STATE OF NEW JERSEY VS. ERIC MENZZOPANEÂ (2014-10, MERCER COUNTY AND STATEWIDE), A-5732-14T3

Background

Sycamore Energy purchased certain assets (including customer lists/accounts) from Oil Guy, Inc. under an asset purchase agreement in which Anna Barton warranted she was the owner and no other entity had rights in the assets; the agreement contained non‑compete and confidentiality provisions.
After the sale, Dennis Peterson claimed an ownership interest in Oil Guy, formed a competing business (A.J.'s Fuel), and Sycamore alleged he used Oil Guy's customer information to interfere with Sycamore's business.
Sycamore sued Barton, Peterson and A.J.'s asserting breach of contract, fraud, conversion, defamation and tortious interference; the trial court entered various interlocutory orders (including pendente lite payments to Barton) and extensive discovery disputes followed.
The court granted summary judgment to Peterson (finding no ownership interest and no viable claims against him) and granted partial summary judgment to Barton on fraud and conversion (but denied summary judgment on breach of contract); at bench trial the court found Barton did not breach and entered final judgment for her.
Peterson sought and obtained a fee award; the Appellate Division affirmed most rulings but reversed and vacated the fee award to Peterson, finding the record did not support sanctions.

Issues

Issue	Plaintiff's Argument	Defendant's Argument	Held
Pendente lite payments to Barton	Court erred in ordering payments withheld under the agreement be paid to Barton	Payments were proper under the agreement and court ordered them	Appellate court treated this issue as moot in light of final outcome; no reversal of substantive rulings tied to payment order was required
Motion to amend to add Oil Guy	Sycamore argued Oil Guy should be added and sought related documents (tax returns, payroll)	Barton argued cross‑motion procedurally improper and Oil Guy not a proper party	Denial of cross‑motion affirmed: cross‑motion procedurally deficient and no demonstrated prejudice from denying amendment
Summary judgment for Peterson (ownership, fraud, conversion, defamation, interference)	Sycamore argued discovery incomplete and factual disputes existed about Peterson’s ownership and misuse of customer lists	Peterson argued he was never an owner, thus not bound by the agreement; evidence supported dismissal of all claims against him	Affirmed: no competent evidence created a triable issue that Peterson owned Oil Guy or committed fraud/conversion; defamation and interference claims failed as matter of law
Sanctions / fee award to Peterson	Sycamore opposed sanctions; argued claims against Peterson had a reasonable basis at filing	Peterson argued Sycamore pursued baseless litigation and sought fees under Rule 1:4‑8 and the frivolous‑litigation statute	Reversed: trial court found initial suit was not frivolous and did not find bad faith; fee award vacated as an abuse of discretion given record
Pretrial subpoena for Oil Guy and expert testimony re damages	Sycamore argued subpoena and expert testimony were necessary to prove breach and damages	Barton argued subpoena sought non‑party financials and expert damages were net opinions/speculative	Quash of Oil Guy subpoena and exclusion/limitation of expert damages testimony affirmed or held harmless: documents unlikely to produce relevant evidence on remaining issue; expert’s net opinions properly limited and exclusion harmless given court’s ruling on breach
Final judgment for Barton on breach claim	Sycamore contended evidence showed breach (customer list misuse/insufficient protection)	Barton argued she was sole owner, had no duty/control over Peterson post‑sale and did not breach agreement	Affirmed: factual findings supported conclusion Barton did not breach the agreement; judgment of no cause of action sustained

Key Cases Cited

Globe Motor Co. v. Igdalev, 225 N.J. 469 (discussion of standard of review for summary judgment)
Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co., 224 N.J. 189 (summary judgment standard and Rule 4:46 framework)
Ji v. Palmer, 333 N.J. Super. 451 (appellate review limited to motion record)
Lombardi v. Masso, 207 N.J. 517 (limitations on application of law‑of‑the‑case doctrine)
United Hearts, L.L.C. v. Zahabian, 407 N.J. Super. 379 (standards for frivolous‑pleading sanctions and when continued prosecution may become sanctionable)
Townsend v. Pierre, 221 N.J. 36 (discussion of expert net opinions and admissibility)