Court Opinion

ID: 7800923
Source: CourtListenerOpinion
Date Created: 2022-08-16 14:08:00.503426+00
Date Added: 2024-06-11T16:29:12.618181
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NOT FOR PUBLICATION WITHOUT THE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-2306-19

RANJIT BENIPAL, DIWAN
BENIPAL, BHAGWAN SINGH
and SUBHAN SINGH,

          Plaintiffs-Appellants,

v.

TRI-STATE PETRO, INC.
and AMAR GILL,

     Defendants-Respondents.
__________________________

                   Argued May 31, 2022 – Decided August 16, 2022

                   Before Judges Messano, Rose and Enright.

                   On appeal from the Superior Court of New Jersey,
                   Chancery Division, Mercer County, Docket No.
                   C-000060-17.

                   Kevin T. Kerns argued the cause for appellants (Cozen
                   O'Connor, attorneys; Kevin T. Kerns and John P.
                   Johnson, Jr., on the briefs).

                   Donald W. Kiel argued the cause for respondents (K&L
                   Gates, LLP and Martin Law LLC, attorneys; Donald W.
                   Kiel and Benjamin I. Rubinstein, on the brief).
PER CURIAM

      This intrafamily dispute about the ownership of commercial property in

West Windsor is before us a second time. We described the factual allegations

underlying the complaint filed by plaintiffs-brothers Ranjit Benipal, Diwan

Benipal, Bhagwan Singh, and Subhan Singh, against their cousin, defendant

Amar Gill and his company Tri-State Petro, Inc. (TSP), in our prior opinion,

Benipal v. Tri-State Petro, Inc., A-0894-17 (App. Div. Jan. 4, 2019).

      Plaintiffs alleged they contributed equally with Gill to fund a joint

venture, G&B Business Associates, Inc. (G&B), to purchase the property and

operate a gas station on it. Id. at 2–3. Plaintiffs claimed that "[i]nstead of titling

the property in G&B's name, however, Gill titled the property in the name of . . .

[TSP], a company Gill owned with his family." Id. at 3.

      On defendants' motion, the trial judge dismissed plaintiffs' complaint

alleging fraud and seeking quiet title to the property based on the statute of

limitations. Id. at 4. In large part, the judge rejected plaintiffs' invocation of

the discovery rule, see, e.g., Lopez v. Swyer, 62 N.J. 267, 273 (1973), and

concluded plaintiffs were on constructive notice in early 1994, when the

property was purchased and the deed duly recorded that reflected TSP was the

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sole purchaser. Id. at 3–4. The judge ruled plaintiffs' 2017 complaint was,

therefore, time barred. Id. at 4.

      We reversed and remanded the matter to conduct a Lopez hearing. Id. at

10. We explained our reasoning as follows:

            [E]xtending to plaintiffs the benefit of all favorable
            inferences set forth in their complaint, as we must, we
            conclude the record is not fully developed surrounding
            Gill's purchase of the property and recording of the
            deed in TSP's name. Further, the present record is
            incomplete as to when, and under what circumstances,
            plaintiffs discovered that the property was not titled in
            G&B's name. Discovery has not yet commenced in this
            matter and more information is needed, for example, to
            shed light on G&B's ownership structure and assets
            held since 1994.          Despite plaintiffs' obvious
            complacency over the years, it is not clear on the record
            before us that even a prudent investor would have
            uncovered concealment of the property's true
            ownership.

                   Given these and other uncertainties, we conclude
            that the most appropriate course of action is to remand
            the matter for an evidentiary hearing under Lopez. As
            the Court noted in Lopez, such a hearing is not always
            necessary, but "[g]enerally the [knowledge] issue will
            not be resolved on affidavits or depositions since
            demeanor may be an important factor where credibility
            is significant." That rationale is even more applicable
            here, where no answer has yet been filed, discovery has
            not yet commenced, and we are limited in our review to
            the four corners of plaintiffs' complaint. Accordingly,
            we discern that credibility is an issue that is best
            explored at an evidentiary hearing. For these reasons
            we conclude the motion judge's failure to conduct a

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            Lopez hearing was plain error, capable of producing an
            unjust result, and we remand for that purpose.

            [Id. at 8–9 (second and third alterations in original)
            (emphasis added) (quoting Lopez, 62 N.J. at 275).]

      Following limited discovery, the Law Division judge conducted the

hearing we ordered. Over several days, he heard the testimony of a number of

witnesses, including some plaintiffs and defendant Gill.1 In his oral opinion

following the hearing, the judge first recounted each witness's testimony.

      The judge noted the purpose of the hearing was not to decide the merits

of plaintiffs' complaint but only to "decid[e] . . . whether or not the discovery

rule applies here." He noted there was no testimony from plaintiff Subhan Singh

to "sustain his burden . . . with regard to the discovery [rule]," so the judge

dismissed the complaint as to Subhan.        The judge noted the "dearth of

documentary evidence" and concluded resolution of the question "depend[ed]

on the [c]ourt's assessment of the credibility of the witnesses." The judge found

"plaintiffs are independent and experienced businessmen," with "substantial

interests outside of G&B," and Gill had no "involvement in any of the other

businesses started and operated by plaintiffs." Noting plaintiffs' description of

1
  We apologize for the informality of sometimes using first names, but we do
so to avoid confusion since several witnesses share the same surname.
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their relationship with Gill, who, although their cousin, was described more as

an uncle or older brother, the judge found it was expected, therefore, that Gill

would be involved in plaintiffs' other business ventures.

      The judge noted plaintiffs' business acumen included "leases, deeds,

notes, and mortgages," and each testified they "understood the significance of a

deed, that it demonstrates legal ownership of the property . . . . Yet at no time

did any of them ask . . . Gill for a copy of the deed or did they attempt to check

the public record." The judge also found the deed was properly recorded, and

Gill never "attempt[ed] . . . to conceal the transaction by not recording the deed

in a timely fashion." He further noted that plaintiffs could have checked the

records in the local tax office, which reflected TSP owned the property, and

"farmland assessment applications" in TSP's name, but they never did.

      The judge also found that "various notices and permits" were kept at the

gas station and showed TSP as its owner. The judge cited, as examples, "DEP

certificates . . . issued in 1994." Additionally, the judge found, "Plaintiffs were

well aware that the site was in deplorable condition in 1994 and that hundreds

of thousands of dollars were required for the improvement of the site. Plaintiffs

were aware about the work that was being performed." The judge also found

that "[p]laintiffs never asked for any documentation of their ownership interest,"

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and observed there was "no evidence other than their own uncorroborated claim

that they were lulled into this false belief by Gill that they had owned the

property." The judge found that neither Ranjit nor Bhagwan could "recall a

single conversation with Gill about the . . . property after 1994."

      The judge then addressed the non-exhaustive list of "determinative

factors" the Lopez Court said should be considered in deciding whether equity

justified application of the discovery rule to toll a statute of limitations. These

included:

            the nature of the alleged injury, the availability of
            witnesses and written evidence, the length of time that
            has elapsed since the alleged wrongdoing, whether the
            delay has been to any extent deliberate or intentional,
            whether the delay may be said to have peculiarly or
            unusually prejudiced the defendant.

            [62 N.J. at 276.]

The judge concluded that without documentary evidence, "plaintiffs' case rests

entirely on a conversation that is alleged to have occurred over [twenty-five]

years ago and . . . even Diwan . . . admitted he could not recall the particulars of

the conversation between him and Amar Gill."

      The judge found that "a reasonable person exercising due diligence should

have discovered that plaintiffs were not the owners of the . . . property during

the discovery period. Plaintiffs have failed to demonstrate they're entitled to

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                                         6
relief pursuant to the discovery [rule]." The judge dismissed the compl aint and

this appeal followed.

                                         I.

      Before proceeding to the specific arguments plaintiffs raise on appeal, we

set some parameters for our review. "Determining whether a cause of action is

barred by a statute of limitations is a question of law that we review de novo."

Save Camden Pub. Schs. v. Camden City Bd. of Educ., 454 N.J. Super. 478, 487

(App. Div. 2018) (citing Catena v. Raytheon Co., 447 N.J. Super. 43, 52 (App.

Div. 2016)). "The application of the discovery rule is for the court, not a jury,

to decide." Catena, 447 N.J. Super. at 52 (citing Lopez, 62 N.J. at 274–75).

      "Under the rule, a claim does not accrue until the plaintiff 'discovers, or

by an exercise of reasonable diligence and intelligence should have discovered

that he [or she] may have a basis for an actionable claim.'"          Id. at 52–53

(emphasis added) (quoting Lopez, 62 N.J. at 272). "The party seeking the rule's

benefit bears the burden to establish it applies." Id. at 53 (citing Lopez, 62 N.J.

at 276).   Following a Lopez hearing, the "trial court's findings should be

disturbed only if they are so clearly mistaken 'that the interests of justice demand

intervention and correction.'" R.L. v. Voytac, 199 N.J. 285, 303 (2009) (quoting

State v. Elders, 192 N.J. 224, 244 (2007)).

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      Without question, the two causes of action pled by plaintiffs were time

barred when the complaint was filed in 2017. Benipal, slip op. at 7. Plaintiffs

bore the burden to prove their quiet title action did not accrue until 1997 at the

earliest, i.e., within the twenty-year statute of limitations in N.J.S.A. 2A:14-7,

and their fraud claim did not accrue until 2011 at the earliest, within the six-year

statute of limitations in N.J.S.A. 2A:14-1. They needed to demonstrate that an

average investor, even with the exercise of reasonable diligence and

intelligence, would not have discovered before 2011 the basis for an actionable

claim based on Gill's alleged fraud, or would not have discovered before 1997

that the property was titled in TSP's name.

      We fully concur with the hearing judge that plaintiffs failed to carry their

burden, because they essentially acknowledged not exercising the reasonable

diligence and intelligence of the average business investor. As we explain

further below, we reject plaintiffs' claim that the judge failed to use an objective

standard in conducting his analysis. Maldonado v. Leeds, 374 N.J. Super. 523,

531 (App. Div. 2005). The judge's opinion may be clearly read as finding that

it was not just that plaintiffs failed to exercise reasonable diligence and

intelligence, but rather, that a prudent sophisticated business investor would

have, through the exercise of reasonable diligence and intelligence, discovered

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facts — for example, that the property was titled in TSP's name in 1994, DEP

permits were issued to TSP in 1994, and TSP was listed on the tax records as

the property's owner — "that would alert a reasonable person to the possibility

of an actionable claim." Catena, 447 N.J. Super. at 54 (quoting Lapka v. Porter

Hayden Co., 162 N.J. 454, 555–56 (2000)). Plaintiffs never had any interest in

TSP. Any reasonable investor would objectively understand that he or she had

an actionable claim shortly after the property was purchased in 1994, and

certainly before 1997, to the quiet title action, or before 2011 as to the fraud

claim.

                                        II.

      Plaintiffs' specific challenge to the soundness of the judge's findings and

conclusions, instead, rests on two evidential rulings he made. "Because the

determination made by the trial court concerned the admissibility of evidence,

we gauge that action against the palpable abuse of discretion standard."

Brenman v. Demello, 191 N.J. 18, 31 (2007) (citing Green v. N.J. Mfrs. Ins. Co.,

160 N.J. 480, 492 (1999)). "Accordingly, 'we will reverse an evidentiary ruling

only if it "was so wide [of] the mark that a manifest denial of justice resulted."'"

Rowe v. Bell & Gossett Co., 239 N.J. 531, 551–52 (2019) (alteration in original)

(quoting Griffin v. City of E. Orange, 225 N.J. 400, 413 (2016)).

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                                         9
      "However, no deference is accorded when the court fails to properly

analyze the admissibility of the proffered evidence." E&H Steel Corp. v. PSEG

Fossil, LLC, 455 N.J. Super. 12, 25 (App. Div. 2018) (citing Konop v. Rosen,

425 N.J. Super. 391, 401 (App. Div. 2012)). In those situations, our review is

de novo. Konop, 425 N.J. Super. at 401.

                                       A.

      As noted above, in our prior opinion we cited the lack of information about

"G&B's ownership structure and assets held since 1994" and lack of clarity in

the record "that even a prudent investor would have uncovered concealment of

the property's true ownership." Benipal, slip op. at 8. Before any testimony at

the hearing, defendants moved in limine to exclude the tax returns and other

financial documents of non-party G&B, which, plaintiffs argued, reflected G&B

owned the property.     Defendants challenged plaintiffs' interpretation of the

financial records, citing deposition testimony of the accounting firm that

prepared them, but defendants also argued that plaintiffs never asked to see the

documents between 1994 and commencement of the suit. Defendants contended

the evidence was irrelevant to the purpose of the plenary Lopez hearing.

      Plaintiffs conceded they never asked to see the documents, but they argued

even if they had, the documents would have supported their belief that G&B

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                                      10
owned the property. In other words, measuring plaintiffs' conduct against that

of a reasonably prudent investor, plaintiffs still would not have discovered Gill's

fraudulent acts. As plaintiffs' counsel explained, applying an objective standard,

if the judge found plaintiffs acted unreasonably by not making sufficient

inquiries, "you have to look at what they would have found" if they had asked

for the financial documents.

      The judge granted defendants' motion without prejudice. He explained,

            [T]he initial question with regard to these records is
            whether or not the plaintiffs ever requested the records.
            Plaintiffs wish to go beyond that and with the [c]ourt to
            examine the records and make a decision [about] what
            would have been revealed if the plaintiffs had looked at
            the records, but that's a step too far. The fact of the
            matter is that plaintiffs' concession that they have not
            looked at these records demonstrates that these records
            are not material.

                   . . . If at trial, based upon evidence that's
            presented to the [c]ourt regarding the level of the
            relationship [between the parties], plaintiffs are able to
            demonstrate to the [c]ourt that somehow that level of
            that relationship may have excused the failure to
            request the records, then the [c]ourt will revisit the
            issue.

The judge denied plaintiffs' subsequent request during the hearing essentially on

the same grounds.

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                                       11
      Before us, plaintiffs contend the judge failed to apply the "objective

standard" and consider that even had plaintiffs asked for the financial

information, it would not have alerted them to Gill's fraud or that TSP owned

the property.    In part, plaintiffs rely upon our decision in Catena for the

proposition that even if a plaintiff exercises no due diligence before the statutory

accrual deadline, he may still satisfy the discovery rule and benefit from

equitable tolling of the statute of limitations if such efforts "would likely have

been futile."

      We accept plaintiffs' contention that the financial information was

relevant.   As we said in Catena, "[i]f [the plaintiff] can demonstrate that

reasonable diligence would not have revealed the fraud . . . his claims will not

be time-barred." 447 N.J. Super. at 59. However, any error in excluding the

evidence was harmless.       See R. 2:10-2 ("Any error or omission shall be

disregarded by the appellate court unless it is of such a nature as to have been

clearly capable of producing an unjust result . . . .").

      Viewing the facts objectively, "[g]enerally stated, in order to justify the

tolling of a statute of limitations, plaintiffs must explain why they reasonably

could not have discovered their cause of action in time to comply with the

limitation period." Phillips v. Gelpke, 190 N.J. 580, 595 (2007). Although we

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                                        12
recognized in Catena the relevance of what a diligent inquiry may have or may

have not revealed, we made clear that application of the discovery rule required

the court to "determine at what point [the plaintiffs], through the exercise of

reasonable diligence, should have discovered the alleged fraud." 447 N.J. Super.

at 59 (citing Partrick v. Groves, 115 N.J. Eq. 208, 211 (E. & A. 1934)).

      The judge's findings make clear his conclusion that acting as reasonably

prudent investors would, plaintiff should have discovered shortly after closing

on the property that Gill had titled it in TSP's name, and that G&B did not own

the property. Plaintiffs have consistently claimed that was contrary to their

agreement with Gill, and it was sufficient knowledge to alert plaintiffs that they

"may have [had] a basis for an actionable claim." Id. at 52–53 (quoting Lopez,

62 N.J. at 272). These findings and conclusions are unassailable on this record.

Admitting evidence that if plaintiffs had checked other documents, i.e., G&B's

financial records, they would not have discovered the alleged fraud does not

compel or even suggest a different result.       Excluding evidence of G&B's

financial records was not "clearly capable of producing an unjust result." R.

2:10-2.

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                                       13
                                        B.

      Plaintiffs' other evidentiary challenge is that the judge erred in relying on

N.J.R.E. 408 to exclude certain evidence. That evidence rule provides:

                  When a claim is disputed as to validity or amount,
            evidence of statements or conduct by parties or their
            attorneys in settlement negotiations . . . including offers
            of compromise or any payment in settlement of a
            related claim, is not admissible either to prove or
            disprove the liability for, or invalidity of, or amount of
            the disputed claim. Such evidence shall not be
            excluded when offered for another purpose; and
            evidence otherwise admissible shall not be excluded
            merely because it was disclosed during settlement
            negotiations.

            [N.J.R.E. 408.]

We need to provide some context.

      Plaintiffs claimed they first knew about Gill's alleged fraud in 2016 and

went to his home to discuss the situation. Ranjit testified that Gill admitted

making a mistake by titling the property in TSP's name and said he would fix

the mistake, although it might take some time. Gill denied such a meeting every

occurred.

      Plaintiffs first tried to introduce the testimony of a third-party, Sikander

Ranu, Gill's son-in-law, regarding an April 26, 2017 meeting he arranged for all

parties to attend at a Sikh temple. The judge heard some of Ranu's testimony

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                                       14
and concluded Ranu "set up the meeting in order to try to get the parties to come

to an agreement about this dispute." Citing our decision in KAS Oriental Rugs,

Inc. v. Ellman, 394 N.J. Super. 278 (App. Div. 2007), the judge concluded

evidence about alleged admissions Gill made during the meeting was

inadmissible under N.J.R.E. 408.

      Ranjit further testified that at a subsequent meeting earlier in April 2017,

he confronted Gill about his earlier promise to "correct the problem," and why

was it taking so long; an argument ensued. Ranjit "asked [Gill] if he want[ed]

to split the property, I need some information." The judge sustained defense

counsel's objection, concluding the testimony was "an offer of compromise,"

inadmissible under N.J.R.E. 408.

      Plaintiffs then sought to introduce an email chain, dated April 6 through

April 10, 2017. In an email to Gill's son Preet, Ranjit summarized the earlier

meeting, claiming Gill admitted mistitling the property "since we had paid for

that property in our investment. As per the meetings that property will be part

of valuation of the G&B business and get divided among the owners of G&B."

The document showed Preet forwarded the email to Gill who responded: "Preet,

[I] agree with the contents of email received from Ranjit . . . . [P]lease forward

this to your [U]ncle Ranjit. Thanks. Your Dad." Defense counsel objected to

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introduction of the document, and the judge sustained the objection and

excluded the document pursuant to N.J.R.E. 408.

      Ranjit testified he had several more discussions with Gill after receiving

the email, sparking another objection from defense counsel. The judge again

sustained the objection, noting "this issue relates to something out side of 2016

going to what I've already ruled to be settlement negotiations."

      Plaintiffs argue these rulings were premised on an erroneous

understanding of N.J.R.E. 408's scope and application. They argue evidence of

Gill's "admissions" to mistakenly titling the property in TSP's name was not

about a "disputed claim" within the rubric of the rule, the evidence was not

sought to be admitted to prove the "validity or amount" of plaintiffs' claim, and

had the evidence been properly admitted, the lack of any documentation

regarding the original purchase of the property would be "rendered extraneous."

We largely agree with the judge's rulings.

      Initially, we note that plaintiffs were not excluded from introducing

evidence Gill admitted during a 2016 meeting that he had mistitled the property

and agreed to remedy the situation. The judge had the ability to consider the

testimony in this regard, as well as Gill's denial.

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      Plaintiffs, therefore, recognize that the only issue is whether rulings

excluding Ranu's testimony about the April 2017 meeting at the temple, Ranjit's

testimony about the earlier meeting in April 2017, and the April 2017 email

chain that included Gill's admission would have otherwise tipped the balance of

the credibility scale.

      Ranu acknowledged he organized the meeting at the temple specifically

to get the parties to come to some agreement. We agree with the judge that

"evidence of statements or conduct by parties" in this context is not admissible

to prove Gill defrauded plaintiffs. See N.J.R.E. 408. We also agree that Ranjit's

testimony about his follow-up meeting with Gill in April 2017 was more than

just a "demand" that Gill make good on his earlier promise to correct the deed,

which is how plaintiffs' counsel characterized it. As the judge properly found,

the testimony clearly focused on Ranjit's willingness to discuss an amicable

settlement of the parties' interests in the property after he was supplied with

additional information.

      That leaves the email chain and Gill's acknowledgment to his son that he

agreed with Ranjit's summary of a prior meeting and Gill's commitment to

rectify a mistake. But, the judge correctly noted that "[w]hen in the course of a

defendant's settlement offer, he makes an admission of his liability, N.J.R.E. 408

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                                       17
proscribes the evidential use of such a statement as proof of liability." Biunno,

Weissbard & Zegas, Current N.J. Rules of Evidence, cmt. 1 on N.J.R.E. 408

(2022–23). We find no error in these rulings.

      Moreover, even if we are incorrect, any error was harmless. The sole

purpose of the hearing was for the judge to decide whether plaintiffs were

entitled to the discovery rule's equitable tolling of the applicable statutes of

limitations. This equitable relief was only available if plaintiffs proved their

objectively reasonable conduct would not have alerted them to the possibility of

a viable cause of action against Gill during the time period prior to the start of

the statute of limitations' clock. The exclusion of evidence about events that

occurred twenty-three years after the property was purchased and titled solely

in TSP's name did not have the clear capacity to bring about an unjust result. R.

2:10-2.

      In light of our disposition, we need not consider plaintiffs' final arg ument

that it was error to dismiss Suban as a plaintiff because he failed to testify.

      Affirmed.

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