ELEVATOR MEDIC CORPORATION v. LITANA DEVELOPMENT, INC., (L-1064-20, HUDSON COUNTY AND STATEWIDE)

• Court: New Jersey Superior Court Appellate Division
• Decided: January 27, 2022
• Docket: A-1377-20
• Status: Unpublished

Opinion

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court ."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-1377-20

ELEVATOR MEDIC CORPORATION,

Plaintiff-Appellant,

v.

LITANA DEVELOPMENT, INC.,

Defendant-Respondent.

Argued December 7, 2021 – Decided January 27, 2022

Before Judges Fisher and Currier.

On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-1064-20.

Ronald Gutwirth argued the cause for appellant (Law Office Constantine Bardis, LLC, attorneys; Ronald Gutwirth, of counsel and on the brief; Constantine Bardis, on the brief).

Danielle E. Cohen argued the cause for respondent (Tesser & Cohen, attorneys; Danielle E. Cohen, on the brief).

PER CURIAM Plaintiff filed a complaint in Essex County, alleging defendant did not pay

it for work performed on a project in Cedar Grove. Six months later, plaintiff

dismissed the complaint with prejudice after realizing it had listed the wrong

address for the job. Thereafter, plaintiff filed a complaint in Hudson County,1

seeking payment for work performed for defendant on a job in Paterson.

Defendant moved to dismiss plaintiff's complaint in lieu of an answer

under Rule 4:6-2, contending the second complaint was barred under the entire

controversy doctrine, Rule 4:30A. The motion judge agreed and dismissed the

complaint, finding "the claims in this matter are considered to have been fully

adjudicated and the entire controversy doctrine bars further adjudication." The

court denied plaintiff's subsequent motion for reconsideration.

The parties did not litigate the claims asserted in the Essex County action.

The issues were not adjudicated on the merits. Therefore, the entire controversy

doctrine is not applicable, and it was error to dismiss the Hudson County

complaint. We reverse.

Plaintiff performed work as a subcontractor under a contract executed

with defendant on a project in Paterson. When the parties disputed whether

1 Plaintiff's place of business is located in Hudson County. A-1377-20 2 plaintiff was owed any monies for its work, plaintiff filed the Essex County

action. In the complaint, plaintiff alleged it performed work for defendant at an

address in Cedar Grove. When plaintiff realized the address of the job site was

wrong, it voluntarily dismissed the complaint with prejudice.23 The dismissal

occurred before defendant filed any responsive pleading. Thereafter, plaintiff

filed the second complaint, venued in Hudson County, alleging the work

performed was in Paterson.

The objectives of the entire controversy doctrine are "to encourage

complete and final dispositions through the avoidance of piecemeal decisions

and to promote judicial efficiency and the reduction of delay." Wadeer v. N. J.

Mfrs. Ins. Co., 220 N.J. 591, 610 (2015). The doctrine compels "litigants to

consolidate their claims arising from a single controversy whenever possible."

Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo, Hyman and Stahl, P.C.,

237 N.J. 91, 98 (2019) (citing Thornton v. Potamkin Chevrolet, 94 N.J. 1, 5

(1983)). If a party fails to properly assert a claim that must be joined in an

2 Plaintiff concedes it erred in dismissing the complaint with prejudice. 3 Plaintiff contends it learned of the mistake in the address from defendant's counsel who contacted plaintiff to advise of the error. A-1377-20 3 action, the court may, in its discretion, bar that claim under the entire

controversy doctrine. Ibid.

However, because a violation of the entire controversy doctrine may result

in claim preclusion, courts must consider the two pillars of "fairness to the

parties and fairness to the system of judicial administration." Hillsborough Twp.

Bd. of Educ. v. Faridy Thorne Frayta, P.C., 321 N.J. Super. 275, 284 (App. Div.

1999) (holding the entire controversy doctrine does not bar the plaintiff's

subsequent claim where the plaintiff voluntarily stipulated to dismiss the

original action with prejudice and the defendant did not pay plaintiff

consideration for the dismissal). Therefore, when applying the entire

controversy doctrine, courts must consider whether the party the doctrine is

asserted against "had a fair and reasonable opportunity to . . . litigate[] that claim

in the original action." Ibid. (quoting Gelber v. Zito P'ship, 147 N.J. 561, 565

(1997)).

Plaintiff's claims were not adjudicated in the Essex County action.

Defendant did not file a responsive pleading. Plaintiff voluntarily dismissed its

complaint after noting an error in the allegations, subsequently refiling the

complaint in another county.

A-1377-20 4 Equitable considerations are at the forefront when applying the entire

controversy doctrine and courts have discretion in applying the doctrine

depending on the factual circumstances. Bank Leumi USA v. Kloss, 243 N.J.

218, 227 (2020) (citations omitted). As the Leumi Court stated: "[A] court

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 of conclusive determinations, party fairness,

and judicial economy and efficiency." Ibid. (citing Dimitrakopoulos, 237 N.J.

at 119).

The motion judge reasoned that the dismissal with prejudice of the Essex

County matter was an adjudication on the merits, relying on Velasquez v. Franz,

123 N.J. 498, 507 (1991). However, Velasquez is inapposite to the present

circumstances. There, a federal court dismissed the plaintiff's case under Fed.

R. Civ. P. 12(b)(6) for failure to state a claim. Ibid. Plaintiff did not appeal the

determination but instead filed an identical complaint four days later in New

Jersey Superior Court. Id. at 503-04. The trial court dismissed the complaint.

Id. at 504. The Court affirmed, finding a federal court dismissal under Fed. R.

Civ. P. 12(b)(6) was an adjudication on the merits. Id. at 505. Therefore, the

plaintiff's state court complaint was barred under the principles of res judicata.

A-1377-20 5 Here, plaintiff's claims were not adjudicated in Essex County. And

defendant does not assert res judicata precludes plaintiff from pursuing its

claims. But the entire controversy is also not applicable under these

circumstances. As we have previously stated, the entire controversy doctrine

does not preclude a second action where the first action did not result in an

adjudication on the merits. See Arena v. Borough of Jamesburg, 309 N.J. Super.

106, 111 (App. Div. 1998) (holding the entire controversy doctrine bars "a

subsequent action only when a prior action based on the same transactional facts

has been tried to judgment or settled"). Moreover, plaintiff dismissed a case

alleging a cause of action for work done in Cedar Grove. The Hudson County

complaint alleged breach of contract for work done in Paterson.

Here, where plaintiff voluntarily dismissed its action and refiled it within

several weeks, the policies underlying the entire controversy doctrine would not

be promoted by barring plaintiff's claims. There was no adjudication on the

merits. There was no consideration exchanged for the dismissal. Defendant

could potentially receive a windfall if the entire controversary doctrine applied

by escaping any potential liability for breach of contract. Plaintiff is entitled to

litigate its claims in the Hudson County action.

A-1377-20 6 Reversed and remanded for reinstatement of the complaint. We do not

retain jurisdiction.

A-1377-20 7