JOHN GIOVANNI GRANATA VS. EDWARD F. BRODERICK, JR., ESQ. (L-3278-07, PASSAIC 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NOT FOR PUBLICATION WITHOUT THE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-3930-17T1
JOHN GIOVANNI GRANATA,
Plaintiff,
v.
EDWARD F. BRODERICK, JR.,
ESQ., an Attorney at Law of the
State of New Jersey, BRODERICK,
NEWMARK & GRATHER,
Defendants,
and
ROTENBERG, MERIL, SOLOMON,
BERTIGER & GUTILLA, PC,
Intervenor,
and
ELLIOT H. GOURVITZ, ESQ.,
Intervenor-Respondent,
and
OKS REALTY,
Intervenor-Appellant.
_____________________________
Argued January 23, 2019 – Decided February 6, 2019
Before Judges Yannotti and Natali.
On appeal from Superior Court of New Jersey, Law
Division, Passaic County, Docket No. L-3278-07.
Kenneth S. Thyne argued the cause for appellant
(Roper & Thyne, LLC, attorneys; Kenneth S. Thyne,
on the briefs).
Ari H. Gourvitz argued the cause for respondent Elliot
H. Gourvitz (Gourvitz & Gourvitz, LLC, attorneys;
Ari H. Gourvitz, on the brief).
PER CURIAM
Intervenor OKS Realty (OKS) appeals from a March 23, 2018 order
denying its application for reasonable attorney's fees, interest, and late fees on
an outstanding lien. Because the trial court failed to set forth its legal
conclusions and factual findings in accordance with Rule 1:7-4, we reverse the
March 23, 2018 order and remand for further proceedings.
I.
OKS's appeal is the latest chapter in this protracted litigation related to
the appropriate priority and distribution of three liens held by intervenors
OKS, Elliot H. Gourvitz, Esq. (Gourvitz), and accounting firm Rotenberg,
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Meril, Solomon, Bertiger & Gutilla (Rotenberg).1 The procedural history and
facts underlying the dispute are fully detailed in our published opinion.
Granata v. Broderick, 446 N.J. Super. 449 (App. Div. 2016), aff'd, 231 N.J.
135 (2017). We briefly recount that history to provide context for our decision
and also add additional, pertinent facts from the trial proceedings that led to
the entry of the March 23, 2018 order.
Plaintiff John Giovanni Granata filed a complaint against Prudential
Insurance Company of America (Prudential) alleging he was improperly fired
in violation of the Conscientious Employee Protection Act, N.J.S.A. 34:19-1 to
-8. After the court denied Prudential's application to compel arbitration,
Prudential appealed, and we reversed. Granata v. Prudential Ins. Co. of Am.,
No. A-7052-97 (App. Div. Dec. 28, 1998).
Defendants Edward F. Broderick, Jr., Esq. and Broderick, Newmark &
Grather, represented plaintiff before the arbitration panel. The panel awarded
plaintiff $28,000 in compensatory damages but assessed $12,530.50 in fees
and costs against him. In 2007, plaintiff retained then-attorney Diane
1
We have been advised by the parties that OKS and Rotenberg settled.
Rotenberg has not participated in this appeal.
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Acciavatti of Acciavatti, LLC, (Acciavatti) to prosecute a legal malpractice
action against defendants.
Following a lengthy trial, a jury awarded plaintiff $910,000 in damages.
After interest was added to the verdict, plaintiff's judgment totaled $1,597,193.
Defendants appealed and we reversed and vacated the judgment based on
the court's failure to provide an "exercise of judgment" charge. Granata v.
Broderick, No. A-5272-10 (App. Div. July 8, 2013). On remand, the parties
settled plaintiff's claims for $840,000.
After the settlement, OKS, Gourvitz, and Rotenberg asserted liens upon
Acciavatti's legal fees. We previously detailed the intervenors' lien interests as
follows:
On October 27, 2010, following the $1.5 million jury
verdict, but before our decision vacating that verdict,
Acciavatti, LLC obtained a loan from OKS which
Acciavatti guaranteed. On that date, a security
agreement, a promissory note, and a guaranty of
payment were all executed and signed by Acciavatti
on behalf of Acciavatti, LLC. On December 2, 2010,
OKS filed a UCC–1 financing statement, listing as
debtors both Acciavatti, LLC and Acciavatti as
guarantor of the loan. The statement identified the
collateral as legal fees due to Acciavatti in the
litigation, Granata v. Broderick, and noted that
judgment was entered on August 23, 2010.
Gourvitz is a lien creditor. On September 9, 2011, a
consent judgment was entered in Gourvitz v.
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Colfax, whereby Acciavatti assumed responsibility for
a debt obligation to Gourvitz as a result of a March 5,
2010 summary judgment order entered against
Acciavatti's client, Colfax, for collection of unpaid
legal fees. On August 19, 2011, even though
Acciavatti had not yet assumed responsibility for the
debt, the trial judge entered an order declaring that
Gourvitz had a lien on any attorney's fees awarded to
Acciavatti in this case. On November 4, 2011,
Gourvitz's judgment was recorded as a lien, and a writ
of execution was filed on August 19, 2013.
Rotenberg is also a lien creditor. Acciavatti assumed
a debt obligation to Rotenberg pursuant to a March 21,
2011 settlement agreement. On that same day,
Acciavatti entered into a consent judgment with
Rotenberg, which was recorded as a lien on January
24, 2013. A writ of execution was filed in January
2014.
[Granata, 446 N.J. Super at 473.]
At a January 9, 2015 hearing to address OKS's, Gourvitz's, and
Rotenberg's lien interests, the court asked the intervenors' attorneys to confirm
the amount of each lien. The judge specifically asked counsel to "tell me [if]
this is right or this is wrong. I've got [OKS] in at one hundred and nineteen
thousand," to which OKS's counsel replied, "[c]orrect." Gourvitz's counsel
stated the amount owed to its client was $82,045.74 "as of [January 9, 2015],"
and Rotenberg's counsel informed the court that his client was owed
$133,652.42.
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The court entered an order on January 15, 2015, which awarded
Acciavatti $279,720 in attorney's fees to be paid out of the $840,000
settlement. On January 26, 2015, the court entered two orders, one of which
denied Granata's motion for reconsideration. The other January 26, 2015 order
established the distribution of Acciavatti's counsel fees as follows: 1) $40,000
to Granata's substituted attorneys pursuant to a previously executed agreement;
2) $9597.56 to the trustee holding the funds; 3) $83,284.97 to Gourvitz; 4)
$133,652.42 to Rotenberg; and 5) the remaining $13,185.05 to OKS.
Granata appealed from the January 15, 2015 order awarding Acciavatti
counsel fees and the January 26, 2015 order that denied reconsideration . OKS
appealed from the January 26, 2015 order designating it last in the priority of
Acciavatti's creditors.
We affirmed the two orders from which Granata appealed, but vacated
the January 26, 2015 order to the extent it prioritized Gourvitz's and
Rotenberg's lien interests ahead of OKS's, and remanded the matter for further
proceedings. The Supreme Court granted Gourvitz's and Rotenberg's petition
for certification, and subsequently affirmed our decision. Granata v.
Broderick, 231 N.J. 135 (2017).
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During the remanded proceedings, OKS filed a motion to intervene on
December 15, 2017. The trial court denied OKS's motion on January 23, 2018,
concluding that "a post judgment motion would suffice" and "[t]here is nothing
to intervene into." 2
OKS then filed a motion seeking an order "establishing the current lien"
and "compelling the payment of monies disbursed" to Gourvitz and Rotenberg.
Specifically, OKS sought $224,029.49, comprised of the asserted outstanding
principal of $125,000, $89,719.45 in interest, $5383.17 in late fees, $956.92
for the costs related to the appeal, and $16,155 in attorney's fees . OKS
acknowledged receipt of the $13,185.05 disbursed pursuant to the January 26,
2015 order, and subtracted that sum from the amount requested.
OKS maintained that it was entitled to attorney's fees, interest, and late
fees under the October 27, 2010 promissory note between it and Acciavatti.
The note provided that Acciavatti would be in default by, among other events,
failing to make any required payment under the note within thirty days after
2
It is unclear from the record the basis for the trial court's ruling denying
intervention as we had already concluded that "each of the creditors was
entitled to intervene as of right . . . pursuant to Rule 4:33-1." See Granata, 446
N.J. Super. at 473. Accordingly, on remand, OKS and Gourvitz shall be
deemed intervenors as of right.
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the payment became due. Further, the note stipulated that "upon the
occurrence of an event of default hereunder, . . . [OKS] shall be entitled to
recover all costs and expenses incurred by [OKS], including a reasonable
allowance for attorneys' fees, to obtain or enforce payment of any sums owing
hereunder or to enforce other obligations of [Acciavatti] to [OKS]." In
addition, the note stated that "[n]o delay on the part of [OKS] in the exercise
of any right, rights or options hereunder . . . and no failure to declare a default
with respect to any one item of default shall constitute a waiver thereof or
impair in any respect the rights of . . . [OKS] . . . to take any action provided
herein."
Rotenberg opposed OKS's application on the basis that the UCC-1
financing statement that established OKS as a secured party lapsed and had not
been renewed. In addition to joining Rotenberg's claim that OKS was no
longer a secured party, Gourvitz alternatively relied on various estoppel-based
theories in asserting that OKS's recovery should be limited to the $119,000
that counsel previously represented to the court, and it should not be permitted
to recover late fees, interest, and counsel fees.
On March 23, 2018, the court heard oral arguments and issued an oral
opinion in which the judge stated:
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So I understand your position. I am going to order
[OKS] gets paid one nineteen, no interest, no
attorney's fees. Gourvitz gets the same [$83,284.97],
and the accounting firm [Rotenberg] gets
[$37,435.03].
The court entered an order that same day that valued OKS's lien at
$119,000, and ordered Rotenberg to pay OKS $105,814.95 "for the reasons set
forth on the record" at the March 23, 2018 hearing. 3 This appeal followed.
II.
On appeal, OKS argues that it was entitled to an award of interest,
reasonable attorney's fees, and late fees and was not estopped from seeking
those sums. OKS also claims the court's "naked conclusion" that it was "going
to order [OKS] gets paid one nineteen, no interest, no attorney's fees," did not
comply with Rule 1:7-4. Alternatively, OKS requests that we invoke original
jurisdiction pursuant to Rule 2:10-5 and "find that OKS is entitled to payment
of the $83,284.97 erroneously awarded to Gourvitz . . . with interest."
Gourvitz maintains that OKS is not entitled to interest, attorney's fees or
late fees and, to the extent the October 27, 2010 promissory note authorized
those costs, OKS waived its right to collect those sums due to its counsel's
3
The $105,814.95 figure equals OKS's counsel's $119,000 representation
minus the $13,185.05 that OKS received pursuant to the January 26, 2015
order.
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affirmative statement in which she sought only $119,000 and also because
OKS delayed in seeking relief to Gourvitz's detriment.
As it did in the trial court, Gourvitz relies on various equitable doctrines
in support of its waiver argument, including collateral, judicial, and equitable
estoppel as well as the doctrines of invited error and laches. Finally, Gourvitz
opposes OKS's request that we invoke original jurisdiction, and maintains that
any necessary factual findings should be made by the trial court in accordance
with Rule 1:7-4.
We conclude that the court's March 23, 2018 oral decision failed to
comply with Rule 1:7-4. Further, we reject OKS's request that we invoke
original jurisdiction.
Rule 1:7-4(a) provides that the court "shall . . . find the facts and state its
conclusions of law thereon . . . on every motion decided by a written order that
is appealable as of right . . . ." "Meaningful appellate review is inhibited
unless the judge sets forth the reasons for his or her opinion. In the absence of
reasons, we are left to conjecture as to what the judge may have had in mind."
Salch v. Salch, 240 N.J. Super. 441, 443 (App. Div. 1990); see also Estate of
Doerfler v. Fed. Ins. Co., 454 N.J. Super. 298, 301 (App. Div. 2018).
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Although in some instances, a court may, by reference, rely on a
litigant's reasons in reaching its decision, Vartenissian v. Food Haulers, Inc.,
193 N.J. Super. 603 (App. Div. 1984), "[t]he court should, however, make the
fact of such reliance explicit, and its failure to do so is tantamount to making
no findings at all." Pressler & Verniero, Current N.J. Court Rules, cmt. 1 on
R. 1:7-4 (2019) (citing Allstate Ins. Co. v. Fisher, 408 N.J. Super. 289, 301
(App. Div. 2009)).
Here, the judge in his March 23, 2018 oral opinion summarily concluded
that it would award OKS $119,000, "no interest, no attorney's fees" and failed
to explain its reasoning in denying OKS's request for attorney's fees and
interest expressly permitted by the October 27, 2010 promissory note. Nor did
the court analyze Gourvitz's various estoppel-based theories, or its claim that
OKS, at the time of the November 23, 2018 hearing, no longer had a viable
lien due to its failure to renew its UCC-1 filing.
We do not pass upon the merits of the parties' claims or defenses, but
identify them solely to illustrate that by failing to provide any reasons for its
decision, we, along with the litigants "are left to conjecture as to what the
judge may have had in mind." See Salch, 240 N.J. Super. at 443. Because
"our function as an appellate court is to review the decision of the trial court,
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not to decide the motion tabula rasa[,]" Doerfler, 454 N.J. Super. at 302, the
absence of appropriate factual findings and legal conclusions prevents this
Court from meaningfully performing our function.
We also decline to exercise original jurisdiction. Rule 2:10-5 provides
that "[t]he appellate court may exercise such original jurisdiction as is
necessary to the complete determination of any matter on review." See also
N.J. Const. art. VI, § 5, ¶ 3. "However, [this Court's] 'original factfinding
authority must be exercised only with great frugality and in none but a clear
case free of doubt.'" Fisher, 408 N.J. Super. at 301 (quoting Tomaino v.
Burman, 364 N.J. Super. 224, 234–35 (App. Div. 2003)). "In determining
whether to exercise original jurisdiction, an appellate court not only must
weigh considerations of efficiency and the public interest that militate in favor
of bringing a dispute to a conclusion, but also must evaluate whether the
record is adequate to permit the court to conduct its review." Price v. Himeji,
LLC, 214 N.J. 263, 295 (2013).
An appellate court may "exercise original jurisdiction to eliminate
unnecessary further litigation," but it is "discourage[d] . . . if factfinding is
involved." Id. at 294 (quoting State v. Santos, 210 N.J. 129, 142 (2012)). We
do not "'weigh[] evidence anew and mak[e] independent factual findings;
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rather, our function is to determine whether there is adequate evidence to
support the judgment rendered' by the trial court." Fisher, 408 N.J. Super. at
302 (quoting Cannuscio v. Claridge Hotel & Casino, 319 N.J. Super. 342, 347
(App. Div. 1999)).
Based on the record before us, it is clear that additional factfinding is
necessary rendering it inappropriate for us to exercise original jurisdiction.
Among the unresolved issues are the reasonableness of OKS' attorney's fees,
whether OKS's UCC-1 filing lapsed and the significance, if any, of that event.
Further, we cannot conclude from the record if Gourvitz relied in good faith on
OKS's former counsel's representation that OKS was owed $119,000. 4
Reversed and remanded. We do not retain jurisdiction.
4
We do not intend this to be an exhaustive list of the unresolved factual
issues.
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