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Ameritemps, Inc v. Hainesport Industrial Railroad

September 26, 2012


On appeal from the Superior Court of New Jersey, Law Division, Burlington County, Docket No. DC-10783-10.

Per curiam.


Submitted May 22, 2012

Before Judges Messano, Yannotti and Kennedy.

Plaintiff, Ameritemps, Inc., appeals from a final judgment in the Special Civil Part, following a bench trial, in favor of defendant Hainesport Industrial Railroad, dismissing its complaint for money due on a contract between them. Plaintiff's complaint asserted causes of action based upon a book account, breach of a promise to pay, and quantum meruit. Defendant asserted a counterclaim in which it alleged that plaintiff "failed to provide services and insurance as agreed." The final judgment also dismissed the counterclaim, but defendant has not filed an appeal or cross appeal from that ruling.

We discern the facts from the trial record. Plaintiff is a corporation located in Camden that provides its clients with temporary staff on a contract basis. Defendant is a business entity that runs a "shortline railroad" servicing the Hainesport Industrial Complex.

At some point in 2008, defendant hired three individuals to work as general laborers and paid them on a cash basis. However, these workers may not have been citizens of the United States and Darryl Caplan, one of defendant's principals, became concerned about whether they were "legally permitted to work in the country." He also wanted to be certain that their taxes were paid properly and workers' compensation insurance was in place. Because of the nature of defendant's business, Caplan wanted to be certain that "there were no issues"; and he "did not feel that internally [defendant] had the ability to ensure full compliance." Consequently, defendant decided "to move those employees to an employee leasing type company."

Defendant contacted plaintiff, and Troy Brady, plaintiff's representative, met with another of defendant's principals and went over with him a sample contract and "control sheet." Brady explained the contract terms in detail and left the documents with defendant.

The contract stated on the first page, under the heading "Permanent Placement," that no employee of plaintiff will be hired by the other party "without first paying the permanent placement fee." The contract also stated that "[t]his [c]ontract contains [the] agreement of the parties, also binding are client information on back of staffing control [sheet][.]"

The staffing control sheet is, in effect, a time sheet listing Ameritemps employees assigned to a client. The client was required to fill it out each week and certify the hours worked by each individual. The sheet stated that "[b]y execution of this form . . . client agrees to the terms and conditions on the reverse side . . . ." On the reverse side of the sheet, various terms were listed, including three paragraphs whereby the "client" agreed to pay plaintiff various sums of money if it hired directly any of plaintiff's "[t]emporary employee[s]." Defendant's principal went over the documents with Brady but had no questions about any of the provisions therein.

In April 2008, plaintiff and defendant executed the contract whereby plaintiff agreed to provide to defendant "General Labor" at "$12.00 per hour per person" which rate was to include "all Workers Comp., Payroll, Taxes, and Liability Insurance." Later, at defendant's request, the amount was raised to $12.75 per hour because plaintiff kept $3.75 of that sum for its services, and defendant wanted to insure that the laborers received the full $9.00 per hour that they had received before they were hired by plaintiff and assigned to defendant.

The three individuals that caused concern for defendant were thereafter hired by plaintiff and listed for "payroll purposes" as independent contractors for Ameritemps PA, a Pennsylvania corporation wholly owned by plaintiff. According to plaintiff, defendant wanted the three employees to be engaged as "independent contractors" in order to insure they received payment of $9.00 per hour without deductions for backup withholding. The employees wanted to be listed as independent contractors, as well. Plaintiff agreed to this arrangement because, according to Jesse Proctor, plaintiff's president, "one, the customer requested it; two, they worked for the railroad and that's one of the industries where you can pay employees [as independent contractors] . . . ."

Accordingly, the three individuals signed W-9 forms, certifying they were citizens of the United States not subject to "backup withholding." The three individuals were then paid $9.00 per hour by Ameritemps PA and assigned to work at defendant's facility. They worked an average of sixty hours per week for approximately sixteen weeks. Defendant filled out the staffing control sheets for the three individuals each week and submitted them as directed by plaintiff.

A dispute arose between plaintiff and defendant after a few months. Defendant claimed plaintiff did not properly credit its payments and plaintiff claimed that defendant was behind in paying invoices. Defendant "terminated" the contract on September 22, 2008, and on October 10 issued a check to plaintiff for $8325.75, indicating on the check "pain [sic] in full." This was the outstanding balance due at the time on plaintiff's invoices, and defendant's principal claimed he had reached an ...

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