                        NOT FOR PUBLICATION WITHOUT THE
                      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-2030-15T4


MICHAEL D. KIEFFER, Individually
and Derivatively on behalf of
DIGITAL PRODUCTION, INC.,

        Plaintiff-Respondent,

v.

CHARLES A. BUDD and
DIGITAL PRODUCTION, INC.,

     Defendants-Appellants.
_________________________________

              Submitted March 8, 2017 – Decided August 24, 2017

              Before Judges Fuentes, Simonelli and Gooden
              Brown.

              On appeal from the Superior Court of New
              Jersey, Chancery Division, Gloucester County,
              Docket No. C-0006-12.

              Hagner   &   Zohlman,  LLC,   attorneys  for
              appellants (Thomas J. Hagner, of counsel and
              on the briefs).

              Fox Rothschild LLP, attorneys for respondent
              (R. James Kravitz, of counsel and on the
              brief).
PER CURIAM

     In    this   minority    shareholder       oppression        and    breach     of

contract     matter,     defendants     Charles        A.     Budd   and    Digital

Production,    Inc.    (DPI),1   appeal      from     the    September     16,   2015

Chancery Division order for judgment entered in favor of plaintiff

Michael D. Kieffer.       Defendants also appeal from the December 31,

2015 order denying their motion for a new trial, and from the

December 31, 2015 final judgment.            We affirm.

     We derive the following facts from the evidence presented at

the two-day bench trial before Judge Anne McDonnell.                       DPI is a

closely    held   family     business       engaged     in     providing    graphic

solutions to retailers and manufacturers.                   Budd is DPI's founder

and president and was its sole shareholder until October 22, 2010.

     On June 4, 2010, DPI and plaintiff executed an employment

agreement whereby DPI would employ plaintiff as vice-president

once he became a shareholder and owned at least twelve shares of

DPI's common stock, and pay him an annual salary of $100,000,

"payable in accordance with [DPI's] normal payroll practices for

its employees."        Once plaintiff purchased the shares, DPI would

pay him "an annual salary in the amount corresponding with the

level of [DPI's] gross sales achieved by [DPI] during its fiscal


1
    We shall sometimes refer to Budd and DPI collectively as
defendants.

                                        2                                    A-2030-15T4
year (as reported on [DPI's] compiled financial statements based

on the accrual method of accounting)[.]"     Specifically, DPI would

pay plaintiff an annual salary of $110,000 if its gross sales were

between $1.5 million and $2,999,999 during its fiscal year.       DPI

could change plaintiff's salary upon prior notice.    The employment

agreement also required DPI to pay plaintiff a $7500 signing bonus,

payable in three installments of $2500 on the first day of July,

August, and September 2010.

     After signing the employment agreement, plaintiff received

the following payments from DPI:

          June 15, 2010:              $3076
          June 24, 2010:              $3100
          July 10, 2010:              $2500
          August 13, 2010             $1506
          August 18, 2010             $2,866.84
          September 19, 2010:         $727.38
          October 22, 2010            $5000

DPI's general ledger contained separate entries for net payroll.

The general ledger did not list any of the above payments as

payroll or salary payments, and there are no payroll records for

the period June 4, 2010 to October 22, 2010.       In addition, the

payments do not reflect any pay period, and are not consistent

with a $100,000 annual salary.       Notably, DPI's 2010 federal tax

return for the fiscal year beginning April 2, 2010 and ending

March 31, 2011, did not list plaintiff as an officer or shareholder

of DPI.   Plaintiff testified that the above payments were for

                                 3                           A-2030-15T4
independent       contracting     work   he    performed     for   DPI   prior    to

purchasing the shares and commencing employment as DPI's vice-

president on October 22, 2010.

       Also on June 4, 2010, DPI, Budd, and plaintiff executed a

stock purchase agreement, whereby Budd agreed to sell twelve of

his 100 shares of DPI's common stock to plaintiff for $13,016 per

share for a total of $156,192.                On October 22, 2010, plaintiff

purchased the twelve shares for that amount, deriving the money

from a mortgage on his home.                 That same day, DPI, Budd, and

plaintiff executed a stock restriction agreement, and DPI's Board

of Directors (Board) issued a resolution electing plaintiff to the

Board and appointing him DPI's vice-president effective that day.

       Termination of plaintiff's employment with DPI was one of the

events that triggered the application of the stock restriction

agreement.    If plaintiff's employment was terminated other than

for cause during the first twelve months of his employment, DPI

had to purchase, and plaintiff had to sell, all of his shares of

stock at $13,016 per share for a total of $156,192, payable in one

lump   sum   no    later   than    sixty      days   after   termination.         If

termination occurred after the first twelve months, the purchase

price would be the stock's fair market value.

       DPI's payroll records reveal that on November 12, 2010,

plaintiff received his first paycheck in the gross amount of

                                         4                                 A-2030-15T4
$3,846.16 (amounting to $100,000 annually) for the bi-weekly pay

period beginning October 23, 2010, and ending November 5, 2010.

Plaintiff continued receiving $3,846.16 bi-weekly until April 11,

2011, when the Board issued a resolution, which plaintiff signed,

reducing     his   and   Budd's   salaries   to   $1000   bi-weekly,   and

authorizing the treasurer to make loans to them so they could pay

their personal expenses until business improved.

     Plaintiff testified that Budd said the salary reduction was

temporary and necessary to induce the bank to purchase DPI's

receivables.       Budd testified that DPI had a $250,000 loss as of

March 31, 2011,       sales were not good, and plaintiff's salary

reduction, as well as the layoff of two employees (his son Brian

and girlfriend Julie Pfeiffer) was necessary to reduce payroll

because DPI lacked a sufficient cash flow.          Budd also testified

it would not have been responsible to allow DPI to continue to pay

plaintiff's original salary.

     In addition to his $1000 bi-weekly salary, plaintiff received

five checks in the amount of $1500 each, for a total of $7500.

Four of the checks bore the notation "Loan," while one bore the

notation "Employee Advance."        According to plaintiff, there was

no loan agreement and he considered these payments to be salary,

not loans.    Budd testified the payments were loans.



                                     5                            A-2030-15T4
       Plaintiff testified that Budd eventually told him the bank

was not purchasing DPI's receivables and DPI lacked funds to

reinstate plaintiff's salary.          Plaintiff thereafter discovered

that Budd had been defalcating corporate funds during the time he

claimed DPI lacked funds to pay plaintiff's salary.           Specifically,

Budd used DPI's funds to finance a business known as Born to Wrap

Graphics, LLC (BTWG), which Brian managed, and pay for trips to

Cancun, Las Vegas, and Boca Raton and Pfeiffer's gym membership

fees and automobile insurance.     Budd also used DPI's funds to pay

for his grandchild's childcare costs, carpeting in his home, coffee

at Starbucks, Broadway theatre tickets, and purchases at Barnes

and Noble.    Defendants produced no documents evidencing a business

purpose for any of these expenditures.           Plaintiff also learned

that Brian's girlfriend, who was the mother of Budd's grandchild,

was on DPI's payroll.

       On August 11, 2011, plaintiff resigned after an argument with

Budd about his salary.      Brian replaced plaintiff at a salary of

$2000 bi-weekly beginning September 16, 2011, which increased to

$2500 bi-weekly beginning November 25, 2011.

       Plaintiff, as a minority shareholder, demanded copies of

certain   DPI   financial   records.      In   response,      Budd   demanded

redemption of plaintiff's shares of stock for $50,000, payable

over   five   years.   Plaintiff   rejected     the   offer    and   filed    a

                                   6                                  A-2030-15T4
complaint, alleging minority shareholder oppression and breach of

contract, among other things.     Defendants counterclaimed, alleging

breach of contract, specific performance of the stock restriction

agreement, breach of the employment agreement, and fraud, among

other things.

     An issue at trial was the commencement date of plaintiff's

employment, which effected the purchase price for his shares of

stock.    Plaintiff asserted his employment with DPI commenced on

October 22, 2010, when he purchased the shares and was appointed

DPI's    vice-president.      Plaintiff   averred    that   because   his

employment terminated on August 11, 2011, less than twelve months

after it commenced, he was entitled to $13,016 per share for a

total    of   $156,192.      Defendants   asserted   that    plaintiff's

employment commenced on June 4, 2010, the day he signed the

employment agreement, and ended more than twelve months later,

thus entitling him to only the fair market value of his shares.

As evidence of the commencement date, defendants pointed to the

payments plaintiff received from DPI after plaintiff signed the

employment agreement.

     Also at issue was the amount of plaintiff's salary. Plaintiff

asserted that because DPI's gross sales exceeded $1.5 million

during the fiscal year ending March 31, 2011, his salary should

have been $110,000.       A court-appointed expert rendered a report

                                   7                             A-2030-15T4
and testified that DPI had gross sales of approximately $1.7

million for the fiscal year ending March 31, 2011.                    The expert

concluded that plaintiff was entitled to an annual salary of

$110,000, and DPI's financial statements should have listed a

liability    in   the   amount   of   $10,000   for    deferred       salary,    as

plaintiff was not paid in accordance with the employment agreement.

Defendants did not challenge the expert's report or testimony, or

produce evidence that DPI's revenues were less than $1.5 million

for the fiscal year ending March 31, 2011.

     In a comprehensive written opinion, dated September 16, 2015,

Judge McDonnell found credible plaintiff's testimony that Budd

said plaintiff's salary reduction was necessary to induce the bank

to purchase DPI's receivable. The judge emphasized that "if [Budd]

had told [plaintiff] the truth, i.e. that it was not in the

interest of DPI to pay [plaintiff's] salary, [plaintiff] would not

have stayed an additional four months."

     Judge    McDonnell     determined      that      during    the     time     of

plaintiff's salary reduction, Budd used large amounts of DPI's

funds to finance BTWG, pay his grandchild's daycare expenses,

Pfeiffer's    gym   membership,       and   Budd's     trips,     and    Brian's

girlfriend, who was on DPI's payroll in a clerical position.                    The

judge found that Budd did not tell plaintiff DPI was paying these

expenses.

                                       8                                  A-2030-15T4
     Judge    McDonnell       found       that   plaintiff      was   an    oppressed

shareholder.       She determined that "DPI, at Budd's direction and

without [p]laintiff's knowledge, spent substantial sums to support

Brian and his family.              This depleted DPI's funds that would

otherwise have been available to fund activities to increase

DPI['s] sales and productivity in the print and newly-established

digital POP display market."              The judge concluded as follows:

            Here, the lack of transparency in payments
            made by DPI to and on behalf of Brian and his
            family and BTWG, the total amount of money
            diverted from DPI, and the simultaneous [two-
            third] reduction of [p]laintiff's salary are
            persuasive in determining that [Budd's]
            conduct was oppressive.

                   . . . .

            Plaintiff has proved [he] was affected by the
            diversion of money from DPI to [Budd's]
            family. He lost his substantial salary at the
            same time money was flowing out of DPI for day
            care and BTWG expenses.     Plaintiff had no
            voice in the amount or to whom DPI's funds
            were being paid. . . . Plaintiff has proved
            that DPI payments to [Budd's] family members
            affected DPI's ability to pay his salary.

Judge   McDonnell         found    that     defendants    breached         the     stock

restriction agreement.            She acknowledged the parties had signed

the employment agreement on June 4, 2010, but found there were no

documents    for    the    year    2010    confirming    when     plaintiff        began

receiving    his    $100,000       salary.        The   judge    determined          that

plaintiff's employment officially commenced on October 22, 2010,

                                            9                                    A-2030-15T4
when he purchased the shares, and his pre-employment services to

DPI were as an independent contractor.             The judge also determined

that the reduction of plaintiff's salary in April 2011 constituted

a   constructive    termination.        Thus,     the   judge   concluded     that

plaintiff was entitled to $156,192 for his shares.               The judge gave

plaintiff the option of selling his shares for $47,000, which the

court-appointed expert had determined was the stock's fair market

value as of March 31, 2012, or compelling DPI to purchase them for

$156,192.     Plaintiff chose the latter remedy.

      Judge   McDonnell     found   that    defendants     had   breached      the

employment agreement by failing to pay plaintiff $110,000 in

salary.     The judge determined that plaintiff was entitled to a

salary of $110,000, effective April 1, 2011, and awarded him

$29,461.44 for unpaid salary from April 1, 2011 through August 5,

2011.     The judge reduced this amount by the amount of loans made

to plaintiff, and awarded him a net of $22,141.44 for unpaid

salary.       The   judge   dismissed      defendants'     counterclaim       with

prejudice.

      Judge McDonnell memorialized her decision in a September 16,

2015 order for judgment.       Defendants subsequently filed a motion

for a new trial, and plaintiff filed a cross-motion to enter

judgment.      In   a   December    31,    2015   order,   the    judge    denied

defendants' motion for a new trial for the reasons expressed in

                                      10                                  A-2030-15T4
her September 16, 2015 written opinion.       In a December 31, 2015

final judgment, the judge entered judgment in plaintiff's favor

in the amount of $178,333.44 plus pre-judgment interest.2

     On appeal, defendants contend the record does not support

Judge McDonnell's finding that plaintiff's employment commenced

on October 22, 2010, and he was constructively terminated in April

2011.    Defendants   also   contend   that   even   if   plaintiff   was

constructively terminated, it was no sooner than mid-August 2011.

Defendants further contend the judge erred in finding DPI breached

the employment agreement by not paying plaintiff $110,000 in

salary; finding that plaintiff was an oppressed shareholder within

the meaning of N.J.S.A. 14A:12-7; dismissing the counterclaim for

fraud; not granting defendants' motion for a new trial; and not

awarding defendants fees and costs pursuant to N.J.S.A. 14A:12-

7(10).

     Our review of a trial court's fact-finding in a non-jury case

is limited.   Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150,

169 (2011).   "The general rule is that findings by the trial court

are binding on appeal when supported by adequate, substantial,

credible evidence.    Deference is especially appropriate when the


2
  In a March 18, 2016 order, the judge corrected the final judgment
to omit the award of pre-judgment interest and grant plaintiff
post-judgment interest pursuant to Rule 4:42-11 as of October 15,
2015.

                                 11                              A-2030-15T4
evidence     is    largely   testimonial      and   involves   questions    of

credibility."       Ibid. (quoting Cesare v. Cesare, 154 N.J. 394, 411-

12 (1998)).       We "should not disturb the factual findings and legal

conclusions of the trial judge unless [we are] convinced that they

are   so   manifestly     unsupported    by    or   inconsistent   with    the

competent, relevant and reasonably credible evidence as to offend

the interests of justice."       Ibid. (quoting Cesare, supra, 154 N.J.

at 411-12).        However, we owe no deference to a trial court's

interpretation of the law, and review issues of law de novo. State

v. Parker, 212 N.J. 269, 278 (2012); Mountain Hill, L.L.C. v. Twp.

Comm. of Middletown, 403 N.J. Super. 146, 193 (App. Div. 2008),

certif. denied, 199 N.J. 129 (2009).

      "[G]ranting or denying a motion for a new trial rests with

the sound discretion of the trial court and should only be granted

if, having given due regard to the opportunity of the [factfinder]

to pass upon the credibility of the witnesses, it clearly and

convincingly appears that there was a miscarriage of justice under

the law."     Borough of Saddle River v. 66 E. Allendale, LLC, 424

N.J. Super. 516, 526 (App. Div.) (citations omitted), certif.

granted, 211 N.J. 274 (2012).       We will not reverse a trial court's

decision to deny a motion for a new trial "unless it clearly

appears that there was a miscarriage of justice under the law."

R. 2:10-1.

                                    12                               A-2030-15T4
     We have considered defendants' contentions in light of the

record and applicable legal principles and conclude they are

without    sufficient   merit   to   warrant   discussion   in   a   written

opinion.    R. 2:11-3(e)(1)(E).       We affirm substantially for the

reasons Judge McDonnell expressed in her written opinion. However,

we make the following brief comments.

     The record amply supports Judge McDonnell's finding that

plaintiff's employment with DPI commenced on October 22, 2010.

There is no evidence that the payments DPI made to plaintiff prior

to October 22, 2010 were for the salary he was to be paid pursuant

to the employment agreement. Rather, DPI's payroll records confirm

that plaintiff began receiving his salary in accordance with the

employment agreement as of October 23, 2010.                Thus, even if

plaintiff's seventy-percent salary reduction in April 2011 did not

constitute a constructive termination, the termination of his

employment in August 2011 occurred less than twelve-months after

his employment commenced, entitling him to $156,192 for his shares

pursuant to the stock restriction agreement.         Defendants' failure

to pay plaintiff that amount constituted a breach of the stock

restriction agreement.

     The record also amply supports Judge McDonnell's finding that

plaintiff was entitled to a salary of $110,000 as of April 1,

2011, pursuant to the employment agreement.            The unchallenged

                                     13                              A-2030-15T4
expert evidence confirmed that DPI had gross sales over $1.5

million in the fiscal year ending March 31, 2011, and plaintiff

was entitled to be paid $110,000.         Defendants produced no evidence

to establish that DPI had accrual-based revenue of less than $1.5

million, and do not contend that revenues were less than that

amount.    Defendants' failure to pay plaintiff a salary of $110,000

as   of   April   1,   2011   constituted   a   breach   of   the   employment

agreement.

      Affirmed.




                                     14                                A-2030-15T4
