A New Jersey appeals court on Monday threw out frivolous-lawsuit sanctions against the lawyer for a commercial tenant suing his landlord.
The Appellate Division found, in Cuccurullo v. Volpecello, that James DeStefano had good reason to believe at least one of his client’s four causes of action had sufficient legal and factual support.
DeStefano, of the firm of Charles Damian in Cedar Grove, filed a Special Civil Part suit in Morris County on Aug. 19, 2011, on behalf of Arthur Cuccurullo Jr. in connection with his lease of a commercial nursery from John Volpecello Sr.
Cuccurullo claimed that a greenhouse building on the premises leaked and lacked heat, running water and a restroom, and that Volpecello had agreed to remedy the problems but did not.
His suit asserted a claim for breach of contract, with damages of $12,903, and counts of negligence, tortious interference with business, and fraud.
Volpecello denied liability and brought counterclaims for unpaid rent, late fees and attorney fees, and conversion due to a missing Christmas tree bailing device.
On the trial date, Feb. 6, 2012, Judge Donald Coburn dismissed Cuccurullo’s claims for negligence, tortious interference and fraud based on DeStefano’s failure to mention them in his opening.
The trial proceeded on the breach-of-contract claim, and, after Cuccurullo rested his case, Coburn granted the defense motion to dismiss the claim.
Coburn said Cuccurullo was obligated under the lease to make repairs, and he did not prove any damages resulting from the alleged breach of contract.
Judgment was granted against Cuccurullo for eight months’ unpaid rent, plus $12,400 in late fees.
Volpecello then moved for frivolous litigation sanctions against Cuccurullo, DeStefano and the Damian firm.
On May 29, Coburn concluded there was “almost no evidence at all and certainly no credible evidence to support plaintiff’s claims. They were, in short, utterly untenable.”
He ordered DeStefano to pay Volpecello $17,325 in attorney fees for fighting the frivolous-litigation case.
On June 19, 2012, DeStefano moved for reconsideration, but Volpecello opposed the motion and cross-moved to include the Damian firm as a jointly responsible party.
He also sought additional counsel fees for his response to the reconsideration motion.
On Nov. 27, Coburn named Damian as an additional responsible party, found no basis to reconsider his order and awarded Volpecello an additional $1,750 for counsel fees incurred to respond to the motion.
On appeal, Judges Joseph Yannotti, Victor Ashrafi and Jerome St. John reversed.
DeStefano could reasonably believe the breach-of-contract claim viable, the panel said, finding he could argue that the tenant’s obligation under the lease to make “repairs and replacements” was ambiguous.
“That obligation might not apply where, as plaintiff alleged in this case, defendant had agreed to make the necessary repairs to put the premises ‘in good repair’ at the start of the lease term,” it continued.
In addition, DeStefano presented receipts before trial showing Cuccurullo paid $300 for certain premises repairs, and in opposition to the sanction motion presented receipts for plants Cuccurullo bought for his nursery business, which he claimed were lost due to the greenhouse’s allegedly poor condition.
Although DeStefano did not present that evidence at trial, it shows he had a good-faith belief that the breach-of-contract claim was tenable.
Timothy Kane of Abdy & Kane in Totowa, who represented DeStefano and the Damian firm in the appeal, said the Appellate Division ruling was “the right decision under the circumstances,”
Robert Nish of Nish & Nish in Morristown, representing Volpecello, did not return calls. ■