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J.R.S. Holdings, L.L.C. v. Jes Properties

August 17, 2010

J.R.S. HOLDINGS, L.L.C., PLAINTIFF-RESPONDENT,
v.
JES PROPERTIES, L.L.C. AND JONATHAN SACHAR, A/K/A JONATHAN E. SACHAR, A/K/A JONATHAN EDWARD SACHAR, JOINTLY AND SEVERALLY, DEFENDANTS-APPELLANTS.



On appeal from the Superior Court of New Jersey, Law Division, Hunterdon County, Docket No. L-518-08.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted August 3, 2010

Before Judges Graves and Yannotti.

Defendants Jonathan E. Sachar (Sachar) and JES Properties, L.L.C. (JES) appeal from an order dated July 17, 2009, which denied their motion for reconsideration of an order entered on April 17, 2009, that required Sachar and JES to retain separate counsel for himself or JES; and awarded plaintiff attorney's fees and costs in the amount of $13,558.06. We reverse.

The following facts are pertinent to our decision. JES borrowed $200,000 from plaintiff, pursuant to a commercial loan and security agreement dated February 21, 2008. The agreement states that Sachar is the sole owner of JES and its managing member. The agreement provides, among other things, that plaintiff may enforce the agreement through legal action and recover damages caused by any breach, "including court costs, reasonable attorneys' fees and other costs and expenses incurred in the enforcement of" JES Properties' obligations under the agreement. Sachar signed the agreement as "guarantor."

JES and Sachar defaulted and plaintiff brought this action against defendants to enforce the agreement. On October 31, 2008, plaintiff obtained a judgment against defendants in the amount of $238,303.59, plus costs in the amount of $328.29. On November 5, 2008, plaintiff served an information subpoena upon defendants, which required that they provide the requested discovery.

On November 8, 2008, defendants filed a motion to vacate the judgment. Plaintiff filed a cross-motion to enforce litigant's rights. Plaintiff argued, among other things, that Rule 1:21-1(c) barred Sachar from representing himself and representing JES in this case. The court heard the motions on January 9, 2009.

The court entered two orders dated January 12, 2009. One was an order denying defendants' motion to vacate the default judgment and granting plaintiff's cross-motion for counsel fees and costs in the amount of $7,397.42. The other order required defendants to comply with the information subpoena.

It appears that defendants did not provide all of the information sought by the information subpoena and plaintiff filed another motion in aid of litigant's rights. The court filed a memorandum of decision dated April 17, 2009, in which it concluded that defendants had not complied with the information subpoena. The court ordered defendants to respond completely to the information subpoena within twenty days of the date of the order.

The court also found that, despite its prior order, Sachar had not retained an attorney for JES. The court determined that Sachar would have an additional thirty days to obtain counsel for JES and, if he failed to do so, plaintiff could file a motion for sanctions. The court entered an order dated April 17, 2009, which memorialized its ruling.

Sachar and JES thereafter filed a motion for reconsideration of the court's prior orders and also sought a reduction of the counsel fees previously awarded to plaintiff. Plaintiff filed a cross-motion seeking the imposition of sanctions and the award of additional counsel fees and costs. The court addressed the motions in a memorandum of decision dated July 17, 2009.

The court found that Sachar did not violate the court's prior orders by failing to retain separate counsel for himself or JES Properties. The court also determined that Sachar had not established a basis for reconsideration of its prior orders. The court entered an order dated July 17, 2009, which denied defendants' motion for reconsideration, and awarded plaintiff counsel fees and costs in the amount of $13,558.06. This appeal followed.

In this appeal, Sachar and JES argue that the court: 1) erred by finding that Rule 1:21-1(c) precludes him from representing himself and JES in this litigation; 2) erred by finding that a conflict of interest would arise if he represented himself and JES in this case; and 3) abused its discretion by awarding plaintiff attorneys' fees and costs for ...


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