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New Jersey Sports and Exposition Authority v. Tufo

Decided: February 22, 1989.


On appeal from the Superior Court, Law Division, Monmouth County, whose opinion on pretrial motion is reported at 210 N.J. Super. 664.

Pressler, O'Brien and Stern.

Per Curiam

[230 NJSuper Page 619] Plaintiff New Jersey Sports and Exposition Authority, a public body, is the successor by merger to a former privately held, publicly traded corporation, Monmouth Park Jockey Club

(Monmouth Park), which owned and operated a race track in Oceanport, New Jersey. It brought this action pursuant to N.J.S.A. 14A:11-1 et seq. for an evaluation of the fair value of the shares of the two dissenting stockholders, defendant Daniel J. Del Tufo, the owner of 3,620 of the approximately 776,000 issued and outstanding shares of Monmouth Park, and defendant Carol Del Tufo, the owner of 300 shares. Following trial the fair value was fixed at $58 per share. Defendants appeal from the judgment so decreeing on both substantive and procedural grounds. They also appeal from a pretrial order striking their demand for a jury trial and from the provisions of the judgment awarding a $25,000 fee to the independent appraiser appointed pursuant to N.J.S.A. 14A:11-8(c) and ordering them to pay half of it. Finally, they appeal from the denial of their motion for a new trial. Plaintiff cross-appeals from the provisions of the judgment awarding defendants prejudgment interest and requiring it to share in the payment of the independent appraiser's fee.

The litigation background is recited in the trial judge's opinion, reported at 210 N.J. Super. 664 (Law Div.1986), which explains his reasons for striking defendants' demand for a jury. We affirm the ensuing order substantially for the reasons therein stated.

Following that order and the later denial of defendants' motion for partial summary judgment, the trial judge appointed Martin J. Whitman, a chartered financial analyst, to determine the fair value of Monmouth Park's stock as of the statutorily mandated date of September 11, 1985. See N.J.S.A. 14A:11-3(3). His appraisal report, assigning a value of $58 per share, was filed in April 1987. Trial commenced in that month with the taking of Mr. Whitman's testimony, which consumed the first day. The second day of trial started with the marking of exhibits. During this process, an agreement was offered which had been entered into by plaintiff with one of the Monmouth Park stockholders, who, as it turned out, was a neighbor and close friend of the trial judge. The trial judge explained this

circumstance to counsel, advising them of his consequent decision to recuse himself. By agreement of the parties, however, and with the judge's concurrence, the document-marking was then completed and the matter assigned to another judge for trial.

Proceedings recommenced two months later before a second judge, the parties advising him at the outset of their agreement that Mr. Whitman would not be again produced and, in lieu thereof, the transcript of his April testimony would be introduced. Trial then continued with the testimony of the two witnesses proffered by defendant, their financial expert who valued the shares at $103.41 and one of plaintiff's Commissioners who had apparently been reported by the press as opining that the value of the land owned by Monmouth Park exceeded the price paid by plaintiff for the Monmouth Park stock. He testified, however, that he had never seen a land appraisal, was not himself in the real estate business, and had said, or meant to say, that "it was a good deal for the State of New Jersey to purchase Monmouth Park."

In August 1987 the trial judge rendered his oral opinion. In a careful review of the evidence and based on his fact-finding supported thereby, he accepted the appraisal methodology and price evaluation offered by Mr. Whitman and concluded that plaintiff had met its burden of demonstrating the fairness of the merger price. We are satisfied that the trial judge's findings and conclusions were adequately supported by the weight of the credible evidence and accorded with applicable legal principles. We therefore defer to them. See Rova Farms Resort v. Investors Ins. Co., 65 N.J. 474, 483-484 (1974). And see R. 2:11-3(e)(1)(A). We consequently affirm that portion of the judgment fixing the value of the shares at $58 substantially for the reasons stated by the trial judge.

In so doing, we reject defendants' contention that

the record of the proceedings below is so riddled with misleading or totally uncomprehending testimony at crucial points, and with such a conspicuous absence of any information at all or an almost equally conspicuous presence of total ...

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