RAYMOND S. NADEL v. MORRIS STARKMAN, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0074-05T30074-05T3

RAYMOND S. NADEL, ESQUIRE,

Plaintiff-Respondent,

v.

MORRIS STARKMAN, ESQUIRE,

Defendant-Appellant,

and

STARKMAN, ROCHMAN &

AUMILLER, ATTORNEYS AT LAW,

Defendants.

______________________________

 

Argued October 10, 2006 - Decided November 9, 2006

Before Judges Lintner and Seltzer.

On appeal from the Superior Court of

New Jersey, Chancery Division, Camden

County, C-158-04.

Robert N. Agre argued the cause for

appellant.

Kenneth G. Andres, Jr. argued the cause

for respondent (Andres and Berger, attorneys; Mr. Andres, on the brief).

PER CURIAM

Defendant, Morris Starkman, appeals from an August 2, 2005, order that denied his motion for summary judgment and granted summary judgment in favor of plaintiff, Raymond Nadel. The order was premised on a determination that plaintiff was defendant's partner in a law practice and entitled to compensation pursuant to a written agreement when the practice was terminated. Because we believe the documents submitted to the motion judge were too ambiguous to determine the nature of the parties' association without a hearing, we reverse and remand.

We glean from what has been presented to us that in 1988 plaintiff had been practicing law for approximately ten years more than had defendant. Plaintiff and defendant began working together in 1986 and, in 1988, executed an "AGREEMENT BETWEEN MS AND RSN COMMENCING 1/1/88" (the Agreement). They continued to practice law under the name "Starkman and Nadel" until July 28, 2004, when defendant terminated the relationship in accordance with the provisions of the Agreement.

Plaintiff asserted a right to compensation for what he took to be his partnership interest in the firm. Defendant denied that the parties' relationship was anything other than that of employer and employee. Plaintiff then filed this complaint, alleging a partnership and seeking various relief. Defendant counterclaimed, seeking a determination that the litigants were not partners. Cross-motions for summary judgment followed.

The record before the motion judge consisted of the Agreement, copies of advertisements for the firm, and various documents, including insurance policies, in which the parties referred to themselves as partners. Neither party made any direct representation as to the nature of the relationship they had intended to create. Defendant did not submit any certification at all; plaintiff submitted a certification attesting to the accuracy of the statement of material facts contained in his brief "to the best of my knowledge, information and belief." The statement of material facts referenced the documents submitted to the court, the history of the parties' relationship, and opinions as to the legal effect of these documents and the parties' history.

The contents of the documents submitted to the motion judge were not disputed. The parties, however, did dispute the interpretation to be given to the Agreement and other documents. Plaintiff asserted that the Agreement formed a partnership; defendant asserted that it simply set forth "a professional employment relationship."

The motion judge heard argument on February 18, 2005, and issued a letter opinion on July 15, 2005. That opinion recognized that the Agreement was ambiguous as to the nature of the relationship created. The ambiguity was created, the judge held, by the inclusion of some terms that could support a finding that no partnership was intended and others that could support a contrary finding. The judge concluded, however, that he was required to resolve those ambiguities against defendant, who had drafted the Agreement. Accordingly, the judge held that the parties had formed a partnership, and that plaintiff was entitled to a percentage of the fees generated by files retained by defendant.

Our review of the judge's resolution of the summary judgment motions requires us to apply the same standard as that utilized by the motion judge, Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998), without affording any special deference to the judge's interpretation of the law. Balsamides v. Protameen Chem., Inc., 160 N.J. 352, 372 (1999); Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995). That is, we review the record in the light most favorable to the resisting party to determine if there is a dispute as to a material fact. If so, the issue may not be resolved by motion; if not, we determine if the record, thus viewed, requires judgment as a matter of law. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).

Both parties have argued before us that all facts are undisputed. We agree that there is no dispute as to the authenticity of the documents produced before the motion judge. The central issue is the intent these documents evidence. Whether the parties intended to create a partnership relationship, entitling plaintiff to some distribution on termination, or an employer-employee relationship, with some participation in income, was very much contested. So long as more than one reasonable interpretation may be drawn from an undisputed fact, summary judgment is inappropriate. See Lima & Sons, Inc. v. Borough of Ramsey, 269 N.J. Super 469, 477-478 (App. Div. 1994). Accordingly, unless the uncontested documents evidence an intent to form, or not to form, a partnership so clearly that one litigant or the other is entitled to "'prevail as a matter of law,'" Brill, supra, 142 N.J. at 540 (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 2512, 91 L. Ed. 2d 202, 214 (1986)), summary judgment is inappropriate. Ibid.

The role of the court is to give "juristic effect" to the intention of the parties as expressed in the contract. George M. Brewster & Son, Inc. v. Catalytic Constr. Co., 17 N.J. 20, 27-28 (1954) (citing Corn Exch. Nat'l Bank & Trust Co. v. Taubel, 113 N.J.L. 605 (E. & A. 1934)); Domanske v. Rapid-

Am. Corp., 330 N.J. Super. 241, 246 (App. Div. 2000) (citations omitted). Ascertaining the intent of the parties requires, as the motion judge recognized, an analysis of the Agreement. See Kearny PBA Local # 21 v. Town of Kearny, 81 N.J. 208, 221 (1979) ("The polestar of construction of a contract is to discover the intention of the parties." (citing Atlantic Northern Airlines, Inc. v. Schwimmer, 12 N.J. 293, 301 (1953))); Caruso v. Ravenswood Developers, Inc., 337 N.J. Super. 499, 506 (App. Div. 2001) ("Courts are generally obligated to enforce contracts based on the intent of the parties, the express terms of the contract, surrounding circumstances and the underlying purpose of the contract." (citations omitted)).

If the contract is unambiguous, it must be enforced as written. Schenck v. HJI Assocs., 295 N.J. Super. 445, 450 (App. Div. 1996) (quoting U.S. Pipe & Foundry Co. v. American Arbitration Ass'n., 67 N.J. Super. 384, 393 (App.Div. 1961)), certif. denied, 149 N.J. 35 (1997). A contract is ambiguous if it is reasonably susceptible of two interpretations. Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997) (quoting Kaufman v. Provident Life & Cas. Ins. Co., 828 F. Supp. 275, 283 (D.N.J. 1992)) (additional alteration omitted). The issue of ambiguity is one of law. Ibid.

If the contract is ambiguous, so that parole evidence is necessary to resolve the issue of intent, the meaning of the contract should be left for a fact finder after an appropriate evidentiary proceeding. See Bedrock Foundations, Inc. v. Geo. H. Brewster & Son, Inc., 31 N.J. 124, 133 (1959) (citations omitted); Michaels v. Brookchester, Inc., 26 N.J. 379, 387 (1958); Trucking Employees of N. Jersey Welfare Fund, Inc. v. Vrablick, 177 N.J. Super. 142, 148 (App. Div. 1980).

Given those principles, we conclude that the judge was correct in determining that the contract was ambiguous. The Agreement contains provisions supporting a conclusion that the litigants were only employer and employee. Other provisions suggest that the litigants were partners.

Paragraph eight of the Agreement, for example, provides: "The practice shall continue to be owned solely by [defendant] who alone shall make all decisions with respect to management of the practice. [Plaintiff] shall be deemed an independent contractor and shall be solely responsible for all taxes payable upon his remuneration." This paragraph evidences an intent that plaintiff not have a partnership interest in the practice.

The Agreement's preamble recites that "[plaintiff] wishes that [defendant] share in the net income of the practice" because "[defendant] does not wish to . . . 'purchase' a share of said practice for cash [.]" Accordingly, "[plaintiff] is willing to allow [defendant] to share in the 'bottom line' profit of the practice" by basing "the annual remuneration to be paid by [plaintiff] to [defendant] upon a percentage of the net income of the practice." This paragraph appears to indicate an intent that defendant pay plaintiff a salary determined by net income, but a salary nonetheless. This conclusion is further supported by the contract provision assuring defendant of a "guaranteed payment" for the first five years.

Finally, the contract permits plaintiff to terminate the arrangement and retain those files he brought into the practice upon the payment of a proportion of the fees generated to defendant. The Agreement contains no provision for sharing fees generated by the files retained by defendant. This arrangement might reasonably be interpreted as a recognition that plaintiff's files increased in value by virtue of his association with defendant, but that defendant's files remained free of any interest of plaintiff.

On the other hand, the preamble also recites that the practice has "heretofore [been] owned solely by [plaintiff]," suggesting that the Agreement has modified that prior sole ownership. Moreover, the Agreement provided for the purchase of life insurance, the proceeds of which, on plaintiff's death, would be paid to his estate "for his total and complete interest interest [sic] in the law practice which shall thereafter be owned solely by [defendant]." This provision suggests that plaintiff held an equity ownership which would be purchased with the proceeds of the policy on his life. Finally, the motion judge had before him evidence showing that the parties held themselves out as partners in their advertising and on applications for insurance.

The judge recognized that these conflicting provisions rendered the contract susceptible of two interpretations. He felt, however, that the ambiguities need be resolved against defendant who had drafted the Agreement. That rule, however, is no more than a rule of construction intended to aid in the discovery of the parties' intent, and it must be "subordinated to that goal." See Kearny PBA Local # 21, supra, 81 N.J. at 221-222 (citing Ace Stone, Inc. v. Twp. of Wayne, 47 N.J. 431, 439 (1966)). Given the substantial capacity for conflicting interpretation of several provisions of the contract, and in light of the frequent warning that intent is not usually appropriately decided on a motion for summary judgment, see Auto Lenders Acceptance Corp. v. Gentilini Ford, Inc., 181 N.J. 245, 271 (2004), we hold that the question of whether the parties intended to invest defendant with an equity position could not be determined on cross-motions. Rather, a plenary hearing, at which the parties might explain what they intended to accomplish by the Agreement, must be held.

Because the judge's ruling on the motions may be viewed as an indication of the judge's view of the substantive merits and the credibility of the assertions regarding the nature of the parties' relationship, we deem it appropriate to direct the required hearing be conducted by a judge other than the motion judge. See R. 1:12-1(d); N.J. Div. of Youth and Family Services v. A.W., 103 N.J. 591, 617-618 (1986) (citation omitted); Biddle v. Biddle, 166 N.J. Super. 1, 7 (App. Div. 1979).

Reversed and remanded.
 
 

 

That certification was insufficient to meet the Rule 1:6-6 requirement that affidavits "be made on personal knowledge." See Stowell v. N.J. State Ass'n. of Chiefs of Police, 325 N.J. Super. 512, 520-521 n.2 (App. Div. 1999) (citing Lippmann v. Hydro-Space Technology, 77 N.J. Super. 497, 504 (App. Div. 1962)).

(continued)

(continued)

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November 9, 2006