Court Opinion

ID: 4910772
Source: CourtListenerOpinion
Date Created: 2021-09-14 15:10:35.083426+00
Date Added: 2024-06-11T08:13:27.549228
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NOT FOR PUBLICATION WITHOUT THE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-3612-19

KEVIN DIPIANO,

          Plaintiff-Appellant,

v.

CURTIS POINT PROPERTY
OWNERS ASSOCIATION,
JOSEPH DEVITO, FRED
FARKOUH, KENNETH MACK,
RONALD IVANICKI, DR.
JOSEPH V. DETROLIO,1
WILLIAM COTTONGIM,
BOB DRUSKIN, KEVIN
DUNPHY, VINCE PERRI,
ENGNJSHORE, LLC, MICHAEL
MAFFATTONE, SANDY
MAFFATTONE, PAULINE
COSTELLO TRUST, C/O
STACY POLANSKYJ,
CHRISTOPHER J. MCCARTHY,
ERNEST J. MUIR, JOAN M.
MUIR, PHYLLIS W. TOZZI,
GARY TRABKA, LOUISE
TRABKA, TODD A.
CARNEVALE, ROBERT A.

1
  Both "DeTrolio" and "DiTrolio" appear in the record. We use "DeTrolio" for
consistency.
ESTI, VALERIE A. ESTI,
MANUEL J. LOPES,
WILLIAM HEINZERLING,
ROSEMARY HEINZERLING,
MATTHEW SMITH, ROSEMARIE
RICCIARDELLI, THOMAS
GRAZIANO, BONNIE GRAZIANO,
DAVID R. REIM, JENNIFER REIM,
FRANK M. PISANI and
CYNTHIA PISANI,

     Defendants-Respondents.
__________________________________

         Argued September 1, 2021 - Decided September 14, 2021

         Before Judges Geiger and Mitterhoff.

         On appeal from the Superior Court of New Jersey, Law
         Division, Ocean County, Docket No. L-2415-19.

         Michael F. Bevacqua Jr. argued the cause for appellant
         (Mandelbaum Salsburg PC, attorneys; Stuart J.
         Lieberman and C. Michael Gan, on the briefs).

         Ellen M. Boyle argued the cause for respondents Curtis
         Point Property Owners Association, Fred Farkouh,
         Kevin Dunphy, William Cottongim, Joseph Devito, Dr.
         Joseph V. DeTrolio, Bob Druskin, Vince Perri, Kenneth
         Mack and Ronald Ivanicki (Kirmser, Lamastra,
         Cunningham & Skinner, attorneys; Ellen M. Boyle, of
         counsel and on the brief).

         Jerry J. Dasti argued the cause for respondents
         Engnjshore, LLC, Pauline Costello Trust, C/O Stacy
         Polanskyj, Christopher McCarthy, Phyllis Tozzi,
         Louise Trabka, Gary Trabka, Thomas Graziano, Bonnie
         Graziano, Frank Pisani and Cynthia Pisani, Michael

                                                                  A-3612-19
                                   2
           and Sandy Maffattone, and Rosemarie Riccardelli
           (Dasti, Murphy, McGuckin, Ulaky, Koutsouris &
           Connors, attorneys; Jerry J. Dasti, of counsel; Patrick
           F. Varga, on the brief).

           Eric S. Schlesinger argued the cause for respondents
           Todd A. Carnevale, Manuel J. Lopes, David R. Reim,
           Jennifer Reim, Ernest J. Muir, and Joan M. Muir
           (Golden, Rothschild, Spagnola, Lundell, Boylan,
           Garubo & Bell, PC, attorneys; Eric S. Schlesinger, on
           the brief).

           Barbara J. Davis argued the cause for respondents
           Robert A. Esti and Valerie A. Esti (Marhsall Dennehey,
           attorneys; Barbara J. Davis, on the brief).

           Stephen Trzcinski argued the cause for respondents
           Matthew Smith, William Heinzerling, and Rosemary
           Heinzerling (Bennett, Bricklin & Saltzburg LLC,
           attorneys; Michael Dolich and Jason Farina, on the
           brief).

PER CURIAM

     Plaintiff Kevin DiPiano appeals from a February 24, 2020 order granting

defendant William Heinzerling's motion to dismiss; a February 24, 2020 order

granting summary judgment in favor of defendants Curtis Point Property

Owner's Association (CPPOA), Fred Farkough, Kevin Dunphy, William

Cottongim, Joseph DeVito, Dr. Joseph V. DeTrolio, Bob Druskin, Vince Perri,

Kenneth Mack and Ronald Ivanicki; a February 24, 2020 order denying

plaintiff's motion to amend his complaint; a February 25, 2020 order granting

                                                                       A-3612-19
                                     3
defendant Matthew Smith's motion to dismiss; and an April 15, 2020 order

denying plaintiff's motion for reconsideration. On appeal, plaintiff argues that

the trial judge erred in applying the entire controversy doctrine (ECD) to bar his

claims against defendants because the parties in the previous action were

different, his claims did not ripen until after the litigation concluded, and,

although the actions raised similar legal claims, they were premised on a

different set of factual circumstances. Plaintiff also contends that the judge

erred in dismissing his defamation claim. Having reviewed the record and

considered the applicable law, we affirm substantially for the reasons set forth

in Judge James Den Uyl's thoughtful and thorough written decision. We add

only the following comments.

      Curtis Point consists of over 140 homes, all of which are private

residential properties. Almost all of the units have deed restrictions that require

the units be single-family, detached, and not over two stories in height. 2 The

CPPOA is a non-profit entity, governed by a Board of Trustees (Board), which

is comprised of four officers and five other members. In 2003, plaintiff and his

wife purchased real property located in Curtis Point and, accordingly, became

2
  Although the actual language of the deed restriction is not in the record, the
parties seemingly do not dispute such language exists.
                                                                             A-3612-19
                                        4
members of the CPPOA. Plaintiff is also the owner and managing partner of

Nicholas Holdings, LLC (Nicholas Holdings) which acquired property in Curtis

Point in 2015.

      In July 2017, pursuant to the CPPOA's rules and regulations, Nicholas

Holdings submitted architectural and construction plans to the CPPOA's

architect, John Burgdorfer. Burgdorfer reviewed Nicholas Holdings' plans and

notified plaintiff that the construction package complied with the deed

restrictions with the exception of the two-story height limit.

      On March 1, 2018, Nicholas Holdings filed a complaint in the Chancery

Division alleging breach of contract, breach of fiduciary duty, and breach of the

covenant of good faith and fair dealing against the CPPOA. The complaint also

alleged breach of contract and unjust enrichment against eighteen individual

homeowners that were purportedly permitted to construct a third story.

      Upon notice of the complaint, the CPPOA's insurance carrier, Chubb,

retained counsel to defend the CPPOA. The individual homeowner defendants

retained separate counsel because they were not covered under the Chubb

insurance policy.

      During the CPPOA's 2018 annual meeting, members discussed the suit

against the CPPOA and the eighteen individual homeowners. The CPPOA

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                                        5
disclosed that it would pay for the legal defense of the homeowner defendants

that certified that their homes were in compliance with the subject deed

restriction.

      On April 5, 2019, Judge Francis Hodgson granted summary judgment with

prejudice in favor of the CPPOA and eleven of the homeowners. Two of the

individual homeowners defaulted; the remaining defendants continued the suit.

On June 12, 2019, Judge Hodgson denied Nicholas Holdings' motion for

reconsideration of the April 5, 2019 order. Nicholas Holdings' motion for leave

to appeal was denied on September 5, 2019. 3

      Meanwhile, in April 2019, the CPPOA sent out a notice of its 2019 annual

meeting to all of the homeowners in Curtis Point. The notice stated:

               As you may recall from last year's Annual Meeting, the
               Curtis Point Property Owners Association and 18
               individual residents were sued by Nicholas Holdings
               LLC (whose principal, Kevin DiPiano, is a Curtis Point
               resident), essentially because he desired to build a
               dwelling in excess of two stories in violation of our
               deed restrictions. The individual homeowners sued
               were alleged to have violated their respective deed
               restrictions.

               Further discussed at last year’s Annual Meeting, the
               Board of Trustees, which is responsible for upholding
               the Association's obligation to review building plans

3
  Final disposition of the chancery action was achieved on or about August 19,
2020.
                                                                         A-3612-19
                                         6
           for deed restriction compliance, defended the suit and
           those individual defendants who certified their homes
           complied with the deed restriction.

           We are pleased to inform you that, on April 5, 2019, on
           Motions for Summary Judgment, the Court dismissed
           the lawsuit against the Association and 11 of the
           individual defendants with prejudice. Two individuals
           defaulted and the remaining defendants continue in the
           suit. Regrettably, the lawsuit has resulted in significant
           costs to the Association, resulting in a substantial
           reduction of the Association's Membership Equity
           Fund.

           In addition, there are a number of beneficial projects
           the Board of Trustees believes are necessary to protect
           and add to Member amenities, notably a beach
           observation platform and landscaping work near the
           front entrance.

           The Board of Trustees is proposing a Special
           Assessment of $500 per resident member household in
           order to restore the Association Membership's Equity
           Fund to historic levels, as well as to provide Capital
           Funds critically needed for the common property
           projects. The Special Assessment will require approval
           by a majority of a quorum of the membership of the
           Association. The Board of Trustees unanimously
           recommends the Membership approve the Special
           Assessment.

     On September 23, 2019, while the chancery action was pending, plaintiff

filed a complaint in the Law Division against the CPPOA, its board members,

                                                                        A-3612-19
                                       7
and seventeen4 individual homeowners for breach of fiduciary duty, breach of

loyalty, breach of duty of care, breach of covenants, breach of covenant of good

faith and fair dealing, defamation, and accounting. Plaintiff alleged that the

CPPOA violated its bylaws by paying for the legal defense of the individual

homeowners and that the notice of the 2019 annual meeting falsely claimed that

the Nicholas Holdings chancery action had resulted in significant costs to the

association.

      On November 8, 2019, the CPPOA and its board members moved for

summary judgment. They argued that the ECD barred the claims relating to the

unauthorized use of association funds given plaintiff's opportunity to raise the

issue in the chancery action. They further argued that the notice was truthful

and that the association members were protected by qualified immunity.

      On November 14, 2019, defendant Matthew Smith filed a motion to

dismiss. On November 19, 2019, defendant William Heinzerling filed a motion

to dismiss. Each argued that, as individual homeowners, they owed no duty

regarding the use of association funds, and therefore could not be held liable for

the claims asserted in plaintiff's complaint.

4
  One of the individual homeowners named in the chancery division suit was
not named in the law division suit.
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                                         8
      On February 24, 2020, the motion judge issued three orders: (1) granting

Heinzerling's motion to dismiss; (2) granting summary judgment to the CPPOA

and its board members; and (3) denying plaintiff's request to amend his

complaint to add claims of unjust enrichment. On February 25, 2020, the motion

judge issued an order granting Smith's motion to dismiss.          In his written

decision, the judge found that:

            [p]laintiff fail[ed] to establish the elements necessary
            for defamation as a matter of law. The [Notice of 2019
            Annual Meeting] reflects the procedural history of
            plaintiff's chancery action against the Association and
            individual residents in the community. That [p]laintiff
            "desired to build a dwelling in excess of two stories in
            violation of our deed restrictions" was based on the
            finding of the Association's architect, John Burgdorfer,
            who reviewed [p]laintiff's plans. It was found to be [a]
            violation by the Hon. Francis R. Hodgson, Jr., P.J. Ch.
            for the reasons explained in his amplification on August
            9, 2019, before this [L]aw [D]ivision complaint was
            filed. There is no dispute that the association paid
            attorney's fees for the individual homeowner
            defendants who certified that their properties were in
            compliance with the deed restriction.

      The judge also concluded that, "in any event, [d]efendants would be

entitled to a conditional or qualified privilege because they, themselves, had an

interest in the subject matter of the communication and distributed the newsletter

to individuals who had a corresponding interest."

      As to the remaining claims, the motion judge determined:

                                                                            A-3612-19
                                        9
            This action is brought in [the] [L]aw [D]ivision in the
            name of Kevin DiPiano, managing member of Nicholas
            Holdings, LLC, against parties to the chancery action[,]
            many of whom were granted summary judgment by
            Judge Hodgson. In the facts of Judge Hodgson's
            decision, this court has serious concerns [that] this
            complaint is an end run around the chancery court
            action or getting a second bite at the apple. Clearly
            gamesmanship. There is no valid reason presented why
            any of the other remaining claims and counts against all
            defendants in this lawsuit could not have been timely
            brought in the chancery action.

      Plaintiff subsequently moved for reconsideration of the February 24 and

25, 2020 orders, R. 4:49-2, which was denied on April 15, 2020. The judge

found that plaintiff failed to demonstrate that the previous decision was based

on a palpably incorrect or irrational basis. In the same written decision, the

judge also dismissed the claims against the remaining defendants for the reasons

set forth in his previous decision. This appeal ensued.

      On appeal, plaintiff raises the following issues for our consideration:

            POINT I

            THE TRIAL COURT ERRED IN GRANTING
            DEFENDANTS' MOTIONS TO DISMISS THE
            CLAIMS BASED ON THE ENTIRE CONTROVERSY
            DOCTRINE.

                  A. Plaintiff . . . and the Board and Officers
                  of CPPOA were not a party to the Chancery
                  Action.

                                                                           A-3612-19
                                      10
                 B. Plaintiff's Claims Arose After the
                 Chancery Action Concluded as to the
                 Primary Defendant.

                 C. Plaintiff's Claims Arose From a
                 Different Set of Factual Circumstances.

           POINT II

           THE TRIAL COURT ERRED IN GRANTING
           [CPOAA'S]  MOTION  TO   DISMISS   THE
           DEFAMATION CLAIM BECAUSE PLAINTIFF'S
           LAWSUIT DID NOT CAUSE THE ASSOCIATION
           TO INCUR COSTS.

                 A.    Defendants Published [a] False,
                 Defamatory Statement Against Plaintiff,
                 Therefore[,] Plaintiff Has a Valid
                 Defamation Claim Against Defendants.

                 B. Defendants' Statement Is Not Protected
                 By Qualified Privilege.

           POINT III

           THE TRIAL COURT ERRED IN DENYING
           PLAINTIFF'S MOTION FOR LEAVE TO AMEND
           COMPLAINT.

     We review "de novo the trial court's determination of the motion to

dismiss under Rule 4:6-2(e)."    Dimitrakopoulos v. Borrus, Goldin, Foley,

Vignuolo, Hyman and Stahl, P.C., 237 N.J. 91, 108 (2019) (citing Stop & Shop

Supermarket Co., LLC v. Cnty. of Bergen, 450 N.J. Super. 286, 290 (App. Div.

2017)). On a motion to dismiss, a plaintiff need not prove the case, but need

                                                                       A-3612-19
                                    11
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)).

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)).

      Preliminarily, we agree with the judge's decision that plaintiff's complaint

failed to state a claim for which relief can be granted against the individual

homeowners. They had no control over the allocation of the CPPOA funds.

Consequently, even the most generous reading of plaintiff's complaint reveals

no basis for recovery. Ibid. Furthermore, during oral argument, plaintiff's

counsel conceded that plaintiff had no valid claim against the individual

homeowners.

      We also conclude that the ECD precludes plaintiff's claims against the

CPPOA and its Board members. The ECD assures "that all aspects of a legal

dispute occur in a single lawsuit. The goals of the doctrine are to promote

judicial efficiency, assure fairness to all parties with a material interest in an

action, and encourage the conclusive determination of a legal controvers y."

Olds v. Donnelly, 150 N.J. 424, 431 (1997).

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                                       12
      The doctrine reflects a "long-held preference that related claims and

matters arising among related parties be adjudicated together rather than in

separate, successive, fragmented, or piecemeal litigation." Kent Motor Cars,

Inc. v. Reynolds & Reynolds Co., 207 N.J. 428, 443 (2011). As codified in Rule

4:30A, the ECD "embodies the principle that the adjudication of a legal

controversy should occur in one litigation in only one court; accordingly, all

parties involved in a litigation should at the very least present in that proceeding

all of their claims and defenses that are related to the underlying controversy."

Wadeer v. N.J. Mfrs. Ins. Co., 220 N.J. 591, 605 (2015) (quoting Highland Lakes

Country Club & Cmty. Ass'n v. Nicastro, 201 N.J. 123, 125 (2009)).

      In this case, plaintiff was in direct privity with Nicholas Holdings, as its

owner and managing partner. He had notice of the CPPOA's decision to use

association funds to pay for the individual homeowners' legal defense as early

as April 2019, while Nicholas Holdings' motion for reconsideration of the April

5, 2019 chancery order was pending. He had ample opportunity and every

incentive to move to amend his complaint in the Chancery Division. He chose

not to. The rational inference is that he believed he would fare better with a

different judge. As Judge Den Uyl noted, "clearly gamesmanship." This is

                                                                              A-3612-19
                                        13
precisely the type of piecemeal litigation the ECD seeks to preclude. Kent

Motor Cars, Inc., 207 N.J. at 443.

         The elements of a cause of action for defamation are: (1) defendant "made

a false and defamatory statement concerning" plaintiff; (2) "the statement was

communicated to another person (and not privileged);" and (3) defendant "acted

negligently or with actual malice." G.D. v. Kenny, 205 N.J. 275, 292-93 (2011).

"A defamatory statement is one that is false and 'injurious to the reputation of

another' or exposes another person to 'hatred, contempt or ridicule' or subjects

another person to 'a loss of the good will and confidence' in which he or she is

held by others." Romaine v. Kallinger, 109 N.J. 282, 289 (1988) (quoting Leers

v. Green, 24 N.J. 239, 251 (1957)). "The threshold issue in any defamation case

is whether the statement at issue is reasonably susceptible of a defamatory

meaning," which is a question of law "to be decided first by the court." Id. at

290. In determining the truth of a statement, courts will not focus on minor

inaccuracies, but on whether its substance can be factually supported. See G.D.,

205 N.J. at 306-07 (holding truth as a defense for a statement that a person went

to jail for five years when in fact, he was sentenced to five years and served

less).

                                                                            A-3612-19
                                        14
      Even under the most indulgent reading of plaintiff's complaint, we

conclude, as the motion judge did, that there was no legal basis for recovery for

his defamation claim. Because the statements in the notice of the 2019 annual

meeting were accurate, and "truth is a defense to a defamation action," G.D.,

205 N.J. at 304, that count was properly dismissed.5

      To the extent not addressed, we conclude plaintiff's remaining arguments

lack sufficient merit to warrant discussion in a written opinion.

      Affirmed.

5
  Regardless, the CPPOA and its Board members are entitled to a qualified privilege
because the notice of the 2019 annual meeting was published only to Curtis Point
homeowners, all of whom shared an interest in the subject matter of the
communication. See Feggans v. Billington, 291 N.J. Super. 382, 392-93 (App. Div.
1996).
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                                       15