NICHOLAS SHIMKO v. DONNA MARTER

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

NICHOLAS SHIMKO,

Plaintiff-Respondent,

v.

DONNA MARTER, WHITE BEACON

INVESTMENTS, L.L.C., FARIELLO

BUS SERVICE, L.L.C., and

RICKY MARTER,

Defendants-Appellants.

_________________________________

November 25, 2015

Argued October 6, 2015 Decided

Before Judges Hoffman, Leone and Whipple.

On appeal from Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-1618-11.

Louis E. Granata argued the cause for appellants (Granata & Zaccardi, attorneys; Mr. Granata, on the briefs).

Robert G. Stevens, Jr. argued the cause for respondents (Szaferman, Lakind, Blumstein & Blader, P.C., attorneys; Mr. Stevens, on the brief).

PER CURIAM

Defendants appeal from a May 23, 2014 order entering judgement for plaintiff after a jury trial and dismissing defendants' counterclaims. We affirm.

We discern the following facts from the record.1 On August 31, 2006, plaintiff Nicholas Shimko, defendant Donna Marter and Timothy Telymonde entered into an Operating Agreement ("Agreement") to form defendant White Beacon Investments, L.L.C. ("WBI") for the purpose of operating a school bus business. Marter was named President of WBI and had responsibility for oversight of WBI's operations, while plaintiff was named Mechanical Operations Manager and was responsible for maintenance of the buses. Telymonde was Vice-President of Sales and Marketing. The agreement indicates that plaintiff contributed $100,000 in capital and agreed to provide up to $250,000 in financing. Each member had an equal one-third interest in the company. Marter's contribution was her knowledge, expertise and reputation regarding the school bus industry. On September 1, 2006, WBI entered into a bus leasing agreement with Gallco Enterprises, Inc. ("Gallco"). In December 2006, Marter, plaintiff, and Telymonde met to discuss the financial condition of WBI, while an office manager took notes.

On February 27, 2007, plaintiff took control of two-thirds interest in the company after agreeing to purchase Telymonde's share. Differences arose between plaintiff and Marter, and seeking to assert control, plaintiff filed an order to show cause on March 5, 2008. The court granted plaintiff temporary relief and scheduled a hearing for March 28, 2008 on whether to make the injunctive relief permanent. In support of the relief, plaintiff filed an affidavit alleging that Marter was using company money for personal expenditures and hiding company funds in a bank account to which plaintiff did not have access.

On April 9, 2008, the parties consented to a number of interim measures, including WBI hiring a forensic accountant; Marter stepping down as President and turning over the business to plaintiff; Marter accompanying plaintiff to Amboy Bank and Bank of America to authorize him to sign checks on behalf of the company; plaintiff being authorized to copy files located in WBI's computer system; and Marter preserving the company computer for safekeeping in the WBI garage, removing her personal property from the office, and turning over her keys to plaintiff. Neither party would "take draws for their services until further" order of court. WBI would continue to pay $1600 in interest per month to plaintiff for his loan and would give notice to all school boards and Gallco that Marter was stepping down from her position at WBI.

On July 18, 2008, plaintiff filed an amended complaint alleging that Marter misappropriated company funds and resources, neglected various legal duties, and improperly blocked access to the financial records of the company. On December 4, 2008, plaintiff and Marter signed a consent order stipulating to a dismissal without prejudice.

During this time, WBI brought suit against Gallco. In its complaint, WBI complained that Gallco unlawfully seized the buses that WBI had leased from it. When the case was concluded, the court entered order of judgment against Gallco for more than $500,000.

Prior to the consent order dismissing the complaint without prejudice, on May 22, 2008, plaintiff complained about Marter's activity with the company to the Monmouth County Prosecutor, and initiated an investigation against Marter. On October 28, 2009, plaintiff issued a signed statement to the prosecutor's office, including allegations that Marter was misappropriating funds. The prosecutor's office did not pursue criminal charges against Marter.

On March 31, 2011, plaintiff filed the present complaint against Marter and WBI, alleging breaches of the operating agreement, minority member oppression, breaches of the covenant of good faith and fair dealing, fraud, breach of fiduciary duty, breach of a loan contract, and conversion. He also filed a claim against defendant Ricky Marter, Marter's husband, and defendant Fariello Bus Service L.L.C.2 for accepting funds unlawfully. On May 18, 2011, defendants filed a motion to dismiss plaintiff's complaint, asserting plaintiff's complaint was barred by the entire controversy doctrine; because the Monmouth County Prosecutor had not elected to press charges against Marter; and because all of his claims could have been raised in the Gallco litigation. The motion judge denied defendant's motion to dismiss in the order of June 24, 2011.

Donna Marter also filed a counterclaim, alleging defamation because a certification made by Arthur Gallagher, a witness in in the Gallco litigation, revealed an allegedly defamatory statement made by plaintiff in 2008, and on the basis of plaintiff's complaints to the Prosecutor's office on October 28, 2009. On May 30, 2011, plaintiff moved for summary judgment, arguing that the statute of limitations had expired on Marter's counterclaims and that his statements to the prosecutor were absolutely privileged. The trial court granted plaintiff's motion for summary judgment dismissing the counterclaims.

The matter proceeded to trial on April 29 and concluded on May 7, 2014. On May 7, 2014, the jury found in favor of plaintiff.3 The court entered judgment on May 23, 2014, in the amount of $536,251 in compensatory damages, $35,000 in punitive damages, and $60,039 in prejudgment interest. This appeal followed.

On appeal, defendant first argues that the trial court erroneously granted plaintiff's in limine motions, which we will not address in this appeal.4 Defendant also argues the court erred in failing to dismiss plaintiff's complaint under the entire controversy doctrine, and that defendants' counterclaims were improperly dismissed on the basis of the statute of limitations and judicial proceeding immunity. Defendants also argue that the court erroneously barred the meeting minutes. We disagree.

This appeal concerns a trial judge's application of law to facts, as well as the trial judge's interpretation of law. Accordingly, we review the proceedings de novo. A "trial court's interpretation of the law and the consequences that flow from established facts are not entitled to any special deference." See Manalapan Realty v. Manalapan Tp. Comm., 140 N.J. 366, 378 (1995).

"The [entire controversy] doctrine requires a litigant to present all aspects of a controversy in one legal proceeding." Hobart Bros. Co. v. Nat'l Union. Fire Ins. Co., 354 N.J. Super. 229, 240 (App. Div.) (quoting The Malaker Corp. Stockholders Protective Comm. v. First Jersey Nat'l Bank, 163 N.J. Super. 463, 496 (App. Div. 1978), certif. denied, 79 N.J. 488 (1979)) (internal quotations omitted), certif. denied, 175 N.J. 170 (2002). Its purpose is to prevent a party from strategically withholding a part of the controversy, by precluding the party from raising it later. Id. at 240-41. The doctrine serves the twin goals of "ensuring fairness to parties and achieving economy of judicial resources." Kent Motor Cars, Inc. v. Reynolds & Reynolds, Co., 207 N.J. 428, 443 (2011). The doctrine generally only applies to cases that have been litigated to conclusion, either to final judgment or settlement; it does not require dismissal when multiple actions are pending simultaneously. Kaselaan & D'Angelo Assocs. v. Soffian, 290 N.J. Super. 293, 299 (App. Div. 1996).

Rule 4:30A reads "[n]on-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 . . . ." Specifically, a successive action is not barred if an earlier complaint is not adjudicated on the merits. Gazzillo v. Grieb, 398 N.J. Super. 259, 265 (App. Div.), certif. denied, 195 N.J. 524 (2008); see also Arena v. Borough of Jamesburg, 309 N.J. Super. 106, 110-11 (App. Div. 1998) ("[W]hen a prior action has been dismissed without prejudice prior to trial, a plaintiff is not barred from filing a subsequent action based on the same transactional facts.").

Plaintiff's 2008 complaint cannot form the basis of a dismissal under the entire controversy doctrine as nothing was adjudicated. Gazzillo, supra, 398 N.J. Super. at 265; Arena, supra, 309 N.J. Super. at 110-11. Moreover, the Gallco litigation was not transactionally related to plaintiff's claims in this case. While the Gallco case involved transactions of WBI, it did not address the claims of plaintiff against these defendants. Finally, the fact that there was a criminal investigation against Marter which did not result in charges is of no consequence. We discern no error in the motion judge's denial of defendants' motion to dismiss.

We reject defendants' arguments that the motion judge improperly dismissed Marter's counterclaims because they were barred by the statute of limitations and because the allegedly defamatory statements were subject to the litigation privilege. Count one of defendant's counterclaim asserts that plaintiff made false and libelous statements about Marter to Arthur Gallagher, president of Gallco, which were repeated in a certification filed by Gallagher in the Gallco litigation in 2011. Count two asserts that plaintiff made false statements about Marter to the Monmouth County Prosecutor's Office. Neither statement was made within one year of the filing of defendants' counterclaim.

As to the Gallagher statement, Marter argues that the defamation claims arose when she discovered it upon the filing of the Gallagher certification in the Gallco litigation in April 2011. However, "[t]he statute of limitations applicable to the present suit . . . does not measure the limitations period in terms of the 'accrual' of a cause of action. Instead, it provides that an action must be brought within one year of 'the publication' of the alleged libel." Lawrence v. Bauer Publ'g & Printing, Ltd., 78 N.J. 371, 374-75 (1979) (Pashman, J., concurring). The discovery rule, however, is inapplicable to an action for defamation. NuWave Inv. Corp. v. Hyman Beck & Co., Inc., 221 N.J. 495, 500-01 (2015). Moreover, the reporting of the defamation in the Gallco certification, and plaintiff's certification to the prosecutor, fall within the privilege for judicial communications.

Defendants remaining arguments, that the trial judge erred in barring the recorded minutes of the December 20, 2006 meeting and the Gallco certification from evidence, are without sufficient merit to warrant discussion in this opinion. Rule 2:11-3(e)(1)(E). Defendants failed to meet the requirements of N.J.R.E. 803(c)(6) to establish the minutes qualified as a business record; additionally, defendants failed to meet the requirements of N.J.R.E. 803(a)(1)(A), and declined the opportunity for a Rule 104 hearing. In any event, we find that the exclusion of the minutes and certification was harmless.

Affirmed.

1 Defendants have only supplied this court with a partial record of the proceedings. According to the July 15, 2 014 Rule 2:5-1 submission of the trial court, the trial was conducted on April 29, 30, and May 1, 2, 5, 6, and 7, 2014. Defendants have omitted the transcripts from the April 29, and May 6 and 7, 2014 hearings on the record. Although we recognize that Rule 2:5-3(c)(1) permits parties to submit an abbreviated transcript if the parties consent to such a submission in writing, there was no such consent presented herein. Of particular concern is the omission of the first day of plaintiff's trial testimony.

2 Fariello Bus Service L.L.C. is the legal name for Marter's new bus company, which conducts business under the name Greenwood Bus Service. Shimko alleges that Marter used Shimko's assets to run her company.

3 We rely upon the July 15, 2 014 Rule 2:5-1 statement provided by the trial judge for these dates as defendants have not provided a complete record.

4 Defendants have not provided a transcript of the May 28, 2013 motion in limine hearing. Defendants are required to provide us with the transcripts of "the entire proceeding" where, as here, there is no consent under Rule 2:5-3(c). See R. 2:5-3(b). We therefore decline to consider this issue on appeal.