Court Opinion

ID: 9911274
Source: CourtListenerOpinion
Date Created: 2023-12-19 19:07:06.964041+00
Date Added: 2024-06-11T12:57:04.631644
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NOT FOR PUBLICATION WITHOUT THE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-0683-21

JACQUELINE MCDADE,

          Plaintiff-Respondent,

v.

P&P ASSOCIATES, INC.,
and STEVEN PAGLIONE,

          Defendants/Third-Party
          Plaintiffs-Appellants,

v.

MICHELLE O'NEILL,

     Third-Party Defendant-
     Respondent.
____________________________

                   Argued December 4, 2023 — Decided December 19, 2023

                   Before Judges Mawla and Chase.

                   On appeal from the Superior Court of New Jersey, Law
                   Division, Cape May County, Docket No. L-0437-18.
            Louis Michael Barbone argued the cause for appellants
            (Jacobs & Barbone, PA, attorneys; Louis Michael
            Barbone, on the briefs).

            Deborah Lynn Mains argued the cause for respondent
            Jacqueline McDade (Costello & Mains, LLC,
            attorneys; Drake P. Bearden, Jr., on the brief).

PER CURIAM

      Defendants P&P Associates, Inc., and Steven Paglione appeal from a jury

verdict in favor of plaintiff Jacqueline McDade finding defendants liable for

defamation and awarding plaintiff $105,000 in unspecified damages and

$500,000 in punitive damages. On appeal, defendants challenge the denial of

their summary judgment motion to dismiss plaintiff's complaint pursuant to the

entire controversy doctrine and the damages award. We affirm the summary

judgment determination and vacate and remand the damages for retrial for the

reasons expressed in this opinion.

      Plaintiff is a licensed beautician who leased commercial space from P&P

to operate her business, beginning in 2009. Two other businesses also occupied

space at the premises. Paglione operated one of the businesses, and the third

space was occupied by another tenant. Paglione is the sole owner of P&P.

      The parties' dispute began when plaintiff complained about repairs that

she needed defendants to make to her space. Paglione responded by verbally

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abusing plaintiff and using vulgarities. In 2010, plaintiff had issues with the air

conditioning and decided to withhold rent.         P&P filed a landlord-tenant

complaint for nonpayment and the parties ultimately settled the matter, with

plaintiff agreeing to pay the rent, and P&P agreeing to install new air

conditioning and heating units. However, plaintiff testified Paglione would not

allow her to use the units for heat in the winter and would "shut off the breakers

and tell [her] not to touch them because he didn't want them to get worn out."

Plaintiff complained about other habitability issues, which were not resolved to

her satisfaction.

      In November 2017, plaintiff tried to turn on the heater in the hair salon

and heard a "loud . . . crack . . . , pop noise." She got "nervous because [she]

had been told multiple times that that heater was no good" so she immediately

called the gas company. The gas company responded with firefighters and

police officers. They evacuated plaintiff's salon and the third tenant's office and

asked plaintiff if she had access to the space operated by Paglione. Plaintiff had

a key and granted first responders access to Paglione's space.          When the

firefighters returned, they "told [plaintiff] that they had red-tagged the heater"

and the "hot water heater because it was illegally installed."

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                                        3
      Plaintiff called Paglione, who was at the airport leaving for vacation, and

said, "we have a problem with the heater" and Paglione responded, "What the

f[***] did you do?" Paglione denied saying this but admitted he "might have

dropped the F bomb . . . ." Plaintiff asserted Paglione hung up on her, but

Paglione testified he told her to use the heat setting on the air conditioning units.

Paglione's wife testified she heard Paglione's side of this conversation, and he

did not "make any sexually harassing or derogatory comments . . . ."

      The gas company informed code enforcement authorities that the alleyway

behind defendant's building was blocked with debris and machinery, and the

back door was not accessible. Brian Melchiorre, the local code enforcement

officer, testified he visited the property and observed the debris. He sent a

violation notice to P&P.

      Plaintiff withheld the rent and retained Seth Fuscellaro, Esq. to help her

get out of her lease. Fuscellaro had a telephone conversation with Paglione

about plaintiff's intent to abate the rent due to the heating and other problems.

Fuscellaro testified Paglione called plaintiff a "loser" and "trash," and "used the

word f[***] numerous times . . . ." Paglione denied he said anything derogatory

about plaintiff during his conversation with Fuscellaro. Paglione's daughter,

who also served as his attorney, testified she was present when Fuscellaro called

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                                         4
Paglione and overheard Paglione "get upset" but did not hear him say anything

derogatory about plaintiff. Paglione's wife testified she did not hear any "yelling

or screaming" or anything derogatory about plaintiff during this phone call

either.

      Plaintiff's counsel sent Paglione's attorney a letter seeking termination of

the lease based on plaintiff's various issues with the property.        Following

correspondence between the attorneys, a new heater was ultimately installed in

early December 2017.

      On December 6, 2017, P&P filed a landlord-tenant complaint against

plaintiff for nonpayment of rent and utilities. The following day, Paglione called

Melchiorre and said he would not comply with the notice of violation because

the debris in the alley behind the building was "not the borough's business and

the inspector [was] not permitted to be on his property." Melchiorre testified

Paglione accused him of receiving oral sex from plaintiff in the alley. Paglione

called Melchiorre a "loser" and that his wife and high-school-age daughters were

"whore[s.]" Melchiorre was "shocked" at the language Paglione used.

      Paglione testified he was "upset" during this phone call and "had words"

with Melchiorre but denied saying "anything derogatory" about plaintiff.

Paglione's wife's testimony corroborated his testimony.

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      On January 21, 2018, plaintiff and her employee, Michelle O'Neill, were

in the hair salon. When plaintiff left, Paglione came in and said: "Michelle,

we're good, right? We're not pieces of s[***] like that Jackie. We're good, we're

good people. She is nothing but a n[*****]-loving, d[***]-sucking piece of

s[***]. She f[*****] me, she f[*****] me good[,] and I'll get her." O'Neill

asked Paglione to leave because he was "making [her] very uncomfortable and

very nervous" and Paglione complied. Paglione denied making these statements

to O'Neill.

      Neither party appeared for the landlord-tenant proceeding on January 22,

2018. The court entered a default judgment of possession against plaintiff.

      On January 25, 2018, Richard Murphy served a warrant of removal at the

salon. Four of plaintiff's clients were present, as were Paglione and his wife.

O'Neill was working that day and testified Paglione walked in and said,

"Everybody get the f[***] out." O'Neill called plaintiff. Plaintiff testified she

arrived at the salon to find Paglione and his wife "screaming [and] hollering,

'Everyone get the f[***] out of my building.'"

      Murphy testified Paglione was only inside for "a minute or two, if that"

and Murphy did not recall "him yelling or screaming or saying the F word . . . ."

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                                       6
Paglione testified he and his wife were sitting in his car, and he "never talked"

to plaintiff that day. His wife corroborated his testimony.

      The parties ultimately agreed plaintiff would have a few days to vacate.

Plaintiff moved her salon to a space she rented from Barbara Ann Flacco.

Plaintiff spent a considerable sum in moving costs and renovations to Flacco's

space to make it suitable for a hair salon.

      Flacco testified she was a retired hairstylist who had known plaintiff since

birth and had known Paglione for thirty years or longer. Paglione called Flacco

in December or January because he heard plaintiff was going to rent from her.

He said "all kind of crazy things" to Flacco and called plaintiff a "liar."

      In February 2018, Paglione confronted Flacco outside of her property.

Flacco testified Paglione was "livid" and "crazy" and called Flacco "a

backstabbing SOB for renting to the N-lover[,]" referring to plaintiff. She said

Paglione "use[d] the actual N word." Flacco told plaintiff and her husband what

Paglione had said, and they were upset.

      Paglione testified he called Flacco to ask whether plaintiff was "looking

to move into [Flacco's] store[,]" which Flacco denied. He admitted going to

Flacco's property but denied saying anything "rude or ignorant" to her.

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       Fuscellaro testified that, after plaintiff's eviction, he encountered Paglione

in municipal court where Fuscellaro served as the public defender.            When

Paglione saw Fuscellaro, he became upset, approached Fuscellaro, and said

"how can you represent that n[*****] lovin' piece of s[***,]" referring to

plaintiff.

       Fuscellaro also recalled an incident in July or August 2018, when he

visited Paglione's pizzeria. Paglione and his other daughter told him to "get the

f[***] out of here, you represent" plaintiff. They began to yell "choke and die"

at him "as almost a chant."

       Paglione denied making derogatory statements about plaintiff when he

saw Fuscellaro in court. He testified when he saw Fuscellaro at his pizzeria, he

told him, "you're not welcome here, and I'd appreciate if you don't come back."

He admitted his daughter told Fuscellaro to "choke on it."

       On February 26, 2018, P&P filed a Special Civil Part complaint against

plaintiff for past due rent from November 2017 to January 2018, and "three

years' worth of sewer bills." The complaint sought a judgment for $5,138.72.

Plaintiff filed a handwritten answer stating: "We did not have heat for three

months. All other repairs were ignored. Sewer [and] water were paid up to

Dec[ember] 2017."

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                                          8
      On May 21, 2018, plaintiff retained a different attorney and filed a

municipal criminal complaint, alleging Paglione harassed her and "stalked [her]

in [the] parking lot as [she] would leave work." Plaintiff referred to Paglione's

statements to Fuscellaro and O'Neill, his "harassing visits and phone calls to

[Flacco]," and alleged Paglione entered her business when she was not present

and, when asked to leave, stole a box of cookies. On June 4, 2018, a municipal

complaint summons was issued, charging Paglione with bias intimidation,

N.J.S.A. 2C:16-1(a); theft by deception, N.J.S.A. 2C:20-4; two counts of

harassment, N.J.S.A. 2C:33-4(a) and (c); criminal mischief, N.J.S.A. 2C:17-

3(a)(2); and theft of services, N.J.S.A. 2C:20-8.

      The parties settled the Special Civil Part matter pursuant to a handwritten

settlement agreement.     Paglione's attorney testified she would not have

recommended acceptance of this settlement if she had known plaintiff would

later assert sexual harassment and defamation claims against Paglione.

      On August 7, 2018, Paglione and plaintiff reached a consent agreement

with respect to the municipal matter, which was dismissed without prejudice.

Paglione agreed to: have no contact with plaintiff directly or via third parties;

not make "any disparaging comments or remarks" about plaintiff, and not drive

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                                        9
past her hair salon or "park or stop his vehicle within 100 feet of [the hair salon,]

unless he is required to stop at a traffic control device."

        On October 16, 2018, plaintiff sued defendants in the Law Division. The

complaint alleged they violated the New Jersey Law Against Discrimination

(LAD), N.J.S.A. 10:5-1 to -50, and asserted the following LAD claims: sexual

harassment in the course of a contractual relationship (count one); sexual

harassment in a place of public accommodation (count two); discrimination in

contract (count three); retaliation (count four); and retaliation "as to the

individual defendant" Paglione (count five). Count six alleged defamation.

        Defendants filed an answer and counterclaim, and a third-party complaint

against O'Neill. The counterclaim alleged: malicious prosecution by filing a

false criminal complaint against defendants (count one); and defamation (count

two).     Count one of the counterclaim was dismissed with prejudice by

stipulation.

        Defendants moved for summary judgment dismissal of the complaint. The

trial judge granted partial summary judgment and dismissed counts two, four,

and five. The remaining counts, along with defendant's counterclaim and third-

party complaint, were tried before a jury over the course of four days. In

addition to the testimony we have recounted, plaintiff testified Paglione's

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                                        10
offensive comments were borne of his animus toward her as a woman. He often

referred to her as a "B-word" when he was angry. She believed his comments

to others calling her an "N-lover" intended to reference her adult daughter who

is a biracial child. In addition, she testified the comments Paglione made to her

and others were embarrassing. She told the jury

                    I should be at work today, I should have been at
             work yesterday, but instead I have to come and I have
             to deal with this and I've had to deal with this for three
             years, watching over my back every time I walk out the
             door. Wondering if something's going to happen to my
             business or how my reputation is being destroyed out
             there to anybody that wants to hear his story.

At the close of trial, the court granted plaintiff's motion for a directed verdict on

defendants' counterclaim for defamation.

      The jury returned a unanimous no cause verdict in favor of defendants on

counts one and three. It returned a unanimous verdict in favor of plaintiff on

count six. It returned a unanimous no cause verdict in favor of O'Neill on

defendants' third-party complaint for defamation. The jury awarded plaintiff

$105,000 in "damages . . . as a result of the defamation."

      No additional testimony was taken in the punitive damages phase of the

trial, and the parties stipulated to the valuation of defendants' income and assets.

The jury awarded plaintiff $500,000 in punitive damages.

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                                        11
      Defendants moved for a judgment notwithstanding the verdict (JNOV) or

a new trial, arguing the verdict and $105,000 damages award was against the

weight of the evidence. Defendants also moved for a JNOV or a new trial on

punitive damages. The trial judge denied the motions.

                                       I.

      On appeal, defendants assert the trial judge erred by denying summary

judgment pursuant to the entire controversy doctrine. They argue plaintiff's

claims should have been brought during either the tenancy or Special Civil cases

because they arose from the landlord-tenant relationship.

      The entire controversy doctrine is "an equitable doctrine whose

application is left to judicial discretion based on the factual circumstances of

individual cases."   Bank Leumi USA, v. Kloss, 243 N.J. 218, 227 (2020)

(quoting Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl,

PC, 237 N.J. 91, 114 (2019)). Therefore, even though this issue was presented

to the trial judge on summary judgment, we review it for an abuse of discretion,

rather than de novo. Unkert by Unkert v. Gen. Motors Corp., 301 N.J. Super.

583, 595 (App. Div. 1997) (affirming denial of summary judgment under the

entire controversy doctrine, finding no "abuse of the trial court's discretion in

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                                      12
not applying the doctrine"). See also Est. of Hanges v. Met. Prop. & Cas. Ins.

Co., 202 N.J. 369, 384 (2010). 1

        The entire controversy doctrine is codified in Rule 4:30A. It "seeks to

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

whenever possible." Dimitrakopoulos, 237 N.J. at 98 (quoting Thornton v.

Potamkin Chevrolet, 94 N.J. 1, 5 (1983)). The doctrine "has three fundamental

purposes: '(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 delay.'" Bank Leumi, 243 N.J. at 227 (quoting DiTrolio v.

Antiles, 142 N.J. 253, 267 (1995)). Trial courts "should not preclude a claim

under the entire controversy doctrine if such a remedy would be unfair in the

totality of the circumstances and would not promote the doctrine's objectives

. . . ." Id. at 227-28 (quoting Dimitrakopoulos, 237 N.J. at 119).

        Application of the entire controversy doctrine "does not require

commonality of legal issues. Rather, the determinative consideration is whether

distinct claims are aspects of a single larger controversy because they arise from

interrelated facts." DiTrolio, 142 N.J. at 271. However, the "forum of the earlier

1
    Even if we were to exercise a de novo review, the result would be the same.
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                                       13
action must have afforded a fair and reasonable opportunity to litigate the claim

in order for the doctrine to apply . . . ." Dimitrakopoulos, 237 N.J. at 115. "[T]he

first forum must have been able to provide all parties with the same full and fair

opportunity to litigate the issues and with the same remedial opportunities as the

second forum." Id. at 117 (quoting Hernandez v. Region Nine Hous. Corp., 146

N.J. 645, 661 (1996)). "[T]he doctrine 'does not apply to unknown or unaccrued

claims'" and fairness in its application "focuses on the litigation posture of the

respective parties and whether all of their claims and defenses could be most

soundly and appropriately litigated and disposed of in a single comprehensive

adjudication." Wadeer v. N.J. Mfrs. Ins. Co., 220 N.J. 591, 606 (2015) (quoting

DiTrolio, 142 N.J. at 274, 277).

      Defendants assert that all of plaintiff's claims against them "sprung out of

her [long-term] lease agreement" to operate her hair salon and, therefore, should

be considered aspects of a single controversy arising from interrelated facts . We

are unpersuaded.

      Plaintiff's defamation claim was based solely on Paglione's statements

about plaintiff to O'Neill, Melchiorre, Fuscellaro, and Flacco. The statements

had nothing to do with the substance of the landlord-tenant dispute over

habitability, or the Special Civil Part dispute over the rent and utilities. Not only

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                                        14
was Paglione not a party to the tenancy and Special Civil case, his defamatory

statements targeted plaintiff's alleged personal, private, and sexual conduct, not

her actions as a tenant.

      We are unconvinced plaintiff had an opportunity to litigate her defamation

claim in either prior action. She did not have a defamation claim when the

tenancy action was happening because Paglione had not yet made his defamatory

statements. Moreover, as the trial judge noted, "there is nothing . . . that shows

[p]laintiff understood she would be giving up substantial tort claims by settling

the rent dispute." The judge correctly found the tenancy action did not provide

plaintiff "a full and fair opportunity to litigate" her claims.

      The judge reached the same conclusions regarding the Special Civil Part

matter. He noted the complaint was filed by P&P and would necessitate plaintiff

joining Paglione and filing a counterclaim against P&P. He stated plaintiff was

self-represented in the Special Civil Part action when she settled it.            He

concluded under these circumstances, "[i]t would be unjust to preclude her

claims and penalize [p]laintiff for failing to understand that she must join parties

and claims that were not connected with the dispute . . . ." The judge found the

municipal criminal complaint did not bar plaintiff's complaint because it was

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                                        15
prosecuted by the State and "a criminal complaint does not preclude civil

remedies."

      The trial judge relied in part on Cafferata v. Peyser, 251 N.J. Super. 256

(App. Div. 1991). There, the plaintiff—who had been a patient of the defendant

and had been previously sued by the defendant in the Special Civil Part over

unpaid medical bills, settling the Special Civil case for a nominal amount later—

sued the defendant for malpractice. Id. at 257-59. On appeal, we reversed the

trial court's grant of summary judgment to defendant under the entire

controversy doctrine. Id. at 259-60. We noted nothing in the record showed

that plaintiff knew he was giving up a substantial tort claim when he settled the

Special Civil matter. Id. at 261-62. Even if the plaintiff had knowledge of his

medical malpractice claims prior to the settlement of the collection action, it did

not bar the malpractice claim because he did not have a "fair and reasonable

opportunity to have fully litigated [the malpractice] claim in the original action."

Id. at 261. We noted the nominal amount in controversy in the Special Civil

matter and the fact both parties were self-represented. Ibid.

      We concluded the entire controversy doctrine did not control because

Special Civil cases are adjudicated in a forum "in which pro se litigants are able

quickly, inexpensively, expeditiously, and with minimum resort to legal counsel

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                                        16
and judicial intervention, to resolve specifically stated and narrowly defined

small claims" and not "intended to have preclusionary consequences beyond

their own scope." Id. at 262-63. To apply the preclusive effect of the entire

controversy doctrine would be unfair, "seriously undermine[]" the "legitimacy

of small claims processing[,]" and "convert the entire controversy doctrine from

an equitable device into a trap for the unsuspecting." Id. at 263.

      Defendants are correct that the facts in Cafferata were slightly different.

There, the plaintiff was self-represented in the Special Civil Part matter, id. at

261, whereas here, the judge mistakenly found plaintiff was self-represented.

This distinction, however, is not dispositive.      Here, like the problem we

confronted in Cafferata, the landlord-tenant and Special Civil forums were

inadequate to provide the proper processes to hear plaintiff's discrimination,

defamation, and damages claims. Permitting these claims to proceed did not

conflict with the entire controversy doctrine's precepts of promoting a complete

and final disposition of disputes, fairness to the parties, and reducing delay. On

the contrary, employing the doctrine would act as a sword, leaving substantial

claims unresolved, depriving plaintiff of the right to have them adjudicated, and

unnecessarily complicating the tenancy and Special Civil actions. There is no

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                                       17
assertion the jury trial in this case was inefficient. For these reasons, the trial

judge correctly denied defendants summary judgment.

                                         II.

      Defendants argue the trial judge incorrectly instructed the jury on

compensatory and nominal damages. They assert there should have been no

compensatory damages instruction because plaintiff did not adduce evidence she

suffered any actual damages because of the defamation. Further, the instruction

on nominal damages was contradictory and confusing. As a result of confusion

in both the jury charge and the verdict sheet, it is unclear whether the jury

intended the $105,000 award as compensatory or nominal damages.

      Defendants did not object to the jury charge or the verdict sheet, but

following the verdict moved for a JNOV or a new trial, which the trial court

denied. On appeal, defendants confine their challenge on the damages issue to

the trial court's denial of their post-trial motions.

      During the charge conference, the trial judge stated he intended to use

certain portions of Model Jury Charges (Civil), 8.46, "Defamation Damages

(Private or Public)" (approved June 2014) (Model Charge). He would also

instruct the jury using Sections A (Damages-General Instructions), C

(Compensatory Damages-Emotional Suffering (In conjunction with actual

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                                         18
damages)), and D (Compensatory Damages (Nominal Damages for Slander Per

Se or Libel)) of the Model Charge. Both counsel signaled their acceptance of

these proposed charges. Plaintiff's counsel then remarked that regarding the

defamation claim, the jury could award damages for plaintiff's emotional

distress, or nominal damages. The judge agreed.

     The trial judge instructed the jury on defamation as follows:

                 Our law holds that there are some categories of
           statements that are so injurious to a person that they
           incur damages by the mere saying of the statements.
           These statements are called defamation per se. A
           statement is considered per se defamatory if it asserts
           number one, a criminal offense; number two, a
           loathsome      disease;    number       three,   conduct,
           characteristics, or a condition that is incompatible with
           his or her business, trade, or office; or number four,
           serious sexual misconduct.

                  In a claim for slander or defamation per se, a
           plaintiff does not need to prove damages, and a jury can
           presume damages. A person who is the victim of
           defamation per se is to be awarded by a jury a sum to
           compensate that victim. This is referenced under the
           law as nominal damages. The word "nominal" in this
           context is not intended to denote a small or modest sum,
           but the sum you the jury believe is appropriate to
           compensate the victim for the damages suffered.

                 I'm going to talk to you about damages under
           defamation. For the injury to reputation caused by a
           defendant's alleged defamatory statement, the plaintiff
           seeks    to     recover   compensatory       damages.

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Compensatory damages are sought by plaintiff for
recovery of the money value of his or her losses.

      I will first explain the law on compensatory
damages. If a plaintiff has established the essential
elements of his or her claim as explained in these
instructions, he or she is entitled to compensatory
damages for all the detrimental effects of a defamatory
statement relating to the plaintiff’s reputation, which
were reasonably to be foreseen, and which are the direct
and natural result of the defamatory statement.
Damages awarded for such purposes are compensatory.

       The foundation of an action for defamation is the
injury to reputation. Hence, any award you choose to
make as part of the compensation to plaintiff may only
be to redress consequences which followed from injury
to plaintiff’s reputation. In connection with plaintiff's
claimed emotional distress, I instruct you that the
plaintiff or the third-party plaintiff may be
compensated by you for such ill effects only if you find
that he or she experienced them because of the actual
damage done to his or her reputation.

      If you find that his or her emotional suffering was
caused only by his or her having read the [libel], or
having heard the slander, having read or heard the
defamation, and not by the publication's impact upon
his or her reputation, you may not consider such
suffering in arriving at the amount of damages you
choose to award.

       In the event you find the plaintiff is not entitled
to actual damages, the plaintiff or the third-party
plaintiff’s claims [were] caused by defendant's
wrongful act, then the plaintiff seeks recovery for
nominal damages which the law presumes to follow
naturally and necessarily from the defamation, and

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                           20
            which are recoverable by plaintiff or the third-party
            plaintiff without proof of causation and without proof
            of actual injury.

                  ....

                   In fact, it has been said that damages which are
            presumed from the publication or statement or
            distribution of defamatory material, while not capable
            of being accurately measured, are in many ways more
            substantial and real than those which can be proved and
            measured accurately by the dollar standard.

                   For these reasons, you are permitted to award
            nominal damages to compensate a party, the plaintiff or
            the third-party plaintiff, for injury to reputation which
            you reasonably believe he or she sustained. Nominal
            damages are a small amount of money damages that are
            not designed to compensate a plaintiff but are awarded
            for the infraction of a legal right where the extent of the
            loss is not shown . . . .

            [(emphasis added).]

      As to the defamation claim, the verdict sheet asked the jury, "Has the

plaintiff proven by a preponderance of the evidence that defendant . . . Paglione

defamed her?" The jury unanimously answered "Yes." The next question was,

"What amount of damages is plaintiff entitled to as a result of the defamation?"

The jury unanimously responded "$105,000."

      Defendant's post-judgment motions for JNOV or a new trial argued the

verdict was against the weight of the evidence.        The trial judge found the

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                                       21
evidence was "sufficient for a jury to conclude that [p]laintiff suffered

reputational damages." He found defendant intentionally sought out and made

his defamatory comments "to four different, unrelated people, all of whom lived

or worked in" the same area. The judge concluded as follows:

            There was no purpose for making such comments other
            than to hurt [p]laintiff and her reputation in her
            community.

                  It is also important to whom he made the
            comments: an employee, who might quit her job and
            leave [p]laintiff in a difficult position; the Code
            Enforcement Official who while performing his job
            must exercise substantial discretion, and who could
            exercise his discretion in a manner that substantially
            harms [p]laintiff; [p]laintiff's attorney, perhaps to get
            him to stop representing her; and her landlord, who
            could also make [p]laintiff's life difficult.

                  A reasonable jury could conclude that the
            purpose and intent of the defamation was precisely to
            hurt [p]laintiff's reputation in her community, and
            potentially to hurt her relationship with people of
            influence in her life.

The judge found plaintiff "testified compellingly about the emotional distress

she suffered knowing that [Paglione] was out there in the world making

comments about her that would cause some to conclude that she was guilty of

serious sexual misconduct."

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                                      22
      Also, "[t]here was sufficient evidence for the jury to make a finding of

defamation per se[,]" which would support an award of nominal damages. The

judge acknowledged it was unclear whether the jury awarded plaintiff $105,000

in compensatory or nominal damages. However, this was irrelevant to whether

the damages award should be sustained because "[t]he award of the damages

was not the product of passion or emotion. The jury awarded $105,000 in

compensatory or nominal damages . . . all within the instructions provided by

the court." The judge concluded "the award of $105,000 was [not] so grossly

excessive as to shock the conscience."

      We review a trial court's denial of a motion for a JNOV or new trial

applying the same standard as the trial court. Smith v. Millville Rescue Squad,

225 N.J. 373, 397 (2016). "The standard for granting a [JNOV] is essentially

the same as that applicable to the grant of a new trial motion." Pressler &

Verniero, Current N.J. Court Rules, cmt. 3 on R. 4:40-2 (2024). The court shall

not grant a motion for a new trial unless, "having given due regard to the

opportunity of the jury to pass on the credibility of the witnesses, it clearly and

convincingly appears that there was a miscarriage of justice under the law." R.

4:49-1(a). A "'miscarriage of justice' can arise when there is a 'manifest lack of

inherently credible evidence to support the finding,' when there has been an

                                                                             A-0683-21
                                       23
'obvious overlooking or under-valuation of crucial evidence,' or when the case

culminates in 'a clearly unjust result.'" Hayes v. Delamotte, 231 N.J. 373, 386

(2018) (quoting Risko v. Thompson Muller Auto. Grp., Inc., 206 N.J. 506, 521-

22 (2011)).

      "It is fundamental that '[a]ppropriate and proper charges to a jury are

essential for a fair trial.'" Velazquez ex rel. Velazquez v. Portadin, 163 N.J. 677,

688 (2000) (alteration in original) (quoting State v. Green, 86 N.J. 281, 287

(1981)). Jury instructions "must outline the function of the jury, set forth the

issues, correctly state the applicable law in understandable language, and plainly

spell out how the jury should apply the legal principles to the facts as it may

find them[.]" Wade v. Kessler Inst., 172 N.J. 327, 341 (2002) (alteration in

original) (quoting Velazquez, 163 N.J. at 688).

      "[I]n construing a jury charge, a court must examine the charge as a whole,

rather than focus on individual errors in isolation." Carmona v. Resorts Int'l

Hotel, Inc., 189 N.J. 354, 374 (2007) (citing Ryder v. Westinghouse Elec. Corp.,

128 F.3d 128, 137 (3d Cir. 1997)). "[A]n appellate court will not disturb a jury's

verdict based on a trial court's instructional error 'where the charge, considered

as a whole, adequately conveys the law and is unlikely to confuse or mislead the

jury, even though part of the charge, standing alone, might be incorrect.'" Wade,

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                                        24
172 N.J. at 341 (quoting Fischer v. Canario, 143 N.J. 235, 254 (1996)).

"Therefore, 'an appellate court must consider the language surrounding an

alleged error in order to determine its true effect.'" Smith v. Jersey Cent. Power

& Light Co., 421 N.J. Super. 374, 394 (App. Div. 2011) (quoting Viscik v.

Fowler Equip. Co., 173 N.J. 1, 18 (2002)).

      "Damages which may be recovered in an action for defamation are: (1)

compensatory or actual, which may be either (a) general or (b) special; (2)

punitive or exemplary; and (3) nominal." W.J.A. v. D.A., 210 N.J. 229, 239

(2012) (quoting Prosser and Keeton on Torts § 116A at 842 (5th ed. 1984)).

Actual damages are those "real losses flowing from the defamatory statement[,]"

which are "'not limited to out-of-pocket loss,' but include[] 'impairment to

reputation and standing in the community,' along with personal humiliation,

mental anguish, and suffering to the extent that they flow from the reputational

injury." Ibid. (quoting Gertz v. Robert Welch, Inc., 418 U.S. 323, 350 (1974)).

"Special" actual damages "compensate a plaintiff for specific economic or

pecuniary loss." Nuwave Inv. Corp. v. Hyman Beck & Co., 221 N.J. 495, 499

(2015). "General" actual damages "address harm that is not capable of precise

monetary calculation." Ibid. "All compensatory damages, whether considered

special or general, depend on showings of actual harm, demonstrated through

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                                       25
competent evidence, and may not include a damage award presumed by the

jury." Ibid.

      Nominal damages may be awarded in cases where damages are presumed,

but the plaintiff "has not proved a compensable loss." W.J.A., 210 N.J. at 240,

249. Damages are presumed in instances of "slander per se"; that is, "when one

accuses 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.'" Too Much Media, LLC v. Hale, 413 N.J. Super. 135, 166-67

(App. Div. 2010), aff'd as modified, 206 N.J. 209 (2011) (quoting McLaughlin

v. Rosanio, Bailets, & Talamo, Inc., 331 N.J. Super. 303, 313-14 (App. Div.

2000)). "Nominal damages are 'awarded for the infraction of a legal right, where

the extent of the loss is not shown, or where the right is one not dependent upon

loss or damage.'" W.J.A., 210 N.J. at 240-41 (quoting Charles T. McCormick,

Damages 85 (1935)).

      An award of nominal damages is a "judicial declaration that the plaintiff's

right has been violated[,]" id. at 241 (quoting McCormick, Damages 85), and

"serves the purpose of vindicating the plaintiff's character by a verdict of a jury

that establishes the falsity of the defamatory statement."       Id. at 241. The

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Punitive Damages Act (PDA), N.J.S.A. 2A:15-5.9 to -5.17, defines nominal

damages as "damages that are not designed to compensate a plaintiff and are

less than $500." N.J.S.A. 2A:15-5.10. "An award of nominal damages cannot

support an award of punitive damages"; punitive damages are only available "if

compensatory damages have been awarded in the first stage of the trial."

N.J.S.A. 2A:15-5.13(c).

      Pursuant to these principles, we are constrained to reverse the $105,000

award because the jury instruction on nominal damages was incorrect and

confusing. As we recounted, the trial judge gave the jury two different and

contradictory definitions of nominal damages. First, he told the jury "nominal"

was "not intended to denote a small or modest sum, but the sum you the jury

believe is appropriate to compensate the victim for the damages suffered ." He

then instructed them that "[n]ominal damages are a small amount of money

damages that are not designed to compensate a plaintiff but are awarded for the

infraction of a legal right where the extent of the loss is not shown."

      The section of the judge's instruction advising the jury "nominal [is] not

intended to denote a small or modest sum" was created by the judge. The latter

part of the instruction advising "[n]ominal damages are a small amount of money

                                                                          A-0683-21
                                       27
damages that are not designed to compensate a plaintiff" was drawn from

Section D of the then-existing Model Charge.

      Recently, our Supreme Court held Section D of the Model Charge was

"contradictory" and "did not 'adequately convey[] the law'" because it stated

both that the jury "could 'award nominal damages to compensate the plaintiff'"

and that "[n]ominal damages . . . are not designed to compensate a plaintiff."

Graphnet, Inc. v. Retarus, Inc., 250 N.J. 24, 42 (2022) (alterations in original)

(quoting Fischer, 143 N.J. at 254).        Graphnet involved a claim of trade

defamation by a competitor, Retarus, who criticized Graphnet's performance in

providing "cloud-based facsimile services" and "described the purported

advantages of Retarus's services" in a brochure provided to potential customers.

Id. at 30. "At trial, Graphnet introduced evidence that it had lost revenue from

several clients after Retarus published the brochure, most notably J.P. Morgan

Chase (JPMC)[,]" although JPMC personnel "stated that JPMC did not rely on

the brochure in choosing Retarus as a new vendor." Id. at 31-32.

      After being instructed in accordance with the Model Charge, the jury

determined Graphnet had not proven any "actual damages that it suffered as a

result of the statement made by Retarus" and awarded no compensatory

damages. Id. at 34. The next question on the verdict sheet asked:

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                                      28
            In the event that you find that Graphnet is not entitled
            to actual damages, Graphnet may recover nominal
            damages without proof of causation and without proof
            of actual harm for the publication of the defamatory
            statement to a third party other than Graphnet. What is
            the amount of nominal damages Graphnet is entitled to
            compensate Graphnet for the injury to reputation which
            you reasonably believe is sustained?

            [Ibid.]

In response, the jury awarded Graphnet $800,000 in nominal damages. Ibid.

      The trial court granted Retarus's motion for remittitur and reduced the

award to $500 because it found the award was "grossly disproportionate to the

purpose of nominal damages." Ibid. (quoting N.J.S.A. 2A:15-5.10). Although

the Court reversed the grant of remittitur because Graphnet did not consent, it

held the error in the jury charge required a remand for a new trial on the entire

damages issue, compensatory and nominal. Id. at 41-42.

      The Court found that, in accordance with the limit set in the PDA,

"nominal damages, under New Jersey law, can best be defined as 'a token

amount of not more than $500.'" Id. at 39. Thus, the Court required on remand

that the jury be instructed on the $500 limit to nominal damages and referred the

matter to the Committee on Model Civil Jury Charges for changes to the Model

Charge. Id. at 43. The Committee thereafter amended the Model Charge

incorporating the $500 limit on nominal damages. See Model Jury Charges

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                                      29
(Civil), 8.46, "Defamation Damages (Private or Public)" (approved June 2014;

revised Nov. 2022).

      The jury instruction here suffered from the same deficiency as the one in

Graphnet. The problematic nature of the instruction was further compounded

by the contradictory definition of nominal damages, which advised this type of

damages could be either small or large. The judge's view the jury could award

$105,000 in nominal damages, notwithstanding the $500 limit set forth in the

PDA, was a mistaken application of law.

      Moreover, the verdict sheet used here was problematic because, unlike the

one in Graphnet, it did not contain separate interrogatories on compensatory and

nominal damages. See Sons of Thunder v. Borden, Inc., 148 N.J. 396, 418

(1997) (verdict sheet may be grounds for reversal if questions "were misleading,

confusing, or ambiguous"). Therefore, we have no means of discerning whether

the jury intended to award compensatory or nominal damages.

      We reject defendants' claim it was reversible error for the trial judge to

instruct the jury on compensatory damages at all because plaintiff produced no

evidence of actual damages. The trial judge found plaintiff produced sufficient

evidence her emotional distress was a result of reputational injury to let the jury

consider the question of compensatory damages. He explained how there was

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                                       30
no purpose for Paglione's statements other than to damage her reputation in her

community by damaging her relationship with her landlord, lawyer, employee,

and code enforcement officials.

      Actual damages for defamation may arise from "personal humiliation,

mental anguish, and suffering" but only "to the extent that they flow from the

reputational injury." W.J.A., 210 N.J. at 239 (quoting Gertz, 418 U.S. at 350).

"Accordingly, a plaintiff should offer some concrete proof that his reputation

has been injured." Sisler v. Gannett Co., 104 N.J. 256, 281 (1986). It is a "fatal

deficiency" for a plaintiff seeking actual damages for defamation to provide

evidence demonstrating only that "his sufferings were directly caused by

defendants' remarks and not by their effect upon his reputation." Arturi v.

Tiebie, 73 N.J. Super. 217, 223 (App. Div. 1962). Although "[t]estimony of

third parties as to a diminished reputation will also suffice to prove 'actual

injury[,]'" an "[a]ward[] based on a plaintiff's testimony alone or on 'inferred'

damages [is] unacceptable." Sisler, 104 N.J. at 281.

      Plaintiff presented evidence of her emotional distress in support of her

damages claim resulting from Paglione's defamatory statements. However, none

of the witnesses specifically testified plaintiff's reputation was in fact harmed

because of Paglione's statements. Plaintiff testified she was harmed because,

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                                       31
for the past "three years" she had been "[w]ondering if something's going to

happen to [her] business or how [her] reputation is being destroyed out there"

but did not cite examples of actual reputational damage.

      Our standard of review on a JNOV or new trial requires us to accord

plaintiff "the benefit of all inferences which can reasonably and legitimately be

deduced" from the testimony.       Dolson v. Anastasia, 55 N.J. 2, 5 (1969).

Reasonable minds can differ as to whether the testimony demonstrated plaintiff

suffered a reputational injury. Sons of Thunder, 148 N.J. at 415. Under the

circumstances of this case, it was not a miscarriage of justice to let the jury

consider the compensatory damages issue.

      However, because we are unable to discern whether the jury awarded

compensatory or nominal damages, we vacate and remand the damages award

for a new trial on damages. We further direct the court to fashion a verdict sheet

that separately delineates the compensatory and nominal damages jury

interrogatories.

                                       III.

      Finally, we are in accord with defendants' argument the punitive damages

award must be vacated because they are unavailable to a plaintiff who is awarded

only nominal damages. Punitive damages may be awarded "if compensatory

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                                       32
damages have been awarded in the first stage of the trial." N.J.S.A. 2A:15 -

5.13(c). As we noted, we cannot discern whether the jury awarded plaintiff

compensatory or nominal damages. For these reasons, the punitive damages

award is vacated and shall abide the outcome of the retrial and whether plaintiff

proves she is entitled to compensatory damages.

      Affirmed in part and vacated and remanded in part. We do not retain

jurisdiction.

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