MFC RESOURCES, INC. VS. JUERGEN HOMANN(L-9612-13, BERGEN COUNTY AND STATEWIDE) ( 2017 )


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  •                         NOT FOR PUBLICATION WITHOUT THE
    APPROVAL OF THE APPELLATE DIVISION
    This opinion shall not "constitute precedent or be binding upon any court."
    Although it is posted on the internet, this opinion is binding only on the
    parties in the case and its use in other cases is limited. R.1:36-3.
    SUPERIOR COURT OF NEW JERSEY
    APPELLATE DIVISION
    DOCKET NO. A-3866-14T3
    MFC RESOURCES, INC.; MFC
    COMMODITIES GMBH; MFC
    COMMODITIES U.S.A., L.P.,
    INC.; MFC COMMODITIES U.S.A.,
    G.P., INC.; and POSSEHL MEXICO,
    S.A. D.E. C.V.,
    Plaintiffs-Appellants,
    v.
    JUERGEN HOMANN,
    Defendant-Respondent,
    and
    YAN CHEN; JEFF TIANG; JOHN
    HOYING; CJAM CORPORATION, INC.;
    THYSSENKRUPP METALLURGICAL
    PRODUCTS GMBH; and THYSSENKRUPP
    MATERIALS NA, INC.,
    Defendants.
    __________________________________
    Argued November 16, 2016 – Decided July 11, 2017
    Before Judges Fuentes, Simonelli and Carroll.
    On appeal from the Superior Court of New
    Jersey, Law Division, Bergen County, Docket
    No. L-9612-13.
    Christopher P. Massaro argued the cause for
    appellants (Cole Schotz, P.C., and Charles
    Michael (Steptoe & Johnson LLP) of the New
    York Bar, admitted pro hac vice, attorneys;
    Mr. Massaro and Mr. Michael, of counsel and
    on the briefs).
    Mark A. Berman argued the cause for respondent
    Juergan Homann1 (Hartmann Doherty Rosa Berman
    & Bulbulia, LLC, attorneys; Mr. Berman, Jeremy
    B. Stein, and Kelly A. Zampino, on the brief).
    PER CURIAM
    In this contract dispute, plaintiffs MFC Resources, Inc., MFC
    Commodities GmbH, MFC Commodities, L.P., Inc., MFC Commodities
    U.S.A.,   G.P.,   Inc.,   and   Possehl   Mexico,   S.A.   D.E.   C.V.
    (collectively, MFC)2 appeal from: (1) the September 19, 2014 order,
    which denied their motion to dismiss the counterclaim filed by
    defendant Juergen Homann; (2) the September 19, 2014 order, which
    granted Homann's motion to compel discovery; (3) the November 21,
    2014 order, which enforced a settlement between MFC and Homann;
    and (4) the March 19, 2015 order and judgment.         We affirm the
    September 19, 2014 order, which granted Homann's motion to compel
    discovery, but reverse all other orders and remand for further
    proceedings.
    1
    Respondent's brief purports to represent Alumina Trading Company
    (Alumina). Alumina was not a named defendant but was added as a
    counterclaimant pursuant to Rule 4:7-6.
    2
    We shall sometimes refer to defendant Possehl Mexico, S.A. D.E.
    C.V. as Possehl.
    2                           A-3866-14T3
    I.
    We derive the following facts from the record.                     Homann was
    the sole owner of ACC Resources, Co., L.P. (ACC), a commodities
    trading firm organized as a limited partnership under Pennsylvania
    law, with its principal place of business in New Jersey.                     Through
    his ownership in ACC, Homann indirectly owned a 30% interest in
    Alumina, a New Jersey general partnership that had a 54.95%
    ownership interest in Possehl, a commodities trading firm located
    in Mexico.
    MFC entered into a purchase agreement with Homann to purchase
    70% of Homann's interest in ACC.               As part of the transaction, the
    parties executed another agreement whereby Homann had an option
    to require MFC to purchase his remaining 30% interest in ACC, and
    MFC had a had an option to purchase that interest.                    MFC could also
    purchase    that   interest      upon   Homann's        breach   of    the   purchase
    agreement.    The parties agreed that Homann would remain the CEO
    of   ACC   after   the   sale.      The       parties    also    executed    a   third
    agreement, whereby Homann would sell Alumina's 54.95% ownership
    interest in Possehl to MFC.
    At the closing, MFC paid over $20,000,000 to acquire 70% of
    Homann's 30% interest in ACC and Alumina's 54.95% interest in
    Possehl.     Thereafter, MFC incorporated ACC in Nevada by merging
    it into ACC Resources, Inc., a newly formed Nevada corporation.
    3                                   A-3866-14T3
    MFC renamed the company MFC Resources and continued operating the
    new company out of New Jersey offices.
    Homann remained CEO of MFC Resources after the closing, but
    was terminated in May 2013.         MFC claimed that Homann threatened
    to leave for a competitor, ThyssenKrupp Metallurgical Products (TK
    Met Pro), and induced certain MFC Resources employees, Yan Chen
    and Jeff Tiang (the TK defendants) to leave MFC Resources for TK
    Met Pro.
    In    October   2013,   MFC   allegedly      exercised   its     option    to
    purchase Homann's remaining interest in ACC for approximately $1.3
    million. Homann disputed the validity of MFC's attempt to exercise
    the option, and claimed the purchase price was approximately $12.8
    million.
    MFC filed a complaint against Homann, asserting claims of
    breach of contract and specific performance; breach of the implied
    covenant of good faith and fair dealing; breach of fiduciary duty;
    aiding     and   abetting    breaches       of   fiduciary    duty;    tortious
    interference; misappropriation of confidential information; and
    conspiracy.      Homann filed a counterclaim, asserting claims of
    breach of contract; breach of the covenant of good faith and fair
    dealing; conversion; fraud; fraudulent inducement; conspiracy;
    shareholder oppression; and breach of fiduciary duty.
    Homann filed a motion to compel discovery, and MFC filed a
    4                                A-3866-14T3
    motion pursuant to Rule 4:6-2(e) to dismiss with prejudice the
    counterclaims      for   fraud,   fraudulent     inducement,         shareholder
    oppression, and breach of fiduciary duty.             While the motions were
    pending, the parties engaged in settlement discussions, after
    which Homann filed a motion to enforce an alleged oral settlement
    agreement.
    In support of his motion to enforce the oral settlement
    agreement, Homann certified that MFC's attorney, Charles Michael,
    Esq.,   proposed    holding   a   settlement    meeting      in     New   York    on
    September 10, 2014, and his attorney, Mark Berman, Esq., sought
    written confirmation that whoever attended on MFC's behalf had the
    authority to settle.      Michael responded, "Yes, of course."              Berman
    also    informed   Michael    that    by   agreeing    to    meet    to   discuss
    settlement, Homann was not also agreeing to delay his pending
    motion to compel discovery.          The meeting did not occur.
    In opposition to Homann's motion to enforce, MFC's CEO Gerardo
    Cortina and CFO Samuel Morrow certified that on September 16,
    2014, they met with Homann in New York to discuss settlement, but
    did not reach an agreement.           At the end of the meeting, Homann
    suggested meeting again two days later.               The parties agreed to
    hold that meeting without counsel present.                  Homann said Kevin
    Colosimo, Esq. would accompany him to the meeting.                  Colosimo was
    an attorney who was not involved in the litigation, but who had
    5                                   A-3866-14T3
    been advising Homann on the case.3          Homann certified that Cortina
    agreed to proceed with Colosimo present, and Cortina advised him
    that he had informed Michael that Colosimo would attend the
    meeting.    Cortina denied this.
    On September 18, 2014, Homann, Colosimo, Cortina, and Morrow
    met in New York to continue settlement negotiations.                      Homann
    certified that at no time during the meeting did either Cortina
    or Morrow advise him or Colosimo that they lacked authority to
    settle.     In fact, when Homann asked them about this, Morrow said
    that he and Cortina were "the two highest ranking officers in the
    company."
    Cortina certified that the meeting was productive and the
    parties established a framework for a possible settlement.                Morrow
    certified that the parties discussed various elements and setoffs
    relating to the underlying purchase price dispute and reviewed
    each of the elements in some detail, "often disagreeing quite
    vigorously."     For certain items and setoffs, the parties discussed
    values    and   terms   that   could   be   used   as   part   of   an   overall
    settlement calculation, and for others they could not reach a
    working consensus and left matters open.           Under the framework they
    3
    Colosimo was a trustee of a trust that held an interest in
    Alumina and a signatory on some of the relevant documents. He was
    not admitted to practice law in New Jersey or New York.
    6                                 A-3866-14T3
    discussed, MFC would pay Homann $5.5 million, plus at least $1
    million relating to overdue receivables dating back to Homann's
    ownership of ACC, and Homann would work as a paid consultant for
    MFC Resources for two years.
    Morrow and Cortina certified that several critical items
    remained open, even on a working basis, including whether: (1) MFC
    would release Homann from certain indemnification obligations; (2)
    MFC would release the TK defendants as part of its settlement with
    Homann; and; and (3) whether Homann would be able to claim certain
    of the company's losses on his tax returns. During the meeting,
    no one said or otherwise indicated that the matter was settled or
    that the terms being negotiated were final.           Morrow and Cortina
    also   certified   that    the   parties   never   reached   a   settlement
    agreement and they did not intend any settlement to be final unless
    and until they resolved several important open points, drafted a
    formal settlement document, and received approval from the board
    of directors.
    On September 19, 2014, Michael and Berman appeared for oral
    argument on the     motions to compel discovery and dismiss the
    counterclaim.      Prior   thereto,   Berman   sent   Michael    an    email,
    stating: "Hopefully the case settles on Sep 18 [2014] and everyone
    is happy.    If the case does not settle, we submit the discovery
    disputes to the [c]ourt on Sep 19[.]"
    7                               A-3866-14T3
    Following oral argument on September 19, 2104 the motion
    judge denied MFC's motion to dismiss the counterclaims as untimely,
    and found that the counterclaims were suggested by the facts.              The
    judge denied the motion without prejudice so MFC could file a
    motion for summary judgment at the conclusion of discovery.                The
    judge also granted Homann's motion to compel discovery.
    After oral argument, the judge met with counsel to inquire
    about the possibility of settlement.              No one advised the judge
    that the matter had settled.       To the contrary, Berman advised the
    judge that the parties had made progress toward, but had not
    reached, a final settlement.
    Later   that    day,   Colosimo   circulated     a   document   entitled
    "Indicative Term Sheet for Settlement Agreement," which allegedly
    contained the settlement terms (the Term Sheet).                According to
    Homann,   Colosimo    circulated   the     Term   Sheet   at   Cortina's   and
    Morrow's suggestion to memorialize the material terms of the
    parties' oral settlement agreement reached on September 18, 2014.
    Colosimo's email with the attached Term Sheet stated as follows:
    In an effort to be simple, I've attached a
    somewhat rudimentary Term Sheet following my
    notes from yesterday's meeting.     We could
    wordsmith the Term Sheet to death, I'm sure,
    but I think the better course is to put the
    lawyers to work on a more formal settlement
    agreement, etc.
    Let me know if this captures the spirit and
    big picture. I'm sure there are details to
    8                              A-3866-14T3
    flesh out in the drafting process but I'm not
    sure that's needed here. If there are changes
    needed, let me know. Otherwise, we can put
    signatures lines on it and get the lawyers to
    work on the final agreement.
    Cortina and Morrow certified that the Term Sheet was not
    consistent with the parties' discussion on September 18, 2014.
    For example, three unresolved critical items were treated as final:
    Homann's indemnification obligations; release of the codefendants;
    and Homann taking the company's tax losses, were treated as final
    in the Term Sheet and in Homann's favor.
    Michael certified that in the days following circulation of
    the Term Sheet, no one acted as if the case was settled, and Homann
    did   not   advise   him   or   anybody   associated   with   MFC   that    he
    considered the case settled.          Notably, on September 24, 2014,
    Berman forwarded the order granting Homann's motion to compel
    discovery to Michael, with a cover letter stating, "Please be
    guided accordingly[,]" meaning discovery would continue.
    Michael had previously advised Frank Coppa, Esq., counsel for
    defendants John Hoying and CJAM Corporation, that his clients
    would likely be released from the litigation if MFC reached a
    settlement with the TK defendants.         On September 22, 2014, Coppa
    emailed Michael to follow up on the settlement meeting, stating,
    "were you able to make any headway on Friday[, September 19,
    2014]?"     The next day, Michael responded, "Yes.              We have a
    9                              A-3866-14T3
    handshake deal with TK – have a separate one with Homann, too.
    Goal is to wrap everything up in the next couple of weeks."
    After not hearing from Cortina for a week after Colosimo
    circulated the Term Sheet, Homann called Cortina.              According to
    Homann, Cortina advised him for the first time that MFC would not
    recognize his authority to enter into the settlement agreement on
    behalf of MFC, and that former MFC CEO Michael Smith would not
    ratify the settlement agreed upon by Homann, Cortina, and Morrow
    on September 18, 2014.
    Cortina certified that MFC had discussed internally how to
    respond to Colosimo's Term Sheet, and ultimately decided to proceed
    with the litigation.          On September 29, 2014, Michael notified
    Berman    that   the   Term    Sheet    did   not    reflect   the   parties'
    discussions, and that MFC would proceed with the litigation.
    The TK defendants' attorney, Thomas R. Valen, Esq., certified
    that on September 30, 2014, Michael called him and told him MFC's
    settlement with his clients was contingent upon MFC's settlement
    with Homann, and MFC "previously had some sort of an agreement
    with Homann but it had fallen through."             Michael also told Valen
    that if MFC's settlement agreement with the TK defendants were to
    proceed, MFC would require a provision allowing MFC to take
    discovery from TK Met Pro to use in their litigation against
    Homann.   Valen responded it was his position that the parties had
    10                             A-3866-14T3
    already reached an enforceable settlement with his clients that
    was not contingent upon MFC reaching a settlement with Homann.
    Homann filed a motion to enforce the alleged oral settlement
    agreement that he claimed the parties reached during the September
    18, 2014 meeting.        He requested oral argument and an evidentiary
    hearing. In opposition, MFC argued, in part, that the negotiations
    were only preliminary; the parties never reached a settlement
    agreement; there were several unresolved critical terms, including
    the   release   of   Homann's     indemnification    obligations;    and    the
    parties never intended to be bound unless and until they executed
    a more formal agreement.
    On November 21, 2014, the motion judge entered an order and
    written opinion, granting Homann's motion without oral argument
    or    an   evidentiary   hearing.4     The   judge   found   there   were    no
    genuinely     disputed    facts    which   would    materially   impact     the
    enforceability of the settlement agreement.            The judge also found
    that Homann manifested his intent to be bound by the parties' oral
    settlement agreement, explaining as follows:
    Berman['s] appearance in court on the morning
    of September 19, 2014, wherein he represented
    that settlement had not been reached, does not
    disturb this finding. . . . Berman certified
    to the [c]ourt that prior to the reduction of
    the oral settlement to writing, he felt there
    4
    The judge revised the written opinion on November 24, 2014, and
    May 28, 2015, to correct clerical errors.
    11                             A-3866-14T3
    was a risk that MFC would renege. From the
    time stamps on . . . Colosimo's [emails], it
    is clear that there was not even time prior
    to the [c]ourt's entertaining of oral argument
    on the outstanding motions in this matter for
    counsel to draw up the Term Sheet and send it
    to the parties. To bar Homann from seeking
    to enforce an agreement he purportedly reached
    because an attorney who was not present and
    not involved in the negotiation sought
    adjudication of outstanding motions would be
    inequitable.      Furthermore, the [emails]
    between [Berman] and [Michael] regarding the
    authority of Morrow and Cortina to settle
    indicates   that    Homann   objectively   and
    reasonably       believed      that      MFC's
    representations at that meeting would settle
    the litigation, even without a written
    agreement.
    The judge further found that MFC had manifested an intent to
    be bound by the oral settlement agreement, explaining as follows:
    MFC does not dispute that it then manifested
    an intent to be bound by the vast majority of
    the material terms cited above. They instead
    try to characterize the settlement as "a
    framework for settlement that was never
    completed," . . . on the basis that either
    some ancillary terms remained open, or that a
    formal writing was not actually signed. . . .
    Indeed, as discussed above, the [c]ourt has
    found that this settlement did in fact contain
    the   essential   terms    of   the   parties'
    litigation.   Certifying a subjective belief
    after the fact does not alter the fact that a
    party has manifested an intent to be bound to
    a settlement. . . .      Their manifestations
    clearly bound MFC just as if they actually
    signed a written agreement created by their
    own counsel. Their presence at the settlement
    negotiations, the terms agreed upon there, and
    their certifications indicating a significant
    acceptance of the material terms of the
    12                          A-3866-14T3
    settlement agreement all establish for this
    [c]ourt that MFC, through Cortina and Morrow,
    intended to be bound on September 18, 2014.
    Moreover, their belief, some five days after
    the fact, that they had reached a "handshake
    deal," confirms that the contents of . . .
    Colosimo's September 19, 2014 [email] were
    accurate, insofar as they demonstrated that a
    formal writing was contemplated, for which the
    material terms had been reached. . . .
    Moreover, the failure of the parties to reduce
    the agreement to a more definite writing
    cannot be fatal to the performance obligations
    of the parties when those obligations are
    clear from the evidence presented.
    The judge ordered the parties to negotiate in good faith and
    execute a written settlement agreement implementing the material
    terms of the settlement, as contained in the Term Sheet.
    The parties attempted to negotiate the settlement in good
    faith, but were unable to agree on one critical term: Homann's
    indemnification obligations.       Although Homann had argued that the
    indemnity issue was not an "essential" term of the settlement, he
    refused to execute a formal written settlement agreement unless
    MFC agreed to waive any indemnification obligation.
    The parties cross-moved for entry of final judgment using
    their respective forms of order: MFC's version preserving Homann's
    indemnification obligations, and Homann's version releasing them.
    At   oral     argument,   Berman     insisted    that    releasing    his
    indemnification    obligations     was   a   "material   term"   of   the
    settlement.
    13                            A-3866-14T3
    On March 19, 2015, the judge entered an order and written
    opinion granting judgment in Homann's favor, awarding him $7.1
    million,   and   dismissing   the   parties'   respective   claims     with
    prejudice, except for MFC's claim for indemnification, which was
    dismissed without prejudice.        In doing so, the judge rejected
    Homann's argument that the parties had agreed to dismiss MFC's
    indemnification claims, stating as follows:
    In this case Homann is estopped from
    contending that a valid, binding, and complete
    settlement was not reached.      As such, the
    [c]ourt ordered the parties to reduce their
    oral settlement to writing, and ruled that the
    issue of indemnification was "ancillary."
    Indeed, Homann agreed with the court then[.]
    [Homann] has now reversed course . . . .
    It was clear to this [c]ourt upon . . .
    Homann's    original   motion   [to    enforce
    settlement], and it remains clear at this
    point, that the parties settled this matter
    by reaching an oral agreement upon all
    material terms. In good faith compliance with
    this [c]ourt's Order effectuating that oral
    agreement, the parties attempted to negotiate
    further and to fully implement those terms
    deemed     material    by     the     [c]ourt.
    Indemnification was not among those terms. At
    no point did this [c]ourt find that MFC bound
    itself to release . . . Homann from his
    contractual indemnification obligations.
    The   judge   declined    to    waive   obligations    that    Homann
    previously said were immaterial to settlement, and noted that the
    indemnification issue, which amounted to "an inchoate concern over
    speculative future liability did not prevent final resolution of
    14                             A-3866-14T3
    this lawsuit."
    II.
    MFC contends, in part, that the judge erred in finding the
    parties reached an enforceable settlement agreement.                           MFC argues
    the    evidence      was    insufficient        to    establish       that   the    parties
    intended to be bound or had agreed to the essential terms of the
    alleged settlement.             MFC posits that the court should have held
    an evidentiary hearing to resolve the factual disputes surrounding
    the alleged settlement.               We agree.
    A settlement of a legal claim between parties is a contract
    like any other contract, Nolan v. Lee Ho, 
    120 N.J. 465
    , 472 (1990),
    "which    a   court,       absent      a   demonstration         of   'fraud    or     other
    compelling circumstances,' should honor and enforce as it does
    other contracts."          Pascarella v. Bruck, 
    190 N.J. Super. 118
    , 124-
    25 (App. Div.),            certif. denied, 
    94 N.J. 600
     (1983) (quoting
    Honeywell v. Bubb, 
    130 N.J. Super. 130
    , 136 (App. Div. 1974)).
    That    the   agreement         was    oral,    instead     of    written,     is     of    no
    consequence.         Id. at 124.           "Where the parties agree upon the
    essential terms of a settlement, so that the mechanics can be
    'fleshed      out'    in    a    writing       to    be   thereafter     executed,         the
    settlement will be enforced notwithstanding the fact the writing
    does not materialize because a party later reneges."                         Lahue v. Pio
    Costa, 
    263 N.J. Super. 575
    , 596 (App. Div.), certif. denied, 134
    15                                       A-3866-14T3
    N.J. 477 (1993) (quoting Bistricer v. Bistricer, 
    231 N.J. Super. 143
    , 145 (Ch. Div. 1987)).         We will not interfere with a trial
    judge's factual findings and conclusions concerning a settlement
    agreement that are amply supported by the record.          Id. at 597.
    The   burden   of   proving   that   the   parties   entered   into    a
    settlement agreement is upon the party seeking to enforce the
    settlement.   Amatuzzo v. Kozmiuk, 
    305 N.J. Super. 469
    , 475 (App.
    Div. 1997).
    On a disputed motion to enforce a settlement,
    as on a motion for summary judgment, a hearing
    is to be held to establish the facts unless
    the available competent evidence, considered
    in a light most favorable to the non-moving
    party, is insufficient to permit the judge,
    as a rationale factfinder, to resolve the
    disputed factual issues in favor of the non-
    moving party.
    [Id. at 474-75.]
    However, not every factual dispute on a motion requires a plenary
    hearing; a plenary hearing is only necessary to resolve a genuine
    issue of a material fact.     Eaton v. Grau, 
    368 N.J. Super. 215
    , 222
    (App. Div. 2004).    We are satisfied that there are material issues
    of fact surrounding the alleged settlement requiring a plenary
    hearing.
    In finding there were no genuinely disputed facts, the judge
    incorrectly considered the evidence in the light most favorable
    to Homann, focusing on evidence supporting the finding of an
    16                              A-3866-14T3
    enforceable    oral   settlement       agreement   and    overlooking     or
    minimizing the significance of evidence supporting the opposite
    conclusion.    First, the judge focused on Colosimo's decision to
    circulate    the   Term   Sheet,    which   allegedly    memorialized   the
    parties' oral settlement agreement. However, he failed to consider
    that Colosimo admitted the Term Sheet was merely his own "somewhat
    rudimentary" notes from the meeting on September 18, 2014.
    Further, the judge considered MFC's failure to respond to
    Colosimo's email as evidence that no changes were needed. However,
    the judge's extrapolation is based solely on one sentence taken
    out of context from the entire paragraph, which reads:
    Let me know if this captures the spirit and
    big picture. I'm sure there are details to
    flesh out in the drafting process but I'm not
    sure that's needed here. If there are changes
    needed, let me know. Otherwise, we can put
    signatures lines on it and get the lawyers to
    work on the final agreement.
    The sentence on which the judge focused, "If there are changes
    needed, let me know[,]"is followed by a request to sign the Term
    Sheet if no changes were necessary.          Since MFC did not sign the
    Term Sheet, it could not be assumed that MFC believed the Term
    Sheet was acceptable as is.        To the contrary, and considering this
    evidence in a light most favorable to MFC, MFC did not sign the
    Term Sheet, indicating it was unacceptable to MFC.
    Thus, when Colosimo's email is read in its entirety, it is
    17                            A-3866-14T3
    clear he was seeking MFC's approval of the terms contained in the
    Term Sheet.     Indeed, the first sentence asked MFC to let him know
    if the Term Sheet "captures the spirit and big picture" of the
    alleged settlement agreement.         The judge did not consider that
    MFC's failure to respond immediately to that request can be viewed
    as evidence that MFC did not believe the Term Sheet captured the
    "spirit and big picture" of the settlement negotiations.                    The
    judge also failed to consider that approximately ten days after
    receiving the email, MFC advised Homann that the Term Sheet was
    not consistent with the parties' settlement negotiations.
    MFC's lack of immediate response to Colosimo's email and the
    Term   Sheet,   when   taken   in   the   light   most   favorable    to   MFC,
    indicates that the parties were still negotiating the terms of a
    settlement and that MFC did not agree to the terms in the Term
    Sheet.    Nowhere in Colosimo's email does it state that the matter
    had been settled or that both parties had agreed to certain
    settlement terms.      Rather, Colosimo sent MFC a "rudimentary" Term
    Sheet for which he sought MFC's approval.
    Second, the judge focused on Michael's e-mail to Coppa wherein
    he stated that MFC had a "handshake deal" with Homann.               The judge
    failed to consider that Michael did not state a belief that MFC
    had entered into a settlement agreement with any party, but rather,
    stated the parties had made "headway."            Thus, placed into proper
    18                                A-3866-14T3
    context, and viewed in a light most favorable to MFC, the e-mail
    indicates that MFC did not believe the matter was settled.
    Third, the judge downplayed the fact that Berman specifically
    represented that the parties had not reached a settlement.        The
    judge rejected Michael's explanation of why the parties proceeded
    with the cross-motions (that no settlement had been reached) and
    accepted Berman's explanation (that "he did not want to run the
    risk of further delaying resolution of motions that were fully
    briefed" and that he felt there was a risk that MFC would renege).
    The judge also focused on the fact that "there was not even
    time prior to the [c]ourt's entertaining of oral argument on the
    outstanding motions in this matter for counsel to draw up the Term
    Sheet and send it to the parties."   The judge then concluded that
    to bar Homann from seeking to enforce an agreement he purportedly
    reached because an attorney who was not present and not involved
    in the negotiation sought adjudication of outstanding motions
    would be inequitable.
    However, the judge failed to consider that if the parties had
    reached an enforceable oral settlement agreement at the September
    18, 2014 meeting, it would have been unnecessary for counsel to
    draft and circulate a Term Sheet before informing the judge that
    the parties had settled.    Furthermore, by focusing on Berman's
    excuse for why he informed the judge that the parties had not
    19                            A-3866-14T3
    reached a settlement, the judge overlooked the significance of
    Michael's action or inaction.    If MFC actually believed that the
    matter was settled, it is reasonable to assume that Michael would
    have advised the judge that the parties had settled, or at the
    very least corrected Berman's representation that they had not.
    While Berman may have had his reasons for proceeding with oral
    argument, there was no legitimate reason why MFC would have wanted
    to proceed if it actually believed the matter had settled.
    When taken in the light most favorable to MFC, Berman's
    representation to the judge that the parties had not entered into
    a settlement agreement, and Michael's failure to inform the judge
    of any such settlement or to correct Berman's representation,
    indicates that the parties did not enter into an enforceable oral
    settlement agreement on September 18, 2014.
    Fourth, the judge found that the Term Sheet contained the
    essential terms of the settlement on which the parties agreed.
    However, the record does not support that finding.     Cortina and
    Morrow certified that the Term Sheet was "not consistent" with the
    parties' settlement discussions; MFC did not intend any settlement
    negotiated to be final; and no final settlement had been agreed
    to by the parties.   When taken in the light most favorable to MFC,
    Cortina's and Morrow's certifications indicate that the parties
    did not enter into an oral settlement agreement on September 18,
    20                           A-3866-14T3
    2014, and strong evidence that MFC did not intend to be bound by
    the parties' settlement negotiations.
    Lastly, the judge found that Homann had manifested his intent
    to be bound by the oral settlement agreement.                The judge noted
    that    Homann    had   voiced   some     concern    over    "indemnification
    requirements," but concluded that was not an essential term of the
    settlement.       However, there was evidence that Homann did not
    intend to be bound by the terms of the Term Sheet as well.
    Contrary to the judge's conclusion, Berman had insisted that
    releasing Homann's indemnification obligations was a "material
    term" of the settlement.
    While the evidence could support the conclusion that the
    parties had entered into an oral settlement agreement, when taken
    in the light most favorable to MFC, evidence could support the
    conclusion that there was no "meeting of the minds" between the
    parties as to a settlement agreement.           MFC claims it did not agree
    to the terms contained in the Term Sheet and did not intend to be
    bound by the settlement negotiations.            At the very least, there
    were   disputed    issues   of   fact,    as   set   forth   in   the   parties'
    conflicting certifications, and therefore, the judge should have
    held an evidentiary hearing.        Accordingly, we reverse and remand
    for an evidentiary hearing to determine whether there was an
    enforceable settlement agreement.
    21                                  A-3866-14T3
    III.
    MFC contends that the judge erred by denying its motion to
    dismiss the counterclaims for shareholder oppression and breach
    of fiduciary duty.5   MFC argues that the judge erred by finding
    the motion was untimely.
    The defense of failure to state a claim upon which relief can
    be granted may be raised by motion or as an enumerated defense in
    an answer.   Rule 4:6-2 provides as follows:
    Every defense, legal or equitable, in law or
    fact, to a claim for relief in any complaint,
    counterclaim, cross-claim, or third-party
    complaint shall be asserted in the answer
    thereto, except that the following defenses,
    unless otherwise provided by R. 4:6-3, may at
    the option of the pleader be made by motion,
    with briefs:   . . . (e) failure to state a
    claim upon which relief can be granted. . . .
    If a motion is made raising any of these
    defenses, it shall be made before pleading if
    a further pleading is to be made. . . .
    The comments to Rule 4:6-2 provide as follows:
    [Rule 4:6-2] identifies the six dispositive
    defenses which may be raised either by answer
    or by motion, but, if by motion, then before
    the party's required responsive pleading. . .
    . The rule must be read in conjunction with
    R. 4:6-3, which requires, as to defenses (b),
    5
    The judge also denied MFC's request to dismiss the counterclaims
    for fraud and fraudulent inducement. Because MFC did not address
    these claims in its merits brief, the issue is deemed waived. See
    Pressler & Verniero, Current N.J. Court Rules, comment 4 on R.
    2:6-2 (2017); N.J. Dep't of Envtl. Prot. v. Alloway Twp., 
    438 N.J. Super. 501
    , 505-06 n.2 (App. Div.), certif. denied, 
    222 N.J. 17
    (2015).
    22                          A-3866-14T3
    (c), and (d), that if initially raised by
    answer, a motion raising the defense must also
    be made within 90 days after service of the
    answer in which the defense was asserted.
    Defenses (a), (e), and (f), whether raised by
    motion or answer, are required, on a party's
    application to be heard and determined before
    trial unless the court otherwise orders.
    [Pressler & Verniero, Current N.J. Court
    Rules, comment 1 on R. 4:6-2 (2017) (emphasis
    added).]
    Rule 4:6-3 requires a party who initially stated a Rule 4:6-
    2(b), (c), or (d) defense in his or her answer to raise it by
    filing a motion within ninety days after service of the answer.
    However, Rule 4:6-2(a), (e), and (f) defenses do not have that
    ninety-day     requirement,   but     the    defenses   must   be   "heard    and
    determined before trial on application of any party, unless the
    court for good cause orders that the hearing and determination
    thereof be deferred until the trial."           R. 4:6-3.      Thus, Rule 4:6-
    2 contemplates that a party who raises Rule 4:6-2(e) defense in
    its answer will make an application to the court prior to trial.
    MFC raised a Rule 4:6-2(e) defense in its answer, and filed
    motion to dismiss prior to trial, consistent with the Rule.                Thus,
    the   motion   was   not   untimely    and    the   judge   erred   by   holding
    otherwise.
    MFC also argues that the judge failed to conduct a choice of
    law analysis on Homann's counterclaims for breach of fiduciary
    23                                 A-3866-14T3
    duty and shareholder oppression.           MFC posits that New Jersey has
    adopted the internal affairs doctrine for choice-of-law purposes
    and, pursuant to that doctrine, Nevada law applies to Homann's
    counterclaims for shareholder oppression and breach of fiduciary
    duty.
    Because the counterclaims suggested causes of action, we
    conclude   the   judge   correctly    determined    they   were   adequate.
    Printing Mart-Morristown v. Sharp Elecs. Corp., 
    116 N.J. 739
    , 746
    (1989).    However, because the judge failed to conduct a choice-
    of-law analysis, we reverse the denial of MFC's motion to dismiss
    the counterclaims for breach of fiduciary duty and shareholder
    oppression and remand for the court to conduct a choice-of-law
    analysis to determine whether New Jersey or Nevada law applied to
    those counterclaims.
    IV.
    Lastly, MFC contends that the judge erred in granting Homann's
    motion to compel discovery.     MFC's argument, in its entirety, is
    as follows: "Finally, since the breach of fiduciary duty and
    shareholder oppression [counter]claims are the sole basis for
    . . . Homann's second discovery requests         . . . this [c]ourt should
    likewise reverse the trial court's order compelling MFC to comply
    with those requests."
    MFC provides no credible evidence and cites no legal authority
    24                             A-3866-14T3
    to support its argument.        See State v. Hild, 
    148 N.J. Super. 294
    ,
    296 (App. Div. 1977) (parties are obligated to justify their
    positions by specific reference to legal authority); Weiss v.
    Cedar Park Cemetery, 
    240 N.J. Super. 86
    , 102 (App. Div. 1990)
    ("The failure to adequately brief the issues requires it to be
    dismissed as waived").
    In any event, the argument lacks merit.          "Generally, pursuant
    to Rule 4:10-2(a), parties may obtain discovery regarding any non-
    privileged matter that is relevant to the subject of a pending
    action or is reasonably calculated to lead to the discovery of
    admissible evidence."       In re Liquidation of Integrity Ins. Co.,
    
    165 N.J. 75
    , 82 (2000).      "Our discovery rules are to be liberally
    construed because we adhere to the belief that justice is more
    likely to be achieved when there has been full disclosure and all
    parties are conversant with all available facts."                
    Ibid.
    MFC admits that MFC's improper conduct, as Homann alleged in
    his counterclaim, is the same conduct on which he relied for his
    breach of contract counterclaim.             Thus, because MFC's improper
    conduct supports both Homann's contract counterclaim and breach
    of fiduciary duty and shareholder oppression counterclaims, the
    discovery   he   sought   was    relevant,    or   likely   to    lead   to   the
    discovery   of   relevant       evidence,    regardless     of    whether     the
    counterclaims are dismissed.
    25                                  A-3866-14T3
    Affirmed in part, reversed in part, and remanded for further
    proceedings consistent with this opinion.           Because the motion
    judge   made   factual   findings   to   support   his    ultimate     legal
    conclusion, the vicinage's Presiding Judge of the Civil Division
    should assign this case to a different judge.            We do not retain
    jurisdiction.
    26                               A-3866-14T3