139 A.3d
57 (2016)225 N.J. 469
GLOBE MOTOR COMPANY, a corporation
of the State of New Jersey, and the
Margolis Law Firm,
LLC, Plaintiffs-Respondents,
v.
Ilya IGDALEV and
Julia Igdalev, Defendants-Appellants.
Argued January 19, 2016.
Decided June 29, 2016.
58*58 On
appeal from the Superior Court,
Appellate Division, whose opinion is reported at 436 N.J. Super. 594
(App. Div. 2014).
Christopher J. Koller, Hackensack, argued the cause for appellants.
This appeal as of right arises from defendants' alleged breach of a
settlement agreement executed by defendants and one of the plaintiffs in this
action, Globe Motor Company (Globe), to resolve prior litigation between the
parties. Shortly after defendants sent two checks totaling $75,000 to
plaintiffs to settle the earlier action, a Trustee appointed to represent the
estate of an insolvent Minnesota entity brought an adversary proceeding against
plaintiffs. The Trustee demanded that plaintiffs disgorge the settlement funds,
on the ground that those funds had belonged to the bankrupt entity,
not to defendants, and that the transactions were therefore voidable under
provisions of the United States Bankruptcy Code,
11 U.S.C.A. §§ 544 and 548. Plaintiffs paid $22,500 to resolve
the bankruptcy Trustee's
claim.
Plaintiffs filed this action against defendants, seeking to recover
the money that
they paid to settle the bankruptcy proceeding
as well as attorneys' fees
and costs. They asserted claims for breach of contract, breach of the implied
covenant of good faith and fair dealing, unjust enrichment, fraud, and
indemnification. The motion judge entered
summary judgment for plaintiffs on their breach of contract claim. An Appellate
Division panel affirmed that determination, with one judge dissenting.
We hold that the motion judge improperly
granted summary judgment in plaintiffs' favor. We conclude that the record
before the motion court, viewed
in accordance with the summary judgment standard prescribed by Rule 4:46-2(c),
did not establish plaintiffs' right to judgment as a matter of law. We
therefore remand this case to
the motion court for
the development of a factual record, and a determination of plaintiffs' claims
based on that record.
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I.
The prior litigation that gave rise to this matter was instituted by
plaintiff, the Margolis Law Firm,
LLC (Margolis), as counsel for Globe, against a New Jersey limited
liability company, Gemp, LLC (Gemp) and its members, defendants Ilya Igdalev
(Ilya) and his wife Julia Igdalev (Julia).[1] In
October 2009, the parties resolved the matter. They executed an undated
Settlement Agreement and Release (Settlement Agreement) that provided for the
payment of the settlement amount in accordance with the following terms:
That ILYA and JULIA shall jointly pay to GLOBE the amount of
SEVENTY-FIVE THOUSAND ($75,000.00) DOLLARS, by certified or attorney trust
account check payable to ["]The Margolis Law Firm
LLC, as attorneys for
Globe Motor Company" and delivered to The Margolis Law Firm
LLC not later than 1:00pm on Friday, October 2, 2009 TIME BEING
EXPRESSLY MADE OF THE ESSENCE.
The Settlement Agreement required Julia to pay Globe the entire $75,000
in the event that Ilya "does not pay, for any reason or no reason, any
portion of the settlement amount."
60*60 On
or about October 1, 2009, Margolis received two certified checks in amounts
totaling $75,000. As the Settlement Agreement required, each check was made
payable to "The Margolis Law Firm
LLC, as attorneys for
Globe Motor Company." One check, in the amount of $63,000, was drawn on
a bank identified
as M & I Marshall & Ilsley Bank, with no
address. The check stated that the remitter was Mike Povolotsky, an individual
later identified as a friend and business associate of Ilya. Povolotsky was
affiliated with Auto Point, Limited (Auto Point), an entity organized under
the laws of
Minnesota. The second check, in the amount of $12,000, was a cashier's check
drawn on Wells Fargo Bank N.A.,
and included the address of a Wells Fargo branch in Golden Valley, Minnesota.
Neither Globe nor Margolis objected to the manner in which the
settlement funds were paid, and the checks apparently cleared. Five months
later, Globe and defendants executed a stipulation dismissing Globe's action,
with prejudice and without costs.
Following the dismissal of Globe's action, Auto Point filed a voluntary
petition pursuant to Chapter 7 of
the United States Bankruptcy Code
(Chapter 7),
11 U.S.C.A. §§ 701-784, in the United States Bankruptcy Court for
the District of Minnesota. The Bankruptcy Court appointed
a Trustee to represent Auto Point's bankruptcy estate.
Almost a year later, the Trustee instituted an adversary proceeding pursuant
to Federal Rules of Bankruptcy Procedure §§
7001, 7003 and 7004 against Globe and Margolis. The Trustee contended that the
$75,000 used to settle Globe's action against defendants belonged to Auto Point
and that the transfers of those funds to plaintiffs were voidable pursuant to
11 U.S.C.A. §§ 544 and 548. The Trustee alleged that Auto
Point had no obligation to Globe or Margolis and had received less than "a
reasonably equivalent value" in exchange for the $75,000 disbursement. In
the alternative, the Trustee alleged that Auto Point was either insolvent when
the payment was made, or became insolvent because of the payment.
Plaintiffs retained Minnesota bankruptcy counsel.
They eventually resolved the adversary proceeding by paying $22,500 to Auto
Point's bankruptcy estate.
According to plaintiffs, they decided to settle the matter on the advice of
their bankruptcy counsel.
Because of the settlement, the United States Bankruptcy Court for
the District of Minnesota did not determine whether the Trustee was entitled to
the funds.
Globe and Margolis then filed this declaratory judgment action pursuant
to N.J.S.A. 2A:16-52. They alleged that in the Settlement
Agreement that resolved the prior litigation, defendants had agreed to pay the
settlement amount "free and clear from claims of others and not subject to
surrender," and were therefore liable for breach of contract, breach of
the implied covenant of good faith and fair dealing, unjust enrichment, fraud,
and common-law indemnification.
They also asserted a claim against Julia for contractual indemnification. Globe
and Margolis claimed damages in the amount that they had paid to settle the
claims of the Trustee, as well as attorneys' fees
and costs for both the Minnesota action and the declaratory judgment action.
The parties filed cross-motions for summary judgment. In support of
their motion for summary judgment, plaintiffs set forth the terms of the
Settlement Agreement, presented the checks received in payment of the
settlement amount, recounted the history of the Minnesota bankruptcy proceeding,
and documented their claims for damages and attorneys' fees.
61*61 In
a certification filed in support of defendants' summary judgment motion, Ilya
stated that at the time of the settlement of Globe's action against him, his
"New Jersey bank accounts
had been restrained due to allegations in a criminal action against
[him]." According to Ilya, he asked Povolotsky, who "was holding more
than $75,000.00 of money owed
to [Ilya] from prior dealings," to "make checks payable [to
Margolis], in the total amount of $75,000.00 in settlement of this case."
Ilya represented that neither he nor Julia had been asked to indemnify
plaintiffs or hold them harmless from any claims, and did not do so, and that
the Settlement Agreement did not mandate that "the funds were to come from
my wife or myself, individually, or any specific payor." Defendants'
motion was also supported by a certification signed by Julia, adopting the
contentions set forth in Ilya's certification and further noting that
plaintiffs "accepted [the checks] without protest[.]"
The court granted
plaintiffs' motion for summary judgment, and denied defendants' cross-motion
for summary judgment. Although the motion judge did
not individually address each of plaintiffs' claims, his grant of summary
judgment was premised on plaintiffs' cause of action for breach of contract.[2] The judge reasoned
that, by virtue of the Trustee's allegation that the $75,000 was transferred by
Auto Point and could be recovered by Auto Point's estate in bankruptcy,
defendants had not satisfied their obligations under the Settlement Agreement.
The motion court entered
judgment for $22,500, the amount that plaintiffs had paid to settle the Chapter 7 adversary
proceeding brought by the Trustee of Auto Point's bankruptcy estate.
The court evidently
concluded that Julia was individually liable on a theory of contractual
indemnification because it entered judgment against her as well as Ilya.
The motion court initially
denied without prejudice plaintiffs' application for attorneys' fees
but granted a later fee application. It entered judgment compelling defendants
to pay $19,881 in fees, expenses and costs, in addition to the $22,500 awarded
as compensatory damages, for a total of $42,381.
Defendants appealed the grant of plaintiffs' motion for summary
judgment. With one judge dissenting,
an Appellate Division panel affirmed the judgment of the motion court. The
majority concluded that when the record is viewed in the light most favorable
to defendants, Ilya's certification demonstrates nothing more than that
Povolotsky was holding money owed
to Ilya, and that Povolotsky was asked by Ilya to pay plaintiffs the amount
owed by defendants to fulfill the terms of the Settlement Agreement. The
Appellate Division majority concluded that, based on the Minnesota bankruptcy Trustee's
claim, it appears that Povolotsky paid the checks using the assets of Auto
Point. It held that the motion court properly
exercised its discretion when it granted summary judgment and awarded attorneys' fees
and costs.
The dissenting Appellate Division judge asserted
that the majority construed the facts and drew inferences in the light most
favorable to plaintiffs rather than in the light most favorable to defendants,
who were the non-moving parties. The dissenting judge criticized
the majority's conclusion 62*62 that
the contested funds belonged to Auto Point as premised on nothing more than an
untested allegation in the United States Bankruptcy Court's adversary
proceeding. She concluded that, although defendants are potentially liable for
breach of the implied covenant of good faith and fair dealing, unjust
enrichment, fraud, or common-law indemnification,
the motion judge should
have granted summary judgment in favor of defendants on two of plaintiffs'
claims, dismissing the causes of action for breach of contract and contractual
indemnification against Julia.[3]
Pursuant to Rule 2:2-1(a)(2), defendants filed a notice
of appeal as of right based on the dissent in the Appellate Division.
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II.
Defendants argue that the Appellate Division majority misapplied the
summary judgment standard, because it failed to view the record in the light
most favorable to defendants and to draw inferences that supported defendants'
arguments. They contend that they did not breach the Settlement Agreement,
because they provided certified funds in the proper amount in accordance with
that Agreement, and plaintiffs accepted the two checks without questioning the
origin of the funds. Defendants also contest the conclusion of the Appellate
Division dissenting judge that
they could be held liable for breach of the implied covenant of good faith and
fair dealing, unjust enrichment, fraud, or common-law indemnification.
Plaintiffs counter that the motion judge's entry
of summary judgment was premised on the judge's unavoidable
conclusion that defendants failed to provide "good funds," as the
Settlement Agreement required. They argue that, in accordance with the parties'
objective intent as manifested by the contract terms, the Settlement Agreement
should be construed to require the payment of funds free of potential legal
claims. Plaintiffs contend that the money transferred
to them was fraudulently obtained or otherwise constituted "bad
funds" because that money was
subject to the adversary proceeding instituted by Auto Point's Chapter 7 Trustee.
They urge the Court to
affirm the Appellate Division's judgment.
III.
A.
We review the grant of summary judgment "in accordance with the
same standard as the motion judge." Bhagat v. Bhagat, 217 N.J. 22,
38, 84 A.3d 583 (2014) (citing W.J.A. v. D.A., 210 N.J. 229,
237-38, 43 A.3d 1148 (2012); Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330, 9 A.3d
882 (2010)). That standard compels the
grant of summary judgment "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." R. 4:46-2(c).
The summary judgment rule set forth in Rule 4:46-2
"serve[s] two competing jurisprudential philosophies": first,
"the desire to afford every litigant who has a bona fide cause
of action or defense the opportunity to fully expose his case,"
and second, to guard "against groundless claims and frivolous
defenses," thus saving 63*63 the
resources of the parties and the court. Brill v. Guardian Life
Ins. Co. of Am., 142 N.J. 520, 541-42, 666 A.2d 146
(1995) (quoting Robbins v. Jersey
City, 23 N.J. 229,
240-41, 128 A.2d 673 (1957)). In light of the important interests at stake
when a party seeks summary judgment, the motion court must
carefully evaluate the record in light of the governing law, and
determine the facts in the light most favorable to the non-moving party. R. 4:46-2(c).
Rule 4:46-2(c)'s "genuine issue [of]
material fact" standard mandates that the opposing party do more than
"point[ ] to any fact in dispute" in order to defeat
summary judgment. Brill, supra, 142 N.J. at
529, 666 A.2d 146. Under
that standard, once the moving party presents sufficient evidence in support of
the motion, the opposing party must "demonstrate by competent evidential
material that a genuine issue of fact exists[.]" Robbins, supra, 23 N.J. at
241, 128 A.2d 673; see
also Brill, supra, 142 N.J. at
529, 666 A.2d 146 (noting opposing party should "come forward with evidence that
creates a `genuine issue as to any material fact challenged'"
(quoting R. 4:46-2)). As Justice Coleman
noted in Brill, supra, if the party opposing the
summary judgment motion
offers ... only facts which are immaterial or of an insubstantial
nature, a mere scintilla, "fanciful, frivolous, gauzy or merely
suspicious," he will not be heard to complain if the court grants
summary judgment, taking as true the statement of uncontradicted facts in the
papers relied upon by the moving party, such papers themselves not otherwise
showing the existence of an issue of material fact.
[142 N.J. at
529, 666 A.2d 146 (quoting Judson v. Peoples Bank
& Trust Co. of Westfield, 17 N.J. 67, 75, 110 A.2d
24 (1954)).]
A court deciding
a summary judgment motion does not draw inferences from the factual record as
does the factfinder in a trial, who "may pick and choose inferences from
the evidence to the extent that `a miscarriage of justice under
the law' is not
created." Id. at 536, 666 A.2d 146
(quoting R. 4:49-1(a)). Instead, the motion court draws
all legitimate inferences from the facts in favor of the non-moving
party. R. 4:46-2(c); see also Durando v. Nutley Sun, 209 N.J. 235,
253, 37 A.3d 449 (2012) (noting "courts construe
the evidence in the light most favorable to the non-moving party in a summary
judgment motion" (quoting Costello v. Ocean Cty.
Observer, 136 N.J. 594, 615, 643 A.2d 1012
(1994))); Brill, supra, 142 N.J. at
536, 666 A.2d 146 (explaining "[o]n a motion for summary judgment the court must
grant all the favorable inferences to the non-movant").
The motion court must
analyze the record in light of the substantive standard and burden of proof
that a factfinder would apply in the event that the case were
tried. Bhagat, supra, 217 N.J. at
40, 84 A.3d 583; Davis v. Devereux
Found., 209 N.J. 269,
286, 37 A.3d 469 (2012); see Davidson v. Slater, 189 N.J. 166,
187, 914 A.2d 282 (2007). Thus,
"neither the motion court nor
an appellate court can
ignore the elements of the cause of action or the evidential standard governing
the cause of action." Bhagat, supra, 217 N.J. at
38, 84 A.3d 583; see, e.g., id. at
47-48, 84 A.3d 583 (reviewing grant of summary judgment in light of
elements of valid and irrevocable gift and clear and convincing standard of
proof); Durando, supra, 209 N.J. at
253-57, 37 A.3d 449 (applying clear and
convincing evidentiary standard to grant of summary judgment in defamation
action); Brill, supra, 142 N.J. 64*64 at 542-45,
666 A.2d 146 (evaluating
motion court's summary
judgment determination in light of substantive standard and burden of proof
governing cause of action of breach of duty owed by insurer to insured). With
the factual record construed in accordance with Rule 4:46-2(c),
"the court's task
is to determine whether a rational factfinder could resolve the alleged
disputed issue in favor of the non-moving party[.]" Perez v.
Professionally Green, LLC, 215 N.J. 388, 405-06, 73 A.3d
452 (2013); see also Bhagat, supra, 217 N.J. at
39, 84 A.3d 583 (noting
when deciding summary judgment motion, court determines
whether reasonable jury could rule in favor of non-moving party).
Accordingly, when the movant is the plaintiff, the motion court must
view the record with all legitimate inferences drawn in the defendant's favor
and decide whether a reasonable factfinder could determine that the plaintiff
has not met its burden of proof. See, e.g., Bhagat, supra, 217 N.J. at
38, 84 A.3d 583; Durando, supra, 209 N.J. at
253, 37 A.3d 449; Brill, supra, 142 N.J. at
523, 666 A.2d 146. If a reasonable factfinder could decide in the defendant's favor, then
the plaintiff has not demonstrated that it is "entitled to a judgment or
order as a matter of law"
and the court must
deny the plaintiff's summary judgment motion. R. 4:46-2(c); see,
e.g., Bhagat, supra, 217 N.J. at
47-49, 84 A.3d 583 (reversing grant of summary judgment because genuine issues of fact
exist as to elements necessary to establish irrevocable gift); Lyons v. Twp. of
Wayne, 185 N.J. 426,
434-37, 888 A.2d 426 (2005) (reversing grant of summary judgment because record was inconclusive as
to whether dispute exists regarding plaintiffs' nuisance claim).
B.
We apply those settled principles to the trial court's grant
of summary judgment in favor of plaintiffs on their breach of contract claim.
An agreement to settle litigation is "governed by [the general]
principles of contract law." Brundage v. Estate of
Carambio, 195 N.J. 575, 600-01, 951 A.2d 947
(2008) (quoting Thompson v. City of
Atl. City, 190 N.J. 359, 379, 921 A.2d 427
(2007)). Our law imposes
on a plaintiff the burden to prove four elements: first, that "[t]he
parties entered into a contract containing certain terms"; second, that
"plaintiff[s] did what the contract required [them] to do"; third,
that "defendant[s] did not do what the contract required [them] to
do[,]" defined as a "breach of the contract"; and fourth, that
"defendant[s'] breach, or failure to do what the contract required, caused
a loss to the plaintiff[s]." Model Jury Charge (Civil), §
4.10A "The Contract Claim-Generally" (May 1998); see also Coyle v. Englander's, 199 N.J.Super. 212,
223, 488 A.2d 1083 (App.Div.1985) (identifying essential elements for breach of contract claim as "a
valid contract, defective performance by the defendant, and resulting
damages"). Each element must be proven by a preponderance of the
evidence. See Liberty Mut. Ins. Co.
v. Land, 186 N.J. 163, 169, 892 A.2d 1240
(2006) (citing State v. Seven
Thousand Dollars, 136 N.J. 223, 238, 642 A.2d 967
(1994)). Under
that standard, "a litigant must establish that a desired inference is more
probable than not. If the evidence is in equipoise, the burden has not been
met." Ibid. (quoting Biunno, Current N.J. Rules
of Evidence, comment 5a on N.J.R.E. 101(b)(1)
(2005)).
The initial task before the motion court was
to determine the parties' intent, which, in an appropriate setting, is "a
purely legal question that is particularly suitable for decision on a motion
for summary judgment." Pressler & Verniero, 65*65 Current
N.J. Court Rules, comment
5 on R. 4:46-2 (2016); see also Khandelwal v. Zurich
Ins. Co., 427 N.J.Super. 577, 585, 50 A.3d 52
(App.Div.) (noting
interpretation of contract "is generally appropriate to resolve ... on
summary judgment"), certif. denied, 212 N.J. 430,
54 A.3d 810 (2012).[4] Here, the Settlement
Agreement required defendants to pay Globe "the amount of [$75,000], by
certified or attorney trust
account check payable to [`]The Margolis Law Firm
LLC, as attorneys for
Globe Motor Company.'" Neither party submitted extrinsic evidence of
contractual intent; the record before the court on
that issue was limited to the language of the Settlement Agreement's payment
provision.
The parties sharply disputed the meaning of that language. Plaintiffs
argued that the contract required the payment of funds that were owned by
defendants and that would not be subject to claims in the future. Defendants
countered that the Settlement Agreement required only that they provide the
funds to plaintiffs, by certified or attorney trust
account check made payable to Margolis as Globe's counsel. In resolving that
question, the motion court's task
was "not to rewrite a contract for the parties better than or different from
the one they wrote for themselves." Kieffer, supra, 205 N.J. at
223, 14 A.3d 737. Instead,
the court was
charged to determine "the intention of the parties to the contract as
revealed by the language used [by them.]" Lederman v. Prudential
Life Ins. Co. of Am., Inc., 385 N.J.Super. 324, 339,
897 A.2d 373 (App.Div.), certif. denied, 188 N.J. 353,
907 A.2d 1013 (2006); see also Pacifico v. Pacifico, 190 N.J. 258,
266, 920 A.2d 73 (2007) ("[I]t is a
basic rule of contractual interpretation that a court must
discern and implement the common intention of the parties.").
The motion court never
adopted either party's construction of the Settlement Agreement's payment term
or stated its own conclusion as to the meaning of that provision. Its only
finding on that issue was that "[t]he objective intent was to receive
$75,000." Although the court questioned
why plaintiffs did not insist on language in the Settlement Agreement requiring
defendants to hold plaintiffs harmless in the event of a claim against the
settlement funds, it also stated that a plaintiff who settles a case has
the right to expect that the settlement funds will not be challenged two years
after the matter is resolved. Thus, the motion court premised
a grant of summary judgment on a breach of contract claim without clearly
construing the critical term.
Notwithstanding the unresolved meaning of the Settlement Agreement's
payment term, the motion court concluded,
as a matter of law, that
plaintiffs established a breach of the Settlement Agreement. To properly make
such a determination, the court was
required to view the record with all legitimate inferences drawn in defendants'
favor, and to determine if there was no genuine issue of material fact. See
R. 4:46-2(c); see also Durando, supra, 209 N.J. at
253, 37 A.3d 449; Brill, supra, 142 N.J. at
536, 666 A.2d 146. At a minimum, 66*66 that
conclusion required competent evidence substantiating plaintiffs' allegation
that the funds in question belonged to Auto Point.
Plaintiffs did not submit evidence demonstrating that defendants'
$75,000 payment was made using funds that were owned by Auto Point. They
contended, instead, that because the bankruptcy Trustee
filed an adversary proceeding seeking the return of the settlement funds, and
plaintiffs paid $22,500 to settle that proceeding, defendants breached the
Settlement Agreement. The certification that they submitted to the motion court,
summarizing the Minnesota adversary proceeding and their settlement of the
Trustee's claim, demonstrated only that the Trustee had asserted that the funds
belonged to Auto Point's bankruptcy estate.
Plaintiffs submitted no certification, financial records, or other competent
proof to demonstrate that the funds were Auto Point's.
Defendants relied solely on Ilya's certification, which reiterated
defendants' claim that Povolotsky was "holding" money owed
to Ilya "from prior dealings," and that the funds in question
belonged to Ilya, not to Auto Point. That certification was also inconclusive;
it did not document the origin of the money or
substantiate defendants' representations that the funds belonged to Ilya.[5]
The record did not adequately support the motion court's conclusion that
defendants breached the payment terms of the Settlement Agreement and that
plaintiffs were entitled to summary judgment on their breach of contract claim.
When all legitimate inferences are drawn in defendants' favor, the record
presents a genuine issue of material fact on a critical question: whether the
settlement funds were Auto Point's, as the Trustee alleged, or were owned by
Povolotsky and owed to Ilya based on prior transactions. To be sure, the
Trustee may have been entitled to a remedy under 11 U.S.C.A. §§
544 and 548, and plaintiffs' decision to settle the Trustee's adversary proceeding
for thirty percent of the amount claimed, rather than devote resources to the
litigation of that action, may represent sound legal strategy. Because of that
settlement, however, the crucial evidence was never presented to the United
States Bankruptcy Court, and
that court never
determined that the disputed funds were in fact assets of Auto Point's bankruptcy estate.
Before the motion court, plaintiffs
demonstrated nothing more than that the Trustee filed a complaint, and that the
Trustee's claim was settled. In short, the critical factual question was left
undecided by the summary judgment record.
Accordingly, defendants raised a genuine issue of material fact with
respect to the breach of contract claim. A reasonable factfinder considering
the evidence set forth in the record, with all legitimate inferences drawn in
defendants' favor, could find that plaintiffs did not prove by a preponderance
of the evidence that defendants breached the payment obligations imposed by the
Settlement Agreement. Plaintiffs were not entitled to judgment as a matter
of law on
their breach of contract claim.
Notwithstanding our ruling that the motion judge's grant
of summary judgment constituted error, we do not concur with the
dissenting judge's view
that plaintiffs' breach of contract claim and contractual indemnification claim
against Julia should 67*67 have
been dismissed on summary judgment. On remand, the parties will have the
opportunity to develop a factual record regarding all of the claims asserted in
this case and
to file motions for summary judgment based on that record.
IV.
The judgment of the Appellate Division is reversed, and the matter is
remanded to the trial court for
further proceedings consistent with this opinion.
Chief Justice RABNER;
Justices LaVECCHIA, ALBIN, FERNANDEZVINA and SOLOMON; and Judge CUFF
(temporarily assigned), join in Justice PATTERSON's
opinion.
[1] According
to a certification submitted by Globe, the litigation "arose out of
[defendants'] violation against Globe and [their] agreements with purchasers of
several Mercedes Benz vehicles which were, pursuant to said agreements, not to
be exported to foreign countries[,]" but "were in fact exported in
violation of the aforesaid agreements." Globe sought damages for breach of
contract and fraud, among other claims.
[2] The
motion judge did
not specifically mention plaintiffs' claims for breach of the implied covenant
of good faith and fair dealing, unjust enrichment or common-law indemnification.
He briefly suggested that defendants might have committed fraud, but then
indicated that he was only referring to an allegation in the Minnesota bankruptcy proceeding
and stated that he made no finding as to fraud.
[3] The
dissenting Appellate Division judge did
not address the motion court's award
of attorneys' fees
and costs; consequently, that award is not before the Court. R. 2:2-1(a)(2).
Nevertheless, because plaintiffs were improperly granted summary judgment, they
are not entitled to attorney's fees
or costs.
[4] Generally,
if a contract is unambiguous, "then the words presumably will reflect the
parties' expectations." Kieffer
v. Best Buy, 205 N.J. 213, 223, 14 A.3d
737 (2011). When the
parties' intent cannot be derived from a contract's plain text, however, our
jurisprudence "permit[s] a broad use of extrinsic evidence to achieve the
ultimate goal of discovering the intent of the parties" and thus,
"[e]xtrinsic evidence may be used to uncover the true meaning of
contractual terms." Conway
v. 287 Corp. Ctr. Assocs., 187 N.J. 259,
270, 901 A.2d 341 (2006); see also Manahawkin
Convalescent v. O'Neill, 217 N.J. 99, 118,
85 A.3d 947 (2014).
[5] The
motion judge commented
that he did not believe Ilya's "insulting self-serving statement" in
his certification that the $75,000 paid to settle the parties' litigation was
his money, in the
custody of Povolotsky.
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