THE HOLDER GROUP, INC. VS. PIKE CONSTRUCTION, CO., LLC (L-4909-15, ESSEX COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-5098-17T1
THE HOLDER GROUP,
INC.,
Plaintiff-Appellant,
v.
PIKE CONSTRUCTION CO.,
LLC, and JEFFREY L. ABRAMS,
Defendants-Respondents.
____________________________
Argued September 17, 2019 – Decided November 6, 2019
Before Judges Yannotti, Hoffman and Currier.
On appeal from the Superior Court of New Jersey, Law
Division, Essex County, Docket No. L-4909-15.
Jeffrey S. Mandel argued the cause for appellant.
John D. Horowitz argued the cause for respondents.
PER CURIAM
Plaintiff, a construction management firm owned by Andrew Holder, filed
this action in July 2015, alleging that defendants breached a joint venture
agreement. Plaintiff appeals from Law Division orders granting summary
judgment in favor of defendants and denying its motion for partial summary
judgment. Plaintiff also challenges the trial court's rulings on various pretrial
motions. For the reasons that follow, we affirm.
I.
In 2011, plaintiff made contact with The Pinnacle Companies (Pinnacle),
a developer hired by DCH Montclair (DCH) to help obtain "new entitlements"
for the construction of two buildings in Montclair (the Project); in addition,
Pinnacle had the responsibility of selecting a general contractor who could
competently provide preconstruction services. During an initial meeting, Holder
informed Brian Stolar, Pinnacle's president, that "in order for [plaintiff] to
participate in construction of [a] project of this magnitude[, plaintiff] would
have to joint venture with somebody else that has bonding capacity and
experience . . . ." Holder then contacted defendants, Pike Construction Co., LLC
(Pike) and Jeffrey Abrams (Pike's part-owner), in an attempt to form a joint
venture with Pike to compete for the Project.1
1
At his deposition, Stolar testified he "had already been referred to" Pike by a
partner.
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At his deposition, Holder testified that he called Abrams, and the two
agreed
that we'd be a joint venture partnership[;] that we would
be 50/50 partners based on a concept that each [of the
parties] would be responsible for their own respective
home office expenses, including principals[;] that we'd
be financially equally responsible for the [p]roject[;]
that we would participate in terms of construction
responsibilities on [an] equal basis[;] and that Pike
would bring their bonding capacity to the [P]roject and
[plaintiff] would make the introduction to the client.
It is undisputed there was never a written agreement between plaintiff and
defendants, nor was there a written agreement between plaintiff and Pinnacle,
or between the alleged joint venture and Pinnacle.
In a certification, Abrams recalled the phone call with Holder, but stated
in his deposition that he "never agreed to the alleged terms proposed by Holder,
as set forth." He stated the parties "had an understanding that we were pursuing
the . . . [P]roject and other projects with Pinnacle together"; however, he "was
skeptical of [plaintiff's] ability to perform and fully expected that [Pike] would
end up carrying the ball . . . on this," because plaintiff did not "possess . . . the
experience necessary to build a project like this or the financial capability . . . ."
Abrams' partner, David Weiner, similarly testified that plaintiff lacked "the
financial wherewithal" and "the experience" necessary to complete the Project.
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In May 2011, Holder and Abrams attended a preconstruction meeting with
representatives of Pinnacle – a senior vice president at Pinnacle recalled walking
"away with the understanding that [plaintiff] and Pike Construction were going
to work together as joint venture partners." In June 2011, plaintiff emailed
Abrams a two-page document titled "division of responsibility," which consisted
of a chart connecting plaintiff and Pike to Pinnacle through a "joint venture
partnership"; the document also provided a check list regarding project
administration.
However, at his deposition, Stolar dismissed the "division of
responsibility" document as
a list with checks on it . . . [eighty] percent of the
checkmarks are in both [plaintiff's and Pike's] columns.
. . . [T]here were . . . dark checks and light checks. I'm
like, what's the dark check and the light check? And
the dark check is more emphasis and the light check is
less emphasis, and with all due respect I'm building a
very expensive project and I need a little more
specificity . . . .
Stolar certified that "Pinnacle was not going to agree to the 'division of
responsibility' . . . therefore, that entire document became meaningless, and I
do not believe that it was ever discussed again."
At his deposition, Stolar stated that once Holder said he did not have the
bonding capacity to perform the Project, it "became a clear undeniable inability
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to work on this project," and "because he never worked on a project of anything
like this scale[, Pinnacle] would not consider him to work on [the] [P]roject." 2
Stolar did not believe plaintiff and defendants were engaged in a joint
relationship.
According to plaintiff, on "September 1, 2011, [plaintiff] provided
[d]efendants with . . . budget estimates for the project." Plaintiff cites to an
email from an employee of plaintiff to Weiner, with "attached information
regarding the budget estimates for [t]he Pinnacle [c]ompanies." None of the
attachments are included in the record, and defendants point out the
"[a]ttachments" section of the email included a document titled "Westfield
ground floor sketch plan." According to defendants, "Westfield" is a wholly
different (and much smaller) project than the Project at issue here. Thus,
defendants argue plaintiff's claim that plaintiff "provided . . . budget materials
for the project" "is a provably false representation."
Stolar also certified that "[o]n or about January 24, 2012, a [plaintiff]
employee sent [Pinnacle] an email suggesting that Pinnacle had verbally agreed
2
Prior to 2013, plaintiff had served on only six out-of-the-ground construction
projects – those requiring excavation – and none exceeded $5,000,000 in
contract price. In contrast, Pike had served as a general contractor for more than
thirty years, during which it completed out-of-the-ground construction projects
ranging from $10,000,000 to $150,000,000.
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to pay . . . a fee for preconstruction services, which was not correct." According
to Stolar, "Contrary to [plaintiff's]'s assertion, there was a specific verbal
agreement among Pinnacle, Pike and [plaintiff], that Pike and [plaintiff] were
not charging Pinnacle any preconstruction fees." Later that day, "Holder
apologized for [plaintiff] having wrongfully claimed that Pinnacle verbally
agreed to pay for preconstruction fees, when no such fee existed – and in fact,
the exact opposite agreement was reached between" the parties and Pinnacle.
Notwithstanding Holder's apology, Stolar felt plaintiff's email "reflected
[plaintiff's] lack of credibility, and at that point . . . [he] decided [he] did not
want [plaintiff] to have any meaningful involvement in the Project." Stolar
responded to Holder in an email stating, "We need [Abrams] to lead . . . . Your
role is to make him better – but it has to be as HE sees fit. I leave it to your joint
relationship to do so." Holder responded, "Agreed."
Stolar further certified that in "January 2012, Pinnacle had no obligation
to hire Pike and/or [plaintiff] to serve as general contractor," and at that time,
he "decided that Pinnacle was not going to sign a contract with [plaintiff], or
with any joint venture that included [plaintiff], or consent to any arrangement
whereby Pike and [plaintiff] were splitting the work in any meaningful way. . . ."
Stolar stated he "was willing to allow Pike to assign minor tasks to [plaintiff],
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subject to my review and approval, strictly as a courtesy to Pike since it was my
understanding that . . . Abrams and . . . Holder were friends." Overall, Stolar
concluded that plaintiff "did not perform any meaningful work in furtherance of
the Project, nor did [plaintiff] add any value to the Project."
In April 2013, Abrams asked Holder to provide "takeoffs" for the project
– plaintiff defined takeoffs as "lists that identify how much material is required
on the project and quantity/quality assessments." Plaintiff provided twelve
pages of "takeoff" material; however, David Topalian, a Pike employee, testified
at his deposition that the takeoffs had to be re-done. The record fails to indicate
the amount of time or effort plaintiff spent in creating the takeoffs.
On May 9, 2013, during the preconstruction phase of the Project, MAP
Urban Renewal, LLC (MAP) purchased the property from DCH. LCOR
Construction Services LLC, (LCOR) served as the developer for MAP in
connection with the project. Plaintiff concedes that after MAP closed on its
purchase of the property, plaintiff never participated or worked on the project.
According to Holder, on May 16, 2013, Abrams sent him an email, stating
in pertinent part:
We have a fundamentally different impression of how
this [P]roject has evolved. As discussed several times
since your introduction of Pike to Pinnacle and again
during our most recent meeting, it is not feasible, or
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equitable, for Pike to be the financially responsible
party to a construction contract and to equally share the
potential fees with another firm . . . .
On October 29, 2013, Pike entered into a Project Construction Agreement 3
with LCOR, and ultimately completed the construction of the buildings as the
sole general contractor. In contracting with Pike, Lawrence Capelli, the Director
of Development and Construction at LCOR, certified that "LCOR and MAP
wanted one entity, in this case Pike, to be responsible for all of the general
contractor's responsibilities, and did not want Pike's general contractor
responsibilities to be delegated to anyone else."
Plaintiff's complaint alleged that defendants breached the parties' alleged
joint venture agreement, and also asserted claims of conversion, fraud, breach
of fiduciary duty, and breach of the duty of good faith. Plaintiff also sought an
accounting of the Project and demanded compensatory and punitive damages.
In March 2017, plaintiff filed a motion for leave to file an amended
complaint, seeking to add Pinnacle and Stolar as defendants under a theory of
tortious interference. After finding the complaint would be futile, as the putative
defendants would subsequently file a successful motion to dismiss for failure to
3
According to Abrams, "The contract price for the Project, as amended, was in
excess of $55,000,000, and MAP issued payments directly to Pike."
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state a claim, the trial court denied plaintiff leave to file an amended complaint.
The trial court also entered an order on November 28, 2017, denying plaintiff's
request for discovery of documents shown and notes taken by defendants'
attorney during a meeting with a former Pinnacle employee, whom plaintiff later
deposed. In addition, the court entered an order on January 5, 2018, denying
plaintiff's motion for leave to compel depositions of four LCOR employees,
more than a week after fact discovery closed.
Before trial, the parties filed summary judgment motions, which the Law
Division decided on July 6, 2018. The motion judge granted defendants' motion,
and entered an order dismissing plaintiff's complaint with prejudice. The judge
dismissed plaintiff's cross-motion for summary judgment as moot. This appeal
followed.
II.
Plaintiff argues that the motion judge erred by granting summary
judgment in favor of defendants.
When reviewing an order granting or denying summary judgment, we
apply the same standards that are applied by the trial court when ruling on a
motion seeking such relief. Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A.,
189 N.J. 436, 445-46 (2007); Henry v. N.J. Dept. of Human Servs., 204 N.J.
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320, 330 (2010). Summary judgment shall be granted when there is no genuine
issue of material fact, and the moving party is entitled to judgment as a matter
of law. R. 4:46-2(c).
Furthermore, "[a]n issue of fact is genuine only if, considering the burden
of persuasion at trial, the evidence submitted by the parties on the motion,
together with all legitimate inferences therefrom favoring the non-moving party,
would require submission of the issue to the trier of fact." Ibid. Where the party
opposing summary judgment points only to disputed issues of fact that are "of
an insubstantial nature," the proper disposition is summary judgment. Brill v.
Guardian Life Ins. Co. of Am., 142 N.J. 520, 529 (1995). Where the evidence
on a factual issue "is so one-sided that one party must prevail as a matter of
law," the court "should not hesitate" in granting summary judgment. Id. at 540
(quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252 (1986)).
Plaintiff claims that defendants breached the parties' joint venture
agreement when defendants completed the construction project as the sole
general contractor. Plaintiff argues that a reasonable jury could find that the
parties established a joint venture for the construction of the properties based on
the facts in the record.
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A joint venture is "an undertaking usually in a single instance to engage
in a transaction of profit where the parties agree to share profits and losses."
Wittner v. Metzger, 72 N.J. Super. 438, 444 (App. Div. 1962) (quoting Kurth v.
Maier, 133 N.J. Eq. 388, 391 (E. & A. 1943)). A joint venture ordinarily has
some or all of the following elements: 1) a contribution by the parties of money,
property, effort, knowledge, skill or other assets to a common undertaking; 2) a
joint property interest in the subject matter of the venture; 3) a right of mutual
control or management of the enterprise; 4) an expectation of profit; 5) the right
to participate in profits; and 6) limitation of the objective to a single undertaking.
Ibid.
To create a joint venture, the parties must agree upon essential terms
because a "basic criterion" for the establishment of a joint venture is "the
voluntary agreement of the parties to form a relationship with the intent to create
a joint venture." Sullivan v. Jefferson, Jefferson & Vaida, 167 N.J. Super. 282,
290 (App. Div. 1979). "The sine qua non of joint venture is a contract
purposefully entered into by the parties." Id. at 289 (quoting Wittner, 72 N.J.
Super. at 443).
In a written opinion, the motion judge noted that a joint venture must
include some, but not all, of the relevant factors set forth in Wittner. Regarding
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the first factor, the judge found that plaintiff admits it was "unable to contribute
money, property, effort, knowledge, skill or other asset to the common
undertaking. Plaintiff's contribution to the joint venture seems to have been
simply connecting Pinnacle with [d]efendant to perform the necessary work."
The judge found no evidence of a joint property interest in the subject matter of
the Project, and no evidence that either party had a right to control the venture.
The judge also found that while plaintiff claimed "an expectation of
profits as being divided 50/50[,] [t]his expectation . . . must be coupled with the
right to participate in profits." The judge determined that plaintiff lacked the
right to participate in profits because there was no agreement to share any losses,
noting, "Without an agreement to share in losses, there cannot be a joint
venture." The judge stated that it was unclear whether the alleged joint venture
was limited to a single undertaking.
Plaintiff points to various facts in the record to support its argument that
a jury could find that the parties established a joint venture to construct the
buildings together. We are not persuaded. Considering the record and the
applicable law, we find this issue so one-sided that defendants must prevail as a
matter of law. Brill, 142 N.J. at 540
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Plaintiff's brief vaguely explains its actual participation in the Project: that
plaintiff and defendants referred to themselves as a "joint venture"; that a senior
vice president at Pinnacle understood that plaintiff and Pike would "work
together as joint venture partners"; that plaintiff attended preconstruction
meetings; that documents such as the "division of responsibility" labelled
plaintiff and Pike as a "joint venture partnership"; that plaintiff worked with
defendants on budget preparation; and that plaintiff prepared "takeoffs" for the
project. However, evidence in the record indicates the "division of
responsibility" plaintiff prepared was never used, and needed to be redone, and
plaintiff's work on the "takeoffs" was done incorrectly and re-done by someone
else. Also, the record does not include any documents that provide budget
estimates.
Most importantly, where plaintiff attempts to provide examples of the
work it performed on the Project, it fails to specify or substantiate the amount
of time, money, personnel, resources, knowledge, or effort utilized in its alleged
participation in the project. Thus, plaintiff fails to provide sufficient competent
evidence for a rational factfinder to conclude that plaintiff satisfied the first
element of a joint venture under Wittner. We agree with the motion judge's
assessment that plaintiff's contribution to the alleged "joint venture seems to
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have been simply connecting Pinnacle with [d]efendant to perform the necessary
work."
Moreover, the record makes clear that the preconstruction stages of the
project – the only period in which plaintiff alleges that it participated – were not
events that occurred on behalf of a contract between the alleged joint venture
and Pinnacle or LCOR. Plaintiff attempted to charge Pinnacle for
"preconstruction fees," and Pinnacle rejected the billing because "there was a
specific verbal agreement among Pinnacle, Pike and [THG], that Pike and
[THG] were not charging Pinnacle any preconstruction fees." Clearly, neither
plaintiff nor the alleged joint venture were ever involved in a contract or rig ht
to profits with any of the owners or developers on the Project – in fact the record
shows the developers specifically avoided working with plaintiff.
We conclude that the motion judge correctly found plaintiff failed to
present sufficient evidence to establish that it was part of a joint venture with
Pike. Plaintiff failed to establish the elements generally required to prove the
existence of a joint venture. Plaintiff did not make a substantial contribution to
the venture, and lacked the relevant construction experience and bonding
capacity for the project.
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Furthermore, plaintiff's introduction of Pike to Pinnacle had little value
because the record shows Stolar intended to contact Abrams at Pike before that
introduction. There was no evidence that plaintiff and Pike had a joint property
interest. The subject property was DCH Montclair's property, which sold the
Project to MAP; at that time, LCOR took over for Pinnacle as developer for the
project.
There was no agreement between plaintiff and Pike as to the control of the
alleged joint venture. Indeed, the record shows that Stolar decided he did not
want plaintiff to have any involvement in the project. There also was no
agreement to share losses.
Plaintiff's assertion that the parties would be equally responsible
financially for the project lacks sufficient support in the record. The assertion
is also inconsistent with evidence that Pike would provide the bond required for
the Project.
In addition, both our Supreme Court and this court have made clear that
any losses incurred by a joint venture must be shared for there to be an
enforceable joint venture contract. See Grober v. Kahn, 47 N.J. 135, 148 (1966)
(no joint venture is formed if the parties do not agree to share in losses); Wittner,
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72 N.J. Super. at 444-45 (venturers must share profits and losses to maintain an
enforceable joint venture).
Based on the summary judgment record, a reasonable jury could not find
that the plaintiff and defendants established a joint venture for the construction
of the Project. In its reply brief, plaintiff concedes its remaining claims are all
premised on the existence of a joint venture partnership. Since the judge
correctly granted summary judgment in favor of defendants on the joint
enterprise issue, the judge properly dismissed plaintiff's remaining claims as
moot.
III.
Plaintiff also contends that the motion judge erred by denying: its motion
for leave to extend discovery; its motion for leave to file an amended complaint;
its request for documents from defendants' attorney's meeting with a former
Pinnacle employee; and other related discovery motions.
A trial court's decision on discovery matters is reviewed under an abuse
of discretion standard. Pomerantz Paper Corp. v. New Cmty. Corp., 207 N.J.
344, 371 (2011) (citing Bender v. Adelson, 187 N.J. 411, 428 (2006)). "That is,
'[w]e generally defer to a trial court's disposition of discovery matters unless the
court has abused its discretion or its determination is based on a mistaken
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understanding of the applicable law.'" Ibid. (quoting Rivers v. LSC P'ship, 378
N.J. Super. 68, 80 (App. Div. 2005)).
The trial court did not abuse its discretion by refusing to order defendants
to produce notes prepared by defense counsel during his meeting with Pinnacle
Vice President Doug Bush. The meeting took place several months before
plaintiffs deposed Bush. The court correctly found the notes constituted
attorney work-product and therefore were not discoverable. Nor did the court
err by denying plaintiff's request to obtain drafts of Stolar's affidavit, which
defendants submitted in support of their summary judgment motion. Since
plaintiff deposed Stolar, plaintiff had a full opportunity to obtain any needed
information. In addition, the court did not err by quashing a subpoena to compel
LCOR to produce certain documents. The subpoena was overbroad.
Plaintiff's counsel inexplicably waited until December 20 to file the
motion for leave to depose four LCOR employees, returnable on January 5,
2018. The trial court denied the motion, stating that "[f]act discovery concluded
on [December 28,] 2017 per [o]rder dated [November 11,] 2017." We discern
no abuse of discretion.
We also find no reason to disturb the trial court's denial of plaintiff's
motion to amend its complaint to add Stolar and Pinnacle as defendants. "Courts
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are free to refuse leave to amend when the newly asserted claim is not
sustainable as a matter of law." Interchange State Bank v. Rinaldi, 303 N.J.
Super. 239, 256-57 (App. Div. 1997) (quoting Mustilli v. Mustilli, 287 N.J.
Super. 605, 607 (Ch. Div. 1995)). In determining plaintiff's amended complaint
would be futile, the court found the putative defendants "never said[] or did
anything, . . . to tortuously interfere . . . with the . . . suggested joint venture."
Rather, they indicated "that they just simply didn't want to work with . . .
[p]laintiff." Moreover, plaintiff's proposed amended complaint failed to allege
any facts suggesting that Stolar or Pinnacle acted with malice, i.e., without
excuse or justification, when they decided they did not want to work with
plaintiff, particularly after receiving plaintiff's email claiming that Pinnacle
verbally agreed to pay for preconstruction fees.
Any arguments not specifically addressed lack sufficient merit to warrant
discussion in a written opinion. R. 2:11-3(e)(1)(E).
Affirmed.
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