Whoppers And Litigation Privilege

The New Jersey Appellate Division reversed a lower court application of the litigation privilege

In this interlocutory appeal, we are required to consider the reach and contours of the common law litigation privilege, which insulates a litigant from harmful or defamatory statements or communications made during the course of judicial proceedings. Because the privilege was misapplied here, we reverse in part, affirm in part, and remand for further proceedings.

The dispute between the stepmother and three children of the deceased involved rights in property with a Burger King on it that had led to a 2004 settlement in the probate matter

A few months later, Patricia Brown filed a verified complaint in the Probate Part and sought entry of an order requiring her stepchildren to show cause why the 2004 settlement order should not be enforced; she also recorded and served a notice of lis pendens.  The stepchildren promptly moved for an order discharging the notice of lis pendens. Based on the papers presented and without a need for an evidentiary hearing, the Chancery judge entered an order on March 2, 2020, that dismissed the complaint with prejudice and discharged the notice of lis pendens.

In June 2020, Patricia’s stepchildren and the buyer amended their [sale] contract by removing that part of Section 10(D) concerning Burger King’s obligation to pay Patricia $3,500 per month and replacing it with an amendment stating that the buyer and the stepchildren had “agree[d] that [Patricia Brown] shall no longer be entitled to receive any monthly rent” from Burger King “or otherwise.” The transaction closed on June 25, 2020, and the buyer purchased the Burger King property for $1,550,000.

Then

The stepchildren then commenced this action against Patricia Brown in the Law Division, asserting that her complaint and notice of lis pendens in the preceding probate action constituted: tortious interference with an existing contractual relationship; tortious interference with a prospective economic advantage; abuse of process; and malicious prosecution.

Error below

What was misconceived in the trial court was what the litigation privilege protects. The privilege does not protect a party from the tortious impact caused by a party’s prior suit; it protects only statements made during the prior suit.

Thus

The privilege’s reach in the present matter is best understood when illuminated by these basic principles. For example, had Patricia Brown – in furtherance of her earlier probate action – made a defamatory and malicious statement in the verified complaint or in an affidavit or from the witness stand, that statement would fall within the privilege – so long as it had “some relation to the nature of the proceedings,” Devlin v. Greiner, 147 N.J. Super. 446, 453 (Law Div. 1977) (cited and quoted with approval in Hawkins, 141 N.J. at 215) – and a later action by the injured person based on that statement would be vulnerable to the litigation privilege. But the privilege doesn’t immunize Patricia Brown from an action that alleges her earlier suit tortiously interfered with the stepchildren’s contract to sell the Burger King property or some other prospective economic advantage. A statement made during that judicial proceeding may be privileged but the suit’s commencement and prosecution is not. So, we affirm the denial of summary judgment based on the privilege but for these reasons, not those expressed by the trial judge.

As to lis pendens

We disagree with the conclusion reached by the judge in declining to hold that the notice of lis pendens was protected by the litigation privilege. The judge misapprehended the scope of N.J.S.A. 2A:15-6, which authorizes the filing and recording of a notice of lis pendens in an action “the object of which is to enforce a lien upon real estate or to affect the title to real estate or a lien or encumbrance thereon.”

…We recognize Patricia Brown did not claim, in either her complaint or her notice of lis pendens, that she believed she held title, in whole or in part, to the Burger King property or that she believed her stepchildren did not hold title. But N.J.S.A. 2A:15-6 is not that limited; Patricia Brown was entitled to record a notice of lis pendens to make known that she asserted in her complaint a claim to an equitable lien derived from the Burger King property or on an interest in an encumbrance (the lease) on the property.

Holding

To summarize, we conclude the judge erred in denying that part of Patricia Brown’s motion that sought summary judgment in her favor on all the claims, or parts of the claims, insofar as they alleged damages caused by the statements in, or the recording of, the notice of lis pendens. We otherwise affirm the denial of summary judgment as to the tortious interference claims because the litigation privilege protects only statements made in judicial proceedings and not the commencement of frivolous, vexatious or tortious lawsuits; in so holding, we offer no view as to whether Patricia Brown’s prior suit was frivolous, vexatious or tortious. In so disposing of this appeal, we merely conclude that on the existing record there is no basis for applying the litigation privilege – beyond its application to the notice of lis pendens – as to the remaining claims; we offer no view of the substance or viability of those remaining claims.

(Mike Frisch)