SERGE POLAJENKO v. JONATHAN CRAWFORD

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

SERGE POLAJENKO,

Plaintiff-Appellant,

v.

JONATHAN CRAWFORD and CAROLYN

CRAWFORD,

Defendants-Respondents,

and

NOIDEA ENTERPRISES, LLC, NOIDEA

INC.,1 THE FARM GROUP, MICHAEL

RUBERTON, OCEAN AVENUE PROPERTIES,

LLC, THE FARM ON SPRUCE AVE LLC,

and THE FARM ON RIDGE AVE LLC,

Defendants.

____________________________________________________

March 27, 2015

Submitted March 10, 2015 Decided

Before Judges Fisher and Manahan.

On appeal from the Superior Court of New Jersey, Law Division, Atlantic County, Docket No. L-7666-11.

Keith T. Smith, attorney for appellant.

Greenblatt & Laube, P.C., attorneys for respondents (Jay H. Greenblatt, on the brief).

PER CURIAM

The machinations regarding the parties' interests in real estate in Egg Harbor Township gave rise to disputes that were resolved either by trial or motion. We conclude the trial judge did not err in rejecting plaintiff Serge Polajenko's attempts to prove the value of the property but that the judge did err in the manner in which he found plaintiff and his attorney liable for frivolous-litigation fees.

The record developed at trial reveals that, in August 1989, plaintiff purchased what the parties have referred to as Tract I, an undeveloped parcel in Egg Harbor Township for $160,000; the sellers took back a mortgage to secure full payment. Plaintiff defaulted, and sellers obtained a judgment in October 2001. In June 2002, defendant Carolyn Crawford (defendant) paid $70,000 for an assignment of the note and mortgage from the sellers to her, and she obtained the property by sheriff's deed in November 2002.

Plaintiff and defendant thereafter entered into oral discussions about the property that led to an understanding never reduced to writing the nature of which was disputed. Plaintiff contends they agreed he would maintain ownership of Tract I and payments he made to defendant were for the accruing tax obligation; plaintiff also asserted he paid approximately $70,000 toward the purchase price at the sheriff's sale. On the other hand, defendant claimed she agreed to purchase the property and any contribution made by plaintiff was for rental payments under an oral lease that allowed plaintiff to remain on the property. She acknowledged that plaintiff paid off all outstanding tax liens on Tract I prior to her receiving the property by sheriff's deed. And, although denying plaintiff's claim he was a partner in ownership of Tract I, defendant conceded she agreed with plaintiff that if he constructed a barn on Tract I for her use as a storage facility and, also, gathered the funds to repurchase Tract I, she would sell Tract I back to him.

In May 2004, defendant purchased a nearby tract of land (Tract II) for approximately $250,000. Plaintiff alleged he paid $55,000 toward the purchase price and agreed to pay Tract II's property taxes, thereby obtaining a partnership interest in Tract II as well. Defendant denied this.

Tract II was assigned to The Farm Group, an entity created by defendant's son, Jonathan Crawford (Jonathan). On July 1, 2008, defendant transferred Tract I to Noidea Enterprises, L.L.C., and The Farm Group transferred Tract II to Noidea Group, L.L.C.; both of these limited liability companies were created and operated by Jonathan.

In July 2011, plaintiff filed a complaint against defendant, Jonathan, and the aforementioned entities. Defense counsel corresponded with plaintiff's counsel on September 20, 2011, alleging the claims were frivolous, citing Rule 1:4-8 and N.J.S.A. 2A:15-59.1, and demanding the action's dismissal; plaintiff's counsel wrote to disagree.

Plaintiff amended his complaint a month later. By counterclaim, defendant alleged a breach of an oral lease. After lengthy discovery and a summary judgment that disposed of some issues in defendants' favor, a five-day jury trial resolved the following specific issues contained in a verdict sheet: (1) plaintiff proved by clear and convincing evidence the existence of an agreement that made him and defendant partners; (2) plaintiff proved by clear and convincing evidence that defendant breached that contract; (3) plaintiff proved no damages resulting from the breach; (4) defendant proved that plaintiff expressly or impliedly contracted to pay for his use of the property; (5) defendant proved plaintiff's breach of that contract; and (6) defendant proved damages of $49,000. Judgment based on this verdict was entered on October 8, 2013.

Jonathan thereafter moved for an award of sanctions against plaintiff and his attorney pursuant to N.J.S.A. 2A:15-59.1 and Rule 1:4-8. Before the motion was decided, plaintiff filed his notice of appeal. Months later, without oral argument or an explanation for the ruling, the judge held plaintiff and his attorney jointly and severally liable to Jonathan for $24,447.50. An order memorializing that determination was entered on February 12, 2014.

In this appeal, plaintiff argues

I. THE REFUSAL OF THE TRIAL JUDGE TO ALLOW ANY EVIDENCE AS TO THE VALUE OF THE LAND, WHICH WAS THE OBJECT OF THE PARTNERSHIP OTHER THAN EXPERT TESTIMONY RESULTED IN AN UNFAIR TRIAL AND THE JURY NOT BEING ABLE TO ASSESS DAMAGES REQUIRING A NEW TRIAL ON DAMAGES.

II. THE COURT ERRED ALLOWING DEFENDANT[]S TO CLAIM RENT UNDER AN ORAL LEASE AND NOT REQUIRING THE DEFENSE PROVE THE LEASE BY CLEAR AND CONVINCING EVIDENCE, NOR MITIGA-TION, THUS THE DAMAGES VERDICT SHOULD BE OVERTURNED.

III. THE TRIAL JUDGE'S FAILURE TO PROVIDE A CURATIVE INSTRUCTION AS TO THE DEFENSE'S EXAMINATION OF AND CALLING PLAINTIFF'S SISTER, AND PLAINTIFF AS "GYPSIES" DENIED PLAINTIFF A FAIR TRIAL ON THE ISSUE OF DAMAGES.

IV. THE ATTORNEY FEE AWARD AGAINST PLAINTIFF'S COUNSEL AND PLAINTIFF SHOULD BE VACATED.

A. Attorney's fees are not collectable against an adverse party's attorney under the frivolous litigation statute and the judge's order of a joint and several award was improper.

B. The Attorney fee Award against [Plaintiff's] counsel should be vacated as there is no R. 1:4-8 letter that clearly sets forth with SPECIFICITY the basis why defense counsel believed the claim was frivolous.

C. The attorney fee award against [Plaintiff] should be vacated as the claims asserted were brought in good faith and there was no notice to him of the claim for frivolous litigation damages.

V. THE ATTORNEY FEE AWARD SHOULD BE VACATED WHERE IT WAS NOT MADE IN ACCORDANCE WITH THE REQUIREMENTS OF THE COURT RULES.

We find no merit in the first three points and, therefore, leave intact the October 8, 2013 judgment; however, because of problems surrounding the fee award, we vacate the February 12, 2014 order referred to in plaintiff's fourth and fifth points and remand for further proceedings.

I

Plaintiff argues the trial judge erred (a) in refusing to allow plaintiff to opine on the property's value, and (b) in barring admission of the tax assessment on the property. We find no error and agree the disputed value of the property was a subject to be expressed to the jury only through expert testimony.

The first aspect of this argument is without merit and warrants little discussion. Plaintiff was not an expert and the property's value could not be presented to the jury without expert testimony because that is a subject as to which a jury "would not be expected to have sufficient knowledge or experience." Torres v. Schripps, Inc., 342 N.J. Super. 419, 430 (App. Div. 2001); see also Pansini Custom Design Assocs., L.L.C. v. Ocean City, 407 N.J. Super. 137, 143 (App. Div. 2009) (holding that "[e]xpert testimony is generally required to determine the fair market value of real property").

Once plaintiff was properly precluded from offering an opinion as to its value, his attorney attempted to elicit information about the property's assessed value. The defense objected, arguing that the assessed value would be misleading, particularly when that amount was going to be conveyed by plaintiff instead of the assessor a method that would eliminate the possibility of cross-examination into the ascertainment of the assessed value. In response, plaintiff's counsel asserted that "it's a public record" and suggested contrary to his own argument about the worth of the assessed value in demonstrating fair market value that "it's lower, the tax assessments are typically lower than what people pay for the properties." In fact, plaintiff argued that the judge could take judicial notice of tax assessed values being lower than fair market value. The judge properly rejected the invitation to take judicial notice of any of these contentions.

We agree with the trial judge's ruling in all respects. Although it has been held that, as a starting point in tax matters, the assessment carries a presumption of accuracy, it is a presumption that may be overcome by the taxpayer. Pantasote Co. v. City of Passaic, 100 N.J. 408, 412-13 (1985). Here, plaintiff sought to use that information in a different context to prove something different fair market value. Moreover, allowing the use of the assessment without cross-examination of its author would not only have been unfair to defendant but had the potential to mislead the jury.

In addition, we discern from the manner in which the issue was posed and resolved in the trial court that counsel sought to prove the assessed value of the property through plaintiff's testimony. If that is correct and we acknowledge the record is not clear on this point plaintiff's testimony would have constituted inadmissible hearsay. Although it is true that N.J.R.E. 803(c)(8) excepts public records, reports and findings from the hearsay rule, that information is admissible only when offered in the manner prescribed by N.J.R.E. 803(c)(8)(A), i.e., through "a statement contained in a writing made by a public official." There is nothing in the record to suggest plaintiff was prepared to move a certified copy of the tax assessor's records into evidence. And plaintiff's testimony of what the public records allegedly revealed was an improper means for conveying what might otherwise have been admissible hearsay.

II

In his second point, plaintiff argues that the trial judge erred in allowing the jury to determine by a preponderance of the evidence instead of by clear and convincing evidence the terms of the parties' oral lease agreement. Of relevance is that part of the Statute of Frauds which declares "a lease of real estate for more than three years shall not be enforceable unless . . . the real estate, the term of the lease and the identity of the lessor and the lessee are proved by clear and convincing evidence." N.J.S.A. 25:1-12(b). Here, even though the tenancy continued over the course of many years, defendant alleged and sought to prove the existence of a month-to-month lease a lease not encompassed by the Statute of Frauds.

The judge, therefore, correctly instructed the jury that defendant was only required to prove the terms of the alleged month-to-month lease agreement by a preponderance of the evidence.

III

In his third point, plaintiff contends the judge erred in failing to give a curative instruction regarding testimony that purported to refer to plaintiff and his sister as "gypsies." Plaintiff argues the term is offensive and demeaning.

In considering this argument we assume although it is not entirely clear that the word "gypsy" may be used in an offensive way and was so intended here.2 The problem with plaintiff's argument is that it was not actually used when defense counsel cross-examined plaintiff's sister, although the attorney did elicit from that witness the fact that she works "as a fortune teller."3 The word "gypsy" appears only to have been uttered by defendant during cross-examination when she expressed that she thought plaintiff was "defrauding" her because she

found out that [plaintiff] had referred to [her] as a "mark." That's a gypsy term for somebody that you think you're going to really take over. I was his "mark[.]"

[Emphasis added.]

As can be seen, plaintiff was not called a gypsy; the accusation was that plaintiff had taken defendant for "a mark," which the witness characterized as "a gypsy term." And, even though defense counsel continued to pursue this allegation in his summation by arguing that defendant "was a mark and she was used and she was victimized," he did not refer to plaintiff as a gypsy.

Even though it may be arguable that the better practice would have been for the judge to have given the jury an appropriate instruction, we find no abuse of discretion in his failure to do so, and we see no prejudicial impact caused by the brief comments in question.

IV

In his fourth and fifth points, plaintiff argues that the attorney fee award should be vacated. We agree but for different reasons and without reaching those reasons urged by plaintiff.

As observed earlier, the notice of appeal was filed prior to either the judge's ruling or entry of the order in question. The judge lacked jurisdiction to consider the motion for fees that had been filed prior to the notice of appeal. See R. 2:9-1(a); Waste Mgmt. v. Morris County Mun. Auth., 433 N.J. Super. 445, 450 (App. Div. 2013). The trial judge's obligation upon the filing of a notice of appeal is to take no further action until instructed by the appellate court unless the subsequent proceeding falls within the exceptions set forth in Rule 2:9-1(a). In that instance, the parties have two options either move in the appellate court to dismiss the notice of appeal as having been filed before finality was achieved in the trial court or move for a limited remand so the trial judge may dispose of the remaining issue. The judge's ruling on the motion without direction from us was not an option. His ruling was void ab initio.

Even if the issue did not arise in this particular procedural posture, we would nevertheless vacate the order under review because the trial judge failed to give any reasons for his decision to award fees and because he failed to explain how he arrived at the particular amount awarded. See R. 1:7-4(a); Curtis v. Finneran, 83 N.J. 563, 570 (1980); Kas Oriental Rugs, Inc. v. Ellman, 407 N.J. Super. 538, 562-63 (App. Div.), certif. denied, 200 N.J. 476 (2009).4

V

Lastly, although not urged as grounds for reversal, we feel the need to make some comments about one particular incident at trial. That is, as he sent the jurors off to begin their deliberations, the trial judge imposed a time limit on their deliberations

Okay. We're going to send you back . . . . Now, how much time do you have to decide? Unfortunately, you don't have a lot of time. You have basically from now [shortly after 3:00 p.m.] until about 4:30 because at 4:30, due to budget considerations, we've got to clear out of this building. And if you think you need a little bit more time, I might be able to get it. I don't know, but I'll check with you about 4 o'clock and see how you're doing.

The jury was then sworn and a few moments later the transcriber noted the proceedings ended at 3:07 p.m. At 4:11 p.m., the jury reentered the courtroom presumably it had completed its deliberations at least a few minutes earlier and delivered its verdict.

The judge erred when he limited the time within which the jury was required to return a verdict. His directions were contrary to the declaration of our Supreme Court that "[t]rial courts must understand . . . that nothing is more important than that they set the atmosphere of calm, unhurried, and studied deliberation that is the hallmark of a fair trial." State v. Roberts, 163 N.J. 59, 60 (2000).

VI

For these reasons, we affirm the October 8, 2013 judgment, but we vacate the February 12, 2014 order that awarded attorneys' fees, and we remand for further proceedings in conformity with this opinion.

Affirmed in part, and vacated and remanded in part. We do not retain jurisdiction.

1These two entities are sometimes referred to in the record as "No Idea" instead of "Noidea."

2The word "gypsy," in a literal sense, suggests a member of a nomadic people in either North America or Europe; it has not been demonstrated to us how such a reference conveys a derogatory meaning any more than referring to someone as being "Irish," "Italian," or "English." And the word is also commonly used in a non-offensive way, as when referring to itinerant employees or, perhaps somewhat archaic, when referring to dancers in a chorus.

3The witness stated she preferred the term "metaphysicist."

4We also observe that counsel for plaintiff has made arguments regarding the attorney-fee award that may be viewed as inconsistent with his obligations to his client. That is, plaintiff's counsel in this appeal is the same attorney who was held "jointly and severally" liable for the fees awarded. In his arguments in this court, counsel not only attacks the award in a way that equally supports both him and his client, he also then argues the fees should not have been awarded against him, a contention that may be interpreted as contrary to the best interests of his client. Because of how we dispose of this appeal, we consider the issue no further but we assume that care will be taken in the proceedings that follow today's decision. Indeed, we need not decide whether the Rules of Professional Conduct require that counsel cease representing plaintiff in the proceedings that follow.