January 27, 2011
NEIL KAHANOVITZ, M.D., PLAINTIFF-APPELLANT,
ELECTRO-BIOLOGY, INC., EBI, L.P. AND BIOMET, INC., DEFENDANTS-RESPONDENTS.
On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-8-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 19, 2010 - Decided
Before Judges Messano and Waugh.
Plaintiff Neil Kahanovitz appeals the dismissal on summary judgment of his amended complaint for breach of contract against defendants Electro-Biology, Inc., and EBI, L.P. (collectively EBI), and also against Biomet, Inc. (Biomet). Because we have concluded that there were genuine issues of material fact precluding summary judgment on the contractual claim, at least prior to the completion of discovery, we reverse in part and remand for further proceedings consistent with this opinion. However, we affirm as to the remaining counts of the amended complaint and the denial of Kahanovitz's cross-motion for summary judgment.
We discern the following facts and procedural history from the record.
Kahanovitz is a medical doctor who specializes in orthopedic surgery. Approximately twenty-five years ago, Kahanovitz started working with EBI in the development of medical products, primarily for use in spine surgery. According to Kahanovitz, EBI's sales of those products have exceeded a hundred million dollars.
Kahanovitz and EBI entered into a "consulting agreement" on January 1, 1998. The consulting agreement, which replaced a prior agreement, had a five-year term. Paragraph three of the consulting agreement required Kahanovitz to provide consulting services, as requested by EBI, with respect to such issues as "Product Line development and expansion," "marketing and promotional activities," "reimbursement and managed care programs and strategies," and "research projects and scientific papers regarding the [p]roduct(s)." It also required him to "[m]ake presentations as reasonable and mutually agreeable at various meetings selected by EBI." Paragraph four provided for compensation through a series of three separate categories of minimum payments per year, or one quarter of one percent (.25%) to two percent (2%) of the net sales of three types of products, whichever was greater.*fn1 The agreement also provided that EBI would own the rights to any products resulting from Kahanovitz's consulting services.
The consulting agreement was amended on November 1, 1998. The amendments modified the nature of Kahanovitz's duties and the manner of compensation. The term of the consulting agreement was extended by one year.
The consulting agreement was amended again, effective December 1, 2004.*fn2 The second amendment also revised the nature of Kahanovitz's duties and compensation. It provided that the consulting agreement, as amended, would terminate on November 30, 2008. One of the changes to the compensation section provided as follows:
Notwithstanding the above, during the Term of this Agreement and for so long as Kahanovitz is performing Services within the Agreement Field, EBI shall guarantee Kahanovitz a minimum annual royalty payment equal to two hundred and fifty thousand dollars ($250,000.00) per fiscal year. Said minimum royalty shall be paid in four equal quarterly installments. Minimum quarterly payments will be reconciled with actual royalties earned at the end of each fiscal year.
As will be seen, this appeal involves the interpretation of the underlined provision. Kahanovitz contends that it obligated EBI to continue making minimum payments after the expiration of the consulting agreement, while defendants argue that the language cannot reasonably be read to require such continuing payments. EBI notified Kahanovitz during April or May 2008 that the consulting agreement would not be renewed when it expired on November 30, 2008, attributing its decision to changes in the regulatory environment with respect to the relationship between medical device companies and their consulting physicians. When the agreement expired, EBI ceased requesting and Kahanovitz ceased providing services to EBI. Once it had made all payments due to Kahanovitz under its interpretation of the consulting agreement, EBI ceased making payments to him.
Kahanovitz filed his three-count complaint on December 15, 2008. He stated causes of action for breach of contract, unjust enrichment, and imposition of a constructive trust. His theory of EBI's obligations under the agreement was articulated as follows:
11. From the beginning, it was the intention of both Dr. Kahanovitz and the EBI principals with whom he dealt personally, including EBI CEO James R. Pastena, that, so long as Plaintiff maintained an active practice in orthopedic surgery, Dr. Kahanovitz would continue to assist defendants in development and marketing of new orthopedic surgical devices, and that defendants would continue to pay Dr. Kahanovitz royalties on the products which he developed or helped develop for EBI. This arrangement was, and was intended to be, unlike an existing relationship between defendants and their other physician consultants. This arrangement was never intended to pay off Dr. Kahanovitz for using EBI products nor as an incentive to increase his use of EBI products in his clinical practice.
12. From 1981 through 2008, Dr. Kahanovitz remained loyal to EBI. During this period he refused several lucrative consulting offers from defendants' competitors, the last offer just several months ago. In furtherance of his longstanding agreement and relationship with Defendants, and in consideration for Plaintiff's role as an actual developer of the products at issue, as well as the exclusivity of Plaintiff's services to defendants, in or about November, 1998 Plaintiff requested and received a written amendment to the parties' existing contract. The amendment stated that henceforth all of his fees would be paid on the basis of royalties rather than per-diem fees. This arrangement was further memorialized in the parties' Second Amendment of Consulting Agreement, dated December 6, 2004.
13. In or about April, 2008, while the parties' contract was still in force and effect, officers of defendant Biomet Inc. advised Plaintiff of their intention to terminate the parties' contract. Defendants proffered an "explanation" to Plaintiff that governmental authorities were investigating and prosecuting consultancy relationships between surgical implant suppliers and surgeons as fraudulent monetary inducements to physicians to use certain suppliers' products exclusively, in violation of Medicare payment rules. Plaintiff pointed out that, unlike numerous of defendants' hourly-compensated physician-"consultants" who were merely Biomet/EBI-product end users, he was an actual developer, particularly of Biomet's "SpF" electrical stimulation product line. Defendants themselves had recognized this distinction in setting up Dr. Kahanovitz's unique royalty payment arrangement starting in November, 1998 in recognition of Dr. Kahanovitz's role as an actual product developer.
14. Despite the defendants' continuing obligation to accept Dr. Kahanovitz's development and marketing services, and to pay Dr. Kahanovitz the royalties set out in the parties' contract, the defendants thereafter ceased payment to Plaintiff and advised him that the parties' contract was and is "terminated."
Kahanovitz filed an amended complaint, which is substantially the same as his original complaint. Defendants filed their answer and affirmative defenses to the amended complaint on May 22, 2009.
Kahanovitz served interrogatories and document requests on September 29, 2009. On November 9, 2009, he served a notice of deposition, to be held on November 30, 2009.
On November 20, 2009, prior to the completion of the requested discovery, defendants moved for summary judgment. They argued that, as a matter of law and the applicable contractual language, Kahanovitz's right to receive any payments under the consulting agreement terminated when the agreement expired on November 30, 2008. They further argued that there could be no unjust enrichment in light of the termination of Kahanovitz's right to receive compensation.
Kahanovitz opposed the motion and filed a cross-motion for summary judgment in his favor. In his supporting certification, Kahanovitz again outlined the history of his relationship with EBI. He again asserted that, unlike many orthopedic surgeons receiving compensation from device manufactures, he was being compensated for actual services, including product development, assistance with regulatory review and the provision of educational services, rather than merely for using EBI's products during surgery.
Kahanovitz further asserted that the 1998 amendment was designed to provide him with compensation on a "royalty basis" for his services on an "exclusive basis." He continued:
Later, EBI promised to provide me with a guarantee of minimum annual compensation in the amount of $250,000 per year, for as long as I remained active in the practice of medicine, and agreed to make my services available to them on an exclusive basis. These promises were memorialized in the 2004 Amendment to my Agreement with EBI, which specifically delineated the areas where I would devote my activities and efforts exclusively to EBI, as the "Agreement Field." The Agreement also provided for ongoing compensation to me based on royalties, for as long as I was performing services within the Agreement Field, as follows: ". . . during the Term of this Agreement and for so long as Kahanovitz is performing Services within the Agreement Field, EBI shall guarantee Kahanovitz a minimum annual royalty payment equal to two hundred and fifty thousand dollars ($250,000.00) per fiscal year. Said minimum royalty shall be paid in four equal quarterly installments. Minimum quarterly payments shall be reconciled with actual royalties earned at the end of each fiscal year."
5. Although this Agreement was drafted by EBI and its attorneys, I always understood this language in my Agreement with EBI as a direct reflection of the understanding of all parties that, in light of the assistance I had already provided to EBI in connection with the development of spine products it was already selling as of December of 2004, and my agreement to provide my services in the areas delineated to them on an exclusive basis, on a going forward basis I would receive a minimum of $250,000 per year in royalty payments, as long [as] I remained active in the practice of medicine, as an orthopedic surgeon, and agreed to provide my services in those areas exclusively to EBI. I would never have continued to provide my services in the areas of research and development exclusively to EBI, in the absence of that promise of ongoing compensation to me, in the minimum amount of $250,000 per year, for the duration of my career, because it would have made no sense for me to reject the numerous offers I received from EBI's competitors, without the assurance that EBI would provide me with ongoing compensation sufficient to justify the rejection of those offers. If I had understood the Agreement we entered into in December of 2004 to obligate EBI to make payments to me in the amount of $250,000 per year, solely for the term of that Agreement, I would never have signed it.
Finally, Kahanovitz disputed defendants' contentions that the agreement was terminated because of a change in the regulatory environment. While he did not dispute that there was regulatory concern about some contractual arrangements between device manufacturers and orthopedic surgeons, he argued that the regulatory concern was focused on "consulting agreements designed to 'pay' surgeons for their use of the company's products."
Kahanovitz also submitted the certification of James Pastena, who had been senior vice president at Biomet and president of EBI until June 2005. Pastena asserted that he had been directly involved in negotiations involving the agreement and its amendments. According to Pastena, the "spine products" that Kahanovitz "had either developed on his own, or assisted in developing, accounted for in excess of $300 million of the $500 million in net product sales of EBI [as of June 2005] on an annual basis." He reviewed the history of Kahanovitz's relationship with EBI and the various agreements and compensation arrangements.
With respect to the issue of whether the agreement required minimum royalty payments to Kahanovitz in the event it was terminated or not renewed, Pastena certified as follows:
5. During the same period of time that EBI's relationship with Dr. Kahanovitz began to flourish, based upon his contributions to EBI in the area of intellectual property, and new product development, EBI and other manufacturers of biomedical products were coming under increasing pressure and scrutiny regarding their relationships with practicing physicians in general. This increased pressure was the result of arrangements frequently being entered into between manufacturers and physicians, loosely referred to as "Consulting Agreements," but in reality designed to enable the manufacturers to "buy business" from the physicians, in the form of patient referrals for use of their products. It was as the result of this increased governmental pressure and scrutiny, that Dr. Kahanovitz and EBI both agreed upon certain changes in his royalty agreement with EBI, including the practice of entering into agreements with term limits, generally of approximately five years, and of routinely "rolling over" his ongoing Royalty Agreement when a particular term limit expired. As a result, in the 2004 Amendment to his Agreement with EBI, the Agreement specifically delineated the areas where Dr. Kahanovitz would devote his activities and efforts exclusively to EBI, known as the "agreement field." . . . In addition, the parties agreed upon inclusion of the following language:
". . . during the Term of this
Agreement and for so long as Kahanovitz is performing Services within the Agreement Field, EBI shall guarantee Kahanovitz a minimum annual royalty payment equal to two hundred and fifty thousand dollars ($250,000.00) per fiscal year. Said minimum royalty shall be paid in four equal quarterly installments. Minimum quarterly payments shall be reconciled with actual royalties earned at the end of each fiscal year."
. . . (emphasis supplied).
6. This language in Dr. Kahanovitz's Agreement with EBI was a direct reflection of the understanding of all parties that, in light of the assistance Dr. Kahanovitz had already provided to EBI in connection with the development of spine products it was already selling as of December of 2004, on a going forward basis he would receive a minimum of $250,000 per year in royalty payments, as long [as] he remained active in the practice of medicine, as an orthopedic surgeon, and continued to agree to make his services exclusively available to EBI, in connection with new product development. The language was also intended to protect Dr. Kahanovitz, in the event EBI decided not to renew his Agreement, by assuring him that, regardless of what occurred in the future, as long as he agreed to make his services available to EBI he would receive royalty payments in the minimum amount of $250,000 per year, for the duration of his career, whether EBI chose to utilize his services or not. The senior executives at EBI all considered this to be a small price to pay for Dr. Kahanovitz's assistance in the development of products generating sales in excess of $300 million per year at that time.
Kahanovitz also submitted generally similar certifications from Marshall L. Perez, a former senior vice president at EBI, who was involved with sales, marketing and product development, and Dan L. Page, also a former senior vice president at EBI, who had signed the second amendment on behalf of EBI. Following argument on March 19, 2010, the motion judge delivered an oral opinion, granting defendants' motion and denying Kahanovitz's cross-motion. After setting forth the arguments of the parties and the basic factual background, the judge turned to the interpretation of the agreement.
The pertinent paragraph . . . which is primarily the subject of the motions says as follows, "Notwithstanding the above, during the term of this agreement and for so long as Kahanovitz is performing services within the agreement field, EBI shall guarantee Kahanovitz a minimum annual payment of $250,000 per fiscal year." And then . . . it says, "Not to exceed $400,000 a year."
Now, the key language here . . . is, what is the meaning and the intention of this "during the term of this agreement and for so long as Kahanovitz is performing services within the agreement field." Just that section . . . is really the heart of this motion.
The defense says where the terms are clear and unambiguous the Court must [enforce] the terms of a contract as written. And in that regard, the terms are to be given their plain and ordinary meaning. The Court has no right to rewrite the contract and the law is that the Court is not to make a better contract for the parties that they themselves have seen fit to enter into, or alter it for the benefit of one party and to the detriment of another.
The cases on those very basic contract principles are set forth [in] . . . the defendant's initial brief. I'm not going to cite the cases. But there is a case that is important here and it is cited in that section. It's Conway versus 287 Corporation Center Associates, 187 New Jersey 259, a 2006 Supreme Court Case.
Now, the defense argues the agreement is clear and unambiguous. And in that regard there were two express conditions precedent. Specifically, pursuant to . . . the second amendment, Dr. Kahanovitz was to provide consulting services within the agreement field, and these services must have been performed during the term of the agreement.
The defense says those are conditions to the agreement. They are two conditions precedent to Dr. Kahanovitz's receipt of compensation. And in responding to the plaintiff's argument the defense says well, this is a consulting agreement. It's not a royalty agreement. It has a specific term, or terms, as the amendments provide, and nowhere does it say that the plaintiff is entitled to receive compensation as long as he is maintaining a medical practice.
Now, like the original consulting agreement, the December 2004 amendment provides a listing of consulting services. And further, the second amendment also provides a list of consulting services. And it should be noted that it is undisputed.
. . . [I]t is undisputed as set forth in the reply brief submitted by the defense, that the consulting agreement terminated on November 30, 2008, that EBI paid Dr. Kahanovitz for whatever services that he had rendered during the term up to and including November 30, 2008, that EBI never asked Dr. Kahanovitz to perform any consulting services after November 30, 2008, and that nothing in the consulting agreement states or even suggests that Dr. Kahanovitz would be entitled to compensation from EBI at any time after the effective termination date.
MR. MEYERS: Your Honor, that's not understood
THE COURT: I'm sorry.
MR. MEYERS: I didn't mean to -- to interrupt, but I can show you
THE COURT: I know, Mr. Meyers, you disagree.
MR. MEYERS: Okay.
THE COURT: All right? That's stated. That's clear. Now, the plaintiff has submitted various certifications, curiously enough, from former employees of EBI. . . .
[T]hey basically side with the plaintiff's interpretation that he was entitled to royalty compensation and royalty payments for as long as he was engaged in the practice of medicine. And they, as indicated, they side with the plaintiff, not the defense.
Now, there is a certification provided by the defense, and that was noted. But at the same time, while this agreement was drafted apparently by EBI, Dr. Kahanovitz is a sophisticated individual, quite sophisticated in the medical field -- maybe to a lesser extent in the business field, but he was not without sophistication. And if it was intended that the agreement was to just rollover automatically after each term ended it doesn't say that anywhere in any of these agreements. Further, it doesn't say that he was entitled to a perpetual royalty as long as he remains active in the practice of orthopedic surgery and was willing to make himself available exclusively to EBI.
It doesn't say that he was guaranteed compensation as long as he remained active in the practice of surgery. Nowhere does it say that.
At the same time the plaintiff and the various individuals that support his cause, agree that it's entitled a consulting agreement, that it had term limits, and . . . the agreement as a whole, terminated on November 30, 2008.
Now, the Court referred earlier to the Conway case, and I agree with the plaintiff's position, that there can be extrinsic evidence which is offered to provide background and interpretation of terms in a contract. But at the same time the Conway case cannot be used to say that parol evidence can be admitted to change, vary, or contradict the terms of an integrated and unambiguous agreement.
Flat out, these agreements, referring to the original and the two amendments, do not refer to a perpetual royalty. And to the extent that the affidavit supporting the plaintiff's cause from the three former EBI employees, referred to a perpetual royalty, referred to the fact that even if Dr. Kahanovitz doesn't perform services he's entitled to a perpetual royalty, that would vary the terms of the contract.
The Court, in essence, does not read . . . [the applicable provision] of the consulting agreement to say, as the plaintiff's interpretation would suggest, "during the term of this agreement or for so long as Kahanovitz is performing services."
The [applicable provision] says, as the Court indicated earlier, "during the term of the agreement and for so long as Dr. Kahanovitz is performing services." It's in the conjunctive. It's not in the disjunctive.
And I agree, or the Court agrees, with the defense, that there are two conditions precedent here. Number one, that the compensation applies only during the term of the agreement, and during the term where Dr. Kahanovitz is performing services.
It's undisputed that the agreement terminated November of 2008. It is undisputed that he did not perform services thereafter. I agree with the defense. He is not entitled to a perpetual royalty.
The order of dismissal was entered the same day.
This appeal followed.
On appeal, Kahanovitz argues that the motion judge erred in granting summary judgment because the crucial provision of the consulting agreement should have been interpreted in accordance with the intent of those who negotiated it, as expressed in the certifications he had submitted. He also argues that, at the very least, the language was ambiguous. Consequently, he contends that the judge should have either denied summary judgment because there were disputed issues of material fact or interpreted the agreement against EBI and granted the cross- motion. Defendants disagree, arguing that the agreement is not ambiguous and that the judge correctly refused to use parol evidence to vary its terms.
It is well-established that our review of a trial judge's conclusions of law is de novo. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference."). Consequently, we review a grant of summary judgment de novo, applying the same standard governing the trial court under Rule 4:46-2(c). Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007); Brill v. Guardian Life Ins. Co., 142 N.J. 520, 539-40 (1995).
Generally, a court must "consider 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, supra, 142 N.J. at 540; see also R. 4:46-2(c). However, a "'genuine' issue of material fact" does not exist if there is only one "unavoidable resolution of the alleged disputed issue of fact." Ibid. (citation omitted).
The rules of contractual interpretation are well established. The role of the court is to give "juristic effect" to the intention of the parties as expressed in the contract.
George M. Brewster & Son, Inc. v. Catalytic Constr. Co., 17 N.J. 20, 27-28 (1954) (citing Corn Exch. Nat'l Bank & Trust Co. v. Taubel, 113 N.J.L. 605 (E. & A. 1934)); Domanske v. Rapid-Am. Corp., 330 N.J. Super. 241, 246 (App. Div. 2000) (citations omitted). For the purposes of this appeal, ascertaining the intent of the parties requires an analysis of the language of the consulting agreement between Kahanovitz and EBI. Kearny PBA Local # 21 v. Town of Kearny, 81 N.J. 208, 221 (1979) ("The polestar of construction of a contract is to discover the intention of the parties." (citing Atl. N. Airlines, Inc. v. Schwimmer, 12 N.J. 293, 301 (1953))); Caruso v. Ravenswood Developers, Inc., 337 N.J. Super. 499, 506 (App. Div. 2001) ("Courts are generally obligated to enforce contracts based on the intent of the parties, the express terms of the contract, surrounding circumstances and the underlying purpose of the contract." (citations omitted)).
If a contract is unambiguous, it must generally be enforced as written. Schenck v. HJI Assocs., 295 N.J. Super. 445, 450 (App. Div. 1996) (citing U.S. Pipe & Foundry Co. v. Am. Arbitration Ass'n., 67 N.J. Super. 384, 393 (App. Div. 1961)), certif. denied, 149 N.J. 35 (1997). A contract is ambiguous if it is reasonably susceptible of two interpretations. Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997) (quoting Kaufman v. Provident Life & Cas. Ins. Co., 828 F. Supp. 275, 283 (D.N.J. 1992), aff'd, 993 F.2d 877 (3d Cir. 1993)). The issue of ambiguity is one of law. Ibid.
Kahanovitz points to the certifications filed in opposition to defendants' motion, arguing that they demonstrate a general intent that the consulting agreement be renewed on a regular basis and, in any event, that the minimum royalty payment continue even if the agreement itself is allowed to lapse. He contends that the true intent of the parties, which is the "polestar" of contractual interpretation, can be understood only in the context provided by his certification and those submitted by EBI's former employees. As we held in Caruso, supra, 337 N.J. Super. at 506, the "surrounding circumstances and the underlying purpose of the contract" must be considered along with the "express terms" in ascertaining the "intent of the parties."
Kahanovitz relies on Conway v. 287 Corporate Center Associates, 187 N.J. 259, 269 (2006) to support his argument that extrinsic evidence, such as that contained in the certifications, must be considered in interpreting the consulting agreement. Defendants counter by arguing that Conway does not permit the use of extrinsic evidence to vary the terms of an integrated contract, such as the one at issue here. Both sides are correct.
Conway does not require that there be an ambiguity before extrinsic evidence is examined in connection with the interpretation of a contract. Instead, the Court held that our courts will "consider all of the relevant evidence that will assist [them] in determining the intent and meaning of [a] contract." Id. at 269.
This is so even when the contract on its face is free from ambiguity. The polestar of construction is the intention of the parties to the contract as revealed by the language used, taken as an entirety; and, in the quest for the intention, the situation of the parties, the attendant circumstances, and the objects they were thereby striving to attain are necessarily to be regarded. The admission of evidence of extrinsic facts is not for the purpose of changing the writing, but to secure light by which to measure its actual significance. Such evidence is adducible only for the purpose of interpreting the writing-not for the purpose of modifying or enlarging or curtailing its terms, but to aid in determining the meaning of what has been said. So far as the evidence tends to show, not the meaning of the writing, but an intention wholly unexpressed in the writing, it is irrelevant. The judicial interpretative function is to consider what was written in the context of the circumstances under which it was written, and accord to the language a rational meaning in keeping with the expressed general purpose.
[Ibid. (quoting Atl. N. Airlines v. Schwimmer, 12 N.J. 293, 301-02 (1953)).] When examining the extrinsic evidence to interpret a contract, a court may consider "'the particular contractual provision, an overview of all the terms, the circumstances leading up to the formation of the contract, custom, usage, and the interpretation placed on the disputed provision by the parties' conduct.'" Ibid. (quoting Kearny PBA Local #21, supra, 81 N.J. at 221). "'Semantics cannot be allowed to twist and distort [the words'] obvious meaning in the minds of the parties.' . . . Consequently, the words of the contract alone will not always control." Id. at 269-70 (quoting Schwimmer, supra, 12 N.J. at 307).
Nevertheless, once the intent of the parties has been ascertained, "the parol evidence rule comes into play to prohibit the introduction of extrinsic evidence to vary the terms of the contract." Id. at 270. As the Court said in Schwimmer, supra, 12 N.J. at 301-02, The admission of evidence of extrinsic facts is not for the purpose of changing the writing, but to secure light by which to measure its actual significance. Such evidence is adducible only for the purpose of interpreting the writing-not for the purpose of modifying or enlarging or curtailing its terms, but to aid in determining the meaning of what has been said. So far as the evidence tends to show, not the meaning of the writing, but an intention wholly unexpressed in the writing, it is irrelevant.
[(Emphasis added.)] It is not unusual for parties in a contractual dispute to disagree about the intent embodied in their contract. This case is unusual because, while EBI itself disputes Kahanovitz's assertions concerning their mutual intent, three former EBI officials, who were in office at the time of the second amendment to the consulting agreement and one of whom signed that document on EBI's behalf, support Kahanovitz's position.
Indeed, Pastena, who was EBI's president at the time, specifically certified that the provision at issue was also intended to protect Dr. Kahanovitz, in the event EBI decided not to renew his Agreement, by assuring him that, regardless of what occurred in the future, as long as he agreed to make his services available to EBI he would receive royalty payments in the minimum amount of $250,000 per year, for the duration of his career, whether EBI chose to utilize his services or not.
Because the case was decided on summary judgment in the trial court, we must take that assertion as true. Brill, supra, 142 N.J. at 536.
Although intentions of the parties that remain unexpressed in the language of a contract are "irrelevant," Schwimmer, supra, 12 N.J. at 302, we have concluded that Kahanovitz presented sufficient facts in opposition to defendants' motion on the contract claim to raise a genuine issue of material fact as to whether the language at issue was intended to express the intent claimed by Kahanovitz and his witnesses, i.e., that minimum payments continue after the term of the agreement, or whether it is at least ambiguous when viewed in that context.*fn3 A fuller exploration of the facts through discovery is needed before it can be determined whether summary judgment is appropriate, if at all.*fn4 Consequently, the motion should have been denied as to the contract claim.
We affirm the dismissal as to the other two counts of the amended complaint, as well as the denial of Kahanovitz's motion for summary judgment. We see no need for an extended discussion of those issues in a written decision. R. 2:11-3(e)(1)(E). We add only that, under the circumstances of this case, Kahanovitz's rights are purely contractual. If the contract was not violated, he has no claim at all, because he chose to enter into a contractual arrangement with EBI with respect to his entitlement to royalties. See Suburban Transfer Serv., Inc. v. Beech Holdings, Inc., 716 F.2d 220, 226-27 (3d Cir. 1983) ("Quasi-contract liability will not be imposed, however, if an express contract exists concerning the identical subject matter. The parties are bound by their agreement, and there is no ground for implying a promise as long as a valid unrescinded contract governs the rights of the parties.").
In summary, we reverse the grant of summary judgment on the contractual claim (count one of the amended complaint) and remand for further proceedings consistent with this opinion. Otherwise, we affirm the order on appeal. Affirmed in part, reversed in part, and remanded.