EDWARD DINGLER v. ALLAN YALLOF (2013)

Plaintiff Edward Dingler appeals from a March 2, 2012 order dismissing his December 29, 2011 complaint against defendant Allan Yallof.   For the reasons that follow, we reverse and remand.

On February 12, 2008, the parties entered into a settlement agreement to resolve all outstanding claims relating to their joint business venture.   Under the agreement, defendant promised to pay plaintiff $90,000 pursuant to a specific payment schedule.   In addition, defendant executed a confession of judgment in favor of plaintiff, which provided in pertinent part as follows:

In the event that any of these payments are/were not made in a timely manner, as call[ed] for by schedule set forth in the agreement, then the defendant has authorized plaintiff to file this confession of judgment for $90,000.00, together with interest from the date of the settlement agreement, and reasonable attorney fees.

When defendant defaulted on the required payments, plaintiff filed a complaint on February 1, 2010, to enforce the settlement agreement and confession of judgment.   The complaint was dismissed for lack of prosecution on February 22, 2011, when plaintiff failed to appear for trial.

Plaintiff filed a second complaint against defendant dated June 17, 2011, again demanding the sum owed under the settlement agreement and confession of judgment.   Defendant filed an answer together with a motion to dismiss the complaint.   In a certification in support of his motion, defendant said plaintiff's first complaint was dismissed “for lack of prosecution,” and plaintiff's second complaint was barred by “the doctrine of res judicata and the entire controversy doctrine.”   Plaintiff's second complaint was dismissed on November 4, 2011.   Although the order stated the motion was unopposed, it did not explain why the complaint was dismissed.

Plaintiff's third complaint, filed on December 29, 2011, also sought to enforce the parties' settlement agreement.   Defendant filed an answer and counterclaim on February 1, 2012, together with a motion to dismiss plaintiff's complaint.   Defendant asserted that plaintiff's complaint was barred by duress, fraud, unclean hands, estoppel, waiver, laches, accord and satisfaction, the entire controversy doctrine, collateral estoppel, and res judicata.

During oral argument on March 2, 2012, plaintiff's counsel explained that due to an “office failure,” he was not aware of the motion to dismiss plaintiff's second complaint until a decision “had already been rendered.”   In addition, plaintiff's counsel emphasized there was never a decision on the “underlying merits” of plaintiff's case.   Following argument, the court granted defendant's motion to dismiss plaintiff's third complaint, reasoning as follows:

Since there is no dispute [that] this matter involves the same subject matter as the prior two docket numbers, [the court] find[s] no basis whatsoever ․ to allow the plaintiff to proceed with the same cause of action, since the initial cause of action ․ was dismissed for lack of prosecution in February 2011.   Thereafter, the same cause of action filed with a different complaint ․ was dismissed in November 2011․  And this complaint ․ was filed December 29, and ․ there is no dispute, it's the same subject matter.

Any relief concerning the prior two complaints or dismissal of the same should be filed on those complaints.

Thereafter, on May 2, 2012, the court denied plaintiff's motion to vacate the dismissal and reinstate his complaint.   A hand-written note on the order stated, “[I]dentical case dismissed for lack of prosecution.   Movant should attempt to re-open original case.”

On appeal, plaintiff argues the trial court erred because the merits of his underlying claims “have yet to be decided by the court.”   Additionally, plaintiff argues that because his claims were never adjudicated on their merits, the court erroneously concluded that his complaint is barred by either res judicata or the entire controversy doctrine.   We agree.

The first complaint, filed on February 1, 2010, was dismissed without prejudice for lack of prosecution and was not adjudicated on its merits.   Likewise, plaintiff's second complaint was dismissed without prejudice and without an adjudication on the merits.   Therefore, plaintiff's third complaint was not procedurally barred by res judicata.   See Velasquez v. Franz, 123 N.J. 498, 509 (1991) (“The words ‘without prejudice’ generally indicate that ‘there has been no adjudication on the merits of the claim, and that a subsequent complaint alleging the same cause of action will not be barred simply by reason of its prior dismissal.’ ”) (quoting Mason v. Nabisco Brands, Inc., 233 N.J.Super. 263, 267 (App.Div.1989));  Pressler & Verniero, Current N.J. Court Rules, comment 1.2 on R. 4:37–1 (2013) (“It is, of course, clear that a dismissal without prejudice, including a voluntary dismissal, adjudicates nothing, and does not itself constitute a bar to reinstitution of the action[.]”);  see also Brookshire Equities, LLC v. Montaquiza, 346 N.J.Super. 310, 318 (App.Div.) (“[F]or res judicata to bar an action there must be (1) a final judgment by a court of competent jurisdiction, (2) identity of issues, (3) identity of parties, and (4) identity of the cause of action.”), certif. denied, 172 N.J. 179 (2002).   For similar reasons, the entire controversy doctrine is inapplicable.

In view of the foregoing, the order entered on March 2, 2012, is reversed and plaintiff's complaint is reinstated.

Reversed and remanded.

PER CURIAM