Court Opinion

ID: 4199228
Source: CourtListenerOpinion
Date Created: 2017-08-26 02:16:37.394474+00
Date Added: 2024-06-11T14:41:19.402284
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                 APPROVAL OF THE APPELLATE DIVISION

                                     SUPERIOR COURT OF NEW JERSEY
                                     APPELLATE DIVISION
                                     DOCKET NO. A-4136-13T4

NICHOLAS CALANDRILLO,

     Plaintiff-Appellant,

v.

GODADDY.COM, LLC,

     Defendant-Respondent,

_______________________________________

         Submitted May 12, 2015 – Decided May 26, 2015

         Before Judges Yannotti and Hoffman.

         On appeal from Superior Court of New Jersey,
         Law Division, Morris County, Docket No. L-
         2379-13.

         Dubeck   Law   Firm,   LLC,  attorneys   for
         appellant (Mark D. Miller, of counsel and on
         the brief).

         Marshall Dennehey Warner Coleman & Goggin,
         attorneys for respondent (Walter F. Kawalec,
         III, on the brief).

PER CURIAM

     Plaintiff   Nicholas    Calandrillo   appeals   from   an   order

entered by the Law Division on March 5, 2014, dismissing his

complaint with prejudice. We affirm, but remand the matter to
the trial court for entry of an amended judgment dismissing the

complaint without prejudice.

    Plaintiff is the Chief Executive Officer of Metaphor, Inc.

("Metaphor"),     a     pharmaceutical        advertising        agency.    Akrimax

Pharmaceuticals       ("Akrimax")        is   one    of    Metaphor's       largest

clients.    Akrimax     distributes      certain     pharmaceutical        products,

including    Tirosint,     which    is    used      to   treat    hypothyroidism.

Defendant GoDaddy.com, L.L.C. ("Go Daddy") is an internet domain

registrar   and   web    hosting    company      that,    among    other    things,

auctions off internet web addresses.

    Plaintiff purchased the "tirosint.com" web address from Go

Daddy in order to manage it for Akrimax. Plaintiff's purchase of

the web address was made pursuant to Go Daddy's Universal Terms

of Service Agreement (the "Agreement"), which includes, among

other terms, the following:

            21. GOVERNING LAW; JURISDICTION;                     VENUE;
            WAIVER OF TRIAL BY JURY

            Except for disputes governed by the Uniform
            Domain Name Resolution Policy . . . this
            Agreement shall be governed by and construed
            in accordance with the federal law of the
            United States and the state law of Arizona,
            whichever is applicable, without regard to
            conflict of laws principles. You agree that
            any action relating to or arising out of
            this Agreement shall be brought in the state
            or   federal  courts  of   Maricopa  County,
            Arizona, and you hereby consent to (and
            waive all defenses of lack of personal
            jurisdiction and forum non conveniens with

                                         2                                  A-4136-13T4
            respect to) jurisdiction and venue in the
            state and federal courts of Maricopa County,
            Arizona. You agree to waive the right to
            trial by jury in any action or proceeding
            that takes place relating to or arising out
            of this Agreement.

      In his complaint, plaintiff alleges that on May 22, 2013,

he met with the president of Akrimax (the "PA") and the vice

president of marketing for the company (the "VPA"). Plaintiff

claims that the VPA told him he had learned the tirosint.com

domain name was up for auction, and someone at Go Daddy had

informed him that the owner of the domain name would have had to

authorize    the   auction.   Plaintiff    allegedly   told   the    Akrimax

representative that he did not authorize the auction.

      Plaintiff claims that he called the VPA a liar and said he

was fabricating the story to make him look bad. He challenged

the VPA. Plaintiff said he should agree to quit his position

with Akrimax if plaintiff could prove that plaintiff did not put

the tironsint.com domain name up for auction. The PA left the

meeting and said he would not deal with this kind of behavior.

      Plaintiff claims that, after the meeting, he had several

telephone calls with persons at Go Daddy and he recorded the

calls. According to plaintiff, in these conversations, persons

at Go Daddy confirmed that he had never authorized the auction

of   the   tirosint.com   domain   name.   Plaintiff   alleges,     however,

that the VPA had in his possession a taped conversation with a

                                     3                              A-4136-13T4
representative       of    Go    Daddy,      who   "verified"          to   the    VPA       that

plaintiff had, in fact, authorized the auction of the domain

name. The Go Daddy representative also allegedly said that Go

Daddy would never have put the tirosint.com domain name up for

auction without plaintiff's approval.

      Plaintiff claims that, as a result of the telephone call

indicating he had authorized the auction, his relationship with

Akrimax, the principal owner of Akrimax, the PA, and the VPA

"has been destroyed." He said that Akrimax began to "curtail its

work with Metaphor." He claims his relationship with Akrimax's

principal owner "has been irreparably damaged."

      Plaintiff      alleges        that     the     VPA        has     used      the       taped

conversation with the Go Daddy representative as a means to

diminish his role in the advertising of all the products that

Akrimax    distributes.          Plaintiff       claims    that,        although        he     had

provided    Akrimax       with    recorded       conversations          with     Go     Daddy's

representative confirming that he did not authorize the auction

of the tirosint.com domain name, "the damage to his business and

his reputation has been done."

      Plaintiff alleges that Go Daddy was negligent in offering

the   tirosint.com        website      for       sale,     by    sending       the       VPA     a

confirmation    of    the       bid,   and    by   confirming          to   the       VPA    that

plaintiff    had   authorized          the    domain      name        auction.     Plaintiff

                                             4                                          A-4136-13T4
alleges that, as a result of Go Daddy's negligence, his business

with    his     "most    important     client    has    been    damaged"     and   his

reputation and long-term relationship with Akrimax's principal

owner    "has     been     irreparably     harmed."      Plaintiff     sought      $10

million in damages, the award of attorney's fees, and such other

relief as the court deemed just.

       On November 12, 2013, Go Daddy filed a motion to dismiss

the complaint. It argued that, although plaintiff had asserted a

negligence claim, under the economic loss doctrine, the claim

was essentially a contract claim arising under the Agreement. Go

Daddy     argued       that    the    Agreement's      forum     selection    clause

requires plaintiff to pursue his claim in a court in Arizona.

Plaintiff opposed the motion.

       On February 14, 2014, the trial court heard oral argument

on the motion. Thereafter, the court filed an order dated March

5,     2014,    dismissing      the    complaint       with    prejudice.     In    an

accompanying statement of reasons, the court stated that the

economic       loss     doctrine     applied    and,   although     plaintiff      was

seeking damages under a negligence theory, plaintiff's alleged

losses arose from the Agreement and were economic losses. Thus,

the complaint did not assert a cognizable tort claim.

       The     court    also   rejected   plaintiff's         contention   that    the

Agreement was unconscionable and unfairly one-sided, noting that

                                           5                                 A-4136-13T4
plaintiff      was    sophisticated       in       business,     specifically        the

advertising     business.    The    court         concluded    that    plaintiff     was

bound    by   the    Agreement,    and    the      Agreement's    forum     selection

clause     required     dismissal        of       the   complaint.      This    appeal

followed.

       On appeal, plaintiff argues that the trial court erred by

dismissing his complaint. He maintains that the economic loss

doctrine does not apply in these circumstances. Plaintiff claims

that he is asserting a negligence claim, not a contract claim

arising under the Agreement. He also contends that his complaint

may be read to include claims of defamation, a violation of the

Consumer      Fraud    Act   ("CFA"),         N.J.S.A.     56:8-1      to   -20,     and

intentional     interference       with       a    contractual    relationship        or

prospective economic advantage. In addition, plaintiff contends

that    the   Agreement's     forum      selection       clause       should   not    be

enforced because it includes a waiver of the right to trial by

jury.

       We have considered plaintiff's arguments in light of the

record and the applicable legal principles. We conclude that

plaintiff's arguments are without sufficient merit to warrant

extended discussion. R. 2:11-3(e)(1)(E). We affirm the dismissal

of plaintiff's complaint substantially for the reasons set forth

                                          6                                    A-4136-13T4
in the statement accompanying the trial court's March 5, 2014

order. We add the following brief comments.

    "Economic        loss   can   take       the    form    of    either   direct     or

consequential damages." Spring Motors Distribs., Inc. v. Ford

Motor Co., 98 N.J. 555, 566 (1985). "Under New Jersey law, the

economic      loss    doctrine       defines       the     boundary    between       the

overlapping theories of tort law and contract law by barring the

recovery of purely economic loss in tort[.]" Travelers Indem.

Co. v. Dammann & Co., 594 F.3d 238, 244 (3d Cir. 2010) (internal

quotation marks and citations omitted).

    The purpose of the economic loss doctrine "is to strike an

equitable balance between countervailing public policies[] that

exist    in   tort   and    contracts    law."       Ibid.     (internal      quotation

marks and citations omitted). The purpose of a tort duty is to

protect society's interest in freedom from harm, and                            a duty

arises without reference to any agreement between the parties.

Spring Motors, supra, 98 N.J. at 579. On the other hand, a

contractual       duty     "arises     from        society's      interest     in    the

performance of promises." Ibid.

    Although a plaintiff's complaint may sound in tort, the

action     will      be    governed     by     contract          principles     if    it

"'essentially arises in contract rather than tort[.]'" Saltiel

v. GSI Consultants, Inc., 170 N.J. 297, 309 (2001) (quoting

                                         7                                     A-4136-13T4
Wasserstein v. Kovatch, 261 N.J. Super. 277, 286 (App. Div.

1993)). One factor that is considered in determining whether a

matter is a tort or contract action is whether the plaintiff is

seeking     recovery     for       intangible      economic        loss.     Id.   at     310

(citing Prosser & Keeton on the Law of Torts, § 92 at 656-58

(5th ed. 1984)).

       "When     a   company      agrees     to   render      a    service    or     sell   a

product,     a     contract       normally    will      define     the     scope     of   the

parties' specific obligations." Id. at 316. Furthermore, "a tort

remedy does not arise from a contractual relationship unless the

breaching party owes an independent duty imposed by law." Ibid.

(citing New Mea Constr. Corp. v. Harper, 203 N.J. Super. 486,

493-94 (App. Div. 1985)).

       As   indicated       in    the   complaint,       plaintiff's         relationship

with   Go   Daddy     was     entirely     contractual        in    nature.     Plaintiff

purchased the tirosint.com domain name in July 2012, with a

registration period of one year. The purchase was subject to the

terms spelled out in the Agreement. As Go Daddy points out, the

core   of    the     parties'      relationship         was   that    Go     Daddy    would

provide     plaintiff       the    exclusive      and    unfettered        right     to   the

tirosint.com domain name, and ensure the product information on

the website was available to persons who have access to the

internet.

                                             8                                     A-4136-13T4
    Plaintiff       essentially    claims     that     Go       Daddy    breached   the

Agreement by placing the domain name up for auction without his

authorization. Moreover, the damages that plaintiff seeks are

economic losses allegedly sustained as a result of that breach.

Thus,   the   trial   court     correctly     determined          that    plaintiff's

claims are essentially contractual in nature and a tort claim

based on the allegations is not cognizable.

    Plaintiff argues that, aside from any contract-based claim,

his complaint sets forth viable tort-based causes of action. We

disagree. Plaintiff suggests that his complaint can be read to

state   a   claim   of   defamation,        but   such      a    claim    requires     a

statement reasonably susceptible of a defamatory meaning. See

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

765 (1989) (citations omitted). Plaintiff's complaint does not

reference     any   statement    that   could     be     reasonably        viewed    as

defamatory.

    Plaintiff also asserts that his factual allegations support

a claim under the CFA. However, to state a claim under the CFA,

the plaintiff must show, among other things, that the defendant

engaged in some act or practice declared to be unlawful by the

CFA. Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 557 (2009)

(citations omitted). N.J.S.A. 56:8-2 provides in part that it is

unlawful for any person to use or employ "any unconscionable

                                        9                                     A-4136-13T4
commercial       practice,     deception,      fraud,      false    pretense,      false

promise, misrepresentation" or knowingly conceal, suppress or

omit "any material fact with intent that others rely upon such

concealment,        suppression    or    omission,      in    connection     with   the

sale or advertisement of any merchandise or real estate[.]"

       Here,     plaintiff     merely    claims     that     Go   Daddy    negligently

represented to the VPA that plaintiff had authorized the auction

of the tirosint.com domain name, but he does not allege Go Daddy

made any such representation to him. There is, moreover, no

allegation that the statement was made in connection with the

"sale       or   advertisement"      of    the      services       covered    by    the

Agreement. Furthermore, plaintiff does not claim that Go Daddy's

alleged      misstatement      constitutes     an     unconscionable        commercial

practice.

       In    addition,     plaintiff      asserts     that    his   complaint       sets

forth       sufficient     facts     to     support        claims     for     tortious

interference with contract or prospective economic advantage. To

support      such    claims,    plaintiff      must     establish,        among    other

things, that the interference was done with malice. Printing

Mart-Morristown, supra, 116 N.J. at 751 (citations omitted). In

this    context,      malice     means     that     "the     harm    was     inflicted

intentionally        and   without       justification        or    excuse."       Ibid.

(citing Rainier's Dairies v. Raritan Valley Farms, Inc., 19 N.J.
10                                  A-4136-13T4
552,   563     (1955)).    Plaintiff's        complaint        lacks       any    allegation

that   Go    Daddy     acted     to    harm     his    contractual          relations          or

prospective      economic      advantage        maliciously,          intentionally            or

without justification.

       Plaintiff     further     argues       that     the    trial       court    erred       by

finding that the forum selection clause in the Agreement was

enforceable and required plaintiff to pursue his claims in a

court in Arizona. Again, we disagree. Forum selection clauses

are prima facie valid and enforceable in New Jersey. Caspi v.

The Microsoft Network, L.L.C., 323 N.J. Super. 118, 122 (App.

Div.) (citation omitted), certif. denied, 162 N.J. 199 (1999).

       Nevertheless, New Jersey courts will not enforce a forum

selection      clause     if   the     clause     is    "a     result       of     fraud       or

overweening bargaining power," enforcement of the clause would

violate      "strong      public       policy     of     the       local         forum,"       or

"enforcement would be seriously inconvenient for the trial[.]"

Wilfred MacDonald, Inc. v. Cushman, Inc., 256 N.J. Super. 58,

63-64 (App. Div.) (citation omitted), certif. denied, 130 N.J.
17 (1992).

       Here,     plaintiff       had    reasonable           notice        of     the      forum

selection clause. It was not proffered unfairly or with a design

to   conceal     its    terms.     Moreover,         there    is     no    evidence         that

plaintiff's      acceptance       of    the     Agreement       as     a    condition          to

                                          11                                            A-4136-13T4
purchase      the     domain     name   was        the   result      of     any    fraud    or

overweening bargaining power.

      In      addition,     as    the    trial       court     pointed       out    in     its

statement of reasons, plaintiff is a sophisticated businessman.

The court noted that plaintiff is engaged in the advertising

business, in which the "knowledge of the impact of contracts

including those similar to" the Agreement are a "requisite of

success." Furthermore, enforcement of the forum selection clause

would not violate any strong public policy or inconvenience a

trial.

      Thus, the record supports the trial court's determination

that plaintiff's claims are contract-based and arose under the

Agreement.      The    court     correctly         determined     that      plaintiff      was

bound    by     the    forum     selection         clause    in   the     Agreement        and

required to assert his claim in a court in Arizona. Therefore,

the     court    correctly        decided      that      the      complaint        must     be

dismissed.

      However,        because     the   trial        court     did    not    address       the

complaint       on    its   merits,     the    court     erred       by   dismissing       the

complaint with prejudice. See Exxon Research & Eng'g Co. v.

Indus. Risk Insurers, 341 N.J. Super. 489, 519 (App. Div. 2001)

(holding that dismissal predicated in part on a forum selection

clause should be without prejudice because it did not adjudicate

                                              12                                    A-4136-13T4
the merits of the complaint). See also Pressler & Verniero,

Current    N.J.      Court   Rules,    comment       4    on       R.   4:37-2     (2015)

(dismissal     on    the   merits    generally   is       with      prejudice,      while

dismissal based on the procedural inability to consider a case

is without prejudice) (citing Watkins v. Resorts Int'l Hotel &

Casino, 124 N.J. 398, 415-16 (1991)). Accordingly, we remand the

matter    to   the   trial   court    for    entry       of   an    amended      judgment

dismissing the complaint without prejudice.

    Affirmed and remanded to the trial court for entry of an

amended judgment in conformity with this opinion.

                                        13                                       A-4136-13T4