BEVERLY HILLS MOTORING, INC. et al v. MORICI et al

Filing 59

OPINION/ORDER granting 31 Motion to Dismiss ; granting in part and denying in part 32 Motion to Dismiss; that the First, Second, Third, Fourth, and Fifth Counts of Todd Moricis and Morici Motor Sports, LLCs third-party complaints against Collec tible Exotic Motor Car, LLC and Thomas E. Johnson are DISMISSED; that Morici Motor Sports, LLCs Sixth Count against Thomas E. Johnson is DISMISSED, but that Todd Moricis Sixth Count against Thomas E. Johnson remains. Signed by Judge Faith S. Hochberg on 1/20/15. (DD, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY
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: Civil Case No. 14-756 (FSH)
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: OPINION & ORDER
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: Date: January 20, 2015
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BEVERLY HILLS MOTORING, INC. and
MILESTONE MOTORCARS LLC,
Plaintiffs,
v.
TODD MORICI and
MORICI MOTOR SPORTS LLC,
Defendants.

HOCHBERG, District Judge:
This matter comes before the Court upon Third-Party Defendant Collectible Exotic
Motor Cars, LLC’s (“Collectible”) and Third-Party Defendant Thomas E. Johnson’s (“Johnson”)
motions to dismiss Todd Morici (“Morici”) and Morici Motor Sports, LLC’s (“MMS”) thirdparty complaint pursuant to Federal Rule of Civil Procedure 12(b)(6). The Court has reviewed
the submissions of the parties and considers the motion pursuant to Federal Rule of Civil
Procedure 78.
I.

BACKGROUND

Morici and MMS’s third-party complaint alleges the following facts. In February 2013,
Johnson told Morici about a 1967 275GTB Ferrari (“the Ferrari”) for sale in New Jersey by a
person named Robert Zweiben (“Zweiben”). After inspecting the Ferrari, Morici purchased it
from Zweiben and paid Johnson a $10,000 commission.

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Johnson subsequently told Morici that he had a potential buyer for the Ferrari named Roy
Broad (“Broad”). Morici quoted a price and told Johnson that if the Ferrari was sold to Broad
within one week at that price, then MMS would pay Johnson a commission of $25,000. Morici
told Johnson that his ownership of the Ferrari was confidential and that he did not want it
“shopped” to any potential buyer other than Broad. Johnson agreed to Morici’s terms. Neither
Morici nor MMS agreed to pay Johnson a commission on any other future sale of the Ferrari.
Broad did not purchase the Ferrari.
Around April 2013, Collectible, acting through an agent named Andrew Cohen
(“Cohen”), 1 approached Morici to discuss purchasing the Ferrari. Cohen asked for a commission
of $100,000 if the Ferrari could be sold for $1.6 million. Morici agreed, on the condition that
Cohen would not also receive a commission from Collectible.
On May 8, 2013, Cohen traveled to New Jersey to inspect the Ferrari. At that time, Cohen
asked Morici for a signed statement that Cohen would be paid a $100,000 commission on
consummation of the sale to Collectible. Morici wrote an email stating such to Cohen, then
printed and signed the email (the “Commission Agreement”), which Morici handed to Cohen.
When Cohen admitted to Morici that Collectible would also be paying Cohen a commission on
the proposed sale, Morici threatened to cease discussions unless Cohen agreed that MMS would
not owe Cohen a commission and returned the Commission Agreement. Cohen agreed, and
Morici crumpled up the Commission Agreement and threw it into a trashcan. Later, when Morici
was out of the room, Cohen retrieved the Commission Agreement from the trashcan without
Morici’s knowledge. Later that day, Cohen signed a contract on behalf of Collectible purchasing
the Ferrari (the “Sales Agreement”).

1

Cohen is a Plaintiff in this matter.
2

On March 8, 2014, Johnson told Brandon Lawrence of Sportscar Italiano that Morici was
“a bad guy,” had “screwed him out of a commission,” and that Morici’s “word was not good.”
II.

STANDARD OF REVIEW

“To survive a motion to dismiss, a complaint must contain sufficient factual matter,
accepted as true, to ‘state a claim to relief that is plausible on its face.’” Ashcroft v. Iqbal, 129 S.
Ct. 1937, 1949 (2009) (quoting Bell Atl. Corp. v. Twombly, 550 U.S. 544, 570 (2007)); see also
Phillips v. County of Allegheny, 515 F.3d 224, 234 (3d Cir. 2008) (“[S]tating . . . a claim requires
a complaint with enough factual matter (taken as true) to suggest the required element. This does
not impose a probability requirement at the pleading stage, but instead simply calls for enough
facts to raise a reasonable expectation that discovery will reveal evidence of the necessary
element.” (citations omitted)).
When considering a motion to dismiss under Iqbal, the Court must conduct a two-part
analysis. “First, the factual and legal elements of a claim should be separated. The District Court
must accept all of the complaint’s well-pleaded facts as true, but may disregard any legal
conclusions. Second, a District Court must then determine whether the facts alleged in the
complaint are sufficient to show that the plaintiff has a plausible claim for relief.” Fowler v.
UPMC Shadyside, 578 F.3d 203, 210–11 (3d Cir. 2009) (citations omitted). “A pleading that
offers labels and conclusions or a formulaic recitation of the elements of a cause of action will
not do. Nor does a complaint suffice if it tenders naked assertions devoid of further factual
enhancement.” Iqbal, 129 S. Ct. at 1949 (citations omitted).
Under Federal Rule of Civil Procedure 9(b), “[i]n alleging fraud or mistake, a party must
state with particularity the circumstances constituting fraud or mistake. Malice, intent,
knowledge, and other conditions of a person’s mind may be alleged generally.” Rule 9(b)

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requires plaintiffs to “plead with particularity the ‘circumstances’ of the alleged fraud in order to
place the defendants on notice of the precise misconduct with which they are charged, and to
safeguard defendants against spurious charges of immoral and fraudulent behavior.” Seville
Indus. Machinery Corp. v. Southmost Machinery Corp., 742 F.2d 786, 791 (3d Cir. 1984), cert.
denied, 469 U.S. 1211 (1985). To satisfy the pleading requirement, plaintiffs may plead the
specific conduct alleged to be fraudulent along with the “date, place or time” that the alleged
fraud occurred or use some “alternative means of injecting precision and some measure of
substantiation into their allegations of fraud.” Id. Vague or conclusory allegations of fraud will
not survive a motion to dismiss. In re Burlington Coat Factory Sec. Litig., 114 F.3d 1410, 1418
(3d Cir. 1997).
III.

DISCUSSION

Collectible has moved to dismiss Morici and MMS’s claims for fraud (First Count),
breach of contract (Third Count), breach of implied covenant of good faith and fair dealing
(Second Count), and for attorneys’ fees (Fourth Count). Johnson has moved to dismiss Morici
and MMS’s claims for tortious interference with prospective economic relations (Fifth Count)
and defamation (Sixth Count).
a. First Count: Fraud
Third-Party Plaintiffs assert a fraud claim against Collectible over the execution of the
Sales and Commission Agreements. “To state a claim for fraud under New Jersey law, a plaintiff
must allege (1) a material misrepresentation of fact; (2) knowledge or belief of its falsity; (3)
intention that the other person rely on it; (4) reasonable reliance thereon by the other person; and
(5) resulting damage.” Frederico v. Home Depot, 507 F.3d 188, 200 (3d Cir. 2007) (citing
Gennari v. Weichert Co. Realtors, 691 A.2d 350, 367–68 (1997)). Although “conditions of mind

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. . . may be averred generally,” Federal Rule of Civil Procedure 9(b) applies a stringent pleading
standard to fraud claims such that “the circumstances constituting fraud or mistake shall be stated
with particularity.” To meet this standard, a plaintiff “must plead or allege the date, time, and
place of the alleged fraud or otherwise inject precision or some measure of substantiation into a
fraud allegation.” Frederico, 507 F.3d at 200.
Although Third-Party Plaintiffs allege that Cohen acted deceitfully—in misrepresenting
that Collectible would be paying Cohen a commission and in retrieving the Commission
Agreement from the trashcan—Third-Party Plaintiffs’ claim for fraud fails because the complaint
fails to allege any damage or harm resulting from a reliance on Cohen’s alleged
misrepresentations. The complaint states only that Third-Party Plaintiffs “suffered economic and
other injury.” (Dkt. No. 24 ¶ 21.) The complaint does not allege particular facts in support of this
conclusion—it does not allege, for example, that Third-Party Plaintiffs were induced to pay a
doubled commission as a result of Cohen’s deceit, nor does it allege that Third-Party Plaintiffs
were, in any way, disadvantaged by the Sales Agreement. Third-Party Plaintiffs’ bare and
conclusory recitation of the legal element of harm fails to satisfy the pleading requirements of
Twombly/Iqbal, let alone Federal Rule of Civil Procedure 9(b). See, e.g., White v. Brommer, 747
F. sup. 2d 447, 466 (E.D. Penn. 2010) (dismissing tort claim because “conclusory recitation” of
element of harm, without pled facts, failed to meet Twombly standard); Yost v. General Motors
Corp., 651 F. Supp. 656, 658 (D.N.J. 1998) (dismissing fraud claim because “plaintiff fails to
plead facts to show that he relied to his detriment on any such representations”).
b. Third Count: Breach of Contract
Third-Party Plaintiffs assert that Cohen’s actions constitute a breach of the Sales
Agreement between Collectible and Third-Party Plaintiffs. The elements of a breach of contract

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claim under New Jersey law are that: (1) a valid contract exists; (2) the defendant materially
breached the contract; and (3) the plaintiff suffered damages as a result of the breach. Fletcher–
Harlee Corp. v. Pote Concrete Contractors, Inc., 421 F. Supp. 2d 831, 833 (D.N.J.
2006) (citing Coyle v. Englander’s, 488 A.2d 1083, 1088–89 (N.J. Super. Ct. App. Div. 1985)).
Third-Party Plaintiffs’ complaint fails to allege any damage suffered as a result of the
alleged breach beyond a conclusory recitation that Third-Party Plaintiffs have “suffered
economic and other injury.” (Dkt. No. 24 ¶ 28.) As above, this bare statement does not meet the
federal pleading requirements.
c. Second Count: Breach of Implied Covenant of Good Faith
Third-Party Plaintiffs also assert a claim against Collectible for breach of the implied
covenant of good faith and fair dealing. “[E]very contract in New Jersey contains an implied
covenant of good faith and fair dealing.” Kalogeras v. 239 Broad Ave., LLC, 997 A.2d 943, 953
(N.J. 2010) (quoting Sons of Thunder v. Borden, Inc., 690 A.2d 575, 587 (N.J. 1997)). 2 New
Jersey generally recognizes a breach of the implied covenant of good faith and fair dealing claim
in three circumstances: (1) to rectify a party’s unfair exercise of discretion; (2) to redress a
party’s bad-faith performance; and (3) to include additional terms not expressly part of the
contract but consistent with the parties’ expectations. Seidenberg v. Summit Bank, 791 A.2d
1068, 1076 (N.J. Super. Ct. App. Div. 2002).
Third-Party Plaintiffs’ complaint fails to state sufficient facts to situate their claim within
one of these broad buckets. Indeed, the complaint only suggests one expectation of performance
2

The complaint asserts the implied covenant claim “in connection with the sale of the subject
car.” (Dkt. No. 24 ¶¶ 24–25.) Such phrasing does not clearly indicate whether the Third-Party
Plaintiffs intend to assert that implied covenant allegedly breached was that of the Sales
Agreement or the Commission Agreement. Because this Court’s reasoning above applies in
either instance—and applies even if the Court were to read the implied covenant claim as a
standalone claim as some New Jersey courts have done—the Court need not attempt to discern
Third-Party Plaintiffs’ intent from this inartful wording.
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for Collectible under the Sales Agreement: Collectible was to pay Third-Party Plaintiffs $1.6
million (Third-Party Plaintiffs’ own asking price) in exchange for the Ferrari. As far as an
implied additional term, the only such term to which the complaint hints is that the parties
expected that Cohen would only receive one commission—from either Collectible or Third-Party
Plaintiffs. 3 This term may be read into the allegations that Morici repeatedly refused to negotiate
the sale or commission with Cohen unless Cohen agreed that Cohen would not receive a
commission from Third-Party Plaintiffs if he would also receive a commission from Collectible.
(Dkt. No. 21 ¶¶ 13, 16.) Nonetheless, the complaint only alleges that Cohen attempted to procure
a second commission on the sale; the complaint clearly indicates that Third-Party Plaintiffs never
paid Cohen a commission and alleges instead that Morici did not realize that Cohen intended to
collect on the trashed Commission Agreement until Cohen initiated this lawsuit. (Dkt. No. 21
¶ 17.) In other words, even were Third-Party Plaintiffs to establish through discovery that such
an implied term was intended by the parties, the complaint itself alleges that the term was not
breached.
Stated another way, the implied covenant of good faith and fair dealing presumes 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.” Kalogeras, 997 A.2d at 953 (quoting
Palisades Properties, Inc. v. Brunetti, 207 A.2d 522, 531 (1965)). The complaint puts forward no

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Such a reading of the complaint requires accepting Third-Party Plaintiffs’ contentions that
Cohen’s alleged deceits in procuring the Commission Agreement impute to Collectible under the
law of agency. Because Third-Party Plaintiffs’ implied covenant claim fails for the separate
reasons stated above, the Court need not consider this highly fact-specific inquiry at this an early
stage in the litigation.
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allegations that would allow a plausible inference that Third-Party Plaintiffs were denied “the
fruits of the contract”—namely, a $1.6 million payment in exchange for the Ferrari. 4
d. Fourth Count: Attorneys’ Fees
Because the Court finds that Third-Party Plaintiffs have failed to state a claim against
Collectible, the Court denies their request for attorneys’ fees from Collectible.
e. Fifth Count: Tortious Interference with Prospective Economic Relations
Third-Party Plaintiffs assert that Johnson’s statements to Lawrence constitute tortious
interference with prospective economic relations. Under New Jersey law, a claim for tortious
interference with prospective economic relations requires that the plaintiff establish: (1) a
reasonable expectation of economic advantage; (2) that economic advantage was lost as a direct
result of defendant’s malicious interference; and (3) plaintiff suffered damages. Lamorte Burns
& Co. v. Walters, 770 A.2d 1158, 1170 (N.J. 2001).
Third-Party Plaintiffs’ complaint fails to allege a reasonable expectation of economic
advantage. The complaint alleges that Johnson’s statements to Lawrence will “interfere with and
harm Morici’s business relation with Brandon Lawrence and his company, Sportscar Italiano,”
but the complaint proffers no more specific allegation of expected economic advantage. The
complaint does not, for example, allege that Morici was in business negotiations with Lawrence
or Sportscar Italiano or even that Morici had discussed a possible deal with Lawrence or
Sportscar Italiano. Instead, Third-Party Plaintiffs contend that a reasonable expectation of
economic advantage exists because it may be presumed that two parties within a relatively niche
market—here, the dealing of classic cars—may be presumed to engage in business relations at
some undefined future time. Such a presumption is far too attenuated to be a “reasonable”
4

Indeed, Collectible asserts in its motion papers that, in accordance with the Sales Agreement,
Collectible paid Third-Party Plaintiffs their asking price of $1.6 million.
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expectation of economic advantage. Third-Party Plaintiffs provide the Court no cases in which
courts have sustained a similar claim on analogously attenuated presumptions, and indeed, as
Johnson argues in his motion briefing, the cases that Third-Party Plaintiffs did cite concern
specific, contemplated business deals. See Harris v. Perl, 197 A.2d 359, 464 (N.J. 1964); Louis
Kamm, Inc., v. Flink, 175 A. 62, 69–70 (N.J. 1934); Leslie Blau Co. v. Alfieri, 384 A2d 859,
864–65 (N.J. Super. Ct. App. Div. 1978); Myers v. Arcadio, Inc., 180 A2d 329, 331 (N.J. Super.
Ct. App. Div. 1962); Sustick v. Slatina, 137 A.2d 54, 57–58 (N.J. Super. Ct. App. Div. 1957);
McCue v. Deppert, 91 A.2d 503, 504–505 (N.J. Super. Ct. App. Div. 1952).
f. Sixth Count: Defamation
Third-Party Plaintiffs also assert a claim against Johnson for defamation. Third-Party
Plaintiffs’ complaint, however, only alleges defamatory statements made by Johnson about
Morici. (Dkt. No. 21 ¶ 19.) Because the complaint fails to allege that Johnson made defamatory
statements about MMS, MMS has failed to state a claim for defamation. The remaining
paragraphs of this subsection deal only with Morici’s claim for defamation.
A New Jersey claim for defamation consists of the following elements: “(1) the assertion
of a false and defamatory statement concerning another; (2) the unprivileged publication of that
statement to a third party; and (3) fault amounting at least to negligence by the publisher.” Leang
v. Jersey City Bd. of Educ., 969 A.2d 1097, 1113 (N.J. 2009) (citations omitted). “A defamatory
statement, generally, is one that subjects an individual to contempt or ridicule, one that harms a
person’s reputation by lowering the community’s estimation of him or by deterring others from
wanting to associate or deal with him.” G.D. v. Kenny, 15 A.3d 300, 310 (N.J. 2011) (citations
omitted).

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Whether a statement is defamatory, however, depends on “its content, verifiability, and
context.” Lynch v. N.J. Educ. Assoc., 735 A.2d 1129, 1136 (N.J. 1999). The statement must be
one of fact able to be proven true or false. Id. at 1137. Statements of pure opinion do not satisfy
this requirement because such statements only “reflect a state of mind” and, therefore, generally
“cannot be proved true or false.” Id. For example, stating a person “was dishonest and lacking in
integrity” is an opinion that is generally not subject to verification. Gulrajaney v. Petricha, 885
A.2d 496, 503–504 (N.J. Super. Ct. App. Div. 2005). Similarly, here, Johnson’s statements that
Morici “was a bad guy” and that Morici’s “word was not good” are statements of opinion that
are not actionable under New Jersey defamation law.
Allegedly defamatory statements of “mixed opinion,” on the other hand, may be
actionable. A “mixed opinion” is one that is “apparently based on facts about the plaintiff or his
conduct that have neither been stated by the defendant nor assumed to exist by the parties to the
communication.” Kotlikoff v. The Comty. News, 444 A.2d 1086, 1089 (1982). Such a mixed
opinion statement that implies “reasonably specific assertions” of “underlying objective facts
that are false” may be actionable. Ward v. Zelikovsky, 643 A.2d 972, 979 (N.J. 1994). For
example, a defendant’s alleged statement that the plaintiff “cooked the books” was found
actionable because underlying the statement were facts—“specifically alleged and with sufficient
evidence” and “capable of being proven objectively false”—that the plaintiff engaged in
financial improprieties. See Mangan v. Corp. Synergies Grp., 834 F. Supp. 2d 199, 204–205
(D.N.J. 2011). Johnson’s alleged statement that Morici “screwed him out of a commission” may
be a similar and actionable statement of mixed opinion. The complaint alleges that Morici did
not pay Johnson a commission on an earlier proposed sale because the sale was not
consummated within one week, as Morici and Johnson agreed.

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Johnson contends that Morici fails to state a claim for defamation because the complaint
does not adequately allege fault, the third element of defamation laid out above. The Supreme
Court requires some showing of fault for a defamation claim. Gertz v. Robert Welch, Inc., 418
U.S. 323, 347 (1974); see also Steaks Unlimited, Inc. v. Deaner, 623 F.2d 264, 272 (3d Cir.
1980) (“[The] First Amendment forbids states to impose liability [for defamation] without
fault.”). When the plaintiff is a private person, he or she need show only that the defendant was
negligent. McLaughlin v. Rosanio, Bailets & Talamo, Inc., 751 A.2d 1066, 1072 (N.J. Super. Ct.
App. Div. 2000); see also Feggans v. Billington, 677 A.2d 771, 775 (N.J. Super. Ct. App. Div.
1996) (requiring a showing that defendant negligently failed “to ascertain the truth or falsity of
the statement before communicating it”). Johnson contends that Morici’s complaint fails to plead
fault because Johnson was not, in fact, paid a commission by Morici and it was Johnson’s own
opinion that this was a result of Morici “screw[ing]” Johnson. As described above, however, the
complaint alleges that Morici did not pay Johnson a commission on the sale of the Ferrari
because the conditions of that sale to which Johnson agreed—that it be consummated within one
week to Broad—were not met, an allegation which, if proven true, may be sufficient to establish
Morici’s defamation claim. 5

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Johnson also argues that Morici’s defamation claim should be dismissed because Johnson has a
qualified privilege. An otherwise defamatory statement may be found to be privileged based on
“(1) the appropriateness of the occasion on which the defamatory information is published, (2)
the legitimacy of the interest thereby sought to be protected or promoted, and (3) the pertinence
of the receipt of that information by the recipient.” Bainhauer v. Manoukian, 520 A.2d 1154,
1169–70 (N.J. Super. Ct. App. Div. 1987). The complaint does not allege facts specific to the
“appropriateness of the occasion” and, as to the second and third elements, alleges only that the
recipient of the allegedly defamatory statements, Brandon Lawrence, was also in the classic car
market. Although it may be likely that Johnson is protected by a qualified privilege, the few facts
alleged in the complaint are not enough to find Johnson’s asserted defense apparent on the face
of the complaint and dismiss Morici’s claim.
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IV.

CONCLUSION & ORDER

For the reasons stated above,
IT IS on this 20th day of January, 2015,
ORDERED that Collectible Exotic Motor Car, LLC’s motion to dismiss (Dkt. No. 31) is
GRANTED; and it is further
ORDERED that Thomas E. Johnson’s motion to dismiss (Dkt. No. 32) is GRANTED
IN PART AND DENIED IN PART; and it is further
ORDERED that the First, Second, Third, Fourth, and Fifth Counts of Todd Morici’s and
Morici Motor Sports, LLC’s third-party complaints against Collectible Exotic Motor Car, LLC
and Thomas E. Johnson are DISMISSED; and it is further
ORDERED that Morici Motor Sports, LLC’s Sixth Count against Thomas E. Johnson is
DISMISSED, but that Todd Morici’s Sixth Count against Thomas E. Johnson remains.

IT IS SO ORDERED.

/s/ Hon. Faith S. Hochberg
Hon. Faith S. Hochberg, U.S.D.J.

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