10. A true and correct copy of Alex’s Responses to Plaintiffs First Request for

Admissions is attached hereto as Exhibit H.

11. A tte and correct copy of Michaelson Foreign Car Parts v. Kuhn, No. A-0909-

1011, 2011 WL 5599616 (NJ. Super. Ct. App. Div. Nov. 18, 2011) is attached hereto as Exhibit

12. A true and comect copy of Sokoloff v. Kamson Corp., No. A-4812-08T3, 2010

WL 3326712 (NJ. Super. Ct App. Div. Aug. 13, 2010) is attached hereto as Exhibit
J.

Thereby certify that the foregoing statements made by me are true. I am aware
that if any

of the foregoing statements made by me are willfully false, I am subjectto punishment.

Dated: October 18, 2023 GREENSPOON MARDER LLP
Attorneys for Plaintiff

/s/Kory Am Ferro
Kory Amn Fenn, Esq. (ID No. 065932013)
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EXHIBIT A
BER-L-004071-23 10/18/2023 4:07:35 PM Pg4of114 Trans ID: LCV20233151722

WASHINGTON TOWN CENTER, LLC, a SUPERIOR COURT OF NEW JERSEY
New Jersey Limited Liability Company, LAW DIVISION
BERGEN COUNTY
Plaintiff,
DOCKET NO.:
Vv.
CIVIL ACTION
GRANITE COMMERCIAL PROPERTY
MANAGEMENT, LLC, a New Jersey VERIFIED COMPLAINT WITHJURY
Limited Liability Company, and DEMAND
ALEXANDER DICHIARA,

Defendants.

Plaintiff Washington Town Center, LLC (“WTC”), by and through its undersigned counsel,

hereby complains as follows against Defendants Granite Commercial Property Management, LLC

(“Granite”) and Alexander DiChiara (“Alex”) (collectively “Defendants”):

I INTRODUCTION

This case is about an ongoing fraud, yearslong embezzlement, and theft of business records

recently uncovered following the unfortunate incapacitation of WTC’s founding member,

DiChiara Leone (“Leone”). In her prior capacity as the sole member of WTC, Leone engaged the

assistance of her son, Alex, through his company Granite to manage WTC alongside of her, as the

manager of WTC’s shopping center in Washington Township, New Jersey. Leone engaged

Granite, on behalf of WTC, to co-manage WTC in exchange for a hefty salary of $300,000 per
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year. Leone put her faith and trust in Alex to operate WTC as a fiduciary and in the best interests

of the company.

Unfortunately, Alex and his company Granite mismanaged WTC and used WTC’s

operating account as their own personal piggy bank. Since Leone has declined in health and mental

acuity, it became necessary for Leone to be removed from the management of WTC and replaced

with successor trustees. In order to fulfill their fiduciary and managerial duties to WTC, the

successor trustees sought WTC’s records and information from Defendants only to be met with

empty promises of cooperation that never came to fruition. Indeed, Granite fails and refuses to

provide copies WTC’s own leases and contracts to it despite months of requests.

A preliminary review of WTC’s records, to the extent available to Plaintiff, revealed why

Defendants were likely hiding the ball — Defendants absconded with hundreds of thousands of

dollars of WTC’s monies, if not more, through overpayment of compensation and

misappropriation of WTC funds for personal or non-reimbursable business expenses. After

months of attempting to work with Defendants, WTC had no choice but to terminate the Granite

management contract for cause and seek redress through the court.

This suit follows to gain access to all WTC corporate documents, recoup damages inflicted

by Defendants for, amongst other things, Defendants’ mismanagement of WTC and

misappropriation of WTC’s funds. Not only is Granite liable as the contracting party, but Alex

must be held individually liable as well based upon his abuse of the corporate form to advance his

own interests.

IL. PARTIES

1 Plaintiff WTC is a New Jersey limited liability company with its principal address

at 285 Pascack Road, Washington Township, New Jersey (the “Property”).
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2 WTC is comprised of two members: the Adele Leone Family Trust (the “Family

Trust”) — which owns 1% of WTC’s membership, and the Adele DiChiara Revocable Trust (the

“Trust”) — which owns 99% of WTC’s membership.

3 John Michael DiChiara (“John”) is the Trustee of the Family Trust and the son of

Adele DiChiara Leone (“Leone”), the founding member of WTC.

4. John and Laurence I. Blair (“Larry”) are the Trustees of the Trust.

5 Defendant Granite is a New Jersey limited liability company with its principal

address at 285 Pascack Road, Suite 8, Washington Township, New Jersey.

6. Defendant Alexander DiChiara (“Alex”) is Granite’s Chief Executive Officer who

conducts Granite’s business out of its principal address listed above. Alex is also Leone’s son.

Til. FACTUAL BACKGROUND

A, Company Formation
7
The foregoing paragraphs are incorporated herein as if set forth in full.

8 On March 17, 1997, WTC was registered as a New Jersey Limited Liability

Company for the purpose of acquiring, owning, developing, renting, managing and/or selling the

shopping center located at the Property.

9 On March 24, 1997, the Family Trust was formed, which was later amended on

December 10, 2015 by way of the First Amendment to the Adele Leone Family Trust executed by

Leone.

10. Under the terms of the Family Trust, Leone was designated as the Trustee and, in

the event of her disability, John was appointed as Successor Trustee.

11. On March 28, 1997, the Operating Agreement for the WTC was executed naming

Leone individually as 99% owner and the Family Trust as 1% owner thereof.
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12. On November 12, 2001, the Trust was formed, which was later amended and

restated several times, the latest of which occurred via the September 13, 2018 Adele DiChiara

Leone Sixth Amended and Restated Revocable Trust Agreement.

13. Under the terms of the Trust, Leone was designated the Trustee of the Trust and, in

the event of incapacity, John and Larry (collectively the “Trustees”) were appointed as Successor

Trustees.

14. One of the assets of the Trust, as identified in Exhibit A to the Trust, was all right,

title, and interest in and to WTC, including all membership units. Therefore, Leone transferred

her 99% ownership interest in WTC to the Trust.

B Appointment of Granite as Property Manager for WTC

15. The foregoing paragraphs are incorporated herein as if set forth in full.

16. On December 24, 2017, WTC acted to appoint Granite as day-to-day Manager of

WTC to serve alongside Leone as the existing Manager of WTC subject to the contract for services

executed on that same day. Leone executed the appointment on behalf of the Trust and Family

Trust, as owners of WTC. Therein, Granite was provided with the authority to make certain

management and legal decisions for and alongside WTC.

17. The contract for services also executed on December 24, 2017, refers to the

Property Management Agreement (the “Agreement”) through which WTC retained Granite as the

property manager of WTC pursuant to the terms and conditions set forth in the company resolution.

18. Pursuant to Paragraph | of the Agreement, Granite is required to be accountable to

the members of the WTC.

19. Pursuant to Paragraph 3 of the Agreement, Granite’s compensation is an annual fee

of $300,000 payable bi-weekly (i.e., $12,500 twice per month).
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20. Pursuant to Paragraph 4 of the Agreement, Granite can be terminated for just cause

including, but not limited to, “any material acts of dishonesty, an act of moral turpitude which

adversely affects [WTC], or its reputation, gross negligence or material misconduct, neglect of

duties of Manager, or the inability of Manager to fulfill its obligations for three (3) months as set

forth in this Agreement.”

Cc. Leone’s Incapacity and the Appointment of Successor Trustees

21. The foregoing paragraphs are incorporated herein as if set forth in full.

22. On February 17, 2023, Joseph M. Sperduto, MD, one of Leone’s long-term doctors,

declared Ms. Leone incapacitated due to declined mental capacity, making her unable to make her

own decisions regarding finances and her own wellbeing.

23. On March 6, 2023, Jose Conde, MD, Leone’s physician for over four (4) years,

declared Leone incapacitated due to physical and sensory deficits as well as some underlying

dementia rendering her incapable of making her own cognizant decisions regarding health and

business dealings.

24. As a result of Leone’s disability and incapacity, under the terms of the Family Trust

and Trust respectively, the Trustees, John and Larry, were nominated to assume the trusteeships.

25. On March 27, 2023, John accepted his nominations to serve as Successor Trustee

for both the Family Trust and the Trust.

26. On March 29, 2023, Larry accepted his nomination to serve as Successor Trustee

for the Trust.

27. On March 29, 2023, as a result of Leone’s disability and incapacity, the members

of the WTC, comprised of the Family Trust (1%) and the Trust (99%), acted to remove Leone as

Manager of the WTC and appoint John and Larry to serve as Managers of the WTC in her place.
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D. Interactions between the Trustees and Defendants

28. The foregoing paragraphs are incorporated herein as if set forth in full.

29. On March 29, 2023, the Trustees sent correspondence to Defendants advising that

Leone was no longer serving as Trustee of the Trust and that John and Larry had been appointed

as Successor Trustees. Defendants were furnished with copies of the Acceptance by Successor

Trustee documents evidencing such change. In order to effectively manage WTC, and as part of

their fiduciary obligations, the Trustees requested information related to the operation of WTC,

including outstanding invoices, expense budget breakdown, rent roll, environmental remediation

status, and details of recent and/or pending legal action.

30. While the Trustees hoped that Defendants would be able to continue to effectively

manage WTC alongside them, the reality was, unfortunately, the opposite. The Trustees were met

with Defendants’ empty promises to cooperate, excuses, obstruction, and evidence of

mismanagement.

31. After the March 29" correspondence, Larry and Alex engaged in a telephone

conference wherein Larry explained to Alex the circumstances surrounding Leone’s incapacitation

and his and John’s resulting appointment as Successor Trustees. Larry also reiterated their need

for WTC’s records as part of their fiduciary and co-managerial roles with WTC.

32. On April 3, 2023, Defendants sent an email to TD Bank, N.A. (“TD Bank”), the

banking institution with which WTC banks and which holds WTC’s note and mortgage on the

Property, and copied John suggesting a meeting “to discuss how best we can work together.”

33. In response, TD Bank advised that WTC was past due for the required year-end

reporting for the rent roll and requested that same be sent in advance of any meeting.

34. On April 5, 2023, Defendants sent purported rent roll data to TD Bank.
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35. On April 6, 2023 TD Bank advised Defendants that the rent roll data furnished by

them on behalf of WTC was insufficient. TD Bank requested rent roll and lease summary

information in a specified format complete with lease details and unit numbers, as previously

required, and sent a sample of same to Granite for ease of compliance. As the renewal of TD

Bank’s financing of the Property is approaching at the end of 2023, this information was needed

not only to comply with the note and mortgage, but also as part of the underwriting process for the

renewal.

36. On April 11, 2023, the Trustees sent a second correspondence to Defendants again

requesting an expense budget breakdown, monthly rent roll data, additional details regarding

environmental remediation, details regarding legal actions, and notice of all capital expenditures

for pre-approval. The Trustees required this information from Defendants in order to fulfill their

responsibilities and had not received the documentation and information needed from Defendants

in response to the Trustee’s first correspondence. Moreover, the Trustees’ request for rent roll data

was broken out into a specified form to meet both WTC’s and TD Bank’s specified requirements.

37. On April 11, 2023, due to the importance of the relationship between WTC and TD

Bank — especially in light of the upcoming renewal — the Trustees reached out to TD Bank to advise

of their appointment, request copies of pertinent documents, and to assure TD Bank that the

Trustees would work to ensure that WTC remains in good standing with TD Bank.

38. On April 15, 2023, Alex acknowledged receipt of the Trustee’s second

correspondence and advised that he would begin to create the reports requested in collaboration

with the bookkeeper/accountant. However, as detailed below, Defendants have failed and refused

to provide such information to the Trustees.
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39. On April 26, 2023, TD Bank responded to the Trustee’s April 11" correspondence

advising that TD Bank had still not received the detailed annual rent roll on the Property required

for the note and mortgage to remain in good standing. Despite requests by TD Bank, Defendants

had failed to correct this deficiency thereby jeopardizing the note and mortgage on the Property as

>
well as the possibility of renewal. As such, the Trustees became aware that Defendants

mismanagement of WTC was harming WTC and its business relationships.

40. On May 4, 2023, the Trustees sent a third correspondence to Granite and Alex again

requesting information related to legal actions and the monthly rent roll data needed to meet TD

Bank’s requirements as well as insurance policy declaration pages, vendor lists, lawyer contact

information, an ongoing monthly leasing report, a licensed site remediation professional report,

correspondence or reports to/from the State of New Jersey, and a copy of a standard lease. The

Trustees require information from WTC’s property manager — the Defendants — to ascertain the

status of WTC, effectively co-manage WTC, and to comply with TD Bank’s requirements.

Al. On May 4, 2023, Alex acknowledged receipt of the correspondence and advised he

would add the requests to those the accountant was already working to compile. Alex further

advised that, since he has no staff, the requested reports would take some time. Unfortunately, this

was a false promise. Defendants have not furnished this information to date.

42. WTC then received a letter from Granite and Alex dated May 6, 2023, not providing

the WTC information outstanding for over a month, but instead requesting a $1,000,000 reserve

to be held in WTC’s TD Bank operating account, which amount was far in excess of the historical

reserve held.

43. On May 8, 2023, Alex and Larry corresponded with one another to schedule a site

visit for Larry to inspect the property, meet Alex, and gain an understanding of the layout, leasing
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environment, tenants, and their leases. Alex flagged some key issues to discuss regarding WTC

including financing and lease renewal strategies. Thus, Defendants acknowledged the Trustees’

role as the members and co-managers of WTC.

44. On May 12, 2023, the Trustees sent a fourth correspondence to Defendants

requesting justification for the $1,000,000 reserve request, advising that capital expenditures must

be submitted to the Trustees for pre-approval, and advising that an ATM card would not be issued

as all vendors should be paid via the bill-pay system. The Trustees also attached their May 4"

correspondence reiterating the requests for documents and information as set forth therein and that

had been outstanding for a month and a half despite Alex’s representations that he and an

accountant were compiling same.

45. On May 15, 2023, Alex acknowledged receipt of the correspondence and advised

that the accountant was working on compiling the information requested. Upon information and

belief, as evidenced by Defendants’ failure to provide same to date, Alex’s representations were

false and Defendants never intended to provide WTC with its own requested information.

46. On May 17, 2023, Alex met with Larry at the Property during which Larry toured

the Property and reiterated the Trustee’s requests for documents and information. Alex’s meeting

with Larry further solidified Defendant’s acknowledgment of the Trustees’ role respecting WTC.

47. On May 26, 2023, the Trustees sent a fifth correspondence to Defendants again

requesting monthly rent roll data, insurance policy declaration pages, vendor lists, lawyer contact

information, legal actions, ongoing monthly leasing reports, and correspondence or reports to/from

the State of New Jersey as well as seeking copies of all leases and abstracts. This request was

necessitated after the four (4) prior requests had gone unanswered except for Defendants’

(mis)representations feigning cooperation.
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48. In May 2023, given Granite and Alex’s lack of transparency, failure to provide

documents and information despite multiple requests, and escalating concerns about possible

mismanagement, the Trustees began reaching out to WTC vendors to advise of John and Larry’s

roles as Trustees of WTC, obtain information needed to ensure the proper administration of WTC,

and to ensure the payment and accounting of any and all vendor invoices.

49, On May 26, 2023, unbelievably, Alex demanded that WTC contact all of its own

vendors through him and, for the first time and after months of communications and promises of

cooperation, demanded additional “evidence” that John and Larry had authority to act on behalf

of WTC as Trustees.

50. Also on May 26, 2023, Alex demanded full copies of the Trust documents

otherwise, Alex stated: “you shall force me to conclude...there is something in the document that

is not to my benefit...” and that “[a]nything less would force me to conclude the trust isn’t to my

benefit.” Alex’s concerns were clearly self-interested about his own potential financial gain rather

than about WTC’s best interests.

S51. On May 31, 2023, even after his demand for additional “evidence,” Alex continued

to make (mis)representations that he would cooperate with the Trustees. He advised that he needed

to hire an assistant to prepare the documents and information requested by the Trustees. He also

stated that he was encouraging the accountant to make the reports requested a priority.

§2. On June 7, 2023, Larry received a letter from counsel retained by Defendants

formally requesting documentation related to the trusts, the WTC’s ownership, and Leone’s

incapacity.

53. On June 9, 2023, the Trustees, through counsel, sent a sixth correspondence to

Granite and Alex reiterating all prior requests for documents and information. Although not

10
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necessary, WTC provided additional documentation further evidencing that Larry and John are the

Trustees of the Trust and therefore the current members of the WTC to which Defendants were

accountable. Specifically, WTC furnished the two physicians’ certifications, relevant portions of

the Trust, relevant portions of the Family Trust, and a copy of the Actions by Members of the WTC

appointing John and Larry as Managers of the WTC. The Trustees provided such requested

information in the spirit of cooperation and in the hopes of finally being provided WTC’s

information that had been outstanding for over two (2) months.

54. Defendants, through counsel, continued to claim this information provided

regarding the Trustees’ roles was insufficient.

55. On June 13, 2023, a Certificate of Amendment was filed with the New Jersey

Division of Revenue & Enterprise Services amending the members to reflect that John and Larry

are now the Trustees of the WTC.

56. Also on June 13, 2023, TD Bank followed up with the Trustees regarding the status

of the requisite rent roll data that remained outstanding as a result of Defendants’ complete lack of

responsiveness to TD Bank’s request for same and the Trustees six (6) correspondence requesting

such information.

57. On June 26, 2023, the Trustees, through counsel, sent a seventh correspondence to

Defendants reiterating all prior requests for documents and information. WTC also provided,

although not necessary and solely out of an abundance of caution in order to secure WTC’s own

records, even more documentation evidencing that Larry and John were the Trustees of the Trust

which owns WTC. Specifically, WTC furnished:

a. the Agreement and Exhibit A thereto comprised of the Actions by the Members of

WTC appointing Granite as Manager of WTC,

ll
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the current New Jersey Business Status Report for WTC listing Larry and John as

managers of WTC,

the complete Trust (both initial and the operative amended) listing WTC as an asset

thereof,

the complete First Amendment to the Family Trust, and

Leone’s 2017 Durable Power of Attorney appointing John and Larry as Leone’s

lawful agents.

58. Finally, on June 28, 2023, after months of requests by both TD Bank and the

Trustees, Defendants sent additional rent roll data to TD Bank along with, upon information and

belief, an entirely inappropriate, aggressive, and unprofessional correspondence that had the effect

of alienating TD Bank from Defendants. TD Bank has since requested to limit its communications

with Alex further impairing Defendants’ ability to appropriately manage WTC.

59. To date, Defendants have failed and refused to provide the information and

documentation related to WTC’s management requested in no less than seven (7) separate

correspondences and in the face of copious evidence that the Trustees have properly assumed the

membership of the Trust and the Family Trust and thereby WTC itself.

60. Indeed, the rent roll data finally furnished to TD Bank, in or about early July of

2023, did not comply with the requirements of TD Bank nor the Trustees. It was not provided in

the format requested, is convoluted, incomplete, and outdated. It is impossible to discern from the

data provided by Granite, among other things, the correct number of units at the Property, current

versus prior tenants, or correct the monthly and/or yearly rental income.

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61. Upon information and belief, Defendants have falsely advised various WTC

vendors that Larry and John are not authorized to act on behalf WTC in an effort to block WTC’s

access to its own contracts, vendors, and company information.

62. Moreover, Defendants obstructionist behavior makes clear that Defendants are

incapable of managing WTC alongside the Trustees.

63. In refusing to work with the Trustees, Defendants have withheld and refused to

provide WTC with its own business information, including, but not limited to, WTC’s own leases,

insurance information (except partial incomplete information through counsel after months of

requests), and business/vendor information.

64. After multiple requests, the Trustees were forced to reach out themselves to

determine the status of WTC’s contracts and invoices. Upon information and belief, Defendants

then instructed vendors not to speak or cooperate with the Trustees in direct contravention of the

Agreement and contrary to the best interests of WTC.

E Discovery of Defendants’ Misappropriation

65. The foregoing paragraphs are incorporated herein as if set forth in full.

66. Upon assumption of the role of Trustees and in compliance with their fiduciary

obligations, John and Larry also undertook an initial accounting of the bank records of WTC.

67. A review of such records revealed that both Granite and Alex were

misappropriating WTC funds.

68. Upon information and belief, and by way of limited example:

a. Granite has been impermissibly utilizing WTC funds for Granite’s own

business expenses to run its property management business and not WTC’s

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business by charging items such as Yardi Systems (a property management

software), Microsoft 365, and McAfee antivirus software;

Granite has been improperly paying itself in direct contravention of

Paragraph 3 of the Agreement, including paying itself more than twice per

month (e.g., in January 2022, without justification or authorization, Granite

paid itself three payments of $12,500 and two payments of $3,454) and

paying itself far in excess of $300,000 annually (e.g., approximately

$397,475.37 in 2022 and $337,994.00 in 2021).

Alex has been absconding with WTC funds to pay for his own personal

expenses such as Amazon Prime, EZ Pass, Stubhub, LL Bean, NYU SCPS

Student Payment, and Dick’s Sporting Goods.

69. Upon information and belief, Defendants have absconded with at least hundreds of

thousands of dollars of WTC’s monies, if not more, by utilizing WTC’s operating account for

personal expenses.

F. Granite’s Termination and Demand for Return of Property

70. The foregoing paragraphs are incorporated herein as if set forth in full.

71. On August 1, 2023, the Trustees, through counsel, sent a notice of termination of

Granite for cause in accordance with Paragraph 4(b) of the Agreement (the “Termination Notice”).

72. The Termination Notice detailed Granite’s material acts of dishonesty, gross

negligence, material misconduct, neglect of duties, and inability to fulfill its management

obligations, including, but not limited to: (i) failure to be accountable to the members of WTC in

contravention of Paragraph 1(b) of the Agreement by failing and refusing to produce WTC

business records to the members after over four (4) months’ of requests; (ii) inability to work with

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vendors; (iii) misappropriation of funds; and (iv) overpayment of compensation in contravention

of Paragraph 3 of the Agreement.

73. As part of the Termination Notice, the Trustees requested the return of all WTC

property, including but not limited to, all information and documentation as previously demanded

and listed again in the Termination Notice, computers, electronic devices, documents, printers,

laptops, machinery, WTC funds, WTC tenant rents and leases, WTC company and business data,

WTC bank account information, WTC property keys (including building access, office spaces,

tenant keys, and post office box(es) keys), WTC records, reports, correspondence (including

electronic communications, emails, facsimiles, mail, etc.), vendor communications and contact

information, tenant communications and contact information, WTC access codes, secured

information, electronically stored information, engineering diagrams and plans, architectural

plans, drawings, reports, surveys, building permits, certificates of occupancy, and WTC tangible

and intangible property. Kindly contact the undersigned to arrange for the immediate return of

WTC’s property.

74. As of the filing of this Complaint, Defendants have failed and refused to return all

of WTC’s property.

Iv. CAUSES OF ACTION

COUNTI
Breach of Contract
(Against Granite)

75. The foregoing paragraphs are incorporated herein as if set forth in full.

76. WTC and Granite entered into the Agreement appointing Granite as the Manager

of the WTC.

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77. WTC did what the Agreement required it to do by, amongst other things, providing

payment to Granite for services as its Manager.

78. Granite breached the Agreement in multiple ways, including, but not limited to,

failing to be accountable to the members of WTC in contravention of Paragraph 1(b) of the

Agreement, paying itself in a manner inconsistent with and in excess of the compensation allowed

in Paragraph 3 of the Agreement, and misappropriating WTC funds in violation of Paragraph 1 of

the Agreement’s requirement to perform duties customarily rendered by the manager of WTC and

to distribute net income to its members.

79. Granite’s breaches of the Agreement caused WTC losses, including, but not limited

to loss of income related to misappropriated funds, loss of income related to overpayment in

compensation, reputational harm, and loss of good will.

80. Granite’s breaches of the Agreement were malicious and in wanton and willful

disregard of WTC’s rights. Granite’s wrongdoing in absconding with WTC’s funds and failing to

be accountable to WTC’s members was done intentionally and/or deliberately with a high degree

of probability of foreseeable harm to WTC or reckless indifference to the consequences.

81. Granite’s breaches were done in breach of trust between the Parties as a result of

the fiduciary nature of Granite’s property management role for WTC.

WHEREFORE, Plaintiff WTC respectfully requests judgement against Defendant Granite

on the First Count as follows:

A Compensatory damages, including general (expectation) and consequential

(special) damages;

Punitive damages;

Pre-judgment and post-judgment interest;

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Counsel fees, costs of suit, and such other damages as are available at law; and

Such other and further relief as the Court deems equitable and just.

COUNT II
Breach of the Covenant of Good Faith and Fair Dealing
(Against Granite)

82. The foregoing paragraphs are incorporated herein as if set forth in full.

83. Pursuant to the Agreement between Granite and WTC, Granite had an affirmative

duty of good faith and fair dealing with respect to its contractual relationship with WTC.

84. Granite acted in bad faith and with the purpose of depriving WTC of the rights or

benefits of the Agreement by, amongst other things, refusing to be accountable to WTC’s members,

acting in a manner contrary to WTC’s best interests, interfacing with WTC’s vendors in an

inappropriate and unprofessional manner, and misappropriating WTC funds.

85. As a result of Granite’s conduct, WTC has been harmed.

86. Granite’s breaches of the implied covenant of good faith and fair dealing were

malicious and in wanton and willful disregard of WTC’s rights. Granite’s wrongdoing in

absconding with WTC’s funds and failing to be accountable to WTC’s members was done

intentionally and/or deliberately with a high degree of probability of foreseeable harm to WTC or

reckless indifference to the consequences.

87. Granite’s breaches were done in breach of trust between the Parties as a result of

the fiduciary nature of Granite’s property management role for WTC.

WHEREFORE, Plaintiff WTC respectfully requests judgement against Defendant Granite

on the Second Count as follows:

A Compensatory damages, including general (expectation) and consequential

(special) damages;

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Punitive damages;

Pre-judgment and post-judgment interest;

Counsel fees, costs of suit, and such other damages as are available at law; and

Such other and further relief as the Court deems equitable and just.

COUNT III
Breach of Fiduciary Duty
(Against Granite)

88. The foregoing paragraphs are incorporated herein as if set forth in full.

89. Granite owed a duty to WTC through their fiduciary relationship established as

agent and principal respectively.

90. WTC placed trust and confidence in Granite and Granite was under a duty to act

for the benefit of WTC as WTC’s manager.

91. Granite breached this duty by, amongst other things, refusing to be accountable to

WTC’s members, acting in a manner contrary to WTC’s best interests, interfacing with WTC’s

vendors in an inappropriate and unprofessional manner, and misappropriating WTC funds.

92. WTC was injured as a result of Granite’s breach of its fiduciary duty.

93. Granite’s breaches of its fiduciary duty were malicious and in wanton and willful

disregard of WTC’s rights. Granite’s wrongdoing in absconding with WTC’s funds and failing to

be accountable to WTC’s members was done intentionally and/or deliberately with a high degree

of probability of foreseeable harm to WTC or reckless indifference to the consequences.

WHEREFORE, Plaintiff WTC respectfully requests judgement against Defendant Granite

on the Third Count as follows:

A An accounting of the monies gained by Granite by virtue of the breach of its

fiduciary duty;

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Disgorgement of monies, profits, commissions, and/or wages received by Granite

from the breach of its fiduciary duty;

Case Info

Judge

Nicholas Ostuni Track Judge’s New Case

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Document Filed Date

October 18, 2023

Case Filing Date

August 01, 2023

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