Court Opinion

ID: 4703107
Source: CourtListenerOpinion
Date Created: 2021-07-13 14:11:43.783348+00
Date Added: 2024-06-11T08:06:29.229084
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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-2694-19
                                                                A-2699-19

2820 MT. EPHRAIM AVENUE,
LLC, and JOHN CALZARETTO,
ESQ.,

       Plaintiffs-Appellants,

v.

MICHAEL E. BROWN, ESQ.,
DEMBO, BROWN &
BURNS, LLP, and MARKEIM-
CHALMERS, INC.,

     Defendants-Respondents.
____________________________

                Argued May 5, 2021 – Decided July 13, 2021

                Before Judges Alvarez, Sumners, and Mitterhoff.

                On appeal from the Superior Court of New Jersey, Law
                Division, Camden County, Docket No. L-1007-18.

                Gary M. Marek argued the cause for appellants (Law
                Offices of Gary M. Marek, and Calzaretto & Bernstein,
                LLC, attorneys; Gary M. Marek and John A. Calzaretto,
                on the briefs).
            John L. Slimm argued the cause for respondent Michael
            E. Brown, Esq. and Dembo, Brown & Burns, LLP
            (Marshall, Dennehey, Warner, Coleman & Goggin,
            attorneys; John L. Slimm, on the brief).

            Kristofer B. Chiesa argued the cause for respondent
            Markeim-Chalmers, Inc. (Sherman, Silverstein, Kohl,
            Rose & Podolsky, PA, attorneys; Bruce S. Luckman
            and Kristofer B. Chiesa, on the brief).

PER CURIAM

      These appeals were calendared back-to-back and, because they share

common facts, we now consolidate them solely for the purpose of issuing a

single opinion. In Docket No. A-2699-19, plaintiffs 2820 Mt. Ephraim Avenue,

LLC (Mt. Ephraim) and John Calzaretto (Calzaretto) appeal from two orders

entered on May 22, 2018 dismissing their claims against defendant Markeim-

Chalmers, Inc. (MCI) and the conspiracy claim against defendants Michael E.

Brown (Brown) and Dembo, Brown & Burns, LLP (Dembo). In that appeal,

plaintiffs raise the following arguments:

            POINT I

            BY ITS ORDERS DATED MAY 22, 2018, THE
            LOWER COURT HAS IGNORED MCI'S OPEN AND
            BLATANT VIOLATIONS OF PRUDENT OWNER
            STANDARDS, N.J.S.A. 46A:29-1, ET. SEQ.,
            PERMITTED PRE-FORCED SALE ORDER AND
            PRE-SALE   CRIMINAL,    ILLEGAL    AND
            UNLAWFUL ACCESS TO THE PROPERTY
            RESULTING IN SUBSTANTIAL DAMAGE TO

                                                                      A-2694-19
                                       2
            PETITIONER BORROWER'S PROPERTY AND
            OPPOSING THE SALE OF THE PROPERTY TO THE
            HIGHEST BIDDER; FURTHER, ITS ACTS COULD
            NOT HAVE BEEN COMMITTED WITHOUT THE
            JOINT PARTICIPATION OF DBB AND THE
            RELATED PRINCIPALS.

            POINT II

            THE LOWER COURT'S GRANTING . . .
            DEFENDANTS'      DISMISSAL     OF     THE
            PETITIONERS' CLAIM OF CONSPIRACY . . .
            AGAINST DBB AND MCI IS MANIFESTLY
            UNJUST AND PREJUDICES THE SUBSTANTIAL
            RIGHTS OF THE PETITIONERS SINCE THE FACTS
            IN   THIS   PRESENT    MATTER    CLEARLY
            DEMONSTRATE THAT THE ELEMENTS OF
            CONSPIRACY EXISTED AND THAT DBB AND
            MCI PARTICIPATED IN ITS COMMISSION.

      In Docket No. A-2694-19, plaintiffs appeal from a January 24, 2020 order

granting summary judgment on the remaining claims against defendants Brown

and Dembo. In that appeal, plaintiffs raise the following arguments for our

consideration:

            POINT I

            BY ITS ORDER[] DATED JANUARY 24, 2020, THE
            LOWER    COURT    ERRED   IN   GRANTING
            DEFENDANTS'     MOTION   FOR   SUMMARY
            JUDGMENT ON THE BASIS OF LITIGATION
            PRIVILEGE.

                                                                        A-2694-19
                                      3
            POINT II

            THE LOWER COURT [ERRED] IN FINDING THAT
            MICHAEL BROWN'S STATEMENTS WERE NOT
            DEFAMATORY.

            POINT III

            THE LOWER COURT ERRED IN DETERMINING
            THAT DEFENDANTS DID NOT [TORTIOUSLY]
            INTERFERE WITH PLAINTIFFS' RELATIONSHIP
            WITH   UNITED    FINANCING   GROUP   AS
            [TORTIOUS]    INTERFERENCE     INCLUDES
            [INTERFERENCE]    ON    A   PROSPECTIVE
            CONTRACT.

            POINT IV

            BY ITS ORDER DATED JANUARY 24, 2020, THE
            LOWER COURT IGNORED EVIDENCE OF
            DAMAGES     SUFFERED    BY    PLAINTIFFS
            INDEPENDENT AND APART FROM THE LOSS OF
            THE ANTICIPATED VALUE OF NEW JERSEY TAX
            CREDITS.

Having carefully reviewed the record, and in light of the applicable law, we

affirm, substantially for the reasons set forth in the May 11, 2018 and January

24, 2020 oral opinions of Judge Anthony M. Pugliese. We add the following

brief comments.

      Although the dispute has a tortured history, we summarize the essential

facts that are pertinent to the issues under review. This matter arises from

deficiency and foreclosure actions filed by Parke Bank, represented by

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defendants Dembo and Brown, due to plaintiffs' failure to repay a $3.75 million

loan that was used to finance the purchase of a property in Camden. During the

foreclosure action, Parke Bank moved to appoint MCI as the court-appointed

receiver with the ability to market and sell the property, subject to court

approval. Thereafter, MCI made various good-faith efforts to both lease and

sell the property with the approval of the court.

      In June 2017, plaintiffs filed an amended complaint in the present matter,

asserting claims against MCI for breach of a fiduciary duty, negligence, tortious

interference, and conspiracy. Later that month, MCI filed a motion to dismiss.

R. 4:6-2. On May 22, 2018, following oral argument, Judge Pugliese dismissed

all the claims against MCI. He noted that the lengthy history of the dispute

            indicates a plethora of times when . . . plaintiff[s] in this
            action, 2820 Mount Ephraim and Mr. Calzaretto[,]
            challenge[d] [MCI] relative to the actions that they
            undertook as the [c]ourt-appointed receiver in the
            matter. And I find that the allegations assessed against
            [MCI] are nothing more than a rehash of the same
            matters. Nothing new is being presented.

                  It has been [argued] on at least three, possibly
            four or more occasions . . . by the current plaintiffs that
            [MCI] created waste, did not appropriately manage the
            property, was negligent in the manner in which they
            went forward to manage the property and . . . in other
            ways did not comply and follow the strictures of what
            their fiduciary duties were, and that they acted

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                                         5
            negligently. And the [c]ourt has rejected that on every
            analysis.

                  So, although under [Rule] 4:6-2, . . . plaintiffs
            here make a proper allegation, that allegation has been
            addressed ad nauseam.

      The record supports Judge Pugliese's factual findings. In 2015, Judge Nan

Famular denied plaintiffs' motion to appoint a new receiver after rejecting the

argument that MCI acted improperly in failing to lease the subject property.

Indeed, in June 2016, Judge Pugliese noted that MCI "did a professional job

. . . despite the aspersions that were cast upon them . . . [I]n terms of [MCI]

having an ulterior motive to get paid for work that [t]he [c]ourt's assigned them

to do, that falls on deaf ears at this point." In October 2017, Judge David M.

Ragonese issued an order granting MCI's request to be discharged because it had

"satisfied" its duties reasonably and "lawfully," and that the "allegations of

waste and improper conduct . . . against [MCI] have been addressed previously"

and rejected.   As another judge previously found, MCI's actions were "all

presented to the [c]ourt for approval" and, accordingly, the arguments of breach

of a fiduciary duty, negligence, and waste had been repeatedly argued and

rejected.

      Applying our de novo review of a decision to dismiss the complaint under

Rule 4:6-2(e), Frederick v. Smith, 416 N.J. Super. 594, 597 (App. Div. 2010),

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                                       6
we find that Judge Pugliese correctly concluded that the present claims against

MCI have been "fully litigated." Accordingly, plaintiffs' claims against MCI are

barred by the doctrine of collateral estoppel. See Ziegelheim v. Apollo, 128 N.J.

250, 265 (1992) ("The doctrine of issue preclusion, or collateral estoppel, 'bars

relitigation of any issue which was actually determined in a prior action,

generally between the same parties, involving a different claim or cause of

action.'" (quoting State v. Gonzalez, 75 N.J. 181, 186 (1977))). For similar

reasons, we discern no basis in the record to overturn the dismissal of the claims

against MCI for conspiracy. 1

      We turn our attention now to plaintiffs' claims against Brown and Dembo.

While MCI was attempting to sell the property, plaintiffs endeavored to settle

the matter by purchasing the loan documents with the assistance of United

Financial Group, Inc. (UFG), and then selling the property to Mosaic

Development Partners LLC (Mosaic). In April 2016, during the course of these

efforts, the Director of Sales at UFG called Brown to discuss the possibility of

1
  Because Judge Pugliese dismissed the conspiracy claim against MCI, he correctly
dismissed the same claim against Brown and Dembo. See Exxon Corp. v. Wagner,
154 N.J. Super. 538, 545 (App. Div. 1977) (a conspiracy requires "a plurality of
actors, that is, two or more persons, and concerted action.").
                                                                            A-2694-19
                                        7
the purchase of the loan documents. During the call, Brown purportedly called

Calzaretto a "wannabe gangster."

      Plaintiffs contend that Brown's statement that Calzaretto was a "wannabe

gangster" was slander per se or, at a minimum, slander. Plaintiffs also claim

that this statement constituted tortious interference with their efforts to sell the

property. We disagree.

      "[A] statement is defamatory if it is false, communicated to a third person,

and tends to lower the subject's reputation in the estimation of the community

or to deter third persons from associating with him." W.J.A. v. D.A., 210 N.J.

229, 238 (2012) (alteration in original) (quoting Lynch v. N.J. Educ. Ass'n, 161

N.J. 152, 164-65 (1999)). "This question is one to be decided first by the court."

Romaine v. Kallinger, 109 N.J. 282, 290 (1988).

      It is well-settled that:

            [u]nder New Jersey law, four kinds of statements
            qualify as slander per se that is defamation that in and
            of itself injures the person: accusing another (1) of
            having committed a criminal offense, (2) of having a
            loathsome disease, (3) of engaging in conduct or having
            a condition or trait incompatible with his or her
            business, or (4) of having engaged in serious sexual
            misconduct.

            [Rocci v. Ecole Secondaire Macdonald-Cartier, 165
            N.J. 149, 162 (2000) (citing Biondi v. Nassimos, 300
            N.J. Super. 148, 154 (App. Div. 1997)).]

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                                         8
We conclude that the statement "wannabe gangster" does not constitute slander

per se because it did not impute a criminal offense, id. at 156, and did not

necessarily assign Calzaretto a characteristic that is incompatible with his

business or trade.

      In any event, we agree with Judge Pugliese that the statement falls within

the litigation privilege. See Feggans v. Billington, 291 N.J. Super. 382, 393

(App. Div. 1996) ("In determining whether the qualified privilege is a defense,

it is irrelevant whether the statement at issue was defamatory." (citing Lutz v.

Royal Ins. Co. of Am., 245 N.J. Super. 480, 496 (App. Div. 1991))).

Notwithstanding plaintiffs' narrow view to the contrary, the litigation privilege

is not confined to the courtroom and "extends to all statements or

communications in connection with the judicial proceeding."         Ruberton v.

Gabage, 280 N.J. Super. 125, 133 (App. Div. 1995). "The only limitation which

New Jersey places upon the privilege is that the statements at issue 'have some

relation to the nature of the proceedings.'" Rabinowitz v. Wahrenberger, 406

N.J. Super. 126, 134 (App. Div. 2009) (quoting Hawkins v. Harris, 141 N.J. 207,

215 (1995)). We conclude that Judge Pugliese correctly granted Brown and

                                                                           A-2694-19
                                       9
Dembo's summary judgment motion because the defamation claim was barred

by the litigation privilege. 2

      Affirmed.

2
   Because the claims for slander and slander per se were properly dismissed, Mt.
Ephraim's claim for tortious interference must also fail, as it is based entirely on the
alleged defamation.
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