BARRY MEYERS et al. v. RCM TECHNOLOGIES, INC.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-dsd6874-02T5

BARRY MEYERS and MARTIN BLAIRE,

Plaintiffs-Respondents/

Cross-Appellants,

v.

RCM TECHNOLOGIES, INC.,

Defendant-Appellant/

Cross-Respondent,

and

LEON KOPYT,

Defendant.

_______________________________________

 

Argued: February 15, 2005 - Decided:

Before Judges Kestin, Lefelt and Alley.

On appeal from the Superior Court of New Jersey, Law Division, Civil Part, Bergen County, L-10166-98.

David L. Harris argued the cause for appellants/cross-respondents (Lowenstein Sandler and Steven Kudatzky, attorneys; Mr. Harris and Karim G. Kaspar, of counsel; Kenneth M. Schultz and Jason E. Halper, on the brief).

Thomas S. Howard argued the cause for respondents/cross-appellants (Kirsch, Gartenberg & Howard, attorneys; Mr. Howard and Daniel E. Kirsch, on the brief).

PER CURIAM

Defendant RCM Technologies, Inc. (RCM) and plaintiffs, Barry Meyers and Martin Blaire, respectively appeal and cross-appeal from the judgment entered by the trial court on August 4, 2003, and from certain pre-trial and post-trial orders. The claims against Leon Kopyt as an individual defendant had previously been dismissed.

The judgment in favor of plaintiffs from which RCM appeals was for $7,606,693.79 with costs to be taxed and post-verdict interest of $171,932.12. RCM also appeals from an order entered on June 23, 2003, denying its motion for a new trial on damages or, alternatively, for remittitur; and from a pre-trial order entered on July 16, 2001, denying its motion for summary judgment on count five of the complaint.

Plaintiffs cross-appeal from the judgment's omission to assess pre-judgment interest. They also appeal from a series of interlocutory rulings and orders to the extent those orders were incorporated in and reflected by the judgment: a provision of the June 23, 2003 order denying pre-judgment interest, and an order of August 9, 2002 denying plaintiff Blaire's motion for summary judgment on count four of the complaint. Plaintiffs also appeal conditionally from the trial court's order of October 10, 2002, applying the so-called "New York rule" of damages to plaintiffs' claims, and from that portion of the order of July 16, 2001 to the extent it denied their motion for partial summary judgment on the fifth count of the complaint.

We affirm as to all issues in RCM's appeal. Accordingly, we do not reach the issues raised in plaintiffs' conditional cross-appeal. We also affirm as to the non-conditional issues raised in plaintiffs' cross-appeal.

I

Plaintiffs were the primary shareholders in a successful information technology firm, the Consortium. They entered into negotiations with Kopyt, the president and chief executive officer of RCM, for RCM's purchase of the Consortium. According to plaintiffs, the negotiations revolved generally about the idea that the parties were to agree on "a relative valuation of [the Consortium], as compared to RCM's existing business, and swap stock on a tax-free merger basis." RCM also represented that it could make a "secondary offer" to raise additional acquisition capital to provide "some degree of personal liquidity," and that RCM had "balance sheet resources which allow[ed] it to make a fairly substantial acquisition on [sic] someone without further capital infusion from a secondary offer." A witness on behalf of RCM, its chief financial officer (CFO), described how, originally, RCM was prepared to offer plaintiffs 7,500,000 shares of stock in acquiring the Consortium but, after reviewing the Consortium's tax situation, concluded the acquisition would trigger large income tax liability for RCM, and so "we reduced the purchase price to 6,500,000 shares."

On December 12, 1995, RCM's Board of Directors ratified Kopyt's action in pursuing the merger and approved a one-to-five reverse stock split, as a result of which RCM's 24,175,243 outstanding common shares would be reduced to 4,835,048.6 shares. At that meeting, Kopyt gave the reasons supporting the reverse split as including the then-current low stock price, the large number of shares outstanding hampering the company's ability to raise money, and brokers' general reluctance to deal in low-priced stocks. RCM stock was priced at less than one dollar per share at the time. He also noted that the reverse split had been discussed by the directors "informally" before and that "the time had now come to proceed." The effective date of the reverse split was to be the date the corporate secretary filed the certificate of amendment with the Secretary of State of Nevada.

Negotiations for RCM's acquisition of the Consortium continued, sometimes between the principals directly and sometimes between their counsel. Plaintiff Meyers intended to stay with RCM "for a good while and have some fun."

On January 4, 1996, the parties executed a letter of intent that included a restriction on the number of shares plaintiffs would be able to sell per week and per quarter. Kopyt had anticipated initially that, following the issuance of plaintiffs' shares and without application of the reverse stock split which still had not taken effect, the total number of outstanding RCM shares would be between 24,000,000 and 25,000,000, and the quarterly limit for any sales by plaintiffs would be set at 1% of the outstanding shares, 240,000. During the process of drafting the letter of intent the weekly sales limit changed from 50,000 shares total to 50,000 shares for each plaintiff.

Eventually, in early March 1996, the parties executed several documents formalizing various aspects of their arrangement. On March 1, 1996, for example, plaintiffs and the other Consortium shareholders signed a stock purchase agreement providing for transfer to RCM of 100% of the Consortium stock in return for 6.5 million shares of RCM's common stock. Each plaintiff received 3,037,338 shares, pledging to place a total of 1.625 million of those shares in an escrow account. On March 6, 1996, RCM issued stock certificates to plaintiffs.

On March 11, 1996, the parties signed additional documents including a registration rights agreement (RRA), the document that was to become the focus of their later dispute. In particular, a subsection of the RRA under the heading "shelf registration" provided:

(c) Public resale by the Holders of the Restricted Stock shall be subject to the following limitations: (i) no public resales by any of the Holders will be permitted earlier than April 1, 1997; (ii) from April 1, 1997 through March 11, 1998 (the second anniversary of the Closing) all public resales by Martin Blaire and Barry Meyers, in the aggregate, will be limited to that number of shares of Restricted Stock that upon resale will yield gross proceeds to Messers. Blaire and Meyers of $600,000, and no public resales will be permitted during this period of any of the other Holders; (iii) from March 11, 1998 (the second anniversary of the closing[)] through March 11, 1999 (the third anniversary of the Closing), each of the Holders will be permitted to effectuate the public resale of shares of Restricted Stock limited in a manner calculated under Rule 144(e) under the [Securities Exchange Act of 1934] (as such Rule is in effect on the Closing), as though such shares of Restricted Stock were treated as "restricted securities" held by "affiliates" or "persons other than affiliates," whichever the case may be, to the extent such terms are defined under Rule 144, however, in no event greater than 50,000 shares per week per Holder; and (iv) following March 11, 1999 (the third anniversary of the Closing), public resales of the Restricted Stock will be permitted without regard to numerical limitations under this subparagraph 2(c).

Separate employment and non-competition agreements between plaintiffs individually and RCM, also dated March 11, 1996, set forth two-year periods of employment at annual salaries of $240,000 each. Blaire was to serve as executive vice president, while Meyers was to be the chief operating officer. The only ground recognized for early termination, besides the death of either plaintiff, was for "good and sufficient cause" as defined in the agreements. Nevertheless, if either plaintiff were terminated without good and sufficient cause during the two-year period covered in the agreements, under a section denominated "severance" he still would be entitled to continue to receive his existing salary for one additional year following the expiration of the two-year employment period, but such additional compensation was unavailable if he were terminated "with 'good and sufficient cause'" during that period. According to Blaire, that provision was very important, because plaintiffs were taking a major risk in participating in the merger. He saw the severance language as some additional protection in the event things did not work out.

Also on March 11, 1996, the Consortium shareholders signed a "standstill and shareholders' agreement" governing, among other things, the manner in which they would hold and vote their new shares in RCM.

On March 29, 1996, RCM's directors approved the reverse stock split. When the split actually took effect in April, the stock went from selling for $.75 on a Friday to about $3.50 when the markets opened the following Monday. As the CFO explained, at the same time the reverse stock split took effect the number of shares was adjusted accordingly so, "in total, market value of the company, market cap if you will[,] remained the same. No one was hurt. No one enjoyed any additional value or there was no diminishment in value."

As a result of the reverse split, plaintiffs' actual shares went from 3,037,338 to 607,468 each. Because the cutoff in the shareholders' voting on the RCM Board's reverse stock split resolution was January 1996, and plaintiffs did not get their shares until March, they did not participate in the shareholder vote that approved the split. The parties agree that the RRA did not expressly address the effect of a stock split on the number of shares plaintiffs could sell in any given period.

RCM's CFO related at trial that, shortly after the acquisition in March 1996, both plaintiffs had frequent questions about "how they could sell their shares, what's the process, when they could do it, when they can't do it, how to do it and so forth." At some point, too, plaintiffs asked RCM to extend their employment agreements beyond the March 11, 1998, expiration dates, and on May 6, 1997, the compensation committee informed them that it was deferring any decision on those requests. Also sometime in 1997, Blaire participated in an RCM public offering by trading 36,000 shares.

According to Meyers, by November 1997, his intention was to continue working at RCM and to hold onto his RCM shares which, he hoped, would increase in value. Nevertheless, in January 1998, he sold 12,000 shares in order to raise capital for the purchase of a home.

In January 1998, Kopyt wrote to both plaintiffs that the parties' March 1996 employment agreement would expire on March 11, 1998, and that RCM was willing to continue to employ them as at-will employees thereafter at their current salaries and titles and with their current duties until such time, if ever, Kopyt altered them. Koypt's position upset Meyers, who felt as if he were being "pushed out" but yet was not being expressly fired at that point. At trial, he acknowledged that, although he wanted to stay, at some point he recognized the "bad blood" between the parties.

On February 19, 1998, Kopyt spoke to Meyers on the phone and told Meyers that he had to "get off the premises," that he had "made a very serious error," referencing "something to do with the stock." Meyers replied that he had not done anything wrong and he asked Kopyt to reconsider, but Kopyt refused. Also at about this same time, Meyers overheard a conversation in which RCM's securities counsel said "[t]hey terminated Meyers on a bullshit technicality that just [didn't] make sense." According to Meyers, no one on the board ever contacted him about anything he had done wrong and even Kopyt never "ask[ed him] anything about the sale of stock."

The parties agree that Blaire's at-will employment ended on March 27, 1998. The record furnishes no details about the circumstances that brought about the end of his employment on that date. Plaintiffs did not dispute RCM's contention that Blaire had resigned.

RCM never paid Blaire the $240,000 in severance he maintained was owed. In his deposition, Kopyt said that in denying Blaire severance he acted on the advice of counsel but that he probably "could have been persuaded either way."

At trial, Kopyt said he had fired Meyers because of insider information Meyers had as a result of his position in RCM and his attendance at particular meetings, and the timing of Meyers's subsequent sale of some stock. After he fired Meyers, Kopyt was concerned with Blaire's attitude because he knew plaintiffs were close and he was uncertain what Meyers's departure would mean to Blaire. On March 13, 1998, Kopyt met with Blaire and offered him a position as a consultant even though Blaire's employment contract had expired. A few weeks later, Blaire informed Kopyt that he had decided he did not wish to continue working full time. Eventually, when Blaire did not clarify whether he was interested in performing consulting functions for RCM on a part-time basis, Kopyt wrote Blaire that he was confirming Blaire's resignation.

According to Meyers, when Kopyt fired him, he decided to sell the remainder of his stock. Meyers testified that he was motivated to do so in part because he just wanted the money for expenses but also because without being at RCM to "watch [his] stock," he viewed the shares as representing a less sound investment than before. Nevertheless, before selling any more of his shares, Meyers spoke with RCM's securities counsel, who told him that, based on the five-to-one reverse stock split, he and Blaire could sell no more than 10,000 shares per week. According to RCM's CFO, about two weeks after Blaire left, Meyers called the CFO "and asked me about the mechanics of a reverse stock split." In their conversation regarding the 50,000 share-per-week sales limitation in the RRA, the CFO told Meyers: "you have to divide it by five because of the reverse [stock] split."

Meyers initially accepted RCM's construction of the restriction, but, as he reflected on it, he concluded RCM was wrong and that he was not limited by the reverse split. Plaintiffs had received no notices or amendments from RCM purporting to modify the parties' RRA. At some point, plaintiffs informed RCM of their intent to sell their shares of stock on a schedule which amounted to 10,000 shares each day. On May 14, 1998, RCM's counsel wrote Meyers reaffirming the 10,000-share-per-week limit and asserting that plaintiffs' planned actions could have materially adverse effects for RCM. Regardless of the position it took with plaintiffs, however, both in public filings it had made in June 1997 and again in May 1998 in connection with secondary public offerings, RCM had set forth that plaintiffs' resale rights were subject to the 50,000 share-per-week maximum sales limit established under Rule 144.

As of March 11, 1998, plaintiffs held a total of 1,166,936 RCM shares. The parties agree that the pertinent period of restriction began on March 11, 1998, and ran through March 11, 1999. The stock opened at $22.625 on March 11, 1998, and closed at $16.0625 on March 11, 1999. During that period, the share price varied between $10.8125 and $30.125.

Plaintiffs sold no shares during the first week of the restriction period, but the following week they sold a total of 20,000. They continued to sell shares in varying numbers of no more than 20,000 units in total until the week beginning March 8, 1999. During some weeks of the restriction period, they would sell the 20,000-share maximum RCM allowed, although sometimes they sold as few as 2,000 shares in a given week; and there were several weeks after that initial week when they sold no shares at all. In the course of the restriction period they sold a total of 638,900 shares for $13,581,034.

In the meantime, RCM's CFO had called plaintiffs in April 1998 and invited them to participate in another RCM public offering. He recalled that he told them it was a "once-in-a-lifetime" chance to liquidate all their shares "and come out with approximately $22 million." Plaintiffs showed some interest, but Blaire expressed the opinion that the stock would rise even higher, that it "was going to go greater than $25 a share," and stated that plaintiffs did not want to pay a broker commission greater than 5%. The CFO took notes of their conversation to pass along to Kopyt, while plaintiffs expressed the desire to speak directly to the underwriter, which the CFO endorsed. The CFO never heard from plaintiffs again about their participation in the offering.

In supporting RCM's construction of the RRA, Kopyt explained at trial that when RCM originally negotiated with plaintiffs over the restriction on their sale of shares, the ratio decided upon of shares each plaintiff could sell to the number of outstanding shares was 4.8 to 1, and that the subsequent enforcement of the 10,000-share-per-week limit on each plaintiff, following the reverse stock split, was based on maintaining that same ratio. Moreover, he testified, if the weekly limit were not adjusted after the split "[w]e have .96 to one. We have a weekly limit that's greater than the quarterly limit, which is . . . absurd."

Also according to Kopyt, between the time the parties signed the letter of intent in January 1996 and their execution of the closing documents in March, plaintiffs were made aware of the reverse stock split, indicated they had discussed it with their friends or advisors, and lobbied Kopyt for a smaller reversal number, "three to one or four to one;" but Kopyt insisted that "the proxies were already mailed to all of the shareholders, so there was really no discussion on that point." Also, according to Kopyt, in January or February 1996, but before the closing with plaintiffs, he informed plaintiffs of RCM's sale of approximately $1 million in stock to another individual. He testified that plaintiffs "were extremely upset. They thought that that sale would dilute the company and it [would] dilute their . . . potential ownership of the company." For that particular sale, RCM issued new shares rather than sell some of its "publicly available" shares.

In a conference call with board members, including Blaire, on March 19, 1998, Kopyt discussed RCM's acquisition of a California technology firm as well as the process of a secondary offering of RCM stock. RCM's goal in the secondary offering was to raise $15 to $20 million in addition to paying down an existing debt of about $10 million. Kopyt sold some of his own shares in the 1998 offering. RCM invited plaintiffs to participate in the offering because it was clear to Kopyt that it would not be able to obtain a "lockup" for them, i.e., "an agreement with major stockholders that would prevent them from selling stock approximately 90 days after the offering, so that there is no competition between the new investors that are coming into the offering versus the old investors that would flood the market with stock." That was especially true in this case because Kopyt saw plaintiffs' position as a holding of "a large block of stock . . . in . . . unfriendly hands." Ultimately, plaintiffs did not express their disinclination to participate in the offering but accomplished the same thing, according to Kopyt, by putting "conditions that were outrageous" on their participation. Those conditions included a guarantee price of about $25 per share and a 4% commission.

James Brucki, Jr., a vice president of a New York Stock Exchange firm, was plaintiffs' expert in stock sales strategies and the purchase, sale, and pricing of NASDAQ and other securities. His opinions were informed by thirty years of experience in the stock market industry. Prior to trial, RCM asserted that Brucki's views were net opinion, and moved to bar his testimony. Following a hearing on Brucki's reports as well as on the report of RCM's expert and his credentials, pursuant to Rule 104 of the New Jersey Rules of Evidence, the court ruled that both experts could testify.

Brucki explained at trial how SEC Rule 144 regulated the maximum number of shares of stock an affiliate could sell. In applying the Rule's parameters to the parties' contract, Brucki opined that, together, and without reference to the stock split, plaintiffs could sell up to 100,000 shares per week (or 50,000 a piece) and not be in violation of any limitations. At that point, the court read to the jury the provisions of an order entered before trial, on October 10, 2002, directing how the jury was to compute damages. Brucki would testify that, at the time he formulated the charts that informed the bases of his opinion, he was not aware of the October 10, 2002 order. The preamble of the order contains the following recitation:

The parties: 1) agreed that the "New York Rule" as set forth most recently in Duncan v. TheraTx, Inc., 775 A.2d 1019 (Del. 2001) and also in Madison Fund, Inc. v. Charter Co., 427 F. Supp. 597 (S.D.N.Y. 1977), shall supply the principles for determining plaintiffs' damages under the Fifth Count of the Complaint; (2) requested the Court to determine the method of calculating plaintiffs' alleged damages under the New York Rule as applied to this case; (3) stipulated that the amount set forth in Schedule Y to the July 12, 2002 expert report of James E. Brucki, Jr., of $22,016,264.96 shall be the amount utilized under Step Two of the New York Rule as applied to this case; and (4) agreed that RCM shall waive all mitigation defenses except for its claim that plaintiffs should have mitigated their damages by selling their shares in RCM's May, 1998 secondary offering[.]

Brucki had explained in his July 12, 2002 supplemental report how damages under "the New York rule" were to be calculated. In the first step, "a determination must be made as to the highest intermediate price at which the shares presumably could have been sold taking into account the 50,000 shares per week limitation and Rule 144 limitations." In the second step, one determines "the hypothetical immediate price at which the shares could have been sold limited to the 20,000 shares per week that were unrestricted by RCM." In arriving at this second number, "each day's high price and low price as reported on NASDAQ were averaged," and "then those average daily prices were averaged by calendar week." New York rule damages are then calculated by subtracting the latter figure from the former.

The trial court's October 10, 2002 order had gone on to provide that in the event plaintiffs prevailed on their allegations of breach of the RRA:

then, without taking into account how plaintiffs' damages would be calculated and might be subject to reduction should RCM prevail on its remaining mitigating defense, plaintiffs' compensatory damages shall be calculated in accordance with the following formula:

1. The trier of fact should determine the maximum number of shares of RCM stock that plaintiffs could have sold on a weekly basis without adversely affecting the market, but in no event more than 100,000 shares per week or such lesser amount as limited by Rule 144(e), beginning with the week in which March 11, 1998 falls and proceeding week by week until plaintiffs would have disposed of all 1,166,936 shares which they held on March 11, 1998.

2. The trier of fact should then select the highest intermediate price of RCM stock during each week of the period of weekly restrictions at which that week's sales could have been achieved, multiply that price by the number of shares which the trier of fact has determined plaintiffs could have sold in each such week, and then total the respective products, expressed in dollars, of all such hypothetical weekly sales.

3. The Court will deduct $22,016,264.96 from the total dollar sum of plaintiffs' hypothetical weekly sales calculated as provided above, with the difference constituting plaintiffs' compensatory damages under the Fifth Count of the Complaint.

IT IS FURTHER ORDERED that the foregoing determination shall govern all subsequent proceedings in this action in this Court with respect to plaintiffs' Fifth Count claims;

IT IS FURTHER ORDERED that RCM has waived any mitigation defenses that it has or could have asserted, except for its above-referenced defense that plaintiffs should have mitigated their damages by participating in RCM's May, 1998 secondary offering;

IT IS FURTHER ORDERED that the issue of whether pre-judgment interest shall be awarded to plaintiffs on any recovery under the Fifth Count is left to the trial court for determination.

Brucki said that he had applied a more conservative approach than provided in the order. He described at length the process by which he had formed his opinion on the number of shares plaintiffs could have sold each week during the limitation period without affecting the market, and how he computed the hypothetical sales prices. He had compared the actual sale prices of plaintiffs' RCM stock with the potential prices if they had each been permitted to sell 50,000 shares of RCM on a weekly basis. Included in the information he considered were the opening and closing prices and the high and low prices for the stock each day during the period January 1996 through August 2001, as well as the volume sold. He classified years 1998 and 1999 as reflecting a "bull market," i.e., an upward pressure on stock prices. In forming his ultimate opinions, Brucki took into consideration the economic climate at the time and the limitations on a broker's ability to sell so many shares in a work day.

Brucki testified that what the October 10, 2002 order had posited in terms of "the highest intermediate price in any given week" for plaintiffs' stock, or the first step in the New York rule, was particularly elusive, and he went on to say that, because of the way the market works, he did not feel that anyone could give such an opinion. Thus, notwithstanding the availability of various higher prices at which the RCM stock actually traded during the relevant period, Brucki ultimately used the lowest prices at which the stock actually sold in that time frame in forming his opinion because, he said, that was the most conservative approach:

Clearly, in my opinion the stock could have been sold at no lower than that price during that week's period. If we go back and look we can see that actual sales took place at various prices on various of these weeks higher than the low price for the week, some of them at the mid-range, some of them even higher, some maybe at the high point of the day depending upon when the actual transaction was put in.

I felt that if you used the low price for the week that that was the most conservative way of valuing what the proceeds would be.

Otherwise, he stated, "I don't think anybody could tell you what the highest intermediate price in any given week was that could have been achieved to sell the stock."

Brucki also described how plaintiffs' weekly allotment of permissible shares to sell could have been sold in "blocks" of 10,000 shares or otherwise without the manner of the sale adversely affecting the price obtained. For example, brokers could routinely manage to sell 3,000 shares in an hour and, with thirty-two-and-a-half "market hours" in a work week, 100,000 shares could be sold in about that same period. According to Brucki, buyers who agreed to purchase at least 1,000 shares were referred to as "market makers." During the period at issue there were about six to ten entities that were market makers for RCM stock, five of which were among the largest market makers in business. Market makers were required to purchase the stocks put on the market and to honor their bids, which were "changing . . . all the time" in the normal course. Thus, in his opinion, plaintiffs could have sold a combined 100,000 shares of RCM per week without adversely affecting the market, and would have sold all shares within twenty-one weeks, or by July 27, 1998. Using his methodology and the weekly low prices for the stock during the twenty-one week period, Brucki calculated the total sale proceeds at $26,735,384.25. When that figure was adjusted in accordance with the parties' stipulation of a $22,016,264.96 offset, plaintiffs' damages on count five of the complaint according to Brucki's analysis were $4,719,120. Applying the 20,000 share per-week limit, however, it would have taken approximately fifty-eight and a half weeks to sell all of plaintiffs' shares.

Plaintiffs' counsel had asked Brucki to consider other approaches as well and so, at counsel's request, he calculated the potential total proceeds using only the high sale prices at $29,735,458.75. Brucki added that it was clearly not reasonable to use only the high prices, because that did not reflect "economic reality." Also, counsel had him consider an average of the high and low sales, and when Brucki summed the potential proceeds during the period using that approach, he calculated the amount at $28,356,233.75. Brucki agreed that this "averaging approach" would be a reasonable one, but it was not the conservative approach which he had taken. He had allowed, however, that if the New York rule were to be applied as the October 10, 2002 order had set forth, subtracting the aggregate hypothetical immediate price from the aggregate highest intermediate price, plaintiffs' damages totaled $7,719,193.79.

On cross-examination, Brucki testified that he had assumed that market makers would not change their bids for subsequent blocks of RCM stocks purchased. Moreover, he maintained, trying to determine "the highest intermediate price" for plaintiffs' stock was "an impossible task." He discounted plaintiffs' own professed view as lacking expertise on the sensitivity of stock prices to the quantities sold and, although he considered the overall market trend for the period at issue, he did not particularly factor the price trend of RCM stock itself.

The trial court also qualified, on plaintiffs' behalf, John Coates, a Harvard professor, as an expert in securities law and in mergers and acquisitions. Among the things he discussed were: the operation of Rule 144; how a reverse stock split would not "require an adjustment of the 50,000 number" in the RRA; and why parties in these transactions often use an express number, such as 50,000, to restrict sales rather than rely solely on the Rule 144 limitation inasmuch as businessmen, as opposed to SEC lawyers, typically find a hard number easier to deal with. It was also Coates's opinion that if the parties had wanted the reverse stock split to affect the RRA restrictions they would have said so, and that a reverse stock split usually has a "boost effect" on stock prices.

David Hartzell worked for the underwriter that had put together RCM's May 1998 public offering. He described how he approached plaintiffs about participating in the offering as a means to dispose of their stock. Although he concluded they would not be interested in participating, he realized at the time that plaintiffs probably would try and sell their shares as soon as they could after the underwriter "priced the transaction" in the offering, and that even with an ability to sell 50,000 shares a week as a "worst case scenario," the underwriter concluded plaintiffs' sale of their shares in that manner would not create problems for the stock.

Mark Penny was RCM's expert and, like Brucki, he based his calculations on the low prices for each week during the restriction period. According to Penny, a number of factors informed the decision how many shares of RCM stock could be sold in a given week without depressing the market. Among the factors he considered were the closing stock price the week before, weekly price change and weekly price change percentage, total volume traded in a week, and block trades per week as a percentage of overall weekly trades.

Penny explained that those factors could indicate high or low liquidity in a given period, and implicate how the prices for a stock sold in volume would react:

For example, if the stock price is increasing, that indicates an ability to sell stock without depressing the price. One of the factors that could be contributing to the price increase is an increase in demand relative to supply, thereby bidding up the stock price in that period.

Conversely, a stock price drop can be an indicator of reduced liquidity or reduced ability to dispose of stock without depressing the price, because a decline in the stock price can be indicative of an excess of supply, an over-supply relative to the demand at various prices.

The volume statistics are significant in a number of ways. The first way is . . . it [sic] indicates the actual volume in a given week, which is useful for comparing how much additional volume you could put into that week and whether or not that would be a large increment or a small increment. For example, if 50,000 . . . shares sold into [sic] a week where there's 200,000 shares totally sold prior to that, there's a 25 percent increase in volume, whereas, if it's a million shares it's a much smaller percentage.

Now the notion there is[,] if the incremental shares you're trying to sell represent only a little bit extra into the market, it may not have a significant price effect, whereas, if it represents a significant increase, 10 percent, 20 percent, or greater into the existing market, it may have a depressing effect depending upon what the other indicators are telling you.

Thus, "[b]lock activity by itself doesn't necessarily indicate receptivity or lessened ability to sell . . . , but it can indicate some things in concert with the other factors." Likewise, knowing that the volume in the prior week was drastically higher than in the subsequent week "may provide an indication of the ability or lack of ability to introduce new shares without depressing the market."

Under Penny's analysis there were weeks when plaintiffs could have successfully sold 100,000 shares, and other weeks they could not have sold more than 20,000 shares without the sales having a detrimental effect on price. In his view, therefore, plaintiffs could have sold all 1,166,936 shares of their RCM stock in thirty eight weeks without depressing the market, and had they done so, they would have suffered only $841,748 in damages.

Penny also analyzed how long it would have taken plaintiffs to sell all their stock if they had tried to get the "weekly high price." For example, in evaluating the period from March 11 to April 20, 1998, only 47,200 shares traded at the weekly high price even though sales volume in that period was 6,000,000 shares. In his opinion, therefore, it would have taken "many years . . . to dispose of . . . [plaintiffs'] shares under that scenario."

Moreover, according to Penny, if plaintiffs had participated in the secondary offering RCM had announced in late April 1998 of $19.95 per share and stopped selling their stock on their own at that point, they would have realized a total of approximately $24 million from the combination of their sales to that date and their participation in the offering. More specifically, up to April 27, 1998, plaintiffs had received $1.3 million for shares sold, with 1,036,936 shares remaining. They would have gotten another $20,686,873 if they had sold those shares through the public offering. In that case, Penny said, they would not have suffered any damages.

II

Plaintiffs had commenced the action in a seven-count complaint. By the time of trial, three counts remained to be adjudicated. After an extensive trial, the jury returned verdicts on a series of questions that resulted in a damages determination of $7,606,693.79 on plaintiffs' claim against RCM for breach of the RRA as pled in the fifth count. The jury found no cause of action both on Blaire's claim for breach of the severance pay provisions of his employment contract as pled in the fourth count, and on the claim of both plaintiffs for breach of the implied warranty of good faith and fair dealing in connection with the parties' stock option agreements as pled in the seventh count.

Thereafter, RCM moved for a new trial or, in the alternative, remittitur of the jury award to $841,748; and to preclude prejudgment interest. In a written decision, the trial judge stated his reasons for denying a new trial or remittitur. A confirming order was entered, also disallowing prejudgment interest, and the judgment eventually was entered.

On appeal, RCM argues that the damages verdict must be set aside because it was "based entirely on the unreliable and unsupported personal belief of plaintiffs' expert." RCM contends that the expert should have been barred from testifying and that his testimony was inadmissible as net opinion. RCM also argues that the damages verdict was excessive, against the weight of the evidence, and greatly exceeding the damages assessment of plaintiffs' own expert. RCM also posits jury error, especially in the use of a dictionary; and cumulative error. To the extent RCM's appeal includes a challenge to the trial court's denial of summary judgment in its favor on count five of the complaint, that argument is meritless.

Plaintiffs, in cross-appealing, urge affirmatively that they are entitled to prejudgment interest on the breach of contract damages; and that the trial court erred in deciding adversely to Blaire on summary judgment his claim for $240,000 arising from his employment contract with RCM.

Following the filing of plaintiffs' reply brief on appeal, RCM moved to strike some of plaintiffs' positions on cross-appeal as improperly raised in their reply brief. Plaintiffs filed a cross-motion to bar certain of RCM's arguments on appeal. We reserved decision on both motions and now deny them.

III

We discern no misapplication of discretion in the trial court's pre-trial rulings recognizing both Brucki's qualifications as an expert and the evidentiary sufficiency of the opinions he offered. See Kemp v. State, 174 N.J. 412, 424 (2002); Carey v. Lovett, 132 N.J. 44, 64-65 (1993); Bellardini v. Krikorian, 222 N.J. Super. 457, 463 (App. Div. 1988)("[A]n expert may rely on his own knowledge, as well as on facts supplied to him by others. * * * Obviously the expertise of a witness may be based on knowledge or experience acquired over a period of years." (citations omitted)); Dawson v. Bunker Hill Plaza Assocs., 289 N.J. Super. 309, 323 (App. Div.), certif. denied, 146 N.J. 569 (1996); Molino v. B.F. Goodrich Co., 261 N.J. Super. 85, 98-99 (App. Div. 1992), certif. denied, 134 N.J. 482 (1993). We are in substantial agreement with the court's rationale explaining those rulings. The views Brucki stated were not net opinion. See, e.g., Buckelew v. Grossbard, 87 N.J. 512, 524 (1981); Fernandez v. Baruch, 52 N.J. 127, 131 (1968); Rosenberg v. Tavorath, 352 N.J. Super. 385, 401-04 (App. Div. 2002); Taylor v. DeLosso, 319 N.J. Super. 174, 180 (App. Div. 1999). Rather, the experience-based premises for his opinions were adequately articulated "with specific reasoning which the jury could accept or reject." Molino, supra, 261 N.J. Super. at 99. See also Nguyen v. Tama, 298 N.J. Super. 41, 49 (App. Div. 1997). The subject matter involved here was not one that called for applications of scientific knowledge, but rather attributions of experience and method.

The parties were bound by their stipulation to be governed by the "New York rule," and neither has challenged the trial court's order of October 10, 2002 applying that standard. Both parties' experts offered their testimony in the context of that decisional criterion. Brucki's opinion testimony specifically addressed the principles embodied in the "New York rule" even though he had been unaware, in preparing his reports, of the trial court's application of that paradigm. Manifestly, his testimony and that of RCM's expert was designed to assist the jury in understanding the market dynamics and approaches to valuation that it would need in applying the damage standard that all agreed governed.

RCM had every opportunity to test Brucki's opinions and approaches in cross-examination, and did so. RCM had every opportunity to present countervailing views through its own expert, and presented Penny's testimony to that end. The jury evaluated the parties' presentations and made choices within the parameters of the proofs proffered. For reasons well-stated in the trial judge's memorandum decision disposing of the parties' post-trial motions, we are obliged to respect the jury's findings. See Carrino v. Novotny, 78 N.J. 355, 360 (1979); Baxter v. Fairmont Food Co., 74 N.J. 588, 596-601 (1977); Dolson v. Anastasia, 55 N.J. 2, 6-9 (1969).

None of the cases advanced by RCM as embodying general propositions supporting a contrary view deal with the type of issue before the jury in this case, involving the sale of such large amounts of stock. The nature of the questions presented here were sufficiently different in kind and degree to be distinguishable in critical particular. See, e.g., Madison Fund, Inc. v. Charter Co., 427 F. Supp. 597, 608-09 (S.D.N.Y. 1977); Duncan v. TheraTx, Inc., 775 A.2d 1019, 1026-27 (Del. 2001). Particular flaws in Brucki's testimony asserted by RCM were subject to jury evaluation. It was incumbent upon RCM to persuade the jury that those flaws were so basic as to affect Brucki's credibility. See Lorenc v. Bernards Twp., 5 N.J. Tax 39, 48 (Tax 1982), aff'd o.b. sub nom. Sage v. Bernards Twp., 6 N.J. Tax 349 (App. Div. 1984).

IV

RCM challenges the damages verdict as excessive. It contends that the verdict was not only against the weight of the evidence but contrary to the evidence plaintiffs themselves submitted. In particular, it points to the fact that while Brucki based his damage calculation on the weekly low prices, the jury awarded damages more in accordance with the weekly high prices. As a result, it claims, the jury awarded almost $3 million more in damages than "what even plaintiffs believed was reasonable." In this respect, it argues that the jury's verdict was improperly influenced by a trial exhibit, P-63, that showed calculations for the weekly high prices. RCM seeks a new trial.

During Brucki's testimony he discussed three exhibits, P-62, P-63 and P-64, each of which analyzed, on a special premise noted, plaintiffs' ability to dispose of their RCM stock at the combined rate of 100,000 shares per week "in accordance with the provisions of SEC Rule 144." P-62 presented sales in accordance with the weekly low prices, P-63 gave the same information but in accordance with the weekly high price; and P-64 reflected sales according to the mean weekly averages. Brucki discussed them all even though his opinion was that the lowest prices were the most appropriate. Brucki realized that the court's October 2002 order spoke in terms of the "highest intermediate price" and stated that while the weekly low prices were not necessarily the "highest intermediate" prices at which the stock could have been sold, he did not think "anybody could tell you what the highest intermediate price in any given week" would have been, and that was why he opted to use the lowest actual sale prices.

Defense counsel objected to the charts themselves being published to the jury, but the court overruled the objection. Later, the court expressed the view that the charts might not be received in evidence.

At the close of evidence, on RCM's motion, the court excluded P-63 and P-64. The record is not clear regarding the disposition of P-65, but the court ultimately concluded that P-67, a multi-page document under the heading "Yahoo Finance," which was received in evidence and used by Brucki as a basis for his opinions, was the critical piece of information the jury would use in making its determinations. Defense counsel expressed no disagreement.

In ruling on RCM's post-trial motions, the trial judge found the damages awarded not to be excessive. He stated that the jury's award for breach of contract was not shocking. He characterized the award as "one of the two alternatives, presented by the parties, which the jury could return." He also denied remittitur on the basis that he discerned "no principled basis upon which [the court] could establish an alternate damage figure."

Breach of contract damages "are those arising naturally according to the usual course of things from the breach of contract, or such as may fairly and reasonably be supposed to have been in the contemplation of the parties" when they contracted. Tessmar v. Grosner, 23 N.J. 193, 203 (1957). As a general proposition governing the calculation of damages, the plaintiff ought to be put in as good a position as he would have been had the defendant kept the promise made. See Giumarra v. Harrington Heights, Inc., 33 N.J. Super. 178, 196 (App. Div. 1954), aff'd, 18 N.J. 548 (1955).

Damages may be awarded for losses even where the amount of damage cannot be precisely assessed. See American Sanitary Sales Co. v. State, 178 N.J. Super. 429, 435 (App. Div.), certif. denied, 87 N.J. 420 (1981). Evidence affording a basis for estimating damages with some reasonable degree of certainty is sufficient to support a compensatory damage award. See Paolicelli v. Wojciechowski, 132 N.J. Super. 274, 278-79 (App. Div.), certif. denied, 68 N.J. 153 (1975).

On appeal of a damage award, the judgment of the factfinder is entitled to considerable respect and will not be overturned absent a showing that the judgment constitutes a manifest denial of justice. See Baxter v. Fairmont Food Co., 74 N.J. 588, 597-98 (1977).

RCM argues that the jury's award was based entirely on the evidence of weekly high prices as set forth in P-64 and P-65 and as addressed by Brucki, and that that evidence was improperly before the jury because Brucki had disavowed anything but the weekly low prices. It also contends that the trial court's refusal to strike any testimony related to that exhibit was error. RCM claims the damages award was so shockingly high that it must be reversed as a matter of law.

Although Brucki favored using the weekly low prices, he acknowledged that the average of the weekly high and low prices was reasonable. He called his approach "conservative" because he used only the lowest available figures, and he implied that the actual prices plaintiffs could have obtained, although ultimately unknowable, might have been higher than his figures.

Conceptually, the task of particularizing damages in a case such as this is rather elusive because of the nature of stocks and the dynamics of a constantly changing market. Nevertheless, even when a subject lends itself to more defined measurements of damages, "[i]f the evidence affords a basis for estimating the damages with some reasonable degree of certainty, it is sufficient." Tessmar, supra, 23 N.J. at 203.

Although Brucki's opinion was cast in terms of only the lowest prices, he acknowledged that taking the high prices into some consideration was reasonable. The instruction the court gave they jury in accordance with the standard established in the October 10, 2002 order, and with the parties' approval, was for a determination of the "highest intermediate price" each week, not the lowest price. The jury could properly consider all of the prices during the relevant period in reaching its verdict. It was not required to credit Brucki's opinion in total; it was free to accept or reject his testimony in whole or in part. Amaru v. Stratton, 209 N.J. Super. 1, 20 (App. Div. 1985)("A jury has no duty to give controlling effect to any or all of the testimony provided by the parties' experts, even in the absence of evidence to the contrary.").

Given the evidence, and the instruction incorporating the standards of the October 10, 2002 order, specifically the reference therein to "highest intermediate price," the jury award cannot be seen as excessive, either on post-trial motion or appeal. See Dolson, supra, 55 N.J. at 6-9; Baxter, supra, 74 N.J. at 596 ("[A] trial judge should not interfere with the quantum of damages assessed by a jury unless it is so disproportionate . . . as to shock his conscience and to convince him that to sustain the award would be manifestly unjust."). "[A] jury verdict, from the weight of evidence standpoint, is impregnable unless so distorted and wrong, in the objective and articulated view of a judge, as to manifest with utmost certainty a plain miscarriage of justice." Carrino v. Novotny, 78 N.J. 355, 360 (1979).

We reject RCM's argument that the jury was improperly influenced by its exposure to the high-price data. The verdict that was reached was not out of line based on the admitted and admissible evidence before the jury. For example, P-67, an exhibit that was admitted, included quotes for the open, high, low and closing prices, as well as the volume traded.

The P-67 information was not only before the jury, but it appears that RCM also agreed that it was properly in evidence. No objection was lodged when plaintiffs first had Brucki describe how he had used the information in P-67 to form his opinions. When the court was deciding whether or not to bar P-63 and P-64 from evidence, defense counsel pointed to the admissibility of P-67 as a reason why P-63 and P-64 should be excluded. We note, as well, that RCM objected to P-63 on the grounds that it was a prepared "schedule that purports to show damages at the week's high prices" as opposed to "objective information," and had been "repudiated" by plaintiffs' own expert. No such objection was made to P-67. Counsel for RCM clearly understood that plaintiffs would, in fact, seek higher damages than those in Brucki's analysis.

Discerning no error in the admission of P-67, we have no basis for viewing the jury's verdict as unsupported by the evidence. If any error could be seen to exist, it was invited by defendants and therefore cannot serve as the basis for a successful appeal. "Trial errors which were induced, encouraged or acquiesced in or consented to by defense counsel ordinarily are not a basis for reversal on appeal." State v. Harper, 128 N.J. Super. 270, 277 (App. Div.), certif. denied, 65 N.J. 574 (1974). In those cases, the appellate court considers reversal only where the particular error "cut mortally into the substantive rights" of the disadvantaged party. State v. Corsaro, 107 N.J. 339, 345 (1987). Here, admitting P-67 into evidence was not a mistake, let alone a fatal one, inasmuch as defendants, too, needed the information about the prices at which RCM stock traded, and they seem to have determined that such data in "raw" form was preferable to the other schedules plaintiffs' had proffered. See State v. Buonadonna, 122 N.J. 22, 44 (1991) ("Strategic decisions made by defense counsel will not present grounds for reversal on appeal").

V

In appealing from the judgment, RCM also points to two irregularities in the jury's deliberations that it contends so prejudiced the fairness of the trial as to require a reversal and remand for a new trial. In one argument, RCM asserts that the jury improperly used a dictionary during deliberations "to research key terms that were squarely at issue in the case." In the other, RCM maintains that one of the jurors wrongfully refused to participate in the deliberations.

A.

It is undisputed that, on the first day of jury deliberations, a member of the court's staff, without the court's permission, gave the jury a dictionary at the jury's request. The following day the court set forth, on the record, exactly what had taken place. The jury had expressed to the staff member a need to "clarify some definitions." The staff person gave the court a note asking if the jury could use the judge's dictionary. The court responded by asking for the words that the jury needed, but did not receive a reply. Instead, evidently at about the same time as the note was delivered, another court staff member gave the jury a dictionary believing the court had approved the request. Shortly thereafter, yet another staff member realized the court had not approved, and retrieved the dictionary, also bringing the matter to the judge's attention. The judge immediately apprised counsel of the situation. The jury had had the dictionary for approximately two minutes.

The judge proposed to counsel that the particular juror who asked for the dictionary be interviewed, followed by interviews with all of the other jurors, to "verify to everyone's satisfaction that they can put aside anything they looked up," and whether they had looked up other definitions on their own. Defense counsel noted that, at the time of the jury's request for the dictionary, counsel and the court had been "struggling with . . . how to assist the jury with respect to what does highest intermediate price mean" and other questions posed by the jury, and that perhaps in "the interim the jury ha[d] satisfied itself about definitions and I think that that's got to be the focus of our inquiry." All agreed that the proper way to proceed was to have the court rather than counsel ask the questions, with counsel relating any particular areas of concern to the court as the inquiry progressed. In the meantime, the jury would be told to suspend its deliberations.

The inquiry was conducted at the beginning of the next day. Juror eight, the person who had asked for the dictionary, explained that the request had been made on behalf of the entire jury. She said that, while the jury had the dictionary, two words had been looked up: "intermediate" and "terminate." On the day of the court's inquiry, that juror had also brought a dictionary from home but had not used it that morning and had not used it at home, either. The judge asked the juror to give him the dictionary from home and explained that dictionary definitions were "totally irrelevant." He also reminded the juror that all communications from the jury needed to be in writing and that, as he had previously instructed, the case should only be decided on the evidence. The juror acknowledged that if the court were to "define those two terms in a particular way" she would be able to "put aside any notion" that had been "gleaned from the dictionary with respect to that." The judge then interviewed the other jurors in turn and each gave responses that were similar to and consistent with those given by juror eight.

Following ensuing on-the-record and off-the-record discussions between counsel and the court, RCM moved for a mistrial. Among the reasons cited were that, while the jury had previously asked for a definition of "highest intermediate price," it had never asked a question about "termination;" that some jurors had said the definition of "intermediate" confirmed "their own speculation that intermediate had something to do with the price between the high and the low;" and that the entire matter confirmed how Brucki's testimony concerning the exhibits the court had excluded had prejudiced defendants, which prejudice could not be corrected by the court's further instructions. In denying the motion, the court expressed its thinking as follows:

Gentlemen, I've had an . . . opportunity to consider the motion and after conferring . . . not only with counsel in terms of the inquiry with respect to the jury and the jury, more importantly, themselves, I am going to deny defendant's motion for a mistrial. I believe that the record is clear and the jurors have worked diligently since early December on this matter. I understand . . . what happened yesterday was a mistake. I've taken responsibility for that. That was . . . an error made by staff and not the jurors. And after talking to them, I'm convinced that they will follow the Court's instruction . . . .

The court then instructed the jury on the meanings of "terminate" and "highest intermediate price," in response to jury questions posed before the dictionary issue became a focus. In connection with the latter instruction, the court clarified that the term referred to the weekly prices, saying it meant "the highest price that could have been achieved for the number of shares you determine . . . for each week during the restricted period . . . ." The court also reviewed the meaning in the context of the jury interrogatories, pointing out that "[i]ntermediate, as used in the highest intermediate price, has nothing to do with the mean or median price of the stock, but rather refers only to the time period, in this case, each trading week."

A verdict ensued without any further questions from the jury. RCM renewed the mistrial issue in its post-trial motions. The court, in its written memorandum of decision, set out an analysis of its reasons for denying the motion. Among the reasons the court gave were how quickly the incident had been discovered and addressed; how each juror was interviewed with counsel, how the dictionary definition of "intermediate" was irrelevant to the question before the jury in any event; and how, after each juror had been polled, there was "no indication that the jurors would not follow the Court's instructions or that they were influenced by the use of the dictionary." Although the court was familiar with reported decisions cautioning against a court's trying to determine "the extent to which extraneous dictionary evidence played a role in the jury's verdict," it relied instead on the settled law permitting the trial to continue when appropriate limiting instructions are given at the proper time.

"Appropriate and proper charges to a jury are essential for a fair trial." State v. Green, 86 N.J. 281, 287 (1981). The judge should give a comprehensible explanation of the questions that the jury must resolve, as well as apprise them of the law applicable to the facts of the case. Id. at 287-88. Erroneous jury instructions on material issues are usually presumed to be reversible error. State v. Crisantos, 102 N.J. 265, 273 (1986).

On appeal of a jury charge, the appellate court reviews the charge as a whole, State v. Ramseur, 106 N.J. 123, 289 (1987), to determine whether the jury was misled. Ellis v. Caprice, 96 N.J. Super. 539, 546 (App. Div.), certif. denied, 50 N.J. 409 (1967).

"The use by a jury of a dictionary has an obvious potentiality for harmful influence," and new trials have been granted "where the jury resorted to dictionary definitions of words and expressions having a technical legal signification already explained in the court's charge." Palestroni v. Jacobs, 10 N.J. Super. 266, 273 (App. Div. 1950). Nevertheless, courts presume juries follow their instructions. State v. Loftin, 146 N.J. 295, 390 (1996). And even where some mistake occurs, an appellate court will not reverse where the record indicates that the jury was able to comply with the court's "sharp and complete curative instruction." State v. Winter, 96 N.J. 640, 649 (1984). A motion to set aside a jury verdict based on improper matter before the jury is addressed to the trial court's sound discretion. Palestroni, supra, 10 N.J. Super. at 273.

RCM's primary argument is that the court erred in not declaring a mistrial because the jury had used the dictionary to look up the term "intermediate," which was a critical term in the case by reason of the October 10, 2002 order prescribing the manner in which the jury was to calculate any damages. The gravamen of the argument is that the situation here was particularly sensitive in the light of Brucki's opinion that was cast in terms of the lowest weekly sales prices, and that the jury's understanding of "intermediate" based on the dictionary implicated a higher price than the lowest price.

We conclude that the trial court's prompt and thorough attention to the problem that occurred, and each juror's expressed commitment to rendering a verdict free of any influence from dictionary definitions validate the result. The need to vacate a verdict reached after resort to a dictionary, sponsored in Palestroni, is mitigated by the timing, quality, and throughness of the trial court's response to the problem when it is identified, see State v. Vaszorich, 13 N.J. 99, 114-15), cert. denied, 346 U.S. 900, 74 S. Ct. 219, 98 L. Ed. 2d 400 (1953), and the principle that the jury is presumed to have heeded a trial court's instructions. Loftin, supra, 146 N.J. at 390.

B.

RCM also contends that the verdict was tainted by the conduct of juror four in not participating in the vote on plaintiffs' damages. Juror four was the sole juror who disagreed that the weekly per-plaintiff share-sale limit was 50,000, deciding instead that it was only 10,000. As the court polled the jurors whether they answered "yes" in reference to the question about the weekly sales proceeds plaintiffs could have realized but for RCM's improper limitations, juror four stated "[n]o, since I didn't vote for the 50,000 [in question two], I didn't think this was appropriate for me to vote on." The jury's verdict with respect to the total damages from defendants' improper sales limitations was reflected in the verdict sheet on a week-by-week basis as a seven-to-one determination.

RCM stresses that, in its jury charge, the court had instructed that a seven-to-one vote would be acceptable on any question but that all eight jurors must deliberate on all questions, and "[a] juror who has been outvoted on any question shall continue to deliberate with other jurors fairly, impartially, honestly, and conscientiously to decide the remaining questions." RCM contends that juror four's actions with respect to question 5 ran afoul of this instruction. The trial court did not address this claim in its resolutions of the parties' post-trial motions and, according to the record, RCM lodged no objection nor did it move for a clarification at the time juror four gave the explanation.

When a court presents special interrogatories or elicits special verdicts, it must clearly instruct the jury that "each juror must determine and decide each question" and that "inconsistency on the determination of one question or verdict does not disqualify a juror from deliberating on remaining questions." Williams v. James, 113 N.J. 619, 632-33 (1989). In this case, of course, RCM does not fault the court's instruction, but rather claims error from juror four's failure to heed it.

RCM did not object at a time when, had the issue been explored, it could have been satisfactorily addressed in terms. Moreover, juror four's lack of participation in question 5, while not appropriate, is understandable given that question 5 involved the calculation of damages based on the answer to question 2. In fact, question 2 included the instruction, to which defendants do not object on appeal, that "[i]f your answer is 10,000 or less per plaintiff, go to part III," and Part III begins with question seven. As those instructions applied to juror four who thought the proper answer to question 2 was 10,000 not 50,000, the juror's sense of need to abstain from the consideration question 5 can be understood. Also, given the requirements of question 5, which called for mathematical calculations based in substantial part on the answer to question 2, juror four's input would likely have been immaterial. Where the record supports the conclusion that the juror at issue substantially participated in the deliberations and there was no undue prejudice, the verdict will not be reversed even if he or she failed to vote on all questions. See Mahoney v. Podolnik, 168 N.J. 202, 226-27 (2001).

Accordingly, we reject RCM's challenges to the jury verdict on this basis.

VI

A.

We reject RCM's cumulative error argument, as well. We have determined that no error of any consequence occurred in the trial. If some minor mistakes or imperfections not capable of affecting the verdict occurred, they are of no moment, inasmuch as defendants were entitled to a fair trial, not a perfect one. State v. Feaster, 156 N.J. 1, 84 (1998), cert. denied sub nom. Kenney v. New Jersey, 532 U.S. 932, 121 S. Ct. 1380, 149 L. Ed. 2d 306 (2001).

B.

As for RCM's contention that the jury wrongly awarded damages for the week of March 11, 1998, the trial court, in resolving the post-trial motions, noted that RCM had raised that issue for the first time after the trial. Had RCM introduced the argument in timely fashion, reference to that particular week could have been removed from the jury interrogatory. RCM, however, permitted the jury to consider the possible number of shares to be sold beginning March 11, 1998, as the parties' contract allowed, rather than based on what plaintiffs actually did.

The jury's consideration of sales in that first week of the limitation period was not improper. The issue was how quickly plaintiffs could have sold all their shares if defendants had not breached, rather than how quickly plaintiffs actually began to sell shares after defendants breached. The jury was free to determine that plaintiffs' lack of sales during that first week of the limitation period was itself influenced by RCM's breach. Likewise the jury was free to award damages for the week of March 23, 1998, notwithstanding anything Blaire might have said about them not actually having attempted to sell shares in that week.

Accordingly, we reject RCM's remaining contentions that it is entitled to a new trial based on cumulative or specific error.

VII

We turn, now, to plaintiffs' cross-appeal. They raise two issues affirmatively, and two conditionally. Having determined that an affirmance is warranted on the issues advanced by RCM, we need not address the issues plaintiffs raise conditionally. As to their affirmative issues, plaintiffs contend the trial court erred in denying them prejudgment interest. They assert that the trial court failed to analyze the equities properly in making its decision regarding prejudgment interest. They also contend that the trial court erred at the summary judgment stage in denying Blaire's claim for $240,000 promised in his employment contract.

A.

Except for an interest award of $171,932.12 from the date of verdict until the date of judgment, the trial court denied plaintiffs' application for prejudgment interest. In his post-trial written decision disposing of various motions and applications, the trial judge did not express any reasons for so limiting the prejudgment interest award.

Typically, prejudgment interest is awarded in the trial court's discretion based on equitable principles. Musto v. Vidas, 333 N.J. Super. 52, 74 (App. Div.), certif. denied, 165 N.J. 607 (2000). Where a case involves a liquidated sum, "prejudgment interest has been regarded by our courts as compensatory to indemnify the plaintiff for the loss of what the monies due him would presumably have earned if payment had not been refused." Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J 474, 506 (1974). In such cases the loss is assumed and the plaintiff need not prove it. Ibid. But "[i]nterest is not punitive, . . . it is compensatory[.]" Tobin v. Jersey Shore Bank, 189 N.J. Super. 411, 416 (App. Div. 1983)(quoting Busik v. Levine, 63 N.J. 351, 358, app. dism., 414 U.S. 1106, 94 S. Ct. 831, 38 L. Ed. 2d 733 (1973)). On appeal, the trial court's prejudgment interest determination stands unless it represents a manifest denial of justice. Musto, supra, 333 N.J. Super. at 74.

"The equities ordinarily lie with an obligee who had to litigate the claim while the obligor retained the use of the funds." AGS Computers, Inc. v. Bear, Stearns & Co., Inc., 244 N.J. Super. 1, 4 (App. Div. 1990). And, the trial judge should express the reasons for awarding or denying interest so the record will reflect whether the equities did indeed support the decision. See Rova Farms, supra, 65 N.J. at 505 (while the judge has discretion regarding an award of interest, the proper exercise of such discretion requires that the judge be aware of the "alternatives open to him for consideration"). Here, the court limited the award and failed to give clear expression to its reasons for doing so.

It is clear, however, that plaintiffs' recovery was at the upper limits of what the evidence supported. It was larger than even plaintiffs' own expert had opined was reasonable and appropriate. Nevertheless, the jury was free to reject the expert's opinion on the ultimate question and to assess an amount of damages it deemed reasonable in the circumstances, as long as that determination had support in the evidence. As we have indicated, the verdict this jury reached was adequately supported by the record.

We are also mindful of other considerations. The value of stock and other corporate securities is sensitive to market variations. Also, the fact that this case involved shares of ownership in RCM rather than funds belonging to plaintiffs tends to negate the idea that RCM had the "use" of plaintiffs' funds as that notion is typically understood. These thoughts provide additional support for the view that the trial court's limited award of interest was equitable in the circumstances.

B.

Plaintiff Blaire claims the trial court erred in denying his pre-trial motion for summary judgment for $240,000 on his severance claim. He asserts that he had made out a prima facie case by establishing, at least, that the contract was unambiguous on its face and that RCM had failed to make the promised payment.

Both plaintiffs had sought damages for RCM's failure to pay them the severance set forth in their employment contracts. The severance amount was one year's salary, or $240,000 each. Shortly before trial, the court heard argument on Blaire's motion for summary judgment. The court took as a given that Meyers had been terminated without cause. It concluded, however, that the contract language was ambiguous with respect to Blaire's situation because one way to interpret the language was that, if Blaire continued to work for defendants after the expiration of the agreement and then either quit or was terminated thereafter, the obligation to pay the year's salary as severance no longer pertained. Subsequently, the jury decided this issue against plaintiffs, finding that the parties did not intend that Blaire would receive the severance amount if he continued working beyond the March 11, 1998 expiration date of the agreement. Following the verdict, the court rejected plaintiffs' post-trial motion on this point, concluding not only that the jury's verdict was hardly shocking but also that "there was a reasonable basis to support the jury's verdict as to that issue."

Under R. 4:46-2(c) summary judgment should be entered if

the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law. An issue of fact is genuine only if, considering the burden of persuasion at trial, the evidence submitted by the parties on the motion, together with all legitimate inferences therefrom favoring the non-moving party, would require submission of the issue to the trier of fact.

See Brill v. Guardian Life Ins. Co., 142 N.J. 520, 538 (1995); Judson v. Peoples Bank & Trust Co., 17 N.J. 67, 73-74 (1954).

In determining whether a genuine issue of material fact exists, the standard is "whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill, supra, 142 N.J. at 540. The judge does not weigh the evidence to determine its truth but only decides whether an issue exists for trial. Ibid. Thus, a party may defeat the motion by showing that, when viewed in light of the relevant burdens applicable at trial, the evidential materials raise credibility issues which could permit the factfinder to decide the question against the movant. Id. at 523. On appeal, the reviewing court applies the same standards as the trial court. S. Jersey Family Med. Ctrs., Inc. v. City of Pleasantville, 351 N.J. Super. 262, 279 (App. Div. 2002), aff'd, 176 N.J. 184 (2003).

With respect to particular language in dispute, the parties' intentions control the construction of a contract. Duff v. Trenton Beverage Co., 4 N.J. 595, 604 (1950). When the terms of an agreement are clear and unambiguous, there is no room for interpretation and the courts must enforce the terms as written. Karl's Sales & Serv. v. Gimbel Bros., 249 N.J. Super. 487, 493 (App. Div.), certif. denied, 127 N.J. 548 (1991). By the same token, however, when the meaning of a contract is uncertain or a term ambiguous, the matter should be left to the jury to resolve. Garden State Bldgs., L.P. v. First Fidelity Bank, 305 N.J. Super. 510, 525 (App. Div. 1997), certif. denied, 153 N.J. 50 (1998).

We reject plaintiffs' contention that Blaire was entitled to summary judgment on this claim. The contract provision at issue was clearly ambiguous and the parties' intent if Blaire stayed on after the employment contract expired was less than clear.

The language at issue was contained in paragraph 11 of the employment and non-competition agreement:

Upon the earlier of the expiration of the Employment Term or the date, if at all, Employee is otherwise terminated without "good and sufficient cause" (the "Expiration Date"), Employee shall be entitled to continue to receive a salary at the level of his existing salary as of the Expiration Date for the one (1) year period following the Expiration Date. In the event Employee is terminated with "good and sufficient cause," Employee shall not be entitled to any amounts under this Paragraph 11.

By its express terms, the employment and non-competition agreement expired on March 11, 1998.

Blaire continued to work for RCM after that date and until March 27, 1998. In his certification in support of the motion for summary judgment, Blaire acknowledged that for the time he worked after March 11, 1998, until March 27, 1998, his status was that of an at-will employee, and he concedes on appeal that, at trial, he did not challenge the contention that he had "resigned" on March 27, 1998. Therefore, there were at least two material fact issues that required resolution by the ultimate finder of fact: whether the parties intended the provision in paragraph 11 to survive and apply if Blaire's employment ended after the expiration date; and, if so, whether the provision could apply in any of the possible circumstances thereafter, such as Blaire's resignation or his discharge.

VIII

For all the foregoing reasons, the judgment is affirmed. The motions of the parties initially filed on May 17, 2004 and May 25, 2004, each addressed to matter appearing in the briefs of the other on appeal, are denied.

 

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A-6874-02T5

December 2, 2005