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P.A.Y. Commercial Holding, LLC v. Case

January 25, 2010

P.A.Y. COMMERCIAL HOLDING, LLC, PLAINTIFF-APPELLANT,
v.
GEORGE CASE, INDIVIDUALLY AND T/A GEORGE C'S TAVERN, DEFENDANT-RESPONDENT.



On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-2142-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted January 6, 2010

Before Judges Sabatino and J. N. Harris.

This appeal grows out of a convoluted and ultimately failed sale of a tavern. We are asked to reverse the Law Division judge who dismissed the complaint at a proof hearing because plaintiff could not prove its entitlement to a judgment to the satisfaction of the court. In a supplemental written opinion, submitted after the present appeal was filed, the judge held:

The court, having reviewed and considered the parties' written submissions, relevant law, and oral testimony and argument found that [plaintiff] P.A.Y. failed to prove by [a] preponderance of the evidence that a contract existed which entitled P.A.Y. to damages. The papers and documents themselves that were submitted lacked any resemblance to an enforceable contract, and failed on their own merit; and the testimony of the plaintiff did not prove any conduct by [defendant] Case, which would give rise to any claim even of the nature of quantum meruit. [(Emphasis added.)]

We disagree and reverse. Plaintiff is entitled to an entirely new proof hearing and shall be afforded an opportunity to prove anew both liability and damages. We do not intend to presage the outcome of that proceeding and instead leave it to the Law Division to proceed appropriately.

I.

The litigation initially involved only two parties: plaintiff P.A.Y. Commercial Holding, LLC (P.A.Y.)*fn1 and defendant George Case (Case).*fn2 P.A.Y is the owner of land and a building located at 198 Liberty Street in Trenton, the address of the tavern in question. It sued Case, an individual, for more than $100,000 on contract and quasi-contract theories for failure to pay a book account, failure to pay for goods sold and delivered, quantum meruit, and breach of an account stated.*fn3

Case denied the allegations contained in P.A.Y.'s complaint and, in turn, filed a third-party complaint against Gilliepie, Inc. (Gilliepie),*fn4 a corporation, and Dennis E. Young (Young), an individual, for $7,000, which Case claimed he had loaned to the third party defendants. Case also sought "all sums that may be adjudged against Third Party Plaintiff and in favor of P.A.Y. Commercial Holding, LLC" pursuant to an additional unspecified theory.

Gilliepie and Young both answered the third-party complaint. Gilliepie filed a counterclaim against Case for breach of contract relating to the acquisition of the tavern and for breach of a month-to-month commercial lease agreement relating to 198 Liberty Street. Young filed a counterclaim against Case seeking equitable relief in the form of an order compelling Case to re-transfer Gilliepie shares of stock to Young.

Subsequently, Case failed to participate in the litigation and defaults were entered against him.*fn5 On March 11, 2009, the Law Division judge conducted the proof hearing where only Young (who was sworn) and Case (who was not sworn) addressed the court. At the conclusion of the hearing, the court stated:

This case is dismissed. I am not satisfied that the plaintiff can prove that the defendant did anything other than the plaintiff took advantage of him. The case is dismissed. Judgment for the defendant. There's no proof here that I am satisfied with. Mr. Murphy, I'm sorry. Your client was taking Mr. Case for a ride. I'm not granting a judgment against him. Mr. Young has the property, he has the liquor license, he didn't lose anything. He lost a little bit out of a bad deal that he made. Case is dismissed.

Sharing some of the same frustration noted by the Law Division judge over the quality of the written and testimonial record, we piece together the transaction as best we can. Nevertheless, we ...


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