Preview
BER-L-004071-23 10/26/2023 4:40:48 PM Pglof12 Trans ID: LCV20233224128
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
Limited Liability Company, and
ALEXANDER DICHIARA,
Defendants.
MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS’ MOTIONTO
DISMISS COMPLAINT AND COMPEL ARBITRATION
GREENSPOON MARDER LLP
Kelly M. Purcaro, Esq. (Atty. ID: 017692009)
Kory Amn Fenn, Esq. (Atty. ID: 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
Of Counsel and on the Brief:
Kelly M. Purcaro, Esq.
Kory Amn Fenn, Esq.
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TABLE OF CONTENTS
PRELIMINARY STATEMENT
IL LIMITED STATEMENT OF FACTS AND PROCEDURAL HISTORY
Il. LEGAL ARGUMENT
A Standard of Review
B. The Axbitration Provision at Issue is Unenforceable Under Atalese
Because It Lacks the Requisite Waiver of- Rights
The Recent Appellate Division Decision Cited by Defendants Should
Not Be Relied Upon
D There Was No Meeting of the Minds as to an Arbitral Forum Because
There Is No AAA in Bergen County, New Jersey
IV. CONCLUSION
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TABLE OF AUTHORITIES
Page(s)
Cases
Atalese v. U.S. Legal Servs. Grp., L.P.,
219 NJ. 430 (2014) passim.
Cnty. of Passaic v. Horizon Healthcare Servs., Inc.,
254 NJ. 69 (2023)
Cnty. of Passaic v. Horizon Healthcare Servs., Inc.,
474 NJ. Super. 498 (App. Div. 2023) 67,8
Del v. Di ,
244 NJ. 466 (2020) 45,7
Flanzman v. Jenny Craig, Inc.,
244 NJ. 119 (2020) 7,9
Garfinkel v. Morristown Obstetrics & Gynecology Assocs., P.A.,
168 NJ. 124 (2001) 45,6
Guidotti v. Legal Helpers Debt Resol., L.L.C.,
716 F.3d 764 (3d Cir. 2013),
Inre Arbitration Between Grover & Universal Underwriters Ins. Co.,
80 NJ. 221 (1979)
Itzhakov v.
No. A-2619-17T4, 2019 WL 4050104 (NJ. Super. Ct App. Div. Aug. 28, 2019) 34
Kleine v. Emeritus at Emerson,
445 NJ. Super. 545 (App. Div. 2016)
Knorrv. Smeal,
178 NJ. 169 (2003)
Leodori v. CIGNA Cor.,
175 NJ. 293 (2003)
McDermott v. Genesis Healthcare, No. A-3,
585-1714, 2019 WL 3282925 (NJ. Super. Ct. App. Div. July 22, 2019)
NAACP of Camden Cnty. E. v. Foulke Mgmt. Corp.,
421 NJ. Super. 404 (App. Div. 2011) 46
Somerset Consulting, LLC v. United Cap. Lenders, LLC,
832 F. Supp. 24474 (ED. Pa 2011)
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I PRELIMINARY STATEMENT
This case involves
a mother who put her trust in her son to help her run her business in
exchange for very generous annual compensation. Unfortunately, her son took much more than
his $300,000 annually - which was only discovered following his mom’s health decline and the
appointment of trustees to take her place in the management and oversight of the company.
Moms company andson, now plaintiff and defendant respectively, memorialized
the son’ s
management role and compensation in a written agreement, which agreement contains an
“employment” arbitration provision, completely devoid of any explanation as to what arbitration
is, howit differs from Court proceedings, or that the parties’ constitutional right to have their case
heard
in a Court by ajury is waivedby an agreementto arbitrate. Under well-settled New Jersey
Supreme Court precedent, such deficiencies undoubtedly invalidate the arbitration provision in the
subject agreement. Defendants’ argument that a newly decided Appellate Division decision,
which decision is currently on appeal to the Supreme Court, changes the analysis is without merit.
These are family members who executed an agreement purportedly seeking to utilize the
Employment Rules of the American Arbitration Association. Defendants cannot have it both
ways. They cannot both have the benefit of the Employment Rules, as opposed to the Commercial
Rules and the increased
litigant costs relatedto same, but yet claimto be sophisticated commercial
entities. The reality is that these are not sophisticated commercial parties with
a history of business
dealings, as further evidenced
by the very language upon which Defendants
now rely, and
as such,
the lack of clear waiver of the right to proceed in Court language renders the arbitration provision
moot and unenforceable.
Additionally, the arbitration provision at issue selects an arbitral forum that does not exist:
AAA in Bergen County, New Jersey. As such forum is unavailable (because it is non-existent),
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arbitration
cannot be compelled in an altemate, unagreed-to forumto which there was no meeting
of the minds.
I LIMITED STATEMENT OF FACTS AND PROCEDURAL HISTORY
WICisaNew]Jessey Limited Liability company located at 285 Pascack Road, Washington
Township, New Jersey (the “Property”). See Certification of Kory Ann Fen (“Ferro Cert.”) at
Ex. 1, 91. WTC owns and operates a commercial shopping
center at the Property. Id.
at (918, 14.
At its 1997 inception, WIC was owned by Adele DiChiara Leone (“Adele”) and her
Family Trust. Id.
at 111. In 2001, Adele transferred
her WTC ownership
to a Revocable Trust.
Id. at 1712, 14. Thus, WIC was and is owned by the Adele Leone Family Trust and the Adele
DiChiara Revocable Tuust (the “Trusts”). Id. at 42.
Granite Commercial Property Management, LLC (“Granite”), via a December 24, 2017
Property Management Agreement (the “Agreement’), was appointed the day-to-day manager of
WIC, managing alongside Adele. Id. at {1 15-16. Defendant Alexander DiChiara (“Alex”)
(together with Granite, “Defendants”) is Adele’s son and Granite’s Chief Executive Officer. Id.
at 16.
In March 2023, due to Adele’s incapacity, John Michael DiChiara (“John”) and Laurence
I. Blair (“Lary”) (the “Trustees”) became successor trustees and replaced Adele as WTC’s
manager. Id. at {] 22-27. On March
29, 2023, Defendants were advised of the new Trustees, their
roles as managers, and their need for information related to the operation of WTC. Id. at {" 29-
64. Defendants were uncooperative, refusedto tumover WTC ’s records, and falsely advised WTC
vendors that the Trustees were not authorized to act on behalf of WTC. Ibid. A review
of WIC’s
bank records revealed Defendants had been misappropriating WIC funds, including, but not
limited to, payment of: (1) Granite’s business expenses; (2) income to Granite in excess of the
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$300,000 annually provided
in the Agreement; and (3) Alex’s personal expenses
such as Amazon
Prime, Stubhub, and NY U SCPS Student Payment. Id. at {| 66-69.
On August 1, 2023, the Trustees terminated Granite for cause. Id. at 1] 71-73. Also on
August 1, 2023, WIC filed this action against Defendants for: Breaches of the Agreement, the
Covenant of Good Faith and Fair Dealing, Fiduciary Duty, Statutory Duty of Loyalty and Care;
Negligence; Gross Negligence; Unjust Enrichment; Conversion; Fraud; and Piercing Corporate
Veil. Id. at 11 75-137.
On October 2, 2023, Defendants filed their Answerto Complaint, Separate Defenses, Jury
Demand and Certifications (Trans. ID LCV 20233003542). On October 4, 2023, Defendants filed
the instant Motion (Trans. ID LCV20233037187) and a Motion to Stay Discovery (Trans. ID
LCV 20233045069). On October 18, 2023, WTC filed
a Motion to Strike Defendants’ Affirmative
Defenses (Trans. ID LCV20233151722). All three Motions are retumable on November 3, 2023.
TI. LEGAL ARGUMENT
A. Standard
of Review
“[W]hen
itis apparent, basedon ‘the face of a complaint, and documents
relied upon in the
complaint,’ that certain of a party’s claims ‘are subject to an enforceable arbitration clause, a
motion to compel arbitration should be considered under a [motion to dismiss] standard without
discovery’s delay.’” Guidotti v. Legal Helpers Debt Resol., L.L.C., 716 F.3d 764, 776 (3d Cir.
2013) (Somerset Consulting, LLC v. United Cap. Lenders, LLC, 832 F. Supp. 2d 474, 482 (E.D.
Pa. 2011). “But if the complaint and its supporting documents are unclear regarding the
agreementto arbitrate, or if the plaintiff has responded to a motion to compel arbitration with
additional facts sufficient to place the agreement to arbitrate in issue, then ‘the parties should be
entitled to discovery on the question of arbitrability before a court entertains further briefing on
[the] question.’” Guidotti, 716 F.3d at 776 (3d Cir. 2013) (quoting Somerset Consulting, 832 F.
Supp. 2d at 482); Itzhakov v. Segal, No. A-2619-17T4, 2019 WL 4050104, at*8 (NJ. Super. Ct.
3
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App. Div. Aug. 28, 2019); McDemnott v. Genesis Healthcare, No. A-3585-17T4, 2019 WL
3282925, at*1 (NJ. Super. Ct. App. Div. July 22, 2019). “After limited discovery, the court may
entertain
a renewed motion to compel arbitration, this time judging the motion under a summary
judgment standard.” Ibid.
B The Arbitration Provision at Issue is Unenforoeable Under Atalese Because
It Lacks the Requisite Waiver-of-
Rights
Although the Agreement contains an arbitration provision, that provision itself is
unenforceable
due to a lack of mutual assent thereto in accordance with the landmark New Jersey
Supreme Court holding in Atalese v. U.S. Legal Servs. Gmp., L.P., 219 NJ. 430 (2014), which
decision has been reaffirmed by our Supreme Court multiple times, most recently
in December
2020 in Delaney v. Dickey, 244 NJ. 466, 500 (2020). “Mutual assent requires that the parties
have an understanding of the terms to which they have agreed.” Atalesev. U.S. Legal Servs. Grp.,
LP., 219 NJ. 430, 442 (2014). “The Court has stressed that ‘[iJn the absence of a consensual
understanding, neither party is entitledto force the otherto arbitrate their dispute.’” Garfinkel v.
Monistown Obstetrics & Gynecology Assocs., P.A., 168 NJ. 124, 132 (2001) (quoting In re
Arbitration Between Grover & Universal Underwriters Ins. Co., 80 NJ. 221, 228 (1979))
(alteration in original).
“By its very nature, an agreementto arbitrate involves a waiverof a party’s rightto have
her claims and defenses litigated
in court.” NAACP of Camden Cnty. E. v. Foulke Mgmt. Corp.,
421 NJ. Super. 404, 425 (App. Div. 2011). “An effective waiver requires a party to have full
knowledge of his legal rights and intentto surrender those rights.” _Knorrv. Smeal, 178 NJ. 169,
177 (2003). “[B]ecause arbitration involves a waiver of the right to pursue a case in a judicial
forum, ‘courts take particular care in assuring the knowing assent of both parties to arbitrate, and
a clear mutual understanding of the ramifications of that assent.’” Atalese, 219 NJ. at 442-43
(quoting Foulke, 421 NJ. Super. at 425).
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For a decade, “under New Jersey law, any contractual “waiver-of-rights provision must
reflect that [the party] has agreed clearly and unambiguously” to its terms.” Atalese, 219 NJ. at
443 (quoting Leodori v. CIGNA Corp., 175 NJ. 293, 302 (2003)). “Ourjurisprudence
has stressed
that when a contract contains a waiver of rights—whetherin an arbitration or other clause—the
waiver ‘mustbe clearly and unmistakably established.’” Id. at 444 (quoting Garfinkel, 168 NJ. at
132). Our Courts “have repeatedly stated that ‘[t]he point is to assure that the parties know that in
electing arbitration as the exclusive remedy, they are waiving their time-honored right to sue.’”
Ibid. (quoting Garfinkel, 168 N,J. at 132) (alteration in original).
“Our courts have upheld arbitration clauses phrased in various ways when those clauses
have explained
that arbitration is a waiver
of the right to bring suit in ajudicial forum.” Ibid. (i.e,
Plaintiff agreed “to waive [her] rightto ajury trial”; “they are waiving
their rights to maintain other
available resolution processes, such as a court action or administrative proceeding”; “Instead of
suing in court . . . There's no judge or jury, and review is limited”). “The waiver of-rights
language, however, must be clear and unambiguous—
that is, the parties must know that there is a
distinction between resolving a dispute in arbitration and in ajudicial forum.” Id. at 445. Where
an arbitration provision does not explain what arbitration is, how it is different from proceeding in
court, and is not written in plain language, it will not be upheld. See id. at 446. Our Supreme
Court has applied the Atalese rule even in the context of sophisticated parties. See Delaney, 244
NJ. at 500 (analyzing arbitration clause under Atalese where Plaintiff was a “sophisticated
businessman
and not unfamiliarto litigation”).
Here, the arbitration provision at issue reads:
Any and all controversies or claims relating to, or arising out of,
Manager's management of the Company, or the termination of said.
or the terms of this Agreement, including any breach.
thereof, shall be settled by arbitration in Bergen County of New
Jersey, in accordance with the Employment Rules of the American
Arbitration Association, and judgment upon the reward rendered
5
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may be entered in any court having jurisdiction thereof. The
arbitrator shall decide who shall pay the expense of the arbitration.
Any decision made by an arbitrator under this provision shall be
final and binding.
See Feno Cert. at Ex. 2, 1 6(f).]
This arbitration provision does not comply with the requirements detailed by Atalese. It
makes
no reference to a waiver of the right to bring suit in a judicial forum; it does not explain
what arbitration
is; and it does not advise that there is a distinction between resolving a dispute in
arbitration and in a judicial forum, and it does not state that arbitration is the sole and exclusive
remedy
for disputes. See Atalese, 219 NJ. at 444-45. In the absence of clear and unambiguous
waiver of rights, mutual assent is absent and the arbitration provision in the Agreement is
unenforceable. See id. at 442-45; Garfinkel, 168 NJ. at 132; Foulke, 421 NJ. Super. at 425.
Cc ‘The Recent Appellate Division Decision Cited by Defendants Should Not Be
Relied Upon
This yearin, Cnty. of Passaicv. Horizon Healthcare Servs., Inc., 474 NJ. Super. 498 (App.
Div. 2023), the Appellate Division sought to limit our Supreme Court's nearly ten-year-old rule
set forth in Atalese holding that the requirement for arbitration clauses to have a waiver of the right
to bring suit in a judicial forum does not apply to “individually-negotiated contracts between
sophisticated parties - often represented by counsel at the formation stage - possessing relatively
similar bargaining power.” Id, at 503-04. Such holding, which was granted certification by the
New Jersey Supreme Court (Cnty. of Passaic v. Horizon Healthcare Servs., Inc., 254 NJ. 69
(2023)), highlights that the waiver-of-rights rule in arbitration provisions is most often found “in
the context of employment and consumer contracts” aimed at protecting “those not versed in the
law ornot necessarily aware of the fact that an agreement to arbitrate may preclude the right to sue
in acount or invoke
the inestimable night of trial by jury[.]” Ci of Passaic, 474 NJ. Super. at
503-04.
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First
of all, this decisionis contrary
to precedent in this State and may well be reversedor
narrowed by the Supreme Court. Its holding challenges almost a decade of Supreme Court
precedent reaffirmed countless times between 2014 and the present. Moreover, it runs contraryto
the analysis in Delaney, 244 NJ. 466, which applied Atalese to a “sophisticated businessman and
not unfamiliarto litigation.”
More importantly, Cnty. of Passaic, even
if upheld, does not apply to this case. This case
does not involve “individually-negotiated contracts between sophisticated parties.” Instead, it
involves a mother, through her Trusts, and son, through an LLC he formed to help run his mom's
business. These are not individuals “versed in the law or not necessarily aware of the fact that an
agreement to arbitrate may preclude the right to sue in a court or invoke the inestimable right of
trial by jury.” These are family members seeking to memorialize their agreement to run a family
business
Indeed, the arbitration provision itself calls for the Employment Arbitration Rules to apply,
which mules apply to employees and their employers - not the “sophisticated” “businesses” with
equal bargaining
power claimed by Defendants. Surely Granite
is not saying both: (1) itis not an
employee for the purpose of this arbitration enforceability analysis; but (2) it is an employee for
the purpose of arbitration and associated reduced costs afforded to Defendants under the
Employment Arbitration fee schedule. If Defendants are claiming to be employees, then the
analysis of enforceability must be viewed under the employer/employee context - in which case it
cannot be disputed that the lack of waiver language is fatal here. See Cnty. of Passaic, 474 NJ.
Super. at 503-04; see also Flanzmanv. Jenny Craig, Inc., 244 NJ. 119 (2020).
Defendants cannot be permitted to “work the system” with positioning only favorable to
itself. For example, if this is an employment arbitration, and Defendants were employees, then
the AAA requires that the employer company bear the increased, one-sided
costs for the
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arbitration. See, e.g., Certification of Kory Ann Fenn (“Ferro Cert”) at Ex. 3 (“Non-refundable
filing fee of $2,450 is payable in full by the company” plus a “Case Management Fee $750”).
Further, under the employment mules, there is a “Fee for Advancing to Arbitrator Selection Process:
This fee will be billed and must be paid prior to the arbitrator selection process. Individuals:
administrative fee of $100 per case; Company: administrative fee of $1,750 per case.” Ibid.
“Under the Employment/Workplace Fee Schedule, the employee’s or individual’ s fee is capped at
$350” and the employer pays the arbitrator’ s compensation and administrative fees, which are “not
subject to reallocation by the arbitrator.” See Employment Arhitration under AA Administration,
ADR.orc, https://www.adr.org/employment (last visited October 26, 2023).
Tf, however, Defendants claimto be a “sophisticated” “business” enforcing a Commercial
Arbitration agreement, the Commercial Rules would have applied and would require Defendants
bear the costs of arbitration on equal footing with Plaintiff. See, eg., Feo Cert. at Ex. 4 (fee
schedule provisions requiring certain costs to be shared “50/50” by parties). Additionally, the
deposits required to pay the arbitrator would be allocated among the parties thereby increasing the
cost for both sides. See Fen Cert
at Ex. 5. Defendants
are attempting to utilize
the Employment
Arbitration Rules to escape the high fees to which they would be subject under the Commercial
Arbitration Rules, but bypass the impact same has on the waiver-of-rights requirement in the
employment context.
Thus, even were this Courtto rely upon the Of Passaic decision, the futureof which
is unknown, the Atalese waiver requirement
would still apply here on the very face of the subject
arbitration provision, as well as the underlying facts, and the Agreement’ s arbitration provision
unequivocally fails.
1 Notably, the arbitration provision in the Agreement relied on my Defendants provides that fees
shall be determined by the Axhitrator, which is inconsistentwith and directly contradictory
to the
AAA Employment Arbitration Rules which it purports to apply.
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D. There Was No
Is NoAAA rote
in Bergen
of the Minds as to an Arbitral Forum Because There
County, New J ersey
Where the “arbitration process contemplated by [an arbitration] clause” is not available,
arbitration cannot be compelled. Kleine v. Emeritus at Emerson, 445 NJ. Super. 545, 552 (App.
Div. 2016). In Kleine, the arbitration provision elected AAA as the arbitral forum, but the AAA
wes no longer accepting the type of dispute involved in Kleine. Ibid) The Court held:
“Consequently, when the parties contracted, their exclusive forum for arbitration was no longer
available; there being no agreement to arbitrate in any other forum, arbitration could not be
compelled. In short, even assuming the clause was otherwise enforceable and consented to by
Plaintiff, there was no meeting of the minds as to an arbitral forum if AAA was not available.”
Ibid; see also Flanzman, 244 NJ. at 140 (detailing holding in Kleine
as valid law).
Even assuming the arbitration provision at issue is otherwise valid, which it is not, there
‘wes no meeting of the minds as to the arbitral forum. The arbitration
provision at issue elects
AAA arbitration in Bergen County, New Jersey when same does not exist. See Global and
Domestic AAA-IDCR Office Locations, ADR.orG, https://www.adr.org/OfficeLocations (last
visited October 26, 2023); Ferro Cert. at 18. The AAA does not have any offices in Bergen
County, New Jersey and therefore the forum selected is unavailable. As such, WIC cannot be
compelled to arbitration in a forumto which it did not consent.
IV. CONCLUSION
For the foregoing reasons, Defendants’ Motion to Dismiss and Compel Arbitration must
be denied in its entirety.
Dated: October 26, 2023 GREENSPOON MARDER LLP
Attorneys for Plaintiff
/s/Kory Ann Ferro
Kory Amn Fenn, Esq. (ID No. 065932013)
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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
LAW DIVISION
New Jersey Limited Liability Company,
BERGEN COUNTY
Plaintiff,
DOCKET NO.: BER-L-004071-23
Vv.
CIVIL ACTION
GRANITE COMMERCIAL PROPERTY
CERTIFICATION OF KORY ANN FERRO
MANAGEMENT, LLC, a New Jersey
IN OPPOSITION TO DEFENDANTS’
Limited Liability Company, and
MOTION TO DISMISS COMPLAINT AND
ALEXANDER DICHIARA,
COMPEL ARBITRATION
Defendants.
KORY ANN FERRO, hereby certifies as follows:
1 I am an attorney at law of the State of New Jersey and senior counsel at the law
firm of Greenspoon Marder LLP, attorneys for Plaintiff Washington Town Center, LLC in the
within matter. I am one of the attorneys 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 opposition to Plaintiff's Motion to Dismiss Complaint
and Compel Arbitration.
3 A true and correct copy of the August 1, 2023 Complaint with Case Information
Statement (Trans. ID LCV20232231246) is attached hereto as Exhibit 1.
4 A true and correct copy of the December 24, 2017 Management Agreement is
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attached hereto as Exhibit 2.
5 A true and correct copy of the American Arbitration Association (“AAA”)
Employment/Workplace Fee Schedule (Amended and Effective August 1, 2023) found at
https://www.adr.org/sites/default/files/Employment_Workplace_Fee_Schedule.pdf is attached
hereto as Exhibit 3.
6. A true and correct copy of the AAA Commercial Arbitration Rules and Mediation
Procedures Administrative Fee Schedules (Amended and Effective May 1, 2018) found at
https://www.adr.org/sites/default/files/Commercial_Arbitration_Fee_Schedule_1.pdfis attached
hereto as Exhibit 4.
7
A true and correct copy of R-58 of the Commercial Arbitration Rules and
Mediation Procedures (Amended and Effective September 1> 2022) found at
https://www.adr.org/sites/default/files/Commercial-Rules_Web.pdf (page 34) is attached hereto
as Exhibit 5.
8 On October 26, 2023, this office contacted the AAA Case Filing Hotline and
confirmed that the only AAA locations in New Jersey are in Piscataway and Voorhees with no
location in Bergen County, New Jersey.
9 A true and correct copy of Itzhakov_v. Segal, No. A-2619-17T4, 2019 WL
4050104 (N.J. Super. Ct. App. Div. Aug. 28, 2019) is attached hereto as Exhibit 6.
10. A true and correct copy of McDermott v. Genesis Healthcare, No. A-3585-17T4,
2019 WL 3282925 (N.J. Super. Ct. App. Div. July 22, 2019) is attached hereto as Exhibit 7.
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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 subject to punishment.
Dated: October 26, 2023 GREENSPOON MARDER LLP
Attorneys
for Plaintiff
/s/Kory Ann Ferro
Kory Ann Ferro, Esq. (ID No. 065932013)
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EXHIBIT 1
BER-L-004071-23 10/26/2023 4:40:48 PM Pg5of69 Trans ID: LCV20233224128
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
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 WITH JURY
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.”
C. 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 aresult 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.
Preview
BER-L-004071-23 10/26/2023 4:40:48 PM Pglof12 Trans ID: LCV20233224128 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 Limited Liability Company, and ALEXANDER DICHIARA, Defendants. MEMORANDUM OF LAW IN OPPOSITION TO DEFENDANTS’ MOTIONTO DISMISS COMPLAINT AND COMPEL ARBITRATION GREENSPOON MARDER LLP Kelly M. Purcaro, Esq. (Atty. ID: 017692009) Kory Amn Fenn, Esq. (Atty. ID: 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 Of Counsel and on the Brief: Kelly M. Purcaro, Esq. Kory Amn Fenn, Esq. BER-L-004071-23 10/26/2023 4:40:48 PM Pg2of12 Trans ID: LCV20233224128 TABLE OF CONTENTS PRELIMINARY STATEMENT IL LIMITED STATEMENT OF FACTS AND PROCEDURAL HISTORY Il. LEGAL ARGUMENT A Standard of Review B. The Axbitration Provision at Issue is Unenforceable Under Atalese Because It Lacks the Requisite Waiver of- Rights The Recent Appellate Division Decision Cited by Defendants Should Not Be Relied Upon D There Was No Meeting of the Minds as to an Arbitral Forum Because There Is No AAA in Bergen County, New Jersey IV. CONCLUSION BER-L-004071-23 10/26/2023 4:40:48 PM Pg3o0f12 Trans ID: LCV20233224128 TABLE OF AUTHORITIES Page(s) Cases Atalese v. U.S. Legal Servs. Grp., L.P., 219 NJ. 430 (2014) passim. Cnty. of Passaic v. Horizon Healthcare Servs., Inc., 254 NJ. 69 (2023) Cnty. of Passaic v. Horizon Healthcare Servs., Inc., 474 NJ. Super. 498 (App. Div. 2023) 67,8 Del v. Di , 244 NJ. 466 (2020) 45,7 Flanzman v. Jenny Craig, Inc., 244 NJ. 119 (2020) 7,9 Garfinkel v. Morristown Obstetrics & Gynecology Assocs., P.A., 168 NJ. 124 (2001) 45,6 Guidotti v. Legal Helpers Debt Resol., L.L.C., 716 F.3d 764 (3d Cir. 2013), Inre Arbitration Between Grover & Universal Underwriters Ins. Co., 80 NJ. 221 (1979) Itzhakov v. No. A-2619-17T4, 2019 WL 4050104 (NJ. Super. Ct App. Div. Aug. 28, 2019) 34 Kleine v. Emeritus at Emerson, 445 NJ. Super. 545 (App. Div. 2016) Knorrv. Smeal, 178 NJ. 169 (2003) Leodori v. CIGNA Cor., 175 NJ. 293 (2003) McDermott v. Genesis Healthcare, No. A-3, 585-1714, 2019 WL 3282925 (NJ. Super. Ct. App. Div. July 22, 2019) NAACP of Camden Cnty. E. v. Foulke Mgmt. Corp., 421 NJ. Super. 404 (App. Div. 2011) 46 Somerset Consulting, LLC v. United Cap. Lenders, LLC, 832 F. Supp. 24474 (ED. Pa 2011) BER-L-004071-23 10/26/2023 4:40:48 PM Pg4of12 Trans ID: LCV20233224128 I PRELIMINARY STATEMENT This case involves a mother who put her trust in her son to help her run her business in exchange for very generous annual compensation. Unfortunately, her son took much more than his $300,000 annually - which was only discovered following his mom’s health decline and the appointment of trustees to take her place in the management and oversight of the company. Moms company andson, now plaintiff and defendant respectively, memorialized the son’ s management role and compensation in a written agreement, which agreement contains an “employment” arbitration provision, completely devoid of any explanation as to what arbitration is, howit differs from Court proceedings, or that the parties’ constitutional right to have their case heard in a Court by ajury is waivedby an agreementto arbitrate. Under well-settled New Jersey Supreme Court precedent, such deficiencies undoubtedly invalidate the arbitration provision in the subject agreement. Defendants’ argument that a newly decided Appellate Division decision, which decision is currently on appeal to the Supreme Court, changes the analysis is without merit. These are family members who executed an agreement purportedly seeking to utilize the Employment Rules of the American Arbitration Association. Defendants cannot have it both ways. They cannot both have the benefit of the Employment Rules, as opposed to the Commercial Rules and the increased litigant costs relatedto same, but yet claimto be sophisticated commercial entities. The reality is that these are not sophisticated commercial parties with a history of business dealings, as further evidenced by the very language upon which Defendants now rely, and as such, the lack of clear waiver of the right to proceed in Court language renders the arbitration provision moot and unenforceable. Additionally, the arbitration provision at issue selects an arbitral forum that does not exist: AAA in Bergen County, New Jersey. As such forum is unavailable (because it is non-existent), BER-L-004071-23 10/26/2023 4:40:48 PM Pg5of12 Trans ID: LCV20233224128 arbitration cannot be compelled in an altemate, unagreed-to forumto which there was no meeting of the minds. I LIMITED STATEMENT OF FACTS AND PROCEDURAL HISTORY WICisaNew]Jessey Limited Liability company located at 285 Pascack Road, Washington Township, New Jersey (the “Property”). See Certification of Kory Ann Fen (“Ferro Cert.”) at Ex. 1, 91. WTC owns and operates a commercial shopping center at the Property. Id. at (918, 14. At its 1997 inception, WIC was owned by Adele DiChiara Leone (“Adele”) and her Family Trust. Id. at 111. In 2001, Adele transferred her WTC ownership to a Revocable Trust. Id. at 1712, 14. Thus, WIC was and is owned by the Adele Leone Family Trust and the Adele DiChiara Revocable Tuust (the “Trusts”). Id. at 42. Granite Commercial Property Management, LLC (“Granite”), via a December 24, 2017 Property Management Agreement (the “Agreement’), was appointed the day-to-day manager of WIC, managing alongside Adele. Id. at {1 15-16. Defendant Alexander DiChiara (“Alex”) (together with Granite, “Defendants”) is Adele’s son and Granite’s Chief Executive Officer. Id. at 16. In March 2023, due to Adele’s incapacity, John Michael DiChiara (“John”) and Laurence I. Blair (“Lary”) (the “Trustees”) became successor trustees and replaced Adele as WTC’s manager. Id. at {] 22-27. On March 29, 2023, Defendants were advised of the new Trustees, their roles as managers, and their need for information related to the operation of WTC. Id. at {" 29- 64. Defendants were uncooperative, refusedto tumover WTC ’s records, and falsely advised WTC vendors that the Trustees were not authorized to act on behalf of WTC. Ibid. A review of WIC’s bank records revealed Defendants had been misappropriating WIC funds, including, but not limited to, payment of: (1) Granite’s business expenses; (2) income to Granite in excess of the BER-L-004071-23 10/26/2023 4:40:48 PM Pg6of12 Trans ID: LCV20233224128 $300,000 annually provided in the Agreement; and (3) Alex’s personal expenses such as Amazon Prime, Stubhub, and NY U SCPS Student Payment. Id. at {| 66-69. On August 1, 2023, the Trustees terminated Granite for cause. Id. at 1] 71-73. Also on August 1, 2023, WIC filed this action against Defendants for: Breaches of the Agreement, the Covenant of Good Faith and Fair Dealing, Fiduciary Duty, Statutory Duty of Loyalty and Care; Negligence; Gross Negligence; Unjust Enrichment; Conversion; Fraud; and Piercing Corporate Veil. Id. at 11 75-137. On October 2, 2023, Defendants filed their Answerto Complaint, Separate Defenses, Jury Demand and Certifications (Trans. ID LCV 20233003542). On October 4, 2023, Defendants filed the instant Motion (Trans. ID LCV20233037187) and a Motion to Stay Discovery (Trans. ID LCV 20233045069). On October 18, 2023, WTC filed a Motion to Strike Defendants’ Affirmative Defenses (Trans. ID LCV20233151722). All three Motions are retumable on November 3, 2023. TI. LEGAL ARGUMENT A. Standard of Review “[W]hen itis apparent, basedon ‘the face of a complaint, and documents relied upon in the complaint,’ that certain of a party’s claims ‘are subject to an enforceable arbitration clause, a motion to compel arbitration should be considered under a [motion to dismiss] standard without discovery’s delay.’” Guidotti v. Legal Helpers Debt Resol., L.L.C., 716 F.3d 764, 776 (3d Cir. 2013) (Somerset Consulting, LLC v. United Cap. Lenders, LLC, 832 F. Supp. 2d 474, 482 (E.D. Pa. 2011). “But if the complaint and its supporting documents are unclear regarding the agreementto arbitrate, or if the plaintiff has responded to a motion to compel arbitration with additional facts sufficient to place the agreement to arbitrate in issue, then ‘the parties should be entitled to discovery on the question of arbitrability before a court entertains further briefing on [the] question.’” Guidotti, 716 F.3d at 776 (3d Cir. 2013) (quoting Somerset Consulting, 832 F. Supp. 2d at 482); Itzhakov v. Segal, No. A-2619-17T4, 2019 WL 4050104, at*8 (NJ. Super. Ct. 3 BER-L-004071-23 10/26/2023 4:40:48 PM Pg7of12 Trans ID: LCV20233224128 App. Div. Aug. 28, 2019); McDemnott v. Genesis Healthcare, No. A-3585-17T4, 2019 WL 3282925, at*1 (NJ. Super. Ct. App. Div. July 22, 2019). “After limited discovery, the court may entertain a renewed motion to compel arbitration, this time judging the motion under a summary judgment standard.” Ibid. B The Arbitration Provision at Issue is Unenforoeable Under Atalese Because It Lacks the Requisite Waiver-of- Rights Although the Agreement contains an arbitration provision, that provision itself is unenforceable due to a lack of mutual assent thereto in accordance with the landmark New Jersey Supreme Court holding in Atalese v. U.S. Legal Servs. Gmp., L.P., 219 NJ. 430 (2014), which decision has been reaffirmed by our Supreme Court multiple times, most recently in December 2020 in Delaney v. Dickey, 244 NJ. 466, 500 (2020). “Mutual assent requires that the parties have an understanding of the terms to which they have agreed.” Atalesev. U.S. Legal Servs. Grp., LP., 219 NJ. 430, 442 (2014). “The Court has stressed that ‘[iJn the absence of a consensual understanding, neither party is entitledto force the otherto arbitrate their dispute.’” Garfinkel v. Monistown Obstetrics & Gynecology Assocs., P.A., 168 NJ. 124, 132 (2001) (quoting In re Arbitration Between Grover & Universal Underwriters Ins. Co., 80 NJ. 221, 228 (1979)) (alteration in original). “By its very nature, an agreementto arbitrate involves a waiverof a party’s rightto have her claims and defenses litigated in court.” NAACP of Camden Cnty. E. v. Foulke Mgmt. Corp., 421 NJ. Super. 404, 425 (App. Div. 2011). “An effective waiver requires a party to have full knowledge of his legal rights and intentto surrender those rights.” _Knorrv. Smeal, 178 NJ. 169, 177 (2003). “[B]ecause arbitration involves a waiver of the right to pursue a case in a judicial forum, ‘courts take particular care in assuring the knowing assent of both parties to arbitrate, and a clear mutual understanding of the ramifications of that assent.’” Atalese, 219 NJ. at 442-43 (quoting Foulke, 421 NJ. Super. at 425). BER-L-004071-23 10/26/2023 4:40:48 PM Pg8of12 Trans ID: LCV20233224128 For a decade, “under New Jersey law, any contractual “waiver-of-rights provision must reflect that [the party] has agreed clearly and unambiguously” to its terms.” Atalese, 219 NJ. at 443 (quoting Leodori v. CIGNA Corp., 175 NJ. 293, 302 (2003)). “Ourjurisprudence has stressed that when a contract contains a waiver of rights—whetherin an arbitration or other clause—the waiver ‘mustbe clearly and unmistakably established.’” Id. at 444 (quoting Garfinkel, 168 NJ. at 132). Our Courts “have repeatedly stated that ‘[t]he point is to assure that the parties know that in electing arbitration as the exclusive remedy, they are waiving their time-honored right to sue.’” Ibid. (quoting Garfinkel, 168 N,J. at 132) (alteration in original). “Our courts have upheld arbitration clauses phrased in various ways when those clauses have explained that arbitration is a waiver of the right to bring suit in ajudicial forum.” Ibid. (i.e, Plaintiff agreed “to waive [her] rightto ajury trial”; “they are waiving their rights to maintain other available resolution processes, such as a court action or administrative proceeding”; “Instead of suing in court . . . There's no judge or jury, and review is limited”). “The waiver of-rights language, however, must be clear and unambiguous— that is, the parties must know that there is a distinction between resolving a dispute in arbitration and in ajudicial forum.” Id. at 445. Where an arbitration provision does not explain what arbitration is, how it is different from proceeding in court, and is not written in plain language, it will not be upheld. See id. at 446. Our Supreme Court has applied the Atalese rule even in the context of sophisticated parties. See Delaney, 244 NJ. at 500 (analyzing arbitration clause under Atalese where Plaintiff was a “sophisticated businessman and not unfamiliarto litigation”). Here, the arbitration provision at issue reads: Any and all controversies or claims relating to, or arising out of, Manager's management of the Company, or the termination of said. or the terms of this Agreement, including any breach. thereof, shall be settled by arbitration in Bergen County of New Jersey, in accordance with the Employment Rules of the American Arbitration Association, and judgment upon the reward rendered 5 BER-L-004071-23 10/26/2023 4:40:48 PM Pg9of12 Trans ID: LCV20233224128 may be entered in any court having jurisdiction thereof. The arbitrator shall decide who shall pay the expense of the arbitration. Any decision made by an arbitrator under this provision shall be final and binding. See Feno Cert. at Ex. 2, 1 6(f).] This arbitration provision does not comply with the requirements detailed by Atalese. It makes no reference to a waiver of the right to bring suit in a judicial forum; it does not explain what arbitration is; and it does not advise that there is a distinction between resolving a dispute in arbitration and in a judicial forum, and it does not state that arbitration is the sole and exclusive remedy for disputes. See Atalese, 219 NJ. at 444-45. In the absence of clear and unambiguous waiver of rights, mutual assent is absent and the arbitration provision in the Agreement is unenforceable. See id. at 442-45; Garfinkel, 168 NJ. at 132; Foulke, 421 NJ. Super. at 425. Cc ‘The Recent Appellate Division Decision Cited by Defendants Should Not Be Relied Upon This yearin, Cnty. of Passaicv. Horizon Healthcare Servs., Inc., 474 NJ. Super. 498 (App. Div. 2023), the Appellate Division sought to limit our Supreme Court's nearly ten-year-old rule set forth in Atalese holding that the requirement for arbitration clauses to have a waiver of the right to bring suit in a judicial forum does not apply to “individually-negotiated contracts between sophisticated parties - often represented by counsel at the formation stage - possessing relatively similar bargaining power.” Id, at 503-04. Such holding, which was granted certification by the New Jersey Supreme Court (Cnty. of Passaic v. Horizon Healthcare Servs., Inc., 254 NJ. 69 (2023)), highlights that the waiver-of-rights rule in arbitration provisions is most often found “in the context of employment and consumer contracts” aimed at protecting “those not versed in the law ornot necessarily aware of the fact that an agreement to arbitrate may preclude the right to sue in acount or invoke the inestimable night of trial by jury[.]” Ci of Passaic, 474 NJ. Super. at 503-04. BER-L-004071-23 10/26/2023 4:40:48 PM Pg10of12 Trans ID: LCV20233224128 First of all, this decisionis contrary to precedent in this State and may well be reversedor narrowed by the Supreme Court. Its holding challenges almost a decade of Supreme Court precedent reaffirmed countless times between 2014 and the present. Moreover, it runs contraryto the analysis in Delaney, 244 NJ. 466, which applied Atalese to a “sophisticated businessman and not unfamiliarto litigation.” More importantly, Cnty. of Passaic, even if upheld, does not apply to this case. This case does not involve “individually-negotiated contracts between sophisticated parties.” Instead, it involves a mother, through her Trusts, and son, through an LLC he formed to help run his mom's business. These are not individuals “versed in the law or not necessarily aware of the fact that an agreement to arbitrate may preclude the right to sue in a court or invoke the inestimable right of trial by jury.” These are family members seeking to memorialize their agreement to run a family business Indeed, the arbitration provision itself calls for the Employment Arbitration Rules to apply, which mules apply to employees and their employers - not the “sophisticated” “businesses” with equal bargaining power claimed by Defendants. Surely Granite is not saying both: (1) itis not an employee for the purpose of this arbitration enforceability analysis; but (2) it is an employee for the purpose of arbitration and associated reduced costs afforded to Defendants under the Employment Arbitration fee schedule. If Defendants are claiming to be employees, then the analysis of enforceability must be viewed under the employer/employee context - in which case it cannot be disputed that the lack of waiver language is fatal here. See Cnty. of Passaic, 474 NJ. Super. at 503-04; see also Flanzmanv. Jenny Craig, Inc., 244 NJ. 119 (2020). Defendants cannot be permitted to “work the system” with positioning only favorable to itself. For example, if this is an employment arbitration, and Defendants were employees, then the AAA requires that the employer company bear the increased, one-sided costs for the BER-L-004071-23 10/26/2023 4:40:48 PM Pgllof12 Trans ID: LCV20233224128 arbitration. See, e.g., Certification of Kory Ann Fenn (“Ferro Cert”) at Ex. 3 (“Non-refundable filing fee of $2,450 is payable in full by the company” plus a “Case Management Fee $750”). Further, under the employment mules, there is a “Fee for Advancing to Arbitrator Selection Process: This fee will be billed and must be paid prior to the arbitrator selection process. Individuals: administrative fee of $100 per case; Company: administrative fee of $1,750 per case.” Ibid. “Under the Employment/Workplace Fee Schedule, the employee’s or individual’ s fee is capped at $350” and the employer pays the arbitrator’ s compensation and administrative fees, which are “not subject to reallocation by the arbitrator.” See Employment Arhitration under AA Administration, ADR.orc, https://www.adr.org/employment (last visited October 26, 2023). Tf, however, Defendants claimto be a “sophisticated” “business” enforcing a Commercial Arbitration agreement, the Commercial Rules would have applied and would require Defendants bear the costs of arbitration on equal footing with Plaintiff. See, eg., Feo Cert. at Ex. 4 (fee schedule provisions requiring certain costs to be shared “50/50” by parties). Additionally, the deposits required to pay the arbitrator would be allocated among the parties thereby increasing the cost for both sides. See Fen Cert at Ex. 5. Defendants are attempting to utilize the Employment Arbitration Rules to escape the high fees to which they would be subject under the Commercial Arbitration Rules, but bypass the impact same has on the waiver-of-rights requirement in the employment context. Thus, even were this Courtto rely upon the Of Passaic decision, the futureof which is unknown, the Atalese waiver requirement would still apply here on the very face of the subject arbitration provision, as well as the underlying facts, and the Agreement’ s arbitration provision unequivocally fails. 1 Notably, the arbitration provision in the Agreement relied on my Defendants provides that fees shall be determined by the Axhitrator, which is inconsistentwith and directly contradictory to the AAA Employment Arbitration Rules which it purports to apply. BER-L-004071-23 10/26/2023 4:40:48 PM Pg12of12 Trans ID: LCV20233224128 D. There Was No Is NoAAA rote in Bergen of the Minds as to an Arbitral Forum Because There County, New J ersey Where the “arbitration process contemplated by [an arbitration] clause” is not available, arbitration cannot be compelled. Kleine v. Emeritus at Emerson, 445 NJ. Super. 545, 552 (App. Div. 2016). In Kleine, the arbitration provision elected AAA as the arbitral forum, but the AAA wes no longer accepting the type of dispute involved in Kleine. Ibid) The Court held: “Consequently, when the parties contracted, their exclusive forum for arbitration was no longer available; there being no agreement to arbitrate in any other forum, arbitration could not be compelled. In short, even assuming the clause was otherwise enforceable and consented to by Plaintiff, there was no meeting of the minds as to an arbitral forum if AAA was not available.” Ibid; see also Flanzman, 244 NJ. at 140 (detailing holding in Kleine as valid law). Even assuming the arbitration provision at issue is otherwise valid, which it is not, there ‘wes no meeting of the minds as to the arbitral forum. The arbitration provision at issue elects AAA arbitration in Bergen County, New Jersey when same does not exist. See Global and Domestic AAA-IDCR Office Locations, ADR.orG, https://www.adr.org/OfficeLocations (last visited October 26, 2023); Ferro Cert. at 18. The AAA does not have any offices in Bergen County, New Jersey and therefore the forum selected is unavailable. As such, WIC cannot be compelled to arbitration in a forumto which it did not consent. IV. CONCLUSION For the foregoing reasons, Defendants’ Motion to Dismiss and Compel Arbitration must be denied in its entirety. Dated: October 26, 2023 GREENSPOON MARDER LLP Attorneys for Plaintiff /s/Kory Ann Ferro Kory Amn Fenn, Esq. (ID No. 065932013) BER-L-004071-23 10/26/2023 4:40:48 PM Pg1lof69 Trans ID: LCV20233224128 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 LAW DIVISION New Jersey Limited Liability Company, BERGEN COUNTY Plaintiff, DOCKET NO.: BER-L-004071-23 Vv. CIVIL ACTION GRANITE COMMERCIAL PROPERTY CERTIFICATION OF KORY ANN FERRO MANAGEMENT, LLC, a New Jersey IN OPPOSITION TO DEFENDANTS’ Limited Liability Company, and MOTION TO DISMISS COMPLAINT AND ALEXANDER DICHIARA, COMPEL ARBITRATION Defendants. KORY ANN FERRO, hereby certifies as follows: 1 I am an attorney at law of the State of New Jersey and senior counsel at the law firm of Greenspoon Marder LLP, attorneys for Plaintiff Washington Town Center, LLC in the within matter. I am one of the attorneys 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 opposition to Plaintiff's Motion to Dismiss Complaint and Compel Arbitration. 3 A true and correct copy of the August 1, 2023 Complaint with Case Information Statement (Trans. ID LCV20232231246) is attached hereto as Exhibit 1. 4 A true and correct copy of the December 24, 2017 Management Agreement is BER-L-004071-23 10/26/2023 4:40:48 PM Pg2of69 Trans ID: LCV20233224128 attached hereto as Exhibit 2. 5 A true and correct copy of the American Arbitration Association (“AAA”) Employment/Workplace Fee Schedule (Amended and Effective August 1, 2023) found at https://www.adr.org/sites/default/files/Employment_Workplace_Fee_Schedule.pdf is attached hereto as Exhibit 3. 6. A true and correct copy of the AAA Commercial Arbitration Rules and Mediation Procedures Administrative Fee Schedules (Amended and Effective May 1, 2018) found at https://www.adr.org/sites/default/files/Commercial_Arbitration_Fee_Schedule_1.pdfis attached hereto as Exhibit 4. 7 A true and correct copy of R-58 of the Commercial Arbitration Rules and Mediation Procedures (Amended and Effective September 1> 2022) found at https://www.adr.org/sites/default/files/Commercial-Rules_Web.pdf (page 34) is attached hereto as Exhibit 5. 8 On October 26, 2023, this office contacted the AAA Case Filing Hotline and confirmed that the only AAA locations in New Jersey are in Piscataway and Voorhees with no location in Bergen County, New Jersey. 9 A true and correct copy of Itzhakov_v. Segal, No. A-2619-17T4, 2019 WL 4050104 (N.J. Super. Ct. App. Div. Aug. 28, 2019) is attached hereto as Exhibit 6. 10. A true and correct copy of McDermott v. Genesis Healthcare, No. A-3585-17T4, 2019 WL 3282925 (N.J. Super. Ct. App. Div. July 22, 2019) is attached hereto as Exhibit 7. BER-L-004071-23 10/26/2023 4:40:48 PM Pg3o0f69 Trans ID: LCV20233224128 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 subject to punishment. Dated: October 26, 2023 GREENSPOON MARDER LLP Attorneys for Plaintiff /s/Kory Ann Ferro Kory Ann Ferro, Esq. (ID No. 065932013) BER-L-004071-23 10/26/2023 4:40:48 PM Pg4of69 Trans ID: LCV20233224128 EXHIBIT 1 BER-L-004071-23 10/26/2023 4:40:48 PM Pg5of69 Trans ID: LCV20233224128 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 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 WITH JURY 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 BER-L-004071-23 10/26/2023 4:40:48 PM Pg6of69 Trans ID: LCV20233224128 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”. BER-L-004071-23 10/26/2023 4:40:48 PM Pg7of69 Trans ID: LCV20233224128 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. BER-L-004071-23 10/26/2023 4:40:48 PM Pg 8of69 Trans ID: LCV20233224128 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). BER-L-004071-23 10/26/2023 4:40:48 PM Pg9of69 Trans ID: LCV20233224128 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.” C. 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 aresult 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. BER-L-004071-23 10/26/2023 4:40:48 PM Pg10of69 Trans ID: LCV20233224128 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. BER-L-004071-23 10/26/2023 4:40:48 PM Pg1lof69 Trans ID: LCV20233224128 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. BER-L-004071-23 10/26/2023 4:40:48 PM Pg12of69 Trans ID: LCV20233224128 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 BER-L-004071-23 10/26/2023 4:40:48 PM Pg13 of69 Trans ID: LCV20233224128 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.