KENT MOTOR CARS, INC., d/b/a HONDA OF PRINCETON, ET AL. V. REYNOLDS AND REYNOLDS CO., ET AL., __ N.J. Super. __ (App. Div. 2010), A-5246-07, February 9, 2010:

In 1998, the Supreme Court adopted a series of rule amendments that eliminated the former party joinder requirements of the entire controversy doctrine and instead imposed a new requirement that a party provide notice in its first pleading of the names of other potentially liable parties. See R. 4:5-1(b)(2); R. 4:29-1(b); R. 4:30A. If a party fails to comply with this notice requirement, one of the amended rules authorizes a court to impose an appropriate sanction, including dismissal of a subsequent action against a party whose existence was not disclosed.

In Cogdell v. Hospital Center at Orange, 116 N.J. 7, 13-28 (1989), the Supreme Court expanded the entire controversy doctrine, which formerly had required only the compulsory joinder of transactionally-related claims, to also require the compulsory joinder of all parties who have a material interest in a controversy.

Rule 4:5-1(b)(2), as amended in 1998, provides:

(b) Requirements for First Pleadings.
. . . .
(2) Notice of Other Actions and Potentially Liable Persons. Each party shall include with the first pleading a certification as to whether the matter in controversy is the subject of any other action pending in any court or of a pending arbitration proceeding, or whether any other action or arbitration proceeding is contemplated; and, if so, the certification shall identify such actions and all parties thereto. Further, each party shall disclose in the certification the names of any nonparty who should be joined in the action pursuant to R. 4:28 or who is subject to joinder pursuant to R. 4:29-1(b) because of potential liability to any party on the basis of the same transactional facts. Each party shall have a continuing obligation during the course of the litigation to file and serve on all other parties and with the court an amended certification if there is a change in the facts stated in the original certification. The court may require notice of the action to be given to any non-party whose name is disclosed in accordance with this rule or may compel joinder pursuant to R. 4:29-1(b). If a party fails to comply with its obligations under this rule, the court may impose an appropriate sanction including dismissal of a successive action against a party whose existence was not disclosed or the imposition on the noncomplying party of litigation expenses that could have been avoided by compliance with this rule. A successive action shall not, however, be dismissed for failure of compliance with this rule unless the failure of compliance was inexcusable and the right of the undisclosed party to defend the successive action has been substantially prejudiced by not having been identified in the prior action.

Thus, under the final sentence of Rule 4:5-1(b)(2), a court may not dismiss a subsequent action based on a party’s failure to comply in a prior action with the notice requirements of the rule unless it finds that: (1) the action is a “successive action”; (2) the failure to provide notice of other potentially liable parties was “inexcusable”; and (3) the undisclosed party’s right to defend the successive action has been “substantially prejudiced” by that failure.

The entire controversy doctrine only precludes successive suits involving related claims. It does not require dismissal [of a second filed action] when multiple actions involving the same or related claims are pending simultaneously. Kaselaan & D’Angelo Associates v. Soffian, 290 N.J. Super. 293, 299 (App. Div. 1996); accord Rycoline Prods., Inc. v. C & W Unlimited, 109 F.3d 883, 887-89 (3d Cir. 1997).

Rule 4:5-1(b)(2) does not require notice of an action to be given to other potentially liable parties. The rule only requires such notice to the other named parties to the action and the trial court.

NOTE: This Blog/Blawg, NJ Family Issues, is managed by Paul G. Kostro, Esq., an attorney/lawyer/mediator in Linden, Union County, New Jersey.

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