Court Opinion

ID: 4639156
Source: CourtListenerOpinion
Date Created: 2020-12-03 15:14:33.439443+00
Date Added: 2024-06-11T07:58:54.226965
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NOT FOR PUBLICATION WITHOUT THE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-3899-18T4

KYLE J. FUNSCH,

          Plaintiff-Appellant,

v.

PROCIDA FUNDING, LLC,
WILLIAM PROCIDA,
and JOHN MULLANE,

          Defendants-Respondents.

                   Argued November 2, 2020 - Decided December 3, 2020

                   Before Judges Sabatino, Currier and DeAlmeida.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Bergen County, Docket No. L-7221-16.

                   Leonard Feiwus argued the cause for appellant
                   (Kasowitz Benson Torres LLP and Michael J. Bowe, of
                   the New York bar, admitted pro hac vice, attorneys;
                   Leonard Feiwus, Michael J. Bowe and Lauren
                   Tabaksblat, on the brief).

                   Leo V. Leyva argued the cause for respondents
                   (Cole Schotz PC, attorneys; Leo V. Leyva and Jason
                   Melzer, of counsel and on the brief; Wendy F. Klein,
                   Krista L. Kulp and Elizabeth A. Carbone, on the brief).
PER CURIAM

      This appeal involves a dispute between two men about a business

relationship gone awry. The relationship began in 2009 when co-defendant

William "Billy" Procida hired plaintiff Kyle J. Funsch to work at Procida's real-

estate investment company, Procida Funding, LLC ("the LLC" or "the

Company"). Procida was the sole member of the LLC. In the ensuing years,

Funsch was mentored by Procida, and handled many transactions that raised

millions of dollars.

      In May 2011, Procida sent an email to Funsch and another employee, co-

defendant John Mullane, that is the heart of this dispute. As interpreted by

Funsch, the 2011 email granted Funsch and Mullane the right to each receive a

12.5% share of the Company's net earnings, and allegedly promised them an

ownership share of the business. However, the LLC's Operating Agreement was

never amended to specify that Funsch had become an authorized member of the

LLC, nor did it detail the terms of his alleged membership.

      Eventually the relationship between Procida and Funsch deteriorated, and

Funsch stopped working for the Company in December 2015. Funsch claimed

an equity interest in the LLC and a right to certain additional compensation,

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                                       2
which Procida denied. According to Funsch, Procida also made disparaging

statements about him to business associates and clients.

      In his complaint in the Law Division, Funsch asserted that, based on the

May 2011 email and other conduct by Procida holding him out at times as a

"partner" or "principal," he is entitled to an equity share in the LLC as well as

additional unpaid compensation. Funsch also sought damages from Procida for

alleged defamation.

      After a non-jury trial, the court found Funsch's claims lacking in merit.

The court rejected his assertion of membership status in the LLC, finding the

May 2011 email and the other evidence inadequate to make Funsch a member

under the applicable LLC statutes and the Operating Agreement.

      The court adopted Procida's trial testimony explaining the course of

events, and concluded the parties never achieved a meeting of the minds with

sufficiently definite terms to create an enforceable agreement.       The court

particularly noted that Funsch never agreed to or signed any of the multiple

proposed amendments to the Operating Agreement that Procida presented to

him. Additionally, the court dismissed Funsch's defamation claims as a matter

of law, and also determined he was not owed any further compensation.

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                                       3
      On appeal, Funsch variously argues: (1) the case should be reversed and

remanded for a jury trial, which the trial court improperly denied; (2) he should

have been declared an equity owner of the Company; (3) he is entitled to an

unpaid portion of the Company's profits from 2015; (4) the court should not have

excluded his damages expert's supplemental report; and (5) his cause of action

for defamation should be revived.

      For the reasons to follow, we affirm the court's judgment in favor of

defendants.

                                       I.

      The record reveals the following relevant facts, allegations, and

procedural history.

      The LLC

      William Procida created Procida Funding, LLC in 2008 and was the sole

member at the time of its creation. The LLC is the fund manager for the 100

Mile Fund, a private equity investment enterprise launched in 2011. The 100

Mile Fund specializes in bridge, construction, mezzanine, and preferred real

estate equity investments.

      The LLC is governed by an operating agreement dated December 16, 2008

(the "Operating Agreement"). Pertinent to this ownership dispute, Section 1.8

                                                                         A-3899-18T4
                                       4
of the Operating Agreement specifies that a new member may be admitted to the

LLC upon "the unanimous written consent of [its] Members." Because William

Procida was the sole member of the LLC, his personal consent was required to

admit any new members.

      The Business Relationship Between Funsch and Procida

      The business relationship between Funsch and Procida commenced in

2009. Funsch, who is much younger than Procida, had recently launched an

internet-based real estate company.

      Between 2009 and 2011, Funsch, working with Mullane and under

Procida's tutelage, developed and implemented a residential "fix and flip"

program for the Company.

      The May 13, 2011 Email

      On May 13, 2011, Procida sent an email jointly to Funsch and Mullane

that is at the core of this litigation. The email contains the subject line, "my new

partners," and states the following:

            [Y]our work to date has been admirable and your skill
            sets improve daily. I am proud to work with you both
            (despite that I beat you to the office today) therefore I
            am making you partners. [T]he terms of which are as
            follows: for as long as you work here, you will each
            own and be entitled to 12.5% of the combined
            companies [sic] net earnings. [Y]ou will receive a draw
            against those earnings . . net income will be calculated

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                                         5
            by all income less all expenses exclusive of interest
            income on my investments. [S]hould either of you
            leave the firm you will forfeit any rights to future
            earnings or ownership. [S]ince talk is cheap I wanted
            to put something in writing, so we can consider this
            legally binding. [A]s we've got many things to do save
            this email.

            [(Emphasis added).]

The email continued:

            [I]f I die or become disabled it is my wish that you guys
            own 50% and send the balance to my kids. [Y]ou are
            now to refer to yourselves as my partners. [W]e will
            fine tune this over time. [W]e will do a press release to
            announce this shortly.

            [(Emphasis added).]

      Funsch argued this email constituted "unanimous written consent" by

Procida to make Funsch an equity owner in the Company. In opposition, Procida

argued the May 2011 email was merely a promotion of Funsch to a salaried

employee who could hold himself out publicly as a "partner" in the business , but

only as long as Funsch worked at the Company.

      It is undisputed that in the weeks following the May 2011 email, the

Company issued multiple public announcements describing Funsch and Mullane

as "partners." The announcements appeared on the Company's website and in

the June 6, 2011 issue of Institutional Investor News, a trade publication.

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                                        6
      As Procida conceded on cross-examination at trial, Funsch was also held

out to investors, lenders, regulators, and the public on several occasions as a

"principal" or "partner."   For example, these statements appeared in the

following publications, filings, and communications:

        • SEC Form D signed by Procida dated January 9, 2012
          identifying Funsch as a "principal" of Procida Funding;

        • Procida Funding's website, listing Funsch as a
          "Principal";

        • a Final Private Placement Memorandum for the 100
          Mile Fund, LLC identifying Funsch as a "principal at
          Procida Funding";

        • a May 18, 2011 email from Procida to Gregory R.
          Haworth, attorney for Procida Funding, stating: "[J]ohn
          and [K]yle should be noted as partners in the fund
          manager";

        • a September 22, 2012 email from Procida to a client,
          Salvatore Pappalardo, stating "Kyle is a partner who has
          successfully closed over 200 million in the last [three]
          years. With several repeat customers. . . . If u can’t
          deal with [K]yle I’m sorry but that’s how we run our
          company";

        • an October 4, 2012 email from Procida to Carl Schwartz
          describing "Kyle Funsch and John Mullane. Both
          partners" as "[m]y new [Z]urlini and [Mc]clain. Great
          guys," thereby drawing an analogy to Procida's former
          equity partners in Palisades Financial, Procida’s former
          company; and

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                                      7
         •     a June 8, 2015 business magazine story entitled "Urban
              Renewal: The money men," identifying Funsch as one
              of the Company's "principals" in an interview with
              Funsch, Procida, and Mullane, and in which Procida
              personally described Funsch as "the partner in charge of
              originations."

      Defendants underscored at trial that the May 2011 email is devoid of any

references to "membership," "equity," or "ownership interest" in the Company

itself. They further stressed the email lacks any specific terms and/or conditions

related to: (1) loss sharing; (2) capital contributions; (3) work schedule; (4)

consent rights; (5) amending the books and records or other Company

documents; and (6) the Company's debts.

      As further counterproof, defendants cited to an email sent by Procida on

July 26, 2011 to Funsch, Mullane, and third parties, asserting that Procida owned

"100%" of the Company and that "[J]ohn and [K]yle are cash flow partners."

[(Emphasis added).]

      Defendants also stressed that Funsch never received a Schedule K-1 or

any membership certificates; made any capital contributions to the Company;

executed any amended operating agreement for the Company; shared in the

Company's losses; or managed the Company or possessed any voting rights of

any nature.

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                                         8
      In another email chain on February 8, 2012 between Funsch and Ali Betts,

the controller of the Company, Betts stated that Funsch needed an "official

partnership agreement with [Procida], not an email, not today you are his

partner[], tomorrow his junior partner[], then his employee[], then his kid[] . . .

a real agreement with 3 . . . count them 1 2 3 signatures from all parties!"

[(Emphasis added).] Funsch responded:

            I will speak for myself in saying that I will not sign
            documents, represent the company nor my family when
            I have [zero] say. The one thing at Palfi [Procida's
            former company] that [Procida] attributes to failure was
            control, that isn't changing this time around.
            Sometimes a little input is helpful but it's extremely
            difficult when you are treated as a pawn in a game of
            chess.

            [(Emphasis added).]

Later, in his testimony at trial, Funsch acknowledged that he never sought a

"partnership agreement" from Procida.

      In December 2012, Procida raised the revenue-sharing percentage earned

by Funsch and Mullane from 12.5% to 15% each. Procida wrote an email on

December 20, 2012 to, among others, Procida’s attorney, stating, "I want to

amend the [P]rocida [F]unding operating agreement to admit [K]yle. [A]nd

[J]ohn as [straight] up 15% partners. Effective [J]an. 1." As instructed by this

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                                        9
email, Funsch and Mullane were thereafter compensated at the rate of 15% of

net earnings.

      As we have already noted, the parties never executed an amended

Operating Agreement. Between 2012 and 2015, a series of four draft proposed

amendments were circulated between Procida and Funsch, along with other

persons. But none of these proposed amendments were signed or agreed to by

Funsch.

      In one such proposed amendment, the terms of which were explained in a

June 19, 2015 email from Procida, he made clear that he would still retain

exclusive control over any and all Company decisions. For example, Procida's

exclusive authority would extend to any decision to stop cash flow distributions,

or to remove any "operating manager" from the Company if that individual

performed a so-called "bad boy act." As Procida described in his email, such

"bad boy acts" would include "lying cheating or stealing or violating the

moonlighting clause," and whether such an act occurred would be determined at

his own "sole discretion."

      Funsch did not respond to the June 19, 2015 email from Procida. Indeed,

the only action Funsch appeared to take in connection with the proposed

Operating Agreement amendments was when he forwarded an email to his

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                                      10
mother in October 2015 with Procida's comments about such a proposal. Funsch

wrote his mother, "[Procida] produced an unassignable document then gives

[four] business days [for me] to review and give comments. It took [four] years

to get a document." In her reply, Funsch's mother, who evidently has business

experience, questioned what advantage it would be for Funsch to be a member

of the Company. She suggested to him that he instead "just [get] a contract that

says [he] is entitled to [a rate of] 13.04% [in compensation]."

       The parties disputed the legal significance of the exchange of drafts of

proposed amendments to the Operating Agreement. Funsch argued the drafts

"continued to recognize [his] and Mullane's previously conferred status as

members." By contrast, defendants argued that such proposed amendments

constituted mere negotiations that, only if fully consummated, would elevate

Funsch and Mullane from employees to "partners."

       As support for their position, defendants noted that throughout his time at

the Company, Funsch received W-2s,1 the type of tax form an employee

1
    IRS Form W-2 (entitled "Wage and Tax Statement").
                                                                          A-3899-18T4
                                       11
receives, as opposed to a K-1 form,2 which a partner in a firm typically receives.3

Defendants also pointed out that Funsch "never asked why he was not receiving

a Schedule K-1 for his share of Company profits, despite knowing what a

Schedule K-1 was and having a family accountant at his disposal." Defendants

further noted that, in 2012, Funsch "requested that Procida increase his base

salary." [(Emphasis added).]

      Termination of the Business Relationship Between Funsch and Procida

      The parties sharply disputed at trial whether Procida fired Funsch or

Funsch voluntarily quit. The record is clear that, towards the end of their

business relationship, Funsch and Procida frequently argued in the office.

      The tensions reached an apex on December 17, 2015, when Funsch and

Procida had an altercation.     According to Funsch, he attempted to avoid

escalating the altercation by walking away, but Procida followed him into the

parking lot and "continued to scream" at him. Procida's version was that while

2
   Schedule K-1 (IRS Form 1065, entitled "Partner's Share of Income,
Deductions, Credits, etc.").
3
  Funsch's W-2s reflect he earned $109,038.50 in 2012, $185,577.03 in 2013,
$306,601.16 in 2014, and $282,985.07 in 2015. Funsch testified at trial that he
believed he was entitled to an additional sum of approximately $200,000 for
work he performed in 2015 but was unable to substantiate that full figure. He
presently asserts he is owed a lower figure of $65,638.93 for 2015.
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                                       12
he was "yelling" orders in the office, Funsch stood up and suddenly and

belligerently proclaimed to him, "[D]o you have to talk so damn loud?" and left

the office. Procida recalled he followed Funsch into the hallway to ask what

was going on, to which Funsch responded, "[I]t's your f***ing [C]ompany, do

what you want," and sprinted down to the parking lot. According to Procida, he

followed Funsch to the parking lot, whereupon Funsch jumped into his car and

began to drive away.

        Following the December 17 altercation, according to Procida, Funsch's

resignation was thereafter accepted. Procida further asserts in his brief, "out of

an abundance of caution, a text message [4] was sent to Funsch confirming that

he was no longer associated with the Company."

        Funsch admitted that he drove away from Procida after the altercation, but

noted there is no evidence that he ever tendered his resignation. Funsch argues

in his brief that Procida sent the post-altercation text message "purporting to fire

4
    The text message states:

              I think that this relationship is over. We will discuss an
              unwind tomorrow. No need to come back to the office
              now or ever[.] Leo [his attorney] will be sending u
              formal notice. I ask that u don't go to the office today
              or tomorrow. We will arrange for u to get your personal
              belongings. Pls don't make me have u removed.
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                                         13
[Funsch], even though he lacked the authority to do so under the 2008 Operating

Agreement." That argument presumes that Procida had made Funsch a member

of the LLC before the altercation.

      Events After Funsch's Departure

      According to Funsch's testimony, he has been unemployed since leaving

the Company in 2015, aside from a brief foray into starting his own limited

liability company. As of the time of trial, he reportedly had applied to about

four jobs over three years.

      Funsch alleged he has been unable to find work because Procida

"intentionally disparaged and defamed [Funsch's] work performance to, among

others, [Funsch's] colleagues, and prospective investors, partners, and

employers."

      As support for this claim, Funsch cited two emails: one Procida sent the

day after Funsch's departure to the entire staff at the Company, berating their

performance and questioning why he had to perform everyone else's work and

beseeching them to do better. The other email was the previously mentioned

email forwarded by Procida to two of the Company's main investors, with the

following message:

              No need to be alarmed but as my valued friends, trusted
              advisors and my [two] most important investment

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                                       14
            partners I needed u to be aware of the below email
            which is only a small part of why I had to terminate
            [K]yle yesterday which trust me was one of the most
            difficult decisions of my life[.]

      Defendants disputed plaintiff's claim of intentional wrongdoing by

pointing out that a few weeks after Funsch left the Company, Procida "attempted

to assist Funsch to find another job that would have paid $300,000.00 a year."

      The Trial Court's Decision

      After considering the documentary exhibits, the trial testimony of Funsch,

Procida, and other witnesses, and the arguments of counsel, the trial court issued

a fifteen-page written decision on April 15, 2019, ruling in defendants' favor.

      With respect to Funsch's central claim of an ownership stake in the LLC,

the court found the evidence "demonstrated that Mr. Funsch did not have, and

knew he never had, a membership interest in Procida Funding." The court

reasoned that under both the New Jersey Limited Liability Company Act (the

"LLCA"), and the New Jersey Revised Limited Liability Company Act (the

"RULLCA"), a "member" of an LLC is a person who has been admitted as

"provided in and upon compliance with the [LLC's] operating agreement."

N.J.S.A. 42:2B-21(b)(1) (the LLCA provision); N.J.S.A. 42:2C-31(c)(1) (the

cognate RULLCA provision).

                                                                          A-3899-18T4
                                       15
       Here, the sole executed Operating Agreement clearly established that

Procida, the Company's founder, was the sole member of the LLC. Under the

express terms of the Operating Agreement, Funsch could only be admitted as a

member with Procida's "prior unanimous written consent." The court found that

Procida "did not consent, in writing or otherwise, to Mr. Funsch's admission as

a member."

       The court recognized the series of four proposed amendments to the

Operating Agreement would have admitted Funsch as an LLC member "if

finalized and executed," but that he "rejected each and every [such] draft

agreement." The court added that "[t]he existence of ongoing negotiations

concerning Mr. Funsch's admission, demonstrates that the parties had never

come to any agreement." The court insightfully added its perception that the

various communications between the parties about the draft agreements

evidenced "a reluctance by [Funsch] to consummate an agreement, where

instead of just receiving income from [the Company], he would potentially face

liability."

       The court flatly rejected Funsch's contention that the May 2011 email

sufficed to imbue him with the legal status of a member of the LLC. As the

court observed, the email "does not state that it is amending or supplementing

                                                                        A-3899-18T4
                                     16
the operating agreement." The court further noted the email "lacks core, basic,

and material terms relating to Funsch's relationship with Procida Funding" that

would be expected to be included in an amendment admitting a new member.

For example, the court pointed out the email omitted any provisions addressing

such topics as loss sharing, capital contributions, and consent rights.

      The court further underscored that the May 2011 email promised Funsch

a percentage of the Company's net earnings only "for as long as [he] work[ed]

[there]," and that "should Funsch leave the firm [he] will forfeit any rights to

future earnings or ownership."     The court agreed with defendants that the

message was "simply an email notifying Mr. Funsch about his promotion and

altering the manner in which [his] compensation was calculated." The court also

found significant that the May 2011 email was thereafter "clarified" by Procida's

July 26, 2011 email, which specifically referred to Funsch and Mullane as "cash

flow partners," and not members. The court further noted that Funsch confirmed

he was paid as a W-2 employee and did not receive any K-1 forms reflecting

any owner distributions.

      In addition, the court rejected Funsch's argument that the various press

announcements and other statements Procida made to third parties referring to

Funsch and Mullane as "partners" and "principals" were sufficient to grant them

                                                                          A-3899-18T4
                                       17
the legal status of members in the LLC. The court cited Procida's testimony that

he imprecisely used the term "partner" and similar words "to inveigh apparent

authority for negotiation purposes, but not to confer [upon Funsch and Mullane]

LLC membership status."

      The court summarized its rejection of plaintiff's ownership claim as

follows: "At best the evidence only demonstrates that Mr. Procida was

considering admitting Mr. Funsch and that there were ongoing negotiations over

same." More pointedly, the court characterized Funsch's claim of ownership as

"absolute folly," and that "any claim [he] somehow thought he was a member of

the LLC or somehow entitled to be a member is entirely fallacious."

      The court further determined in its findings of fact that Funsch had

voluntarily resigned from the Company when he walked off the premises in

December 2015 and did not return. Because of that voluntary departure, Funsch

was not entitled to any more payment from the Company's earnings for 2015,

consistent with the conditions set forth in the May 2011 email.

      With regard to plaintiff's defamation claim, the court acknowledged that

at times Procida used coarse and sometimes profane language to criticize Funsch

and other employees of the Company. The court also acknowledged that Procida

"clearly is a hard-driving real estate entrepreneur," and that in this "highly

                                                                        A-3899-18T4
                                      18
stressed . . . business milieu," Procida "would scream and be abusive." Even so,

the court found no evidence that Procida had defamed Funsch to others.

      The court determined in this regard that an August 11, 2015 email Procida

sent to John Newman, which contained a line saying that "[m]y guys suck," did

not identify Funsch or any another individual personally. In addition, the court

found that a long email Procida sent to Company staff the day after Funsch's

departure, alluding to a previous "famous blow out" with Funsch, did not rise to

actionable defamation. Further, the court rejected Funsch's claim that a private

text message Procida sent to Funsch about this litigation and disclaiming

liability was likewise not a viable basis for a defamation claim.

      On the whole, the court determined that Procida's critiques of Funsch's

work amounted to "non-actionable statements of opinion." The court further

noted that Funsch had not produced at trial any witness who received or had

been affected by the allegedly defamatory statements, or any proof that the

statements were harmful to Funsch. The court rejected Funsch's theory that the

statements were so pernicious as to be defamatory per se.

      The present appeal followed.

                                                                         A-3899-18T4
                                      19
                                          II.

        We first address Funsch's argument that he was unfairly denied the

opportunity to have his claims tried by a jury. In approaching that issue, we

recognize that Funsch included a jury demand with his complaint in accordance

with Rule 4:35-1(a).

        We are mindful that during a colloquy with the court on March 3, 2017,

when the attorneys appeared that day to argue a defense motion to dismiss the

complaint, the lawyers and the judge mentioned on the record that a jury trial

had been requested. At that time, the judge stated he anticipated that equitable

facets of the case would be decided by the court after a jury first decided "the

legal issues[,] which would be contract or – or defamation."

        Nevertheless, for reasons that are not clear to us from the record, the trial

court's docket entries at some point classified this lawsuit as a non-jury case,

despite the jury demand accompanying the complaint. This apparently led to

the case being assigned a trial date for a non-jury proceeding in early November

2018.

        On October 12, 2018, counsel appeared for oral argument on defendants'

motion for summary judgment.            At that motion argument, Funsch was

represented by a different partner of the law firm because the partner's colleague

                                                                             A-3899-18T4
                                         20
who had been primarily handling the case was in trial on another matter. During

the course of that October 2018 proceeding, which was more than eighteen

months after the March 2017 hearing, the following discussion took place about

whether the case would be tried by a jury:

            THE COURT: Well shouldn't -- now let's cut to the
            chase. Shouldn't we wait to hear the [evidence of an
            alleged creation of an ownership interest] in court? We
            have a trial date, a bench trial, on 11-13-2018 and then
            we can find out if [such a right] ever really was really
            [e]nunciated.

            DEFENSE COUNSEL: Absolutely not, Your Honor.

            THE COURT: Okay.

            DEFENSE COUNSEL: Because the undisputed facts
            that he was never listed as an owner on the tax returns,
            never insisted he was an owner --

            THE COURT: Well, it will be a real short trial then,
            right?

            DEFENSE COUNSEL: But that's not what the standard
            is here.

            THE COURT: Okay.

            [(Emphasis added).]

The argument then focused on the May 2011 email:

            DEFENSE COUNSEL: The e-mail says what it says,
            it's not a matter -- it's not a matter for a jury.

                                                                       A-3899-18T4
                                      21
            THE COURT: Well, I have to find out if he left [the
            Company] or not even, don't I?

            DEFENSE COUNSEL: He left, he's not there.

            [(Emphasis added).]

A few minutes later, plaintiff's counsel, who had not previously appeared in the

case, rose to present his opposition to defendants' summary judgment motion:

            PLAINTIFF'S COUNSEL: I had to parachute into this
            case about a month ago because [my partner], who has
            been taking lead on it has been handling it for a couple
            of years, is trying the case in Morristown and in fact, I
            think she's waiting for a jury today. So you know, I
            apologize that she couldn't be here --

            THE COURT: Yeah because we -- by the way,
            November 13th is the main event, we're not cancelling
            that.

            PLAINTIFF'S COUNSEL: Yeah, I --

            THE COURT: When I write down a trial day on a
            complex commercial date, that's the date we're going,
            it's a done deal, unless you lose your motion today.

            PLAINTIFF'S COUNSEL: Right.

            THE COURT: So tell me –

            PLAINTIFF'S COUNSEL: Well, Your Honor, first of
            all --

            THE COURT: -- about facts.

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                                      22
PLAINTIFF'S COUNSEL: -- we do welcome that date
and we're pleased that we're finally getting an
opportunity. You did mention, though, that it was a
bench trial. We do have a jury demand on the front
page of our complaint. So --

THE COURT: Well, it's been listed as no jury for the
entire time. It's --

PLAINTIFF'S COUNSEL: Well, there's a -- there is a
jury demand in our complaint, Your Honor.

THE COURT: I don't know about that. We put this
down as a non-jury trial forever.

DEFENSE COUNSEL: That's our understanding too,
Your Honor.

PLAINTIFF'S COUNSEL: I don't know, I think that's
an --

THE COURT: So you can try to figure out how you can
now change it to a jury trial but it's not going to happen,
I don't think.

PLAINTIFF'S COUNSEL: Your Honor, if you look at
page 12 of our complaint --

THE COURT: I'm not looking at page 12 of your
complaint. This thing has been marked as a non-jury
case. It was stipulated as that, it was set down as that
and for you to now pull out a complaint at last minute,
as a substitute attorney, and say it's going to be a jury
trial, isn't going to happen.

PLAINTIFF'S COUNSEL: And Your Honor, quite
frankly, quite frankly, as I said, I haven't been working

                                                              A-3899-18T4
                           23
            on it. If there was such a stipulation, I'm not aware of
            it so I apologize.

            THE COURT: And even if there wasn't, that's the way
            this thing has been already carried for the whole nine
            yards.

            PLAINTIFF'S COUNSEL: Right.

            THE COURT: I didn't come up with it because when I
            came up with the whole idea of when we were going to
            do it, that's how I slipped it in. I knew I could do it as
            a non-jury trial and fit it in with the way scheduling is.

            PLAINTIFF'S COUNSEL: Understood and I appreciate
            Your Honor clarifying it for me because I was unaware
            of that but --

            THE COURT: Anyway, tell me the facts.

            PLAINTIFF'S COUNSEL: Certainly.

            [(Emphasis added).]

      Plaintiff's counsel then proceeded to present his arguments opposing the

dispositive motion, and there was no further discussion about the court's clear

plan to try the case without a jury. As it turned out, plaintiff successful ly

convinced the court to deny summary judgment and the case proceeded to a

bench trial on November 13. In the meantime, no one from plaintiff's law firm

wrote the court a letter or filed a motion asking the judge to reconsider his

decision to try the case without a jury.

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                                       24
      Based on what has been presented to us on appeal, the court evidently was

mistaken in several respects about the jury demand. There is no evidence

presented to us of any stipulation of the parties to waive a jury.

      In addition, the judge's observations on October 12, 2018 that the case had

been listed as a non-jury case from its inception are contradicted by the

discussion at the earlier proceeding in March 2017 about using a jury in the case

to decide certain issues. It may well be that, without a transcript 5 to consult, the

judge simply did not remember what was said at the earlier session that occurred

more than a year before, and was relying on the docket's "non-jury" entry. It is

also possible that defense counsel, who personally had not appeared at the March

2017 session, was unaware of those discussions about a jury trial.

      Funsch argues that the court unfairly deprived him of a right to jury trial,

brushed aside his jury request, and afforded his attorney no fair chance to show

that the docket's non-jury designation was mistaken.          He requests that the

evidence and the results of the bench trial be swept aside and the case remanded

for a new trial, this time by jury.

5
 A transcript of the March 3, 2017 proceeding was not prepared until the present
post-judgment appeal.
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                                        25
      In opposition, defendants argue that plaintiff and his counsel waived his

right to a jury trial by acquiescence. They do not assert, however, that there had

been a stipulation with a jury waiver. They note that after the October 12

proceeding, plaintiff did not submit any jury voir dire questions or proposed jury

charges in accordance with Rule 4:25-7 and Appendix XXIII of the Court Rules.

Nor did plaintiff attempt to move for leave to appeal seeking relief from this

court, although we note such interlocutory review would have been

discretionary. See R. 2:5-6.

      It is possible that plaintiff, having succeeded in persuading a judge who

planned to be the factfinder at trial to deny defendants' motion for summary

judgment, could have strategically decided to accept the judge for that role. Or

perhaps, on reflection, the client and counsel might have felt that a swifter trial

date and a less costly trial without the extra time and expense of jury selection,

jury instructions, and deliberations was to their potential benefit. We simply do

not know what, if any, strategic factors may have affected plaintiff's lack of

further action in the intervening four weeks before the bench trial started.

      It is well established that waiver is a "voluntary relinquishment of a known

right" evidenced by a clear, unequivocal, and decisive act from which an

intention to relinquish the right can be based. Sroczynski v. Milek, 197 N.J. 36,

                                                                           A-3899-18T4
                                       26
63-64 (2008) (quoting Knorr v. Smeal, 178 N.J. 169, 177 (2003)). At times, a

waiver may be implied by conduct or acquiescence. Guber v. Peters, 149 N.J.

Super. 138, 140 (App. Div. 1977) (holding that the defendants had waived their

right to a jury trial requested in their initial pleadings by failing to press that

right to the court thereafter). Silence by counsel may be construed in appropriate

circumstances as waiver of a jury. See, e.g., Van Note-Harvey Assocs., P.C. v.

Twp. of E. Hanover, 175 N.J. 535, 541 (2003) (holding that defendants waived

any right to have a jury decide prejudgment interest claims by failing to object

after the court repeatedly made clear that the court would decide that interest

claim post-trial).

      That said, we also recognize the trial judge put plaintiff's counsel, who

was appearing for the first time in the case, in an awkward situation by

mistakenly telling him the case had always been regarded as a non-jury matter

and suggesting, without a contrary word from defense counsel, that there was a

stipulation to that effect. The judge should have afforded counsel a fuller

opportunity to state his concerns on the record after telling him in no uncertain

terms that a jury trial "is not going to happen."

      To be sure, plaintiff's attorney did not voice the words "I object" after the

judge interrupted him, and instead politely thanked the judge for "clarifying" the

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                                       27
topic. Plaintiff argues his counsel made a sufficient attempt to preserve his

opposition to a bench trial under Rule 1:7-2, and that we should deem that

attempt to be a valid continuing objection which preserved his right to appeal.

In this regard, we bear in mind the Supreme Court's observation in Mead v.

Wiley Methodist Episcopal Church, 4 N.J. 200, 205 (1950), that "[c]ounsel is

not required to continuously object or take exception to a [ruling] he deems

erroneous after having made known his objection and clearly stating the grounds

therefor."

      We also appreciate that an attorney in counsel's shoes might have wanted

to avoid possibly antagonizing the court by renewing opposition to a bench trial,

since the judge had made clear there would be no jury and would thus be the

trier of fact. However, we caution that it is wrong to ever presume that a judge

will not abide by his oath and ethical duty to judge the merits of a case fairly,

just because the judge made a certain pretrial ruling on an issue against that

party. See Liteky v. United States, 510 U.S. 540, 550-56 (1994) (observing that

a judge's ability to decide a case fairly should not be impugned simply because

the judge made earlier rulings against that litigant). And, although the judge

had stated his plan to try the case without a jury firmly, we will not presume the

judge would have denied fair consideration to a further application by plaintiff

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                                       28
for relief, particularly if the judge had been presented with a transcript of the

March 2017 proceeding showing what had been discussed earlier, or an

acknowledgment by defendants of that discussion. We will not presume the

judge was incapable of changing course, once apprised of a fuller and accurate

background.

      Given the circumstances, we decline to resolve the thorny question of

whether plaintiff's attorney's comments to the court on October 12 and

subsequent participation in the bench trial amounted to a waiver of the claimed

right to a jury trial. It is unnecessary for us to do so because, upon a closer

assessment of the issues, there was no jury right to be waived on a viable claim.

      The right to a civil jury trial is preserved federally as the Seventh

Amendment to the United States Constitution. Allstate N.J. Ins. Co. v. Lajara,

222 N.J. 129, 141 (2015).      However, the Seventh Amendment guarantee

"extends only to federal trials because the Seventh Amendment has not been

made applicable to the States through the Fourteenth Amendment's Due Process

Clause." Ibid. Thus, "the right to a trial by jury in New Jersey must arise under

either a statute or the state constitution." Ibid. (quoting In re Env't Ins.

Declaratory Judgment Actions, 149 N.J. 278, 292 (1997)).

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                                      29
      As the Court in Lajara noted, New Jersey's constitutional jurisprudence

dictates that the right to a jury trial only applies to causes of action that sound

in law rather than equity, which entails not only looking at whether the remedy

is legal in nature, but also whether the cause of action resembles one that existed

at common law. Id. at 142. Here, Funsch's core contention that he is entitled to

be declared a member of the LLC under the applicable statutes and Operating

Agreement is fundamentally an issue for the court rather than one cognizable as

a common law claim suitable for a jury.

      Our opinion in IMO Indus. Inc. v. Transamerica Corp., 437 N.J. Super.
577, 636 (App. Div. 2014), finding no viable right to a civil trial by jury, is

instructive. In that case, the plaintiff sought a jury trial on certain of its claims

seeking compensatory and punitive damages. Nonetheless, we held that the

original complaint primarily focused on declaratory relief, seeking the court's

aid in defining and fixing the obligations of the defendants pursuant to an

agreement between the parties. Id. at 634. We also noted the damages that the

plaintiff sought were in connection with pending or future obligations of the

defendants. Ibid. Consequently, the case was not one in which a plaintiff had a

right to a trial by jury. As Judge Ashrafi wrote:

             All of IMO's pleadings sought declarations about the
             future obligations of defendants. Any alleged claims of

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                                        30
            bad faith, wrongful abandonment, breach of fiduciary
            duty, or tortious interference stem from whether the
            contractual rights alleged by IMO in fact existed. From
            the outset and throughout the litigation, IMO's
            complaints were mainly equitable.

            [Id. at 634-35 (emphasis added).]

      Similarly here, Funsch's contentions that he had the legal status of an

equity "member" of the LLC are mainly equitable in nature. His claims for

additional monetary compensation are predicated upon a legal assessment as to

whether the parties' course of conduct rises to a level that satisfies the

membership criteria of the LLC statutes (the LLCA and the RULLCA) and the

unamended Operating Agreement. That assessment was based on documentary

evidence, such as the May 2011 email and other written statements, the existence

of which was undisputed. What the parties essentially fought over at trial was

the legal import of those statements.        The assessment of ownership or

membership status inherently involved complex issues of contract law, business

law, and statutory law. Arguably, the only credibility issue at trial concerned

exactly what occurred in December 2015 when the parties had an argument and

Funsch left the building. But that discrete event did not bear upon the core legal

issue of whether Funsch was a member of the LLC.

                                                                          A-3899-18T4
                                       31
      We are cognizant that, in some breach-of-contract cases, it may be

appropriate for a jury to resolve disputed issues of fact, and, as plaintiff's counsel

reminds us, model civil jury charges are available for such cases. But here the

predicate dispute was not about what was said or done, but rather the legal

consequences of the parties' actions and inactions. Those were appropriate

issues for the court to decide, not a jury. If, hypothetically, the court had decided

that Funsch was indeed a member of the LLC with an equity share, then perhaps

the residual dispute over whether Funsch was entitled to further compensation

might have been an appropriate damages issue for a jury.               But no such

membership status was ever established as a matter of law. And, to the extent

that Funsch contends as an alternative claim that he was short-changed in his

2015 payout as a mere employee, that subsidiary issue does not alter the primary

thrust of the case as a whole.

      We do agree with plaintiff that his claim of defamation, had it been viable,

would have been appropriate for a jury. Even so, for the reasons we briefly

discuss in Part IV, the evidence that emerged at trial shows there was no genuine

issue of material fact for a jury to decide because there was insufficient proof of

the legal elements of such a claim.

                                                                              A-3899-18T4
                                         32
      In sum, waiver or no waiver, plaintiff was not deprived of an enforceable

right to a jury trial. There is no need for the case to be tried anew before a jury.

                                        III.

      We turn to the substance of plaintiff's arguments, specifically his

contentions that the trial court misapplied the law and lacked a sufficient basis

in the evidence to conclude he never became a member of the LLC with an

equity interest in the Company. We further consider plaintiff's claim that the

trial court erred in rejecting his claim for additional compensation.

      In assessing these points, we are guided by well-established principles of

appellate review. An appellate court shall "not disturb the factual findings and

legal conclusions of the trial judge unless [it is] convinced that they are so

manifestly unsupported by or inconsistent with the competent, relevant and

reasonably credible evidence as to offend the interests of justice." Seidman v.

Clifton Sav. Bank, 205 N.J. 150, 169 (2011) (quoting In re Trust Created by

Agreement Dated Dec. 20, 1961, 194 N.J. 276, 284 (2008)); see also Anderson

v. City of Bessemer City, 470 U.S. 564, 574 (1985) (noting the trial court's

"major role is the determination of fact"); Rova Farms Resort, Inc. v. Invs. Ins.

Co. of Am., 65 N.J. 474, 484 (1974). We only review de novo the trial court's

                                                                            A-3899-18T4
                                        33
legal determinations. 30 River Ct. E. Urb. Renewal Co. v. Capograsso, 383 N.J.

Super. 470, 476 (App. Div. 2006) (citing Rova Farms, 65 N.J. at 483-84).

      Applying that scope of review, we affirm the trial court's substantive

decision, substantially for the sound reasons set forth in its detailed wr itten

opinion dated April 15, 2019. We need not reiterate that analysis here, as we

are satisfied the court correctly applied the LLC statutes and the Company's

Operating Agreement, and that the court's conclusions have ample support in the

evidence.

      We agree with the trial court that the May 2011 email was simply too

incomplete and indefinite to establish the necessary terms to elevate Funsch to

membership status in the LLC. We also concur that Funsch's admitted steadfast

refusal to execute any of the proposed draft Operating Agreements severely

undermines his claims. We are likewise convinced that the parties' course of

conduct and Procida's imprecise references to Funsch as a "partner" were

insufficient to grant him the legal status of a member. 6

6
  That said, we do note some concern about Procida's representation to the SEC
on the Form D filing stating that Funsch was a "principal" of the LLC, but the
truth and materiality of that representation would be more appropriate for
securities regulators or investors to address, if at all, see 17 C.F.R. §§ 230.501
and 230.503(a) (concerning Form D disclosure requirements), and does not
control the internal relationships of these parties under the LLC statutes. We do
not make any ruling here about that issue.
                                                                          A-3899-18T4
                                       34
      We reject plaintiff's argument that the court focused unduly in its analysis

upon the absence of any capital contribution by Funsch. Although we are

mindful that the statutes do not require a person to make a capital contribution

in order to become a member of an LLC, it still can be one indication of such

membership rights. The court duly considered several other factors apart from

the absence of a capital investment in soundly concluding that Funsch never

attained the status of a member in the LLC.

      We likewise uphold the court's determination that Funsch was not owed

any additional compensation for 2015 after his departure from the firm. The

May 2011 email, on which Funsch so heavily relies as part of his ownership

claim, specifies that "should either of you [Funsch or Mullane] leave the firm

you will forfeit any rights to future earnings or ownership." The trial court

determined, as a matter of fact, that Funsch voluntarily resigned after the

argument with Procida on December 17, 2015. That finding of fact, even if it

can be reasonably debated, is supported by ample evidence to deserve our

appellate deference. Rova Farms, 65 N.J. at 484.

      Further, even if this court held Funsch had been duly admitted as a

member pursuant to the 2008 Operating Agreement, the distinction between

voluntarily leaving and being fired would not affect his claim of an equity share

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                                      35
in the enterprise. The Operating Agreement provides in Section Eight that a

member can only sell, assign, or otherwise dispose of his interest in the

Company with the "prior written consent of a majority of the other

nontransferring [m]embers" or if he dies, becomes incompetent, or goes

bankrupt.

        As the trial court correctly noted, the default "statutory provisions" of the

LLCA and RULLCA 7 apply only in the absence of an operating agreement.

Hence, the language in Section Eight of the Operating Agreement controls here.8

See Union Cnty. Improvement Auth. v. Artaki, LLC, 392 N.J. Super. 141, 152

(App. Div. 2007); IE Test, LLC v. Carroll, 226 N.J. 166, 178 (2016). Under that

7
  It appears the LLCA would apply to this case, as the "alleged operative event,"
i.e., the May 2011 email, occurred prior to the effective date of the RULLCA.
8
    The Operating Agreement further states in Section Eight that:

              The value of each Member's Interest in the Company
              will be determined on the date this Agreement is signed,
              and the value will be endorsed on Schedule 3 attached
              . . . . The value of each Member's Interest will be
              redetermined unanimously by the Members annually
              ....

While Funsch produced expert testimony on the valuation of the Company at
trial, the fact that he never signed a revised Operating Agreement and never
completed its pursuant "Schedule 3" lends further support to his status as an
employee rather than an equity owner, as it is unclear what exactly his share of
the Company would be.
                                                                             A-3899-18T4
                                         36
provision, Funsch had no viable claim for a buyout of his alleged interest in the

Company.

      We also defer to the trial court's determination that Funsch was not owed

any additional compensation for 2015 for the period preceding his walkout. The

court reasonably relied in this regard on the Company's Profit and Loss

Statement for 2015.

      Funsch argues the trial court should not have relied on the 2015 Profit and

Loss Statement, since it only reflects Funsch's alleged share of the profits, prior

to so-called "audit and 'true-up,'" not what Funsch was actually paid during this

period. Funsch asserts he is entitled to an additional $65,638.93 for 2015.

Funsch also argues he should have been awarded additional profits from the

Company derived from the "promote" of loans originated by the 100 Mile Fund ,

which he says were typically distributed in the first quarter of the following year

and would not have been reflected on the 2015 Profit and Loss Statement.

      In response, defendants note the only competent evidence produced by

Funsch to support his claim is the 2015 Profit and Loss Statement, which

demonstrates "the profits of the Company for all of 2015 – not the relevant

period January 1, 2015-December 17, 2015 (the time frame in which Funsch was

still employed)." Defendants point out it is "entirely possible that the Company

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                                       37
closed deals after December 17, 2015 (prior to year-end [sic]) thus earning

profits after Funsch was no longer employed" and which profits he would not

be entitled to collect. Defendants thus assert that Funsch did not meet his burden

to demonstrate what the Company's profits were as of December 17, 2015.

      We agree with defendants that plaintiff has failed to show the trial court

clearly erred in rejecting his claim to an additional $65,638.93 in compensation.

While not explicitly stated, Funsch appears to calculate the figure of $65,638.93

by subtracting the total wages he received (less income tax withheld) on his 2015

W-2, i.e., $282,985.07, from the total amount of distribution on the 2015 Profit

and Loss Statement, $348,624. However, Funsch does not compare the 2015

Profit and Loss Statement to the 2014 Profit and Loss Statement , which

comparison helps explain the approximately $23,000 decrease in his salary in

2015 from 2014.      In 2015, the Company's net income was approximately

$125,000 less than its net income in 2014, resulting in a decrease in Funsch's

distribution on the Profit and Loss Statement, from $367,724 in 2014 to

$348,624 in 2015. That appears to account for the difference between Funsch's

2014 and 2015 W-2s, reflecting that he took home $306,601.16 in wages in 2014

and earned $282,985.07 in 2015. Although that comparison does not refute

                                                                          A-3899-18T4
                                       38
Funsch's claim for additional compensation in its entirety, it undercuts his

quantification of a shortfall of over $65,000.

        Additionally, Funsch does not reconcile his admission that he would not

be entitled to any "future earnings or ownership" with his argument that he is

entitled to the so-called "promote," i.e., additional profits calculated following

the Company audit and "true-up," which for 2015 was computed and distributed

in the first quarter of 2016. Funsch admitted in his brief that the promote is

calculated at the conclusion of each calendar year and disbursed in the first

quarter of the following year, but he does not explain why he was entitled to

such profits when his relationship with the Company ended on December 17,

2015.

        Given our limited scope of appellate review, and bearing in mind that

Funsch bore the burden of proof on his claims, we are unpersuaded that the trial

court clearly erred in its denial of additional compensation.

                                       IV.

        We briefly address the rejection of Funsch's claim for defamation. We

concur with the trial court that Funsch failed to put forward sufficient evidence

to sustain such a cause of action.

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                                       39
      To succeed on a defamation claim, a plaintiff is obligated to prove by a

preponderance of the evidence that the defendant: (1) made false and defamatory

statements of fact about plaintiff, (2) to third parties in a non-privileged setting,

(3) depending upon the nature of the speech and the plaintiff, with either

knowledge that the statements were false, a reckless disregard for the truth or

falsity of the statements, or negligence in failing to ascertain the truth or falsity

of the statements. See G.D. v. Kenny, 205 N.J. 275, 292-93 (2011) (citing

DeAngelis v. Hill, 180 N.J. 1, 13 (2004)); see also Restatement (Second) of

Torts § 558 (1977).

      Importantly, a defendant's statements of opinion about a plaintiff, rather

than of fact, are not actionable defamation. As the trial court properly noted,

"[s]tatements of opinion, like unverifiable statements of fact, generally cannot

be proved true or false." Lynch v. N.J. Educ. Ass'n, 161 N.J. 152, 167 (1999).

Moreover, "insults, epithets, name-calling, and other forms of verbal abuse,

although offensive, are not defamatory." Ibid. (citation omitted). Here, the

various negative things that Procida said about Funsch after their relationship

devolved are fundamentally expressions of opinion.

      Moreover, as an independent basis for rejecting the defamation claim, the

court reasonably determined that Funsch failed to identify any person who

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                                        40
received Procida's communications and, as a result, thought less of him.

Plaintiff failed to show that a particular prospective employer or client was

aware of or affected by Procida's words.        To be sure, certain slanderous

statements can be defamation per se and enable reputational damages to be

presumed, see W.J.A. v. D.A., 210 N.J. 229, 240 (2012). However, we are

unpersuaded that Procida's utterances conveying negative opinions about

plaintiff (and, for that matter, at times about other employees at his company)

comprise actionable false statements of fact.

      To the extent we have not otherwise addressed them, the balance of

plaintiff's arguments, including his claim the trial court abused its discretion on

evidential rulings, lack sufficient merit to warrant discussion.         R. 2:11-

3(e)(1)(E).

      Affirmed.

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                                       41