Introduction

In a recent decision from the Superior Court of New Jersey, Appellate Division, the Court outlined the elements of the “joint venture” doctrine and whether an unwritten plan to purchase and sell real property fell within the ambit of the doctrine, and found it did based on the equities. Digiacomo v. Forman, A-2676-22, 2024 N.J. Super. Unpub. LEXIS 3143 (App. Div. Dec. 27, 2024). The court also issued an important reminder regarding the technical requirements for adequately opposing a motion for summary judgment.

Background

Plaintiff, Paul DiGiacomo (“DiGiacomo”), and defendant, Clifford Forman (“Forman”) in his capacity as a manager for the entity Biz Management LLC (“Biz Management”), entered into an agreement to purchase real property (the “Property”) in Rockaway, New Jersey. The purchase of the Property was impeded due to a second mortgage on the Property. As a workaround, the parties agreed to proceed with the property purchase by BizManagement acquiring an assignment of the first mortgagee’s note and mortgage, and moving forward with the foreclosure action that was already being pursued against the second mortgagee.

Pursuant to that plan, Forman sent an offer letter to the first mortgagee, and designated DiGiacomo as the primary contact. DiGiacomo then spent over a year communicating with various parties facilitating the transaction, including retaining mortgage servicers. Ultimately, Biz Management acquired the deed via sheriff’s sale, recorded the deed, and conveyed the Property to 27 West Lake Shore Drive, LLC.

DiGiacomo subsequently contacted Forman to discuss the sale of the Property and splitting of the profits. Forman replied that he would no longer be speaking with DiGiacomo. DiGiacomo sued and asserted that a joint venture existed to buy the Property and then sell it, or, alternatively, that he was entitled to unjust enrichment or quantum meruit.

The trial court granted DiGiacomo’s summary judgment motion since it found that Forman’s response did not comply with Rule 4:46-2(b), and that based on  DiGiacomo’s allegations being admitted as true, the parties had formed a joint venture. Accordingly, the court ordered that the Property be partitioned by sale, and the proceeds be divided equally between the parties.

The Decision

As an initial matter, regarding the opposition to DiGiacomo’s summary judgment motion, the Appellate Division affirmed the lower court’s finding that Forman failed to comply with Rule 4:46-2(b)’s requirement that a respondent to a summary judgment motion cannot rely on mere allegations nor denials, but must respond by competing affidavit(s) setting forth that a genuine issue exists for trial. The Court noted that, in support of his motion, DiGiacomo filed his certification with nearly 500 pages of exhibits and a statement of material facts.  In turn, Forman did not cite to the motion record in his responding statement.  Nor did he provide an affidavit or certification.

Based on the record before it being undisputed, the Court undertook an analysis of the prima facie elements of a joint venture in New Jersey. In that regard, a joint venture exists if “some or all” of the following exist:

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.

While no written agreement existed between the parties, the Appellate Division found that a joint venture existed since the parties sought to acquire the property to sell it for profit, to be split equally. With respect to their respective contributions, the Court found that Forman supplied the capital, while DiGiacomo facilitated the purchase.

Finally, in considering the remedy, the Court found that partition was appropriate but remanded the case to the lower court for further development of the record on whether the Property should be partitioned in kind or by sale.

Takeaways

There are three primary takeaways to be gleaned from the aforementioned case.

• First, it is obvious: to oppose motions, particularly summary judgment motions, the opposition must be supported by counter affidavits and other record evidence.
• Second, while it is customary to think any agreement must be in writing as to enforcing agreements to purchase real estate, the courts still have the ability to invoke doctrines such as the “Joint Venture” doctrine rooted in equitable principles to prevent a party from knowingly taking advantage of another.
• Finally, in partition actions, one must be clear as to the remedy sought: sale or division of the property.

For a copy of the decision, please contact Michael O’Donnell at modonnell@riker.com, Matthews Florez at mflorez@riker.com, Kori Pruett at kpruett@riker.com or Shelley Wu at swu@riker.com.