On appeal from Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-2023-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Cuff and Simonelli.
Plaintiff's attorney, Laurence A. Hecker, Esq., appeals from the order of November 30, 2006, imposing sanctions against him, pursuant to Rule 1:4-8, and N.J.S.A. 2A:15-59.1, the Frivolous Claim Statute.*fn1 We affirm.
On June 5, 1996, Party City of Flemington, L.L.C. (the LLC) was formed with defendant Scott Molin as its sole member. The LLC operates a franchise known as Party City (the store) located in Flemington.
On July 1, 2002, Molin executed an Assignment of Limited Liability Interest transferring a fifty-percent interest in the LLC to defendants Marc Reichman and Alan Lazaroff (defendants). On May 28, 2004, defendants executed an Assignment of Limited Interest transferring their interest in the LLC to Molin and his wife, defendant Maureen Molin.
In or about November 2002, Molin purportedly entered into an oral agreement with plaintiff for construction services at the store. A dispute arose as to the cost of plaintiff's services. As a result, plaintiff filed a complaint against the Molins on August 2, 2004. Plaintiff did not name the LLC as a defendant. The Molins filed a bankruptcy action after plaintiff filed the complaint.
Because he believed a partnership owned the store, Hecker sought to take depositions from Reichman and Lazaroff. By letter dated July 13, 2005, defendants' attorney, Michael A. Quiat, advised Hecker and provided documentation showing that the store was owned by the LLC, not a partnership. Quiat further advised Hecker:
Under the circumstances, I see no good faith basis to bring an action against Messrs. Reichman and Lazaroff in this matter, as they clearly do not have personal liability. I am instructed to advise you that any attempt to join these individuals as defendants will be met with a motion for sanctions, as there exists no good faith basis to name them as defendants in this suit.
Hecker responded by letter, dated July 14, 2005, that a representative from the franchisor advised him that the franchisor did not give approval for the LLC to operate the store, and the only approved documentation was a partnership agreement, dated November 12, 2002. By letter, dated August 15, 2005, Quiat advised Hecker, and provided documentation showing, that: (1) on November 4, 2002, the franchisor confirmed the LLC as the franchisee of the store, and consented to defendants assuming a membership interest in the LLC; (2) on November 12, 2002, defendants and Mrs. Molin executed a Transfer Agreement and Consent, which conveyed a membership interest in the LLC to them; and (3) the parties executed an Assignment of Limited Liability Interest in the LLC, confirming that defendants and Mrs. Molin were purchasing a membership interest in the LLC. Quiat once again advised Hecker:
[T]here is no good faith basis for proceeding against Messrs. Reichman and Lazaroff individually in connection with any claims on behalf of Mr. Vitale. As a result, I must again remind you that any attempt to join these individuals as defendants is frivolous as a matter of law, and will be met with a motion for sanctions, including an application for attorney's fees.
Hecker claimed he never received this letter because he had moved his office. However, Quiat sent the letter by certified mail to the address on Hecker's ...