Opinion
DOCKET NO. A-3907-14T2
06-29-2016
DEBARON ASSOCIATES (a Partnership) and RONALD A. DURANTE, Plaintiffs-Appellants, v. BARBARA R. VAN SLOOTEN and DEBRA S. SCHEIBEL, Defendants-Respondents.
William J. Pinilis argued the cause for appellants (PinilisHalpern, LLP, attorneys; Mr. Pinilis, on the brief). Respondents have not filed a brief.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Yannotti and Vernoia. On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-34-10. William J. Pinilis argued the cause for appellants (PinilisHalpern, LLP, attorneys; Mr. Pinilis, on the brief). Respondents have not filed a brief. PER CURIAM
Plaintiff Ronald A. Durante appeals a March 17, 2015 Law Division order holding him in contempt and directing that he pay $3,541.80 in attorney's fees and costs incurred by defendant Barbara R. Van Slooten. We reverse.
I.
This matter arose from a dispute among the partners of DeBaRon Associates (the partnership) - plaintiff, Van Slooten, and Debra S. Scheibel. We set forth the facts in two prior opinions, DeBaRon Assocs. v. Van Slooten, A-6209-10 (App. Div. June 28, 2012) ("DeBaRon I"), and DeBaRon Assocs. v. Van Slooten, A-4984-11 (App. Div. Jan. 23, 2014) ("DeBaRon II"), and briefly restate the pertinent facts here.
On August 4, 2011, an order for judgment was entered after a bench trial appointing Christopher C. Botta, Esq. (Botta) the receiver for the partnership, ordering the partnership's dissolution, and directing that Botta liquidate and distribute the partnership's assets, including real estate located in "Latham, New York in which Federal Express [was] currently a tenant." We subsequently affirmed the August 4, 2011 order in DeBaRon I, supra, slip op. at 16.
Following entry of the August 4, 2011 order, Botta undertook the dissolution of the partnership and liquidation of its assets, and listed property located at Terminal Drive, Colonie, New York for sale through a broker, Ronald Cohn Associates, Inc. (Cohn). In DeBaRon II, we summarized the proceedings following Botta's listing of the Terminal Drive property for sale.
[Plaintiff] learned of the listing in January 2012 and advised Cohn that he was the owner of a portion of the property that had been listed for sale, identified as 284 Wolf Road. [Plaintiff] provided Cohn with a copy of his deed and objected to the listing. Cohn responded that it would continue to market the property at the direction of Botta.
On February 23, 2012, [Plaintiff] filed an order to show cause in New York State Supreme Court in Albany, New York to quiet title to the Wolf Road parcel. [Plaintiff] named DeBaRon, Cohn, and a tenant in the premises as defendants. The New York Court set March 15, 2012, as a return on the order to show cause.
On February 28, 2012, Botta filed a motion to enforce litigant's rights before the Law Division seeking the following relief:
1) Compelling [plaintiff] to comply with [the] August 4, 2011 Order; and
2) Deeming the Terminal Drive Properties located in Albany as DeBaRon assets; and
3) Compelling [plaintiff] to cooperate with the sale of the Albany Properties and execute any documents which would effectuate the sale of the Terminal Drive Properties; and
4) Directing that all proceeds from the sale of the Albany Properties be disbursed to DeBaRon Associates and not solely to [plaintiff]; and
5) Granting such other relief as may be deemed appropriate.
[Plaintiff] opposed the receiver's motion and cross-moved seeking an order staying the sale of all DeBaRon properties pending [this court's] decision on the [then-pending] appeal [of the August 4, 2011 order].
[Defendant] Van Slooten cross-moved for an order finding [plaintiff] in contempt and enjoining him "against the continued bad faith prosecution of the [New York litigation]." Van Slooten also sought costs and counsel fees in connection with her cross-motion, as well as the fees of the receiver and his counsel, expended in the New York litigation.
[DeBaRon II, supra, slip op. at 7-9 (sixth and fourteenth alterations in original)].
The trial court entered an order on April 13, 2012, finding "that the Terminal Drive Albany Properties are considered DeBaRon assets," compelling plaintiff to cooperate in the sale of the "Albany Properties," ordering that all proceeds from the sale "be disbursed to DeBaRon Associates and not solely to" plaintiff, and directing that plaintiff comply with the August 4, 2011 order. In the rider to the April 13, 2012 order, the court stated that Botta's motion was granted and plaintiff's motion for a stay was denied.
On April 30, 2012, the court entered an order granting Van Slooten's cross-motion for an order pursuant to Rule 1:10-3. The court found plaintiff "in violation and contempt" of the court's August 4, 2011 order, "enjoined and restrained" plaintiff's "continued bad faith prosecution" of the New York civil action to quiet title, directed that plaintiff execute all documents necessary for the sale of the Terminal Drive properties, and required plaintiff to pay the costs and attorney's fees incurred by Van Slooten and Botta in responding to the New York civil action.
On May 18, 2012, the court entered an order directing that plaintiff pay $6,279.30 to Van Slooten's counsel. The court entered a separate order directing that plaintiff pay $14,264.72 to DeBaRon Associates for reimbursement of payments made to Botta and his New York counsel.
Plaintiff appealed that portion of the April 30, 2011 order holding him in contempt. He also appealed the May 18, 2012 orders, arguing that the counsel fee awards were "not supported by adequate findings."
On appeal, we first noted that Rule 1:10-1 permits the court to "'adjudicate contempt summarily' without the filing of an order to show cause" only under the defined circumstances set forth in the Rule. DeBaRon II, supra, slip op. at 11. We did not address the issue directly, but the record reflects that none of the circumstances permitting a finding of contempt under Rule 1:10-1 were extant.
Although we did not address summary contempt proceedings under Rule 1:10-2 in DeBaRon II, the Rule was inapplicable because the Law Division's contempt finding was not based on proceedings "instituted . . . by the court upon an order for arrest or an order to show cause specifying the acts or omissions alleged to have been contumacious." R. 1:10-2(a). The court entered the contempt finding in its ruling on Van Slooten's cross-motion filed under Rule 1:10-3.
We also discussed the court's authority to impose sanctions under Rule 1:10-3 for a party's violation of an order. We noted that an evidentiary hearing is not always required when sanctions are imposed, but is required where the record is inadequate "for a fully informed determination of the underlying issue, or where an evidentiary hearing would be helpful for a determination of the issue." Id. at 12-13 (quoting Abtrax Pharm. Inc. v. Elkins-Sinn, Inc., 139 N.J. 499, 519 (1995)).
Based upon our review of the record, we held that there was no support "in the sparse record before us" for the finding in the rider attached to the April 13, 2012 order that plaintiff "sought to 'circumvent' the August 4, 2011 order 'by having a New York court void this Court's directive that property be sold and distributed among the DeBaRon partners.'" Id. at 13. We explained the lack of evidence in the record as follows:
We note that the August 4, 2011 order [did] not identify with specificity which
New York properties [were] to be sold by [Botta]. While it may be argued that "the facility in Latham, New York in which Federal Express is currently a tenant" can only be understood as a reference to the property that became the subject of the New York litigation, it is equally clear that, at the time of the entry of the August 4, 2011 order, the Law Division was not aware that [plaintiff] held title to that property by dint of a 1986 deed. Confronted with this facially valid claim of ownership, the Law Division's summary conclusion that [plaintiff's] actions in initiating the New York litigation constituted a "bad faith prosecution," is unsupported in the record before us."
[Id. at 13].
We vacated that portion of the court's "April 30, 2012 order finding [plaintiff] in contempt of the August 4, 2011 order," and the May 18, 2012 orders awarding fees and costs. Id. at 13-14. We remanded the matter "for an evidentiary hearing on Van Slooten's cross-motion for the imposition of costs and attorney's fees against" plaintiff. Id. at 14.
At the remand hearing on July 11, 2014, counsel for plaintiff and Van Slooten appeared and declined the opportunity to introduce additional evidence. The court heard argument and rendered an oral opinion finding that plaintiff's initiation of the New York civil action was an attempt to "take control of the Albany properties that [the] [c]ourt had specifically ruled on previously," the "Albany properties were extensively discussed in the trial," plaintiff "certainly knew of the properties that had existed in his family for decades," and he brought an "ancillary action [concerning] property" that "he knew full well was the subject of the litigation in this court." The court again found plaintiff in contempt "in facie curiae," concluded that Van Slooten incurred attorney's fees and costs as a result of plaintiff's contemptuous institution of the New York civil action, and directed that counsel submit certifications "for the sanctions on the legal fees."
On March 17, 2015, the court entered an order finding plaintiff in contempt of its "previous rulings and orders respecting the dissolution of DeBaRon Associates" and awarding attorney's fees in the amount of $3,541.80 to Van Slooten. In the rider annexed to the order, the court explained that its award was limited to only those fees attributable to Van Slooten's defense of the New York civil action. This appeal followed.
II.
We first turn our attention to plaintiff's argument that the court erred in finding him in contempt because we vacated the court's finding of contempt in DeBaRon II and remanded the matter solely for "an evidentiary hearing on Van Slooten's cross-motion for the imposition of costs and attorney's fees against" him. DeBaron II, supra, slip op. at 14. Plaintiff argues the court exceeded the scope of the remand by considering the issue of contempt and finding him in contempt.
In DeBaRon II we discussed the requirements for a finding of contempt under Rule 1:10-1. We did not, however, bar the remand court's consideration of the issue after an evidentiary hearing. Id. at 13-14. In contrast, our remand required that the court consider contempt because Van Slooten's cross-motion included a request that plaintiff be held in "contempt" under Rule 1:10-3. We therefore reject plaintiff's assertion that the court's contempt finding should be reversed based on any alleged failure of the remand court to comply with the binding pronouncements from this court. Cf. Triffin v. Automatic Data Processing, Inc., 411 N.J. Super. 292, 306 (App. Div. 2010) ("It is beyond dispute that a trial judge has the responsibility to comply with pronouncements of an appellate court." (quoting Tomaino v. Burman, 364 N.J. Super. 224, 233 (App. Div. 2003), certif. denied, 179 N.J. 310 (2004))).
We next consider the merits of the court's contempt finding against plaintiff. We defer "to the trial court's factual findings . . . 'when [they are] supported by adequate, substantial and credible evidence.'" Zaman v. Felton, 219 N.J. 199, 215 (2014) (first alteration in original) (quoting Toll Bros., Inc. v. Twp. of W. Windsor, 173 N.J. 502, 549 (2002)). We review de novo the "trial court's interpretation of the law and the legal consequences that flow from established facts." Manalapan Realty L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
"[A]n order issued under the court's inherent contempt of court powers must comply with the procedures set forth in R. 1:10." In re Duane, Morris & Heckscher LLP, 315 N.J. Super. 304, 312 (App. Div. 1998) (citing Canino v. D.R.C., Co., 212 N.J. Super. 620, 622 (App. Div. 1986)). "[A]bsent an admission to the [court] of inexcusable or willful non-compliance or what may be deemed a 'direct' contempt in the actual presence of the court, compliance with R. 1:10-2 is required." Ibid. (citing R. 1:10-1(a)-(e)). Moreover, Rule 1:10-1 requires that the court's contempt order "recite the facts and contain a certification by the judge that he or she saw or heard the conduct constituting the contempt and that the contemnor was willfully contumacious." R. 1:10-1. "[A]n adjudication without the required recitation and certification is fatally defective." In re Duane, Morris & Heckscher, LLP, supra, 315 N.J. Super. at 313 (quoting Pressler, Current N.J. Court Rules, comment 2 on R. 1:10-1 (1998)).
Based upon our review of the record, we are constrained to reverse the court's finding of contempt in facie curiae under Rule 1:10-1. Plaintiff did not admit to the contempt, there was no evidence plaintiff's conduct occurred in the presence of the judge, the court did not proceed by order to show cause under Rule 1:10-2, and the court failed to include the required recitation of facts and certification in the contempt order. Ibid. We therefore conclude that the court's contempt finding was entered in error.
"In facie curiae" refers to summary contempt proceedings under Rule 1:10-1. In re Lynch, 369 N.J. Super. 93, 99 (App. Div. 2004) (explaining Rule 1:10-1 governs the adjudication of "in facie curiae" contempt and "the procedure required to be followed"); State v. Quintana, 270 N.J. Super. 676, 682 (App. Div. 1994) (stating that Rule 1:10-1 governs "contempt in facie curiae"). --------
Plaintiff also challenges the court's award to Van Slooten for the attorney's fees she incurred in the New York civil action. He argues that the award must be reversed because it was based upon the court's erroneous contempt finding, and that the amount of the fees awarded was not supported by the evidence.
We reject plaintiff's argument that the court's erroneous finding plaintiff was in contempt under Rule 1:10-1 requires reversal of the court's attorney's fee award. Van Slooten's cross-motion requested that the court hold plaintiff in contempt. However, she also moved for an award of attorney's fees and costs as a sanction under Rule 1:10-3.
The procedural and substantive requirements for the imposition of a sanction under Rule 1:10-3 are different than those required for a finding of contempt under Rule 1:10-1. Pasqua v. Council, 186 N.J. 127, 140 (2006). As a result, the court's erroneous contempt finding under Rule 1:10-1 did not preclude the requested award of attorney's fees and costs that Van Slooten requested and which are permitted in the court's discretion under Rule 1:10-3.
In DeBaRon II, we remanded the matter for an evidentiary hearing on Van Slooten's cross-motion for the imposition of an award of attorney's fees and costs because the "sparse record before us" did not support the court's finding that plaintiff violated the August 4, 2011 order. DeBaRon II, supra, slip op. at 13. On remand the parties chose not to introduce any additional evidence, thereby leaving us and the trial court with the identical record we previously determined was insufficient to support an award of attorney's fees and costs to Van Slooten. Ibid. Because the evidentiary record remains unchanged, there is no basis upon which to change the result.
Reversed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION