Exadaktilos v. Cinnaminson Realty Co.

167 N.J. Super. 141, 400 A.2d 554 (1979)

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Exadaktilos v. Cinnaminson Realty Co.

New Jersey Superior Court
167 N.J. Super. 141, 400 A.2d 554 (1979)

Facts

Leonidas Exadaktilos (plaintiff) claimed to own 20 percent of a restaurant operated by Cinnaminson Realty Company (Cinnaminson) (defendant). George Skordas (defendant), Exadaktilos’s father-in-law, owned 40 percent, and two others (other principals) (defendants) owned 20 percent each. Exadaktilos had no previous restaurant experience, unlike Skordas and the other principals. Exadaktilos worked at the restaurant for a while, but he clashed with other employees and the other principals and quit on several occasions without reason or notice. After Cinnaminson fired Exadaktilos, Exadaktilos sued Cinnaminson, Skordas, and the other principals, alleging that he was an oppressed minority shareholder. Cinnaminson, Skordas, and the other principals responded that Exadaktilos was not a shareholder because Skordas paid for the stock, making Skordas the stock’s beneficial owner until Exadaktilos repaid Skordas. Additionally, Cinnaminson, Skordas, and the other principals argued that they did not oppress Exadaktilos. At trial, Exadaktilos testified that he paid for the shares from his work savings, the proceeds of a truck sale, and help from his wife. However, cross-examination revealed that Exadaktilos’s income tax returns and other evidence contradicted Exadaktilos’s claim. The record further showed that (1) Skordas was well-off; (2) Skordas and Exadaktilos had good relations at the relevant time; (3) Skordas defended Exadaktilos from the other principals (who possibly objected to Exadaktilos’s inclusion in the venture); (4) Skordas loaned Exadaktilos $20,000 to cover Exadaktilos’s share of restaurant-improvement costs (for which Exadaktilos provided only an unsecured promissory note); and (5) after receiving his stock certificate, Exadaktilos cosigned and personally guaranteed a note for Cinnaminson’s $220,000 bank loan. Skordas admitted that he (1) told Exadaktilos that Exadaktilos could repay the money later, (2) did not discuss the stock’s ownership with Exadaktilos, and (3) did not reserve title in the stock despite doing so for stock that another principal (to whom Skordas was unrelated) purchased with a Skordas loan. Regarding Cinnaminson’s operations, the record showed that Skordas and the other principals informally made business decisions and that Cinnaminson did not hold regular board or shareholder meetings.

Rule of Law

Issue

Holding and Reasoning (Haines, J.)

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