Kassover v. Kassover

312 N.J. Super. 96, 711 A.2d 360 (App. Div. 1998)
  • Opinion Date: May 28, 1998

PARTNERSHIPS; RECEIVERS—Absent a request for partition, a court should not appoint a receiver or other agent for more than a short time to manage property owned as a tenancy in common.

Parties on each side of the controversy were all members of the same family and owned 38 commercial properties in New York and New Jersey as tenants in common. The parties entered into a non-partition agreement under which they waived the right to seek partition of the properties for a period of 21 years. A disagreement subsequently developed among the parties concerning management of the properties. In a resulting lawsuit, the court appointed a “Special Fiscal Agent” to manage the properties until the expiration of the non-partition agreement. In that action, the Court gave the parties the option to reach a consensual agreement that would obviate the need for court supervision. The parties never reached such an agreement.

Upon the expiration of the non-partition agreement, one of the family members sought an order continuing the appointment of the Special Fiscal Agent. The lower court granted that motion and continued the appointment. In the lower court’s view, continuing the appointment was necessary to avoid a waste of assets. What the court did not do, however, was to impose any deadline for the termination of the Special Agent’s appointment or other components of the court’s management of the property. A dissatisfied family member appealed. The Appellate Division affirmed the appointment of the Special Fiscal Agent but concluded that the lower court had abused its discretion by failing to set a termination date of that appointment or for the court’s management of the property. Consequently, it remanded the case to the lower court to set a termination date. The Appellate Division’s reasoning was that New Jersey courts have long recognized that a court should generally appoint a receiver of a business or of land held in common, but only for a short period of time required to protect assets pending the final resolution of litigation or dissolution of the business enterprise. The Appellate Division’s analysis was that the non-partition agreement provided the sole possible justification for the long term appointment of a Special Fiscal Agent to manage the property. Although the parties’ failure to enter into a management agreement during the Agent’s long tenure provided an adequate basis for the short extension of the appointment to afford the parties a final opportunity to negotiate a management agreement or, if that could not be done, to seek partition, there was no justification for the appointment to continue for an indefinite period of time. In the Appellate Division’s view, courts exist to resolve disputes between litigants, not to manage the businesses of persons who are unwilling or unable to do it themselves. In the absence of any petition for partition, the Appellate Division felt that continuation of the Special Fiscal Agent for more than a short period of time was inappropriate and that the parties should be required to manage the property themselves.