On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-8489-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges R. B. Coleman and Sabatino.
This appeal arises out of litigation between two former business partners, which was referred to a private arbitrator. After the arbitration was partially completed, plaintiff voluntarily dismissed his claims on certain specified conditions. Defendant then sought to recover counsel fees, contending that he had been forced to defend a frivolous complaint. The Law Division denied the fee application, and this appeal ensued. We affirm.
We present the following chronology of relevant events, mindful that many of the underlying facts remain disputed. Prior to 2002, defendant Antoine El-Ghoul and his then-associate, Maira Anabell-Russo, formed a corporation known as Via Vita, LLC ("Via Vita"). They created Via Vita with the intention of opening a restaurant on the first floor of premises located at 58 Easton Avenue in New Brunswick.
In 2002, plaintiff Hani El-Khoury, who had come to the United States from Nigeria, expressed to defendant an interest in becoming a principal in Via Vita. To advance that objective, plaintiff began to pay for some of the expenses incurred in renovating the restaurant premises. According to plaintiff, he generally made those payments to defendant by check, and occasionally by cash.*fn1
At some point between 2002 and 2003, plaintiff and defendant entered into an agreement by which plaintiff acquired Anabell-Russo's share in Via Vita. Defendant also contends that plaintiff promised to pay an additional $40,000 to buy into the business, although that alleged promise is not documented in the record before us.
In or about August 2003, plaintiff indicated to defendant that his father would give him $75,000 to invest in their business, funds which plaintiff, in turn, would loan to defendant. Pursuant to that plan, plaintiff and defendant executed a Promissory Note and a companion Security Agreement, both dated August 19, 2003.
In its opening paragraph, the Promissory Note recited:
Borrower, [defendant], individually, and/or as a principal of Via Vita, LLC, promises to pay to the order of Lender [plaintiff], in lawful money of the United States of America, at its address indicated above or wherever else Lender may specify, the sum of Seventy-Five Thousand and No/100 Dollars ($75,000.00) or such sum as may be advanced and outstanding from time to time with no interest on the unpaid principal balance on the terms provided in this Promissory Note... and in the Loan Documents... executed contemporaneously herewith. [(Emphasis added).]
Additionally, the repayment terms in the Promissory Note stated as follows:
This Note shall be due and payable in twelve
(12) consecutive monthly payments of principal amounting to $6,250.00 per month, commencing upon the first day the restaurant and lounge establishment... begins business operations and accepts business patrons or within six (6) months of the execution of this Promissory Note, whichever shall transpire first. Each monthly payment [shall be] due on the 30th or last day of each month thereafter, with a final payment of principal to be due and payable no later than January 31, 2005.
In the event of an uncured default by defendant in repaying the funds, the Promissory Note provided that plaintiff could resort to various specified remedies. Those remedies included, among other things, acceleration of the unpaid debt, the foreclosure of collateral, and defendant's surrender and forfeiture of his ownership interest in Via Vita.
The accompanying Security Agreement had corresponding provisions concerning the terms of repayment. It designated as collateral for the loaned funds "all business assets of Via Vita," specifically including "all inventory, [c]hattel paper, accounts including accounts receivable, furniture, equipment, and all general ...