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PER CURIAM.
Plaintiff Dennis Maas appeals from the February 12 and February 16, 2016 orders dismissing his complaint against all defendants with prejudice. The Law Division judge dismissed the complaint under the entire controversy doctrine (ECD), asserting that the complaint at issue was identical to a prior complaint that had been dismissed without prejudice in the Chancery Division. Because we find there was no adjudication on the merits of the action in the Chancery Division, we reverse the dismissal orders.
Plaintiff was employed by defendant Hoyt Corporation from 1986 until his termination in 2015, serving as its vice president and chief financial officer. In 1986, the two principals of Hoyt, William Nixon
On the same day the Agreement was executed, plaintiff was sold one share of stock and he executed a different agreement, memorializing the purchase and providing that upon his termination, the stock would be sold to Hoyt. Plaintiff's employment was defined as "at will."
In late 1986, Hoyt, Nixon, and Maguire executed an amendment to the Agreement that permitted Nixon to transfer his majority interest to defendant William H. Nixon Revocable Trust (the Trust), a trust for the benefit of his spouse and descendants, making the Trust the majority shareholder of Hoyt.
Nixon served as president of Hoyt until 1999, at which time Maguire became president until his retirement in October 2014. In November 2014, defendant Michael Bradford became the interim president. A new Board of Directors was elected in December 2014 to include defendants Susan Nixon Bradford, Nicholas B. Nixon, and Maria Esparraguera (the Nixon defendants). Hoyt purchased Maguire's stock after his death in March 2015. In April, defendant Michael Bradford purchased two shares of the corporation, ensuring plaintiff's status as minority shareholder. Nixon died in May 2015, and in August, plaintiff was terminated on allegations of improper conduct in the workplace.
In June 2015, plaintiff filed an Order to Show Cause (OTSC) and verified complaint in the Chancery Division against Hoyt, Michael Bradford, the Nixon defendants, the Trust, and the Estate of William H. Nixon (Estate).
Plaintiff's OTSC and complaint alleged that all of the defendants had "mismanaged or acted oppressively . . . in breach of their fiduciary duties to [p]laintiff as a stockholder and employee [of] the [c]orporation" by refusing to effectuate plaintiff's request to buy back the stock formerly owned by Nixon, and currently held by the Trust. Plaintiff sought the appointment of a custodian or provisional director to repurchase all of the corporation's stocks, including the stock owned by the Trust and Michael Bradford. He also sought a declaration that he was the sole remaining stockholder.
The OTSC alleged additional causes of action for breach of contract; breach of the implied covenant of good faith, cooperation, and fair dealing; and specific performance. The Chancery court denied the OTSC.
Following his termination, plaintiff amended his complaint to assert three additional claims: violation of the Conscientious Employee Protection Act (CEPA),
All of the defendants moved to dismiss the complaint under
On November 6, 2015, the Chancery judge issued a written opinion granting defendants' motions. Quoting
As to the Act, the judge stated that plaintiff had no legal standing to allege a cause of action because he was neither a party to nor a third-party beneficiary of the Agreement. He advised, however, that plaintiff could raise this allegation under a derivative theory in a new pleading.
The counts alleging breach of contract and implied covenant of good faith and fair dealing were similarly dismissed without prejudice as a result of the judge's conclusion that plaintiff was not a party to the Agreement. The judge again noted, plaintiff's allegation that he was an intended beneficiary of the Agreement, and advised that the claims could be brought in a derivative action.
Quoting
In addressing the allegation of civil conspiracy, the judge found that the complaint failed to set forth sufficient facts to "establish Defendants agreed to inflict a wrong or injury upon Plaintiff, or that the Plaintiff suffered damages as a result of any such agreement." The count was dismissed without prejudice.
Finally, the judge dismissed the tortious interference with a contract claim, reiterating that plaintiff was not a party to the Agreement and, therefore, had no standing to assert this contractual claim. The judge advised again that if plaintiff was an intended beneficiary, he could pursue claims to enforce any rights of Hoyt in a derivative action.
In conclusion, the Chancery judge noted the general premise that a dismissal for failure to state a claim is without prejudice because there has been no adjudication on the merits of the claims. He said:
Plaintiff did not appeal from the Chancery court's order. Instead, he filed an action in the Law Division asserting identical claims and adding a count for a shareholder derivative action pursuant to
The Law Division judge determined that the ECD required the dismissal of all of the claims in the new complaint previously asserted in the Chancery complaint. He stated that the Chancery judge's decision to dismiss without prejudice "can only be read as allowing plaintiff to address the deficiencies of the pleadings when re-filed in the Law Division." Since plaintiff failed to set forth any new facts or legal arguments in the second complaint, the Law Division judge dismissed the previously asserted claims with prejudice. He similarly dismissed the new derivative action count as he concluded that because plaintiff was the only stockholder, the derivative suit was "representative of only his personal concerns and alleged injuries."
On appeal, plaintiff argues that the Law Division judge erred in dismissing his complaint under the ECD. We agree.
"The [ECD] bars a subsequent action only when a prior action based on the same transactional facts has been tried to judgment or settled."
Because we review judgments and orders, however, and not the reasoning for their entry,
Limiting our review to the "legal sufficiency of the facts alleged in the complaint[,]"
Plaintiff presented sufficient facts to support his claim under the Act. The pertinent count provides detailed allegations to meet the requirements of
In the CEPA count, plaintiff alleges that: (1) Hoyt employed him; (2) defendants violated the Act and
Finally, we review the derivative shareholder claim. Plaintiff alleges that the Nixon defendants have mismanaged the corporation, including their refusal to purchase the Trust stock following Nixon's death. Plaintiff further alleges that the Nixon defendants' refusal deprived Hoyt from the benefits of repurchasing the stock. Because the only other shareholders are Michael Bradford and the Trust, plaintiff describes himself as the only bona fide shareholder. He acknowledges that his individual rights as a shareholder and his derivative rights on behalf of the class of all bona fide stockholders overlap. These allegations are sufficient to meet his pleading burden.
Whether any or all of the pled claims will remain viable after discovery and potential summary judgment motions is not before us and we express no view as to the likelihood of success of any such motions. We need only be able to "glean" a cause of action from the complaint for it to survive a dismissal motion under
Reversed and remanded. We do not retain jurisdiction.