LENMAR CONSULTING INC v. MALCOLM SHEPPARD

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

LENMAR CONSULTING, INC.,

Plaintiff-Appellant,

v.

MALCOLM SHEPPARD,

Individually and d/b/a

TARRAGON NJ, INC.,

Defendants-Respondents.

____________________________

January 14, 2014

Submitted December 17, 2013 Decided

Before Judges Reisner and Alvarez.

On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-3188-11.

Law Offices of Marina Dimentman, attorneys for appellant (Ms. Dimentman and Nasim Dibaee, on the briefs).

Hartsough Kenny Chase & Sullivan, attorneys for respondents (David J. Kenny, of counsel and on the brief).

PER CURIAM

Plaintiff Lenmar Consulting, Inc. (Lenmar) appeals from an October 26, 2012 order granting summary judgment in favor of defendants Malcom Sheppard and Tarragon NJ, Inc. (Tarragon), and from a January 11, 2013 order denying reconsideration. We affirm.

I

We review a trial court's summary judgment order de novo, using the same legal standard as the trial court. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998); Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). We "first decide whether there was a genuine issue of material fact, and if none exists, then decide whether the trial court's ruling on the law was correct." Henry v. Dep't of Human Servs., 204 N.J. 320, 330 (2010). Accordingly, we have considered the record on appeal with those standards in mind.1

These are the pertinent undisputed facts.2 On April 22, 2005, plaintiff Lenmar entered into a contract with Tarragon to "provide the computer consulting and programming services specified in the TASK ORDER" attached to the contract and in any future task orders to which the parties agreed. Sheppard signed the contract on behalf of Tarragon, in his capacity as "Director." He did not sign in his personal capacity, and the contract by its terms did not name him as a contracting party. The attached task order recited that pursuant to the agreement between Lenmar and Tarragon, Malcolm Sheppard as "consultant" would provide computer consulting and/or programming services for a project listed as "State of New Jersey" (State). However, the contract, which Lenmar drafted, did not identify the State as Lenmar's client.

The agreement between Lenmar and Tarragon contained a restrictive covenant which provided that the sub-contracting company (Tarragon) or any of its employees

will not directly or indirectly or in any capacity, compete or attempt to compete with the Company [Lenmar] . . . to provide computer programming or data processing services . . . by soliciting any Client of the company with whom the Sub-Contracting Corp. or its employee had dealings with on behalf of the Company.

The record contains no contract between Lenmar and the State, and hence, no legally competent evidence that the State was ever Lenmar's client. Instead, the record contains a contract between Lenmar and a company called Fujitsu Consulting (Fujitsu), which in turn was a State contractor.3 Under the terms of the Lenmar-Fujitsu contract, Lenmar was to provide "the professional services of individuals identified on Work Orders" signed by Fujitsu and Lenmar. The contract further provided that Lenmar would invoice Fujitsu for the individuals' work, and Fujitsu would pay Lenmar. A work order attached to the Lenmar-Fujitsu contract identified Sheppard as the "Mainframe Consultant" whose services Lenmar would provide to Fujitsu.4 Pursuant to that agreement, Lenmar in turn contracted with Tarragon to assign Sheppard as a consultant on a project for the State. The Lenmar-Fujitsu contract prohibited Lenmar from soliciting or doing business with Fujitsu's clients.

It is undisputed on this record that in October 2010, Fujitsu notified Sheppard that its work on the State project had come to an end, and his services were no longer needed. Sheppard, in turn, notified Lenmar by email that the job had come to an end and sent Lenmar his final invoice. Lenmar responded with a friendly farewell email, wishing Sheppard good luck in his future endeavors. Thereafter, Sheppard did not perform any further work for Lenmar, nor did he go to work for Fujitsu. Instead, he obtained employment with a different computer consulting service, which placed him with a State agency as a consultant.

On June 13, 2011, Lenmar filed a complaint against Tarragon and Sheppard, claiming that Sheppard breached the Tarragon-Lenmar contract by obtaining employment with an unnamed "end-client," later identified as the State. On that theory, Lenmar also made claims for tortious interference, breach of the duty of good faith and fair dealing, unjust enrichment, misrepresentation and fraud.

Following discovery, the parties filed cross-motions for summary judgment. The trial court denied Lenmar's motion and granted defendants' motion. In a brief statement of reasons, the judge noted:

The Court finds that Malcolm Sheppard signed only in his capacity as director of Tarragon and not individually. The Court further finds that Fujitsu and not the State of New Jersey is Lenmar's client. Lenmar failed to produce any agreement between itself and the State of New Jersey.

Lenmar filed a motion for reconsideration, which the court denied. This appeal followed.

II

Having reviewed the record, we find that the case was ripe for summary judgment, because there were no material facts in dispute. Brill, supra, 142 N.J. at 540. We also conclude that the complaint was properly dismissed because, on this factual record, it was completely without legal merit.

On this appeal, Lenmar argues that Sheppard "tortiously interfered" with Lenmar's "Agreement with Tarragon"; that Sheppard was "unjustifiably enriched at plaintiff's expense"; and that there were "genuine issues of material fact" concerning Lenmar's breach of contract claims. We cannot agree with any of those contentions. Except as addressed below, they are without sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

In construing the Lenmar-Tarragon contract, we apply two well established principles. First, an ambiguity in a contract will be construed against the drafter, which in this case was Lenmar. See Karl's Sales & Serv. v. Gimbel Bros., 249 N.J. Super. 487, 493 (App. Div. 1991). Second, we will not make a better contract for a party than the one it entered into. Ibid. Both of these principles favor defendants.

Lenmar claims that the State was its client and that Sheppard wrongfully began performing work for the State after the Tarragon-Lenmar contract ended. There is no proof that Lenmar had a contract with the State. Moreover, the Tarragon-Lenmar contract does not define the term "client," nor does it list the State as a Lenmar client. At best, the task order listing the project as "State of New Jersey" is ambiguous on the question of whether the State could possibly be understood as being a Lenmar client. Under these circumstances, we cannot construe the State as being Lenmar's client for purposes of paragraph eight which precluded Tarragon from working for, or allowing its employees to work for, Lenmar's clients. Consequently, Lenmar's breach of contract claim is without merit and was properly dismissed.

Lenmar's tortious interference claim is likewise unimpressive. A claim for tortious interference requires proof that defendants interfered with plaintiff's rights under an existing contract or with plaintiff's legally protectable expectation of receiving a future economic benefit. Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739, 751 (1989).

An action for tortious interference with a prospective business relation protects the right to pursue one's business, calling, or occupation, free from undue influence or molestation. Not only does the law protect a party's interest in a contract already made, but it also protects a party's interest in reasonable expectations of economic advantage. To prove its claim, plaintiff must show that it had a reasonable expectation of economic advantage that was lost as a direct result of defendants' malicious interference, and that it suffered losses thereby. Causation is demonstrated where there is "proof that if there had been no interference there was a reasonable probability that the victim of the interference would have received the anticipated economic benefit."

[Lamorte Burns & Co. v. Walters, 167 N.J. 285, 305-06 (2001) (citations omitted).]

Lenmar failed to prove that it had an existing contract with the State or that it had a legally protectable interest in providing future services to the State. The undisputed evidence supports the conclusion that the State was Fujitsu's client. Thus by the terms of the Lenmar-Fujitsu contract, Lenmar was prohibited from providing services to the State as a client or from soliciting business from the State. Therefore, Lenmar had no legally protectable expectation of economic advantage in the form of a future contract with the State.

Further, there is no dispute that Fujitsu's project with the State had come to an end, and there was no further work for Tarragon or Sheppard on that project. Nothing in the Lenmar-Tarragon contract obligated Sheppard or Tarragon to continue providing services to Lenmar. In fact, paragraph six of that contract provided that either party could terminate the contract on two weeks' notice. Consequently, there is no merit to Lenmar's claim that Sheppard wrongfully caused Tarragon to terminate its contract with Lenmar. Nor did Lenmar produce proof that it had any legally protectable expectation of performing future work for Fujitsu. All of these flaws are fatal to Lenmar's claim that Sheppard tortiously interfered with its prospective economic advantage.

Finally, because Lenmar produced no proof that it had the opportunity or the legal right to provide services to the State after Fujitsu's State project ended, or that Sheppard had any legal obligation to continue working for Lenmar, its claim against Sheppard for unjust enrichment is likewise without merit. "To establish unjust enrichment, a plaintiff must show both that defendant received a benefit and that retention of that benefit without payment would be unjust." VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 554 (1994). There is no proof that, in performing services for the State as an employee of another company, Sheppard was unjustly obtaining a benefit for which he should have paid Lenmar.

Affirmed.

1 For future guidance, we note that the trial court's statement of reasons for granting summary judgment did not set forth the findings of fact and conclusions of law required by Rule 1:7-4 and Rule 4:46-2(c), and the court did not provide reasons for denying reconsideration. Nonetheless, after reviewing the record ourselves, we conclude that the trial court reached the correct result and a remand is not required.

2 Contrary to Rule 2:6-2(a)(4), plaintiff's statement of facts is not supported by citations to the record. We have only considered facts for which there is record support.

3 The record does not contain a contract between Fujitsu and the State, but the parties did not dispute that Fujitsu was a State contractor.

4 Neither Tarragon nor Sheppard signed the Fujitsu-Lenmar contract. Notably, the contract provided that Fujitsu would pay Lenmar a higher hourly rate than Lenmar had agreed to pay Tarragon; thus it is clear that there was a built-in profit for Lenmar in arranging for Sheppard to provide computer services to Fujitsu.