ELEVATOR MEDIC CORPORATION v. LITANA DEVELOPMENT, INC., (L-1064-20, HUDSON COUNTY AND STATEWIDE) ( 2022 )

NOT FOR PUBLICATION WITHOUT THE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-1377-20
ELEVATOR MEDIC
CORPORATION,
Plaintiff-Appellant,
v.
LITANA DEVELOPMENT, INC.,
Defendant-Respondent.
Argued December 7, 2021 – Decided January 27, 2022
Before Judges Fisher and Currier.
On appeal from the Superior Court of New Jersey, Law
Division, Hudson County, Docket No. L-1064-20.
Ronald Gutwirth argued the cause for appellant (Law
Office Constantine Bardis, LLC, attorneys; Ronald
Gutwirth, of counsel and on the brief; Constantine
Bardis, on the brief).
Danielle E. Cohen argued the cause for respondent
(Tesser & Cohen, attorneys; Danielle E. Cohen, on the
brief).
PER CURIAM
Plaintiff filed a complaint in Essex County, alleging defendant did not pay
it for work performed on a project in Cedar Grove. Six months later, plaintiff
dismissed the complaint with prejudice after realizing it had listed the wrong
address for the job. Thereafter, plaintiff filed a complaint in Hudson County,1
seeking payment for work performed for defendant on a job in Paterson.
Defendant moved to dismiss plaintiff's complaint in lieu of an answer
under Rule 4:6-2, contending the second complaint was barred under the entire
controversy doctrine, Rule 4:30A. The motion judge agreed and dismissed the
complaint, finding "the claims in this matter are considered to have been fully
adjudicated and the entire controversy doctrine bars further adjudication." The
court denied plaintiff's subsequent motion for reconsideration.
The parties did not litigate the claims asserted in the Essex County action.
The issues were not adjudicated on the merits. Therefore, the entire controversy
doctrine is not applicable, and it was error to dismiss the Hudson County
complaint. We reverse.
Plaintiff performed work as a subcontractor under a contract executed
with defendant on a project in Paterson. When the parties disputed whether
1
Plaintiff's place of business is located in Hudson County.
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plaintiff was owed any monies for its work, plaintiff filed the Essex County
action. In the complaint, plaintiff alleged it performed work for defendant at an
address in Cedar Grove. When plaintiff realized the address of the job site was
wrong, it voluntarily dismissed the complaint with prejudice.23 The dismissal
occurred before defendant filed any responsive pleading. Thereafter, plaintiff
filed the second complaint, venued in Hudson County, alleging the work
performed was in Paterson.
The objectives of the entire controversy doctrine are "to encourage
complete and final dispositions through the avoidance of piecemeal decisions
and to promote judicial efficiency and the reduction of delay." Wadeer v. N. J.
Mfrs. Ins. Co., 220 N.J. 591, 610 (2015). The doctrine compels "litigants to
consolidate their claims arising from a single controversy whenever possible."
Dimitrakopoulos v. Borrus, Goldin, Foley, Vignuolo, Hyman and Stahl, P.C.,
237 N.J. 91, 98 (2019) (citing Thornton v. Potamkin Chevrolet, 94 N.J. 1, 5
(1983)). If a party fails to properly assert a claim that must be joined in an
2
Plaintiff concedes it erred in dismissing the complaint with prejudice.
3
Plaintiff contends it learned of the mistake in the address from defendant's
counsel who contacted plaintiff to advise of the error.
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action, the court may, in its discretion, bar that claim under the entire
controversy doctrine. Ibid.However, because a violation of the entire controversy doctrine may result
in claim preclusion, courts must consider the two pillars of "fairness to the
parties and fairness to the system of judicial administration." Hillsborough Twp.
Bd. of Educ. v. Faridy Thorne Frayta, P.C., 321 N.J. Super. 275, 284 (App. Div.
1999) (holding the entire controversy doctrine does not bar the plaintiff's
subsequent claim where the plaintiff voluntarily stipulated to dismiss the
original action with prejudice and the defendant did not pay plaintiff
consideration for the dismissal). Therefore, when applying the entire
controversy doctrine, courts must consider whether the party the doctrine is
asserted against "had a fair and reasonable opportunity to . . . litigate[] that claim
in the original action." Ibid. (quoting Gelber v. Zito P'ship, 147 N.J. 561, 565
(1997)).
Plaintiff's claims were not adjudicated in the Essex County action.
Defendant did not file a responsive pleading. Plaintiff voluntarily dismissed its
complaint after noting an error in the allegations, subsequently refiling the
complaint in another county.
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Equitable considerations are at the forefront when applying the entire
controversy doctrine and courts have discretion in applying the doctrine
depending on the factual circumstances. Bank Leumi USA v. Kloss, 243 N.J.
218, 227 (2020) (citations omitted). As the Leumi Court stated: "[A] court
should not preclude a claim under the entire controversy doctrine if such a
remedy would be unfair in the totality of the circumstances and would not
promote the doctrine's objectives of conclusive determinations, party fairness,
and judicial economy and efficiency." Ibid. (citing Dimitrakopoulos, 237 N.J.
at 119).
The motion judge reasoned that the dismissal with prejudice of the Essex
County matter was an adjudication on the merits, relying on Velasquez v. Franz,
123 N.J. 498, 507 (1991). However, Velasquez is inapposite to the present
circumstances. There, a federal court dismissed the plaintiff's case under Fed.
R. Civ. P. 12(b)(6) for failure to state a claim. Ibid. Plaintiff did not appeal the
determination but instead filed an identical complaint four days later in New
Jersey Superior Court. Id. at 503-04. The trial court dismissed the complaint.
Id. at 504. The Court affirmed, finding a federal court dismissal under Fed. R.
Civ. P. 12(b)(6) was an adjudication on the merits. Id. at 505. Therefore, the
plaintiff's state court complaint was barred under the principles of res judicata.
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Here, plaintiff's claims were not adjudicated in Essex County. And
defendant does not assert res judicata precludes plaintiff from pursuing its
claims. But the entire controversy is also not applicable under these
circumstances. As we have previously stated, the entire controversy doctrine
does not preclude a second action where the first action did not result in an
adjudication on the merits. See Arena v. Borough of Jamesburg, 309 N.J. Super.
106, 111 (App. Div. 1998) (holding the entire controversy doctrine bars "a
subsequent action only when a prior action based on the same transactional facts
has been tried to judgment or settled"). Moreover, plaintiff dismissed a case
alleging a cause of action for work done in Cedar Grove. The Hudson County
complaint alleged breach of contract for work done in Paterson.
Here, where plaintiff voluntarily dismissed its action and refiled it within
several weeks, the policies underlying the entire controversy doctrine would not
be promoted by barring plaintiff's claims. There was no adjudication on the
merits. There was no consideration exchanged for the dismissal. Defendant
could potentially receive a windfall if the entire controversary doctrine applied
by escaping any potential liability for breach of contract. Plaintiff is entitled to
litigate its claims in the Hudson County action.
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Reversed and remanded for reinstatement of the complaint. We do not
retain jurisdiction.
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