Opinion
DOCKET NO. A-0811-11T1
02-15-2013
MARYANN COTTRELL, Plaintiff-Appellant, v. ZAGAMI, LLC, D/B/A THE LANDMARK AMERICANA TAP AND GRILL, D/B/A LANDMARK LIQUORS, D/B/A THE SPOT, Defendant-Respondent.
Maryann Cottrell, appellant, argued the cause pro se. Melissa J. Kanbayashi argued the cause for respondent (Marks, O'Neill, O'Brien & Courtney, P.C., attorneys; Sean X. Kelly and Ms. Kanbayashi, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Parrillo and Maven.
On appeal from the Superior Court of New Jersey, Law Division, Gloucester County, Docket No. L-223-11.
Maryann Cottrell, appellant, argued the cause pro se.
Melissa J. Kanbayashi argued the cause for respondent (Marks, O'Neill, O'Brien & Courtney, P.C., attorneys; Sean X. Kelly and Ms. Kanbayashi, on the brief). PER CURIAM
Plaintiff Maryann Cottrell appeals from an August 31, 2011 order of the Law Division dismissing her malicious use of process complaint against defendant Zagami, LLC, for failure to state a claim pursuant to Rule 4:6-2(e).
Some of the background to this matter is set forth in our reported decision, Zagami, LLC v. Cottrell, 403 N.J. Super. 98 (App. Div. 2008), certif. denied, 198 N.J. 309 (2009). In 2007, Zagami, the owner of a restaurant, bar, liquor store and nightclub in Glassboro, brought an action against plaintiff and Luis Perez, who both had objected to the renewal of Zagami's liquor license at a town council meeting. The complaint alleged defamation and the related torts of commercial disparagement/trade libel, interference with business relations, and civil conspiracy, claiming that statements they made during administrative proceedings on, and in opposition to, Zagami's application were both false and maliciously uttered. Id. at 101-103. Plaintiff and Perez, who have characterized Zagami's litigation as a SLAPP suit, moved to dismiss, arguing that their statements were entitled to absolute immunity as made in the course of a quasi-judicial proceeding. Id. at 103. The trial judge denied the motion to dismiss on grounds of litigation privilege. Ibid. Following our denial of plaintiff's and Perez's motions for leave to appeal, the Supreme Court reversed and summarily remanded to us the issue of the parties' litigation privilege defense for consideration on the merits. Ibid.
Strategic Lawsuit Against Public Participation.
We held that the alleged defamatory statements made by plaintiff and Perez in opposition to Zagami's liquor license renewal application were protected under the litigation privilege. Id. at 112. We reasoned that past New Jersey courts had expanded the privilege "beyond strictly judicial proceedings to encompass so-called 'quasi-judicial' proceedings[,]" id. at 105 (quoting Hawkins v. Harris, 141 N.J. 207, 216 (1995)), so long as those proceedings had "attendant safeguards similar to those in strictly judicial proceedings" such as "notice and hearing; neutral oversight; availability of review on appeal; and presence of 'retarding influences[,]'" ibid. (quoting Rainier's Dairies v. Raritan Valley Farms, Inc., 19 N.J. 552, 562 (1955)). Finding the "procedures and standards for the renewal of municipal ABC licenses" to be "comprehensive," id. at 109, and that the parties' allegedly defamatory statements "all dealt with the manner in which [Zagami] operates its licensed liquor establishment and business," id. at 111, we concluded that the litigation privilege afforded the parties' statements absolute immunity and therefore ordered that Zagami's complaint be dismissed with prejudice. Id. at 112.
Specifically, we ruled:
Accordingly, we find that the litigation privilege immunizes defendants from plaintiff's defamation claim, which consequently should have been dismissed on defendants' motion. Because the other counts alleging related torts are predicated upon the same conduct on which the defamation claim is based, defendants are shielded from liability for them as well, and, therefore, plaintiff's entire complaint should have been dismissed.
[Ibid.]
Thereafter, plaintiff and Perez individually filed "SLAPP-back" suits against Zagami for malicious abuse of process, each alleging that Zagami's defamation complaint lacked probable cause, was actuated by malice, was resolved in Perez's and plaintiff's favor, caused Perez and plaintiff to incur substantial attorney's fees, and discouraged Perez and plaintiff from participating in future public proceedings.
These separate lawsuits were never consolidated.
Plaintiff's complaint also included a count alleging a violation of the New Jersey Civil Rights Act (CRA), N.J.S.A. 10:6-2.
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Zagami separately moved to dismiss these complaints pursuant to Rule 4:6-2(e), arguing that Zagami's defamation allegations were made with probable cause, were not actuated by malice, and were absolutely privileged based on advice of counsel. Plaintiff opposed the motion, and cross-moved to amend her complaint to name Zagami's attorney in the defamation suit as a defendant and to state additional facts.
Having filed suit much earlier (July 26, 2010) than plaintiff (February 22, 2011), Perez's opposition to Zagami's dismissal motion was heard first. The Law Division granted Zagami's motion to dismiss pursuant to Rule 4:6-2(e), concluding, as a matter of law, that Zagami "had probable cause" for filing its defamation complaint. Perez v. Zagami, LLC, Docket No. L-1248-10 (Law Div. February 28, 2011) (slip op. at 10). In particular, the court reviewed "the leading reported [absolute immunity] cases before June 27, 2007" and found that "the applicable law in this area was [neither] clear [nor] well-settled at the time Zagami filed its lawsuit." Id. at 4. The judge opined that it was "far from clear that the alleged defamatory statements of Mr. Perez would be entitled to . . . absolute immunity" because "[t]he subject liquor license renewal hearing had neither the 'comprehensive control' of a trial judge nor the 'retarding influences such as false swearing and perjury prosecutions' since the witnesses were not placed under oath." Id. at 6-7. The judge thus concluded that, "[g]iven the factual history in this case, as well as the unsettled state of the law as to the applicability of absolute privilege to the proceedings in question, it is clear that [Zagami] had probable cause to believe that it had a viable defamation claim against [Perez]." Id. at 10.
Perez appealed and another panel of this court reversed the dismissal of Perez's malicious use of process complaint. Perez v. Zagami, LLC, Docket No. A-3296-10 (App. Div. July 12, 2012), certif. granted, _ N.J. _ (2013). Therein, the court held:
Here, the Law Division judge found that Perez failed to meet the second condition -- that Zagami's defamation complaint lacked probable cause. We conclude that at this stage of the proceedings, this decision was in error. Contrary to the court's decision, Perez's entitlement to absolute immunity was not "far from clear" before Zagami filed its defamation complaint.Citing in particular, Rainier's Dairies, supra, 19 N.J. 552, a Supreme Court case decided over fifty years ago, the court found that
[Perez, supra, slip op. at 11-12.]
based upon the past cases, Zagami knew or should have known when it filed its defamation complaint that liquor license renewal applications and the resulting hearings "are now a vital part of American life and perform important public duties," and that it would be "only just that, to the extent they discharge a function comparable to the judicial function, they and the participants in the proceedings before them be vested with [absolute] immunity." Rainier's Dairies, supra, 19 N.J. at 562-63.
As we noted in Zagami, New Jersey has a strong public policy interest in regulating alcoholic beverages, and has established comprehensive procedures for the renewal of such licenses. Zagami, supra, 403 N.J. Super. at 109. Also, all of Perez's allegedly defamatory statements related to that renewal application. Id. at 111. Glassboro's liquor license renewal procedures, and Perez's participation in those procedures, more than meet the long-established test for quasi-judicial proceedings, and no reasonable person would have believed otherwise at the time Zagami filed its defamation complaint.
[Perez, supra, slip op. at 12-13.]
Prior to this court's opinion in Perez, plaintiff herein filed a motion to dismiss Zagami's defamation complaint against her, virtually identical to Perez's. Because of the "close similarity of facts, law, and arguments made before the court in the two proceedings," the Law Division judge in denying plaintiff's motion, "borrow[ed] heavily from [his] opinion in Perez v. Zagami, LLC issued on February 28, 2011." Cottrell v. Zagami, Docket No. L-223-11 (Law Div. Aug. 31, 2011) (slip op. at 2, n.1). Thus, just as he concluded with respect to Perez, the judge found that existing case law at the time Zagami filed suit on July 27, 2007, was "far from clear that the alleged defamatory statements of [plaintiff] would be entitled to . . . absolute immunity . . ." and therefore probable cause existed to support Zagami's belief that plaintiff engaged in defamatory conduct. Id. at 6.
We reiterate that the Law Division's August 31, 2011 determination predated our July 12, 2012 decision reversing the lower court's dismissal of the Perez complaint. Because the Perez action is identical in all relevant respects to the instant matter, we reach the same result as the panel in Perez and thus for the same reasons, we conclude that the dismissal of plaintiff's malicious use of process complaint was reversible error.
As noted, in addition to alleging malicious use of process, plaintiff also included a count alleging a violation of the CRA, N.J.S.A. 10:6-2. This same claim had been the subject of a cross-motion by Perez seeking to include it in an amended complaint, which the Law Division judge denied. We reversed this aspect of the trial court's ruling as well, relying on Felicioni v. Administrative Office of the Courts, 404 N.J. Super. 382, 400 (App. Div. 2008), certif. denied, 203 N.J. 440 (2010), and reasoning that:
Perez's CRA count alleging that Zagami "deprived" him of "his substantive due process right of free speech at public proceedings" would not fail for lack of "a person acting under color of law," Perez's claim is not legally futile on his face, and the amendment should have been permitted.
[Perez v. Zagami, LLC, supra, slip op. at 18-19.]
As noted, plaintiff alleged this same CRA claim in her complaint, which the Law Division similarly dismissed, because the CRA "is limited to acts under color of law." Once again we reach the same result as the panel in Perez as to this feature of the Law Division's August 31, 2011 decision and for the same reasons.
In a separate order of August 31, 2011, the Law Division judge denied plaintiff's cross-motion to amend her complaint to add defendant's former attorneys as additional parties. An identical cross-motion had previously been made by Perez and denied by the same Law Division judge as moot. In reversing this feature of the Perez order, we noted:
in a SLAPP-back suit, "if and when the advice-of-counsel defense is asserted, the party seeking relief may then pursue a cause of action against the attorney claimed to have been the source of that advice as well." LoBiondo [v. Schwartz, 199 N.J. 62, 72 (2009)]. Zagami raised such a claim in its motion to dismiss, and Perez was entitled to pursue that claim.
[Perez v. Zagami, supra, slip op. at 19.]
Unlike Perez, however, the denial of plaintiff's cross-motion to amend is not the subject of this appeal, has not been identified as such in either her notice of appeal or civil case information statement, and has not been briefed by plaintiff. Therefore, we find no reason to disturb this feature of the Law Division's separate order of August 31, 2011.
Accordingly, the order of August 31, 2011 dismissing plaintiff's complaint for failure to state a claim of malicious use of process and a CRA violation upon which relief could be granted is reversed. The separate order of August 31, 2011 denying plaintiff's motion to add additional parties is affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION