On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-3955-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Parker, Yannotti and LeWinn.
Plaintiffs David Grippi, Robert Bier and Thomas Martino appeal from orders entered by Judge John Mullaney on January 2 and 4, 2008, dismissing plaintiffs' claims against defendants Anthony Spalliero (Spalliero), Dominica Spalliero Russo (Russo), and Joseph Spalliero (J. Spalliero).*fn2 For the reasons that follow, we affirm.
In 1995, plaintiffs and other parties filed an action in the Law Division in which they alleged that they were shareholders of Marlboro, an entity incorporated by Spalliero and Abraham M. Penzer (Penzer). Plaintiffs alleged that in March 1990, Marlboro entered into an agreement with a joint venture called Herraxx Associates (Herraxx) for the purchase of about twenty-one acres of land along Routes 9 and 520 in Monmouth and Middlesex Counties.
According to the complaint, Marlboro intended to construct a movie theater, recreation center, bowling center, restaurant, bank and other structures on the site. Plaintiffs alleged that Herraxx had represented and warranted that it had no knowledge of any fact or circumstance that would interfere with the anticipated development of the property. In May 1990, Marlboro received final major site plan approval for the development of the site.
Plaintiffs further alleged that Herraxx had previously applied to the U.S. Army Corps of Engineers for a wetlands construction permit and had been directed to submit plans to the New Jersey Department of Environmental Protection (NJDEP) to determine the extent of the wetlands on the site and to obtain authorization for construction of the proposed improvements. According to plaintiffs, the NJDEP only authorized Herraxx to disturb .27 acres of freshwater wetlands on the property for the construction of a sewer line.
Plaintiffs alleged that Marlboro first became aware that there were freshwater wetlands on the site in April 1990. In May 1990, Marlboro commenced construction by dredging and filling the property. In July 1990, the Army Corps issued a letter to Spalliero, who was then Marlboro's president, stating that approximately eight acres of protected wetlands on the property had been cleared and filled without authorization. Even so, on August 21, 1990, Marlboro closed on the purchase of the property and Herraxx transferred title to Marlboro.
Plaintiffs asserted that in November 1990, the NJDEP issued a notice of violation and instructed Marlboro to cease and desist from any further construction on the property. In February 1991, the Army Corps advised Marlboro that about nine acres of wetlands had been impermissibly destroyed and ordered Marlboro to restore the property to its original condition.
Plaintiffs alleged that Marlboro was faced with the cost of restoring the wetlands as well as extensive fines and penalties. In July and August 1990, Spalliero and Penzer solicited investments in Marlboro from plaintiffs. Plaintiffs claimed that Spalliero and Penzer represented to them that Marlboro was constructing various improvements on the property and that the site was suitable for these purposes.
Plaintiffs further alleged that Spalliero and Penzer failed to inform them that there were wetlands on the property or that the presence of wetlands would have an effect on the proposed construction and development of the property. They also claimed that Spalliero and Penzer never told them that Marlboro had been cited for the "wetlands violations" and ordered to restore the property to its original condition. Plaintiffs stated that after they invested "hundreds of thousands of dollars" in Marlboro, they learned about the "wetlands problem" on the property.
Based on these allegations, plaintiffs asserted claims against Marlboro for breach of contract, negligence, fraud, and breach of the covenants of good faith and fair dealing. They asserted claims against Spalliero and Penzer for breach of contract, negligence, breach of the covenants of good faith and fair dealing and breach of fiduciary duty. Plaintiffs additionally asserted claims against Spalliero for fraud and conversion; and a claim against Penzer for legal malpractice. Claims also were asserted against professional engineers Edward A. Patalano and Edward A. Patalano Associates, Herraxx, Herrican Development, Ltd., XAX Group, Inc., Continental Insurance Company, Diraje Corp., and Green Meadows Holdings, L.L.C.
Plaintiffs agreed to settle their claims against Spalliero and Penzer. On March 13, 2000, the settlement was placed on the record before Judge Paul Chaiet. Spalliero and Penzer agreed to provide plaintiffs with cash or services in the total amount of $300,000. Plaintiffs, Spalliero and Penzer agreed that, upon full payment, the "standard releases" would be signed and exchanged. They further agreed that the terms of the settlement would remain confidential.
In court, plaintiffs, Spalliero and Penzer were sworn and they stated on the record that they agreed to the terms of the settlement. They also stated that they had not been forced to enter into the settlement and they were satisfied with the efforts of their attorneys. The record of the settlement was sealed. Thereafter, the plaintiffs provided releases to Spalliero and Penzer.
B. The Complaint in this Matter
This action was commenced on September 6, 2005. In their complaint, plaintiffs noted that the prior litigation had been settled. They also stated that United Jersey Bank (UJB) had filed an action to foreclose on a note, Spalliero's personal guaranty and a mortgage on the property. On October 3, 1995, UJB had assigned its rights under the note, guaranty and mortgage to SED.
Plaintiffs alleged that, at the time of that assignment, Spalliero agreed that he would not bid on the property at the foreclosure sale and he would cooperate in the development of the property. Plaintiffs further alleged that they had agreed to the settlement of the prior litigation based upon representations made both on the record and off the record that Spalliero "no longer maintained, and would not maintain, any interest, directly or indirectly, in the [p]roperty."
Plaintiffs claimed that Spalliero had "maintained, either directly or indirectly" an interest in the property through Marlboro, SED and Marlboro 9/520 "prior to and since the time the settlement was reached." Plaintiffs also claimed that Spalliero had transferred real and personal property and other assets to the other defendants. Plaintiffs alleged that Spalliero did so with the intent to delay, hinder and defraud plaintiffs.
Plaintiffs sought, among other things, an order vacating the settlement of the prior litigation, restoration of the complaint in the previous action, a declaration voiding the alleged fraudulent transfers of property, restraints against the further ...