NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-4136-13T4
NICHOLAS CALANDRILLO,
Plaintiff-Appellant,
v.
GODADDY.COM, LLC,
Defendant-Respondent,
_______________________________________
Submitted May 12, 2015 – Decided May 26, 2015
Before Judges Yannotti and Hoffman.
On appeal from Superior Court of New Jersey,
Law Division, Morris County, Docket No. L-
2379-13.
Dubeck Law Firm, LLC, attorneys for
appellant (Mark D. Miller, of counsel and on
the brief).
Marshall Dennehey Warner Coleman & Goggin,
attorneys for respondent (Walter F. Kawalec,
III, on the brief).
PER CURIAM
Plaintiff Nicholas Calandrillo appeals from an order
entered by the Law Division on March 5, 2014, dismissing his
complaint with prejudice. We affirm, but remand the matter to
the trial court for entry of an amended judgment dismissing the
complaint without prejudice.
Plaintiff is the Chief Executive Officer of Metaphor, Inc.
("Metaphor"), a pharmaceutical advertising agency. Akrimax
Pharmaceuticals ("Akrimax") is one of Metaphor's largest
clients. Akrimax distributes certain pharmaceutical products,
including Tirosint, which is used to treat hypothyroidism.
Defendant GoDaddy.com, L.L.C. ("Go Daddy") is an internet domain
registrar and web hosting company that, among other things,
auctions off internet web addresses.
Plaintiff purchased the "tirosint.com" web address from Go
Daddy in order to manage it for Akrimax. Plaintiff's purchase of
the web address was made pursuant to Go Daddy's Universal Terms
of Service Agreement (the "Agreement"), which includes, among
other terms, the following:
21. GOVERNING LAW; JURISDICTION; VENUE;
WAIVER OF TRIAL BY JURY
Except for disputes governed by the Uniform
Domain Name Resolution Policy . . . this
Agreement shall be governed by and construed
in accordance with the federal law of the
United States and the state law of Arizona,
whichever is applicable, without regard to
conflict of laws principles. You agree that
any action relating to or arising out of
this Agreement shall be brought in the state
or federal courts of Maricopa County,
Arizona, and you hereby consent to (and
waive all defenses of lack of personal
jurisdiction and forum non conveniens with
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respect to) jurisdiction and venue in the
state and federal courts of Maricopa County,
Arizona. You agree to waive the right to
trial by jury in any action or proceeding
that takes place relating to or arising out
of this Agreement.
In his complaint, plaintiff alleges that on May 22, 2013,
he met with the president of Akrimax (the "PA") and the vice
president of marketing for the company (the "VPA"). Plaintiff
claims that the VPA told him he had learned the tirosint.com
domain name was up for auction, and someone at Go Daddy had
informed him that the owner of the domain name would have had to
authorize the auction. Plaintiff allegedly told the Akrimax
representative that he did not authorize the auction.
Plaintiff claims that he called the VPA a liar and said he
was fabricating the story to make him look bad. He challenged
the VPA. Plaintiff said he should agree to quit his position
with Akrimax if plaintiff could prove that plaintiff did not put
the tironsint.com domain name up for auction. The PA left the
meeting and said he would not deal with this kind of behavior.
Plaintiff claims that, after the meeting, he had several
telephone calls with persons at Go Daddy and he recorded the
calls. According to plaintiff, in these conversations, persons
at Go Daddy confirmed that he had never authorized the auction
of the tirosint.com domain name. Plaintiff alleges, however,
that the VPA had in his possession a taped conversation with a
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representative of Go Daddy, who "verified" to the VPA that
plaintiff had, in fact, authorized the auction of the domain
name. The Go Daddy representative also allegedly said that Go
Daddy would never have put the tirosint.com domain name up for
auction without plaintiff's approval.
Plaintiff claims that, as a result of the telephone call
indicating he had authorized the auction, his relationship with
Akrimax, the principal owner of Akrimax, the PA, and the VPA
"has been destroyed." He said that Akrimax began to "curtail its
work with Metaphor." He claims his relationship with Akrimax's
principal owner "has been irreparably damaged."
Plaintiff alleges that the VPA has used the taped
conversation with the Go Daddy representative as a means to
diminish his role in the advertising of all the products that
Akrimax distributes. Plaintiff claims that, although he had
provided Akrimax with recorded conversations with Go Daddy's
representative confirming that he did not authorize the auction
of the tirosint.com domain name, "the damage to his business and
his reputation has been done."
Plaintiff alleges that Go Daddy was negligent in offering
the tirosint.com website for sale, by sending the VPA a
confirmation of the bid, and by confirming to the VPA that
plaintiff had authorized the domain name auction. Plaintiff
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alleges that, as a result of Go Daddy's negligence, his business
with his "most important client has been damaged" and his
reputation and long-term relationship with Akrimax's principal
owner "has been irreparably harmed." Plaintiff sought $10
million in damages, the award of attorney's fees, and such other
relief as the court deemed just.
On November 12, 2013, Go Daddy filed a motion to dismiss
the complaint. It argued that, although plaintiff had asserted a
negligence claim, under the economic loss doctrine, the claim
was essentially a contract claim arising under the Agreement. Go
Daddy argued that the Agreement's forum selection clause
requires plaintiff to pursue his claim in a court in Arizona.
Plaintiff opposed the motion.
On February 14, 2014, the trial court heard oral argument
on the motion. Thereafter, the court filed an order dated March
5, 2014, dismissing the complaint with prejudice. In an
accompanying statement of reasons, the court stated that the
economic loss doctrine applied and, although plaintiff was
seeking damages under a negligence theory, plaintiff's alleged
losses arose from the Agreement and were economic losses. Thus,
the complaint did not assert a cognizable tort claim.
The court also rejected plaintiff's contention that the
Agreement was unconscionable and unfairly one-sided, noting that
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plaintiff was sophisticated in business, specifically the
advertising business. The court concluded that plaintiff was
bound by the Agreement, and the Agreement's forum selection
clause required dismissal of the complaint. This appeal
followed.
On appeal, plaintiff argues that the trial court erred by
dismissing his complaint. He maintains that the economic loss
doctrine does not apply in these circumstances. Plaintiff claims
that he is asserting a negligence claim, not a contract claim
arising under the Agreement. He also contends that his complaint
may be read to include claims of defamation, a violation of the
Consumer Fraud Act ("CFA"), N.J.S.A. 56:8-1 to -20, and
intentional interference with a contractual relationship or
prospective economic advantage. In addition, plaintiff contends
that the Agreement's forum selection clause should not be
enforced because it includes a waiver of the right to trial by
jury.
We have considered plaintiff's arguments in light of the
record and the applicable legal principles. We conclude that
plaintiff's arguments are without sufficient merit to warrant
extended discussion. R. 2:11-3(e)(1)(E). We affirm the dismissal
of plaintiff's complaint substantially for the reasons set forth
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in the statement accompanying the trial court's March 5, 2014
order. We add the following brief comments.
"Economic loss can take the form of either direct or
consequential damages." Spring Motors Distribs., Inc. v. Ford
Motor Co., 98 N.J. 555, 566 (1985). "Under New Jersey law, the
economic loss doctrine defines the boundary between the
overlapping theories of tort law and contract law by barring the
recovery of purely economic loss in tort[.]" Travelers Indem.
Co. v. Dammann & Co., 594 F.3d 238, 244 (3d Cir. 2010) (internal
quotation marks and citations omitted).
The purpose of the economic loss doctrine "is to strike an
equitable balance between countervailing public policies[] that
exist in tort and contracts law." Ibid. (internal quotation
marks and citations omitted). The purpose of a tort duty is to
protect society's interest in freedom from harm, and a duty
arises without reference to any agreement between the parties.
Spring Motors, supra, 98 N.J. at 579. On the other hand, a
contractual duty "arises from society's interest in the
performance of promises." Ibid.
Although a plaintiff's complaint may sound in tort, the
action will be governed by contract principles if it
"'essentially arises in contract rather than tort[.]'" Saltiel
v. GSI Consultants, Inc., 170 N.J. 297, 309 (2001) (quoting
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Wasserstein v. Kovatch, 261 N.J. Super. 277, 286 (App. Div.
1993)). One factor that is considered in determining whether a
matter is a tort or contract action is whether the plaintiff is
seeking recovery for intangible economic loss. Id. at 310
(citing Prosser & Keeton on the Law of Torts, § 92 at 656-58
(5th ed. 1984)).
"When a company agrees to render a service or sell a
product, a contract normally will define the scope of the
parties' specific obligations." Id. at 316. Furthermore, "a tort
remedy does not arise from a contractual relationship unless the
breaching party owes an independent duty imposed by law." Ibid.
(citing New Mea Constr. Corp. v. Harper, 203 N.J. Super. 486,
493-94 (App. Div. 1985)).
As indicated in the complaint, plaintiff's relationship
with Go Daddy was entirely contractual in nature. Plaintiff
purchased the tirosint.com domain name in July 2012, with a
registration period of one year. The purchase was subject to the
terms spelled out in the Agreement. As Go Daddy points out, the
core of the parties' relationship was that Go Daddy would
provide plaintiff the exclusive and unfettered right to the
tirosint.com domain name, and ensure the product information on
the website was available to persons who have access to the
internet.
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Plaintiff essentially claims that Go Daddy breached the
Agreement by placing the domain name up for auction without his
authorization. Moreover, the damages that plaintiff seeks are
economic losses allegedly sustained as a result of that breach.
Thus, the trial court correctly determined that plaintiff's
claims are essentially contractual in nature and a tort claim
based on the allegations is not cognizable.
Plaintiff argues that, aside from any contract-based claim,
his complaint sets forth viable tort-based causes of action. We
disagree. Plaintiff suggests that his complaint can be read to
state a claim of defamation, but such a claim requires a
statement reasonably susceptible of a defamatory meaning. See
Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739,
765 (1989) (citations omitted). Plaintiff's complaint does not
reference any statement that could be reasonably viewed as
defamatory.
Plaintiff also asserts that his factual allegations support
a claim under the CFA. However, to state a claim under the CFA,
the plaintiff must show, among other things, that the defendant
engaged in some act or practice declared to be unlawful by the
CFA. Bosland v. Warnock Dodge, Inc., 197 N.J. 543, 557 (2009)
(citations omitted). N.J.S.A. 56:8-2 provides in part that it is
unlawful for any person to use or employ "any unconscionable
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commercial practice, deception, fraud, false pretense, false
promise, misrepresentation" or knowingly conceal, suppress or
omit "any material fact with intent that others rely upon such
concealment, suppression or omission, in connection with the
sale or advertisement of any merchandise or real estate[.]"
Here, plaintiff merely claims that Go Daddy negligently
represented to the VPA that plaintiff had authorized the auction
of the tirosint.com domain name, but he does not allege Go Daddy
made any such representation to him. There is, moreover, no
allegation that the statement was made in connection with the
"sale or advertisement" of the services covered by the
Agreement. Furthermore, plaintiff does not claim that Go Daddy's
alleged misstatement constitutes an unconscionable commercial
practice.
In addition, plaintiff asserts that his complaint sets
forth sufficient facts to support claims for tortious
interference with contract or prospective economic advantage. To
support such claims, plaintiff must establish, among other
things, that the interference was done with malice. Printing
Mart-Morristown, supra, 116 N.J. at 751 (citations omitted). In
this context, malice means that "the harm was inflicted
intentionally and without justification or excuse." Ibid.
(citing Rainier's Dairies v. Raritan Valley Farms, Inc., 19 N.J.
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552, 563 (1955)). Plaintiff's complaint lacks any allegation
that Go Daddy acted to harm his contractual relations or
prospective economic advantage maliciously, intentionally or
without justification.
Plaintiff further argues that the trial court erred by
finding that the forum selection clause in the Agreement was
enforceable and required plaintiff to pursue his claims in a
court in Arizona. Again, we disagree. Forum selection clauses
are prima facie valid and enforceable in New Jersey. Caspi v.
The Microsoft Network, L.L.C., 323 N.J. Super. 118, 122 (App.
Div.) (citation omitted), certif. denied, 162 N.J. 199 (1999).
Nevertheless, New Jersey courts will not enforce a forum
selection clause if the clause is "a result of fraud or
overweening bargaining power," enforcement of the clause would
violate "strong public policy of the local forum," or
"enforcement would be seriously inconvenient for the trial[.]"
Wilfred MacDonald, Inc. v. Cushman, Inc., 256 N.J. Super. 58,
63-64 (App. Div.) (citation omitted), certif. denied, 130 N.J.
17 (1992).
Here, plaintiff had reasonable notice of the forum
selection clause. It was not proffered unfairly or with a design
to conceal its terms. Moreover, there is no evidence that
plaintiff's acceptance of the Agreement as a condition to
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purchase the domain name was the result of any fraud or
overweening bargaining power.
In addition, as the trial court pointed out in its
statement of reasons, plaintiff is a sophisticated businessman.
The court noted that plaintiff is engaged in the advertising
business, in which the "knowledge of the impact of contracts
including those similar to" the Agreement are a "requisite of
success." Furthermore, enforcement of the forum selection clause
would not violate any strong public policy or inconvenience a
trial.
Thus, the record supports the trial court's determination
that plaintiff's claims are contract-based and arose under the
Agreement. The court correctly determined that plaintiff was
bound by the forum selection clause in the Agreement and
required to assert his claim in a court in Arizona. Therefore,
the court correctly decided that the complaint must be
dismissed.
However, because the trial court did not address the
complaint on its merits, the court erred by dismissing the
complaint with prejudice. See Exxon Research & Eng'g Co. v.
Indus. Risk Insurers, 341 N.J. Super. 489, 519 (App. Div. 2001)
(holding that dismissal predicated in part on a forum selection
clause should be without prejudice because it did not adjudicate
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the merits of the complaint). See also Pressler & Verniero,
Current N.J. Court Rules, comment 4 on R. 4:37-2 (2015)
(dismissal on the merits generally is with prejudice, while
dismissal based on the procedural inability to consider a case
is without prejudice) (citing Watkins v. Resorts Int'l Hotel &
Casino, 124 N.J. 398, 415-16 (1991)). Accordingly, we remand the
matter to the trial court for entry of an amended judgment
dismissing the complaint without prejudice.
Affirmed and remanded to the trial court for entry of an
amended judgment in conformity with this opinion.
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