Switlik v. Hardwicke Co., Inc.

• Decision Date: 08 June 1981
• Docket Number: No. 80-2174,80-2174
• Citation: 651 F.2d 852
• Parties: Richard SWITLIK and Stanley Switlik, Appellants, v. HARDWICKE COMPANY, INC.; Six Flags; Great Adventure, Inc.; Jane Doe and Richard Doe; Arthur F. Brown, Ocean County Sheriff, Appellees.
• Court: U.S. Court of Appeals — Third Circuit

Page 852

651 F.2d 852

Richard SWITLIK and Stanley Switlik, Appellants, v. HARDWICKE COMPANY, INC.; Six Flags; Great Adventure, Inc. Jane Doe and Richard Doe; Arthur F. Brown, Ocean County Sheriff, Appellees.

No. 80-2174.

United States Court of Appeals, Third Circuit.

Argued Feb. 25, 1981.

Decided June 8, 1981.

Neal S. Solomon (argued), Richard M. Altman, Pellettieri, Rabstein & Altman, Trenton, N. J., for appellants.

Frederic K. Becker (argued), Wilentz, Goldman & Spritzer, Woodbridge, N. J., and Murray, Hollander & Sullivan, New York City, for appellees, Great Adventure, Inc., Hardwicke Companies Inc., and GSC/Six Flags Corp.; Daniel J. Sullivan, New York City, Christine D. Petruzzell, Woodbridge, N. J., Kathleen A. McMahon, New York City, on brief.

Peter S. Hennes, Babcock & Hennes, Toms River, N. J., for appellee, Arthur F. Brown.

Before ADAMS, ROSENN, and HUNTER, Circuit Judges.

OPINION OF THE COURT

ROSENN, Circuit Judge.

Stanley and Richard Switlik appeal from the dismissal of their civil rights action filed in the United States District Court for the District of New Jersey pursuant to 42 U.S.C. § 1983 (1976). ¹ The action sought to enjoin the enforcement of a New Jersey state court judgment against the appellants because execution of the judgment would allegedly punish constitutionally protected first amendment activity. The district court dismissed the case, holding that the Switliks' 1983 claim was barred by the doctrines of res judicata and collateral estoppel, the underlying first amendment issues having been raised and decided in the previous state court litigation. We affirm.

I.

In May 1972 Stanley and Wanda Switlik contracted to sell to Hardwicke Companies, Inc., ² a large tract of land on which was to be built a wild animal theme park and "related facilities." When it became clear that the "related facilities" were likely to overwhelm the "wildlife preserve" nature of the park, Stanley Switlik became concerned. At this point, Richard Switlik, Stanley and Wanda's son, became involved in the land sale transaction. Richard began insisting on various additions and alterations to the transaction before the deal was to close. Great Adventure finally sued for specific performance of the contract but, due to the projected delay and expense of the litigation, settled the suit on unfavorable terms in order to close the deal on June 22, 1973.

On the same day the sale to Great Adventure closed, Richard Switlik purchased a tract of land adjoining the land conveyed by his parents. He placed the land in trust for his four children (the Seelig trust). In September 1973, it was discovered that the access roads to the trust property had been chained off by Great Adventure. The trust brought suit to protect access and settlement was reached when Great Adventure bought the trust property.

During the course of the Stanley Switlik and Great Adventure negotiations, it was assumed that a wedge-shaped parcel of property, designated as "10-C," which jutted into the property subject to transfer was owned by the State of New Jersey by virtue of a deed of gift from Stanley Switlik in 1964. The negotiations proceeded under assurances from Stanley that the state would be willing to trade parcel 10-C for another portion of the property being transferred. However, in July 1973, after the transfer from Stanley to Great Adventure was completed, Richard Switlik, by an unusual move, obtained an amendment to the deed, thereby returning title to parcel 10-C to Stanley Switlik. This posed an insurmountable obstacle to Great Adventure's plans and construction of the major portion of the park had to be delayed pending resolution of the parcel 10-C problem.

In September 1973 Stanley Switlik filed suit in the Superior Court of New Jersey, Chancery Division, to enjoin Great Adventure's cutting of trees on Stanley's property and for damages for trees already removed. A preliminary injunction was denied, but this decision was reversed on appeal. Great Adventure answered and asserted six counterclaims, naming Richard Switlik as an additional defendant. The claims relating to the alleged trespass were severed and tried. The trial court reached the following conclusions: (1) the parties had never reached agreement on the boundaries of the parcel that had been conveyed; (2) the Switliks had "deliberately misled" the buyers concerning the ownership of parcel 10- C; and (3) the Switiks were not entitled to the use of the existing public access road, which bisected the park, as a means of egress and ingress to their property. The trial court set boundaries in accordance with what it perceived to be the parties' intent and imposed a constructive trust on parcel 10-C for the benefit of Great Adventure.

The remaining issues raised by Great Adventure's counterclaims were resolved in separate trials on liability and damages. The findings were that Stanley and Richard had committed fraud with respect to parcel 10-C, that Richard had unlawfully interfered with the relationship created by the contract of sale between his parents and Great Adventure, and that Richard had unlawfully interfered with the prospective economic advantage of Great Adventure. Damages were assessed at $4,912,043 for the fraud count; $1,318,571 for the interference with contract claim; and $117,053 for the interference with prospective economic advantage. The judgment was appealed to the Appellate Division of the New Jersey Superior Court and it affirmed per curiam. The New Jersey Supreme Court denied review and reconsideration. The United States Supreme Court denied a petition for a writ of certiorari. The federal action was filed ten days later.

The Switliks claim in the federal court that the state courts penalized Richard's constitutionally protected activities. The state trial court allowed Great Adventure to introduce into evidence certain letters written by Richard to various governmental agencies complaining about alleged violations of the law being committed by Great Adventure. The bulk of these complaints were of an environmental nature, usually making reference to the harm being done to the adjoining Switlik lands or lakes. Testimony was also elicited from Richard, on cross-examination, of his involvement in efforts to have the access road bisecting the park declared to be the public means of access to the Switlik property by the Jackson Township Planning Board. Further, evidence was received that Richard contributed $6,000 to the Upper Freehold Environmental Commission to defray the cost of an environmental suit brought by that group against Great Adventure. Although it appears that the Switliks' attorney interposed objections, or at least questioned the relevance of such evidence when it was offered, the trial judge admitted it, although he, too, at times had reservations concerning its relevance. Great Adventure's response to the objections and questions was that it demonstrated the malicious intent of Richard Switlik to ruin the Great Adventure project.

The state court apparently accepted Great Adventure's theory. In its opinion on liability the court stated:

(Richard Switlik) made numerous complaints by letter and otherwise to official and unofficial bodies concerning Hardwicke's activities both before and after the title to the property was conveyed. He persisted in claiming that his father had access through the original access road even after the settlement of this claim. He purchased the "Seelig Property" for at least the partial purpose of being in a position, as a neighbor, to make complaints through an alleged trustee. The complaints reinforced his own complaints against Hardwicke. He did not disclose his interest in this property. He participated in the financing of a law suit by the Environmental Commission of Upper Freehold, et al, by furnishing at least some of his money to the plaintiffs for legal expenses. He caused twenty (20) tons of sand to be dumped in a drainage area to the disadvantage of Hardwicke. He appeared before the Planning Board and spoke out in opposition to the location of an Entertainment Park on the Hardwicke property although he had participated in the settlement leading to the title closing. He knew that this settlement specifically contemplated such a park. The above activities interfered with and were detrimental to Hardwicke's economic position.

I conclude that many of the above activities taken separately would not be wrongful. Taken together they satisfy me of Richard Switlik's malicious motivations in undertaking them. I find therefore that Richard Switlik is liable to Hardwicke on (the theory of interference with prospective economic advantage.)

In awarding damages to Great Adventure, the state court expressly allowed recovery of the company's legal fees in defending against the Seelig trust suit and the Environmental Commission suit.

In their federal action, plaintiffs complained that the state trial court had predicated its findings of malice, an essential element in all of defendants' state causes of action, at least in part on evidence of Richard Switlik's complaints to governmental authorities about recurring violations of the law by Great Adventure. These activities, plaintiffs allege, are protected under the first amendment's Petition Clause and their exercise may not serve as the basis of liability under state tort law. The district court found that the constitutional issues had been raised and litigated in the state court. Therefore, the court concluded that the plaintiffs' civil rights claim was barred by principles of res judicata and collateral estoppel. ³ We review the correctness of that judgment.

II.

Our analysis begins with an issue largely ignored by the parties to this appeal: the nature of the judgment presented to us for review. The judgment was entered in response to the defendants' Motion to Dismiss Plaintiffs' Complaint. However, the defendants had submitted two affidavits in...