SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0879-19

IMPACT PROTECTIVE 

EQUIPMENT, LLC, and

MARK D. MONICA,

Plaintiffs-Appellants,

v.

XTECH PROTECTIVE

EQUIPMENT, LLC, 

THEODORE A. "TED"

MONICA, JR., BOB 

BRODERICK, PETER

COLUCCINI, JOSEPH SKIBA,

NEW YORK FOOTBALL 

GIANTS, INC., 

Defendants-Respondents,

RICHARD "BIG DADDY" 

SALGADO, and COASTAL 

ADVISORS, LLC,

Defendants.

___________________________

Submitted December 7, 2020 – Decided April 14, 2021

Before Judges Messano, Hoffman, and Suter.

NOT FOR PUBLICATION WITHOUT THE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.
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On appeal from the Superior Court of New Jersey, Law 

Division, Morris County, Docket No. L-0429-18.

Roper & Thyne, LLC, attorneys for appellants (Angela 

Roper and Kenneth S. Thyne, of counsel and on the 

briefs).

Meister Seelig & Fein, LLP, attorneys for respondents 

XTech Protective Equipment, LLC, Theodore A. "Ted" 

Monica, Jr., Bob Broderick, and Peter Coluccini 

(Jeffrey Schreiber, on the brief).

McCarter & English, LLP, attorneys for respondents 

New York Football Giants, Inc., and Joseph Skiba 

(Richard Hernandez and Scott M. Weingart, on the 

brief).

PER CURIAM 

Plaintiffs Impact Protective Equipment, LCC (Impact) and its CEO, Mark 

Monica (Mark),1appeal from an April 5, 2019 Law Division order dismissing, 

pursuant to Rule 4:6-2(e), all but one of the claims pled in plaintiffs' amended 

complaint.

2

 We affirm, in part, and reverse and remand, in part. We affirm the 

1

 For ease of reference, and intending no disrespect, we refer to Mark Monica 

and his brother, defendant Theodore A. "Ted" Monica, Jr., by their first names.

2

 The April 5, 2019 order became ripe for appeal in September 2019, when the 

parties entered a stipulation of dismissal with prejudice as to plaintiffs' only 

remaining claim, which alleged negligent misrepresentation, and the court 

entered an order dismissing the claims against defendants Salgado and Coastal 

Advisors for lack of prosecution. 
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dismissal of all claims brought by Mark in his individual capacity; the dismissal 

of all claims brought against defendants Joseph Skiba and the New York 

Football Giants, Inc. (the Giants); and the dismissal of Impact's tortious 

interference with prospective economic advantage claim. We reverse the 

dismissal of Impact's claims of fraud, unfair competition, conversion, unjust 

enrichment, civil conspiracy, and aiding and abetting, and remand those claims 

to the trial court for further proceedings.

I.

Because this appeal comes to us on a Rule 4:6-2(e) motion to dismiss, we 

accept the facts alleged in the complaint as true, granting plaintiff "every 

reasonable inference of fact." Green v. Morgan Props., 215 N.J. 431, 452 (2013) 

(quoting Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 

(1989)). Thus, we begin with a summary of the facts pled by plaintiffs.

In 2001, Mark and Ted formed Impact, a New Jersey limited liability 

company. Headquartered in Mountain Lakes, Impact commenced business in 

2002, but suspended active operations in 2010. Mark served as Impact's 

president and CEO, while Ted served as vice president and general manager. 

Impact designed, developed, marketed, and distributed performance equipment 

for football players, including its signature product – the Impact Performance 
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Pad, a state-of-the-art shoulder pad. At the height of Impact's success, many

NFL, college, and high school players wore Impact pads. Notwithstanding its

success, Impact suspended operations on November 10, 2010, as the result of 

taking "on too much debt beyond its capacity to sell shoulder pads to cover the 

debt." Another important development occurred in 2010, when the U.S. Patent 

& Trademark Office rejected Mark's application to patent his shoulder pads.

Defendant XTech Protective Equipment, LLC (XTech), a limited liability 

company formed in June 2012, makes its headquarters in East Hanover. XTech 

develops state-of-the-art protective performance equipment for athletes, mainly 

focusing on shoulder pads. Plaintiffs listed XTech's founding members and 

current principals as defendants Peter Coluccini, president; Bob Broderick, vice 

president of marketing and sales; and Ted, "in charge of East Coast sales."

3

The Giants, a New York corporation with its principal place of business 

in East Rutherford, owns and operates the National Football League franchise 

of the same name. Skiba, the former equipment director for the Giants, worked 

for the team from 1994 until 2018. Plaintiffs describe Skiba as secretly involved 

3

 As of February 19, 2021, XTech's website lists Broderick as President and Ted 

as Vice President, Design / R&D, but does not mention Coluccini. XTECH PADS, 

https://xtechpads.com/company (last visited February 17, 2021). For ease of 

reference, we refer to Coluccini, Broderick, Ted, and XTech as the XTech 

defendants.
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with XTech, "as either a shareholder or as [a] compensated broker in exchange 

for his efforts at putting the XTech's principals together and raising investment 

money for the company." 

Coastal Advisors, an insurance agency owned and operated by defendant 

Richard "Big Daddy" Salgado, specializes in selling insurance and providing 

estate planning services for athletes and sports figures. Salgado provided 

funding to Impact until 2004, when Salgado unsuccessfully attempted to force 

Mark out of Impact. Plaintiffs contend, "Upon information and belief, Salgado 

is an investor/shareholder in XTech, and/or was compensated for bringing 

investors to [XTech]"; in addition, he maintained "extensive far-reaching ties to 

the Giants at all levels, from the equipment staff, to the players, to the coaches, 

all the way up to and including the Giants’ ownership."

In the spring of 2011, about six months after Impact suspended its 

operations, Mark met with Salgado and began discussing the possible revival of 

Impact. However, in August 2011, Salgado stated that "he is taking over Impact, 

and Mark now answers to him[,]" and that "[i]f Mark had a problem working for 

him, he should say so now and not be a part of the company moving forward." 

Thereafter, on multiple occasions in the fall of 2011, Salgado made statements 

that "Mark is out and is going to have to collect his check on a beach 
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somewhere." In October 2011, the Sports Business Journal quoted Salgado as 

saying that his next big venture was gathering a group of investors to resurrect 

Impact, with the slogan, "The guy who protects you off the field now protects 

you on the field." At that point, no serious discussions had taken place between 

Mark and Salgado regarding Impact's future, Salgado had no financial interest 

in Impact, and Salgado was not authorized in any way to speak or act on behalf 

of Impact. Salgado's statements and posture towards Mark ultimately soured

any possible business relationship between Mark and Salgado. 

At some point in 2011 or early 2012, the individual defendants met in the 

Giants equipment room and "hatched" a scheme to "fraudulently procure 

Impact’s proprietary information under the false pretense of an Impact revival, 

and then once procured, use Impact’s proprietary information to start a new 

venture (XTech), while leaving Impact and its shareholders in the lurch." 

Supported by "the behind the scenes urging" of Salgado and Skiba, Broderick, 

and Coluccini, Ted agreed to form XTech, but despite Ted's "reputation within 

the industry as a 'rock star equipment guru,' the conspirators had no substance 

upon which to base their new venture." Thus, these defendants "orchestrated a

conspiracy where they would misappropriate Impact's proprietary information, 

inclusive of the vendor list, the customer list, the product construction and 
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design, and other proprietary information, by engaging Mark . . . to disclose that 

information under the false pretense that they were going to restart Impact." 

In early 2012, Ted sent Mark a text requesting to "[p]ut this behind us and 

move forward for the good of [Impact]." In February 2012, Ted represented that 

his new contact, Broderick, a financial consultant, had a client "interested in 

researching a possible investment in the Impact revival." On March 12, 2012, 

Mark and his associate, Elgin Clemons, met with defendants Broderick, 

Coluccini, and Ted. At this meeting, Coluccini stated "he had an unnamed 

mystery investor who was interested in the revival of Impact." Coluccini also 

discussed the attendees' future roles in a revived Impact: Ted "would remain in 

the building and work on the technical aspects, Mark would go on the road to 

do sales, Broderick would do the marketing, and Coluccini would bring in the 

money." To further this project, Coluccini stated that he needed "Impact’s 

complete financials, all documentation, lists, costs, and any other documents 

relating to Impact’s business." From plaintiffs' perspective, the meeting 

concluded with all parties agreeing "to move forward to attempt to relaunch

Impact and provide the potential investor(s) represented by Coluccini with 

updated information." 
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Over the next month through April 2012, Mark sent Broderick, Coluccini, 

and Ted "a series of proprietary Impact documents" including, but not limited 

to

answers to questions asked for seed financing, list of 

Impact suppliers, Impact past sales numbers, Impact 

customer list, Impact vendor list, Impact financials, 

Impact internet orders, Impact NFL sales, Impact 

NCAA sales, Impact Interscholastic sales, Impact list 

of manufacturing reps, [b]ill of materials, product 

costing, and other assorted documents pertaining to 

Mark Monica's opinion on strategy moving forward. 

Throughout the spring of 2012, Broderick, Coluccini, and Ted scheduled 

multiple meetings with plaintiffs to discuss Impact, but they either cancelled 

each meeting or failed to show up. At the same time, Salgado scheduled multiple 

meetings with Clemons to meet an alleged prospective investor in Impact, but 

Salgado also failed to attend, rescheduled, or cancelled these meetings. 

Beginning in late May 2012, Broderick, Coluccini, Ted, and Salgado thwarted 

plaintiffs' attempts to contact them. 

In July 2012, Ted contacted both Clemons and Impact's legal counsel, 

requesting "a letter from Impact on Impact letterhead releasing him from any 

obligation to Impact, because nobody [would] hire him." Ted also requested a 

copy of Impact's Operating Agreement, allegedly for estate planning services. 

In early August 2012, an attorney named Mitchell Schuster also contacted 
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Clemons, claiming Ted retained him for estate planning purposes, and 

requesting a copy of Impact's Operating Agreement. Mark later discovered 

Schuster's law firm was in the same building as Salgado's Coastal Advisors, 

which meant "[o]bviously, Salgado connected Ted . . . to Schuster." 

On August 29, 2012, Clemons called Ted to confront him about his 

suspicious relationship with Salgado and Schuster. During this phone call, Ted 

"denied any association with Salgado, and stated that he is not working in 

concert with Salgado, Coluccini, and Broderick to restart Impact without 

Mark[.]" Around this time, Coluccini told Mark and Clemons that "there was 

an investor conflict and he had to find a new investor."

Unbeknownst to plaintiffs, Broderick, Coluccini, and Ted had formed 

XTech in June 2012. Indeed, Ted's biography on XTech's website states, "[Ted]

returned to the protective equipment industry full-time in June 2012, when he 

joined XTech Protective Equipment and helped launch the XTech shoulder pad." 

Schuster, the attorney supposedly handling Ted's estate planning, filed XTech's 

trademark on August 20, 2013. 

By the fall of 2012, XTech began prototyping and manufacturing "test 

pads," which, thanks to Skiba, the Giants' players wore for the entirety of the 

2013 NFL season. Throughout 2013, the XTech defendants made sales calls 
10 A-0879-19

and visits to various NFL equipment managers attempting to sell XTech's new 

shoulder pads. In multiple sales presentations, Ted reportedly stated, "I took 

everything that was good about Impact, and put it in this pad. This pad is just 

like Impact, only better." 

Plaintiffs' amended complaint asserts:

[T]he XTech pad was an exact copy of the Impact pad: 

a. The pads were originally manufactured in a white 

plastic outer shell. The interior padding has a 

white fabric outer layer (visible) when the player 

is wearing the pad, and a black moisture wicking 

inner fabric layer. Impact was the first company 

to do this solely in production.

b. The belt and buckle system are attached using a 

single rivet to allow for the entire system to 

"swivel" and fall naturally on the player's body 

for comfort, rather than a three-point rivet 

attachment system that is stationary and provides

no movement and a predetermined angle of 

degree on the players body. Impact was the first 

company to do this in production.

c. The interior foam padding that is beneath the 

outer layers of black and white fabric are open 

celled in nature which allows for increased air 

flow and liquid absorbing capabilities (i.e. 

perspiration) with additional ventilation holes. It 

is also layered, using two or more different foams 

to increase protection. Impact was the first 

company to do this in production.
11 A-0879-19

d. The outer plastic shell has ventilation holes or 

other geometric shapes to provide for increased 

air flow to cool the body faster by evaporative 

cooling. Impact was the first to do this in 

production and reduce weight.

e. The two "halves" of the shoulder pad are attached 

using a "swivel" plate system to allow for greater 

player movement. Impact used a four point 

system.

f. Impact invented the optional "padded belt slide" 

that XTech offers today. It is the exact same 

shape as Impact's padded belt slide, which was 

Impact's #1 selling accessory.

g. Impact used a "round" pad behind the buckle and 

sewn the padding to the buckle. Impact was the 

first to sew the pad to the buckle.

h. The XRD foam that XTech is using, and that 

Broderick falsely claims to have discovered on 

Google, was introduced to Impact by Under 

Armour. At the time, XRD had a two-year 

exclusive with either Rawlings or Bike, and 

would not let Impact use the foam. Impact was 

going to replace its visco elastic foam with the 

XRD foam once Impact depleted its inventory of 

visco elastic foam, and the two-year exclusive 

ended.

i. Impact was the first company to mold the plastic 

outer shell in multiple pieces and connect them to 

make one piece.

j. XTech's backplates look exactly like the pad that 

Mark Monica designed for Under Armour. He 
12 A-0879-19

still has a drawing of the pad, as well as the Nike 

one. 

k. XTech also makes claims of "body cooling", "airflow", and "protective capabilities" that are 

identical to principles upon which Impact was 

founded. The first XTech shoulder pad was 

identical to the Impact pad, and was used by

XTech to buy time to design and build XTech's 

final version.

l. Even XTech's signature 'shock and awe' 

presentation where Broderick covers his hand 

with the XTech padding, and then smashes a 

football helmet full force onto his hand, only to 

emerge unscathed, was directly ripped-off from 

Impact's presentation developed years earlier.

Plaintiffs allege that defendants' wrongful usurpation of Impact's 

proprietary information "permanently crippled [Impact] with no hope of 

recovery or revival, . . . destroyed Impact's ability to raise money, and likewise 

destroyed Impact's ability to resurrect its deal with Under Armour which was in 

the works at the time Impact suspended operations." Because of defendants' 

wrongful conduct, plaintiffs lost the opportunity to revive Impact, which at one 

point was valued at more than thirty million dollars, and the money of Impacts'

numerous investors "is lost without hope of recovery from an Impact revival." 

In addition, "[Mark]'s standing and reputation within his chosen industry has 

been destroyed," and he "has also been deprived of the expected fruits emanating 
13 A-0879-19

from Impact's revival including the restoration of his reputation in the industry, 

lost income, lost profits, and other benefits." 

II.

Plaintiffs filed their initial complaint on May 6, 2018, alleging the 

following claims: breach of fiduciary duty (count one); common law fraud 

(count two); fraudulent concealment (count three); negligent misrepresentation 

(count four); tortious interference with prospective economic advantage (count 

five); unfair competition and trade secret misappropriation at common law and

under N.J.S.A. 56:4-1 (count six); conversion (count seven); quasi contractual

unjust enrichment (count eight); civil conspiracy (count nine); aiding and 

abetting (count ten); negligent supervision (count eleven); and respondent 

superior (count twelve). On November 7, 2018, the motion judge dismissed 

counts seven, nine, and eleven with prejudice and the remaining counts without 

prejudice, allowing plaintiffs leave to amend their complaint to cure the counts

dismissed without prejudice. The judge also found that Mark lacked standing 

to sue in his individual capacity because the complaint failed to articulate he 

suffered a special injury beyond that to Impact and failed to allege demand or 

demand futility. 
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On December 6, 2018, plaintiffs filed their amended complaint, asserting 

the same claims as their initial complaint but omitting count one, the breach of 

fiduciary duty claim against Ted. The amended complaint contained the 

following counts against the XTech defendants: common law fraud (count one), 

fraudulent concealment (count two), and negligent misrepresentation (count 

three); the following counts against all defendants: tortious interference with 

prospective economic advantage (count four), unfair competition and trade 

secret misappropriation under N.J.S.A. 56:4-1 (count five), conversion (count 

six), quasi-contractual unjust enrichment (count seven); civil conspiracy (count 

eight), aiding and abetting (count nine); negligent supervision against the Giants

(count ten), and respondeat superior against XTech, the Giants, and Coastal 

Advisors (count eleven). 

On December 20, 2018, the XTech defendants moved to dismiss the

amended complaint, and the following week, Skiba and the Giants likewise 

moved to dismiss. On January 17, 2019, plaintiffs cross-moved for 

reconsideration regarding the claims in the original complaint that were 

dismissed with prejudice. The first motion judge denied this cross-motion for 

reconsideration on March 20, 2019. 
15 A-0879-19

On April 5, 2019, another judge (the second motion judge) granted, in 

large part, defendants' motions to dismiss plaintiffs' amended complaint. The 

judge dismissed all of plaintiffs' claims except for plaintiffs' negligent 

misrepresentation claim against the XTech defendants. The judge also found 

that Mark lacked standing to sue in his individual capacity because he had not 

suffered a special injury, despite plaintiffs amending their complaint to 

specifically allege special injury to Mark and demand futility. 

The XTech defendants filed an answer to this remaining count on May 10, 

2019. Thereafter, on September 25, 2019, plaintiffs and the XTech defendants 

entered into a stipulation of dismissal with prejudice as to the remaining 

negligent misrepresentation count. 

This appeal followed, with plaintiffs challenging the dismissal of their 

conversion, civil conspiracy, and negligent supervision claims with prejudice, 

and the dismissal of their remaining claims without prejudice. Plaintiffs contend 

they pled sufficient facts to warrant the denial of defendants' Rule 4:6-2(e)

dismissal motions. 

III. 

Rule 4:6-2(e) provides that a complaint may be dismissed for "failure to 

state a claim upon which relief can be granted[.]" This Rule tests "the legal
16 A-0879-19

sufficiency of the facts alleged on the face of the complaint." Printing Mart, 116 

N.J. at 746.

We apply a de novo standard when reviewing a dismissal of a complaint 

for failure to state a claim under Rule 4:6-2(e). MTK Food Servs., Inc. v. Sirius 

Am. Ins. Co., 455 N.J. Super 307, 311 (App. Div. 2018). "[O]ur inquiry is 

limited to examining the legal sufficiency of the facts alleged on the face of the 

complaint." Printing Mart, 116 N.J. at 746. "At this preliminary stage of the 

litigation[,]" we are "not concerned with the ability of plaintiffs to prove the 

allegation contained in the complaint." Ibid. Rather, "we accept as true the facts 

alleged in the complaint[,]" and afford plaintiffs "every reasonable inference in 

their favor." Craig v. Suburban Cablevision, 140 N.J. 623, 625-26 (1995). 

Nevertheless, we will "dismiss the plaintiff's complaint if it has failed to 

articulate a legal basis entitling plaintiff to relief." Sickles v. Cabot Corp., 379 

N.J. Super. 100, 106 (App. Div. 2005). 

On a motion to dismiss, a plaintiff need not prove the case, but need only 

"make allegations which, if proven, would constitute a valid cause of action." 

Kieffer v. High Point Ins. Co., 422 N.J. Super. 38, 43 (App. Div. 2011) (quoting

Leon v. Rite Aid Corp., 340 N.J. Super. 462, 472 (App. Div. 2001)). On such a

motion, plaintiff is entitled to "every reasonable inference of fact." Printing 
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Mart, 116 N.J. at 746 (citing Indep. Dairy Workers Union v. Milk Drivers Local 

680, 23 N.J. 85, 89 (1956)).

A reviewing court must "search[] the complaint in depth and with 

liberality to ascertain whether the fundament of a cause of action may be gleaned

even from an obscure statement of claim, opportunity being given to amend if 

necessary." Ibid. (quoting Di Cristofaro v. Laurel Grove Mem. Park, 43 N.J. 

Super. 244, 252 (App. Div. 1957)). This review should be "at once painstaking 

and undertaken with a generous and hospitable approach." Ibid. 

A motion to dismiss should only be granted in "the rarest of instances." 

Kieffer, 422 N.J. Super. at 43 (quoting Printing Mart, 116 N.J. at 771-72). Only 

where "even a generous reading of the allegations does not reveal a legal basis 

for recovery" should the motion be granted. Ibid. (quoting Edwards v. 

Prudential Prop. & Cas. Co., 357 N.J. Super. 196, 202 (App. Div. 2003)).

Because we conclude the first motion judge mistakenly dismissed three 

counts of plaintiffs' initial complaint with prejudice without affording an 

opportunity to amend, see Printing Mart, 116 N.J. at 746, and since plaintiffs 

included those counts in their amended complaint, our review focuses on 

plaintiffs' amended complaint.
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Plaintiff Mark Monica's Standing

Plaintiffs first challenge the finding that Mark lacked standing to sue in 

his individual capacity. Plaintiffs argue that Mark suffered "a special injury"

separate and apart from the damages sustained by Impact and its members, 

contending he "invented the concept of a breathable shoulder pad with viscoelastic dry polymer foam." This "special injury," in turn, entitled Mark to bring 

a direct action against defendants. This argument lacks merit. 

The Revised Uniform Limited Liability Company Act restricts the ability 

of an LLC member to assert claims that belong to the LLC. N.J.S.A. 42:2C-67 

to -68. In that respect, it is similar to corporation law, which restricts a 

corporation's shareholder from asserting claims of the corporation. See Pepe v. 

Gen. Motors Acceptance Corp., 254 N.J. Super. 662, 666 (App. Div. 1992) 

("The law is clear and uniform: shareholders cannot sue for injuries arising from 

the diminution in value of their shareholdings resulting from wrongs allegedly 

done to their corporations. Nor can stockholders assert individual claims for . . . 

other income lost because of injuries assertedly done to their corporations." 

(citations omitted)); see also Brown v. Brown, 323 N.J. Super. 30, 36 (App. Div.

1999) (distinguishing between derivative actions which are conditioned on 
19 A-0879-19

injury or breach of duty to the corporation, and direct actions, involving injury 

sustained by, or violating a duty owed to a shareholder). 

Under N.J.S.A. 42:2C-67, to "maintain a direct action against another 

member, a manager, or the limited liability company to enforce the member's

rights and otherwise protect the member's interests," a member of an LLC must 

"plead and prove an actual or threatened injury that is not solely the result of an 

injury suffered or threatened to be suffered by the limited liability company." 

On the other hand, an LLC member "may maintain a derivative action to enforce 

a right of a limited liability company if the company . . . [does] not bring the 

action within a reasonable time." N.J.S.A. 42:2C-68(a). When determining 

whether the action is a direct or derivative claim, courts look at the nature of the 

wrong alleged in the complaint and not the designation or claimed intent of the 

plaintiff. Strasenburgh v. Straubmuller, 146 N.J. 527, 551 (1996).

The second motion judge determined plaintiffs' amended complaint did 

not sufficiently describe a special injury to Mark, and therefore, he lacked 

standing to bring a direct suit. The amended complaint's allegation of special 

injury to Mark contended that defendants destroyed his reputation in the 

shoulder pad industry and as president and CEO of Impact; in addition, 

defendants "deprived [Mark] of the expected fruits emanating from Impact's 
20 A-0879-19

revival[,] including the restoration of his reputation in the industry, lost income, 

lost profits, and other benefits." The judge found these assertions did not rise 

to the level of special injury because the injuries Mark suffered arose out of 

injuries to Impact as a whole, which "would have depressed the stock value for

all [members] of Impact[.]"

We affirm the judge's determination that Mark lacked standing to bring a 

direct suit. The wrongs alleged, namely the fraudulent misappropriation and use 

of Impact's proprietary information, constituted wrongs to Impact, and any 

injury Mark suffered flowed from the injury to Impact. The wrongs allegedly 

inflicted on Impact negatively impacted the economic prospects of all members 

of Impact, rendering Mark's claims derivative. 

Plaintiffs also argue Mark has standing to sue in his individual capacity 

because their amended complaint established the requirements for Mark to bring 

a derivative action on behalf of Impact. We disagree. 

N.J.S.A. 42:2C-68(a) provides that a member may bring a derivative 

action on behalf of the LCC if "the managers or other members do not bring the 

action within a reasonable time[.]" Here, Impact brings the exact same causes 

of action as Mark attempts to bring as an individual. Mark therefore cannot 

claim Impact failed to bring an action to enforce its rights within reasonable 
21 A-0879-19

time, a prerequisite for a member to maintain a derivative suit. Therefore, Mark 

lacks standing as an individual to bring either a direct or derivative suit against 

defendants. 

Impact's Common Law Fraud Claim

Plaintiffs assert they pled sufficient facts to support a claim for common 

law fraud against the XTech defendants. We agree.

The elements of common law fraud are: "(1) a material misrepresentation 

of a presently existing or past fact; (2) knowledge or belief by the defendant of 

its falsity; (3) an intention that the other person rely on it; (4) reasonable reliance 

thereon by the other person; and (5) resulting damages." Banco Popular N. Am. 

v. Gandi, 184 N.J. 161, 172-73 (2005) (quoting Gennari v. Weichert Co. 

Realtors, 148 N.J. 582, 610 (1997)). Each element requires proof by "clear and 

convincing evidence." DepoLink Court v. Rochman, 430 N.J. Super. 325, 336

(App. Div. 2013). 

A claim for common law fraud "must relate to a present or preexisting fact 

and cannot ordinarily be predicated on representations [that] involve things to 

be done in the future." Anderson v. Modica, 4 N.J. 383, 391-92 (1950). 

However, "a present intention to act or not act in the future" can constitute an 

actionable misrepresentation if the person making the representation did not 
22 A-0879-19

intend to act, or not act, when the statement was made. Stochastic Decisions, 

Inc. v. DiDomenico, 236 N.J. Super. 388, 395-96 (App. Div. 1989) (citing Van 

Dam Egg Co. v. Allendale Farms, Inc., 199 N.J. Super. 452, 457 (App. Div. 

1985) ("A promise to pay in the future is fraudulent if there is no present intent 

ever to do so.")). 

The second motion judge concluded that the facts alleged in plaintiffs' 

amended complaint did not state a claim for common law fraud. He determined 

that plaintiffs' belief that the XTech defendants wanted to revive Impact was 

based solely on Coluccini's statement describing a potential mystery investor 

interested in reviving the company, and that this constituted a non-actionable 

promise of future intent. We do not agree that plaintiffs based their claim solely 

upon Coluccini's potential mystery investor.

Assuming the facts alleged by plaintiffs are true, and affording them all 

reasonable inferences, we conclude plaintiffs adequately pled a cause of action 

for common law fraud against the XTech defendants. The amended complaint 

describes the XTech defendants making a series of intentional 

misrepresentations, beyond Coluccini's one statement, designed to trick 

plaintiffs into providing them with Impact's confidential proprietary 

information. 
23 A-0879-19

Plaintiffs' complaint recounts two communications from Ted to Mark in 

early 2012 where Ted requested to "'[p]ut this behind us and move forward for 

the good of the company'" and "represented that to help fund Impact he had a 

new contact . . . interested in researching a possible investment in the Impact 

revival." The parties set up a meeting based on these communications; during 

the meeting, Coluccini discussed the roles the parties would play in a revived 

Impact and the documents needed to make the revival happen. Plaintiffs allege 

they relied on the representations made during the meeting, where "all parties 

agreed to move forward to attempt to re-launch Impact[.]" Thereafter, the 

XTech defendants scheduled meetings in April and May of 2012 to discuss 

Impact's future, and then cancelled those meetings. The statements and actions 

of the XTech defendants constitute representations of their then-present intent 

to revive Impact with plaintiffs.

We reject the conclusion that the misrepresentations made by the XTech 

defendants concerned a future intent and not a presently existing fact. Plaintiffs

alleged that, in the early part of 2012, the XTech defendants approached Mark

and made representations of their intent to restart Impact, assisted by investors

interested in such a venture. These were "false state of mind" representations, 

which are actionable as fraud at common law. Ocean Cape Hotel Corp. v. 
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Masefield Corp., 63 N.J. Super. 369, 380 (App. Div. 1960). The XTech 

defendants represented they intended to restart Impact along with plaintiffs, but

to do so, they needed plaintiffs to provide Impact's proprietary information. The 

XTech defendants intended plaintiffs would rely on these statements and 

reasonably foresaw that such reliance would occur. As a result, plaintiffs 

suffered damages in the form of the XTech defendants acquiring Impact's

proprietary information without compensation. Since these facts as alleged in 

plaintiffs' amended complaint establish the elements of common law fraud, we

reverse the Rule 4:6-2(e) dismissal of this claim. 

Impact's Tortious Interference with Prospective Economic Advantage Claim

Plaintiffs contend they pled sufficient facts for Impact to assert a viable

claim of tortious interference with prospective economic advantage. We 

disagree.

Actions for tortious interference with prospective economic advantage 

safeguard "the right to pursue one's business, calling, or occupation, free from 

undue influence or molestation. Not only does the law protect a party's interest 

in a contract already made, but it also protects a party's interest in reasonable 

expectations of economic advantage." Lamorte Burns & Co. v. Walters, 167 
25 A-0879-19

N.J. 285, 305 (2001) (internal citations omitted). To survive a motion to 

dismiss, a complaint of tortious interference must allege

facts that show some protectable right – a prospective 

economic or contractual relationship. Although the 

right need not equate with that found in an enforceable 

contract, there must be allegations of fact giving rise to 

some reasonable expectation of economic advantage.

A complaint must demonstrate that a plaintiff was in 

"pursuit" of business. Second, the complaint must 

allege facts claiming that the interference was done 

intentionally and with malice. For purposes of this tort, 

"[t]he term malice is not used in the literal sense 

requiring ill will toward the plaintiff." Rather, malice 

is defined to mean that the harm was inflicted 

intentionally and without justification or excuse. Third, 

the complaint must allege facts leading to the 

conclusion that the interference caused the loss of the 

prospective gain. A plaintiff must show that if there 

had been no interference[,] there was a reasonable 

probability that the victim of the interference would 

have received the anticipated economic benefits.

Fourth, the complaint must allege that the injury caused 

damage.

[Printing Mart, 116 N.J. at 751-52 (alterations in 

original) (internal quotations and citations omitted).]

Additionally, "it is fundamental to a cause of action for tortious interference 

with a prospective economic relationship that the claim be directed against 

defendants who are not parties to the relationship." Id. at 752 (internal citations 

and quotation marks omitted).
26 A-0879-19

Plaintiffs' amended complaint asserts a "protectable interest of 

prospective economic advantage" in "[p]laintiffs' right to pursue their lawful 

business, specifically, the revival of Impact." In dismissing this claim, the judge

determined plaintiffs' claimed expectation of economic success was too 

speculative, and "would necessitate a finding that the [p]laintiffs economic 

prospects were both created and interfered with at the same meeting, sixteen 

months after suspending operations." Additionally, the judge determined the 

complaint did not properly allege causation between defendants' misconduct and 

Impact's failure to resume operations or obtain other economic benefits. 

We also conclude that plaintiffs' complaint does not establish the essential 

facts to support a cause of action for tortious interference with prospective 

economic advantage. The complaint fails to satisfy the causation requirement 

to establish tortious interference because it fails to allege plaintiffs would have 

received any economic benefit had there been no interference by defendants. 

The complaint does not state that plaintiffs would have or could have revived 

Impact without defendant's involvement. From the facts alleged in the 

complaint, Impact was inactive and would have remained inactive even if 

defendants had not, as plaintiffs allege, fraudulently induced plaintiffs to give 

up Impact's proprietary business information. As pled, the XTech defendants 
27 A-0879-19

constituted the sole reason for plaintiffs' prospective opportunity of reviving 

Impact. Plaintiffs cannot assert a tortious interference claim against the party 

that constituted the prospective economic advantage. 

Impact's Unfair Competition and Trade Secret Misappropriation Claims

Plaintiffs next argue their amended complaint states a claim for unfair 

competition and trade secret misappropriation at common law and under 

N.J.S.A. 56:4-1. We agree that their amended complaint states a claim for unfair 

competition at common law, but conclude it does not state a claim for statutory 

misappropriation. 

At common law, the business tort of unfair competition remains "an 

'amorphous' area of law . . . generally defined as the 'misappropriation of one's 

property by another . . . which has some sort of commercial or pecuniary value.'" 

ADP, LLC v. Kusins, 460 N.J. Super. 368, 414 (2019) (quoting Duffy v. Charles 

Schwab & Co., 97 F.Supp.2d 592, 600 (D.N.J. 2000)). See also Columbia 

Broad. Sys. Inc. v. Melody Recordings, Inc., 134 N.J. Super. 368, 377 (App. 

Div. 1975) (finding defendants engaged in unfair competition as a matter of law 

by rerecording original recorded musical performances and selling the 

duplicates). The tort broadly focuses on "fair play," and aims "to promote higher 

ethical standards in the business world." Ryan v. Carmona Bolen Home for 
28 A-0879-19

Funerals, 341 N.J. Super. 87, 92 (App. Div. 2001). Unfair competition is "as 

flexible and elastic as the evolving standards of commercial morality demand."

Ibid.

According to our Supreme Court, the "taking of . . . confidential and 

proprietary property and then using it effectively to target plaintiffs' clients[ ] is 

contrary to the notion of free competition that is fair." Lamorte Burns & Co. v. 

Walters, 167 N.J. 285, 309 (2001). A company's "information need not rise to 

the level of a trade secret to be protected" from misappropriation; it "may 

otherwise be publicly available." Id. at 299. Ultimately, "[t]he key to 

determining the misuse of information is the relationship of the parties at the 

time of disclosure and the intended use of the information." Ibid. In Lamorte 

Burns, two employees, one of whom had a restrictive covenant, left the plaintiff 

company to establish a new business and compete directly with their former 

employer. Id. at 291-93. In doing so, the former employees developed a 

targeted solicitation list based on information from their former employer's 

client files. Ibid. The Court found this conduct contrary to the notion of fair 

competition. Id. at 309.

N.J.S.A. 56:4-1 provides, "No merchant, firm or corporation shall 

appropriate for his or their own use a name, brand, trade-mark, reputation or 
29 A-0879-19

goodwill of any maker in whose product such merchant, firm or corporation 

deals." This statute "applies specifically to situations involving the wrongful 

appropriation or misuse of trademarks, names, brands, good-will and the like, 

as well as false, misleading or deceptive advertisement of products and certain 

pricing practices." Melody Recordings, 134 N.J. Super. at 375. Numerous 

federal cases have held that N.J.S.A. 56:4-1 is identical to the federal Lanham 

Act, 15 U.S.C. 1125(a)(1)(B), which creates civil liability for trademark 

infringement. See, e.g., Buying for the Home, LLC v. Humble Abode, LLC, 

459 F.Supp.2d 310, 317 (D.N.J. 2006). However, the statute leaves undisturbed 

and does not "attempt to regulate different unfair business practices which 

historically have been reached by common law precepts." Melody Recordings, 

134 N.J. Super. at 375.

The second motion judge dismissed Impact's unfair competition claim 

because Impact's shoulder pad technology was not patented, noting the U.S. 

Patents and Trademarks Office deemed Mark's patent abandoned in January 

2010. In addition, Impact was non-operational when the alleged 

misappropriation occurred and "was not due any special protections simply 

because a competitor entered the field." 
30 A-0879-19

In our view, plaintiffs' complaint states a claim for unfair competition at 

common law.4 The complaint alleges the information plaintiffs sent to 

Broderick, Coluccini, and Ted constituted confidential and proprietary 

information based on the relationship of the parties involved and the intended 

use of the information. Plaintiffs sent this information to these defendants under 

the belief they were business partners in reviving XTech. Impact would not 

have provided this information but for defendants' misrepresentations. Even if 

this information was not patented, plaintiffs allege the XTech defendants 

obtained this information through fraudulent means and by exploiting their 

feigned relationship with Impact. If proven, such conduct would not represent 

fair competition among rival businesses, but rather dishonest conduct that runs

contrary to the notion fair competition. 

Plaintiffs' amended complaint does not, however, state a claim for 

statutory unfair competition under N.J.S.A. 56:4-1. Plaintiffs do not allege that 

XTech attempted to pass off their products as Impact's, claimed an affiliation

with Impact, or wrongfully used Impact's brand. The facts alleged do not 

4

 The amended complaint broadly aims this claim at "[d]efendants." Though 

we find the complaint does present a viable cause of action for unfair 

competition, the facts alleged only support such a claim against the XTech 

defendants.
31 A-0879-19

establish trademark infringement and thus, the statutory claim was properly 

dismissed.

Impact's Conversion Claim

Plaintiffs argue they properly pled a claim for conversion, and this claim 

should not have been dismissed. We agree. 

Plaintiffs' initial complaint alleged defendants "willfully exercised 

dominion over [p]laintiffs' property, to the exclusion of [p]laintiffs' rights to 

their property, to wit, [p]laintiffs' pad design, technology, and trade secrets." 

The first motion judge dismissed this conversion claim with prejudice because 

the complaint did not allege defendants converted plaintiffs' tangible property, 

and New Jersey does not recognize conversion claims for intangible property. 

Plaintiffs' amended complaint alleged defendants "willfully exercised 

dominion over [p]laintiffs' property, to the exclusion of [p]laintiffs' rights to 

their property, to wit, [p]laintiffs' pad design, technology, trade secrets, and 

other tangible property listed in [p]aragraph [forty-five]." (emphasis added). 

Paragraph forty-five lists the "proprietary Impact documents" forwarded to 

Broderick, Coluccini, and Ted following the March 2012 meeting: 

These documents included, but were not limited to: 

answers to questions asked for seed financing, list of 

Impact suppliers, Impact past sales numbers, Impact 

customer list, Impact vendor list, Impact financials, 
32 A-0879-19

Impact internet orders, Impact NFL sales, Impact 

NCAA sales, Impact Interscholastic sales, Impact list 

of manufacturing reps, Bill of materials, product 

costing, and other assorted documents pertaining to 

Mark Monica’s opinion on strategy moving forward.

The second motion judge dismissed this count, finding plaintiffs barred from 

bringing a conversion claim after the first motion judge's dismissal with 

prejudice, and concurring that New Jersey law does not allow claims of 

conversion of intangible property. 

The tort of conversion is the "intentional exercise of dominion or control 

over a chattel which so seriously interferes with the right of another to control 

it that the actor may justly be required to pay the other the full value of the 

chattel." Chicago Title Ins. Co. v. Ellis, 409 N.J. Super. 444, 454 (App. Div. 

2009) (quoting Restatement (Second) of Torts § 222A(1) (Am. Law Inst. 1965)). 

However, "the mere use of the property of another without permission of the 

owner does not necessarily amount to conversion." LaPlace v. Briere, 404 N.J. 

Super. 585, 595 (App. Div. 2009). "To constitute a conversion of goods, there 

must be some repudiation by the defendant of the owner's right, or some exercise 

of dominion over them by him inconsistent with such right, or some act done 

which has the effect of destroying or changing the quality of the chattel. " Id. at 

596 (quoting Frome v. Dennis, 45 N.J.L. 515, 516 (Sup. Ct. 1883)).
33 A-0879-19

We are satisfied that plaintiffs' amended complaint established the 

essential facts to support a cause of action for conversion.5 The allegedly 

converted property referenced in the amended complaint encompassed more 

than mere intangible and intellectual property; it included actual documents 

containing customer lists, supplier lists, costing information, and sales 

information. Plaintiffs' complaint alleges XTech used these documents to solicit 

and form relationships with Impact's former customers, which enabled XTech

to take over the market space formerly occupied by Impact. Because XTech's 

alleged use of these documents seriously interfered with Impact's use and control 

of them, and significantly diminished their value to Impact, Impact asserted, at 

the pleading stage, a viable claim for conversion, seeking compensation for the 

diminution in value of these documents against the XTech defendants. 

Discovery can be expected to illuminate whether the conduct of the XTech 

defendants "destroy[ed] or chang[ed] the quality" of XTech's documents and 

lists. LaPlace, 404 N.J. Super. at 596.

5

 The amended complaint broadly aims this claim at "[d]efendants." Though 

we find the complaint does present a viable cause of action for conversion, the 

facts alleged only support such a claim against the XTech defendants.
34 A-0879-19

Impact's Unjust Enrichment Claim

Plaintiffs argue their amended complaint states a claim for recovery under 

the quasi-contractual theory of unjust enrichment. We agree.

When parties do not have an express contract governing their relationship, 

the law allows for quasi-contractual remedies, such as unjust enrichment. N.Y.-

Conn. Dev. Corp. v. Blinds-To-Go (U.S.), Inc., 449 N.J. Super. 542, 556 (App. 

Div. 2017). Courts may grant relief on the basis of unjust enrichment if a 

plaintiff establishes that it conferred a benefit upon a defendant, and it would be 

unjust to allow the defendant to retain it. VRG Corp. v. GKN Realty Corp., 135 

N.J. 539, 554 (1994). Liability will only be imposed if the "plaintiff expected 

remuneration from the defendant, or if the true facts were known to [the] 

plaintiff, he would have expected remuneration from [the] defendant, at the time 

the benefit was conferred." Castro v. NYT Television, 370 N.J. Super. 282, 299

(App. Div. 2004) (quoting Callano v. Oakwood Park Homes Corp., 91 N.J. 

Super. 105, 109 (App. Div. 1966)).

The second motion judge found plaintiffs' complaint failed to state a claim 

for unjust enrichment because "[a] claim for unjust enrichment cannot survive 

where a contract is in place that governs the parties' rights." Since "as an LLC, 

Impact was required to have some form of an Operating Agreement or other 
35 A-0879-19

controlling document," and plaintiffs "failed to allege that a document setting 

forth the relationship between Plaintiff and Defendants does or does not exist[,]" 

the second motion judge determined dismissal was in order.6

We reject the conclusion that the existence of an operating agreement bars 

Impact from asserting a quasi-contractual unjust enrichment claim. If this 

agreement exists, it would only establish a contractual relationship between 

Impact and Ted, who was one of two members of Impact. Since the other 

defendants were not members or employees of Impact, the operating agreement

would not address their relationship with Impact. It is also not certain that the 

operating agreement's terms would cover such a dispute between Ted and 

Impact, or if the operating agreement is still applicable, as Impact has been 

nonoperational since 2010. 

Regardless, we find the complaint states a claim for unjust enrichment.7 

The complaint alleges that plaintiffs provided Broderick, Coluccini, and Ted 

with Impact's confidential and proprietary information with the expectation that 

6

 The second motion judge's opinion notes that while defendants argued that 

Impact's operating agreement precluded plaintiffs from bringing an unjust 

enrichment claim, neither party produced a copy of this agreement. 

7 While the amended complaint asserts this claim against "[d]efendants[,]" we 

conclude plaintiffs pled a viable cause of action for quasi-contractual unjust 

enrichment only against the XTech defendants.
36 A-0879-19

these defendants would work on behalf of Impact to revitalize the company. 

This did not occur, and instead, these defendants used Impact's information to 

form XTech to the exclusion of plaintiffs. If plaintiffs had known defendants

planned to exclude them from their planned venture, they would have expected 

renumeration in exchange for providing defendants with the information. 

Plainly, the allegations pled by plaintiffs describe defendants inducing plaintiffs 

to confer upon them a benefit under false pretenses, and therefore it would be 

unjust for defendants to retain it without compensating plaintiffs. We are 

satisfied plaintiffs pled a viable unjust enrichment claim under a quasicontractual theory against the XTech defendants. 

Dismissal of Impact's Claims Against Skiba

The second motion judge found the complaint devoid of facts establishing 

any wrongdoing by Skiba, and its allegations that Skiba was involved in the 

conspiracy against Impact to be entirely conclusory. Plaintiffs argue the 

complaint properly joined Skiba as a defendant, and Impact's claims against 

Skiba should not have been dismissed. We affirm the dismissal of all claims 

against Skiba.

The complaint alleges Skiba introduced Broderick, Coluccini, and Ted, 

enabled them to meet at the Giants' facilities, and urged them to start XTech. It 
37 A-0879-19

further vaguely provides "[u]pon information and belief, Skiba was 

compensated by [XTech] for his efforts in putting the company together and 

raising money for [XTech]" and suggests Skiba may secretly be a shareholder 

in XTech. Even accepting these speculative allegations as true, the complaint 

does not describe Skiba engaging in any wrongdoing or participating in the 

conspiracy to misappropriate Impact's confidential information. Because the 

complaint does not describe Skiba engaging in any tortious conduct, we find it 

does not state any cause of action against Skiba. 

Dismissal of Impact's Civil Conspiracy Claim

Civil conspiracy occurs when "a combination of two or more persons act[ ] 

in concert to commit an unlawful act, or to commit a lawful act by unlawful 

means[.]" Banco Popular, 184 N.J. at 177 (quoting Morgan v. Union Cnty. Bd. 

of Chosen Freeholders, 268 N.J. Super. 337, 364 (App. Div. 1993)). The 

principal elements of a civil conspiracy are the parties' agreement "to inflict a 

wrong against or injury upon another, and an overt act that results in damage."

Ibid. (quoting Morgan, 268 N.J. Super. at 364). Plaintiffs "are not required to 

provide direct evidence of the agreement between the conspirators[,]" and may 

prove the existence of such an agreement through circumstantial evidence. 

Morgan, 268 N.J. Super. at 365.
38 A-0879-19

A conspiracy requires a "plurality of actors, that is, two or more persons, 

and concerted action." Exxon Corp. v. Wagner, 154 N.J. Super. 538, 545 (App. 

Div. 1977). However, "[t]here can be no such . . . conspiracy by a 

corporation . . . with its own officers, agents or employees, who are performing 

their usual job of formulating and carrying out its managerial policy." Ibid. 

The first motion judge dismissed plaintiffs' claim of civil conspiracy with 

prejudice, finding Broderick, Coluccini, and Ted "were acting within the scope 

of their employment with [XTech] when they allegedly conspired to 

misappropriate Impact's proprietary information." Despite the dismissal with 

prejudice, plaintiffs' amended complaint included a civil conspiracy count, 

which emphasized that defendants entered into an "unlawful agreement" and 

"intentionally conspired among themselves to commit the unlawful acts 

described herein against Plaintiffs for unlawful purposes." The amended 

complaint clarified, "There were three separate and distinct subgroups to the 

conspiracy: (1) The XTech, by and through their principals, Ted Monica, Jr., 

Broderick, and Coluccini; (2) Joe Skiba; and (3) Salgado." The second motion 

judge dismissed the civil conspiracy count, finding the claim barred due to the 

previous dismissal with prejudice and because plaintiffs "failed to persuade [the 
39 A-0879-19

court] that the actions taken by the [XTech] [d]efendants were not within the 

scope of their employment." 

We are convinced that plaintiffs' amended complaint states a claim for 

civil conspiracy. The complaint alleges that defendants Broderick, Coluccini, 

and Ted were engaged in illegal and fraudulent conduct. It cannot be said they 

were performing their usual jobs with XTech or carrying out managerial policy 

and operations. Additionally, the complaint alleges Broderick, Coluccini, and 

Ted conspired with Salgado to commit their fraud against Impact. 8 Salgado is 

not alleged to be an agent of XTech, but rather a third-party who aided and 

abetted the XTech defendants. Therefore, even if Broderick, Coluccini, and Ted 

were acting solely on behalf of XTech, their affiliation with Salgado in this 

conspiracy satisfies the plurality of actors' requirement. 

The complaint describes defendants Broderick, Coluccini, Ted, and 

Salgado as secretly agreeing and scheming to fraudulently misappropriate

Impact's confidential information. By meeting with plaintiffs and feigning

interest in restarting Impact, Broderick, Coluccini, and Ted performed an overt 

8 The amended complaint also alleges that Skiba, another third-party, conspired 

with Broderick, Coluccini, Ted, and Salgado; however, we previously 

determined the claims against Skiba are deficient and were properly dismissed. 
40 A-0879-19

act in furtherance of this conspiracy. Accepting these allegations as true, 

plaintiffs set forth a claim for civil conspiracy against the XTech defendants and 

Salgado.9

Impact's Aiding and Abetting Claim

Liability for aiding and abetting "is found in cases where one party 'knows 

that the other's conduct constitutes a breach of duty and gives substantial 

assistance or encouragement to the other so to conduct himself.'" State ex rel. 

McCormac v. Qwest Commc'ns Int'l, Inc., 387 N.J. Super. 469, 481 (App. Div. 

2006) (quoting Judson v. Peoples Bank Tr. & Co., 25 N.J. 17, 29 (1957)). "[T]he 

mere common plan, design or even express agreement is not enough for liability 

in itself, and there must be acts of a tortious character in carrying it into 

execution." Id. at 483 (citing Restatement (Second) of Torts § 876(b) cmt. d

(Am. Law Inst. 1979)). To prove such a claim,

a plaintiff must show that "(1) the party whom the 

defendant aids must perform a wrongful act that causes 

an injury; (2) the defendant must be generally aware of 

his role as part of an overall illegal or tortious activity 

at the time that he provides the assistance; (3) the 

defendant must knowingly and substantially assist the 

principal violation."

9

 As previously noted, the Law Division entered an order dismissing plaintiffs'

claims against Salgado for lack of prosecution. Our discussion of plaintiffs' 

pleadings and the allegations asserted against Salgado does not affect the 

dismissal of plaintiffs' claims against Salgado.
41 A-0879-19

[Id. at 484-85 (quoting Tarr v. Ciasulli, 181 N.J. 70, 84 

(2004)).]

Furthermore, "A claim for aiding and abetting fraud [thus] requires proof of the 

underlying tort, that is, the fraud committed by [the principal]." Id. at 484. 

Aiding and abetting liability focuses on "whether a defendant knowingly 

gave substantial assistance to someone engaged in wrongful conduct, not 

whether the defendant agreed to join the wrongful conduct." Podias v. Mairs, 

394 N.J. Super. 338, 353 (App. Div. 2007) (alteration in original) (citations, 

internal quotations, and emphasis omitted). Determining how much assistance 

is considered substantial is fact-sensitive. Ibid.

The second motion judge dismissed this count in plaintiffs' amended 

complaint because he found the allegations of aiding and abetting were 

conclusory and failed to specify the underlying tort that was aided and abetted. 

He also noted that "employees cannot be liable for aiding and abetting their 

employer[,]" and since "the [XTech] [d]efendants are employees of [XTech], 

their actions cannot be construed as 'aiding and abetting.'" 

In our view, the amended complaint states a claim for aiding abetting 

against defendants Broderick, Coluccini, Ted, and Salgado. The underlying tort 

claims are those pled elsewhere in the complaint: fraud, unfair competition, and 
42 A-0879-19

conversion. The complaint alleges these defendants knew of, supported, and 

encouraged each other in their scheme to fraudulently misappropriate Impact's 

confidential information to Impact's detriment. Whether each defendant's 

participation was substantial, at this point, remains a factual question. At this 

stage, we accept the amended complaint's allegations that these defendants 

substantially assisted in the fraud, unfair competition, and conversion against 

Impact. 

Additionally, as we noted regarding plaintiffs' civil conspiracy claim, 

Broderick, Coluccini, and Ted would not have been acting in their capacity as 

XTech employees when engaging in fraudulent conduct. And the complaint 

alleges Salagado, who is not an XTech employee, was working with the XTech 

defendants to commit the alleged wrongs against Impact. The amended 

complaint therefore does not merely allege these defendants were aiding and 

abetting their employer. 

Respondeat Superior

Under the doctrine of respondeat superior, an employer will be held liable 

to a third party for the torts of an employee if the employee was acting within 

the scope of his or her employment. Carter v. Reynolds, 175 N.J. 402, 408-09 

(2003). "[T]he fact that the tort is negligent or intentional is of no real 
43 A-0879-19

consequence." Hill v. Fauver, 342 N.J. Super. 273, 305 (2001). An act may fall 

within the scope of employment although consciously criminal or tortious. 

Gilborges v. Wallace, 78 N.J. 342, 351 (1978) (holding master liable for conduct 

not within the scope of employment only if the servant's action advanced "the 

employer's business or interests, as distinguished from the private affairs of the 

servant." (quoting Restatement (Second) of Agency, § 238 cmt. b (Am. Law 

Inst. 1957)));

Conduct by an employee is usually within the scope of employment if the 

conduct is of the kind the employee was hired to perform, "it occurs substantially 

within the authorized time and space limits; [and] it is actuated, at least in part, 

to serve the [employer]." Di Cosala v. Kay, 91 N.J. 159, 169 (1982) (quoting 

Restatement (Second) of Agency § 228 (Am. Law Inst. 1957)) (first alteration 

in original). Other factors include:

whether the conduct is of the same general nature as 

that authorized, or incidental to the conduct authorized; 

whether the master has reason to expect that such an act 

will be done; the similarity in quality of the act done to 

the act authorized; and the extent of departure from the 

normal method of accomplishing an authorized result.

[Hill, 342 N.J. Super. at 306 (citing Restatement 

(Second) of Agency § 229 (Am. Law Inst. 1957)).]
44 A-0879-19

Conversely, if an employee deviates from his or her employer's business and 

commits a tort while in pursuit of his or her own ends, the employer is not liable.

Roth v. First Nat'l State Bank of N.J., 169 N.J. Super. 280, 286 (App. Div. 1979).

Plaintiffs' amended complaint alleges facts sufficient to hold XTech liable 

under a respondeat superior theory for the actions of Broderick, Coluccini, and 

Ted. Plaintiffs allege these defendants did not fraudulently misappropriate 

Impact's confidential information merely in pursuit of their own ends, but rather 

did so to serve XTech and advance XTech's business. Since Broderick, 

Coluccini, and Ted are the alleged principals of XTech, it follows that their 

conduct done on behalf of XTech was authorized by XTech. We therefore 

conclude that Impact asserted a viable respondeat superior claim against XTech. 

Additionally, we note that because we affirm the dismissal of all claims against 

Skiba, no claims remain to hold the Giants vicariously liable under a respondeat 

superior theory. For the same reason, we need not address the rejection of 

Impact's negligent supervision claim.

In summary, we reverse the dismissal of Impact's claims against the 

Broderick, Coluccini, Ted, and XTech for common law fraud, common law 

unfair competition, conversion, quasi-contractual unjust enrichment, civil 
45 A-0879-19

conspiracy, and aiding and abetting. We affirm the dismissal of Impact's 

remaining claims and all of Mark's claims. 

Any arguments not specifically addressed lack sufficient merit to warrant 

discussion in a written opinion. R. 2:11-3(e)(1)(E).

Affirmed, in part, and reversed and remanded, in part. We do not retain 

jurisdiction.