Court Opinion

ID: 4185057
Source: CourtListenerOpinion
Date Created: 2017-07-11 13:10:50.386366+00
Date Added: 2024-06-11T09:21:25.381472
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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-3866-14T3

MFC RESOURCES, INC.; MFC
COMMODITIES GMBH; MFC
COMMODITIES U.S.A., L.P.,
INC.; MFC COMMODITIES U.S.A.,
G.P., INC.; and POSSEHL MEXICO,
S.A. D.E. C.V.,

        Plaintiffs-Appellants,

v.

JUERGEN HOMANN,

        Defendant-Respondent,

and

YAN CHEN; JEFF TIANG; JOHN
HOYING; CJAM CORPORATION, INC.;
THYSSENKRUPP METALLURGICAL
PRODUCTS GMBH; and THYSSENKRUPP
MATERIALS NA, INC.,

     Defendants.
__________________________________

              Argued November 16, 2016 – Decided July 11, 2017

              Before Judges Fuentes, Simonelli and Carroll.

              On appeal from the Superior Court of New
              Jersey, Law Division, Bergen County, Docket
              No. L-9612-13.
          Christopher P. Massaro argued the cause for
          appellants (Cole Schotz, P.C., and Charles
          Michael (Steptoe & Johnson LLP) of the New
          York Bar, admitted pro hac vice, attorneys;
          Mr. Massaro and Mr. Michael, of counsel and
          on the briefs).

          Mark A. Berman argued the cause for respondent
          Juergan Homann1 (Hartmann Doherty Rosa Berman
          & Bulbulia, LLC, attorneys; Mr. Berman, Jeremy
          B. Stein, and Kelly A. Zampino, on the brief).

PER CURIAM

     In this contract dispute, plaintiffs MFC Resources, Inc., MFC

Commodities GmbH, MFC Commodities, L.P., Inc., MFC Commodities

U.S.A.,   G.P.,   Inc.,   and   Possehl   Mexico,   S.A.   D.E.   C.V.

(collectively, MFC)2 appeal from: (1) the September 19, 2014 order,

which denied their motion to dismiss the counterclaim filed by

defendant Juergen Homann; (2) the September 19, 2014 order, which

granted Homann's motion to compel discovery; (3) the November 21,

2014 order, which enforced a settlement between MFC and Homann;

and (4) the March 19, 2015 order and judgment.         We affirm the

September 19, 2014 order, which granted Homann's motion to compel

discovery, but reverse all other orders and remand for further

proceedings.

1
  Respondent's brief purports to represent Alumina Trading Company
(Alumina). Alumina was not a named defendant but was added as a
counterclaimant pursuant to Rule 4:7-6.
2
  We shall sometimes refer to defendant Possehl Mexico, S.A. D.E.
C.V. as Possehl.

                                  2                           A-3866-14T3
                                          I.

      We derive the following facts from the record.                     Homann was

the sole owner of ACC Resources, Co., L.P. (ACC), a commodities

trading firm organized as a limited partnership under Pennsylvania

law, with its principal place of business in New Jersey.                     Through

his ownership in ACC, Homann indirectly owned a 30% interest in

Alumina, a New Jersey general partnership that had a 54.95%

ownership interest in Possehl, a commodities trading firm located

in Mexico.

      MFC entered into a purchase agreement with Homann to purchase

70% of Homann's interest in ACC.               As part of the transaction, the

parties executed another agreement whereby Homann had an option

to require MFC to purchase his remaining 30% interest in ACC, and

MFC had a had an option to purchase that interest.                    MFC could also

purchase    that   interest      upon   Homann's        breach   of    the   purchase

agreement.    The parties agreed that Homann would remain the CEO

of   ACC   after   the   sale.      The       parties    also    executed    a   third

agreement, whereby Homann would sell Alumina's 54.95% ownership

interest in Possehl to MFC.

      At the closing, MFC paid over $20,000,000 to acquire 70% of

Homann's 30% interest in ACC and Alumina's 54.95% interest in

Possehl.     Thereafter, MFC incorporated ACC in Nevada by merging

it into ACC Resources, Inc., a newly formed Nevada corporation.

                                          3                                   A-3866-14T3
MFC renamed the company MFC Resources and continued operating the

new company out of New Jersey offices.

     Homann remained CEO of MFC Resources after the closing, but

was terminated in May 2013.         MFC claimed that Homann threatened

to leave for a competitor, ThyssenKrupp Metallurgical Products (TK

Met Pro), and induced certain MFC Resources employees, Yan Chen

and Jeff Tiang (the TK defendants) to leave MFC Resources for TK

Met Pro.

     In    October   2013,   MFC   allegedly      exercised   its     option    to

purchase Homann's remaining interest in ACC for approximately $1.3

million. Homann disputed the validity of MFC's attempt to exercise

the option, and claimed the purchase price was approximately $12.8

million.

     MFC filed a complaint against Homann, asserting claims of

breach of contract and specific performance; breach of the implied

covenant of good faith and fair dealing; breach of fiduciary duty;

aiding     and   abetting    breaches       of   fiduciary    duty;    tortious

interference; misappropriation of confidential information; and

conspiracy.      Homann filed a counterclaim, asserting claims of

breach of contract; breach of the covenant of good faith and fair

dealing; conversion; fraud; fraudulent inducement; conspiracy;

shareholder oppression; and breach of fiduciary duty.

     Homann filed a motion to compel discovery, and MFC filed a

                                        4                                A-3866-14T3
motion pursuant to Rule 4:6-2(e) to dismiss with prejudice the

counterclaims      for   fraud,   fraudulent     inducement,         shareholder

oppression, and breach of fiduciary duty.             While the motions were

pending, the parties engaged in settlement discussions, after

which Homann filed a motion to enforce an alleged oral settlement

agreement.

       In support of his motion to enforce the oral settlement

agreement, Homann certified that MFC's attorney, Charles Michael,

Esq.,   proposed    holding   a   settlement    meeting      in     New   York    on

September 10, 2014, and his attorney, Mark Berman, Esq., sought

written confirmation that whoever attended on MFC's behalf had the

authority to settle.      Michael responded, "Yes, of course."              Berman

also    informed   Michael    that    by   agreeing    to    meet    to   discuss

settlement, Homann was not also agreeing to delay his pending

motion to compel discovery.          The meeting did not occur.

       In opposition to Homann's motion to enforce, MFC's CEO Gerardo

Cortina and CFO Samuel Morrow certified that on September 16,

2014, they met with Homann in New York to discuss settlement, but

did not reach an agreement.           At the end of the meeting, Homann

suggested meeting again two days later.               The parties agreed to

hold that meeting without counsel present.                  Homann said Kevin

Colosimo, Esq. would accompany him to the meeting.                  Colosimo was

an attorney who was not involved in the litigation, but who had

                                       5                                   A-3866-14T3
been advising Homann on the case.3          Homann certified that Cortina

agreed to proceed with Colosimo present, and Cortina advised him

that he had informed Michael that Colosimo would attend the

meeting.    Cortina denied this.

     On September 18, 2014, Homann, Colosimo, Cortina, and Morrow

met in New York to continue settlement negotiations.                      Homann

certified that at no time during the meeting did either Cortina

or Morrow advise him or Colosimo that they lacked authority to

settle.     In fact, when Homann asked them about this, Morrow said

that he and Cortina were "the two highest ranking officers in the

company."

     Cortina certified that the meeting was productive and the

parties established a framework for a possible settlement.                Morrow

certified that the parties discussed various elements and setoffs

relating to the underlying purchase price dispute and reviewed

each of the elements in some detail, "often disagreeing quite

vigorously."     For certain items and setoffs, the parties discussed

values    and   terms   that   could   be   used   as   part   of   an   overall

settlement calculation, and for others they could not reach a

working consensus and left matters open.           Under the framework they

3
   Colosimo was a trustee of a trust that held an interest in
Alumina and a signatory on some of the relevant documents. He was
not admitted to practice law in New Jersey or New York.

                                       6                                 A-3866-14T3
discussed, MFC would pay Homann $5.5 million, plus at least $1

million relating to overdue receivables dating back to Homann's

ownership of ACC, and Homann would work as a paid consultant for

MFC Resources for two years.

       Morrow and Cortina certified that several critical items

remained open, even on a working basis, including whether: (1) MFC

would release Homann from certain indemnification obligations; (2)

MFC would release the TK defendants as part of its settlement with

Homann; and; and (3) whether Homann would be able to claim certain

of the company's losses on his tax returns. During the meeting,

no one said or otherwise indicated that the matter was settled or

that the terms being negotiated were final.           Morrow and Cortina

also   certified   that    the   parties   never   reached   a   settlement

agreement and they did not intend any settlement to be final unless

and until they resolved several important open points, drafted a

formal settlement document, and received approval from the board

of directors.

       On September 19, 2014, Michael and Berman appeared for oral

argument on the     motions to compel discovery and dismiss the

counterclaim.      Prior   thereto,   Berman   sent   Michael    an    email,

stating: "Hopefully the case settles on Sep 18 [2014] and everyone

is happy.    If the case does not settle, we submit the discovery

disputes to the [c]ourt on Sep 19[.]"

                                      7                               A-3866-14T3
     Following oral argument on September 19, 2104 the motion

judge denied MFC's motion to dismiss the counterclaims as untimely,

and found that the counterclaims were suggested by the facts.              The

judge denied the motion without prejudice so MFC could file a

motion for summary judgment at the conclusion of discovery.                The

judge also granted Homann's motion to compel discovery.

     After oral argument, the judge met with counsel to inquire

about the possibility of settlement.              No one advised the judge

that the matter had settled.       To the contrary, Berman advised the

judge that the parties had made progress toward, but had not

reached, a final settlement.

     Later   that    day,   Colosimo   circulated     a   document   entitled

"Indicative Term Sheet for Settlement Agreement," which allegedly

contained the settlement terms (the Term Sheet).                According to

Homann,   Colosimo    circulated   the     Term   Sheet   at   Cortina's   and

Morrow's suggestion to memorialize the material terms of the

parties' oral settlement agreement reached on September 18, 2014.

Colosimo's email with the attached Term Sheet stated as follows:

           In an effort to be simple, I've attached a
           somewhat rudimentary Term Sheet following my
           notes from yesterday's meeting.     We could
           wordsmith the Term Sheet to death, I'm sure,
           but I think the better course is to put the
           lawyers to work on a more formal settlement
           agreement, etc.
           Let me know if this captures the spirit and
           big picture. I'm sure there are details to

                                       8                              A-3866-14T3
            flesh out in the drafting process but I'm not
            sure that's needed here. If there are changes
            needed, let me know. Otherwise, we can put
            signatures lines on it and get the lawyers to
            work on the final agreement.

      Cortina and Morrow certified that the Term Sheet was not

consistent with the parties' discussion on September 18, 2014.

For example, three unresolved critical items were treated as final:

Homann's indemnification obligations; release of the codefendants;

and Homann taking the company's tax losses, were treated as final

in the Term Sheet and in Homann's favor.

      Michael certified that in the days following circulation of

the Term Sheet, no one acted as if the case was settled, and Homann

did   not   advise   him   or   anybody   associated   with   MFC   that    he

considered the case settled.          Notably, on September 24, 2014,

Berman forwarded the order granting Homann's motion to compel

discovery to Michael, with a cover letter stating, "Please be

guided accordingly[,]" meaning discovery would continue.

      Michael had previously advised Frank Coppa, Esq., counsel for

defendants John Hoying and CJAM Corporation, that his clients

would likely be released from the litigation if MFC reached a

settlement with the TK defendants.         On September 22, 2014, Coppa

emailed Michael to follow up on the settlement meeting, stating,

"were you able to make any headway on Friday[, September 19,

2014]?"     The next day, Michael responded, "Yes.              We have a

                                      9                              A-3866-14T3
handshake deal with TK – have a separate one with Homann, too.

Goal is to wrap everything up in the next couple of weeks."

     After not hearing from Cortina for a week after Colosimo

circulated the Term Sheet, Homann called Cortina.              According to

Homann, Cortina advised him for the first time that MFC would not

recognize his authority to enter into the settlement agreement on

behalf of MFC, and that former MFC CEO Michael Smith would not

ratify the settlement agreed upon by Homann, Cortina, and Morrow

on September 18, 2014.

     Cortina certified that MFC had discussed internally how to

respond to Colosimo's Term Sheet, and ultimately decided to proceed

with the litigation.          On September 29, 2014, Michael notified

Berman    that   the   Term    Sheet    did   not    reflect   the   parties'

discussions, and that MFC would proceed with the litigation.

     The TK defendants' attorney, Thomas R. Valen, Esq., certified

that on September 30, 2014, Michael called him and told him MFC's

settlement with his clients was contingent upon MFC's settlement

with Homann, and MFC "previously had some sort of an agreement

with Homann but it had fallen through."             Michael also told Valen

that if MFC's settlement agreement with the TK defendants were to

proceed, MFC would require a provision allowing MFC to take

discovery from TK Met Pro to use in their litigation against

Homann.   Valen responded it was his position that the parties had

                                       10                             A-3866-14T3
already reached an enforceable settlement with his clients that

was not contingent upon MFC reaching a settlement with Homann.

       Homann filed a motion to enforce the alleged oral settlement

agreement that he claimed the parties reached during the September

18, 2014 meeting.        He requested oral argument and an evidentiary

hearing. In opposition, MFC argued, in part, that the negotiations

were only preliminary; the parties never reached a settlement

agreement; there were several unresolved critical terms, including

the   release   of   Homann's     indemnification    obligations;    and    the

parties never intended to be bound unless and until they executed

a more formal agreement.

       On November 21, 2014, the motion judge entered an order and

written opinion, granting Homann's motion without oral argument

or    an   evidentiary   hearing.4     The   judge   found   there   were    no

genuinely     disputed    facts    which   would    materially   impact     the

enforceability of the settlement agreement.            The judge also found

that Homann manifested his intent to be bound by the parties' oral

settlement agreement, explaining as follows:

             Berman['s] appearance in court on the morning
             of September 19, 2014, wherein he represented
             that settlement had not been reached, does not
             disturb this finding. . . . Berman certified
             to the [c]ourt that prior to the reduction of
             the oral settlement to writing, he felt there

4
  The judge revised the written opinion on November 24, 2014, and
May 28, 2015, to correct clerical errors.

                                      11                             A-3866-14T3
         was a risk that MFC would renege. From the
         time stamps on . . . Colosimo's [emails], it
         is clear that there was not even time prior
         to the [c]ourt's entertaining of oral argument
         on the outstanding motions in this matter for
         counsel to draw up the Term Sheet and send it
         to the parties. To bar Homann from seeking
         to enforce an agreement he purportedly reached
         because an attorney who was not present and
         not involved in the negotiation sought
         adjudication of outstanding motions would be
         inequitable.      Furthermore, the [emails]
         between [Berman] and [Michael] regarding the
         authority of Morrow and Cortina to settle
         indicates   that    Homann   objectively   and
         reasonably       believed      that      MFC's
         representations at that meeting would settle
         the litigation, even without a written
         agreement.

    The judge further found that MFC had manifested an intent to

be bound by the oral settlement agreement, explaining as follows:

         MFC does not dispute that it then manifested
         an intent to be bound by the vast majority of
         the material terms cited above. They instead
         try to characterize the settlement as "a
         framework for settlement that was never
         completed," . . . on the basis that either
         some ancillary terms remained open, or that a
         formal writing was not actually signed. . . .
         Indeed, as discussed above, the [c]ourt has
         found that this settlement did in fact contain
         the   essential   terms    of   the   parties'
         litigation.   Certifying a subjective belief
         after the fact does not alter the fact that a
         party has manifested an intent to be bound to
         a settlement. . . .      Their manifestations
         clearly bound MFC just as if they actually
         signed a written agreement created by their
         own counsel. Their presence at the settlement
         negotiations, the terms agreed upon there, and
         their certifications indicating a significant
         acceptance of the material terms of the

                              12                          A-3866-14T3
            settlement agreement all establish for this
            [c]ourt that MFC, through Cortina and Morrow,
            intended to be bound on September 18, 2014.
            Moreover, their belief, some five days after
            the fact, that they had reached a "handshake
            deal," confirms that the contents of . . .
            Colosimo's September 19, 2014 [email] were
            accurate, insofar as they demonstrated that a
            formal writing was contemplated, for which the
            material terms had been reached. . . .
            Moreover, the failure of the parties to reduce
            the agreement to a more definite writing
            cannot be fatal to the performance obligations
            of the parties when those obligations are
            clear from the evidence presented.

The judge ordered the parties to negotiate in good faith and

execute a written settlement agreement implementing the material

terms of the settlement, as contained in the Term Sheet.

     The parties attempted to negotiate the settlement in good

faith, but were unable to agree on one critical term: Homann's

indemnification obligations.       Although Homann had argued that the

indemnity issue was not an "essential" term of the settlement, he

refused to execute a formal written settlement agreement unless

MFC agreed to waive any indemnification obligation.

     The parties cross-moved for entry of final judgment using

their respective forms of order: MFC's version preserving Homann's

indemnification obligations, and Homann's version releasing them.

At   oral     argument,   Berman     insisted    that    releasing    his

indemnification    obligations     was   a   "material   term"   of   the

settlement.

                                   13                            A-3866-14T3
     On March 19, 2015, the judge entered an order and written

opinion granting judgment in Homann's favor, awarding him $7.1

million,   and   dismissing   the   parties'   respective   claims     with

prejudice, except for MFC's claim for indemnification, which was

dismissed without prejudice.        In doing so, the judge rejected

Homann's argument that the parties had agreed to dismiss MFC's

indemnification claims, stating as follows:

           In this case Homann is estopped from
           contending that a valid, binding, and complete
           settlement was not reached.      As such, the
           [c]ourt ordered the parties to reduce their
           oral settlement to writing, and ruled that the
           issue of indemnification was "ancillary."
           Indeed, Homann agreed with the court then[.]

                [Homann] has now reversed course . . . .
           It was clear to this [c]ourt upon . . .
           Homann's    original   motion   [to    enforce
           settlement], and it remains clear at this
           point, that the parties settled this matter
           by reaching an oral agreement upon all
           material terms. In good faith compliance with
           this [c]ourt's Order effectuating that oral
           agreement, the parties attempted to negotiate
           further and to fully implement those terms
           deemed     material    by     the     [c]ourt.
           Indemnification was not among those terms. At
           no point did this [c]ourt find that MFC bound
           itself to release . . . Homann from his
           contractual indemnification obligations.

     The   judge   declined    to    waive   obligations    that    Homann

previously said were immaterial to settlement, and noted that the

indemnification issue, which amounted to "an inchoate concern over

speculative future liability did not prevent final resolution of

                                    14                             A-3866-14T3
this lawsuit."

                                            II.

       MFC contends, in part, that the judge erred in finding the

parties reached an enforceable settlement agreement.                           MFC argues

the    evidence      was    insufficient        to    establish       that   the    parties

intended to be bound or had agreed to the essential terms of the

alleged settlement.             MFC posits that the court should have held

an evidentiary hearing to resolve the factual disputes surrounding

the alleged settlement.               We agree.

       A settlement of a legal claim between parties is a contract

like any other contract, Nolan v. Lee Ho, 120 N.J. 465, 472 (1990),

"which    a   court,       absent      a   demonstration         of   'fraud    or     other

compelling circumstances,' should honor and enforce as it does

other contracts."          Pascarella v. Bruck, 190 N.J. Super. 118, 124-

25 (App. Div.),            certif. denied, 94 N.J. 600 (1983) (quoting

Honeywell v. Bubb, 130 N.J. Super. 130, 136 (App. Div. 1974)).

That    the   agreement         was    oral,    instead     of    written,     is     of    no

consequence.         Id. at 124.           "Where the parties agree upon the

essential terms of a settlement, so that the mechanics can be

'fleshed      out'    in    a    writing       to    be   thereafter     executed,         the

settlement will be enforced notwithstanding the fact the writing

does not materialize because a party later reneges."                         Lahue v. Pio

Costa, 263 N.J. Super. 575, 596 (App. Div.), certif. denied, 134

                                            15                                       A-3866-14T3
N.J. 477 (1993) (quoting Bistricer v. Bistricer, 231 N.J. Super.

143, 145 (Ch. Div. 1987)).         We will not interfere with a trial

judge's factual findings and conclusions concerning a settlement

agreement that are amply supported by the record.          Id. at 597.

     The   burden   of   proving   that   the   parties   entered   into    a

settlement agreement is upon the party seeking to enforce the

settlement.   Amatuzzo v. Kozmiuk, 305 N.J. Super. 469, 475 (App.

Div. 1997).

           On a disputed motion to enforce a settlement,
           as on a motion for summary judgment, a hearing
           is to be held to establish the facts unless
           the available competent evidence, considered
           in a light most favorable to the non-moving
           party, is insufficient to permit the judge,
           as a rationale factfinder, to resolve the
           disputed factual issues in favor of the non-
           moving party.

           [Id. at 474-75.]

However, not every factual dispute on a motion requires a plenary

hearing; a plenary hearing is only necessary to resolve a genuine

issue of a material fact.     Eaton v. Grau, 368 N.J. Super. 215, 222

(App. Div. 2004).    We are satisfied that there are material issues

of fact surrounding the alleged settlement requiring a plenary

hearing.

     In finding there were no genuinely disputed facts, the judge

incorrectly considered the evidence in the light most favorable

to Homann, focusing on evidence supporting the finding of an

                                    16                              A-3866-14T3
enforceable    oral   settlement       agreement   and    overlooking     or

minimizing the significance of evidence supporting the opposite

conclusion.    First, the judge focused on Colosimo's decision to

circulate    the   Term   Sheet,    which   allegedly    memorialized   the

parties' oral settlement agreement. However, he failed to consider

that Colosimo admitted the Term Sheet was merely his own "somewhat

rudimentary" notes from the meeting on September 18, 2014.

     Further, the judge considered MFC's failure to respond to

Colosimo's email as evidence that no changes were needed. However,

the judge's extrapolation is based solely on one sentence taken

out of context from the entire paragraph, which reads:

            Let me know if this captures the spirit and
            big picture. I'm sure there are details to
            flesh out in the drafting process but I'm not
            sure that's needed here. If there are changes
            needed, let me know. Otherwise, we can put
            signatures lines on it and get the lawyers to
            work on the final agreement.

The sentence on which the judge focused, "If there are changes

needed, let me know[,]"is followed by a request to sign the Term

Sheet if no changes were necessary.          Since MFC did not sign the

Term Sheet, it could not be assumed that MFC believed the Term

Sheet was acceptable as is.        To the contrary, and considering this

evidence in a light most favorable to MFC, MFC did not sign the

Term Sheet, indicating it was unacceptable to MFC.

     Thus, when Colosimo's email is read in its entirety, it is

                                     17                            A-3866-14T3
clear he was seeking MFC's approval of the terms contained in the

Term Sheet.     Indeed, the first sentence asked MFC to let him know

if the Term Sheet "captures the spirit and big picture" of the

alleged settlement agreement.         The judge did not consider that

MFC's failure to respond immediately to that request can be viewed

as evidence that MFC did not believe the Term Sheet captured the

"spirit and big picture" of the settlement negotiations.                    The

judge also failed to consider that approximately ten days after

receiving the email, MFC advised Homann that the Term Sheet was

not consistent with the parties' settlement negotiations.

       MFC's lack of immediate response to Colosimo's email and the

Term   Sheet,   when   taken   in   the   light   most   favorable    to   MFC,

indicates that the parties were still negotiating the terms of a

settlement and that MFC did not agree to the terms in the Term

Sheet.    Nowhere in Colosimo's email does it state that the matter

had been settled or that both parties had agreed to certain

settlement terms.      Rather, Colosimo sent MFC a "rudimentary" Term

Sheet for which he sought MFC's approval.

       Second, the judge focused on Michael's e-mail to Coppa wherein

he stated that MFC had a "handshake deal" with Homann.               The judge

failed to consider that Michael did not state a belief that MFC

had entered into a settlement agreement with any party, but rather,

stated the parties had made "headway."            Thus, placed into proper

                                     18                                A-3866-14T3
context, and viewed in a light most favorable to MFC, the e-mail

indicates that MFC did not believe the matter was settled.

     Third, the judge downplayed the fact that Berman specifically

represented that the parties had not reached a settlement.        The

judge rejected Michael's explanation of why the parties proceeded

with the cross-motions (that no settlement had been reached) and

accepted Berman's explanation (that "he did not want to run the

risk of further delaying resolution of motions that were fully

briefed" and that he felt there was a risk that MFC would renege).

     The judge also focused on the fact that "there was not even

time prior to the [c]ourt's entertaining of oral argument on the

outstanding motions in this matter for counsel to draw up the Term

Sheet and send it to the parties."   The judge then concluded that

to bar Homann from seeking to enforce an agreement he purportedly

reached because an attorney who was not present and not involved

in the negotiation sought adjudication of outstanding motions

would be inequitable.

     However, the judge failed to consider that if the parties had

reached an enforceable oral settlement agreement at the September

18, 2014 meeting, it would have been unnecessary for counsel to

draft and circulate a Term Sheet before informing the judge that

the parties had settled.    Furthermore, by focusing on Berman's

excuse for why he informed the judge that the parties had not

                               19                            A-3866-14T3
reached a settlement, the judge overlooked the significance of

Michael's action or inaction.    If MFC actually believed that the

matter was settled, it is reasonable to assume that Michael would

have advised the judge that the parties had settled, or at the

very least corrected Berman's representation that they had not.

While Berman may have had his reasons for proceeding with oral

argument, there was no legitimate reason why MFC would have wanted

to proceed if it actually believed the matter had settled.

     When taken in the light most favorable to MFC, Berman's

representation to the judge that the parties had not entered into

a settlement agreement, and Michael's failure to inform the judge

of any such settlement or to correct Berman's representation,

indicates that the parties did not enter into an enforceable oral

settlement agreement on September 18, 2014.

     Fourth, the judge found that the Term Sheet contained the

essential terms of the settlement on which the parties agreed.

However, the record does not support that finding.     Cortina and

Morrow certified that the Term Sheet was "not consistent" with the

parties' settlement discussions; MFC did not intend any settlement

negotiated to be final; and no final settlement had been agreed

to by the parties.   When taken in the light most favorable to MFC,

Cortina's and Morrow's certifications indicate that the parties

did not enter into an oral settlement agreement on September 18,

                                20                           A-3866-14T3
2014, and strong evidence that MFC did not intend to be bound by

the parties' settlement negotiations.

       Lastly, the judge found that Homann had manifested his intent

to be bound by the oral settlement agreement.                The judge noted

that    Homann    had   voiced   some     concern    over    "indemnification

requirements," but concluded that was not an essential term of the

settlement.       However, there was evidence that Homann did not

intend to be bound by the terms of the Term Sheet as well.

Contrary to the judge's conclusion, Berman had insisted that

releasing Homann's indemnification obligations was a "material

term" of the settlement.

       While the evidence could support the conclusion that the

parties had entered into an oral settlement agreement, when taken

in the light most favorable to MFC, evidence could support the

conclusion that there was no "meeting of the minds" between the

parties as to a settlement agreement.           MFC claims it did not agree

to the terms contained in the Term Sheet and did not intend to be

bound by the settlement negotiations.            At the very least, there

were   disputed    issues   of   fact,    as   set   forth   in   the   parties'

conflicting certifications, and therefore, the judge should have

held an evidentiary hearing.        Accordingly, we reverse and remand

for an evidentiary hearing to determine whether there was an

enforceable settlement agreement.

                                     21                                  A-3866-14T3
                               III.

     MFC contends that the judge erred by denying its motion to

dismiss the counterclaims for shareholder oppression and breach

of fiduciary duty.5   MFC argues that the judge erred by finding

the motion was untimely.

     The defense of failure to state a claim upon which relief can

be granted may be raised by motion or as an enumerated defense in

an answer.   Rule 4:6-2 provides as follows:

          Every defense, legal or equitable, in law or
          fact, to a claim for relief in any complaint,
          counterclaim, cross-claim, or third-party
          complaint shall be asserted in the answer
          thereto, except that the following defenses,
          unless otherwise provided by R. 4:6-3, may at
          the option of the pleader be made by motion,
          with briefs:   . . . (e) failure to state a
          claim upon which relief can be granted. . . .
          If a motion is made raising any of these
          defenses, it shall be made before pleading if
          a further pleading is to be made. . . .

The comments to Rule 4:6-2 provide as follows:

          [Rule 4:6-2] identifies the six dispositive
          defenses which may be raised either by answer
          or by motion, but, if by motion, then before
          the party's required responsive pleading. . .
          . The rule must be read in conjunction with
          R. 4:6-3, which requires, as to defenses (b),

5
  The judge also denied MFC's request to dismiss the counterclaims
for fraud and fraudulent inducement. Because MFC did not address
these claims in its merits brief, the issue is deemed waived. See
Pressler & Verniero, Current N.J. Court Rules, comment 4 on R.
2:6-2 (2017); N.J. Dep't of Envtl. Prot. v. Alloway Twp., 438 N.J.
Super. 501, 505-06 n.2 (App. Div.), certif. denied, 222 N.J. 17
(2015).

                               22                          A-3866-14T3
           (c), and (d), that if initially raised by
           answer, a motion raising the defense must also
           be made within 90 days after service of the
           answer in which the defense was asserted.
           Defenses (a), (e), and (f), whether raised by
           motion or answer, are required, on a party's
           application to be heard and determined before
           trial unless the court otherwise orders.

           [Pressler & Verniero, Current N.J. Court
           Rules, comment 1 on R. 4:6-2 (2017) (emphasis
           added).]

      Rule 4:6-3 requires a party who initially stated a Rule 4:6-

2(b), (c), or (d) defense in his or her answer to raise it by

filing a motion within ninety days after service of the answer.

However, Rule 4:6-2(a), (e), and (f) defenses do not have that

ninety-day     requirement,   but     the    defenses   must   be   "heard    and

determined before trial on application of any party, unless the

court for good cause orders that the hearing and determination

thereof be deferred until the trial."           R. 4:6-3.      Thus, Rule 4:6-

2 contemplates that a party who raises Rule 4:6-2(e) defense in

its answer will make an application to the court prior to trial.

      MFC raised a Rule 4:6-2(e) defense in its answer, and filed

motion to dismiss prior to trial, consistent with the Rule.                Thus,

the   motion   was   not   untimely    and    the   judge   erred   by   holding

otherwise.

      MFC also argues that the judge failed to conduct a choice of

law analysis on Homann's counterclaims for breach of fiduciary

                                      23                                 A-3866-14T3
duty and shareholder oppression.           MFC posits that New Jersey has

adopted the internal affairs doctrine for choice-of-law purposes

and, pursuant to that doctrine, Nevada law applies to Homann's

counterclaims for shareholder oppression and breach of fiduciary

duty.

     Because the counterclaims suggested causes of action, we

conclude   the   judge   correctly    determined    they   were   adequate.

Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746

(1989).    However, because the judge failed to conduct a choice-

of-law analysis, we reverse the denial of MFC's motion to dismiss

the counterclaims for breach of fiduciary duty and shareholder

oppression and remand for the court to conduct a choice-of-law

analysis to determine whether New Jersey or Nevada law applied to

those counterclaims.

                                     IV.

     Lastly, MFC contends that the judge erred in granting Homann's

motion to compel discovery.     MFC's argument, in its entirety, is

as follows: "Finally, since the breach of fiduciary duty and

shareholder oppression [counter]claims are the sole basis for

. . . Homann's second discovery requests         . . . this [c]ourt should

likewise reverse the trial court's order compelling MFC to comply

with those requests."

     MFC provides no credible evidence and cites no legal authority

                                     24                             A-3866-14T3
to support its argument.        See State v. Hild, 148 N.J. Super. 294,

296 (App. Div. 1977) (parties are obligated to justify their

positions by specific reference to legal authority); Weiss v.

Cedar Park Cemetery, 240 N.J. Super. 86, 102 (App. Div. 1990)

("The failure to adequately brief the issues requires it to be

dismissed as waived").

     In any event, the argument lacks merit.          "Generally, pursuant

to Rule 4:10-2(a), parties may obtain discovery regarding any non-

privileged matter that is relevant to the subject of a pending

action or is reasonably calculated to lead to the discovery of

admissible evidence."       In re Liquidation of Integrity Ins. Co.,

165 N.J. 75, 82 (2000).      "Our discovery rules are to be liberally

construed because we adhere to the belief that justice is more

likely to be achieved when there has been full disclosure and all

parties are conversant with all available facts."                Ibid.

     MFC admits that MFC's improper conduct, as Homann alleged in

his counterclaim, is the same conduct on which he relied for his

breach of contract counterclaim.             Thus, because MFC's improper

conduct supports both Homann's contract counterclaim and breach

of fiduciary duty and shareholder oppression counterclaims, the

discovery   he   sought   was    relevant,    or   likely   to    lead   to   the

discovery   of   relevant       evidence,    regardless     of    whether     the

counterclaims are dismissed.

                                     25                                  A-3866-14T3
    Affirmed in part, reversed in part, and remanded for further

proceedings consistent with this opinion.           Because the motion

judge   made   factual   findings   to   support   his    ultimate     legal

conclusion, the vicinage's Presiding Judge of the Civil Division

should assign this case to a different judge.            We do not retain

jurisdiction.

                                    26                               A-3866-14T3