ESTATE OF ARTHUR M PICON v. FBR GROUP

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2305-12T3

ESTATE OF ARTHUR M. PICON,

SANDRA PICON and DREW PICON,

Plaintiffs-Appellants,

v.

FBR GROUP, FINANCIAL BENEFITS

RESEARCH GROUP, FINANCIAL

BENEFITS RESEARCH SERVICES, and

BARRY GIMELSTOB,

Defendants-Respondents.

______________________________________

October 15, 2013

Argued September 23, 2013 Decided

Before Judges Yannotti and Leone.

On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-7461-11.

Leonard C. Leicht argued the cause for appellants (Morgan, Melhuish, Abrutyn, attorneys; Mr. Leicht, of counsel and on the briefs).

James Crawford Orr argued the cause for respondents (Wilson, Elser, Moskowitz, Edelman & Dicker, LLP, attorneys; Mr. Orr and Robert A. Berns, of counsel and on the brief; Robert C. Neff, Jr. and Charles F. Kellett, on the brief).

PER CURIAM

Plaintiffs Drew Picon, Sandra Picon, and the estate of Arthur M. Picon appeal an order granting summary judgment.1 They argue that the judge erroneously found their complaint barred by releases Drew and Arthur had signed. We affirm.

I.

The following undisputed facts are taken from the parties' pleadings and motion certifications: Defendant Barry Gimelstob is licensed by the State of New Jersey as a life insurance producer. He is the principal of defendants FBR Group, Financial Benefits Research Group, and Financial Benefits Research Services.

Arthur and his sons Drew and Scott Picon communicated with defendants regarding insurance policies on Arthur's life. As a result, Gimelstob brokered the purchase of insurance policies on Arthur's life, which were issued by MetLife Investors USA Insurance Company.

Drew and Arthur later communicated with defendants regarding the sale of the policies. The Picons received offers to purchase the policies around May 2009. Scott accepted an offer to sell his policy to Coventry First, LLC. Drew and Arthur declined an offer from Coventry to sell the policies they each owned, which named Drew and Arthur's wife, Sandra, as beneficiaries. After another company's offer to purchase their policies fell through, Progressive Capital Solutions, LLC ("Progressive") offered to purchase each policy for $240,000. On or about August 3, 2009, Drew and Arthur accepted Progressive's offer and completed the closing package.

Funding issues delayed the completion of the sale of the policies to Progressive. Progressive issued checks which bounced due to insufficient funds. Progressive later provided checks that cleared. Gimelstob eventually waived any commission for the sale of the policies.

On December 3, 2009, Drew and Arthur executed a release entitled "Letter of Agreement," which referred to the policy owned by Drew on Arthur's life. Above their signatures, the release provided:

The Undersigned hereby release Progressive Capital Solutions, LLC, Welcome Funds Inc., FBR Group, Red Rock Insurance Associates LLC, and their respective affiliates, managers, officers, trustees, employees, successors, assigns, heirs and representatives (collectively, the "Releasees") from any and all actions, causes of actions, suits, claims and sums of money whatsoever that the Undersigned had, may have or ever will have against the Releasees arising out of, or in connection with, the amounts due the Undersigned in connection with the sale of the Policy. By executing this Letter of Agreement, the Undersigned agrees, with respect to any matter arising out of or in connection with amounts due the Undersigned in connection with the sale of the Policy, not to: a) disparage any of the Releasees, b) file any complaint against any of the Releasees, c) or publicly disclose such matters, except where necessary for the Undersigned's business-related purposes.

We suggest that the Undersigned consult with an attorney of the Undersigned's choosing in connection with the evaluation and execution of this Letter of Agreement. The Undersigned acknowledges that he has either consulted with an attorney or he knowingly and voluntarily has chosen to waive his opportunity to do so.

On the same date, Arthur signed a second release, containing these identical provisions, regarding the policy Arthur owned on his own life. Both releases bore Progressive's heading and were signed by its manager.

II.

On September 14, 2011, plaintiffs filed a complaint alleging that Arthur had died on November 4, 2010. The complaint claimed that defendants were negligent, committed insurance producer malpractice, breached their fiduciary duty, and breached a contractual obligation. The basis for each claim was plaintiffs' allegation that defendants had a duty or obligation to advise plaintiffs that the policies' premiums could be paid from the policies' cash surrender value, allowing plaintiffs to hold onto the policies. The complaint alleged that defendants failed to give that advice, causing Drew and Sandra to lose the $5,000,000 benefits due from the policies upon Arthur's death. Defendants' answer alleged, among other things, that the complaint was barred by the doctrine of accord and satisfaction.

Defendants filed a motion for summary judgment. They argued that when Drew and Arthur signed the releases, they waived any right to file a complaint raising these causes of action. On December 21, 2012, the judge heard argument, granted the motion, and dismissed plaintiffs' complaint with prejudice. Plaintiffs appeal.

III.

We must hew to our standard of review, which is the same summary judgment standard that governed the trial court. Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010). Summary judgment must be granted if "the pleadings, depositions, answers to interrogatories and admissions on file, together with 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." R. 4:46-2(c). To decide whether there is a genuine issue of material fact, the court must determine "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 v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). "'[T]he court must accept as true all the evidence which supports the position of the part[ies] defending against the motion and must accord [them] the benefit of all legitimate inferences which can be deduced therefrom.'" Id. at 535 (citation omitted).

IV.

In Drew's certification in opposition to summary judgment, he alleges as follows: the Picons had a longstanding business relationship with defendants, who acted as their insurance brokers for the purchase of several life insurance policies.2 Through defendants, Drew and Arthur purchased and sold two policies, each with a face amount of $2,500,000. They purchased the policies in 2007 and sold them in 2009. Defendants never advised the Picons that they could keep the policies and pay the continuing premiums from the already substantial cash value of the policies.3 Defendants had no incentive to give this advice because they only received commissions if they "brokered a sale of the Policies and then sold new policies to [Drew and Arthur]."4 Indeed, defendants, without telling the Picons, tried to obtain an approximately $90,000 commission from the sale of the policies. If defendants had properly advised the Picons, they would have kept the policies and received the $5,000,000 death benefits when Arthur died fifteen months later. We accept plaintiffs' allegations as true as required by Brill.

The issue is whether the releases, signed by Drew and Arthur as the owners of the policies, bar plaintiffs from filing a complaint raising such allegations. "[A] release is merely a form of contract and the general rules that apply to contract interpretation apply to releases." Domanske v. Rapid-Am. Corp., 330 N.J. Super. 241, 246 (App. Div. 2000). "'[W]hen reading a contract, our goal is to discover the intention of the parties.'" Highland Lakes Country Club & Cmty. Ass'n v. Franzino, 186 N.J. 99, 115-16 (2006) (quoting Marchak v. Claridge Commons, Inc., 134 N.J. 275, 282 (1993)). "[W]e consider the contractual terms, the surrounding circumstances, and the purpose of the contract.'" Ibid. "Generally, the terms of an agreement are to be given their plain and ordinary meaning." M.J. Paquet v. N.J. DOT, 171 N.J. 378, 396 (2002).

Here, the terms of the parties' letters of agreement released defendants "from any and all actions, causes of actions, suits, claims and sums of money whatsoever that the Undersigned had, may have or ever will have against the Releasees arising out of, or in connection with, the amounts due the Undersigned in connection with the sale of the Policy." The terms "any and all" causes of action "whatsoever" that Drew and Arthur "had, may have, or ever will have," "arising out of, or in connection with" are all quite broad.

Plaintiffs stress the words "the amounts due" in connection with the sale of the policies. They argue that these words limit the otherwise broad language of the releases, and, as a result, their current causes of action are not waived.

Contrary to plaintiffs' argument, their current causes of action arise out of, and are in connection with, "the amounts due [Drew and Arthur] in connection with the sale of the Policy." They accepted the $240,000 amount due in connection with the sale of each policy, instead of awaiting the $2,500,000 death benefit. Plaintiffs now claim that they were misled into accepting the $240,000 amount due in connection with the sale of each policy, and seek the $2,500,000 death benefit. Indeed, plaintiffs concede that the $240,000 amount received in connection with the sale of the policies would have to be subtracted in determining their damages for their current causes of action.

As the judge stated, "[t]he reason we're here is because there's a difference in the sale price versus what [they] could have gotten had they waited until death." Had plaintiffs upon sale received the $2,500,000 face value of the policies rather than the $240,000, they would have no damages to support their complaint. We therefore agree with the judge that plaintiffs' current claim is a claim arising out of the amounts due in connection with the sale of the policies.

Plaintiffs next emphasize the surrounding circumstances. They allege that Progressive's delay in funding the $240,000 amounts due on the sale of the policies, and defendants' attempt to subtract an undisclosed commission, caused Drew and Arthur to threaten to sue Progressive and defendants if plaintiffs did not receive the agreed-upon payment for the policies. Progressive then paid the amounts due and asked Drew and Arthur to sign a release for each of the policies. Accordingly, plaintiffs argue that the purpose of the releases was just to verify the payment of the $240,000 amount due in connection with the sale of the policies.

However, the plain language of the releases is not drawn so narrowly. Again, Drew and Arthur released "any and all actions, causes of actions, suits, claims and sums of money whatsoever that the Undersigned had, may have or ever will have against the Releasees arising out of, or in connection with, the amounts due the Undersigned in connection with the sale of the Policy." This broad language encompasses far more than a claim that Progressive previously failed to pay the $240,000 or that defendants had formerly intended to subtract a commission.

Further, the circumstances surrounding the signing of the releases indicate that the broader language addresses a broader concern. It is undisputed that the $240,000 had already been paid, and the commission had been abandoned, before the releases were signed.5 This indicates that the broad language was intended to address not only the satisfied past claims but also future claims. Particularly given the threat by Drew and Arthur to sue Progressive and defendants, and the self-evident desire of Progressive and defendants to end this threat and conclude the transfer of the policies, the plain language of the releases is broader in scope than plaintiffs allege.

The judge further reasoned that "the difference between date of death value [and] sale value" was "the only thing that [Progressive and defendants] needed a release for. They didn't need a release for that which [Drew and Arthur] got." We do not go so far, as belt-and-suspender releases for paid claims are not inconceivable. But the fact that the purchase price had been paid, the disputed commission had been waived, and the releases were drafted with such broad language, suggests that the words "amounts due" do not limit the scope of the releases to an already resolved purchase price dispute.

Plaintiffs argue that Drew and Arthur could not have intended to release defendants from plaintiffs' current claims, because at that time the Picons were not aware of their claims against defendants for failing to provide proper advice. However, "'[i]n interpreting a contract, [i]t is not the real intent but the intent expressed or apparent in the writing that controls.'" Flanigan v. Munson, 175 N.J. 597, 606 (2003) (citation omitted). Here, the agreement plainly provides that Drew and Arthur release defendants not only from the claims they had, but also from the claims they "may have or ever will have." That expressed intent easily encompasses claims of which plaintiffs were unaware.

In any event, "'[a] contracting party is bound by the apparent intention he or she outwardly manifests to the other party,'" even if he "'had a different, secret intention from that outwardly manifested.'" Domanske, supra, 330 N.J. Super. at 246 (citations omitted).

New Jersey has a long-standing public policy in favor of the negotiated settlement of disputes. It would be contrary to that policy to permit a litigant, years later, to assert that he or she, at the time of executing the release, had an intent that had not been communicated to anyone else.

[Ibid. (citations omitted).]

Plaintiffs next claim that the releases should be construed against defendants on the theory that they were drafters of the releases. That theory is dubious, as the releases bear Progressive's name and were signed by Progressive's manager, and plaintiffs say Progressive asked Drew and Arthur to sign the releases. Nonetheless, Drew certified that "Progressive and [defendants] tailored the agreements to reflect the then-existing disputes concerning the amounts due for the sales of the Policies." Under Brill, we will assume that assertion is true and that defendants helped draft the releases.

Under the doctrine of contra proferentem, "[w]hen a contract term is ambiguous, that rule of contract interpretation requires a court to adopt the meaning that is most favorable to the non-drafting party." Pacifico v. Pacifico, 190 N.J. 258, 267 (2007). "However, a document that is not susceptible to more than one interpretation is not ambiguous." Watson v. City of E. Orange, 175 N.J. 442, 447 (2003). Here, the fair interpretation of the broad terms of the releases unambiguously encompass plaintiffs' claims. "It is only when the contract contains ambiguous language that the court will construe the contract against the party that drew it[.]" Steiker v. Phila. Nat'l Ins. Co., 7 N.J. 159, 166 (1951).

V.

Plaintiffs next argue that the language of the releases is ambiguous and thus creates a genuine issue of material fact that precludes summary judgment. As set forth above, however, the releases' language was unambiguous and sufficiently broad to encompass plaintiffs' current causes of action. See Leodori v. Cigna Corp., 175 N.J. 293, 302, cert. denied, 540 U.S. 938, 124 S. Ct. 74, 157 L. Ed. 2d 250. "[T]he interpretation of contract language is a question of law." Selective Ins. Co. of Am. v. Hudson E. Pain Mgmt. Osteopathic Med., 210 N.J. 597, 605 (2012). "Consequently, it is generally appropriate to resolve such questions on summary judgment." Khandelwal v. Zurich Ins. Co., 427 N.J. Super. 577, 585 (App. Div.), certif. denied, 212 N.J. 430 (2012).

Plaintiffs cite Michaels v. Brookchester, Inc., 26 N.J. 379 (1958), for the proposition that "[o]rdinarily the construction of a written agreement is a matter for the court, but where its meaning is uncertain or ambiguous and depends upon parol evidence admitted in aid of interpretation, the meaning of the doubtful provisions should be left to the jury." Id. at 387. However, we have ruled that the broad language in the releases is neither uncertain nor ambiguous, and encompasses plaintiffs' current causes of action even assuming the truth of the parol evidence in Drew's certification. Thus, a jury trial is unnecessary. See R. 4:46-2(c).

Finally, plaintiffs argue that summary judgment should not have been granted because discovery was incomplete. "A party opposing summary judgment on the ground that more discovery is needed must specify what further discovery is required, rather than simply asserting a generic contention that discovery is incomplete." Trinity Church v. Lawson-Bell, 394 N.J. Super. 159, 166 (App. Div. 2007). Plaintiffs state that they are awaiting unspecified subpoenaed information from Progressive, and that they seek to depose Gimelstob and representatives from Progressive and an unspecified entity involved in the drafting of the releases. Unspecified discovery is insufficient, however. Ibid. Further, parol evidence from the drafters of the releases cannot change "'the intent expressed or apparent in the writing.'" See Flanigan, supra, 175 N.J. at 606 (citation omitted); Domanske, supra, 330 N.J. Super. at 246. This is not a situation where the contract terms "were ambiguous, and parol evidence was required to resolve the ambiguity." Cf. Driscoll Constr. Co., Inc. v. State, Dep't of Transp., 371 N.J. Super. 304, 314 (App. Div. 2004).6 As set forth above, the release was broad and unambiguous.

Plaintiffs are bound by the terms of the releases', which encompass plaintiffs' current causes of action. Under New Jersey's "strong policy of enforcing settlements," "our courts 'strain to give effect to the terms of a settlement wherever possible.'" Brundage v. Estate of Carambio, 195 N.J. 575, 601 (2008) (citation omitted). Accordingly, we affirm the judge's grant of summary judgment and dismissal of the complaint with prejudice.

1 For brevity, we will refer to the Picons by their first names.

2 Defendants assert that over the course of their business relationship, the Picons bought and sold numerous insurance policies on Arthur's life.

3 Progressive's forms purportedly signed by Drew and Arthur did advise them that there are alternatives to selling a life insurance policy, including "borrowing against the cash value of the policy.".

4 Defendants assert that Gimelstob gave proper advice and that defendants were aware of their options, having previously sold life insurance policies in the viatical settlement market. See N.J.S.A. 17B:30B-1 to -17 (regulating the market for viatical settlements, i.e., the sale of a life insurance policy for less than the expected death benefits).

5 Defendants' statement of undisputed facts alleged that Progressive issued valid checks on November 17, 2009, two weeks before Drew and Arthur signed the release on December 3, 2009. Plaintiffs admitted that Progressive supplied valid checks, and did not deny the date. See R. 4:46-2(b).

6 Nor is this contract interpretation case one where "'critical facts are peculiarly within the moving party's knowledge.'" Cf. Velantzas v. Colgate-Palmolive Co., 109 N.J. 189, 193 (1988) (citation omitted).