Opinion
DOCKET NO. A-4320-12T1
05-21-2014
BUDD LARNER, P.C., Plaintiff-Appellant, v. FRANK GABRIEL, Defendant-Respondent, and URSULA TORELLA, Defendant.
Steven M. Resnick argued the cause for appellant (Budd Larner, P.C., attorneys, David Scott Mack, on the brief). Joshua H. Raymond argued the cause for respondent (Trenk, DiPasquale, Della Fera & Sodono, P.C., attorneys; Mr. Raymond, of counsel; Amanda Graham, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Messano and Lisa.
On appeal from the Superior Court of New Jersey, Law Division, Essex County, Docket No. L-2234-12.
Steven M. Resnick argued the cause for appellant (Budd Larner, P.C., attorneys, David Scott Mack, on the brief).
Joshua H. Raymond argued the cause for respondent (Trenk, DiPasquale, Della Fera & Sodono, P.C., attorneys; Mr. Raymond, of counsel; Amanda Graham, on the brief). PER CURIAM
Plaintiff-law firm, Budd Larner, P.C., appeals from the grant of summary judgment dismissing its complaint against defendant Frank Gabriel. Plaintiff contends that because genuine disputes of material facts existed, the motion judge erred in concluding defendant was entitled to judgment as a matter of law. We have considered the arguments raised in light of the record and applicable legal standards. We affirm.
The complaint also named Ursala Gabriel as a defendant. Plaintiff subsequently dismissed with prejudice the complaint against her.
I.
Plaintiff's complaint alleged that it was retained to represent defendant's son, Benjamin, in a matrimonial dispute. Plaintiff further claimed that defendant "orally promised to pay . . . all fees and disbursements for the services . . . rendered on behalf of [his] son[,]" and that defendant "had a personal interest in the outcome of the matrimonial dispute . . . ." The complaint stated that defendant had paid $17,500 to plaintiff, pursuant to an unexecuted retainer agreement between the firm and Benjamin that was attached to the complaint. Plaintiff further alleged that defendant owed the firm an unpaid balance of $280,290.37.
We refer to members of the same family by their first names as necessary to avoid confusion. We apologize for this informality.
In his answer, defendant specifically denied guaranteeing payment of Benjamin's legal fees, and alternatively, he asserted that as to "any alleged oral guaranty," plaintiff's claims were "barred by the Statue of Frauds." Defendant also averred that the debt to plaintiff was discharged in Benjamin's Chapter 7 Bankruptcy proceeding. Discovery ensued before defendant moved for summary judgment.
In support of defendant's summary judgment motions, Benjamin certified that in July 2011, he filed a voluntary Chapter 7 Bankruptcy petition and his debts were discharged on April 10, 2012. The record reveals that the bankruptcy petition listed the outstanding balance of plaintiff's invoices as one of Benjamin's debts. Plaintiff's complaint was filed on March 14, 2012.
The motion record revealed the following. It was undisputed that defendant paid $17,500 to plaintiff in three payments, the last of which was made in April 2010. However, Benjamin asserted that defendant never promised to pay his legal fees and never executed a guaranty of payment. Benjamin also claimed that he never executed plaintiff's retainer agreement.
The record contains an order dated August 5, 2011, entered by the Family Part judge in Benjamin's divorce case. The judge denied plaintiff's motion for an attorney's lien, see N.J.S.A. 2A:13-5, based, in part, on the absence of any executed retainer agreement between plaintiff and Benjamin.
Attached to Benjamin's certification in support of defendant's motion were two unsigned letters from Steven M. Resnick, a member of plaintiff's firm, requesting payment and referencing an agreement by Benjamin's parents to pay his legal fees. Benjamin denied the letters were ever sent to his father, and defendant disputed receiving a letter, which was identical to those sent to Benjamin, but addressed to defendant. Benjamin executed an acknowledgment of his obligation to pay plaintiff's invoices on one of those letters, but not before he emailed plaintiff clearly advising that defendant was not obligated to the law firm.
Robert G. Rosenberg, defendant's former attorney, stated that, with the exception of the first meeting Benjamin had with plaintiff at which defendant was present, he (Rosenberg) represented defendant at all meetings thereafter. Rosenberg never had any discussions regarding defendant's alleged promise to pay Benjamin's legal fees. Rosenberg also stated that defendant never expressed concerns about seeing his grandchildren during Benjamin's divorce proceedings or thereafter.
Defendant claimed that he never agreed, in writing or orally, to be responsible for his son's legal expenses. Defendant noted that plaintiff never sent him any invoices or copies of letters seeking payment sent to Benjamin, and defendant never "personally benefit[ted]" from the matrimonial litigation.
In opposition, Barry L. Baime, of counsel to plaintiff, certified that on a number of occasions when he met with Benjamin, defendant and Rosenberg were also present and involved in trial strategy. Baime claimed that he personally asked defendant for payment toward the outstanding balance and defendant "never denied personal responsibility." Baime also alleged that defendant was concerned about the financial impact of pendente lite support orders upon his son and the family jewelry business, which defendant had purchased from his son. Benjamin was employed at the jewelry store.
In a separate certification, Resnick claimed that defendant was very concerned about the pendente lite support order and its financial impact on Benjamin. Resnick stated that he asked defendant how Benjamin would pay for the services rendered, and defendant told him "'not to worry.'" Resnick "was left with a clear understanding that [defendant] would pay for the services rendered by [plaintiff]."
At oral argument on the motion, defendant contended that there was insufficient proof that he orally promised to pay his son's legal expenses. Alternatively, defendant argued that any oral promise was unenforceable pursuant to the Statute of Frauds (SOF). See N.J.S.A. 25:1-15 ("A promise to be liable for the obligation of another person, in order to be enforceable, shall be in a writing signed by the person assuming the liability or by that person's agent.").
Plaintiff countered by arguing that a genuine factual dispute existed as to whether defendant made an oral promise to guarantee payment of his son's legal bills. It also argued that defendant's oral promise was as an exception to the SOF, because the leading object of defendant's promise was his own business and family interests. See Schoor Assoc., Inc. v. Holmdel Heights Constr. Co., 68 N.J. 95, 101-02 (1975) ("[W]hen the leading object of the promisor is to subserve some interest or purpose of his own, notwithstanding the effect is to pay or discharge the debt of another, his promise is not within the [SOF].") (citation omitted).
After considering oral argument, the motion judge observed that plaintiff waited until after Benjamin filed for bankruptcy before ever serving notice upon defendant or copying him with the demands for payment served on Benjamin. Nevertheless, the judge found whether defendant orally promised to pay Benjamin's legal fees presented a genuine disputed fact.
The judge carefully and thoroughly reviewed precedent involving the SOF. He found the record failed to demonstrate that defendant's "leading purpose" in making the disputed oral promise was a concern for the financial success of the jewelry business. He also rejected plaintiff's argument that defendant's "leading purpose" was to secure visitation time with his grandchildren. The judge found it was mere "conjecture" that defendant's "main and leading purpose" in making any oral promise to pay was personal in nature, rather than simply "helping his son in dealing with his divorce and paying his attorney's fees." The judge granted defendant's motion and this appeal followed.
II.
"In an appeal of an order granting summary judgment, appellate courts 'employ the same standard [of review] that governs the trial court.'" Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010) (alteration in original) (quoting Busciglio v. DellaFave, 366 N.J. Super. 135, 139 (App. Div. 2004)). We first determine whether the moving party has demonstrated there were no genuine disputes as to material facts. Atl. Mut. Ins. Co. v. Hillside Bottling Co., Inc., 387 N.J. Super. 224, 230 (App. Div.), certif. denied, 189 N.J. 104 (2006).
[A] determination whether there exists a "genuine issue" of material fact that precludes summary judgment requires the motion judge to 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 v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995).]
We then decide "whether the motion judge's application of the law was correct." Atl. Mut. Ins. Co., supra, 387 N.J. Super. at 231. "We review the law de novo and owe no deference to the trial court . . . if [it has] wrongly interpreted a statute." Zabilowicz v. Kelsey, 200 N.J. 507, 512 (2009) (citations omitted).
Before us, plaintiff essentially reiterates its argument that defendant personally benefitted from the firm's representation of Benjamin. It notes that Benjamin was able to continue working at the jewelry business, described on the store's website as a long-standing family enterprise started by defendant. Plaintiff also contends that defendant's personal interests were served because defendant believed Benjamin's wife was intentionally hurting his son, and defendant was concerned about her ability to influence how often he would see his grandchildren. While either of these benefits to defendant may have been incidental to plaintiff's representation of Benjamin, we agree with the motion judge. Plaintiff failed to raise a genuine factual dispute that either purpose was the "leading object" of defendant's oral promise to pay plaintiff's billings, if indeed one was made.
In Schoor, supra, the plaintiffs contended that Alan Sugarman, who owned approximately eighteen percent of the defendant-company's stock and "at all relevant times acted as its attorney," orally promised to pay for the plaintiffs' continued services. 68 N.J. at 98. Among other things, in finding for the plaintiffs, the trial judge concluded that Sugarman "had a substantial financial interest" in the success of the defendant's development project. Id. at 100. We reversed, concluding that the oral promise to pay was unenforceable under the SOF. Ibid.
In reversing, the Court recognized that Sugarman's oral promise to pay the corporation's bills could be enforceable as an exception to the SOF under the "'leading object or main purpose rule.'" Id. at 101-02 (quoting 2 Corbin on Contracts § 366, at 273-74 (1950)). As the Court explained:
Whether or not the [SOF] will apply is . . . to depend upon whether this consideration was mainly desired for the promisor's benefit or for the benefit of the original debtor. In applying this rule the finder of fact must examine all circumstances bearing upon the transaction, the relationship of the parties to one another and endeavor to discern the intent, purpose and object of the promisor.The Court concluded that Sugarman's "substantial pecuniary and business interest . . . furthered" by his oral promise to pay the corporation's debts made it "abundantly clear" that the consideration was extended "mainly . . . for his personal benefit." Id. at 106.
[Id. at 105.]
We applied "the Schoor exception to the [SOF]" in Walder, Sondak, Berkeley, & Brogan v. Lipari, 300 N.J. Super. 67, 78 (App. Div. 1997). There, the plaintiff-law firm sued its former client, at the time the mayor of Passaic, and two closely-held corporations in which he retained "dominant management and operational control." Id. at 70. The evidence at trial revealed that the plaintiff performed some services for the defendant corporations, and that the corporations paid some of the bills for services rendered to Lipari. Id. at 72-73. Additionally, Lipari told the plaintiff that the corporations would pay his bills. Id. at 73.
We took note of the trial testimony given by two of Lipari's family members, who stated that
the continued association of Lipari with [the] defendants' business in the minds of some of their customers gave [the] defendants a reason to help Lipari fight potential convictions that would harm their reputation and induce some customers to stop doing business with them.We also observed that the jury specifically found "the leading object or main purpose of the promise to pay Lipari's legal bills was to benefit [the] defendants and was of little or no benefit to Lipari." Id. at 78-79 (internal quotation marks omitted). We affirmed the trial judge's denial of the defendants' motion for judgment notwithstanding the verdict or for a new trial. Id. at 79.
[Id. at 78.]
The parties have brought two unpublished cases to our attention, Marshall v. Burke, No. A-1858-05 (App. Div. May 24, 2007) (slip op. at 25), and Atl. City Prof'l Baseball Club, Inc. v. Rodman, A-3265-05 (App. Div. Aug. 1, 2007) (slip op. at 10,12). In both, we concluded that the oral promise to pay was enforceable under the "leading object" or "main purpose" exception to the SOF. Neither decision is precedential, see Rule 1:36-3, and both present factual circumstances that are distinguishable from this case.
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In this case, the motion judge correctly noted that plaintiff failed to produce any evidence that the leading object or main purpose of defendant's oral promise was to "improve his business." As the judge explained,
There's nothing presented where you can make a conclusion based on [defendant's] finances[,] meaning what kind of business was being done, what he was paying himself, what he was paying his son, what was the money . . . his son was drawing out of the business, what was he doing at it. All we know is that the business was in debt. So you had a business that wasn't making any money and it's alleged that [defendant's] primary purpose was, if he only pays for his son's divorce, which has nothing directly to do with the business, the business would make money.The judge similarly concluded that there was "not sufficient credible evidence for a fact finder to draw the conclusion that when [defendant] made the alleged promise[,] . . . what was paramount and primary in his mind was that . . . [he was] not going to see [his] [grand]kids."
. . . .[A] fact finder could not make reasonable inferences that have to be made from the facts that the major and leading object of [defendant], if he did promise to pay for attorneys' fees[,] that what was more in his mind, what could be considered reasonably that you can draw the conclusion, he was concerned that . . . he needed his son to make money for the business. . . .
. . . .[I]t's just too much of a leap and it just becomes conjecture and speculative that you could say [that was] the main and leading purpose, greater than helping his son in dealing with his divorce and paying his attorneys fees. . . .
Having thoroughly reviewed the record, we agree substantially with the motion judge's analysis. Summary judgment dismissing plaintiff's complaint was properly granted.
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF APPELLATE DIVIDION