Opinion
DOCKET NO. A-2806-10T1 DOCKET NO. A-3520-10T1
02-29-2012
ROBERT ROSS, JR., Plaintiff-Appellant, v. RICHARD ANNUNZIATA, PUTNAM AT TINTON FALLS, LLC and GINO PALAZZALO, Defendants-Respondents. ROBERT ROSS, JR., Plaintiff-Respondent, v. RICHARD ANNUNZIATA, Defendant, and PUTNAM AT TINTON FALLS, LLC and GINO PALAZZALO, Defendants-Appellants.
Geoffrey T. Bray argued the cause for appellant Robert Ross, Jr. in A-2806-10 and as respondent in A-3520-10 (Bray & Bray, L.L.C., attorneys; Mr. Bray, on the briefs). Amy P. Burr argued the cause for respondent Richard Annunziata in A-2806-10 (Burr Law Group, LLC, attorneys; Ms. Burr, on the brief). Elias Abilheira argued the cause for respondents Putnam at Tinton Falls, LLC and Gino Palazzalo in A-2806-10 and as appellants in A-3520-10 (Abilheira & Associates, P.C., attorneys; Mr. Abilheira, on the briefs).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
DOCKET NO. A-2806-10T1
These cases, calendared back-to-back, are consolidated for purposes of this opinion.
Before Judges Axelrad and Ostrer.
On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-1359-09.PER CURIAM
Geoffrey T. Bray argued the cause for appellant Robert Ross, Jr. in A-2806-10 and as respondent in A-3520-10 (Bray & Bray, L.L.C., attorneys; Mr. Bray, on the briefs).
Amy P. Burr argued the cause for respondent Richard Annunziata in A-2806-10 (Burr Law Group, LLC, attorneys; Ms. Burr, on the brief).
Elias Abilheira argued the cause for respondents Putnam at Tinton Falls, LLC and Gino Palazzalo in A-2806-10 and as appellants in A-3520-10 (Abilheira & Associates, P.C., attorneys; Mr. Abilheira, on the briefs).
These cross-appeals arise out of a venture to develop a parcel of land in Tinton Falls. Plaintiff Robert Ross, Jr. and defendant Richard Annunziata entered an agreement to bid on the land in Annunziata's name at a bankruptcy auction. Ross agreed to provide at least $2 million. The bid was successful, but Annunziata purchased the land through a business entity, Putnam at Tinton Falls, LLC (Putnam LLC), which he formed with Gino Palazzalo. Ross then sued Annunziata, Palazzalo and Putnam LLC, alleging breach of contract against Annunziata and various business tort claims against some or all the three defendants. Annunziata filed a counterclaim alleging that Ross breached the contract by failing to produce the required purchase monies. Annunziata, Putnam LLC and Palazzalo filed a counterclaim seeking damages caused by Ross's wrongful filing of a lis pendens. Judge Honora O'Brien Kilgallen granted cross-motions for summary judgment, dismissing plaintiff's complaint based on plaintiff's failure to demonstrate the capacity to provide the $2 million of funding, and dismissing the Palazzalo-Putnam LLC counterclaim on the grounds that the filing of the lis pendens was privileged. We affirm.
I.
Ross and Annunziata entered into a February 3, 2009 written agreement to purchase at a bankruptcy auction ninety-eight unimproved lots known as "Greenbriar Falls I and II" located in Tinton Falls. The parties' actual ownership interests and profit shares would depend on their proportional contributions to the venture, but Ross's participation was conditioned upon his funding at least $2 million. The agreement stated:
1. Richard Annunziata and Robert Ross, Jr., hereby agree that they shall be fifty-percent/fifty-percent (50%) partners with respect to the purchase and ownership of the above referenced development projects previously owned by Landsource Holding Company, LLC, a subsidiary of Lennar Homes. The actual ownership interests and distribution of profits with respect to this project shall be dependent upon the actual funds provided on behalf of each of the partners and adjusted from the fifty-percent
(50%) ownership share accordingly, based upon the actual funds invested on a percentage basis, on behalf of each of the partners. These amounts shall be subject to adjustment after being named as the highest successful bidder based upon the funding obtained by each of the respective parties in order to complete the purchase, provided that Robert Ross, Jr. produces investment of at least 2 million dollars towards the purchase of the project.
2. The parties hereby agree that the Bid for the purchase of the Greenbriar Falls properties shall be submitted in the name of Richard Annunziata and that the financial information provided to the Seller shall initially come from and be provided by Richard Annunziata.
[(Emphasis added).]
Ross deposited approximately $142,000 and Annunziata deposited approximately $120,000 with First American Title Company of New York so that Annunziata could become a qualified bidder for the auction. Ross and Annunziata attended the bankruptcy auction on February 12, 2009, and Annunziata was the highest bidder on the Greenbriar properties with an $8 million bid. It is undisputed that Ross never produced or proffered the $2 million; Annunziata formed Putnam LLC and assigned to it his right to purchase; Putnam LLC closed on the land purchase on March 6, 2009; and the same day, Annunziata refunded to Ross his bid deposit and $60,000 more that Ross contributed to the venture.
However, the parties disputed why Ross did not participate in the purchase. In brief, Ross maintained that Annunziata intentionally prevented him from participating in the venture, withholding information about the preparations to close, and assigning his right to purchase to Putnam LLC. Annunziata maintained that Ross failed to perform by failing to produce the required funding, which compelled Annunziata to seek Palazzalo's enlarged role, in order to successfully close on the purchase. Regardless of whether Ross was given the chance to perform, we are persuaded, based on our review of the record evidence, that Ross was incapable of producing the $2 million, which was a condition precedent to his participation in the venture.
Ross claimed that after the auction, Annunziata denied him information about the schedule for closing and the procedure for payment of his share of price. He submitted to the court email communications, produced in discovery, between Annunziata's transactional attorneys, and between those attorneys and attorneys for the seller, which were not copied to him. However, Ross admitted that he learned of the March 6, 2009 closing date "a week to 15 days" in advance — which would mean, as early as February 19, 2009 — a week after the auction. In a subsequent certification, Ross asserted that he made a mistake, and that he learned of the closing only a week in advance.
Ross disputed Annunziata's deposition testimony that he had informed Ross before they entered their agreement that the Bankruptcy Court required closing pursuant to a "time of the essence" clause. The purchase agreement itself contained no "time of the essence" provision. The Bankruptcy Court apparently entered an order on February 24, 2009 approving the February 12, 2009 sale agreement, and Ross admitted he learned of the March 6 closing date "after they got out of court in Delaware." However, we are not prepared to find that the Bankruptcy Court imposed the closing date, as that court's order was not provided to Judge Kilgallen or to us.
The agreement did not dictate a specific closing date, but stated that the closing would occur eight days following satisfaction of various specified conditions. It also provided that the agreement could be terminated, subject to various provisos, if closing has not occurred by June 30, 2009.
On the other hand, after the entry of the Bankruptcy Court order, emails between defendants' transactional attorneys reflected their own unsuccessful effort to delay the closing until March 13, 2009 or March 19, 2009. One email indicated that the need to close by Friday, March 6, 2009 was created by the demands of the lender to the debtor-in-possession of the property, and if Annunziata did not close, the seller would turn to the back-up bidder.
Annunziata claimed that Ross informed him that he was unable to produce his $2 million investment, which Ross denied. During a meeting on March 3, 2009, Ross claimed — and Annunziata denied — that Annunziata and Palazzalo told Ross that he was "out of the deal" and that Annunziata and Palazzalo would be proceeding with the acquisition without him. Ross was nonetheless allegedly asked to deposit another $60,000 at First American Title Company of New York, which he did, bringing his outlay up to approximately $202,000. An email from one of Annunziata's attorneys to Ross reflected discussions about permitting Ross to participate in the development of several lots, instead of all ninety-eight, in return for a smaller investment. On March 3, 2009, Annunziata formed Putnam LLC, and he was listed as the sole member/manager.
Regarding his capacity to fund his $2 million minimum contribution, Ross attached to his complaint — which he later verified — a March 5, 2009 "letter of interest" from Kennedy Funding, Inc. (KFI). According to the letter, KFI would consider lending up to half the market value of the property, repayable in three years, at an initial interest rate of Libor (London Interbank Offered Rate) plus eleven percent. KFI required an immediate payment of $10,000, which would be applied toward a commitment fee of three percent of the loan, and would be subject to KFI's due diligence. There was no promise regarding the time KFI would need for its due diligence, but "closing could occur in as quickly as seven to ten days after completion of our due diligence and receipt of title. . . ." Ross did not state who solicited the KFI letter, or why the letter was sought. The letter was dated two days after Ross allegedly was told he was out of the deal.
In subsequent filings, in response to defendants' motion to discharge the lis pendens, Ross attempted to demonstrate his ability to fund the project by producing a certification from a different potential lender, Mitchell Martinez. Ross asserted that Martinez's certification "confirms the fact that I was ready, willing and able to pay the balance of my $2 million obligation." Martinez in turn certified that he and an unnamed business partner were ready to lend $1.5 million and an unnamed "third person" was going to lend the remaining $300,000 — all in time for a March 2009 closing.
However, in deposition, Martinez's readiness to invest, and the amount he was prepared to contribute, appeared much less certain. He stated, "I personally was going to provide half of the [$]1.5 [million] and the other party was going to provide the other half of the [$]1.5 [million] and there was a third party or possibly multiple parties that would have provided the other $300,000." When questioned further, Martinez stated that the parties had not come to an agreement on security for the loan and they never reached terms under which he definitely would have lent Ross the money. Martinez also testified at deposition that he would have required security, preferably a first mortgage on the property before agreeing to lend the money. Ross admitted that Martinez would have required a first mortgage on the property.
Martinez testified that Ross told him "right after" the auction that he needed $1.8 million. However, Martinez and Ross had not agreed to terms when Ross approached him the night before the closing, asking him to produce the $1.8 million the next day, which Martinez said he could not accomplish. Martinez testified that Ross also discussed obtaining funding of less than $1.8 million to fund the purchase of as few as five lots. Ross admitted in his deposition that aside from Martinez, he had no other source of the $2 million. Ross did not present certifications from the persons whom Martinez claimed would have provided the additional $750,000 and $300,000. Martinez also admitted that Ross had promised him a share of any recovery he obtained in his litigation against defendants.
Annunziata claimed that he initially envisioned Palazzalo's role as a lender. But, when Ross failed to produce his $2 million, Annunziata was forced to turn to Palazzalo for additional funding. As a result, Annunziata incurred increased interest charges and yielded part of his anticipated share of the equity in the project. Annunziata alleged that Ross knew he would be unable to provide the minimum funding when he entered the partnership agreement. Annunziata, Putnam LLC and Palazzalo claimed the filing of the lis pendens made it difficult to sell units.
II.
Plaintiff filed his complaint on March 19, 2009 against Annunziata, Putnam LLC, and Palazzalo. He alleged breach of contract against Annunziata and various tort and equitable claims against one or more of the three defendants, including tortious interference and fraud.
Annunziata answered separately from Putnam LLC and Palazzalo. In his counterclaim, Annunziata alleged that Ross had breached their agreement. He also claimed fraud and wrongful filing of a lis pendens. On September 11, 2009, Judge John R. Tassini denied Putnam LLC's and Palazzalo's motion to discharge the lis pendens. In August 2010, Putnam LLC and Palazzalo filed a late counterclaim seeking discharge of the lis pendens and damages, alleging "plaintiff filed a Notice of Lis Pendens negligently, falsely and/or maliciously claiming an interest in the property." They alleged that plaintiff's "action [was] knowingly fraudulent and willful, wanton and/or grossly negligent."
Discovery was prolonged and marked by significant motion practice as plaintiff sought disclosure of defendants' financial records to support his damages claim; and defendants sought disclosure of evidence demonstrating plaintiff's alleged capacity to produce the $2 million investment.
In September 2010, after the general end date for discovery (although some additional damages discovery was still permitted), and about a month before scheduled trial, Putnam LLC and Palazzalo filed a motion for summary judgment, seeking dismissal of plaintiff's claims against them, and discharge of the lis pendens. Annunziata ultimately joined in the motion. Plaintiff cross-moved to compel defendants' production of financial information.
After a thorough review of the motion record, Judge Kilgallen on November 12, 2010 granted summary judgment dismissing plaintiff's claims. Even assuming defendants denied Ross information about the closing and ultimately excluded him from the deal, Judge Kilgallen reasoned that plaintiff had failed to demonstrate his capacity to obtain the $2 million that was a condition precedent to his participation in the venture. The court also denied as moot plaintiff's cross-motion for additional discovery of defendants' financial information.
Thereafter, Ross filed on December 22, 2010 a motion for summary judgment seeking dismissal of all defendants' counterclaims. Although defendants' counterclaims included Annunziata's claim that Ross breached his contractual obligation to fund the purchase, Ross's motion papers were directed toward the counterclaim seeking damages for wrongful filing of the lis pendens. During oral argument, the court noted that although defendants had argued that the plaintiff's lis pendens filing constituted malicious prosecution, as well as slander of title, defendants never pled malicious prosecution. Counsel for Putnam LLC and Palazzalo asked the court to permit them to "conform the counterclaim" to assert malicious prosecution. The court declined to rule on defendants' request regarding adding a malicious prosecution claim, and granted plaintiffs' motion by order entered February 4, 2011, reasoning that the filing of the lis pendens was privileged under Lone v. Brown, 199 N.J. Super. 420 (App. Div. 1985).
Plaintiff appeals and presents the following points:
I. THE COURT ERRED IN GRANTING SUMMARY JUDGMENT AS THERE ARE DISPUTED MATERIAL FACTS AND THE COURT FAILED TO GIVE ALL LEGITIMATE INFERENCES TO AND VIEW THE FACTS IN FAVOR OF, THE PLAINTIFF AS THE NON-MOVING PARTY.
II. THE COURT ERRED IN RULING THAT THE QUESTION OF WHETHER THE DEFENDANTS PREVENTED OR MADE IT IMPOSSIBLE FOR ROSS TO INVEST THE $2 MILLION WAS A QUESTION OF LAW AND NOT A QUESTION OF FACT FOR A JURY.
III. THE COURT ERRED IN FAIL[ING] TO STATE FACTS AND CONCLUSIONS OF LAW AS TO ANY OF PLAINTIFF'S CAUSES OF ACTION WHEN GRANTING SUMMARY JUDGMENT.
IV. THE COURT ERRED IN DENYING THE PRODUCTION OF CERTAIN DOCUMENTS SOUGHT IN ROSS' CROSS-MOTION TO COMPEL.
Defendants Putnam LLC and Palazzalo raise the following points on their appeal:
I. SUMMARY JUDGMENT MUST BE DENIED WHEREVER THERE IS A MATERIAL QUESTION OF FACT.
II. THE NOTICE OF LIS PENDENS IS NOT PRIVILEGED IF IT IS BASED UPON FRAUDULENT ALLEGATIONS.
III. THE COURT HEARING FAILED TO STATE FACTS AND CONCLUSIONS OF LAW WHEN GRANTING SUMMARY JUDGMENT AS TO DEFENDANT'S COUNTERCLAIM.
III.
We review the trial court's grant of summary judgment de novo applying the standard set forth in Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). Lapidoth v. Telcordia Tech., Inc., 420 N.J. Super. 411, 417 (App. Div. 2011); Agurto v. Guhr, 381 N.J. Super. 519, 525 (App. Div. 2005). We "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill, supra, 142 N.J. at 540. Judgment shall be granted if the evidence in the motion record shows "there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c).
We must be mindful that not every disputed fact presents a genuine issue. "If there exists a single, unavoidable resolution of the alleged disputed issue of fact, that issue should be considered insufficient to constitute a 'genuine' issue of material fact for purposes of Rule 4:46-2." Brill, supra, 142 N . J. at 540. "[W]hen the evidence 'is so one-sided that one party must prevail as a matter of law,' . . . the trial court should not hesitate to grant summary judgment." Ibid . (quoting Anderson v . Liberty Lobby , Inc ., 477 U . S . 242, 252, 106 S . Ct . 2505, 2512, 91 L . Ed .2d 202, 214 (1986) (emphasis added). See also Liberty Surplus Ins . Co . v . Nowell Amoroso , P . A ., 189 N . J . 436, 444-46 (2007).
Having reviewed the record in light of that standard, we agree that summary judgment dismissing plaintiff's claim of breach of contract and related tort and equitable claims was appropriate. In light of that disposition, plaintiff's cross-motion for additional damages-related discovery was correctly denied. The court also properly granted summary judgment dismissing defendants' claim for damages arising out of plaintiff's privileged filing of a lis pendens. We add these comments.
A.
We turn first to defendants' motion. The principle of law governing defendants' motion for summary judgment on plaintiff's breach of contract claim may be briefly stated. If contracting party A's rights are subject to fulfilling a condition precedent, then A may not complain that B took actions to prevent A's performance, if A could not or would have performed the condition precedent regardless of B's actions. Our Supreme Court has adopted Williston's formulation:
Williston has written that:
The principle that prevention by one party excuses performance by the other, both of a condition and of a promise, may be laid down broadly for all cases. This statement is frequently quoted. The condition is excused because the promisor has caused the non-performance of the condition. Therefore, it is not enough that the promisor evidently would have prevented performance of the condition. If the promisee could not or would not have performedThus, if a promisee lacks the financial wherewithal to perform a condition precedent, then the condition precedent is not excused, regardless of the promisor's actions to prevent the promisee's performance. Ward v. Merrimack Mut. Fire Ins. Co., 332 N.J. Super. 515, 526 (App. Div. 2000) (stating that promisee must show that promisor caused non-performance of condition precedent, but "'[i]f the promisee . . . could not or would not have performed the condition, or it would not have happened whatever had been the promisor's conduct, the condition is not excused.'")(quoting 5 Williston on Contracts §677 (Jaeger ed. 1961)).
the condition, or it would not have happened whatever had been the promisor's conduct,_the condition is not excused.[Creek Ranch, Inc. v. N.J. Tpke. Auth., 75 N.J. 421, 432 (1978) (quoting 5 Williston, Contracts, § 677 at 231-232 (3d ed. 1957).]
According to these principles, regardless of what Annunziata and Palazzalo may have done to prevent Ross's performance — which is genuinely disputed — the finding is unavoidable that Ross lacked the capacity to fulfill the condition precedent that would have triggered Annunziata's obligations under the agreement. Although Ross insisted that he was capable of providing the $2 million that was a condition precedent to his participation in the venture, the record evidence is so one-sided to the contrary that we deem there to be no genuine issue of fact in that regard.
Ross admitted that he did not personally possess $2 million, and the only way he could obtain it was borrowing it from Martinez. Ross did not sufficiently explain why, in his complaint, he referred not to Martinez, but to KFI, although it was patent that KFI's participation was uncertain and undefined. However, there was insufficient evidence that the funds were even available from Martinez. Martinez admitted that he would insist upon obtaining a security interest in the project. Although they was no explicit impediment to Ross pledging his own interests in the project, or providing his own personal guarantees, he had neither an express nor implied right under his agreement with Annunziata to encumber anyone else's property rights.
Also, Martinez was at most willing to lend $750,000. There was no cognizable evidence that a second lender, Darius Stafford, was willing to provide $750,000 and a third lender, who was not even identified with certainty, was willing to provide $300,000. Martinez's statements in deposition that these persons were prepared to lend the necessary sums were hearsay. Ross presented no certifications from these two essential lenders themselves stating they were prepared to fund Ross's obligation.
Lastly, there was no evidence that Martinez and his co-lenders could have met the tight deadlines imposed upon Annunziata. The only record evidence before the court established that the March 6, 2009 closing date was immovable. Whether imposed by a time-of-the-essence clause, a Bankruptcy Court order, or the insistence of the debtor-in-possession's lenders, the evidence reflects that efforts to push back the closing date were unsuccessful. Martinez admitted that under no circumstances could he have secured the funding for Ross by March 6, 2009. In sum, according to the evidence in the motion record, Ross was incapable of producing the $2 million, which was a condition precedent to Annunziata's performance under the agreement. Therefore, Annunziata did not breach his express obligation under his agreement with Ross.
Ross fares no better on his claim that Annunziata breached the implied covenant of good faith and fair dealing. Annunziata certainly owed Ross a duty, implied in all contracts, not to interfere with, or undermine Ross's efforts to perform.
In every contract there is an implied covenant that neither party shall do anything which will have the effect of destroying or injuring the right of the other party to receive the fruits of the contract; in other words, in every contractSee also Restatement (Second) of Contracts, § 245, comment a (1979) (where promisor's duty is subject to a condition precedent, "duty of good faith and fair dealing . . . may require some cooperation [by promisor] . . . either by refraining from conduct that will prevent or hinder the occurrence of . . . condition [precedent] or by taking affirmative steps to cause its occurrence.").
there exists an implied covenant of good faith and fair dealing.
[Palisades Prop., Inc. v. Brunetti, 44 N.J. 117, 130 (1965)(quotation omitted).]
Moreover, "[a]s a general rule, [s]ubterfuges and evasions in the performance of a contract violate the covenant of good faith and fair dealing. . . ." Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Ctr. Assoc., 182 N.J. 210, 225 (2005) (breach by withholding vital information from plaintiff that contributed to plaintiff's failure to exercise option timely) (quotation omitted). See also Bak-A-Lum Corp. of Am. v. Alcoa Bldg. Prods., Inc., 69 N.J. 123, 130 (1976) (breach of covenant where contracting party selfishly withheld information of intention to terminate distributorship). Proof of bad motive or intention is an essential element of the claim. Wilson v. Amerada Hess Corp., 168 N.J. 236, 251 (2001).
However, the covenant of good faith and fair dealing does not override a contracting party's express rights. Sons of Thunder, Inc. v. Borden, Inc., 148 N.J. 396, 419 (1997). "[W]here the contractual right to terminate is express and unambiguous, the motive of the terminating party is irrelevant." Id. at 423. Moreover, a plaintiff must show that the alleged bad faith or unfair dealing materially contributed to the denial of contractual benefits. Brunswick Hills Racquet Club, Inc., supra, 182 N.J. at 225 (stating that plaintiff must prove "conduct that denied the benefit of the bargain originally intended by the parties"); Restatement (Second) of Contracts, §245, comment b (1979) ("[I]f it can be shown that the condition would not have occurred regardless of the lack of cooperation, the failure of performance did not contribute materially to its non-occurrence and the rule [excusing non-performance of the condition] does not apply.").
Thus, even if one assumes for argument's sake that defendants withheld information from Ross and otherwise failed to cooperate, Ross was unable to demonstrate that defendants' actions materially contributed to his failure to satisfy the condition precedent. Ross admitted that he knew of the closing a week to fifteen days in advance. He lacked $2 million. His proposed source, Martinez, could only produce $750,000, and there was no proof that others were prepared to produce the balance. None of that was defendants' doing.
Also, Martinez admitted that he could not fund the project without more time, and would not fund it without a security interest in the property. Yet, defendants were themselves powerless to provide more time, and were under no duty to encumber their interests to benefit plaintiff. In sum, Ross's claim of breach of the implied covenant of good faith and fair dealing was correctly dismissed on defendants' motion.
The record also justified summary judgment dismissing Ross's tortious interference claims. Ross's claim of tortious interference with contract and prospective economic advantage could not be maintained against Annunziata, because Ross had a contractual relationship with him.
[I]t is "fundamental" to a cause of action for tortious interference with a prospective economic relationship that the claim be directed against defendants who are not parties to the relationship. Tortious interference developed under common law to protect parties to an existing or prospective contractual relationship from outside interference. . . . Where a person interferes with the performance of his or her own contract, the liability is governed by principles of contract law.
[Printing Mart Morristown v. Sharp Elecs., 116 N.J. 739, 752-53 (1989) (internal citations omitted).]
Ross's tortious interference claim against Palazzalo and Putnam LLC suffered from the same infirmity as his breach of contract claim. Ross lacked the capacity to fund his participation in the venture. Thus, he could not prove that defendants' actions caused him to lose the benefits of his contractual relationship with Annunziata, or of his prospective economic advantage.
To establish the tortious interference claim, Ross had to prove "he had a reasonable expectation of advantage from a prospective contractual or economic relationship, that defendant interfered with this advantage intentionally and without justification or excuse, that the interference caused the loss of the expected advantage, and that the injury caused damage." Patel v. Soriano, 369 N.J. Super. 192, 242 (App. Div.) (emphasis added), certif. denied, 182 N.J. 141 (2004). "Causation is demonstrated where there is proof that if there had been no interference there was a reasonable probability that the victim of the interference would have received the anticipated economic benefit." LaMorte Burns & Co . v . Walters, 167 N . J . 285, 306 (2001) (quotation omitted). Plaintiff failed to present any cognizable evidence that absent any actions by Palazzalo or Putnam LLC, Ross would have been able to obtain the $2 million.
Finally, Ross failed to present sufficient evidence to justify a trial on his claim for a constructive trust, particularly in view of the clear and convincing standard of proof governing the claim. See Brill, supra, 142 N.J. at 533 (stating that court must be guided by governing standard of proof in deciding motion for summary judgment); Dessel v. Dessel, 122 N.J. Super. 119, 121 (App. Div. 1972) (clear and convincing evidence must support imposition of the constructive trust), aff'd, 62 N.J. 141 (1973). A constructive trust is "designed to 'prevent unjust enrichment and force a restoration to the plaintiff of something that in equity and good conscience [does] not belong to the defendant.'" Flanigan v. Munson, 175 N.J. 597, 608 (2003) (quoting Dan B. Dobbs, Remedies § 4.3, at 246 (1973)).
Our courts have applied a two-part test to determine whether a constructive trust is an appropriate remedy. "First, a court must find that a party has committed 'a wrongful act.'" Ibid. (quoting D'Ippolito v. Castoro, 51 N.J. 584, 589 (1968)). "[B]reach of contract alone is not sufficient and does not qualify as the type of wrongful act or fraud which would warrant imposition of a constructive trust." Presten v. Sailer, 225 N.J. Super. 178, 195 (App. Div. 1988).
Second, "the wrongful act must result in a transfer or diversion of property that unjustly enriches the recipient." Flanigan, supra, 175 N.J. at 608 (emphasis added). To establish unjust enrichment, a "plaintiff [must] show that it expected remuneration from the defendant at the time it performed or conferred a benefit on defendant and that the failure of remuneration enriched defendant beyond its contractual rights." VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 554 (1994). See also Restatement (Third) on Restitution and Unjust Enrichment, § 2, comment c ("Restitution is accordingly subordinate to contract as an organizing principle of private relationships, and the terms of an enforceable agreement normally displace any claim of unjust enrichment. . . ."). "Equitable relief is not available merely because enforcement of the contract causes hardship to one of the parties." Brunswick Hills Racquet Club, Inc., supra, 182 N.J. at 223.
Applying these principles, plaintiff's constructive trust claim fell short. Assuming for argument's sake that defendants committed a wrongful act, plaintiff has not provided sufficient proof that those acts were something more than breaches of express and implied contractual duty. Also, those acts did not result in the transfer of property to defendants to the exclusion of plaintiff. Ross was excluded because he was incapable of producing his minimum investment.
Lastly, Ross did not enrich defendants beyond their contractual rights. Defendants refunded to Ross his bid deposits, and purchased the property with their own funds. While Ross certainly assisted Annunziata in qualifying to bid by contributing over $140,000 toward the bid deposit, Ross nonetheless expressly agreed to condition his ownership rights on his contribution of at least $2 million. The parties' agreement overrides the claim of unjust enrichment; and, absent unjust enrichment, a constructive trust was unwarranted.
Ross's remaining arguments that the court erred in granting summary judgment dismissing his claims of conversion and willful and malicious conduct, and his demand for additional damages-related discovery, lack sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).
B.
Judge Kilgallen also correctly awarded plaintiff judgment on defendants' claim that the filing of the lis pendens was wrongful. We have held the filing of a notice of lis pendens is absolutely privileged. Lone, supra, 199 N.J. Super. at 428-29; see also Peters Well Drilling Co. v. Hanzula, 242 N.J. Super. 16, 28 n.1 (App. Div. 1990) ("Lone v. Brown . . . precludes a suit for slander of title based upon the wrongful filing of a lis pendens."). We reasoned that since the notice republishes essential information in a complaint, its filing should be covered by the same privilege that covers statements made in the course of judicial proceedings. Id. at 428.
We also reject defendants' argument that their claim should have survived under the rubric of "malicious prosecution/fraud." Defendants did not plead malicious use of process. Elements of the cause of action include proof that: (1) the malicious-use-of-process defendant instituted an action against the plaintiff; (2) the defendant's action was motivated by malice; (3) the action lacked probable cause; (4) the action was terminated favorably to plaintiff; and (5) plaintiff suffered a "special grievance." LoBiondo v. Schwartz, 199 N.J. 62, 89-90 (2009) (identifying and discussing five elements). Particularly outside the context of SLAPP litigation, it is a disfavored cause of action. Id. at 72.
We assume defendants meant to refer to "malicious use of process." "Malicious prosecution" "provides a remedy for harm caused by the institution or continuation of a criminal action that is baseless." LoBiondo v. Schwartz, 199 N.J. 62, 89 (2009). "Malicious use of process," is the civil counterpart. Id. at 89-90. We have no reason to believe defendants intended to refer to "malicious abuse of process." See Baglini v. Lauletta, 338 N.J. Super. 282, 294 (App. Div.), certif. denied, 169 N.J. 608 (2001).
SLAPP stands for Strategic Lawsuit Against Public Participation and refers to litigation by land-use applicants to deter or silence public opposition to their development plans. LoBiondo, supra, 199 N.J. at 72.
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Moreover, the claim had to await the favorable conclusion of the action allegedly actuated by malice. Penwag Prop. Co. v. Landau, 76 N.J. 595, 598 (1978) ("It is not appropriate to institute a suit or file a counterclaim until the litigation has terminated in favor of the party" asserting malicious use of process). See also Id. at 599 (Pashman, J., concurring) ("I join in the Court's ruling that an action for malicious use of process may not be maintained as a counterclaim in the action alleged to have been maliciously brought."). Defendants misplace reliance on Lone, supra, where the plaintiff filed a separate suit for damages after prevailing as the defendant in a buyer's suit for specific performance of a contract to purchase real property.
Affirmed.