ALENA KOLEGAROVA v. EDWARD SKUBINSKI

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NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

ALENA KOLEGAROVA,

Plaintiff-Appellant/

Cross-Respondent,

v.

EDWARD SKUBINSKI,

Defendant-Respondent/

Cross-Appellant.

___________________________________

September 23, 2015

 

Argued December 16, 2014 Decided

Before Judges Messano and Ostrer.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Middlesex County, Docket No. FD-12-806-13.

Mark Goldstein argued the cause for appellant/cross-respondent(Goldstein, Bachman & Newman, LLP, attorneys; Sebastian Ferrantell, of counsel and on the briefs).

Natalia Teper argued the cause for respondent/cross-appellant (Teper Law Firm LLC, attorneys; Ms. Teper, on the brief).

The opinion of the court was delivered by

OSTRER, J.A.D.

This is a partition action arising out of a lengthy unmarried relationship between plaintiff Alena Kolegarova and defendant Edward Skubinski. After the relationship ended, plaintiff contended that the parties had engaged in a joint venture with respect to two residential properties in Old Bridge Township that were titled solely in defendant's name the one they cohabited for over twenty years on East Greystone Road (Greystone property), and a second investment property on Prospect Avenue (Prospect property). Plaintiff sought a fifty-percent interest in the two properties. Defendant denied that the parties engaged in a joint venture; and asserted that plaintiff was a mere tenant and was entitled to nothing.

Following a non-jury trial at which the two parties were the principal witnesses, the court implicitly found that the parties participated in a joint venture solely with respect to the Greystone property. The judge found plaintiff contributed $6000 toward its original purchase price of $184,000. The judge found defendant funded purchase of the Prospect property with separate funds and rejected plaintiff's argument that he used equity from the Greystone property.

The court rejected plaintiff's assertion that she made further contributions to the equity of the Greystone property. The court concluded that plaintiff's $6000 contribution to the purchase price entitled her to a three-percent interest in the property. Based on the property's current fair market value of $445,000, the court found that plaintiff was entitled to a payment from defendant of $13,350.

Plaintiff appeals, arguing that the parties engaged in a joint venture, but the court's evaluation of plaintiff's contribution to the equity was contrary to the evidence.1 Defendant cross-appeals, arguing there was insufficient evidence of a joint venture as to the Greystone property.

Having reviewed the parties' arguments in light of the record and applicable principles of law, we affirm the finding, implicit in the court's decision, that the parties engaged in a joint venture as to the Greystone but not the Prospect property, but we remand for reconsideration of the court's equitable award.

I.

We exercise limited review of the court's fact-findings after a non-jury trial, and consider them binding if supported by adequate, substantial and credible evidence. See Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 483-84 (1974). We defer to findings based on the court's feel of the case and its opportunity to assess witnesses' demeanor. State v. Johnson, 42 N.J. 146, 161 (1964). Having carefully reviewed the record in light of those principles, we discern no basis to disturb the court's findings of fact essential to the findings of a joint venture. The court found both parties were sincere, but were often unable to recall specific details. The court considered the extensive testimony regarding the nature of the parties' relationship of roughly twenty years, but ultimately concluded it was unnecessary to resolve competing claims regarding whether they held themselves out as a married couple.

The court found that the Greystone property was purchased in 1996 while the parties were engaged in a "dating relationship," after searching for houses together. While defendant was capable of purchasing the property without plaintiff's contribution, the court found he accepted $6000 from her toward the acquisition. Defendant borrowed half of the $184,000 purchase price. According to the record, the initial monthly payment on the adjustable rate mortgage note was $480.10.

The court also considered the proofs regarding plaintiff's claim that she made additional contributions that should result in an increase in her share of the house's equity

Despite the fact that all bills associated with the property remained in Defendant's name, Plaintiff testified that she would place all of her earnings for the week in a drawer at the residence and that those funds were utilized for paying expenses associated with the property, as well as personal expenses. The Defendant concedes that Plaintiff would give him approximately $300.00 to $400.00 per month from 1997 forward. However, he maintains this was not all the money she was earning and that she kept additional funds for her personal use.

The proof regarding the parties' respective incomes during the relevant time period from 1996 to present were unfortunately deficient. Both parties testified that they would receive cash payment at times so the ability to substantiate their asserted incomes is lacking. In any event, Plaintiff testified that she earned from 1996 on, from working for a cleaning service, approximately $900.00 to $1,000.00 per month. Further, the peak of her income was in 1999 when she and Defendant began to work together in a cleaning business. She testified they earned approximately $3,000.00 per month. This, however, was joint income for both parties. As a result, Plaintiff's financial contribution towards the parties' monthly expenses was not such that she would have had the financial ability to gain a greater equity in the respective properties of which she now seeks partition. Moreover, Plaintiff would have had some shelter expense had she not been residing with the Defendant. Based on a description of the subject property as an all brick three-bedroom, three and one-half baths residence on approximately one-acre of land, Plaintiff's contribution of approximately $400.00, as Defendant asserts or up to $1,000.00 as Plaintiff claims, on a monthly basis to reside at the property seems reasonable.

In addition, Plaintiff asserted that she made contributions for improvements to the residence that would have increased its value. Despite this assertion, Plaintiff was unable to provide any evidence to document her claim. The majority of Plaintiff's contributions by her testimony appear to be of a domestic nature maintaining the property on a daily basis in terms of cleaning, etc. Plaintiff also claims that she helped clear trees from the properties and contributed landscaping. Further, Defendant testified, and was able to document, that the actual improvements made to the E. Greystone Property, included but not limited to, installing a swimming pool, building a pool house, paving a driveway and parking area, etc. were done by the Defendant without any financial contribution from Plaintiff.

The Court finds Plaintiff's sole financial contribution towards the [Greystone] property was the $6,000.00 towards the purchase.2

The court also rejected plaintiff's claim to a share of the Prospect property

The Prospect Property was purchased on February 28, 2008 and similarly, all documents were taken exclusively in Defendant's name, including Deed, Mortgage, etc. The parties never occupied this second property and it was utilized solely by Defendant for rental income. Plaintiff asserts that there was a home equity line of credit taken to purchase the second property which entitles her to some equitable share of the Prospect Property. This claim, however, was not borne out by the proofs. Specifically, Defendant demonstrated that the funds for the purchase of the second property came from his sale of another property he owned in Piscataway, New Jersey. This property was sold in 2005 for $220,000.00.

As noted, the court found that the plaintiff's $6,000 contribution "gave Plaintiff a three . . . percent interest in the property." Based on the current appraised value of $445,000,3 her equity was $13,350. The court ordered defendant to pay that amount to plaintiff.

II.

We turn first to the court's conclusions that a joint venture existed and plaintiff was entitled to an award of $13,350. We review de novo whether the facts satisfy the applicable legal standard for a joint venture. See Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.").

We recognize that the court did not expressly state that a joint venture existed. However, the conclusion was implicit in the court's extensive discussion of caselaw on joint ventures and its grant of equitable relief. The court referred to Mitchell v. Oksienik, 380 N.J. Super. 119, 123-24, 127 (App. Div. 2005), wherein we affirmed a trial court's finding that an unmarried couple formed a joint venture when they purchased a residential property utilizing joint savings, a loan from the plaintiff's parents, and borrowed funds.

The trial court also correctly recognized that a joint venture may be established "in the absence of a written agreement, inferred from conduct of the parties." See id. at 129. Citing Mitchell, supra, 380 N.J. Super. at 130, the trial court held that the fact that title may be placed in one party's name is of no consequence. We discern no error.

A joint venture is simply a single-purpose partnership. Fliegel v. Sheeran, 272 N.J. Super. 519, 524 (App. Div.), certif. denied, 137 N.J. 312 (1994). Generally speaking, some or all of the following elements are present in a joint venture

(A) A contribution by the parties of money, property, effort, knowledge, skill or other asset to a common undertaking;

(B) A joint property interest in the subject matter of the venture;

 
(C) A right of mutual control or management of the enterprise;

 
(D) Expectation of profit, or the presence of "adventure," as it is sometimes called;

 
(E) A right to participate in the profits;

 
(F) Most usually, limitation of the objective to a single undertaking or ad hoc enterprise.

[Wittner v. Metzger, 72 N.J. Super. 438, 444 (App. Div.) (quoting 2 Williston on Contracts 318A (3d ed. 1959)), certif. denied, 37 N.J. 228 (1962).]

In the non-commercial context of an unmarried couple sharing an investment in a residence, without any promises of lifetime support that would constitute a "palimony agreement,"4 the factors that loom largest are the parties' joint contribution of money and effort toward the acquisition, upkeep, and improvement of the property; their venture's singular interest in the property; and the parties' expectation that if their relationship ended, they would receive an equitable share of their joint investment, regardless of formalities of title.

Applying those factors, the parties engaged in a joint venture. Our conclusion is not altered by the document plaintiff signed in 1999. The document, translated into English, includes two statements, each followed by plaintiff's signature. The first certifies that plaintiff is a tenant in the Greystone property and further states: "I do not want any interest before, now and in the future. I certify I am singing [sic] this with full knowledge and understanding." This statement was drafted by defendant. Below her signature to the first statement, plaintiff added a handwritten note stating: "I make no claim to his movable and immovable property," and signed after that as well.

Plaintiff testified that she did not understand the meaning of the statement defendant wrote. As for her own handwritten statement, it is too ambiguous to disclaim plaintiff's interest in the property. Given the dispute as to whether her contribution to the purchase gave her an interest in the property, the reference to "his" property begs the question whether she intended that to include the Greystone property. Without a specific reference to the Greystone property, the statement cannot be definitively interpreted as a disclaimer of her interest in the property.

Based on the court's fact-findings and its consideration of partition and other equitable relief, we are satisfied that the court correctly found that a joint venture existed.

III.

Finally, we consider the court's equitable award to plaintiff of $13,350. Since partition is an equitable remedy, the court is granted "discretion as to the particular manner in which partition is effected between the parties." Newman v. Chase, 70 N.J. 254, 263 (1976). We deferentially review a court's equitable division of a joint venture's assets, and will not disturb the court's decision absent an abuse of discretion. See Fortugno v. Hudson Manure Co., 51 N.J. Super. 482, 504-06 (App. Div. 1958) (holding that equitable division of assets in a partnership dissolution action is "within the discretion" of the court).

In dissolving a joint venture consisting of an unmarried couple's joint investment in a residential property, the court may consider "a forced sale of the property and division of the net proceeds between the parties." Mitchell, supra, 380 N.J. Super. at 128. Partition in kind may be impracticable, or cause great prejudice to the parties. See Swartz v. Becker, 246 N.J. Super. 406, 412-13 (App. Div. 1991); N.J.S.A. 2A:56-2. Given the court's power "to adapt equitable remedies to the particular circumstances," Mitchell, supra, 380 N.J. Super. at 131 (internal quotation marks and citation omitted), we discern no impediment to requiring one party to buy out the interest of the other party. See Aronow v. Silver, 223 N.J. Super. 344, 352 (Ch. Div. 1987) (approving a partition in which one party was permitted to retain title to a condominium, while satisfying the other's mortgage obligation); see also Leonard v. Leonard, 124 N.J. Super. 439, 443-44 (App. Div. 1973) (approving uneven partition of multiple properties where "[t]he party receiving the greater share will be required to pay the other party the amount required to equalize the partition").

Applying these principles, we are constrained to remand for reconsideration of the court's allocation to plaintiff of $13,350. Based on its finding that plaintiff contributed $6000 toward the acquisition cost, the court concluded that plaintiff obtained a three percent interest in the joint venture. However, the court's three percent figure is grounded in a miscalculation. Although the purchase price of the house was $184,000, the parties' initial equity in the house was $92,000. Plaintiff's $6000 investment thus constituted a 7.25 percent share of the venture. Assuming plaintiff is deemed entitled to a share of the value of the house equal to her initial acquisition contribution, she is entitled to 7.25 percent of the fair market value of $445,000.

However, we also remand for the court to reconsider whether plaintiff ultimately acquired more than a 7.25 percent share of the venture by contributing more than 7.25 percent toward the maintenance of the property, and by virtue of amortization of the mortgage. If she did so, then her equity share increased. The court held that plaintiff did not increase her share of equity during the subsequent years. The court also did not find that plaintiff's share declined over the years. But, the court found that plaintiff contributed between $400 and $1000 a month toward the household expenses, plus "sweat equity" toward the cleaning and upkeep. The court should determine whether the value of that total contribution exceeded a 7.25 percent share of the property's total costs. To the extent it did, plaintiff may be entitled to an enhanced share of equity.

Affirmed as to the presence of a joint venture. Remanded for reconsideration of equitable remedy pertaining to the Greystone property. We do not retain jurisdiction.

1 Although plaintiff addressed in her notice of appeal the court's denial of equity in the Prospect property, she failed to argue the matter in her brief. We therefore consider the issue waived, notwithstanding a passing mention of the issue in her reply brief. See Berlin v. Remington & Vernick Eng'rs, 337 N.J. Super. 590, 596 (App. Div.) (declining to consider an argument raised for the first time in a reply brief), certif. denied, 168 N.J. 294 (2001).

2 In disputing any interest held by plaintiff in the property, defendant also relies on a document he asked plaintiff to sign in 1999, after the acquisition of the property, in which, he alleged, plaintiff unilaterally disavowed any interest in the property. The court did not address the document, impliedly finding that it did not disprove the formation of the joint venture years earlier.

3 We recognize that defendant contends the property is encumbered by mortgage debt, such that the total equity of the venture is less than its fair market value. However, plaintiff contends that defendant encumbered the property with new debt after the original mortgage debt was satisfied. Since the court utilized the $445,000 figure for its calculation, we presume the court found that the venture ultimately held $445,000 in equity in the property.

4 See Botis v. Estate of Kudrick, 421 N.J. Super. 107, 115 (App. Div. 2011) (reviewing authorities and describing the basis for a palimony claim).