NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
PER CURIAM.
Plaintiff, Jade Apparel, Inc. (Jade), owned by Dismothenis Maroulis, appeals from the order of the Law Division granting summary judgment to defendant, SBWE, Inc., the real estate brokerage firm plaintiff engaged in 2007 to assist it in finding a commercial space suitable to accommodate Jade's business activities. Relying on Rule 4:5-1(b)(2)'s proscription against piecemeal litigation, Judge Rachelle L. Harz dismissed plaintiff's complaint "because this action, without question, constitutes Jade's third litigation based on similar transactional facts."
We affirm substantially for the reasons expressed by Judge Harz in her well-reasoned oral opinion delivered from the bench on September 19, 2014. These are the salient facts.
I
In addition to owning Jade, Maroulis owns Aris Fashions, Inc. (Aris), a real estate holding company that owns an industrial building in Newark. In 2006, Jade rented the Newark property from Aris to conduct its clothing manufacturing operation.1 In March 2006, Maroulis decided to sell the Newark property and consequently relocate Jade's manufacturing operations. According to Maroulis, in August 2006 Aris accepted an offer from Kenneth Rome, LLC, to buy the Newark property for $8,000,000. Aris retained attorney Frank D. Angelastro to represent it in the sale of the property.
Angelastro drafted the contract for the sale of the property, which anticipated that closing would take place between June 15 and June 30, 2007. Sometime thereafter, Jade engaged Dean Brody, a salesperson then employed by SBWE, to find a commercial space to lease that was suitable to accommodate its clothing manufacturing business. After learning from Maroulis the requirements of Jade's manufacturing operation, Brody searched the SBWE database and found a commercial property located in the Town of Harrison, owned by Hartz Mountain Industries, Inc. (Hartz), that seemed suitable for Jade's manufacturing needs.2
In February 2007, Brody showed Maroulis the Hartz property in Harrison. On March 7, 2007, Brody faxed an offer to Hartz, as Jade's agent, to lease 38,587 square feet of commercial space. Simultaneously, Brody notified Hartz:
Should the lease be acceptable, our office [SBWE] expects to receive a commission equal to 5% of the net aggregate rentals involved in such transaction including any renewals, extensions or additional space, and/or purchase of the subject property.
Maroulis gave the initial lease document drafted by Hartz to Angelastro for review. The record includes a copy of the lease dated March 14, 2007, containing Angelastro's handwritten notes on the margins. These handwritten notes included a notation next to Article 23, denoted "Eminent Domain," next to which Angelastro wrote the following: "Is any now threatened or contemplated. Any notice, formally or informally." At a deposition taken on March 21, 2011, Angelastro was asked about whether he discussed the concerns he expressed in this notation when he met with Maroulis on April 18, 2007,3 before he signed the lease.
Q. Did you discuss that with your client?
A. We discussed this clause in general, yes.
Q. Okay.
A. We specifically discussed the issue of eminent domain and what would happen if the Town [of Harrison] decided to take this property by eminent domain.
Q. As best as you can recollect, give me the details of that discussion. First of all, did you have that discussion at this March meeting or subsequently?
A. Probably at the March [18, 2007] meeting.
Q. Okay.
A. Because we were doing that with the whole lease. The discussion was what happens if the Town or State, whoever would come in and take the property by eminent domain.
And then we went over the specific clauses in the lease. And the fact that if the property is taken by eminent domain, that he would have to obviously move out, that he would be able to make a claim for his loss of business, his relocation expenses and . . . so forth.
As far as a partial taking . . . 25 percent, one of the things we discussed [was] that would be somewhat unlikely because if you're going to have a partial tak[ing] like that, it's usually because of a road widening . . . only a road widening. Other . . . things could happen, a bridge and things like that. But the way . . . this property was located, road widening would be the only possibility and it didn't even seem a possibility where the property was located. So the only real possibility would be a full taking.
Q. Okay.
A. And if it was a full taking, then there were built-in safeguards for him. One of the things Mr. Maroulis said was this is, you know, a five-year lease; I don't plan on being there forever. And he wasn't that concerned about it.
Under paragraph 7 of the contract for the sale of the Newark property, closing of title was scheduled to occur between June 15 and June 30, 2007.4 On May 8, 2007, Angelastro sent Hartz a list of requests and clarifications concerning the lease, including the following pertaining to Article 23:
We need a representation that there is no notice of taking by eminent domain received by the landlord and no knowledge by the landlord of any current plans by any governmental authority to take any portion of the premises by eminent domain. We would like a further representation that there has been no notice of declaring the premises blighted.
Angelastro copied Maroulis and Brody on the letter. Hartz's representatives did not respond to Angelastro's direct request for this representation. Despite this, on May 29, 2007, Jade entered into a five-year lease with Hartz for the Harrison property; the lease had a start date of June 2007.5 Jade made fixed monthly rental payments to Hartz in the amount of $13,505, with an additional monthly payment of $6,500; Jade also spent more than $250,000 in alterations and improvements to meet its manufacturing requirements. On June 5, 2007, Hartz sent SBWE a letter formally acknowledging its obligation to pay the 5% commission for obtaining Jade as a tenant.
On October 29, 2007, the buyer for the Newark property terminated the contract to purchase the property after Aris was unable to obtain a No Further Action letter or other form of written confirmation of non-applicability under the Industrial Site Recovery Act (ISRA), N.J.S.A. 13:1K-6 to-14, from the New Jersey Department of Environmental Protection. Thereafter, Aris sued the buyer. The case settled by Maroulis retaining $150,000 of the $250,000 initial deposit the buyer made when it signed the contract.
In June 2007, after it had taken possession of the Harrison property, Jade learned that the area where the property was located had been designated for redevelopment by the Harrison Redevelopment Agency. The Agency informed Jade not to make any further improvements to the property because the premises were subject to being taken by eminent domain and razed for redevelopment. Plaintiff stopped paying rent in February 2010. In March 2008, Aris and Jade officially discharged Angelastro as their attorney.
II
On March 5, 2010, Jade filed a civil action in the Chancery Division, General Equity Part in Hudson County, naming Hartz as a defendant. Jade alleged fraudulent concealment, equitable fraud, concealment of latent defects, breach of implied covenant of good faith and fair dealing, breach of the lease agreement and the covenant of quiet enjoyment, unjust enrichment, and consumer fraud under the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to-195. Jade also sought punitive damages for intentional, malicious conduct on Hartz's behalf. The underlying factual claims supporting these various theories of liability are all related to Hartz's failure to disclose the redevelopment designation of the leased property during negotiations and before Jade signed the lease. The allegation reflected in paragraph 13 of the complaint illustrates this factual theme: "At no time during the negotiations did Defendant disclose to Plaintiff the Redevelopment Designation, the RCRA [Resource Conservation and Recovery Act] Designation, and the Environmental Conditions."
Pursuant to Rule 4:5-1, plaintiff's attorney certified
that the matter in controversy is not the subject of any other pending or contemplated judicial or arbitration proceeding. I am not currently aware of any other party who should be joined in this action.
Neither Angelastro nor SBWE were mentioned in the complaint. The attorney who signed this certification is the older brother of Dean Brody, the SBWE representative who found the Hartz property in Harrison and facilitated the eventual execution of the lease. Angelastro, Maroulis, Dean Brody, and Jade's general manager, Philip Azzollini, were all deposed in connection with this litigation. In an order dated September 16, 2011, the General Equity Part granted summary judgment in favor of Hartz. The parties thereafter entered into a settlement agreement through which Jade agreed to pay Hartz $722,509.
On August 26, 2010, five months after it filed its complaint against Hartz, Jade and Aris filed a joint complaint against Angelastro alleging professional malpractice. As it relates to Aris, the factual basis for this action includes the circumstances that led to the failure to close title on the Newark property. The allegations pertaining to the Harrison lease include Angelastro's failure to advise Jade that the lease should be contingent on the sale of the Newark property. The complaint further alleged Angelastro failed to advise Jade "that, as a result of the redevelopment designation, the Harrison Premises may be taken by Harrison at any time and that such designation would be an impediment to Jade's ability to sublet the property." The complaint does not mention Jade had worked with a real estate broker and does not refer to SBWE and/or Dean Brody.
Plaintiffs' counsel in this matter is the same attorney who represented Jade in the case against Hartz. This time, his Rule 4:5-1(b)(2) certification notes that "the matter in controversy is not presently the subject of any other action pending in any court . . . except for the matter of Jade Apparel, Inc. v. Hartz Mountain Industries, Inc.[.]" However, in a certification submitted by Angelastro's attorney6 in support of a motion to permit Angelastro to file a third party complaint, the attorney stated:
Frank Angelastro seeks to amend the answer to include a third party complaint against Dean Brody and SBWE, Inc. for joint tortfeasor contribution and indemnification. If Frank Angelastro is deemed to be responsible for the alleged damages sustained by plaintiff with respect to the Hartz Lease because it was located in the Harrison Redevelopment Zone, Dean Brody and SBWE, Inc. are joint tortfeasors . . . for their failure to investigate the zoning status of that property. The damages alleged by plaintiff arise out of the failure to investigate and discover that the Hartz property was located in the Harrison redevelopment zone and subject to condemnation at any time.
The parties settled the matter. A stipulation of dismissal was signed by the parties on January 18, 2012.
III
This matter comes before us on plaintiff's appeal from the grant of summary judgment. We review the grant of summary judgment "in accordance with the same standard as the motion judge." Globe Motor Co. v. Igdalev, ___ N.J. ___, ___ (2016), slip op at 19 (quoting Bhagat v. Bhagat, 217 N.J. 22, 38 (2014)). We must affirm the grant of summary judgment "if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." Ibid. (quoting Rule 4:46-2(c)).
The facts we have recited here support Judge Harz's decision to dismiss based on a clear violation of Rule 4:5-1(b)(2), which provides, in pertinent part:
Each party shall include with the first pleading a certification as to whether the matter in controversy is the subject of any other action pending in any court or of a pending arbitration proceeding, or whether any other action or arbitration proceeding is contemplated; and, if so, the certification shall identify such actions and all parties thereto. Further, each party shall disclose in the certification the names of any non-party who should be joined in the action pursuant to R. 4:28 or who is subject to joinder pursuant to R. 4:29-1(b) because of potential liability to any party on the basis of the same transactional facts. Each party shall have a continuing obligation during the course of the litigation to file and serve on all other parties and with the court an amended certification if there is a change in the facts stated in the original certification.
Judge Harz found this third lawsuit by Jade violated Rule 4:5-1(b)(2), because it is predicated on the same transactional facts as the professional malpractice action and the claims asserted against Hartz. Permitting this case to go forward would promote the piecemeal and duplicative litigation the Supreme Court sought to prevent when it adopted Rule 4:5-1(b)(2). As Judge Harz correctly explained:
At the time of the settlement of the legal malpractice action, the stipulation itself makes reference to the potential of litigation as against the defendants in this lawsuit. In and of itself[,] that is a violation of [R.] 4:5-1(b)(2) because clearly at the time that that litigation was ongoing[,] it was known that these defendants could be a potential defendant in a later litigation. There is no right to reserve litigation . . . by way of a stipulation between parties.
We are also satisfied plaintiff's complaint violates the Entire Controversy Doctrine, as codified in Rule 4:30A. As the Supreme Court has noted:
Taken together, both Rule 4:30A and Rule 4:5-1(b)(2) advance the same underlying purposes. As it relates to claims and to parties, they express a strong preference for achieving fairness and economy by avoiding piecemeal or duplicative litigation. Both, however, recognize that the means of accomplishing those goals rests with the court. That is, Rule 4:30A requires joinder of claims but grants authority to a trial judge to create a safe harbor in an appropriate case. Similarly, Rule 4:5-1(b)(2) requires that names of potentially liable or relevant parties be disclosed to the court, leaving to it the decision about whether to join them or not.
[Kent Motor Cars, Inc. v. Reynolds & Reynolds, Co., 207 N.J. 428, 445 (2011).]
However, we need not rely on the Entire Controversy Doctrine. Judge Harz's analysis and ultimate reliance on Rule 4:5-1(b)(2) properly dispatches the matter.
Affirmed.
