DEFENDANT'S VERDICT - BREACH OF CONTRACT - PLAINTIFF CONTENDS DEFENDANT BREACHED CONTRACT TO PAY PLAINTIFF FOR 'BOOK OF BUSINESS' BY MAKING LATE PAYMENTS AND MISMANAGING CLIENTS - DEFENDANT DENIES LATE PAYMENT AND CLAIMS FEWER CLIENTS LEFT AFTER HE TOOK OVER BUSINESS THAN WHEN PLAINTIFF WAS MANAGING ACCOUNTS.

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to a single material term as it relates to settlement. Specifically, there
was a time when both parties were amenable to resolution for
$125,000. The plaintiff claimed that the defendants served a pro-
posed Settlement Agreement, which had several more terms, and
conditionstowhichthepartiesneveragreed.Thecaselawreliedupon
by the defendants was instructive in stating, “qualified or conditional
acceptance containing terms and conditions not in the original pro-
posal may operate as a counter-offer’ and acceptance does not result
in the formation of a valid contract binding upon the parties.” Carlin
v. City of Newark 36 N.J. Super 74, 89 (Law Div. 1955). This is true be-
cause the court determined the “seeming acceptance”from the defen-
dant college was “in fact a counter-offer, containing unmentioned
terms requiring acceptance before the matter could be resolved.”
The plaintiff maintained that the same was true in this matter. The
plaintiff concluded that there was no agreement as the plaintiff had
not agreed to the material terms in the defendants’ counteroffer, and
as with any contract, the agreement was unenforceable because there
was no explicit, affirmative agreement that unmistakably reflects as-
sent and a willingness to be bound. Rather, the plaintiff explicitly re-
fused the terms of the counteroffer, refused toexecute the agreement,
and sought to exercise his constitutional right to prosecute his claims
before a jury. Notably, “when one party... presents a contract for sig-
naturetoanotherparty,theomissionofthatotherparty’ssignatureis
a significant factor in determining whether the two parties mutually
have reached an agreement.” Leodori v. CIGNA Corp., 175 N.J. 293,
305 (2003). The plaintiff requested that the matter be returned to the
trial court, and the defendants’ request to enforce a settlement be
denied.
The court granted the defendants’ motion to enforce the settlement
and denied the plaintiff’s motion to reinstate the case.
DEFENDANT’S VERDICT – BREACH OF CONTRACT – PLAINTIFF CONTENDS
DEFENDANT BREACHED CONTRACT TO PAY PLAINTIFF FOR “BOOK OF BUSINESS” BY
MAKING LATE PAYMENTS AND MISMANAGING CLIENTS – DEFENDANT DENIES LATE
PAYMENT AND CLAIMS FEWER CLIENTS LEFT AFTER HE TOOK OVER BUSINESS THAN
WHEN PLAINTIFF WAS MANAGING ACCOUNTS.
Monmouth County, NJ
This matter involved claims by the plaintiff against
the defendant investment advisers. The
defendants worked with an investment advisory
company located in Colts Neck. The plaintiff and
one of the defendants entered into a contract in
August 2016 pursuant to which the defendant
bought the plaintiff’s then-existing investment
advisory “book of business,” which consisted of
the plaintiff’s client accounts. At the time of the
contract, the plaintiff had an action pending
against him in FINRA, the agency that oversees
and licenses securities broker/dealers. The
pending action would potentially result in
revocation of the plaintiff’s license to work in the
securities industry.
The parties entered into an Asset Purchase Agree-
ment dated August 25, 2016 which provided for the
sale of assets, including brokerage insurance and in-
vestment advisory accounts on which the plaintiff was
the representative of record. The agreement pro-
vided for the sale of 25% of the plaintiff’s book of
business to the defendant and the transfer of the re-
maining 75% upon a “trigger event” defined as the
death or suspension of the plaintiff’s license by FINRA.
The plaintiff’s clients were transferred to the defen-
dant, who at that point, was listed as the representa-
tive of record on those accounts. The agreement
provided that the plaintiff could repurchase the book
of business from the defendant at any time prior to
the final transfer in order that, if he was not sus-
pended, he could buy back the 25% of his book of
business that had been sold to the defendant. The
parties entered into an Adjustable Promissory Note
pursuant to which the defendant would pay the plain-
tiff the total amount of $47,500 for the book of busi-
ness. The defendant paid the plaintiff a $10,000
down payment on August 10, 2016 in the form of a
loan which was treated as repaid in full by the plaintiff
at the time of closing. Under the agreements, the de-
fendant was to make monthly payments to the plain-
tiff in the amount of $1,319 beginning on September
1, 2016. The first three monthly payments were the
basis for part of the plaintiff’s claim in this matter. The
plaintiff argued that the payments were made late,
contrary to the terms of the agreement and note.
The plaintiff’s license was revoked by FINRA on No-
vember 18, 2016. Per the agreement, the defendant
purchased the remaining 75% of the plaintiff’s book
of business following the “trigger event” of the revoca-
tion of the plaintiff’s license. In July 2017, the defen-
dant advised the plaintiff that a particular client with
a large account had left the firm and that the parties
would need to make a downward adjustment on the
amounts being paid by the defendant to the plaintiff.
The plaintiff disagreed and set forth that he believed
the downward adjustment to be inappropriate in a
letter dated August 11, 2017. The plaintiff maintained
that the downward adjustment constituted a breach
of the contract and demanded that the defendant
immediately pay all principal owed under the accel-
eration clause contained in the note signed by the
parties. The plaintiff also included the defendant
owner of the investment firm, of which the defendant
was an employee, as a defendant in the action.
The defendant maintained that all payments made
to the plaintiff were made properly and in confor-
mance with the agreements between the parties. As
to the downward adjustment, the defendant advised
the plaintiff that he was entitled to reduce the
monthly payments to the plaintiff due to the fact that
the GDC had reduced during the adjustment period
by more than 10% and indicated that he was going
to voluntarily provide a higher payment than he was
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