NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argue May 7, 2013.
On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-3484-10.
Philip B. Vinick argued the cause for appellant.
Christopher J. Carey argued the cause for respondents (Graham Curtin, attorneys; Mr. Carey, of counsel and on the brief; David M. Blackwell, on the brief).
Before Judges Messano and Ostrer.
Plaintiff, Joseph DiFalco, appeals from the Law Division's order of June 29, 2012, that dismissed with prejudice his complaint against defendants Joseph R. Merlino, Jr., and his law firm, Merlino and Gonzalez (collectively, the Merlino defendants). The order reflects the judge's determination that plaintiff "fail[ed] to join indispensable parties" and "fail[ed] to comply with the entire controversy doctrine [(ECD)]." We set forth the procedural history at length because it is critical to our consideration of the issues presented on appeal.
I. The Hodgson Action
In October of 2009, represented by Lenore M. Kasperowicz, plaintiff filed a complaint against Hodgson Holding, LLC; Sabrina Hodgson, Inc.; Antoinette Hodgson and Sabrina Hodgson. In December of 2009, plaintiff filed an amended complaint adding Thomas Hodgson and his wife as defendants (collectively, the Hodgson defendants). Plaintiff alleged defendants failed to repay various loans and lines of credit which were secured by mortgages on several properties.
In the third count of the amended complaint, plaintiff alleged that Antoinette and Thomas had executed a mortgage for property located at 33 North Willow Street, Montclair (the Willow Street property) to secure a $400, 000 loan. Plaintiff prepared a discharge of that mortgage based upon alleged representations that it would be replaced with a mortgage on other property. Plaintiff further contended that, even though the discharge was recorded, the Hodgson defendants never filed a substitute mortgage.
Kasperowicz's Rule 4:5-1 certification in the amended complaint stated that "the matter in controversy is not the subject of any pending litigation . . . . Additionally, the undersigned is unaware of any additional parties which should be joined in this matter." The certification continued, "I recognize the continuing obligation of each party to file and serve . . . an amended certification if there is a change in the facts stated . . . ." The Hodgson defendants filed an Answer to the amended complaint in February 2010. In January of 2011, plaintiff's current counsel, Philip B. Vinick, filed a substitution of attorney and succeeded Kasperowicz.
Meanwhile, on December 9, 2010, judgment was entered against Antoinette in federal court for the Southern District of New York in connection with her guilty pleas to wire fraud and conspiracy to commit wire fraud. Antoinette was sentenced to seventy-two months in prison; the amount of restitution set forth in the judgment of conviction was "TBD." On March 17, 2011, the judgment was amended to reflect restitution in the amount of $22, 978, 739.01. Along with dozens of other names, plaintiff's name appeared on the "Restitution List, " along with an amount, i.e., $2 million.
In March and June 2011, plaintiff moved for and obtained summary judgments against the Hodgson defendants. On August 1, 2011, Thomas filed a voluntary petition in bankruptcy. The petition identified plaintiff as having a $400, 000 unsecured non-priority claim. Thomas also identified the litigation, and other litigation plaintiff instituted against him, in the petition. Sabrina filed a voluntary petition in bankruptcy on September 15, 2011, identifying plaintiff as a creditor. Sabrina also ...