SYLLABUS

(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please note that, in the interests of brevity, portions of any opinion may not have been summarized).

Lawrence DeNike v. Michael Cupo (A-61-07)

Argued May 6, 2008 -- Decided September 24, 2008

RABNER, C.J., writing for a unanimous Court.

This appeal considers a sitting judge’s exploration of future employment opportunities with an attorney appearing before the judge. In addition, the Court addresses generally the issue of post-retirement employment discussions by sitting judges.

Plaintiff Lawrence DeNike and defendant Michael Cupo were the sole members of Classic Mortgage, LLC (Classic). They operated the business for a number of years and eventually had a falling out. After they tried unsuccessfully to mediate their dispute, DeNike filed a lawsuit in July 2003 seeking to terminate and acquire Cupo’s interest in the company. Cupo counterclaimed. Both parties sought primarily the same relief: calculation of the fair value of Cupo’s interest so that DeNike could buy out Cupo’s interest.

The Honorable Gerald C. Escala, then Judge of the Superior Court and Presiding Judge of the Chancery Division, oversaw two-and-a-half years of hard-fought litigation in this matter. DeNike retained Thomas J. Herten of the law firm Herten Burstein to represent him. After a five-day bench trial in February and March 2005, the trial judge ruled that DeNike would acquire Cupo’s interest at fair market value. The court rejected each side’s valuation expert and appointed William Morrison to calculate the value of Cupo’s interest. The trial court then issued a supplemental decision directing DeNike to purchase Cupo’s interest in Classic for the net amount of $436,682.

As directed, DeNike submitted a proposed form of order on January 3, 2006; Cupo objected and submitted his own proposed order. On January 11, 2006, the court entered an order affirming that $436,682 was owed to Cupo. Both parties filed motions, and the court issued its second supplemental decision on January 20, 2006. In that ruling, the trial judge agreed with Cupo and noted that it erred regarding the expert’s calculations. As a result, Cupo was due $493,271.