OAK TREE CASH CARRY LLC v. 1630 OAK TREE, LLC

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NOT FOR PUBLICATION WITHOUT THE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 hers use in other cases is limited. R. 1:36-3.

SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4380-18T3

OAK TREE CASH & CARRY,
LLC,

Plaintiff/Third-Party
Defendant-Appellant,

1630 OAK TREE, LLC,
SAM DOSHI, HINAXI DOSHI
and JASON DOSHI,

Defendants/Third-Party
Plaintiffs-Respondents,

and

HABIB AMERICAN BANK
and TRILOCKI BATRA,

Third-Party Defendants,

and

CHIRAG BATRA,

Third-Party Defendant-
Appellant.
___________________________
Submitted October 1, 2020 – Decided November 30, 2020

Before Judges Ostrer and Vernoia.

On appeal from the Superior Court of New Jersey, Law
Division, Middlesex County, Docket No. L-8125-12.

Law Offices of Susheela Verma, attorney for appellants
(Nishi Patel and Susheela Verma, on the briefs).

Robbins and Robbins, LLP, attorney for respondents
(Spencer B. Robbins, on the brief).

PER CURIAM

In our prior decision in this matter, Oak Tree Cash & Carry, LLC v. 1630

Oak Tree, LLC, we remanded for the trial court to conduct a proof hearing on the

causes of action asserted in defendants/third-party plaintiffs 1630 Oak Tree LLC's

(1630 Oak Tree), Sam Doshi's, Hinaxi Doshi's, and Jason Doshi's (collectively

"defendants") third-party complaint against Chirag Batra (Batra), and to determine

the appropriate disposition of $39,600 in escrow funds. No. A-5463-14 (App. Div.

Apr. 12, 2018) (slip op. at 29-31). Following the proof hearing, the court entered

an order finding plaintiff Oak Tree Cash & Carry, LLC (C&C) and Batra jointly

and severally liable to defendants for compensatory and punitive damages and for

attorney's fees. The remand court did not directly decide the escrow funds issue.

C&C and Batra appeal from the order, claiming the court exceeded the scope

of our remand order and made erroneous findings of fact and conclusions of law.

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Based on our review of the record in light of the applicable legal principles, we

reverse the court's order finding C&C and Batra liable and awarding defendants

compensatory and punitive damages and attorney's fees. We remand for the court

to consider and decide whether monies held in escrow pursuant to a prior trial court

order should be returned to C&C or defendants.

The facts pertinent to the causes of action asserted in defendants' third-party

complaint against Batra are detailed in our prior opinion and need not be repeated

at length here. See Oak Tree Cash & Carry, LLC, slip op. at 8-10. We restate the

facts only to the extent required to provide context for our discussion of the issues

raised on appeal.

C&C filed an action against defendants for possession of the property that

1630 Oak Tree purchased in July 2012 at a sheriff's sale ordered in a foreclosure

proceeding. The foreclosure proceeding was brought by Habib American Bank

(HAB) against the property's then-owner Om Namoh Shivoy, LLC (ONS). In

its complaint against defendants, C&C alleged it was entitled to possession of the

first floor and basement of a building on the property pursuant to a long-term lease

with ONS. C&C also sought damages based on claims defendants wrongly

deprived it of use of the property following their purchase of the property at the

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3
sheriff's sale and damaged or converted C&C's personalty on the premises following

the purchase.

Following the filing of C&C's complaint, the court entered an order allowing

C&C's possession of the property pending the outcome of a hearing on its claimed

entitlement to possession under the purported lease. The court later entered an order

requiring that C&C make $3,300 monthly rent payments to 1630 Oak Tree and pay

$39,600 "for unpaid base rent" for the eleven-month period prior to August 2012.

The court ordered the $39,600 was to be held in defendants' counsel's escrow

account pending further order of the court.

Defendants filed a counterclaim and third-party complaint.1 In the four-count

counterclaim against C&C, defendants alleged: they never entered into a lease with,

or accepted an attornment from, C&C, and C&C maintained unlawful possession

of the property and instituted a fraudulent lawsuit for possession based on a

fraudulent lease (count one); C&C's lawsuit for possession was frivolous (count

two); C&C's actions prevented defendants' use and occupancy of the property

(count three); and C&C caused damage to the property during the pendency of its

lawsuit (count four).

1
The original third-party complaint was amended. We summarize the
allegations in the amended third-party complaint.

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In the third-party complaint, defendants asserted four claims against Batra

that mirrored the claims they asserted against C&C in the counterclaim.2

Defendants alleged: Batra is "the individual owner" of C&C, he executed a

fraudulent lease to interfere with defendants' use of the property, he maintained

unlawful possession of the property, and he instituted a "fraudulent lawsuit" for

possession of the property (count two); Batra brought a frivolous lawsuit for

possession of the property (count three); Batra's actions deprived defendants of use

and occupancy of the property (count four); and Batra caused damage to the

property during the pendency of C&C's lawsuit (count five).

Batra did not file a responsive pleading to the third-party complaint, and

default was entered against him in June 2014. The court later denied Batra's motion

to vacate default, entered a default judgment in defendants' favor against Batra, and

ordered the scheduling of a proof hearing. The court subsequently denied Batra's

motion for reconsideration.

2
The third-party complaint included a cause of action (count one) against HAB.
HAB financed the purchase of the property by its former owner, ONS, and, as
noted, was the plaintiff in the foreclosure action that resulted in the sheriff's sale
of the property to 1630 Oak Tree. In count one of the third-party complaint
against HAB, defendants alleged that prior to the sheriff's sale HAB falsely
represented there were no leases on the property. The disposition of count one
of the third-party complaint against HAB is not at issue on appeal.
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The Special Civil Part held a trial on plaintiff's cause of action for possession,

and entered a May 2, 2013 order finding C&C's 2009 lease "was terminated by the

[f]inal [j]udgment in [f]oreclosure," and that no "attornment [of the lease] was ever

created between" HAB and C&C. The court also determined C&C "lost its right to

possession of" the property and 1630 Oak Tree was entitled to possession. The

court ordered C&C to vacate the property and remove its belongings within thirty

days. C&C's damage claims and defendants' counterclaim and third-party

complaint were transferred to the Civil Part for trial. The court's order did not make

any provision for the disbursement of the $39,600 it previously directed be paid by

C&C and held in escrow for back rent.

Following the parties' opening statements at the subsequent bench trial on the

parties' respective damage claims, the court dismissed C&C's claims against

defendants, defendants' counterclaims against C&C, and defendants' third-party

claims against Batra. Defendants appealed from the dismissal of the counterclaims

and third-party complaint, and C&C cross-appealed from the dismissal of its

complaint. Batra appealed from the orders denying his motions to vacate default

and for reconsideration.

We affirmed the court's dismissal of C&C's complaint against defendants.

Oak Tree Cash & Carry, LLC, slip op. at 13-18. We also affirmed the dismissal of

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the four causes of action in defendants' counterclaims against C&C. Id. at 18-25.

We observed the "counterclaims alleged C&C instituted a fraudulent and frivolous

lawsuit based on a non-existent, sham lease, which caused them damages and legal

fees," id. at 18, and we concluded the representations in defendants' opening

statement and in the proffers made to the court did not demonstrate defendants could

"show[] [Batra] or C&C had acted in bad faith," id. at 25.

We rejected Batra's claim the court erred by denying his motions to vacate

default and for reconsideration. Id. at 29. We explained the third-party complaint

against Batra alleged he "executed 'a fraudulent lease' to interfere with defendants'

possession of the [p]roperty, and that [Batra] instituted a fraudulent lawsuit against

[defendants] based on 'a non-existent lease that was a sham.'"3 Ibid.

We also observed Batra raised "procedural issues" for the first time on appeal.

Id. at 30. More particularly, we noted Batra claimed he was not a party to the

lawsuit C&C brought against defendants, and defendants did not name him in their

Rule 1:4-8(b) demand for withdrawal of C&C's complaint. Ibid. We further found

Batra did not offer any reason for his failure to raise the procedural issues in either

3
The third-party complaint also named Batra's father, Trilocki Batra, as a
defendant and asserted the same claims against him that were alleged against
Batra. The claims against Trilocki Batra were dismissed without prejudice after
he filed for bankruptcy. Id. at 3 n.1.

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"a properly filed answer" or in his motions challenging the entry of default against

him. Ibid.

We found the court had failed to hold the proof hearing it had ordered when

the default judgment was entered against Batra. Ibid. We remanded for the court

to conduct a proof hearing on defendants' third-party claims against Batra. Ibid.

We explained we did not express any opinion on whether defendants' claims against

Batra "replicate[d]" defendants' causes of action against C&C or whether the claims

against Batra "implicate[d] the procedural issues" under Rule 1:4-8 that he raised

for the first time on appeal. Id. at 31. Those issues were left to the remand court's

discretion to consider either at the proof hearing or in a Rule 4:50-1(f) motion. Ibid.

We also directed that the remand court address whether the $39,600 being held in

escrow, which the Special Civil Part judge ordered C&C to pay for back rent, should

be disbursed to defendants or returned to C&C. Ibid.

At the proof hearing held pursuant to our remand order, Jason Doshi testified

as defendants' sole witness. He explained 1630 Oak Tree was formed to purchase

the property as the new location for a business he owned. Shortly after 1630 Oak

Tree purchased the property at the sheriff's sale, C&C filed the civil action for

possession and damages against defendants.

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Jason Doshi explained C&C's civil claims were founded on an alleged lease

that "[didn't] make sense" financially and was false. He testified the mortgage

payment, taxes, and carrying costs for the property greatly exceeded the rent

charged under the purported lease and, as a result, the lease was not financially

feasible. He testified the law firm of Rajan & Rajan, LLP, first represented

defendants in C&C's civil suit, and then the firm of Robbins & Robbins, LLP,

represented defendants in the matter.

Jason Doshi also testified Batra filed criminal complaint-summonses alleging

theft and criminal mischief offenses against him, Sam Doshi, and Hinaxi Doshi

(collectively the "Doshis").4 The complaint-summonses were later dismissed.

Jason Doshi testified the Doshis retained Andrew Maze as their attorney to defend

the criminal complaint-summonses Batra filed against them.

During the proof hearing, defendants voluntarily dismissed count five of the

third-party complaint, which alleged C&C damaged the property while in

possession during the pendency of C&C's lawsuit. Following the proof hearing, the

4
The criminal complaint-summonses alleged that following 1630 Oak Tree's
purchase of the property, the Doshis entered the premises leased by C&C and
damaged and stole C&C's property.

A-4380-18T3
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court issued a written opinion on the three remaining claims against Batra—those

contained in counts two, three, and four of the third-party complaint.

In its opinion, the court recognized our remand required a proof hearing "as

to [Batra] only" on the causes of action against him in the third-party complaint.

Nonetheless, the court found defendants were "entitled to judgment against C&C

for legal fees incurred in defending against the suit for personal property and the

criminal complaint" because "both" actions were "frivolous."

With regards to the three claims remaining against Batra, the court

determined the third count of the complaint asserted a cause of action under the

frivolous claims statute, N.J.S.A. 2A:15-59.1(b). The court dismissed the claim

against Batra based on its finding defendants failed to provide the requisite notice

of the claim pursuant to Rule 1:4-8.

The court construed the remaining counts of the third-party complaint—

counts two and four—as asserting causes of action for common law fraud against

Batra. The court then detailed a series of actions taken by Batra that the court

determined constituted material misrepresentations made to defendants. For

example, the court found Batra: sought to enforce a lease against defendants that

"made no economic sense"; committed to pay a security deposit and rent to ONS

and the rent receiver but failed to do so; claimed in C&C's lawsuit he did not

A-4380-18T3
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abandon the property "when he clearly had done so"; and argued defendants were

bound to accept the "nominal rent" set forth in the purported lease. The court further

found Batra made the misrepresentations to the Doshis "with the intent that they

rely upon them."

The court also determined that although Batra's actions were taken on behalf

of C&C, it was appropriate to pierce the corporate veil and hold Batra liable

individually for his actions. The court found that "[w]hen fraud is committed in a

corporate name by a person having the right to speak for the corporation for his

personal gain and benefit, that person must answer personally for their wrongful

acts." The court concluded that Batra's "fraudulent intent and bad faith have been

shown by clear and convincing evidence" and that he is personally liable to

defendants under counts two and four of the third-party complaint.

The court found C&C and Batra jointly and severally liable for $53,700 in

damages for defendants' eight-month loss of possession of the property during the

pendency of the civil lawsuit and for costs to restore the utilities following C&C's

abandonment of the property.5 The court also found C&C and Batra jointly and

severally liable to defendants for punitive damages in the amount of $40,000.

5
The court calculated the damages as follows: $48,000 for the loss of the use
of the property based on damages of $6,000 per month for eight months; and
$5,700 for the costs to restore the utilities.
A-4380-18T3
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The court found defendants were not entitled to an award of attorney's fees

against Batra under Rule 4:42-9 for the services provided to them by Andrew Maze

and Rajan & Rajan, LLP. The court, however, ordered that C&C pay defendants

$10,000 for attorney's fees they previously paid for those counsels' services. The

court apparently found defendants were entitled to recoup their attorney's fees from

C&C under the frivolous claims statute, N.J.S.A. 2A:15-59.1(b).6

The court found the firm of Robbins & Robbins, LLP, was entitled to an

attorney's fees award under Rule 4:42-9 because its actions resulted in the creation

of a fund in court—the $39,600 the court ordered that C&C deposit in escrow for

past due rent. See R. 4:42-9(a)(2) (allowing an award of attorney's fees, in the

court's discretion, "[o]ut of a fund in court"). The court considered the affidavit of

services provided, determined the reasonableness of the time entries, and

determined the reasonable hourly rate for the services provided. The court

6
The court did not make any findings directly supporting its award of $10,000
in attorney's fees for the services Andrew Maze and Rajan & Rajan, LLP,
provided to defendants. In its finding C&C's claims against defendants were
frivolous, the court stated defendants are entitled to a judgment for attorney's
fees and that the "quantum of fees" would be addressed later in its opinion.
However, other than finding defendants are entitled to "$10,000" in attorney's
fees from C&C, the court did not detail its calculation of the amount of that fee.

A-4380-18T3
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determined the firm was entitled to $25,500 and found C&C and Batra jointly and

severally liable for its payment.7

The court also directed the disbursement of the $39,600 in back rent the

Special Civil Part had ordered to be held in escrow. The court directed the escrow

funds should first be disbursed to satisfy the $25,500 in legal fees awarded to

Robbins & Robbins, LLP, and then to satisfy $10,000 in legal fees awarded to

Andrew Maze and Rajan & Rajan, LLP. The court ordered that the remaining

balance of the escrow funds, $4,100, be applied to the $53,700 in damages owed to

defendants, leaving a $49,600 balance owed to defendants for the compensatory

damages awarded against C&C and Batra.8

7
The court's opinion states, "$25,500 is awarded to [Robbins & Robbins, LLP]
as a legal fee as against C&C and [Batra] . . . ." The court's order, however,
provides only that the law firm "is awarded $25,500 for a legal fee" and does
not specify which party must pay the fee.
8
The court's opinion and corresponding order include a mathematical error.
The court awarded $53,700 in compensatory damages to defendants. The court
directed the disbursement of $25,500 in fees to Robbins & Robbins, LLP, and
$10,000 to Andrew Maze and Rajan & Rajan, LLP, from the $39,600 in escrow
funds. After payment of those fees, the balance in the escrow account that could
be applied to satisfy the damages award is $4,100, not the $4,150 stated in the
court's opinion and order, and the amount that remained due to defendants for
compensatory damages was $49,600 and not the $49,550 stated in the order.
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The court entered an order reflecting the decision set forth in its written

opinion. The court subsequently denied C&C's and Batra's motion for

reconsideration of the order. This appeal followed.

II.

C&C and Batra argue the court erred by exceeding the scope of our remand

order. They contend the remand was limited to a determination of defendants'

claims against Batra and that the remand court erred by admitting evidence against

C&C, making determinations concerning C&C, and finding C&C liable for

compensatory and punitive damages and attorney's fees. They also contend our

remand required only a determination of defendants' frivolous litigation claim

against Batra and that the court erred by considering and assessing damages on the

other causes of action in the third-party complaint. Defendants assert the court

complied with our order and properly awarded damages based on its findings.

A trial court is required to comply with an appellate court's directives and

must, on remand, "obey the mandate of the appellate tribunal precisely as it is

written," Triffin v. Automatic Data Processing, Inc., 411 N.J. Super. 292, 306 (App.

Div. 2010) (quoting Tomaino v. Burman, 364 N.J. Super. 224, 233 (App. Div.

2003)), even if it disagrees with the appellate court's decision, Tomaino, 364 N.J.

Super. at 233.

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Our decision in Oak Tree Cash & Carry, LLC clearly stated the parameters

of the remand. Slip op. at 30-31. We explained it did not appear that the court had

held the proof hearing that was ordered when default was entered on defendants'

third-party claims against Batra, and we remanded for the court to conduct that

hearing. Id. at 30. We also directed that the court "address whether the escrowed

funds should be released to C&C or defendants." Id. at 31.

As we plainly explained in our prior decision, we affirmed the dismissal with

prejudice of defendants' claims against C&C. Id. at 3, 18-25. We did not remand

for the court to revive or reconsider the claims, decide them, or award compensatory

and punitive damages and attorney fees against C&C based on them. Indeed, it

would have been illogical to affirm the dismissal with prejudice of defendants'

claims against C&C following a trial and, in the same opinion, remand for the court

to reconsider the claims against C&C at a proof hearing. The court exceeded the

scope of our remand in finding C&C was liable to defendants and by awarding

compensatory and punitive damages and attorney's fees against C&C. See

Tomaino, 364 N.J. Super. at 233. We reverse the court's order finding C&C liable

and awarding defendants damages, attorneys fees, and any other relief against C&C.

We are not persuaded by Batra's claim the court exceeded the scope of the

remand by considering and deciding all the claims asserted by defendants against

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him in the third-party complaint. Batra argues the remand was limited to a

consideration of only defendants' frivolous litigation claim. He is incorrect because

we expressly remanded for the proof hearing the court ordered when default was

entered, Oak Tree Cash & Carry, LLC, slip op. at 30, and there was no limitation

imposed on the scope of the proof hearing when the court first ordered it.

Additionally, in our prior decision we did not limit the scope of the proof

hearing to a particular claim in defendants' third-party complaint. We stated we did

not express an opinion as to whether the third-party complaint replicated defendants'

complaint against C&C, id. at 31, but that statement did not limit our remand for a

proof hearing based on Batra's default on the claims asserted in the third-party

complaint. The court did not exceed the scope of our remand order by considering

each of the causes of action asserted against Batra in the third-party complaint.

III.

As noted, the court dismissed count five of the third-party complaint against

Batra, and defendants do not appeal from that dismissal. The court also dismissed

count three, which it characterized as a frivolous litigation claim, see N.J.S.A.

2A:15-59.1(b), because defendants failed to serve Batra with the requisite Rule

1:4-8 notice. Defendants do not cross-appeal from the dismissal of count three. We

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therefore consider Batra's argument the court erred by finding him liable under

counts two and four of the third-party complaint.

"The scope of appellate review of a trial court's fact-finding function is

limited." Cesare v. Cesare, 154 N.J. 394, 411 (1998). "Findings by the trial judge

are considered binding on appeal when supported by adequate, substantial and

credible evidence." Rova Farms Resort, Inc. v. Invs. Ins. Co. of Am., 65 N.J. 474,

484 (1974). "Therefore, an appellate court should not disturb the 'factual findings

and legal conclusions of the trial judge unless [it is] convinced that they are so

manifestly unsupported by or inconsistent with the competent, relevant and

reasonably credible evidence as to offend the interests of justice.'" Cesare, 154 N.J.

at 412 (alteration in original) (quoting Rova Farms, 65 N.J. at 484). In contrast, "[a]

trial court's interpretation of the law and the legal consequences that flow from

established facts are not entitled to any special deference." Manalapan Realty, LP

v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

Here, we consider the court's determinations relating to a defaulting party.

On remand, the court exercised its discretion and required that defendants present

evidence establishing Batra's liability. See Douglas v. Harris, 35 N.J. 270, 276-77

(1961); Heimbach v. Mueller, 229 N.J. Super. 17, 21 (App. Div. 1988). "When a

trial court exercises its discretion to require proof of liability as a prerequisite to

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entering judgment against a defendant who has defaulted, what is required . . . is

that the plaintiff adduce [a prima facie case.]" Heimbach, 229 N.J. Super. at 23.

The court does not "weigh[] evidence or find[] facts," it determines only if the party

prosecuting the claim has presented the "bare sufficiency" of proofs required to

satisfy the "prima facie standard" for its claims. Kolczycki v. City of E. Orange,

317 N.J. Super. 505, 514 (App. Div. 1999). A court may properly dismiss a claim

at a proof hearing where a party fails to present evidence establishing a prima facie

case of liability against a defaulting party, or where the "claim [is] barred by some

rule of law whose applicability was evident either from the pleadings or from the

proofs presented." Heimbach, 229 N.J. Super. at 23-24.

The remand court interpreted the causes of action asserted in counts two and

four of the third-party complaint as alleging common law fraud. Defendants do not

challenge the court's interpretation of their pleading, and, in fact, they argue on

appeal the evidence established a prima facie cause of action for common law fraud

under counts two and four. Batra argues the court erred by finding him liable for

common law fraud because counts two and four of the third-party complaint do not

allege fraud with the requisite specificity, see R. 4:5-8(a), and defendants did not

present evidence establishing a prima facie fraud claim. We therefore consider

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whether the evidence presented at the proof hearing established a prima facie claim

of common law fraud against Batra.

"To establish common-law fraud, a plaintiff must prove: '(1) a material

misrepresentation of a presently existing or past fact; (2) knowledge or belief by the

defendant of its falsity; (3) an intention that the other person rely on it; (4)

reasonable reliance thereon by the other person; and (5) resulting damages.'" Walid

v. Yolanda for Irene Couture, Inc., 425 N.J. Super. 171, 180 (App. Div. 2012)

(quoting Banco Popular N. Am. v. Gandi, 184 N.J. 161, 172-73 (2005)); see also

Allstate N.J. Ins. Co. v. Lajara, 222 N.J. 129, 147 (2015). "Reliance is an essential

element of common law fraud." Byrne v. Weichert Realtors, 290 N.J. Super. 126,

137 (App. Div. 1996) (citing Axelrod v. CBS Publ'ns Inc., 185 N.J. Super. 359, 372

(App. Div. 1982)). Consequently, "[w]ithout reasonable reliance on a material

misrepresentation, an action in fraud must fail." Triffin v. Automatic Data

Processing, Inc. (Triffin I), 394 N.J. Super. 237, 249 (App. Div. 2007).

The court's determination Batra is liable for common law fraud is premised

on its finding Batra made false statements related to the property and lease. The

court found Batra falsely informed ONS he would provide a security deposit and

pay rent, falsely advised the rent receiver he would pay rent, and misrepresented to

HAB there was no tenant in possession of the property. The court also found Batra

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"committed to the [rent] receiver and to the court that he intended to continue to

operate his market [on the property] when his conduct was tantamount to an

abandonment." There is no evidence, however, Batra made any of those

representations to defendants, and, as a result, defendants could not have, and did

not, reasonably rely on them.

The remaining false statements the court found established the common law

fraud claims consist of assertions and claims Batra made during the various

litigations involving the property and defendants. The court found that in the civil

litigation Batra "resisted the claim that he abandoned the premises when he clearly

had done so" and that he asserted "he occupied the premises in 2011 when he last

paid a water bill in June[] 2010." The court also found that in the criminal cases

filed against the Doshis, Batra falsely claimed that personalty was owned by him

and that the Doshis sold the personalty.

Those false statements do not support the common law fraud claims against

Batra because defendants never relied on them. To the contrary, defendants

contested Batra's false assertions during the various proceedings. See, e.g., Triffin

I, 394 N.J. Super. at 249 (finding no reliance on the plaintiff's misrepresentation the

defendant needed to pay him based on counterfeit checks when the defendant chose

to litigate a claim rather than settle it).

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In the court's otherwise detailed decision, it does not make any findings on

the reasonable reliance element of a common law fraud claim, and with good reason.

The record is bereft of evidence establishing defendants relied on any of the false

statements the court found Batra made concerning the property and the lease.

Without such evidence, defendants' common law fraud claim "must fail," ibid., and

we are constrained to conclude the court erred by finding defendants sustained their

burden of establishing a prima facie common law fraud claim against Batra. We

therefore reverse the court's order finding Batra liable to defendants on those claims

in the third-party complaint.9

The remand court's award of compensatory and punitive damages and

attorney's fees to defendants is founded on its determination Batra is liable to

defendants on the common law fraud claims contained in counts two and four of the

third-party complaint. As a result, we also reverse the court's order awarding

compensatory and punitive damages to defendants and requiring that Batra pay

defendants' attorney's fees.

9
Our determination renders it unnecessary to address Batra's claim the remand
court should have dismissed counts two and four of the third-party complaint
because they did not allege common law fraud with sufficient specificity, see R.
4:5-8, and his claim the court erred by piercing the corporate veil as a basis for
finding him liable for the common law fraud claims. It is also unnecessary to
address his arguments concerning the court's award of compensatory and
punitive damages and attorney's fees.
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In our prior decision, we also remanded for the court to address whether the

$39,600 held in escrow "should be released to C&C or defendants." Oak Tree Cash

& Carry, LLC, slip op. at 31. The remand court did not address the issue directly.

It did not make any findings of fact or conclusions of law supporting a determination

whether the funds in escrow should be released to C&C or defendants. See R. 1:7-4.

Instead, the court considered the escrow monies as a "fund in court" defendants

"create[ed] and maintain[ed]," and it ordered the funds to be used to satisfy the

attorney's fees awards and partially satisfy the compensatory damages award to

defendants, as directed in its written opinion.

It might be argued the court's order requiring the escrow funds be used to

satisfy the attorney's fees and compensatory damages the court found C&C

obligated to pay reflects an implicit determination the funds should have otherwise

been released to C&C. It would be illogical for the court to order that the escrow

funds be used to satisfy C&C's obligations to defendants unless the court also

determined the funds otherwise belonged to C&C. Due to the lack of any factual

findings or conclusions of law on the issue, we cannot find and will not assume the

court actually considered the issue or made such a determination. The court's

allocation of the funds to pay C&C's obligations to defendants is just as easily

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explained as an erroneous determination the escrow monies constituted a fund in

court that simply should be paid to the prevailing party in the lawsuit.

The absence of any findings addressing the issue, and the parties' failure to

address the issue in their briefs on appeal, permit only speculation as to whether the

court actually considered and decided the issue, or decided it correctly or

incorrectly. See, e.g., Gormley v. Gormley, 462 N.J. Super. 433, 449 (App. Div.

2019) (explaining "we must be provided with adequate reasons for the [court's]

determinations" to conduct appropriate appellate review). We are therefore

without an adequate record to determine whether the court actually considered and

decided the issue we directed it to address on remand: whether the escrow funds

should be released to C&C or defendants. See Oak Tree Cash & Carry, LLC, slip

op. at 31. The court must determine based on the entirety of the record whether the

$39,600 the court ordered on November 27, 2012, be deposited in escrow for back

rent for the twelve months prior to August 2012 should be returned to C&C or

disbursed to defendants.

We again remand for the court to address the issue in the first instance in

accordance with our prior decision in this matter. See ibid.; see also Gormley, 462 N.J. Super. at 449 (explaining a trial court's "omission of critical factual

findings, . . . impedes our review" and necessitates a remand (alteration in

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original) (quoting Elrom v. Elrom, 439 N.J. Super. 424, 443 (App. Div. 2015))).

On remand, the court shall conduct such additional proceedings it deems necessary

to address and decide the issue, and its decision shall be supported by findings of

fact and conclusions of law. See R. 1:7-4. Nothing in this opinion shall be

construed as a decision on the merits of the issue.

Reversed. The matter is remanded for the court to conduct further

proceedings in accordance with this opinion. We do not retain jurisdiction.

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