May 3, 2012
LEXINS, LLC, PLAINTIFF-APPELLANT,
POWERPLACE SOFTWARE, INC., KUMAR BHAVANASI, DEFENDANTS,
AND DAN KENTON, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-834-10.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted December 14, 2011
Before Judges Cuff and Lihotz.
Plaintiff Lexins, LLC, appeals from summary judgment, dismissing its complaint against defendant Dan Kenton.
Plaintiff alleged Kenton was individually liable for the breach of the lease between plaintiff, the landlord, and PowerPlace Software Inc. (PowerPlace), the tenant. The motion judge found no legal basis to impose personal liability for the corporation's default.
On appeal, plaintiff argues the motion judge erred by assuming facts not in the record and because the facts regarding Kenton's liability as a named tenant in the lease document was reasonably disputed, obviating summary judgment. We disagree and affirm.
The facts are derived from evidence submitted by the parties in support of, and in opposition to, the summary judgment motion, which we view in a light most favorable to plaintiff. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995). The introductory clause of the four-page commercial lease designates the parties as: "LEXINS, LLC" and "PowerPlace Software, Inc./Dan Kenton." Kenton and Kumar Bhavanashi executed the lease for the tenant on July 25, 2008. Kenton's designation was listed as: "PowerPlace Software Inc. Dan Kenton, CEO Tenant." Bhavanashi's signature was added above the designation "PowerPlace Software Inc., Kumar Bhavanashi President, Tenant." The one-year lease term commenced on August 1, 2008.
Prior to the expiration of the lease term, PowerPlace ceased operations. It last paid rent on February 22, 2009 and surrendered the premises in April 2009.
On February 16, 2010, plaintiff filed this action seeking unpaid rent of $31,286, plus interest and costs. Following the submittal of his answer, Kenton moved for summary judgment, asserting he was not personally liable for PowerPlace's rental obligation. Plaintiff's opposition asserted the lease listed Kenton as a listed tenant making him liable for the rent.
In a written statement of reasons accompanying her order, the motion judge reviewed the plain language of the lease agreement, noting Kenton signed the lease in his corporate capacity, not personally. Kenton's motion for summary judgment was granted and plaintiff's complaint as to him was dismissed.
In our de novo review of a trial court's grant or denial of summary judgment, we apply the same standard as the trial court. Chance v. McCann, 405 N.J. Super. 547, 563 (App. Div. 2009). Summary judgment is appropriate when "the pleadings, depositions, answers to interrogatories and admissions on file, together with 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). Accord Taylor v. Metzger, 152 N.J. 490, 495 (1998). "'Bare conclusions in the pleadings, without factual support in tendered affidavits, will not defeat a meritorious application for summary judgment.'" Baran v. Clouse Trucking, 225 N.J. Super. 230, 234 (App. Div.) (quoting U.S. Pipe & Foundry Co. v. Amer. Arbitration Ass'n, 67 N.J. Super. 384, 399-400 (App. Div. 1961)), certif. denied, 113 N.J. 353 (1988). In our review, we decide whether a genuine issue of material fact has been presented, and if not, we undertake an independent review of whether the motion judge's application of the law was correct, noting the "interpretation of the law and legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
We are also guided by principles governing contract interpretation, which is a legal question. Celanese Ltd. v. Essex Cnty. Imp. Auth., 404 N.J. Super. 514, 528 (App. Div. 2009). Generally, parties are bound by the contracts they make for themselves. When examining an agreement, the document must be read "as a whole in a fair and common sense manner." Hardy ex. rel. Dowdell v. Abdul-Matin, 198 N.J. 95, 103 (2009). "When the terms of a contact are clear, the court must enforce them as written." E. Brunswick Sewerage Auth. V. E. Mill Assocs., Inc., 365 N.J. Super. 120, 125 (App. Div. 2004). Moreover, we will "'not supply terms to contracts that are plain and unambiguous,'" nor will we improve a contract for the benefit of either party. Petersen v. Twp. of Raritan, 418 N.J. Super. 125, 133 (App. Div. 2011) (quoting Maglies v. Estate of Guy, 193 N.J. 108, 143 (2007)).
On appeal, plaintiff argues the evidence of Kenton's individual liability "is staggering[.]" Citing the lease's preamble, identifying him as a party to the lease, plaintiff concludes Kenton has individual liability as a tenant. Further each rental statement is addressed to "Mr. Dan Kenton, PowerPlace Software, Inc." We disagree.
"[A] corporation is an entity separate and distinct from its principals." Touch of Class Leasing v. Mercedes-Benz Credit of Can., Inc., 248 N.J. Super. 426, 441 (App. Div.), certif. denied, 126 N.J. 390 (1991). Absent fraud, statutory liability or and injustice "officers of corporations are insulated from personal liability for the conduct of the corporation." Macysyn v. Hensler, 329 N.J. Super. 476, 486 (App. Div. 2000). Consequently, an individual who signs a contract will not be personally liable if their execution is as an officer of a corporation. Ibid. See also Baran, supra, 225 N.J. Super. at 235 (holding when an instrument signed by a corporate officer, who affixes his corporate title to his name, is not the responsibility of the individual).
As noted by the motion judge, Kenton's signature was accompanied by his title, CEO. Clearly, Kenton modified the signature line by deleting "President" and inserting CEO. More important, he made these changes on July 25 when he signed the lease. Plaintiff's execution of the lease by its managing member was on July 26, 2008, following Kenton's signature. Plaintiff did not object or insist on Kenton's personal execution of the lease agreement. Moreover, the lease contains no terms discussing individual liability or a personal guarantee.
We conclude, as did the motion judge, Kenton's signature executed the lease on behalf of the corporation and not as an individual. If, as plaintiff contends, it would have not entered the lease without Kenton's personal guarantee, it could have assured that fact, rather than accepting Kenton's modification. We reject plaintiff's contention that the material facts are in dispute and conclude the motion judge's legal decision is consistent with the applicable law. We discern no basis to interfere with the summary judgment dismissal in favor of Kenton.
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