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Cardoso v. Goldberg

November 19, 2007

MANUEL CARDOSO, A/K/A MANUEL CARDOSO, JR., PLAINTIFF-APPELLANT/ CROSS-RESPONDENT,
v.
IRA GOLDBERG, INDUSTRIAL REALTY, LLC, A LIMITED LIABILITY COMPANY OF THE STATE OF NEW JERSEY, A/K/A INDUSTRIAL REALTY INV., LLC; AND BOMANITE OF NEW JERSEY, INC., A NEW JERSEY CORPORATION, DEFENDANTS/THIRD-PARTY PLAINTIFFS-RESPONDENTS/CROSS-APPELLANTS,
v.
NOVA CRETE, INC., THIRD-PARTY DEFENDANT.



On appeal from Superior Court of New Jersey, Chancery Division, Middlesex County, Docket No. C-196-05.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued September 19, 2007

Before Judges Cuff, Lihotz and Simonelli.

Plaintiff Manuel Cardoso, Jr. appeals from summary judgment entered on March 6, 2006, as modified by an order dated May 10, 2006, which had been entered prior to the completion of discovery. Defendants/third-party plaintiffs cross-appealed from a May 8, 2006 order denying their request for an award of counsel fees and sanctions pursuant to Rule 1:4-8 and N.J.S.A. 2A:15-59.1. Plaintiff and defendant Ira Goldberg were shareholders in defendant Bomanite of New Jersey, Inc. (Bomanite) and defendant Industrial Realty, LLC (IR). Bomanite installs decorative concrete systems and flooring. Bomanite is the sole tenant in the realty owned and operated by IR.

Cardoso filed a Chancery Division complaint seeking rescission of a settlement agreement that allowed Goldberg to purchase Cardoso's thirty-five percent interest in Bomanite for $75,000, and to release him from any obligations under a restrictive covenant agreement. Cardoso asserts he signed the agreement because he mistakenly believed the restrictive covenant was enforceable. Cardoso also challenged the enforcement of a provision structuring Goldberg's purchase of plaintiff's fifty percent interest in IR. Cardoso argues that genuine issues of material fact were presented on these two issues precluding summary judgment.

In their cross-appeal, defendants assert the motion judge abused her discretion in denying the motion for attorney's fees and sanctions. We disagree with the arguments advanced by plaintiff and defendants, and we affirm.

I.

The facts, viewed in the light most favorable to Cardoso, follow. Coyne v. N.J. Dep't of Transp., 182 N.J. 481, 491 (2005). Goldberg incorporated Bomanite in 1984. In 1988, Cardoso commenced employment with Bomanite performing decorative concrete masonry work. On October 1, 1990, Goldberg gave Cardoso a thirty-five percent ownership interest in the corporation. In addition to Goldberg and Cardoso, the third shareholder, Jerome M. Selvers, owned ten percent of the Bomanite stock. In 1999, to raise operating capital, the shareholders sold a ten percent stock interest to Lars Anderssen. The four shareholders subsequently executed a Shareholder's Agreement, and Cardoso, Goldberg, and Anderssen also executed Executive Employment Agreements that contained the following non-compete covenants:

4. COVENANTS . . . .

(b) During the term of his employment and for three years thereafter (or, if longer, until expiration of the initial term of employment hereunder), the Executive shall not, directly or indirectly, engage in or be interested in (as owner, partner, shareholder, employee, director, officer, agent, consultant, or otherwise), with or without compensation, any business located or which markets its goods or services in New Jersey, New York, Eastern Pennsylvania or Connecticut and which is competitive with the business being conducted by the Company at any time during the term of the Executive's employment.

(c) During the term of his employment and for three years thereafter, the Executive shall not, directly or indirectly, solicit or contact any employee of the Company, with a view to inducing or encouraging such employee to leave the employ of the Company for the purpose of being hired by the Executive, an employer affiliated with the Executive or any competitor of the Company.

(d) The Executive acknowledges that the provisions of the Section 4 are reasonable and necessary for the protection of the Company and that the Company will be irrevocably damaged if such covenants are not specifically enforced. Accordingly, the Executive agrees that, in addition to any other relief to which the Company may be entitled in the form of actual or punitive damages, the Company shall be entitled to seek and obtain injunctive relief from a court of competent jurisdiction for the purposes of restraining the Executive from any actual or threatened breach of such covenants.

Cardoso and Goldberg formed IR in 1999. The entity purchased a one-acre parcel located at 36 Industrial Drive, Old Bridge, on which a single-tenant industrial building consisting of approximately 2,300 square feet of office space and 5,000 square feet of warehouse space was constructed. Bomanite was the sole tenant.

Cardoso resigned from Bomanite effective June 30, 2003. He formed third-party defendant Nova Crete, Inc., located at 62 Morris Court, Sayreville, approximately 3.13 miles from Bomanite, and which directly ...


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