Thursday, December 12, 2013

Vince Fumo Finally A Winner In Court

By Ralph Cipriano
for Bigtrial.net

Vince Fumo finally walked out of court a winner.

The former Pennsylvania state senator won a case in New Jersey Superior Court on Tuesday Dec. 10th in Atlantic County when a judge denied a $73,000 claim against Fumo brought by Mitchell Rubin. He's a former Fumo political ally and the husband of Ruth Arnao, Fumo's co-defendant at his 2009 federal corruption trial.

It's a tale of three former political buddies who went in on a condo development down the shore a decade ago and then wound up suing each other after everybody got convicted by the feds and had a bitter falling out.

Fumo built the five-unit development located at 6601 Mommouth Avenue in Ventnor on land his mother bought back in the 1960s for $1,800. He rented the units out before he converted them into condos, and sold one unit to Rubin in 2003, for $135,000.

Rubin filed suit in 2011, claiming he was owed as much as $174,000 for money he had allegedly spent on improvements that included rebuilding decks and docks. The cased was tried on Oct. 15th and 16th before Judge Michael Winkelstein.

According to Kevin Kotch, Fumo's lawyer, Rubin complained that the condo association as well as Fumo had agreed to pay him back on that alleged $174,000 investment on property improvements.

During discovery, however, it was learned that Rubin had only paid $63,000 in cash for that condo he had originally agreed to purchase for $135,000. Arnao was in charge of collecting the rest of the purchase price from Rubin, but apparently, she never got around to it. Rubin and Arnao claimed they had paid the remainder of the purchase price by advancing funds for improvements.

Subsequently, Rubin's claim against Fumo was whittled down to $73,000. The judge, however, in remarks read into the record on Dec. 10th, ruled that there never had been any agreement to grant any portion of marina assets to Rubin or Arnao. The judge further found that the statute of limitations barred any claim, which should have been filed by 2010.

The only real claim Rubin had would have been against the condominium association, the judge said, but during the lawsuit, Rubin dismissed the condo association as a defendant. The judge found that Rubin could not substantiate his claim for reimbursement. He presented a set of incomplete records, and used various formulas to calculate his credit against the purchase price for the unit, according to Kotch.

The judge said in court that he based his decision on the credibility and demeanor of the witnesses. During the trial, the judge heard testimony from Fumo, Rubin and Arnao. All three are convicted felons.

Fumo was convicted July 14, 2009 of 137 counts of fraud, conspiracy, obstruction of justice, and filing a false tax return. He was released in August, after spending four years in prison.

Arnao was convicted during that same trial of 45 counts of the 137 counts; she served a sentence of one year and one day.

Rubin, former chairman of the Pennsylvania Turnpike Commission, pleaded guilty in 2010 to one count of obstruction of justice. He served six months of house arrest. Rubin filed suit against Fumo after he was ordered by the feds to pay back $150,000 in restitution.

In Atlantic County Court, Fumo testified there had never been any agreement to repay Rubin for improvements made to the Ventnor property. It was only in looking through records for this case that Fumo discovered that Rubin never fully paid for the condo unit he bought.

The judge also found that a $20,000 insurance check for Hurricane Sandy damages that was originally sent to Fumo should be paid to the association so the money could be spent on needed repairs. The $20,000 insurance check was sent to Fumo, because he had taken out the insurance policy on behalf of the condos. The judge told Fumo he wanted that insurance check sent to the condo association within 60 days of the judgment he was issuing.

The $20,000, however, is in an account currently frozen by the IRS, which has filed a jeopardy assessment against Fumo. If not for the jeopardy assessment, Kotch said, Fumo would have already seen that the money was used for needed repairs.

The judge also denied a Fumo counterclaim seeking reimbursement for $70,000 of Arnao's legal expenses that Fumo had paid on her behalf to attorney Ed Jacobs. The judge noted that under the statute of frauds, Rubin could not be liable for repayment without a written agreement that showed he was supposed to pay the money back to Fumo.

Kotch said Rubin's case was hampered by "the confused record after 10 years and that was Mitchell's burden to prove, his right to being reimbursed after so many years."

"It was a difficult case in that we were looking back 10 years and trying to make sense of what had happened, and there were a number of strong personalities there," Kotch said of the litigants. The judge's decision was "well-reasoned," and "should withstand any attack," Kotch said.

Rubin has 45 days to appeal in Superior Court's appellate division after final judgement is entered. Rubin's lawyer, Joseph P. Grimes, could not be reached for comment.

Prior to the Dec. 10th judgment against Rubin, Fumo had lost two federal appeals, the first to lengthen his sentence, the second to increase his fines and restitution. In September, Peter Goldberger, an appeals lawyer representing Fumo, filed a petition for a writ of certiorari with the U.S. Supreme Court, requesting that it review lower court rulings involving Fumo. That petition, however, was denied last month.

Fumo also lost a case in Philadelphia Orphans Court involving a trustee he had appointed to administer a $2.5 million trust fund that Fumo had set up to benefit his son and daughter. The case against him was filed by his daughter Allie, one of the beneficiaries. In August, Judge Joseph D. O'Keefe  ruled in favor of Allie Fumo, installing her choice for trustee, Sylvia DiBona, over Fumo's choice of Dr. Anthony Repici.

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