NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-3163-15T2
RICHARD D. ZOCHOWSKI, as 50% shareholder in Zachmar, Inc.,
Plaintiff-Respondent,
v.
T. ROBERT ZOCHOWSKI, as 50% shareholder in Zachmar, Inc. and Zachmar, Inc., a New Jersey Corporation,
Defendants-Appellants. _________________________________
Submitted August 30, 2017 – Decided September 7, 2017
Before Judges Rothstadt and Vernoia.
On appeal from the Superior Court of New Jersey, Chancery Division, Monmouth County, Docket No. C-349-03.
T. Robert Zochowski, appellant pro se.
McKenna, DuPont, Higgins & Stone, attorneys for respondent (Edward G. Washburne, on the brief).
PER CURIAM
In an unpublished decision, we previously remanded to the
Chancery Division this "dispute between two brothers regarding the sale of real estate owned by their closely held corporation" for
a hearing as to "the distribution of [a] forfeited deposit and
plaintiff's purported misuse of corporate funds to pay legal fees."
Zochowski v. Zochowski, No. A-5841-13 (App. Div. Nov. 2, 2015)
(slip op. at 1, 6). On remand, the Chancery judge conducted a
plenary hearing at which plaintiff Richard Zochowski and defendant
T. Robert Zochowski testified and offered numerous documents that
were admitted into evidence.
Defendant appeals from the Chancery judge's February 22, 2016
order that rejected his claim about the distribution of the
forfeited funds; required plaintiff to reimburse defendant for a
portion of the legal fees he paid using corporate funds; and denied
defendant any other relief based on the judge's finding that
plaintiff did not intentionally violate court orders that required
him to keep defendant updated as to the sale of the company's real
estate. On appeal, defendant argues that the judge abused her
discretion by finding that the parties' stock transfer agreement
was "unclear and ambiguous"; erred by finding plaintiff owed only
one half of $12,176 in legal fees paid from corporate funds,
instead of one-half of $16,441; incorrectly failed to award legal
fees; and mistakenly failed to recognize that plaintiff "breached
his fiduciary duty and obli[g]ation to [the corporation] and
[defendant]." We disagree and affirm.
2 A-3163-15T2 We need not set forth at length again the history of this
family dispute that dates back to 2003 as we have previously
provided those details in our three earlier unpublished decisions.
See id. at 2-7; Zochowski v. Zochowski, No. A-4375-06 (App. Div.
Mar. 27, 2008) (slip op at 3-7); Zochowski v. Zochowski, No. A-
5930-05 (App. Div. Aug. 1, 2007) (slip op. at 1-3). Instead, we
begin by summarizing the Chancery judge's decision.
After considering the testimony and evidence adduced at the
remand hearing, the judge placed her comprehensive findings of
fact and conclusions of law on the record before entering the
order under appeal. Turning first to defendant's claim that the
forfeited deposit was not distributed in accordance with the
parties' agreement, the judge found that although the parties'
parents agreed to a transfer of their shares in the family
corporation to their two sons, through an October 1986 amendment
to the family's September 1985 stock purchase agreement, the
parents reserved the right to share equally with their sons in any
proceeds from the sale of corporate assets during the parents'
lives, even though they no longer owned any stock. The 1985
agreement provided that upon the death of either parent, the
proceeds would be distributed equally among the surviving spouse
and the brothers. The 1986 amendment, prepared by defendant,
3 A-3163-15T2 provided that if either parent died, the surviving parent would
receive the decedent's share.
The parties' father died in 2001. In 2006, the corporation
entered into a contract for the sale of certain real estate. The
purchaser paid a $75,000 deposit and then cancelled the contract,
forfeiting the deposit. Plaintiff retained for the corporation
twenty percent of the deposit for its reserves and distributed the
balance in accordance with the 1986 amendment to the stock purchase
agreement, fifty percent to his mother and twenty-five percent to
his brother and to himself.
Defendant argued to the Chancery judge that the deposit was
not a sale as contemplated by the amendment to the stock purchase
agreement.1 The judge concluded that it was, finding that the
agreement was ambiguous because it did not define a deposit towards
the sale of corporate asset as being the same as proceeds or "net
monies" from an actual sale. The judge concluded that the parties'
intended that "[w]hile the term sold is used and technically there
was never a sale, the forfeited deposit was part of a proposed
sale" and was properly distributed by plaintiff in accordance with
the amendment.
1 On appeal, defendant acknowledges that had the sale been completed, the plaintiff's distribution of the proceeds would have been proper and consistent with parties' agreement, as was done when they sold off a different property owned by the company.
4 A-3163-15T2 Next, the judge addressed defendant's claim that plaintiff
had violated earlier court orders by using corporate funds to pay
legal fees associated with the brothers' litigation. The judge
identified the August 29, 2008 order that prohibited plaintiff
from paying those fees going forward and preserved defendant's
claim regarding any fees already paid. The judge described her
detailed review of the legal bills paid by plaintiff after entry
of the earlier order, found that they totaled $12,716, and
concluded that defendant was entitled to one half that amount
because the payments were made in contravention of the earlier
order. As to legal bills paid before the entry of the 2008 order,
the judge found that the earlier bills "clear[ly] . . . relate[d]
to the sale of the [company's] property" and not to the parties'
dispute or litigation, and therefore defendant was not entitled
to any reimbursement.
The judge then considered defendant's claim that plaintiff
failed to keep him notified about the sale of company assets. The
judge disagreed after detailing the various methods by which
defendant was given regular access to all required available
information over the years. The judge concluded there was no
violation of the orders and that no sanctions were warranted.
Finally, the judge rejected defendant's claim for counsel
fees associated with the present proceedings. She denied the
5 A-3163-15T2 application after recognizing her authority to award fees under
Rule 1:10-3, but finding "there was no willful failure to comply"
with any order.
The scope of our review of a judgment entered in a non-jury
case is limited. Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J.
150, 169 (2011). "[W]e do not disturb the factual findings and
Free access — add to your briefcase to read the full text and ask questions with AI
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-3163-15T2
RICHARD D. ZOCHOWSKI, as 50% shareholder in Zachmar, Inc.,
Plaintiff-Respondent,
v.
T. ROBERT ZOCHOWSKI, as 50% shareholder in Zachmar, Inc. and Zachmar, Inc., a New Jersey Corporation,
Defendants-Appellants. _________________________________
Submitted August 30, 2017 – Decided September 7, 2017
Before Judges Rothstadt and Vernoia.
On appeal from the Superior Court of New Jersey, Chancery Division, Monmouth County, Docket No. C-349-03.
T. Robert Zochowski, appellant pro se.
McKenna, DuPont, Higgins & Stone, attorneys for respondent (Edward G. Washburne, on the brief).
PER CURIAM
In an unpublished decision, we previously remanded to the
Chancery Division this "dispute between two brothers regarding the sale of real estate owned by their closely held corporation" for
a hearing as to "the distribution of [a] forfeited deposit and
plaintiff's purported misuse of corporate funds to pay legal fees."
Zochowski v. Zochowski, No. A-5841-13 (App. Div. Nov. 2, 2015)
(slip op. at 1, 6). On remand, the Chancery judge conducted a
plenary hearing at which plaintiff Richard Zochowski and defendant
T. Robert Zochowski testified and offered numerous documents that
were admitted into evidence.
Defendant appeals from the Chancery judge's February 22, 2016
order that rejected his claim about the distribution of the
forfeited funds; required plaintiff to reimburse defendant for a
portion of the legal fees he paid using corporate funds; and denied
defendant any other relief based on the judge's finding that
plaintiff did not intentionally violate court orders that required
him to keep defendant updated as to the sale of the company's real
estate. On appeal, defendant argues that the judge abused her
discretion by finding that the parties' stock transfer agreement
was "unclear and ambiguous"; erred by finding plaintiff owed only
one half of $12,176 in legal fees paid from corporate funds,
instead of one-half of $16,441; incorrectly failed to award legal
fees; and mistakenly failed to recognize that plaintiff "breached
his fiduciary duty and obli[g]ation to [the corporation] and
[defendant]." We disagree and affirm.
2 A-3163-15T2 We need not set forth at length again the history of this
family dispute that dates back to 2003 as we have previously
provided those details in our three earlier unpublished decisions.
See id. at 2-7; Zochowski v. Zochowski, No. A-4375-06 (App. Div.
Mar. 27, 2008) (slip op at 3-7); Zochowski v. Zochowski, No. A-
5930-05 (App. Div. Aug. 1, 2007) (slip op. at 1-3). Instead, we
begin by summarizing the Chancery judge's decision.
After considering the testimony and evidence adduced at the
remand hearing, the judge placed her comprehensive findings of
fact and conclusions of law on the record before entering the
order under appeal. Turning first to defendant's claim that the
forfeited deposit was not distributed in accordance with the
parties' agreement, the judge found that although the parties'
parents agreed to a transfer of their shares in the family
corporation to their two sons, through an October 1986 amendment
to the family's September 1985 stock purchase agreement, the
parents reserved the right to share equally with their sons in any
proceeds from the sale of corporate assets during the parents'
lives, even though they no longer owned any stock. The 1985
agreement provided that upon the death of either parent, the
proceeds would be distributed equally among the surviving spouse
and the brothers. The 1986 amendment, prepared by defendant,
3 A-3163-15T2 provided that if either parent died, the surviving parent would
receive the decedent's share.
The parties' father died in 2001. In 2006, the corporation
entered into a contract for the sale of certain real estate. The
purchaser paid a $75,000 deposit and then cancelled the contract,
forfeiting the deposit. Plaintiff retained for the corporation
twenty percent of the deposit for its reserves and distributed the
balance in accordance with the 1986 amendment to the stock purchase
agreement, fifty percent to his mother and twenty-five percent to
his brother and to himself.
Defendant argued to the Chancery judge that the deposit was
not a sale as contemplated by the amendment to the stock purchase
agreement.1 The judge concluded that it was, finding that the
agreement was ambiguous because it did not define a deposit towards
the sale of corporate asset as being the same as proceeds or "net
monies" from an actual sale. The judge concluded that the parties'
intended that "[w]hile the term sold is used and technically there
was never a sale, the forfeited deposit was part of a proposed
sale" and was properly distributed by plaintiff in accordance with
the amendment.
1 On appeal, defendant acknowledges that had the sale been completed, the plaintiff's distribution of the proceeds would have been proper and consistent with parties' agreement, as was done when they sold off a different property owned by the company.
4 A-3163-15T2 Next, the judge addressed defendant's claim that plaintiff
had violated earlier court orders by using corporate funds to pay
legal fees associated with the brothers' litigation. The judge
identified the August 29, 2008 order that prohibited plaintiff
from paying those fees going forward and preserved defendant's
claim regarding any fees already paid. The judge described her
detailed review of the legal bills paid by plaintiff after entry
of the earlier order, found that they totaled $12,716, and
concluded that defendant was entitled to one half that amount
because the payments were made in contravention of the earlier
order. As to legal bills paid before the entry of the 2008 order,
the judge found that the earlier bills "clear[ly] . . . relate[d]
to the sale of the [company's] property" and not to the parties'
dispute or litigation, and therefore defendant was not entitled
to any reimbursement.
The judge then considered defendant's claim that plaintiff
failed to keep him notified about the sale of company assets. The
judge disagreed after detailing the various methods by which
defendant was given regular access to all required available
information over the years. The judge concluded there was no
violation of the orders and that no sanctions were warranted.
Finally, the judge rejected defendant's claim for counsel
fees associated with the present proceedings. She denied the
5 A-3163-15T2 application after recognizing her authority to award fees under
Rule 1:10-3, but finding "there was no willful failure to comply"
with any order.
The scope of our review of a judgment entered in a non-jury
case is limited. Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J.
150, 169 (2011). "[W]e do not disturb the factual findings and
legal conclusions of the trial 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[.]" Ibid. (second alteration in
original) (quoting In re Trust Created By Agreement Dated Dec. 20,
1961, ex rel. Johnson, 194 N.J. 276, 284 (2008)). "[I]n reviewing
the factual findings and conclusions of a trial judge, we are
obliged to accord deference to the trial court's credibility
determination[s] and the judge's 'feel of the case' based upon his
or her opportunity to see and hear the witnesses." N.J. Div. of
Youth & Family Servs. v. R.L., 388 N.J. Super. 81, 88 (App. Div.
2006) (quoting Cesare v. Cesare, 154 N.J. 394, 411-13 (1998)),
certif. denied, 190 N.J. 257 (2007). "Findings by the trial judge
are considered binding on appeal when supported by adequate,
substantial and credible evidence," and "should not be disturbed
unless . . . they are so wholly insupportable as to result in a
denial of justice." Rova Farms Resort, Inc. v. Inv'rs Ins. Co.
6 A-3163-15T2 of Am., 65 N.J. 474, 483-84 (1974) (alteration in original)
(citations omitted). However, we owe no special deference to the
judge's legal conclusions. Manalapan Realty, L.P. v. Twp. Comm.
of Manalapan, 140 N.J. 366, 378 (1995). "When deciding a purely
legal issue, review is de novo." Kaye v. Rosefielde, 223 N.J.
218, 229 (2015) (quoting Fair Share Hous. Ctr., Inc. v. N.J. State
League of Municipalities, 207 N.J. 489, 493 n.1 (2011)).
We review a trial judge's decision to award or withhold Rule
1:10-3 counsel fees for an abuse of discretion. Under the Rule,
a party may seek enforcement of an unstayed order, and "[t]he
court in its discretion may make an allowance for counsel fees to
be paid by any party to the action to a party accorded relief
under this rule." R. 1:10-3. The decision to award fees under
the Rule is not automatic. It "only applies to parties who
willfully fail to comply" with a court's order. Hynes v. Clarke,
297 N.J. Super. 44, 57 (App. Div. 1997). The award is a
discretionary decision. Chalom v. Benesh, 234 N.J. Super. 248,
262 (Law Div. 1989). Among the factors a trial court may consider
are: "the reasons for, and necessity of, making the application;
the conduct of the parties; the result achieved; the reasonableness
of the fee; and the danger to the integrity of R[ule] 4:42-9 if
fees are awarded." Ibid.
7 A-3163-15T2 Guided by these standards, we find defendant's contentions
to lack sufficient merit to warrant discussion in a written
opinion. R. 2:11-3(e)(1)(E). The Chancery judge's lengthy,
detailed decision, which resulted in the order challenged here,
is supported by sufficient credible evidence, is legally correct,
and demonstrates a proper exercise of the judge's discretion. We
therefore affirm substantially for the reasons expressed by the
Chancery judge in her thorough oral decision.
Affirmed.
8 A-3163-15T2