Opinion ID: 691321
Heading Depth: 1
Heading Rank: 8

Heading: estoppel claims

Text: 83 Linan-Faye's final contention is that HACC is precluded from refusing to pay compensation by reason of principles of equitable and judicial estoppel. Linan-Faye argues that HACC could have terminated for convenience in 1988 but that it did not, and it breached a duty of fairness by waiting two years before deciding to terminate. Linan-Faye relies on a single case, M. & O. Disposal Co. v. Township of Middletown, 100 N.J.Super. 558, 242 A.2d 841 (A.D.1967), aff'd, 52 N.J. 6, 242 A.2d 841 (1968), to support its equitable estoppel argument. Additionally, Linan-Faye argues that because HACC asserted in prior judicial proceedings that there would be a defined measure of damages under the termination for convenience clause, HACC is now judicially estopped from arguing that it owes Linan-Faye nothing. 84 We find Linan-Faye's equitable estoppel claim unpersuasive. HACC could have terminated for convenience in 1988, but it also could have pursued completion of the contract according to its terms. HACC's decision to terminate after an inability to agree to such terms does not breach a duty of fairness. Indeed, this termination was within HACC's rights under the contract and, as explained above, the constructive termination for convenience doctrine allows HACC to convert its original termination into a termination for convenience. 85 Moreover, Linan-Faye's reliance on M. & O. Disposal is misplaced. That case involved the question of whether a municipality impliedly ratified a contract for extra work which was outside the scope of contract to dispose of garbage. Id., 100 N.J.Super. at 560, 567, 242 A.2d at 841, 846. In that case, the New Jersey court merely stated the general precept that equitable principles of estoppel will be applied against municipalities where the interests of justice, morality, or common fairness clearly dictate this course. Id. at 567, 242 A.2d at 846. Beyond the obvious fact that the timing problem presented here has almost nothing to do with the ratification issue presented in M. & O. Disposal, Linan-Faye has failed to demonstrate how HACC's exercise of its rights under this contract violates principles of justice, morality, or common fairness. Thus, we find Linan-Faye's equitable estoppel argument unconvincing. 86 Linan-Faye's argument for judicial estoppel is also unpersuasive. Judicial estoppel precludes a party from assuming a position in a legal proceeding inconsistent with one previously asserted to the prejudice of an adverse party. Brown v. Allied Plumbing & Heating Co., 129 N.J.L. 442, 446, 30 A.2d 290, 292 (Sup.Ct.), aff'd 130 N.J.L. 487, 33 A.2d 813 (E. & A.1943); Chattin v. Cape May Greene, Inc., 243 N.J.Super. 590, 620, 581 A.2d 91, 107 (A.D.1990) (citations omitted), aff'd, 124 N.J. 520, 591 A.2d 943 (1991). There is no inconsistency in taking the position that HACC took in prior proceedings. HACC merely argued that the termination for convenience clause provided the defined measure of damages. After the district court decided the difficult question of whether the termination for convenience clause defines the measure of damages, it was not only appropriate, but necessary, for HACC to address the question of what the measure of damages is under that clause. At this later stage, HACC may contend that this clause provides no compensation for Linan-Faye in this instance. The attempt by Linan-Faye to describe a contradiction in HACC's legal position has no force under the facts presented in this case.