Opinion
DOCKET NO. A-0922-11T3
07-15-2014
PHILIP NOTARO, JR., Individually and Derivatively on behalf of DEPENDABLE AIR FREIGHT & FORWARDING CO., LLC, Plaintiff-Appellant, v. IMPAC LOGISTIC SERVICES, L.L.C., d/b/a IMPAC, IMPROVED PACKING AND CONSOLIDATION CORP., a/k/a IMPAC, IMPAC ADMINISTRATIVE SERVICES, INC., IMPAC LOGISTIC SERVICES, INC., (Florida Corp.), IMPAC LOGISTIC SERVICES, INC., (California Corp.), S.D.S. MANAGEMENT & CONSULTING SERVICES, INC., INNOVATIVE METHODS, PACKING AND APPAREL CORRECTIONS, LLC, IDS USA, f/k/a IDS-IMPAC, LTD., BETH MOSES as Executor of the Estate of STEVEN MOSES1, RICHARD SAPIENZA, INTEGRATED DISTRIBUTION SERVICES GROUP LIMITED, a/k/a IDS and IDS-GROUP, and IDS GROUP, LIMITED, Defendants-Respondents. BETH MOSES as Executor of the Estate of STEVEN MOSES, Individually And Derivatively on behalf of DEPENDABLE AIR FREIGHT & FORWARDING CO., LLC, Plaintiff-Respondent, v. PHILIP NOTARO, JR., Defendant-Appellant, and MARCHRIS FREIGHT SALES AND CONSULTING, INC., Defendant.
Michael Confusione argued the cause for appellant (Hegge & Confusione, LLC, attorneys; Mr. Confusione and John F. Olsen, of counsel and on the briefs). Anthony B. Ullman (Salans LLP, n/k/a Dentons) of the New York bar, admitted pro hac vice, argued the cause for respondents IDS USA, IDS Group, Limited, and Integrated Distribution Services Group Limited (Post, Polak, Goodsell, Macneill & Strauchler, P.A., and Mr. Ullman, attorneys; Mr. Ullman and Frederick B. Polak, on the brief). Jaime Katz Sussner argued the cause for respondent Steven Moses (Herrick, Feinstein LLP, attorneys) and Ty Hyderally argued the cause for respondents Impac Logistic Services, LLC, Impac Administrative Services, Inc., Improved Packing and Consolidation Corp., Impac Logistic Services, Inc. (Florida Corp.), Impac Logistic Services, Inc. (California Corp.), S.D.S. Management & Consulting Services, Inc., Innovative Methods, Packing and Apparel Corrections, LLC, and Richard Sapienza (Hyderally & Associates, P.C., attorneys) (Ms. Sussner, Mr. Hyderally, and Francine Foner, on the joint brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Yannotti, Ashrafi and Leone.
On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket Nos. L-5933-07 and L-3270-08.
Michael Confusione argued the cause for appellant (Hegge & Confusione, LLC, attorneys; Mr. Confusione and John F. Olsen, of counsel and on the briefs).
Anthony B. Ullman (Salans LLP, n/k/a Dentons) of the New York bar, admitted pro hac vice, argued the cause for respondents IDS USA, IDS Group, Limited, and Integrated Distribution Services Group Limited (Post, Polak, Goodsell, Macneill & Strauchler, P.A., and Mr. Ullman, attorneys; Mr. Ullman and Frederick B. Polak, on the brief).
Jaime Katz Sussner argued the cause for respondent Steven Moses (Herrick, Feinstein LLP, attorneys) and Ty Hyderally argued the cause for respondents Impac Logistic Services, LLC, Impac Administrative Services, Inc., Improved Packing and Consolidation Corp., Impac Logistic Services, Inc. (Florida Corp.), Impac Logistic Services, Inc. (California Corp.), S.D.S. Management & Consulting Services, Inc., Innovative Methods, Packing and Apparel Corrections, LLC, and Richard Sapienza (Hyderally & Associates, P.C., attorneys) (Ms. Sussner, Mr. Hyderally, and Francine Foner, on the joint brief). PER CURIAM
Plaintiff Philip Notaro, Jr. appeals from orders entered by the Law Division which denied his motions to extend discovery and for partial summary judgment, and granted summary judgment in favor of defendants. For the reasons that follow, we affirm.
I.
This appeal arises from the following facts. In 1996, Notaro and Steven Moses formed Dependable Air Freight and Forwarding Co., LLC (Dependable), after initially founding the company as a corporation in 1994. Notaro and Moses were the sole owners and members of Dependable, and both had a fifty-percent ownership interest in the company. Dependable was a broker of freight and trucking services. At the time Notaro and Moses formed the corporation, Moses owned another business, OPS Distributors, Inc. (OPS), which Moses had created sixteen years earlier. OPS was in the warehouse business, which afforded Moses experience and contacts in the logistics industry.
Notaro and Moses entered into an agreement dated March 11, 1996, governing the operation of Dependable (the Operating Agreement). Among other things, the Operating Agreement stated that each member "shall devote such time to the business and affairs of the [c]ompany as is necessary to carry out the [m]ember's duties," and that "no [m]ember shall be entitled to compensation" for the services performed. Profits and losses of the company would be allocated to the members in accordance with their respective ownership interests.
In addition, the Operating Agreement included the following provisions:
5.4.2 Except as otherwise expressly provided in Section 5.4.3, nothing in this Agreement shall be deemed to restrict in any way the rights of any Member, or of any Affiliate of any Member, to conduct any other business or activity whatsoever except with a business that is the same or similar to the business being conducted by the Company and the Member shall not be accountable to the Company or to any Member with respect to that business. The organization of the Company shall be without prejudice to their respective rights (or the rights of their respective Affiliates) to maintain, expand or diversify such other interests and activities and to receive and enjoy profits or compensation therefrom. Each member waives any rights the Member
might otherwise have to share or participate
in such other interests or activities of any other Member or the Member's Affiliates.
5.4.3. Each Member understands and acknowledges that the conduct of the Company's business may involve business dealings and undertakings with Members and their Affiliates. In any of those cases, those dealings and undertakings shall be at arm's length and on commercially reasonable terms.
Moses and Notaro agreed that Moses would focus his time upon sales, customer service and business development for Dependable, while Notaro would be responsible for day-to-day operations and administration. The Operating Agreement was amended in 1997 and 1998. The 1998 amendment stated that each member of the company agreed that "upon the termination of his employment with and/or the transfer of his membership interest in the company" he shall not compete with Dependable.
Prior to 1999, Richard Sapienza was an owner of Improved Packing and Consolidated Corp. (Improved Packing) and related companies that were in the public warehousing and trucking business. In August 2000, Dependable, Improved Packing, OPS, Notaro, Moses and Sapienza entered into an agreement (the 2000 Agreement), which authorized Moses to enter into a business relationship with Sapienza, and Improved Packing or an affiliated company, that engages in operations similar to Dependable's operations. Paragraph 6(B) of the 2000 Agreement stated that:
Moses and any companies which Moses may be associated with, shall have the unilateral right(s) to enter into any business agreement with Sapienza, [Improved Packing] or any of their affiliated companies, including but not limited to an equity ownership, officer, director, employee, joint venturer or in any other capacities without being in violation or conflict with the Operating Agreement.
Paragraph 16 of the 2000 Agreement stated that it would be in effect "(i) in perpetuity or (ii) as long as Dependable is an active entity doing business and Moses is a member of Dependable, whichever is sooner." This paragraph also stated that in no event shall the agreement terminate earlier than the time period provided in paragraph 7, which required Moses to compensate Notaro for certain business referred to Dependable over a five-year period by Sapienza, Improved Packing or an affiliated company, pursuant to formula.
However, as indicated on the signature page, Sapienza and Improved Packing only agreed to paragraphs one through five of the agreement. Those paragraphs provided that Dependable would have exclusive rights to certain freight business, and Sapienza would be paid commissions for certain road shipments and domestic air freight
Dependable also was given the exclusive right to all of its former and existing local trucking and air freight customers, as identified on Schedule A to the agreement. In addition, Dependable was given exclusive rights to all trucking controlled by the other parties, if physically shipped from OPS's facility in Paterson.
At some point after the parties entered into the 2000 Agreement, Sapienza and Moses shifted Improved Packing's operations to their limited liability company called Impac Logistic Services, LLC. (Impac). They also created various affiliates companies, called Impac Administrative Services, Inc., S.D.S. Management & Consulting Services, Inc., and Innovative Methods, Packing and Apparel Corrections, LLC.
In 2004 or 2005, certain companies indicated that they might be interested in acquiring Impac and its affiliated companies. In early 2006, discussions about such an acquisition took place with representatives of FMI Group and IDS Group, a subsidiary of Integrated Distribution Services Group, Ltd. (Integrated), a holding company organized in Bermuda with a principal office in Hong Kong.
Moses endeavored to promote the sale of Dependable along with the sale of Impac and its affiliated companies. However, on January 31, 2006, Notaro informed Moses and Sapienza that he would prefer to remain "on the sidelines" and let the deal involving Impac and its affiliates proceed with one of the potential buyers.
IDS Impac, Ltd. was formed in October 2006, and later became known as IDS USA (IDS). In December 2006, IDS executed an agreement to acquire the assets of Impac and the Impac-affiliated companies. At that time, IDS entered into employment agreements with Moses and Sapienza, which allowed them to continue to do business with Dependable and another entity in which Sapienza, Moses and Notaro had ownership interests.
It appears that Dependable's gross profits declined in the period from 2004 to 2006. Moreover, Dependable's decline continued after IDS acquired Impac and its affiliates. Notaro claimed that IDS drove Dependable out of business, and he accused Moses of destroying the company. Moses, in turn, came to believe that Notaro had misappropriated Dependable's funds and engaged in other tortious acts.
This litigation ensued, with Notaro filing a complaint in the Law Division, Hudson County, and Moses filing a separate action in the Law Division, Passaic County. The actions were consolidated in Hudson County. The parties engaged in about two years of discovery. The trial court entered an order dated January 25, 2010, denying Notaro's motion for an extension of time for discovery.
The parties filed summary judgment motions, which the trial court considered on September 3, 2010. The court granted defendants' motions, and denied Notaro's motion, thereby dismissing Notaro's complaint in its entirety. The court also denied defendants' motions for summary judgment on their affirmative claims against Notaro. Defendants thereafter dismissed their claims, and the trial court entered a final order of disposition on September 21, 2011. This appeal followed.
We note that in March 2012, Moses filed a motion in this court to suppress Notaro's brief and appendix and to impose sanctions upon Notaro (Motion No. M-4357-11). Moses argued that Notaro's appendix included materials that were not part of the record, and failed to include certain required items. In April 2012, IDS, the IDS Group, and Integrated also filed a motion to suppress Notaro's brief, but on different grounds (Motion No. M-4937-11).
We entered orders dated May 21, 2012, reserving our decision on these motions. We noted that the merits panel would not consider any materials improperly included in the appendix, or any argument related to such materials. We now deny these motions to suppress, noting that we have not considered any evidence that is not part of the record on appeal.
We also note that in August 2012, Moses filed another motion to suppress Notaro's appendix and his reply brief and to impose sanctions upon Notaro (Motion No. M-8011-11). In response, Notaro filed a motion to supplement the record with the document attached to his reply brief (Motion No. M-8269-11).
We entered orders dated November 8, 2012, denying both motions. We incorporated the terms of the order entered on May 21, 2012, thus indicating that, notwithstanding the denial of Moses's motion, we would not consider any material that was inappropriately included in the appendix or any argument based on such material.
We note additionally that Moses passed away while this appeal was pending. We entered an order dated June 27, 2014, permitting the substitution of the executor of the estate for Moses as a party (Motion No. M-7817-13).
II.
Notaro argues that the motion judge erred by granting summary judgment in favor of defendants.
When reviewing an order granting or denying summary judgment, we apply the same standards that are applied by the trial court when ruling on a motion seeking such relief. Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007); Henry v. N.J. Dept. of Human Servs., 204 N.J. 320, 330 (2010). Summary judgment shall be granted when there is no genuine issue of material fact, and the moving party is entitled to judgment as a matter of law. R. 4:46-2(c).
Furthermore, "[a]n issue of fact is genuine only if, considering the burden of persuasion at trial, the evidence submitted by the parties on the motion, together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact." Ibid. "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 v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
A. Claims Against Moses for Breach of Contract and Fiduciary Duties
Notaro contends that the evidence presented to the trial court was sufficient to raise a genuine issue of material fact as to whether Moses violated his contractual and fiduciary duties to Notaro and Dependable by: (1) directing customers away from Dependable to Moses's new employer, IDS; (2) decreasing, then abandoning, his solicitation of customers and sales efforts for Dependable; (3) permitting, if not directing, IDS to send disparaging letters to Dependable's customers; (4) working full time for IDS; (5) cutting Dependable from the acquisition deal with the IDS Group for Moses's personal benefit; and (6) threatening him and Dependable with cessation of referral business and outright dissolution of Dependable if Notaro did not release all of his claims.
We find no merit in these arguments. We affirm the grant of summary judgment to Moses on these claims substantially for the reasons stated by the judge in the statement of reasons appended to the November 26, 2010 order.
As the motion judge noted, when the events forming the basis for this litigation occurred, Dependable and Impac were engaged in the same type of business. Even so, Moses was permitted by the 2000 Agreement to own interests in, and participate in the operation of, both businesses.
As the judge explained, that agreement gave Moses the right to do business with Sapienza, Improved Packing, Impac and the Impac affiliates. The judge noted that "Moses'[s] participation in Impac before and after it was sold to IDS is expressly recognized and permitted" by the agreement, regardless of whether Notaro might have had "some viable claim" against Moses due to his affiliation with Impac or IDS in "the absence of this agreement."
The judge also noted that Moses's affiliation with IDS did not violate the restrictive covenant in Dependable's Operating Agreement. That covenant was triggered by the termination of Moses's employment and/or the transfer of his membership interest in Dependable. As the judge pointed out, neither event occurred.
The judge further determined that there was no factual basis for Notaro's claim that Moses and Sapienza had agreed to sell Impac and Dependable together. The record shows that, for a time, Moses and Sapienza attempted to sell the companies together. However, as we have explained, that effort failed. Impac and its affiliates were sold to IDS. The judge determined that Moses did not have any legal obligation to include Dependable in the sale of the Impac companies. The judge also determined that Notaro's claim that Moses wrongfully "cut" Dependable from the sales transaction for his personal benefit was meritless.
In addition, the judge determined that the record did not support Notaro's claim that Moses breached the 2000 Agreement by failing to have IDS refer business to Dependable pursuant to that agreement. As the judge noted, Sapienza and Improved Packing were not bound by the provision of the agreement indicating that it would be in effect "in perpetuity." Because Sapienza and Improved Packing could terminate the agreement at will after a reasonable time, they could not be compelled to refer business to Dependable.
The judge added that, even if the agreement survived IDS's purchase of the Impac companies and bound IDS to its terms, Notaro failed to establish that Moses or Sapienza breached the agreement. Indeed, the evidence shows that Moses and Sapienza referred some business to Dependable after the sale of the Impac companies to IDS.
In addition, the judge determined that Notaro had not presented sufficient evidence to show that: Moses devoted less time to Dependable after the sale; Dependable lost sales because Moses was devoting too much time to his duties at IDS; or Moses failed to refer any business he contracted to Dependable. Rather, the evidence before the trial court established that Dependable's business declined after Notaro refused to pay IDS for certain trucking and warehouse services that IDS had provided, and IDS terminated its relationship with Dependable as a result of such non-payment.
We are convinced that the record fully supports the judge's conclusion that Notaro failed to present sufficient evidence to support his claims against Moses. The judge correctly determined that there was no genuine issue of material fact and Moses was entitled to judgment on these claims as a matter of law.
B. Claims Against Sapienza and Improved Packing
Next, Notaro contends that summary judgment should not have been granted to Sapienza and Improved Packing on his breach-of-contract claims. Notaro argues that a reasonable jury could have found that Sapienza and Improved Packing breached the 2000 Agreement. He contends that the agreement gave Dependable exclusive rights to certain freight that Impac or its customers transported, including the customers identified in Schedule A to the agreement. Notaro also contends that a reasonable jury could find that Sapienza and the Impac defendants breached the 2000 Agreement by reducing, then ceasing, the referrals to Dependable, and by soliciting and doing business directly with Dependable's Schedule A customers, after IDS acquired Impac's assets.
Notaro further claims that Sapienza and Impac violated an alleged oral agreement purportedly made in 2004 by permitting IDS to acquire the Impac companies, which Notaro alleges violated the provision of the 2000 Agreement that barred Improved Packing, Sapienza and their affiliates from "owning or being affiliated with another air freight forwarder."
We are convinced that these arguments are entirely without merit. We affirm the grant of summary judgment to Sapienza and Improved Packing substantially for the reasons stated by the motion judge. As the judge explained, Sapienza and Improved Packing were only bound to paragraphs one through five of the 2000 Agreement. Thus, as the judge determined, these parties had the right to terminate the 2000 Agreement at will, after a reasonable time. Moreover, as noted previously, the court correctly found that Moses and Sapienza did not breach the agreement by failing to refer business to Dependable.
Notaro argues, however, that a reading of the entire 2000 Agreement and an April 2001 modification to that agreement shows that Sapienza and Improved Packing were bound by the entire agreement, including paragraph 16, which provides that the agreement would last "in perpetuity" or "as long as Dependable" was actively in business. We disagree. Suffice it to say, the plain language of the 2000 Agreement conclusively refutes that claim.
Notaro further argues that, even if Sapienza and Improved Packing had the right to terminate the agreement, they did not do so until August 7, 2008, and they are liable for any wrongful acts that occurred before that date. However, Notaro failed to present sufficient evidence establishing that Sapienza or Improved Packing breached any obligation owed to Dependable under the 2000 Agreement.
We are therefore convinced that the judge correctly determined that Sapienza and Improved Packing were entitled to summary judgment on Notaro's breach-of-contract claims.
C. Claim that Moses, Sapienza and Improved Packing Created a Joint Venture to Sell Dependable and Impac Together
Notaro contends that a reasonable jury could find that he, Moses, Sapienza and Improved Packing established a joint venture for the operation of Dependable and the Impac companies when they entered into the 2000 Agreement. Notaro also contends that the parties orally agreed in 2004 to create a joint venture to sell the companies together. He claims that Moses, Sapienza and the Impac defendants breached fiduciary duties allegedly owed to him and Dependable under those joint venture agreements.
A joint venture is "'an undertaking usually in a single instance to engage in a transaction of profit where the parties agree to share profits and losses.'" Wittner v. Metzger, 72 N.J. Super. 438, 444 (App. Div.) (quoting Kurth v. Maier, 133 N.J. Eq. 388, 391 (E. & A. 1943)), certif. denied, 37 N.J. 228 (1962). A joint venture ordinarily has some or all of the following elements: (1) a contribution by the parties of money, property, effort, knowledge, skill or other assets to a common undertaking; (2) a joint property interest in the subject matter of the venture; (3) a right of mutual control or management of the enterprise; (4) an expectation of profit; (5) the right to participate in profits; and (6) limitation of the objective to a single undertaking. Ibid.
To create a joint venture, the parties must agree upon essential terms because a "basic criterion" for the establishment of a joint venture is "the voluntary agreement of the parties to form a relationship with the intent to create a joint venture." Sullivan v. Jefferson, Jefferson & Vaida, 167 N.J. Super. 282, 290 (App. Div. 1979). "'The sine qua non of joint venture is a contract purposefully entered into by the parties.'" Id. at 289 (quoting Wittner, supra, 72 N.J. Super. at 443).
Although Notaro argues that the 2000 Agreement established a joint venture for the operation of the companies, the agreement does not support that contention. The agreement does not, by its terms, create a joint venture. Furthermore, the terms of that agreement make clear the parties intended to operate the companies as separate businesses.
Notaro further argues that the parties entered into an oral agreement in 2004, which established a joint venture to sell Dependable and the Impac companies together. But Notaro did not present sufficient credible evidence showing that the parties ever made such an agreement.
Notaro contends, however, that a reasonable jury, considering the six Wittner factors, could find that Moses, Sapienza and the Impac defendants agreed to create a joint venture to sell Dependable and the Impac companies together. We find no merit in this contention.
As noted, there was no agreement, written or oral, to sell the companies together. Moreover, the parties did not agree to jointly own or manage the companies. Indeed, the 2000 Agreement makes clear the parties intended to operate the companies separately. Although Moses initially tried to include Dependable in the sale, Moses and Sapienza were not legally bound to effect such a sale.
In addition, Notaro argues that the motion judge erred by deciding this issue as a matter of law, rather than permitting this issue to be submitted to a jury. However, as we have explained, Notaro failed to present sufficient evidence to support this claim. Where, as here, the evidence on a factual issue "'is so one-sided that one party must prevail as a matter of law,'" the court "should not hesitate" in granting summary judgment. Brill, supra, 142 N.J. at 540 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 2512, 91 L. Ed. 2d 202, 214 (1986)).
We conclude that the motion judge correctly determined that Moses, Sapienza and the Impac defendants were entitled to summary judgment on Notaro's joint-venture claim.
D. Claim that IDS was liable as successor to Impac
Notaro also argues that a reasonable jury could determine that IDS is the "successor in interest" to Impac and, therefore, IDS is liable for Impac's alleged breach of the 2000 Agreement. This contention is entirely without merit.
"The general rule of corporate-successor liability is that when a company sells its assets to another company, the acquiring company is not liable for the debts and liabilities of the selling company simply because it has succeeded to the ownership of the assets of the seller." Lefever v. K.P. Hovnanian Enters., Inc., 160 N.J. 307, 310 (1989).
There are, however, certain exceptions to this general rule. Arevalo v. Saginaw Mach. Sys., Inc., 344 N.J. Super. 490, 502-04 (App. Div. 2001). Notaro suggests that two exceptions apply here: "de facto merger" and "mere continuation." Courts typically consider these two exceptions together, since they "tend to overlap." Woodrick v. Jack J. Burke Real Estate, Inc., 306 N.J. Super. 61, 73 (App. Div. 1997), certif. granted sub nom., Woodrick v. Fox & Lazo, Inc., 153 N.J. 214 (1997), appeal dismissed sub nom. Woodrick v. Jack J. Burke Real Estate, Inc., 157 N.J. 537 (1998).
The record shows that in the asset sale, Impac was the selling company and IDS was the purchaser. Improved Packing was a party to the 2000 Agreement, Impac was not. Notaro did not present sufficient evidence to establish that there was a "de facto merger" of Impac and Improved Packing. Indeed, at his deposition, Notaro testified that he did not know anything about Improved Packing or what became of that company.
Furthermore, Notaro did not present sufficient evidence to establish that IDS was a "mere continuation" of Impac. Indeed, the undisputed evidence is that the ownership, officers, management and corporate structures of the entities are different. In addition, the companies had different physical locations, employees and customers.
Thus, the motion judge correctly determined that Notaro failed to present sufficient evidence to establish that IDS is liable for Impac's alleged breach of the 2000 Agreement.
E. Tortious Interference Claims
Notaro argues that the judge erred by granting summary judgment to Integrated, the IDS Group and IDS on his tortious interference claims. He argues that a reasonable jury could find that these parties tortiously interfered with his existing contracts with Moses, Sapienza and the Impac defendants. Again, we disagree.
To establish a claim for tortious interference with contractual relations, a plaintiff must prove: (1) some protectable right, specifically a prospective economic or contractual relationship; (2) interference with that right, which was done intentionally and with malice; and (3) damages resulting from the interference. Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 751 (1989). To show malice, the plaintiff must present evidence establishing that the defendants "acted intentionally and without justification." Id. at 756 (citing Levin v. Kuhn Loeb & Co., 174 N.J. Super. 560, 573 (App. Div.), certif. denied, 85 N.J. 144 (1980)).
The claim must be directed against someone who is not a party to the underlying relationship. Id. at 752; Jenkins v. Region Nine Hous. Corp., 306 N.J. Super. 258, 265 (App. Div. 1997), certif. denied, 153 N.J. 405 (1998). To prevail on the claim, there must be proof of meddling into the affairs of another. Cappiello v. Ragen Precision Indus., Inc., 192 N.J. Super. 523, 529 (App. Div. 1984).
To constitute a wrongful act for purposes of this cause of action, the defendant's conduct must transgress "generally accepted standards of common morality or of law." Lamorte Burns & Co. v. Walters, 167 N.J. 985, 306 (9001) (internal quotations and citation omitted). Moreover, a claim of tortious interference cannot lie where one has a right to engage in actions alleged to be wrongful. Kopp, Inc. v. United Techs., Inc., 993 N.J. Super. 548, 560 (App. Div. 1988).
Here, the motion judge correctly determined that the IDS defendants were not liable as a matter of law for tortious interference with Notaro's contracts. The judge noted that Notaro failed to present sufficient evidence to show that the IDS defendants intended to interfere with Moses's obligations to Dependable and Notaro, or that the IDS defendants acted with malice. The judge pointed out that IDS had recognized Moses's "continued participation in Dependable" and "expressly permitted it in [Moses's] employment agreement." The record supports the judge's conclusion.
Moreover, Notaro did not present sufficient evidence to show that the IDS defendants did anything to prevent Moses from fulfilling his contractual duties to Notaro or Dependable. Notaro also failed to establish that, by employing Moses, IDS intended to interfere with Moses's performance of those duties.
In fact, Moses's agreement with IDS provided that Moses could work for Dependable while employed by IDS so long as it did not materially interfere with his duties at IDS. Furthermore, at his deposition, Notaro testified that he was not aware of any facts showing that Moses failed to do anything he should have done for Dependable because of his employment by IDS.
Notaro also claims that IDS tortiously inferred with its contracts and prospective economic advantage by sending certain allegedly "disparaging" letters to Dependable's customers. The claim is without sufficient merit to warrant comment. R. 2:11-3(e)(1)(E).
The letters are dated January 17, 2008, and were written to Blue Cast Denim, So Sweet, Vida Shoes and Generation Footwear. The letters stated that IDS would no longer be using Dependable for trucking services for their businesses, and they would be billed directly for the services provided to them.
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Suffice it to say, however, that the record shows IDS sent the letters because Dependable had refused to pay monies it owed to IDS for services IDS had previously rendered. Thus, IDS had a legitimate business reason to send the letters and, in doing so, IDS did not tortiously interfere with Notaro's contracts or his prospective economic advantage.
We conclude that the motion judge correctly determined that the IDS defendants were entitled to judgment on Notaro's tortious interference claims.
III.
Next, Notaro argues that the trial court erred by dismissing his claims against Integrated for lack of personal jurisdiction. Again, we disagree.
New Jersey courts exercise personal jurisdiction over nonresident defendants to the extent "consistent with due process of law." R. 4:4-4(b)(1). Due process requires only that a defendant have certain minimum contacts with the forum so that maintenance of the suit does not offend "'traditional notions of fair play and substantial justice.'" Lebel v. Everglades Marina, Inc., 115 N.J. 317, 322 (1989) (quoting International Shoe Co. v. Washington, 326 U.S. 310, 316, 66 S. Ct. 154, 158, 90 L. Ed. 95, 102 (1945)).
New Jersey exercises "jurisdiction to the outermost limit of its ability to do so." Reliance Nat. Ins. Co. v. Dana Transp., 376 N.J. Super. 537, 543 (App. Div. 2005) (citing Avdel Corp. v. Mecure, 58 N.J. 264, 268 (1971)). "Critical to the due-process analysis is the question whether the defendant should reasonably anticipate being haled into court in the forum state." Waste Mgmt., Inc. v. Admiral Ins. Co., 138 N.J. 106, 120 (1994) (citing Burger King Corp. v. Rudzewicz, 471 U.S. 462, 474, 105 S. Ct. 2174, 2183, 85 L. Ed. 2d 528, 542 (1985)), cert. denied, 513 U.S. 1183, 115 S. Ct. 1175, 130 L. Ed. 2d 1128 (1995).
In determining whether a defendant's contacts with this State are sufficient to support the exercise of in personam jurisdiction, we consider whether "general or specific jurisdiction is asserted." Citibank, N.A. v. Estate of Simpson, 290 N.J. Super. 519, 526-27 (App. Div. 1996). General jurisdiction allows the forum to exercise jurisdiction over any claim against the defendant, if the defendant's activities in the forum are "'continuous and systematic.'" Lebel, supra, 115 N.J. at 323 (quoting Helicopteros Nacionales de Colombia, S.A. v. Hall, 466 U.S. 408, 416, 104 S. Ct. 1868, 1873, 80 L. Ed. 2d 404, 412 (1984)). Specific jurisdiction may be asserted when the plaintiff's cause of action "arises directly out of a defendant's contacts with the forum state." Waste Mgmt., supra, 138 N.J. at 119 (citing Lebel, supra, 115 N.J. at 322).
Notaro does not claim that New Jersey has general jurisdiction over Integrated. Indeed, there is no evidence that Integrated engaged in continuous or systematic activities in New Jersey. Rather, Notaro argues that Integrated had sufficient contacts with New Jersey to support the exercise of specific jurisdiction over the claims asserted in this case. The trial court correctly rejected this claim.
The court noted that Integrated is a Bermuda corporation headquartered in Hong Kong. It has no operations, but owns other operating companies, including the IDS Group. The court also noted that the IDS Group negotiated the agreement to acquire Impac and its affiliates. The main negotiator was Rajesh Ranavat, who was at the time an officer and director of the IDS Group. Ranavat also was an officer and director of Integrated.
However, Notaro failed to establish that in the negotiations, Ranavat was acting on behalf of Integrated rather than the IDS Group or IDS, the entity that purchased the Impac companies. Later, Benedict Chang, the Group Managing Director of the IDS Group, came to the United States and participated in the negotiations. Chang also was an officer and director of Integrated. Notaro failed to show that, in the negotiations, Chang was acting on behalf of Integrated, rather than the IDS Group.
The court determined that, while the IDS Group had engaged in purposeful activities in New Jersey, and was subject to personal jurisdiction here, Integrated was not. The court pointed out that mere ownership of an entity doing business here was not sufficient to establish jurisdiction, and Ranavat's and Chang's activities were undertaken on behalf of the IDS Group, not Integrated.
We are convinced that the record supports the court's decision. The court correctly determined that the New Jersey courts cannot exercise personal jurisdiction over Integrated. Notaro's arguments on this issue are without sufficient merit to warrant further discussion. R. 2:11-3(e)(1)(E).
Accordingly, we conclude the trial court correctly granted summary judgment in favor of Integrated.
IV.
Notaro also contends that the motion judge erred by denying his motion for a further extension of discovery. Again, we disagree.
A trial court's decision on discovery matters is reviewed under an abuse of discretion standard. Pomerantz Paper Corp. v. New Cmty. Corp., 207 N.J. 344, 371 (2011) (citing Bender v. Adelson, 187 N.J. 411, 428 (2006)). "That is, '[w]e generally defer to a trial court's disposition of discovery matters unless the court has abused its discretion or its determination is based on a mistaken understanding of the applicable law.'" Ibid. (quoting Rivers v. LSC P'ship, 378 N.J. Super. 68, 80 (App. Div.), certif. denied, 185 N.J. 296 (2005)).
Here, the trial court did not abuse its discretion by refusing to extend discovery. In June 2008, the court established May 14, 2009, as the discovery end date. In March 2009, the court extended that date to December 31, 2009. The parties therefore were afforded about two years for discovery from the inception of the case in 2007.
Notaro nevertheless maintains that the trial court erred by failing to extend the discovery period for sixty days, pursuant to Rule 4:24-1(b), after Moses filed an amended complaint that added Marchris Freight Sales and Consulting, Inc. as a defendant in his claims against Notaro. Rule 4:24-1(b) provides, "If a new party is joined, the scheduled discovery end date shall be extended for a 60-day period, unless reduced or enlarged by the court for good cause shown."
In its order denying Notaro's motion, the court noted the length of time in which the discovery had been permitted and the prior extensions to the discovery end date. The court further noted that it had informed the parties of the December discovery deadline on several occasions, and Notaro's motion had not been made returnable prior to the discovery end date, as required by Rule 4:24-1(c).
We are satisfied that the court acted within its discretion in finding that a further extension of the discovery end date was not warranted. Rule 4:24-1(b) provides for a 60-day extension of the discovery period, but allows the court to reduce or eliminate that extension for good cause. The reasons provided by the court established good cause to deny any further extension of time for discovery. Notaro's arguments to the contrary are without sufficient merit to warrant further comment. R. 2:11-3(e)(1)(E).
Accordingly, we conclude that the trial court did not err by denying Notaro's motion for a further extension of the time for discovery.
Affirmed
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION