On appeal from Superior Court of New Jersey, Chancery Division, Morris County, Docket No. C-62-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Cuff and C.L. Miniman.
Plaintiffs appeal from an order entered following trial on two of several issues raised in plaintiffs' complaint concerning the business operations of plaintiff Royce Contractors, Inc. and plaintiff Royce Services, LLC. We affirm in part, reverse in part, and remand for a new trial.
Plaintiff Christopher Royce and defendant Joseph Donald Royce, Jr., are brothers. They started working together in 1998 and formed Royce Contractors, Inc. in 2000. The firm performed demolition and site work in some of the northern counties of New Jersey. The brothers also formed Royce Services, LLC to perform the snow plowing contract for the Willowbrook Mall in Passaic County.
On April 18, 2007, Christopher and the two business entities filed a complaint against Joseph, his wife, and a joint venture known as Antonucci-Farren, LLC and its principals, John and Phil Antonucci. Christopher alleged that Joseph had formed a joint venture with the Antonucci cousins that diverted assets and corporate opportunities from the Royce business enterprises to the Antonucci business enterprises. Christopher sought temporary and permanent injunctive relief against his brother, compensatory and punitive damages from his brother for breach of the shareholder agreement and breach of his fiduciary duties, and compensatory and punitive damages against the Antonucci defendants for breach of a joint venture agreement.
It was undisputed that the Antonucci cousins approached Joseph in early 2005 to join them in an entity known as Antonucci-Farren, LLC to bid on a contract for work at the Indian Point nuclear facility in New York. They obtained the contract and commenced work at the facility in 2005.
Christopher alleged that he and Royce Contractors were members of the joint venture and should receive one-third of the profits from the joint venture. Joseph and the Antonucci defendants asserted they were the only members of the joint venture. They also asserted that the joint venture had compensated Royce Contractors and Royce Services for the use of its equipment and personnel.
It was also undisputed that Christopher and Joseph executed a Shareholder Agreement governing Royce Contractors, Inc. and Royce Services, LLC. Articles V and VI of the agreement included an exclusive employment clause and a non-competition clause, respectively. Article V provided:
Each of the Original Shareholders (i) shall be employed on a full-time basis by the Corporation and the LLC and (ii) shall devote his full business time and effort to the business of the Corporation and the LLC, for which he shall receive compensation as an employee of the Corporation and the LLC, the amount of which compensation shall be determined from time to time by the Board of Directors of the Corporation and the managing members of the LLC.
Each of the Original Shareholders hereby agree that, during the term of this Agreement, he (i) will not, directly or indirectly, engage or invest in, own, manage, operate, control, participate in the ownership, management, operation, financing or control of, be employed by or associated, or in any manner connected with, lend his credit to, or render service or advice to, any business or commercial enterprise or pursuit, other than the Corporation and the LLC, but (ii) will devote his full time and attention to the business and activities of the Corporation and the LLC.
On October 8, 2008, the General Equity judge entered a Special Pretrial Conference Order bifurcating the trial and directing that two issues would be tried commencing January 26, 2009: the issues of "ownership" and "agreement." As directed, trial proceeded for two days. On February 27, 2009, the trial judge issued an oral decision in which she ...