MICHAEL A. MADDALUNA v. DTD ENTERPRISES, INC., d/b/a TOGETHER, LET US INTRODUCE YOU, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0831-06T50831-06T5

MICHAEL A. MADDALUNA,

Plaintiff-Respondent,

v.

DTD ENTERPRISES, INC., d/b/a

TOGETHER, LET US INTRODUCE

YOU, and TOGETHER,

Defendant-Appellant.

________________________________________________________________

 

Argued May 9, 2007 - Decided May 25, 2007

Before Judges Winkelstein and Baxter.

On appeal from the Superior Court of New Jersey, Special Civil Part, Somerset County, Docket No. DC-3005-06.

Vano I. Haroutunian argued the cause for appellant (Ballon Stoll Bader & Nadler, attorneys; Mr. Haroutunian, on the brief).

Richard O. Mattoon, II argued the cause for respondent.

PER CURIAM

Defendant DTD Enterprises, Inc., d/b/a Together, Let Us Introduce You (Together), appeals from a September 11, 2006 judgment in favor of plaintiff in the amount of $3,000. Defendant argues that the trial court erred when it admitted parol evidence to alter the terms of a written contract that specified no refunds, rescissions or cancellations would be provided. We agree with defendant's argument that the contract terms were clear and unambiguous, and that plaintiff's failure to have read the contract before he signed it does not justify the admission of parol evidence or serve as a basis for voiding the contract. We reverse and remand for entry of judgment in favor of defendant.

I.

Plaintiff Michael Maddaluna was a seventy-one year old widower when he went to the offices of Together on August 18, 2005, seeking information about its dating service. He met with Pamela Kaplan, the director of the office, who explained to him the type of screening process her office used and the number of "referrals" he could expect to receive for each of the specified prices. They then discussed the ages of the women Together would refer to plaintiff as suitable prospects, and Kaplan recommended that plaintiff agree to accept referrals of women who were up to sixty-three years of age, rather than limit his search to women no older than fifty. Kaplan explained that she had numerous women who would be interested in meeting him. After plaintiff and Kaplan agreed upon a contract price and the number of referrals Together would forward to him in exchange for payment of that fee, Kaplan produced a preprinted contract. Because plaintiff did not have his eyeglasses with him, he was unable to read the contract, which was printed in very small type. Consequently, Kaplan volunteered to summarize the contract terms. She did not read the document verbatim, but she did explain that he would receive ten referrals for a contract price of $3995.

What she did not tell him or read to him was paragraph one of the contract, which specified, "[t]he Client, by executing this agreement, hereby acknowledges that Client is purchasing the services of interviewing, testing, evaluating, processing, matching and marketing by DTD Enterprises, Inc. ("DTD"). It is understood and agreed that DTD matches [the] cost of $3,995 upon joining; therefore, there is no provision for refunds, re[s]cis[s]ions or cancellations of any kind . . . ." Plaintiff signed his name on the signature line below that paragraph. After he provided Kaplan with his credit card as payment, she gave him a receipt that specified "no refunds or exchanges."

Within a few days of signing the contract, defendant sent plaintiff two referrals. The first woman was sixty-three years old, and the second did not return plaintiff's phone call. Disappointed, plaintiff sent Kaplan a letter on September 30, 2005, demanding a refund of the contract price. In response, Kaplan sent plaintiff a letter on October 3, 2005, declining to provide a refund. Her letter stated:

We are in receipt of your request to cancel your membership with Together. Please understand that according to our agreement on section I, above your signature, it states "therefore, there is no provision for refunds, rescissions or cancellations of any kind." Therefore, you are not entitled to any refund and are liable for all membership fees. Your signature in section I indicates that you read and agreed with the provisions. Let us know if you still wish to forfeit your referrals anyway. Bear in mind, that if you choose to forfeit your referrals, there are no refunds.

After receiving her letter, plaintiff filed suit in the Special Civil Part seeking a refund.

At trial, plaintiff testified that he did not have his eyeglasses with him at the time he met with Kaplan, but she "seemed very honest," and he "just signed it because . . . [he] had confidence in her and felt she was telling [him] the truth" when she explained the terms of the contract. "She just briefly went over each paragraph," after which he signed the document and gave her his credit card as payment. He asserted that she never explained that the contract price was non-refundable. He admitted to having placed his signature immediately below the non-cancellation language in paragraph one, but insisted that he was "never told" about its provisions.

Kaplan testified that she "took him through the agreements and he signed everything." Kaplan acknowledged that when she summarized the provisions of the contract, she never told plaintiff that the contract price was non-refundable, nor did he ask such a question. She stated, "[n]o, it did not come up and if he would have asked me, I would have told him, of course, there is not an--first of all, I wouldn't want to sign somebody up who I think is going to cancel the membership anyway." She believed that plaintiff understood everything that was on the form before he signed and initialed it.

The judge found that because plaintiff did not have his eyeglasses with him when he signed the contract, plaintiff relied on Kaplan to explain the contents of the agreement. He observed that both sides agreed that Kaplan never told plaintiff about the non-cancellation provision. The judge recognized that "the general rule is that parol evidence will not be received to add or alter the terms of a contract that is in writing [e]xcept when fraud or illegality has been [established]." The judge held that:

this is a contract that was entered into by the plaintiff without being able to read the contract. He was provided the information of the contract by the defendant and there is no evidence that this was an agreement that the plaintiff had entered into in a knowing fashion, at least with respect to the essential provision, that is the provision that there would be no refunds, rescissions, or cancellations of any kind. Consequently, I conclude that parol evidence is admissible to establish that the defendant never provided that information to the plaintiff in the circumstances of this case; that this provision about refunds or rescissions was never revealed to the plaintiff at the time that he signed the contract on August 18, 2005. So as to that provision of the contract, I find it is not binding on the plaintiff because . . . he did not know of that at the time that the contract was entered into.

After ruling in plaintiff's favor, the judge gave Together a credit for $995 because it had provided plaintiff with two referrals. Accordingly, a judgment was entered in favor of plaintiff for $3000 plus costs, and defendant appealed.

II.

Unquestionably, plaintiff failed to read the contract. As a general rule, one who does not choose to read a contract before signing it cannot later avoid being bound by its terms. Gras v. Assocs. First Capital Corp., 346 N.J. Super. 42, 56 (App. Div. 2001), certif. denied, 171 N.J. 445 (2002). "It is the general rule that where a party affixes his signature to a written instrument . . . a conclusive presumption arises that he read, understood and assented to its terms and he will not be heard to complain that he did not comprehend the effect of his act in signing." Peter W. Kero, Inc. v. Terminal Const. Corp., 6 N.J. 361, 368 (1951). However, that rule does not apply when the execution of the contract has been procured by fraud, even though the fraud could have been discovered by reading the document. Ibid.

Here, the trial judge did not conclude that Kaplan's failure to advise plaintiff of the non-cancellation clause constituted a fraud. Instead, he found that Kaplan's failure to do so resulted in there being no "meeting of the minds," which nullified the contract and prevented defendant from enforcing its non-cancellation provisions. Although the judge did not say so explicitly, implicit in his decision is a conclusion that plaintiff would not have signed the contract if he had known that the non-cancellation provision was included. The record does not support this conclusion.

Plaintiff testified merely that he was never advised by Kaplan that he could not rescind or cancel the contract if he was dissatisfied with the referrals that he received. Such testimony is far different, however, from an assertion that had he been advised that he could not cancel the contract, he would never have entered into it. The record establishes that none of plaintiff's hesitation about signing the contract pertained to whether he would be entitled to a refund. Instead, plaintiff's hesitation related to the cost of the contract, which was resolved when Kaplan offered to provide him with ten, rather than five, referrals for the same price, and his unwillingness to accept potential dates who were older than fifty years of age. Never in the course of those discussions with Kaplan did plaintiff ever intimate or suggest that he might want his money back if the women referred to him by defendant were not as he hoped.

We, therefore, conclude that plaintiff's ability to cancel the contract was not material to his decision to sign the contract. "'[A] fact is material when, if the representation had not been made, the contract or transaction would not have been entered into. Conversely a representation is not material when it appears that the transaction would have been entered into notwithstanding it.'" Massachusetts Mut. Life Ins. Co. v. Manzo, 234 N.J. Super. 266, 294 (App. Div. 1989) (quoting 3 Pomeroy (5th ed. 1941) 898, pp. 532-534)), rev'd on other grounds, 122 N.J. 104 (1991). Under those circumstances, Kaplan's failure to have disclosed that term does not constitute fraudulent behavior on her part. Fraud only occurs when a party to a contract misrepresents a material element of the agreement knowing that the other party will rely on that material misrepresentation. SL Industries v. Am. Motorists Ins. Co., 128 N.J. 188, 208-09 (1992).

Accordingly, the presumption established by Kero, supra, 6 N.J. at 368, that a person signing a contract is familiar with its contents should not be disturbed. Plaintiff's signature was not procured by fraud because Kaplan did not omit from her description a material element. Accordingly, the fraud exception recognized in Kero does not apply, and defendant is entitled to the benefit of the favorable presumption that a person signing a contract agrees to be bound by its terms. Ibid.

The trial judge's conclusion that because there was no meeting of the minds, parol evidence should be admitted to alter or modify the terms of the contract, was error. Reversed and remanded for entry of judgment in favor of defendant.

 

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A-0831-06T5

May 25, 2007