Court Opinion

ID: 4549058
Source: CourtListenerOpinion
Date Created: 2020-07-17 14:07:56.601528+00
Date Added: 2024-06-11T08:33:35.599068
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NOT FOR PUBLICATION WITHOUT THE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-3648-18T1

ROBERT ZIENIUK,

          Plaintiff-Respondent,

v.

RUDOLPH ANTHONY MICKLES,

          Defendant/Third-Party
          Plaintiff-Appellant,

v.

LAW OFFICES OF MICHAEL D.
MILLER and MICHAEL D. MILLER,
ESQUIRE,

     Third-Party Defendants.
_______________________________

                   Submitted May 4, 2020 – Decided July 17, 2020

                   Before Judges Moynihan and Mitterhoff.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Camden County, Docket No. L-3013-11.

                   Richard B. Supnick, attorney for appellant.
            Helmer Conley & Kasselman, PA, attorneys for
            respondent (Michael D. Miller, of counsel and on the
            brief).

PER CURIAM

      In this partnership dissolution matter, defendant Rudolph Anthony

Mickles appeals from two March 15, 2019 orders.            The first order denied

defendant's motion for a determination of the distribution of partnership assets

pursuant to the dissolution provisions of the New Jersey Uniform Partnership

Act (UPA), N.J.S.A. 42:1A-39 to -45. The second order granted plaintiff Robert

Zieniuk's motion to require the court-appointed receiver, Robert A. Gleaner,

Esq., to turn over the partnership assets to plaintiff's attorney, Michael D.

Miller.1 In deciding these motions, the judge acknowledged that defendant's

argument may have merit but concluded that because of the substantial delay in

raising the issue, the doctrine of laches barred its consideration.

      This matter has a long and tortured history.         In 1998, plaintiff and

defendant formed a partnership to rent property to various tenants.          When

plaintiff asked defendant for his share of the rental profits and an inspection of

the accounting records, defendant claimed they had never been partners.

1
  Miller is also a third-party defendant, but his role as a third-party defendant is
less significant, so we refer to him as plaintiff's attorney.
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Litigation began in 2008, and in 2012, plaintiff was awarded rental income, his

attorney was awarded fees, and the parties agreed to dissolve and liquidate the

partnership. Litigation has continued since then, and the matter is now before

us after the receiver liquidated the partnership property. Having reviewed the

history of this matter, and in light of the applicable law, we affirm.

      We discern the following facts from the record. In 1998, plaintiff and

defendant became partners in a real estate venture, and they agreed to share

equally in the partnership's profits and losses. Their agreement required that

"[t]he partnership . . . maintain adequate accounting records" and granted each

partner the right to access and inspect "[a]ll books, records, and accounts of the

partnership . . . at all times."

      The partnership property consisted of a building that was purchased for

$36,000 and subsequently used as a rental property. According to plaintiff, he

contributed $4000 toward the purchase, and he and his family performed

significant work to renovate the property, but the property was titled in

defendant's name because plaintiff had bad credit.

      On June 27, 2007, plaintiff's attorney wrote to defendant, stating that

plaintiff had not received any funds representing his proceeds from the

partnership and requesting that defendant provide an accounting of the

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                                        3
partnership's records. When defendant failed to respond, plaintiff filed his first

lawsuit against defendant, in the Special Civil Part. After a trial on September

15, 2008, Judge Michael J. Kassel found that a 50/50 partnership existed , and

the partnership property was then worth at least $66,000 and had generated at

least $30,000 in profits. He awarded plaintiff $15,000 and stated, "That ends

the relationship.   That's the jurisdiction limit of the Special Civil Part."

Defendant paid plaintiff the $15,000.

      In August 2009, plaintiff filed his second lawsuit against defendant, in the

Special Civil Part, again seeking an order to allow an inspection of the

partnership's accounting records and to award plaintiff his share of the rental

profits.   Defendant answered and filed a counterclaim, alleging frivolous

litigation and seeking damages of $15,000, plus attorney's fees. According to

several letters plaintiff's attorney wrote to defendant, the parties conferenced

with Judge Lee B. Laskin in June 2010, where plaintiff agreed to dismiss his

complaint, and the parties agreed to dissolve the partnership by obtaining a

property appraisal and equitably dividing the partnership assets. Plaintiff's

attorney followed up with defendant several times but received no response.

      In June 2011, plaintiff filed his third lawsuit, which eventually led to the

present matter on appeal. Plaintiff again sought an order allowing an inspection

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of the partnership's accounting records and awarding him fifty percent of the

partnership's rental profits, and he requested that defendant obtain a property

appraisal. He also asked for a court-ordered partnership dissolution. Defendant

answered, continuing to deny the partnership's existence, and he filed a third-

party complaint against plaintiff's attorney, primarily alleging malicious abuse

of process.2

      On August 6, 2012, an arbitrator awarded plaintiff $29,900 in rental

income, for the period of October 2008 through July 2012, and he awarded

plaintiff's attorney $5000 in fees for defendant's frivolous third-party complaint.

He also ordered the parties to dissolve the partnership, liquidate the partnership

assets, and divide the proceeds equally. Neither defendant nor his attorney

appeared at the hearing because his attorney calendared the wrong date.

      On September 14, 2012, defendant moved to set aside the arbitration

award and requested a trial de novo, claiming plaintiff failed to exchange

arbitration statements and arguing that an earlier judgment had satisfied

plaintiff's claim.

2
  To assist in these filings, defendant hired a new attorney to represent him, and
this representation continued through some time in 2017, at which point
defendant hired his current attorney.

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      A week later, plaintiff moved to confirm the arbitration award, and on

November 16, 2012, Judge Louis R. Meloni confirmed the award and ordered

the parties to obtain a property appraisal and list the property for sale. The judge

explained that defendant failed to timely request a trial de novo and added that

in filing his third lawsuit, plaintiff was not getting "three bites of the apple."

Defendant appealed, but his appeal was dismissed because he failed to file a

timely brief.

      After confirmation of the award, plaintiff's attorney wrote to defendant

three times, requesting that he pay plaintiff and plaintiff's attorney in accordance

with the November 16, 2012 order, complete the required information subpoena,

and provide plaintiff's appraiser with access to the property. Neither plaintiff

nor his attorney received a response, so on October 23, 2013, plaintiff moved to

hold defendant and his attorney in contempt of court. On November 8, 2013,

Judge Anthony M. Pugliese granted plaintiff's motion and further awarded

plaintiff an additional $10,400 in rental fees, awarded plaintiff's attorney $1500

in fees, and imposed sanctions against defendant's attorney for $1000.            He

denied defendant's motion for reconsideration in January 2014.

      Defendant appealed, and we reversed. Zienuik [sic] v. Mickles, No. A-

2385-13 (App. Div. May 12, 2015). We acknowledged

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                                         6
            the level of frustration experienced by plaintiff's
            counsel and the court as to defendant's and [his
            attorney's] failure to appear at the arbitration, file a
            timely trial de novo, oppose the contempt motion,
            follow through with the appeal from the November 16,
            2012 order, and otherwise demonstrate reasonable
            efforts to appraise the building for sale.

            [Id. at 2.]

However, we found that the judge did not comply with the rules for summary

contempt proceedings, so we reversed the contempt order. Id. at 1, 2-3.

Similarly, we reversed the sanctions and fees awards because the judge did not

state his legal conclusions on the record. Id. at 4. We also set aside the award

of additional rental fees, as there was insufficient evidence to support the award.
Ibid. Lastly, we addressed another meritless argument raised by defendant:

            Finally, as to the third argument, raised for the first time
            on this appeal, that res judicata barred the court from
            entering the November 16, 2012 order confirming the
            arbitration award, the soundness of the November 16,
            2012 order is not before us. The time to make that
            argument was before the court in the second lawsuit or
            on appeal from that order. Although defendant had
            initially appealed from the November 16, 2012 order,
            he failed to file a brief resulting in dismissal of that
            appeal.

            [Id. at 5.]

      On May 27, 2015, plaintiff filed a notice of motion for post-judgment

discovery, again requesting access to the property and the partnership's

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                                         7
accounting records.       Defendant filed a cross-motion for relief from the

November 16, 2012 order confirming the arbitration award, under Rule 4:50-1.

On June 26, 2015, Judge Pugliese granted plaintiff's motion.

      Defendant appealed, and we affirmed. Zieniuk v. Mickles, No. A-5498-

14 (App. Div. Jan. 18, 2017). Because defendant moved for relief from the

November 16, 2012 order "about three years" after Judge Meloni confirmed the

arbitration award, we concluded he was time-barred from seeking relief. Id. at

3. Nevertheless, we rejected his contention that the arbitration award conflicted

with the September 2008 judgment:

            The judgments do not conflict. The first lawsuit's
            $15,000 judgment represented plaintiff's interest in the
            building, not rental income from the building, and it
            was unclear whether it formally dissolved the
            partnership. Because of the ambiguity, in June 2010,
            the parties mutually agreed that they would dissolve the
            partnership and obtain an appraisal of the property in
            exchange for the dismissal of the second lawsuit
            without prejudice.

            Plaintiff filed his third lawsuit due to defendant's failure
            to appraise the property. The court ordered arbitration
            and the arbitrator formally dissolved the partnership,
            awarded plaintiff $29,900 in rental income, and
            awarded plaintiff's counsel $5000. The arbitrator did
            not award value in the property, but awarded the rental
            income generated.

            [Id. at 4.]

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      On February 2, 2017, plaintiff filed a notice of motion for appointment of

a receiver to collect the November 16, 2012 judgment. On March 20, 2017,

Judge Pugliese appointed a receiver and ordered defendant to pay all costs the

receiver incurred. On October 27, 2017, Judge Pugliese granted the receiver the

authority to retain a property management company and real estate agent and to

sign any documents necessary to sell the property. He also awarded plaintiff

damages for lost rentals and plaintiff's attorney for legal fees, and he sanctioned

defendant's attorney. Defendant retained his current attorney and appealed.3

      In December 2017, the parties met with the receiver, and defendant began

to provide documentation regarding leases, violation notices, and property

expenses. Defendant initially arranged the property listing, but in September

2018, the receiver terminated that listing and relisted with another realtor. In

November 2018, he sold the property to a third party for about $90,000. The

sale generated net proceeds of $84,320.20, before accounting for the receiver's

fee of $7800.

3
   Pursuant to a March 19, 2018 consent order signed by Judge Pugliese, the
parties agreed to void only the provision in the October 27, 2017 order that
increased the judgment for additional rent, fees, and sanctions, and they agreed
to dismiss the appeal.
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                                        9
      On January 16, 2019, plaintiff moved to compel the receiver to turn over

the net proceeds from the property sale to plaintiff's attorney. Plaintiff only

served notice upon the receiver. Two days later, plaintiff's attorney wrote to

Judge Pugliese, requesting approval of a revised order agreed to by plaintiff and

the receiver, and the judge signed the order. The same day, defendant learned

of the order and plaintiff's motion and wrote to the judge, explaining that he,

plaintiff, and the receiver agreed that the matter should be heard before entry of

an order. The judge vacated his January 18 order.

      On February 5, 2019, defendant filed a cross-motion to settle the

partnership accounts and determine the proper distribution of the net proceeds

from the property sale in accordance with the dissolution provisions of the UPA.

He attached an Excel spreadsheet displaying a profit and loss statement for the

property, and he provided various loan documents and invoices for contributions

made to maintain and repair the property.

      On March 15, 2019, Judge Pugliese heard oral argument and issued an

oral decision. He acknowledged defendant's argument that much of the delay

over the years was caused by his former attorney. However, he explained, "[A]t

some point in time it is the litigant's case and the litigant has a responsibility,"

especially after defendant's former attorney was no longer representing him.

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                                        10
Further, defendant "showed himself to be an uncooperative sort that was going

to ignore discovery requests, ignore orders demanding discovery requests, [and]

ignore direct orders of the [c]ourt." The judge could not "separate [defendant's]

failures to provide information from his attorney[']s."

      "[W]hile [defendant's current attorney] has come forward and done a

professional job in terms of presenting at this late date what [defendant]

indicates are his contributions to the property, . . . it is late." Had defendant

provided the documents sooner, "they would have been subjected to the scrutiny

of the discovery process." However, defendant chose to wait until a time when

it might be difficult or impossible to challenge the veracity of the documents.

The judge indicated, "[I]t's almost as if [defendant] tried to pull off some

ingenious plan." Therefore, "this [was] precisely the type of case where the

equitable doctrine of laches attaches." Although defendant "very well may have

had legitimate credits, legitimate repairs made, [and] legitimate expenses, things

that would have gone into his capital account," it would be inequitable to allow

him to benefit from his constant resistance and obstruction. The judge added

that "it [was] interesting that [defendant's current application] only happened

. . . at the point in time when the property was finally sold and the money was

sitting in the bank account."

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                                       11
      Accordingly, the judge denied defendant's application for a determination

of distributions in accordance with the UPA and ordered the receiver to turn

over the appropriate funds to plaintiff. Plaintiff was awarded $77,060.10 4 and

the receiver was awarded his $7800 fee. Because these amounts exceeded the

net proceeds of the property sale, defendant was required to pay plaintiff the

balance of $539.90. The judge signed two orders later that day, memorializing

his decision. This appeal ensued.

      On appeal, defendant argues that his delay in seeking the relief at issue is

excusable due to "the apparent malfeasance" of his former attorney; the length

of time matters were pending in the Appellate Division, one of which was

decided in his favor; and plaintiff's various filings. He contends that plaintiff

has not suffered harm from any delay because defendant alone continued to

maintain the property, even though plaintiff was a partner and therefore was

responsible for half of the costs. Additionally, he argues that he "was not time

barred from asserting his rights to distribution in accordance with the dissolution

statutes" because he provided documents to plaintiff and the receiver when the

4
  This amount equals fifty percent of the net proceeds from the property sale
plus the $29,900 and $5000 previously awarded to plaintiff.

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                                       12
property was turned over to the receiver, and he sought reimbursement for the

expenses related to winding up the partnership soon after they were incurred.

      As an equitable doctrine, "[w]hether laches should be applied depends

upon the facts of the particular case and is a matter within the sound discretion

of the trial court." Fox v. Millman, 210 N.J. 401, 418 (2012) (alteration in

original) (quoting Mancini v. Township of Teaneck, 179 N.J. 425, 436 (2004)).

Therefore, we review its application for an abuse of discretion. See id.

      The doctrine of laches is "invoked to deny a party enforcement of a known

right when the party engages in an inexcusable and unexplained delay in

exercising that right to the prejudice of the other party." Knorr v. Smeal, 178
N.J. 169, 180-81 (2003). "[L]aches is not governed by fixed time limits but

instead relies on analysis of time constraints that 'are characteristically

flexible.'" Fox, 210 N.J. at 418 (citation omitted) (quoting Lavin v. Bd. of Educ.,

90 N.J. 145, 151 (1982)). A judge may properly apply laches "when the delaying

party had sufficient opportunity to assert the right in the proper forum and the

prejudiced party acted in good faith believing that the right had been

abandoned." Knorr, 178 N.J. at 181. The judge should consider "the length of

the delay, the reasons for the delay, and the 'changing conditions of either or

both parties during the delay.'" Ibid. (quoting Lavin, 90 N.J. at 152).

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                                       13
      With these principles in mind, we are convinced that the record supports

Judge Pugliese's decision to apply the doctrine of laches, precluding defendant

from arguing he was entitled to a distribution of the net proceeds from the

property sale in accordance with the dissolution provisions of the UPA.

      In 2008, plaintiff sought judicial relief to gain access to the partnership's

accounting records and obtain the proceeds for interest in the partnership. Two

years later, the parties met with Judge Laskin and agreed to dissolve the

partnership and equitably divide the partnership assets. At that point, defendant

was certainly aware that distribution of the partnership assets would involve a

review of the partnership's accounting records. However, even if defendant did

not understand that to be the case at that time, he had clear opportunities to raise

the instant issue and provide plaintiff with the partnership records in June 2011,

when plaintiff filed the third lawsuit; in August 2012 at the arbitration; in

November 2012, when Judge Meloni confirmed the arbitration award; and

thereafter, when he appealed the confirmation.

      Any litigation that ensued after the confirmation of the arbitration award

does not excuse defendant's delay.           For almost a year after the award

confirmation, plaintiff's attorney requested that defendant comply with the terms

of the award. Defendant's failure to do so prompted plaintiff to file the contempt

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                                        14
motion. Although we reversed the part of the order regarding the contempt

issue, we decided it on procedural grounds and acknowledged Judge Pugliese's

frustration with defendant and his attorney. We further addressed defendant's

attempt to dispute the arbitration award, explaining that defendant had waited

too long to raise the issue. Nevertheless, defendant filed another motion seeking

relief from the arbitration award. The judge denied his request, and we affirmed

because defendant wait almost three years to file this motion.

      At no point during these proceedings did defendant provide plaintiff

access to the partnership records. After plaintiff filed the third lawsuit, again

seeking access to the partnership records, defendant waited more than six years

to begin providing some of the requested records. We perceive no reasonable

explanation for this delay, and we are not persuaded by his reliance on his former

attorney's conduct as an excuse.

      As a result of this unjustified delay, plaintiff has been prejudiced. "The

primary factor to consider when deciding whether to apply laches is whether

there has been a general change in condition during the passage of time that has

made it inequitable to allow the claim to proceed." Nw. Covenant Med. Ctr. v.

Fishman, 167 N.J. 123, 141 (2001). Plaintiff has waited years for defendant to

start complying with court orders. We agree with Judge Pugliese that it would

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                                       15
be difficult for plaintiff to verify the accuracy of any of defendant's documents.

The ability to scrutinize these documents has been severely diminished because

of the significant passage of time.

      To the extent we have not addressed defendant's remaining arguments, we

conclude they are without sufficient merit to warrant discussion in a written

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

      Affirmed.

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