Court Opinion

ID: 5122029
Source: CourtListenerOpinion
Date Created: 2021-10-29 14:09:04.264922+00
Date Added: 2024-06-11T08:22:25.610504
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE
                               APPROVAL OF THE APPELLATE DIVISION
        This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
     internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.

                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-3630-19

MICHAEL KARLIS,

           Plaintiff-Appellant,

v.

NORMAN-SPENCER AGENCY,
INC., NU HOLDINGS, INC.,
BRIAN NORMAN, and
CHRISTOPHER NORMAN,

     Defendants-Respondents.
____________________________

                    Argued October 14, 2021 – Decided October 29, 2021

                    Before Judges Haas and Mitterhoff.

                    On appeal from the Superior Court of New Jersey, Law
                    Division, Somerset County, Docket No. L-0987-19.

                    Erik Frins argued the cause for the appellant (Simon
                    Law Group, attorneys; Erik Frins and Britt J. Simon, on
                    the briefs).

                    Christopher M. Curci argued the cause for respondent
                    (Ward Law, LLC, attorneys; Jennifer L. Ward and
                    Christopher M. Curci, on the brief).
PER CURIAM

      In this contract dispute, plaintiff Michael Karlis appeals from an April 17,

2020 order denying his motion for reconsideration of the court's January 24,

2020 order granting summary judgment in favor of defendants Norman-Spencer

Agency, Inc., NU Holdings Inc., Brian Norman, and Christopher Norman.1

Plaintiff argues the motion judge erred in granting summary judgment to

defendants by failing to give effect to the plain language and structure of his

employment contract and by failing to consider extrinsic evidence support ing

his interpretation of the contract. We affirm, substantially for the reasons set

forth in Judge Robert G. Wilson's well-reasoned opinion. We add only the

following brief remarks.

      Plaintiff, a licensed attorney in the State of New Jersey, owned and

operated an insurance management business called Northern Star Management

(Northern Star). Defendants provide property and casualty insurance. In August

2014, defendants purchased Northern Star from plaintiff. In connection with the

contract of sale, plaintiff entered into a July 31, 2014 employment agreement 2

1
  The contract at issue involved plaintiff and defendant Norman-Spencer Agency,
Inc. The rest of the named defendants were not parties to the contract.
2
  The entire Employment Agreement consisted of multiple agreements governing
employment, confidential information, and invention assignment.
                                                                            A-3630-19
                                        2
(Employment Agreement) with defendant Norman-Spencer Agency, Inc. The

Employment Agreement provided that plaintiff would serve as: a) Managing

Director of defendant's Personal and Commercial Boater Safety Associations;

b) Managing Director of the defendant's Risk Purchase Groups, including but

not limited to Norman-Spencer Real Estate Risk Purchasing Group and Norman-

Spencer Crane and Boom Truck Risk Purchasing Group; and c) Senior Counsel.

The agreement set plaintiff's annual salary at $200,000 in year one, $210,000 in

year two, $220,500 in year three; and at least $231,525 in year four and

thereafter.

      The effective date of the Employment Agreement was July 31, 2014.

Section one divided plaintiff's term with the company into an initial period of

forty-eight months (Initial Term Period), and a subsequent period during which

plaintiff would become an at-will employee (At-Will Period). Section one

states:

              (a) Initial Term Period.        Subject to the provisions
              for termination as hereinafter provided, the term of this
              Agreement shall be from the Effective Date and
              continuing for forty[-]eight (48) months ("Initial Term
              Period"). Upon the expiration of the Initial Term
              Period, Employee will become an "At-Will Employee"
              as provided for under section 1.(b) below. The terms
              and conditions set forth in the Agreement will survive
              the expiration of the Initial Term Period and continue
              until termination of Employee's employment with

                                                                          A-3630-19
                                         3
            Company. The period from the date hereof until
            termination of the Employee's employment with
            Company is referred to herein as the "Term"[].

            (b) At-Will Employment.   EMPLOYEE
            UNDERSTANDS AND ACKNOWLEDGES THAT
            EMPLOYEE'S           EMPLOYMENT      WITH
            COMPANY FOLLOWING THE INITIAL TERM
            PERIOD IS FOR AN UNSPECIFIED DURATION
            AND           CONSTITUTES        "AT-WILL"
            EMPLOYMENT.                      EMPLOYEE
            ACKNOWLEDGES THAT THE EMPLOYMENT
            RELATIONSHIP MAY BE TERMINATED AT
            ANY TIME, WITH OR WITHOUT CAUSE AND
            FOR ANY OR NO CAUSE, AT THE OPTION
            EITHER OF COMPANY OR EMPLOYEE, WITH
            OR WITHOUT NOTICE, EXCEPT THAT ANY
            TERMINATION BY THE COMPANY WIHOUT
            CAUSE SHALL BE WITH AT LEAST SIX (6)
            MONTHS NOTICE.             EMPLOYEE ALSO
            UNDERSTANDS THAT ANY REPRESENTATION
            TO THE CONTRARY, EXPRESS OR IMPLIED, IS
            UNAUTHORIZED AND NOT VALID UNLESS
            OBTAINED IN WRITING AND SIGNED AND
            DATED BY THE DULY ELECTED PRESIDENT
            OF THE COMPANY.              NEITHER THIS
            AGREEMENT NOR ANY CHANGES IN
            EMPLOYEE'S DUTIES, POSITION, TITLE,
            COMPENSATION OR OTHER CONDITIONS OF
            EMPLOYMENT              DURING     HIS/HER
            EMPLOYMENT WITH COMPANY SHALL
            ALTER THE FOREGOING.

      On January 29, 2018, defendant sent plaintiff a letter providing notice of

its intent to terminate plaintiff effective July 31, 2018, at the end of the Initial

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                                         4
Term. January 29, 2018 was more than six months before the expiration of the

Initial Term. Defendant sent the termination notice by email and certified mail.

      On July 31, 2018, plaintiff sent an email to Pat Malone, defendant's Chief

Financial Officer, and Brian Norman, defendant's Chief Executive Officer and

stated:

             I spoke with Pat a few minutes ago. Pat advised me that
             it was the position of the company that my
             employment[] ends today. I disagreed with Pat,
             however, to keep the peace in the office, I agreed not to
             come into the office.
             I will work from home and be available for work.

             Again, based upon our agreements, I do not agree that
             my employment ends today with Norman-Spencer.

      Plaintiff's brother, George Karlis, 3 was also employed by defendant. The

parties dispute whether the employment agreements signed by plaintiff and his

brother were identical; however, defendant terminated George in November

2018, via a separation agreement.

      On July 26, 2019, plaintiff filed a complaint against defendants alleging:

breach of contract (count one); breach of implied covenant of good faith and fair

dealing (count two); fraud (count three); negligent misrepresentation (count

3
  As plaintiff and his brother share the same last name, we refer to George Karlis as
"George." We intend no disrespect.
                                                                              A-3630-19
                                         5
four); negligence (count five); gross negligence (count six); civil conspiracy

(count seven); bad faith (count eight). All eight counts were filed against each

of the named defendants. Defendants filed an answer on September 3, 2019.

      On December 23, 2019, defendants filed a motion for summary judgment.

Plaintiff filed opposition and a cross-motion for partial summary judgment. On

January 24, 2020, after oral argument, Judge Wilson issued an oral decision

granting defendants' motion for summary judgment. Judge Wilson explained:

                  I agree that [p]laintiff's argument is that
            [d]efendants could not provide [p]laintiff with a six-
            month notice of termination during the at-will
            employment phase until after the at-will employment
            phase began.

                   I agree with [d]efendants that if the court were to
            accept that argument, doing so would result in the court
            transforming the 48-month contract term into a 54-
            month contract term. And I do agree [that is] contrary
            to the language of the agreement.

                  I agree with [d]efendants that when viewing the
            contract as a whole, in a fair and common sense
            manner, a [fifty-four] month contract term was not the
            agreed upon intent of the parties; that it was [forty-
            eight] months; and that the court cannot torture the
            language of the contract to create an ambiguity, nor can
            the court rewrite a contract that is better than or
            different from the one the parties wrote themselves.

      Plaintiff filed a motion for reconsideration, which was denied without

prejudice on February 28, 2020.      Plaintiff then filed a second motion for

                                                                          A-3630-19
                                        6
reconsideration. The court denied plaintiff's motion and re-affirmed his original

decision. This appeal followed.

      On appeal, plaintiff raises the following arguments for our consideration:

            POINT I

            THE MOTION JUDGE ERRED BY FAILING TO
            GIVE EFFECT TO THE PLAIN LANGUAGE AND
            STRUCTURE      OF    THE    EMPLOYMENT
            AGREEMENT, WHICH BY ITS TERMS PROVIDED
            FOR A MODIFIED AT[-]WILL EMPLOYMENT
            PERIOD TO BEGIN AFTER THE INITIAL TERM,
            WITH A SIX[-]MONTH NOTICE PROVISION THAT
            COULD ISSUE ONLY DURING THE AT-WILL
            PERIOD

            POINT II

            THE MOTION JUDGE ERRED BY FAILING TO
            CONSIDER THE IMPORT OF EXTRINSIC
            EVIDENCE SUBMITTED BY PLAINTIFF, WHICH
            SUPPORTS A FINDING THAT THE PARTIES
            NEGOTIATED A SEPARATE AT[-]WILL PERIOD,
            WITH A SIX[-]MONTH TERMINATION NOTICE
            THAT COULD NOT ISSUE UNTIL AFTER
            EXPIRATION    OF  THE  INITIAL   TERM;
            THEREFORE, PLAINTIFF WAS ENTITLED TO
            SUMMARY JUDGMENT; ALTERNATIVELY, THE
            COMPETING INTERPRETATIONS OF WHEN
            NOTICE MAY ISSUE UNDER THE AT[-]WILL
            CLAUSE   CONSTITUTED    A   SUFFICIENT

                                                                           A-3630-19
                                       7
            AMBIGUITY           TO     PRECLUDE          SUMMARY
            JUDGMENT4

      We review a motion judge's grant of summary judgment de novo, applying

the same standard as the motion judge. Conley v. Guerrero, 228 N.J. 339, 346

(2017). Summary judgment must be granted "if the pleadings, depositions,

answers to interrogatories and admissions on file, together with the affidavits, if

any, show that there is no genuine issue as to any material fact challenged and

that the moving party is entitled to a judgment or order as a matter of law."

Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224

N.J. 189, 199 (2016) (quoting R. 4:46-2(c)).

      When construing contract terms, "unless the meaning is both unclear and

dependent on conflicting testimony," its interpretation is a matter of law.

Celanese Ltd. v. Essex Cnty. Improvement Auth., 404 N.J. Super. 514, 528

(App. Div. 2009) (quoting Bosshard v. Hackensack Univ. Med. Ctr., 345 N.J.

Super. 78, 92 (App. Div. 2001)).

      Well-established rules of construction govern this court's review of

contractual terms. "The polestar of contract construction is to discover the

4
   We conclude that plaintiff's argument that the agreement is ambiguous
necessitating consideration of extrinsic evidence is without sufficient merit to
warrant discussion a written opinion, R. 2:11-3(e)(1)(E), and affirm for the reasons
set forth by Judge Wilson.
                                                                             A-3630-19
                                         8
intention of the parties as revealed by the language used by them." Karl's Sales

& Serv., Inc. v. Gimbel Bros., 249 N.J. Super. 487, 492 (App. Div. 1991).

Courts "should not torture the language of [contracts] to create ambiguity."

Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997) (quoting Stiefel

v. Bayly, Martin & Fay, Inc., 242 N.J. Super. 643, 651 (App. Div. 1990)).

      The focus of review is "the intention of the parties to the contract as

revealed by the language used, taken as an entirety; and, in the quest for the

intention, the situation of the parties, the attendant circumstances, and the

objects they were thereby striving to attain. . . ." Lederman v. Prudential Life

Ins. Co. of America, 385 N.J. Super. 324, 339 (App. Div. 2006) (citation

omitted). Courts may not re-write a contract or grant a better deal than that for

which the parties expressly bargained. See Solondz v. Kornmehl, 317 N.J.

Super. 16, 21 (App. Div. 1998).

      Indeed, reviewing courts must read the contract "as a whole in a fair and

common sense manner." Hardy ex rel. Dowdell v. Abdul-Matin, 198 N.J. 95,

103 (2009). "[W]ords and phrases are not to be isolated but related to the context

and the contractual scheme as a whole, and given the meaning that comports

with the probable intent and purpose." Republic Bus. Credit Corp. v. Camhe-

                                                                            A-3630-19
                                        9
Marcille, 381 N.J. Super. 563, 569 (App. Div. 2005) (quoting Newark

Publishers' Ass'n v. Newark Typographical Union, 22 N.J. 419, 426 (1956)).

      With these guiding principles in mind, we reject plaintiff's argument that

the commencement of his at-will term was somehow hobbled by the separate

contractual provision requiring defendant to provide six-months' notice of its

intent to terminate him. Plaintiff and defendant agreed to a single initial forty-

eight-month term of employment during which plaintiff could not be terminated

without good cause. The contract stated unambiguously that after this initial

term, plaintiff's employment would be at will.         Accordingly, the contract

permitted defendant to terminate plaintiff without cause on the first day of the

at-will term.

      Nothing in the notice provision prohibited defendant from providing the

required notice before the initial term ended. As Judge Wilson found, to

conclude the notice provision trumped the provision limiting the for-cause term

to forty-eight months would contravene the plain language of the agreement.

Defendant received both appropriate notice and the full benefit of the initial term

of the employment. We conclude that Judge Wilson wisely refrained from re-

writing the parties' agreement or giving plaintiff a better deal than that for which

the parties expressly bargained. See Solondz, 317 N.J. Super. at 21.

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Affirmed.

                 A-3630-19
            11