KEVIN POTTER et al. v. JARED STOLZ, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2533-05T52533-05T5

KEVIN POTTER and MARGUERITE

POTTER,

Plaintiffs-Appellants,

v.

JARED STOLZ, TARA RUGGIERO,

JOHN METHFESSEL, JR., JOEL

WERBEL, METHFESSEL & WERBEL,

ALDO J. RUSSO, RUSSO & DELLA

BADIA, LLC, and GUARANTEED SUBPOENA

SERVICE, INC.,

Defendants-Respondents,

and

ELAINE MAGEE,

Defendant.

________________________________________________________________

 

Submitted October 31, 2006 - Decided

Before Judges Lisa and Holston, Jr.

On appeal from the Superior Court of New Jersey, Law Division, Cumberland County, L-82-05.

Kevin Potter and Marguerite Potter, appellants pro se.

Kurtz & Revness, attorneys for respondent Guaranteed Subpoena Service, Inc. (Michael J. Revness and Robert T. Grolnick, on the brief).

Marshall, Dennehey, Warner, Coleman & Goggin, attorneys for respondents Jared Stolz, Tara Ruggiero, John Methfessel, Jr., Joel Werbel and Methfessel & Werbel (John L. Slimm, on the brief).

Swartz Campbell, attorneys for respondents Aldo J. Russo and Russo & Della Badia, LLC (Joseph A. Venuti, Jr., on the brief).

On February 5, 2000, Marguerite Potter allegedly was injured when she slipped and fell on ice on the premises of her son, Kevin Potter. Marguerite filed a state court action against Kevin for her alleged injuries. Kevin submitted the claim to his homeowner's insurance carrier, Proformance Insurance. He proposed to admit liability and damages. The law firm of Methfessel and Werbel was retained by Proformance to defend the claim. The firm assigned counsel, but that attorney did not file an answer or otherwise act on Kevin's behalf. This was because the Methfessel firm filed a separate state court action on behalf of Proformance against the Potters, claiming insurance fraud. Substitute counsel was assigned to represent Kevin in the personal injury claim brought by his mother.

Proformance then filed a new action in the United States District Court against the Potters, making multiple claims, including fraud, collusion, conspiracy, and racketeering. Marguerite's personal injury claim against Kevin was transferred to federal court, and she filed a new action there asserting that claim. The two state court actions were dismissed.

On March 18, 2004, a settlement was achieved in federal court, which required Proformance to pay Marguerite $25,000. Orders of dismissal were entered by the District Court judge on March 18, 2004. Each order recited that the District Court "retains jurisdiction of the matter to the extent necessary to enforce the terms and conditions of any settlement entered into between the parties." On March 19, 2004, Marguerite and Kevin signed a release memorializing the settlement.

About ten months later, on January 21, 2005, the Potters filed in state court the action which is the subject of this appeal. They named as defendants the various attorneys and other parties involved in the prior litigation that led up to the federal court settlement. They sought to set aside the dismissal orders entered by the District Court and the settlement in conjunction with which those orders were entered. Defendants moved to dismiss. After hearing oral argument on October 21, 2005, Judge Michael Brooke Fisher granted the motion and entered an order dismissing the complaint with prejudice and without costs. The Potters then filed a motion for a protective order and other relief. On November 18, 2005, after hearing oral argument, Judge Fisher noted that Kevin Potter withdrew the motions, but the judge entered an order amplifying his earlier dismissal order with the following provision:

IT IS FURTHER ORDERED that the Court hereby dismisses this case with prejudice, based on the fact that there has been a settlement of the case of Marguerite Potter vs. Kevin Potter in the Federal Court. This dismissal is with the caveat if plaintiffs are successful in Federal Court in setting aside the settlement in the matter of Marguerite Potter vs. Kevin Potter, it does not preclude the plaintiffs from filing a new claim in this court.

On the same day, November 18, 2005, the Potters filed a new complaint in District Court that was virtually identical to the one filed in state court on January 21, 2005 that was dismissed by Judge Fisher. The new federal complaint sought the same relief, namely to set aside the settlement, and it names the same parties that were sued in the state court action.

The Potters have appealed Judge Fisher's orders of October 21, 2005 and November 18, 2005. They acknowledge before us, as they did in the trial court, that they mistakenly filed their complaint in state court seeking to set aside the settlement and orders entered in the federal court. They do not take issue with the fact that their state court complaint was dismissed. They contend, however, that the dismissal should have been without prejudice because the state court lacked jurisdiction over the subject matter of the dispute (the federal court settlement, over which the District Court retained exclusive jurisdiction). More specifically, appellants present these arguments on appeal:

POINT ONE

BECAUSE THE STATE COURT ADMITTEDLY LACKED LEGAL AUTHORITY AND SUBJECT MATTER JURISDICTION TO DECIDE ANYTHING IN THIS PROCEEDING, UNTIL CHALLENGES TO THE SETTLEMENT AGREEMENT WERE ADJUDICATED BY THE DISTRICT COURT, THE STATE COURT ERRED IN DISMISSING THIS PROCEEDING "WITH PREJUDICE". THUS, THE DISMISSAL OF THIS CASE WITH PREJUDICE SHOULD BE VACATED OR REVERSED AS A MATTER OF LAW.

POINT TWO

BECAUSE JUDGE FISHER'S RULING ON NOVEMBER 18, 2005 DECLARED THAT THE FEDERAL COURT SETTLEMENT "PRECLUDES THIS CASE FORM GOING FORWARD IN THE STATE VENUE IN ANY WAY WHATSOEVER" THE ORDER DATED OCTOBER 21, 2005 MUST BE VACATED OR NULLIFIED AS A MATTER OF LAW, SINCE THE LATTER RULING WAS ISSUED BY A COURT THAT LACKED AUTHORITY OR SUBJECT MATTER JURISDICTION TO DECIDE ANYONE RIGHTS.

POINT THREE

ALTERNATIVELY, IF THIS COURT SOMEHOW HOLDS THAT IT HAS AUTHORITY AND SUBJECT MATTER JURISDICTION OVER THIS CASE, APPELLANTS THEN ARGUE IN THE ALTERNATIVE THAT THE LOWER COURT ERRED BY GRANTING ANY RULING THAT MAY BE CONSTRUED AS AN ADJUDICATION ON THE MERITS OF THIS CASE.

Based upon our review of the record and in consideration of the arguments raised on appeal and the prevailing legal principles, we conclude that appellants' arguments lack sufficient merit to warrant discussion in a written opinion, and we affirm. See R. 2:11-3(e)(1)(E). We add the following brief comments.

The entire subject matter embodied in the state court complaint derived directly from the series of events emanating from Marguerite's alleged injuries on February 5, 2000. All of those issues were before the federal court. A settlement was achieved there, and the District Court retained exclusive jurisdiction over enforcement of the settlement. As long as that settlement was in effect, appellants were estopped from relitigating an issue determined in the previous action. See Woodrick v. Jack J. Burke Real Estate, Inc., 306 N.J. Super. 61, 79 (App. Div. 1997). With respect to any additional claims related to the underlying controversy, they are precluded by the entire controversy doctrine. See In re Estate of Sarkis Gabrellian, 372 N.J. Super. 432, 444 (App. Div. 2004), certif. denied, 182 N.J. 430 (2005).

In effect, Judge Fisher's order of November 18, 2005 recognized that if the preclusive effect of the dismissal orders and settlement in federal court were vacated by the District Court, appellants would be permitted to refile their action in state court. By so ordering, any potential prejudice to appellants was eliminated.

We note that during the pendency of this appeal, we have been furnished with a copy of an order entered on September 18, 2006 by the District Court, dismissing with prejudice as to all defendants the complaint filed by the Potters in federal court on November 18, 2005. The District Court found no legally sustainable basis to set aside the dismissals and reopen the litigation.

Affirmed.

 

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A-2533-05T5

November 20, 2006