RICHARD D. ZOCHOWSKI, ETC. VS. T. ROBERT ZOCHOWSKI, Â ETC.(C-349-03, MONMOUTH COUNTY AND STATEWIDE), A-3163-15T2

Shares in Zachmar, Inc. were transferred by parents to sons via a 1985 stock purchase agreement and a 1986 amendment reserving parents' right to share in proceeds from sales of corporate assets during their lifetimes.
Father died in 2001; in 2006 Zachmar entered a contract to sell real estate; buyer paid a $75,000 deposit then cancelled, forfeiting the deposit.
Richard (plaintiff) retained 20% of the deposit for corporate reserves and distributed the remaining forfeited deposit consistent with the 1986 amendment: 50% to the mother and 25% each to the brothers.
Defendant T. Robert (appellant) argued the forfeited deposit was not a sale proceeds subject to the amendment and challenged plaintiff’s distribution; he also claimed plaintiff improperly used corporate funds to pay litigation fees and failed to keep him informed about the sale.
On remand the Chancery judge held a plenary hearing, found the agreement ambiguous but that the forfeited deposit was part of a proposed sale and properly distributed, ordered plaintiff to reimburse defendant one-half of certain post-2008 legal bills paid with corporate funds, denied other relief, and refused to award Rule 1:10-3 counsel fees.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Whether forfeited deposit constitutes "proceeds" under the 1986 amendment	Zochowski treated the forfeited deposit as part of a proposed sale and distributed per the amendment	Forfeited deposit is not a sale proceeds and thus not subject to the amendment	Court: agreement ambiguous but forfeited deposit was part of proposed sale; distribution was proper
Whether defendant is entitled to reimbursement for corporate funds used to pay litigation fees	Plaintiff argued most fees related to property sale and predated the 2008 order; only limited post-order payments were recoverable	Defendant argued plaintiff violated the 2008 order and must reimburse half of fees paid from corporate funds	Court: identified $12,716 in post-2008 fees and awarded defendant one-half; pre-2008 fees were for property matters, not reimbursable
Whether plaintiff violated court orders by failing to keep defendant informed about the sale	Plaintiff documented provision of regular access and communications over the years	Defendant claimed plaintiff willfully failed to update him as required	Court: no violation found; evidence showed adequate notice and access
Whether Rule 1:10-3 fees should be awarded to defendant for enforcing orders	Plaintiff argued no willful noncompliance; judge has discretion	Defendant sought counsel fees for enforcement	Court: denied fees—no willful failure to comply warranting sanctions under Rule 1:10-3

Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150 (discusses standard of review for non-jury cases)
Rova Farms Resort, Inc. v. Inv'rs Ins. Co. of Am., 65 N.J. 474 (trial findings binding when supported by adequate credible evidence)
Cesare v. Cesare, 154 N.J. 394 (deference to trial court credibility determinations)
Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366 (no special deference to legal conclusions)
Hynes v. Clarke, 297 N.J. Super. 44 (Rule 1:10-3 applies only to willful failures to comply with orders)