RONDELL L. THURMAN v. LINDENWOLD CENTER LLC

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

RONDELL L. THURMAN and

DANYELLE A. THURMAN d/b/a

PHENOMENAL HAIR SALON LLC,

Plaintiffs-Appellants,

v.

LINDENWOLD CENTER LLC,

Defendant-Respondent.

March 9, 2015

Argued February 25, 2015 Decided

Before Judges Maven and Carroll.

On appeal from the Superior Court of New Jersey, Law Division, Camden County, Docket No. L-5440-12.

Jo-Leo W. Carney-Waterton argued the cause for appellants.

Adam Nachmani argued the cause for respondent (Sirlin Lesser & Benson, P.C., attorneys; Mr. Nachmani, of counsel and on the brief).

PER CURIAM

Plaintiffs Rondell and Danyelle Thurman, d/b/a Phenomenal Hair Salon, appeal from a May 24, 2013 Law Division order dismissing their amended complaint against their former landlord, defendant Lindenwold Center LLC (Lindenwold). Plaintiffs' amended complaint asserted claims for breach of their lease agreement and fraud arising out of a temporary construction easement entered into between Lindenwold and the County of Camden that blocked one of the two main entrances/exits to the shopping center's parking lot. The motion judge concluded that the Thurmans' claims were barred by the doctrines of res judicata and collateral estoppel because they were litigated in a previous action in which Lindenwold sought to collect past-due rents from the Thurmans, who in turn asserted an eminent domain claim as a defense. For the reasons that follow, we affirm.

I.

Plaintiffs entered into a lease agreement (the lease) with Lindenwold to rent 1355 square feet of commercial space in the Lindenwold Shopping Center, located on Blackwood Clementon Road in Lindenwold. The shopping center has two sets of entrances and exits: one set connects to Blackwood Clementon Road, the other to Laurel Hill Road. The initial lease term was three years, commencing on November 1, 2001. Two subsequent amendments to the lease were executed by the parties, extending its term to October 31, 2007, and then to October 31, 2010.

Paragraph 20 of the lease is entitled "Eminent Domain." Pertinent to this appeal is subsection (d), which provides

(d) If (i) more than 50% of the rentable floor space in the Shopping Center, other than the Demised Premises, is taken or condemned, or (ii) more than 50% of the common areas of the Shopping Center (excluding rentable floor space therein) is taken or condemned, or (iii) such part or parts of the Shopping Center are taken or condemned so as to deprive the Demised Premises of reasonable vehicular access to abutting public highways serving it prior to the condemnation, then, in any such case, Tenant or Landlord shall have the right, within 30 days of the date that the condemning authority takes physical possession of the part so taken or condemned to give written notice to the other of its election to terminate this Lease and on the date specified in such notice (in which event such date shall be no less than 30 days after the date on which such notice is delivered) this Lease shall terminate.

In August 2004, the Camden County Department of Public Works (County) sent Lindenwold a letter indicating that it intended "to determine the fair market value of a proposed partial taking" of the shopping center property in order to "provide just compensation for the acquisition (temporary or permanent) of a portion" of it. In August 2005, the County agreed to pay Lindenwold $3400 for a temporary construction easement and temporary right of way to allow the County to store construction vehicles and equipment on the shopping center property and for grading the entrance/exit to Blackwood Clementon Road.

Construction did not commence until March 2008. It is unclear from the record how long the work lasted, or the length of time that the entrance and exit connecting the shopping center to Blackwood Clementon Road was affected. It appears undisputed, however, that the entrance and exit adjoining Laurel Hill Road was never disturbed by the construction.

In April 2010, Lindenwold filed a summary dispossess action (the Landlord-Tenant Action) in the Special Civil Part, Docket No. LT-2105-10, seeking a judgment of possession due to the Thurmans' failure to pay rent. On April 8, 2010, the parties entered into a consent judgment pursuant to which the Thurmans agreed to the entry of a judgment of possession, to vacate the premises by April 22, 2010, to pay Lindenwold $1800, and to surrender their security deposit.

Although the Thurmans vacated the property, they failed to pay the $1800 due. Consequently, on May 24, 2010, Lindenwold filed a complaint in the Law Division, Camden County, Docket No. L-2591-10 (the Prior Action), alleging that the Thurmans were in default under the lease. Lindenwold subsequently claimed that the Thurmans' arrearages under the lease were approximately $23,000, representing $17,217 in back rent, $344.34 in late fees, and counsel fees of $5,461.75.

The Thurmans filed a pro se answer on July 27, 2010. They denied liability "since the eminent domain action caused the nullification" of the lease. They asserted numerous affirmative defenses, including the following

2. [their] business was damaged by eminent domain action by Camden County.

4. [Lindenwold] failed to terminate the lease agreement when [it] had knowledge that the eminent domain action by Camden County had made the premises unfit for the operation of [the Thurmans'] business therein, according to the lease agreement.

5. [Lindenwold] failed to terminate the lease agreement when (1), more than 50% of the common areas of the Shopping Center was taken and/or condemned, or (2), when such part or parts of the Shopping Center were taken and/or condemned, depriving the Demised Premises of reasonable vehicular access to abutting public highways serving it prior to the condemnation, according to the lease agreement.

7. [Lindenwold] had actual knowledge and [the Thurmans] informed [Lindenwold] that the taken and condemned areas of the Shopping Center, for over three years, had destroyed their business, made the lease null and void, that [the Thurmans] were terminating the lease and vacating the premises.

Additionally, the Thurmans filed a counterclaim seeking the return of their security deposit.

Lindenwold moved for summary judgment in the Prior Action. On February 24, 2012, Judge Stephen M. Holden granted Lindenwold's motion and entered an $1800 judgment against the Thurmans. The judge denied Lindenwold's additional monetary claims for rent, late fees, and attorney's fees. Neither party appealed, and the Thurmans paid Lindenwold $1800 in satisfaction of the judgment.

In late 2012 or early 2013, the Thurmans filed a complaint, and later an amended complaint, against Lindenwold in the Law Division (the Current Action).1 In count one of their amended complaint, the Thurmans sought damages against Lindenwold, alleging that Lindenwold breached the lease by "failing to inform the Thurmans of the County's taking and[/]or condemnation" and by "fail[ing] to reduce the Thurma[ns'] rent in wake of the County's taking and[/]or condemnation." The second count alleged fraud as a result of Lindenwold's "failure to inform [the Thurmans] of [the County's] taking and[/]or condemnation from . . . March 14, 2008[,] to November 19, 2009."

On March 18, 2013, Lindenwold moved to dismiss the complaint, arguing that it was barred by res judicata, collateral estoppel, and the entire controversy doctrine. Lindenwold also submitted a certification from the County's outside counsel, who averred that, "[t]here was no condemnation or taking of the real property owned by Lindenwold . . . ." Instead, the $3400 paid to Lindenwold by the County represented consideration for "a 'Temporary Construction Easement' and temporary right of way to allow the [County] to store construction vehicles and equipment" on Lindenwold's property.

Judge John T. Kelley heard oral argument on the motion to dismiss on May 24, 2013. In an oral decision, Judge Kelley in pertinent part determined that plaintiffs were "attempting to relitigate matters that were litigated and conclusively determined by this court in an earlier action filed by Lindenwold . . . ." The judge found "no dispute that the prior action was fairly litigated and a final determination was rendered . . . on the merits." He further found that "[a]ll of the allegations of the current action were conclusively determined in the prior action." Accordingly, the court dismissed the complaint based on the doctrines of res judicata and collateral estoppel. Additionally, the court rejected the Thurmans' assertion of newly discovered evidence regarding the taking, explaining that supposedly newly discovered documents were public records that were available or otherwise subject to subpoena in the Prior Action. This appeal followed.

II.

A.

"The term 'res judicata' refers broadly to the common-law doctrine barring relitigation of claims or issues that have already been adjudicated." Velasquez v. Franz, 123 N.J.498, 505 (1991). Specifically, the doctrine "provides that a cause of action between parties that has been finally determined on the merits by a tribunal having jurisdiction cannot be relitigated by those parties or their privies in a new proceeding." Ibid. "By insulating courts from the relitigation of claims, res judicata prevents the judicial inefficiency inherent in multiplicitous litigation[,]" ensures the finality of judgments, and advances the interest of fairness "[b]y preventing harassment of parties[.]" Watkins v. Resorts Int'l Hotel & Casino, Inc., 124 N.J. 398, 409 (1991).

For an action to be barred based on the application of res judicata there must be (1) a final judgment by a court of competent jurisdiction, (2) identity of parties, and (3) substantially similar or identical causes of action. Culver v. Ins. Co. of N. Am., 115 N.J. 451, 460-61 (1989). "[A] consent judgment has the same res judicata effect as any other judgment." Joseph L. Muscarelle, Inc. v. State, 175 N.J. Super. 384, 395 (App. Div. 1980) (citation omitted), appeal dismissed, 87 N.J. 321 (1981). Further, "[t]he preclusive effect of res judicata applies not only to matters which were raised in a prior action but also to matters which could have been raised." Ibid.

Applying these factors, we conclude that the trial court correctly determined that res judicata bars the Current Action. The parties in both the Prior and Current Actions are identical. In both actions, the Thurmans pleaded that the County's roadwork constituted a taking that voided the lease, that Lindenwold knew about the taking, failed to disclose it, and that the taking damaged the Thurmans' business. The Thurmans sought redress in both the Prior and Current actions for the rents they paid and the damages they suffered as a result of the County's roadwork. Thus, "the wrong for which redress is sought is the same in both actions." Culver, supra, 115 N.J. at 461 (citation and internal quotation marks omitted).

Indisputably, the Prior Action resulted in a judgment in favor of Lindenwold. The Thurmans now argue that summary judgment was improvidently granted in the Prior Action, and that it would be unfair to bar the Current Action as a result. However, we do not sit in review of that earlier decision, nor is it properly before us. If the Thurmans felt aggrieved by the judgment in the Prior Action, their remedy was to appeal or seek reconsideration of that decision. Similarly, if the Thurmans would not have entered into the consent judgment in the Landlord-Tenant Action but for Lindenwold's alleged fraud, they could have moved to vacate that prior judgment. R. 4:50-1. They chose neither course, and consequently res judicata bars the relief they now seek.

B.

"[C]ollateral estoppel, or issue preclusion, bars the relitigation of an issue that has already been addressed in a prior matter. . . ." Bondi v. Citigroup, Inc., 423 N.J. Super. 377, 423 (App. Div. 2011), certif. denied, 210 N.J. 478 (2012). That is, whereas res judicata, or claim preclusion, bars relitigation of already adjudicated claims between the same parties or their privies, collateral estoppel "bars relitigation of issues in suits that arise from different causes of action." Selective Ins. Co. v. McAllister, 327 N.J. Super. 168, 173 (App. Div.), certif. denied, 164 N.J. 188 (2000).

Collateral estoppel requires a party to establish

(1) the issue to be precluded is identical to the issue decided in the prior proceeding; (2) the issue was actually litigated in the prior proceeding; (3) the court in the prior proceeding issued a final judgment on the merits; (4) the determination of the issue was essential to the prior judgment; and (5) the party against whom the doctrine is asserted was a party to or in privity with a party to the earlier proceeding.

[First Union Nat'l Bank v. Penn Salem Marina, Inc., 190 N.J. 342, 352 (2007) (citation and internal quotation marks omitted).]

Applying these principles, we share the trial court's conclusion that collateral estoppel bars the Thurmans' Current Action. The Thurmans already "had their day in court" on the same issues they raise in the Current Action. Most notably, in the Prior Action they asserted eminent domain as a defense to Lindenwold's claim for past and future rents, arguing that the construction easement either nullified the lease or entitled them to a rent abatement. In granting summary judgment in favor of Lindenwold in the Prior Action, Judge Holden rejected those arguments. In sum, the Thurmans litigated the eminent domain issue. Consequently, they are precluded from doing so again.

C.

Although the trial court did not address Lindenwold's argument that the entire controversy doctrine also bars the Thurmans' new action, we agree that it does so. The entire controversy doctrine, like res judicata, "serves the purpose of providing finality and repose; prevention of needless litigation; avoidance of duplication; reduction of unnecessary burdens of time and expenses; elimination of conflicts, confusion and uncertainty; and basic fairness." Wadeer v. N.J. Mfrs. Ins. Co., ___ N.J. ___, ___ (2015) (slip op. at 18) (citations and internal quotation marks omitted).

"The entire controversy doctrine embodies the principle that the adjudication of a legal controversy should occur in one litigation in only one court." Cogdell v. Hosp. Ctr. at Orange, 116 N.J.7, 15 (1989). It is implemented by Rule4:30A, which provides

Non-joinder of claims required to be joined by the entire controversy doctrine shall result in the preclusion of the omitted claims to the extent required by the entire controversy doctrine, except as otherwise provided by R. 4:64-5 (foreclosure actions) and R. 4:67-4(a) (leave required for counterclaims or cross-claims in summary actions).

The rule "encompasses 'virtually all causes, claims, and defenses relating to a controversy,'" Oliver v. Ambrose, 152 N.J. 383, 394 (1998) (quoting Cogdell, supra, 116 N.J. at 16), and requires all parties in an action to raise all transactionally related claims or risk preclusion. K-Land Corp. No. 28 v. Landis Sewerage Auth., 173 N.J. 59, 69-71 (2002). See also Kopin v. Orange Prods., Inc., 297 N.J. Super. 353, 374 (App. Div.) ("The entire controversy doctrine requires 'a party to join all its claims against its adversary when those claims [are] related to and part of the same [underlying] controversy.'" (alteration in original) (quoting Aetna Ins. Co. v. Gilchrist Bros., Inc., 85 N.J. 550, 557 (1981)), certif. denied, 149 N.J. 409 (1997))).

As an equitable principle, the entire controversy doctrine's applicability is left to judicial discretion to be exercised on a case-by-case basis. Mystic Isle Dev. Corp. v. Perskie & Nehmad, 142 N.J. 310, 323 (1995). The courts "are to be guided by the general principle that all claims arising from a particular transaction or occurrence[,]" including those actually litigated and those which might have been litigated and decided, "should be joined in a single action." Higgins v. Thurber, 413 N.J. Super. 1, 12 (App. Div. 2010), aff'd, 205 N.J. 227 (2011).

The entire controversy doctrine is inapplicable to, and does not apply to bar component claims either unknown, unarisen or unaccrued at the time of the original action. K-Land Corp., supra, 173 N.J. at 70. When "considering fairness to the party whose claim is sought to be barred, a court must consider whether the claimant has had a fair and reasonable opportunity to have fully litigated that claim in the original action." Gelber v. Zito P'ship, 147 N.J. 561, 565 (1997) (citation and internal quotation marks omitted).

Here, the Current Action and the Prior Action revolve around the same transaction the parties' lease and the impact on it caused by the road construction. The construction began in 2008, and there is no doubt that the Thurmans were aware of it in 2010 when Lindenwold filed the Landlord-Tenant action and the Prior Action to collect rents and other fees due under the lease. Thus, the Current Action does not assert claims that were "either unknown, unarisen[,] or unaccrued at the time of the original action." K-Land Corp., supra, 173 N.J. at 70 (citation and internal quotation marks omitted). The Thurmans had a full and fair opportunity to litigate their eminent domain and fraud claims in the Prior Action. Accordingly, their complaint was properly dismissed.

Affirmed.

1 The Thurmans' appendix does not include their original complaint. At oral argument Lindenwold's counsel represented that Lindenwold was never served with this complaint. The Thurmans' amended complaint was filed on January 23, 2013.