KEVIN DIPIANO VS. CURTIS POINT PROPERTY OWNERS ASSOCIATION (L-2415-19, OCEAN COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE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-3612-19
KEVIN DIPIANO,
Plaintiff-Appellant,
v.
CURTIS POINT PROPERTY
OWNERS ASSOCIATION,
JOSEPH DEVITO, FRED
FARKOUH, KENNETH MACK,
RONALD IVANICKI, DR.
JOSEPH V. DETROLIO,1
WILLIAM COTTONGIM,
BOB DRUSKIN, KEVIN
DUNPHY, VINCE PERRI,
ENGNJSHORE, LLC, MICHAEL
MAFFATTONE, SANDY
MAFFATTONE, PAULINE
COSTELLO TRUST, C/O
STACY POLANSKYJ,
CHRISTOPHER J. MCCARTHY,
ERNEST J. MUIR, JOAN M.
MUIR, PHYLLIS W. TOZZI,
GARY TRABKA, LOUISE
TRABKA, TODD A.
CARNEVALE, ROBERT A.
1
Both "DeTrolio" and "DiTrolio" appear in the record. We use "DeTrolio" for
consistency.
ESTI, VALERIE A. ESTI,
MANUEL J. LOPES,
WILLIAM HEINZERLING,
ROSEMARY HEINZERLING,
MATTHEW SMITH, ROSEMARIE
RICCIARDELLI, THOMAS
GRAZIANO, BONNIE GRAZIANO,
DAVID R. REIM, JENNIFER REIM,
FRANK M. PISANI and
CYNTHIA PISANI,
Defendants-Respondents.
__________________________________
Argued September 1, 2021 - Decided September 14, 2021
Before Judges Geiger and Mitterhoff.
On appeal from the Superior Court of New Jersey, Law
Division, Ocean County, Docket No. L-2415-19.
Michael F. Bevacqua Jr. argued the cause for appellant
(Mandelbaum Salsburg PC, attorneys; Stuart J.
Lieberman and C. Michael Gan, on the briefs).
Ellen M. Boyle argued the cause for respondents Curtis
Point Property Owners Association, Fred Farkouh,
Kevin Dunphy, William Cottongim, Joseph Devito, Dr.
Joseph V. DeTrolio, Bob Druskin, Vince Perri, Kenneth
Mack and Ronald Ivanicki (Kirmser, Lamastra,
Cunningham & Skinner, attorneys; Ellen M. Boyle, of
counsel and on the brief).
Jerry J. Dasti argued the cause for respondents
Engnjshore, LLC, Pauline Costello Trust, C/O Stacy
Polanskyj, Christopher McCarthy, Phyllis Tozzi,
Louise Trabka, Gary Trabka, Thomas Graziano, Bonnie
Graziano, Frank Pisani and Cynthia Pisani, Michael
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and Sandy Maffattone, and Rosemarie Riccardelli
(Dasti, Murphy, McGuckin, Ulaky, Koutsouris &
Connors, attorneys; Jerry J. Dasti, of counsel; Patrick
F. Varga, on the brief).
Eric S. Schlesinger argued the cause for respondents
Todd A. Carnevale, Manuel J. Lopes, David R. Reim,
Jennifer Reim, Ernest J. Muir, and Joan M. Muir
(Golden, Rothschild, Spagnola, Lundell, Boylan,
Garubo & Bell, PC, attorneys; Eric S. Schlesinger, on
the brief).
Barbara J. Davis argued the cause for respondents
Robert A. Esti and Valerie A. Esti (Marhsall Dennehey,
attorneys; Barbara J. Davis, on the brief).
Stephen Trzcinski argued the cause for respondents
Matthew Smith, William Heinzerling, and Rosemary
Heinzerling (Bennett, Bricklin & Saltzburg LLC,
attorneys; Michael Dolich and Jason Farina, on the
brief).
PER CURIAM
Plaintiff Kevin DiPiano appeals from a February 24, 2020 order granting
defendant William Heinzerling's motion to dismiss; a February 24, 2020 order
granting summary judgment in favor of defendants Curtis Point Property
Owner's Association (CPPOA), Fred Farkough, Kevin Dunphy, William
Cottongim, Joseph DeVito, Dr. Joseph V. DeTrolio, Bob Druskin, Vince Perri,
Kenneth Mack and Ronald Ivanicki; a February 24, 2020 order denying
plaintiff's motion to amend his complaint; a February 25, 2020 order granting
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defendant Matthew Smith's motion to dismiss; and an April 15, 2020 order
denying plaintiff's motion for reconsideration. On appeal, plaintiff argues that
the trial judge erred in applying the entire controversy doctrine (ECD) to bar his
claims against defendants because the parties in the previous action were
different, his claims did not ripen until after the litigation concluded, and,
although the actions raised similar legal claims, they were premised on a
different set of factual circumstances. Plaintiff also contends that the judge
erred in dismissing his defamation claim. Having reviewed the record and
considered the applicable law, we affirm substantially for the reasons set forth
in Judge James Den Uyl's thoughtful and thorough written decision. We add
only the following comments.
Curtis Point consists of over 140 homes, all of which are private
residential properties. Almost all of the units have deed restrictions that require
the units be single-family, detached, and not over two stories in height. 2 The
CPPOA is a non-profit entity, governed by a Board of Trustees (Board), which
is comprised of four officers and five other members. In 2003, plaintiff and his
wife purchased real property located in Curtis Point and, accordingly, became
2
Although the actual language of the deed restriction is not in the record, the
parties seemingly do not dispute such language exists.
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members of the CPPOA. Plaintiff is also the owner and managing partner of
Nicholas Holdings, LLC (Nicholas Holdings) which acquired property in Curtis
Point in 2015.
In July 2017, pursuant to the CPPOA's rules and regulations, Nicholas
Holdings submitted architectural and construction plans to the CPPOA's
architect, John Burgdorfer. Burgdorfer reviewed Nicholas Holdings' plans and
notified plaintiff that the construction package complied with the deed
restrictions with the exception of the two-story height limit.
On March 1, 2018, Nicholas Holdings filed a complaint in the Chancery
Division alleging breach of contract, breach of fiduciary duty, and breach of the
covenant of good faith and fair dealing against the CPPOA. The complaint also
alleged breach of contract and unjust enrichment against eighteen individual
homeowners that were purportedly permitted to construct a third story.
Upon notice of the complaint, the CPPOA's insurance carrier, Chubb,
retained counsel to defend the CPPOA. The individual homeowner defendants
retained separate counsel because they were not covered under the Chubb
insurance policy.
During the CPPOA's 2018 annual meeting, members discussed the suit
against the CPPOA and the eighteen individual homeowners. The CPPOA
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disclosed that it would pay for the legal defense of the homeowner defendants
that certified that their homes were in compliance with the subject deed
restriction.
On April 5, 2019, Judge Francis Hodgson granted summary judgment with
prejudice in favor of the CPPOA and eleven of the homeowners. Two of the
individual homeowners defaulted; the remaining defendants continued the suit.
On June 12, 2019, Judge Hodgson denied Nicholas Holdings' motion for
reconsideration of the April 5, 2019 order. Nicholas Holdings' motion for leave
to appeal was denied on September 5, 2019. 3
Meanwhile, in April 2019, the CPPOA sent out a notice of its 2019 annual
meeting to all of the homeowners in Curtis Point. The notice stated:
As you may recall from last year's Annual Meeting, the
Curtis Point Property Owners Association and 18
individual residents were sued by Nicholas Holdings
LLC (whose principal, Kevin DiPiano, is a Curtis Point
resident), essentially because he desired to build a
dwelling in excess of two stories in violation of our
deed restrictions. The individual homeowners sued
were alleged to have violated their respective deed
restrictions.
Further discussed at last year’s Annual Meeting, the
Board of Trustees, which is responsible for upholding
the Association's obligation to review building plans
3
Final disposition of the chancery action was achieved on or about August 19,
2020.
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for deed restriction compliance, defended the suit and
those individual defendants who certified their homes
complied with the deed restriction.
We are pleased to inform you that, on April 5, 2019, on
Motions for Summary Judgment, the Court dismissed
the lawsuit against the Association and 11 of the
individual defendants with prejudice. Two individuals
defaulted and the remaining defendants continue in the
suit. Regrettably, the lawsuit has resulted in significant
costs to the Association, resulting in a substantial
reduction of the Association's Membership Equity
Fund.
In addition, there are a number of beneficial projects
the Board of Trustees believes are necessary to protect
and add to Member amenities, notably a beach
observation platform and landscaping work near the
front entrance.
The Board of Trustees is proposing a Special
Assessment of $500 per resident member household in
order to restore the Association Membership's Equity
Fund to historic levels, as well as to provide Capital
Funds critically needed for the common property
projects. The Special Assessment will require approval
by a majority of a quorum of the membership of the
Association. The Board of Trustees unanimously
recommends the Membership approve the Special
Assessment.
On September 23, 2019, while the chancery action was pending, plaintiff
filed a complaint in the Law Division against the CPPOA, its board members,
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and seventeen4 individual homeowners for breach of fiduciary duty, breach of
loyalty, breach of duty of care, breach of covenants, breach of covenant of good
faith and fair dealing, defamation, and accounting. Plaintiff alleged that the
CPPOA violated its bylaws by paying for the legal defense of the individual
homeowners and that the notice of the 2019 annual meeting falsely claimed that
the Nicholas Holdings chancery action had resulted in significant costs to the
association.
On November 8, 2019, the CPPOA and its board members moved for
summary judgment. They argued that the ECD barred the claims relating to the
unauthorized use of association funds given plaintiff's opportunity to raise the
issue in the chancery action. They further argued that the notice was truthful
and that the association members were protected by qualified immunity.
On November 14, 2019, defendant Matthew Smith filed a motion to
dismiss. On November 19, 2019, defendant William Heinzerling filed a motion
to dismiss. Each argued that, as individual homeowners, they owed no duty
regarding the use of association funds, and therefore could not be held liable for
the claims asserted in plaintiff's complaint.
4
One of the individual homeowners named in the chancery division suit was
not named in the law division suit.
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On February 24, 2020, the motion judge issued three orders: (1) granting
Heinzerling's motion to dismiss; (2) granting summary judgment to the CPPOA
and its board members; and (3) denying plaintiff's request to amend his
complaint to add claims of unjust enrichment. On February 25, 2020, the motion
judge issued an order granting Smith's motion to dismiss. In his written
decision, the judge found that:
[p]laintiff fail[ed] to establish the elements necessary
for defamation as a matter of law. The [Notice of 2019
Annual Meeting] reflects the procedural history of
plaintiff's chancery action against the Association and
individual residents in the community. That [p]laintiff
"desired to build a dwelling in excess of two stories in
violation of our deed restrictions" was based on the
finding of the Association's architect, John Burgdorfer,
who reviewed [p]laintiff's plans. It was found to be [a]
violation by the Hon. Francis R. Hodgson, Jr., P.J. Ch.
for the reasons explained in his amplification on August
9, 2019, before this [L]aw [D]ivision complaint was
filed. There is no dispute that the association paid
attorney's fees for the individual homeowner
defendants who certified that their properties were in
compliance with the deed restriction.
The judge also concluded that, "in any event, [d]efendants would be
entitled to a conditional or qualified privilege because they, themselves, had an
interest in the subject matter of the communication and distributed the newsletter
to individuals who had a corresponding interest."
As to the remaining claims, the motion judge determined:
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This action is brought in [the] [L]aw [D]ivision in the
name of Kevin DiPiano, managing member of Nicholas
Holdings, LLC, against parties to the chancery action[,]
many of whom were granted summary judgment by
Judge Hodgson. In the facts of Judge Hodgson's
decision, this court has serious concerns [that] this
complaint is an end run around the chancery court
action or getting a second bite at the apple. Clearly
gamesmanship. There is no valid reason presented why
any of the other remaining claims and counts against all
defendants in this lawsuit could not have been timely
brought in the chancery action.
Plaintiff subsequently moved for reconsideration of the February 24 and
25, 2020 orders, R. 4:49-2, which was denied on April 15, 2020. The judge
found that plaintiff failed to demonstrate that the previous decision was based
on a palpably incorrect or irrational basis. In the same written decision, the
judge also dismissed the claims against the remaining defendants for the reasons
set forth in his previous decision. This appeal ensued.
On appeal, plaintiff raises the following issues for our consideration:
POINT I
THE TRIAL COURT ERRED IN GRANTING
DEFENDANTS' MOTIONS TO DISMISS THE
CLAIMS BASED ON THE ENTIRE CONTROVERSY
DOCTRINE.
A. Plaintiff . . . and the Board and Officers
of CPPOA were not a party to the Chancery
Action.
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B. Plaintiff's Claims Arose After the
Chancery Action Concluded as to the
Primary Defendant.
C. Plaintiff's Claims Arose From a
Different Set of Factual Circumstances.
POINT II
THE TRIAL COURT ERRED IN GRANTING
[CPOAA'S] MOTION TO DISMISS THE
DEFAMATION CLAIM BECAUSE PLAINTIFF'S
LAWSUIT DID NOT CAUSE THE ASSOCIATION
TO INCUR COSTS.
A. Defendants Published [a] False,
Defamatory Statement Against Plaintiff,
Therefore[,] Plaintiff Has a Valid
Defamation Claim Against Defendants.
B. Defendants' Statement Is Not Protected
By Qualified Privilege.
POINT III
THE TRIAL COURT ERRED IN DENYING
PLAINTIFF'S MOTION FOR LEAVE TO AMEND
COMPLAINT.
We review "de novo the trial court's determination of the motion to
dismiss under Rule 4:6-2(e)." Dimitrakopoulos v. Borrus, Goldin, Foley,
Vignuolo, Hyman and Stahl, P.C., 237 N.J. 91, 108 (2019) (citing Stop & Shop
Supermarket Co., LLC v. Cnty. of Bergen, 450 N.J. Super. 286, 290 (App. Div.
2017)). On a motion to dismiss, a plaintiff need not prove the case, but need
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only "make allegations which, if proven, would constitute a valid cause of
action." Kieffer v. High Point Ins. Co., 422 N.J. Super. 38, 43 (App. Div. 2011)
(quoting Leon v. Rite Aid Corp., 340 N.J. Super. 462, 472 (App. Div. 2001)).
Only where "even a generous reading of the allegations does not reveal a legal
basis for recovery" should the motion be granted. Ibid. (quoting Edwards v.
Prudential Prop. & Cas. Co., 357 N.J. Super. 196, 202 (App. Div. 2003)).
Preliminarily, we agree with the judge's decision that plaintiff's complaint
failed to state a claim for which relief can be granted against the individual
homeowners. They had no control over the allocation of the CPPOA funds.
Consequently, even the most generous reading of plaintiff's complaint reveals
no basis for recovery. Ibid. Furthermore, during oral argument, plaintiff's
counsel conceded that plaintiff had no valid claim against the individual
homeowners.
We also conclude that the ECD precludes plaintiff's claims against the
CPPOA and its Board members. The ECD assures "that all aspects of a legal
dispute occur in a single lawsuit. The goals of the doctrine are to promote
judicial efficiency, assure fairness to all parties with a material interest in an
action, and encourage the conclusive determination of a legal controvers y."
Olds v. Donnelly, 150 N.J. 424, 431 (1997).
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The doctrine reflects a "long-held preference that related claims and
matters arising among related parties be adjudicated together rather than in
separate, successive, fragmented, or piecemeal litigation." Kent Motor Cars,
Inc. v. Reynolds & Reynolds Co., 207 N.J. 428, 443 (2011). As codified in Rule
4:30A, the ECD "embodies the principle that the adjudication of a legal
controversy should occur in one litigation in only one court; accordingly, all
parties involved in a litigation should at the very least present in that proceeding
all of their claims and defenses that are related to the underlying controversy."
Wadeer v. N.J. Mfrs. Ins. Co., 220 N.J. 591, 605 (2015) (quoting Highland Lakes
Country Club & Cmty. Ass'n v. Nicastro, 201 N.J. 123, 125 (2009)).
In this case, plaintiff was in direct privity with Nicholas Holdings, as its
owner and managing partner. He had notice of the CPPOA's decision to use
association funds to pay for the individual homeowners' legal defense as early
as April 2019, while Nicholas Holdings' motion for reconsideration of the April
5, 2019 chancery order was pending. He had ample opportunity and every
incentive to move to amend his complaint in the Chancery Division. He chose
not to. The rational inference is that he believed he would fare better with a
different judge. As Judge Den Uyl noted, "clearly gamesmanship." This is
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precisely the type of piecemeal litigation the ECD seeks to preclude. Kent
Motor Cars, Inc., 207 N.J. at 443.
The elements of a cause of action for defamation are: (1) defendant "made
a false and defamatory statement concerning" plaintiff; (2) "the statement was
communicated to another person (and not privileged);" and (3) defendant "acted
negligently or with actual malice." G.D. v. Kenny, 205 N.J. 275, 292-93 (2011).
"A defamatory statement is one that is false and 'injurious to the reputation of
another' or exposes another person to 'hatred, contempt or ridicule' or subjects
another person to 'a loss of the good will and confidence' in which he or she is
held by others." Romaine v. Kallinger, 109 N.J. 282, 289 (1988) (quoting Leers
v. Green, 24 N.J. 239, 251 (1957)). "The threshold issue in any defamation case
is whether the statement at issue is reasonably susceptible of a defamatory
meaning," which is a question of law "to be decided first by the court." Id. at
290. In determining the truth of a statement, courts will not focus on minor
inaccuracies, but on whether its substance can be factually supported. See G.D.,
205 N.J. at 306-07 (holding truth as a defense for a statement that a person went
to jail for five years when in fact, he was sentenced to five years and served
less).
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Even under the most indulgent reading of plaintiff's complaint, we
conclude, as the motion judge did, that there was no legal basis for recovery for
his defamation claim. Because the statements in the notice of the 2019 annual
meeting were accurate, and "truth is a defense to a defamation action," G.D.,
205 N.J. at 304, that count was properly dismissed.5
To the extent not addressed, we conclude plaintiff's remaining arguments
lack sufficient merit to warrant discussion in a written opinion.
Affirmed.
5
Regardless, the CPPOA and its Board members are entitled to a qualified privilege
because the notice of the 2019 annual meeting was published only to Curtis Point
homeowners, all of whom shared an interest in the subject matter of the
communication. See Feggans v. Billington, 291 N.J. Super. 382, 392-93 (App. Div.
1996).
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