(This syllabus is not part of the opinion of the Court. It has been prepared by the Office of the Clerk for
the convenience of the reader. It has been neither reviewed nor approved by the Supreme Court. Please
note that, in the interests of brevity, portions of any opinion may not have been summarized).
JOSEPH V. DITROLIO, M.D. V. LEONARD ANTILES, MD., ET AL. (A-145/146-94)
(NOTE: This is a companion case to Circle Chevrolet v. Giordano, Halleran & Ciesla, Mystic Isle
Devel. Corp. v. Perskie & Nehmad, and Mortgagelinq Corp. v. Commonwealth Land Title
Insurance Co. , also decided today.)
Argued March 28, 1995 -- Decided August 1, 1995
HANDLER, J., writing for a unanimous Court.
Joseph V. DiTrolio, M.D., seeks monetary damages for a variety of tortious acts committed by the
four defendant-doctors and their professional medical group. DiTrolio claims that as a result of the actions
of these defendant-doctors, who are on the medical staff at Mountainside Hospital (Mountainside), he was
wrongfully denied full promotional staff privileges at the hospital and suffered consequential damages,
including injury to his reputation and economic well-being and emotional distress. This lawsuit follows a
previous lawsuit against Mountainside and its Board of Trustees (hereinafter "the privileges lawsuit"), in
which DiTrolio sought to obtain the privileges that he claimed were unfairly denied him.
In the privileges lawsuit, DiTrolio alleged that the decision to deny him full staff privileges was
arbitrary and capricious, was based on false evidence, failed to comport with medical staff by-laws, and
deprived DiTrolio of his right to due process under the by-laws and New Jersey case law. DiTrolio
requested an order compelling Mountainside and its Board of Trustees to adopt and enforce a hospital
committee's full recommendation, which provided that he receive full staff privileges as an associate
attending physician and that he be supervised by an outside urologist or be allowed to perform certain
procedures at the other hospitals. The complaint mentioned the defendant-doctors numerous times in order
to establish the factual basis of the allegations in the privileges lawsuit.
Discovery proceeded for almost a year, during which time the defendant-doctors were deposed. On
May 4, 1990, DiTrolio and Mountainside reached a settlement agreement in which DiTrolio agreed, among
other things, to dismiss the then-pending lawsuit without prejudice. Six days after the settlement was signed,
DiTrolio brought the tort action against the four defendant-doctors and the professional medical group. The
facts giving rise to the tort claims against these defendants also gave rise to the claims against Mountainside
and its Board of Trustees in the earlier action.
Thereafter, the trial court dismissed the complaint against defendant-doctors and their group,
concluding that DiTrolio's claims were barred by the entire controversy doctrine as enunciated in Cogdell. A
majority of the Appellate Division reversed, concluding that the entire controversy doctrine did not apply
because the remedies sought in the two suits were very different. In a concurring opinion, one judge found
that the doctrine was not applicable because the prior litigation was settled without prejudice. One judge
dissented, finding that the entire controversy doctrine should apply to bar the second action.
The appeal is before the Supreme Court as of right based on the dissent in the Appellate Division.
HELD: It is the commonality of facts that defines the scope of a controversy and implicates the joinder
requirements of the entire controversy doctrine. Pursuant to that doctrine, Joseph V. DiTrolio,
M.D. is barred from bringing the second action against defendant-doctors and their professional
medical group because the factual bases in both lawsuits are identical and those defendants had a
material interest in the original lawsuit.
1. It is the core set of facts that provides the link between distinct claims against the same or different
parties and triggers the requirement that they be determined in one proceeding. One measure of whether
distinct claims are part of an entire controversy is whether parties have a significant interest in the
disposition of a particular claim, one that may materially affect or be materially affected by the disposition of
that claim. Defendant-doctors had a material interest in the privileges lawsuit sufficient to mandate their
joinder in that action. The factual bases of both the first action and the second action are identical; most of
the same evidence presented in the privileges lawsuit is not only relevant to the second suit against the
individual doctors, but actually formed the basis for this claim. In the privileges lawsuit, at least nineteen
paragraphs of the complaint specifically implicated defendant-doctors. Joinder of defendant-doctors would
have broadened the scope of discovery, advanced the goal that the ultimate determination of the action be
comprehensive, just and conclusive as to all persons named in the controversy, resulted in a fuller and fairer
presentation of the relevant evidence, and would have enabled the factfinders to make a more informed and
complete determination of liability. (pp. 14-20)
2. The entire controversy doctrine does not require commonality of legal issues. Rather, the determinative
consideration is whether distinct claims are aspects of a single larger controversy because they arise from
interrelated facts. It is this commonality of facts, rather than the commonality of issues, parties or remedies,
that defines the scope of a controversy and implicates the joinder requirements of the entire controversy
doctrine. (pp. 20-22)
3. The premise behind the application of the entire controversy doctrine is judicial fairness. Party joinder is
limited to parties with a material interest in the lawsuit. The focus is on whether defendants would be in a
better position to defend themselves if the claims against them had been raised and asserted in the first
litigation. Defendant-doctors are now disadvantaged because they were not parties to the first litigation.
Their inability to participate in the first trial clearly affects their position in the second. (pp. 22-24)
4. Mandatory joinder is not unfair to a plaintiff where he or she had sufficient information to have included
the defendants in the earlier lawsuit. DiTrolio was fully aware of the actionable conduct of defendant-doctors when he brought the first suit. He had ample opportunity of fully litigating the claim against
defendant-doctors in the first action; he simply chose not to do so. The need for a single comprehensive
adjudication, however, may be outweighed by the complexity, confusion or unmanageability that might arise
from joinder. That decision is left to the discretion of the trial court, not the parties. (pp. 24-26)
5. DiTrolio does not claim unfairness attributable to excusable neglect. He already obtained the equitable
relief he requested in the original suit and should not now be allowed to manipulate the judicial system to
get the monetary damages he could have sought in the first action. The consideration of inefficiency and
waste of judicial resources is not negated by the fact that a prior action did not proceed to trial or judgment
on the merits. At the time of the settlement, defendant-doctors were known to DiTrolio not just as
witnesses but as additional parties who could have been joined by the filing of an amended complaint.
Although a settlement or dismissal without prejudice is a factor a court should consider when applying the
entire controversy doctrine, neither is dispositive in the circumstances of this litigation. Defendant-doctors
were not parties or privy to the settlement that purported to authorize DiTrolio's subsequent lawsuit against
them. (pp. 26-32)
Judgment of the Appellate Division is REVERSED and DiTrolio's complaint is dismissed with
prejudice.
CHIEF JUSTICE WILENTZ and JUSTICES GARIBALDI, STEIN, and COLEMAN join in
JUSTICE HANDLER's opinion. JUSTICES POLLOCK and O'HERN did not participate.
SUPREME COURT OF NEW JERSEY
A-145/
146 September Term 1994
JOSEPH V. DITROLIO, M.D.,
Plaintiff-Respondent,
v.
LEONARD ANTILES, M.D., PETER
BOORJIAN, M.D., DOMENICK
FALCONE, M.D., OLEH BACHYNSKY,
M.D., and the MONTCLAIR UROLOGICAL
GROUP,
Defendants-Appellants,
and
JANE DOE, a fictitious defendant,
JOHN DOE, a fictitious defendant,
and XYZ, P.A., a fictitious
defendant,
Defendants.
Argued March 28, 1995 -- Decided August 1, 1995
On appeal from the Superior Court, Appellate
Division, whose opinion is reported at
276 N.J. Super. 234 (1994).
Glenn A. Clark argued the cause for
appellants Leonard Antiles, M.D., Peter
Boorjian, M.D., Domenick Falcone, M.D., and
Oleh Bachynsky, M.D. (Riker, Danzig, Scherer,
Hyland & Perretti, attorneys; Mr. Clark and
Edward A. Zunz, Jr., of counsel; Mr. Clark
and Barbara J. Scheader, on the briefs).
David P. Weeks argued the cause for appellant
Montclair Urological Group (Mackenzie, Welt,
Maher, North & Weeks, attorneys).
Frank R. Ciesla argued the cause for
respondent (Giordano, Halleran & Ciesla,
attorneys; Mr. Ciesla, John F. Varley, III,
and James L. Petsche, on the brief).
The opinion of the Court was delivered by
HANDLER, J.
In this case, we again consider the scope of the entire
controversy doctrine. The occasion is presented in an action by
a doctor seeking monetary damages for a variety of tortious acts
committed by four doctors and their professional medical group.
Plaintiff claims that as a result of the actions of the doctors,
who are on the medical staff of a hospital, he was wrongfully
denied full promotional staff privileges at the hospital and
suffered consequential damages. This action follows a previous
law suit against the hospital and its board of trustees, in which
plaintiff sought to obtain the privileges that he claimed were
unfairly denied.
We must determine whether the entire controversy doctrine is
applicable to bar the current action because the facts giving
rise to the tort claims against the doctors and their medical
group also gave rise to the claims against the hospital and its
trustees in the earlier action. The issue is, basically, whether
a sufficient commonality of facts undergirds each set of claims
to constitute essentially a single controversy that should be the
subject of only one litigation.
The trial court applied the entire controversy doctrine to
bar the current action. The Appellate Division reversed.
276 N.J. Super. 234 (1994). The appeal is before us as the result of
a dissent in the Appellate Division. R. 2:2-1.
In 1984, plaintiff Joseph DiTrolio was admitted to the medical staff of Mountainside Hospital (Hospital) as a provisional staff member in the Department of Urology (Department), and as such, was subject to supervision and observation by active staff members. 276 N.J. Super. at 238. The Hospital's bylaws provided that an appointment as a provisional staff member was for a two-year term, whereupon the individual could either be promoted to the position of active staff member in the rank of an associate attending physician, with no supervision, or reappointed for a single additional term, as a provisional staff member with supervision. Ibid.
At the time of plaintiff's appointment, the Department of Urology consisted of four voting members: Drs. Leonard Antiles, Peter Boorjian, Dominic Falcone and Oleh Bachynsky. Dr. Antiles was the director of the Department. Three of the voting members, Drs. Antiles, Boorjian and Falcone, were shareholders in the Montclair Urological Group. Ibid.
Plaintiff maintains that from the beginning of his affiliation with the Hospital in 1984, the doctors engaged in conduct "for the sole purpose of interfering with his ability to
treat patients there." Specifically, plaintiff points to
numerous scheduling problems. The doctors, who supervised
plaintiff during surgery, would often cancel at the last minute.
Consequently, plaintiff claims that he was "forced to limit his
hospital admissions to only a handful of patients each year."
After two years as provisional staff, plaintiff became
eligible for appointment to the active medical staff of the
Hospital. The bylaws required the Department to make a
recommendation concerning plaintiff's medical competency. In
September 1986, the Department submitted its recommendation to
the Medical Staff Membership and Credential's Committee (M & C
Committee). The same four doctors who comprised the Urology
Department also at that time comprised the entire M & C
Committee. The Urology Department recommended against
plaintiff's appointment as an active staff member and for
reappointment as a provisional staff member under continued
supervision and observation. Id. at 238-39. In their review of
plaintiff's record, the members of the Department determined
"that Dr. DiTrolio has not done a sufficient number of cases to
have supervision and observation removed. Therefore, he is not
eligible to be promoted to Associate Attending." Id. at 239.
The Department, however, also recommended that plaintiff be
permitted to perform four specified procedures without
supervision or observation. Ibid. The M & C Committee accepted
these recommendations. Ibid.
Specifically, the Department was concerned about plaintiff's
medical care in two cases that had been the subject of Department
Quality Assurance presentations. The Department viewed these
cases as involving "substandard" medical care and informed
plaintiff at a September 11, 1986 meeting that if "the quality of
his work does not improve significantly . . . the Department will
not recommend the appointment to the Staff at the end of the
provisional period."
The following year, on August 20, 1987, plaintiff once again
requested promotion from provisional to associate attending
status. Ibid. Because the Hospital's medical bylaws provide that
a candidate can be reappointed to the provisional staff only
once, the only options available to the doctors at this time were
to recommend that plaintiff either be appointed as a full-fledged
active staff member or to reject his appointment completely.
Once again, the Department recommended against the
promotion, citing seven cases that "typified Dr. DiTrolio's
inability to perform up to the standards of the Mountainside
Urology Department." Ibid. The M & C Committee on February 16,
1988, accepted the Department's recommendation that plaintiff
"not be reappointed to the [Hospital] medical staff because of
his inability to maintain adequacy of medical care in the
[Department]." Ibid. The Committee further recommended that
plaintiff "however continue with his current privileges until due
process is completed." Ibid.
In a letter dated February 17, 1988, plaintiff's attorney
requested a hearing pursuant to the Hospital bylaws regarding
plaintiff's "application for promotion to associate attending
status . . . and removal of all departmental observation and
supervision," asserting "that the Membership and Credentials
Committee has failed to submit to the Medical Board a
recommendation regarding Dr. DiTrolio's application for promotion
from provisional to associate status." Ibid. Based on this
request, an ad hoc committee of the Hospital's medical staff (Ad
Hoc Committee) was constituted. Ibid. It conducted hearings on
nine non-consecutive days between May 18 and July 5, 1988. Ibid.
Plaintiff was represented by counsel throughout the ad hoc
hearing. The Department doctors testified, as well as the
Chairman of the M & C Committee and the Director of Medical
Records. Plaintiff testified on his own behalf, and additionally
presented two independent expert witnesses who testified that
plaintiff did not violate accepted standards of medical care in
the seven cases. Plaintiff also called the Hospital's Medical
Staff President, the Hospital's Chief Executive Officer, and
another doctor as witnesses. The hearing generated 1100 pages of
transcripts.
In September 1988, The Ad Hoc Committee concluded that
plaintiff should be promoted and that his medical care was
satisfactory. In its review of the seven cases presented, the Ad
Hoc Committee determined that plaintiff's overall management of
the seven cases "was generally acceptable and does not justify a
recommendation for non-reappointment." Id. at 240. The Ad Hoc
Committee also recommended that because plaintiff had not had an
opportunity to demonstrate competence at the Hospital in three
areas of complex urological surgery, that before unsupervised
surgical privileges be granted with respect to radical
nephrectomy, open uretal procedures, and cystectomy, plaintiff
present evidence, such as two or three cases
in each category, done at another hospital
for review of adequacy by an Ad Hoc
Committee. This Committee should include at
least one urological consultant from another
hospital. In the event that this material is
not available, an outside urologist should be
hired by the hospital to supervise these
cases done at Mountainside Hospital. This
consultant should report directly to the
Medical Staff President.
Additionally, the Ad Hoc Committee expressed concern about "the procedures followed by the Department of Urology and the Membership and Credential Committee in this case," but noted that it "cannot conclude that there was intentional wrongdoing." Ibid. The specific concerns were:
1. Department of Urology meetings were held in the Chairman's office, rather than in the hospital. Because departmental meetings are official hospital business, they should be conducted on the hospital premises.
2. Assigning supervision has apparently been at the
sole discretion of the Chairman. A specific
procedure for assigning supervision should be
included in the Department rules, and all active
members of the Department should be included to
provide broadened assessment of competence.
3. The Committee is concerned that Dr. DiTrolio was not adequately informed and properly counseled at the time criticisms of his work
apparently arose. It is extremely important
that if alleged deficiencies exist, they be
discussed openly and constructively with the
physician under supervision at the time they
occur, not only in fairness to the physician,
but in order to maintain and improve patient
care in an ongoing basis.
4. The Committee is concerned that specific
criteria for advancing a physician from the
Provisional Staff or removing supervision and
observation do not exist. Each Department
should establish such criteria, which should
be included in Department Rules and
Regulations and which should include a
reasonable number of cases, by category, to
be reviewed, particularly in departments
doing technical procedures. The total period
of supervision and observation should not be
inordinately long and generally should be
completed well before initial application for
promotion to the active Staff.
5. Supervision should not be reinstituted in
accordance with due process in our By-laws.
6. To foster professional and administrative
vitality within each department, directors
should not serve more than two consecutive 2-year terms during any 8-year period.
7. To promote impartiality, the Membership and
Credentials Committee should not consist of
Department Directors. The Chairman should be
an At-Large member of the Medical Board and
other members appointed by the President and
Medical Staff or elected by the Medical Staff
as a whole.
8. The Committee is concerned about the process
which was followed in the Membership and
Credentials Committee. Since serious
criticism of a physician could affect his or
her hospital privileges, it is imperative
that the basis of that criticism be
meticulously explored. Written procedures
for the process should be established, which
should include a factfinding committee which
would be empowered to perform a complete
investigation and make recommendations to the
full Committee.
9. The hearing process in our By-laws should be
reviewed and revised.
10. A member's file should be available to him.
In October 1988, the Hospital's Medical Board (Medical
Board) agreed with the Ad Hoc Committee's recommendation that
plaintiff should be promoted to an Associate Attending at the
Hospital. Id. at 241. The Medical Board, however, concluded
that plaintiff should be subjected to continued supervision by
the Urology Department, and not by outside urologists, because he
had deviated from the "standard of good urological treatment" in
two cases. The Medical Board also chose not to provide plaintiff
with the option of presenting clinical evidence from another
hospital to demonstrate his competency in the three urological
procedures.
Pursuant to the Hospital's bylaws, plaintiff requested
appellate review by the Hospital's Board of Trustees. Id. at
242. The Board appointed an Appellate Review Committee, which
reported on February 2, 1989. Ibid. The Appellate Review
Committee agreed with the Medical Board's conclusions that (1)
plaintiff "should be reappointed to the Medical Staff with the
rank of Associate Attending in the Department of Urology;" and
(2) plaintiff should be supervised by Mountainside Department
Urologists in three types of Urological procedures. The
Committee noted:
While it is true that there have been some
conflicts between Dr. DiTrolio and his
supervisors, the Committee expects that both
Dr. DiTrolio and the Department members who
act as supervisors will act professionally
and responsibly to assure the quality of
patient care in the Hospital. The Committee
expects that supervision of Dr. DiTrolio can
and will be carried out in the future
appropriately in accordance with the regular
procedures of the Department and the Rules
and Regulations of the Medical staff.
On February 13, 1989, the Board of Trustees adopted the
findings and conclusions of the Appellate Review Committee. Ibid.
Plaintiff thereafter filed suit against the Hospital and its
Board of Trustees in the Chancery Division alleging that the
Medical Board's decision was arbitrary and capricious, failed to
comport with Medical Staff bylaws, and deprived defendant of his
"right to due process under the Bylaws and New Jersey case law."
Specifically, plaintiff contended that the procedures followed by
the Hospital's Medical Board and Board of Trustees on appeal of
the Ad Hoc Committee's recommendations were flawed because (1)
the Medical Board considered evidence not presented at the ad hoc
hearing in violation of the bylaws, and that evidence, presented
by Dr. Antiles, contained significant misrepresentations of fact;
(2) plaintiff was denied his right to have counsel present at any
hearing regarding his privileges; (3) plaintiff was denied his
right to disclosure of the information; and (4) the Board
breached its duty by failing to base its determination solely on
the recommendation of the M & C Committee, the transcripts of the
hearings, and the conclusions of the Ad Hoc Committee. Plaintiff
thus requested on Order compelling the Hospital and the Board of
Trustees to adopt and enforce the Ad Hoc Committee's full
recommendation, including the conclusion that plaintiff should be
supervised by an outside urologist or be allowed to perform the
three procedures at other hospitals.
The complaint named Drs. Antiles, Boorjian, Falcone and
Bachynsky in support of plaintiff's allegation that the Medical
Board violated his due process rights. It stated that the four
doctors, as the only members of the M & C Committee of the
Department of Urology, decided against recommending plaintiff for
reappointment at their October 1987 meeting, without having read
the charts of the seven cases considered. Furthermore, the
complaint alleged that these same four doctors, who also
comprised the only voting members of the Department, unanimously
decided not to recommend plaintiff for reappointment in 1987.
Dr. Antiles, as Director of the Department, presented the
recommendation to the M & C Committee. The complaint asserted
that "all four doctors are direct economic competitors of Dr.
DiTrolio," and that Drs. Antiles, Falcone and Boorjian are part
of the same practice group.
The complaint further alleged that Drs. Antiles, Falcone,
Boorjian and Bachynsky, testified at the ad hoc hearing in
support of the M & C Committee's decision not to reappoint
plaintiff. According to the complaint, the medical staff "did
not introduce any independent physicians to testify regarding Dr.
DiTrolio's competence or the quality of his patient care." The
complaint also asserted that Dr. Antiles presented new evidence
to the Medical Board not considered by the Ad Hoc Committee in
contravention of the Hospital bylaws, and that "Dr. Antiles
significantly misrepresented certain facts to the Medical Board
in discussing certain of the seven cases." In total, the
complaint mentioned Dr. Antiles by name 13 times, Drs. Falcone
and Boorjian four times, and Dr. Bachynsky three times.
Discovery began and continued for almost a year.
Depositions were taken of Drs. Antiles and Falcone on December
21, 1989. Drs. Boorjian, and Bachynsky were each deposed on
December 28, 1989. On May 4, 1990, plaintiff and the Hospital
reached a settlement agreement in which plaintiff agreed to
dismiss the then-pending lawsuit without prejudice, and also
agreed not to institute a new action against the Hospital and its
Board of Trustees based upon the foregoing allegations or any
conduct of those defendants preceding February 8, 1989. Id. at
244. The stipulation of agreement also contained the following
provisions:
The plaintiff, by entering into the
Stipulation of Settlement and by having this
action dismissed without prejudice, in no way
is limited in pursuing an action(s) against
any individual(s) or entity(ies) other than
the defendants in this action nor shall the
Stipulation of Settlement or Dismissal
Without Prejudice constitute collateral
estoppel.
The filing of the Dismissal Without Prejudice
and this Stipulation shall in no way affect
the plaintiff's rights with respect to future
applications for full privileges without
supervision at the Mountainside Hospital in
Montclair.
Six days after the settlement was signed, plaintiff brought
suit against Drs. Antiles, Boorjian, Falcone and Bachynsky, and
the Montclair Urological Group, seeking money damages,
compensatory and punitive, for injuries to his reputation and his
economic well-being and for emotional distress. This suit
alleges "interference with business and professional
relationships and with prospective economic advantage;
defamation; intentional infliction of emotional distress; and
conspiracy to monopolize the practice of urology at the
Hospital." Id. at 245. Plaintiff sued the Group because the
numerous misrepresentations, criticisms and
interference with patient care by Dr.
Antiles, Dr. Boorjian and Dr. Falcone . . .
were in furtherance of economic gain for
Defendant Montclair Urological Group. Their
relationship with Montclair Urological Group
and the control it has over the Department of
Urology at Mountainside Hospital, enabled Dr.
Antiles, Dr. Boorjian and Dr. Falcone to
improperly interfere with [plaintiff's]
practice at the Hospital.
The trial court granted defendant's motion for summary
judgment, concluding that defendants were entitled to judgment
under the entire controversy doctrine as enunciated in Cogdell v.
Hospital Center,
116 N.J. 7 (1989).
The Appellate Division reversed. The majority concluded
that the entire controversy doctrine does not apply because the
remedies sought in the two suits are "very different." Id. at
248. Judge Skillman filed a concurring opinion, concluding that
the entire controversy doctrine is not applicable because the
prior litigation was settled without prejudice. Id. at 253. The
appeal is before us by virtue of Judge Michels' dissent based on
his conclusion that the entire controversy doctrine should apply
to bar the second action. Id. at 255-69.
We now reverse the Appellate Division determination,
substantially for the reasons expressed in Judge Michels'
dissenting opinion.
Rule 4:30A, which codifies the entire controversy doctrine, provides:
Non-joinder of claims or parties required to be joined by the entire controversy doctrine shall result in the preclusion of omitted claims to the extent required by the entire controversy doctrine, except as otherwise provided by R. 4:64-5 (foreclosure actions) and R. 4:67-4(a) (leave required for counterclaims of cross-claims in summary actions).
Originally, the doctrine mandated joinder of only those claims arising from "the same overall transaction" involving the parties already named in the lawsuit. Crispin v. Volkswagenwerk, A.G., 96 N.J. 336, 343-44 (1984) (recognizing that extension of entire controversy doctrine to include mandatory joinder of parties may be appropriate, but refusing to extend doctrine outright); Tall Timbers Property Owners Ass'n v. Tall Timbers, Inc., 217 N.J. Super. 119, 123 (App. Div. 1987). In 1989, however, this Court extended the entire controversy doctrine to mandate joinder of "all parties with a material interest, one that can affect or be affected by the judicial outcome of a legal
controversy." Cogdell v. Hospital Ctr., supra, 116 N.J. at 23.
In expanding the doctrine, we reasoned that the party-joinder
rule, R. 4:28-1, and the claims-joinder rule, R. 4:27-1, both
"reflect a common policy" and "are not only conceptually similar
but are procedural twins." Id. at 17.
The fundamental principle behind the inclusion policy of the
entire controversy doctrine is that
the adjudication of a legal controversy
should occur in one litigation in only one
court; accordingly, all parties involved in a
litigation should at the very least present
in that proceeding all of their claims and
defenses that are related to the underlying
controversy.
[Id. at 15 (citation omitted).]
The doctrine reflects a basic concept of judicial administration
that is of constitutional dimension. See N.J. Const. (1947),
art. VI, § 3, ¶ 4. The purposes of the doctrine are threefold:
(1) the need for complete and final disposition through the
avoidance of piecemeal decisions; (2) fairness to parties to the
action and those with a material interest in the action; and (3)
efficiency and the avoidance of waste and the reduction of delay.
Cogdell, supra, 116 N.J. at 15.
In determining whether successive claims constitute one
controversy for purposes of the doctrine, the central
consideration is whether the claims against the different parties
arise from related facts or the same transaction or series of
transactions. See Malaker Corp. Stockholders Protective
Comm. v. First Jersey Nat'l Bank,
163 N.J. Super. 463, 497 (App.
Div. 1978), certif. denied,
79 N.J. 488 (1979). It is the core
set of facts that provides the link between distinct claims
against the same or different parties and triggers the
requirement that they be determined in one proceeding. See
Newmark v. Gimbel's, Inc.,
54 N.J. 585, 600-01 (1969); Applestein
v. United Bd. & Carton Corp.,
35 N.J. 343, 356 (1961); Vacca v.
Stika,
21 N.J. 471, 476 (1956); Ajamian v. Schlanger,
14 N.J. 483, 488, cert. denied,
348 U.S. 835 (1954). One measure of
whether distinct claims are part of an entire controversy is
whether parties have a significant interest in the disposition of
a particular claim, one that may materially affect or be
materially affected by the disposition of that claim. Cogdell,
supra, 116 N.J. at 23. The test for whether claims are "related"
such that they must be brought in a single action under New
Jersey entire controversy doctrine was expressed in O'Shea v.
Amoco Oil Co.,
886 F.2d 584 (3d Cir. 1989), as follows: if
parties or persons will, after final judgment is entered, be
likely to have to engage in additional litigation to conclusively
dispose of their respective bundles of rights and liabilities
that derive from a single transaction or related series of
transactions, the omitted components of the dispute or
controversy must be regarded as constituting an element of one
mandatory unit of litigation. Id. at 590-91.
In this case, defendants named in the second suit had a
"material interest" in the first suit sufficient to mandate
joinder of those defendants in that suit. 276 N.J. Super. at 261
(Michels, J. dissenting) (citing Cogdell, supra, 116 N.J. at 26).
The first complaint alleged that the review process conducted by
the Hospital and its Board of Trustees resulted in a decision
that was arbitrary and capricious, was based on false evidence
and deprived defendant of due process. In that suit, defendant
demanded equitable relief, specifically, that he be reappointed
to the Hospital's Medical Staff with the rank of Associate
Attending in the Department of Urology, and that he be supervised
either in another hospital or by an outside physician hired by
the Hospital. In contrast, the second complaint against the
defendant-doctors demands money damages primarily to compensate
plaintiff for the alleged tortious conduct of the individual
defendants. We agree with Judge Michels' conclusion that
"[a]lthough the two complaints allege different causes of action
in law and equity, the factual bases of both actions are
identical[,]" and thus "plaintiff cannot fractionalize this
litigation in order to save his second suit from dismissal." 276
N.J. Super. at 261.
Most of the same evidence presented in plaintiff's first
suit is not only relevant to his suit against the individual
doctors, but actually formed the basis for this claim. In the
first suit, at least nineteen paragraphs of the complaint
specifically implicated defendants in the factual allegations
forming the basis of the action against the Hospital and the
Board of Trustees. The complaint alleged various improper
procedures taken by the four defendant-doctors. It stated that
when the Department, the voting members of which were comprised
of the four defendant-doctors in this case, discussed plaintiff's
medical cases, all discussions took place out of the presence of
either plaintiff or his attorney. The complaint further stated
that the doctors were direct economic competitors of plaintiff,
and that these doctors failed to review the plaintiff's medical
charts before recommending against his appointment. Moreover,
the complaint alleged that Dr. Antiles significantly
misrepresented certain facts regarding plaintiff's cases to the
Medical Board.
Plaintiff's first complaint also alleged that the Medical
Board's denial of plaintiff's application for full staff
membership "did not rely upon sufficient reliable evidence and
[was] not founded on reasonable sensible grounds." Accordingly,
"[i]n adopting the actions, findings and recommendations of the
Medical Board, the Board of Trustees' conclusions and
recommendations did not rely upon sufficient reliable evidence
and were not founded on reasonable grounds." In addition, the
complaint alleged that the Hospital and its Board of Trustees
acted arbitrarily and capriciously in adopting those findings.
Judge Michels correctly pointed out that the gravamen of
plaintiff's complaint against the Hospital stemmed from the
alleged uninformed recommendations resulting in large measure
from the tortious actions of the four doctors, who comprised both
the Urology Department and the M & C Committee responsible for
making recommendations as to an applicant's medical competency.
All of these allegations were founded in a
factual scenario that begins with the actions
of the four doctors named as defendants in
this second suit. The doctors'
recommendations and presentation of evidence
at the in-house hospital hearings form the
basis of the Medical Board's report and
recommendation. That recommendation, in
turn, provided the basis of the final
decision rendered by the Hospital after the
completion of all appellate processes. Thus,
the doctors' conduct, recommendations, and
submission of evidence are inseparably
entangled with the Hospital's review
procedures, which plaintiff challenged in the
first suit. As Judge Fuentes [the trial
judge] so appropriately observed, "It is the
defendant doctors' involvement in that
procedural process that created the factual
basis for the second lawsuit." There is no
question that defendants had a material
interest in the first suit.
[Id. at 261-62 (Michels, J.
dissenting).]
Moreover, as Judge Michels found, joinder of the defendant-doctors would have advanced the goal that the ultimate determination of the action would be "comprehensive, just and conclusive as to all persons implicated in the controversy." Id. at 262 (citing Cogdell, supra, 116 N.J. at 25). Naming the doctors as parties might have broadened the scope of discovery in the first suit by enabling them actively to participate. Ibid. Joinder could have helped to reveal whether the Hospital's decisions were based on unreliable evidence or whether the supposedly unreliable evidence was, in fact, the product of false and tortious information provided by defendant-doctors. Thus,
"the participation of all potentially responsible parties in the
original action would have resulted in a fuller and fairer
presentation of the relevant evidence and would have enabled the
[factfinder] to make a more informed and complete determination
of liability." Cogdell, supra, 116 N.J. at 25.
The Appellate Division characterized the two suits as
entirely dissimilar, even though they stemmed from related facts,
because the first suit focused on the soundness of the Hospital's
decision and the fairness of its decisionmaking process, while
the second suit sought damages for injuries attributable to the
conduct of certain individuals. It reasoned that the single
controversy test required not merely a shared involvement in the
underlying facts, but also an "objectively ascertainable
practical commonality between legal issues as well." Id. at 251.
The entire controversy doctrine does not require commonality
of legal issues. Rather, the determinative consideration is
whether distinct claims are aspects of a single larger
controversy because they arise from interrelated facts. We have
long recognized that the same set of facts can give rise to
discrete causes of action and different kinds of relief. See Orr
v. Orr,
36 N.J. 236 (1961) (recognizing that same tortious act
may give rise to two or more separate causes of action). A
plaintiff bringing an action based on two distinct legal theories
is required to bring those claims together in one proceeding.
Aetna Ins. Co. v. Gilchrist Bros., Inc.,
85 N.J. 550, 556-57
(1981) (ruling policy that all matters in controversy, whether
legal or equitable, be disposed of in one suit in one court to
obviate multiplicity of suits requires that party include in
action all related claims against adversary); New Jersey Highway
Auth. v. Renner,
18 N.J. 485, 492 (1955) (recognizing that
judicial system contemplates that, generally, all matters in
controversy between parties, whether legal or equitable, will be
disposed of in one action). Indeed, the Legislature itself has
expressly recognized in different contexts that a single
controversy, one arising from a common set of underlying facts,
may generate different causes of action that nonetheless must be
brought in one proceeding under the mantra of one adjudication.
E.g., New Jersey Law Against Discrimination, N.J.S.A. 10:5-1 to -42 (LAD) (providing for single action that can include common law
and equitable remedies, and expressly reversing Shaner v. Horizon
Bancorp.,
116 N.J. 433 (1989), in which this Court ruled that
statute did not authorize traditional common law remedies and
jury trial in LAD action); cf. Young v. Schering Corp., __ N.J.
__ (1995) (recognizing implicitly that because of breadth of
entire controversy doctrine, waiver provision, N.J.S.A. 34:19-8,
within Conscientious Employee's Protection Act, N.J.S.A. 34:19-1
to -8, (CEPA), should be construed narrowly to apply to only
those causes of action arising from a common set of underlying
facts that specifically involve retaliatory conduct).
The Appellate Division based its rejection of the entire
controversy doctrine in this case largely on the fact that
plaintiff's successive claims seek different remedial relief
against different defendants. 276 N.J. Super. at 248-51. That
position ignores, however, that a controversy between or among
persons that arises from a core set of related factual
circumstances may trigger different claims against different
parties. It is this commonality of facts, rather than the
commonality of issues, parties or remedies that defines the scope
of the controversy and implicates the joinder requirements of the
entire controversy doctrine.
If disparate claims must be joined against one defendant,
e.g., Aetna Ins. Co., supra; Renner, supra, the mandatory joinder
doctrine requires that such claims must also be joined against
all defendants, subject, of course, to the supervisory authority
of the court to modify or alter such joinder. Cogdell, supra,
116 N.J. 27-28; Petrocelli v. Daniel Woodhead Co.,
993 F.2d 27,
31 (3d Cir. 1993) (entire controversy doctrine does not require
that all claims and parties culminate in one litigation; rather
all claims and parties must initially be joined together for the
court, which can then determine how to proceed with various
claims and parties).
The "polestar of the application of the rule is judicial 'fairness.'" Reno Auto Sales, Inc. v. Prospect Park Sav. and Loan Ass'n, 243 N.J. Super. 624, 630 (App. Div. 1990) (citing Cogdell, supra, 116 N.J. at 28). Fairness, in the context of party joinder, focuses on basic fairness to all of the parties,
especially those sued in the second suit who were prevented from
participating in the first. In Cogdell, supra, we explained that
the party-joinder rule "tries foremost to protect an absent
person from an adjudication of his or her interests; it also
protects all of society from repetitious, abortive, and wasteful
litigation." 116 N.J. at 17-18 (citation omitted). The entire
controversy doctrine's requirement of party joinder is limited to
parties with a "material interest" in the suit, id. at 26, that
is, parties "that can affect or be affected by the judicial
outcome of a legal controversy." Id. at 23. Fairness is thus a
protective concept that focuses primarily on whether defendants
would be in a better position to defend themselves if the claims
against them had been raised and asserted in the first
litigation.
There is no doubt that defendants are now disadvantaged
because they were not parties to the first litigation. Each of
the four defendant-doctors were deposed as witnesses during the
discovery period in plaintiff's suit against the Hospital.
Although they were represented by counsel during these
depositions, had they been made parties to the original action,
they might have approached the depositions and discovery process
differently. 276 N.J. Super. at 262 (Michels, J., dissenting).
They would have been able actively to participate in discovery by
objecting to interrogatories and requests for documents.
Moreover, they would have been able to engage in discovery of
their own. Thus, it is clear that their inability to participate
as parties in the first trial affects their position in the
second, relative to that of the plaintiff, especially in this
instance where many of the facts and much of the evidence are the
same in both actions.
Fairness to the plaintiff must also be considered. The
court must be mindful that "as in the case of all other
preclusionary doctrines . . . the party whose claim is being
sought to be barred must have had a fair and reasonable
opportunity to have fully litigated that claim in the original
action." Cafferata v. Peyser,
251 N.J. Super. 256, 261 (App.
Div. 1991). Thus, the entire controversy doctrine does not apply
to unknown or unaccrued claims. R. 4:30A cmt. 2; Mauro v.
Raymark Indus., Inc.,
116 N.J. 126, 138 (1989) (holding that
entire controversy doctrine would not bar toxic-tort plaintiff's
damage claim because plaintiff discovered existence of disease
after first litigation); Zaromb v. Borucka,
166 N.J. Super. 22,
27 (App. Div. 1979) (holding that slander claim was not precluded
by entire controversy doctrine because party was not aware of its
existence). Cogdell instructs, however, that mandatory joinder
is not unfair to a plaintiff where the "plaintiff had sufficient
information to have included these defendants in the earlier
lawsuit." 116 N.J. at 25.
It is clear that plaintiff was fully aware of the actionable
conduct of defendant-doctors when he brought the original suit.
Plaintiff contended, and unquestionably knew, that the doctors'
conduct led to the Hospital's decision to restrict his promotion
to active staff member. Extensive allegations in the complaint
in the first proceeding implicated defendant-doctors in the
factual basis of plaintiff's claim against the Hospital and its
Board of Trustees. As Judge Michels observed,
The facts pleaded in the second complaint,
although couched in terms designed to
emphasize the alleged tortious conduct of the
doctors, mirror the facts pleaded in the
first complaint in all material aspects. The
chronology is identical and the entire
controversy stems from the recommendation of
the doctors in both complaints.
Additionally, only six days passed between
the settlement of the first suit and the
filing of the complaint in the second suit. .
. . Thus, mandatory joinder of the doctors in
the first suit would not have been unfair to
plaintiff as plaintiff knew all of the facts
and the possible causes of action at the time
he initiated the first suit.
[276 N.J. Super. at 263-64.]
Thus, plaintiff had ample opportunity to have fully litigated the
claim in the first action; he simply chose not to.
A derivative aspect to the fairness prong is whether it is
fair to preclude the second litigation because the entire
controversy doctrine was not followed. A reviewing court could
determine in hindsight that a trial court, confronted in the
earlier action with an entire controversy application, would have
found grounds to excuse joinder. Thus, the need for a single
comprehensive adjudication may be outweighed by the complexity,
confusion or unmanageability that might arise from joinder. It
is important to emphasize, however, that the joinder
determination does not repose with the parties. It is the trial
court's responsibility to determine whether or not joinder is
appropriate in a given case, and thus litigants should be
compelled to bring all actions at one time. Brown v. Brown,
208 N.J. Super. 372, 381 (App. Div. 1986) ("[trial] court, rather
than litigant acting unilaterally, must make determination of
whether supplementary claim is to be joined or reserved"). The
trial court is vested with the discretion to sever or stay an
inappropriate consolidation. See Cogdell, supra, 116 N.J. at 27-28 ("Any possible unfairness to litigants, confusion in the
presentation of issues, administrative unmanageability, or
distortion in the truth-determining process that may result from
compulsory joinder of parties . . . can be eliminated or at least
minimized by a trial court possessed of the discretion to excuse
joinder or to order severance.") (citing Crispin, supra, 96 N.J.
at 355 (Handler, J., concurring)); see Crispin, supra, 96 N.J.
at 354 n.3 (Handler, J., concurring) (noting procedural devices
available to the trial court to prevent unmanageability,
including pre-trial conferences, stipulations of the parties as
matters of fact, and utilization of special verdicts to help
clarify issues for jury); Baureis v. Summit Trust Co.,
280 N.J.
Super. 154, 163 (App. Div. 1994). A plaintiff's failure to allow
the trial court the opportunity to manage the full controversy at
the outset diminishes the force of any later claim that joinder
would have been inappropriate. See Petrocelli, supra, 993 F.
2d
at 31; Brown, supra, 208 N.J. Super. at 382.
Moreover, plaintiff does not claim unfairness attributable
to excusable neglect. Excusable neglect is that carelessness
"attributable to an honest mistake that is compatible with due
diligence or reasonable prudence." Mancini v. EDS,
132 N.J. 330,
335 (1993) (citation omitted). Excusable neglect does not
encompass ignorance of the law. Lutz v. Semcer,
126 N.J. Super. 288, 297 (1974). Plaintiff already received the equitable relief
he requested in the original suit when he was fully aware that he
was targeting defendants for another action; he should not now be
allowed to manipulate the judicial system to get the monetary
damages he could have sought in the first action.
The Appellate Division also observed that plaintiff made no
secret of his intention to bring suit against defendants, even
before his first suit was filed. 276 N.J. Super. at 250. The
implication of that observation is that the doctors knew or
should have known during the first lawsuit that plaintiff
intended to bring a separate action against them, and, hence,
were not "surprised" by that eventuality. In the context of the
doctrine of mandatory joinder, however, fairness cannot be
equated simply with the absence of surprise. Although the
element of "surprise" may indeed be a circumstance relevant to
the fairness of allowing a second lawsuit, the absence of
surprise does not necessarily make a second action just. Here,
the ostensible lack of surprise on the part of defendants does
not in any way restore the opportunity that they lost to defend
themselves as parties in the first litigation by plaintiff's
failure to abide by the entire controversy doctrine.
We note with respect to questions raised by the
circumstances of notice or awareness on the part of defendants
that the trial court also ruled that defendants are entitled to
judgment under Rule 4:5-1. That rule states that a party has a
continuing obligation during the course of litigation to disclose
the names of any other parties who should be joined in the
action. The trial court noted that plaintiff had knowledge of
the second lawsuit and the identity of the parties at the time
his first suit was pending. Consequently, plaintiff "was
obligated in his initial certification to include the doctors as
contemplated parties. His failure to do so results in a
violation of R. 4:5-1 and as such, justifies dismissal."
The Appellate Division concluded that the notice provisions
of Rule 4:5-1 were unnecessary because "here, defendants were or
ought to have been fully aware that plaintiff intended filing
suit against them and do not contend that they were unaware of
the terms of the settlement of the prior action as they were
developing. . . ." Id. at 252. Thus, "the violation of the
rules is only technical and imposition of a dismissal sanction is
inappropriate." Id. at 252-53. That position, however, fails to
recognize that the rule is intended to secure joinder in a
current action and to subject joinder issues to the supervisory
authority of the court. The rule is not intended simply to
notify a new party of the imminence of a future lawsuit.
Fairness in the application of the entire controversy
doctrine focuses on the litigation posture of the respective
parties and whether all of their claims and defenses could be
most soundly and appropriately litigated and disposed of in a
single comprehensive adjudication. The extensive discovery taken
in the first action, especially the depositions taken of the four
defendant-doctors concerning their specific conduct and motives
regarding plaintiff's staff membership application is not only
relevant to the second case, but points to plaintiff's intent to
use the information in a later suit against these very doctors.
Clearly bringing the suits in one action would have been the
fairest course of action and would have enabled the factfinder to
determine at one time the responsibility and degree of fault
attributable to each party.
The third factor examined in Cogdell is the policy that mandatory joinder is appropriate to further "[j]udicial economy and efficiency -- the avoidance of waste and delay." Cogdell, 116 N.J. at 23. At its most fundamental level inefficiency is "a duplication of lawsuits . . . [and] multiple actions each involving the identical controversy and the same witnesses." Id. at 26. Here, plaintiff's second complaint alleges that defendants engaged in arbitrary and capricious conduct in recommending denial of plaintiff's application for active staff membership and in supervising plaintiff. 275 N.J. Super. at 264 (Michels, J. dissenting). The complaint also alleges libel, slander, malicious and tortious interference with plaintiff's professional and economic relations and prospective economic advantage, intentional infliction of emotional distress, and conspiracy to monopolize the practice of urology at the Hospital in violation of the common law and New Jersey's Anti-Trust Law. Ibid. The wrongful conduct of defendants in frustrating plaintiff's promotion is at the heart of all of the tort claims. As pointed out by Judge Michaels, the additional evidence may be required to establish tort liability and damages does not warrant a separate lawsuit, which would, in any event, require the production of substantially the same evidence that would be adduced in the first action. Id. at 265.
Moreover, the consideration of inefficiency and waste of judicial resources is not negated by the fact that a prior action did not proceed to trial or a judgment on the merits. Noting that defendant's first suit had settled within one year and had not required a trial, the Appellate Division emphasized that judicial economy and efficiency is only one consideration and that such concerns cannot override the entire controversy doctrine's overall objective of fairness. Id. at 250-52. Although the weight of the economy factor lessens when a case is dismissed soon after the complaint is filed, here, we are presented with a case that witnessed one year of vigorous pre-trial litigation, including fairly extensive discovery, and involved the respective parties, numerous attorneys and various
witnesses before it ultimately settled. More importantly, there
is an obvious waste of judicial resources if the second
litigation would have been obviated or rendered unnecessary by
mandatory joinder.
The concurring opinion below finds substantial the fact that
the case was settled. The suggestion is that mandatory joinder
may have been premature when the case settled.
After a lawsuit is filed, as discovery
progresses and the contours of a controversy
crystallize, a plaintiff often will file
amended complaints, stating new claims or
joining additional parties. When a plaintiff
accepts a settlement offer, this evolutionary
process in the pretrial development of a
lawsuit terminates. Therefore, the
invocation of the single controversy doctrine
to bar a plaintiff's subsequent action
against a party who was not joined prior to
the settlement of the original action may
unfairly preclude a plaintiff from pursuing
all claims against all responsible parties.
Such an expansive application of the single
controversy doctrine also may discourage a
plaintiff who conceives that there may be
other responsible parties from settling,
contrary to this State's firmly established
policy of encouraging the settlement of the
litigation.
[Id. at 254 (Skillman, J.
concurring) (citation omitted).]
That analysis expresses a sound policy but is inapplicable to this case. It does not take into account that, at the time of settlement, these defendants were known to plaintiff not simply as witnesses but as "additional parties," who could have been brought into the action by the filing of an amended complaint. Moreover, the analysis fails to acknowledge that although settlement in the first proceeding may have succeeded in avoiding
a costly trial of that action, the courts would still be faced
with plaintiff's suit against the doctors. It is unrealistic to
suggest that the parties reached a final resolution of the whole
controversy by a settlement that now confronts the judicial
system with another full-blown lawsuit based on the very same
transaction. At best what has been achieved is a partial
settlement that fails by a very wide margin to bring litigational
peace at once to all of the parties enmeshed in the same
controversy.
The concurrence also notes that plaintiff accepted a
settlement offer with the understanding that he would be free to
bring future claims against individuals not made parties to the
original action. Ibid. Although a settlement or a dismissal
without prejudice is a factor a court should consider when
applying the entire controversy doctrine, neither is dispositive
in the circumstances of this litigation. These defendants were
not parties or privy to the settlement that purported to
authorize plaintiff's subsequent lawsuit against them.
We hold that pursuant to the entire controversy doctrine, plaintiff is barred from bringing the second suit. Mandatory joinder is required in this case because the defendant-doctors named in the second suit had a material interest in the first suit. Their joinder in the first suit would have ensured a comprehensive, just and conclusive disposition of the entire
controversy in one legal action. Further, such joinder would
have promoted fairness to all parties and avoided duplicative
litigation.
The judgment of the Appellate Division is reversed, and
plaintiff's complaint is dismissed with prejudice.
CHIEF JUSTICE WILENTZ and JUSTICES GARIBALDI, STEIN, and COLEMAN join in JUSTICE HANDLER's opinion. JUSTICES POLLOCK and O'HERN did not participate.
NO. A-145/146 SEPTEMBER TERM 1994
ON APPEAL FROM Appellate Division, Superior Court
ON CERTIFICATION TO
JOSEPH V. DITROLIO, M.D.,
Plaintiff-Respondent,
v.
LEONARD ANTILES, M.D., et al.,
Defendants-Appellants,
and
JANE DOE, a fictitious defendant,
et al.,
Defendants.
DECIDED August 1, 1995
Chief Justice Wilentz PRESIDING
OPINION BY Justice Handler
CONCURRING OPINION BY
DISSENTING OPINION BY