READ v. PROFETA et al
OPINION. Signed by Judge Kevin McNulty on 5/29/2019. (ld, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
Civ. No. l5-02637-KM-JBC
PAUL PROFETA; PAUL V. PROFETA &
ASSOCIATES; RADIUS: BRICK CITY &
BEYOND; STEVEN COLEMAN; and
KEVIN MCNULTY. U.S.D.J.:
Introduction and Summary
This matter arises from plaintiff Philip Read’s idea for a magazine that
would focus on downtown Newark, New Jersey, to be called The Downtowner.
On December 8, 2010, Read, a former reporter for the Star-Ledger newspaper
in Newark, emailed defendant PaL11 Profeta an unsolicited “blueprint” of his
idea for the magazine. The two had discussions about the magazine idea into
early 2011, and later revived their discussions in July 2012. Discussions broke
down for good in January 2013, when the two could not agree on a business
In the fall of 2013, however, Profeta launched his own Newark-centric
magazine, called Radius: Brick City and Beyond.’ On April 14, 2015, Read filed
this action against Profeta for “stealing” his magazine idea. Radius lost money,
and publication ceased in 2017.
Read was a man with an idea, but little capital. An eager suitor, he
necessarily assumed the burden of developing the concept into something that
would attract investment. Profeta, the party being wooed, could remain
“Brick City” has emerged as a nickname for Newark.
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noncommittal at little cost to himself The issue here is whether Read, rather
like the old Book-of-the-Month Club, succeeded in placing an obligation on the
solicited party. One need not wholly endorse the manner in which Profeta dealt
with Read, a person of lesser means and business experience, to find that
Profeta did not take on any such legal obligation.
Before discussing Read’s claims individually, I will divide them into two
classes. The division is imperfect—some claims are ill-defined, or might
straddle the two classes—but the classification is still conceptually useful.
Class A consists of Read’s claims that Profeta made an enforceable
commitment to fund and publish The Downtowner magazine. In these claims,
Read seeks the benefit of that bargain, primarily his expected salary or profit as
editor of The Dowrztowner. I find the evidence insufficient to create a triable
issue that Profeta committed to a contract of employment or the equivalent.
Class B consists of Read’s claims that, in the course of preparing for the
launch of the aborted Downtowner magazine, he performed services or incurred
expenses, and that Profeta had a duty to reimburse him for the value of those
services or expenses. The earliest statements by Profeta that suggested even a
potential commitment to the project occurred in September/October 2012 (see
pp. 11—12, infra). From that date on, Read might have been entitled to the
value of his expenditures or services until discussions broke down in January
2013, if those statements had constituted a sufficiently firm promise. But they
didn’t; the evidence shows that both parties left it vague, and that Profeta
imposed conditions, never fulfilled, on his assent. If Read expected to be
compensated, he needed to be clear; if necessary, he needed to state that he
would not perform further services without some kind of commitment to be
paid for them.
Critically, there is no Class C. What is not claimed here is that Profeta
pirated Read’s idea and used it to turn a profit. Radius lost money, to the tune
of some S500,000. Understandably, Read is not eager to claim his equitable
share of that.
Profeta, for his part, closes the circle of blame by asserting counterclaims
in which he attributes the Radius losses to Read’s defamatory accusations that
his idea was stolen. Critical elements of these claims, too, are unsupported by
sufficient evidence to create a triable issue of fact.
Each side has filed a motion for summary judgment seeking dismissal of
the other’s claims. (DE 64, 65). Both of those motions are granted. Also before
the Court is Read’s motion to strike portions of a declaration submitted by
Profeta and for sanctions, which is granted in part and denied in part. (DE 72).
Facts and Procedural History
Unless otherwise indicated, the facts recited below are not disputed.2
Certain key items from the record will be abbreviated as follows:
Docket entry number;
Amended Complaint (DE 25);
Defendants’ summary judgment brief (DE 64-2);
Defendants’ statement of undisputed material facts (DE 64-fl;
Plaintiffs brief in opposition to defendants’ summary judgment (DE 71);
Plaintiffs response to defendants’ statement of undisputed material facts (DE
71-1, at 1-15);
Plaintiffs statement of material facts in dispute (DE 71-1, at 16-33);
Defendants’ reply brief in support of its summary judgment motion (DE 73);
Plaintiffs summary judgment brief on defendants’ counterclaims E 65);
Defendants’ brief in opposition to Read’s summary judgment motion (DE 70);
Defendants’ response to plaintiffs statement of undisputed material facts (DE
Defendants’ statement of material facts (DE 70-1);
Plaintiffs statement of undisputed material facts (DE 65-4);
Plaintiffs reply brief in support of its summan judgment motion and motion
to strike (DE 72-2);
Defendants’ brief in opposition to Read’s motion to strike (DE 74);
Plaintiffs reply brief in further support of motion to strike (DE 75).
A. Facts on Defendants’ Motion for Summary Judgment3
Plaintiff Philip Read worked as a reporter for the Star-Ledger newspaper
in Newark from 1997 to 2010. (PSMF ¶1; (DE 64-3, Ex. A, Jan. 16, 2018
Prior to outlining the pertinent facts in this matter, I make the following
observation regarding Read’s responses to the defendants’ statement of undisputed
facts. The permissible options in response to a statement are “admitted” or “denied.”
Read, however, has found a third alternative. He frequently responds with “qualify”
and inserts non-pertinent or nonresponsive material, even when the defendants’
proffered statement of fact derives from Read’s own deposition testimony. (See, e.g.,
PRS 92, 3, 5, 7, 10, 16, 22, 28, 29, 30, 35, 37, 47). Here is an example:
1. In or around November 2010, plaintiff Philip Read (“Read”) approached
Profeta and asked his permission to tell Profeta about an idea he had for
a magazine. See Deposition Testimony of Philip Read, dated February 8,
2018, at 195:2-13, attached as Exhibit B to the Declaration of Christine
F. Marks (“Marks Decl.”).
Qualify. The Plaintiff testified that, as to his idea, Profeta “was very
open to it.” (Defendants’ Exhibit B, 195: 16-17).
2. un late 2010] Profeta responded that, having never run a newspaper or
being familiar with the economics involved, he would not know what
questions to ask or where to start. Marks Dccl., Exhibit B at 197:19-23;
Qualify. The Plaintiff testified that, by mid-2012, he thought “there
was an agreement” (Defendant’s Exhibit B, 196: 19-21).
(DSMF 91-2; PRS ¶j1-2). Whether Read thought there was an agreement by mid2012 is not responsive to the state of negotiations in November of 2010. “The proper
response to a procedurally correct Rule 56 motion is to file a counter statement that
denies the fact is material, admits the material fact, or denies the material fact by
counter proofs conforming to the rules of evidence.” Falcon u. Cont’l Airlines, 2014 U.s.
Dist. LEXIS 20146, at *5 (D.N.J. Feb. 18, 2014) (alteration in original) (quotation and
citation omitted); see also Schwartz v. Hilton Hotels Corp., 639 F. Supp. 2d 467, 469
n.2 (D.N.J. 2009) (deeming facts that were neither admitted nor denied in Rule 56.1
statement to be undisputed).
Where Read is nonresponsive, and thus falls to create an actual dispute about
the fact alleged, the Court will deem defendants’ facts as admitted pursuant to Local
Civil Rule 56.1; see also Barker u. OurLady of Mount Carmel Sch., 2016 U.S. Dist.
LEXIS 118067, at *2 n. 1 (D.N.J. Sep. 1, 2016) (deeming defendants’ factual assertions
admitted where plaintiff “add[ed] additional facts but d[idl not contest the asserted
proposition[1.” (citation omitted)), appeal dismissed, 2017 U.S. App. LEXIS 18125 (3d
Cir. July 26, 2017).
Coincidentally, Read has requested that this Court deem certain facts asserted
by Read to be admitted by Profeta in his reply brief in support of his motion for
summary judgment on Profeta’s counterclaims, contending that a proper response to a
supported material fact is either “admit or deny.” (PSJRBr at 10-1 1).
Deposition of Philip Read, at 23:18-22 (hereinafter “Read Dep. I”))). He focused
on redevelopment in Newark for about eighteen months before he accepted a
buyout and resigned. (DE 7 1-5, at 8, Plaintiff’s Answers to Defendants’ First
Set of Interrogatories
¶ 10). Read believed there was a market opportunity for a
“city magazine” in Newark. (Id.). While other similarly situated cities had
established city-centric magazines, Newark had not. (PSMF ¶3).
Initial 2010—11 Discussions
In November of 2010, Read asked defendant Paul Profeta, the principal of
Paul V. Profeta & Associates, if he could pitch him an idea he had for a
Newark-centric magazine, to be called The Downtowner. (DSUMF ¶1; DE 64-3,
Ex. 3, Feb. 8,2018 Deposition of Philip Read, at 195:8-13 (hereinafter “Read
Dep. II”)). On December 8, 2010, Read emailed Profeta a “blueprint” of his idea
for The Downtowner. (PSMF ¶6; DE 7 1-8, Ex. E, E-mail from Philip Read to
Paul Profeta (Dec. 8, 2010, 02:05 PM)).
Read’s email stated the mission of The Downtowner “to give the Halsey
Street/Broad Street neighborhood an identity and sense of liveliness with an
in-your-hands news product that would create a buzz and serve to solidify the
good efforts of many who see a future in the rebirth of New Jersey’s largest
city.” (DE 71-8, Ex. E). Read suggested that Profeta, who had dedicated himself
“to the revitalization of Newark
might be someone willing to lead a startup
intended to give the rebirth a face of its own on a regular basis.” (Id.).
Read indicated that they would need to gather a team of “like-minded
investors” and stakeholders “to produce the seed capital for the start-up,” and
to set up substantial advertising commitments. (Id.). Read provided a list of
“initial” staffing requirements, including
full-time writer-editors, an
advertising salesperson, an advertising artist to design the ads, and an editorial
page designer. (Id.). Profeta would serve as the publisher. (Id.).
Profeta submitted certain portions of Read’s deposition transcripts. Read’s
opposition includes additional portions of his deposition transcripts. (See DE 7 1-4, Ex.
A (copy of Read Dep. 1); DE 71-26, Ex. MI (copy of Read Dep. II)).
Read also required a freelance budget for writers, a storefront office on
Halsey or Market Street, and editorial/production computer equipment. (Id.).
Read’s email also suggested that The Downtownerbe published monthly and
distributed for “free” or for a nominal price of less than a dollar. (Id.). Read
noted that his salary at the Star-Ledger was formerly $93,804 and that his son
could work as the advertising artist for about $40,000. (Id.; PSMF ¶8).
In response, Profeta asked Read if he had “any idea what it would cost to
launch” the magazine, noting that he did not have any print experience. (DE
71-8, Ex. E, E-mail from Paul Profeta to Philip Read (Dec. 12, 2010 09:52 PM)).
On December 15, 2010, Read provided a breakdown of costs. (DE 64-3, at 79,
E-mail from Philip Read to Paul Profeta (Dec. 15, 2010 05:34 PM)).
Profeta told Read that he had never run a newspaper before, was not
familiar with the economics of running such a publication, and that he did “not
know where to start or what questions to ask.” (DSUMF ¶2; DE 64-3, Ex. D, at
795). Read believed that Profeta was “very open” to his idea at the time. (Read
Dep. II at 195: 16-17). Read did not tell Profeta that his ideas were confidential,
and the parties did not execute a confidentiality agreement. (DSUMF ¶3; Read
Dep. II at 195:21-25).
In early 2011, the parties’ initial discussions regarding the magazine
ended, with Read advising Profeta that he was going to approach other
potential investors. (DSUMF ¶4; PRS ¶4; PSMF
¶ 12). In 2011, Read discussed
his magazine with other potential backers, including Frank Giantomasi of the
law firm of Genova, Burns & Giantomasi, and Mark Berson of Fidelco. (PSMF
912, 39; DSUMF ¶5; Read Dep. II at 202:6-14; DE 71-19).
Read created a visual depiction of his magazine idea and presented his
idea to other potential backers, including Dan Stroll of Rutgers Business
School, Jay Gottesman of Edison Properties, Helen Paxton of Rutgers! Newark,
This number refers to the automatically generated ECF page number located in
the top right-hand corner of defendants’ exhibits, which were all filed under docket
Barbara Kaufman of the Newark Regional Business Partnership, Stefan Pryor
of Brick City Development, Vaughn Crow of the Amelior Foundation, Jeff
Normal of the New Jersey Performing Arts Center, and Kathy Weaver of the
Newark Alliance. (DSUMF ¶6; PRS ¶6; PSMF ¶44; Read Dep. II at 225:17227:4; DE 71-19). Read did not ask anyone he met with to execute a
confidentiality agreement. (Read Dep. II at 228: 16-18; DSUMF W39; PRS ¶39).
Reopened 2012—13 Discussions
Sometime in July of 2012, Read reapproached Profeta about the
magazine. (DSUMF ¶7; Read Dep. II at 199:1316).6 Read advised Profeta that
he had persuaded some “significant people [to] step forward as stakeholders”
for The Downtowner. (DSUMF ¶8; PRS ¶7; Read Dep. II at 200:2-4). Between
July of 2012 and October 2012, Profeta asked Read “to basically educate him
about magazines.” (PSMF ¶40).
On July 18, 2012, Read emailed Profeta regarding a meeting they had
held that day. (PSMF ¶14; DE 7 1-12, Ex. I, Email from Philip Read to Paul
Profeta (July 18, 2012 06:5 1 PM)). Read’s email was seemingly a response to a
question that Profeta had posed during the meeting regarding the “editorialadvertising mix” of “the competition.” (DE 7 1-12, Ex. I). Read provided Profeta
with a few examples of city magazines, their editorial/advertising ratio, and
sample “rate cards,” which detailed prices for various ad placement options.
(DE 7 1-12, Ex. I; PSMF ¶141-42). Read’s email noted that the deputy editor
and design director of The Downtowner would not need health benefits, but
that the three other full-time employees, including Read, would. (Id.).7
Read asserts that he “spent the next year personally lobbying stakeholders in
the city, finding doors opening for him because of his reputation, and getting the
greatest support from Frank Giantomasi.” (PSMF fl12, 13; DE 71-li). It was allegedly
because neither Giantomasi nor Berson was willing to take on the role of publisher
that Read “re-approached Profeta.” (PSMF ¶ 12). For these facts, which clearly are
within Read’s own knowledge and control, he cites only the discovery responses of the
defendants, which in any event are not supportive.
Read alleges that the next event that occurred was on August 9, 2012, when
Profeta requested certain information about the magazine from Read. (PSMF ¶ 15).
Read’s citation for this factual assertion, however, is the July 18, 2012 email and
“Defendant’s Response, p. 187.” The July 18, 2018 email does not support Read’s
On August 9, 2012, Read sent Profeta another email with more
information. (PSMF ¶16; DE 7 1-13, Ex. J, Email from Philip Read to Paul
Profeta (Aug. 9, 2012 12:22 PM)). Read’s email stated that Giantomasi told him
that either Berson or Giantomasi would provide office space, although Read
believed that a downtown Newark address “would be best.” (Id.). Read provided
Profeta with an average full-page advertising rate and indicated that he had a
person in mind for the advertising salesperson position. (fri.).
Read stated that Giantomasi and Berson encouraged the project. (Id.).
Giantomasi allegedly told Read that “I know this is going to happen,” and
Berson told him that “we’re going to take this to the next level.” (Id.). Read
claims that their interest in the project “just died,” however, for “want of
someone to assume the ‘publisher role.” (Id.). Read suggested a meeting with
himself, Profeta, Berson, and Giantomasi. (Id.).
In his August 9, 2012 email, Read also stated that he had a “Plan B” for
the magazine. (Id.). Instead of ten issues per year, the magazine would run six.
(fri.). This alternative plan would reduce printing costs, but would also yield
less advertising revenue, and would require the staff to accept “greatly reduced
Read sent Profeta a follow-up email on August 23, 2012, indicating that
he had found an ad salesperson who would work at a salary of $800 per week,
plus a ten percent commission. (PSMF ¶17; DE 71-14, Ex. K, E-mail from
Philip Read to Paul Profeta (Aug. 23, 2012 01:28 PM)). Read suggested setting
up a meeting with the ad salesperson and asked whether he should set up the
meeting with Berson and Giantomasi. (Id.).
On August 27, 2012, Profeta responded that Read should setup the
meeting with Berson and Giantomasi, and stated that he would meet with the
assertion and the second citation to “Defendant’s Response” is not a citation to a
particular document in the record. The defendants’ discovery responses submitted by
plaintiff do not contain a page 187. (See 71-li, Ex. H).
ad salesperson. (DE 7 1-14, Ex. K, E-mail from Paul Profeta to Philip Read (Aug.
27, 2012 08:54 AM)).
On September 10, 2012, Read emailed Profeta again. Read wrote that he
was having difficulty scheduling a meeting with the ad salesperson, but that he
was available to meet with Berson and Giantomasi “anytime.” (PSMF ¶18; DE
7 1-15, Ex. L, E-mail from Philip Real to Paul Profeta (Sept. 10, 2012 07:26
PM)). Read provided more information about his “Plan B,” which reduced the
“start-up/ramp-up costs marginally from $132,000 to $118,000,” lowered the
per-month ad sale minimum, and required a reduction in salary “for the key
In response to this email, Profeta advised Read that he was considering
funding the entire magazine venture, subject to a positive outcome of his due
diligence and a mutually agreeable business structure. (DSUMF ¶9-10; PRS
fl9-l0; PSMF ¶18; DE 64-3, Ex. E at 85; DE 71-15, Ex. L). Profeta stated that
he still wanted to meet with Berson and Giantomasi to see if they would
consider donating office space. (Id.).
Read understood that Profeta was conducting due diligence and that
Profeta was not at this time promising to pay him. (DSUMF ¶12; PRS 12; Read
Dep. II at 243:11-14). Read claims, however, that he relied upon Profeta’s
“assurances” that Profeta was considering funding the magazine. (Read Dep. II
On September 18, 2012, Read emailed Profeta, advising Profeta that he
had met with representatives from Bayard, Oot, James & Associates
(hereinafter “Bayard”), a company to which magazines outsource their ad sales.
Read stated that those Bavard representatives were available to meet with
Profeta. (PSMF ¶19; DE 71-16, E-mail from Philip Read to Paul Profeta (Sept.
18, 2012 02:46 PM)). On September 25, 2012, the meeting was scheduled for
September 27, 2012. (PSMF ¶20, DE 71-17).
In the meantime, on September 26, 2012, in response to Profeta’s
questions, Read emailed Profeta with a breakdown of “potential income
expensesand rates.” (PSMF ¶21; DE 71-18). Read provided ad rate cards,
display advertising, and starting salaries. (DE 7 1-18). Read estimated that the
total per-issue expense was $63,840. That figure, however, did not include
expenses for items (fixed costs, evidently), such as office space, phone service,
or medical benefits for the staffers. (Id.). Read also provided Profeta more
background on Bayard, its experience with selling ads in Newark, and a
monetary “set-aside” for Bayard. (DE 71-18).
Also on September 26, 2012, Read sent Profeta a separate email that
included a presentation booklet, or “Executive Summary,” reflecting a sixissue-per-year model. (PSMF ¶22; DE 71-19). The cover page of the Executive
Summary was marked “confidential.” (DE 7 1-19). The Executive Summary
described the magazine in the following manner:
The Newark DowntownerTM is intended to be a vehicle to give
Military Park and Halsey and Broad Street Neighborhoods (and
their environs) an identity and sense of liveliness with an in-yourhands news product that would create a buzz and serve to solidify
the efforts of many who see a future in the fragile rebirth of New
Jersey’s largest city.
The magazine format published six times a year will be
focused on Newark’s downtown and will provide a voice that is
being lost in ever-shrinking daily newspapers that choose to give
their content away for free online, in the process undercutting their
ability to maintain the more lucrative print advertising as well as
staff to produce content, in particular anything other than the
latest Newark shooting or city-hall brouhaha.
(DE 7 1-19; PSMF ¶7). The Executive Summary identified the magazine’s target
audience as commuters from wealthier suburbs, college students, and “higher
income Newarkers.” (DE 7 1-19; PSMF ¶56).
In terms of competition, the Executive Summary noted that there were
“some weeklies in Newark now, but they are almost entirely advertising vehicles
running poorly written press releases verbatim.” (Id.). Hoboken and Jersey City,
it disclosed, had both recently launched city magazines. (Id.).
The Executive Summary further explained the magazine’s proposed
staffing. Full-time staff included Read as editor-in-chief; Russell Ben-Ali as
deputy editor; Bob Bogert as design director; and Philip Read Jr. as senior
graphics designer. (fri.). Photographers and “some writing contributors” would
be funded through a freelance account. (Id.). Per-issue payroll was estimated as
On October 5, 2012, Read again emailed Profeta about the business plan
for the magazine. (PSMF ¶23; DE 71-20). In terms of ad sales, Read indicated
that when he initially presented the magazine idea to potential stakeholders, he
sought a one-year commitment, and then suggested six months, but was not
successful. (DE 71-20). The best he could accomplish was “an informal 6month commitment” from Rutgers Business School. (Id.).
In addressing a business structure, Read indicated that Profeta would be
the majority owner and publisher. (Id.). Read stated that he would “like to
retain a small minority stake, in recognition for developing the idea and
spending the better part of 2 years nurturing it.” (Id.). Read testified that he
believed that he and Profeta were “partners,” but the parties never agreed, for
example, to share in profits or losses. (PSMF ¶84; Read Dep. II at 109:10-20).
On October 9, 2012, Profeta and Read had a meeting with Berson and
Giantomasi. (PSMF ¶24; DE 7 1-16; DE 71-21). In that meeting, Profeta told
Read that “it looks like you got your magazine.” (DSUMF ¶13; PRS ¶13; Read
Dep. II at 263:12-13). Read testified that if this meeting had not gone well and
Profeta had not given him this assurance, Read “probably would have taken a
couple more pokes at people, and if nothing materialized quickly, I would [have]
cut the cord.” (Read Dep. II at 157:2-12). Even at that point, Read knew that
Profeta was not “100 percent committed” to move forward with The
Downtowner. (DSUMF ¶14; Read Dep. II at 263:16-20).
Read’s alleges that he “produced a Prospectus 1 in 2011” and “The Plaintiffs
Prospectus 2 was marked ‘Confidential’ and described as ‘an important void to fill.’”
(PSMF ¶60-61). These factual assertions do not contain a citation to the record, and
it is unclear whether these allegations relate to the information contained in the
Executive Summary. Read’s statement of material facts then goes on to describe the
information contained in “Prospectus 2” without a proper citation. (See PSMF ¶J6164).
Read’s response to the “not 100 percent committed” allegation was “Qualify.
The Plaintiff testified that it ‘was 98 percent’ (Defendants’ Exhibit B, 2 1-24).” (PRS
Nonetheless, Read testified that by mid-2012 he had “an agreement” with
Profeta. (Read Dep. flat 196:19-20). At his deposition, Read was asked to state
the terms of that alleged agreement. Read answered that Profeta “was
passionate about the magazine and we should go forward, and this was going
to happen now, and his CEO was saying I look forward to working with you.”
(Read Dep. II at 196:21-25; see also PSMF ¶38).
In a follow-up email that same day, October 9, 2012, Read expressed
gratitude to Profeta for Berson and Giantomasi’s evident enthusiasm about
creating a “Founders Club,” or a page in the magazine that would be dedicated
to its “Founders.” (DE 71-21; Read Dep. II at 269:14-21; DE 71-27, Ex. X, at
76:12-77:9 (July 10, 2018 Deposition Transcript of Paul Profeta (hereinafter
“Profeta Dep.”fl).’° Read told Profeta that he believed that they were getting
closer to launching the magazine and that he hoped they could “set up a
business structure by month’s end.” (DE 71-21).
On October 14, 2012, Profeta responded that he would not fund the
venture until there were “at least 40 members in the Founder’s Club” and that
he would start trying to secure such members that week. (Id.). On October 17,
2102, Read provided Profeta with a final proposed ad rate card. (DE 7 1-22).
On November 7, 2012, Read emailed his staff, stating that Profeta had
told him that the magazine was going to happen, possibly in thir’ days, and
that the staff would be on payroll by January 1. (PSMF ¶55; DE 7 1-28). Read’s
email to the staff also indicated that Profeta had asked him to come up with a
half-page contract for “founders.” (Id.).”
¶14). Defendants’ Exhibit B does not contain pages 2 1-24 and lines 21-24 on page 263
do not support Read’s proposition. Nor does Read Dep. I, which contains pages 2 1-24,
support Read’s proposition. I will search no further for the “98%” figure.
Read submitted Profeta’s deposition as an exhibit in support of his motion for
summary judgement. (DE 65-15). The role of these “founders” is ill-defined in the
papers; it is not clear whether they were to buy advertising space, merely lend their
name to the publication, both, or something else.
Read has alleged that “Profeta told the Plaintiffs staff that the Magazine was
going to happen.” (PSMP ¶88 (citing Read Dep. 11 at 153: 9-10)). The cited portion of
Read’s deposition does not support this alleged fact. Read testified as follows:
On November 19, 2012, Profeta invited Read and the magazine’s staff to
his office’s Christmaè party. (PSMF ¶27; DE 7 1-24). Read accepted the
invitation on behalf of himself and the staff, and stated that he “trust[edj that
we’ll be official by then.” (DE 71-24). Profeta responded that he would “love” to
tell Read that they would be “officially rolling by Dec. 14th,” but had “doubt[s]
[that they] would be that lucky.” (Id.).
Around December 3, 2012, Profeta asked Read for a “mockup” of the
magazine that could be distributed to the Founder prospects so that they could
“visualize what they
would be putting their names on.” (PSMF
¶28; DE 71-25). On December 16, 2012, Read responded to Profeta’s email,
and stated that he needed a photo of Profeta for the mockup. (DE 7 1-29). He
further stated that he had attempted to “get a hold of Ledger photos that ran
with [his] old stories,” but was unable to do so. (Id.). He further stated that the
stories in the mockup, without the art, “simply won’t do.” (Id.). Read further
noted that Profeta would be away from December
expressed hope that the magazine could nonetheless launch on January “14th,
fingers crossed.” (DE 7 1-29; PSMF ¶67).
Profeta responded on December 17, 2012 that they “should go fonvard
with the best we [have] and take our best shot. I will get a shot taken of Marisa
and me.” (DE 71-29). As of December 2012, Read believed that Profeta was
entirely committed to funding the magazine because he had directed Read to
send the mockup to the printer. (Read Dep. II at 265:17-24; PSMF ¶47).
Q. And you approached Mr. Profeta in mid 2012? He was enthusiastic?
Q. He didn’t commit to it, right?
A. As I said to my staff, he was so enthusiastic, you knew this was going
(Read Dep. II at 153:5-10). The documentary evidence in the record has established
that Read told his staff that this project “was going to happen.” Read has not pointed
to anything in the record to establish that Profeta communicated this to Read’s staff.
On January 8, 2013, Profeta emailed Read, stating that he had reviewed
the mockup. Profeta expressed concern about Read’s January 14 deadline, in
part because he had not yet spoken to any Founders and the mockup was still
in draft form. (DE 71-30). On January 10, 2013, Read responded that he would
push the deadline back to February 4 and asked if Profeta would consider
putting each staff member on a “small retainer” of $1,000 per month. (Id.).
In January of 2013, Profeta learned that another Newark-centric
magazine, Newark Bound, was being published. (DSUMF ¶15; PRS ¶15; Read
Dep. II at 274:11-14). Read testified that he was not “surprised” to learn of the
publication because he “was shopping this around for two years” and knew
“other people might do it.” (DSUMF ¶16; Read Dep. TI at 274:11-275:14). Read
admitted that he did not “own” the idea of creating a city magazine in Newark.
(DSUMF ¶36; PRS ¶36).
In January 2013, Profeta told Read that he was not moving fonvard with
Read’s magazine idea. (DSUMF ¶17; Read Dep. II at 276:4-7; PSMF ¶11; DE
71-1 1). In an email exchange between Read and Profeta on January 16, 2013,
Profeta told Read that the proposed business model, which included a formal
office and staffed employees on a payroll, was not financially feasible. (DSUMF
¶18; PRS ¶18; PSMF ¶69; DE 64-3, Ex. F, at 88). Profeta also expressed
concern that Read’s proposed deadlines were “not realistic.” (DE 71-3 1).
Profeta related discouraging conversations with his wife, who used to
work for Hearst Corporation and was the managing editor of Cosmo Girl
magazine, as well as with her colleagues in the magazine business. Through
those conversations, Profeta said, he learned that the magazine world had
shifted away from formal offices and payroll. (DE 64-3, Ex. F, at 88). Instead,
individuals were hired on a per project basis: writers were paid per article,
graphic designers were paid per issue, and photographers were paid per shoot.
(Id.). Such individuals also furnished their own equipment. (Id.). Profeta asked
Read if he could wait until the summer to launch the magazine so that they
would have time to consider a freelance business model. (Id.).
Read responded that same day that he was not interested in the
freelance model. (DSUMF ¶19; PRS ¶19; DE 71-31). Read wanted salaried staff
because New Jersey “has the highest property taxes in the nation and has a
high cost of living.” (Read Dep. I at 27:17-21). Read’s email to Profeta stated
that he could not work for a freelance salary and afford to pay his property
taxes and health benefits. (flED 71-3 1). Read also stated that he wanted a
physical office space, and that the cost would not be a significant concern if the
space could be donated by Berson or Giantomasi. (Id.). Read told Profeta that
he was flexible with deadlines, “but would need a firm commitment of some
kind, as would the staff.” (DE 7 1-32, at 3).
On January 18, 2013, Profeta responded to Read that he was “having a
hard time gaining confidence in your business model, given what I have
learned lately about magazines. $500,000 is a huge amount of money to risk
on a program that I do not feel comfortable with.” (PSMF ¶71; DE 7 1-33). On
January 22, 2013, Read requested that Profeta return his “business
plan/presentation booklet” as well as the mock-up prototype. (DE 7 1-34).
Read acknowledged that there was nothing obligating Profeta to continue
with the magazine and that he never had a “firm deal” with Profeta. (DSUMF
¶J22-23; PRS ¶23; Read Dep. II at 301:25-302:2). Read and Profeta never
executed a contract for the project or agreed on a mutually acceptable business
structure. (DSUMF ¶24; PRS ¶24; Read Dep. II at 239:16-20). Nevertheless,
Read testified, Profeta was enthusiastic about launching The Downtowner,
“thought the time was right,” and told Read “on more than one occasion
this is going to happen now.” (DE 64-3, Read Dep. I at 54:21-24; PSMF ¶30).12
Read does not provide much detail to substantiate Profeta’s comments. (See DE
Read Dep. I at 54:21-24; PSMF ¶30). Where Read has supported his allegations
with some supporting detail, however minimal, they have been incorporated in this
opinion. I note that Read has generally alleged in his opposition that Profeta
“continued to give the Plaintiff ‘assurances that kept us moving forward.” (PSMF ¶89).
Those additional assurances, however, are not identified with any specificity.
To defeat summary judgment, a plaintiff must go beyond unsupported
allegations and support each essential element with concrete evidence in the record.
Celotex Corp. v. Catrett, 477 U.S. 317, 323-23 (1986); see Haryrove v. Cnty. of At!., 262
Read did not tell Profeta that any information he had disclosed about his
magazine concept was secret. (Read Dep. II at 196:6-9; DSUMF ¶33; PRS ¶33).
Much or most of the information that Read had shared with Profeta he also
shared with the other potential backers. (Read Dep. II at 196:1-5; DSUMF
930, 32; PRS ¶930, 32). Read’s research regarding his platform was disclosed
to everyone “who asked.” (DSMF ¶34; PRS
Profeta Publishes Radius’4
Read admitted that he and Profeta had no agreement that would have
prohibited Profeta from launching his own magazine. (DSUMF ¶50; PRS ¶50).
In the fall of 2013, Profeta did launch a magazine called Radius: Brick City and
Beyond. (DSUMF ¶51; PRS ¶51). Radius used a freelance business model.’5 It
was Profeta’s first experience with printed media. (PSMF ¶48; Profeta Dep. at
According to the Radius website, the mission of Radius was “to provide a
positive antidote to the numbing, distorted, depiction of Newark printed daily in
the Star-Ledger. Radius tried to suggest what was positive and fun about
returning to Newark.” (PSMF ¶4; DE 7 1-7, Ex. D, Paul V. Profeta, Letter from
the Publisher— Summer 2016, Radius: Brick City and Beyond (May 26, 2016)).
In his “Letter from the Publisher,” Profeta states that before he “began to
publish Radius,” he “canvassed the anchor institutions of Newark before
F. Supp. 2d 393, 418 (D.N.J. 2003) (“It is well settled that
feelthgs, however, genuine, when they are not supported by
generalities, and gut
specific facts” are insufficient to defeat summary judgment.). “In deciding a motion for
summary judgment, the court considers the competent evidence presented and need
not credit Plaintiff’s bald, unsupported allegations.” See Bumbarger v. New Enter.
Stone & Lime Co., 170 F. Supp. 3d 801, 832 (W.D. Pa. 2016).
Profeta testified that he returned the documents that Read provided to him for
the magazine, except for a thumb drive, which was lost. (Profeta Dep. at 75: 1-10; see
Radius, LLC, the entity, has been incorrectly sued as “Radius: Brick City and
Beyond,” the name of the magazine. (DE 70-3, ¶1, Declaration of Paul Profeta).
Read claims that Radius published its first issue in August of 2013 but fails to
cite to the record for that fact. (PSMF ¶73). Similarly, Read claims that Radius’s offices
are located in a Berson-owned building, without a citation to the record. (PSMF ¶75).
assuming a financial endeavor like this one.” (PSMF ¶5; DE 7 1-7, Ex. D).
Profeta testified that Radius was mailed to people in the suburbs, while The
Downtowner was going to be distributed for free in downtown locations.
(Profeta Dep. at 83:9-11).
Many other municipalities have city-centric magazines. (DSUMF ¶37;
PRS ¶37; Read Dep. II at 304:1-205:20). Read alleges, however, that Profeta
took his idea for a Newark-centric magazine and used “the people” that Read
had lined up as advertisers. (Read Dep. 11 at 2 12:20-25; PRS ¶38; PSMF
When asked how Profeta was “enriched,” as alleged in his complaint, Read
testified that it perhaps was Profeta’s “ego” that was enriched. He
acknowledged that Profeta’s magazine, Radius, was not a financial success.
(Read Dep. II at 68:17-22). Read further indicated that “no magazine really” has
data that would enable a person “to quantify the return on investment.” (Read
Dep. I at 15:18-21).
Read asserts that he is entitled to $300,000 in damages. (Read Dep. II at
120:3-122:1). That number includes a notional six-figure yearly salary of
$109,000 for two years.’7 The two-year period represents the time Read spent
Read asserts that “On the Founder’s Page, listed were Genova Burns
Qiantomasi and Marc Webster, Marc Berson’s Fidelco, Brick City Development Corp.,
MCJ Amelier Foundation, and Rutgers Business School, persons or entities with
whom the Plaintiff had made connections (DeZao Decl.. Exhibit W) (Vol. II, 114:17
115:10).” This citation to Read’s deposition testimony, however, only establishes that
Read met with these individuais, not that they had agreed to buy ads or be listed on
Radius’s founders page. (See Id.). Read does not otherwise identify any specific
advertisers Profeta allegedly took for Radius. Read argues throughout his briefing that
Profeta used the “same investors” that Read had cultivated. That statement, however,
is unsupported by any citation to the record.
Read did testify that he had “lined up” advertisers for The Downtowner. (PSMF
¶82; Read Dep. II at 95:17-93:3). However, Read then clarified that that these were
only “prospective” or “potential” advertisers, and that they had not actually entered
into any agreements. (Read Dep. 1196:96:9-21). “Lining up” prospects is not the same
as actually selling advertising space. As stated above, Read testified that the most he
actually accomplished was “an informal 6-month commitment” from Rutgers Business
School. (PSMF ¶23; DE 7 1-20).
Read indicated that he earned $93,000 per year at the Star-Ledger. (Read Dep.
“pitching his idea to anyone in Newark who would listen.”8 (DSUMF ¶46(c);
II at 192:12-17). Regarding his proposed salary, Read testified as follows:
Q. Mr. Read, in your damage calculation, you came up with S 109,000,
A. I rounded 100,000 a year I think, six figures.
Q. You told me $109,000.
A. That’s how much
Q. That’s what you testified to under oath, right?
Q. But your last year at the Star Ledger you were only making $93,000,
Q. Why didn’t you choose $93,000?
A. I chose six figures, meaning $100,000, which is less than 109 but
more than 93.
Q. You weren’t making $100,000 your last year at the Star Ledger, right?
A. That’s correct.
Q. Did Mr. Profeta tell you to quit the Star Ledger?
Q. Did you rely upon anything relating to Mr. Profeta to leave your job at
the Star Ledger?
Q. Did Mr. Profeta talk to you about the DownTowner when you left the
Q. And you didn’t leave the Star Ledger because of Mr. Profeta or the
A. That’s correct.
Q. And that was in 2010?
(Read Dep. II at 129:3-130:9).
Read seems to be referring to the period from December 2010 until discussions
with Profeta broke down in January 2013, a period during which he was pitching the
project to other investors and Profeta. This, then, is not a “Class A” claim for his salary
as editor of the Downtowner if had been launched; it must be a “Class B” claim that
his entrepreneurial efforts to launch the magazine should for some reason be
compensated at the rate approximated by his prior salary at the Star-Ledger. It
Read further claims that he is entitled to recover expenses for the time he
spent developing The Downtowner. (DE 7 1-5, at 7, Plaintiff’s Answers to
Defendants’ First Set of Interrogatories, ¶7). When asked how much money
Read believed Profeta owed him for his efforts, Read testified “1 could only look
at it in terms of my investment in time and the significant expenses I took to
stay in place to put these pieces together under Mr. Profeta’s direction.” (Read
Dep. I at 49:18-21). Such expenses, he says, involved the liquidation of
$20,000 in a mutual fund, $31,000 in trust money from his mother, and
cashing out his 40 1(k), in the amount of $75,000. (Read Dep. 11121:9-18;
PSMF ¶8 1). Read used the $75,000 to pay his mortgage. (Read Dep. II at
148:22-23). He used the $20,000 to pay for other living expenses. (Read Dep. II
at 149:5-9). Read used the $31,000 for his family’s expenses. (Read Dep. II at
150:2-6). There is no claim that Profeta committed to pay such living expenses,
or that they would not have been incurred but for something Profeta said or
did. Nor is there any indication that these expenses were incurred in the period
after mid-2012, the earliest time that, even by Read’s own account, he had an
“agreement” with Profeta.
Read believes that he was “hired” in 2012 and that he “worked for”
Profeta. (Read Dep. I at 50:4-51:52:2). Read admitted that he did not have an
employment contract with Profeta, and that the parties never agreed upon a
salary. (DSUMF ¶25-26; PRS ¶26; DE 64-3, Read Dep. Tat 46:10-12, 51:1624). Nonetheless, Read says he expected to be paid by Profeta. (PSMF
Read did not keep track of the hours that he claims to have expended,
never told Profeta he would be charging for his time, and did not submit claims
for expenses to Profeta. (Read Dep. I at 52:6-8; Read Dep. TI at 208:16-209:19;
amounts to a claim that Profeta did hire him or should have hired him (and picked tip
his living expenses) to develop the magazine concept—indeed, that Profeta should have
been paying Read to pitch the concept to other investors—starting in about December
2010. I fail to see any basis for this claim; Read himself elsewhere claims, at best, that
Profeta in effect “hired” him in mid-2012. (Read Dep. I at 50:4-51:52:2).
DSUMF ¶45; PRS ¶45). Read admitted that his investment of time and
expenses is “subjective” and is “open to anyone’s interpretation.” (DSUMF ¶48;
PRS ¶48). Read’s answers to interrogatories state that he “invested literally
hundreds of hours to the project over two years, which he [estimatesj to be
worth approximately $200,000.” (DE 7 1-5, at 7). It is unclear how Read came
up with this figure. (See id.; PSMF ¶66).
Read claims that he focused all his time on developing the magazine to
the exclusion of other employment opportunities. (PSMF fl57-58; DE 71-5, at
10-1 1). Read recalled that he got “a tip” about ajob opening at “NJ BIZ,” but
felt there was no reason to abandon the project for a full-time job. (Id.).
Read has since started a freelance-style city magazine in Wake Forest,
North Carolina, with no employees and no office. (DSUMF ¶52; PRS ¶52; PSMF
B. Facts Presented in Read’s Motion for Summary Judgment1°
Radius was published from November 2013 to June 2017, when it was
shut down for “lack of profitability.” (DE 65-10, Defendants’ Answers to
PSUMF ¶8; DRS ¶8). Radius never made a profit; it lost
over $500,000. (DE 65-10, Defendants’ Answers to Interrogatories,
Profeta’s counterclaims allege that Read engaged in a “campaign of
callousness” that was “designed to defame and destroy” Radius. (PSUMF ¶9;
DRS ¶9). Profeta claims that Read began to falsely communicate to third
parties that Profeta had stolen his business plan and magazine concept.
(PSUMF ¶10; DRS ¶10). Profeta further alleges that Read communicated with
Radius’s funding sources, including certain advertisers, that Radius is based
on a “stolen” magazine concept, which impaired Radius’s ability to raise funds
for its continued operation. (PSUMF ¶13; DRS
Profeta claims that he had
a reasonable expectation that he would have obtained funding from these
The first twenw-five paragraphs of Read’s Rule 56 statement of undisputed
material facts recite the allegations of Profeta’s counterclaim. (PSUMP ¶1-25). Read
then regurgitates this Court’s opinion on Read’s motion to dismiss Profeta’s
counterclaims. (PSUMF ¶26-3O).
sources, but due to Read’s conduct, was unable to do so. (PSUMF ¶14; DRS
During the course of this litigation, Read propounded written discovery’
requests to Profeta, and asked Profeta to “set forth in detail your factual
allegations” in support of his counterclaim against Read. (DE 65-10,
¶ 18). In Profeta’s November 15, 2017 certified responses, he
incorporated the general allegations set forth in his counterclaim and provided
no further detail. (Id.). In response to a discovery request regarding damages,
Profeta simply asserted that he “sustained special damages and incurred legal
fees.” (Id. at ¶18; PSUMF ¶33).
On February 7, 2018, plaintiff’s counsel requested more specific answers
and, in particular, requested a more specific answer to Interrogatory No. 18.
(DE 65-1 1). On February 16, 2018, defense counsel responded only that the
“amount of special damages if awarded are within the discretion of the court
and july to be determined by them.” (DE 65-11; PSUMF ¶35).
Plaintiff’s counsel sent another deficiency letter on February 23, 2018.
(DE 65-12; DE 74-2, ¶6; DE 74-5). The letter stated that the response to
Interrogatory No. 18, even as amended, was deficient in that Profeta failed to
provide “any” factual bases for the counterclaims or his calculation of damages.
(DE 74-5, at 3). Read requested confirmation that Profeta did not have any
“actual” damages. (DE 74-5, at 3).
On February’ 27, 2018, Profeta “supplemented” his discovery responses,
and attached an April 15, 2015 article that was published by the Star-Ledger.
(DE 65-12; DE 74-6). This article was a supplementation to Interrogatory No.
18. (DE 74-6). Profeta asserted that this article was “an item of special
damages” that “damaged Mr. Profeta’s reputation in the community.” (Id.).
Defendants further asserted that they believed that Read had “been provided
with more than enough information to go forward with a deposition of Mr.
The article is titled “Former Star-Ledger reporter files suit, claims N.J.
bizman stole his magazine idea.” (Id.). Written by Thomas Zambito, the article
recited the aHegations of Read’s complaint, noting that all of the facts
presented in the article were “according to the lawsuit” or consisted of what
“Read claims” in the lawsuit. (Id.).
Profeta testified that after the article was published, he called Zambito.
(Profeta Dep. 14:18-16:19; PSUMF ¶50; DRS ¶50). Zambito told Profeta that
the article was “planted” by Read, which Profeta took to mean that Read wrote
the article. (PSUMF ¶1J52, 54; DRS. fl52, 54). Zambito told Profeta that Read
was his friend, and that Read had previously sued “wealthy people,” including
5.1. Newhouse,2° the publisher of the Star-Ledger. (Profeta Dep. 19:4-20:9).
Profeta spoke about the article with “Rutgers people,” including the
Chancellor of Rutgers-Newark, Gene Vincenti.2’ (Profeta Dep. at 25:23-26:23).
Profeta “thought they mentioned the article to me,” and Profeta told them that
the article had been planted by Read. (Id.; PSUMF ¶58; DRS ¶58).
Giantomasi told Profeta that he thought the article was “unfortunate.”
(PSUMF ¶60; DRS ¶60; Profeta Dep. at 28:2-16). Berson told Profeta that “It’s
sad that you got slandered like this.” (Profeta Dep. at 29:20-30:11). Profeta
could not recall speaking with anyone else about the article. (PSUMF ¶64; DRS
In opposition to Read’s motion for summary judgement, Profeta has
submitted a declaration, which Read has moved to strike. (DE 70-3 (Oct. 22,
2018 Profeta Declaration (hereinafter “Profeta Decl.”fl). Profeta states in that
certification that after the launch of Radius, “Read began to communicate
falsely to third-parties that I had ‘stolen’ his business plan and magazine
concept in an effort to forestall Radius’ success and decimate its ability to turn
a profit.” (Profeta Decl. ¶6; DSMF ¶5). Profeta further states that Read
The reference may be to Advance Publications, founded by SI. Newhouse, Sr.,
which owns Conde Nast, the Star-Ledger, and other publications.
Profeta stated that he also spoke to the assistant chancellor, whose name he
could not recall. (Profeta Dep. at 26:6-9).
communicated “falsely to Radius’ funding and advertising sources, including
many of Radius’ ‘Founders,’ that Radius was based upon Read’s ‘stolen’
magazine concept.” (Profeta Decl. at ¶6). He claims this impacted Radius’s
ability to raise funds. (Id.). Profeta claims that he “heard from marketing people
with several of Radius’ advertisers that the executives in the companies” were
disappointed in Profeta for “stealing” Read’s idea. (Profeta Decl. ¶8).
Regarding these factual assertions, Profeta does not identify (1) the third
parties; (2) what Read actually said; (3) when Read made these statements; (4)
how Profeta knows what Read said to other third parties; or (5) the identity of
the funding or advertising sources, or “Founders.”
During his deposition, Profeta identified the following individuals as
persons with knowledge of his counterclaims: Steven Coleman; Phil Read and
his son; Bob Bogert; and Zambito. (Profeta Dep. at 10:23-11:25). These were
the only individuals that Profeta could “recollect” at the time. (Profeta Dep. at
Profeta claims that the following companies discontinued their
advertisements with Radius: Commercial Mortgage, Cook Maran, Dr.
Boiardo/CarePoint, ECC, Flemington Car & Truck Country, Genova Burns
Qiantomasi & Webster, Hollister Construction, Hehi & Hehl, J.P. Morgan,
Korman, McElroy Deutch Mulvaney & Carpenter, MCJ Amelier
Keeper, PUIF, St. Michael’s Hospital, United Energy Consultants, Van Cleef,
and Verizon. (Profeta Decl. ¶9; PSMF ¶8). Profeta claims that each of these
advertisers had previously paid $4,000 per quarter in advertising. (PSMF ¶9;
Profeta DecI. ¶9). He does not, however, proffer additional facts linking the loss
of these advertisers to defamatory statements by Read.
Read objects to the majority of Profeta’s declaration, claiming that
Profeta’s assertions are based on hearsay, lack a sufficient foundation of
personal knowledge, and violate discovery rules. (See PRS ¶jf 4-9, 12).
C. Procedural History
On April 14, 2015, Read initiated this action against Profeta, Steven
Coleman, William Kohn, Paul V. Profeta & Associates, and Radius: Brick City &
Beyond. (DE 1). On April 15, 2016, the Court granted in part and denied in
part the defendants’ motion to dismiss the complaint. (DE 23, 24). On May 10,
2016, Read filed an amended complaint asserting fourteen counts: theft of
intellectual property (count 1); fraud (count 2); interference with a prospective
economic advantage (count 3); promissory estoppel (count 4); breach of an
implied covenant of good faith and fair dealing (count 5); conversion (count 6);
breach of contract (count 7); negligence (count 8); gross negligence (count 9);
unjust enrichment (count 10); quantum meruit (count 11); breach of fiduciai
duty (count 12); equitable fraud (count 13); and injunctive relief (count 14). (DE
On June 21, 2016, defendants filed an answer and counterclaim against
Read. (DE 30). On January 11, 2017, the Court granted in part and denied in
part Read’s motion to dismiss the counterclaim. (DE 39). Defendants filed an
amended counterclaim on January 27, 2017. (DE 41). Count 1 of the
counterclaim, which alleged abuse of process, was dismissed with prejudice on
consent. (DE 55, at 4). Read’s motion to dismiss the amended counterclaim
was otherwise denied. The remaining counterclaims against Read are as
follows: tortious interference with prospective economic advantage (second
count); defamation and slander (third count); tortious interference with
contractual relations (fourth count); false light (fifth count); and trade libel
(sixth count). (DE 41).
On January 4, 2018, pursuant to the parties’ stipulation, defendants
Steven Coleman, William Kohn, and Paul V. Profeta and Associates were
dismissed from the case. (DE 59).
Fact discovery was completed on July 31, 2018. (DE 63). The Court’s
order directed “the resolution of certain objections by Plaintiff to responses to
written discovery and the deposition of Defendant Profeta” to be completed by
that date and directed the parties to “meet and confer regarding Plaintiff’s
objections to written discovery responses.” Id. Any remaining disputes were to
be submitted to the Court by letter on or before June 7, 2018. Id. No such
letter was received by the Court.
On September 14, 2018, Profeta and Radius moved for summary
judgment on Read’s claims (DE 64) and Read moved for summary judgment on
defendants’ counterclaims (DE 65). Each party opposed the other’s summary
judgment motion. (DE 70, 71).
Read has also moved for sanctions and to strike Profeta’s declaration in
opposition to Read’s motion for summary judgment. Defendants have opposed
that motion. (DE 72, 74).
Federal Rule of Civil Procedure 56(a) provides that summary judgment
should be granted “if the movant shows that there is no genuine dispute as to
any material fact and the movant is entitled to judgment as a matter of law.”
See Kreschollek a S. Stevedothig Co., 223 F.3d 202, 204 (3d Cir. 2000);
Anderson a Liberty Lobby, Inc., 477 U.S. 242, 248 (1986). In deciding a motion
for summary judgment, a court must construe all facts and inferences in the
light most favorable to the nonmoving party. See Boyle v. Cnty. of Allegheny
Pennsylvania, 139 F.3d 386, 393 (3d Cir. 1998) (citing Peters a Delaware River
Port Auth. of Pa. & N.J., 16 F.3d 1346, 1349 (3d Cir. 1994)). The moving party
bears the burden of establishing that no genuine issue of material fact
remains. See Celotex, 477 U.S. at 322-23. “[Wlith respect to an issue on which
the nonmoving party bears the burden of proof.
party may be discharged by ‘showing’
the burden on the moving
that is, pointing out to the district
that there is an absence of evidence to support the nonmoving party’s
case.” Id. at 325.
Once the moving party has met that threshold burden, the non-moving
party “must do more than simply show that there is some metaphysical doubt
as to material facts.” Matsushita Elec. Indus. Co., Ltd. a Zenith Radio Corp., 475
U.S. 574, 586, 106 5. Ct. 1348, 89 L. Ed. 2d 538 (1986). The opposing party
must present actual evidence that creates a genuine issue as to a material fact
248; see also Fed. R. Civ. P. 56(c) (setting forth
for trial. Anderson, 477 U.S.
types of evidence on which nonmoving
rely to support its assertion
that genuine issues of material fact exist).
Unsupported allegations, subjective beliefs, or argument alone, however,
cannot forestall summary’ judgment. See Lujan v. Nat’l Wildlfe Fed’n, 497 U.S.
871, 888, 111 L. Ed. 2d 695, 110 S. Ct, 3177 (1988) (nonmoving party may not
successfully oppose summary judgment motion by simply replacing
“conclusory allegations of the complaint or answer with conclusoiy allegations
of an affidavit.”); see also Gleason v. Nonvest Mortg., Inc., 243 F.3d 130, 138
(3d Cir. 2001) (“A nonmoving party has created a genuine issue of material fact
if it has provided sufficient evidence to allow ajuzy to find in its favor at trial.”).
Thus, if the nonmoving party fails “to make a showing sufficient to establish
the existence of an element essential to that party’s case, and on which that
party will bear the burden of proof at trial
there can be ‘no genuine issue of
material fact,’ since a complete failure of proof concerning an essential element
of the nonmoving party’s case necessarily renders all other facts immaterial.”
Katz v. Aetna Cas. & Sir-. Co., 972 F.2d 53, 55 (3d Cir. 1992) (quoting Celotex,
477 U.S. at 322-23).
Anderson, 477 U.S.
alleged factual dispute between
otherwise properly supported motion for summary
that there be
only “material” for purposes of a
summary judgment motion if a dispute over that fact “might affect the outcome
of the suit under the governing law.” Id. at 248. A dispute about a material fact
is “genuine” if “the evidence is such that a reasonable jury could return a
verdict for the nonmoving party.” Id.
Defendants’ Motion for Summary Judgement
A. Contract Claims
Defendants move to dismiss Read’s contract claims (Counts 5 and 7).
They assert that the essential terms of a contract, including price and duration,
were never agreed to by the parties or even sufficiently defined. (DSJBr at 1316). It is undisputed that there was no express contract. The plaintiff claims,
however, that there was a contract implied in fact.
A “contract implied in fact ‘is in legal effect an express contract,’ and
varies from the latter only insofar as the parties’ agreement and assent thereto
have been manifested by conduct instead of words.” Saint Barnabas Med. Ctr.
v. Cnty. of Essex, 111 N.J. 67, 77 (1988) (citation omitted); see Baer v. Chase,
392 F.3d 609, 616 (3d Cir. 2004) (“The distinction between express and implied
contracts rests on alternative methods of contract formation.”) (citing In re
Penn. Cent. Transp. Co., 831 F.2d 1221, 1228 (3d Cir. 1987) (“An implied-infact contract, therefore, is a true contract arising from mutual agreement and
intent to promise, but in circumstances in which the agreement and promise
have not been verbally expressed. The agreement is rather inferred from the
conduct of the parties.”)).
An implied contract “must be sufficiently definite that the performance to
be rendered by each party can be ascertained with reasonable certainty.”
Weichen Co. Realtors v. Ryan, 128 N.J. 427, 435 (1984) (citations and internal
quotations omitted).22 Courts will, if possible, “attach a sufficiently definite
meaning to the terms of a bargain to make it enforceable,” Paley v. Barton
Savings and Loan Assoc., 82 N.J. Super. 75, 83 (App. Div. 1964), and in doing
so may refer to “commercial practice or other usage or custom.” Lynch v. New
Deal Delivenj Serv. Inc., 974 F. Supp. 441, 458 (D.N.J. 1997).
“For a contract to be enforceable there must be a meeting of the minds
for each material term to an agreement.” In re Rappaport, 517 BR. 518, 529
(Bankr. D.N.J. 2014) (internal quotations and citations omitted). The
The parties do not dispute that New Jersey Jaw applies.
requirements of a meeting of the minds “is ‘an essential element to the valid
consummation of any contract.” Id. at 530 (quoting Ctr. 48 F’ship v. May Dep’t
Stores Co., 355 N.J. Super. 390, 406 (App. Div. 2002)). This requirement is met
when “there has been a common understanding and mutual assent to all the
terms of a contract.” Id. (citation and quotation omitted). An implied-in-fact
contract is “unenforceable for vagueness when its terms are too indefinite to
allow a court to determine with reasonable certainty what each party has
promised to do.” Lynch, 974 F. Supp. at 457.
Assuming an offer contains definite terms, there must also be “‘sri
unqualified acceptance to conclude the manifestation of assent.’” Weichen Co.
Realtors, 128 N.J. at 435-36 (quoting Johnson & Johnson v. Channley Drug Co.,
11 N.J. 526, 539 (1953)). Manifestation of assent may be communicated
through oral or written communication, or through conduct. Id. at 436. “Like
express contracts, contracts implied in fact depend on ‘mutual agreement and
intent to promise.’” Saint Barnabas Med. Ctr., 111 N.J. at 77.
Read asserts that the parties’ conduct created an implied-in-fact
contract. The parties “agreed,” he says, that Read would work for defendant “on
a salary, along with the Plaintiffs staff.” (PBr at 9). In Read’s telling, “Plaintiffs
documents and testimony” establish that there is at least a triable issue of fact
as to whether a contract was formed.
I disagree and will grant defendants’ motion for summary judgment on
the claims of breach of contract and breach of the implied covenant of good
faith and fair dealing. This record unambiguously demonstrates a course of
negotiations that never took shape as an agreed-upon, definite, and enforceable
contract. There is no evidence that Profeta, by words or conduct, agreed to pay
Read a salary or fund his proposed magazine. Neither the terms themselves,
nor the alleged acceptance-by-conduct of such terms, ever attained the
Read approached Profeta in November of 2010 with an idea to launch a
that first discussion in November 2010, and the cessation
of the initial discussions in early 2011, Profeta did no more than ask Read for
more information about the costs related to launching a magazine. At no point
did Profeta expressly or implicitly agree to pay Read a salai
See Flemming u.
Ronson Corp., 107 N.J. Super. 311, 315 (Law Div. 1969), affdo.b., 114 N.J.
Super. 221 (App. Div. 1971) (finding parties never had a meeting of the minds
and no contract was formed when “all that [could] be derived” from parties’
course of conduct was an invitation from defendant to plaintiff to submit an
idea, defendant requested additional details of idea, defendant “did not promise
to pay for the mere submission of an idea,” and after receipt of information
from plaintiff of additional information, defendant stated it was not interested
Read told Profeta that he wanted to hire editors, an advertising
salesperson, an artist, and an editorial page designer. That might urguendo be
construed as an offer, although it seems more exploratory than definite. Be
that as it may, there is no evidence that Profeta accepted that offer in 2010—11.
Indeed, the parties ceased their discussions and Read sought other potential
financial backers, until he re-approached Profeta over a year later.
I turn to those resumed discussions, beginning in July 2012 and
extending through January 2013. In those months, Read continued to supply
information to Profeta about his proposed magazine and at times responded to
Profeta’s requests for more information. A request for more information,
however, falls far short of an agreement or a meeting of the minds on the
material terms of a contact.
On July 18, 2012, for example, Read told Profeta that certain staff,
including himself, would need health benefits. There is no evidence that Profeta
agreed or even responded to this request. On August 9, 2012, Read proposed a
Read’s briefing is not entirely clear as to whether he was expecting a salary for
the work that he did in preparing the concept of The Downtowner or was expecting a
salary as editor once it was launched. That lack of clarity is emblematic of the problem
with the contract claims: even Read cannot seem to articulate what the terms of the
agreement were supposed to be. Either claim would fail, in any event, for lack of a
reasonably clear agreement between the parties.
“Plan B” for the magazine, which would reduce the number of issues per year
and require the staff to accept reduced salary levels. Again, the record is devoid
of any evidence that Profeta agreed to either Plan A or Plan B, or agreed to fund
It was not until September 10, 2012, that Profeta even broached the idea
of funding the entire venture. However, Profeta’s offer to fund the magazine was
premised on an important condition that was never met: that the parties could
come together on a “mutually agreeable business structure.” The parties had
discussions back-and-forth about the business structure, but never reached
agreement on such highly material terms as whether there would be an office
and salaried employees.
On September 26, 2012, in response to a request from Profeta, Read
provided a breakdown of expenses. (PSMF ¶21). Read also provided an
Executive Summary, which included proposed staffing levels for the magazine.
(DE 7 1-19). Again, neither of these events suggest that Profeta agreed to Read’s
proposal. At best, they constitute due diligence by Profeta and Read’s
continued attempts to convince Profeta to back his idea.
On October 5, 2012, Read raised the possibility of being a minority
stakeholder, stating that he would “like to retain a small minority stake” in
recognition of his having developed the idea. (PSMF23; DE 7 1-20). Read says
he believes that he and Profeta were partners. (PSMF ¶84; Read Dep. II at
109:10-20). All this evidence shows, however, is that Read asked to be a
On October 9, 2012, Read sent another email to Profeta, expressing his
hope that they would set up a business structure by the end of the month. (DE
71-21). Profeta replied that he would not fund the venture until there were “at
least 40 members in the Founder’s club.” (Id.). For all that appears in this
record, no person or entity ever actually committed to be a “Founder.” Cf In re
Beltrumi, 324 B.R. 255, 277 (Bankr. M.D. Pa. 2005) (“these comments
conveyed nothing more than promises that negotiations would continue
and hope that a final agreement would eventually be reached.”). Frankly, it
remains unclear what “Founder” status was even supposed to consist of.
After inviting Read to the Christmas party, Profeta expressed to Read
that while he hoped that the magazine would “launch by jDecemberj 14m,” he
had “doubts” as to whether that would occur. (DE 7 1-24).
Read admittedly understood at the time that Profeta was not “100
percent committed” to move forward with The Downtowner. (Read Dep. II, at
263:16-20). Read nonetheless testified that he believed that, by mid-2012, he
had “an agreement” with Profeta. (Read Dep. II at 196:19-20). Asked to state
the terms of the alleged agreement, Read answered that Profeta “was
passionate about the magazine and we should go fonvard, and this was going
to happen now, and his CFO was saying I look forward to working with you.”
(Read Dep. II at 196:21-25; see also PSMF ¶38).
All of the foregoing seems more like wishful thinking than classic offerand-acceptance. These alleged terms, moreover, are too vague to rise to the
level of an enforceable contract. By January 2013, the parties’ negotiations
broke down entirely because they never could agree on a business structure.
Among the unsettled issues was whether the magazine would have an office
and salaried employees or would be based on a freelance model.
Granting Read even’ favorable inference, all that can he concluded is that
the parties had extended discussions which never resolved into an actual
agreement. There was no meeting of minds on important and material terms,
and no indication that Profeta manifested assent, by words or conduct, to be
bound by Read’s proposals. Thus, there is no evidence of an enforceable
agreement, and the breach-of-contract claim must fail.
The claim for breach of the implied covenant of good faith and fair
dealing must fail as well. Such a covenant is not a standalone agreement, but
an implied term of a contract. In the absence of an underlying enforceable
contract, “there can be no breach of an implied covenant of good faith and fair
dealing.” Wade a Kessler Inst., 343 N.J. Super. 338, 345 (App. Div. 2001).
Accordingly, the defendants’ motion for summary judgment on Counts 5
and 7 of the complaint will be granted.
B. Promissory Estoppel
The fourth count of the complaint alleges promissory estoppel. (AC 99297). Read alleges that defendants represented to him “that he would be
compensated for sharing his ideas and providing his services” and that he
relied on those representations to his detriment. (AC 992-96). Elsewhere,
however, Read seems to argue that the “promise” was that he would be hired as
a salaried editor of the magazine. Read points to Profeta’s comment, after the
October 9, 2012 meeting with Berson and Giantomasi, that “it looks like you
got your magazine.” (PBr at 13-15; DSUFM ¶13; PRS ¶13; Read Dep. II at
263:12-13). This, says Read, was a promise that he would be “put on payroll.”24
Defendants argue that the record fails to demonstrate a sufficiently clear
promise that Profeta would pay Read a salary. (DSJBr at 20; DSJRBr at 9-10).
A promissory estoppel claim has four essential elements: “(1) a clear and
definite promise by the promisor; (2) the promise must be made with the
expectation that it will induce reliance by the promisee; (3) the promisee must
reasonably rely upon the promise; and (4) the promisee must experience
substantial reliance on the promise.” Alexander v. CIGNA Corp., 991 F. Supp.
427, 439 (D.N.J. 1997), affid, 172 F.3d 859 (3d Cir. 1998); see Toll Bros., Inc. a
Ed. of Chosen Freeholders of Cnty. of Burlington, 194 N.J. 223, 253 (2008);
Pop’s Cones, Inc. a Resorts Intern. Hotel, Inc., 307 N.J. Super. 461, 468-69
(App. Div. 1998). On summary judgment, the plaintiff must demonstrate that
the record creates at least a material issue of fact as to those elements.
At issue here is the first essential element, “an express promise between
the promisor and promisee.” Burton Imaging Grp. a Toys ‘R” Us, Inc., 502 F.
Read’s briefing suggests that Profeta told Read that he “would be on salary
within months or even days.” (PBr at 13). There is no evidence in the record that
Profeta actually made such a statement to Read. (See Section l.A. 1-3, supra). Read
may be referring to his own November 7, 2012 email to his staff, wherein Read stated
that Profeta had told him that the magazine was going to happen, possibly in thirty
days, and that the staff would be on payroll byJanuan’ 1. (PSMF ¶55; DE 71-28).
Supp. 2d 434, 439 (E.D. Pa. 2007). “A ‘broad or vague implied promise’ will not
suffice.” Id. (quoting C & K Petroleum Prods., Inc. v. Equibank, 839 F.2d 188,
192 (3d Cir. 1988) (implied promise by bank to “administer the main checking
in the normal, banking fashion” too vague for promissory estoppel
Such “done deal” expressions of fact or intent “do not constitute a
sufficiently definite promise.” In re Phillips Petroleum Sec. Litig., 881 F.2d 1236,
1250 (3d Cir. 1989) (statement of the defendant’s intent to sell back stock on a
basis equal to all other stockholders not sufficiently definite); Alexander, 991 F.
Supp. at 439 (“[A] ‘truthful statement as to the present intention of a party with
regard to future acts is not the foundation upon which an estoppel may be
built. The intention is subject to change.” (citation omitted)); Landan v. Wal
Man Real Estate Bus. Tr., 2016 U.S. Dist. LEXIS 129481, at *31 (W.D. Pa. Sep.
22, 2016) (“In the context of the ongoing negotiations and the closing that
consistently was not scheduled, the statements of a done deal or that a closing
and executed documents would be forthcoming were at best vague and
aspirational.”); cf. 168th & Dodge, Ltd. P’ship v. Rave Reviews Cinemas, Ltd.
Liab. Co., 501 F.3d 945, 956-57 (8th Cir. 2007) (holding that promise of a “done
deal” insufficient and unenforceable).
Counsel for Read relies on two cases in support of his position that there
was a definite promise: Pop’s Cones, supra, 307 N.J. Super. 461, and Peck v.
linedia, Inc., 293 N.J. Super. 151 (App. Div.), cei1f denied, 147 N.J. 262
(1996). I briefly address them.
In Pop’s Cones, the plaintiff ran a frozen yogurt business on the Atlantic
City boardwalk. The plaintiff and the defendant negotiated about the possible
relocation of the plaintiffs business to a space owned by the defendant. The
defendant offered significant inducements to encourage the plaintiffs interest
in moving to that site. 307 N.J. Super. at 464. The plaintiff made a written offer
to lease the new site, stating that it needed a timely response, because the
renewal date of its current lease was approaching. Id. at 464-65.
In response, the defendant assured the plaintiff that it would have “little
difficulty in concluding the agreement”; more importantly, the defendant
explicitly advised the plaintiff to give notice to its landlord that it would not be
extending its present lease, to “pack up [its] store,” and to “plan on moving.” Id.
at 465. In reliance on those assurances, the plaintiff gave notice to its landlord,
moved its equipment into temporary storage, sent designs for its new store to
its franchisor, and retained an attorney to finalize the new lease with the
defendant. Id. Thereafter, the defendant withdrew its offer to lease the space to
the plaintifL Id. at 466-67. The trial court granted summary judgment to the
defendant. Id. at 468.
On appeal, the New Jersey Appellate Division surveyed the existing
jurisprudence, and recognized that one of its prior decisions seemed to have
imposed a “heightened the amount of proof required to establish a ‘clear and
definite promise’ by searching for ‘an express promise of a ‘clear and definite’
nature.” Id. at 469 (quoting Malaker Corp. Stockholders Protection Comm. v.
First Jersey Nat’l Bank, 163 N.J. Super. 463, 484 (App. Div. 1978) (holding that
bank’s oral promise in October 1970 to lend $150,000 for January, February
and March of 1971 was not “clear and definite promise” because it did not
describe a promise of “sufficient definition.”), certif denied, 79 N.J. 488 (1979)).
Pop’s Cones recognized that the Appellate Division’s language in Malaker
“suggest[ed] that New Jersey Courts expect proof of most, if not all, of the
essential legal elements of a promise before finding it to be ‘clear and definite.”
Pop’s Cozies noted that more recent decisions, however, had “tended to
relax the strict adherence to the Malaker formula for determining whether a
prima facie case of promissory estoppel exists.” Id. The Court carefully pointed
out that the plaintiff was not claiming the benefit of a contractual bargain;
rather, the plaintiff claimed damages already occasioned by the surrender of its
prior location. Id.
In reversing the grant of summary judgment, the Appellate Division held
that relaxation of the “clear and definite proof” standard was particularly
appropriate “where, as here, a plaintiff does not seek to enforce a contract not
fully negotiated, but instead seeks damages resulting from its detrimental
reliance upon promises made during contract negotiations despite the ultimate
failure of those negotiations.” Id. at 469-70.
I turn to Peck, in which the court found a sufficiently clear and definite
promise. 293 N.J. Super. at 165-68. There, an at-will employment offer letter
contained the position title, a “detailed position description
as well as
benefits,” and an annual salary. Id. at 156 (internal
quotation marks omitted). The court determined the offer was a “clear and
definite promise” of employment for purposes of promissory estoppel. See Id. at
At least as to what I have called “Class B” claims (seep. 2, supra), then,
Pop’s Cones suggests that Read may blaim the benefit of a somewhat relaxed
standard of specificity. Still, the claimed promise here does not come close to
those recognized in the case law, including Pop’s Cones and Peck. Profeta did
not clearly or definitively express that he was either funding the magazine or
employing Read to develop the concept. The offer of employment in Peck, which
was issued by the prospective employer, was detailed and included the
position, salary, and benefits. Importantly, the offer was communicated by the
defendant in that case. Here, Read articulated, not an offer by Profeta, but his
own statements to Profeta stating what he would have liked such an offer to
contain. Profeta never came anywhere near agreeing to, for example, a
particular salary or benefits package.25 Nor did Read’s reliance approach that
I set aside the difficulty that the venture itself, which Read says was supposed
to be his employer, never got off the ground. For example, Profeta emailed Read that
he was considering funding the venture, but only subject to a positive outcome of his
due diligence and a mutually agreeable business structure. Read testified, however,
that he relied upon this as an “assurance” that Profeta was considering funding the
magazine. (Read Dep. II at 243:15-25).
of the Pop’s Cones plaintiff, which, at defendant’s behest, cancelled its existing
least and moved its equipment.
On October 5, 2012, Read raised the possibility of being a minority
stakeholder, stating that he would “like to retain a small minority stake” in
recognition of his having developed the idea. (PSMF1J23; DE 71-20). Read states
that, based on this conversation, he believes that he and Profeta were partners.
(PSMF ¶84; Read Dep. II at 109:10-20). This evidence, however, shows only
that Read asked to be partner, not the Profeta agreed, promised, or even stated
that this would occur. Whatever Profeta might have thought generally about
Read’s magazine proposal, he was not accepting Read’s terms.
After the October 9, 2012 meeting with Berson and Giantomasi, Profeta
said “it looks like you got your magazine.”26 The same day as that meeting,
Read sent another email to Profeta, expressing his hope that they would set up
a business structure by the end of the month. (DE 71-21). Profeta replied that
he would not fund the venture until there were “at least 40 members in the
Founder’s club.” (Id.). That, too, never occurred.
Read admits that he contemporaneously understood that Profeta was not
100% committed to move forward with the magazine at all. Afortiori, Profeta’s
general statements fell far short of a commitment that the magazine would
employ Read. See Ankerstjerne v. Schiumberger Ltd., 155 F. App’x 48, 51 (3d
Cir. 2005) (finding multiple statements that plaintiff xvould get paid, such as
assurances that defendant “would get it taken care of’ and “it was ridiculous
[Plaintiff] had not been compensated” too broad and vague); see also
ProgenyHealth, Inc. v. CareSource Mgmt. Grp., Co., 2017 WL 2618879 (ED. Pa.
2017) (dismissing promissory estoppel claim even though defendants made
countless express statements assuring plaintiffs that they would execute a
contract and “were working as ‘partners’ throughout Icontracti negotiations.”)
Read has not proffered what happened in this meeting that led Profeta to say,
“it looks like you got your magazine.” When asked if Profeta had made this statement,
Profeta answered that “we were all hoping to launch something, so we spoke
optimistically.” (Profeta Dep. at 108:17-18).
Similarly, Read’s testimony that Profeta was “passionate” about the
magazine and said “we should go fonvard” is too indefinite to support a
promissory estoppel claim. See Burton Imaging Gtp., 502 F. Supp. 2d at 439
(holding that “we’re going to move ahead with you” was too “broad or vague” to
maintain promisson’ estoppel claim for a contract to provide advertising
technology); Universal At?. Sys. v. Honeywell Int’l, Inc., 2018 U.S. Dist. LEXIS
62022, at *20 (E.D. Pa. Apr. 12, 2018) (dismissing promissory estoppel claim
based on statement “You can be assured that you will be part of this
After Read received the Christmas party invitation, Profeta again
expressed to Read that while he hoped that the magazine would “launch by
[December] 14th,” he had “doubts” that that would be the case. (DE 7 1-24).
These undisputed facts make clear that while Read advocated his idea,
Profeta did not promise that he would fund this venture or pay Read as an
employee, either in the interim or after the magazine launched. The statements
Profeta did make were predictive, vague, and hedged by conditions. Profeta’s
responses made it clear that he had made no commftment and was performing
ongoing due diligence.
Truly without a shred of foundation is Read’s “Class B” claim that Profeta
in effect “hired” him to develop the magazine in a period of approximately two
years running from December 2010 through January 2013. Read states that
he was entitled to a salary of $109,000 per year, plus compensation for his
living expenses. That two-year period, remember, encompasses the initial,
abandoned discussions, as well as approximately sixteen months (January
2011 until July 2012) during which Read was pitching the magazine to
investors other than Profeta. Read himself can’t seem to keep the claim
straight; most often he claims he was “hired” not in December 2010, but in
mid-2012, or possibly in October 2012. At any rate, the annual “salary” figure
of S 109,000 appears to be wholly invented. Read points to no act or statement
by Profeta suggesting a commitment to pay that or any salary, let alone living
expenses. (See discussion at pp. 28-31, supra.)
In sum, the claimed promises cited here are too uncertain and
contingent to be enforced via promissory estoppel. Therefore, summary
judgment will be granted on Read’s promissory estoppel claim (Count 4).
C. Breach of Fiduciary Duty
Read’s breach of fiduciary duty count (Count 12) alleges that the parties
“established a joint venture.” (AC
The count claims that as part of the
joint venture, Profeta would “front the start-up costs, with the Plaintiff
retaining his minority stake”; Profeta “would set up the LLC, with him as
publisher and the Plaintiff as editor/associate publisher”; and Read would
handle all the editorial issues. (AC 9fl41-42, 144). Read claims that Profeta
breached the duty of loyalty and reasonable care by profiting from, and
usurping, Read’s ideas.27
Defendant move for summary judgment on this claim on the basis that
there is no evidence of a joint venture. (DSJBr at 24-25).
“Claims for breach of fiduciary duty require: 1) the existence of a
fiduciary duty or relationship between the parties; 2) breach of that duty; and
3) resulting damages.” Starland v. Fusari, 2015 U.S. Dist. LEXIS 132446, at
*16 (D.N.J. Sep. 3, 2015). With respect to the first element, “[t]he essence of a
fiduciary relationship is that one party places trust and confidence in another
who is in a dominant or superior position. A fiduciary relationship arises
between two persons when one person is under a duty to act for or give advice
for the benefit of another on matters within the scope of their relationship.”
Read’s opposition to defendants’ motion on this claim, however, focuses on
unjust enrichment. (PBr at 18-20). Quantum meruit and unjust enrichment are
discussed separately at Section 111.1, infra. I will not permit that concept to be grafted
onto this fiduciary claim via an argument in a brief. Typically, “arguments raised in
but not squarely argued, are considered waived.” John Wyeth & Brother
Ltd. v. Cigna Int’l Corp., 119 F.3d 1070, 1076 n.6 (3d Cir. 1997) (citing Commonwealth
ofFa. v. HHS, 101 F.3d 939, 945 (3d Cir. 1996)); see also Laborers’ Int’l Union ofN.
Am., AFL-CIO v. Foster Wheeler Energy Corp., 26 F.3d 375, 398 (3d Cir. 1994) (“a
will not suffice to bring that issue before this court.”);
passing reference to an issue
Kadetsky v. Egg Harbor Twp. Bd. ofEduc., 82 F. Supp. 2d 327, 334 n.5 (D.N.J. 2000)
(finding “casual reference” to a claim results in waiver).
F.G. v. MacDonell, 150 N.J. 550, 563-64 (1997) (citing Restatement (Second) of
Torts § 874 cmt. a (1979)).
Traditional fiduciary relationships include those between trustee and
beneficiary, guardian and ward, agent and principal, attorney and client,
corporate director and shareholder, and the members of a partnership. Avon
Bros. v. Tom lYlartin Constr. Co., 2000 N.J. Super. Unpub. LEXIS 1, at *11 (App.
Div. Aug. 30, 2000). Fiduciary duties are not imposed in ordinary business
transactions. Alexandra, 991 F. Supp. at 439 (citing International Minerals and
Mm. z.’. Citicorp, N.A., 736 F. Supp. 587, 597 (D.N.J. 1990); Qlenside West Corp.
v. Exxon Co., U.S.A., 761 F. Supp. 1100, 1116 (D.N.J. 1991) (“no fiduciary
relationship exists between franchisors and franchisees under New Jersey
law”); Coca-Cola Bottling Co. of Elizabethtown v. Coca-Cola Co., 696 F. Supp.
57, 73 (D. Del. 1988) (a company and their bottlers, “although bound together
by their common interest in promoting the sate of Coca-Cola, are arms-length
bargaining parties, not partners.”), affd, 988 F.2d 386 (3d Cir. 1993)). “[T]he
dominant theme of the case law
is that fiduciary relationships arise where
one party has the power and opportunity to take advantage of the other,
because of that other’s susceptibility or vulnerability.” Coca-Cola Bottling Co.,
696 F. Supp. at 75.
However, “[t]here can be no question that joint venturers owe each other
a fiduciary duty.” Lo Bosco v. Kure Eng’g, 891 F. Supp. 1020, 1033 (D.N.J.
1995); see also Starland, 2015 U.S. Dist. LEXIS 132446, at *16 n.4 (joint
venturers owe each other a fiduciary duty because ‘[tihe relation of joint
is fiduciary, one of trust and confidence, calling for the utmost
good faith, permitting of no secret advantages or benefits.”’ (citation omitted)). 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. Id.
“The sine qua non ofjoint venture is a contract purposefully entered into
by the parties. The joint venture is not a status created or imposed by law but
is a relationship voluntarily assumed and arising wholly ex contractu, express
or implied.” Sullivan v. Jefferson, Jefferson & Vaida, 167 N.J. Super. 282, 289
(App. Div. 1979) (citation omitted); see Material Techs. v. Carpenter Tech. Corp.,
2004 U.S. Dist. LEXIS 28892, at *22..23 (D.N.J. Dec. 14, 2004) (“A joint venture
is predicated on the same legal event as an employment or partnership
contract--an agreement between the parties.”). The “basic criterion of a joint
venture” is “the voluntary agreement of the parties to form a relationship with
the intent to create a joint venture.” Sullivan, 167 N.J. at 290; see Read v.
Profeta, 2016 U.S. Dist. LEXIS 51305, at *17 (D.N.J. Apr. 15, 2016) (noting
that joint venture is “voluntary agreement of the parties to form a relationship
with the intent to create a joint venture.”).
It is true that “the joint venture relationship may be less formal” and
“may be implied wholly or in part from the acts and conduct of the parties.”
Starland, 2015 U.S. Dist. LEXIS 132446, at *4Q “Whether or not the parties to
a particular contract have, as between themselves, created the relationship of a
joint venture depends upon their intention.” Id. at 41 (quoting First Mechanics
Bank, v. Commissioner, 91 F.2d 275, 278 (3d Cir. 1937)). That is, “[f]or a joint
venture to have been formed, the parties must have agreed upon the essential
*7 (D.N.J. June
terms.” Burnham v. WMC Mortg. Corp., 2010 WL 2560657, at
For the reasons set forth above dismissing Read’s contract claims for
lack of agreement and dismissing the estoppel claim for lack of a promise,
Read’s fiduciary claim cannot stand. At best, the record reveals planning and
conversations to establish a joint venture. The parties never reached the
partnership or quasi-partnership agreement described by Read, who requested
a small partnership stake
never received an answer.
Read candidly admitted that he did not have an agreement with Profeta
to share profits and losses (Read Dep. 11109:15-20); that he had no
“expectation” regarding the allocation of profits and losses (Read Dep. II at
110:105); that the parties never had a firm deal and had not worked out the
details for an agreement (Read Dep. I at 54:19-50; Read Dep. II at 197:16-18,
305:14-16); and that the parties never satisfied the condition of agreeing on a
business structure. (Read Dep. II at 239:16-20).
Therefore, Read’s claim of breach of fiduciary duty (Count 12) is also
D. Fraud and Equitable Fraud Claims
Read’s fraud claim (Count 2) alleges that defendants represented to him
that they “would work together with him to develop, market, and produce The
Downtowner” (AC ¶63). Read alleges that Profeta represented that the
magazine “would be a joint venture between the jp]arties and that the Plaintiff
would be heavily involved in its development and marketing.” (AC ¶78). Read
claims that the defendants’ “actions and/or representations were material and
designed to get the Plaintiff to cooperate with them and share ideas and
connections so that the Defendants could develop their own magazine without
the Plaintiffs’ involvement.” (AC ¶79). Read’s equitable fraud claim (Count 13)
repeats the same factual allegations. (AC ¶fl51-170).
Defendants move for summary judgment on these counts on the basis
that Read has failed to identify a material misrepresentation. (DSJBr at 16-17).
“Although the word ‘fraud” is used in common parlance to connote any
practice involving shady or underhanded dealing, in the law it is a term of art
with a clear definition.” Banco Popular N. Am. v. Ganth, 184 N.J. 161, 175
(2005). To establish fraud under New Jersey law, a plaintiff must prove that
“the defendant made (1) a material misrepresentation of present or past fact (2)
with knowledge of its falsity (3) with the intention that the other party rely
thereon (4) and which resulted in reasonable reliance by plaintiff.” Lightning
Lube u. Witco Corp., 4 F.3d 1153, 1182 (3d Cir. 1993); see Gennari v. Weiched
Co. Realtors, 148 N.J. 582, 610 (1997).
In addition, “allegations of fraud must be proved by clear and convincing
evidence.” Alexander, 991 F. Supp. at 435 (citing Vanguard Telecomm., Inc. u. S.
New England Tel. Co., 722 F. Supp. 1166, 1187 (D.N.J. 1989), aff’d, 900 F.2d
645 (3d Cir. 1990); Fox u. Mercedes-Benz Credit Corp., 281 N.J. Super. 476,
484 (App. Div. 1995)). Therefore, to survive summary judgment, “a plaintiff
must meet his or her ‘burden of coming forward with evidence which could lead
ajuiy to find clear and convincing proof of fraud.” Id. (quoting Moffatt
Enterprises, Inc a Borden Inc., 807 F.2d 1169, 1174-75 (3d Cir. 1986)).
Of the four elements of fraud, “[mjisrepresentation and reliance are the
hallmarks of any fraud claim, and a fraud cause of action fails without them.”
Banco Popular N. Am., 184 N.J. at 175. An alleged misrepresentation must be
premised upon an assertion that is not in accord with the facts. Restatement
(Second) of Contracts
§ 159 cmt. a, c (1981). However, the assertion “must
relate to something that is a fact at the time the assertion is made in order to
be a misrepresentation. Such facts include past events as well as present
circumstances but do not include future events.” Id. “Indeed, in order to
constitute a fact, a statement’s content must be susceptible of ‘exact
knowledge’ at the time it is made.” Alexander, 991 F. Supp. at 435.
“Statements as to future or contingent events, to expectations or
probabilities, or as to what will or will not be done in the future, do not
constitute misrepresentations, even though they may turn out to be wrong.” Id.
(citing Chatlos Sys., Inc. v. Nat’l Cash Register Corp., 479 F. Supp. 738, 748-49
(D.N.J. 1979); affd in part, ret/cl in part, 635 F.2d 1081 (3d Cir. 1980)).
Additionally, “statements that can be categorized as ‘puffery’ or ‘vague and illdefined opinions’ are not assurances of fact and thus do not constitute
misrepresentations.” Id. (citing Diaz v. Johnson Matt hey, Inc., 869 F. Supp.
1155, 1165 (D.N.J. 1994)); see also Schott Motorcycle Supply, Inc. u. Am. Honda
Motor Co., Inc., 976 F.2d 58, 63-64 (1st Cir. 1992) (holding that defendant’s
representations concerning commitment to the motorcycle market and future
profitability of plaintiff’s franchise were opinions of future events and could not
be justifiably relied upon as “facts”).
“[TJhe elements of equitable fraud are similar to that of common law
fraud except that scienter, or ‘knowledge of the falsity and an intention to
obtain an undue advantage therefrom,’ is not required.” Carrow v. Fedex
Ground Package Sys., 2017 U.S. Dist. LEXIS 48536, at *2o21 (D.N.J. Mar. 30,
Read asserts that a promise to do something in the future, “which the
promisor never intended to keep when he made the promise, may satisfy the
first element of fraud.” (PBr. at 10). That is true enough. “In order to be the
basis for an action for fraud, however, the alleged misrepresentation cannot be
predicated simply upon a promise to perform that subsequently is unfulfilled.”
Lightning Lube, 4 F.3d at 1186. A plaintiff must prove “that at the time the
promise to perform was made, the promisor did not intend to fulfill the
promise.” Id. (citation omitted). “The ‘mere proof of nonperformance does not
prove a lack of intent to perform.’” Id. (quoting Stochastic Decisions, Inc. v.
DWomenico, 236 N.J. Super. 388 (App. Div. 1989)).
Read generally alleges that Profeta withdrew from the project “out of the
blue” after “he promised the Plaintiff he would be able to start working.” (PBr at
11). He further contends that the “timing of’ Profeta’s rejection of “the business
model he and the Plaintiff had agreed upon provides serious questions as to
whether Defendant fraudulent1y] misrepresented his intention of ever hiring
the Plaintiff.” Id.
The fatal flaw in Read’s argument, however, is that he does not point to
evidence that such a promise was made, let alone withdrawn. Profeta’s
misgivings about the business model were fairly clear; he certainly never said
he would hire Read or fund the venture even if they did not agree upon a
business model. In addition, Read admitted that he believed that Profeta was
being honest with him in their dealings and that Profeta was “actually
interested” in working with him on The Downtowner. (Read Dep. II at 16-25).
From late 2010 on, Read was gratuitously shopping his proposal to
investors, essentially working on spec. The earliest suggestion of any level of
potential commitment by Profeta was the September 10, 2012 email, wherein
Profeta indicated that he would fund the entire venture pending a positive
outcome of his due diligence and a mutually agreeable business structure.
Later, he stated that he would need to see at least 40 “Founders” before
committing to the venture. To an extent that these could be construed as
statements of fact about Profeta’s current intent, they were expressly made
contingent on events that never occurred.
The record reveals that Profeta’s statements to Read, however rosy, were
qualified and contingent. Read’s own testimony established that he knew
Profeta was not entirely committed to funding this venture. Profeta’s
statements were not actionable, material misrepresentations.
Accordingly, Read’s claims of fraud (Count 2) and equitable fraud (Count
13) are dismissed.
E. Negligence and Gross Negligence
Read’s negligence claim (Count 8) asserts that the parties entered into a
“business relationship” and as a result of that relationship, defendants “owed
him a duty of exercising reasonable care.” (AC
defendants “breached” their duty of care “in making misrepresentations to the
Plaintiff with regard to their business-related actions.” (AC
negligence (Count 9) claim alleges that defendants owned him a “duty of
exercising basic reasonable care in their professional relationship with him,”
and that defendants breached that dun’ in developing Read’s idea, “earning
monies thereon, and failing to compensate him for same.” (AC fl121, 123).
Defendants move for summary judgment on these claims on the basis
that Read has failed to establish that they owned Read a duty. (DSJBr at 18;
DSJRBr at 8). Additionally, defendants argue that Read has failed to identify a
negligently-made false statement. (DSJBr at 18).
Read addresses these claims in two sentences in his opposition brief, and
simply alleges that there is a disputed fact “as to whether the Defendant owed
the Plaintiff a duty not to utilize his idea and work product to their advantage.”
(PBr at 12).
“jTjo prevail on a negligent misrepresentation claim, a plaintiff must
prove that the defendant negligently made an incorrect statement, upon which
the plaintiff justifiably relied,” which caused economic loss. Alexander, 991 F.
Supp. at 440 (citing H. Rosenblum, Inc. v. Adle,; 93 N.J. 324, 334 (1983)); Ali,i
v. Am. Honda Motor Co., 2010 WL 1372308, at *13 (D.N.J. Mar. 31, 2010).
While “a fiduciary duty between the parties is not an element of a claim
for negligent misrepresentation,” a plaintiff seeking to recover for negligent
misrepresentation must nonetheless establish that the defendant owed it a
duty of care. Kronfeld v. First Jersey Nat’! Bank, 638 F. Supp. 1454, 1465
(D.N.J. 1986); cf New Jersey Econ. Dev. Auth. v. Pavonia Rest., Inc., 319 N.J.
Super. 435, 446 (App. Div. 1998) (“a party has no duty to disclose information
to another party in a business transaction unless a fiduciary relationship exists
between them, unless the transaction itself is fiduciary in nature, or unless one
party ‘expressly reposes a trust and confidence in the other.”). “The question of
whether a duty exists is a matter of law properly decided by the court, not the
jury, and is largely a question of fairness or policy.” Wang v. Allstate Ins. Co.,
125 N.J. 2, 15 (1991).
“The common law tort of negligent misrepresentation shares all the
components of fraud, but includes one additional factor: the misrepresentation
must be made by a person with a duty to the plaintiff.” In re Prudential Ins. Co.
of Am. Sale Practices Litig., 975 F. Supp. 584, 619 (D.N.J. 1996), rev’d on other
grounds, 133 F.3d 225 (3d Cir.), ccii. denied, 525 U.S. 817 (1998).
For most of the same reasons that I dismissed Read’s fraud claims,
supra—particularly, Read’s failure to establish that Profeta made a false or
incorrect statement—the negligent misrepresentation claims will be dismissed
as well. See section III.D, supra. Profeta’s statements amounted to little more
than requests for more information, a hope that the magazine would launch,
and a conditional commitment to fund the magazine.
Read also suggests that the source of duty here was a joint venture. For
the reasons expressed for rejection of Read’s breach of fiduciary duty claim,
that claim is similarly rejected here. See section III.C, supra.
Accordingly, summary judgment is granted as to Read’s negligent
F. Theft of Intellectual Property
Read’s claim of “theft of intellectual property” (Count 1) alleges that he
shared his ideas for The Downtowner with the defendants, who
misappropriated the ideas and used them to create Radius. (AC ¶155-60).
Defendants move for summary judgment on this claim on the basis that
the concept behind The Downtowner was not novel; that Read failed to keep the
idea confidential; and that Profeta neither “adopted” nor “made use oF’ Read’s
proposed business model. (DSJBr at 9-12).
There is no claim that Read possessed intellectual property in the sense
of, say, a copyright or trademark. As the parties recognize, Read is alleging
misappropriation of a mere idea. (DSJBr at 9; PBr at 1). “An idea, as
distinguished from the copyrighted contents of a book or a patented device or
process, is accorded no protection in the
unless it is acquired and used in
such circumstances that the law will imply a contractual or fiduciary
relationship between the parties.” Flemming, 107 N.J. Super. at 315 (citing J.
Irizamj y Puente v. President & Fellows of Hat-v. CoiL, 248 F.2d 799 (1st Cir.
den., 356 U.S. 947 (1958)). “Where a person communicates a novel
idea to another with the intention that the latter may use the idea and
compensate him for such use, the other party is liable for such use and must
pay compensation if he actually appropriates the idea and employs it in
connection with his own activities.” Id. at 317 (citation omitted).
To state a claim for misappropriation of an idea, a plaintiff must show
that “(1) the idea was novel; (2) it was made in confidencef;] and (3) it was
adopted and made use of’ by the defendant. Id.; see Johnson v. Benjamin Moore
& Co., 347 N.J. Super. 71, 84 (2002); see also Dufjy u. Charles Schwab & Co.,
Inc., 123 F. Supp. 2d 802, 807-08 (D.N.J. 2000).
Although novelty does not have a clear definition under New Jersey law,
Baer, 392 F.3d at 627, courts have set forth some guiding principles. For
example, an idea is not novel if “it
merely ‘a different application of a long-
established principle ‘ or if ‘a competitive product similar to [the plaintiffs]
was [already] on the market.” Duffy, 123 F. Supp. 2d at 809 (citation omitted).
“[I]nnovation, originality, or invention” are hallmarks of novelty. Id.
An idea that is an “adaptation of an existing idea or [that] embodies
elements long in use” may nevertheless be novel if “the adaptation or
combination would lead to a significantly new and useful result.” Id. at 810.
Still, “[a]n idea lacks novelty if it is merely a clever or useful adaptation of
existing knowledge, or it is no more than a variation on a basic theme.” Vent u.
Mars Snackfood US, LLC, 611 F. Supp. 2d 333, 338 (S.D.N.Y. 2009) (applying
New Jersey law) (citation omitted).
The court in Duffy noted that the following factors are relevant to the
(1) the idea’s specificity or generality (is it a generic concept or one
of specific application?), (2) the idea’s commonality (how many
people know of this idea?), (3) the idea’s originality (how different is
this idea from generally known ideas?), (4) the idea’s commercial
viability (how widespread is the idea’s use in the industry?), (5) the
idea’s obviousness (was the idea an obvious adaptation or
application of an idea already in the domain of public knowledge?),
and (6) the idea’s secrecy (did an othenvise novel idea lose its
novelty status because of inadequate steps taken to maintain the
Duffy, 123 F. Supp. 2d at 810.
the use of ideas that are not novel properly
confines protection to those ideas that are truly valuable to society.” Blackmon
v. Iverson, 324 F. Supp. 2d 602, 607 (E.D. Pa. 2003). “An idea is novel and
merits protection when it is truly innovative, inventive, and new.” Id.
Novelty is an issue of law for the court, “although some of the factors
relevant to a determination of novelty may be factual.” Duffy, 123 F. Supp. 2d
at 809; accord Baer, 392 F.3d at 628 (“We believe that the district court [in
Duffyj was correct in its conclusion as to how the New Jersey Supreme Court
\Tould decide this issue.”).
In addition to novelty, a plaintiff must show that he or she shared the
idea in a climate of confidence. An idea “is accorded no protection in the law
unless it is acquired and used in such circumstances that the law will imply a
contractual or fiduciary relationship between the parties.” Flemming, 107 N.J.
Super. at 315. In the “absence of such, the parties are merely competitors.”
Anderson a Century Prods. Co., 943 F. Supp. 137, 151 (D.N.H. 1996)
Here, Read has not shown the requisite contractual or fiduciary
relationship between the parties. See sections lll.A (breach of contract) and
III.C (breach of fiduciary duty), supra. He also has failed to establish that his
idea was novel or was kept confidential. This claim, then, fails for multiple
Read stresses that he disclosed his ideas only to potential investors, not
to everyone, and that he marked the Executive Summary to Profeta as
“confidential.”28 I do not agree that an idea disseminated to potential investors
is confidential so long as it was not generally published. See Keane v. Fox TV
Stations, Inc., 297 F. Supp. 2d 921, 940 (S.D. Tex. 2004) (“By gratuitously
sending a packet of information to a company, hoping that the company might
contribute financially to Keane’s desire to turn an idea into a production of
some kind, Keane extinguished any property right to a trade secret that he
might have had. Keane had no ability to create a confidential relationship
Read asserts that his “materia1s’ were marked “confidential.” (PBr at 1). There
is no citation to the record for this assertion. Based on the Court’s review of the
record, the only document marked confidential was Read’s Executive Summary.
between him and the production companies to whom he allegedly sent his idea
simply by declaring that it was self-evident that he was hoping to be paid for its
use.”), aff’d, 129 Fed. App’x 874 (5th Cir. Mar. 17, 2005), cefl. denied, 546 U.s.
938 (2005). It is true that one document, the Executive Summan, was marked
“confidential.” The Executive Summary, however, was sent on September 26,
2012, after Read had already had extensive discussions with Profeta about the
magazine, and after Read had floated his idea to potential backers without
confidentiality restrictions. Indeed, Read acknowledged that for some eighteen
months he pitched the magazine to “anyone in Newark who would listen”
(DSUMF ¶46(c), PRS ¶46(c)), and that he disclosed his research regarding his
platform to everyone “who asked.” (DSMF ¶34; PRS 934).
Read’s claim also fails on the novelty element. Read essentially argues
that the novelty of his idea “lies in the fact that no other Newark publication
like it existed.” (PBr at 6). First, this contention is exaggerated. Newark Bound,
a Newark-centric magazine, was released while the parties were discussing The
Downtowner. (DSUMF ¶15; PRS ¶15; Read Dep. II at 274:11-14). Second, and
more generally, a magazine focusing on a particular city is not a “novel” idea.
While the idea to create a Newark-specific magazine might be considered a
“specific” application, there can be no doubt that the concept is generic and
commonplace. Read acknowledges that many municipalities, including nearby
ones like Hoboken and Jersey City, have city-centric magazines. (DE 71-19). In
developing The Downtowner, Read researched other city-specific magazines,
including ones for Clifton, Asbury Park, Charlotte, Cleveland, and New Orleans.
(DE 71-8, 71-20, 71-32, 71-13). In other words, Read’s concept was simply to
adapt an idea already in the public domain and try it in a particular location,
Newark. See Bedani Promotional Displays v. Midwest Display, Inc., 2007 N.J.
Super. Unpub. LEXIS 1647, at *14 (App. Div. Mar. 8, 2007) (affirming
summary judgment because plaintiff’s idea, drive-through Christmas light
show in a specific location, was not novel and existed in other towns).
Summary judgment will be granted in favor of defendants on Read’s
misappropriation claim (Count 1),29
Read’s conversion claim alleges that Profeta “falsely represented” that
Read would be compensated “for his ideas and work,” and that defendants
“took and developed the Plaintiff’s idea without compensation.” (AC ¶fl03105). Profeta responds that Read’s “idea,” or intangible property, is not entitled
to legal protection. (DSJBr at 18-19).
“In New Jersey, conversion is defined as ‘an unauthorized assumption
and exercise of the right of ownership over goods or personal chattels belonging
to another, to the alteration of their condition or the exclusion of an owner’s
rights.” Capital Health Sys. v. Veznedaroglu, 2017 U.S. Dist. LEXIS 28390, at
*3233 (D.N.J. Feb. 27, 2017) (quoting Ricketti v. Bamj, 2015 WL 1013547, at
*8 (D.N.J. Mar. 9, 2015)); see CFLL Title Ins. Co. v. Ellis, 409 N.J. Super. 444,
456 (App. Div. 2009); Scholes Elec. & Communs. a Fraser, 2006 U.S. Dist.
LEXIS 39287, at *11 (D.N.J. June 14, 2006). Common law conversion consists
of the following elements: “(1) the existence of property, (2) the right to
immediate possession thereof belonging to [thej plaintiff, and (3) the wrongful
interference with that right by [the] defendant.” Capital Health Sys., 2017 U.S.
Dist. LEXIS 28390, at *33
However, “a mere abstract idea, incapable of material embodiment,
cannot be the subject of a claim for conversion.” Flemming, 107 N.J. Super. at
316; see also Premio Foods, Inc. a Purdue Farms, Inc., 2012 U.S. Dist. LEXIS
107421, at *18 (D.N.J. July 30, 2012) (dismissing conversion claim that alleged
that defendants “misappropriated [plaintiff’sJ intangible trade secrets and
applied them to [defendant’s] business operation
because [plaintiff did] not
allege that Defendants are in possession of any of [plaintiffs] tangible
property.”). “Absent a specific holding from the New Jersey Supreme Court
1 do not address Profeta’s arguments regarding whether he “adopted” or “made
use of’ Read’s ideas.
regarding the conversion of intangible property, this District has consistently
interpreted New Jersey law to limit conversion to tangible property.” Capital
*33 (citing Ricketti, 2015 WL
Health Sys., 2017 U.S. Dist. LEXIS 28390, at
1013547, at *8 (compiling numerous cases from District of New Jersey finding
that intangible property cannot be the subject of conversion)).30
Read’s conversion claim fails because he does not allege that Profeta
possesses any of his tangible property.3’ Indeed, as noted above, Read does not
even claim that he owns the rights to his idea. Without such a possessory or
ownership interest, Read has no conversion claim.
Accordingly, Profeta’s motion for summary judgment on Count 6 of the
complaint alleging conversion is granted.
H. Interference with Prospective Economic Advantage
Read’s claim for interference with a prospective economic advantage
(Count 3) alleges that defendants “intentionally and maliciously sought to
prevent the Plaintiff from marketing his ideas and services to other entities or
pursuing other business.” (AC ¶85). This count also alleges that defendants
“falsely represented to the Plaintiff renumeration for his efforts should he
entrust his ideas and provide his services to them and to include them in the
magazine.” (AC ¶87).
Defendants argue that the record is devoid of any evidence that the
defendants prevented Read from marketing his ideas to others, or that
defendants promised Read remuneration. (DSJBr at 21). Defendants further
The one exception to this rule, as cited by Profeta, appears to be money, to the
extent that “a plaintiff can allege that the defendant converted specific segregated or
identifiable funds.” Scholes Elec. & Communs, 2006 U.S. Dist. LEXIS 39287, at *15.
There is no such claim here.
Instead of addressing the merits of the conversion claim, Read complains about
“discovery’ abuses” that occurred during his deposition. (PBr at 12). Read principally
argues that he was “forced” to admit to certain facts in response to defense counsel’s
questions. Id. However, a review of Read’s deposition reveals that (1) Read was nonresponsive to many of defense counsel’s questions; and (2) Read did not object during
the deposition. Read’s belated certification attesting to alleged discovery abuses,
submitted in the hope of defeating defendants’ motion for summary judgment, is
insufficient to create an issue of fact on his conversion claim.
argue that Read has failed to define a prospective advantage with which Profeta
interfered. (DSJRBr at 11). Read responds that he “worked exclusively on the
Magazine for and at the Defendant’s behest for a significant period of time in
which the Defendant was acutely aware that the Plaintiff was without
resources and was not pursuing independent leads.” (PBr at 16).
“An action for tortious interference with a prospective business relation
protects the right ‘to pursue one’s business, calling or occupation free from
undue influence or molestation.” Printing Man-Morristown v. Sharp Elecs. Corp.,
116 N.J. 739, 750 (1989). “What is actionable is ‘[t]he luring away, by devious,
improper and unrighteous means, of the customer of another.”’ Id. (citation
To establish a claim for tortious interference, a plaintiff must establish
(1) that it had an existing contract or reasonable expectation of economic
benefit or advantage; (2) that the defendant knew of the contract or expectancy;
(3) that the defendant wrongfully interfered with that contract or expectancy;
(4) that it is reasonably probable that the loss of the contract or prospective
economic gain was a result of the interference; and (5) that damages resulted
from the interference.” Florian Greenhouse, Inc v. Cardinal IC Corp., 11 F. Supp.
2d 521, 525 (D.N.J. 1998); Palm Bay Imports v. Miron, 2001 U.S. Dist. Lexis
25119 (D.N.J. 2001), aff’d, 55 Fed. App’x 52 (3d Cir. 2002).
With respect to the first element, the plaintiff must show that it had a
“protectable right.” Printing Mart—Morristown, 116 N.J. at 751. Such a right
need not necessarily arise from an existing contract, but “there must be
allegations of fact giving rise to some ‘reasonable expectation of economic
advantage’” or demonstrating that “plaintiff was in ‘pursuit’ of business.” Id.;
see also Avaya Inc., RP
Telecom Labs, Inc., 838 F.3d 354, 412 (3d Cir. 2016)
(affirming grant of summary judgment in favor of defendant on tortious
interference claim where plaintiff failed to point to “one specific example where
it has credible evidence that [defendant’s] allegedly tortious conduct harmed its
Moreover, “New Jersey law requires that a plaintiff alleging tortious
interference with existing or prospective advantage present proof that but for
the acts of the defendant, the plaintiff ‘would have received the anticipated
economic benefits.”’ Lightning Lube, Inc., 4 F.3d at 1168; see Santana Prods. v.
Bobrick Washroom Equip., Inc., 401 F.3d 123, 140 (3d Cir. 2005) (affirming
grant of summary judgment in favor of defendant on tortious interference claim
where plaintiff had identified “one prospective contract,” but failed to show that
it was “reasonably probable” that plaintiff would have been winning bidder on
Read’s argument on this count misses the mark. That Read did not
pursue independent leads does not imply that the defendants wrongfully
interfered with his ability to do so. Read has not made a threshold showing of a
single lost opportunity or prospective opportunity. Moreover, he has not shown
that the defendants interfered with, or were the but-for cause, his loss of any
Accordingly, summary judgment will be granted on Count 3 of the
I. Unjust Enrichment & Quantum Meruit
Read’s claims of unjust enrichment and quantum meruit assert that
Read provided ideas and services to Profeta, and that defendants benefited
from and used Read’s ideas and services without providing deserved
compensation. (AC ¶fl27-l35). Defendants move for summary judgment on
these claims on the basis that Read testified that he had “no expectation” of
receiving a “particular dollar amount” from defendants. (DSJBr at 22).
Defendants also argue that Read has failed to present evidence to establish the
reasonable value of his services. (DSJBr at 22-23).
“Quantum memit is a form of quasi-contract ,...which means ‘as much
as he deserves.”’ Kopin v. Orange Prods., Inc., 297 N.J. Super. 353, 367 (App.
Div.) (citation omitted), certf denied, 149 N.J. 409 (1997). “[C]ourts have
allowed quasi-contractual recovery for services rendered when a party confers a
benefit with a reasonable expectation of payment.” Weichen Co. Realtors, 128
N.J. at 437. Quantum meruit “rests on the equitable principle that a person
shall not be allowed to enrich himself unjustly at the expense of another.” Id.
(quoting Callano v. Oakwood Park Homes Corp., 91 N.J. Super. 105, 108 (App.
Recovery is permitted “when one party has conferred a benefit on
another, and the circumstances are such that to deny recovery would be
unjust.” Id. (real estate agent who was the “procuring cause” of a sale was
entitled to the reasonable value of his services under quantum meruit theory).
For a quantum meruit claim, “[i]t is well settled that where one performs
services for another at his request, but without any agreement or
understanding as to wages or remuneration, the law implies a promise on the
part of the party requesting the services to pay a just and reasonable
compensation.” Kopin, 297 N.J. Super. at 367 (citation omitted).
“To recover under a theory of quantum meruit, a plaintiff must establish:
‘(1) the performance of
good faith, (2) the acceptance of the services
by the person to whom they were rendered, (3) an expectation of compensation
therefor, and (4) the reasonable value of the services.tm Starkey v. Estate of
Nicolaysen, 172 N.J. 60, 68 (2002) (quoting Longo v. Shore & Reich, Ltd., 25
F.3d 94, 98 (2d Cir. 1994) (internal quotations and citations omitted)); see
Hassler v. Sovereign Bank, 644 F. Supp. 2d 509, 519 (D.N.J. 2009), aff’d, 374
Fed. App’x 341 (3d Cir. 2010).
Unjust enrichment is an equitable cause of action that imposes liability
when a “defendant received a benefit” and defendant’s “retention of that benefit
without payment would be unjust.” VRG Corp. v. GKN Realty Corp., 135 N.J.
539, 554 (1994). To state a claim for unjust enrichment, a plaintiff must show
that “(1) at plaintiffs expense (2) defendant received benefit (3) under
circumstances that would make it unjust for defendant to retain benefit
without paying for it.” Arlandson v. Hartz Mt. Corp., 792 F. Supp. 2d 691, 711
(D.N.J. 2011) (internal quotation and citation omitted).
While “damages need not be proved with precision where that is
impractical,” New Jersey “law abhors damages based on mere speculation.”
Mosley v. Femina Fashions, Inc., 356 N.J. Super. 118, 129 (App. Div. 2002)
(internal quotations omitted); see also Rowland
Hudson Cnty., 7 N.J. 63, 74
(1951) (excluding as speculative evidence of estimated costs as a measure of
quantum meruit recovery for architectural work that was never completed).
A plaintiff must provide competent evidence “to enable ajury intelligently
and fairly to place a reasonable value upon the services claimed to have been
rendered.” Perlberg v. Geminder, 20 N.J. Super. 191, 198 (App. Div. 1952); see
Weichert Co. Realtors, 128 N.J. at 437 (recovery under quantum meruit theory
is generally limited to market value of services or costs); see also Hurley v.
Atlantic City Police Dep’t, 174 F.Sd 95, 131 (3d Cir. 1999) (recognizing that
“plaintiff bears the burden of producing sufficient evidence of what constitutes
a reasonable market rate for the essential character and complexity of the
services rendered in order to make out a prima facie case.
contest that prima facie case only with appropriate record evidence.”).
The evidence in the record concerning the value of Read’s “services,” the
costs incurred by Read, or of any benefit that was conferred by Read to Profeta
is deficient. Read did not keep track of the hours that he claims to have
expended and did not submit expenses to Profeta. (Read Dep. I at 52:6-8; Read
Dep. TI at 208:16-209:19; DSUMP ¶45; PRS ¶45). It is not clear if Read kept
track of any of his expenses at all.
In prior sections, I have already discussed the lack of any promise or
reasonable expectation that Read, an entrepreneur seeking an investor, would
be paid for his efforts. Most of the two y:ear period for which Read seeks
compensation was spent in soliciting investors other than Profeta. I add that
the conferral of a benefit, or Profeta’s “enrichment,” is dubious. Asked to
identify such a benefit, Read suggested that he had gratified Profeta’s “ego.”
Radius, as noted, lost money.
Nor is the value of such services established with any certainty. Read
testified that his investment of time and expenses is “subjective” and is “open
to anyone’s interpretation.” (DSUMF ¶48; PRS ¶48). Read’s answers to
interrogatories state that he “invested literally hundreds of hours to the project
over two years, which he [estimates] to be worth approximately $200,000.” (DE
7 1-5, at 7). It is unclear how Read came up with this figure. (See id.; PSMF
‘66). It appears to be entirely speculative. And unlike the majority of cases that
have sustained such a cause of action at the summary judgment stage, Read
has not proffered expert testimony.
Accordingly, defendant’s motion for summary judgment on these claims
of unjust enrichment and quantum meruit is also granted.32
Read’s Motion for Summary Judgment
The counterclaim’s remaining causes of action against Read are tortious
interference with prospective economic advantage (second count); defamation
and slander (third count); tortious interference with contractual relations
(fourth count); false light (fifth count); and trade libel (sixth count). (DE 41).
Read’s motion for summary judgment is granted as to all.
A. Read’s Motion to Strike Profeta’s Declaration
Before addressing the merits of Read’s motion for summary judgment, I
consider Read’s motion to strike Profeta’s declaration. That declaration, for the
first time in this litigation, presents evidence that was requested by Read but
not provided by Profeta during discovery. Read also argues that the declaration
contains inadmissible hearsay and fails to set forth the affiant’s personal
knowledge of the facts alleged. In particular, Read seeks to strike the following
paragraphs from Profeta’s declaration: 5, 6, 7, 8, 9, and 12. (PSJRBr at 5).
On a motion for summary judgment, “[a] party may object that the
material cited to support or dispute a fact cannot be presented in a form that
would be admissible in evidence.” Fed. R. Civ. P. 56(c)(2). Federal Rule of Civil
Because Read has failed to set forth any viable cause of action at this stage,
Count 14, requesting injunctive relief, is also dismissed.
Procedure 56(c)(4) sets out three elements that a declaration in support of a
summary judgment motion must meet. It “must be made on personal
knowledge, set out facts that would be admissible in evidence, and show that
the affiant or declarant is competent to testify on the matters stated.” Fed. R.
Civ. P. 56(q(4).
Second, the Local Civil Rules require that affidavits be factual and rest
on personal knowledge:
Affidavits, declarations, certifications and other documents of the
type reference in 28 U.S.C. § 1746 shall be restricted to statements
of fact within the personal knowledge of the signatory. Argument of
the facts and the law shall not be contained in such documents.
Legal arguments and summations in such documents will be
disregarded by the Court and may subject the signatory to
appropriate censure sanctions or both.
L. Civ. R. 7.2(a). “Any certification, or portion of a certification, that violates
this rule must be disregarded by the court.” Pasqua v. Cnty. of Hunterdon,
2016 U.S. Dist. LEXIS 106143, at *23 (D.N.J. Aug. 11, 2016) (citing Fowler v.
Borough of Westuille, 97 F. Supp. 2d 602, 607 (D.N.J. 2000) (holding that
courts may disregard statements in affidavit which are not based on personal
knowledge)); see also Dreyer v. Altchem Enut?. Servs., Inc., 2007 WL 7186177, at
*3 (D.N.J. Sept. 25, 2007) (“Courts will not consider affidavits that are not
founded on personal knowledge.” (citation omitted)).
Personal knowledge for purposes of Federal Rule of Evidence 602 “may
consist of what the witness thinks he knows from personal perception,” and
requires that the witness “who testifies to a fact
actually observed the fact.”
See Schatz-Bemstein u. Keystone Food Prods., 2009 U.S. Dist. LEXIS 34700, at
*6 (D.N.J. Apr. 17, 2009) (disregarding portion of certification that “does not
attest to the fact the affiant has personal knowledge.”).
On summary judgment, courts may consider hearsay as follows:
The rule in this circuit is that hearsay statements can be
considered on a motion for summary judgment if they are capable
of being admissible at trial. In ruling on a motion for summary
judgment, the court need only determine if the nonmoving party
can produce admissible evidence regarding a disputed issue of
material fact at trial. The proponent need only ‘explain the
admissible form that is anticipated.”’ Thus, in ruling on
Defendants’ motion for summary judgment, the district court
should have limited its inquiry to determining if the out-of-court
statements Plaintiffs were relying on were admissible at trial.
Fraternal Order of Police, Lodge I u. City of Camden, 842 F.3d 231, 238-39 (3d
Cir. 2016) (internal citations omitted) (holding that out-of-court statements
that plaintiffs relied on were admissible at trial when “[p]laintiffs identified the
and noted their availability to testify”); see also Fed.
R. Civ. p. 56 (advisory committee notes to 2010 edition) (“The burden is on the
proponent to show that the material is admissible as presented or to explain
the admissible form that is anticipated.”).
Thus, if the party submitting hearsay adequately explains the admissible
form in which such evidence will be offered at trial, the court will consider it on
summary judgment. See Frilando v. Bordentown Driver Training Sch., LLC, 2017
WL 3191512, at *15 n.19 (D.N.J. 2017) (“Frilando argues Diab’s testimony
concerning what the authorities told him is inadmissible hearsay. Bordentown
says it is not hearsay because it is not being offered to prove the truth of the
statement. The rule in this circuit is [contained in Fraternal Order, supra]. I
accept Bordentown’s explanation and therefore consider Diab’s testimony on
this motion.” (internal citations omitted)); see also Watkins v. Wells Fargo Bank,
N.A., 2017 WL 2399086, at *4 n.3 (D.N.J. June 2, 2017) (“Plaintiff argues that
Wells Fargo’s records cannot be considered by this Court on summary
judgment on the grounds of hearsay. Plaintiff is incorrect
has proffered that these documents are capable of being admissible at trial as
business records under Federal Rule of Evidence 803(6).” (internal citations
“As a general proposition, ‘conclusory, self-serving affidavits are
insufficient to withstand a motion for summary judgment.” Gonzalez v. Sec’y of
Dep’t of Homeland Sec., 678 F.3d 254, 263 (3d Cir. 2012) (quoting Kirleis v.
Dickie, McCarney & Chilcote, P.C., 560 F.3d 156, 161 (3d Cir. 2009)). On the
other hand, “a single, non-conclusory, affidavit or witness’s testimony, when
based on personal knowledge and directed at a material issue, is sufficient to
defeat summary judgment or judgment as a matter of law.” Cappuccio v. Prime
Capital Funding LLC, 649 F.3d 180, 189 (3d Cir. 2011) (citation omitted). “Put
differently, a self-serving affidavit may defeat summanT judgment in the
absence of other evidence rendering it incredible.” Marrin v. Capital Health Sys.,
2017 WL 2369910, at *17 (D.N.J. May 31, 2017) (quotation and citation
The challenged paragraph of Profeta’s declaration most clearly
permissible under these standards is paragraph 12:
12. The author of the Newark Star Ledger article told me that it
was “planted” by Read, and that Read, a former employee of the
Newark Star Ledger, essentially wrote the article, which was then
published under the author’s byline.
(Profeta Decl. ¶12). During his deposition, Profeta testified as to his
conversation with Zambito, under whose byline the article appeared. Paragraph
12 of the declaration carries the clear implication (confirmed by the defendant’s
brief (DSBr 12)) that Zambito is the witness who could be called to testify to
these facts. This paragraph thus meets the personal knowledge and
competency requirements, and there is no unfair surprise. Accordingly, Read’s
motion to strike paragraph 12 is denied.
Regarding the remaining paragraphs (fl5, 6, 7, 8 and 9), defendants
principally confine themselves to addressing Read’s hearsay objections. As to
personal knowledge, they unhelpfully proffer the following: “As is evident from
the fact of the Profeta Decl. that Profeta had personal knowledge of the factual
statements contained in his declaration.” (DSBr at 12).
First, defendants argue that paragraphs 5, 6, and 7 of the certification
are admissible under the party-opponent hearsay exception. See Fed. R. Evid.
801(d)(2). Those paragraphs provide, in full:
5. Read was incensed by the launch of Radius and commenced a
campaign of callousness directed at me and Radius, designed to
defame and destroy my magazine.
6. Thus, Read began to communicate falsely to third-parties that I
had “stolen” his business plan and magazine concept in an effort
to forestall Radius’ success and decimate its ability to turn a profit.
7. Towards this end, Read communicated falsely’ to Radius’
funding and advertising sources, including many of Radius’
“Founders”, that Radius was based upon Read’s “stolen” magazine
concept. As a result, Radius’ ability to raise funds for its continued
operations was inhibited.
(Profeta Decl. fl5-7). Of course, Read’s own statements are admissible against
him as non-hearsay, see Fed. R. Evid. 801(d)(2), provided there is some
foundation to suggest that he made them. Profeta’s declaration offers none.
The basis of Profeta’s knowledge as to these facts is unstated. Nor do
these assertions offer the Court a basis to infer that he is speaking from
personal knowledge. Profeta does not attest that Read rnade these “defamatory”
statements in his presence; rather, the implication is that Read made them to
“third-parties” or Founders. Those unidentified third parties are not partiesopponent, and they are not offered up as witnesses.33
Moreover, Profeta cannot competently attest to Read’s state of mind (that
Read was “incensed” and that the purpose of Read’s communications was “to
forestall Radius’s success”). Accordingly, the Court will grant Read’s motion to
strike paragraph 5, 6, and 7.
Next, defendants argue that paragraphs 8 and 9 are admissible under
the state-of-mind exception to the hearsay bar. (DSBr at 8; see Fed. R. Evid.
803(3)). Defendants assert that the factual assertions in these paragraphs are
submitted as evidence of motive. Those paragraphs provide as follows:
8. Indeed, I heard from the marketing people with several of
Radius’ advertisers that the executives in the companies were
extremely disappointed with me for “stealing” Read’s idea and they
Paragraph 5 need not be credited insofar as it alleges the legal conclusion that
Read “defamed” Profeta. See Lucas v. Romito, 2017 U.S. Dist. LEXIS 151195, at *1819
(D.N.J. Sep. 18, 2017) (disregarding plaintiffs affidavit and granting summary
judgment where plaintiffs “statement that Defendant’s agent promised that she ‘would
now be allowed to stack [Plainliffs’j UM/UIM insurance coverage for up to three
vehicles’ contains a legal conclusion, as ‘stackable’ is a legal conclusion.”).
were not sure that they wanted to continue supporting my
9. As a result of Read’s false statements, the following companies
discontinued purchasing advertising from Radius: Commercial
Mortgage, Cook Maran, Dr. Boiardo/CarePoint, ECC, Flemington
Car & Truck Country, Qenova Bums Giatomasi & Webster,
Hollister Construction, HehI & HehI, J.P. Morgan, Korman,
McElroy Deutch Mulvaney & Carpenter, MCJ Amelier My
Brother’s Keeper, PUlP, St. Michael’s Hospital, United Energy
Consultants, Van Cleef, and Verizon. Prior to Read’s statements,
each of these advertisers had been purchasing advertising of
$4,000 per quarter.
(Profeta Decl. ¶18-9). Same problem. The statements,
admissible over a hearsay objection. But Profeta’s saying, after the close of fact
discovery, that he “heard” these statements had been made does not provide
the necessary foundation.
Here, defendants principally rely on Callahan v. A.E. V., Inc., 182 F.3d
237, 2 52-53 (3d Cir. 1999), wherein the Third Circuit partially reversed a grant
of summary judgment in favor of defendants because the district court
mistakenly excluded evidence as hearsay. In that antitrust case, the plaintiffs,
who ran “mom-and-pop” beer stores, sued a supermarket-style beer distributor
which had allegedly pressured a major wholesaler to obtain exclusive
discounts. Id. at 240.
The district court excluded the plaintiffs’ deposition testimony that their
customers had reported switching to the defendants because the defendants
offered lower prices. Id. at 250. As a result of that evidentiary ruling, the
district court concluded that the plaintiffs could not prove damages associated
with the illegal conduct. Id.
In reversing this aspect of the district court’s decision, the Third Circuit
held that these customers’ hearsay statements were admissible under Federal
The Third Circuit noted that its analysis of the issues presented in Callahan
was limited to damages. Liability was not raised in the appeal. 182 F.3d at 241
(“Strangely, antitrust liability issues are not presented in this appeal.”).
Rules of Evidence 803(3) to show the customers’ motive, i.e., why the
customers had taken their business elsewhere. Id. at 251-52. The statements
could not be used, however, to establish actual loss. Id. Id. at 252 (quotation
and internal punctuation omitted); see also Stelwagon Mfg. Co. u. Tarmac
Roofing Sys., Inc., 63 F.3d 1267, 1274 (3d Cir, 1995) (holding that customers’
statements to plaintiff’s employees that customers ceased business with
plaintiff was not admissible to prove amount of business lost to competitor).
Callahan, a single-level hearsay case, does not solve the double-hearsay
problem of paragraph 8. Profeta is reporting what the “marketing people” said
to him about what the “executives” said to them. While the executives’
statements may be admissible to show motive under Rule 803(3), they did not
make those statements to the affiant, Profeta, but to an intermediary.
Paragraph 8 is entirely stricken.
The portion of paragraph 9 which claims that Profeta lost business “as a
result of Read’s false statements” is also stricken. While this statement might
be relevant to the motivations of Profeta’s customers, the only basis for it is the
two-level hearsay identified in paragraph 8.
The remainder of paragraph 9 provides a list of businesses that ceased
doing business with Profeta. That list is presumably based on his personal
knowledge, and I would not strike it for lack of a foundation. He draws no
factual link between the lost advertisers and any defamation, but it is possible
he could do so through other evidence.
But set that all aside. I nevertheless find that there is justice in Read’s
claim that he has been sandbagged by this declaration, submitted after the
close of fact discovery. Profeta tries to shift the blame to Read: “Plaintiff did not
ask me any questions during my deposition about the third-parties, including
potential funding sources and advertising, to whom Read had communicated
his defamatory and libelous statements.” (Profeta Decl.
That assertion is
contradicted by the record and inconsistent with this Court’s discovery rules.
Rule 26(a) requires a party, without awaiting a discovery request, to disclose
the identity and contact information of individuals likely to have discoverable
information that the disclosing party may use to support its case. Fed. R. Civ.
P. 26(a)(l)(A)(i). Rule 26(e) imposes a continuing obligation on a party to
supplement its Rule 26(a) disclosures as well as its discovery responses “in a
timely manner” if it learns additional or corrective information through the
discovery process. Fed. R. Civ. P. 26(e)(1). The nature of this counterclaim is
that Read’s alleged defamation caused advertisers to cease doing business with
Radius; it strains credulity that Profeta is now surprised by the obligation to
support his claims of lost advertising revenue.
The consequence of failing to provide facts and documents in discovery,
when required in pretrial disclosures or requested during discovery, is that
such evidence cannot be used in opposition to summary judgment. Rule
37(c)(l) makes this obligation clear and provides that “[i]f a party fails to
provide information or identify a witness as required by Rule 26(a) or 26(e), the
party is not allowed to use that information or witness to supply evidence on a
unless the failure was substantially justified or harmless.”
“The exclusion of such evidence is meant to be ‘self-executing’ according
to the Advisory Committee Note accompanying enactment of the current
version of Rule 37(c) in 1993.” Carmichael v. Thomson, 2018 U.S. Dist. LEXIS
166260, at *10 (D.N.J. Sep. 27, 2018). According to the Advisory Committee,
“[tlhis automatic sanction provides a strong inducement for disclos
material that the disclosing party would expect to use as evidence, whether at a
trial, at a hearing or on a motion, such as one under Rule 56.” Id.
Profeta had the burden to show that the failure to disclose this
information previously was “substantially justified or harmless.” I cannot
conclude that it was; quite the contrary:
Read’s initial written discovery requests to Profeta expressly asked
Profeta to “set forth in detail” the “factual allegations, including the amount(s)
and type(s) of damages” in support of his counterclaim against Read. (DE 6510, Interrogatory ¶ 18). In Profeta’s November 15, 2017 certified responses, he
incorporated the general allegations of his counterclaim, and provided no
further detail. (Id.). In terms of damages, Profeta responded that he “sustained
special damages,” a legal conclusion, and “incurred legal fees,” without further
elaboration. (Id. at ¶18; PSUMF ¶33).
In response, plaintiffs counsel sent a deficiency letter, requesting more
information regarding Interrogatory No. 18. (DE 65-il). Instead of providing
more information, defense counsel responded with a second brush-off: the
“amount of special damages if awarded are within the discretion of the court
and jury to be determined by them.” (DE 65-il; PSUMF’135). Well, obviously—
but the Interrogatory was legitimately requesting the evidentiaiy basis for any
Plaintiff’s counsel sent a second deficiency letter. (DE 65-12; DE 74-2,
¶6; DE 74-5). This letter noted the deficient response to Interrogatory No. 18,
stating that Profeta failed to provide “any” factual bases for the counterclaims
as well as a calculation of damages. (DE 74-5, at 3). Read requested
confirmation that Profeta did not have any “actual” damages. (DE 74-5, at 3).
Thereafter, Profeta “supplemented” his discovery responses with the StarLedger article and claimed that this article was “an item of special damages”
that “damaged Mr. Profeta’s reputation in the community.” (DE 74-6). He
provided nothing further.
Profeta’s initial Rule 26 disclosures identified himself, Read, Coleman,
and Kohn as potential witnesses. (PSJRBr at 6-7). During his deposition,
Profeta testified that the following individuals had knowledge of his
counterclaims; Steven Coleman, Phil Read and his son; Bob Bogert; and
Zambito. (Profeta Dep. at 10:23-i 1:25). These were the only individuals that
Profeta could “recollect” at the time of his deposition. (Profeta Dep. at 11 :25).
“A district court may find a declaration to be a sham when it contains facts that
the affiant previously testified he could not remember.” Crawford u. George & Lynch,
Inc., 19 F. Supp. 3d 546, 557 (D. Del. 2013).
The purpose of the “sham affidavit doctrine” is to prevent a party from defeating
summary judgment “by filing an affidavit disputing his or her own sworn testimony
without demonstrating a plausible explanation for the conflict.” Jiminez v. All Am.
Rathskeller, Inc., 503 F.3d 247, 251 (3d Cir. 2007) (citing Baer, 392 F.3d at 624). A
It is clear to this Court that Profeta failed to respond to legitimate
discover-v demands and twice failed to remedy deficiencies when they were
pointed out to him. Profeta has not presented a credible justification for the
belated disclosures in his declaration.
I also cannot conclude that the disclosure is harmless. The disclosure,
after the close of discovery and at the summary judgment stage, has deprived
Read the opportunity to conduct any discovery into these alleged damages.
Fact discovenr was closed on July 31, 2018, inhibiting Read’s ability to cure
the clear prejudice.
Accordingly, the Court will strike and disregard paragraphs 5, 6, 7, 8, 9,
and 12 of Profeta’s declaration. I find that striking this portion of the Profeta’s
declaration is a sufficient sanction; I decline to exercise my discretion to also
impose monetary sanctions. See DiGregorio v. First Rediscount Corp., 506 F.2d
781, 788 (3d Cir. 1974); see also Halsey u. Pfezffer, 2010 WL 3735702, *1
(D.N.J. Sept. 17, 2010).
certification is a “sham” if it contradicts the affiant’s prior testimony and there is no
valid explanation for the inconsistency. Baer, 392 F.3d at 624.
However, “[wihen there is independent evidence in the record to bolster an
otherwise questionable affidavit, courts generally have refused to disregard the
affidavit.” Baer, 392 F.3d at 625. “Such corroborating evidence may establish that the
affiant was ‘understandably’ mistaken, confused, or not in possession of all the facts
during the previous deposition.” Jiminez, 503 F.3d at 254. In the event that the
swearing party fails to explain the contradiction or offers a “weak explanation for his
sudden ability to remember important facts,” a district court may “disregard the
subsequent affidavit and the alleged factual issue in dispute as a ‘sham,’ therefore not
creating an impediment to a grant of summary judgment based on the deposition.”
Crawford, 19 F. Supp. 3d at 557 (citing Yeager, 693 F.3d at 1081); Jiminez, 503 F.3d
Here, Profeta has offered no explanation for his sudden ability to recall critical
facts. Paragraph 9 may also properly be disregarded under the sham affidavit doctrine.
I make one other point. Profeta has essentially placed the general allegations of
his counterclaim into an affidavit. As noted above, “conclusory, self-sewing affidavits
are insufficient to withstand a motion for summary judgment.’” Gonzalez, 678 F.3d at
263; see Lujan, 497 U.S. at 888 (nonmoving party may not successfully oppose
summary judgment motion by simply replacing “conclusoiy allegations of the
complaint or answer with conclusory allegations of an affidavit.”); see also Section I.,
A., 2, n. 11, supra (explaining requirement of competent evidence on summary
B. Defamation, Slander, False Light, and Trade Libel
The only competent evidence before the Court regarding a false or
defamatory statement is the Star-Ledger article that essentially reported the
allegations of the complaint as such. Profeta added in his deposition that his
business colleagues mentioned the article to him. (These, unlike the statements
discussed above, were at least made directly to Profeta and, although vague,
may be relevant to show that the article was read by the relevant audience.)
A claim for defamation has three 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 Ed. of Ethic., 198 N.J. 557, 585 (2009);
see G.D. v. Kenny, 205 N.J. 275, 293 (2011). A defamatory statement may
consist of libel (i.e., a written defamatory statement) or slander (i.e., an oral
defamaton’ statement). W.J.A. v. D.A., 210 N.J. 229, 238 (2012).
A defamatory statement is “false and injurious to the reputation of
another or exposes another person to hatred, contempt or ridicule or subjects
another person to a loss of the good will and confidence in which he or she is
held by others.’” Soobzokov
Lichtblau, 664 P. App’x 163, 166 (3d Cir. 2016)
(quoting Romaine v. Kallinger, 109 N.J. 282, 537 A.2d 284, 287 (1988)). “A
defamatory statement, generally, is one that.
deter[s] others from wanting to
associate or deal with [the subject of the statement].” Kenny, 205 N.J. at 293
(internal citations and quotations omitted).
To determine if a statement has a defamatory meaning, “a court must
consider three factors: (1) the content, (2) the verifiability, and (3) the context of
the challenged statement.” Leang, 198 N.J. at 585. A “statement’s content must
be judged not by its literal meaning but by its objective meaning to a
reasonable person of ordinary intelligence.” McLaughlin v. Rosanio, Ballets &
judgment motion). Given the conclusoiy nature of the affidavit, it is doubtful that even
if I accepted these assertions, they would be sufficient to defeat summary judgment.
Talamo, 331 N.J. Super. 303, 312 (App. Div. 2000). Regarding context, “a
statement’s meaning can be affected by its context.” Id. (citation omitted).
Finally, “only verifiable statements can be defamatory.” Id. Thus,
“recoven’ is limited to defamatory false averments of fact and the truth of the
statement is a complete defense to a defamation action.” Id. Truth may be
asserted as a defense even when the allegedly defamatory statement “is not
perfectly accurate.” Leang, 198 N.J. at 585. The law of defamation “overlooks
minor inaccuracies and concentrates upon substantial truth.” Masson v. New
Yorker Magazine, Inc., 501 U.S. 496, 516 (1991) (“Minor inaccuracies do not
amount to falsity so long as the substance, the gist, the sting, of the libelous
charge be justified.” (quotations and citation omitted)); Saizano v. N. Jersey
Media Grp. Inc., 201 N.J. 500, 523 (2010).
A court must consider a statement as a whole to determine the
impression it will make on a reader. Kenny, 205 N.J. at 294; Decker v.
Princeton Packet, Inc., 116 N.J. 418, 561 A.2d 1122, 1125 (1989) (explaining
that “allegedly defamatory statement must be taken in context and the
publication considered as a whole”). It also “must evaluate the criticized
language according to the fair and natural meaning which it would be given by
persons of ordinary intelligence.” Decker, 116 N.J. 418, 425 (internal quotation
and citation omitted); Saizano, 201 N.J. 500, 523.
The tort of false light “involves ‘publicity that unreasonably places the
other in a false light before the public.” Leang, 198 N.J. at 588 (quoting
Romaine v. Kallinger, 109 N.J. 282, 294 (1988)). “The tort of false light has two
elements: (1) ‘the false light in which the other was placed would be highly
offensive to a reasonable person’; and (2) ‘the actor had knowledge of or acted
in reckless disregard as to the falsity of the publicized matter and the false light
in which the other would be placed.’” Id. at 589 (quoting Romaine, 109 N.J. at
*34 (D.N.J. Dec. 21,
294); see Andros v. Gross, 2005 U.S. Dist. LEXIS 3545, at
2005) (stating that one of the requirements of a false light claim “is, obviously,
falsity”). “Reckless disregard’ is defined as a high degree of probable falsity, for
proof of which plaintiff must present sufficient evidence to permit the
conclusion that defendant in fact entertained serious doubts as to the truth of
the statements.” Hudak v. Fox, 215 N.J. Super. 233, 235 (App. Div. 1985)
(internal quotation marks and citations omitted).37
The Court will grant summary judgment and dismiss Profeta’s claims of
defamation, slander, false light, and trade libel for failure to establish an
actionable false statement. See Molin v. Trentonian, 297 N.J. Super. 153, 155,
159 (App. Div. 1997) (affirming grant of summary judgment to local newspaper
that published article about plaintiffs arrest for stalking because “[n}either the
article nor headline, read in context,” were false). The full context of the article
is fairly understood as reciting Read’s allegations and his claims. Essentially
the statements in the article are sourced, and the article clearly conveys that it
Trade libel seems to be the form of defamation least applicable here. Trade libel
is a “tort addressing aspersions cast upon one’s business operation. The tort is also
known as injurious falsehood, disparagement of property, or commercial
disparagement.” Patel u. Soriano, 369 N.J. Super. 192, 246 (App. Div. 2004). “To prove
a claim of trade libel under New Jersey law, a plaintiff ‘must demonstrate 1)
publication 2) with malice 3) of false allegations concerning its property, product or
business, and 4) special damages, i.e., pecuniary harm.’” Lithuanian Commerce Corp.
v. Sara Lee Hosiery, 47 F. Supp. 2d 523, 538 (D.N.J. 1999) (quoting Juliano ii. 17]’
Corp., ii WL 10023, *4 (D.N.J. Jan. 22, 1991)); see Mayflower Transit, LLC u.
Prince, 314 F. Supp. 2d 362, 378 (D.N.J. 2004). A plaintiff alleging trade libel “must
demonstrate that Defendant’s statements were false or that they were written with
reckless disregard for the truth or falsity.” Mayflower Transit, LLC, 314 F. Supp. 2d at
Trade libel typically applies “to statements that are injurious to plaintiffs
business, but cast no reflection on either plaintiffs person or property.” Patel v.
Soriano, 369 N.J. Super. at 245-46. In other words, trade libel only goes to comments
regarding an actual product or service of a company. Id. at 257 (“If... the aspersion
reflects only on the quality of plaintiffs product, or on the character of plaintiff’s
business as such, it is disparagement.”). In contrast, statements that “attack the
personal character of its owner as vendor” are in actuality defamation. Id. (quoting
Restatement (Second) of Torts § 626 cmt. d (1977)). That Profeta allegedly “stole”
Read’s idea is at most a disparagement of Profeta, not his product, i.e., the magazine.
It is therefore unclear to the Court how trade libel would apply. €Df Id. (“if the
statement charges plaintiff with personal misconduct, or imputes to plaintiff
reprehensible personal characteristics, it is regarded as libel or slander.”).
is reporting the allegations in a complaint, not reporting as a fact that
“stole” Read’s idea.38
All of that aside, many of the actual underlying facts here are not
disputed. The notion that an idea was “stolen” is more of a legal conclu
an opinion-based characterization of the facts, rather than a statement
that itself could be verified or disproved. See Ward v. Zelilcovsky, 136 N.J.
530 (1994) (recognizing distinction between “actionable defamatory
that are capable of verification, and “non-defamatory name-calling,”
“rhetorical hyperbole” and “statements that are in form statements of
There is an additional problem. It is alleged that Read “planted” the article
the Star-Ledger by means of his friend, a reporter. Profeta’s claim is not
against the Star-Ledger, which could not be liable for reporting that a civil
ions. See Snlzano v. N. Jersey Media
been filed and accurately summarizing the allegat
ge to article
Grp. Inc., 201 N.J. 500, 513, 52 1-22 (2010) (applying fair-reporting privile
written about bankruptcy complaint, and recognizing that fair report
to “Ia] full, fair, and accurate report regarding a public document that marks
including a civil complaint), ced. denied, 562
commencement of ajudicial proceeding,”
U.S. 1200, 131 S. Ct. 1045 (2011); see also Petro-Lubricant Testing Labs.,
Adelman, 233 N.J. 236, 261 (2018) (applying fair-report privilege to
forth in [thej
reported on civil complaint that “essentially recounted the allegations set
complaint.”). Nor could Read himself be liable for statements made in a civil
complaint, which enjoy a privilege. See Giles v. Phelan, Hallinan 86 Schrni
901 F. Supp. 2d 509, 523 (D.N.J. 2012) (recognizing that New Jersey’
privilege “ensures that [s]tatements by attorneys, parties and their represe
made in the course ofjudiciai or quasi-judicial proceedings are absolutely
to one that Read is liable for
and immune from liability.”). The claim, then, boils down
“planting” a non-defamatory article that reported the contents of a non-de
Read also argues that the one-year statute of limitations on defamation
bars Profeta’s defamation claim because the article was published on April
June 21, 2016. Read has raised this
and Profeta’s counterclaim was not filed until
Civ. P. 8
statute of limitations defense for the first time in this motion. See Fed. R.
(c)( 1) (“In responding to a pleading, a party must affirmatively state any
statute of limitations”); John R. Sand & Gravel Co. v.
affirmative defense, including
United States, 552 U.S. 130, 133, 128 S. Ct. 750, 753 (2008) (“IT]he law typical
bej raise[d} at the
treats a limitations defense as an affirmative defense that [must
pleadings stage and that is subject to rules of forfeiture and waiver.”); Robins
Johnson, 313 F.3d 128, 134 (3d Cir. 2002) (“[P]arties should generally assert
affirmative defenses early in litigation, so they may be ruled upon, prejudice
avoided, and judicial resources maybe conserved.”).
which cannot reasonably be understood to be meant literally and seriously.”
(citing Restatement (Second) of Torts,
§ 566 cmt. e (1979)).°
Accordingly, Read’s motion for summary judgment on Profeta’s
defamation, slander, false light, and trade libel is granted.
C. Tortious Interference Claims
The remaining two allegations in Profeta’s counterclaim assert tortious
interference with prospective economic advantage, and tortious interference
with contractual relations.
The law regarding tortious interference with a prospective economic
advantage was outlined above. See section lII.H, supra. Similar standards
govern claims of tortious interference with contractual relations. See Florian
Greenhouse, mc, 11 F. Supp. 2d at 525; see also Angrisani v. Capital Access
Network, Inc., 175 F. App’x 554, 557 (3d Cir. 2006) (“Under New Jersey law, a
claim of tortious interference requires a showing of (1) intentional and
malicious interference (without justification); (2) with a prospective or existing
economic or contractual relationship with a third party; (3) causing the loss of
prospective gain; and (4) damages.”).
Profeta has not established a loss of a prospective economic advantage or
contract due to Read’s allegedly tortious conduct. The only proffered evidence
of a prospective economic advantage or contract was contained in paragraphs 8
and 9 of Profeta’s belated declaration, which the Court has struck. (Profeta
Decl. ¶8-9); see Avaya Inc., RP, 838 F.3d at 412 (affirming grant of summary
judgment in favor of defendant on tortious interference claim where plaintiff
failed to point to “one specific example where it has credible evidence that
[defendant’s! allegedly tortious conduct harmed its business.”). And even those
1 obsen’e in passing that the sentiment “I had the idea first” is one frequently
expressed. It would ordinarily be regarded as a boast of priority, and would not
necessarily or usually be taken to mean that the person is an actual lawbreaker or
paragraphs failed to establish with reasonable concreteness that Read’s
statements caused Radius to lose advertisers and ultimately fail.
Accordingly, Profeta’s tortious interference claims are dismissed for
failure to establish causation and damages.
For the reasons expressed above, the motion of the remaining
defendants, Profeta and Radius, for summary judgment on all of Read’s claims
is granted (DE 64). Read’s motion to strike and for sanctions is granted in part
and denied in part. (DE 72). Read’s motion for summary judgment on
defendants’ counterclaims is also granted. (DE 65).
An appropriate order follows. The clerk shall close the file.
Dated: May 29, 2019
United States District Judge
As noted above, Profeta’s claim that he lost business due to Read’s conduct,
equivocal in any event, rested on double hearsay (Profeta Deci. ¶ 8 (“I heard from the
marketing people with several of Radius’ advertisers that the executives in the
companies were extremely disappointed with me for “stealing” Read’s idea and they
were not sure that they wanted to continue supporting my operation.”)).
The only allegations that facially relate to actual damages rest on facts alleged
in the struck paragraph 9. (Profeta Decl. ¶9 (“The following companies discontinued
purchasing advertising from Radius: [The list is quoted at pp. 60—61, supra.j
Prior to Read’s statements, each of these advertisers had been purchasing advertising
of $4,000 per quarter.”)). Profeta’s declaration artfully avoids actually stating that
those advertisers cancelled because of Read’s statements, however. Profeta merely
states that some advertisers expressed disappointment in him for “stealing” the idea,
and then separately lists advertisers who stopped purchasing ads at some point.
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