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Rippon v. Smigel

Superior Court of New Jersey, Appellate Division

March 22, 2017

H. JAMES RIPPON, Plaintiff-Appellant,

          Argued March 13, 2017

         On appeal from Superior Court of New Jersey, Law Division, Cape May County, Docket No. L-455-15.

          Adrienne C. Rogove argued the cause for appellant (Blank Rome, LLP, attorneys; Ms. Rogove and Ethan M. Simon, of counsel and on the brief).

          Paul A. Carbon argued the cause for respondents Leroy Smigel, Esq. and Smigel, Anderson & Sacks (Margolis Edelstein, attorneys; Mr. Carbon, of counsel and on the brief; Sara E. Hoffman, on the brief).

          Lisa M. Hardy argued the cause for respondent Caylene Rippon.

          Before Judges Nugent, Haas, and Currier.

          HAAS, J.A.D.

         Plaintiff H. James Rippon appeals from the January 20, 2016 Law Division order granting motions by defendants Leroy Smigel, Esq. ("Smigel"), Smigel's law firm, Smigel, Anderson & Sacks ("firm"), and Caylene Rippon[1] to dismiss plaintiff's complaint on jurisdictional and other grounds. After reviewing the record in light of the contentions advanced on appeal, we reverse and remand for further proceedings.


         We derive the following facts from the sparse record presented on appeal. During the relevant time periods involving the matters on appeal, Smigel and his firm represented Caylene in three separate actions against plaintiff that were pending in Pennsylvania: (1) a divorce proceeding filed by plaintiff against Caylene; (2) a petition Caylene filed against plaintiff to have him declared incompetent; and (3) a protection from abuse proceeding that Caylene instituted against plaintiff. All three proceedings were highly contentious. Pursuant to a May 23, 2012 order entered in Pennsylvania, plaintiff and Caylene were directed not to have any contact with each other.[2]

         At the same time that Smigel and his firm were representing Caylene in these matters, plaintiff alleged that these two defendants were also representing a business that plaintiff and Caylene jointly owned and that in the course of that representation, they were improperly protecting only Caylene's interests.[3] On September 12, 2013, plaintiff filed suit against Smigel and his firm in Pennsylvania for breach of their fiduciary duty to him. Caylene was not a party to this litigation.

         In the "background facts" section of plaintiff's complaint, he listed nine examples of instances where Smigel and his firm allegedly had taken "positions adverse to" him on behalf of Caylene. As one of these examples, plaintiff stated that "Smigel and his firm, on behalf of Caylene, have attempted to thwart the purchase of a property in Stone Harbor, " New Jersey by plaintiff.[4]

         On June 6, 2014, plaintiff and Caylene entered into an "Interim Joint Stipulation" in their divorce proceeding. Among other things, plaintiff agreed to convey all of his interest in KLE to Caylene. Plaintiff also agreed to "withdraw with prejudice" the lawsuit he had filed against Smigel and his firm for breach of fiduciary duty.[5] In return, Caylene agreed to withdraw her petition to have plaintiff declared incompetent and the protection from abuse proceeding she had previously instituted against him.

         Under the terms of the stipulation, plaintiff was also required to transfer ownership of a house the parties owned in Stone Harbor to Caylene. Caylene had been living in this house, at least part-time, during the pendency of the parties' divorce action. However, Caylene allegedly used the Stone Harbor house as her primary residence after June 2014.

         On September 16, 2015, plaintiff filed a five-count complaint in the Law Division, Cape May County, against Smigel, Smigel's firm, and Caylene for tortious interference with contractual relations (count one); interference with prospective contractual relations (count two); defamation (count three); and violation of the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 to -20 (count four). In addition, plaintiff alleged in count five that Smigel had engaged in the unauthorized practice of law in New Jersey.

         In his complaint, plaintiff asserted that on July 31, 2013, he entered into an agreement to purchase a property in Stone Harbor for himself. He paid a $500, 000 deposit to the seller, which was a New Jersey limited liability company, and planned to finance the balance of the purchase price. The agreement did not contain a mortgage contingency.

         However, the agreement was contingent upon plaintiff "be[ing] able to obtain title insurance on the [p]roperty from a title insurance company authorized to do business in the State of New Jersey." The agreement also provided that "in the event [b]uyer fails to close as set forth herein, the amount of damages sustained by [s]eller will be substantial but hard to calculate. Therefore, the parties agree that the deposit represents a fair and true calculation of damages and same shall be forfeited as set forth herein."

         The complaint asserts that on September 19, 2013, seven days after plaintiff had filed his breach of fiduciary duty action in Pennsylvania against Smigel and his firm, Smigel faxed a letter on Caylene's behalf to RBS Citizens, N.A., of Providence, Rhode Island; Sturdy Savings Bank of Stone Harbor; and Title Alliance of Cape May County, a Stone Harbor title company. The letter stated:

Please be advised that our firm represents Caylene Rippon in her divorce action against [plaintiff]. It has recently come to our attention that [plaintiff] is attempting to obtain a mortgage to finance a home in Stone Harbor, NJ. It is important that all the entities connected with this transaction be aware of the following:
1. There is currently pending in the Court of Common Pleas of Dauphin County, PA, an action for support against [plaintiff] which will drastically change the income that [plaintiff] listed in his loan documents.... [Plaintiff] indicates that his income is only $207, 360 after taxes. (Please see the enclosed income statement submitted by [plaintiff]).
2. The funds being used to secure this mortgage and establish credit are marital assets in which [Caylene] has an equitable interest. Therefore, [Caylene] would have an equitable interest in the title of the house that [plaintiff] is attempting to purchase. Should [plaintiff] go default, [Caylene] will not be held liable and will seek to enforce her equitable interest. . . . There is also a Protection from Abuse action filed against [plaintiff] . . . This Order requires [plaintiff] to stay [100 feet] away from [Caylene] who resides in Stone Harbor, NJ.
3. [Caylene] objects to the use of the joint marital assets to secure the mortgage financed by Sturdy Savings Bank. It would further be noted that [Caylene] will use all equitable means at her disposal to protect the joint marital assets until the conclusion of the divorce.
We understand fully that it is possible that [plaintiff] did not disclose these items to you when attempting to secure his mortgage; however, you are now on notice and we urge you to take the appropriate action as [Caylene] will use all legal and equitable means at her disposal to protect the joint marital assets.
If you have any questions or comments, please do not hesitate to contact me.

         In his September 16, 2015 complaint in the Law Division, plaintiff alleged that Smigel's statements on Caylene's behalf were "untrue" and defamatory. Plaintiff asserted that after the three companies received Smigel's letter, the banks refused to finance plaintiff's proposed purchase of the home and he was unable to obtain other financing. Plaintiff contacted the seller to advise that he could not purchase the home and the seller replied that it was going to keep the $500, 000 deposit based on plaintiff's breach of the agreement. The seller later agreed to return, and plaintiff agreed to accept, $250, 000 of the deposit in order to settle the dispute.

         Caylene responded to plaintiff's complaint by filing a motion to dismiss for failure to state a claim and for lack of jurisdiction. Smigel and his firm filed a motion to dismiss for failure to state a claim, lack of jurisdiction, and on grounds of forum non conveniens. Smigel and his firm also asserted that plaintiff's claims against them were barred by the doctrine of res judicata based upon plaintiff's prior voluntary dismissal of his breach of fiduciary duty complaint in Pennsylvania.

         In support of Smigel and his firm's claim that New Jersey lacked jurisdiction over them, Smigel submitted a certification stating that: (1) his firm was "located in Pennsylvania and does not have any offices in New Jersey"; (2) he did not live in New Jersey and did not own any property in this state; (3) the firm did not advertise in New Jersey; and (4) the firm did "not regularly provide legal services or perform other transactions in New Jersey." (emphasis added).

         Following oral argument, the trial judge rendered a written decision on January 20, 2016, dismissing plaintiff's complaint against all three defendants with prejudice.[6] With regard to the question of jurisdiction, the judge stated that Caylene was a New Jersey resident. Although the judge did not specifically make a finding that Caylene's resident status meant that New Jersey had jurisdiction over her, we have assumed he meant to do so for purposes of this opinion.

         However, the trial judge found that New Jersey had "neither general nor personal jurisdiction" over Smigel or ...

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