Court Opinion

ID: 4552734
Source: CourtListenerOpinion
Date Created: 2020-08-03 14:08:55.249608+00
Date Added: 2024-06-11T13:09:24.102847
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NOT FOR PUBLICATION WITHOUT THE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 NOS. A-2855-17T2
                                                                    A-4616-17T2

AMERICAN FABRIC
PROCESSORS, LLC, d/b/a
AMERICAN FABRIC
PROCESSORS; AMERICAN
FABRIC PROCESSORS, LLC,
d/b/a AMERICAN FABRIC
PROCESSORS as assignee of
CORAL DYEING & FINISHING
CORPORATION, d/b/a CORAL DYEING
& FINISHING CORPORATION
and THE JDM GROUP LLC,
d/b/a JDM LLC,

          Plaintiffs-Appellants,

v.

VERLAN FIRE INSURANCE
COMPANY and SILK CITY
STONE, LLC,

          Defendants-Respondents.

GREEN POND LLC (formerly Carson
& Gebel Ribbon Company LLC),

          Plaintiff,
v.

JDM GROUP, LLC, AMERICAN
FABRIC PROCESSORS, LLC, and
JACOB BINSON,

     Defendants.

FRED DOMBROW and CORAL
DYEING AND FINISHING
CORPORATION,

     Plaintiffs-Respondents,

v.

JACOB BINSON, AMERICAN
FABRIC PROCESSORS and
JDM GROUP,

     Defendants-Appellants.

           Argued (A-2855-17) and Submitted (A-4616-17)
           October 16, 2019 – Decided August 3, 2020

           Before Judges Fisher, Accurso and Gilson.

           On appeal from the Superior Court of New Jersey,
           Law Division, Passaic County, Docket Nos. L-2384-
           15 and L-0495-16; and L-2357-16.

           Richard A. Murray argued the cause for appellants in
           A-2855-17.

           Matthew J. Lodge argued the cause for respondent
           Verlan Fire Insurance Company in A-2855-17

                                                                  A-2855-17T2
                                     2
              (Kennedys CMK LLP, attorneys; Matthew J. Lodge
              and Joshua Scott Wirtshafter, of counsel and on the
              brief).

              Michael C. Salvo argued the cause for respondent Silk
              City Stone, LLC in A-2855-17 (Ahmuty Demers &
              Mc Manus, attorneys; Michael C. Salvo, on the brief).

              Ferro and Ferro, attorneys for appellants in A-4616-17
              (Nancy C. Ferro, on the briefs).

              Welt & Kuzemczak, LLC, attorneys for respondents in
              A-4616-17 (David M. Welt, of counsel and on the
              brief).

PER CURIAM

       Throughout the record in these appeals, the matters are referred to as

complex. They are not, however, as complex as they are convoluted, a

circumstance arising from the fact that these two non-jury cases, as well as a

related third not before us, were not consolidated or decided by a single judge

but decided by different judges at different times.1 Of the two before us, one

was tried and the other disposed of summarily. After our close examination of

the record in light of the parties' arguments, we affirm the former (Dombrow v.

Binson) and reverse the summary judgment in the latter (American Fabric v.

Silk City).

1
    We decide both these appeals by way of a single opinion.
                                                                          A-2855-17T2
                                        3
                                        I.

      To understand the bases and dispositions of these cases, some

consideration must be given to Coral Dyeing & Finishing Corp.'s history. The

company was started in 1955 and operated in Paterson for many years by the

grandfather and father of Fred Dombrow, Jr., who started with the business in

1981 as a mechanic. By the business's peak in the late 1990's, it had 120

employees, but apparently the North Atlantic Free Trade Agreement, which

seriously affected the textile industry in this country, caused the business's

decline, starting in 2002. In 2009, Dombrow was required to decide whether

he should borrow money to "retool to keep the place going" or "shut it down."

Out of dedication to the business and its employees, he chose the former

course and obtained a $1,250,000 loan from Metro Funding Corporation

Partners, LLC. Dombrow executed a promissory note for the repayment and

used Coral Dyeing's real estate as collateral. These funds were used to

diversify the company's product lines, but those efforts proved ineffectual; the

loan went into default, and Metro commenced a foreclosure action. With no

other recourse, in 2013, Coral Dyeing filed a voluntary petition for bankruptcy

under Chapter 11, and thereby stayed Metro's foreclosure action.

                                                                           A-2855-17T2
                                        4
      After the start of the bankruptcy proceedings, four parcels of Coral

Dyeing's real estate were sold to 555 E. 31 Paterson, LLC, for $2,100,000; the

bankruptcy court approved the agreement. That buyer eventually chose not to

go forward, but the sale was revived when that buyer, for $100,000, assigned

its contract rights to JDM Group, an entity controlled by Jacob Binson. The

amount of overdue property taxes to be paid were fixed by the bankruptcy

court, but the closing was delayed and, with the continuing non-payment of

taxes and the addition of interest and penalties, the amount due increased by

$222,723.98 to a total of $1,114,592.74. Because, as the trial judge in

Dombrow v. Binson recognized, the transaction was designed so that

Dombrow was neither required to bring any cash to the closing nor receive any

cash as a result of the closing, Binson faced a situation where for his entity,

JDM Group, to receive title, a greater amount was due in order to satisfy the

city's tax bill. This disconcerting circumstance caused, as the Dombrow v.

Binson judge found, that Binson walked out of the May 2014 closing a number

of times. Eventually, however, the transaction closed, although the precision

normally expected in such a transaction was sorely lacking. For example, t he

closing statement, as the judge found, was "fraught with error, and is fraught

with sloppiness" so as to be "worthless."

                                                                           A-2855-17T2
                                        5
      A few days after the closing – for no ostensible reason – Dombrow

signed two promissory notes: one obligating him to pay JDM Group and

Binson $66,500 by October 30, 2014, and the other obligating Dombrow and

Coral Dyeing to pay JDM Group and Binson $400,000 no later than April 30,

2016. The total amount due appears to be the approximate amount of the

shortfall between what Binson and JDM Group were obligated to pay to obtain

the property.

      The following month, Coral Dyeing sold its business and remaining

assets2 to Binson's American Fabric for $466,500, the same amount as the

promissory notes. The contract expressed the consideration exchanged by

stating that the "Seller is indebted to the Buyer in the sum of $466,500" – a

reference to the promissory notes 3 – and, because "[t]he Seller is unable to

effectuate payment of this loan [the Seller] has elected to transfer all of its

assets to the Buyer in exchange for a release of the debt."

2
  The contract states that Coral Dyeing conveyed its "inventory, accounts
receivable, fixtures, equipment, intellectual property, goodwill, trade name,
trademarks, . . . . and all rights under any contract related to the Business."
3
  According to Dombrow, the amount reflected the debt he owed to PNC Bank
for a loan used to purchase Coral Dyeing machinery and also the debt on his
own home. On the other hand, Binson testified that the amount reflected the
property taxes not paid on the real property then transferred.
                                                                            A-2855-17T2
                                         6
      With the completion of these transactions, Dombrow became employed

by American Fabric, which had become the operator of the business that had

once been Coral Dyeing. The employment relationship started amicably but

didn't last long. Dombrow and Binson soon encountered fundamental

differences about the business, causing Binson to terminate Dombrow's

employment within the month. Binson claimed he paid Dombrow $1000 per

week for the four weeks of employment, while Dombrow denied being paid

anything. The termination of employment left Dombrow in financial straits;

he could not meet his obligations under the PNC Bank loan, see n.3, causing

that bank to initiate foreclosure proceedings on his home and the initiation of

his own bankruptcy proceedings.

      As we observed at the outset, conveyances regarding Coral Dyeing, its

property and assets, formed the background for three lawsuits, all commenced

in the same vicinage but inexplicably never consolidated (except for two of

them being consolidated for discovery purposes only): Dombrow v. Binson

(which is before us in A-4616-17), Green Pond LLC v. American Fabric (not

before us), and American Fabric v. Silk City (which is before us in A-

2855-17).

                                                                         A-2855-17T2
                                       7
      Dombrow v. Binson – of which we will have more to say later in Section

II of this opinion – alleged breach of contract, unjust enrichment, fraud and

conversion arising from the transactions that led to the execution of the

promissory notes and the sale of Coral Dyeing's business and remaining assets

to American Fabric in June 2014.

      Green Pond LLC v. American Fabric arises from another transaction. In

January 2014, a few months before Coral Dyeing's and Dombrow's

transactions with Binson, American Fabric and JDM Group, Green Pond's

predecessor in interest (Carson and Gebel Ribbon Company LLC) purchased –

through the bankruptcy court – the equipment and assets, including inventory,

of Coral Dyeing. Green Pond brought suit against American Fabric and

Binson to replevy the purchased equipment and property still located at Coral

Dyeing's premises. While that action was consolidated with American Fabric

v. Silk City, for discovery purposes, the claims were decided by a different

judge than the judges who handled the cases now before us.

      American Fabric v. Silk City is the third action. The orders in question

in the appeal of that matter, which we will examine in Section III of this

opinion, were entered by yet another judge. In that case, American Fabric

claimed property it had purchased from Coral Dyeing through the conveyances

                                                                             A-2855-17T2
                                        8
at issue in Dombrow v. Binson was damaged by a subtenant, Silk City, and

covered by an insurance policy issued by Verlan Fire. At the heart of that case

is the question whether American Fabric was the rightful owner of that

property or Green Pond, whose interests were considered in Green Pond v.

American Fabric.

      The obvious overlapping factual disputes in these three separated cases

is most evident and troubling because the decisions in each case were rendered

by different judges. The judge in Dombrow v. Binson was required to

consider the impact of a partial summary judgment entered by another judge in

Green Pond v. American Fabric, and yet another judge, in American Fabric v.

Silk City, was required to consider the impact of the findings rendered by the

judge in Dombrow v. Binson.

      With this brief understanding of the convoluted collection of lawsuits

brought concerning these parties and the various conveyances, we turn first to

Dombrow v. Binson.

                                      II.

      In Dombrow v. Binson (A-4616-17), the judge conducted a bench trial in

September and October 2017, and rendered findings of fact and conclusions of

                                                                         A-2855-17T2
                                       9
law through an oral decision placed on the record on October 17, 2017. On

December 12, 2017, the court entered judgment, which:

               • dismissed the breach of contract claim, the
                 judge finding plaintiff failed to prove the
                 alleged contract existed;

               • found that defendants were unjustly enriched
                 and awarded to plaintiffs $374,375 plus
                 prejudgment interest for a total award of
                 $376,067.28;

               • denied plaintiffs' request for counsel fees;

               • determined that plaintiffs conveyed to
                 defendants American Fabric, JDM Group and
                 Binson "all personal property and assets of
                 Coral Dyeing," including "all machines, tools,
                 equipment, fabric material and other assets of
                 Coral Dyeing . . . except for the equipment and
                 personalty that was previously awarded to
                 'Carson and Gabell [now Green Pond]'" in a
                 partial summary judgment entered by another
                 judge in another case; 4 and

               • found that "[a]ny personal property owned by
                 Fred Dombrow and not Coral Dyeing . . . is not
                 transferred as part of this ruling " and that the

4
  By this time, the Green Pond judge had granted partial summary judgment
and issued a writ of replevin in Green Pond's favor for the turnover or removal
of the equipment and machinery from the premises. That was not a final
disposition, since whatever else Green Pond purchased that remained on the
premises was reserved for a later plenary hearing. Apparently, Green Pond
was unable to obtain its property and sought damages for the loss incurred.
We made inquiries and learned that the remaining issues in Green Pond v.
American Fabric were amicably resolved.
                                                                        A-2855-17T2
                                      10
                  parties "have already resolved these issues or
                  will, through their attorneys."

      Defendants Binson, American Fabric, and JDM Group filed post-trial

motions seeking consolidation and other relief, all of which were denied, and

following which defendants filed their notice of appeal. When the Clerk of

this court questioned whether all issues as to all parties had been resolved, the

appeal was dismissed and the trial judge entered an order that dismissed

whatever claims remained, prompting the appeal in A-4616-17.

      Defendants argue in this appeal that:

            I. THE COURT ERRED IN AWARDING
            DAMAGES TO PLAINTIFF ON THE CLAIM FOR
            UNJUST ENRICHMENT SINCE THE
            PROMISSORY NOTES WERE VALID AND THE
            CORAL DYEING EQUIPMENT AND MACHINERY
            WERE NOT OWNED BY DEFENDANT.

            II. THE COURT ERRED IN DENYING
            PLAINTIFF'S MOTION FOR RECONSIDERATION
            WHICH WAS BASED ON THE GROUND THAT
            PLAINTIFF WAS JUDICIALLY ESTOPPED FROM
            CLAIMING TO BE A CREDITOR AFTER
            DECLARING HIMSELF TO BE A DEBTOR IN THE
            BANKRUPTCY ACTION BASED ON THE SAME
            PROMISSORY NOTES.

            III. THE COURT ERRED IN WRITING A BETTER
            AGREEMENT FOR THE PLAINTIFF THAN THE
            AGREEMENT INTO WHICH PLAINTIFF WAS
            ENTERED.

                                                                           A-2855-17T2
                                       11
We find no merit in these arguments.

      To understand the case and our disposition, one must appreciate the trial

judge's accurate and appropriate description of the closing of the real estate

transaction as "sloppy" and the beyond-sloppy later sale of the remaining

assets and business of Coral Dyeing. The judge recognized the realities of the

situation and that Binson was unhappy with the course of the real estate

transaction; Binson had originally agreed to pay $2,300,000, but with the

delays prior to closing and the drastic increase in the amount of taxes owed to

the city, the amount he was required to pay had greatly increased. It is here, as

the judge found, that the parties got inventive:

            [I]n this case those hidden costs took on a very
            different role. They weren't the normal hidden costs
            and things of that sort, and the deal was structured in a
            way that Mr. Dombrow is bringing no money to the
            closing, nor is he going to walk away from the closing
            with any money. He's in bankruptcy court. He could
            have just abandoned the property, walked away from
            it.

                   ....

            Now, Mr. Binson, I agree – I find it credible, was
            getting frustrated here, and as he said, there were three
            or four times . . . he was going to walk away from the
            deal, walked out of the room. But he was trapped in a
            way, because he had already given the 100,000 to [the
            original buyer], so, he had a big investment in it, and
            he had other monies invested in it, and so . . . he also

                                                                           A-2855-17T2
                                       12
            knew it was a good deal. So, there's a lot going on. A
            lot of dynamics here.

            And as the time was going by, and Mr. Binson is
            being told you got to come up with more money, and
            more money, and more money, and I agree with what
            he said here on the witness stand, he said, what am I,
            the golden goose? I got to keep reaching into my
            pocket, and paying, and paying, and paying.

            So, I can understand his frustration, but that's what
            happens in this type of scenario, and either you
            continue going along as the golden goose, or you bail
            out, and the longer you go along as the golden goose,
            and the longer you keep putting money in, if you bail
            out and walk away, you lose that money, and the big
            beneficiary becomes MFC [5] because they're the
            backup bidder. They come in and get it really, really
            cheap.

      Binson, as the judge found, decided to stay with the transaction but

remained desirous of getting the property at the original price:

            So, due to the delays, and due to other things that were
            going on, Mr. Binson doesn't get this property for 2.3
            million, 2.4 if you add the 100,000 he paid for the
            assignment, he's up in the 2.7 range. There's a
            shortage of $400,000, and Mr. Binson believes that I
            shouldn't have to pay this 400,000. I got a contract at
            2.3 million. I shouldn't be paying 2.7 when I got a
            $2.3 million contract. Mr. Dombrow has got to come
            up with the 400,000. But Mr. Dombrow is in
            bankruptcy, and the judge spelled out what he was
            supposed to be paying, which I reviewed the 6,000,

5
  The reader will recall from the earlier discussion that MFC had commenced
a foreclosure action that was stayed when the bankruptcy action was started.
                                                                        A-2855-17T2
                                      13
             the 20, the 25,000. But, other than that, he's not
             coming to this closing with any money, nor is he
             walking out with any money.

             So, it either was Mr. Binson was going to pay the
             added on expenses, caused by the delay, or otherwise,
             or Mr. Binson's remedy was to say I'm not buying this
             property. But he was, as I said earlier, he might have
             felt it's still a good deal, and maybe I can't bail out,
             because I got too much invested, but I think, and I
             firmly believe that although Mr. Binson believed it
             was Mr. Dombrow's obligation to come up with this
             $400,000 shortage, he's wrong in that respect, as a
             matter of law. Mr. Dombrow could not be required to
             come up with anything.

             And, in fact, if Mr. Binson said to Mr. Dombrow you
             got to come up with some money, or I'm not buying it,
             Mr. Dombrow's response would have been, then don't
             buy it, because whether you buy it or not, I'm not
             getting a quarter out of this thing. So, don't buy it.
             He wasn't going to bring any money to the table, and
             he wasn't going to walk away with a dime in his
             pocket from this closing.

It would appear that for these reasons the promissory notes were extracted

from Dombrow and signed a few days after the closing. Then, when the Coral

Dyeing assets were sold to defendants, the extinguishing of the notes

represented the consideration Dombrow purportedly received from defendants

for those assets.

      Dombrow testified that he signed the notes so he could get the business

back up and running with defendants as the business owner and he as a key

                                                                        A-2855-17T2
                                       14
employee, expecting to be employed for at least five years and at a salary that

would help him resolve his own personal debts. The judge recognized,

however, that the parties were not on the same page as to their future

relationship:

            Mr. Dombrow is not represented by counsel [at the
            closing]. He's still suffering the almost blind desire to
            stay with the company and just agreed to a lot of
            things, probably because he had a carrot being dangled
            in front of him. I'll employ you . . . .

            This whole employment contract, I don't know what
            the terms were. I don't know if there was a contract. I
            don't know if there w[ere] discussions. Nothing is in
            writing. [Dombrow] says, "He gave me 30 percent of
            the business," [Binson] says, "No way." [Dombrow]
            says, "I was going to be allowed to work in the lab and
            develop my new theories," Mr. Binson says, "No way.
            I wanted him to make sales." Mr. Dombrow says, "I
            was going to be paid a lucrative salary." Even though
            he was employed, I don't care if it's two weeks, four
            weeks, five weeks, six weeks, there was – there's no
            nexus to him being paid a $2,500 salary.

      From all these and other parts of his overall findings, the judge's

ultimate decision turned on his determination that there was no consideration

for the transfer of the Coral Dyeing business and assets to Binson or American

Fabric because the notes obligated Dombrow to pay something he did not owe

and, so, the extinguishing of the notes, gave no consideration to Dombrow. As

                                                                            A-2855-17T2
                                      15
the judge explained based on his consideration of the evidence and the parties '

credibility:

               [A]fter much thought and much consideration to what
               the contract says about the indebtedness, the fact of
               the matter is, there was no indebtedness at that time.
               Despite the fact that Mr. Dombrow agreed, foolishly,
               that, yes, I owe you 466,000 and I'll sign these two
               notes, which then you could hold against me so that I
               don't beat you and not give you the employment I'm
               promising you, the – it's a myth. It doesn't exist.
               There was no indebtedness. Mr. Binson unfortunately
               got hit with having to pay a lot more than he hoped to
               have to pay, and he was out some 400,000 at some
               point in this whole transaction. But it wasn't a debt
               that he was legally entitled to get the money back
               from Mr. Dombrow. And notwithstanding that, he
               commits Mr. Dombrow to agree to it.

                     ....

               So he agrees to sell his business for $466,500 and he
               gets nothing in return for it. What he gets is, in Mr.
               Binson's mind, well, he wiped out the money he owed
               me. But he never owed him the money. There was no
               consideration to support those notes.

      In light of these findings, the judge viewed the overall transactions in

this way. First, Binson purchased and received the real property. But he

ended up paying more than he anticipated, so he sought to recoup that loss

through the later transactions with Dombrow. He extracted the promissory

notes for which there was no consideration and then extinguished the notes to

                                                                          A-2855-17T2
                                        16
make it appear as if consideration was given for his obtaining the remaining

assets of the business. Based on those findings, the judge concluded that the

only equitable way of putting Dombrow in the position he should have found

himself in was to apply unjust-enrichment principles.

      The judge's extensive findings are grounded in evidence found credible.

Because the trial judge was in the position of observing and assessing the

witnesses' credibility and evaluating the weight of their testimony, we are

obligated to defer to those findings unless convinced they are "manifestly

unsupported by or inconsistent with" the evidence "so as to offend the interests

of justice." Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 484

(1974). In cases where the facts are starkly disputed, we are particularly loath

to second-guess a trial judge's findings. After close examination of the record,

we conclude that the findings are fully supported by the evidence and

testimony the judge was entitled to find credible and, therefore, we will defer

to those findings.

      The judge's application of unjust-enrichment principles was also

appropriate here. These principles apply in cases where a plaintiff shows that

a defendant "received a benefit" and "retention of that benefit without payment

would be unjust." VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 554 (1994);

                                                                         A-2855-17T2
                                      17
see also Thieme v. Aucoin-Thieme, 227 N.J. 269, 288 (2016). Having reached

this fundamental conclusion, the judge then painstakingly ascertained the

extent to which defendants had been unjustly enriched in entering the

judgment now under review.

      Because the judge's factual findings are entitled to our deference and

because the application of unjust-enrichment principles was appropriate in

these circumstances, we reject defendants' arguments in A-4616-17. To the

extent we have not specifically addressed any other aspects of defendants'

arguments, we find them without sufficient merit to warrant further discussion

in a written opinion. R. 2:11-3(e)(1)(E).

                                      III.

      In the second appeal before us (A-2855-17), the record reveals that

plaintiffs American Fabric and JDM Group filed their complaint against Silk

City and Verlan Fire Insurance Company in July 2015, alleging that in June

2014 American Fabric purchased certain property and assets of Coral Dyeing

and became, as it alleged, the "assignee of" Coral Dyeing, while JDM Group

claimed that in May 2014 it obtained a quitclaim deed from Coral Dyeing and

became the owner and landlord of the real property in Paterson. At those

                                                                         A-2855-17T2
                                      18
premises, Coral Dyeing had both operated a dye house and a storage area,

which housed hundreds of rolls of fabric.

      Plaintiffs American Fabric and JDM Group alleged that from January

2013 to August 2014, defendant Silk City sublet part of the premises, where it

conducted a business of mixing and cutting cement and stone products.

Plaintiffs assert that Silk City's business generated debris that infiltrated the

premises and caused damage to their property, including the fabric rolls, which

were allegedly conveyed to American Fabric by Coral Dyeing. Plaintiffs'

complaint against Silk City alleged negligence, nuisance, and trespass.

Plaintiffs also asserted a breach of contract claim against Verlan Fire, which

issued a property damage policy to Coral Dyeing for the period between

September 2013 and September 2014, that named plaintiffs as additional

insureds.

      Early in the litigation, plaintiffs moved to compel Silk City and Verlan

to inspect the fabric rolls so as to preempt a spoliation defense. The motion

was granted in January 2016 but the record reveals, without explanation, that

the parties consented to the vacating of that order the following month. Then,

in November 2016, plaintiffs moved for an order that would permit them to

                                                                             A-2855-17T2
                                        19
"discard their damaged business personal property" that would preclude any

party from "asserting a spoliation defense." This motion was denied.

      In May 2017, Silk City moved for summary judgment; Verlan joined in.

At the same time, Verlan moved for dismissal, claiming a spoliation of

evidence; that is, that allegedly damaged fabric rolls were disposed of, or sold,

and that others were added to the inventory, thereby precluding the opportunity

to assess or understand the damages claimed. There was also a further impact

on ascertaining which rolls were damaged as a result of Binson having

disposed of Coral Dyeing's computers, which had been used to track the

movement of fabric rolls, after the June 2014 transaction. The record was also

rendered unclear as to American Fabric's right to seek damages by the fact that

there was no clarity as to which fabric rolls were conveyed in the January 2014

transaction with Green Pond's predecessor and which came into Coral Dyeing's

possession after January 2014 that it would ostensibly have been free to

convey to American Fabric in June 2014.

      The judge denied both motions in June 2017. In denying summary

judgment, the judge identified a number of problems he saw with the case,

including the impact of Green Pond v. American Fabric and the uncertainties

about ownership of the allegedly damaged fabric rolls for which plaintiffs

                                                                           A-2855-17T2
                                       20
sought relief in this case. In his written decision, the judge labeled plaintiffs'

case "weak or problematic" but ultimately, because of the summary judgment

standard, which obligated him to provide plaintiffs with all the legitimate

inferences that might arise from the facts, Brill v. Guardian Life Ins. Co. of

Am., 142 N.J. 520, 540 (1995), the judge allowed the case to proceed. As for

the spoliation argument, the judge appears to have found spoliation but

concluded that it did not immediately appear that dismissal was required; he

instead left for later disposition – after a plenary hearing – whether or to what

extent there should be a sanction for any spoliation of evidence.

      The record on appeal reveals that the judge's efforts to move this case

toward a trial became stymied by the applications by plaintiffs' then attorney to

be relieved. The attorney's first motion was denied but a later motion, which

was based on plaintiffs' alleged refusal to cooperate in the completion of

discovery, was granted in November 2017. The judge also stayed the action

for thirty days to allow for the retention of new counsel and a trial date was set

to occur in mid-January 2018.

      The spoliation hearing remained scheduled but did not take place

because of plaintiffs' situation with its new counsel. That prompted the

                                                                            A-2855-17T2
                                        21
following colloquy between the trial judge and Binson, who appeared pro se,

in December 2017:

             THE COURT: I've been trying this – I'm trying to
             look at – I mean, I initially was setting a hearing on
             the spoliation back in August. And here we are, it's
             almost January, and we still don't have this
             reconsideration [6] decided because of your dragging
             your feet with your lawyer. And maybe what should
             have happened, maybe he shouldn't have been relieved
             if it was going to cause this kind of a problem.

             MR. BINSON: Well, that's the problem I have with
             the lawyer –

             THE COURT: Well, obviously you created a problem
             with your lawyer, or else he wouldn't have asked to
             get out of the case. Because I know, if I go forward – I
             know what I'm thinking right now, and I know if I go
             forward, whatever I do is just going to be reversed,
             because somebody is going to say I didn't give you the
             opportunity to be represented by counsel. This is
             becoming a farce. It's not fair to the other side. They
             have been prepared. They have been ready to go with
             this thing for months. For months.

Following that the judge turned his attention to the merits themselves,

suggesting a change in tune regarding the defendants' prior application for

summary judgment:

             THE COURT: The underlying matter, I denied
             summary judgment. Now, I'm telling you that I'm
             thinking I may reverse that. Based on everything that

6
    Defendants had moved for reconsideration in the interim period.
                                                                          A-2855-17T2
                                       22
            I now have in the record which clearly shows there is
            not going to be anything forthcoming to show what
            fabrics or inventory actually came [to Coral Dyeing]
            after the [January 2014] sales agreement [and prior to
            the June 2014 transaction].

            [Emphasis added.]

In recognizing the impropriety of considering defendants' pending motion

without plaintiffs having counsel, the judge nevertheless expressed that he was

"inclined – I can tell you right now my inclination is to grant the application"

for reconsideration.

      Plaintiffs' new attorney entered an appearance in late December, 2017,

and requested an adjournment of the reconsideration motion that had been

scheduled for early January 2018, as well as an adjournment of the trial

because of his longstanding vacation plans. In January 2018, the judge denied

the adjournment requests, granted the reconsideration motion, and , in

reconsidering, granted summary judgment in favor of defendants.

      In appealing, plaintiffs present the following arguments:

            I. THE COURT BELOW ERRED IN GRANTING
            DEFENDANTS' MOTIONS FOR RECONSIDER-
            ATION WITHOUT A LEGAL OR FACTUAL BASIS
            ON JANUARY 2, 2018 AFTER DENYING THEM
            ON THE RECORD ON AUGUST 11, 2017.

                                                                           A-2855-17T2
                                       23
                  A. Neither Defendant Introduced New Or
                  Additional Information To The Court's
                  Attention.

                  B. The Motions For Reconsideration Are
                  Merely An Attempt At Having A Second
                  Bite Of The Apple.

                  C. The Trial Court's Rulings Granting
                  The Motions For Reconsideration Which
                  Reversed The Court's Prior Rulings
                  Denying Summary Judgment And
                  Reconsideration Were Not Based On
                  Credible Evidence In The Record.

            II. THE COURT ERRED IN REFUSING TO GRANT
            PLAINTIFFS' COUNSEL'S APPLICATION FOR
            ADJOURNMENT.

      We reject Point II, finding it has insufficient merit to warrant further

discussion in a written opinion. R. 2:11-3(e)(1)(E). We add only that trial

courts have considerable discretion when ruling on adjournment applications,

Kosmowski v. Atl. City Med. Ctr., 175 N.J. 568, 575 (2003), and we discern

no abuse of discretion in the denial of an adjournment here, particularly when

it was plaintiffs who had already delayed the proceedings by swapping

attorneys, and particularly since plaintiffs have not shown how they were

prejudiced. See State v. Miller, 216 N.J. 40, 47 (2013); Smith v. Smith, 17

N.J. Super. 128, 133 (App. Div. 1951).

                                                                           A-2855-17T2
                                       24
      We also find no merit in plaintiffs' arguments that the judge erred or

abused his discretion in reconsidering his earlier denial of summary judgment.

Rule 4:42-2 authorizes a judge – in the exercise of sound discretion – to revisit

an interlocutory order at any time prior to entry of final judgment when

required by the interest of justice. See Lombardi v. Masso, 207 N.J. 517, 534

(2011). Without a doubt, the denial of summary judgment – the prior ruling

that the judge reconsidered here – was interlocutory, see Gonzalez v. Ideal Tile

Importing Co., 371 N.J. Super. 349, 356 (App. Div. 2004) (recognizing that

"an order denying summary judgment . . . decides nothing and merely reserves

issues for future disposition"), aff'd, 184 N.J. 415 (2005), and its

reconsideration here was proper since final judgment had not yet been entered.

Rule 4:42-2 does not, as plaintiffs' argument would suggest, require the

submission of new or different material; a judge may revisit an interlocutory

order when believing an earlier interlocutory ruling was mistaken.

      We, thus, reject nearly the entirety of plaintiffs' arguments on appeal. In

challenging the grant of reconsideration, plaintiffs have included only the most

cursory suggestions about the existence of genuine factual issues that

warranted a trial. That is, plaintiffs have expended nearly all their energies

into arguing that the judge shouldn't have reconsidered the denial of summary

                                                                           A-2855-17T2
                                       25
judgment, and have said very little about whether, if reconsideration was

appropriate, the judge wrongly decided to reverse himself and grant summary

judgment. Defendants – doubtless for sound tactical reasons – made little or

no attempt to demonstrate that summary judgment was appropriately entered,

choosing instead to simply respond to plaintiffs' meritless argument that the

judge was not authorized or abused his discretion in reconsidering his prior

ruling.

      We are mindful – and plaintiffs' counsel should have been mindful too –

that it was plaintiffs' "responsibility to refer us to specific parts of the record to

support their argument" and that they could not "discharge that duty by

inviting us to search through the record ourselves." Spinks v. Twp. of Clinton,

402 N.J. Super. 465, 474 (App. Div. 2008); see also State v. Hild, 148 N.J.

Super. 294, 296 (App. Div. 1977). To seek our overturning of the disposition

of which they were aggrieved, plaintiffs were obligated to show an error in the

judge's grant of summary judgment. Instead, plaintiffs have almost entirely

limited their argument to the question of reconsideration without, but a few

generalities and quotations from the judge's earlier decision, explaining why

the grant of summary judgment was erroneous. Because we find nothing

wrong with the judge's willingness to reconsider his earlier ruling, the

                                                                              A-2855-17T2
                                         26
inadequacies in plaintiffs' presentation on appeal leave us in the unhappy place

of choosing between, on the one hand, affirming based on our view that

reconsideration was not an abuse of discretion, or, on the other, scanning the

record ourselves to determine whether summary judgment was properly

granted. With some misgivings, we conclude that the administration of justice

is better served in this instance by our independent review of the parties'

factual assertions on summary judgment despite the shortcomings in plaintiffs'

submissions in this court.

      As defendant Silk City correctly recognizes, the summary judgment that

concluded this matter was "at its core" based on two concepts: that a plaintiff

"cannot sue for damages on goods it does not own" and "cannot go to trial

without competent evidentiary damage proofs." These assertions, of course,

are true, but it is far from clear whether it can be said – on this record – that

plaintiffs cannot claim ownership of the allegedly damaged fabric rolls or that

their proofs are insufficient as a matter of law.

      As to the former proposition, the judge was required to deal with the

judge's finding in Dombrow v. Binson that American Fabric was the owner of

the fabric rolls located at the premises. To be sure, the documentation

concerning the transaction between Coral Dyeing and Green Pond's

                                                                            A-2855-17T2
                                        27
predecessor – particularly the UCC financing statement – might suggest that

these fabric rolls were conveyed to Green Pond's predecessor in January 2014.

But the Dombrow v. Binson judge determined that the fabric rolls in the

premises belonged to plaintiffs and the judge in Green Pond v. American

Fabric found only that the equipment and machinery belonged to Green Pond

without determining whether Green Pond was also the rightful owner of any

fabric rolls still in the premises. If there is some finer point to put on the

dispute about ownership as it arises in this case, or if there is some reason – as

the judge here held – that the findings in the other cases are not binding on

these defendants, we leave those matters for another day. As a matter of

summary judgment, there is – at best – a dispute about whether plaintiffs own

the fabric rolls for which they seek damages here.

      Moreover, even if fabric rolls were conveyed to Green Pond's

predecessor by way of the January 2014 transaction, and even if the finding in

Dombrow v. Binson about ownership should not be binding on Silk City or

Verlan – they not being parties to the other cases – it seems clear that any rolls

added to inventory after the January 2014 transaction would not be

encompassed by that transaction but would have, instead, been transferred to

plaintiffs here in June 2014. Although the judge determined that plaintiffs

                                                                             A-2855-17T2
                                        28
"cannot prove what inventory was added after" the January 2014 transaction,

there is no clear explanation as to why it was fair for him to draw such a

conclusion. In fact, in responding to summary judgment, plaintiffs asserted

that after the January 2014 transaction, "Coral carried its own inventory

separate from [Green Pond's predecessor's] inventory . . . and that [Green

Pond's predecessor's] portion of the inventory was removed from the subject

property . . . in June 2014." If there is truth to this assertion – and we assume

its truth for purposes of summary judgment – then it could be presently

inferred that the allegedly damaged fabric rolls at the premises in or after June

2014 are the rightful property of plaintiffs.

      Contrary to the judge's statement in his two-page written decision in

June 2017, when summary judgment was denied, about the apparent

difficulties plaintiffs would face in attempting to prove ownership and damage,

the judge asserted in his three-page January 2018 written opinion that, "[u]pon

further reflection," those same problems now appear to be insurmountable and,

if attempted, "would invite the jury to speculate." He provided little

explanation for this conclusion. In reversing summary judgment and in

remanding the matter for further proceedings, we agree that plaintiffs will be

put to the difficult task of proving that any damaged fabric rolls belong to

                                                                            A-2855-17T2
                                       29
them and not to Green Pond, that they were damaged after being conveyed in

June 2014 (because there appears no genuine doubt that the rolls were

conveyed "as is" and it is conceivable that some or maybe all the damage

allegedly caused by Silk City occurred prior to June 2014), and the quantum of

any such damage. In opposing summary judgment on the earlier occasion,

plaintiffs provided expert analysis of the alleged property and its alleged

damage. Plaintiffs were not obligated – in opposing summary judgment – to

actually prove their case, only whether there is a genuine factual basis for their

claims. At the summary judgment stage, a court must not be concerned with

the evidence's weight or whether those who have yet to testify are credible. 7

      We recognize that plaintiffs may have a difficult time demonstrating the

elements of their claims against Silk City and Verlan, but we do not see why

they should be deprived of that opportunity. If, as the motion judge believed,

the jury would be left to speculate on what it is that plaintiffs must prove af ter

hearing plaintiffs' expert's testimony and after hearing Binson or any other

individual with personal knowledge attempt to provide a factual basis for the

7
  In originally denying summary judgment in June 2017, the judge stated in
his written opinion that he "f[ou]nd[] the credibility of Jacob Binson to be
questionable." He did not explain nor is it clear to us why the judge made such
an observation or how the judge was able to assess Binson's credibility by way
of the summary judgment submissions.
                                                                            A-2855-17T2
                                        30
expert's views, then if and when defendants move for an involuntary dismissal,

the judge will be in a far better position to opine on the evidence's sufficiency

than anyone can say at the present time. But we cannot agree it has been

demonstrated that the difficulties plaintiffs will face, in seeking to prove their

case, are so onerous that, as a matter of summary judgment, their claims must

be short-circuited prior to trial.

      So, in short, we reverse the summary judgment entered in favor of

defendants and remand for further proceedings.

                                        IV.

      To summarize our disposition of these appeals, in Dombrow v. Binson

(A-4616-17), we affirm the judgment and orders under review. In American

Fabric v. Silk City (A-2855-17), we affirm the orders under review insofar as

they denied plaintiffs' request for an adjournment and insofar as they granted

reconsideration, but we reverse insofar as the court, in reconsidering, granted

summary judgment in favor of defendants, and we, therefore, remand for

further proceedings. 8 We do not retain jurisdiction.

8
  No one has argued that the trial judge erred in scheduling a hearing to
consider further the spoliation issues. Because the judge ultimately granted
summary judgment, he concluded there was no need to conduct the spoliation
hearing. No one appealed that disposition. Now that we have reversed
summary judgment, the door is opened again to those spoliation issues.
                                                                            A-2855-17T2
                                       31