NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-2157-22
ANGEL CRUZ, EMANUEL RUPERTO LOPEZ, FERDINAND TORRES, EUCLIDES RUPERTO MENDEZ, LUIS OBANDO, JOSE ADOLFO BARRAZA, EFRAIN MORALES, WALTER CHAVARRIA, ANGEL E. CALVA SALAS, JOSE VERA VALDEZ, ANTONIO M. DA ROSA, and WILFREDO SANCHEZ,
Plaintiffs-Appellants,
v.
ASPEN LANDSCAPING CONTRACTING, INC. and MARIA FUENTES,
Defendants,
and
EASTERN LANDSCAPE CONTRACTORS, INC., and DONALD FUENTES,
Defendants-Respondents. ______________________________ Argued May 1, 2024 – Decided December 27, 2024
Before Judges Vernoia and Gummer.
On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-8360-16.
Jeffrey W. Varcadipane argued the cause for appellants (Varcadipane & Pinnisi, PC, attorneys; Jeffrey W. Varcadipane, on the briefs).
Michael A. Spizzuco, Jr. argued the cause for respondents (Brach Eichler, LLC, attorneys; Anthony M. Rainone, on the brief).
The opinion of the court was delivered by
VERNOIA, P.J.A.D.
In their fourth-amended complaint, plaintiffs Angel Cruz, Emanuel
Ruperto Lopez, Ferdinand Torres, Euclides Ruperto Mendez, Luis Obando, Jose
Adolfo Barraza, Efrain Morales, Walter Chavarria, Angel E. Calva Salas, Jose
Vera Valdez, Antonio M. Da Rosa and Wilfredo Sanchez allege defendants,
Aspen Landscaping Contracting Inc. (Aspen), Maria Fuentes (Maria), Donald
Fuentes (Donald), and an alleged successor company of Aspen, Eastern
Landscape Contractors Inc. (Eastern) (collectively, "defendants"), breached
various contractual obligations and violated "New Jersey Wage and Hour Laws,
N.J.S.A. 34:11-1 to -68," by failing to pay to them wages, including overtime
A-2157-22 2 pay, during the years 2006 through 2017. 1 Plaintiffs appeal from orders granting
Donald and Eastern's motion to dismiss the complaint for failure to state a claim
upon which relief may be granted and denying plaintiffs' motion for
reconsideration of the dismissal order. 2 We reverse in part, vacate in part, and
remand for further proceedings.
I.
The initial complaint in this matter was filed on December 6, 2016, against
Aspen as the sole defendant. A first-amended complaint, naming only Aspen as
a defendant, was filed on July 9, 2018. A second-amended complaint, adding
three additional plaintiffs, was filed on September 10, 2018, again only against
Aspen.
In November 2019, Aspen filed a Chapter 11 bankruptcy petition in the
United States Bankruptcy Court for the District of New Jersey. Plaintiffs
entered an appearance in the bankruptcy proceeding and Aspen filed a notice of
bankruptcy in plaintiffs' pending Law Division action.
1 Because Maria Fuentes and Donald Fuentes share the same surname, we refer to them by their first names for clarity, intending no disrespect in doing so. 2 Plaintiffs' claims against Aspen were addressed and resolved in a bankruptcy proceeding and plaintiffs settled their claims against Maria. A-2157-22 3 In February 2020, plaintiffs filed a motion in the Law Division for leave
to amend their complaint to add Maria as a defendant. The court granted
plaintiffs' motion, and, on May 22, 2020, the court granted plaintiffs' motion for
leave to add Donald and Eastern as defendants. On June 22, 2020, plaintiffs
filed a third-amended complaint, adding for the first time Maria, Donald, and
Eastern as defendants in the Law Division action.
Donald and Eastern removed the third-amended complaint, which
included a cause of action alleging a violation of the Fair Labor Standards Act
(FLSA), 29 U.S.C. §§ 201 to 219, to the United States District Court for the
District of New Jersey. In the federal action, plaintiffs moved to file a fourth-
amended complaint that did not include the FLSA claim. The District Court
granted plaintiffs' motion and remanded the matter to the Law Division because
it no longer included a federal claim.
After the matter returned to the Law Division, plaintiffs filed the fourth-
amended complaint that is at issue on this appeal. Donald and Eastern moved
to dismiss the complaint pursuant to Rule 4:6-2(e) for failure to state a claim
and the court granted their motion. Plaintiffs appeal from the dismissal order
and the court's subsequent order denying plaintiffs' motion for reconsideration.
A-2157-22 4 Because the appeal requires our consideration of the disposition of a Rule
4:6-2(e) motion to dismiss a complaint for failure to state a claim upon which
relief may be granted, we "examine 'the legal sufficiency of the facts alleged on
the face of the complaint,' giving the plaintiff the benefit of 'every reasonable
inference of fact.'" Baskin v. P.C. Richard & Son, LLC, 246 N.J. 157, 171
(2021) (quoting Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo, Hyman &
Stahl, P.C., 237 N.J. 91, 107 (2019)). We therefore limit the following summary
of the facts to those asserted in plaintiffs' fourth-amended complaint (the
complaint) because it is the operative complaint for our analysis of the dismissal
order that is the subject of this appeal.
At all times relevant to the allegations in the complaint, plaintiffs were
employed by Aspen, which is "a landscaper that performs large scale
landscaping services throughout New Jersey." Maria is Aspen's sole shareholder
and managing partner. Donald "was an equitable owner and managing officer"
of Aspen. At some unidentified time, Donald departed from Aspen and formed
a new business, Eastern, that "he, along with certain family members , owns and
operates."
In November 2019, "Aspen filed a petition for bankruptcy relief under
Chapter 11 in the United States Bankruptcy Court for the District of New
A-2157-22 5 Jersey." As a result of the filing, the Law Division stayed plaintiffs' action
against Aspen. Although not alleged in the complaint, the parties agree that
subsequent to the filing of the complaint in the Law Division action, plaintiffs'
claims against Aspen were resolved in the bankruptcy proceeding.
In the complaint plaintiffs allege that at all times relevant to their claims,
plaintiffs were engaged and employed to perform, and performed, work for
Aspen. Plaintiffs' "work and/or employment with Aspen was the subject of
certain contracts, of which [p]laintiffs were either signatories and/or third-party
beneficiaries." Other than plaintiffs Chavarria and Luis Obando, the remaining
"[p]laintiffs were members of unions and were intended third-party beneficiaries
of their respective union's collective bargaining agreements." Plaintiffs alleged
that Aspen was bound by the various contracts to pay plaintiffs "for all the time
they spent working, including additional pay for hours worked that constituted
'overtime' and the hourly wages for said work" in addition to "the benefits and
other remuneration" required under the contracts and collective bargaining
agreements.
During the years 2006 through 2017, plaintiffs performed work for, and
were employed by, Aspen "and were routinely required to work hours for
Aspen" for which they were not paid, including "hours that should have been
A-2157-22 6 paid at overtime rates." Aspen and its principals "intentionally and knowingly"
failed and refused to pay plaintiffs "for hours they worked, including overtime
hours."
Plaintiffs and others complained to their respective union representatives
regarding Aspen's failure to pay for hours of work performed but they were not
provided any remedy. "[S]hortly after any individual logged any such
complaint, Aspen['s] principals, executives and/or managers, including [Maria],
would reprimand and/or terminate said individual(s)." Those actions were taken
"as direct retaliations for any complaints pertaining to Aspen's refusal to pay
workers for all hours they had worked, including overtime." Aspen failed to pay
plaintiffs for all the hours they had worked, including overtime hours.
According to the complaint, Eastern is "a successor entity" to Aspen.
Based on those factual allegations, plaintiffs asserted two causes of
action.3 In the first, plaintiffs allege Aspen breached the various contracts with
plaintiffs and their collective bargaining representatives that required Aspen to
pay plaintiffs "specified wages for all the time [p]laintiffs devoted to work on
3 The complaint also includes a third cause of action, asserting Aspen violated the Fair Labor Standards Act, 29 U.S.C. §§ 201 to 219. It appears that claim was resolved against Aspen in the bankruptcy proceeding or was otherwise withdrawn during the litigation in the United States District Court. Its disposition is not an issue on this appeal. A-2157-22 7 behalf of Aspen," including time spent working overtime. Plaintiffs further
alleged Eastern, as a successor entity to Aspen, "is liable for all damages
accruing to Aspen."
The second cause of action alleged that Aspen, Maria, Donald, and
Eastern, as a successor to Aspen, had violated the "New Jersey Wage and Hour
Laws, N.J.S.A. 34:11-1 to -68." Plaintiffs asserted: Aspen had "defaulted on
its wages obligations" by filing the bankruptcy petition; Maria was personally
liable for the unpaid wages "as Aspen's sole shareholder and managing officer";
Donald was personally liable for the unpaid wages "[b]y virtue of his position
as an equitable owner and managing officer of Aspen"; and Eastern was liable
for all damages accruing to Aspen "as a successor entity."
Donald and Eastern moved for dismissal of the complaint, arguing the
facts in the complaint failed to state a claim upon which relief may be granted.
See R. 4:6-2(e). At oral argument on the motion, the court noted that plaintiffs
had clarified that the complaint's allegation Donald and Eastern had violated the
New Jersey wage and hour laws included claimed violations of the New Jersey
Prevailing Wage Act (PWA), N.J.S.A. 56:11-56.25 to -48, the New Jersey Wage
A-2157-22 8 Payment Law (WPL), N.J.S.A. 34:11-4.1 to -4.14, and the New Jersey Wage
and Hour Law (WHL), N.J.S.A. 34:11-56a to -56a38.4
Donald argued the complaint did not assert a claim against him upon
which relief could be granted because he was not an employer bound by the
requirements of the WHL, WPL, or PWA, and any claims against him under
those statutes were time-barred by the applicable statutes of limitation. Eastern
argued the complaint failed to state a claim against it because it had not been
formed when the alleged statutory violations occurred, the complaint did not
allege facts sufficient to support a claim it was a successor to Aspen, and the
claims were otherwise time-barred. In response, plaintiffs argued the claims
were timely filed because their causes of action against Donald and Eastern—
4 The court also referred to the New Jersey Wage Theft Act, L. 2019, c. 212, which was enacted in August 2019. The Act "confers upon an aggrieved employee" the right to "recover in a civil action the full amount of any wages due, or any wages lost because of retaliatory action taken in violation of [N.J.S.A. 34:11-4.10(a)], . . . plus an amount of liquidated damages equal to not more than 200 percent of the wages lost or of the wages due, together with costs and reasonable attorney's fees." Musker v. Suuchi, 479 N.J. Super. 38, 43-44 (App. Div. 2024) (alteration in original) (quoting Maia v. IEW Constr. Grp., 475 N.J. Super. 44, 50-51 (App. Div. 2023)), rev'd on other grounds, 257 N.J. 330 (2024). The court did not further address the statute, and plaintiffs do not argue on appeal the court erred by dismissing any purported claim under the statute. As such, any putative challenge to the court's order dismissing the claim under Rule 4:6-2(e) is deemed abandoned. See Drinker Biddle & Reath LLP v. N.J. Dep't of L. & Pub. Safety, 421 N.J. Super. 489, 496 n.5 (App. Div. 2011). A-2157-22 9 and Maria as well—did not accrue until Aspen defaulted on its obligation to pay
the claimed wages, and that occurred when Aspen filed its bankruptcy petition. 5
The court found there was no legal authority for plaintiffs' claim the
alleged causes of action against Donald, as a putative employer of plaintiffs, and
Eastern, as a successor to Aspen, did not accrue until Aspen filed for bankruptcy.
The court further found that plaintiffs had known about Donald as a putative
employer "from the very beginning" and, as such, the statute of limitations on
the asserted claims "run[] from the date, Aspen and Maria and Donald . . . did
not pay the wages and . . . not from the time that Aspen filed for bankruptcy."
The court found plaintiffs' claims against Donald and Eastern barred under the
applicable statutes of limitation, there was no basis to find the claims against
Donald and Eastern for the first time in 2020 related back to the filing of the
original complaint in 2016, and plaintiffs had not pleaded facts sufficient to
5 During the argument on Donald's and Eastern's motion to dismiss, the court also decided and granted Maria's motion for reconsideration of a prior order denying her motion to dismiss the complaint against her. The court granted the reconsideration motion and dismissed the complaint against her as well. The order entered on Maria's reconsideration motion is not included in the record on appeal. We need not address the court's order dismissing the complaint as to Maria because it is not challenged on appeal and has no relevance to a disposition of Donald and Eastern's arguments on appeal. And, as noted, Maria and plaintiffs later entered into a settlement. A-2157-22 10 establish that Eastern was either a successor to Aspen or had liability as a
successor to Aspen.
The court entered an order dismissing plaintiffs' complaint. Plaintiffs
moved for reconsideration of the order. The court denied the reconsideration
motion and entered a memorializing order. Plaintiffs appeal from the court's
orders.
II.
We conduct a de novo review of a court's decision granting a motion to
dismiss a complaint for failure to state a claim upon which relief may be granted
under Rule 4:6-2(e), "affording no deference to the trial judge's legal
conclusions." Maia, 257 N.J. at 341. In determining the adequacy of a
complaint, we must determine "whether a cause of action is 'suggested' by the
facts." Ibid. (quoting Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J.
739, 746 (1989)). However, a complaint should be dismissed when it "fails to
state a 'claim that supports relief, and discovery will not give rise to such a
claim.'" Id. at 341-42 (quoting Dimitrakopoulos, 237 N.J. at 107). The analysis
of a motion to dismiss under Rule 4:6-2(e) requires that the court "search[] the
complaint in depth and with liberality to ascertain whether the fundament of a
cause of action may be gleaned even from an obscure statement of claim,
A-2157-22 11 opportunity being given to amend if necessary." Printing Mart-Morristown, 116
N.J. at 746 (quoting De Cristofaro v. Laurel Grove Mem'l Park, 43 N.J. Super.
244, 252 (App. Div. 1957)). A court must give the non-moving party every
inference in evaluating whether to dismiss a claim under Rule 4:6-2(e). See
NCP Liti. Tr. v. KPMG, LLP, 187 N.J. 353, 365 (2006); Banco Popular N. Am.
v. Gandi, 184 N.J. 161, 165-66 (2005).
Here, as noted, in their complaint plaintiffs assert a breach of contract
claim against Eastern and separately alleged Eastern and Donald are liable for
violations of "New Jersey Wage and Hour Laws" codified in "N.J.S.A. 34:11-1
and 68." More particularly, plaintiffs allege Eastern and Donald are liable for
violations of the PWA, WPL, and WHL, each of which fall within the statutes
cited in the complaint. We therefore consider whether the complaint states a
cause of action upon which relief may be granted on those claims in the
complaint.
We begin by noting that we agree with plaintiffs that the motion court
erred by finding the complaint averred defendants failed to pay wages due only
for overtime hours worked. The complaint alleges more than that. The
complaint asserts plaintiffs were not paid "specified wages for all time [they]
devoted to work on behalf of Aspen, including . . . additional wages for overtime
A-2157-22 12 worked" and defendants failed to pay wages due "for all the hours they worked
. . . and . . . overtime wages." (Emphasis added). Those allegations plainly state
claims that, as a matter of fact, plaintiffs were not paid wages for hours worked
at both regular and overtime pay rates. We reject the court's conclusion and
Donald and Eastern's claim to the contrary and therefore consider whether those
facts support a cognizable claim against Donald and Eastern under the breach of
contract and statutory causes of action asserted in the complaint.
Plaintiffs' breach-of-contract claim is asserted against Aspen and Eastern.
Plaintiffs do not allege or claim Donald is liable for any purported breach of
contract. They allege that at all relevant times—from 2006 through 2017—
plaintiffs worked for Aspen and it failed to pay them wages as required under
various "contracts and/or collective bargaining agreements." They further allege
plaintiffs suffered damages as a result of Aspen's failure to pay the wages. The
singular allegation against Eastern is that it is liable for those damages "as a
successor entity" to Aspen.
A determination as to whether a corporation is a successor to, and
therefore liable for, the obligations of a predecessor corporation requires a fact-
sensitive inquiry. For example, as a general rule, "when a company sells its
assets to another company, the acquiring company is not liable for the debts and
A-2157-22 13 liabilities of the selling company simply because it has succeeded to the
ownership of the assets of the seller." Lefever v. K.P. Hovanian Enters., 160
N.J. 307, 310 (1999). There are exceptions to the rule where: "(1) the successor
expressly or impliedly assumes the predecessor's liabilities; (2) there is an actual
or de facto consolidation or merger of the seller and the purchaser; [or] (3) the
purchasing company is a mere continuation of the seller[.]" Ibid. "A necessary
predicate to a finding of successor liability" is the successor company must
acquire "all or substantially all" of the predecessor's assets. 160 W. Broadway
Assocs., LP v. 1 Mem'l Drive, LLC, 466 N.J. Super. 600, 613 (App. Div. 2021).
We do not suggest that we have provided an exhaustive summary of the
legal principles that may be applicable to determining if Eastern has successor
liability for Aspen's alleged breach of contractual obligations owed to plaintiffs .6
6 We reject plaintiffs' contention that N.J.S.A. 34:11-58.1 provides the applicable standard for determining whether Eastern is a successor to Aspen such that the complaint stated a claim Eastern is liable for Aspen's alleged breach of contractual obligations owed to plaintiffs or Aspen's alleged violations of various wage and hour laws. The statute states "[a] rebuttable presumption that an employer has established a successor entity arises if the two share at least two of" eight specified "capacities or characteristics," N.J.S.A. 34:11-58.1(d)(1) to (8), but by its express terms the statute applies only where the New Jersey Commissioner of Labor has issued "a written determination directing any appropriate agency to suspend one or more licenses held by [an] employer or successor firm of the employer until the employer complies with [a] determination or judgment" of the Commissioner or a court "made under the
A-2157-22 14 We note the foregoing simply to illustrate that plaintiffs' assertion Eastern is a
"successor" to Aspen constitutes nothing more than a legal conclusion that is
untethered to any factual allegations necessary to support a successor-liability
claim.
"In reviewing a complaint dismissed under Rule 4:6-2(e) our inquiry is
limited to examining the legal sufficiency of the facts alleged on the face of the
complaint." Printing Mart-Morristown, 116 N.J. at 746; see also Baskin, 246
N.J. at 171; R. 4:5-2 (providing pleadings setting forth a claim for relief shall
include "a statement of facts on which the claim is based"). We have engaged
in the requisite "painstaking" review of the "complaint's allegations of fact . . .
with a generous and hospitable approach" and are unable to find a single
allegation of fact supporting plaintiffs' successor-liability claim against Eastern.
Printing Mart-Morristown, 116 N.J. at 746. In the absence of any allegations of
fact supporting it, plaintiffs' singular conclusory assertion Eastern is a successor
to Aspen is simply insufficient to support the successor-liability claim. See
Scheidt v. DRS Techns., Inc., 424 N.J. Super. 188, 193 (App. Div. 2012)
provisions of State wage and hour laws." There is no allegation the Commissioner of Labor has issued any such order here. Moreover, even if the statute applied, plaintiffs' complaint does not include factual allegations sufficient to support a finding of any of the statutory factors supporting the "rebuttable presumption." See N.J.S.A. 34:11-58.1(d)(1) to (8). A-2157-22 15 (explaining "conclusory allegations are insufficient" to sustain a claim upon
which relief may be granted under Rule 4:6-2(e)); Glass v. Suburban Restoration
Co., 317 N.J. Super. 574, 582 (App. Div. 1998) ("It has long been established
that pleadings reciting mere conclusions without facts . . . do not justify a
lawsuit."). The court therefore correctly concluded plaintiffs' failed to state a
claim upon which relief may be granted on the asserted breach-of-contract cause
of action against Eastern.
For the same reasons, the court correctly found plaintiffs failed to state a
cognizable cause of action on their statutory claims—alleged by plaintiffs under
"New Jersey Wage and Hour Laws"—against Eastern. Those claims against
Eastern—set forth in count two of the complaint—are also founded on the
allegation that Aspen had violated the PWA, WHL, and WPL and the conclusory
assertion Eastern is liable as Aspen's successor. The complaint is bereft of any
factual allegations which, even if accepted as true, support a finding Eastern is
a successor to Aspen. And, for that reason, we find no error in the court's
determination plaintiffs failed to state any cognizable claims against Eastern
under the various statutes. Again, plaintiffs' conclusory assertion Eastern is a
successor to Aspen, in the absence of any supporting facts, does not support the
A-2157-22 16 statutory causes of action against Eastern as a purported successor to Aspen.
See Scheidt, 424 N.J. Super. at 193; Glass, 317 N.J. Super. at 582.
We next consider plaintiffs' claims against Donald. In the complaint,
plaintiffs allege Donald is personally liable for Aspen's alleged failure to pay
wages pursuant to the PWA, WPL, and WHL because he was an "equitable
owner and managing officer of Aspen" and therefore qualifies as an "employer"
under the statutes who has personal liability for any failure to pay the wages,
including wages for overtime hours worked, as required. The motion court
dismissed the claims, finding plaintiffs had not alleged facts sufficient to support
causes of action under the PWA and WPL, and dismissed those claims even
though they were otherwise filed within the six-year limitations periods
applicable under those statutes. The court, however, determined the complaint
alleged facts supporting a claim under the WHL, but the court dismissed the
cause of action, finding it had been filed against Donald beyond the applicable
two-year statute of limitations, and there was no basis to find the complaint as
to Donald related back to the 2016 filing of the original complaint. We consider
the court's determinations as to each of the statutes in turn.
The PWA provides that a "contract for 'public work' in excess of a
threshold amount" must "'contain a provision' stating that the workers 'shall be
A-2157-22 17 paid not less than [the] prevailing wage rate.'" Troise v. Extel Commc'ns, Inc.,
345 N.J. Super. 231, 235 (App. Div. 2001) (alteration in original), aff'd o.b., 174
N.J. 375 (2002). "An employee who is paid less than the prevailing wage for
work covered by the" PWA "'may recover in a civil action the full amount of
such prevailing wage less than any amount actually paid to him or her by
employer together with costs and such reasonable attorney's fees as may be
allowed by the court.'" Id. at 236 (quoting N.J.S.A. 34:11-56.40). Although the
PWA does not include an express limitations period for the filing of a private
cause of action, we have held that the six-year limitations period "in N.J.S.A.
2A:14-1 for breach of contract and tortious injury other than injury to the
person" applies to PWA claims. Id. at 236-38.
The complaint fails to state a claim upon which relief may be granted
under the PWA because it does not allege plaintiffs performed any work while
employed by Aspen that qualified as "public work" subject to the PWA's
requirements. That is, the complaint does not allege plaintiffs performed any
work for which they were entitled to pay at the prevailing wage rates required
under the PWA. The court correctly found plaintiffs had not alleged facts
sufficient to support a cause of action under the PWA on that basis.
A-2157-22 18 Plaintiffs also argue the court erred by dismissing their claim under the
WPL. The WPL "governs 'the time and mode of payment of wages due to
employees.'" Musker, 479 N.J. Super. at 42 (quoting Hargrove v. Sleepy's, LLC,
220 N.J. 289, 302 (2015)). The statute is "designed to protect employees' wages
and to guarantee receipt of the fruits of their labor." Ibid. (quoting Rosen v.
Smith Barney, Inc., 393 N.J. Super. 578, 585 (App. Div. 2007), aff'd, 195 N.J.
423 (2008)). In pertinent part, the WPL provides that "every employer shall pay
the full amount of wages due to [that employer's] employees" at prescribed
intervals. Ibid. (quoting N.J.S.A. 34:11-4.2). Wages are defined as "the direct
monetary compensation for labor or services rendered by an employee, where
the amount due is determined on a time, task, piece, or commission basis
excluding any form of supplementary incentives and bonuses which are
calculated independently of regular wages and paid in addition thereto."
N.J.S.A. 34:11-4.1(d).
The WPL is "a 'remedial statute' that should be 'liberally construed' to
effectuate its remedial purpose." Ibid. (quoting Hargrove, 220 N.J. at 303).
Consistent with its purpose, the WPL provides that "officers and managers of an
employing corporation [are] personally liable if that corporation fails to pay
wages to an employee in violation of the statute." Ibid. More particularly,
A-2157-22 19 N.J.S.A. 34:11-4.1 provides that under the WPL, "the officers of a corporation
and any agents having the management of such corporation shall be deemed to
be employers of the employees of the corporation."
Contrary to the motion court's conclusion, there are sufficient facts alleged
in the complaint supporting a cause of action against Donald for a violation of
the WPL. Plaintiffs allege Aspen failed to honor its obligation to timely pay
plaintiffs for earned wages—both at regular and overtime rates—and Donald
was an "equitable owner and managing officer" of Aspen. In our view, those
alleged facts support a claim that Donald is liable under N.J.S.A. 34:11-4.1 for
Aspen's alleged failure, in violation of the WPL, to timely pay plaintiffs their
wages.
The WPL does not include an express limitations period for the filing of
a private cause of action under N.J.S.A. 34:11-4.7. We are persuaded, however,
by our reasoning in Troise that the six-year limitations period in N.J.S.A. 2A:14-
1 should apply to claims under the WPL. In Troise, we were required to
determine the limitations period for private causes of action under the PWA,
which, like the WPL, does not include a statute of limitations. We determined
that a claim for wages arising under the PWA are comparable to claims for
"breach of contract or economic harm" such that they should be "subject to the
A-2157-22 20 six-year limitations period provided by N.J.S.A. 2A:14-1 for breach of contract
and tort claims for economic harm." Id. at 368. The reasoning supporting our
conclusion in Troise applies with syllogistic precision here. We therefore
conclude private causes of action under the WPL are subject to the six-year
statute of limitations in N.J.S.A. 2A:14-1.
Plaintiffs filed their complaint against Donald on June 22, 2020. It is
therefore timely as to claims arising during the six years prior to that date.
Because plaintiffs allege a failure to pay wages in accordance with the WPL
from 2006 through 2017, they assert a claim upon which relief may be granted
as to claims falling within the limitations period. 7 As such, the court erred in
dismissing the WPL cause of action against Donald. The complaint contains
sufficient facts to support claims cognizable under the WPL that fall within the
six-year limitations period.
7 We do not offer any opinion as to determination of when any of the claims asserted in the complaint may have arisen or which claims may fall within the limitations period. We determine only that based on the allegations in the complaint, plaintiffs state a cause of action under the WPL that was filed within the six-year limitations period. Those issues shall be decided by the trial court in the first instance based on the record and arguments presented before it. A-2157-22 21 Plaintiffs also asserted a claim against Donald under the WHL. The court
dismissed the claim, finding it was time-barred. We affirm the court's
determination.
"The WHL is designed to 'protect employees from unfair wages and
excessive hours.'" Hargrove, 220 N.J. at 304 (quoting In re Raymour & Flanigan
Furniture, 405 N.J. Super. 367, 376 (App. Div. 2009)). The WHL establishes "a
minimum wage and also an overtime rate for each hour worked in excess of forty
hours in any week for certain employees," id. at 304 (citing N.J.S.A. 34:11-
56a4), and authorizes the filing of a civil action against an employer by an
employee who is not paid in accordance with the statute's requirements, N.J.S.A.
34:11-56a25. An individual is defined as an "employer" under the WHL if he
or she acts "directly or indirectly in the interest of an employer in relation to an
employee." N.J.S.A. 34:11-56a1.
The WHL was enacted in 1966, Hargrove, 220 N.J. at 304, and "[i]n its
original form . . . did not contain any limitations provision, but a little more than
a year after enactment, the law was amended to add a two-year statute of
limitations with respect to private causes of action, L. 1967, c. 216." Troise,
345 N.J. Super. at 240; see also Maia, 257 N.J. at 345-46 (2024). The two-year
A-2157-22 22 limitations period was codified in N.J.S.A. 34:11-56a25.1 (1967). Maia, 257
N.J. 345-46.
Here, the motion court applied the two-year limitations period and
determined plaintiffs' claim that Donald violated the WHL during the period
2006 through 2017 was time-barred because he was not named as a defendant
until 2020. Plaintiffs argue the two-year limitations period does not apply
because in 2019 the Legislature amended N.J.S.A. 34:11-56a25.1 to extend the
limitations period for a private cause of action under the WHL to six years. L.
2019, c. 212; see also Maia, 257 N.J. at 337. Plaintiffs therefore contend their
WHL claim against Donald is timely because it was filed in 2020, and Donald
is liable under the statute for unpaid wages within the six-year limitations
period.
We reject plaintiffs' argument because our Supreme Court has held the
2019 amendment extending the limitations period for private causes of action
filed under N.J.S.A. 34:11-56a25.1 "is to be applied prospectively to conduct
that occurred on or after April 6, 2019"—the effective date of the extended
limitations period under L. 2019, c. 212—"not retroactively to conduct that
occurred before the effective date." Maia, 257 N.J. at 351. As a result, the prior
two-year limitations period applies to Donald's alleged violations of the WHL
A-2157-22 23 during the entire period—2006 through 2017—alleged in the complaint.
Because the complaint against Donald was not filed until 2020, plaintiffs' WHL
claims against him are time-barred, see ibid., and the complaint therefore fails
to state a WHL claim upon which relief may be granted.
We reject plaintiffs' claim the limitations periods applicable to their
statutory claims against Donald did not begin to run until Aspen declared
bankruptcy. The claim is based on the contention that Donald is "secondarily
liable" for Aspen's failure to comply with its statutory obligations to pay
plaintiffs the wages due and therefore the statute of limitations did not begin to
run on the claims against him until Aspen, by filing for bankruptcy, showed the
wages would not be paid.
The argument ignores that in the complaint plaintiffs allege Donald is
personally and directly, not secondarily, liable for the alleged statutory
violations. Indeed, while arguing the limitations period was tolled until Aspen
declared bankruptcy, plaintiffs incongruously claim their argument "is not
meant to detract from the fact that [Donald] is also primarily liable for the
violation of each of the [w]age [l]aws."
Based on the allegations in the complaint, and as argued by plaintiffs
before the motion court on appeal, Donald qualified as an employer personally
A-2157-22 24 responsible for the payment of the wages due under the PWA, WHL, and WPL
because of his management position with, and alleged equitable ownership
interest in, Aspen. That Aspen or any other person, including Maria, may have
shared the potential liability for the claimed unpaid wages did not render Donald
secondarily liable in any manner affecting the running of the limitations period
on causes of action plaintiffs alleged against him.
Plaintiffs' reliance on Mulford v. Computer Leasing, Inc., 334 N.J. Super.
385 (Law Div. 1999), to support their secondary-liability argument, is
misplaced. The running of a limitations period was not an issue in Mulford.
The plaintiff sued his former corporate employer and certain of its shareholders,
directors, and officers for violations of the WPL. In its decision following a
bench trial, the Law Division found the WPL "imposes personal liability on the
managing officers of a corporation by deeming them the employers of the
employees of the corporation." Id. at 393 (citing N.J.S.A. 34:11-4.1). The court
concluded the individual defendants qualified as employers under the WPL and
determined they were liable for the corporate employer's failure to pay wages
due the plaintiff under the WPL. Id. at 393-95.
The court entered judgment against the corporate employer and individual
defendants, but concluded that "the purpose and sense of the [WPL] will be
A-2157-22 25 furthered by deeming the liability of the [individual defendants] as secondary
. . . , so that their personal liability only comes into play to the extent the
[corporate defendant] does not pay its judgment." Id. at 399. The court's
accommodation to the individual defendants—such that they should be
compelled to pay only a judgment entered against them jointly and severally
with the corporate defendant—finds no support in the WPL.
In any event, the Mulford court's accommodation to the individual
defendants has no bearing on the running of the statute of limitation under the
WPL. Indeed, in Mulford, no one claimed that the causes of action against the
individual defendants were not filed. Here, plaintiffs do not cite to any authority
for the proposition that a statute of limitations is tolled against a party that may
later be deemed secondarily liable for purposes of determining the order of
payment of a judgment. And Mulford does not hold or suggest that is the case.
Plaintiffs also argue that the motion court erred by rejecting their claim
that the statutory causes of action against Donald are not time-barred because
they relate back under Rule 4:9-3 to the June 2016 filing of the original
complaint under Rule 4:9-3.
Whenever the claim . . . asserted in the amended pleading arose out of the conduct, transaction or occurrence set forth or attempted to be set forth in the original pleading, the amendment relates back to the
A-2157-22 26 date of the original pleading; but the court, in addition to its power to allow amendments may, upon terms, permit the statement of a new or different claim or defense in the pleading. An amendment changing the party against whom a claim is asserted relates back if the foregoing provision is satisfied and, within the period provided by law for commencing the action against the party to be brought in by amendment, that party (1) has received such notice of the institution of the action that the party will not be prejudiced in maintaining a defense on the merits, and (2) knew or should have known that, but for a mistake concerning the identity of the proper party, the action would have been brought against the party to be brought in by amendment.
[R. 4:9-3 (emphasis added).]
A proper analysis of the relation-back issue where, as here, the amendment
to a complaint adds a party against whom a claim is asserted, requires in part an
analysis of whether the party had received notice of institution of the action and
will not be prejudiced in maintaining a defense and whether the party knew or
should have known that but for a mistake in identifying the proper party, the action
would have been brought against him or her. See generally Prime Accounting
Dep't v. Twp. of Carney's Point, 212 N.J. 493, 511-14 (2013) (explaining
application of Rule 4:9-3 where an amended complaint adds a new party). In our
view, the record lacks sufficient information and competent evidence permitting a
determination as a matter of law as to whether the June 2020 amended complaint
A-2157-22 27 adding Donald and Eastern should be deemed to relate back under Rule 4:9-3 to
the filing of the 2016 complaint or any of the other prior iterations of the complaint.
See Repko v. Our Lady of Lourdes Med. Ctr., Inc., 464 N.J. Super. 570, 574 (App.
Div. 2020) (explaining a court's decision as to whether an amendment to a
complaint to relates back to filing of the complaint presents a legal issue that is
reviewed de novo). And, because we otherwise remand this matter to the trial
court, we also remand for the court to reconsider the relation-back issue, allowing
the parties to present additional argument, information, and submissions
addressing the factors a court must consider in making a relation-back
determination under Rule 4:9-3.
If on remand the court determines the complaint as to Donald and Eastern
should relate back under Rule 4:9-3, it shall also reconsider whether the WHL
claim is time-barred under the applicable two-year statute of limitations as we have
determined based on the complaint's June 2020 filing date. The court shall also
utilize the relation-back filing date to the extent later necessary to determine, if
required, which claims—among the many wage-loss claims that are asserted by
the numerous plaintiffs—that fall within the applicable limitations periods for the
breach of contract and statutory causes of action in the complaint. The remand
A-2157-22 28 court shall conduct such proceedings as it deems necessary and appropriate to
consider the relation-back issue on remand.
In sum, we determine the court erred by dismissing plaintiffs' WPL claim
against Donald and reverse the order dismissing that claim as to him.
Additionally, we conclude the motion court correctly found plaintiffs did not
allege sufficient facts to support their breach of contract and statutory claims
against Eastern as an alleged "successor to" Aspen and plaintiffs' statutory
claims under the PWA and WHL against Donald. Although the court's order
does not expressly state the dismissal of the complaint against Donald and
Eastern was with prejudice, a statement the court made concerning its dismissal
of the complaint against Maria during argument on Donald and Eastern's
dismissal motion suggests the court dismissed the complaint with prejudice
against them as well. The parties understood that was the court's disposition.
In our view, rather than dismiss those claims with prejudice, the court
"should have given plaintiff[s] an opportunity to amend [their] complaint to
provide additional facts that might support" those claims. Hoffman v.
Hampshire Labs, Inc., 405 N.J. Super. 105, 116 (2009). Although the case had
been pending for four years, Eastern and Donald moved immediately to dismiss
the complaint after it was first filed against them in 2020. And, "[a] motion to
A-2157-22 29 dismiss pursuant to Rule 4:6-2(e) ordinarily is granted without prejudice," and
"[h]ere, the trial court provided no reasons for departing from that general rule."
Ibid.
We therefore vacate the court's order dismissing the breach-of-contract
and statutory (PWA, WHL, and WPL) claims against Eastern and the PWA and
WHL claims against Donald and Eastern and remand for the court to allow
plaintiffs to file an amended complaint providing additional facts supporting
their claims Eastern is a successor to Aspen and Eastern and Donald violated the
PWA and WHL. The court shall establish a reasonable deadline for the
submission of the amended complaint. If plaintiffs elect not to file the permitted
amendments, the court shall dismiss the pertinent claims with prejudice. If
plaintiffs elect to file an amended complaint in accordance with the remand
court's requirements, Donald and Eastern shall be permitted to answer or
otherwise respond to the complaint in accordance with the Rules of Court. In
addition, and as we have explained, the court shall reconsider plaintiffs' claim
the 2020 complaint against Donald and Eastern should relate back to the 2016
complaint, or one of the other prior iterations of the complaint and proceed
accordingly based on that determination in accordance with this opinion.
A-2157-22 30 Our decision to vacate and remand the dismissal order as to the specified
claims shall not be interpreted as expressing an opinion on the merits of the
asserted claims, Donald and Eastern's defenses, or on any of the issues—
including the relation-back issue under Rule 4:9-3—the court will consider on
remand. Because we have either reversed or vacated the challenged provisions
of the dismissal order, it is unnecessary to address plaintiffs' argument the court
erred by denying their motion for reconsideration.
Reversed in part, vacated in part, and remanded for further proceedings in
accordance with this opinion. We do not retain jurisdiction.
A-2157-22 31