Arbitration Agreement is Unenforceable if it Does Not Clearly State that the Signer is Waiving the Right to Pursue Legal Remedies in Court

By Thomas Paschos, Esq. of Thomas Paschos & Associates, P.C.

In Perez v. Zagami, LLC, ___ N.J. Super. ____ (App.Div. Jan. 12, 2016), Perez and Zagami had a long history of litigation between them. After Perez voiced his objections to the renewal of Zagami’s liquor license during a public hearing on the matter, Zagami retained the Nash firm to file a Strategic Lawsuit Against Public Participation (SLAPP) suit, alleging defamation and the related torts of commercial disparagement, trade libel, interference with business relations and civil conspiracy. The court affirmed the dismissal of that suit, finding Perez’s statements at the municipal hearing to be protected by the litigation privilege and therefore non-actionable.

Following that decision, Perez filed a SLAPP-back suit against Zagami for malicious use of process, alleging that the defamation complaint: (1) lacked probable cause, (2) was actuated by malice, (3) had concluded in Perez’s favor, (4) caused Perez to incur substantial attorney’s fees, and (5) had the effect of discouraging Perez from participating in future public proceedings. Zagami moved to dismiss the complaint, stating that Perez had failed to state a cause of action under Rule 4:6-2(e) in that the defamation allegations were privileged as they were based on the advice of counsel. Perez, thereafter, moved for leave to amend his complaint to name Nash and the individual attorneys as defendants. The trial judge granted Zagami’s motion to dismiss, finding that Perez had failed to meet the required element that Zagami’s defamation complaint lacked probable cause and denied Perez’s cross-motion to amend the complaint.

After the case had gone to the Appellate Division once, and was thereafter returned to the Law Division, Nash moved to dismiss the complaint on the grounds that Perez had failed to provide an affidavit of merit, which Nash contended was required by the Affidavit of Merit statute, N.J.S.A. 2A:53A-27. Nash argued that this was in fact a “disguised” professional negligence or malpractice case, and that Perez had to establish the applicable standard of care and deviations from that standard via expert testimony, thus mandating an affidavit of merit. The Law Division denied the motion.

On appeal, the court was faced with this issue of first impression whether an affidavit of merit is required to support a malicious use of process claim when an advice of counsel affirmative defense is asserted in a SLAPP-back suit. The court concluded it is not. The court upheld the trial judge’s denial of the motion to dismiss. The court found that a malicious use of process action is an intentional tort requiring proof of malice and not a deviation from a standard of care and therefore no affidavit of merit is needed to support the claim.

For additional information, please contact Thomas at TPaschos@paschoslaw.com or (856)354-1900

 

 

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