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Leslie Gaber v. Herman Gaber

January 26, 2012


On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Monmouth County, Docket No. FM-13-1541-02B. Frank J.

Per curiam.


Argued: September 28, 2011

Before Judges Axelrad, Sapp-Peterson and Ostrer.

In this post-judgment matrimonial matter, both parties appeal from a March 18, 2010 order. Plaintiff Leslie Gaber (wife) challenges the successful motion in aid of litigant's rights of defendant Herman Gaber (husband) to enforce his right to equitable distribution under the parties' property settlement agreement (PSA) and recover his share of the proceeds of a marital investment from a damages award, plus counsel fees. Husband cross-appeals the denial of prejudgment interest on the award and the denial of the balance of the requested counsel fee. We discern no error of law or abuse of discretion by the Family Part judge and affirm.


The parties were married in 1981, wife filed for divorce in March 2002, and they were divorced on May 14, 2002. The final judgment of divorce incorporated the parties' PSA dated February 25, 2002. Over the course of the marriage, both parties worked, earned income and acquired assets. In 1998, wife took $400,000 of marital funds out of a business of which she was the sole owner, Leslie Gaber Associates, Inc. (LGA), and gave it to the parties' mutual accountant and financial adviser, Howard Krant, to be invested in an entity known as Highgate Manor Group, LLC (Highgate). In l999, wife took an additional $100,000 of marital funds from LGA and gave that sum to Krant as well, this time to invest in Lakewood Plaza Associates, L.P. (Lakewood). Krant informed the parties the investments were made but, as the trial court noted, there is no proof of this. Nevertheless, as wife's attorney acknowledged at oral argument, it does not matter for purposes of this appeal whether Krant converted the money or invested it into Highgate and Lakewood.

As expressly acknowledged, the parties negotiated and executed the PSA with the assistance of independent counsel, waived discovery and further investigation as to the identification and valuation of assets, and agreed to rely on the information provided to each other through Krant, who the parties also relied upon to value their assets. LGA was valued at $1,500,000 without a formal valuation and husband waived "all right, title and interest" in this entity in exchange for $750,000, which was undisputedly paid to him by wife. The PSA further stated in parallel provisions (paragraphs 5.3(c) and

5.3(d)) that the "parties have an interest in a business entity known as" Highgate and Lakewood, "which value has been agreed upon by the parties to be" $400,000 and $100,000, respectively, and that neither entity has been "formally valued, pursuant to the parties instructions." Moreover, "[t]he parties agree they will each maintain a 50% interest" in the LLC and LP entities.

On or about July 28, 2003, wife, LGA, and others*fn1 filed suit in New York state court (the New York action) against Krant and others, alleging fraud, conversion, concealment, breach of fiduciary duty, and unjust enrichment arising out of Krant's accounting, tax, and investment advice, and misappropriation of funds, including the $500,000 the parties entrusted to him to invest in Highgate and Lakewood ("Krant claims that he purchased ownership interests in Defendants Highgate and Lakewood with funds from Gaber & LGA; however, no such investment income appears on the tax returns. Therefore, Krant either improperly prepared the tax returns or Gaber Plaintiffs have no ownership interest in Highgate or Lakewood."). Husband acknowledged in his interrogatory answers in his subsequent lawsuit against Krant that he learned of the existence of the New York action around August 2003.

Pursuant to a confidential settlement and release agreement (confidential settlement agreement) dated September 22, 2004, in which wife individually and on behalf of LGA, "acknowledge[d] and agree[d] that they have released all ownership that they may have in Highgate . . . and Lakewood . . ., and agree[d] to sign any documents required to indicate that they have given up, transferred or released any such interest." The document further provided that the plaintiffs were paid an undifferentiated sum of about $1.7 million, "[t]he settlement shall finally settle and resolve, among other things, all claims asserted or which could have been asserted by Plaintiffs and Defendants[,]" and "[t]his document contains the complete Agreement between the Parties."

On May 14, 2008, husband filed suit against wife, LGA, and Krant*fn2 in the New Jersey Superior Court, Law Division (the New Jersey action). As against Krant, count one alleged breach of contract for accounting and investment related services; count two alleged breach of the implied covenant of good faith and fair dealing in their business relations; count three alleged unjust enrichment for wrongful receipt and retention of husband's investment proceeds in Highgate and Lakewood;*fn3 count four alleged fraud in advising husband to invest in Highgate and Lakewood without, among other things, first disclosing his ownership interest in the company; count five alleged fraudulent concealment of their ownership interest in Highgate and Lakewood; count six alleged conspiracy to defraud husband by convincing him to invest in Highgate and Lakewood; count seven alleged conversion; count eight alleged breach of fiduciary and other duties as husband's accountant and investment advisor; count nine alleged negligence as husband's accountant and investment advisor; count ten alleged professional malpractice; count eleven alleged respondeat superior; and count twelve alleged failure to properly account and pay husband monies due on his investments.

Count thirteen alleged fraud by wife in connection with the PSA by failing to disclose the existence of assets; count fourteen alleged wrongdoing by Krant by failing to disclose the existence of wife's separate investments in connection with the execution of the PSA; count fifteen sought reformation of the PSA regarding non-disclosed assets and investments possessed by wife that were subject to equitable distribution; count sixteen sought a declaratory judgment that the cut-off date for equitable distribution was the filing of the complaint; count seventeen alleged wife was unjustly enriched by her retention of assets subject to equitable distribution; count eighteen alleged conversion by wife of proceeds of property due husband; count nineteen sought an accounting by wife; and count twenty alleged a conspiracy by wife and Krant by entering into the confidential agreement to deprive husband of proceeds to which he was lawfully or equitably entitled.

Wife provided husband with the confidential settlement agreement for the first time on July 11, 2008, during the discovery phase of the New Jersey action. On August 24, 2009, husband settled with Krant for $100,000. The trial court was advised the case ...

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