NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-2672-22
IRA RUSSACK, individually, MARC RUSSACK, individually, AGHARTA RR FLETCHER LLC, a Delaware limited liability company, AGHARTA FLETCHER HOLDINGS LLC, a Delaware limited liability company, AGHARTA FLETCHER MEZZ LLC, a Delaware limited liability company, CROSBY 44 STREET REALTY LLC, and AGHARTA REALTY LLC, a Delaware limited liability company,
Plaintiffs-Appellants,
v.
LIPOT ROSENBERG, individually, LR MANAGEMENT GROUP LLC, a New York limited liability company, AGHARTA RR FLETCHER SUB LLC, a Delaware limited liability company,
Defendants,
and
JEFFREY LEVITIN, individually, LEVITIN & ASSOCIATES, PC, FLETCHER OFFICE CENTER LLC, a Delaware limited liability company, FLETCHER MGR LLC, a Delaware limited liability company, J&D PRINCETON LLC, a New Jersey limited liability company, 9W CORPORATE PLAZA MANAGER LLC, a Delaware limited liability company, FLETCHER AVENUE MEMBER LLC, a Delaware limited liability company, F-W FLETCHER LLC, a limited liability company, and JOSEPH FRIEDLAND, individually,
Defendants-Respondents. ___________________________________
Argued May 22, 2024 – Decided April 15, 2025
Before Judges Gummer and Walcott-Henderson.
On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-000073-22.
Conrad M. Olear argued the cause for appellants (Strasser & Associates, PC, attorneys; Conrad M. Olear, of counsel and on the briefs).
Steven R. Vanderlinden argued the cause for respondents Jeffrey Levitin and Levitin & Associates, PC (Aronsohn Weiner Salerno & Kaufman PC, attorneys; Steven R. Vanderlinden, on the brief).
Fred R. Gruen argued the cause for respondents Fletcher Office Center LLC, Fletcher MGR LLC, J&D Princeton LLC, 9W Corporate Plaza Manager LLC, Fletcher Avenue Member LLC, F-W Fletcher LLC, and
A-2672-22 2 Joseph Friedland (Gruen & Goldstein, attorneys; Fred R. Gruen, on the brief).
The opinion of the court was delivered by
GUMMER, J.A.D.
Plaintiffs appeal from three orders granting on statute-of-limitations
grounds defendants' motions to dismiss pursuant to Rule 4:6-2(e) and an order
denying plaintiffs' subsequent reconsideration motion. Because the trial court
erred in dismissing plaintiffs' non-defamation claims against the law-firm
defendants without conducting an evidentiary hearing pursuant to Lopez v.
Swyer, 62 N.J. 267 (1973), we vacate the orders as to those claims and remand
the case for proceedings consistent with this opinion. We otherwise affirm.
I.
Plaintiffs filed the complaint initiating this lawsuit on April 19, 2022.
Plaintiffs identified and described themselves as Ira Russack, a real estate
investor and majority owner of the plaintiff entities; Mark Russack, a real estate
investor, minority owner of the plaintiff entities, and son of Ira1; and Agharta
RR Fletcher LLC, Agharta Fletcher Holdings LLC, Agharta Fletcher Mezz LLC,
1 Because of their shared last name, we use the first names of the individual plaintiffs to reference them. We do so for ease of reading and intend no disrespect. A-2672-22 3 and Agharta Realty LLC, entities formed by defendant Jeffrey Levitin, Esq., "for
the purpose of owning an interest in the real property located at 2200 Fletcher
Avenue" in Fort Lee. According to plaintiffs, Agharta Realty LLC owned 44%
of the property.
Plaintiffs named as defendants: Levitin and Levitin & Associates, a law
firm owned and operated by Levitin (collectively the Levitin defendants);
Fletcher Office Center LLC, Fletcher MGR LLC, J&D Princeton LLC, 9W
Corporate Plaza Manager LLC, Fletcher Avenue Member LLC, F-W Fletcher
LLC, and Joseph Friedland (collectively the Friedland defendants); and Lipot
Rosenberg, LR Management Group, and Agharta RR Fletcher Sub LLC
(collectively the Rosenberg defendants). According to plaintiffs, Rosenberg
was the sole owner and member of LR Management Group, and Agharta RR
Fletcher Sub LLC was formed by Rosenberg and Levitin without plaintiffs'
knowledge to own an interest in plaintiff Agharta RR Fletcher LLC. Plaintiffs
described Friedland as the manager of J&D Princeton LLC and Fletcher Avenue
Member LLC, the authorized signatory of Agharta Realty LLC and Fletcher
MGR LLC, and a participant involved in the purchase of the property and the
alleged defrauding of plaintiffs.
A-2672-22 4 In the complaint, plaintiffs alleged Rosenberg, whom Ira knew from
previous real-estate transactions, had approached Ira in January 2016 and
advised him he knew someone who was looking for an investor in the purchase
of the property. Plaintiffs believed Friedland was that individual and that
Friedland had enlisted Rosenberg to help him find another investor. According
to plaintiffs, Rosenberg represented to Ira that the property was going to be
purchased for approximately $40,000,000, the buyer needed an investor who
could provide cash at the closing in exchange for an ownership interest in the
property, and if Ira contributed $6,000,000, he would own 54% of the property.
Plaintiffs alleged Levitin represented Ira's interests in connection with the
transaction and did not tell him he and his firm were performing legal work for
Rosenberg in connection with the transaction.
Plaintiffs claimed unbeknownst to Ira, Levitin and Rosenberg "were
concocting a confusing web of entities to comprise the ownership structure that
not only deprived [Ira] of a 54% ownership interest in the Fort Lee property, but
also fraudulently provided . . . Rosenberg with a 40% ownership interest in the
entity which would co-own the Fort Lee property." According to plaintiffs, Ira
did not receive any documents regarding the purchase of the property after the
February 25, 2016 closing, and he was "completely in the dark about the
A-2672-22 5 transaction after signing all the assignments and documents presented to him by
Levitin in the beginning of February." Plaintiffs alleged their repeated demands
for copies of the closing documents were ignored and that "recently, upon [Ira's]
decision to terminate his relationship with Levitin . . . Levitin finally provided
[p]laintiffs with certain documents relative to the transaction whereby [p]laintiff
became aware of . . . the fraud that had been perpetrated by Levitin, Rosenberg
and the other investors in the property." Plaintiffs asserted they had become
aware for the first time that Agharta Realty LLC owned only a 44% interest in
the property on receiving a copy of the deed.
Plaintiffs pleaded eleven causes of action in their complaint. In count one,
entitled "Partition and Demand for Accounting," plaintiff Agharta Realty LLC,
claiming it owned 44% of the property as a tenant-in-common with defendant
Fletcher Office Center LLC, sought a judgment against defendant Fletcher
Office Center LLC, compelling the sale of the property, a partition of the
property pursuant to N.J.S.A. 2A:56-2 and distribution of the sale proceeds, and
an accounting from "the management company of the subject real property" 2 of
2 Whether plaintiffs named "the management company of the subject real property" as a defendant isn't clear from the complaint. Plaintiffs did not describe any of the named defendants as "the management company of the subject real property." A-2672-22 6 disbursements and distributions made in connection with the property since
February 25, 2016. In count two against the Rosenberg defendants, plaintiffs
sought a judgment declaring Ira had a 99% interest and Marc had a 1% interest
in the plaintiff entities.
In count three, plaintiffs alleged defendants Rosenberg, Levitin,
Friedland, and the Friedland entities had engaged in intentional fraud, making
"representations which they knew to be false . . . for financial gain and to extort
money from" plaintiffs.
In court four, entitled "Professional Negligence/Legal Malpractice,"
plaintiffs alleged the Levitin defendants had a "wide ranging" duty to Ira, as his
counsel in the transaction, and had breached that duty by "failing to act in
[p]laintiffs [sic] best interests, representing two clients in the same transaction
with differing interests, failing to advise [p]laintiffs properly regarding various
documents created by. . . [d]efendants and purposely defrauding . . . [p]laintiff
by creating documents that [p]laintiff did not consent to nor authorize[]."
Plaintiffs also faulted the Levitin defendants for "retain[ing] monies which were
rightfully [p]laintiffs" and for having "never advised [p]laintiff that [d]efendants
were representing . . . Rosenberg in the very same transaction."
A-2672-22 7 In count five, plaintiffs alleged the Rosenberg defendants had engaged in
intentional interference with prospective economic advantage by causing "a
cloud on the title of the assets of the [p]laintiff entities" and that defendant 9W
Corporate Plaza Manager LLC had "interfere[ed] with the benefits of
[p]laintiffs" by "receiv[ing] economic benefits from the property ownership"
when it "provided no investment into the initial purchase."
In count six, plaintiffs accused defendants Rosenberg and Levitin of
engaging in "extreme and outrageous" conduct and intentionally inflicting
emotional distress on Ira and Marc. In count seven, plaintiffs claimed
Rosenberg "ha[d] made and continue[d] to make false and defamatory
statements related to the [p]laintiffs, including, but not limited to his ownership
in the [p]laintiff entities." They alleged Rosenberg had published those
defamatory statements "to a third party by executing an Operating Agreement
stating ownership in an entity that he knowingly knew was false" and that
Levitin had "participated in" that defamation "by creating the . . . Operating
Agreement which he knew to be false and fraudulent."
In count eight, plaintiffs alleged defendants had improperly received
distributions of funds that should have been given to plaintiffs. In count nine,
they asserted defendants had "converted for themselves" plaintiffs' property and
A-2672-22 8 had "exercised dominion and control of that property, without proper
authorization." In count ten, plaintiffs alleged "[p]laintiff was in contractual
privity with the [d]efendants" and defendants had "violated the subject
contract/agreements by, among other things, not paying [p]laintiff the amount
of money rightfully due and owing [p]laintiffs" and "failing to account to
[p]laintiff for all monies disbursed related to the subject real property." In count
eleven, plaintiffs contended defendants had violated the implied covenant of
good faith and fair dealing.
The Levitin defendants, Friedland defendants, and Rosenberg defendants,
respectively, moved to dismiss the complaint pursuant to Rule 4:6-2(e).
Plaintiffs opposed the motions, submitting the certifications of Ira and his
personal assistant.
In his certification, Ira supported many of the factual assertions set forth
in the complaint. He also certified he had not "become fully aware" of the
"corporate structure" the Levitin defendants had "create[d] in connection with
this transaction" until "2020 and 2021." He asserted that "[i]n or about 2021,"
he had become "aware that [his] ownership interest in the subject property was
not 54% as [he] had believed since the closing of title in February of 2016." He
also certified he did not receive any of the closing documents after the closing
A-2672-22 9 and Levitin had refused to provide him with copies of the closing documents
and other documents until a July 17, 2020 meeting when Levitin gave Ira a
memory stick he said contained the closing documents.
Ira's personal assistant certified she had on numerous occasions over a
number of years requested copies of the closing documents from the Levitin
defendants, whom she described as "our legal counsel." She also stated Ira's
accountants had requested from the Levitin defendants information on the
closing. According to the assistant, the Levitin defendants did not provide the
requested information until the July 17, 2020 meeting.
After hearing argument, the trial court on December 22, 2022, placed a
decision on the record granting the motions. The court held plaintiffs' causes of
action were barred by the applicable statute of limitations. The court found the
discovery rule did not apply because Ira had been "known to be a savvy
investor," "d[one] th[o]se types of transactions before," and, with the exercise
of due diligence, should and could have obtained the closing documents and
learned of the ownership-share discrepancy earlier.
The next day, the court entered three orders granting defendants' motions.
In the order granting the Friedland defendants' motion, the court dismissed all
claims against those defendants with prejudice except the claim against
A-2672-22 10 defendant Fletcher Office Center LLC in count one, which the court dismissed
without prejudice. As the court explained in its oral decision, plaintiffs
potentially in the future could bring partition or accounting actions, if permitted
under the operating agreement, based on other issues relating to the operation of
the company not at issue in this case but were time-barred from demanding
partition based on the allegations made in the complaint.
Plaintiffs moved for reconsideration of the December 23, 2022 orders.
The court heard argument, placed a decision on the record denying the motion,
and on March 27, 2023, issued an order denying the motion.
This appeal followed. Plaintiffs argue the court should have applied the
discovery rule to delay the accrual of the statute of limitations on its claims ; it
should not have assumed every cause of action in the complaint commenced at
the time of closing; it failed to weigh and consider case law related to the
motions to dismiss; it inexplicably dismissed counts one and two of the
complaint; and it should have conducted a Lopez hearing, to determine the
applicability of the discovery rule.
II.
We review de novo a motion to dismiss for failure to state a claim upon
which relief can be granted under Rule 4:6-2(e). Baskin v. P.C. Richard & Son,
A-2672-22 11 LLC, 246 N.J. 157, 171 (2021). "A reviewing court must examine 'the legal
sufficiency of the facts alleged on the face of the complaint,' giving the plaintiff
the benefit of 'every reasonable inference of fact.'" Ibid. (quoting
Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl, P.C., 237
N.J. 91, 107 (2019)). We "accord no deference to the trial judge's legal
conclusions." Richter v. Oakland Bd. of Educ., 459 N.J. Super. 400, 412 (App.
Div. 2019). We review "a trial court's decision to dismiss a complaint as barred
by a statute of limitations" de novo. Barron v. Gersten, 472 N.J. Super. 572,
576 (App. Div. 2022). We review a trial court's order on a reconsideration
motion under an abuse-of-discretion standard. Branch v. Cream-O-Land Dairy,
244 N.J. 567, 582 (2021).
Plaintiffs filed their complaint six years, one month, and twenty-five days
after the closing date and one year, nine months, and two days after Levitin
purportedly gave Ira the closing documents, placing the filing of the complaint,
considering only those dates, beyond the longest applicable statute of
limitations. See, e.g., N.J.S.A. 2A:14-1 (requiring actions for tortious injury,
conversion, or express or implied contractual claims to "be commenced within
six years next after the cause of any such action shall have accrued"). Plaintiffs
rely on the discovery rule and the doctrine of equitable tolling to explain any
A-2672-22 12 apparent delay in the filing of their complaint. "While the discovery rule
postpones the accrual of a cause of action, equitable tolling acknowledges the
accrual of the action but tolls the statute of limitations because the plaintiff
lacked vital information that was withheld by a defendant." Freeman v. State,
347 N.J. Super. 11, 31 (App. Div. 2002).
Neither the discovery rule nor the doctrine of equitable tolling can save
plaintiffs' defamation claims against the Rosenberg and Levitin defendants.
Pursuant to N.J.S.A. 2A:14-3, "[e]very action at law for libel or slander shall be
commenced within [one] year next after the publication of the alleged libel or
slander." In NuWave Investment Corp. v. Hyman Beck & Co., Inc., 221 N.J.
495, 500 (2015), the Court held the discovery rule does not apply to defamation
claims because "[t]he statute's clear and unqualified language requires all libel
claims to be made within one year of the date of the publication." And even if
the discovery rule or equitable tolling could apply legally to plaintiffs'
defamation claims, the admitted facts of the case do not support their
application. Plaintiffs concede Ira was in possession of the closing documents
on July 17, 2020; they inexplicably waited until April 19, 2022, to file their
complaint. We affirm the dismissal of plaintiffs' defamation claims and the
denial of the reconsideration motion as to those claims.
A-2672-22 13 New Jersey courts have long recognized the application of the discovery
rule to "prevent the sometimes harsh result of a mechanical application of the
statute of limitations." Martinez v. Cooper Hosp.-Univ. Med. Ctr., 163 N.J. 45,
52 (2000). "The discovery rule is 'essentially a rule of equity.'" Catena v.
Raytheon Co., 447 N.J. Super. 43, 53 (App. Div. 2016) (quoting Lopez, 62 N.J.
at 273). A plaintiff seeking to invoke the application of the discovery rule bears
the burden of showing "a reasonable person in her [or his] circumstances would
not have been aware, within the prescribed statutory period, that she [or he] had
been injured by [the] defendant[']s" conduct. Kendall v. Hoffman-La Roche,
Inc., 209 N.J. 173, 197-98 (2012); see also The Palisades At Fort Lee Condo.
Ass'n, Inc. v. 100 Old Palisade, LLC, 230 N.J. 427, 444 (2017).
"The issue that must be determined by the trial judge is whether the party
requesting relief is equitably entitled to the benefit of the discovery rule."
Heyert v. Taddese, 431 N.J. Super. 388, 435-36 (App. Div. 2013). "[L]egal . . .
certainty [is] not required for a claim to accrue." Kendall, 209 N.J. at 193. "The
standard is basically an objective one—whether plaintiff knew or should have
known of sufficient facts to start the statute of limitations running." Ben Elazar
v. Macrietta Cleaners, Inc., 230 N.J. 123, 134 (2017) (quoting Caravaggio v.
D'Agostini, 166 N.J. 237, 246 (2001)) (internal quotation marks omitted). "The
A-2672-22 14 fundamental question in a discovery rule case . . . is 'whether the facts presented
would alert a reasonable person, exercising ordinary diligence, that he or she
was injured due to the fault of another.'" J.P. v. Smith, 444 N.J. Super. 507, 527
(App. Div. 2016) (quoting Caravaggio, 166 N.J. at 246).
The "decision [on accrual] requires more than a simple factual
determination; it should be made by a judge . . . conscious of the equitable nature
of the issue before him [or her]." Id. at 526 (first alteration and omission in the
original) (quoting Lopez, 62 N.J. at 275). Because the discovery rule is, at its
core, a rule of equity, the court also "must consider elements of fairness
pertaining to all parties, not just to those asserting the benefits of the rule."
Lapka v. Porter Hayden Co., 162 N.J. 545, 558 (2000); see also J.P., 444 N.J.
Super. at 526 (finding "[c]ourts must balance the desire to give innocent injured
parties their day in court against the fairness to those who must defend stale
claims"). Thus, "not every belated discovery . . . will justify an application of
the rule lifting the bar of the limitations statute." Szczuvelek v. Harborside
Healthcare Woods Edge, 182 N.J. 275, 281 (2005) (quoting Lopez, 62 N.J. at
275).
"The doctrine of equitable tolling, though similar to the discovery rule, is
slightly different. It may be available 'when a plaintiff is misled . . . and as a
A-2672-22 15 result fails to act within the prescribed time limit.'" Bustamante v. Borough of
Paramus, 413 N.J. Super. 276, 299 (App. Div. 2010) (omission in original)
(quoting Villalobos v. Fava, 342 N.J. Super. 38, 50 (App. Div. 2001)). Only
under very limited circumstances may a statute of limitations be equitably tolled:
"(1) [if] the defendant has actively misled the plaintiff, (2) if the plaintiff has in
some extraordinary way been prevented from asserting his [or her] rights, or (3)
if the plaintiff has timely asserted his [or her] rights mistakenly in the wrong
forum." Barron, 472 N.J. Super. at 577 (alterations in original) (quoting F.H.U.
v. A.C.U., 427 N.J. Super. 354, 379 (App. Div. 2012)) (internal quotation marks
omitted).
"Absent a showing of intentional inducement or trickery by a defendant,
[equitable tolling] . . . should be applied sparingly and only in the rare situation
where it is demanded by sound legal principles and in the interest of justice."
Ibid. (alteration and omission in original) (quoting Binder v. Price Waterhouse
& Co., L.L.P., 393 N.J. Super. 304, 313 (App. Div. 2007)). "[E]quitable tolling
requires plaintiffs to diligently pursue their claims because although it affords
relief from inflexible, harsh or unfair application of a statute of limitations, [it]
does not excuse claimants from exercising the reasonable insight and diligence
A-2672-22 16 required to pursue their claims." Ibid. (alteration in original) (quoting Binder,
393 N.J. Super. at 313) (internal quotation marks omitted).
Applying those equitable principles, we affirm the dismissal of the claims
against the Rosenberg 3 and Friedland defendants and the denial of the
reconsideration motion as to those defendants. Plaintiffs did not assert any facts
that would support the application of equitable tolling as to the claims against
those defendants. Plaintiffs do not claim, for example, those defendants
"actively misled" them, F.H.U., 427 N.J. Super. at 379, or otherwise impeded or
interfered with plaintiffs' ability, through the exercise of due diligence, to file a
claim within the prescribed time period. As for the discovery rule, balancing
the desire to give plaintiffs "their day in court against the fairness to those who
3 The Rosenberg defendants did not participate in this appeal. In a September 21, 2023 letter, plaintiffs' counsel advised this court plaintiffs had "settled this matter" with the Rosenberg defendants, plaintiffs and the Rosenberg defendants were "currently drafting a written settlement agreement," and "[t]he above appeal shall continue against all other remaining [r]espondents." At oral argument of the appeal, plaintiffs' counsel suggested the parties had not finalized the settlement and reminded the court plaintiffs had briefed issues regarding the dismissal of the Rosenberg defendants. Given plaintiffs' counsel's written representations plaintiffs had "settled this matter" with the Rosenberg defendants and that the appeal would "continue against all other remaining [r]espondents," the Rosenberg defendants may reasonably have understood plaintiffs were no longer pursuing the appeal as to them and for that reason did not participate in the appeal. In an abundance of caution, we have considered the appeal as to the Rosenberg defendants and, for the reasons stated in this opinion, affirm the dismissal of the claims against them. A-2672-22 17 must defend stale claims," we conclude the scale leans in favor of these
defendants. J.P., 444 N.J. Super. at 526.
We reach a different conclusion with respect to the Levitin defendants.
Plaintiffs have articulated a basis for equitable tolling against them: the alleged
repeated refusal of a law firm to provide copies of the closing documents to its
client. And given those repeated refusals and the alleged attorney-client
relationship between the parties, plaintiffs have articulated a basis for the
application of the discovery rule as to the Levitin defendants.
Maybe the trial court was right in thinking a "savvy investor" like Ira who
has "d[one] these types of transactions before" would have known to obtain and
review copies of the closing documents right away and would have taken action
against his attorney the first time he failed to turn over the closing documents.
Or maybe, contrary to plaintiffs' allegations, an attorney-client relationship did
not exist between Ira and the Levitin defendants and plaintiffs had copies of the
closing documents long before they claim they did. Those factual disputes are
best resolved in an evidentiary hearing. Generally, discovery-rule issues "will
not be resolved on affidavits or depositions since demeanor may be an important
factor where credibility is significant." Lopez, 62 N.J. at 275; see also Palisades,
230 N.J. at 452 (remanding case for trial court to conduct a Lopez hearing to
A-2672-22 18 examine evidence presented and "in its discretion, take testimony from relevant
witnesses").
Because the trial court erred in deciding those statute-of-limitation issues
without conducting an evidentiary hearing, we vacate the orders granting the
motion to dismiss as to the non-defamation claims against the Levitin defendants
and denying the reconsideration motion as to those claims. We remand for an
evidentiary hearing concerning the factual assertions at issue regarding the
application of the discovery rule and the equitable-tolling doctrine as to those
claims. We otherwise affirm.
To the extent we have not addressed them, all other points raised on appeal
lack sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E).
Affirmed in part; vacated in part; and remanded for proceedings consistent
with this opinion. We do not retain jurisdiction.
A-2672-22 19