MSKP OAK GROVE, LLC v. VENUTO
1:10-cv-06465
D.N.J.Apr 17, 2017Background
- Plaintiff MSKP Oak Grove, LLC is a judgment creditor of Hollywood Tanning Systems, Inc. (HTS) seeking relief under the New Jersey Uniform Fraudulent Transfer Act (NJUFTA) for a June 22, 2007 distribution of $23 million from HTS to its shareholders.
- Plaintiff alleges the June 22, 2007 transfer left HTS insolvent and unable to satisfy a 2009 judgment to Plaintiff.
- Plaintiff filed suit in December 2010 and later amended its complaint; Count IV asserts a claim under N.J.S.A. 25:2-27(b) (NJUFTA fraudulent transfer claim).
- Defendants moved for judgment on the pleadings, arguing Count IV is barred by NJUFTA’s one-year statute of repose (N.J.S.A. 25:2-31) because the transfer occurred in 2007.
- Plaintiff argued defendants waived the statute-of-repose defense and invoked the law-of-the-case from the court’s prior opinion allowing relation back of amendments; Plaintiff also cross-moved for sanctions.
- The court held the one-year statute of repose extinguished any 25:2-27(b) cause of action arising from the 2007 transfer, granted defendants’ motion, and denied Plaintiff’s sanctions motion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether Count IV (N.J.S.A. 25:2-27(b)) is time-barred by NJUFTA’s one-year limitation | The claim survives because (1) amendments relate back under the court’s prior ruling and (2) defendants waived the defense by not raising it earlier | The one-year statute of repose in N.J.S.A. 25:2-31(c) extinguishes any 25:2-27(b) claim more than one year after the transfer, regardless of waiver or relation back | Held: Dismissed — the statute of repose bars the 2007 transfer claim; defendants need not have pleaded it earlier |
| Whether defendants’ failure earlier to raise the defense (or prior court rulings) forecloses invoking the statute of repose | The prior opinion and procedural history prevent defendants from asserting the one-year bar now | The statute of repose is substantive and self-executing; it need not be raised as an affirmative defense to be effective | Held: Court rejects waiver/law-of-the-case arguments and enforces the statute of repose |
| Whether defendants’ motion warranted sanctions against them | N/A (Plaintiff sought sanctions) | The motion was reasonable and could streamline trial; not frivolous or vexatious conduct | Held: Sanctions denied |
Key Cases Cited
- Turbe v. Government of the Virgin Islands, 938 F.2d 427 (3d Cir.) (pleading standards for Rule 12(b)(6) and 12(c) are the same)
- Notte v. Merchants Mut. Ins. Co., 888 A.2d 464 (N.J. 2006) (distinguishing statutes of limitations from statutes of repose)
- Rosenberg v. Town of North Bergen, 293 A.2d 662 (N.J. 1972) (statute-of-repose creates substantive rights and need not be pleaded to be effective)
- Borough of Sayreville v. Union Carbide Corp., 923 F. Supp. 671 (D.N.J.) (procedural discussion of Rule 12 motions)