Gail Palminteri, Etc. v. William Stockman

CourtNew Jersey Superior Court Appellate Division
DecidedJuly 11, 2024
DocketA-0013-22
StatusUnpublished

This text of Gail Palminteri, Etc. v. William Stockman (Gail Palminteri, Etc. v. William Stockman) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Gail Palminteri, Etc. v. William Stockman, (N.J. Ct. App. 2024).

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-0013-22

GAIL PALMINTERI, individually and as Executrix of the Estate of ANTHONY PALMINTERI,

Plaintiff,

v.

WILLIAM STOCKMAN,

Defendant-Respondent,

and

ORADELL ANIMAL HOSPITAL, INC.,

Defendant-Appellant.

Argued April 26, 2023 – Decided July 11, 2024

Before Judges Gooden Brown and DeAlmeida.

On appeal from an interlocutory order of the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-000127-21. Andrew Gimigliano argued the cause for appellant (Mandelbaum Barrett, PC; Andrew Gimigliano and Robert C. Scrivo, of counsel and on the briefs).

Eric S. Latzer argued the cause for respondent (Cole Schotz, PC; Steven R. Klein and Eric S. Latzer, of counsel and on the brief, Arnold P. Picinich, on the brief).

The opinion of the court was delivered by

DeALMEIDA, J.A.D.

On leave granted, defendant Oradell Animal Hospital, Inc. (OAH),

appeals from the July 15, 2022 order of the Chancery Division denying its

motion to disqualify Cole Shotz, PC (CS) as counsel for defendant William

Stockman. We affirm.

I.

We assume for purposes of this appeal that the following facts, which are

alleged in the pleadings, but may be in dispute, are true.

OAH, founded in 1961, and incorporated in 1973, operates a veterinarian

hospital in Bergen County. In 2010, OAH had three shareholders: Anthony

Palminteri, who held forty-five percent of the shares, Stockman, who held forty-

five percent of the shares, and Paul Gambardella, who held ten percent of the

shares. At that time, CS, a law firm that had long represented OAH, primarily

through partner Henry Matri, drafted an amended shareholders agreement

A-0013-22 2 (Shareholders Agreement). The shareholders did not have separate, independent

counsel when negotiating or executing the Shareholders Agreement, which

appointed the three shareholders as members of OAH's board of directors. The

Shareholders Agreement provides that upon the death of a shareholder, the legal

representative of the decedent shall be obligated to sell the deceased

shareholder's shares to OAH within sixty days of death. The closing on the

purchase may be delayed for up to thirty-six months from the death of the

shareholder, in the sole discretion of the surviving directors of OAH.

In 2010, after execution of the Shareholders Agreement, CS stopped

representing OAH. Joseph Torre replaced CS as OAH's corporate counsel.

In 2015, the shareholders amended the Shareholders Agreement through

a joint resolution to provide, in part, that upon the death of a shareholder, OAH

may toll the payout of a shareholder's interest for up to forty months from the

shareholder's death. The amendment was drafted by Torre. The Shareholders

Agreement also states that as "long as any part of the purchase price of shares

of Stock sold" to OAH "in accordance with this Agreement remains unpaid, the

Corporation shall not declare or pay dividends on its Stock."

The Shareholders Agreement contains a provision entitled "Disability of

Paul." The parties dispute the meaning of this provision, its applicability to

A-0013-22 3 Stockman, and whether a 2017 amendment that purported to extend the

"Disability of Paul" provision to Stockman, which was drafted by Torre, was

adopted by the shareholders.

In June 2019, Stockman's New Jersey veterinarian license was changed to

inactive status. The parties dispute the circumstances surrounding this

development, with Stockman contending that Palminteri or his spouse, plaintiff

Gail Palminteri, or both acting in concert, intentionally caused his license to

lapse without his knowledge or consent. 1

In October 2020, Palminteri and Stockman bought out Gambardella's

interest in OAH after negotiations that spanned several years. Each executed

separate agreements with Gambardella, which resulted in each becoming fifty-

percent shareholders of OAH. CS represented Stockman in this transaction,

initially through Matri, but after Matri left CS in 2018, through partner Roger

Iorio. Torre represented Palminteri and OAH in this transaction.

On November 10, 2020, Palminteri died. Stockman takes the position that

Palminteri's death left him as the sole surviving member of OAH's board of

directors. Plaintiff, however, argues that after Palminteri died, the OAH board

1 Because they share a surname, to avoid confusion we refer to Anthony Palminteri as Palminteri and Gail Palminteri as plaintiff. A-0013-22 4 consisted only of Rita Angelo, Kristi Gannon, and Donald Schrope, who were

put in place in 2020 with the assistance of Torre. She alleges that since late

2018, Stockman had been absent and out of touch with the daily operations of

OAH and was no longer a member of the OAH board.

Shortly after Palminteri's death, Stockman wrote to Angelo and stated that

he was removing Torre as OAH's counsel. On November 13, 2020, Stockman

signed a resolution on behalf of the OAH board terminating Torre as OAH's

counsel. CS drafted that resolution on behalf of Stockman. Torre refused to

recognize Stockman's authority to remove him.

Plaintiff, as executrix of Palminteri's estate, began negotiations with

Stockman regarding OAH's purchase of Palminteri's shares. While negotiations

were ongoing, on January 15, 2021, sixty-six days after Palminteri's death, Iorio,

purporting to act as counsel for both OAH and Stockman, issued a letter to

plaintiff's counsel stating that pursuant to the Shareholders Agreement, OAH

elected to toll the time for closing on its purchase of Palminteri's shares. The

letter stated that the exercise of the tolling provision was made at the election of

Stockman, the sole surviving director of OAH. Plaintiff refused to effectuate

the sale of Palminteri's shares to OAH.

A-0013-22 5 On June 1, 2021, plaintiff, individually, as executrix of Palminteri's estate,

and purportedly on behalf of OAH as a nominal defendant, filed a verified

complaint in the Chancery Division. She alleged that: (1) Stockman's purchase

of half of Gambarella's shares in 2020 violated the Shareholders Agreement

because Stockman lacked the mental capacity to enter a contract, was disabled,

and was not a licensed veterinarian when the transaction took place; (2) Iorio

and Stockman's son, Gary Stockman, exercised undue influence over Stockman

to purchase half of Gambardella's shares; (3) the attempt by OAH and Stockman

to toll the purchase of Palminteri's shares was ineffective because it was asserted

more than sixty days after Palminteri's death and resulted in a waiver of OAH's

right to purchase Palminteri's shares; (4) since Palminteri's death, Stockman has

usurped and opposed the shareholder rights of Palminteri's estate by asserting

control over OAH and attempting to terminate OAH's general counsel; (5)

Stockman is seeking to force Palminteri's estate to sell its shares at a value far

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