APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                        SUPERIOR COURT OF NEW JERSEY
                                                        APPELLATE DIVISION
                                                        DOCKET NO. A-3341-18T3









                   Argued December 14, 2020 - Decided January 4, 2021

                   Before Judges Fasciale and Mayer
            On appeal from the Superior Court of New Jersey, Law
            Division, Morris County, Docket No. L-1863-15.

            Charles X. Gormally argued the cause for
            appellants/cross-respondents (Brach Eichler LLC,
            attorneys; Charles X. Gormally and Stuart J. Polkowitz,
            of counsel and on the brief; Edward A. Velky, on the

            Sean F. Byrnes argued the cause for respondents/cross-
            appellants (Byrnes, O'Hern & Heugle, LLC, attorneys;
            Sean F. Byrnes and Tyler A. Diekhaus, on the briefs).


      This case involves a commission dispute between life insurance

producers. The Estate of Barry Gimelstob (Gimelstob) and FBR Financial Corp.

(FBR) (collectively plaintiffs) appeal from a February 22, 2019 judgment

entered after a bench trial, which awarded money damages in plaintiffs' favor

against defendants Holmdel Financial Services, Inc. (Holmdel) and Red Rock

Insurance Associates, LLC (Red Rock), but dismissed plaintiffs' claims against

defendants Christopher W. Nalbandian (Nalbandian) and Michael J. Frenville

(Frenville) (the individual defendants).      Plaintiffs maintain the individual

defendants are personally liable.      Defendants cross-appeal from the same

judgment and contend the evidence did not support an award of damages to

plaintiffs on the life insurance policy purchased by S.P.; and the trial judge erred

by not granting defendants damages, or offsetting plaintiffs' damage award, or

awarding a recoupment, to account for Gimelstob's having purportedly breached

the contract by engaging in rebating and by failing to cooperate in the purchase

of three insurance policies on his life.

      We affirm the appeal and cross-appeal.


      Gimelstob was licensed by the State of New Jersey to sell insurance. He

began working in the life insurance industry in 1971, opened his first agency in

the 1970s or early 1980s, and later founded additional agencies, including FBR.

Gimelstob served as a general agent for multiple insurance companies, to which

he directly submitted applications for insurance on behalf of his clients. When

he did not serve as a general agent for a particular insurance company, he

submitted applications through another general agency.         Nalbandian and

Frenville were licensed insurance producers and co-owners of Holmdel, a

general agency, and Red Rock, a retail agency.

      As early as 2000, the parties began doing business with each other without

a written contract. Gimelstob had significantly more experience in the life

insurance industry than did defendants. Nevertheless, Gimelstob had many

wealthy clients who needed significant amounts of insurance, and it was

particularly helpful to those clients that Nalbandian was a CPA. It was also

helpful to Gimelstob's older clients that defendants had significant experience

in medical underwriting. Gimelstob submitted a large volume of life insurance

applications through Holmdel, consisting of fifty-to-sixty percent of Holmdel's

business. Holmdel shared a larger percentage of commissions with Gimelstob

than with other producers.

      Frenville acted as plaintiffs' principal contact at Holmdel, and he was

often invited to meet with Gimelstob's clients. While Gimelstob stated that he

had a good relationship with Frenville, Frenville described Gimelstob as

challenging, aggressive, and overly demanding, with unrealistic expectations

about what could be accomplished.

                         The October 29, 2013 Contract

      On October 29, 2013, Holmdel, FBR, and Gimelstob entered into a written

contract, effective January 1, 2012, with a termination date of June 30, 2015.

The parties were represented by counsel. Nalbandian signed the contract on

behalf of Holmdel. Neither Nalbandian nor Frenville signed the agreement in

their individual capacity.

      Paragraph seven of the contract addressed the parties' rights to terminate

the agreement, including for dishonest or fraudulent acts, indictment or

conviction for violations of federal or state laws or regulations relating to the

insurance or securities industry, or breach of the agreement.

                   Exclusivity, Commissions, and Accountings

        Under paragraph two of the agreement, plaintiffs agreed to place their life

insurance sales exclusively through Holmdel, with the exception of policies

issued by certain enumerated insurers with whom Gimelstob had general agency

agreements. In exchange, Holmdel agreed to pay plaintiffs commissions as to

these sales.1

        The agreement further provided that Holmdel was obligated to provide

plaintiffs with two separate accountings, along with payment of the amounts

determined to be owed:        (1) for the period between January 1, 2010 and

December 31, 2012; and (2) for the period between January 1, 2013 and July 31,


        Frenville testified that in January 2014, he provided Gimelstob with a

single accounting, for the period through October 2013, along with a check for

$243,715.56 in commissions. He testified that the accounting was similar to

other commission statements he periodically provided to Gimelstob. However,

  Because these policies were placed through Holmdel, all correspondence from
the insurance companies flowed through Holmdel.
he admitted that the accounting addressed only those policies on which

defendants believed they owed plaintiffs money, and not all the policies

Gimelstob placed with them.

      Plaintiffs denied that Holmdel produced the accountings mandated by the

agreement. Gimelstob and other FBR witnesses admitted receiving the check

for $243,715.56. However, they denied the check was accompanied by any

documentation, and stated that, as a result, they were unable to reconcile what

policies the check related to.

      Gimelstob and other FBR witnesses testified that, as a general matter,

commission payments from Holmdel were not accompanied by any supporting

documentation or were accompanied with insufficient documentation. This was

a constant source of frustration throughout the business relationship because it

made it difficult for plaintiffs to reconcile the amounts paid with the

commissions owed.

      Roy Kvalo, plaintiffs' forensic accounting expert, testified that under the

commission schedule set forth in the parties' agreement, defendants underpaid

plaintiffs' commissions in the amount of $2,348,976.10 and owed interest in the

amount of $328,062.

                    Insurance Policies on Gimelstob's Life

      The parties' agreement also required the purchase of three insurance

policies on Gimelstob's life: two policies to be purchased by Holmdel, and a

third policy to be purchased by Gimelstob.

      Specifically, paragraph 5(h) of the agreement provided that Holmdel

would purchase and pay the premiums for two term life insurance policies on

Gimelstob's life: one for $3,000,000; and a second for $1,500,000. Barry

Gimelstob would designate the owners and beneficiaries of the $3,000,000

policy, and Holmdel would own the $1,500,000 policy and designate its

beneficiaries. Gimelstob's authorization for these policies would "survive the

termination of th[e] Agreement." Finally, paragraph 5(h) provided:

            Holmdel has agreed to make these premium payments
            relying upon the provision in paragraph 3e, which
            relieves Holmdel of its obligation to make any further
            payments of services fees and renewal overrides to FBR
            once the proceeds of this policy have been paid.

      At paragraph 6(h) of the agreement, FBR agreed to pay for a $1,500,000

permanent life insurance policy on the life of Gimelstob, so long as he was

living. Gimelstob's authorization for this policy, and FBR's obligation to pay

for it, would survive termination of the Agreement. If FBR failed to pay the

premiums, Holmdel would "have the right to pay said premiums and offset

commissions owed to FBR against any premium that FBR fails to pay. Such

payment or premiums by Holmdel will not waive any rights Holmdel may have

under this Agreement." The owner and designated beneficiaries of this policy

were to be Holmdel or persons, entities, or trusts designated by Holmdel.

Paragraph 6(h) also stated: "This policy of insurance is specifically being

purchased for Holmdel's benefit with FBR's consent and agreement to fully pay

all premiums on this policy in exchange for Holmdel's agreement to grant to

FBR the service fees provided for in Section 3(d)."

      Finally, as referenced above, at paragraphs 3(d) and 3(e) of the agreement,

the parties explained the consideration exchanged for the insurance policies as


            d. In exchange for Barry Gimelstob's allowing Holmdel
            to purchase a one million five hundred thousand dollar
            ($1,500,000) policy of life insurance on his life under
            5(h) and FBR's contributions to the agreed purchase of
            and continued payment of life insurance premiums on
            the one million five hundred thousand dollar
            ($1,500,000) policy of life insurance on the life of
            Barry Gimelstob provided for in paragraph 6(h) herein,
            Holmdel agrees that for all sales by FBR of life
            insurance policies since January 1, 2006, Holmdel will
            pay the first one percent (1.0%) of service fees received
            by Holmdel from any Current Carriers for such

            e. In exchange for Holmdel's purchase of the three
            million dollar ($3,000,000) policy of insurance

            provided for in paragraph 5(h) and Holmdel's payment
            of premiums thereunder, FBR agrees that upon payment
            of the proceeds of said policy, Holmdel shall have no
            further obligation under this Agreement or any prior
            agreements to continue paying service fees or renewal
            overrides (renewal commissions payable under the
            Carrier and Commissions Addendum less any direct
            renewal commission payments from Current and New
            Carriers). However, it remains the intent of the parties
            that so long as Barry Gimelstob is living, Holmdel's
            obligation to pay service fees and renewal overrides
            shall remain in effect and nothing herein diminishes or
            restricts FBR's right to continue to receive such

      Frenville testified that the paragraph 5(h) $1.5 million term life insurance

policy to be paid for by Holmdel was viewed by defendants as a "key-person

insurance" policy, because if Gimelstob were to die, it would result in a

significant loss of revenue for Holmdel. He testified that the paragraph 6(h),

$1.5 million policy to be paid for by FBR but owned by Holmdel was in

exchange for Holmdel's agreement to pay service fees to Gimelstob, which

otherwise would be paid to the general agent. Finally, he testified that the

paragraph 5(h) $3 million term policy to be paid for by Holmdel but owned by

Gimelstob was meant to be "a buyout of all amounts that might be due to

[Gimelstob] or his estate in one clean swoop," including relieving Holmdel of

any obligation to pay renewal commissions.

      Gimelstob and Holmdel never purchased the three life insurance policies.

This resulted in a cost savings to Holmdel, but deprived defendants of the benefit

of the bargain, particularly since Gimelstob died during the course of the trial.

       Gimelstob cooperated in obtaining the three insurance policies, to the

extent that he provided his medical records to Holmdel, which was responsible

for purchasing the policies. However, he would not agree to pay the "preferred"

rates that Holmdel obtained for him. Gimelstob would only agree to pay rates

based upon "super-preferred" status, which Holmdel was unable to obtain for

him due to his age and health status. According to Frenville, Gimelstob also

continually tried "to renegotiate . . . the terms of the coverage and who was going

to pay how much and who was going to pay what and what kind of policy."

      Frenville testified that the required insurance policies remained an

outstanding issue throughout the term of the contract.           However, it was

undisputed that no application was ever presented for Gimelstob to review and

sign. At most, Frenville produced an offer for coverage based upon a preferred

status rating. Defendants also never declared Gimelstob's refusal to proceed

with the insurance policies to be a breach of the parties' agreement, and never

threatened to terminate the contract on that basis. The parties continued to do

business notwithstanding the failure to purchase the policies.

      Finally, at trial, defendants did not produce a copy of the offer for

coverage that Frenville said he provided to Gimelstob, with Frenville testifying

that the illustration documents no longer existed. However, Frenville testified

to his recollection of the cost of the policies using a preferred status rating: the

annual premium on the $1.5 million term policy would be approximately

$18,900; the annual premium on the $3 million policy would be roughly

$37,800; and the annual premium for the $1.5 million universal life policy would

be about $46,100. Frenville did not know the cost of the policies using a super-

preferred status.

                    The S.P. Policy and the Question of Rebating

      In furtherance of his insurance business, and seeking to serve high net-

worth individuals, Gimelstob cultivated a relationship with representatives from

J.P. Morgan Chase (JP Morgan). In early 2014, these representatives asked

Gimelstob to review and evaluate the life insurance policies owned by one o f

their clients, S.P. and design a more suitable program for her, consistent with

her financial and estate planning goals.

      Over the course of about eight months, between March and November

2014, the parties performed a great deal of work to consummate the transaction,

which involved converting a whole life insurance policy with a significant ca sh

value to a policy with a guaranteed death benefit. It was the largest transaction

in the history of the parties' relationship.     For the most part, the parties

performed their normal roles in furtherance of the S.P. policy.          Frenville

submitted the application with him signing as the agent, rather than Gimelstob.

      According to plaintiffs, Frenville signed and submitted the application

himself due to: (1) Gimelstob's concerns that Frenville had not submitted all of

S.P.'s medical information to the issuing insurance company, Transamerica; and

(2) timing concerns in finalizing the policy, relating to the risk that the cost of

the policy would increase as a result of fluctuations in the market for Treasury

bills. According to plaintiffs, Gimelstob discussed these issues with Frenville,

and Frenville responded that he would sign the application if Gimelstob was

uncomfortable with how he was handling the case, and he would still pay

Gimelstob the entire commission.

      Frenville admitted that Gimelstob refused to sign the application due to

concerns that Transamerica had not reviewed one of S.P.'s medical reports.

However, Frenville did not share Gimelstob's concern. He told Gimelstob that

Transamerica had not requested the records, and therefore believed he did not

need to provide them.

      Gimelstob provided an application to Frenville, which S.P. and her trustee

signed. Frenville then signed the application as the agent through Red Rock, his

retail agency, as Gimelstob had agreed to. Frenville did not tell Gimelstob that

he would not receive a commission if he did not sign the application, and in the

past Frenville had signed applications instead of Gimelstob without it affecting

the commission paid.

      Frenville admitted that the medical records issue strained his relationship

with Gimelstob. Frenville highlighted that during a meeting with one of the J.P.

Morgan representatives, Gimelstob discussed the possibility of issuing a rebate

on S.P.'s policy, since the total cost of the premium over the course of the

contract had increased by hundreds of thousands of dollars due to market

fluctuations, and the policy would be issued in Florida, where rebating was

permitted. According to Frenville, prior to that meeting, he had told Gimelstob

on multiple occasions that rebating would not be permitted by Florida law, and

in any event, rebating was prohibited by Transamerica, the carrier with whom

they were dealing. Rebating also violated the parties' contract, under which FBR

agreed to comply with all federal, state, and local laws, rules, and regulations of

any applicable regulatory authority.

      Notwithstanding this issue, defendants decided not to terminate the

contract with plaintiffs.   Frenville testified that, at Gimelstob's request, he

smoothed things over with the JP Morgan representatives, who expressed

disappointment and concern that the topic of rebating had been raised and noted

their fiduciary duty to discuss the issue with their client.

      Plaintiffs disputed this version of events. They maintained that it was

Frenville who raised the issue of rebating and provided Gimelstob with the

Florida statute on the issue.     Plaintiffs' witnesses testified that Gimelstob

provided this information to S.P.'s trustee at JP Morgan, who rejected it out-of-

hand, but was not angry or put off. After the S.P. matter, Gimelstob continued

to work with JP Morgan and several of S.P.'s family members.

      Regarding rebating more generally, Frenville testified that the S.P. matter

was the only one in which the issue of rebating was raised. He had no concern

about Gimelstob offering rebates as a general matter. Nevertheless, at trial,

based upon documents plaintiffs produced in discovery, defendants alleged that

Gimelstob regularly engaged in rebating, and disguised his rebating through

payments to counsel and direct payments to insurance companies, allegedly on

behalf of clients. Defendants made some insurance companies aware of this

conduct, and in 2018 Brighthouse Financial terminated its relationship with


      Gimelstob denied that he ever engaged in rebating. He stated that many

of his clients were wealthy and had complicated financial portfolios. Therefore,

his clients often required legal advice regarding tax and estate issues. He stated

that the payments were not disguised rebates, but payments made to counsel on

behalf of clients for services rendered. Furthermore, the payments he made to

insurance companies on behalf of clients were merely a courtesy, in cases where

clients mistakenly submitted premium payments to him instead of the insurance


      Ultimately, Transamerica issued a $30,000,000 policy to S.P., with an

effective date of September 13, 2014.       S.P. paid a first-year premium of

$12,302,471.     Under the commission schedule set forth in the agreement,

plaintiffs were entitled to a commission of $1,554,797.97 on the S.P. policy , but

were paid only $687,947.11. 2 Thus, plaintiffs maintained that $866,850.86 was

due and owing.

  At Frenville's request, Gimelstob did not deposit the check until February
2015. Frenville explained that defendants were in the process of purchasing a
building and pending that transaction they wanted the money to remain in their
      According to plaintiffs, at the time of the $687,947.11 payment, Frenville

promised to pay the remainder of the commission. Frenville denied this. He

testified that he told Gimelstob they needed to discuss the remainder of his

compensation on the case.

      At trial, defendants maintained that the S.P. policy was outside the terms

of the agreement because of the amount of work defendants performed on the

case, and because Frenville ultimately signed the application, in part, due to

Gimelstob's having raised the issue of rebating.

      Gimelstob continued to provide work to Holmdel notwithstanding the

parties' ongoing disagreement about the appropriate commission to be paid on

the S.P. policy. However, Holmdel no longer paid commissions to Gimelstob.

As far as Frenville knew, no steps were taken to reserve money to compensate

Gimelstob for any money he might be owed. Ultimately, defendants decided to

terminate their relationship with plaintiffs at the conclusion of the contract.

      In July 2015, plaintiffs filed their complaint against Holmdel, Nalbandian,

Frenville, and Lifemark Partners, Inc. (Lifemark). They filed a first amended

complaint in February 2017, and a second amended complaint on May 2017. In

their second amended complaint, plaintiffs added Red Rock as a defendant, and

they asserted claims for breach of contract, breach of the implied covenant of

good faith and fair dealing, conversion, unjust enrichment, fraud, and breach of

fiduciary duty and the duty of loyalty. They also demanded imposition of a

constructive trust on defendants' assets and sought an accounting and injunctive


          Defendants filed answers to the complaints, denying liability and asserting

defenses and counterclaims.         In their counterclaims, defendants demanded

damages relating to the sale of life insurance to S.P.; alleged Gimelstob breached

the parties' agreement and the covenant of good faith and fair dealing by failing

to cooperate in the purchase of insurance on his life; and sought a declaration

that they had no further obligation to pay to plaintiffs service fees or renewal

commissions for any life insurance policies written with Holmdel since 2006.

          In July 2018, the trial judge granted defendants' motion for summary

judgment in part, dismissing plaintiffs' claims seeking a constructive trust and

injunctive relief. In August 2018, the parties stipulated to the dismissal of all

claims against Lifemark.

          The trial judge conducted the bench trial between October 16 and

November 29, 2018. Gimelstob died prior to his scheduled testimony. The trial

judge therefore admitted into evidence portions of his deposition testimony and

interrogatory answers.

      At the close of plaintiffs' case, defendants moved for judgment as to the

claims asserted against the individual defendants.       The trial judge initially

dismissed the fraud claim, but later granted plaintiffs' motion for reconsideration

because she had not yet considered Gimelstob's testimony.

      On February 22, 2019, the trial judge issued a written opinion and entered

final judgment in favor of plaintiffs in the amount of $2,348,976.10:

$1,661,029.10 against Holmdel; and $687,947 against Holmdel and Red Rock,

jointly and severally. The trial judge dismissed all claims against Nalbandian

and Frenville in their individual capacity.

      On March 6, 2019, the trial judge held a conference with the parties, at

which plaintiffs sought clarification as to their ability to pursue a piercing the

corporate veil claim in post-judgment enforcement proceedings. The trial judge

stated that her written opinion sufficiently addressed the claim, and she would

not address post-judgment enforcement issues.

      On appeal, plaintiffs raise the following arguments for this court's


            POINT I

            FRENVILLE    IN    ACCORDANCE      WITH


     A. The Regulation of Insurance Producers in
        Accordance with Title 17 and the
        Administrative Code[.]

     B. The Code Permits the Imputation of Personal
        Liability as to Nalbandian and Frenville[.]

     C. Pursuant to the Code, Nalbandian and
        Frenville Owed Plaintiffs a Fiduciary Duty
        [W]hich Was Breached[.]

     D. The Trial [Judge] Not Only Misconstrued the
        Department of Banking and Insurance's
        Regulatory Scheme Which Imputes Personal
        Liability to Nalbandian and Frenville, but
        Ignored the Substantial Evidence Conferring a
        Fiduciary Duty Upon Nalbandian and
        Frenville at Common Law[.]





    A. The Record Before the Trial [Judge]
       Demonstrates Nalbandian's and Frenville's
       Commission of Common Law Fraud, [W]hich
       the [Trial Judge] Completely Ignored and
       Failed to Analyze[.]

    B. The Record Before the Trial [Judge]
       Demonstrates Nalbandian and Frenville's
       Engagement of Equitable Fraud, [W]hich the
       [Trial Judge] Completely Ignored and Failed
       to Analyze[.]



    A. Law of Conversion[.]

    B. The Trial [Judge] Ignored Nalbandian's and
       Frenville's Ownership Interest in Holmdel and
       Their Respective Actions with Regard to
       Monies Due and Owed [to] Plaintiffs, [W]hich
       Evidences      Their      Commission       of



            UNJUST ENRICHMENT[.]

                  A. The Trial [Judge] Failed to Properly Weigh
                     the Overwhelming Evidence Before it and
                     Improperly Concluded that the Parties'
                     Relationship Was Only Derived from

      On cross-appeal, defendants raise the following arguments for this court's


            POINT I

            DEFENDANTS' CROSS-APPEAL               SHOULD       BE

                  A. The Trial [Judge] Committed Reversible Error
                     When [She] Failed to Award Damages,
                     Measured by the Face Value of the Life
                     Insurance Policies Required by the Agreement
                     to be Purchased For Defendants' Benefit,
                     Given The Plaintiff Gimelstob's Admissions
                     that He Failed To Sign an Application And
                     Submit Himself For The Policies Required by
                     the Agreement.

                  B. The Trial [Judge] Committed Reversible Error
                     When [She] Dismissed Defendants' Claim for
                     a Setoff Or Recoupment, Measured by the
                     Face Value of the Life Insurance Policies
                     Required by the Agreement, Against Any
                     Judgment Awarded to Plaintiffs Based On
                     Plaintiff's Admissions That He Failed to Sign
                     an Application and Submit Himself for the
                     Policies Required by the Agreement.

                  C. The Trial [Judge] Committed Reversible Error
                     When [She] Awarded Plaintiffs Damages
                     Arising from Breaches of the Agreement
                     Despite the Clear Proof Of Rebating by the
                     Plaintiffs in Violation of New Jersey Law, the
                     Policies     of    the    Insurance   Carriers
                     Underwriting and Insurance Policies, and the
                     Terms of the Agreement.

                  D. The Trial [Judge] Committed Reversible Error
                     When [She] Awarded Damages to Plaintiffs,
                     Inclusive of a Commission on the S.P. Life
                     Insurance Policy, Despite the Presentation of
                     Proof that the Plaintiffs Had Offered a Rebate
                     to the Trustee Purchasing The Policy on
                     Behalf of the Insured as well as the
                     Presentation of Proofs of Rampant Rebating
                     by the Plaintiffs.

                  E. The Trial [Judge] Committed Reversible Error
                     When [She] Awarded Damages to Plaintiffs,
                     Inclusive of a Commission on the S.P. Life
                     Insurance Policy, under the Terms of the
                     Agreement When Factors such as the Unique
                     Nature of this Application and Work Done by
                     Plaintiffs, and the Refusal of Mr. Gimelstob to
                     Sign as the Producer for the S.P. Policy,
                     Placed it Clearly Outside the Agreement's


      We begin by addressing whether the judge erred in dismissing plaintiffs'

claims against Nalbandian and Frenville in their individual capacities.

      We will not disturb a trial judge's factual findings unless they are so

manifestly unsupported by the competent, relevant evidence that affirmance

would constitute an injustice. Allstate Ins. Co. v. Northfield Med. Ctr., 

228 N.J. 596

, 619 (2017). We are particularly deferential to the trial judge's assessment

of witnesses' credibility because the judge was able to observe the witnesses as

they testified. Seidman v. Clifton Sav. Bank, S.L.A., 

205 N.J. 150

, 169 (2011).

We review questions of law de novo. Manalapan Realty, L.P. v. Twp. Comm.

of Manalapan, 

140 N.J. 366

, 378 (1995).

                          A. Breach of Fiduciary Duty

      Plaintiffs appeal from the judge's dismissal of their breach of fiduciary

duty claim against Nalbanian and Frenville in their individual capacities.

      The trial judge rejected the breach of fiduciary duty claim, reasoning that

plaintiffs erred in relying upon N.J.A.C. 11:17A-4.10, which provides that "[a]n

insurance producer acts in a fiduciary capacity in the conduct of his or her

insurance business," and N.J.A.C. 11:17A-1.6(c), which provides that

"[l]icensed partners, officers and directors, and all owners with an ownership

interest of [ten] percent or more in the organization shall be held responsible for

all insurance related conduct of the organization licensee, any of its branch

offices, its other licensed officers or partners, and its employees," because the

New Jersey Insurance Producer Licensing Act, N.J.S.A. 17:22A-26 to -57, and

the regulations promulgated thereunder, were intended to protect "consumers of

insurance, i.e., insureds, and not . . . sophisticated insurance producers such as

[p]laintiffs." The trial judge also found that the claim lacked merit under the

common law because the parties' relationship was contractual in nature and

defendants did not dominate or control plaintiffs. The trial judge's ruling is

supported by both the law and the facts.

      As to the statutorily imposed fiduciary duty, it is clear that in both

structure and substance the regulations are intended to protect insurance

consumers. Our Court has recognized that insurance brokers owe duties to their

clients, given the brokers' special knowledge and expertise. See Aden v. Fortsh,

169 N.J. 64

, 78-79 (2001) (explaining that insurance intermediaries must act in

a fiduciary capacity because of "the increasing complexity of the insurance

industry and the specialized knowledge required to understand all of its

intricacies"). As such, the judge properly concluded that plaintiff's reliance on

N.J.A.C. 11:17A-4.10 and N.J.A.C. 11:17A-1.6(c) to substantiate their breach

of fiduciary duty claim was misplaced.

      The judge's conclusion that plaintiffs did not establish the existence of a

common law fiduciary duty is also well-supported. "The essence of a fiduciary

relationship is that one party places trust and confidence in another who is in a

dominant or superior position. A fiduciary relationship arises between two

persons when one person is under a duty to act for or give advice for the benefit

of another on matters within the scope of their relationship."      See F.G. v.


150 N.J. 550

, 563 (1997) (recognizing the fiduciary relationship

between a parishioner and pastoral counselor).

      Here, the parties were sophisticated, licensed insurance producers with

significant industry experience.       The parties formalized their business

relationship through a written contract while represented by counsel.          To

recognize such a duty in the context of the parties' business relationship here

would be inconsistent with the purpose of imposing fiduciary duties, which is to

protect the vulnerable from exploitation and abuse by those in a superior,

dominant, or controlling position. See

id. at 565.

In fact, plaintiffs arguably

were in the superior position given that they initiated more than half of

defendants' business. As such, the judge properly concluded that no common

law fiduciary relationship existed in this context.

                   B. Fraud and Piercing the Corporate Veil

      Plaintiffs argue the trial judge erred by dismissing their fraud claim

against Nalbandian and Frenville, and by not clarifying that her judgment did

not discharge any personal liability of Nalbandian and Frenville arising from the

piercing of Holmdel's corporate veil. As to the latter issue, plaintiffs assert that

defendants' banking records, which were secured through post-judgment efforts,

reflect a post-judgment enforcement issue. Plaintiffs request this court clarify

whether they may piece the corporate veil on that evidence in a post-judgment


      In count five of the second amended complaint, plaintiffs asserted a claim

of fraud. Plaintiffs specifically alleged that defendants "misrepresented to the

insurer that . . . they were S.P.'s agent in connection with their plan to convert

commission payments due to Gimelstob/FBR." In addition, plaintiffs sought to

impose individual liability upon Nalbandian and Frenville with respect to the

alleged fraud, asserting that they were "entitled to 'pierce the corporate veil' of

Holmdel and Red Rock as a result of Nalbandian's and/or Frenville's use of the

corporation and limited liability company form to commit a fraud upon the


      The trial judge found that Gimelstob acquiesced in Frenville's signing

S.P.'s insurance application; that no misrepresentations were made to the insurer

on the S.P. policy, as commissions were paid on the policy in the normal course;

and that the parties' dispute over their share of the S.P. commission was a matter

of contract. Accordingly, in her post-trial opinion, the trial judge rejected the

allegations of fraud and the attempt to pierce the corporate veil, finding that the

fraud claim had not been pled with particularity and the trial proofs did not

support a finding of fraud or for piercing the corporate veil .

      As to plaintiffs' ability to bring a piercing the corporate veil claim in post-

judgment enforcement proceedings, she responded that her written opinion

sufficiently addressed the veil-piercing claim, and she would not address post-

judgment enforcement issues.

      On appeal, plaintiffs assert that their fraud claim was supported by proof

that defendants systematically underpaid commissions and deprived plaintiffs

of documentation needed to determine that the commissions had been underpaid,

including the accountings required under the parties' contract. However, the

fraud claim plaintiffs pled in their second amended complaint related solely to

the S.P. policy.

      Rule 4:5-8(a) requires that a party plead fraud claims with particularity.

Piscitelli v. Classic Residence by Hyatt, 

408 N.J. Super. 83

, 116 (App. Div.

2009). Additionally, plaintiffs are not permitted to assert new claims on appeal

which were not pursued below. Nieder v. Royal Indem. Ins. Co., 

62 N.J. 229


234 (1973). Although we need not address plaintiffs' revised theory of the

alleged fraud, we add the following remarks.

      The trial judge rejected plaintiffs' interpretation of the evidence. In her

post-trial opinion, the trial judge found that defendants often did not provide

documentation as to their commission payments to plaintiffs and did not produce

the accountings required under the contract. However, she attributed those

failures to negligence and under-staffing, not fraud. The trial judge stated that

"[d]uring Frenville's testimony, it was clear to [her] that he was often

overwhelmed by his responsibilities and needed assistance, especially from a

bookkeeper or controller who could better handle the financial records ." The

trial judge also cited Gimelstob's deposition testimony to the same effect. We

see no reason to second-guess the trial judge's interpretation of the factual

evidence, as it is supported by the record.

      Moreover, the trial judge found that the facts did not support a common

law fraud claim, which requires clear and convincing evidence of: (1) a material

misrepresentation of fact; (2) defendants' knowledge of the falsity; (2)

defendants' intent that plaintiffs rely upon the misrepresentation; (4) plaintiffs'

reasonable reliance upon the misrepresentation; and (5) resulting damages.

Banco Popular N. Am. v. Gandi, 

184 N.J. 161

, 172-73 (2005).

      The record also does not support a claim of equitable fraud, which differs

from legal fraud by eliminating the requirements of knowledge of the falsity and

an intention to obtain undue advantage therefrom. Jewish Center of Sussex

County v. Whale, 

86 N.J. 619

, 625 (1981); DepoLink Court Reporting & Litig.

Support Servs. v. Rochman, 

430 N.J. Super. 325

, 336 (App. Div. 2013). The

record clearly shows that plaintiffs did not rely upon defendants' representations

as to what commissions were owed. To the contrary, the record reflects that

plaintiffs had full knowledge of the insurance policies they sold and the

commissions owed to them pursuant to those policies, and they were persistent

in requesting documentation from defendants so that they could independently

verify that the correct amounts had been paid on the accounts payable. Plaintiffs

also obtained a contractual commitment that defendants would prepare

accountings as well as a concomitant legal remedy for defendants' failure to

produce the required accountings.      See 

DepoLink, 430 N.J. Super. at 337

(finding no fraud or equitable fraud where a party "rejected the collection

agency's attempts to collect the debt" and "never relied on the truth of any of the

statements the collection agency made").

      On the veil-piercing claim, plaintiffs argue that they were wrongfully

denied discovery regarding defendants' finances, which prevented them from

establishing a basis for piercing the corporate veil of Holmdel and/or Red Rock.

Based upon documentation obtained post-judgment, they maintain that veil-

piercing is appropriate based upon Nalbandian's having "loot[ed]" and

"pilfer[ed]" corporate funds. We see no such issue.

      The record reflects that during discovery plaintiffs served multiple

subpoenas upon Shore River Community Bank, Shore Community Bank, and

other entities, which defendants moved to quash.        The subpoenas sought

"[c]omplete copies of all statements of account reflecting transactions" of

Holmdel and Red Rock "with respect to the period of November 2014 through

and including December 2015," as well as the entire file regarding a mortgage

and promissory note dated December 2, 2015.

      The subpoenas related to the fact that in late 2014, when Frenville

provided Gimelstob with partial payment of the commission for the S.P. policy,

he asked Gimelstob to not deposit the check immediately, because defendants

were purchasing a building and wanted the lender to see a higher balance in their


      By orders dated April 13, 2017 and April 13, 2018, the trial judge quashed

the subpoenas. However, in her April 13, 2017 ruling, the trial judge permitted

plaintiffs to seek her permission to serve the subpoenas, upon presentation of

evidence reflecting their relevance to the case. Plaintiffs did not pursue that

option. In her April 13, 2018 ruling, the trial judge stated that plaintiffs could

serve the subpoenas at trial. Again, plaintiffs did not pursue that option.

      At trial, plaintiffs did not seek to admit documents or testimony relating

to defendants' finances. Plaintiffs also did not call Nalbandian as a witness

during their case-in-chief, notwithstanding that they had issued a subpoena for

his testimony. During the trial, Nalbandian injured his back and could no longer

attend as previously planned. On the final day of the trial, plaintiffs changed

course and moved to admit excerpts from Nalbandian's deposition testimony as

rebuttal evidence and for an adverse inference based upon his failing to testify.

Plaintiffs did not seek a continuance to permit Nalbandian to testify .

      The trial judge denied the motion to read in the deposition testimony,

finding that plaintiffs' counsel had not provided the defense with notice of intent

to call Nalbandian as a rebuttal witness, such that he could have been made

available to testify both on direct and cross-examination. The trial judge also

declined to continue the trial beyond its scheduled end date. The trial judge

reiterated this ruling in the post-trial opinion and explained that the proposed

deposition excerpts did not constitute proper rebuttal evidence and denied

plaintiffs' request for an adverse inference.

      Thereafter, this court denied plaintiffs' motion to supplement the record

to include documents obtained during post-judgment discovery. Nevertheless,

plaintiffs included the post-judgment subpoena, and they make arguments about

what that subpoena allegedly revealed.

      Plaintiffs have not demonstrated any abuse of discretion in the trial judge's

having quashed the subpoenas for lack of relevance. In re Custodian of Records,

Criminal Div. Manager, 

214 N.J. 147

, 162-63 (2013) (applying abuse of

discretion standard of review to quashing subpoena). Nothing in the record

suggests that the subpoenas sought information relating to the fraud and veil

piercing claims, or that they raised this issue before the trial judge.

      Plaintiffs also have not demonstrated any abuse of discretion in the trial

judge's refusal to admit Nalbandian's deposition testimony at trial. Rowe v. Bell

& Gossett Co., 

239 N.J. 531

, 551-52 (2019) (applying abuse of discretion

standard to evidentiary rulings). Nor have they shown an abuse of discretion in

the trial judge's decision to end the trial without a continuance for Nalbandian

to testify on rebuttal. State v. Hayes, 

205 N.J. 522

, 537 (2011) (stating that

whether to grant continuance is within trial judge's discretion); see also State v.


232 N.J. 308

, 311 (2018) (noting that "[i]n our judicial system, the trial

[judge] controls the flow of proceedings in the courtroom. As a reviewing court,

we apply the abuse of discretion standard when examining the trial [judge's]

exercise of that control").

      It was plaintiffs' burden to establish a fraud or injustice that supported

piercing the corporate veil in order to impose individual liability upon the

corporate principals. Richard A. Pulaski Constr. Co. v. Air Frame Hangars, Inc.,

195 N.J. 457

, 472-73 (2008). They simply did not do so. The record contains

no evidence that defendants failed to observe corporate formalities, nor any

evidence about the corporate defendants' finances. Verni ex rel. Burstein v.

Harry M. Stevens, Inc., 387 N.J. Super 160, 199-200 (App Div. 2006).

Furthermore, contrary to plaintiffs' appellate arguments, the record does not

support a conclusion that plaintiffs' failure to produce such evidence was the

result of either erroneous rulings, or defendants' obstruction or recalcitrance.

                                 C. Conversion

      Plaintiffs contend the trial judge erred by not holding Nalbandian and

Frenville liable for conversion for failing to pay the commissions owed to

plaintiffs. We disagree.

      Conversion is defined as the intentional exercise of dominion or control

over another's property, which is inconsistent with the owner's rights. Bondi v.

Citigroup, Inc., 

423 N.J. Super. 377

, 431 (App. Div. 2011). However, "[t]o

avoid transforming a breach of contract into an act of conversion," the money at

issue must clearly belong to the injured party, and be identifiable.

Id. at 431- 32.

Thus, a conversion claim will not be sustained in the context of a creditor -

debtor relationship, or a dispute about monies owed.

Ibid. Here, there was

no specifically identifiable money that allegedly was

converted by defendants. Rather, as the trial judge found, the record reflects a

creditor-debtor relationship, with a dispute about the amount of money owed

within the context of a contractual relationship.      Therefore, as the judge

determined, the tort of conversion could not apply. Even if it did—which is not

the case—there exists no evidence in the record that Nalbandian and Frenville

distributed commission money belonging to plaintiffs or directed the conversion

of such money.     We therefore conclude that the judge properly dismissed

plaintiffs' conversion claim.

                                D. Unjust Enrichment

      Plaintiffs contend the trial judge erred by not holding Nalbandian and

Frenville personally liable for unjust enrichment, noting the failure to pay

commissions owed, and the alleged fiduciary relationship between the parties.

      "To establish unjust enrichment, a plaintiff must show both that defendant

received a benefit and that retention of that benefit without payment would be

unjust." VRG Corp. v. GKN Realty Corp., 

135 N.J. 539

, 554 (1994). However,

"[u]nder New Jersey law, a tort remedy does not arise from a contractual

relationship unless the breaching party owes an independent duty imposed by

law." Saltiel v. GSI Consultants, Inc., 

170 N.J. 297

, 316 (2002). Accordingly,

"[t]he unjust enrichment doctrine requires that plaintiff show that it expected

remuneration from the defendant at the time it performed or conferred a benefit

on defendant and that the failure of remuneration enriched defendant beyond its

contractual rights." 

VRG, 135 N.J. at 554

. "Because unjust enrichment is an

equitable remedy resorted to only when there was no express contract providing

for remuneration, a plaintiff may recover on one or the other theory, but not

both." Caputo v. Nice-Pak Prods., Inc., 

300 N.J. Super. 498

, 507 (App. Div.


      Here the judge correctly found that, as in Saltiel, the parties' relationship

was governed by contract, and their disputes over monies owed was governed

by the terms of that contract. The parties' relationship was not a fiduciary one.

The individual defendants were not parties to the contract, and plaintiffs may

not assert tort claims against the individual defendants to enhance the benefit

for which they bargained. As previously discussed, plaintiffs presented no

evidence that Nalbandian or Frenville were unjustly enriched by money owed to

plaintiffs by inappropriately taking commission money from the corporate

accounts, and the record does not support plaintiffs' argument that their failure

of proof was caused by arbitrary, capricious, or unreasonable judicial decisions,

or obstruction by defendants. The trial judge properly dismissed the unjust

enrichment claims.


      We now turn to defendants' cross-appeal. Defendants argue the trial judge

erred by not awarding damages to them, or offsetting plaintiffs' damage award

or awarding a recoupment, measured by the face value of the insurance policies

on Gimelstob's life that were contractually mandated but not purchased, minus

premium adjustments.

      Defendants Holmdel, Nalbandian, and Frenville counterclaimed that

plaintiffs breached the parties' agreement through Gimelstob's failure to

cooperate in the purchase of insurance on his life and that plaintiffs breached

the covenant of good faith and fair dealing.

      As relief for these causes of action, defendants sought compensatory and

consequential damages, attorneys' fees, interest and cost of suit.          More

specifically, defendants sought a declaration that they had no further obliga tion

to pay service fees to plaintiffs, and no obligation to pay renewal commissions

for any life insurance policies written with Holmdel since 2006. Defendants

also asserted as an affirmative defense that "[d]efendants are entitled to a setoff

or to recoup certain damages as a result of the [p]laintiff's conduct and/or breach

of contract."

      The trial judge set forth comprehensive findings and conclusions as to

these issues in her post-trial opinion. First, the trial judge concluded that

Gimelstob failed to cooperate in acquiring insurance policies on his life:

            The court is not persuaded that Gimelstob's position
            regarding his rating was reasonable. Despite his
            statement that he might want to apply for other policies
            in the future, he admitted he had not done so. It is clear
            that the permanent policy would have been the most
            expensive and, by his failure to cooperate, Plaintiffs
            benefitted financially. He also stated that it was
            Defendant's obligation to get the insurance and to get
            the best rates; however, this obligation to "get the best
            rates" does not appear in the Agreement, nor does the
            Agreement require that the insurance policies be issued
            at "super preferred" or "preferred plus" rates, which
            Gimelstob admitted in his deposition.

      As a result of this breach of contract, the trial judge found that plaintiffs

were not entitled to receive service fees, thus granting defendants some of the

relief requested. However, the trial judge found that plaintiffs were still entitled

to payment of renewal commissions, notwithstanding Gimelstob's failure to

cooperate in the purchase of the life insurance policies, due to a failure of proof

on the part of defendants. The trial judge explained that "[t]he issue of renewal

overrides . . . was not addressed by Defendants in their pleadings, at trial or in

the post-trial submission," and that although the defendants' counterclaim

demanded a declaration that plaintiffs "have no further right to any renewal

commissions under any policies written with Holmdel," paragraph 3(e) of the

parties' Agreement "distinguishes renewal overrides from renewal commissions

directly paid to plaintiffs[.]"

      Finally, the trial judge found that the proofs did not support defendants'

claim of entitlement to a setoff or recoupment based upon the face value of the

policies. The trial judge found that Gimelstob's obtaining life insurance was not

critical to Holmdel's entry into the agreement or remaining in the agreement,

and Frenville failed to work out the details of the policies in conjunction with

Gimelstob's estate plan. Additionally, the trial judge found that defendants

presented insufficient proof as to the details of the policies proposed to

Gimelstob, including copies of the applications and the quoted premiums, such

that the trial judge was not equipped to determine a reasonable setoff or

recoupment, which would require deducting the cost of the premiums paid from

the face value of the policies.

      We review the interpretation of a contract de novo. Serico v. Rothberg,

234 N.J. 168

, 178 (2018). If the contract terms are clear, this court applies the

contract as written, without "rewrit[ing] a contract for the parties better than or

different from the one they wrote for themselves." Kieffer v. Best Buy, 

205 N.J. 213

, 223 (2011).

      A breach of contract claim requires proof, by a preponderance of the

evidence, that: the parties entered into a valid contract, with certain terms;

plaintiff fulfilled its obligations under the contract; defendant failed to perform

its obligations under the contract; and plaintiff sustained damages as a result.

Woytas v. Greenwood Tree Experts, Inc., 

237 N.J. 501

, 512 (2019). Regarding

damages, "[a] breaching party is 'liable for all of the natural and probable

consequences of the breach of [the] contract.'"

Id. at 514

(quoting Pickett v.


131 N.J. 457

, 474 (1993)).

      As for defendants' request for a setoff, setoff is an equitable right that

provides for affirmative recovery on a claim that may be independent of the

transaction upon which plaintiffs' claims were based. Miah v. Ahmed, 

179 N.J. 511

, 527 (2004). By contrast, recoupment is an equitable defense, the purpose

of which is to examine the parties' transaction and achieve a just result.

Beneficial, 86 N.J. at 609

, 612; Gen. Motors Acceptance Corp. v. Dir., Div. of


26 N.J. Tax 93

, 99-100 (App. Div. 2011). Recoupment may only be

utilized to reduce or extinguish the plaintiff's recovery, whereas setoff may be

awarded for any amount to which defendant is entitled. 

Beneficial, 86 N.J. at 609

, 611.

      Here, the trial judge fairly determined that Gimelstob breached the

contract by failing to cooperate in the purchase of the required life insurance

policies. Moreover, the record supports the trial judge's assessment of the

appropriate damages for that breach of contract: denial of plaintiffs' requests

for service fees, as per the clear contract language regarding the consideration

exchanged for the policies, set forth in paragraphs 5(h) and 6(h) of the contract.

The trial judge fairly rejected additional damages premised upon renewal

overrides, which are also set forth in the contract as consideration for the policies

in paragraph 5(h), due to a lack of proof on this element of the breach of contract


      The trial judge also rejected defendants' request for a setoff or recoupment

premised upon the face value of the policies, minus the premiums that would

have been paid for the policies. The trial judge's rejection was based, in large

part, upon her rejection of Frenville's testimony about the alleged premiums for

the policies, which prevented her from calculating a fair setoff or recoupment

amount. There is no basis to disturb that credibility assessment.

      The trial judge also determined that a setoff or recoupment would not be

equitable in light of the fact that the insurance policies were not critical to

Holmdel's entry into the contract, as evidenced by defendants' failure to work

out the details of the policies for Gimelstob's estate plan, and their failure to

terminate the agreement based upon Gimelstob's breach in failing to cooperate

in the purchase of the policies.

      There is no basis for us to disturb the trial judge's assessment of the factual

record, or the conclusions it reached as a result, and defendants have not

established any basis for appellate intervention.


      Defendants next contend the trial judge erred by awarding plaintiffs

damages for breach of contract, including a commission relating to the S.P.

policy. They contend such damages should have been denied based upon clear

proof that plaintiffs engaged in rebating in violation of New Jersey law, and

offered to engage in rebating with respect to the S.P. policy.

      In their contract, the parties agreed to comply with all federal, state, and

local laws, rules, and regulations of any applicable regulatory authority.

Rebating of insurance premiums is prohibited under N.J.A.C. 11:17A-2.3. The

parties' contract also provided a procedure for terminating the agreement based

upon specified acts, which included dishonest or fraudulent acts. Defendants

never initiated the termination procedures and termination of the agreement

would not have negated defendants' obligation to pay commissions to plaintiffs,

because the contract stated: "Unless otherwise required by law or pursuant to

any general agency agreement, FBR will receive commissions subsequent to

termination of this Agreement with respect to insurance policies placed prior to

termination of this Agreement, in accordance with the Carrier and Commission


      In their answer to the second amended complaint, defendants asserted that

plaintiffs violated the dishonest or fraudulent acts provision of the contract.

They also asserted affirmative defenses to plaintiffs' recovering on their claims,

including that plaintiffs breached the agreement and committed unlawful acts.

In addition, in their counterclaims, defendants alleged that Gimelstob engaged

in "inappropriate dealings" with S.P., and breached the contract, such that

defendants handled the S.P. transaction and should receive the entire S.P.

commission, and plaintiffs should not be entitled to renewal commissions.

      In her post-trial opinion, the trial judge rejected defendants' assertion that

Gimelstob engaged in rebating and concluded that any discussion of rebating

with respect to the S.P. policy was the fault of both parties.         Gimelstob's

payments to Brach Eichler were not for illegal rebating, but for "assistance from

sophisticated tax and estate planning professionals to service [extremely wealthy

clients] properly." Nor was Gimelstob solely responsible for discussions of

rebating with JP Morgan, as the trial judge explained that testimony from an

FBR employee suggested that "Frenville was pushing [Gimelstob] to speak to

JP Morgan about rebating because of the change of premiums for the S.P.

policy," and it appeared that it "was discussed between Frenville and Gimelstob,

and also with [the JP Morgan representative] to some extent[.]" Based upon

these findings, the trial judge dismissed the counterclaim relating to the S.P.

policy. We will not second-guess this determination.


      Finally, defendants contend the trial judge erred by awarding a full

commission to plaintiffs relating to the S.P. policy pursuant to the contract

terms. They argue that Gimelstob's refusal to sign the application placed the

S.P. policy outside the contract's terms, and the partial commission they pai d to

plaintiffs was reasonable given the amount of work defendants performed to

consummate the transaction.

      The contract provided that FBR would be paid premiums for policies sold

by FBR through Holmdel. In their answer to the second amended complaint,

defendants denied that plaintiffs were entitled to any additional commission on

the S.P. policy. In their counterclaims, they asserted that any commission paid

to plaintiffs on the S.P. policy should be returned because the policy was not

sold by FBR or Gimelstob, and the policy would not have been sold but for the

actions of defendants.

      The trial judge made extensive findings regarding the work performed on

the S.P. policy, and largely accepted plaintiffs' version of events. The trial judge

explicitly rejected defendants' allegation that they performed work on the S.P.

policy that was in excess of the norm for other policies sold through Gimelstob,

defendants' arguments about the significance of Frenville's signing the

application, and defendant's allegations with respect to rebating. Thus, the trial

judge ordered that plaintiffs were entitled to the full commission on the S.P.

policy and dismissed defendants' counterclaims with respect to the S.P. policy.

The trial judge's findings are supported by the record, and we see no basis for

appellate intervention.