January 30, 2008
RICHARD TYLER, CEO OF UNITED CHILDREN'S PRESCHOOL, PLAINTIFF-APPELLANT,
NEW BRUNSWICK SCHOOL DISTRICT, NEW BRUNSWICK PUBLIC SCHOOLS, RICHARD KAPLAN, SUPERINTENDENT OF SCHOOLS AND MIDDLESEX COUNTY EDUCATIONAL SERVICES COMMISSION, DEFENDANTS-RESPONDENTS.
On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-6050-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 14, 2008
Before Judges S.L. Reisner, Gilroy and Baxter.
Plaintiff Richard Tyler, CEO of United Children's Center, appeals from the October 21, 2005 grant of summary judgment in favor of defendant Middlesex County Educational Services Commission (ESC). He further appeals from the grant of summary judgment to the remaining defendants, New Brunswick School District, New Brunswick Public Schools, and Richard Kaplan, Superintendent of Schools (the District) on December 15, 2006. We affirm.
For each of the four school years beginning in September 2000 and ending in June 2004, plaintiff operated two preschools, United Children's Preschool, and United Children's Preschool-Raritan under contract with the District.*fn1 A separate contract was executed for each preschool. The contracts contained the following language: "the District shall notify the Provider in writing on or before March 1 of each contract year of its intent to renew the agreement for an additional one (1) year term."
Because the New Brunswick School District is defined as an Abbott district pursuant to Abbott v. Burke*fn2 and its progeny, the District was required to establish childhood education programs for children three and four years old. The funding and the form of the contract were provided annually by the State Department of Education, and the funds were channeled to plaintiff and other providers through the Board.
On February 28, 2005, the Board sent plaintiff a letter notifying him that the District would not renew its contract with United Children's Center, which operated both sites, for the 2005-2006 school year. Prior to that letter, the business administrator of the Board, Richard Jannarone, had informed plaintiff that the downtown site had consistently failed to comply with state-mandated reporting and financial record requirements.
On March 10, 2005, plaintiff's counsel sent a letter to Jannarone acknowledging the school district's decision not to renew, and asking Jannarone to provide specific reasons why the Board made that decision. In a letter dated April 1, 2005, Jannarone reiterated the Board's decision not to renew plaintiff's contract for 2005-2006, and demanded a detailed corrective action plan for plaintiff's non-compliance with the State requirements. Jannarone further stated that upon receipt of the corrective action plan, the Board would notify him whether this plan was "acceptable to continue in the 2005/2006 school year." Ultimately, at its July 26, 2005 meeting, the Board ratified its decision not to renew either contract.
Plaintiff's appeal to the New Jersey Department of Education was denied because it had been untimely filed. On August 22, 2005, plaintiff filed a verified complaint alleging breach of contract and tortious interference with his contractual rights. Plaintiff sought: (1) an order enjoining the District from terminating his contracts until the court could render a decision; and (2) compensatory and punitive damages. In an order filed on August 23, 2005, Judge Paley denied plaintiff's application for injunctive relief.
ESC moved for summary judgment in September 2005, which the court granted in a written decision on October 21, 2005. The judge held that plaintiff had "failed to demonstrate a continuing contract between him and the School District" and plaintiff did not present any evidence that ESC "intended to interfere or did interfere with his contractual right." The judge further reasoned that the District and ESC did not enter into a contract until August 2005, six months after the District had notified plaintiff of its decision not to renew.
On March 28, 2006, plaintiff moved for partial summary judgment against the District. Plaintiff argued that he was entitled to partial summary judgment in the amount of $135,732 because this was the balance due to plaintiff for payment of his employees' benefits for the 2004-2005 contract year. The District did not contest this figure, but instead argued that at least $90,000 of the $135,732 was owed to other vendors, and not plaintiff's employees. The exact amount due to the vendors was unknown at that time because under the applicable statute of limitations, time still remained for the vendors to submit their claims. Consequently, the trial court denied plaintiff's motion because of the uncertainty concerning who was entitled to assert a claim.
On July 24, 2006, plaintiff filed another motion for partial summary judgment, which was heard on September 8, 2006. Similar to his May 26, 2006 motion, plaintiff sought judgment for the monies owed to him by the District under the 2004-2005 contract; however, plaintiff recalculated the amount owed to him and this time sought $53,144 instead of the original $135,000. The District made the same argument it had made earlier, and the judge denied plaintiff's motion for the same reasons it had denied plaintiff's earlier motion.
The District subsequently moved for summary judgment, arguing that it had no obligation to renew the contract and plaintiff had no legal right to rely on renewal. Specifically, the District argued that: (1) all Early Childhood contracts, such as the two at issue here, are annual and are considered to have expired at the conclusion of the school year for which they are made; and (2) if the Board does not send a renewal notice by March 1, the provider's services are deemed terminated. Even though the District did notify plaintiff of its decision not to renew, the District argued that it had no contractual obligation to do so, and its February 28, 2005 letter was sent merely as a courtesy. The District also argued that plaintiff failed to exhaust administrative remedies.
In opposition to the District's motion, plaintiff argued that: (1) the District had "an affirmative duty to [provide him with] notice by the date in question"; (2) the District only gave notice as to one school, the United Children's Preschool, and not Raritan; and (3) the termination of his contracts would result in unjust enrichment. As to the latter argument, plaintiff maintained that he had made a substantial investment in both preschool buildings, from which both defendants benefited because they moved into the buildings plaintiff had leased, doing nothing other than changing the signs. According to plaintiff, ESC did not even change the phone numbers.
The judge rejected the District's argument that plaintiff failed to exhaust administrative remedies, but because the District has not raised that issue on appeal, we need not address it. The judge did, however, agree with the District's argument that it had no contractual obligation to continue the contract. The judge reasoned:
[T]hose contracts are for a term of one year and are at will. Defendants basically assert that they had no obligation to issue written notice of non-renewal of the contract. They claim that . . . the plaintiff is asking the Court to create a contractual obligation which is outside the four corners of that contract. I agree with that position. Based on that, I am satisfied that it has been shown here that the contract with the plaintiff was run for a one year period with notices of renewal made in March of a contractual year. I am satisfied that the contract was cancelable by either at will. No question that [plaintiff] incurred loans or financial obligation as a result of its contract with the school district. But there is no suggestion in any of the material that I have reviewed . . . that the contract here would be renewed to insure that [plaintiff] would recoup his investment . . . I think that the plaintiff here inappropriately assumed . . . its contract with the district would last for enough time for him to recoup his investment. But that was an assumption that was not based on the language of the contract.
After granting summary judgment, the judge addressed plaintiff's claim for the balance due under the 2004-2005 contract, which had been the subject of plaintiff's earlier motions for partial summary judgment. The judge agreed to keep the case open to "resolve any kind of contractual dispute based on [the] existing claims for [the] contract" before it was "non-renewed." The judge explained that he would schedule a conference call to resolve the issue. As of the time of oral argument, that conference call had not taken place and plaintiff's claim for $53,144 had not been resolved.*fn3
We turn first to plaintiff's claim that the trial judge erred when he declined to order the injunctive relief plaintiff sought. If granted, the injunction would have barred the District from awarding the 2005-2006 contract to ESC. Plaintiff does not provide reasons why the trial court erred when it denied injunctive relief. Instead, plaintiff argues that the District did not properly notify him of its decision not to renew the contract.
We review his claim in accordance with our scope of review. We apply an abuse of discretion standard when we review a trial court's decision to grant or deny a preliminary injunction. Rinaldo v. RLR Inv., LLC, 387 N.J. Super. 387, 395 (App. Div. 2006). A preliminary injunction should be granted only if a plaintiff demonstrates: (1) a reasonable probability of success on the merits; (2) a settled legal right supporting the claim; (3) the existence of a threatened irreparable harm; and (4) the relative hardship to the applicant if injunctive relief is denied outweighs the harm to the defendant if injunctive relief is granted. Crowe v. De Gioia, 90 N.J. 126, 132-34 (1982).
Plaintiff argues that the language of the contract is ambiguous, and because it is an adhesion contract, "any ambiguity should be construed against the drafter." Plaintiff does not specify why the language is ambiguous.
In Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997), we explained longstanding principles of contract interpretation that are applicable here:
Whether a term is clear or ambiguous is . . . a question of law. An ambiguity in a contract exists if the terms of the contract are susceptible to at least two reasonable alternative interpretations. . . . To determine the meaning of the terms of an agreement by the objective manifestations of the parties' intent, the terms of the contract must be given their plain and ordinary meaning. A writing is interpreted as a whole and all writings forming part of the same transaction are interpreted together. A court should not torture the language of [a contract] to create ambiguity. [Ibid. (citations omitted).]
The provision of the contract that is at issue here states:
III. TERM OF AGREEMENT . . . .
B. The District shall notify the Provider in writing on or before March 1 of each contract year of its intent to renew the Agreement for an additional one (1) year term.
Although the trial court did not provide reasons for its denial of plaintiff's application for injunctive relief, it is apparent from the record that the court did not abuse its discretion. When given its plain and ordinary meaning, Nester, supra, 301 N.J. Super. at 210, the language of the contract unambiguously states that the District had an obligation to notify the Provider in writing only if the District intended to renew the contract. The contract language makes it abundantly clear that in the absence of a written notice by the District of its intent to enter into a contract for the coming year, the contract is not renewed. If the District does nothing, and sends no letter by March 1, the contract expires. Stated differently, the default position is non-renewal. Only if the District takes affirmative action and sends written notice of its intent to renew by March 1, is the contract deemed renewed. The language in this provision is not susceptible to any other interpretation. Accordingly, it is not ambiguous. Ibid. Furthermore, there is no language that requires the District to notify the provider if it does not intend to renew the contract.
Plainly, in February 2005, the District did not intend to renew the contract with plaintiff and thus there was no contractual requirement for it to notify plaintiff. Consequently, because plaintiff did not establish a settled legal right supporting his claim and could not demonstrate a reasonable probability of success on the merits, the trial court did not abuse its discretion when it denied injunctive relief. See Crowe, supra, 90 N.J. at 132-33.
We decline to address plaintiff's argument that because the contract is an adhesion contract, any ambiguity should be construed against the drafter. That argument need not be addressed because there is no ambiguity in the contract's language. Thus, it is immaterial whether it is an adhesion contract.
Plaintiff next contends the trial judge committed reversible error when he refused to consider plaintiff's unjust enrichment claim against ESC and the District. This issue was not raised in plaintiff's complaint. Indeed, plaintiff did not raise this issue before the trial court until the hearing on the District's motion for summary judgment. Nonetheless, the trial judge did allow plaintiff to present and argue the issue, even though it was raised belatedly. The record demonstrates that contrary to plaintiff's argument, the trial court addressed plaintiff's unjust enrichment claim, but quickly dismissed it during argument because it lacked merit. Specifically, the court asked plaintiff the following questions:
What is the authority for the proposition that a contractor with a . . . public agency who expends money on the expectation that a contract will be renewed subject to a written condition that says you only get your contract renewed if there's a - a written renewal by a certain date, can rely on no writing in order to recoup his investment, I mean, why did your client enter into a contract with those renewal provisions and spend . . . all of that money, knowing that at any time the school could deny renewal . . . . You seem to be arguing that because your client expected a renewal as had happened in the years prior that he somehow has some vested rights. My question is what is the authority that says a private contractor has vested rights with a public agency.
Plaintiff was not able to answer the court's questions. Thus, we conclude that the court addressed the unjust enrichment issue, but rejected it because it lacked merit.
On appeal, plaintiff argues that he invested over $899,000 into structural renovations of the preschool buildings "with the anticipation of having the ability to recoup his investment over the subsequent renew[al] terms of his contract with the District." Plaintiff further argues:
Middlesex moved directly into that school, and reaped direct benefit from [plaintiff's] toil, physical and emotional contribution, and monetary investment. It is in fact submitted that . . . [ESC] . . . was not licensed by Department of Human Services to operate a daycare facility, actually necessitating that it utilize [the plaintiff's] license prior to obtaining its own license. Indeed[,] [ESC] . . . moved directly into both [plaintiff's] Downtown facility and Raritan facility without . . . even changing the phone number (both phone numbers remain actively in use by [ESC] to date) to either facility.
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. The unjust enrichment doctrine requires that plaintiff show that it expected remuneration from the defendant at the time it performed or conferred a benefit on defendant and that the failure of remuneration enriched defendant beyond its contractual rights.
[VRG Corp. v. GKN Realty Corp., 135 N.J. 539, 554 (1994) (citations omitted).]
Here, plaintiff had no reasonable expectation of either renewal of the contract or reimbursement from the District for the money he had invested in the structural renovations. See County of Essex v. First Union Nat'l Bank, 373 N.J. Super. 543, 548 (App. Div. 2004) (the expectation of payment must be reasonable), aff'd, 186 N.J. 46 (2006). As we have explained in Part II, the contract language specified that the contract was not renewable unless the District gave notice to the Provider. There is nothing in the contract or the record that indicates the District had promised plaintiff the contract would be renewed. Consequently, if plaintiff expected the contract to be renewed, that expectation was unreasonable, as was his assumption that he would recoup his investment in the buildings once the contract was renewed. Thus, the District was not unjustly enriched by plaintiff's expenditures because plaintiff had no reasonable expectation of remuneration.
Moreover, the District had no property interest in the preschool buildings. The District did not provide the facilities for the preschool programs, but rather was directed under the Early Childhood Education regulations to contract with private providers who provided the services and the facilities for these programs. Thus, the District had no ownership interest in the facilities that plaintiff "enriched" by investing his own capital.
In addition, ESC was not unjustly enriched because plaintiff did not have a relationship with ESC at the time he invested money into the preschool buildings. Because there was no relationship at that time, plaintiff could not have reasonably expected remuneration from ESC. Accordingly, with no reasonable expectation of remuneration, plaintiff's unjust enrichment claim against ESC also fails. See VRG Corp., supra, 135 N.J. at 554.
Next, plaintiff argues that the trial court committed reversible error when it granted summary judgment in favor of ESC. It is unclear from plaintiff's brief and from oral argument the basis of that contention. Under this point heading, plaintiff cites the standard for summary judgment and then states, "in the instant action, the notice of the claim against said defendants is clear and evident." Because this issue was not properly briefed, we deem it waived. See In re Freshwater Wetlands General Permit No. 16, 379 N.J. Super. 331, 334 n.1 (App. Div. 2005). It is essential for a party on appeal to present an adequate legal argument. State v. Hild, 148 N.J. Super. 294, 296 (App. Div. 1977).
In plaintiff's next argument, he maintains that the trial court committed reversible error when it denied his motions for partial summary judgment on March 28, 2006, May 26, 2006 and September 8, 2006. He argues that "none of the reasons advanced by the trial court were sufficient to deny the requested relief by plaintiff."
Plaintiff does not address the trial court's reason for denying partial summary judgment: that there existed a genuine issue of fact concerning which vendor claims were outstanding and whether those claims would offset the amount due to plaintiff under the 2004-2005 contract. Because plaintiff has not demonstrated that there was no genuine issue of fact, we conclude that the trial court properly denied his partial summary judgment motions. See Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).
Last, plaintiff argues that the trial court erred when it granted summary judgment to the District because the District had a contractual duty to notify plaintiff of its intent not to renew the contract, and thus breached its contract. Specifically, plaintiff argues the following:
The trial court found that the District had no duty to renew the contract. The court did not address the question of whether or not the respondent District had a duty to notify the appellant of its intent to not renew the contract, arising from the [language of the contract].
[W]hile [there exists a] duty for the District to provide a notice of the District decision to renew, a decision to not renew would appear even more paramount, as it would require the provider to make critical decisions (as in the instant case) crucial to the very life of the affected business.
Therefore it would appear that the duty to [provide] notice would be paramount where the District decides not to renew the contract with a provider.
The trial court also failed to address the argument advanced by the appellant, that notice given to appellant was defective, in that at best it only provided notice of the District's intent to not renew the contract with [the Raritan United Children's Preschool].
We reject plaintiff's contention that the court did not address whether the District had a duty to notify plaintiff of its intent not to renew. The judge stated "[d]efendants basically assert they had no obligation to issue written notice of non-renewal of the contract. They claim that [plaintiff] is asking the court to create a contractual obligation which is outside the four corners of that contract. I agree with that position." As we have already discussed in Part II, the District did not breach the contract because the language of the contract did not require the District to give notice if it intended not to renew. It is immaterial whether the notice was defective in this case because the District had no contractual obligation to provide any such notice.