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Yardley Travel Ltd v. Greg Betar and Donna Betar


July 10, 2012


On appeal from Superior Court of New Jersey, Law Division, Morris County, Docket No. L-853-08.

Per curiam.


Submitted March 26, 2012

Before Judges Sabatino and Ashrafi.

Third-party defendant Merrick Wilson*fn1 appeals from judgment after trial before a jury in favor of third-party plaintiffs Greg and Donna Betar for $61,289.93 plus prejudgment interest and costs awarded by the court totaling $5,843.78. Wilson contends that certain prejudicial trial errors occurred, but primarily, he argues that the trial court erroneously permitted the jury to find him personally liable for breach of a settlement agreement with the Betars that he executed only on behalf of the corporate plaintiff, Yardley Travel Ltd. The Betars cross-appeal from the trial court's denial of their motion to amend their third-party complaint to add claims of fraud. We reject the arguments in both the appeal and the cross-appeal and affirm the judgment.


Yardley Travel Ltd. was a Pennsylvania corporation engaged in the travel business and owned by appellant Wilson's wife, Susan Wilson. In 2006, Yardley hired Greg and Donna Betars' son as a travel agent. The following year, Yardley added a ticket brokerage service to its business, and the Betars' son was given primary responsibility for running that service.

In early January 2008, Susan Wilson discovered that a large number of event tickets had been purchased by unauthorized use of her personal American Express card, Yardley's corporate American Express card, and several credit cards of Yardley's clients. Appellant Wilson investigated the unexplained credit card charges and concluded that the Betars' son had carried out a fraudulent ticket purchase scheme. Wilson calculated a loss of $61,298.92 to Yardley and the credit card holders.

On January 4, 2008, Wilson confronted the son, who immediately left the office complaining of health problems. Wilson was not able to contact him after he left. On the same day, Wilson contacted the police in Lower Makefield Township, Pennsylvania, and relayed his belief that the Betars' son had engaged in credit card fraud and theft of the tickets.

Within days, Wilson contacted Greg and Donna Betar, who lived in Oak Ridge, New Jersey. Donna Betar testified at trial that Wilson and his son, Matt Wilson, left threatening messages on her answering machine about her son's potential criminal liability. She testified that the Wilsons told her of an imminent meeting with the police scheduled for the afternoon of January 7, 2008. They offered to cancel the meeting and withdraw their police complaint if the Betars reimbursed Yardley for the losses attributed to their son. In his testimony,

Wilson stated he did not recall whether he agreed not to press charges if the Betars paid for the loss.

After many phone conversations, Donna Betar reached an agreement with Wilson to make payment to avoid criminal and other accusations against her son. At trial, Wilson acknowledged that an agreement was reached but could not recall the substance of the agreement. Donna Betar testified that the agreement was that the Betars would pay Yardley $61,289.93, and in exchange all claims or charges before the police, Yardley's insurance carrier, and American Express would be withdrawn and no further action would be taken against any of the Betars.

On January 7, 2008, the Betars went to Yardley's office in Yardley, Pennsylvania, to complete the settlement. The Betars and Wilson had each prepared a written document for signature by the other party to the oral agreement. The relevant terms of Wilson's settlement document provide:

[The Betars] have given Yardley Travel Ltd. a certified check in the amount of $61,298.92 as consideration to pay for the expenses of the alleged theft, alleged criminal activities, and losses perpetrated by your son . . . against Yardley Travel Ltd. and Yardley Tickets, which have been discovered to date and are outlined in the attached spreadsheet . . . . Yardley Travel Ltd., at your request and as consideration to you, will notify the Lower Makefield Township police department, Selective Insurance Company, and American Express Co. that $61,298.92 has been received to cover the alleged losses . . . .

[The Betars] recognize that the . . . payment is only for the alleged criminal activities that have been discovered and identified as of January 6, 2008 and outlined on the attached itemized spreadsheet . .

The Betars' handwritten settlement document provides:

The checks in the total amount of $61,289.93 are to reimburse Yardley Travel in full for the alleged fraudulent credit card charges that were done by [the Betars' son].

This payment is being made after the verbal agreement between Donna Betar and Rick Wilson and Matt Wilson via telephone stating that upon receipt of the agreed amount . . . Yardley Travel would guarantee all claims and charges would be dismissed with American Express, the Insurance Company, and the police department. . . .

This payment now makes Yardley Travel whole and fully compensated and allows no further action to be taken against [the Betars' son], Donna Betar, and Gregory Betar.

The parties simultaneously signed the two documents, and the Betars made the promised payment by certified checks payable to "Yardley Travel."*fn2 The Betars agreed to sign Wilson's settlement document only on the condition that Wilson sign their settlement document. Despite the contradictory terms of the two documents as to the scope of matters covered by the settlement, the parties acknowledged at trial that both documents are part of the settlement agreement.

Wilson testified that he signed the settlement documents on behalf of Yardley in his capacity as vice-president of the corporation. His signature on both agreements is accompanied by the title "Vice President, Yardley Travel Ltd." However, Wilson produced no documentary evidence at trial to verify his status as an officer of the corporation, and he conceded at trial that there was no formal appointment of him as vice-president. In another document, Wilson indicated he was Yardley's president, and in yet other documents, he had no title related to the corporation.

A month after the settlement agreement was executed, Wilson learned that the Betars' son had arranged an October 2007 trip to Las Vegas for his parents without receiving payment. Yardley sent the Betars a demand letter for $2,342.30 for the Las Vegas trip. The Betars refused to pay the amount demanded, taking the position that others owed part of that sum. Wilson then contacted the local police department and accused the Betars of conspiring in their son's credit card scheme.

Wilson continued to communicate with the police in furtherance of criminal proceedings against the son in Bucks County, Pennsylvania. He did not withdraw the criminal complaint he had filed earlier because, he said, he felt morally obligated to cooperate with the police and the prosecutor and the settlement agreement did not apply to additional losses he discovered.*fn3

After the agreements were executed, Susan Wilson contacted American Express to file a fraud complaint. Also after the agreements were executed, Wilson contacted Yardley's insurer to file a claim for losses related to the credit card scheme.

On February 15, 2008, Wilson filed a Small Claims complaint on behalf of Yardley in the Superior Court of New Jersey, Special Civil Part, to recover $2,342.30 allegedly owed by the Betars for the Las Vegas trip. The Betars filed a counterclaim against Yardley and a third-party complaint against Wilson alleging that he breached the settlement agreement. As damages, the Betars sought a refund of the settlement payment they had made to Yardley. Because the relief sought exceeded the jurisdictional limit of the Special Civil Part, the matter was transferred to the Law Division pursuant to Rule 6:4-1(c).

While trial was pending, Yardley filed for Chapter 7 bankruptcy protection, and the corporation ceased to exist on April 4, 2009. As a result, the Betars' counterclaim for breach of contract against Yardley was dismissed.

The Law Division conducted a four-day trial in June 2010 on Yardley's Small Claims complaint and the Betars' third-party complaint against Wilson. At the close of evidence, the Betars moved to dismiss Yardley's complaint, arguing that Wilson lacked capacity to sue on Yardley's behalf. They also moved to amend their third-party complaint to add fraud claims against Wilson based on his testimony at trial. Wilson moved to dismiss the Betars' third-party complaint, arguing no reasonable jury could conclude that he agreed to be bound personally by the settlement agreement. The court denied all three motions.

In its final charge to the jury, the court gave instructions as to the limited liability of a corporate officer undertaking acts on behalf of the corporation. The jury found that the Betars owed Yardley $300 for the Las Vegas trip. As to the third-party complaint, the jury found that "a contract was formed between the Betars and Merrick Wilson on the subject of reimbursement for the alleged thefts," that Wilson breached the contract, and that the Betars were entitled to damages in the amount of $61,289.93. The court entered judgment on July 15, 2010, for the amounts found by the jury plus prejudgment interest.


Four issues are presented by Wilson's appeal and the Betars' cross-appeal: (1) whether there was sufficient evidence to permit the jury to find that Wilson was bound personally by the settlement agreement; (2) whether testimony that Yardley went out of business prejudiced Wilson; (3) whether the court erred by allowing the jury to hear the answering machine messages left by Wilson and his son for the Betars; and (4) whether the court erred in denying the Betars' motion to amend their third-party complaint to add claims for fraud.


To the extent Wilson may be challenging the jury verdict as against the weight of evidence, Rule 2:10-1 precludes the argument on appeal because he did not move for a new trial on that ground. In the absence of a motion for a new trial raising the issue, an appellate court will usually not consider an appeal challenging the jury verdict as against the weight of the evidence. Ogborne v. Mercer Cemetery Corp., 197 N.J. 448, 462 (2009); Gebroe-Hammer Assocs., Inc. v. Sebbag, 385 N.J. Super. 291, 295 (App. Div.), certif. denied, 188 N.J. 219 (2006).

We view Wilson's appeal as alleging error in the trial court's denial of his motion to dismiss the Betars' claims at the close of evidence pursuant to Rule 4:37-2(b). He argued that he was merely an agent of Yardley when he negotiated the settlement and signed the documents, and that there was no proof he undertook to be personally bound by Yardley's agreement with the Betars. The trial court denied Wilson's motion because it found sufficient evidence for reasonable minds to differ as to whether Wilson had agreed to be a party to the oral agreement negotiated over the telephone and whether Wilson was acting exclusively as an agent of Yardley when he signed the settlement documents.

Our standard of review on an appeal from denial of a motion to dismiss under Rule 4:37-2(b) is whether the evidence, together with all legitimate inferences, could sustain a judgment in favor of the party opposing the motion, here, the Betars. See R. 4:40-1; Besler v. Bd. of Educ. of W. Windsor-Plainsboro Reg'l School Dist., 201 N.J. 544, 572 (2010); Potente v. Cnty. of Hudson, 187 N.J. 103, 111 (2006). We are "not concerned with the worth, nature or extent (beyond a scintilla) of the evidence, but only with its existence." Dolson v. Anastasia, 55 N.J. 2, 5-6 (1969). In reviewing the sufficiency of the evidence, we will accept as true all evidence supporting the third-party complaint and accord that evidence all favorable inferences. Ibid. If reasonable minds could differ, the denial of the motion must be affirmed. Ibid. Under this standard of review, we will not re-weigh witness credibility. Alves v. Rosenberg, 400 N.J. Super. 553, 565-66 (App. Div. 2008); Cavanaugh v. Skil Corp., 331 N.J. Super. 134, 176 (App. Div. 1999), aff'd, 164 N.J. 1 (2000). That function belonged to the jury.

Wilson contends the evidence could not sustain the finding that he was a party to the agreement because he was a disclosed agent of Yardley and therefore not liable for Yardley's contract of settlement, and because he was an officer of Yardley and the circumstances do not justify piercing the corporate veil. We can dispense quickly with the argument regarding piercing the corporate veil because the jury's verdict rests on the Betars' claim that Wilson agreed to be bound personally by the terms of the agreement.

We can also dispense with discussion of Wilson's choice-oflaw contentions because the law of personal liability for corporate actions is not different in New Jersey and Pennsylvania. See Gantes v. Kason Corp., 145 N.J. 478, 484 (1996); Veazey v. Doremus, 103 N.J. 244, 248 (1986). The law in both states is that a corporation acts only through its agents, and the personal liability of an agent for a corporation's contract is determined under the common law of agency. African Bio-Botanica, Inc. v. Leiner, 264 N.J. Super. 359, 363 (App. Div.) (citing Looman Realty Corp. v. Broad St. Nat'l Bank of Trenton, 32 N.J. 461, 476-79 (1960)), certif. denied, 134 N.J. 480 (1993); see Bucks v. Buckwalter, 215 A.2d 625, 627 (Pa. 1966). In both jurisdictions, the general rule is that "[u]nless the parties agree otherwise . . . an agent who contracts on behalf of a fully disclosed principal is not personally liable on the contract." African Bio-Botanica, supra, 264 N.J. Super. at 363-64 (citing Looman, supra, 32 N.J. at 476-78); see Revere Press, Inc. v. Blumberg, 246 A.2d 407, 409 (Pa. 1968); Pa. Gas & Water Co. v. Nenna & Frain, Inc., 467 A.2d 330, 336 (Pa. Super. Ct. 1983); accord Restatement (Third) of Agency § 6.01 (2005).

When a claimant contends an agent agreed to be a party to a contract, that party "has the burden of showing a manifestation of assent by the agent . . . ." Restatement, supra, § 6.01 comment d(1); e.g., Leutwyler v. Royal Hashemite Ct. of Jordan, 184 F. Supp. 2d 303, 309 (S.D.N.Y. 2001). "An agent is not a party . . . if any portion of the parties' writing makes clear that the agent acts solely in a representative capacity . . . ." Restatement, supra, § 6.01 comment d(1). "The manner in which an agent's name appears in a contract is often relevant to establishing . . . whether the agent has manifested assent to become a party to the contract." Ibid. However, "[u]sing language that simply describes a person as an agent is insufficient to indicate that the person acts only in a representative capacity . . . ." Ibid. (emphasis added). "The nature of the parties' contract may also establish whether an organizational executive agreed to be individually liable." Id. at comment d(2).

Wilson admitted he understood and assented to the terms of the Betars' handwritten document after he had entered into an earlier oral agreement. The Betars' document provides that they were making payment in reliance upon "the verbal agreement between Donna Betar and Rick Wilson and Matt Wilson via telephone." Donna Betar testified she believed as a result of the telephone conversations that her agreement was with the Wilsons as well as with Yardley. It makes little sense in the factual circumstances presented that the Betars would agree to pay $61,289.93 without an undertaking by the Wilsons not to do in their personal capacities what they could not do on behalf of Yardley, that is, continue pursuit of criminal or fraud charges against any of the Betars.

Wilson's signature on both settlement documents included the title "Vice President, Yardley Travel." Federal and New York courts have held that an officer cannot negate express terms indicating personal liability by simply adding his or her title to the signature line of the agreement. E.g., Am. Mgmt. Corp. v. Dunlap, 784 F. Supp. 1245, 1250-51 (N.D. Miss. 1992); PNC Capital Recovery v. Mech. Parking Syss., 726 N.Y.S.2d 394, 397 (N.Y. App. Div. 2001), appeal dism., 781 N.E.2d 911 (N.Y. 2002); Chem. Bank v. Masters, 574 N.Y.S.2d 754, 755 (N.Y. App. Div. 1991); see also In re Estate of Duran, 692 A.2d 176, 179 (Pa. Super. Ct. 1997) ("The mere presence of the corporate name above the signature line does not exclusively indicate corporate liability.").

Wilson's reliance on the designation of his purported title is undermined by the fact that the signing occurred after the oral agreement had been reached and also by the nature of the agreement itself. See Chem. Bank, supra, 574 N.Y.S.2d at 755. The disputed factual issue of whether Wilson signed the agreement only on behalf of the corporation or also on his own behalf was for the jury to determine based on all the evidence.

The jury could take into consideration the particular nature of the agreement to conclude that Wilson had personally agreed not to pursue criminal or other fraud charges against any of the Betars provided that they made payment to Yardley of the amount then known to have been lost, which they did. The jury could also consider the fact that Susan Wilson had personally incurred potential liability because her own American Express card had been used in furtherance of the fraudulent ticket purchase scheme and therefore could seek charges against the Betars' son on her own behalf. The jury could conclude that the duties under the settlement agreement did not fall entirely within the scope of Wilson's capacity as a purported corporate officer.

In his brief, Wilson fails to undermine the evidence favoring the Betars' view of the agreement or to reconcile the terms of the conflicting settlement documents. Instead, he points to evidence indicating the parties' intent that Yardley would be bound by the contract, for example, Donna Betar's testimony to that effect, the use of Yardley letterhead for his settlement document, the signing of the documents at Yardley's office, and the designation of Yardley as the payee on the settlement checks. But Wilson does not explain why evidence that Yardley was a party to the agreement demonstrates that he was not a party as well. See Sherman v. Josephson, 44 N.J. Super. 419, 426-27 (App. Div. 1957) (it does not follow as "a necessary inference" that because the subject matter of a contract was owned by the corporation that the officer was only acting in the capacity of an agent of the corporation (quoting Sadler v. Young, 78 N.J.L. 594, 596 (E. & A. 1910))).

Wilson testified that he is an officer of five other corporations and is familiar with the execution of corporate contracts. Yet he did not follow the best practice under these circumstances by signing in a manner that clearly indicates he was acting only in a representative capacity, such as, "Merrick Wilson for Yardley Travel" or "Yardley Travel by Merrick Wilson," Restatement, supra, § 6.01 comment d(1); see Sherman, supra, 44 N.J. Super. at 426 (affirming denial of motion to dismiss because agent "signed individually . . . without any qualification or designation denoting agency"). Wilson's argument is also undermined by his inability to produce any corroborating evidence at trial to support his claim that he was in fact an officer of the corporation. See Bennett v. T. & F. Distrib. Co., 117 N.J. Super. 439, 441-44 (App. Div. 1971), certif. denied, 60 N.J. 350 (1972) (agency is generally a question of fact for the jury).

Ultimately, the outcome of this case turned on the jury's understanding of the conflicting terms of the settlement documents as developed through the testimony of Wilson and Donna Betar. Where a jury's verdict turns on witness credibility, we defer to the jury's determination.

In sum, we reject Wilson's argument that he was entitled to dismissal of the third-party complaint because he was not personally bound by the settlement agreement.


Citing Brodsky v. Grinnell Haulers, Inc., 362 N.J. Super. 256, 265-66 (App. Div. 2003), aff'd, 181 N.J. 102 (2004), Wilson contends he was prejudiced when the jury learned that Yardley was no longer "financially viable" because that knowledge may have caused the jury to shift responsibility to him.

The trial transcript alludes to an in limine ruling instructing the Betars' attorney not to reveal Yardley's bankruptcy. On direct examination, Wilson's attorney asked him what his involvement was with Yardley. Wilson responded: "At this moment in time . . . Yardley Travel Limited doesn't exist." During cross-examination, the Betars' attorney asked Wilson: "When did the company cease to exist?" Wilson's attorney objected, but the court overruled the objection because the question did not seek to reveal Yardley's bankruptcy or insolvency.

In Brodsky, an automobile negligence case, we stated that efforts to focus the jury "on irrelevant and prejudicial facts, such as a party's financial status or insurance status . . . may constitute reversible error" when the statements "reinforc[e] in the jurors' minds the need to shift sufficient blame to the apparently-solvent defendants . . . ." Id. at 265-66. In this case, there was no reference to the solvency or insurance status of Yardley. Moreover, Wilson himself informed the jury that Yardley no longer existed at the time of trial.

There was no abuse of discretion in the court's permitting on cross-examination a question to establish the time at which Yardley went out of business. See Estate of Hanges v. Met. Prop. & Cas. Ins. Co., 202 N.J. 369, 382 (2010).


Wilson contends the trial court erred in allowing the jury to listen to recorded messages left by him and his son on the Betars' answering machine. He contends the Betars recorded those messages in violation of the "Pennsylvania Wiretap Act," which he does not cite in his brief.

Wilson's attorney objected at trial to admission of the recordings, arguing they were cumulative and inflammatory. The court overruled the objections and allowed the jury to hear the messages because they were relevant to the terms of the oral agreement between Wilson and the Betars.

The short answer to Wilson's contention on appeal is that Pennsylvania's Wiretapping and Electronic Surveillance Control Act, 18 Pa. C.S.A. §§ 5701-5782, even if applicable to a message on an answering machine located in New Jersey, does not bar voluntary recordings left on a telephone answering machine or on voice mail. The persons who left the messages, Wilson and his son, Matt Wilson, knew they were leaving recorded messages and therefore consented to the recordings. See id. at § 5704(4).


In their cross-appeal, the Betars contend the trial court erred in denying their motion pursuant to Rule 4:9-2 to amend the pleadings at the close of evidence to add claims of fraud. They pointed to Wilson's testimony at trial that his motivation in signing their handwritten settlement document was to induce them to make the payment. The court acknowledged New Jersey's liberal approach to amending pleadings but denied the Betars' motion because there was insufficient evidence to establish the "material misrepresentation" element of fraud.

"Rule 4:9-2 requires that motions for leave to amend be granted liberally." Kernan v. One Wash. Park Urban Renewal Assocs., 154 N.J. 437, 456 (1998). The court must balance "undue delay or prejudice from the amendment" against "the overriding need to seek justice." Adron, Inc. v. Home Ins. Co., 292 N.J. Super. 463, 475-76 (App. Div. 1996).

The standard of review for denial of a motion to amend in these circumstances is abuse of discretion. See Kernan, supra, 154 N.J. at 457. We find no abuse of discretion in the trial court's ruling, especially since the Betars prevailed in the jury's verdict without the requested amendment.


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