RONALD W. HOROWITZ VS. RICHARD L. FURMAN (L-4274-17, MONMOUTH COUNTY AND STATEWIDE) ( 2019 )

NOT FOR PUBLICATION WITHOUT THE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-4446-17T1
RONALD W. HOROWITZ,
Plaintiff-Appellant,
v.
RICHARD L. FURMAN, individually
and as an agent of Carroll McNulty Kull,
LLC, CARROLL MCNULTY KULL,
LLC and KENNEDYS CMK LLP,
improperly pled as KENNEDY
LAW CMK LLP,
Defendants-Respondents.
_________________________________
Argued telephonically April 4, 2019 –
Decided August 26, 2019
Before Judges Yannotti, Rothstadt and Natali.
On appeal from the Superior Court of New Jersey, Law
Division, Monmouth County, Docket No. L-4274-17.
Ronald W. Horowitz, appellant, argued the cause pro
se.
Kevin Michael Haas, argued the cause for respondents
(Clyde & Co US LLP, attorneys; Kevin Michael Haas,
of counsel and on the brief).
PER CURIAM
In this dispute about whether one law firm poached another's client,
plaintiff Ronald Horowitz, Esq. appeals from the Law Division's April 26, 2018
order granting defendants Richard L. Furman's, Carroll McNulty Kull, LLC's
(CMK), and Kennedys CMK LLP's motion under Rule 4:6-2(e) and alternatively
for summary judgment under Rule 4:46-1, dismissing plaintiff's second
amended complaint. The complaint asserted claims for tortious interference
with contractual relations and with prospective economic advantage based on
plaintiff's allegation that Furman made numerous false and improper statements
to a mutual client's principals regarding plaintiff and his representation of the
client. Judge Marc C. Lemieux granted defendants' motion, finding that plaintiff
had failed to sufficiently plead his claims or meet his burden on summary
judgment. On appeal, plaintiff challenges the judge's ruling, contending that his
claims were sufficiently pled and summary judgment was not warranted and
prematurely granted. We affirm substantially for the reasons expressed by Judge
Lemieux in his oral decision.
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The facts taken from the pleadings and motion record, and considered in
the light most favorable to plaintiff, are summarized as follows. Plaintiff is an
attorney whose practice focuses on freight transportation law. Beginning in
2002, plaintiff regularly represented GMG Transportation, Inc. and GMG
Transwest Corp., two freight transportation companies located in New York
(collectively GMG). In 2007, GMG retained plaintiff to recover approximately
$250,000 from one of its former accounts, PDK Labs, Inc. (PDK). Plaintiff filed
suit on GMG's behalf in the United States District Court for the Eastern District
of New York and obtained a judgment for $250,000. The default judgment was
subsequently vacated and PDK commenced a new action in the Supreme Court
of New York against GMG and its principals for conversion of PDK's freight.
At plaintiff's suggestion, in or about January 2015, GMG retained Furman,
a member of CMK, who also practiced freight transportation law, as local
counsel in the New York action. According to plaintiff, during the next year
and a half, Furman attended court conferences and prepared correspondence and
pleadings for plaintiff's review. Prior to the trial, Furman obtained consent from
plaintiff to participate at trial. The trial began in March 2016 with both plaintiff
and Furman participating. The matter was adjourned after its commencement
and was scheduled to resume on July 26, 2016.
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Plaintiff contends that Furman thereafter began to disparage plaintiff. He
understood that Furman told GMG that (1) its principals should transfer all
assets out of their names unless they terminated GMG's representation by
plaintiff and (2) plaintiff should be removed as trial counsel for GMG in all
cases. On July 1, 2016, GMG advised plaintiff that he would no longer be
representing GMG on any matters, and allegedly stated that their decision was
based on Furman's statement that plaintiff's handling of the PDK case would
cause GMG and its principals to suffer significant losses.
By letter dated July 7, 2016, John Coviello, GMG's president, informed
plaintiff that GMG no longer required his representation and requested that
plaintiff forward all files and documents to Furman. Coviello's letter mentioned
the PDK claim as well as an unrelated matter involving Bankers Insurance
Company, and asked plaintiff to advise if he was handling any other matters on
GMG's behalf. As to the insurance matter, Coviello advised that another law
firm would be substituting as counsel. On July 8, 2016, Furman advised the
judge in the PDK matter that GMG had terminated plaintiff as lead counsel.
Plaintiff made unsuccessful attempts to persuade GMG to change its decision,
but GMG refused and never retained plaintiff again.
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Plaintiff filed a complaint against defendants alleging that they tortiously
interfered with his and GMG's contractual relations, explaining that he had a
valid contract with GMG for approximately fifteen years and that defendants,
knowingly and willfully, intended to harm plaintiff financially by inducing
GMG to violate that agreement. Plaintiff next alleged tortious interference with
prospective economic advantage, contending that he had a long-time business
relationship with GMG which defendants intended to interfere with or destroy,
causing damages to plaintiff. Finally, plaintiff claimed defamation, alleging that
defendants defamed plaintiff by stating he was incapable of properly and
effectively representing GMG, and depicted plaintiff in a false light by
suggesting that he had failed to properly represent GMG, which harmed his
reputation in his profession. Plaintiff stated that defendants published such
statements with reckless disregard for truth, damaging plaintiff's business.
On January 22, 2018, in lieu of filing an answer, defendants moved to
dismiss under Rule 4:6-2. Plaintiff filed opposition in which he cited to
Nostrame v. Santiago, 213 N.J. 109 (2013) as well as the Rules of Professional
Conduct (RPC) to support his position that Furman's actions were improper, and
contended that "the causes of action[] are suggested by the facts." Plaintiff also
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argued, contrary to defendants' assertion, that his defamation claim was timely
filed.
On February 16, 2018, Judge Lemieux dismissed as time-barred plaintiff's
defamation claim with prejudice, but granted plaintiff leave to amend his
complaint regarding the remaining two claims. Plaintiff was directed to provide
more specificity regarding tortious interference with a prospective client and a
more detailed, definitive statement regarding his claims.
Plaintiff filed a second amended complaint on March 14, 2018. In it,
plaintiff briefly expanded on his claims for tortious interference, contending that
Furman violated RPC 8.4(c) and (d) and RPC 7.1(a)(2). Plaintiff added an
allegation that Furman advised GMG and its principals to fraudulently transfer
assets out of their names and out of PDK's reach as a creditor. Notably, the
complaint was silent as to the source of any of plaintiff's allegations about what
Furman allegedly told GMG's representatives about plaintiff.
On March 28, 2018, defendants again moved to dismiss, or in the
alternative, for summary judgment. In support, they filed certifications from
Coviello and Edmund Giza, GMG's former president, in which they denied
either being advised by Furman, or discussing with plaintiff, that (1) Furman
advised them to transfer their assets out of their names unless they terminated
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GMG's representation by plaintiff; (2) Furman advised that plaintiff's handling
of the PDK case could cause GMG and its principals to suffer losses; or (3)
Furman recommended that plaintiff be terminated as GMG's counsel in all
matters.
Furman also filed a certification in which he denied ever advising GMG
as alleged by plaintiff in "words, form or substance." Specifically, Furman
denied advising Coviello or Giza to transfer assets out of their names and denied
recommending that plaintiff be removed as counsel for GMG.
Plaintiff filed a certification in opposition to defendants' motion to
dismiss, contesting defendants' undisputed facts and asserting that the matter
was not ripe for summary judgment because the record was made up of "vague
affidavits of the defendant and his new illicitly obtained client," and the lack of
depositions. Plaintiff also contended that Furman tacitly admitted plaintiff's
allegations because he never denied them.
On April 26, 2018, the parties appeared for oral argument. Judge Lemieux
stated that although he had asked plaintiff to provide more specificity, his second
amended complaint contained only one additional sentence. During the
argument, plaintiff, who was self-represented, explained to the judge that
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"[t]here's no more facts that I have to put . . . in the second amended complaint
to make a cause of action for tortious interference."
In his oral decision placed on the record that same day, the judge cited to
Nostrame and concluded there could be no cause of action for tortious
interference with a contract between a client and his or her attorney, so he
dismissed the complaint's first count. He also concluded that plaintiff failed to
provide factual support for his claims for tortious interference and failed to
supply any evidence to support his various allegations, finding that plaintiff's
reliance on his own "personal assertions" was insufficient. The judge rejected
plaintiff's assertion that if he were permitted to depose defendants, he would
have been able to ascertain the missing facts, explaining that a plaintiff may not
use discovery as a tool to create the basis of his allegations.
The judge also noted regarding plaintiff's allegation that Furman advised
GMG to fraudulently transfer assets, the second amended complaint "does not
indicate where the statement comes from and just relies on a personal assertion
that it was, in fact, made." Regarding the allegedly false and misleading
statements that defendants made about plaintiff and his services, the judge
explained further that plaintiff did not even provide the court with those
statements. The judge concluded that plaintiff's second amended complaint was
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based on unsupported allegations and should be dismissed with prejudice under
Rule 4:6-2(e).
Additionally, the judge rejected plaintiff's argument that summary
judgment was inappropriate because "the determination of whether a material
fact is in dispute . . . depend[ed] on a credibility evaluation that must be
presented to the jury." The judge stated that a motion for summary judgment
cannot be defeated by "pulling out any fact in dispute" or by asserting that
depositions are needed to prove or disprove his assertions. Plaintiff could n ot
get to the discovery stage before he pled with specificity and particularity
defendants' alleged wrongful conduct to support his claims. This appeal
followed.
On appeal, plaintiff contends that it was error for the judge to grant
defendants' motions because his second amended complaint "sufficiently pled
actionable claims," and the matter was not ripe for a summary judgment
determination because the record "contained genuine issues of material fact[s]"
and discovery had not been completed. We disagree.
We begin by identifying our standard of review. A motion to dismiss
under Rule 4:6-2 focuses on the pleadings. Accordingly, under Rule 4:6-2(e), a
complaint can be dismissed if the facts alleged in the complaint do not state a
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viable claim as a matter of law. The standard for determining the adequacy of
plaintiff's pleadings is "whether a cause of action is 'suggested' by the facts."
Green v. Morgan Props., 215 N.J. 431, 451-52 (2013) (quoting Printing Mart-
Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 746 (1989)). "However, we
have also cautioned that legal sufficiency requires allegation of all the facts that
the cause of action requires." Cornett v. Johnson & Johnson, 414 N.J. Super.
365, 385 (App. Div. 2010), aff'd and modified, 211 N.J. 362 (2012). In the
absence of such allegations, the claim must be dismissed. Ibid.; see also Scheidt
v. DRS Techs., Inc., 424 N.J. Super. 188, 193 (App. Div. 2012) ("the essential
facts supporting plaintiff's cause of action must be presented . . . conclusory
allegations are insufficient in that regard").
Here, however, all parties submitted material outside the pleadings and
the motion judge considered and relied on those documents and certifications .
Whether submitted in support of the Rule 4:6-2(e) motion or considered a
separate motion for summary judgment, the same standard applied. See R. 4:6-
2; R. 4:46. The standard for summary judgment is whether the moving parties
have established that there are no genuine disputes as to any material facts, and,
if so, whether the facts, viewed in the light most favorable to the non -moving
party, entitles the moving parties to judgment as a matter of law. R. 4:46-2(c);
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Davis v. Brickman Landscaping, Ltd., 219 N.J. 395, 405-06 (2014); Brill v.
Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
A party opposing summary judgment does not create a genuine issue of
fact simply by offering a sworn statement. Carroll v. N.J. Transit, 366 N.J.
Super. 380, 388 (App. Div. 2004). "'[C]onclusory and self-serving assertions'
in certifications without explanatory or supporting facts will not defeat a
meritorious motion for summary judgment." Hoffman v. Asseenontv.com, Inc.,
404 N.J. Super. 415, 425-26 (App. Div. 2009); accord Brae Asset Fund, LP v.
Newman, 327 N.J. Super. 129, 134 (App. Div. 1999).
What is required of the party opposing summary judgment is affirmative
evidence that is competent, credible, and shows that there is a genuine issue for
trial. "Competent opposition requires 'competent evidential material' beyond
mere 'speculation' and 'fanciful arguments.'" Cortez v. Gindhart, 435 N.J. Super.
589, 605 (App. Div. 2014) (quoting Hoffman, 404 N.J. Super. at 425-26).
Summary judgment will not be precluded by "[b]are conclusory assertions"
lacking factual support, Horizon Blue Cross Blue Shield of N.J. v. State, 425
N.J. Super. 1, 32 (App. Div. 2012), self-serving statements, Heyert v. Taddese,
431 N.J. Super. 388, 413-14 (App. Div. 2013), or disputed facts "of an
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insubstantial nature." Miller v. Bank of Am. Home Loan Servicing, LP, 439
N.J. Super. 540, 547 (App. Div. 2015) (quoting Brill, 142 N.J. at 523).
Ordinarily, summary judgment is inappropriate prior to the completion of
discovery. Wellington v. Estate of Wellington, 359 N.J. Super. 484, 496 (App.
Div. 2003). However, "[a] motion for summary judgment is not premature
merely because discovery has not been completed, unless plaintiff is able to
'demonstrate with some degree of particularity the likelihood that further
discovery will supply the missing elements of the cause of action.'" Badiali v.
N.J. Mfrs. Ins. Grp., 220 N.J. 544, 555 (2015) (quoting Wellington, 359 N.J.
Super. at 496).
When reviewing orders concerning motions to dismiss for failure to state
a claim or motions for summary judgment, we use the same standard as the trial
court and review the decisions de novo. Davis, 219 N.J. at 405; Wreden v. Twp.
of Lafayette, 436 N.J. Super. 117, 124 (App. Div. 2014). Moreover, in
considering questions of law, our review is plenary. Ben Elazar v. Macrietta
Cleaners, Inc., 230 N.J. 123, 135-36 (2017).
Whether defendants' motion in this case should have been denied
depended upon the sufficiency of plaintiff's pleadings to set forth a cause of
action against defendants and whether he sustained his burden on summary
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judgment to establish a genuine issue as to a material fact or that additional
discovery was warranted. We conclude from our de novo review that plaintiff
did not meet his burden.
In order to state a claim of tortious interference with contractual relations,
a plaintiff must plead facts sufficient to establish: "(1) actual interference with
a contract; (2) that the interference was inflicted intentionally by a defendant
who is not a party to the contract; (3) that the interference was without
justification; and (4) that the interference caused damage." Dello Russo v.
Nagel, 358 N.J. Super. 254, 268 (App. Div. 2003).
Generally, this tort cannot apply to a claim of interference with an existing
relationship between an attorney and client and instead "must technically be
analyzed in accordance with the principles" applicable to the tortious
interference with a prospective contractual relationship. Nostrame, 213 N.J. at
121. "[B]oth of these torts have as their focus the means by which one has
interfered with the contractual relationship, whether that contractual relationship
is existing or prospective." Ibid. The interference must not only be
"intentional," but also "improper." Id. at 122 (citing Restatement (Second) of
Torts § 766 (Am. Law Inst. 1979)).
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"The tort of interference with a business relation or contract contains four
elements: (1) a protected interest; (2) malice—that is, defendant's intentional
interference without justification; (3) a reasonable likelihood that the
interference caused the loss of the prospective gain; and (4) resulting damages."
DiMaria Constr., Inc. v. Interarch, 351 N.J. Super. 558, 567 (App. Div. 2001),
aff'd o.b., 172 N.J. 182 (2002).
The elements for a claim of tortious interference with prospective
economic of advantage are defined as follows:
One who intentionally and improperly interferes with
another's prospective contractual relation (except a
contract to marry) is subject to liability to the other for
the pecuniary harm resulting from loss of the benefits
of the relation, whether the interference consists of
(a) inducing or otherwise causing a third person not to
enter into or continue the prospective relation or
(b) preventing the other from acquiring or continuing
the prospective relation.
[Nostrame, 213 N.J. at 122 (quoting Restatement
(Second) of Torts § 766B (Am. Law Inst. 1979)).]
In Nostrame, the plaintiff filed a complaint against the defendant, both of
whom were attorneys, after the plaintiff's client terminated his representation in
favor of the defendant. Id. at 114-15. The plaintiff alleged tortious interference
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and that the defendant had induced the client to discharge plaintiff. Id. at 115.
The defendant filed a motion to dismiss under Rule 4:6-2(e). Id. at 116.
In its opinion affirming the reversal of the denial of the motion, which
resulted in the dismissal of the complaint, the Supreme Court addressed the
circumstances under which a discharged attorney may sustain a cause of action
against a successor attorney for tortious interference with prospective economic
advantage. . Id. at 120-21. According to the Court, when considering such
claims, a trial judge must evaluate whether the means the second attorney used
were improper or wrongful. Id. at 123. In doing so, the Court recognized the
unique relationship between an attorney and client and the expanded definition
of improper conduct that applies to claims between attorneys based on tortious
interference.
The Court stated the following:
Our analysis of the well-established elements that are
required to state a claim for tortious interference is
informed by our recognition that the attorney-client
relationship is terminable at will and by our strong
protections for clients who exercise their free will to
retain and to discharge counsel. It is further guided by
the recognition that competition among attorneys,
although not precisely the same as competition found
in other business pursuits, is not prohibited as long as
it is conducted in adherence to the RPCs and is not
otherwise wrongful or improper. In that context, we are
confident that there will be only rare circumstances in
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which an attorney will behave in a manner that could
translate into a claim by another attorney for tortious
interference.
[Id. at 128-29.]
Addressing "the universe of behaviors that would qualify as improper or
wrongful," the Court explained that attorneys' conduct in relation to their
competition as compared to "ordinary business competitors," attorneys are
subject to "a further series of limitations." Id. at 126, 129. The Court noted that
attorneys are not only "prohibited from making statements about another
attorney that are defamatory or that amount to fraud," but also "may not make
misrepresentations, may not use tactics to pressure or harass, may not, except in
defined circumstances, make comparisons, may not disparage other attorneys,
and may not offer promises about results." Id. at 126. Wrongful acts include
fraud, defamation, deceit, intimidation, and misrepresentation, but do not
include solicitation or "sneaky" or "underhanded" acts. See id. at 124 (citations
omitted). Attorneys also "may not use tactics to pressure or harass . . . disparage
other attorneys, [or] . . . offer promises about results." Id. at 126.
Applying these principles, the Court found that the plaintiff's complaint
stated only that he had a contingent fee agreement with a client, that the client
arranged for a meeting and did not appear, and that she thereafter discharged the
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plaintiff and asked him to send her file to her new lawyer. Ibid. The Court held
that the claim was not supported by any facts that suggested the means the
defendant used were improper or wrongful. Id. at 127. It stated "[b]ecause
plaintiff's complaint is based on nothing more than his unsupported suspicion
that his client would not have discharged him absent some wrongful or improper
means, [the complaint] fails to state a claim upon which relief can be granted."
Id. at 129.
In reaching its decision, the Court noted "that our rules demand [the
wrongful conduct] be pleaded with specificity[.]" Ibid. The Court explained
the need for specificity, and directed that all future actions be pled with
"specificity and particularity." Ibid. It stated as follows:
Because each of these grounds is specific and
particular, because we recognize that the paramount
right to be protected is the right of the client to choose
counsel freely, and because we do not intend to
countenance litigation between successive counsel that
is unsupported by facts known at the time of filing, we
direct that any complaint filed in the future based on
such a cause of action plead the facts and circumstances
that constitute the allegedly wrongful means with
specificity and particularity.
[Ibid.]
The Court required that a plaintiff specifically plead with particularity the
facts known at the time of filing and warned against relying upon the hope that
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discovery would flush out those facts later. The Court stated that since it was
undisputed the plaintiff
had no further facts to plead, instead filing the
complaint in the hope that he could use the tools of
discovery to uncover evidence of wrongdoing. . . .
dismissal with prejudice was entirely appropriate lest
his former client and her newly-chosen attorney be
subjected to a mere fishing expedition, a remedy that
would raise the specter of chilling any client's exercise
of the free choice to select counsel that we have
accorded them.
[Id. at 128.]
With these guiding principles in mind and applying our de novo standard
of review, we conclude plaintiff's complaint was properly dismissed with
prejudice. As Judge Lemieux found, plaintiff's second amended complaint
failed to set forth with specificity any factual basis for the most significant
allegation about defendants' alleged wrongful conduct.
The complaint stated inter alia that that Furman "suggested, induced
and/or recommended to GMG" that if it did not fire plaintiff, its principals'
personal assets were in jeopardy, inferring that GMG would lose the PDK case
because of plaintiff's inability to properly represent GMG. It also stated that
GMG "advised plaintiff that [its] decision was based on learning from . . .
Furman that plaintiff's handling of the PDK case would cause GMG and its
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principals to suffer huge losses." Finally, plaintiff also alleged that Furman
advised GMG, Coviello, and Giza "to fraudulently transfer assets out of their
names and out of PDK's reach" in violation of the Court's RPCs. However,
plaintiff did not allege that such statements were made to him or in his presence,
nor did he divulge how they were otherwise made known to him. In any event,
and significantly, we conclude the sparse allegations did not amount to the
necessary specific and particular pleading of wrongful conduct required by
Nostrame.
Plaintiff's complaint was instead "based on nothing more than his
unsupported suspicion that his client would not have discharged him absent
some wrongful or improper means, [and therefore] fails to state a claim upon
which relief can be granted." Id. at 129. Plaintiff did not plead specifically or
with particularity that Furman engaged in fraud, misrepresentation, deceit, or
any other wrongful or unethical means. He alleged only that Furman
"communicated" with GMG about plaintiff's representation; that Furman
instructed GMG's principals to transfer assets out of their names; and that
Furman suggested that plaintiff be removed as trial counsel. These bald
assertions do not include the elements of or amount to the establishment of any
alleged wrongful acts. Moreover, they were based solely on an alleged
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conversation with GMG's principals in which they described their conversation
with Furman—a conversation which Furman, Coviello, and Giza deny in sworn
affidavits took place. The fact that the complaint referred to various RPCs based
upon Furman allegedly telling the former clients to transfer assets to avoid the
impact of a possible judgment in the PDK matter, did not provide the specific
factual support required to maintain an action for wrongful, intentional and
improper conduct between plaintiff and defendants.
Even if plaintiff's complaint could be considered sufficient, plaintiff failed
to meet his burden on summary judgment. Once defendants' motion was
converted to one for summary judgment, or considered as one from the outset,
and supported by certifications from Furman, Coviello, and Giza denying that
Furman made any of the specific statements and confirming that they never
spoke to plaintiff about the alleged statements, plaintiff was obligated to come
forward with some credible evidence that the statements were made as alleged
in the complaint. He did not.
Instead, plaintiff claimed only that the allegations of the second amended
complaint were sufficient and its allegations were "true and accurate," but gave
no explanation for the basis or source of the disputed statements made to
Coviello or Giza. He only made a bald assertion that further discovery would
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reveal such information about the "vague affidavits of the defendant and his new
illicitly obtained client."
Like the plaintiff in Nostrame, plaintiff speculated that other than
Furman's wrongful conduct, there could be no other reason for GMG terminating
its relationship with plaintiff. In doing so, he made a vague reference to an
unspecified telephone call with Coviello, that was not mentioned in his
pleadings, in which he claims Coviello "expressed" that if plaintiff was not
replaced with Furman, their "personal assets were in jeopardy if they did not
transfer them out of their names." Plaintiff further certified that "[t]here is no
question that he stated that to me. There should be no question that [they] would
not have made such an abrupt and shocking decision to terminate my
representation if fear, of a significant magnitude, was not instilled in [them].
There is no other credible explanation."
The only other parties with knowledge of the alleged conversations—
Furman, Coviello, and Giza—denied in sworn affidavits that any of the
conversations took place, and plaintiff failed to show that depositions or any
other discovery of these same or any other individuals would elicit contradicting
or additional information to support his claims. "A party opposing summary
judgment on the ground that more discovery is needed must specify what further
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discovery is required, rather than simply asserting a generic contention that
discovery is incomplete." Trinity Church v. Lawson-Bell, 394 N.J. Super. 159,
166 (App. Div. 2007) (quoting Auster, 153 N.J. Super. at 56). Here, plaintiff
failed to demonstrate that additional discovery was warranted.
Affirmed.
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