CANON FINANCIAL SERVICES, INC. VS. LINWOOD CITY BOARD OF EDUCATION VS. DOUGLAS GREEN, JR.(L-368-09, BURLINGTON COUNTY AND STATEWIDE) ( 2017 )

NOT FOR PUBLICATION WITHOUT THE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
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SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-0556-15T3
CANON FINANCIAL SERVICES,
INC.,
Plaintiff-Respondent,
v.
LINWOOD CITY BOARD OF
EDUCATION,
Defendant-Appellant,
and
QUALITY FIRST, INC.,
Defendant,
and
LINWOOD CITY BOARD OF
EDUCATION,
Defendant/Third-Party
Plaintiff,
v.
DOUGLAS GREEN, JR. and
DOUGLAS GREEN, SR.,
Third-Party Defendants.
________________________________
Argued April 26, 2017 – Decided June 12, 2017
Before Judges Accurso and Manahan.
On appeal from Superior Court of New Jersey,
Law Division, Burlington County, Docket No.
L-368-09.
Christopher A. Barrett argued the cause for
appellant (Cooper Levenson, P.A., attorneys;
Mr. Barrett, on the briefs).
Howard N. Sobel argued the cause for
respondents (Law Offices of Howard N. Sobel,
P.A., attorneys; Mr. Sobel, of counsel and on
the brief; Margaret D. Nikolis, on the brief).
PER CURIAM
Linwood City Board of Education (LBOE) appeals from the trial
court's order enforcing a settlement between LBOE and Canon
Financial Services (CFS). Having reviewed the record in light of
applicable legal principles, we affirm.
This appeal is rooted in a dispute over the lease of copiers.
On November 3, 2006, LBOE and CFS entered into a lease (Lease) for
the provision of seven articulated copiers. Quality First (QF),
an entity that had done business with the LBOE for many years, was
to supply the copiers. Four days prior to the finalization of the
Lease, LBOE's administrator acknowledged receipt of the copiers
by her signature on the Lease's first page. The Lease called for
monthly payments of $1938 for the seven copiers.
For twenty-four months, LBOE made timely, monthly payments.
In November 2008, LBOE ceased payment claiming that it never
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received two copiers called for in the Lease from QF. LBOE also
claimed that it ceased payment due to QF's failure to service the
copiers.
CFS instituted litigation against LBOE for breach of the
Lease. QF was also named as a defendant for its failure to provide
the two copiers LBOE alleged were never received.
LBOE filed an answer with a cross-claim against QF and its
two principals, Douglas Green, Sr. and Douglas Green, Jr. (the
Greens). Default judgment was entered in favor of CFS against QF
after that entity failed to file a responsive pleading.1 Default
judgment was entered in favor of LBOE against QF and the Greens,
individually, after they failed to file a responsive pleading. No
dollar amount was assigned to the judgment based upon an issue
relating to LBOE's proofs on its consumer fraud claim.
At the conclusion of discovery, CFS filed a motion for summary
judgment. Subsequent thereto and prior to the hearing, CFS and
the LBOE engaged in settlement discussions. The discussions
resulted in an agreement (Agreement). The Agreement was approved
by resolution of the Board of Education. Among its terms, the
Agreement addressed the copiers:
1. Terms of Settlement
1
CFS paid QF approximately $102,000 after it received confirmation
of the delivery of the copiers called for in the Lease.
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(a) CFS will provide two (2) refurbished Canon
IR7095 photocopiers to LBOE. These
photocopiers will be refurbished by Canon
Business Solutions (hereinafter "CBS") solely
at the cost of CFS. These photocopiers will
be incorporated into the Lease Agreement as
the substitutes for copiers IR6570, serial
number SLP20311 and IR6570 serial number
SLP20329, the two copiers which were ordered
by the LBOE but never delivered by QF to
LBOE[;]
(b) The refurbished Canon IR7095 photocopiers
shall be delivered to the LBOE on or before
September 15, 2011;
(c) Commencing on October 1, 2011[,] and
continuing for thirty-six (36) months (ending
September 1, 2014), the LBOE shall pay to CFS
the sum of One Thousand Nine Hundred Thirty-
Eight Dollars ($1938[]) a month which
represents the full, complete monthly
stipulated remaining payments due and owing
from the LBOE to CFS on Lease Agreement No.
01-317093.01, except otherwise provided for in
the Agreement;
(d) After LBOE pays the remaining thirty-six
(36) lease payments due to CFS, the LBOE shall
have the option to purchase the photocopiers
under Lease No. 01-317093.01 and[/]or the
substitute copiers provided by QF, at fair
market value. In the alternative, with at
least sixty (60) days['] notice to CFS, the
LBOE shall advise CFS of their intention to
return these photocopiers which remain on the
premises that are subject of the aforesaid
Lease and or were substitute copiers provided
by QF. The return of these photocopiers shall
be arranged by the LBOE to CFS per the Terms
and Conditions of the Lease Agreement[;]
(e) These terms and conditions are made with
the understanding that the LBOE is not
currently in possession of the photocopiers
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that were originally contained under the Lease
No. 01-317093.01. However, LBOE recognizes
as part of this Lease Agreement it is
receiving two substitute copiers from CFS.
The Agreement also called for LBOE to make the remaining
payments on the Lease. LBOE made all but the last two payments.
After CFS filed a motion to enforce the Agreement, LBOE remitted
those payments.
Per the Agreement, CFS also sought the return of the seven
copiers subject to the Lease or the substituted copiers provided
by QF. In return, CFS acknowledged that it was obligated to
provide two replacement copiers. In opposition, LBOE argued that
it would return the two copiers for the replacement copiers, but
was unable to return the remaining five copiers as it was not in
possession of them.
Subsequent to oral argument, the motion judge held that CFS
was entitled to enforcement of the Agreement relative to the return
of the five copiers or the payment of the fair market value of the
copiers. Since LBOE maintained that it was not in possession of
the copiers at issue, the judge, relying on a certification from
Elaine Monti, a "Senior Legal Specialist" for CFS, ordered LBOE
to pay $20,382.88 as the fair market value.
On appeal, LBOE raises the following arguments:
POINT I
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THE TRIAL COURT ERRED IN IGNORING AND
OTHERWISE NOT ADOPTING THE SETTLEMENT
AGREEMENT'S PLAIN MEANING AND SUPPLYING ITS
OWN INTERPRETATION.
POINT II
ALTERNATIVELY, IF THE SETTLEMENT AGREEMENT IS
DEEMED AMBIGUOUS AND NOT SUBJECT TO A PLAIN
LANGUAGE CONSTRUCTION, THE TRIAL COURT ERRED
BY FAILING TO CONDUCT A PLENARY FACT[-]FINDING
HEARING.
We are not persuaded by these arguments.
We briefly state the principles that guide our analysis.
"Settlement of litigation ranks high in our public policy." Nolan
v. Lee Ho, 120 N.J. 465, 472 (1990) (quoting Jannarone v. W.T.
Co., 65 N.J. Super. 472, 476 (App. Div.), certif. denied, 35 N.J.
61 (1961)). In furtherance of the strong policy of enforcing
settlements, "our courts 'strain to give effect to the terms of a
settlement wherever possible.'" Brundage v. Estate of Carambio,
195 N.J. 575, 601 (2008) (citation omitted). Therefore, an
agreement to settle a lawsuit will be honored and enforced in the
absence of fraud or other compelling circumstances. Pascarella
v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div.), certif. denied,
94 N.J. 600 (1983).
The "[i]nterpretation of a settlement agreement implicates
significant legal and policy principles[.]" Kaur v. Assured
Lending Corp., 405 N.J. Super. 468, 474 (App. Div. 2009). When
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examining the terms of a settlement agreement, we are guided by
the rules of contract construction. Brundage, supra, 195 N.J. at
600-01; see also Thompson v. City of Atl. City, 190 N.J. 359, 379
(2007). "The polestar of contract construction is to discover the
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.), certif. denied, 127 N.J. 548 (1991). In
interpreting a contract, the focus is on "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 Am., Inc., 385 N.J. Super. 324, 339 (App. Div.)
(citation omitted), certif. denied, 188 N.J. 353 (2006). In that
regard, the court may not re-write a contract or grant a better
deal than that for which the parties expressly bargained. Solondz
v. Kornmehl, 317 N.J. Super. 16, 21 (App. Div. 1998). Moreover,
"any action which would have the effect of vitiating the provisions
of a particular settlement agreement and the concomitant effect
of undermining public confidence in the settlement process in
general, should not be countenanced." Dep't of Pub. Advocate,
Div. of Rate Counsel v. N.J. Bd. of Pub. Utils., 206 N.J. Super.
523, 528 (App. Div. 1985).
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Even where the language of a contract is clear on its face,
courts may determine its meaning by looking to extrinsic evidence,
such as "the situation of the parties, the attendant circumstances,
and the objects there were . . . striving to attain." Atl. N.
Airlines, Inc. v. Schwimmer, 12 N.J. 293, 301 (1953). Our courts
"permit a broad use of extrinsic evidence to achieve the ultimate
goal of discovering the intent of the parties." Conway v. 287
Corporate Ctr. Assocs., 187 N.J. 259, 270 (2006). In Sachau v.
Sachau, 206 N.J. 1, 5-6 (2011) (quoting Schwimmer, supra, 12 N.J.
at 302), the Court stated: "A court's role is to consider what is
'written in the context of the circumstances' at the time of
drafting and to apply 'a rational meaning in keeping with the
expressed general purpose.'"
In this dispute regarding the interpretation of the Agreement
and its enforcement, we find the resolution lies within the
language of the Lease, which explicitly referenced seven copiers.
The litigation resolved by the Agreement invoked the non-payment
by LBOE of the monthly charge for the lease of seven copiers. A
matter in dispute relative to the litigation was LBOE's contention
that, although it paid for the lease of seven copiers, it only
received five copiers. In reaching an accord, CFS agreed to remedy
that issue in contest by providing two replacement copiers. The
Agreement also provided for an option to purchase the copiers
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referred to in the Lease "and/or the substitute copiers provided
by QF at fair market value." This language afforded LBOE the
option to return the copiers referenced in the Lease or other
substituted copiers. As such, the language referencing the lack
of possession by LBOE of the copiers from the Lease did not vitiate
its obligation to return five copiers.
We are satisfied the judge correctly considered the Agreement
as a whole and in the context of the resolution of the matters in
dispute between the parties. In the judge's view, it was
"inexplicable" that the LBOE paid the full monthly amount assigned
by the Lease when it did not receive all seven copiers.
As the judge noted in her decision, no explanation from LBOE
was provided for the missing copiers:
The Board of Education has chosen not to
provide me with a certification from anybody
that would outline the history of this copier
debacle which started nine years ago, almost
nine years ago, with signing for seven,
getting only two, maybe losing five, the
middle of the night swap out of the machines.
Nobody has bothered to tell me anything about
that. All I know is counsel says my client
told me they don't have them, they're not
hiding in the schools, and we don't have to
pay for them. But there are no inferences
that can be drawn from the settlement
agreement other than the Board of Education
understood they were on the hook for seven
copiers and they said they would return them
or buy them, and they haven't returned them.
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We agree. Construing the Agreement in the context of the
conditions under which it was entered, we conclude the judge's
interpretation of the Agreement was grounded in the law and
consistent with the circumstances under which it was drawn.
LBOE also argues that the monetary amount assigned by the
judge as fair market value for the unreturned copiers was
erroneous. However, similar to the lack of explanation by LBOE
for the missing copiers, it offered no proof of value; having
clung to its position that there were no copiers to return. The
only proof submitted to the judge regarding value was the Monti
certification. We find no abuse of discretion in the judge's
assessment of the fair market value of the copiers by resort to
that certification.
An award of damages must be calculated with reasonable
certainty and should not be based upon "mere speculation."
Caldwell v. Haynes, 136 N.J. 422, 442 (1994). Precision in such
calculations is not essential. The trial record need only provide
a sufficient "foundation which will enable the trier of the facts
to make a fair and reasonable estimate." Id. at 436 (quoting Lane
v. Oil Delivery, Inc., 216 N.J. Super. 413, 420 (App. Div. 1987)).
Here, the judge's determination of damages was grounded in the
sole evidence presented and was not based upon speculation.
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Finally, LBOE argues that the judge erred in not granting its
motion for reconsideration. Again, we disagree.
We review the trial court's denial of a motion for
reconsideration under an abuse of discretion standard. Marinelli
v. Mitts & Merrill, 303 N.J. Super. 61, 77 (App. Div. 1997).
Reconsideration is "a matter within the sound discretion of the
[c]ourt to be exercised in the interest of justice[.]" Palombi
v. Palombi, 414 N.J. Super. 274, 288 (App. Div. 2010) (quoting
D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)).
Reconsideration is appropriate if "1) the [c]ourt has expressed
its decision based upon a palpably incorrect or irrational basis,
or 2) it is obvious that the [c]ourt either did not consider, or
failed to appreciate the significance of probative, competent
evidence." Cummings v. Bahr, 295 N.J. Super. 374, 384 (App. Div.
1996) (quoting D'Atria, supra, 242 N.J. Super. at 401); see also
Fusco v. Bd. of Educ. of City of Newark, 349 N.J. Super. 455, 461-
62 (App. Div.), certif. denied, 174 N.J. 544 (2002).
Reconsideration is not appropriate as a vehicle to bring to the
court's attention evidence that was not present, but was available,
in connection with initial argument. Fusco, supra, 349 N.J. Super.
at 463.
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Having considered the record in light of our standard of
review and controlling legal principles, we discern no basis for
error in the denial of the motion for reconsideration.
Affirmed.
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