                                NOT FOR PUBLICATION WITHOUT THE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-5027-17T1

NORTH MILL EQUIPMENT
FINANCE, LLC, as servicer
for EFS CREDIT TRUST,

          Plaintiff-Respondent,

v.

CINEMACAR LEASING, INC.,
d/b/a CINEMACAR LEASING
and CINEMACAR II, INC.,

          Defendants-Appellants/
          Third-Party Plaintiffs,

v.

PARAMOUNT EXPORTS INC.,
and SAMUEL MASSY as
guarantor,

     Defendants/Third-Party
     Defendants.
______________________________

                    Argued December 4, 2019 – Decided February 5, 2020

                    Before Judges Koblitz, Whipple, and Mawla.
            On appeal from the Superior Court of New Jersey, Law
            Division, Bergen County, Docket No. L-2358-16.

            Thomas A. Lodato argued the cause for appellants.

            Rafael J. Corbalan argued the cause for respondent
            (Kaufman, Semeraro & Leibman, LLP, attorneys;
            Rafael J. Corbalan, on the brief).

PER CURIAM

      Defendants Cinemacar Leasing and Cinemacar II appeal from the May 25,

2018 judgment after a bench trial finding both jointly and severally liable for

damages stemming from the breach of their contractual obligation to properly

record and perfect plaintiff's lien. We affirm.

      We discern the following facts from the record. Plaintiff North Mill

Equipment Finance, LLC, is a servicer for EFS Credit Trust 1 which finances

commercial vehicle purchases.      On October 27, 2014, plaintiff executed a

Security Agreement with Paramount Exports Inc., signed by Paramount's

president Samuel Massy as personal guarantor, to finance Paramount's purchase

of a Volvo truck from defendants. Plaintiff provided $52,389.36 to Paramount,

and payments of $1,455.26 were to be made by Paramount over a term of thirty-




1
  We refer to North Mill Equipment Finance, LLC and EFS Credit Trust as one
plaintiff.
                                                                       A-5027-17T1
                                        2
six months. The Security Agreement provided plaintiff would maintain first lien

priority on the Volvo.

      Prior to the execution of the Security Agreement, on October 16, Guy

Carnazza, president and owner of both defendants Cinemacar Leasing and

Cinemacar II, had signed a dealer agreement with plaintiff on behalf of

Cinemacar Leasing regarding the Volvo purchase by Paramount. Paragraph four

of the agreement states, in pertinent part:

            If the [e]quipment is a vehicle, also enclosed is a copy
            of the completed and executed application to title the
            [e]quipment in the [c]ustomer's name with you as the
            sole lienholder which the undersigned will promptly
            process and have the original Certificate of Title
            delivered to you as soon as available.

The dealer agreement required that, in the event of a breach, "the undersigned,

upon your demand, will refund to you all amounts paid by you to the

undersigned in connection with the equipment and this transaction, together with

interest thereon at a rate of [eighteen percent] per annum or . . . the highest

legally permissible interest rate." The agreement required Cinemacar Leasing

to perfect the first priority lien by properly recording it with the Department of

Motor Vehicles for the State of New York (DMV). In addition to the dealer

agreement, Carnazza signed a Titling Responsibility Acknowledgement wherein



                                                                          A-5027-17T1
                                         3
he accepted the responsibility for any service and/or titling fees necessary to re -

title the vehicle.

      On July 6, 2015, the Volvo was labeled abandoned, and secured by the

Monroe County Sheriff's Department in Monroe, Michigan. On September 2,

2015, the Volvo was sold for storage and towing costs.            The "Notice of

Abandoned Vehicle" from the Monroe County Sheriff's Office showed their

search for the titleholder of the Volvo revealed only the previous owner of the

Volvo, GG Barnett Transport, Inc., in Beaver Dam, Wisconsin.

      In March 2016, plaintiff filed a complaint against defendants alleging

Cinemacar Leasing and Cinemacar II were liable for $39,861.99 plus eighteen

percent interest.    Defendants filed an answer and asserted a third-party

complaint against Paramount and Massy.

      In June 2017, plaintiff filed an amended complaint adding Paramount and

Massy as direct defendants. Plaintiff's amended complaint asserted breach of

contract claims on two separate accounts; a claim for unjust enrichment against

Cinemacar Leasing and Cinemacar II for accepting the financing and failing to

properly perfect plaintiff's lien; a breach of the implied covenant of good faith

and fair dealing; and allegations plaintiff was injured by all defendants' failure

to honor their express representations.       Plaintiff sought joint and several


                                                                            A-5027-17T1
                                         4
liability. The complaint also sought judgment against Massy pursuant to his

personal guarantee of the security agreement. Neither Paramount nor Massy

answered the complaint, and default judgment was entered against them on or

around October 3, 2017.

      On February 27, 2018, the court conducted a bench trial. Joseph Littier,

Senior Vice President of plaintiff North Mill, testified plaintiff viewed

Cinemacar Leasing and Cinemacar II as the same company, and had received no

notice of the Volvo being abandoned or sold several months later. Litt ier

attributed the lack of notice to plaintiff's lien not being recorded, and asserted

had plaintiff received notice, it would have worked with the towing company to

get the equipment back. He further testified plaintiff was denied the opportunity

to mitigate its damages because it was cut out of the chain of title.

      Carnazza testified, admitting that both Cinemacar II and Cinemacar

Leasing have the same address and operate out of the same location, and that he

is sole owner of both entities. He explained Cinemacar II is a used car sales

dealership and Cinemacar Leasing is a leasing company. Although Carnazza

signed the dealer agreement as the President of Cinemacar Leasing, he did not

notice Cinemacar Leasing was the signatory to the agreement when he signed it

and had he noticed, "[he] would have said something."


                                                                          A-5027-17T1
                                        5
      Carnazza asserted a Notice of Lien form, the document that would have

effectuated the creation of the lien in favor of plaintiff, instructed that five

dollars must be made payable to the Commissioner of Motor Vehicles, and that

one can verify online if the lien was recorded through the DMV website. The

form also stated that "[l]iens will not be recorded if information is illegible,

incorrect, or incomplete."

      Additionally, Carnazza testified the lien form and the accompanying five

dollar check were hand-delivered to the DMV in Albany, New York, but that he

could not check if the lien was recorded because only the holder of the lien, with

a lien filing code, could utilize the DMV website to verify if the lien had been

recorded. However, a question on the lien form asking whether a New York

Certificate of Title has been issued to the borrower was left blank, and

defendants produced no copy or record of the five-dollar payment.

      The court issued a written opinion in March 2018, finding a valid

agreement between the parties, and that Cinemacar Leasing and Cinemacar II

jointly and severally had the obligation under the agreement to properly record

the lien. In reaching this conclusion, the court noted that the parties performed

under the terms of both the dealer agreement and the Security Agreement for

months preceding the abandonment of the vehicle. The court also found that


                                                                          A-5027-17T1
                                        6
whether Cinemacar II or Cinemacar Leasing were substituted on two of the

documents, it did not render the contract void, as the entities are closely related;

owned solely by Carnazza; are in the same building; and in any case, endeavored

to perform under the terms of the contract. The court also found defendants

breached a duty under the contract by failing to properly record and perfect

plaintiff's lien on the Volvo in accordance with terms of the agreement. The

court entered judgment in favor of plaintiff and found defendants jointly and

severally liable for $39,861.99. Final Judgment was entered on May 25, 2018.

This appeal followed.

      Our review of a trial court's fact-finding in a non-jury case is limited.

Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150, 169 (2011). "The general

rule is that findings by the trial court are binding on appeal when supported by

adequate, substantial, credible evidence." Ibid. (quoting Cesare v. Cesare, 154

N.J. 394, 411-12 (1998)). "[We] should not disturb the 'factual findings and

legal conclusions of the trial judge unless [we are] convinced that they are so

manifestly unsupported by or inconsistent with the competent, relevant and

reasonably credible evidence as to offend the interests of justice.'" Cesare, 154

N.J. at 412 (quoting Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65

N.J. 474, 484 (1974)). "However, '[a] trial court's interpretation of the law and


                                                                            A-5027-17T1
                                         7
the legal consequences that flow from established facts are not entitled to any

special deference[,]'" and is subject to de novo review. Mountain Hill, L.L.C.

v. Twp. Comm. of Middletown, 403 N.J. Super. 146, 193 (App. Div. 2008)

(alteration in original) (citation omitted). "[F]or mixed questions of law and

fact, we give deference . . . to the supported factual findings of the trial court,

but review de novo the [trial] court's application of any legal rules to such factual

findings." State v. Harris, 181 N.J. 391, 416 (2004) (citing State v. Marshall,

148 N.J. 89, 185 (1997)).

      On appeal, defendants contend the trial court erred by imposing joint and

several liability on Cinemacar Leasing because Cinemacar Leasing had no

involvement in the financing deal at issue, and the trial court should have found

plaintiff failed to mitigate its claimed damages.

      Defendants assert that while Cinemacar Leasing and Cinemacar II share

the same owner, have similar names, and have the same business address, the

two are separate and unrelated corporations that serve distinct functions because

Cinemacar II sells vehicles while Cinemacar Leasing leases vehicles.

Defendants assert that Cinemacar Leasing only sells vehicles "when they come

back off-lease." Defendants argue Cinemacar II is the only party to a dealer

agreement with plaintiff. We disagree.


                                                                             A-5027-17T1
                                         8
      Carnazza testified he signed the dealer agreement on behalf of Cinemacar

Leasing.   The trial court found the substitution of Cinemacar Leasing and

Cinemacar II on two of the documents did not render the contract void because

the companies are closely related, owned solely by Mr. Carnazza, are located in

the same building, and endeavored to perform under the terms of the contract.

      Ordinarily, "[w]here two corporations are owned and operated by the same

individuals, their existence as separate entities will not be disregarded if no

deception, fraud or other wrongdoing is shown." Pachman, Current N.J. Statutes

Title 14A Corporations § 14A:5 cmt. 6(c)(8) (2019). However, the power to

pierce the corporate veil "will be invoked to prevent an independent corporation

from being used to defeat the ends of justice, to perpetrate a fraud, to accomplish

a crime, or otherwise to evade the law." Tung v. Briant Park Homes, Inc., 287

N.J. Super. 232, 239-40 (App. Div. 1996) (citation omitted). Although piercing

the corporate veil often arises in cases where a parent corporation is held liable

for its wholly owned subsidiary, New Jersey courts will also pierce the veil of a

corporation when justice requires.          See Stochastic Decisions, Inc. v.

DiDomenico, 236 N.J. Super. 388 393-94 (App. Div. 1989). "[T]he party

seeking an exception to the fundamental principle that a corporation is a separate




                                                                           A-5027-17T1
                                        9
entity [is charged with] the burden of proving the court should disregard the

corporate entity." Tung, 287 N.J. Super. at 240.

        Under certain circumstances, veil piercing is appropriate where the

corporations are closely identified and there is ambiguity about the manner and

capacity in which the various corporations and their representatives are acting.

In Stochastic Decisions, 236 N.J. Super. at 395, we affirmed the trial court's

decision to pierce the corporate veil because there was a pervasive commingling

of corporate assets and identities. There, we found there was no reason to limit

the application of veil piercing to parent-subsidiary relationships where the

corporate defendants commingled funds and operated in each other's names.

Ibid.

        Also, in Stochastic Decisions, we endorsed the Massachusetts Supreme

Court's decision in My Bread Baking Co. v. Cumberland Farms, Inc., 353 Mass.

614 (1968), where the court pierced the veils of several closely held

corporations, finding them liable for conversion. Id. at 394. There, the court

reiterated the well-established rule that common ownership and management,

standing alone, will not give rise to common liability, but held:

             [A]dditional facts may be such as to permit the
             conclusion that an agency or similar relationship exists
             between the entities. Particularly is this true (a) when
             there is active and direct participation by the

                                                                        A-5027-17T1
                                       10
            representatives of one corporation, apparently
            exercising some form of pervasive control, in the
            activities of another and there is some fraudulent or
            injurious consequence of the inter-corporate
            relationship, or (b) when there is a confused
            intermingling of activity of two or more corporations
            engaged in a common enterprise with substantial
            disregard of the separate nature of the corporate
            entities, or serious ambiguity about the manner and
            capacity in which the various corporations and their
            respective representatives are acting.          In such
            circumstances, in imposing liability upon one or more
            of a group of "closely identified" corporations, a court
            "need not consider with nicety which of them" ought to
            be held liable for the act of one corporation "for which
            the plaintiff deserves payment."

            [My Bread Baking Co., 353 Mass. at 619.]

      Here, there is no dispute that plaintiff viewed Cinemacar Leasing and

Cinemacar II as the same entity. Indeed, the companies have similar names, are

located in the same building, and share the same owner and president. The trial

court's findings that the companies are "closely related" is supported by

Carnazza's testimony that he signed the dealer agreement under Cinemacar

Leasing, and the titling agreement under Cinemacar II. Based on these facts, at

the very least there existed a "serious ambiguity about the manner and capacity

in which the various corporations and their representatives were acting." Where

companies act with such disregard to their separate identities, this court "need



                                                                        A-5027-17T1
                                      11
not consider with nicety which of them ought to be held liable for the act of one

corporation for which the plaintiff deserves payment."

      Moreover, Carnazza admitted he signed the dealer agreement on behalf of

Cinemacar Leasing. Carnazza's testimony that he did not notice Cinemacar

Leasing was the signatory to the agreement, and had he noticed, "[he] would

have said something[,]" does not relieve the company of its obligations to

perform under the contract, as "in the absence of fraud, one who does not choose

to read a contract before signing it cannot later relieve himself of its burdens."

Moreira Constr. Co. v. Moretrench Corp., 97 N.J. Super. 391, 394 (App. Div.

1967); see also Wade v. Park View Inc., 25 N.J. Super. 433, 440 (Law Div.

1953) (noting "the well[-]settled principle that affixing a signature to a contract

creates a conclusive presumption, except as against fraud, that the signer read,

understood and assented to its terms").

      We also reject defendants' contention the trial court erred by not finding

that plaintiff failed to mitigate its damages.      First, defendants argue that

plaintiff's damages could have been reduced substantially had plaintiff

recovered the Volvo through a replevin action. Second, defendants contend that

plaintiff could have prevented the loss of that collateral by recording the lien.




                                                                           A-5027-17T1
                                       12
      In breach of contract claims "[i]t is well-settled that injured parties have

a duty to take reasonable steps to mitigate damages." Ingraham v. Trowbridge

Builders, 297 N.J. Super. 72, 83 (App. Div. 1997) (alteration in original)

(quoting McDonald v. Mianecki, 79 N.J. 275, 299 (1979)). Damages which the

injured party "might have avoided with reasonable effort without undue risk,

expense, burden, or humiliation will be considered either as not having been

caused by the defendant's wrong or as not being chargeable against the

defendant." 11 Williston on Contracts § 64:31 (4th ed. 2018). Whether or not

a plaintiff has made reasonable efforts to mitigate its damages is a question for

the trier of fact. Ingraham, 297 N.J. at 84. "Thus, the proper standard in a non-

jury case regarding the judge's decision on mitigation of damages 'is whether the

judge's findings are supported by sufficient, credible evidence in the record.'"

Ibid. (citation omitted). We have held however:

            [W]here both the plaintiff and the defendant have had
            equal opportunity to reduce the damages by the same
            act and it is equally reasonable to expect a defendant to
            minimize damages, the defendant is in no position to
            contend that the plaintiff failed to mitigate. Nor will
            the award be reduced on account of damages the
            defendant could have avoided as easily as the plaintiff
            . . . [.] The duty to mitigate damages is not applicable
            where the party whose duty it is primarily to perform
            the contract has equal opportunity for performance and
            equal knowledge of the consequences of the
            performance.

                                                                          A-5027-17T1
                                      13
            [Id. at 83-84 (citations omitted).]

The injured party is not responsible for losses when "the defendant [itself]

prevents the [injured party] from taking the steps necessary to avoid them." 11

Corbin on Contracts § 1039 (Interim ed. 1964). Generally, in contract actions

the burden of proof on avoidable consequences rests upon the party breaching

the contract. Ingraham, 297 N.J. at 83 (citations omitted).

      Defendants' arguments, that plaintiff should have mitigated its damages

by recovering the Volvo through a replevin action or recording the lien itself,

both lack merit. The contention that plaintiff should have recovered the Volvo

through replevin makes little sense because plaintiff never received notice of the

vehicle being towed. After the Volvo was abandoned and recovered by the

Monroe County Sheriff's Department, plaintiff had no recorded lien, and the

police who recovered the vehicle identified the prior owner, GG Barnett

Transport, Inc., as the current owner/lienholder. The lack of notice was a result

of defendants' failure to properly record the lien, and had plaintiff received

notice, they would have worked to get the equipment back. Since defendants

did not fulfill the contractual obligation of recording the lien, resulting in

plaintiff not being notified, plaintiff is not responsible for the losses as "the



                                                                          A-5027-17T1
                                       14
defendant [itself] prevent[ed] [plaintiff] from taking the steps necessary to avoid

them."

      Affirmed.




                                                                           A-5027-17T1
                                       15
