2820 MT. EPHRAIM AVENUE, LLC VS. MICHAEL E. BROWN, ESQ. (L-1007-18, CAMDEN COUNTY AND STATEWIDE) (CONSOLIDATED) ( 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NOT FOR PUBLICATION WITHOUT THE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-2694-19
A-2699-19
2820 MT. EPHRAIM AVENUE,
LLC, and JOHN CALZARETTO,
ESQ.,
Plaintiffs-Appellants,
v.
MICHAEL E. BROWN, ESQ.,
DEMBO, BROWN &
BURNS, LLP, and MARKEIM-
CHALMERS, INC.,
Defendants-Respondents.
____________________________
Argued May 5, 2021 – Decided July 13, 2021
Before Judges Alvarez, Sumners, and Mitterhoff.
On appeal from the Superior Court of New Jersey, Law
Division, Camden County, Docket No. L-1007-18.
Gary M. Marek argued the cause for appellants (Law
Offices of Gary M. Marek, and Calzaretto & Bernstein,
LLC, attorneys; Gary M. Marek and John A. Calzaretto,
on the briefs).
John L. Slimm argued the cause for respondent Michael
E. Brown, Esq. and Dembo, Brown & Burns, LLP
(Marshall, Dennehey, Warner, Coleman & Goggin,
attorneys; John L. Slimm, on the brief).
Kristofer B. Chiesa argued the cause for respondent
Markeim-Chalmers, Inc. (Sherman, Silverstein, Kohl,
Rose & Podolsky, PA, attorneys; Bruce S. Luckman
and Kristofer B. Chiesa, on the brief).
PER CURIAM
These appeals were calendared back-to-back and, because they share
common facts, we now consolidate them solely for the purpose of issuing a
single opinion. In Docket No. A-2699-19, plaintiffs 2820 Mt. Ephraim Avenue,
LLC (Mt. Ephraim) and John Calzaretto (Calzaretto) appeal from two orders
entered on May 22, 2018 dismissing their claims against defendant Markeim-
Chalmers, Inc. (MCI) and the conspiracy claim against defendants Michael E.
Brown (Brown) and Dembo, Brown & Burns, LLP (Dembo). In that appeal,
plaintiffs raise the following arguments:
POINT I
BY ITS ORDERS DATED MAY 22, 2018, THE
LOWER COURT HAS IGNORED MCI'S OPEN AND
BLATANT VIOLATIONS OF PRUDENT OWNER
STANDARDS, N.J.S.A. 46A:29-1, ET. SEQ.,
PERMITTED PRE-FORCED SALE ORDER AND
PRE-SALE CRIMINAL, ILLEGAL AND
UNLAWFUL ACCESS TO THE PROPERTY
RESULTING IN SUBSTANTIAL DAMAGE TO
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PETITIONER BORROWER'S PROPERTY AND
OPPOSING THE SALE OF THE PROPERTY TO THE
HIGHEST BIDDER; FURTHER, ITS ACTS COULD
NOT HAVE BEEN COMMITTED WITHOUT THE
JOINT PARTICIPATION OF DBB AND THE
RELATED PRINCIPALS.
POINT II
THE LOWER COURT'S GRANTING . . .
DEFENDANTS' DISMISSAL OF THE
PETITIONERS' CLAIM OF CONSPIRACY . . .
AGAINST DBB AND MCI IS MANIFESTLY
UNJUST AND PREJUDICES THE SUBSTANTIAL
RIGHTS OF THE PETITIONERS SINCE THE FACTS
IN THIS PRESENT MATTER CLEARLY
DEMONSTRATE THAT THE ELEMENTS OF
CONSPIRACY EXISTED AND THAT DBB AND
MCI PARTICIPATED IN ITS COMMISSION.
In Docket No. A-2694-19, plaintiffs appeal from a January 24, 2020 order
granting summary judgment on the remaining claims against defendants Brown
and Dembo. In that appeal, plaintiffs raise the following arguments for our
consideration:
POINT I
BY ITS ORDER[] DATED JANUARY 24, 2020, THE
LOWER COURT ERRED IN GRANTING
DEFENDANTS' MOTION FOR SUMMARY
JUDGMENT ON THE BASIS OF LITIGATION
PRIVILEGE.
A-2694-19
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POINT II
THE LOWER COURT [ERRED] IN FINDING THAT
MICHAEL BROWN'S STATEMENTS WERE NOT
DEFAMATORY.
POINT III
THE LOWER COURT ERRED IN DETERMINING
THAT DEFENDANTS DID NOT [TORTIOUSLY]
INTERFERE WITH PLAINTIFFS' RELATIONSHIP
WITH UNITED FINANCING GROUP AS
[TORTIOUS] INTERFERENCE INCLUDES
[INTERFERENCE] ON A PROSPECTIVE
CONTRACT.
POINT IV
BY ITS ORDER DATED JANUARY 24, 2020, THE
LOWER COURT IGNORED EVIDENCE OF
DAMAGES SUFFERED BY PLAINTIFFS
INDEPENDENT AND APART FROM THE LOSS OF
THE ANTICIPATED VALUE OF NEW JERSEY TAX
CREDITS.
Having carefully reviewed the record, and in light of the applicable law, we
affirm, substantially for the reasons set forth in the May 11, 2018 and January
24, 2020 oral opinions of Judge Anthony M. Pugliese. We add the following
brief comments.
Although the dispute has a tortured history, we summarize the essential
facts that are pertinent to the issues under review. This matter arises from
deficiency and foreclosure actions filed by Parke Bank, represented by
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defendants Dembo and Brown, due to plaintiffs' failure to repay a $3.75 million
loan that was used to finance the purchase of a property in Camden. During the
foreclosure action, Parke Bank moved to appoint MCI as the court-appointed
receiver with the ability to market and sell the property, subject to court
approval. Thereafter, MCI made various good-faith efforts to both lease and
sell the property with the approval of the court.
In June 2017, plaintiffs filed an amended complaint in the present matter,
asserting claims against MCI for breach of a fiduciary duty, negligence, tortious
interference, and conspiracy. Later that month, MCI filed a motion to dismiss.
R. 4:6-2. On May 22, 2018, following oral argument, Judge Pugliese dismissed
all the claims against MCI. He noted that the lengthy history of the dispute
indicates a plethora of times when . . . plaintiff[s] in this
action, 2820 Mount Ephraim and Mr. Calzaretto[,]
challenge[d] [MCI] relative to the actions that they
undertook as the [c]ourt-appointed receiver in the
matter. And I find that the allegations assessed against
[MCI] are nothing more than a rehash of the same
matters. Nothing new is being presented.
It has been [argued] on at least three, possibly
four or more occasions . . . by the current plaintiffs that
[MCI] created waste, did not appropriately manage the
property, was negligent in the manner in which they
went forward to manage the property and . . . in other
ways did not comply and follow the strictures of what
their fiduciary duties were, and that they acted
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negligently. And the [c]ourt has rejected that on every
analysis.
So, although under [Rule] 4:6-2, . . . plaintiffs
here make a proper allegation, that allegation has been
addressed ad nauseam.
The record supports Judge Pugliese's factual findings. In 2015, Judge Nan
Famular denied plaintiffs' motion to appoint a new receiver after rejecting the
argument that MCI acted improperly in failing to lease the subject property.
Indeed, in June 2016, Judge Pugliese noted that MCI "did a professional job
. . . despite the aspersions that were cast upon them . . . [I]n terms of [MCI]
having an ulterior motive to get paid for work that [t]he [c]ourt's assigned them
to do, that falls on deaf ears at this point." In October 2017, Judge David M.
Ragonese issued an order granting MCI's request to be discharged because it had
"satisfied" its duties reasonably and "lawfully," and that the "allegations of
waste and improper conduct . . . against [MCI] have been addressed previously"
and rejected. As another judge previously found, MCI's actions were "all
presented to the [c]ourt for approval" and, accordingly, the arguments of breach
of a fiduciary duty, negligence, and waste had been repeatedly argued and
rejected.
Applying our de novo review of a decision to dismiss the complaint under
Rule 4:6-2(e), Frederick v. Smith, 416 N.J. Super. 594, 597 (App. Div. 2010),
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we find that Judge Pugliese correctly concluded that the present claims against
MCI have been "fully litigated." Accordingly, plaintiffs' claims against MCI are
barred by the doctrine of collateral estoppel. See Ziegelheim v. Apollo, 128 N.J.
250, 265 (1992) ("The doctrine of issue preclusion, or collateral estoppel, 'bars
relitigation of any issue which was actually determined in a prior action,
generally between the same parties, involving a different claim or cause of
action.'" (quoting State v. Gonzalez, 75 N.J. 181, 186 (1977))). For similar
reasons, we discern no basis in the record to overturn the dismissal of the claims
against MCI for conspiracy. 1
We turn our attention now to plaintiffs' claims against Brown and Dembo.
While MCI was attempting to sell the property, plaintiffs endeavored to settle
the matter by purchasing the loan documents with the assistance of United
Financial Group, Inc. (UFG), and then selling the property to Mosaic
Development Partners LLC (Mosaic). In April 2016, during the course of these
efforts, the Director of Sales at UFG called Brown to discuss the possibility of
1
Because Judge Pugliese dismissed the conspiracy claim against MCI, he correctly
dismissed the same claim against Brown and Dembo. See Exxon Corp. v. Wagner,
154 N.J. Super. 538, 545 (App. Div. 1977) (a conspiracy requires "a plurality of
actors, that is, two or more persons, and concerted action.").
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the purchase of the loan documents. During the call, Brown purportedly called
Calzaretto a "wannabe gangster."
Plaintiffs contend that Brown's statement that Calzaretto was a "wannabe
gangster" was slander per se or, at a minimum, slander. Plaintiffs also claim
that this statement constituted tortious interference with their efforts to sell the
property. We disagree.
"[A] statement is defamatory if it is false, communicated to a third person,
and tends to lower the subject's reputation in the estimation of the community
or to deter third persons from associating with him." W.J.A. v. D.A., 210 N.J.
229, 238 (2012) (alteration in original) (quoting Lynch v. N.J. Educ. Ass'n, 161
N.J. 152, 164-65 (1999)). "This question is one to be decided first by the court."
Romaine v. Kallinger, 109 N.J. 282, 290 (1988).
It is well-settled that:
[u]nder New Jersey law, four kinds of statements
qualify as slander per se that is defamation that in and
of itself injures the person: accusing another (1) of
having committed a criminal offense, (2) of having a
loathsome disease, (3) of engaging in conduct or having
a condition or trait incompatible with his or her
business, or (4) of having engaged in serious sexual
misconduct.
[Rocci v. Ecole Secondaire Macdonald-Cartier, 165
N.J. 149, 162 (2000) (citing Biondi v. Nassimos, 300
N.J. Super. 148, 154 (App. Div. 1997)).]
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We conclude that the statement "wannabe gangster" does not constitute slander
per se because it did not impute a criminal offense, id. at 156, and did not
necessarily assign Calzaretto a characteristic that is incompatible with his
business or trade.
In any event, we agree with Judge Pugliese that the statement falls within
the litigation privilege. See Feggans v. Billington, 291 N.J. Super. 382, 393
(App. Div. 1996) ("In determining whether the qualified privilege is a defense,
it is irrelevant whether the statement at issue was defamatory." (citing Lutz v.
Royal Ins. Co. of Am., 245 N.J. Super. 480, 496 (App. Div. 1991))).
Notwithstanding plaintiffs' narrow view to the contrary, the litigation privilege
is not confined to the courtroom and "extends to all statements or
communications in connection with the judicial proceeding." Ruberton v.
Gabage, 280 N.J. Super. 125, 133 (App. Div. 1995). "The only limitation which
New Jersey places upon the privilege is that the statements at issue 'have some
relation to the nature of the proceedings.'" Rabinowitz v. Wahrenberger, 406
N.J. Super. 126, 134 (App. Div. 2009) (quoting Hawkins v. Harris, 141 N.J. 207,
215 (1995)). We conclude that Judge Pugliese correctly granted Brown and
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Dembo's summary judgment motion because the defamation claim was barred
by the litigation privilege. 2
Affirmed.
2
Because the claims for slander and slander per se were properly dismissed, Mt.
Ephraim's claim for tortious interference must also fail, as it is based entirely on the
alleged defamation.
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