GRANGE CONSULTING GROUP et al v. BERGSTEIN et al
Filing
61
MEMORANDUM OPINION filed. Signed by Judge Peter G. Sheridan on 12/16/2014. (eaj)
t..
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
GRANGE CONSULTING GROUP and
PAUL PARMAR,
Civil Action No. 13-cv-06768 (PGS)
MEMORANDUM AND ORDER
Plainti/fi,
V.
DAVID BERGSTEIN, al.,
Defendants.
This matter is before the Court on a Motion to Dismiss the complaint (‘Complaint” or
‘Cornpl.”) brought by Defendants Alex Weingarten and Weingarten Brown, LLP (collectively
Weingarten”) (ECF 7). The Court has jurisdiction over the matter based on the diversity of the
parties. See 28 U.S.C.
§ 1332.
I.
Weingarten argues that plaintiffs’ claims against it are barred by the absolute litigation
privilege.
In order to determine that issue, the Court must review the Complaint. The Complaint
outlines a long and bitter dispute over monies allegedly owed Plaintiff Parmar (“Parmar”) by
Defendant Bergstein (“Bergstein”) and entities associated with him. In two separate instances
identified in the Complaint, Weingarten is alleged to be ‘an attorney and law firm representing
Bergstein and his companies [who] unlawfully aided and abetted the fraud perpetrated against
Parmar.” (Compl. at
7.) The first instance allegedly arose out of Parmar’s September 27, 2012
filing of a notice of withdrawal of a civil action then pending in New Jersey state court. (Compl. at
112.) Immediately thereafter, Weingarten filed a motion for sanctions against Parmar, wherein
approximately $200,000 was awarded by the Court. (Compi. at
¶ 114). Parmar alleges that “with the
help of [Weingarten] and his firm, Defendant Bergstein reneged on the oral promises to pursue
settlement and sandbagged Parmar with a sanctions motion.” (Compi. at
¶ 113.)
In the second instance. commencing in February, 2012. Weingarten communicated with the
Saiber law firm (“Saiber”) about monies amounting to $2.2 million that Saiber held in trust for
Parmar. (Compi. at ¶ 131.) In a letter, Weingarten positioned that his client did not grant
permission to Saiber to disburse the funds to Parmar. (Compl. at
¶ 132-33) on the ground that
Parmar had “tortuously interfered with [his client’s] ability to control the remaining asset.” (Compl.
at
¶ 134.) Saiber responded by asserting that Weingarten should seek injunctive relief as Saiber
anticipated that it would release the funds to Parmar in the near future. Privately, Saiber advised
Parmar that the funds would not be released until the issue raised by Weingarten was resolved.
(Compl. at ¶ 144.) In order to receive the funds in trust, Parmar capitulated to Bergstein’s demand in
order to have Saiber release the funds. Parmar now alleges Weingarten’s letter to Saiber and related
actions “aided and abetted fraud.” (Compl. at ¶ 146.)
II.
On a motion to dismiss for failure to state a claim pursuant to Fed. R. Civ. P. 12(b)(6),
the Court is required to accept as true all allegations in the Complaint and all reasonable
inferences that can be drawn therefrom, and to view them in the light most favorable to the
non-moving party. See, e.g., Ashcrofi v Iqhal. 129 S. Ct. 1937, 1949-50 (2009); Bell At!. Corp.
v. Twombly, 550 U.S. 544, 555 (2007); Oshiver v. Levin, Fishbein, Sedran & Berman, 38 F.3d
1380, 1384 (3d Cir. 1994). A complaint should be dismissed only if the alleged facts, taken as
true, fail to state a claim. Iqba!, 129 S. Ct. at 1950. The question is whether the claimant can
prove any set of facts consistent with his or her allegations that will entitle him or her to relief,
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not whether that person will ultimately prevail. Sc’inerenko v. Cendani Corp., 223 F.3d 165, 173
(3d Cir. 2000), cert. denied, Forbesv. Seinerenko, 531 U.S. 1149, 121 5.Ct. 1091 (2001). While
a court will accept well-pled allegations as true for the purposes of the motion, it will not accept
bald assertions, unsupported conclusions, unwarranted inferences, or sweeping legal conclusions
cast in the form of factual allegations. Jqbal. 129 S. Ct. at 1949; Morse v. Lower Merion School
District, 132 F.3d 902. 906 (3d Cir.1997). ‘The pleader is required to set forth sufficient
information to outline the elements of his claim or to permit inferences to be drawn that these
elements exist.” Kosi v. Kozakewicz, 1 F.3d 176, 1 83 (3d Cir. 1993) (quoting 5A Wright &
Miller. Fed. Practice & Procedure: Civil 2d
T
1357 at 340). The Supreme Court has recently
held that” {w]hile a complaint attacked by a Rule 12(b)(6) motion to dismiss does not need
detailed factual allegations, a plaintiff’s obligation to provide the “grounds of his entitle[rnentj to
relief’ requires more than labels and conclusions, and a formulaic recitation of the elements of a
cause of action will not do,
above the speculative level,
.
.
.
true (even if doubtful in fact).
omitted); see
also
.
.
.
.
Factual allegations must be enough to raise a right to relief
on the assumption that all the allegations in the complaint are
Twombly, 550 U.S. at 555 (internal citations and quotations
Iqbal, 129 5. Ct. at 1949-50. More importantly under the circumstances of the
instant matter, however, an affirmative defense may be asserted in order to have a case
dismissed.
III.
Weingarten argues that the litigation privilege trumps Parmar’s claims. The litigation
privilege in New Jersey is broad. Giles v. Phelan, Hallinan & Schmieg, L.L.P. 901 F. Supp. 2d 509
(T).N.J. 2012). Chief Judge Simandle efficiently and coherently summarized the substance of the
privilege:
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The New Jersey litigation privilege ensures that {s]tatements by
attorneys, parties and their representatives made in the course of
judicial or quasi-judicial proceedings are absolutely privileged and
immune from liability.’ Peterson v. Ballard, 292 N.J. Super. 575,
679 A.2d 657. 659 (N.J. Super. Ct. App. Div. 1996) (citing Erickson
v. Mars/i & McLennan Co., Inc., 117 N.J. 539, 569 A.2d 793
(1990)). The privilege is expansive. New Jersey courts “have
extended the reach of the litigation privilege even to statements
made by attorneys outside the courtroom, such as in attorney
interviews and settlement negotiations. “Loigman v. Tip. Comm. of
Ti’ip. ofMiddletown, 185 N.J. 566, 889 A.2d 426, 433 (2006), 889
A.2d at 438. The privilege has four elements. It applies to “any
communication (1) made in judicial or quasi-judicial proceedings;
(2) by litigants or other participants authorized by law; (3) to achieve
the objects of the litigation; and (4) that have some cormection or
logical relation to the action.” Hawkins v. Harris, 141 N.J. 207, 661
A.2d 284, 289 (1995) (internal citation omitted).
The litigation privilege is well-established and broadly applicable.
Loigman, 889 A.2d at 435-37. “In New Jersey, the litigation
privilege protects attorneys not only from defamation actions, but
also from a host of other tort-related claims.” Id. at 436. The New
Jersey Supreme Court has noted, “If the policy, which in defamation
actions affords an absolute privilege or immunity to statements
made in judicial and quasi-judicial proceedings, is really to mean
anything then we must not permit its circumvention by affording an
almost equally unrestricted action under a different label.” Rainier’s
Dairies v. Raritan Valley Farms, 19 N.J. 552, 117 A.2d 889, 895
(1955), cited with approval by Loigman, 889 A.2d at 436.
Consequently, New Jersey courts have applied the litigation
privilege to intentional and negligent infliction of emotional
distress, see e.g., Rabinowitz v. Wahrenherger. 406 N.J. Super. 126,
966 A.2d 1091 (N.J. Super. Ct. App. Div. 2009), material
misrepresentation, Commercial Ins. Co. of Newark v. Steiger, 395
N.J. Super. 109, 928 A.2d 126 (2007), and negligent
misrepresentation, fraud, and malicious interference with
prospective economic advantage, Rubeiion v. Gabage, 280 N.J.
Super. 125, 654 A.2d 1002 (1995). In Loigman, the New Jersey
Supreme Court noted that “[t]he spectrum of legal theories to which
the privilege has been applied includes negligence, breach of
confidentiality, abuse of process, intentional infliction of emotional
distress, negligent infliction of emotional distress, invasion of
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privacy, civil conspiracy. interference with contractual or
advantageous business relations, and fraud.” Loigman 889 A.2d at
436 (internal citation omitted).
The Court will apply the standard set forth above in weighing the conduct of Weingarten as
alleged by Parmar. In the first instance, Weingarten, on behalf of its client, moved for
sanctions in the Superior Court of New Jersey. As the above quoted language states, the
litigation privilege extends to all aspects of litigation which would include a motion for
sanctions.
As a result, the litigation privilege bars any action based on a motion for
sanctions. Here, Weingarten’s filing a motion for sanctions is protected by the litigation
privilege and, therefore. plaintiffs’ claims arising from the same is barred as a matter of law.
In the second instance, Weingarten communicated with Saiber regarding funds held
in trust. The court finds such a communication to be akin to a pre-litigation letter or demand
letter. Notbaly, Saiber replied to Weingarten’s letter by advising Weingarten to seek an
injunction more or less and invitation to litigation. In fact, it is “recognized that an absolute
-
privilege attaches to communications by attorneys that have some reference to either
pending or proposed litigation” Kanengiser v. Kanengiser, 248 N.J. Super. 318 330 (Law
,
Div. 1991). Although the matter was resolved without litigation, such litigation was
“proposed” by Saiber. In addition, “pre-litigation demand letters seeking resolution of a
dispute before filing suit are likewise protected.” Rickenbach v. Wells Fc,rgo Bank, NA.,
635 F. Supp. 2d 389, (D.N.J. 2009). The Weingarten letters are consistent within this
principle.
Accordingly, the litigation privilege applies, and plaintiffs’ claims against
Weingarten must fail as a matter of law.
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Iv.
There are a number of other counts that seek relief against “the defendants” without
identifying the offending actions of a particular defendant. As to Weingarten, the Court construes
the Complaint as alleging liability on the part of Weingarten on the basis of the facts set forth
above. As such, the Complaint as a whole is dismissed against Weingarten on the ground that the
plaintiffs’ claims are barred by the litigation privilege.
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ORDER
This matter having come before the Court on a Motion to Dismiss brought by Defendants
Alex Weingarten and Weingarten Brown, LLP; and the Court having reviewed the submissions of
the parties; and for the reasons set forth above; and for good cause shown;
IT IS on this 16th day of October, 2014,
ORDERED that Weingarten’s motion (ECF 7) is GRANTED.
PETER G. SHERIDAN, U.S.D.J.
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