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Matthew Herron, et al v. Mortgagenow Incorporated

March 7, 2013

MATTHEW HERRON, ET AL.,
PLAINTIFFS,
v.
MORTGAGENOW INCORPORATED, ETAL., DEFENDANTS.



The opinion of the court was delivered by: Baylson, J.

MEMORANDUM RE: MOTION TO DISMISS DEFENDANT JAMES MARCHESE'S COUNTERCLAIMS

I. Introduction

Plaintiffs Mathew Herron ("Herron"), Doug Hartman ("Hartman"), Michael Bellano ("Bellano"), and Estrelbin Rabii ("Rabii") filed a complaint seeking a collective action against Defendants MortgageNow, Incorporated ("MortgageNOW") and its CEO and majority shareholder, James Marchese ("Marchese"), alleging violations of the Fair Labor Standards Act, 29 U.S.C. § 201, et seq., and Pennsylvania Minimum Wage Act of 1968, 43 P.S. § 333.1, et seq., and the Pennsylvania Wage Payment and Collection Law, 43 P.S. § 260.1, et seq.

Defendant Marchese, pro se, brings a number of counterclaims against Plaintiffs and seeks to join eight (8) additional parties as defendants to his claims: Thomas Sirico, Dan Bastowski, Barbara Miller, U.S. Mortgage and its owner Steven Milner, and the law firm Offit Kurman and its attorneys Gary Cutler and Ari Karen.

Plaintiffs and the putative additional defendants ("Movants") seek dismissal of Marchese's counterclaims, arguing that all of Marchese's counterclaims are barred by res judicata based on a ruling in a previous case in New Jersey state court. For the reasons below, the Motion to Dismiss is GRANTED.

II. Background

Marchese's complaint sets forth sundry of causes of actions, including claims for breaches of contracts, various business torts, and abuses of civil process. The crux of Marchese's allegations is that Bastowski, Bellano, Hartman, Herron, Miller, Rabii and Sirico, all former employees of MortgageNOW, conspired with Milner to pilfer employees, office equipment, and valuable business information from MortgageNOW's Willow Branch office and transfer them to U.S. Mortgage. As a result of the alleged conspiracy, MortgageNOW's Willow Branch office closed -- all or most of its employees having allegedly moved to U.S. Mortgage.

Marchese further claims that Offit Kurman, through its attorneys Cutler and Karen, aided the conspiracy by threatening to bring baseless lawsuits against Marchese for the purpose of distracting him from the conspiracy and intimidating him into not filing a lawsuit for claims arising out of the conspiracy.

Marchese ultimately filed an unsuccessful lawsuit in New Jersey state court against three (3) of the four (4) Plaintiffs in the action before this Court and five (5) of the eight (8) parties he seeks to join as defendants to his counterclaims (the "New Jersey Action"). As detailed below, the New Jersey Action was dismissed, because Marchese was suing personally to recover based on MortgageNOW's rights, but lacked standing to do so.

III. The New Jersey State Court Decision

In the New Jersey Action, Marchese brought claims based on MortgageNOW's rights, asserting that they had been assigned to him. Ruling from the bench, the judge in the New Jersey Action held that MortgageNOW's alleged assignment was invalid, and, therefore, that Marchese lacked standing. (Tr. of Hr'g 38:2-45:3, Aug. 24, 2012 (ECF 35-1).)

The court determined that the assignment of MortgageNOW's rights was governed by New Jersey law, which required dividing Marchese's claims into those sounding in tort and those sounding in contract. For those claims sounding in tort, MortgageNOW's assignment was invalid because such claims are unassignable per se under New Jersey law. (Id. at 38:23-39:9, 43:6-13.) Regarding the contract-based claims, which were not held to be unassignable per se, the court found that MortgageNOW's assignment to Marchese was "not . . . valid . . . and Mortgage Now did not validly assign any of its rights to bring a cause of action to the plaintiff, James Marchese."*fn1 (Id. at 39:10-40:1, 43:17-44:13.)

V. Discussion

Marchese's counterclaims must be dismissed because either he fails to allege facts sufficient to satisfy the essential elements of his claims, or his claims are based on MortgageNOW's rights, and MortgageNOW never validly assigned him any of its rights.

A. Marchese's Claim for Publicity Placing Him in a False Light or Malicious Prosecution Are Legally Deficient.

Marchese alleges that Plaintiffs were involved in threatening him with and instituting their current action against him for improper purposes, and that the suit lacks any legitimate basis. His cause of action is styled "Private Debt in False Light," but also clearly makes allegations consistent with a malicious prosecution claim. However, Marchese fails to allege facts sufficient to satisfy the essential elements of either claim, and they must be dismissed. See Nichole Med. Equip. & Supply, Inc. v. TriCenturion, Inc., 694 F.3d 340, 350 (3d Cir. 2012) ("A Rule 12(b)(6) motion should be granted when it appears to a certainty that no relief can be granted under any set of facts which could be proved.").*fn2

False light claims in both Pennsylvania and New Jersey*fn3 require "publicity," "that a matter is made public by communicating it to the public at large, or to so many persons that the matter must be regarded as substantially certain to become one of public knowledge." DeBlasio v. Pignoli, 918 A.2d 822, 824 n.3 (Pa. Cmmw. Ct. 2007) (citing Harris by Harris v. Easton Publ'g Co., 483 A.2d 1377 (Pa. Super Ct.1984) (citing Restatement (Second) of Torts § 652D)); Duncan v. Verizon, L-1368-08, 2011 WL 2671825, at *8 (N.J. Super. Ct. App. Div. 2011).*fn4

Filing a lawsuit, which is the only "publicity" Marchese alleges, is insufficient, by itself, to ...


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