For modification and remandment -- Acting Chief Justice Jacobs and Justices Hall, Sullivan, Pashman and Clifford. Opposed -- None.
This case derives from an employment relationship from September 1961 to January 1969 between plaintiff as employee and defendants as employer. (The individual defendant Leonard, as sole proprietor of a New York business, was the employer between 1961 and the end of 1967, at which time the business was incorporated in New York, the individual defendant owning all the stock, and the corporate defendant became the employer.) The employment arrangement consisted of a series of annual letter agreements.
Plaintiff's claim is that these agreements were accompanied by specific oral promises of the individual defendant, first made to induce him to leave his former employment and enter into the first agreement and renewed thereafter as an inducement to continue his employment, that he would be given an equity interest in the business in consideration of past and future services. The written agreements go no further than to say, in the language of the most explicit of them (covering the year 1964), that "it is understood and agreed that if the relationship between Lipsit and Leonard is mutually satisfactory, a more permanent relationship involving partial ownership, profit sharing, or other incentive plan shall be developed, on a mutually acceptable basis, and put into effect at the end of this contract (Dec. 31, 1964) or sooner; if deemed desirable to do so." Nothing was done by the employer to further this expression of intent until 1968 when a proposal was made to plaintiff which, after some negotiation, he found unacceptable as fiscally impossible from
his standpoint. His services were thereafter terminated at the beginning of 1969.
Plaintiff's theories of action, presumably in the alternative although not so stated, are that there resulted a breach of contract based on the oral promises giving rise to a cause of action therefor, as well as a tort claim based on fraud. The latter is spelled out in the complaint in this fashion: "* * * it is clear that Defendant's design from the beginning was to misrepresent and fraudulently obtain the services of Plaintiff through promises of equity and ownership and then attempted to give Plaintiff the equity ownership under a situation that made it impossible for Plaintiff to accept same." In other words, the fraud charge is that Mr. Leonard never intended to keep the oral promises at the time he made them, which amounted to a misrepresentation of an existing fact, and therefore there was fraud in the inducement to enter into the several employment agreements.
The rather inartistic complaint, filed in the Law Division, consists principally, in a single count, of a long rambling narrative statement of the course of dealing and events between the parties, followed by 10 confusing prayers for judgment. The latter, as refined by the pretrial order, seeks relief on both contract and tort theories. For breach of contract, money damages are sought to the amount of 10% of the assets of the business to be valued by an independent appraiser plus "further reasonable damages for Defendant's arbitrary breach of agreement in failing to give Plaintiff what Defendant had agreed to do." In tort, "reasonable damages" are asked "for the fraud and misrepresentations of the Defendant." Punitive as well as compensatory damages are asked for. In addition, several miscellaneous prayers for relief were listed, including unpaid back salary for overtime and vacations earned in 1968, salary for 1969 on the basis that plaintiff was wrongfully discharged, and "reasonable damages for malicious interference in the prospective
business interests of Plaintiff in an amount of $1,000,000."*fn1
Defendants moved for summary judgment upon the entire complaint, expressly relying only upon the pleadings, other documents on file, and depositions taken of plaintiff and not submitting any affidavits or other proofs in their own behalf. This meant that they, although denying any oral promises in the answers, took the position that, assuming for purposes of the motion that everything plaintiff alleged and asserted was true and that therefore there was no issue as to any material fact, R. 4:46-2, they were entitled to judgment as a matter of law.
Both sides correctly agreed that New York substantive law governed the case, both on the contract and tort theories. The employment agreements related to a New York business, they, as well as the alleged oral promises, were made and to be performed there and that state certainly was the "center of gravity" of the matter. The suit happened to be brought in New Jersey because both plaintiff and the individual defendant resided here at the time of institution. This state has no other possible interest. Apparently no motion was made for the application of the forum non conveniens doctrine. The courts of this state are thus put in the difficult and unsatisfactory position of trying to determine the law of New York, when if the suit had been brought in that state, as it could have been, it would have been determined by judges experienced in its law.
The Law Division judge granted defendants' motion, resulting in a dismissal of the entire ...