Opinion ID: 3013538
Heading Depth: 2
Heading Rank: 2

Heading: Baer’s Quasi-Contract Claim

Text: Our rejection of Baer’s implied-in-fact contract claim does not preclude him from recovering on his quasi-contract claim and thus in view of the district court’s disposition of that claim we consider when the statute of limitations started running on it. This inquiry has two parts: (1) application of the discovery rule; and (2) whether the district court erred in disregarding Baer’s certification in opposition to Chase’s motion for summary judgment, particularly when it is clear that evidence in the record corroborated the certification. The court disregarded the certification on the grounds that it conflicted with Baer’s prior deposition testimony. This statute of limitations inquiry is critical as the district court did not reject the quasi-contract claim on the merits, and there is no doubt that in an appropriate case, depending on the facts, that a party may recover on a quasi-contract 16 claim even if there was no actual contract. If, in fact, Baer’s deposition was accurate, everything to which he claims entitlement for compensation had been completed by the end of October 1995, some six years and seven months before he filed this lawsuit. In that circumstance, as we explain below, the district court would have held correctly that the New Jersey statute of limitations barred Baer’s quasi-contract claim unless the discovery rule postponed the commencement of the limitations period. But the deposition testimony may have been incomplete as there is evidence in the record refuting the portion of it indicating that Baer’s last rendition of services was in October 1995, as it is undisputed that Baer sent a letter to Chase on February 10, 1997, critiquing Chase’s early screenplay of The Sopranos. Indeed, this letter was already in the record at the time of the deposition. In addition, Baer corrected the “misstatement” in his deposition by reference to the “undisputed facts that were already in evidence” in his certification in opposition to Chase’s motion for summary judgment. Preliminarily on the statute of limitations issue we observe that under New Jersey law, non-personal injury actions involving monetary damages must be “commenced within 6 years after the cause of any such action shall have accrued.” N.J. Stat. Ann. § 2A:14-1 (West 2000). Moreover, there is no dispute between the parties that the six-year statute of limitations governs quasi-contract claims. See Kopin v. Orange Prods., Inc., 688 A.2d 130, 140-41 (N.J. Super. Ct. App. Div. 1997). The initial issue here, however, is an inquiry into when the statute started to run. Baer challenges the district court’s holding that a quasicontract claim “accrued, if at all” for the purposes of statue of limitations, when Baer rendered his final services in October 1995. Baer, 2004 WL 350050, at . Baer asserts that “the Court did not address Plaintiff’s contention that the discovery rule should be applied and as a result the cause of action did not accrue until The Sopranos first aired on January 10, 1999.” Appellant’s br. at 58. In New Jersey as elsewhere “[t]he discovery rule postpones the commencement of a cause of action until a Plaintiff knows, or should have known, of facts which establish that an injury has occurred, and that fault for that injury can be attributed to another.” Riemer v. St. Claire’s Riverside Med. Ctr., 691 A.2d 1384, 1388-89 (N.J. Super. Ct. App. Div. 1997) (citing Lynch v. Rubacky, 424 A.2d 1169, 1171 (N.J. 17 1981) ( “[The rule] provides that in an appropriate case a cause of action will be held not to accrue until the injured party discovers, or by the exercise of reasonable diligence and intelligence should have discovered that he may have a basis for an actionable claim . . . (or) knows or has reason to know that he has a right of redress.”)). Baer, however, does not cite any New Jersey decision applying the discovery rule to delay the time when the statute of limitations begins to run on a quasi-contract claim.4 Moreover, while most jurisdictions have not ruled explicitly on whether the discovery rule should apply in quantum meruit cases, those that have addressed the issue have chosen not to utilize the discovery rule, but rather to employ a “last rendition of services” test. Thus, in Rabinowitz v. Mass. Bonding & Insurance Co., 197 A. 44, 47 (N.J. 1938), the court used a last “rendition of services” calculation in an unjust enrichment claim. Additionally, the court in Kopin, 688 A.2d at 140, cited a New York case granting summary judgment predicated on the statute of limitations in a quantum meruit case in which there was a failure of proof as to when the plaintiff completed his performance, Wint v. Fields, 576 N.Y.S.2d 266 (N.Y. App. Div. 1991). See also GSGSB, Inc. v. New York Yankees, 862 F. Supp. 1160, 1171 (S.D.N.Y. 1994) (“[A] cause of action for quantum meruit begins to run when the final 4 The only case that Baer cites purporting to apply the discovery rule to a quasi-contract claim is a New York case, German v. Pope John Paul, 621 N.Y.S. 311 (N.Y. App. Div. 1995); see Appellant’s br. at 59 (“[T]he Court expressly held that the discovery rule is applicable to quasi contract claims.”). In German, the plaintiff brought an action against the Pope and others to recover on a tort claim and for breach of contract in connection with membership as a priest within a religious community. The trial court barred his claim, basing its statute of limitations determination on the erroneous conclusion that the plaintiff had resigned from the priesthood in January 1987. The appellate division noted that, in fact, the plaintiff became aware of the alleged improprieties within the religious community that gave rise to his causes of action for unjust enrichment in 1965 or 1966, some 27 years before he commenced the action and therefore held that the trial court properly dismissed the quasicontract claim. To the extent that German is applicable to the discovery rule at all, it applied the rule to invalidate rather than sustain a quasicontract claim. In the circumstances, German hardly provides us with a reason to predict that the New Jersey Supreme Court would apply the discovery rule to toll the accrual of a quasi-contract claim under New Jersey law. 18 service has been performed.”) (citing Kramer, Levin, Nessen, Kamin & Frankel v. Aronoff, 638 F. Supp. 714, 722 (S.D.N.Y. 1986)); Martin v. Camp, 114 N.E. 46 (N.Y. 1916); County of Broome v. Board of Educ., 317 N.Y.S.2d 486, 489 (N.Y. Sup. Ct. 1971). Baer’s rationale in urging us to adopt the discovery rule for quantum meruit claims is doctrinally untenable as well. He alleges that “at the time Plaintiff’s services were completed, Plaintiff reasonably believed that remuneration for those services was governed by a contractual agreement contingent upon the success of the show.” Appellant’s br. at 59. Baer therefore contends, “there is no possible way that Plaintiff knew or should have known that a cause of action had accrued until such time as The Sopranos aired on January 10, 1999.” Id. He misunderstands the nature of a quantum meruit claim with respect to the statute of limitations. “In cases based on quasi-contract liability, the intention of the parties is entirely disregarded. . . .” Callano v. Oakwood Park Homes Corp., 219 A.2d 332, 334 (N.J. Super. Ct. App. Div. 1966). In other words, Baer’s belief that he was going to get paid if and when the show was a success is irrelevant because his understanding of his oral contract, even if correct, does not govern his quasi-contract claim inasmuch as a quasi-contract claim is not a “real” contract based on mutual consent and understanding of the parties. The essence of a quasi-contract claim is not the expectancy of the parties, but rather the unjust enrichment of one of them. It therefore would be inappropriate to look at Baer’s expectations of payment, rather than at the services he provided Chase. Zic v. Italian Government Travel Office, 149 F. Supp. 2d 473 (N.D. Ill. 2001), addressed the question of when a cause of action accrued and started the running of the clock on the statute of limitations in a quantum meruit suit. The plaintiff argued that his claim did not begin until the defendant failed to recognize accrued seniority or to make retroactive salary increases to which he claimed entitlement. Id. at 476. The district court stated that this argument “misunderstands the essence of a quantum meruit claim, which is not the plaintiff’s expectancy of payment, but the unjust enrichment of the defendant.” Id. The court held that the cause of action accrues upon presentment and subsequent rejection of a bill for services, or as soon as the services were rendered. Id. at 475-76. It is clear that any application of the discovery rule would be inappropriate in analyzing whether the statute of limitations ran on Baer’s quantum meruit claim. The district court was therefore correct 19 in utilizing a last rendition of services test to analyze whether Baer’s claim was time barred. The district court, utilizing the last services rendered test, held that the statute of limitations barred Baer’s quasi-contract claim based on his deposition testimony that he last rendered services in October 1995. The district court disregarded Baer’s later certification and the February 10, 1997 letter, holding: [I]n this case, the Plaintiff’s deposition testimony regarding the date that performance was complete was a fact of crucial importance to his case, his performance and the February 10, 1997 letter were the subject of extensive questioning, and the Plaintiff had access to the relevant information at the time of his deposition. Baer, 2004 WL 350050, at . This disposition brings us to the second aspect of our statute of limitations discussion, the “sham affidavit” doctrine. In this regard we have held that a party may not create a material issue of fact to defeat summary judgment by filing an affidavit disputing his or her own sworn testimony without demonstrating a plausible explanation for the conflict. Hackman v. Valley Fair, 932 F.2d 239, 241 (3d Cir. 1991). The “sham affidavit” doctrine refers to the trial courts’ “practice of disregarding an offsetting affidavit that is submitted in opposition to a motion for summary judgment when the affidavit contradicts the affiant’s prior deposition testimony.” Shelcusky v. Garjulio, 797 A.2d 138, 144 (N.J. 2002). When a party does not explain the contradiction between the subsequent affidavit and the prior deposition, the alleged factual issue in dispute can be perceived as a “sham,” thereby not creating an impediment to a grant of summary judgment based on the deposition. Id. Though the district court did not refer to the “sham affidavit” doctrine by name, it utilized its logic and cited precedent applying it in disregarding Baer’s 20 certification. The “sham affidavit” doctrine has its roots in the Court of Appeals for the Second Circuit’s decision in Perma Research & Development Co. v. Singer Co., 410 F.2d 572, 577-78 (2d Cir. 1969). There the court, noting that the plaintiff was unable to justify an inconsistency between his deposition testimony and a later affidavit, disregarded the affidavit and determined that summary judgment should be granted against the plaintiff, explaining: If a party who has been examined at length on deposition could raise an issue of fact simply by submitting an affidavit contradicting his own prior testimony, this would greatly diminish the utility of summary judgment as a procedure for screening out sham issues of fact. Id. at 578. While many state and federal jurisdictions have incorporated the logic of Perma in assessing subsequently filed conflicting affidavits following a deposition, its application has not been applied without regard for the surrounding circumstances. 11 James Wm. Moore, et al., Moore’s Federal Practice § 56.14[1][f] at 56-179 (3d ed. 1997) (“If a party’s deposition and affidavit are in conflict, the affidavit is to be disregarded unless a legitimate reason can be given for discrepancies.”). Thus, it is clear that merely because there is a discrepancy between deposition testimony and the deponent’s later affidavit a district court is not required in all cases to disregard the affidavit. Kennett-Murray Corp. v. Bone, 622 F.2d 887, 894 (5th Cir. 1980); see Choudhry v. Jenkins, 559 F.2d 1085, 1090 (7th Cir. 1977) (summary judgment was improper even though party’s testimony was “not a paradigm of cogency or persuasiveness,” inasmuch it was not a “transparent sham”). In Kennett-Murray, 622 F.2d 887, the Court of Appeals for the Fifth Circuit declined to apply Perma and the “sham affidavit” doctrine in an action in which an employer sought recovery on a promissory note and employment contract from a former employee. Id. at 889. The central issue in dispute concerned “whether a genuine issue exist[ed] as to [a] question of fraud.” Id. at 893. The district court granted the plaintiff’s motion for summary judgment primarily relying on the defendant’s deposition in which he testified that the plaintiff’s vice president had not made any representations about the 21 note or the employment contract. Id. at 892. The court, because of inconsistencies with the earlier testimony, disregarded a subsequently filed affidavit supporting the defendant’s allegations of fraud, which if, considered, would have raised a material issue of fact. Id. The court of appeals recognized that a court “cannot disregard a party’s affidavit merely because it conflicts to some degree with an earlier deposition” and that “a genuine issue can exist by virtue of a party’s affidavit even if it conflicts with earlier testimony of the party’s deposition.” Id. at 893. In reversing the summary judgment order, it held that the subsequent affidavit was in fact not a “sham,” as the defendant’s affidavit did not claim to raise a new or distinct matter, but rather explained certain aspects of his deposition testimony that caused confusion. Id. at 894. The court additionally relied on the fact that the affidavit could not be said to constitute a reformulation of the defendant’s general defense nor was it at odds with the general theory he put forth in the deposition. Id. at 894-95. In Martin v. Merrell Dow Pharmaceuticals, Inc., 851 F.2d 703 (3d Cir. 1998), the plaintiff was the mother of a child born with birth defects who made eight sworn factual statements tending to negate the defendant drug manufacturer’s liability. Later, facing an almost certain loss on summary judgment, she submitted a flatly contradictory affidavit which did not contain an explanation for her change in position. We adopted the logic of Perma, and held that the district court properly could ignore the later affidavit. We, however, did recognize that “there are situations in which sworn testimony can quite properly be corrected by a subsequent affidavit. . .[and] [w]here the witness was confused at the earlier deposition or for some other reason misspoke, the subsequent correcting or clarifying affidavit may be sufficient to create a material dispute of fact.” Id. at 705. Baer argues that his deposition statement was “clearly, and understandably, mistaken,” reasoning that “he was thinking in terms of the overwhelming majority of his services.” Appellant’s br. at 62. The district court refused to accept Baer’s “mistake” argument, relying on the fact that the matter that was of critical importance to his claim and the subject of repeated questioning. Baer, 2004 WL 350050, at . If Baer had advanced only the argument that he had made a mistake, exclusion of the later certification might have been appropriate. The district court, however, overlooked the importance of the evidence existing in the record, i.e., the February 10, 1997 letter 22 that buttressed Baer’s subsequent certification. We therefore must address the question of whether corroborating evidence as to the substance of a later certification ameliorates the concerns that gave rise to the “sham affidavit” doctrine, thereby allowing a subsequent competing affidavit to create a dispute as to a genuine issue of a material fact. When there is independent evidence in the record to bolster an otherwise questionable affidavit, courts generally have refused to disregard the affidavit. See Bushell v. Wackenhut Int'l, Inc., 731 F. Supp. 1574, 1578 (S.D. Fla. 1990) (third party’s deposition testimony can lend credence to subsequent affidavit). The Court of Appeals for the Second Circuit has held the introduction of evidence can help rebut a charge of a “sham” affidavit. Thus, in Palazzo ex rel. Delmage v. Corio, 232 F.3d 38, 43-44 (2d Cir. 2000), the same court that had decided Perma recognized that “a party’s deposition testimony as to a given fact does not foreclose a trial or an evidentiary hearing where that testimony is contradicted by evidence other than the deponent’s subsequent affidavit, for when such other evidence is available, the concern that the proffered issue of fact is a mere ‘sham’ is alleviated.” The court held that the district court properly allowed a party to introduce documentary evidence to support his residency claims contrary to his deposition. The Court of Appeals for the Tenth Circuit reached a similar conclusion in Delany v. Deere & Co., 219 F.3d 1195, 1996 n.1 (10th Cir. 2000), in which it stated that, “[w]hile a party may not defeat summary judgment by contradicting deposition testimony in a subsequent affidavit, new evidence may furnish a good faith basis for the inconsistency.” Baer’s ability to point to evidence in the record that corroborates his later affidavit alleviates the concern that he merely filed an erroneous certification out of desperation to avoid summary judgment. Moreover, Chase does not deny receiving the letter and his personal assistant told Baer that Chase, in fact, had received the letter. And finally, Chase himself has provided the letter in discovery. Given this evidence which corroborates the certification, the concern that Baer’s claim that he performed services as late as February 10, 1997, is either desperate or erroneous is eliminated, and therefore the court should have analyzed the letter and the circumstances surrounding it and Baer’s certification when ruling on the summary 23 judgment motion on the statute of limitations issue.5 The district court therefore erred, at least procedurally, in granting Chase’s summary judgment motion based on the statute of limitations with respect to Baer’s quantum meruit claim. We therefore will reverse the summary judgment on this point and will remand the question of whether Baer presented a timely and otherwise valid quasi-contract 5 Chase argues that even if we refuse to disregard the February 10, 1997 letter, “the letter cannot be characterized as a compensable ‘service’ as a matter of law.” Appellees’ br. at 42. Chase contends that we should disregard the February letter on two grounds, the first of which is its timing. Chase did not receive the letter until some 14 months after he mailed the screenplay to Baer, as well as after all the major networks had rejected the draft. Chase argues that even if the letter had value at one time, it had no value to him when he actually received it. Second, Chase argues that the letter had no value to him as it contained only cursory observations and laudatory phrases about his work. Chase premises his argument on the assumption that in analyzing the statute of limitations for quantum meruit purposes we should dissect the last service rendered to deem if it provided value to the opposing party. We will not affirm the summary judgment on this basis. First, Baer’s letter describes the aspects of the screenplay that he believes were successful, the parts to which he related personally, and what humor worked, and provided encouragement to continue with the project. App. at 22. We will not write these contributions off, as Chase attempts to do, as “empty flattery.” Additionally, we will not dissect each interaction between litigants to quantify the precise value of each correspondence or service rendered. The exchange of ideas and services should not be viewed as incremental, segregable interactions that we can assess individually for purposes of the statute of limitations. A separate issue would arise if a litigant sent a correspondence or rendered a “sham service” in an attempt to avoid the statute. That situation, however, does not describe the circumstances before us. We will not engage in Chase’s request to judge whether the February letter, taken in isolation, was a “compensable service.” We are satisfied that Baer sent the letter and Chase received it, and thus at least at this time it will serve as the “last service rendered” for purposes of the statute of limitations calculus. 24 claim to the district court for further consideration.6