On appeal from the Superior Court of New Jersey, Chancery Division, Middlesex County, Docket No. C-271-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted February 11, 2009
Before Judges Cuff, Fisher and C.L. Miniman.
Plaintiff commenced this action against defendants Nicola Pengue and Fantino Papaleo, his former partners in their real estate development business; the individual parties each held a one-third interest in the partnership. Also joined as defendants were Castle Hill Builders, T.G.N., Inc., T.G.N. South, Inc., and P.P.F., L.L.C., the entities through which the partners operated. Following a trial, Judge Travis L. Francis delineated the partnership assets and determined the worth of plaintiff's interest in those assets.
Defendants appealed, arguing that the judge erred (1) in awarding plaintiff a one-third interest in what the parties have referred to as the Kings Estate development; (2) in requiring reimbursement to plaintiff for the partnership's "soft" expenses that were paid following plaintiff's withdrawal; (3) in awarding plaintiff damages equal to one-third the performance bond on the Sunrise Acres project; and (4) in awarding to plaintiff prejudgment interest. We find no merit in these arguments, R. 2:11-3(e)(1)(E), and affirm substantially for the reasons set forth in Judge Francis's oral decision. We add only the following.
In examining a judgment based on the fact findings of a judge sitting without a jury, our review is limited. We will not disturb those findings unless they are "'so wholly insupportable as to result in a denial of justice'"; findings are binding on appeal "when supported by adequate, substantial and credible evidence." Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 483-84 (1974) (quoting Greenfield v. Dusseault, 60 N.J. Super. 436, 444 (App. Div.), aff'd o.b., 33 N.J. 78 (1960)). Application of these principles compels affirmance of the judgment under review.
With respect to the trial judge's award to plaintiff of $242,666 for his interest in Kings Estate, defendant argues in his first point that this asset was, in fact, "a theoretical and hypothetical non-asset," and, even if subject to distribution, the amount awarded was "grossly inequitable." We reject these contentions. The record demonstrates that defendant Pengue had entered into a contract for the purchase of Kings Estate and that he did so on behalf of the partnership. That there may have been title problems or other difficulties in developing this property does not render the partnership's interest in the property immune from distribution. As for its value, the judge thoroughly canvassed the relevant evidence, considered the expert testimony and weighed the difficulties in developing this asset in reaching his conclusion. We are satisfied after carefully reviewing the record that the judge's determination on this point, which was based upon the evidence he found credible, deserves our deference.
We also reject defendants' criticism, contained in their second point, of the judge's award to plaintiff of an amount equal to one-third of the expenses paid out by the partnership in developing Sunrise Acres after plaintiff's withdrawal from the partnership. Because defendants chose to continue with the partnership rather than dissolve it, thus generating plaintiff's right to the fair value of his partnership interest, defendants were obligated to reimburse plaintiff for their expenditure of his portion of partnership funds following his withdrawal from the partnership.
In their third point, defendants argue that the judge erred in awarding plaintiff a share of the value of a performance bond in the approximate amount of $400,000, which was required by Monroe Township for the Sunrise Acres project. Such a bond, "until repaid or applied to the purpose for which it is deposited," which was the circumstance when plaintiff withdrew from the partnership, "shall continue to be the property of the applicant." N.J.S.A. 40:55D-53.1. Accordingly, Judge Francis correctly held that this bond was, at the time of plaintiff's withdrawal from the partnership, an asset of the partnership, and that plaintiff was entitled to be reimbursed for his one-third interest in the bond.
We lastly reject defendants' fourth point, in which they argue that the judge erred in awarding prejudgment interest. The judge's authority to award interest in favor of a withdrawing partner is fully supported by N.J.S.A. 42:1A-34(e).
For these reasons, and substantially for the reasons set forth by Judge Francis in his thorough and well-reasoned opinion, we affirm.
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