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Kaplan v. Township of Old Bridge

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


January 15, 2009

BRUCE KAPLAN, PLAINTIFF-APPELLANT,
v.
TOWNSHIP OF OLD BRIDGE, DEFENDANT-RESPONDENT.

On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-3386-06.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued October 22, 2008

Before Judges Rodriguez, Lyons and Kestin.

Bruce Kaplan, plaintiff in this breach-of-contract action, appeals from a an order granting summary judgment to defendant, Township of Old Bridge (the Township). The order dismissed, with prejudice, all claims against the Township.

The three-count complaint alleged a contract between the parties for the provision by plaintiff of "brokerage and/or benefit consultant services" to the Township; asserted that plaintiff was "in the business of providing health benefits consultant services and insurance brokerage services to private business organizations and public entities[;]" and claimed that the Township had wrongfully terminated the parties' contractual relationship during its term without the notice required by the instrument, i.e., ninety days before the end of the last twelve-month contracting period, on September 30, 2006. The first two counts of the complaint asserted causes of action against the Township on the basis of which plaintiff sought "(a) reinstatement to his position... until the expiration of the contract terms; (b) compensatory damages; (c) legal fees and costs; and (d)... other... relief...." Plaintiff has not pursued the third-count cause of action against fictional defendants.

The background facts of the matter are essentially undisputed. Plaintiff was initially retained by the Township in November 1994 for a term ending September 30, 1995. In several succeeding years, the parties expressly acted to renew the contract for annual terms. In September 1998, however, a new provision was added to the renewal, which was for the term of "twelve and one half months [from September 15, 1998] through September 30, 1999[:]"

The Agreement shall automatically renew for further 12 month periods, October 1 through September 30, unless written notice is given by either party 90 (ninety) days prior to September 30 of each Agreement period.

According to plaintiff, "[t]here were a number of times during this contract period that Old Bridge requested modifications to brokerage fee amounts and other services. On each occasion the parties negotiated and modified their agreement and continued to move to work together." Further, plaintiff states, "[t]he contracts had [his] commissions built into them. They would be paid each month." The Township does not dispute these assertions, and acknowledges that the agreement "automatically renewed yearly through and including 2004-2005." The Township asserts further, however, that "unlike the other professional service consultants for the Township, there was never a yearly renewal resolution of the governing body authorizing an extension of [this] Agreement or publication of [this] appointment." The parties agree that, on December 15, 2005, the Township's business administrator informed plaintiff that his contract would terminate on January 1, 2006, and a new health care benefits consultant would commence services on that date.

In response to plaintiff's objections, the Township took the position, to which it has adhered throughout, that the contract, as modified in 1998 with a provision for automatic renewal, was void and unenforceable because it violated certain requirements of the Local Public Contracts Law, N.J.S.A. 40A:11-1 to-51. That act limits to a "term of not more than three years" the duration of contracts for "insurance consulting... services" and other functions, N.J.S.A. 40A:11-15(6); and it mandates the passage and publication of a resolution awarding any such contract, N.J.S.A. 40A:11-5(1)(a)(i) and (ii), see Local 1081 v. Essex County, 255 N.J. Super. 671, 680 (App. Div. 1992).

The motion judge, citing Baylinson v. Board of Comm'rs, 282 N.J. Super. 132 (Law Div. 1995), and Township of Lawrence v. Ewing-Lawrence Sewerage Auth., 233 N.J. Super. 253 (Law Div. 1989), credited the arguments advanced by the Township, and ruled against plaintiff on those bases, holding in her oral decision that, even assuming the absence of any unlawful conduct on plaintiff's part, the contract between plaintiff and the Township was "illegal" because it violated the statute.... The contract, in my opinion ended... in 2001 after the first three year term and then every contract after that that was automatically renewed, from that point on, was not a legal contract.

So that in December of 2005[,] when he was notified that he was no longer going to be compensated pursuant to the illegal contract[,] it would appear that he had gotten paid from September 15th of 2005 to December of 2005. It would appear to me that he has been compensated for the work that he did and as a result, I don't see, unless there's something that was left out and was not presented to me that the Township owes him any additional funds because[,] again, the contract was illegal from the beginning.

The judge also dismissed the Township's counterclaim, holding that it could not "at this point in time go after [plaintiff] for something that he may or may not have done pursuant to an illegal contract." Counsel for the Township stated her agreement with that ruling.

We are in substantial agreement with the motion judge's resolution of the basic issue in the matter, i.e., her holding that the contract could not be enforced for the 2005-2006 term because it did not comport with the requirements of the Local Public Contracts Law.

It is unclear whether plaintiff, in resisting the Township's summary judgment motion, specifically proffered an entitlement to income earned during the last contract period before the stated termination date, and unpaid. In the face of his claim in the complaint of a right to compensatory damages, however, and given the assertion in his brief on appeal that "[h]e negotiated contracts [on behalf of the Township] but was not fully paid[,]" we are loath to affirm the dismissal of all issues. It appears from the record that plaintiff's commissions for a health benefits contract he negotiated on behalf of the Township were, under his contract with the Township, payable over the twelve-month term of the latter contract. If the commissions and other payments he earned for his efforts from October 1, 2005 to January 1, 2006 were not fully paid, plaintiff has a likely quantum meruit claim that should be evaluated.

Obviously, if plaintiff has received fair and full compensation for all his efforts performed before his arrangement with the Township was terminated, he would not be entitled to recover damages in this lawsuit. We remand to the trial court so that plaintiff's entitlement can be fully assessed.

We affirm the trial court's dismissal of the breach-of-contract claim for reinstatement of plaintiff's rights for the 2005-2006 contract term and other relief he sought. We remand, only, for a determination of plaintiff's quantum meruit entitlements, if any.

20090115

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