NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-0850-23 A-0889-23
PARKE BANK,
Plaintiff-Respondent, APPROVED FOR PUBLICATION
v. October 31, 2024 APPELLATE DIVISION VOORHEES DINER CORPORATION, MARK KLEIN and NICK DELLAPORTAS,
Defendants,
and
MORI RESTAURANT, LLC,
Appellant. ___________________________
Plaintiff-Respondent,
v.
VOORHEES DINER CORPORATION, MARK KLEIN and NICK DELLAPORTAS,
and LUCILLE LOPEZ and ROBERT P. LOPEZ, JR.,
Appellants. ________________________
Argued October 1, 2024 – Decided October 31, 2024
Before Judges Sumners, 1 Perez Friscia and Bergman.
On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-0715- 20.
Howard N. Sobel argued the cause for appellant Mori Restaurant LLC (Law Offices of Howard N. Sobel, PA, attorneys; Howard N. Sobel and Margaret D. Nikolis, on the briefs).
Alan A. Reuter argued the cause for appellants in A- 0889-23 and respondents in A-0850-23 Lucille Lopez and Robert P. Lopez, Jr. (Nash Law Firm, LLC, attorneys; Alan A. Reuter, on the brief).
Kevin W. Burdett (Braverman Kaskey Garber, PC) argued the cause for respondent Parke Bank (David L. Braverman (Braverman Kaskey Garber, PC) and Kevin W. Burdett, attorneys; David L. Braverman and Kevin W. Burdett, on the briefs).
John L. Slimm argued the cause for respondent Alan I. Gould, Statutory Receiver (Marshall Dennehey, PC, attorneys; John L. Slimm, on the briefs).
The opinion of the court was delivered by
1 Judge Sumners did not participate in oral argument but joins the decision with counsel's consent. R. 2:13-2(b).
A-0850-23 2 PEREZ FRISCIA, J.A.D.
In these back-to-back appeals consolidated for the purpose of issuing a
single opinion, we address the statutory receiver requirements for discharge
under the New Jersey Business Corporations Act (BCA), N.J.S.A. 14A:14-1 to
-27, and New Jersey Court Rules 4:53-1 to -9. Appellants Mori Restaurant,
LLC (Mori), and Lucille Lopez and Robert P. Lopez, Jr. (the Lopezes), appeal
from a November 17, 2023 Law Division order denying reconsideration of an
October 6, 2023 order, which discharged Alan I. Gould, Esq. as the court-
appointed statutory receiver. The Lopezes also appeal the Law Division's
denial of their motion to reconsider the order rejecting their right to intervene.
Following our review of the record and applicable law, we conclude the
Law Division improvidently granted Gould's discharge as the statutory
receiver and reverse and remand for further proceedings consistent with this
opinion. In the unpublished section of this opinion, we affirm the Law
Division's denial of the Lopezes' intervention. Therefore, we affirm in part,
reverse in part, and remand for further proceedings.
I.
On May 20, 2014, Mori Properties, LLC, entered a twenty-year
commercial lease with defendant Voorhees Diner Corporation (VDC) and co -
defendant Mark Klein for property in Voorhees. VDC leased the property to
A-0850-23 3 operate a diner. Plaintiff Parke Bank granted VDC a construction loan for
$1,000,000. Klein and co-defendant Nick Dellaportas, both principals of
VDC, personally guaranteed the loan. In addition to the note, Parke obtained a
security interest in the improvements and a leasehold mortgage. In November,
Mori Properties conveyed its property interest to Mori. On March 16, 2015,
Parke modified the note to include an additional loan of $400,000 to VDC,
which Klein and Dellaportas again guaranteed. The leasehold mortgage
memorialized the increased total loan of $1,400,000. VDC's New Jersey
corporation registration status was allegedly suspended in 2017. In 2019,
VDC defaulted on loan payments to Parke.
On February 20, 2020, Parke filed a complaint against VDC, Klein, and
Dellaportas alleging a breach of the commercial note. Six days later, Parke
moved for a court-appointed statutory receiver, which the Law Division
granted in part staying the designation of a receiver until the "COVID -19
[restaurant] closures" were lifted. Parke had represented its leasehold
mortgage was in jeopardy because VDC was at risk of eviction.
Contemporaneously, Mori had filed a landlord-tenant action seeking a writ of
possession against VDC, which the Law Division stayed due to the COVID-19
pandemic. Mori and VDC thereafter settled their landlord-tenant proceeding.
A-0850-23 4 In July, Parke obtained a final judgment against VDC, Klein, and
Dellaportas in the amount of $1,282,580.66. On September 24, 2021, the Law
Division granted Parke's unopposed motion to appoint Gould as a statutory
receiver to "take all necessary steps to take control over the business, liquor
license, and personal assets of [VDC], Klein, and Dellaportas." The Law
Division's order did not address Gould's posting of a bond pursuant to N.J.S.A.
14A:14-2(4). Beginning in October, Gould operated the diner without posting
a bond.
In September 2020, Parke had filed a foreclosure complaint in the
Chancery Division on the leasehold mortgage. Parke's foreclosure complaint
included the recorded judgment creditors. After defendants defaulted, final
judgment was entered. On November 4, 2021, the Chancery Division
appointed Gould as a special adjudicator 2 to sell the leasehold and other
property improvements in the foreclosure action. On January 18, 2022, after
an advertised sale, Gould sold the leasehold to the only bidder, 320 Route 73,
LLC (Route 73), a subsidiary of Parke, for $100 plus costs. In February, Mori
2 The Chancery Division order used the term special master. We however use the term special adjudicator in accordance with the recent adoption of Rule 1:21-5, which provides "[t]he terminology of 'special master' . . . shall be replaced with 'special adjudicator.'"
A-0850-23 5 filed a landlord-tenant eviction action against Gould and Route 73 in the
Special Civil Part, which Mori amended in March.
On March 30, Mori moved to intervene in the Law Division action
seeking to file claims for back rent and an accounting against Gould. 3 On
April 29, the Law Division denied intervention as the court had appointed
Gould after final judgment by default was entered. The Law Division directed
Mori to file a separate complaint. Further, the Law Division found the motion
was procedurally defective because Mori failed to comply with Rule 4:33-3,4
as a proposed complaint was not provided. On May 19, Mori moved for
reconsideration, which it later withdrew.
In May, the Chancery Division granted Gould's motion to confirm the
foreclosure sale to Route 73 and denied Mori's cross-motion to intervene
reasoning "if there [is] an issue about rent[]" a separate action may be filed.
Gould had continued to operate the diner but allegedly failed to pay Mori rent.
3 Mori has not appealed the Law Division's April 29, 2022 order denying intervention. 4 Rule 4:33-3 provides "A person desiring to intervene shall file and serve on all parties a motion to intervene stating the grounds therefor and accompanied by a pleading setting forth the claim or defense for which intervention is sought along with a Case Information Statement pursuant to R[ule] 4:5- 1(b)(1)."
A-0850-23 6 The Chancery Division found Mori "waited far too long" to contest the
foreclosure proceeding.
In August 2021, counsel for the Lopezes sent a preservation of rights
letter to VDC and Mori advising of Lucille's 5 July 23 slip and fall accident on
VDC's parking lot. Almost two years later, the Lopezes filed a personal injury
complaint alleging the fall occurred on the parking lot owned by Mori. Mori's
lease with VDC provided Mori would maintain "the parking [l]ot, which is part
of the common areas."
On June 28, 2023, Gould moved in the Law Division post-judgment
action to be discharged as the receiver, which Mori and the Lopezes opposed.
The Lopezes cross-moved to intervene and bar Gould's discharge. On October
6, the Law Division granted Gould's motion to be discharged stating he "ha[d]
completed his obligations" and denied the Lopezes' cross-motion. On
November 17, the Law Division denied the Lopezes' and Mori's motions to
reconsider Gould's discharge as well as the Lopezes' request to reconsider the
denial of their intervention.
5 Because Lucille Lopez and Robert P. Lopez, Jr., share the same surname, intending no disrespect, we use their first names in this opinion when mentioning them individually.
A-0850-23 7 Parke and Route 73 had also filed a separate Law Division complaint
regarding the diner's ownership. In October, Mori filed an amended
counterclaim and third-party complaint alleging negligence and other claims
against Gould.
On appeal, Mori contends the Law Division erred by discharging Gould
as the statutory receiver because he failed to comply with the governing
receivership statutes and court rules. The Lopezes similarly argue the Law
Division erroneously discharged Gould despite noncompliance with the
receivership statutes and court rules and wrongly denied their intervention.
II.
We review a court's order to appoint or discharge a receiver for an abuse
of discretion. See N.J. Realty Concepts, LLC v. Mavroudis, 435 N.J. Super.
118, 123 (App. Div. 2014). A court abuses its discretion "when a decision is
made without a rational explanation, inexplicably departed from established
policies, or rested on an impermissible basis." Mims v. City of Gloucester,
479 N.J. Super. 1, 5 (App. Div. 2024) (quoting Kornbleuth v. Westover, 241
N.J. 289, 302 (2020)). However, the trial court's "'interpretation of the law and
the legal consequences that flow from established facts are not entitled to any
special deference.'" Comprehensive Neurosurgical, P.C. v. Valley Hosp., 257
N.J. 33, 80 (2024) (quoting Rowe v. Bell & Gossett Co., 239 N.J. 531, 552
A-0850-23 8 (2019)). An appellate court also reviews an order denying reconsideration for
abuse of discretion. AC Ocean Walk, LLC v. Blue Ocean Waters, LLC, 478
N.J. Super. 515, 523 (App. Div. 2024).
The Superior Court's jurisdiction to appoint a statutory receiver is
codified in N.J.S.A. 14A:14-2 of the BCA. "The reason for the appointment of
a statutory receiver is to liquidate [a] corporation; such an appointment may
survive the termination of the lawsuit, and continues for whatever time it may
take to wind down the affairs of the corporation." Kaufman v. Duncan Invs.,
L.P., 368 N.J. Super. 501, 506 (App. Div. 2004). Pursuant to N.J.S.A. 14A:14 -
2(1)(a), a custodial receiver may be appointed "in the Superior Court by . . . a
creditor whose claim is for a sum certain or for a sum which can by
computation be made certain." N.J.S.A. 14A:14-1(b) defines a creditor as "the
holder of any claim, of whatever character, against a corporation, whether
secured or unsecured, matured or unmatured, liquidated or unliquidated,
absolute or contingent."
Grounds for the appointment of a statutory receiver are: "(a) the
corporation is insolvent"; "(b) the corporation has suspended its ordinary
business for lack of funds"; or "(c) the business of the corporation is being
conducted at a great loss and greatly prejudicial to the interests of its creditors
or shareholders." N.J.S.A. 14A:14-2(2). "[T]he mere appointment of a
A-0850-23 9 receiver operates to place property in custodia legis and automatically
prohibits its sale in the absence of approval of the court." Mavroudis, 435 N.J.
Super. at 124 (quoting Wilzig v. Sisselman, 209 N.J. Super. 25, 32 (App. Div.
1986)) (internal quotation marks omitted). N.J.S.A. 14A:14-1(g) defines
property as "real property, tangible and intangible personal property, and
rights, claims and franchises of every nature."
Rule 4:53-1 provides for the appointment of a statutory receiver under
"the general equity power of the court," stating:
No statutory receiver shall be appointed for a corporation without giving it notice and an opportunity to be heard; and an order appointing a statutory receiver for a corporation shall give the stockholders and creditors of the corporation leave, at a specified time and place, to show cause why the receiver should not be continued. An action in which a receiver of a corporation has been appointed, or applied for shall not be dismissed except by order of the court.
Pursuant to Rule 4:53-3 a receiver "may employ an attorney or accountant only
if the court determines [after an application] that such employment is
necessary." "No order authorizing such employment shall be entered until
after a hearing . . . except that where necessary to prevent immediate and
irreparable damage such employment may be authorized by the court until an
application . . . can be made." Ibid. The receiver must also file an inventory
A-0850-23 10 and periodic accountings, which must be audited and approved by the court.
R. 4:53-7(a) to (d).
"Our courts have consistently held that receivership costs have priority
over the claims of a secured creditor." Hyland v. Anchor Fin. Co., 146 N.J.
Super. 102, 107 (App. Div. 1977). "[R]eceivership costs have been assessed
against funds held in trust by an insolvent corporation." Id. at 108. A court
may appoint a receiver "only for the short period of time required to protect
assets pending a final resolution of litigation or a dissolution of the business
enterprise." Mavroudis, 435 N.J Super. at 125 (quoting Kassover v. Kassover,
312 N.J. Super. 96, 100 (App. Div. 1998)).
A.
We begin the published portion of our analysis by addressing Mori's and
the Lopezes' contentions that the Law Division erroneously discharged Gould
as the statutory receiver despite his failure to comply with the governing
receivership statutes and court rules. Specifically, they posit under the
receivership statutes Gould failed to: provide creditors notice in writing and
by publication, N.J.S.A. 14A:14-15; pay rent as a receivership cost, N.J.S.A.
14A:14-21; execute and file a bond, N.J.S.A. 14A:14-2(4); terminate the
receivership upon learning the diner was unprofitable, N.J.S.A. 14A:14-19;
and receive court approval for professional costs, N.J.S.A. 14A:14-20.
A-0850-23 11 Further, they argue Gould failed to abide by the court rules governing
receiverships, which require: court approval prior to employing professionals,
Rule 4:53-3; submission of an inventory and accounting, Rule 4:53-7(a); a
Superior Court deputy clerk audit review, Rule 4:53-7(b); and court approval
of a final accounting, Rule 4:53-7 (c) to (d).
It is undisputed Gould's statutory receiver appointment occurred in the
Law Division commercial loan action after Parke received a final judgment for
a sum certain. Neither Mori nor the Lopezes were parties to the lawsuit.
Mori's objections to Gould's discharge stems from its claims as a creditor
seeking unpaid rent by VDC and Route 73. See N.J.S.A. 14A:14-1(b). We
note Mori had filed a separate lawsuit against Gould, which the parties indicate
remained pending against Gould. It is clear Mori had standing as a creditor to
object to Gould's discharge. Gould owed Mori, VDC's landlord, rental arrears
that accrued under the commercial lease after the Law Division appointed
Gould as the statutory receiver. The Lopezes' discharge objections are based
on their personal injury claims against VDC. Pursuant to N.J.S.A. 14A:14 -
1(b), the Lopezes also established their status as creditors because they hold a
"claim" against VDC.
In finding Gould's discharge appropriate, the Law Division reasoned
Parke's litigation was post-judgment, VDC was insolvent, Mori was not
A-0850-23 12 foreclosed from pursuing fiduciary negligence claims against Gould in its
separate action, 6 and the Lopezes' personal injury claims did not preclude
discharge. Further, the Law Division concluded barring Gould's discharge for
noncompliance with the receivership statutes and court rules was unwarranted
because "[f]ormalities to follow the statute would have to be paid by
someone."
While not every deficiency under the receivership statutes and court
rules precludes discharge, the Law Division's discharge of Gould was
inappropriate because he failed to comply with the mandatory receivership
obligations. Gould was required to provide notice to creditors. N.J.S.A.
14A:14-15 (providing "the receiver shall, within 30 days following the date of
his appointment, give notice requiring all creditors to present their claims in
writing"). Rule 4:53-7(a) required Gould to provide an inventory and
accounting for the benefit of creditors, which was not obviated simply because
VDC was allegedly insolvent, and Route 73 later obtained the leasehold.
Without a full inventory and accounting, the Law Division could not discern
what funds were available to pay expenses and costs. N.J.S.A. 14A:14-21.
6 We note the Law Division's oral decision provided "a claim against . . . Gould" could proceed in a separate Law Division action. Rule 4:30 provides "[a]ny claim against a party may be reserved or severed and proceeded with separately by court order."
A-0850-23 13 Additionally, Gould was required to receive authorization from the Law
Division to retain an accountant. R. 4:53-3. The failure to provide an
inventory and accounting foreclosed an assessment of whether VDC's
insolvency required Gould to terminate the receivership earlier. N.J.S.A.
14A:14-19 ("A receivership action against a corporation may be discontinued
at any time when it is established that cause for the action no longer exists.").
Thus, we are constrained to part ways with the Law Division's order
granting Gould's discharge, as the BCA and court rules, at a minimum,
required notice to creditors, an inventory, and a final accounting. This is
especially true based on Mori's allegations of Gould's receivership errors.
Gould's argument that reversal is unwarranted because he performed his
receivership duties, as demonstrated by the fact that "three judges . . . found no
wrongdoing," is unsupported by the record. No court specifically addressed
the merits of his receivership deficiencies.
Regarding the necessary accounting, Gould's filing of limited financial
"paperwork" and Parke's submission of profit and loss statements did not
satisfy the statutory and court rule requirements. Further, Gould's contention
that VDC's limited funding was sufficient cause to retroactively waive his
receiver requirements is unsupported. The nature of a statutory receiver's
appointment contemplates the possibility of limited available corporate funds
A-0850-23 14 and insolvency. The required inventory and accounting memorialize the
financial realities, assets and debts, and provide the court an opportunity to
review the receiver's payments to creditors. See N.J.S.A. 14A:14-5. The Law
Division provided scant findings regarding the financial submissions, made no
statement approving an accounting, and did not address Gould's exercise of
powers as a receiver. R. 4:53-7(d). As we recently reiterated in Lakhani v.
Patel, 479 N.J. Super. 291, 297-98 (App. Div. 2024), appellate review is
impeded when a trial court fails to "state its factual findings and conclusions of
law on the record as required by Rule 1:7-4(a)." See R. 1:7-4(a) (requiring
trial courts to make sufficient "find[ings] [of] . . . fact[s] and state [their]
conclusions of law"). "The trial court must state clearly its factual findings
and correlate them with the relevant legal conclusions." Curtis v. Finneran, 83
N.J. 563, 570 (1980).
Undisputedly, Parke successfully attained Gould's appointment and
primarily benefitted from his services, along with its subsidiary Route 73.
Parke paid Gould $300 an hour as he continued in his role as the statutory
receiver on behalf of Route 73, Parke's subsidiary, for approximately fifteen
months after the Chancery Division confirmed the foreclosure sale. It is
unclear why Gould did not procure an inventory and accounting, including the
diner's operating profits and expenses and a full delineation of assets. Further,
A-0850-23 15 Gould "remain[ed] under . . . [Parke's] employ to continue to operate the diner"
well after the sale, but he provided no explanation why he did not file a motion
for discharge contemporaneous to Route 73's assumption of the leasehold.
Upon realizing VDC was not profitable, neither Parke nor Gould moved for the
Law Division to address the lack of compliance with the receivership statutes
and court rules. Gould continued to operate the diner for Route 73's benefit,
yet Gould did not pay Mori all the rent owed during the receivership.
Our court has determined that in "limited . . . situation[s] where the
assets of the dissolving corporation are insufficient to pay the receiver's fees
and costs" there may be circumstances warranting a party to incur the liability
for such payments. Catsouphes v. Atex Assocs., Inc., 287 N.J. Super. 459, 465
(App. Div. 1996); see also Foster v. Bay Front Land Co., 109 N.J. Eq. 569,
576-79 (E. & A. 1931) (holding if there are insufficient funds to afford the
receiver's fees and costs then payment "may be directed to be paid by the
parties at whose suit the appointment was made"). Further, we have
recognized a creditor deriving a benefit from a receivership may be
responsible to "pay its equitable share of [the receivership] expenses."
Hyland, 146 N.J. Super. at 110. The court is "clothed with ample power to
compel the [creditor on whose application the appointment was made] to pay
the expenses incident to the receivership." Id. at 109 (quoting Seidler v.
A-0850-23 16 Branford Rest., 97 N.J. Eq. 531, 535 (1925)). We conclude, based on the
record here, the Law Division had the authority to consider ordering Parke to
incur the cost of providing notice, an inventory, and an accounting if VDC
lacked funds because Parke was the responsible party for requesting the
receiver and primary beneficiary.
While we conclude the Law Division abused its discretion in granting
Gould's discharge, we discern the Law Division did not abuse its discretion in
determining his failure to post a bond was insufficient to preclude discharge.
We note the Law Division's order appointing Gould did not require a bond
although mandated under the BCA. N.J.S.A. 14A:14-2(4) ("Every receiver
shall, before assuming his duties, execute and file a bond . . . with such
sureties and in such form as the court shall approve."). But as observed by the
Law Division, the receivership occurred during the COVID-19 pandemic.
Further, a review of the record does not demonstrate Gould's ability to
retroactively obtain a bond. While N.J.S.A. 14A:14-2(4) requires a bond, we
recognize there may be very limited circumstances where a bond may not be
obtainable, or the Law Division has cause to waive the statutory receiver's
mandate to file a bond. Therefore, on remand we leave to the Law Division's
sound discretion to revisit Gould's filing of a bond at this late stage while
completing his receiver responsibilities; however, if obtaining a bond is not
A-0850-23 17 possible, Gould's discharge after the completion of his duties should not be
withheld. Thus, on remand, Gould's reinstatement is limited to fulfilling his
duties as the statutory receiver consistent with this opinion.
We further note Mori did not appeal the Chancery Division's May 2022
order confirming the foreclosure sale. Once the Chancery Division confirmed
the leasehold sale, it foreclosed the rights of unrecorded creditors against the
leasehold. Generally, in a mortgage foreclosure action, pursuant to N.J.S.A.
2A:50-30, parties "claiming an interest in or an encumbrance or lien upon such
property . . . [that] could be recorded, registered, entered or filed in any public
office in this state, and which shall not be so recorded . . . at the time of the
filing of the complaint" are "bound by the proceedings." The "transfer of a
sheriff's deed . . . cut[s] off both . . . [the] right of redemption and [a movant's]
unrecorded interest." Woodmont Props., LLC v. Township of Westampton,
470 N.J. Super. 534, 544 (App. Div. 2022). Here, Gould's necessity to
complete the mandated inventory and accounting were not obviated. Further,
any creditors' interests lawfully arising against Route 73 after it purchased the
leasehold, and while Gould operated the diner, were not extinguished.
The Law Division's order granting Gould's discharge is reversed and the
matter is remanded for further proceedings consistent with this opinion.
A-0850-23 18 B.
Having addressed Gould's statutory receiver discharge, we now turn to
the Lopezes' argument that reversal of the Law Division's order denying
intervention is warranted. The Lopezes contend the Law Division erroneously
"den[ied] the[ir] motion to intervene despite . . . statutory violations." We are
unpersuaded.
The Lopezes maintain "an August 2, 2021 preservation letter" sent to
VDC and Mori provided sufficient notice of their negligence claims.
Undisputedly, the Lopezes did not send Gould the letter, as the Law Division
did not appoint him as the statutory receiver until September. The Lopezes
correctly argue their status as creditors was established under N.J.S.A. 14A:14 -
1(b), which defines "creditor" as "the holder of any claims, of whatever
character against a corporation, whether secured or unsecured." While their
personal injury claims sufficiently support their creditors' status, that alone
does not serve as cause to intervene. We note, absent from their merits brief is
any citation to authority supporting intervention.
"Our [r]ules of [c]ourt govern intervention at trial, and the trial court's
interpretation of those rules is subject to our de novo review." N.J. Dep't of
Env't Prot. v. Exxon Mobil Corp., 453 N.J. Super. 272, 285 (App. Div. 2018)
(citing Washington Commons, L.L.C. v. City of Jersey City, 416 N.J. Super.
A-0850-23 19 555, 560 (App. Div. 2010)). "We look first to the plain language of the rules
and give the words their ordinary meaning." Robertelli v. N.J. Off. of Att'y
Ethics, 224 N.J. 470, 484 (2016) (citing Bridgewater-Raritan Educ. Ass'n v.
Bd. of Educ. of Bridgewater-Raritan Sch. Dist., Somerset Cnty., 221 N.J. 349,
361 (2015)).
Rule 4:33-1 establishes four criteria for a movant to satisfy in seeking to
intervene as of right in an action:
(1) claim "an interest relating to the property or transaction which is the subject of the transaction," (2) show [the movant] is "so situated that the disposition of the action may as a practical matter impair or impede its ability to protect that interest," (3) demonstrate that the "[movant's] interest" is not "adequately represented by existing parties," and (4) make a "timely" application to intervene.
[Am. Civ. Liberty Union of N.J., Inc. v. County of Hudson, 352 N.J. Super. 44, 67 (App. Div. 2002) (alterations in original) (quoting Meehan v. K.D. Partners, L.P., 317 N.J. Super. 563, 568 (App. Div. 1998)).]
"As the rule is not discretionary, a court must approve an application for
intervention as of right if the four criteria are satisfied." Exxon Mobil Corp.,
453 N.J. Super. at 286 (quoting Meehan, 317 N.J. Super. at 568) (internal
quotation marks omitted).
Alternatively, under Rule 4:33-2, "[u]pon timely application[,] anyone
may be permitted to intervene in an action if the claim or defense and the main
A-0850-23 20 action have a question of law or fact in common." "In exercising its
discretion[,] the court shall consider whether the intervention will unduly delay
or prejudice the adjudication of the rights of the original parties." Ibid. Rule
4:33-2 is "the more liberal permissive intervention rule"; therefore, we must
"review the court's determination of a permissive intervention motion under an
abuse of discretion standard." Exxon Mobil Corp., 453 N.J. Super. at 286-87
(citing City of Asbury Park v. Asbury Park Towers, 388 N.J. Super. 1, 12
(App. Div. 2006)).
We discern no abuse of discretion by the Law Division's order denying
intervention as of right, Rule 4:33-1, and permissive intervention, Rule 4:33-2.
The Lopezes filed their cross-motion to intervene after Gould moved to be
discharged in the post-judgment action. The Lopezes did not establish
intervention as of right because they failed to show a sufficient interest related
to the underlying action or that they had an established interest that would be
impeded. They established no perfected claim against the leasehold and
property improvements. The Lopezes were not foreclosed from pursuing their
negligence claims in their July 2023 personal injury lawsuit. We discern no
basis to disturb the Law Division order regarding intervention.
Turning to permissive intervention under Rule 4:33-2, the Lopezes have
not sufficiently shown their claims "and the [underlying] action have a
A-0850-23 21 question of law or fact in common." Additionally, "[o]n the issue of
timeliness," the Law Division correctly "consider[ed] the purpose of the
intervention motion in relation to the stage in the action when the motion was
made." Chesterbrooke Ltd. P'ship v. Plan. Bd. of Twp. of Chester, 237 N.J.
Super. 118, 125 (App. Div. 1998).
In J.L.B. Equities v. Dumont, 310 N.J. Super. 366, 374 (App. Div.
1998), we elucidated that:
a claimant . . . who is aware . . . of . . . potential claims against a court-appointed receiver arising from the receiver's official duties, and is aware of such [receiver's discharge] proceeding, must move to intervene . . . , or alternatively must move to vacate the order of discharge within a reasonable time period in order to preserve its claims.
The "[f]ailure to do so bars [the litigant's] claim." Ibid. The plaintiff in J.L.B.
was a secured creditor that initiated a negligence action against a receiver for
breaching fiduciary duties. J.L.B., 310 N.J. Super. at 368. A "fiduciary is
liable for harm resulting from a breach of the duties imposed by the existence
of [the fiduciary] relationship." McKelvey v. Pierce, 173 N.J. 26, 57 (2002)
(quoting F.G. v. MacDonell, 150 N.J. 550, 563-64 (1997)). In J.L.B., the court
dismissed the complaint against the receiver because plaintiff had not moved
to intervene during the pendency of the known Chancery Division lawsuit in
which the receiver was appointed and discharged.
A-0850-23 22 Again, the underlying litigation was post-judgment. Further, the
Lopezes did not have a recorded interest pursuant to N.J.S.A. 2A:50-30 prior
to Route 73's purchase of the leasehold and had a pending personal injury
action. Therefore, we conclude the judge did not abuse his discretion in
denying the Lopezes' intervention.
III.
For the reasons stated in Part A, Gould's discharge is reversed, and the
matter is remanded for proceedings consistent with this opinion. We affirm on
the issue of the Lopezes' intervention. To the extent not addressed, appellants'
remaining contentions lack sufficient merit to warrant discussion in a written
opinion. R. 2.11-3(e)(1)(E).
Affirmed in part, reversed in part, and remanded. We do not retain
jurisdiction.
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