Court Opinion

ID: 5122363
Source: CourtListenerOpinion
Date Created: 2021-11-01 14:09:31.479965+00
Date Added: 2024-06-11T08:22:27.752674
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NOT FOR PUBLICATION WITHOUT THE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-1920-19

GLENMORE MANAGEMENT,
LLC, and 955 RTE 22W, LLC,

          Plaintiffs-Appellants/
          Cross-Respondents,

v.

RIS CONSTRUCTION
CORPORATION and
BLAGOJ PEOVSKI,

     Defendants-Respondents/
     Cross-Appellants.
______________________________

RIS CONSTRUCTION
CORPORATION and
BLAGOJ PEOVSKI,

          Third-Party Plaintiffs-
          Respondents/Cross-Appellants,

v.

FOX ARCHITECTURAL
DESIGN, P.C., BOWMAN
CONSULTING GROUP, LTD.,
OMLAND ENGINEERING
ASSOCIATES, INC., and
FRONTIER ENGINEERING
SERVICES, LLC,

     Third-Party Defendants/
     Respondents.
______________________________

         Argued October 4, 2021 – Decided November 1, 2021

         Before Judges Sabatino, Rothstadt and Natali.

         On appeal from the Superior Court of New Jersey, Law
         Division, Somerset County, Docket No. L-0858-18.

         Joseph A. DiPisa, III argued the cause for
         appellants/cross-respondents Glenmore Management
         LLC and 955 RTE 22W, LLC (Beattie Padovano, LLC,
         attorneys; Joseph A. DiPisa, III, of counsel and on the
         briefs).

         Robert J. Greenbaum argued the cause for
         respondents/cross-appellants RIS Construction
         Corporation.

         William F. Waldron, Jr. argued the cause for
         respondent Bowman Consulting Group, Ltd. (Marshall
         Dennehy Warner Coleman & Goggin, attorneys;
         William F. Waldron, Jr., of counsel and on the brief;
         Michael S. Fogler, on the brief).

         Peter K. Oliver argued the cause for respondent
         Frontier Engineering Services, LLC (Hoagland, Longo,
         Moran, Dunst & Doukas, LLP, attorneys; Lawrence P.
         Powers, of counsel and on the brief; Peter K. Oliver, on
         the brief).

                                                                    A-1920-19
                                    2
            Don R. Sampen (Clausen Miller, PC) of the Illinois bar,
            admitted pro hac vice, argued the cause for respondent
            Fox Architectural Design, PC (Clausen Miller PC,
            attorneys; Carl M. Perri, Matthew T. Leis, and Don R.
            Sampen, on the brief).

PER CURIAM

      These appeals and cross-appeals stem from a trial court's dismissal of a

lawsuit, and all counterclaims, cross-claims, and third-party complaints pled in

that lawsuit, based on entire controversy grounds.

      Plaintiff had filed a lawsuit against a single defendant in one county.

While that first case was still pending, plaintiff filed a second lawsuit in another

county against other defendants. They, in turn, filed a third-party complaint in

the second case against the defendant from the first case. Various other third-

party claims, counterclaims, and cross-claims were also pled in the second case.

      Although the subject matters of the two cases partially overlapped,

plaintiff did not include with its pleadings the related-matter notices required by

Rule 4:5-1(b)(2).

      Months later, plaintiff settled with the sole defendant in the first case and

the case was dismissed. That settling party then moved to dismiss the third-

party complaint against it in the second case, invoking the entire controversy

doctrine. The trial court in the second case granted that motion, and issued an

                                                                              A-1920-19
                                         3
order extinguishing all claims asserted by all parties in the second lawsuit. The

court also denied reconsideration. The present appeals ensued.

      Having reviewed these circumstances in light of the equitable principles

limiting the entire controversy doctrine, we reverse the second trial court's

dismissal order. Although we appreciate the court's laudable concern to enforce

Rule 4:5-1(b)(2)'s notice requirement, its blanket dismissal order had overly

preclusive consequences.

      We reinstate the claims in the second lawsuit, except for what we will

describe as "pass-through" claims asserted in the third-party complaint against

the settling party. The matter is remanded to litigate the remaining open claims,

and also to adjudicate the "economic loss" defenses that have been asserted. On

remand, the trial court shall consider alternative measures to sanction plaintiff's

unjustified failures to comply with Rule 4:5-1(b)(2).

                                        I.

      We need not burden the reader with a comprehensive discussion of the

complicated factual and procedural history of the two lawsuits. The parties are

surely familiar with that background. In addition, only limited discovery has

been conducted.     The following abbreviated summary will suffice for our

purposes.

                                                                             A-1920-19
                                        4
      The disputes concern two separate construction projects in which plaintiff

Glenmore Management, LLC and RTE 22W, LLC 1 ("Glenmore") was the

owner/developer of: (1) a parcel in Englewood (in Bergen County) that

Glenmore planned to convert to a parking lot; and (2) a site in North Plainfield

(in Somerset County) that Glenmore planned to develop as a Goodwill retail and

collection center.

      Glenmore contracted with Bowman Consulting Group, Ltd. ("Bowman"),

formerly known as Omland Engineering Associates, Inc. ("Omland"), to provide

engineering and design services for both the Englewood project and the North

Plainfield project.

      For the North Plainfield project, Glenmore contracted with RIS

Construction Corp. ("RIS") to act as the lead contractor, for a contract price of

$1.654 million. The principal of RIS, Blagoj Peovski, personally guaranteed his

company's performance and obligations. Also for the North Plainfield project,

Glenmore entered into separate agreements with Frontier Engineering Services,

1
   For simplicity, we refer collectively to these entities as "Glenmore" and
describe them as "plaintiff" in the singular.
                                                                           A-1920-19
                                       5
LLC ("Frontier") and Fox Architectural Design, P.C. ("Fox").2 RIS and Peovski

were not involved in the Englewood project, nor were Frontier and Fox.

      Problems arose with the construction at both sites. On the Englewood

project, the work apparently stalled because Bowman allegedly delayed in

providing waivers to the Englewood Zoning Board of Adjustment needed for a

variance. Substantial delays also occurred on the North Plainfield project.

Glenmore and RIS contend the delays were caused, at least in part, by alleged

defects with Bowman's engineering designs.

      On June 25, 2017, Glenmore and RIS entered into an Agreement of Loan

and Guaranty to address their respective rights ("the June 2017 Agreement").

Among other things, that agreement provides that RIS is liable for liquidated

damages if it causes delays in the work. Glenmore subsequently gave notice to

RIS in March 2018 that it was in breach of contract due to such delays.

      The June 2017 Agreement stated that RIS agreed it owed Glenmore

$320,000 in liquidated damages as of that date, which could thereafter increase

on a daily basis. However, Glenmore and RIS also agreed that the $320,000

sum "may decrease if a lawsuit or similar legal action is commenced relating to

2
  It does not appear from the limited appellate record that RIS or Peovski had
contracts with Bowman, Frontier, or Fox, all of whom were hired by Glenmore.
                                                                          A-1920-19
                                       6
[the] Project . . . and a court determines that the delays . . . were less than 66%

[of RIS's] fault[.]" The June 2017 Agreement provided that if RIS's fault were

proven to be less than 66%, it would be entitled to a pro rata (i.e., proportional)

reduction of the stipulated delay damages, described as a "set-off." The June

2017 Agreement also provided that unpaid change orders by RIS, pending

Glenmore's approval, would be deemed to "make up" for the delays caused by

RIS and would not be paid. However, RIS would be entitled to a credit for any

sums Glenmore collected from any third parties for damages relating to

"specific" change orders.

      Notably, the June 2017 Agreement also reflects that Glenmore loaned RIS

$170,000, and that RIS was obligated to pay that loan back. RIS disputes

whether such a loan was actually extended, apparently contending the sums

instead were contract advances.

      In January 2018, Glenmore filed an engineering malpractice case against

Bowman in the Law Division in Bergen County ("the first lawsuit" or "the

Bergen case"). No other codefendants were named in that Bergen County action,

and Bowman did not implead any third-party defendants. Glenmore's complaint

alleged that Bowman had acted negligently and breached its obligations with

respect to both the Englewood and North Plainfield projects. The complaint

                                                                             A-1920-19
                                        7
further alleged that as "a direct consequence of Bowman's breaches and

negligence related to the [North Plainfield Project], [Glenmore was] forced to

incur additional costs with RIS to make corrections to the [North Plainfield

Project][.]"

      The Bergen case settled about a year later, with Bowman agreeing to pay

Glenmore a confidential sum3 in exchange for a release of Glenmore's claims

against it for both the Englewood and North Plainfield sites. The stipulation of

dismissal was filed in the Bergen case on March 6, 2019.

      While the Bergen case was still pending in July 2018, Glenmore filed a

second action ("the second lawsuit" or "the Somerset case"), which solely

concerned the North Plainfield project. That complaint was filed in the Law

Division in Somerset County, and named RIS and Peovksi as defendants.

      RIS initially did not respond to the Somerset complaint, apparently

because Peovski had been ill, and default was entered. After the default was

eventually vacated, RIS brought a counterclaim against Glenmore for unpaid

change orders. RIS also pled third party complaints against Bowman, Frontier ,

3
  The parties entered into a confidentiality agreement and order in the Bergen
case sealing the terms of the Glenmore-Bowman settlement. Although that
confidentiality order is not binding upon this court on appeal, there is no reason
for us to discuss the settlement amount here.
                                                                            A-1920-19
                                        8
Fox, and Omland based on common-law (i.e., non-contractual) theories of

contribution and indemnity.

        For reasons that are unclear, Glenmore failed to disclose in its Rule 4:5-

1(b)(2) certification with its complaint in the Somerset case that the related

Bergen case was then pending. Glenmore also inexplicably failed to update its

Rule 4:5-1(b)(2) certification in the Bergen case disclosing that the related

Somerset case had been filed. The two lawsuits co-existed for about eight

months, until the stipulation of dismissal was filed in the Bergen case in March

2019.

        After settling the Bergen case, Bowman moved to dismiss the third-party

complaint RIS brought against it in the Somerset case. A spate of other motions

ensued.

        The central issue before the trial court was whether Glenmore's second

lawsuit in Somerset was barred by the entire controversy doctrine. 4        As a

subsidiary issue, Bowman, Frontier, and Fox argued that the negligence-based

third-party claims of RIS against them are barred by the so-called "economic

loss" doctrine, as set forth by the Supreme Court in Spring Motors Distributors,

Inc. v. Ford Motor Co., 98 N.J. 555, 579-81 (1985) (finding that "tort principles,

4
    At times we will use the acronym "ECD" for stylistic variation.
                                                                            A-1920-19
                                         9
such as negligence, are better suited for resolving claims involving

unanticipated physical injury, particularly those arising out of an accident[,]"

and "[c]ontract principles … are generally more appropriate for determining

claims for consequential damage that the parties have, or could have, addressed

in their agreement[,]" ultimately concluding that "economic expectations …

protected by the [Uniform Commercial Code] are not entitled to supplemental

protection by negligence principles[]"), Dean v. Barrett Homes, Inc., 204 N.J.

286, 294-95 (2010) (holding that the economic loss doctrine "bars tort remedies

in strict liability or negligence when the only claim is for damage to the product

itself[,]" and "evolved as part of the common law, largely as an effort to establish

the boundary line between contract and tort remedies[]"), and other cases.

      In a lengthy written opinion issued on November 6, 2019, the trial court

dismissed the entire Somerset case, and all claims pled within it by the various

parties, on ECD grounds. The court excoriated Glenmore and its (now former)

attorneys for failing to disclose the pendency of the other lawsuits in its two

Rule 4:5-1(b)(2) certifications.      The court also found that RIS would be

prejudiced in defending the delay damages claims in the second case because of

Bowman's settlement in the first case, which arguably relieved Bowman of

liability concerning both projects.

                                                                              A-1920-19
                                        10
      After reflecting upon the equities, the court decided to end the second

lawsuit in all respects, essentially leaving Glenmore and all the other parties

where they stood. The court found it unnecessary to reach the economic loss

doctrine arguments, particularly considering the undeveloped state of the record.

      Glenmore, RIS, and Peovski moved for reconsideration, which was

opposed by Fox, Bowman, and Frontier. The court denied reconsideration in

another lengthy opinion on December 23, 2019.

      Glenmore appealed the dismissal of its claims in the second case. RIS and

Peovski cross-appealed the dismissal of their counterclaim against Glenmore

and their third-party claims against Bowman and the other parties.

      Glenmore argues the trial court went too far in sanctioning it for the

omitted Rule 4:5-1(b)(2) notifications, particularly in depriving Glenmore of a

chance to pursue recovery from RIS and Peovski on the $170,000 allegedly

owed under the loan provision of the June 2017 Agreement, which it further

claims had little or nothing to do with the subject matter of the Bergen case.

      RIS and Peovski do not quarrel with the court's preclusion of Glenmore's

affirmative claims, but they argue it was excessive and unfair to preclude their

own counterclaims and third-party claims.

                                                                           A-1920-19
                                      11
      Bowman, on the other hand, argues the court properly acted within its

discretion, and that, in any event, its settlement with Glenmore in the Bergen

case and the economic loss doctrine bars any negligence claims asserted against

it by RIS or any of the other parties in the Somerset case. RIS responds that it

has affirmative claims against Bowman over and above any liability it may have

to Glenmore, and that those claims are not barred.

      Fox and Frontier are content to have the claims against them extinguished,

but state that, in the event those claims are reinstated on appeal, the court must

address their argument that they are insulated from liability under the economic

loss doctrine.

                                         II.

      In general, the entire controversy doctrine, as codified in Rule 4:30A,

requires all parties to an action to raise all transactionally related claims in that

action. The ECD is an equitable preclusion doctrine that "seeks to assure that

all aspects of a legal dispute occur in a single lawsuit." Olds v. Donnelly, 150

N.J. 424, 431 (1997).

      As our Supreme Court has noted, "[t]he entire controversy doctrine 'seeks

to impel litigants to consolidate their claims arising from a single controversy

whenever possible.'"     Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo,

                                                                               A-1920-19
                                        12
Hyman & Stahl, P.C., 237 N.J. 91, 98 (2019) (quoting Thornton v. Potamkin

Chevrolet, 94 N.J. 1, 5 (1983)). "The doctrine serves 'to encourage complete

and final dispositions through the avoidance of piecemeal decisions and to

promote judicial efficiency and the reduction of delay.'" Ibid. (quoting Wadeer

v. N.J. Mfrs. Ins. Co., 220 N.J. 591, 610 (2015)). "Underlying the Entire

Controversy Doctrine are the twin goals of ensuring fairness to parties and

achieving economy of judicial resources." Kent Motor Cars, Inc. v. Reynolds

& Reynolds, Co., 207 N.J. 428, 443 (2011).

      The doctrine generally disfavors successive suits regarding the same

controversy. See DiTrolio v. Antiles, 142 N.J. 253, 267 (1995) (summarizing

the development of the Court's application of the entire controversy doctrine).

Therefore, when a party fails to assert a claim that the entire controversy

doctrine requires be joined in an action, the court has the authority to bar that

claim or adopt other measures. R. 4:30A.

      One of the key tools in the Rules of Court to promote compliance with the

entire controversy doctrine is the notification requirement in Rule 4:5-1(b)(2).

Rule 4:5-1(b)(2) is designed to "implement the philosophy of the entire

controversy doctrine." Pressler & Verniero, Current N.J. Court Rules, cmt. 2.1

on R. 4:5-1(b)(2). That Rule instructs:

                                                                           A-1920-19
                                      13
              Each party shall include with the first pleading a
              certification as to whether the matter in controversy is
              the subject of any other action pending in any court or
              of a pending arbitration proceeding, or whether any
              other action or arbitration proceeding is contemplated;
              and, if so, the certification shall identify such actions
              and all parties thereto. Further, each party shall disclose
              in the certification the names of any non-party who
              should be joined in the action pursuant to R. 4:28 or
              who is subject to joinder pursuant to R. 4:29-1(b)
              because of potential liability to any party on the basis
              of the same transactional facts. Each party shall have a
              continuing obligation during the course of the litigation
              to file and serve on all other parties and with the court
              an amended certification if there is a change in the facts
              stated in the original certification. The court may
              require notice of the action to be given to any non-party
              whose name is disclosed in accordance with this rule or
              may compel joinder pursuant to R. 4:29-1(b). If a party
              fails to comply with its obligations under this rule, the
              court may impose an appropriate sanction including
              dismissal of a successive action against a party whose
              existence was not disclosed or the imposition on the
              noncomplying party of litigation expenses that could
              have been avoided by compliance with this rule. A
              successive action shall not, however, be dismissed for
              failure of compliance with this rule unless the failure of
              compliance was inexcusable and the right of the
              undisclosed party to defend the successive action has
              been substantially prejudiced by not having been
              identified in the prior action.

              [(Emphasis added).]

        Pursuant to these Rule provisions, a court may dismiss a successive suit

where     non-compliance     with    the    disclosure   requirements       is   deemed

                                                                                  A-1920-19
                                           14
"inexcusable" and to have "substantially prejudiced" the unnamed party's right

to defend the action. Ibid.

      That said, the Supreme Court has stressed that the entire controversy

doctrine must be applied equitably, and that it is not a rigid mandate to bar all

successive or overlapping lawsuits. "[T]he boundaries of the entire controversy

doctrine are not limitless. It remains an equitable doctrine whose application is

left to judicial discretion based on the factual circumstances of individual cases."

Highland Lakes Country Club & Cmty. Ass'n v. Nicastro, 201 N.J. 123, 125

(2009) (quoting Oliver v. Ambrose, 152 N.J. 383, 395 (1998)).

      "[T]he polestar for the application" of the doctrine is "judicial fairness,"

and "a court must apply the doctrine in accordance with equitable principles,

with careful attention to the facts of a given case." Dimitrakopoulos, 237 N.J.

at 114 (quoting K-Land Corp. No. 28 v. Landis Sewerage Auth., 173 N.J. 59, 74

(2002)).

      Accordingly, the Supreme Court has expressed three "significant

concerns" supporting preclusion under the entire controversy doctrine: "(1) the

need for complete and final disposition through the avoidance of piecemeal

decisions; (2) fairness to parties to the action and those with a material interest

in the action; and (3) efficiency and the avoidance of waste and the reduction of

                                                                              A-1920-19
                                        15
delay." Id. at 108 (quoting Wadeer, 220 N.J. at 605). The doctrine is "intended

to be applied to prevent a party from voluntarily electing to hold back a related

component of the controversy in the first proceeding by precluding it from being

raised in a subsequent proceeding thereafter.'" Wreden v. Twp. of Lafayette,

436 N.J. Super. 117, 129 (App. Div. 2014) (quoting Hobart Bros. Co. v. Nat'l

Union Fire Ins. Co., 354 N.J. Super. 229, 240-41 (App. Div. 2002)).

      The doctrine should not be applied "where to do so would be unfair in the

totality of the circumstances and would not promote any of its objectives,

namely, the promotion of conclusive determinations, party fairness, and judicial

economy and efficiency." Dimitrakopoulos, 237 N.J. at 114 (quoting K-Land,

173 N.J. at 70). When analyzing fairness, "courts should consider fairness to

the court system as a whole, as well as to all parties." Wadeer, 220 N.J. at 605

(citing DiTrolio, 142 N.J. at 273-74).     Furthermore, the entire controversy

doctrine "does not apply to bar component claims [either] unknown, unarisen,

or unaccrued at the time of the original action." Harley Davidson Motor Co.,

Inc. v. Advance Die Casting, Inc., 150 N.J. 489, 494 (1997) (alteration in

original) (quoting Mystic Isle Dev. Corp. v. Perskie & Nehmad, 142 N.J. 310,

323 (1995)).

                                                                           A-1920-19
                                      16
      Bearing in mind these equitable principles, we conclude the trial court's

blanket dismissal order, designed as a sanction against Glenmore, caused overly

preclusive consequences. Although a trial court has considerable discretion in

its application of the ECD, see Oliver v. Ambrose, 152 N.J. 383, 395 (1998), we

conclude—with all due deference to the trial court—that its dismissal order went

too far. Other measures ought to be considered to address Glenmore's non-

compliance with Rule 4:5-1(b)(2).

      It is not self-evident that RIS or Peovski were necessary parties to the

Bergen case.     In that case, Glenmore sued Bowman for its own alleged

negligence and contractual breaches for the two delayed projects. Bowman

chose not to bring third-party claims in that case to attempt to shift the blame to

others. By comparison, the Somerset case was exclusively about the North

Plainfield project. A major component of Glenmore's complaint in the Somerset

case was its claim that RIS and Peovski failed to pay back the loan in accordance

with the June 2017 agreement. That loan default (which we understand RIS and

Peovski dispute) was not a compulsory claim that had to be included in the

Bergen case between Glenmore and Bowman. It was not mandatory for the loan

issues to be litigated in the first case.

                                                                             A-1920-19
                                            17
      We do agree with the trial court that the parties have presented no legal

grounds for Bowman, having settled with Glenmore in the first case concerning

its role in both construction projects, to be liable as a third-party defendant in

the second case for any "pass-through" claims of negligence. RIS's third-party

claims against Bowman implicitly appear to be partly based on common-law tort

principles of contribution and indemnity, and not upon contractual

indemnification. If, in fact, Bowman's negligence caused the North Plainfield

project to be delayed, its negligence with respect to "pass-through liability" has

been resolved via settlement with the project owner and developer, Glenmore.

The settlement would have extinguished RIS's derivative third-party claims even

if RIS had been joined as a party in the Bergen case. However, the settlement

would not extinguish RIS's affirmative ("non pass-through") claims over and

above RIS's potential liability to Glenmore.

      Subject to that one caveat, we agree with the trial court that Bowman

should not be "forc[ed] … to re-litigate a case that it ha[d] already resolved via

the Settlement Agreement with [Glenmore][.]" Consequently, we affirm in part

the trial court's dismissal of Bowman from the Somerset case, but solely with

respect to "pass-through" liability and not any viable affirmative claims that are

not barred by an economic loss defense. If such affirmative claims are shown

                                                                            A-1920-19
                                       18
to be viable, we do not discern any unfair burden upon Bowman to have to

defend them in the second case, since it settled the first case promptly and

apparently without extensive discovery.

      Having removed Bowman entirely from the second case, the trial court

further concluded that RIS would be substantially prejudiced because of

Bowman's absence as a party in that litigation. But that is not necessarily so.

For one thing, Bowman's employees would still be potential fact witnesses and

thus subject to subpoenas for their testimony at depositions and at trial in the

Somerset case. As part of that process, Bowman could be required to produce

relevant documents about the North Plainfield project in its possession. See R.

4:14-7(a); R. 4:18-1(d). The Bergen settlement does not insulate Bowman from

such discovery and testimonial demands, and Bowman has not argued to us that

it can or will avoid them.

      Further, the degree to which any negligence on the part of Bowman may

have contributed to delays and losses on the North Plainfield project can still be

adjudicated by a fact-finder in the Somerset case. As a settling party, Bowman

can nonetheless be blamed by RIS and Peovski as a proximate cause of project

delays and losses, and its conduct evaluated as an "empty chair" defendant. See,

e.g., Young v. Latta, 123 N.J. 584, 585-86 (1991) (holding that where one

                                                                            A-1920-19
                                       19
defendant accused of negligence settled prior to trial, the non-settling-defendant

was entitled to argue the settling-defendant's portion of fault before the fact-

finder and be given a credit in the judgment against that non-settling-defendant).

Its percentage share of negligence can be calibrated by the trier of fact. That

percentage, in turn, can be used to compute and offset the amounts that may be

due to Glenmore from RIS and Peovski, pursuant to the numerical formula

specified in the June 2017 Agreement.

      Hence, it is not necessary to bar Glenmore's claims against RIS and

Peovski for non-payment of the loan and other damages, because RIS and

Peovski can try to defend those claims by pointing to Bowman as the proverbial

"empty chair" settlor. There is no need to provide RIS and Peovski with what

may be a windfall eliminating their potential liability, especially with respect to

the unpaid alleged loan.

      The trial court's broad dismissal order also inequitably deprives RIS and

Peovski of a fair opportunity to pursue their own affirmative claims against

Glenmore for non-payment of change orders and other grounds for recovery. It

is unclear why a sanction aimed at Glenmore for violating Rule 4:5-1(b)(2)

should deprive innocent litigants such as RIS and Peovski of a chance to pursue

their own affirmative claims. To be sure, RIS and Peovski would benefit if, as

                                                                             A-1920-19
                                       20
the trial court directed, Glenmore's claims against them—including repayment

of the $170,000 alleged loan—were dismissed with prejudice. But RIS and

Pevoski contend that Glenmore owes them money, and we discern no reason to

apply the ECD to preclude their counterclaims.

      The dismissal order also unnecessarily eliminates the third-party claims

of RIS and Peovski against Fox and Frontier, and the various cross-claims

connected with those allegations.      In all fairness, those claims should be

reinstated and litigated on their merits. We decline to address in the first

instance whether the "economic loss" doctrine bars such claims as a matter of

law, and leave that issue to the trial court to address on remand, perhaps with

the benefit of discovery pertinent to that subject.

      That said, we share the trial court's rightful concern about promoting

compliance with the notice obligations of Rule 4:5-1(b)(2), and in deterring

lawyers and litigants in the future from ignoring the Rule. Toward that end, we

instruct the trial court on remand to consider alternative measures that would

sufficiently address Glenmore's non-compliance.

      As one possibility, the court might consider whether imposing on

Glenmore some form of expense-shifting sanction, as authorized as an

alternative remedy under Rule 4:5-1(b)(2), is warranted to take into account the

                                                                          A-1920-19
                                       21
litigation expenses the other parties incurred in connection with the ECD motion

practice and the present appeal. Since the propriety of such a sanction has not

been briefed, we leave it to the trial court to address that topic, or other remedies

it might fashion. We express no advisory opinion about whether cost-shifting

or other sanctions are appropriate.

      Affirmed in part as to the dismissal of Bowman; otherwise reversed and

remanded for proceedings consistent with this opinion.

                                                                              A-1920-19
                                        22