Court Opinion

ID: 4642598
Source: CourtListenerOpinion
Date Created: 2020-12-14 15:09:18.809281+00
Date Added: 2024-06-11T08:00:33.959768
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NOT FOR PUBLICATION WITHOUT THE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-2963-18T4

POLINA ROITBURG, Executor
of the Estate of DAVID
ROITBURG,

          Plaintiff-Respondent/
          Cross-Appellant,

v.

LEONID ROITBURG a/k/a
LEON ROITBURG, DESIGN OF
TOMORROW, INC. a/k/a
EDUCATIONAL and LABORATORY
SYSTEMS a/k/a ELS, NATIONAL
PRECISION TOOL COMPANY, INC.,
a/k/a NPTC,

          Defendants-Appellants/
          Cross-Respondents,

and

LEON ROITBURG, DESIGN OF
TOMORROW, INC. and NATIONAL
PRECISION TOOL COMPANY, INC.,

          Third-Party Plaintiffs-Appellants/
          Cross-Respondents,
v.

POLINA ROITBURG and
IGOR ROITBURG, personally,

     Third-Party Defendants-
     Respondents/Cross-Appellants.
______________________________

            Submitted September 14, 2020 – Decided December 14, 2020

            Before Judges Messano and Suter.

            On appeal from the Superior Court of New Jersey, Law
            Division, Morris County, Docket No. L-1478-16.

            Dubeck & Miller, attorneys for appellant (Mark D.
            Miller, of counsel and on the briefs).

            Harris Bloom & Archer, LLP, attorneys for respondent
            (Linda S. Agnew, of counsel and on the briefs).

PER CURIAM

      Defendant Leonid (Leon) Roitburg and his brother David were equal

shareholders in Design of Tomorrow, Inc. (DOT), a company that constructed

custom kitchens and cabinetry and operated out of a building owned by National

Precision Tool Company, Inc. (NPTC). NPTC was a corporation in which Leon

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was the sole shareholder.1 Plaintiff Polina Roitburg, David's wife, was DOT's

bookkeeper.

      Leon and David executed a buy-sell agreement in 2006, which, by its

terms was intended "to make provision for the future disposition of the shares

of the corporation" and "provide . . . continuity . . . by providing for the purchase

of a deceased shareholder's shares[.]" DOT named each brother as beneficiary

of a $1 million life insurance policy, which, in the event of one brother's death,

would be used by the survivor to purchase the decedent's DOT stock from his

estate. The agreement also provided for the repayment of any loans made to

DOT by the deceased shareholder: "If the corporation owes money to the

deceased shareholder, the corporation shall pay such amount to the estate of the

deceased shareholder in the normal course of business, but no later than two []

years following the deceased shareholder's date of death."

      According to DOT's accountant, Joseph Brescia, David ran the company

without Leon's involvement. DOT had its "ups and downs" and was insolvent

for several years prior to 2013. During this time, DOT ceased paying its below-

market rent to NPTC. In May 2013, David was diagnosed with brain cancer and

1
 To avoid confusion, we use the first names of members of the Roitburg family.
We intend no disrespect by this informality.
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                                         3
ultimately succumbed to the disease in October 2014. However, prior to his

death, David secured a $2.05 million contract for DOT to restore and modernize

barracks at the United States Military Academy at West Point (the West Point

contract).

      During the company's lean times, David loaned DOT funds and secured

other loans from family and friends. Leon's wife and NPTC also loaned funds

to DOT.2 To successfully obtain the West Point contract, DOT had to execute a

subordination agreement, whereby repayment of DOT's loan obligations was

subordinated to the surety company.

      Leon obtained the $1 million insurance proceeds shortly after David's

death, and, in December 2014, paid David's estate and acquired his brother's

DOT stock. At the time, there was uncertainty as to exactly how much money

DOT owed to David's estate as repayment of his loans to the company. At the

subsequent trial, the parties hotly disputed whether promissory notes, allegedly

executed to satisfy the surety company of the amount of DOT's loan obligations,

reflected the actual amount of loans David made to DOT, and whether the

amounts reflected on the company's books as shareholder loans were accurate.

2
  Leon's wife's first name was also Polina. To avoid confusion, we refer to her
as Leon's wife throughout the opinion and intend no disrespect.
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                                       4
      Although DOT had begun paying David's loans in the ordinary course of

business prior to and immediately following his death, the payments ceased in

February 2015. Leon instructed plaintiff to make monthly interest payments

from DOT to his wife for repayment of monies she loaned to the company during

its financial hardships, and to repay loans made by her and NPTC, without

paying the balance of David's loan account.

      Intrafamily tensions arose, as plaintiff and her son, Igor Roitburg, insisted

that the loans David made to DOT be repaid. At one point, Igor used plaintiff's

access to DOT's financial information to prepare a spreadsheet of the disputed

loan amounts. Unable to resolve the dispute with Leon, plaintiff commenced

litigation by filing a complaint against Leon, DOT, and NPTC.

      Among the various causes of action in the complaint, plaintiff alleged that

DOT breached the buy-sell agreement and owed David's estate more than

$600,000 as repayment of loans David made to the company. She also alleged

that Leon was the alter ego of DOT and NPTC and had fraudulently transferred

funds from DOT to NPTC, in violation of the Uniform Fraudulent Transfer Act

(UFTA), N.J.S.A. 25:2-20 to -34. Plaintiff claimed the circumstances warranted

piercing the corporate veils of DOT and NPTC, and she sought to hold Leon

personally liable for compensatory and punitive damages, and counsel fees.

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      Defendants filed an answer and counterclaim alleging breach of contract

— the subordination agreement — conversion, unjust enrichment, breach of the

duty of loyalty, and a third-party complaint against plaintiff and Igor alleging

conversion, trespass — based on Igor's access of DOT's financial records — and

defamation. The case was tried without a jury.

      The judge heard the testimony of plaintiff, Igor, Leon, Brescia and other

witnesses familiar with DOT's business, and, specifically, the circumstances

surrounding the award of the West Point contract. In a written opinion following

trial, the judge made specific findings of fact. He concluded that DOT breached

the terms of the buy-sell agreement because it failed to repay David's loans to

the company within two years of his death. He rejected Leon's claim that David

and plaintiff had diverted DOT funds for their personal use over the years, and

that this excused DOT's obligation to repay the loans. The judge rejected

defendants' assertion that under the circumstances, DOT was only obligated to

pay over the $1 million life insurance proceeds. The judge concluded "[t]he

undisputed fact is that DOT and the other defendants had absolutely no intention

of honoring the [buy-sell] agreement."

      The judge then considered how much money David loaned to DOT. In

this regard, the judge found "[t]he only reliable and believable evidenc e came

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                                         6
from the testimony of . . . Brescia." Citing a financial statement prepared by

Brescia that "[t]he [c]ompany ha[d] an outstanding loan from its principal

stockholder in the amount of $478,863 as of December 31, 2014[,]" and noting

it was undisputed Leon never personally loaned money to DOT, the judge

concluded this was the amount of plaintiff's damages.

        Reviewing caselaw regarding piercing of the corporate veil, the judge

found that Leon "totally disregarded corporate formalities[,]" and "diverted

funds for his personal use[.]" He concluded that Leon "made sure to drain the

DOT bank account in total disregard of repaying David's loans[,]" and he

determined that Leon and NPTC were jointly and severally liable for plaintiff's

damages. He did not specifically find that Leon committed fraud, nor did he

address plaintiff's UFTA claim at all.

        The judge rejected all of defendants' causes of action against plaintiff and

Igor.    He found no breach of the subordination agreement and, moreover,

because the West Point project was completed and the bonds were released, the

claim was moot. The judge also rejected defendants' generalized allegations that

over the years plaintiff and David were unjustly enriching themselves at DOT's

expense, noting the payments to plaintiff were "based upon the established

protocol since the inception of DOT." He determined that Leon's belated claim

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                                          7
regarding unpaid rent and utilities was "without merit[,]" since Leon "turned a

blind eye to DOT operations until he took over control after David's death."

According to the judge, Leon "surely waived any such claims by his

indifference."

      The court's December 5, 2018 final judgment held DOT, Leon, and NPTC

jointly and severally liable to plaintiff for $478,863, plus interest and costs; the

judgment also dismissed defendants' counterclaim and third-party complaint and

awarded counsel fees, pending submission of an appropriate certification by

plaintiff's counsel.

      Shortly thereafter, defendants moved for partial relief from the judgment.

Citing several trial exhibits in evidence, defendants claimed the judge erred by:

1) concluding Leon made no loans to DOT; and 2) failing to account for

payments DOT made after David's death, thereby reducing the outstanding loan

balance.     Defendants contended that the judgment amount should be

$226,030.62.

      Plaintiff opposed the motion. She cited Brescia's undisputed testimony

that the December 31, 2014 financial statement was accurate. She further

contended that the statement's reference to DOT's principal shareholder meant

David, since it was undisputed that Leon never made a personal loan to the

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                                         8
company. Additionally, plaintiff filed a separate motion to amend the judgment

to include an award of more than $210,000 in counsel fees and more than

$18,000 in costs.

      The judge partially granted defendants' motion, modifying the damage

award to $459,103.14. In a written statement of reasons, the judge noted it was

"undisputed that DOT paid out $19,759.86 post[-David's] death for plaintiff's

benefit[,]" but, he otherwise rejected defendants' claims regarding the amount

of the judgment.

      In a separate order, the judge denied plaintiff's fee request. He concluded

that no statute or court rule provided for a fee award in these circumstances, and

the buy-sell agreement provided for an award only regarding enforcement of any

promissory note covering a shortfall between the life insurance proceeds and the

true value of David's stock shares. The judge found that the insurance proceeds

greatly exceeded the value of David's DOT stock, no promissory note was ever

executed, and, therefore, plaintiff had no contractual claim for counsel fees and

litigation costs.

      On appeal, defendants assert the judge's factfinding was marred by errors

resulting in an inflated award of damages; they again contend that any damage

award must be limited to $226,030.62. They also argue that the judge erred by

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                                        9
piercing the corporate veil and holding Leon personally liable for DOT's debt to

David's estate and NPTC liable for DOT's debt.

      Regarding their counterclaim and third-party complaint, defendants

contend the judge erred by finding: 1) plaintiff did not breach the subordination

agreement, or the implied covenant of good faith and fair dealing as to the buy -

sell agreement; 2) Leon waived any claim against plaintiff by his "indifference";

and, 3) in dismissing defendants' claims for trespass and defamation. Lastly,

defendants challenge evidentiary rulings the judge made during trial.

      In her cross-appeal, plaintiff argues the judge misread the buy-sell

agreement and should have awarded her counsel fees and costs based on the

terms of the promissory note David allegedly executed on DOT's behalf to

secure bonding for the West Point project. She also contends that the evidence

proved Leon violated the UFTA, and, independently entitles her to an award of

counsel fees.

                                       I.

      We set some guideposts for our consideration of these arguments. Most

importantly, our standard of review following a bench trial is well-known.

                   Final determinations made by the trial court
            sitting in a non-jury case are subject to a limited and
            well-established scope of review: "we do not disturb
            the factual findings and legal conclusions of the trial

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                                      10
            judge unless we are 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, SLA, 205 N.J. 150, 169
            (2011) (alteration in original) (quoting In re Trust
            Created By Agreement Dated December 20, 1961, ex.
            rel. Johnson, 194 N.J. 276, 284 (2008)).]

In reviewing the judge's findings, "[w]e do not weigh the evidence, assess the

credibility of witnesses, or make conclusions about the evidence." Mountain

Hill, LLC v. Twp. of Middletown, 399 N.J. Super. 486, 498 (App. Div. 2008)

(alteration in original) (quoting State v. Barone, 147 N.J. 599, 615 (1997)).

However, we owe no deference to the judge's interpretation of the law and the

legal consequences that flow from established facts. Manalapan Realty L.P. v.

Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) (citing State v. Brown,

118 N.J. 595, 604 (1990)).

      To the extent any of defendants' arguments imply the judge erroneously

found a breach of the buy-sell agreement, or plaintiff violated the implied

covenant of good faith and fair dealing regarding the buy-sell agreement, or she

and David wrongfully diverted DOT funds, those arguments lack sufficient

merit to warrant discussion in a written opinion.     R. 2:11-3(e)(1)(E). The

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                                      11
findings made by the judge were supported by the credible evidence at trial and

we will not disturb them.

      Indeed, defendants' principal argument post-trial was and remains that the

amount of the judgment —the amount of unpaid loans David made to DOT —

was "inconsistent with the competent, relevant and reasonably credible

evidence[.]" Seidman, 205 N.J. at 169. Notably, the judge rejected both sides'

claims regarding the dollar amount of outstanding loans. Plaintiff alleged it

exceeded $600,000 based on Igor's review of DOT's financial records, although

during trial, Igor conceded it could be less; defendants argued the true amount,

based on Brescia's testimony and other documents in the record, was

$226,030.62.

      The judge credited a financial statement Brescia prepared demonstrating

that as of December 31, 2014, DOT carried an outstanding loan to its principal

stockholder of $478,863. He later adjusted this amount on defendants' motion,

recognizing that they were entitled to credits for payments DOT made on

account of the loan balance after David's death. The judge found that it was

undisputed that Leon never personally loaned any money to DOT, and the

reference to "principal stockholder" meant David.

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                                      12
      Defendants argue this conclusion was clearly erroneous, because it is

undisputed that NPTC made a loan of $250,000 in May 2014, as reflected in a

promissory note and other documentary evidence adduced at trial. They argue

that the amount of outstanding loans in Brescia's December 2014 statement

included the NPTC loan, which was made on behalf of Leon. Defendants also

point to an email exchange between Brescia and Igor in December 2014, in

which the accountant states after reviewing DOT's financial condition with

Leon, "there are . . . two stockholder loan payables of approx[imately]

$245[,000] to each shareholder." With some minor adjustments for Leon's other

recognized obligations to DOT, defendants contend the judge simply failed to

credit Leon's loan (through NPTC) to the figure in the financial statement. At

trial, Brescia insisted this was the correct amount, and the December 2014

statement reflected loans outstanding to both brothers, not just David.

      However, DOT's December 2013 financial statement, also prepared by

Brescia, showed at that time DOT carried more than $500,000 in outstanding

loans to its "principal stockholder." Brescia tried to explain this as including

loans made to David years earlier by members of his family.           On cross-

examination, Brescia acknowledged, however, that these intrafamilial loans

were carried on DOT's books in accounts that were separate from David's loan

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                                      13
account. Defendants do not dispute that Leon, DOT's only other stockholder,

never personally loaned the company any money prior to May 2014, when NPTC

made a loan.

      Moreover, the judge heard the testimony of Leon, Brescia, and David

Goldstein, who for many years was DOT's bonding agent and intimately

involved in the bonding of the West Point contract. It suffices to say that the

testimony raised questions about whether some of the documents prepared for

the bonding company's approval accurately reflected the true financial

obligations of DOT regarding outstanding loans.       At one point, Goldstein

believed there was a total of $750,000 in outstanding shareholder loans to DOT

that were subordinated to the bonds, i.e., approximately $500,000 received from

David, and, after NPTC's infusion of money in spring 2014, $250,000 ostensibly

received from Leon.

      In short, there was competing evidence adduced by both sides regarding

the outstanding loan balance due David's estate. Our role is not to "weigh the

evidence, assess the credibility of witnesses, or make conclusions about the

evidence." Mountain Hill, LLC, 399 N.J. Super. at 498 (quoting State v. Barone,

147 N.J. 599, 615 (1997)). The trial judge had the witnesses before him, as well

as all the documentary evidence. He not only heard the competing arguments

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                                      14
of counsel, but he also reconsidered the amount of the judgment upon

defendants' motion for partial relief and adjusted the figure accordingly. We

cannot conclude that the judge's findings and conclusions "offend the interests

of justice" and require reversal. Seidman, 205 N.J. 169. 3

                                       II.

      "[A] corporation is an entity separate from its stockholders." Lyon v.

Barrett, 89 N.J. 294, 300 (1982). "[T]he party seeking an exception to the

fundamental principle that a corporation is a separate entity from its principal

bears the burden of proving that the court should disregard the corporate entity."

Tung v. Briant Park Homes, Inc., 287 N.J. Super. 232, 240 (App. Div. 1996)

(citing Touch of Class Leasing v. Mercedes-Benz Credit of Canada, Inc., 248
N.J. Super. 426, 441 (App. Div. 1991)).

3
   In a separate sub-point responding to defendants' arguments regarding the
amount of the judgment, plaintiff contends the March 12, 2019 amended
judgment, which gave defendants credit for payments DOT made on account of
David's loans after his passing, provided too much credit to defendants. Plaintiff
contends the documentary evidence shows DOT transferred some of these funds
before December 31, 2014, and, therefore, credit for those funds are already
contained in the bottom-line outstanding loan balance in Brescia's December
2014 financial statement. This argument is not validly raised as part of
plaintiff's cross-appeal from the court's separate March 12, 2019 order denying
plaintiff counsel fees. We refuse to address it any further.
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                                       15
      "The purpose of the doctrine of piercing the corporate veil is to prevent

an independent corporation from being used to defeat the ends of justice, to

perpetrate fraud, to accomplish a crime, or otherwise to evade the law[.]" State,

Dept. of Env't. Prot. v. Ventron Corp., 94 N.J. 473, 500 (1983) (citations

omitted). "Personal liability may be imposed upon a controlling stockholder of

a close corporation where the controlling stockholder disregards the corporate

form and utilizes the corporation as a vehicle for committing equitable or legal

fraud." Marascio v. Campanella, 298 N.J. Super. 491, 502 (App. Div. 1997)

(citing Walensky v. Jonathan Royce Int'l, Inc., 264 N.J. Super. 276, 283 (App.

Div. 1993)).

      The judge found Leon "dominated and controlled DOT and NPTC[,]" and

that he disregarded corporate formalities. The judge cited "irrefutable evidence

that Leon diverted funds for his personal use including purchases of jewelry, his

daughter's wedding, his wife's credit card, donations to his temple and . . . past

due rent and utility bills." The judge found that Leon paid himself "a whopping"

salary of more than $95,000 in calendar year 2016. The judge concluded all of

this "drain[ed] the DOT bank account in total disregard of repaying David's

loans."

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                                       16
      After David's death and his purchase of his brother's stock, Leon was the

sole shareholder and officer of both corporations. He clearly "dominated and

controlled" both corporations because there was no one else. The lack of

corporate formality is certainly not unusual in sole shareholder corporations.

      Nor do we find Leon's decision to pay himself a salary or NPTC rent

reason to pierce the corporate structure of either DOT or NPTC.           Brescia

testified that he advised Leon paying rent and utility bills was appropriate, and

he discussed continuing the operation of DOT with Leon, particularly since the

company had just secured the West Point contract. DOT continued to function

as an ongoing business with Leon running the company after David's death. Our

review of Leon's trial testimony regarding the personal expenses cited by the

judge reveals these were all paid by NPTC, not DOT.

      It is undisputed that NPTC and Leon's wife were also creditors of DOT

when David died. David's estate was a debtor of DOT, but this imposed no

fiduciary duty on Leon. See United Jersey Bank v. Kensey, 306 N.J. Super. 540,

552 (App. Div. 1997) ("The virtually unanimous rule is that creditor -debtor

relationships rarely give rise to a fiduciary duty.").

      Admittedly, Leon chose to pay off the loans NPTC and his wife made to

DOT before paying David's estate.            This certainly supported the judge's

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                                        17
conclusion that DOT breached the buy-sell agreement, because the agreement

obligated DOT to pay David's estate the amount of outstanding loans David

made to DOT within two years, and it failed to do so.

      Generally speaking, "there must be equitable fraud" to pierce the

corporate veil. MacFadden v. MacFadden, 49 N.J. Super. 356, 360 (App. Div.

1958) (citing Irving Inv. Corp. v. Gordon, 3 N.J. 217, 223 (1949)). Equitable

fraud "includes 'all acts, omissions or concealments which involve a breach of a

legal or equitable duty, trust or confidence justly reposed, and are injurious to

another, or by which an undue or unconscientious advantage is taken of

another.'" Walensky, 264 N.J. Super. at 283 (quoting MacFadden, 49 N.J.

Super. at 360). However, as already noted, the judge did not conclude that

Leon's decisions, made as sole shareholder and officer of DOT, to pay off DOT's

obligations to NPTC and his wife before paying David's estate, were legally or

equitably fraudulent or criminal.

      Considering the record as a whole, the judge's findings do not support

piercing DOT's corporate veil. We therefore reverse entry of judgment against

Leon personally and against NPTC.

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                                      18
                                      III.

      We consider the balance of arguments defendants raise regarding other

grounds for reversal and dismissal of their counterclaim and third-party

complaint.

      We agree with the judge that defendants lacked standing to assert a claim

that plaintiff breached the subordination agreement with the surety company by

paying down some of David's loans and other expenses while the bonds were

extant, and the West Point project was ongoing. The subordination agreement

was between DOT and the surety company, with David listed as creditor of

DOT. David executed the agreement on behalf of DOT.          We fail to see how

DOT, as defendant, can assert a claim that plaintiff, who continued to write

checks as DOT's bookkeeper after the subordination agreement was signed and

after her husband's death, was violating the subordination agreement, which

inured solely to the surety company's benefit. Nor did defendants prove they

were damaged by this alleged breach. Lastly, by the time of trial, the West Point

project was completed, and we agree with the judge that any breach of contract

claim was moot.

      Given the judge's factual findings, we have no reason to reverse dismissal

of defendants' claim for trespass. It is undisputed that Igor accessed DOT's

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                                      19
financial reports with his mother's express permission. Pursuant to her job

duties, plaintiff routinely accessed and used the very same information, and, we

assume, she might just have reasonably produced the information herself.

Undoubtedly, plaintiff did not commit a tort by accessing the records, and

defendants' argument lacks sufficient merit to warrant further discussion. R.

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

      The defamation claim was supported by the testimony of Leon Sirota, who

was married to Leon's wife's niece, and Laura Titievsky, a close friend of

plaintiff. Sirota claimed that at a meeting with Igor and another family member,

Igor claimed Leon had forged his father's name on a "document" and was going

to jail as a result. Titievsky testified that plaintiff told her "Leon forge[d]

David's signature after David passed away" and "sign[ed] for David . . . [on]

some paperwork."

      Leon claims these statements were slander per se. See, e.g., Biondi v.

Nassimos, 300 N.J. Super. 148, 154 (App. Div. 1997) (noting that "defamatory

statements which impute to another person . . . a criminal offense" may be

slander per se). "[A] statement is defamatory if it is false, communicated to a

third person, and tends to lower the subject's reputation in the estimation of the

community or to deter third persons from associating with him." W.J.A. v. D.A.,

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                                       20
210 N.J. 229, 238 (2012) (alteration in original) (quoting Lynch v. N.J. Educ.

Ass'n, 161 N.J. 152, 164–65 (1999)).

      The judge's written opinion began with nearly thirty pages setting forth

the factual contentions of both parties.      Clearly, plaintiff questioned the

authenticity of the promissory notes and subordination agreement allegedly

signed by David and introduced at trial.      The judge dismissed defendants'

defamation claim finding Leon failed to prove "special damages," or that he

suffered in his personal or business relationships. However, if a plaintiff proves

slander per se, he is entitled to "presumed damages . . . 'which are normal and

usual and are to be anticipated when a person's reputation is impaired.'" Id. at

239 (quoting Prosser & Keeton on Torts § 116A at 843 (5th ed. 1984)).

"Presumed damages are a procedural device which permits a plaintiff to obtain

a damage award without proving actual harm to his reputation." Ibid. (citing

Rodney A. Smolla, Law of Defamation § 9:17 (2d ed. 2008)).

      The judge also reasoned that "Igor's alleged statements were made in a

settlement conference" and subject to the immunity provided by the litigation

privilege. See Hawkins v. Harris, 141 N.J. 207, 216 (1995). Leon appropriately

points out that Sirota was not authorized to settle anything, and, by his own

testimony, was at the meeting at the urging of another family member to try and

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                                       21
bring peace to the two warring factions of the Roitburg family. He was not a

"litigant[] or other participant[]" in a "judicial or quasi-judicial proceeding[] . . .

authorized by law . . . to achieve the objects of the litigation[.]" Ibid.

      However, the judge never made a finding as to the credibility of Sirota or

Titievsky, i.e., that plaintiff or Igor actually made these statements, nor did he

ever find that the nub of the alleged statements, i.e., Leon forged David's name

on certain documents, was false. Truth is an absolute defense to a defamation

claim, Ward v. Zelikovsky, 136 N.J. 516, 530 (1994), and "may be asserted as a

defense even when a statement is not perfectly accurate." G.D. v. Kenny, 205
N.J. 275, 293 (2011).

      Moreover, "[w]hen the publication of defamatory matter has been invited,

instigated or procured by the one defamed, or by someone acting on his behalf,

he generally cannot be heard to complain of the resulting injury." 30 River Ct.

E. Urb. Renewal Co. v. Capograsso, 383 N.J. Super. 470, 478 (App. Div. 2006)

(alteration in original) (emphasis added) (quoting Mick v. Am. Dental Ass'n, 49
N.J. Super. 262, 275 (App. Div. 1958)). Here, the comments allegedly made by

Igor and plaintiff were made to two individuals, knowledgeable of the

intrafamily dispute and desirous of trying to resolve it. They were both family

members or considered family.           Under the circumstances, the requisite

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                                         22
publication of the allegedly defamatory remarks to a third-party was lacking.

We affirm the dismissal of the defamation count for reasons other than those

expressed by the trial judge. See Hayes v. Delamotte, 231 N.J. 373, 387 (2018)

("[I]t is well-settled that appeals are taken from orders and judgments and not

from opinions, oral decisions, informal written decisions, or reasons given for

the ultimate conclusion." (quoting Do-Wop Corp. v. City of Rahway, 168 N.J.
191, 199 (2001))).

      Defendants argue the judge erroneously limited the testimony of several

defense witnesses by not allowing them to testify to statements David made

while alive because they were hearsay, and by nevertheless allowing Igor to

testify about conversations he had with David prior to his death. Specifically,

defendants argue the judge failed to consider the evidence as an exception to the

hearsay rule. See N.J.R.E. 804(b)(6) (permitting admission in civil cases of "a

statement made by a person unavailable as a witness because of death if the

statement was made in good faith upon declarant's personal knowledge in

circumstances indicating that it is trustworthy"). Defendants also contend the

judge permitted certain records to be admitted during Igor's testimony as

business records, even though Igor never worked for DOT.

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      "[O]rdinarily, an evidentiary determination made during trial is entitled to

deference and is to be reversed only on a finding of an abuse of discretion[.]"

Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 374 (2010).

"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 of the evidentiary

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

      We have carefully reviewed defendants' citations to the trial transcript as

set forth in their brief. In most cases, there was no objection, and most do not

involve testimony regarding statements made by David. In any event, to the

extent inadmissible evidence crept into the trial, its admission surely did not

lead to an unjust result. See Green v. N.J. Mfrs. Ins. Co., 160 N.J. 480, 502

(1999) (requiring appellate court to consider if erroneous decision to admit

certain evidence "was 'clearly capable of producing an unjust result'" (quoting

R. 2:10-2)).

                                       IV.

      We turn our attention to the points raised in plaintiff's cross-appeal.

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                                        A.

      Plaintiff contends the judge correctly awarded counsel fees in the original

judgment, but then erroneously denied any fee award in the separate March 12,

2019 order deciding plaintiff's motion. In his statement of reasons supporting

the original judgment, the judge offered no explanation for the basis of the fee

award. In support of the subsequent order denying any award, the judge found

there was no basis for an award of counsel fees under Rule 4:42-9(a). We agree.

      Rule 4:42-9(a) provides exceptions to the American Rule that generally

prohibits fee shifting. In re Niles Trust, 176 N.J. 282, 293–94 (2003). None of

the exceptions in the Rule apply to this case.

      The judge also concluded that the only provision in the buy-sell

agreement, the basis of plaintiff's breach of contract claim, permitting an award

of counsel fees was limited to collection costs on any note DOT issued as a

shortfall between the $1 million life insurance proceeds and the actual value of

the deceased shareholder's stock. The judge properly concluded, and pl aintiff

does not assert otherwise, that there was no such shortfall.

      Plaintiff instead contends the judge's reliance on this provision in the buy-

sell agreement was a mistake. She argues that under another provision of the

buy-sell agreement — the one the judge determined defendants breached —

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DOT was obligated to pay off David's loan within two years of his death.

Plaintiff contends that the promissory note DOT allegedly issued in David's

favor reflecting a $250,000 loan balance contained a provision for an award of

fees if litigation to collect ensued, and plaintiff prevailed.

      It is recognized that regardless of the provisions of Rule 4:42-9(a),

"[a]ttorney's fees may be allowed where the parties have agreed thereto in

advance . . . in a promissory note . . . or other agreement or contract[.]" Pressler

& Verniero, Current N.J. Court Rules, cmt. 2.10 on R. 4:42-9 (2021). However,

as we already noted, the judge never decided a contested issue at trial, i.e.,

whether the promissory note was authentic. It was plaintiff who challenged its

authenticity and whether it was conclusive evidence of David's total loan

balance, as defendants argued. In short, plaintiff never sought to enforce the

note. We therefore affirm on this point in the cross-appeal.

                                         B.

      Plaintiff argues that defendants violated the UFTA when Leon transferred

monies from DOT while the corporation owed David's estate repayment of loans

David made to the company. The judge never addressed the count in plaintiff's

complaint alleging a violation of the UFTA.

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      The UFTA "prevent[s] a debtor from placing his or her property beyond a

creditor's reach" and from "deliberately cheat[ing] a creditor by removing his

property from the 'jaws of execution.'" Gilchinsky v. Nat'l Westminster Bank

N.J., 159 N.J. 463, 475 (1999) (citations omitted). "Plaintiff bears the burden

of proving the transfer was fraudulent by clear and convincing evidence."

Jecker v. Hidden Valley, Inc., 422 N.J. Super. 155, 164 (App. Div. 2011) (citing

Barsotti v. Merced, 346 N.J. Super. 504, 520 (App. Div. 2002)).

      The court must consider certain "factors commonly referred to as 'badges

of fraud.'    'Badges of fraud' represent circumstances that so frequently

accompany fraudulent transfers that their presence gives rise to an inference of

intent." Gilchinsky, 159 N.J. at 476. These "badges of fraud" are set forth in

N.J.S.A. 25:2-26. Jecker, 422 N.J. Super. at 164.

                    The remedies available to a successful claimant
             under the UFTA are broad. Obviously, avoidance of
             the transfer is primary. N.J.S.A. 25:2-29(a)(1). Other
             remedies include attachment against the asset
             transferred or other property of the transferee, N.J.S.A.
             25:2-29(a)(2); a money judgment against the transferee
             where the transfer cannot be undone, N.J.S.A. 25:2-
             30(a), (b); and injunctive relief. N.J.S.A. 25:2-
             29(a)(3)(a). The statute also contains a catch-all
             provision, affording a creditor "[a]ny other relief the
             circumstances may require." N.J.S.A. 25:2-29(a)(3)(c).

             [Banco Popular N. Am. v. Gandi, 184 N.J. 161, 176–
             177 (2005) (alteration in original).]

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      Plaintiff urges us to essentially exercise our original jurisdiction, see Rule

2:10-5, and find clear and convincing evidence that defendants violated the

UFTA. She further asserts that such a finding independently justifies an award

of counsel fees commensurate with the application submitted to the trial judge

post-verdict. As we already said, the trial judge had the opportunity to see and

hear the witnesses and consider all the voluminous documentary evidence. We

cannot discern why he failed to address the issue, but we refuse to exercise

original jurisdiction, particularly given plaintiff's enhanced burden of proof

under the UFTA.

      We remand the matter to the Law Division specifically to address

plaintiff's UFTA cause of action, something the trial judge did not do. We leave

the conduct of the remand to the judge's discretion, and we do not retain

jurisdiction.

      In summary, on the appeal, we affirm the judgment in all respects, except

we order the trial court to vacate the judgment as to Leon and NPTC.

      On the cross-appeal, we affirm, but remand the matter to the trial court to

consider plaintiff's UFTA cause of action against defendants. We express no

opinion on the merits of the UFTA claim.

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