FALGUN DHARIA VS. OM RIDDHI SIDDHI, LLC,ET AL.(L-320-14, ESSEX COUNTY AND STATEWIDE)
A-4445-14T3
| N.J. Super. Ct. App. Div. | Aug 11, 2017Background
- Dharia sued Shah and Om Riddhi Siddhi, LLC alleging an oral consulting/investment agreement: Dharia would provide consulting and start-up capital for Dunkin' Donuts franchises in exchange for a one‑third equity interest and one‑third profit distributions. Complaint filed January 2014.
- During discovery Dharia sought broad business records (bank records, emails, P&Ls, QuickBooks, tax returns back to 2006). Shah objected; the trial court partly granted and partly denied Dharia’s first motion to compel (Dec. 5, 2014).
- Shah moved for summary judgment December 19, 2014; Dharia renewed discovery (Dec. 24, 2014) alleging noncompliance. The court denied the second discovery motion (Feb. 6, 2015) and, the same day, granted Shah summary judgment and dismissed the complaint even though discovery remained open until April 1, 2015.
- Dharia produced a $30,000 check payable to the West Orange LLC, a bank statement naming him on a joint account, emails from Shah referencing profit distributions and a spreadsheet/meeting minutes suggesting Dharia owned a one‑third/22% interest in the ventures. Shah denied any agreement, payments, or distribution to Dharia.
- Appellate court reversed: found genuine issues of material fact supported by Dharia’s certifications and corroborative documents and held that additional discovery was warranted before summary judgment; vacated the denial of discovery and summary judgment and remanded for a management conference and further discovery. The denial of Shah’s sanctions motion was affirmed as moot on remand grounds.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether summary judgment was proper before discovery closed | Dharia: summary judgment premature; documentary and testimonial evidence create triable issues | Shah: no documentary proof of agreement; no consideration; time/bar defenses; no reasonable trier of fact could find for Dharia | Reversed — genuine issues of material fact exist and discovery should continue |
| Whether Dharia produced sufficient evidence of an oral equity/profit‑sharing agreement | Dharia: certifications + check, bank statement, emails, minutes corroborate the oral agreement | Shah: denies involvement/payments; K‑1s do not list Dharia; disputes documentary authenticity/meaning | Held for Dharia on sufficiency to create triable issue; evidence viewed favorably to non‑movant withstands summary judgment |
| Whether trial court properly denied further discovery before ruling on summary judgment | Dharia: court misapplied relevance/standard and should have allowed more targeted discovery | Shah: initial order was sufficient; requests overbroad or privileged | Reversed — trial court should conduct management conference, rule on specific requests, and if needed review documents in camera |
| Whether sanctions against Dharia were warranted for frivolous claims | Shah: requested fees under Rule 1:4‑8 and statute for frivolous suit | Dharia: claims had factual support and were not frivolous | District court denial of sanctions affirmed (cross‑appeal moot given remand) |
Key Cases Cited
- Bhagat v. Bhagat, 217 N.J. 22 (discusses standard of review on appeal of summary judgment)
- Globe Motor Co. v. Igdalev, 225 N.J. 469 (quotes R. 4:46‑2(c) summary judgment standard)
- Robbins v. Jersey City, 23 N.J. 229 (requires opposing party to present competent evidential material to defeat summary judgment)
- Davis v. Brickman Landscaping, Ltd., 219 N.J. 395 (evidence must be viewed in the light most favorable to the nonmoving party)