Joel v. Morrocco

• Decision Date: 26 February 1997
• Citation: 688 A.2d 1036,147 N.J. 546
• Parties: Kenneth E. JOEL, Plaintiff-Appellant, v. Vincent MORROCCO and Joseph Parlavecchio, Defendants-Respondents, and Joseph Silvestri, Defendant.
• Court: New Jersey Supreme Court

Page 546

147 N.J. 546

688 A.2d 1036

Kenneth E. JOEL, Plaintiff-Appellant, v. Vincent MORROCCO and Joseph Parlavecchio, Defendants-Respondents and Joseph Silvestri, Defendant.

Supreme Court of New Jersey.

Argued Sept. 25, 1996.

Decided Feb. 26, 1997.

Kenneth E. Joel, Keyport, pro se.

Edward C. Eastman, Freehold, for defendant-respondent Vincent Morrocco (Lomurro, Davison, Eastman & Munoz, attorneys).

Robert J. Sussman, Bloomfield, submitted a letter in lieu of brief on behalf of defendant-respondent Joseph Parlavecchio and relied upon the arguments presented on behalf of defendant-respondent Vincent Morrocco (Sussman & Altwarg, attorneys).

The opinion of the Court was delivered by

O'HERN, J.

This appeal concerns an application of the entire controversy doctrine. The essential question is whether a party making a judicial challenge to zoning approvals granted to a partnership must name in that land-use suit the individual partners in the partnership as a precondition to later enforcement of a money settlement against the partners. We find that joinder of the partners was not necessary to the resolution of the zoning suit and that the individual partners may not invoke the entire controversy doctrine as a defense to their liability on the monetary settlement made on behalf of the partnership.

I

In a series of recent cases, we have reviewed the principles of the entire controversy doctrine. Prevratil v. Mohr, 145 N.J. 180, 678 A.2d 243 (1996); Circle Chevrolet Co. v. Giordano, Halleran & Ciesla, 142 N.J. 280, 662 A.2d 509 (1995); DiTrolio v. Antiles, 142 N.J. 253, 662 A.2d 494 (1995); Mystic Isle Dev. Corp. v. Perskie & Nehmad, 142 N.J. 310, 662 A.2d 523 (1995). There is no need to review those principles in detail. "The objectives behind the doctrine are threefold: (1) to encourage the comprehensive and conclusive determination of a legal controversy; (2) to achieve party fairness, including both parties before the court as well as prospective parties; and (3) to promote judicial economy and efficiency by avoiding fragmented, multiple and duplicative litigation." Mystic Isle, supra, 142 N.J. at 322, 662 A.2d 523. The entire controversy doctrine seeks to further these objectives by requiring that, whenever possible, "the adjudication of a legal controversy should occur in one litigation in only one court." Cogdell v. Hospital Ctr., 116 N.J. 7, 15, 560 A.2d 1169 (1989). The doctrine requires parties to a controversy before a court to assert all claims known to them that stem from the same transactional facts, even those against different parties. The doctrine fosters the "goals of efficient judicial administration and fairness" to parties. Prevratil, supra, 145 N.J. at 187, 678 A.2d 243.

The most clear-cut applications of the party-joinder rule are in Crispin v. Volkswagenwerk A.G., 96 N.J. 336, 476 A.2d 250 (1984); Cogdell, supra, 116 N.J. 7, 560 A.2d 1169; and DiTrolio, supra, 142 N.J. 253, 662 A.2d 494. In Crispin, the claimant's attorney quite deliberately withheld from resolution in a pending automobile accident case a claim against the manufacturer of the automobile for manufacture of a defective vehicle. A second suit would have necessitated a rerun of the first case to determine that part of the claimant's injuries attributable to the crash-worthiness of the car and the portion of the injuries that would have occurred in any event. In Cogdell, injured claimants alleging medical malpractice first sued the doctors alleged to have negligently caused serious injuries to an infant during delivery and then later sued the hospital and its staff for causing the same injuries. The Court stated that the failure to join the hospital and its staff in the first lawsuit was "inconsistent with all of the policies that surround the entire controversy doctrine." Cogdell, supra, 116 N.J. at 26, 560 A.2d 1169. The Court held that "to the extent possible courts must determine an entire controversy in a single judicial proceeding and that such a determination necessarily embraces not only joinder of related claims between the parties but also joinder of all persons who have a material interest in the controversy." Ibid. In DiTrolio, a physician first sued for restoration of privileges to practice at a hospital and later attempted to sue many of the same physicians who had participated in the evaluation of the underlying licensing decision.

"The polestar of the application of the [entire controversy] rule is judicial fairness." DiTrolio, supra, 142 N.J. at 272, 662 A.2d 494. Fairness in the context of party joinder focuses on basic fairness to all of the parties, but especially to those named in the second suit who claim prejudice from not participating in the first suit. It is a protective concept that focuses primarily on whether defendants would be in a better position to defend themselves if the claims against them had been raised and asserted in the first litigation. Thus, for example, in DiTrolio, when the doctors named as defendants in the second action were deposed as witnesses during the discovery period in the earlier action, they would have approached the depositions and the discovery process differently.

Fairness to the plaintiff must also be considered. We have emphasized that the plaintiff must be actually aware of the actionable conduct when the original suit is brought. Thus, to bar a claim, a plaintiff "must have had a fair and reasonable opportunity" to have made the claim in the first action and have chosen not to do so. DiTrolio, supra, 142 N.J. at 273, 662 A.2d 494.

Efficiency in accomplishing the comprehensive and conclusive determination of a legal controversy is the third aspect of fairness. "At its most fundamental level inefficiency is a duplication of lawsuits and multiple actions, each involving the identical controversy and the same witnesses." DiTrolio, supra, 142 N.J. at 277, 662 A.2d 494. In essence, it is the factual circumstances giving rise to the controversy itself, rather than a commonality of claims, issues or parties, that triggers the requirement of joinder to create a cohesive and complete litigation. Id. at 267-68, 662 A.2d 494. ¹ In DiTrolio, the Court found that "substantially the same evidence that would be adduced in the first action" would have been adduced in the second action. 142 N.J. at 278, 662 A.2d 494. In Mystic Isle, the Court found that "requiring Mystic to join the attorney-defendants would have resulted in a more comprehensive determination of the underlying legal controversy that sought to determine who was responsible for [an] insufficient number of sewer permits" needed for a development project. 142 N.J. at 327, 662 A.2d 523.

In this case, none of the facts giving rise to the first action would be adduced in the second action. The first action was a complaint in lieu of a prerogative writ challenging the issuance of a zoning approval. The matter would have been tried on the basis of the administrative record before the local agency. The assertion of the personal claims against the partners was not at all necessary to the "comprehensive and conclusive" determination of the underlying legal controversy in the land-use case. Defendants, however, assert that once Ms. Maloy agreed to a money settlement and took steps to enforce the settlement, she was bound to join the individual partners.

II

We appreciate that a good measure of confusion arose because the parties focused the court's attention on the fairness of the retroactive application of the Appellate Division decision in Seventy-Three Land, Inc. v. Maxlar Partners, 270 N.J.Super. 332, 637 A.2d 202 (App.Div.1994). Seventy-Three Land held that in order to impose individual liability on partners in excess of partnership assets a creditor must have first joined the partners in the action on the debt against the partnership. This case began seven years before Seventy-Three Land, in 1987, when the Keyport Planning Board granted permits to Watersedge, a partnership of the State of New Jersey (Watersedge), to construct nine condominium units on premises (the Keyport property) that adjoined property owned by Ethel Maloy (Maloy). Maloy first sued on October 1, 1987, to set aside the approvals. On May 17, 1988, the Superior Court set aside the approvals. Watersedge thereafter reapplied and the Planning Board approved a scaled down version of the project. The Keyport ordinance permitted multi-family uses under certain circumstances, but required that eighty percent of the units be one-bedroom or efficiency units, and that other lot size requirements be met. Maloy filed suit again in 1988 to void the action of the Planning Board. In April 1989, Watersedge offered to settle the claims of Maloy for a sum of money. The settlement contemplated a sliding scale of payments depending on the number of units constructed, with a minimum payment of $23,800 and the execution of a mortgage on the property to secure the settlement. When Maloy sought to be paid, the partnership denied that there had been a settlement. Plaintiff moved to enforce the settlement. On October 9, 1990, the trial court found that a settlement had been made and entered an order in favor of Maloy requiring the partnership to execute the settlement agreement, deliver the mortgage, and make payment of the monies called for in the agreement. When the partnership still refused to honor the settlement, Maloy made a motion in aid of litigant's rights. On June 28, 1991, the court appointed an attorney-in-fact to execute the settlement documents on behalf of the partnership. On January 16, 1992, Maloy assigned her rights in the settlement to her attorney, Kenneth Joel (Joel). In October 1992, Joel deposed Vincent Morrocco, a Watersedge partner, and learned for the first time that Joseph Parlavecchio was a member of the partnership. Until that time Joel had dealt only with Morrocco and Joseph Silvestri, another Watersedge partner.

In December 1992,...