Opinion
DOCKET NO. A-5355-12T1
10-17-2014
YELLOWBOOK SALES AND DISTRIBUTION COMPANY, INC., Plaintiff-Appellant, v. JANET FIGLIOLIA, Defendant-Respondent.
James T. Hunt, Jr. argued the cause for appellant (Slater, Tenaglia, Fritz & Hunt, P.A., attorneys; Mr. Hunt and Georgios K. Panagiotopoulos, on the briefs). Steven C. DePalma argued the cause for respondent (Nicoll Davis & Spinella, LLP, attorneys; Mr. DePalma and Jack T. Spinella, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION Before Judges Sabatino, Simonelli and Guadagno. On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-1692-11. James T. Hunt, Jr. argued the cause for appellant (Slater, Tenaglia, Fritz & Hunt, P.A., attorneys; Mr. Hunt and Georgios K. Panagiotopoulos, on the briefs). Steven C. DePalma argued the cause for respondent (Nicoll Davis & Spinella, LLP, attorneys; Mr. DePalma and Jack T. Spinella, on the brief). PER CURIAM
This appeal concerns five form contracts signed by defendant Janet Figliolia, an officer of Alex Figliolia Contracting Company (AFCC), to purchase advertising for AFCC from plaintiff Yellowbook Sales and Distribution Co. Inc. (Yellowbook). Yellowbook sought to hold Figliolia personally liable for payment pursuant to personal liability clauses in the contracts. The motion judge found the contracts were ambiguous, and thus, unenforceable. Accordingly, the judge denied Yellowbook's motion for summary judgment, granted Figiolia's cross-motion for summary judgment, and dismissed the complaint with prejudice. The judge also denied Yellowbook's motion for reconsideration. Because we conclude there are genuine issues of material fact precluding summary judgment, we reverse and remand for trial.
We derive the following facts from evidence submitted by the parties in support of, and in opposition to, the summary judgment motion, viewed in the light most favorable to the non-moving party. Angland v. Mountain Creek Resort, Inc., 213 N.J. 573, 577 (2013) (citing Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995)). Between October 2005 and January 2007, Figliolia signed five contracts with Yellowbook for advertising services for AFCC. There is no dispute that under her signature on two contracts appeared the words "Authorized Signature Individually and for the Company (Read clause 15F on reverse side)," and on three contracts appeared the words "Authorized Signature Individually and for the Customer (Read paragraph 15F on the reverse hereof)." Nor is there any dispute that clause 15F in three contracts contained personal liability language, while in two contracts that language appeared in clause 15G, not clause 15F.
Yellowbook filed a complaint against Figliolia, seeking payment of the unpaid balance of $398,672, $346,844.62 in interest, and $131,561.76 for attorney's fees, for a total of $877,078.38. Figliolia asserted a statute of frauds defense in her answer, among other defenses. In opposing plaintiff's summary judgment motion and supporting her cross-motion, she certified that she "never agreed to assume personally liability for any of [AFCC's] debts."
In granting summary judgment to Figliolia, the motion judge applied New York law and found the contracts were ambiguous, as they did not clearly notify the signor that he/she was personally liable, and the ambiguity rendered the contracts unenforceable. This appeal followed the denial of Yellowbook's motion for reconsideration.
The parties agreed that New York law applied.
Our review of a ruling on summary judgment is de novo, applying the same legal standard as the trial court. Nicholas v. Mynster, 213 N.J. 463, 477-78 (2013). "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.'" Town of Kearny v. Brandt, 214 N.J. 76, 91 (2013) (quoting R. 4:46-2(c)). Thus, we 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.'" Ibid. (quoting Brill, supra, 142 N.J. at 540).
If there is no genuine issue of material fact, we must then "'decide whether the trial court correctly interpreted the law.'" DepoLink Court Reporting & Litig. Servs. v. Rochman, 430 N.J. Super. 325, 333 (App. Div. 2013) (citation omitted). We review issues of law de novo and accord no deference to the trial judge's conclusions on issues of law. Nicholas, supra, 213 N.J. at 478. Applying these standards, we conclude that summary judgment was improvidently granted.
Under New York law,
[she] who signs or accepts a written contract, in the absence of fraud or other wrongful act on the part of another contracting party, is conclusively presumed to know its contents and to assent to them and there can be no evidence for the jury as to his understanding of its terms.This is true whether the signing party read the contract terms or not, as ignorance is generally not a defense. Ibid.
[Level Export Corp. v. Wolz, Aiken & Co., 305 N.Y. 82, 87-88 (1953).]
However, in the context of suretyship clauses, such as the personal liability clauses at issue here, the Court of Appeals of New York has held that, to comply with the statute of frauds, "[a]n agent for a disclosed principal will not be personally bound unless there is clear and explicit evidence of the agent's intention to substitute or superadd his personal liability for, or to, that of his principal." Salzman Sign Co. v. Beck, 10 N.Y. 2d 63, 67 (1961) (citation and internal quotation marks omitted). In Salzman Sign Co., supra, 10 N.Y. 2d at 65, a corporation contracted with the plaintiff to purchase an advertising sign. The defendant-officer of the corporation signed the contract. Ibid. When the corporation defaulted, the plaintiff filed a complaint against the defendant-officer individually based on a contract clause that read, "Where the Purchaser is a corporation, in consideration of extending credit to it, the officer or officers signing on behalf of such corporation, hereby personally guarantee the payments hereinabove provided for." Ibid.
The Court of Appeals is the highest tribunal in the State of New York. See Town of Massena v. Niagara Mohawk Power Corp., 45 N.Y. 2d 482, 491 (1978).
In affirming the grant of summary judgment to the defendant-officer, the Court held as follows:
In modern times most commercial business is done between corporations, everyone in business knows that an individual stockholder or officer is not liable for his corporation's engagements unless he signs individually, and where individual responsibility is demanded the nearly universal practice is that the officer signs twice — once as an officer and again as an individual. There is great danger in allowing a single sentence in a long contract to bind individually a person who signs only as a corporate officer. In many situations the signing officer holds little or no stock and if the language of the agreement makes him individually liable his estate may be stuck for a very large obligation which he never dreamed of assuming. We think the better rule is the one used here -- that is, that the statement in the contract purporting to bind the signing officer individually is not sufficient for Statute of Frauds purposes without some direct and explicit evidence of actual intent.
[Id. at 67 (emphasis added).]
In applying this ruling to Yellowbook's form advertising contracts, the Supreme Court of New York, Appellate Division, has rendered four opinions on the issue of whether Yellowbook may enforce a personal liability provision against a corporate officer. In all four opinions, the court cited and applied the principle that "[a]n agent who signs an agreement on behalf of a disclosed principal will not be held liable for its performance unless the agent clearly and explicitly intended to substitute his personal liability for that of his principal." Yellow Book Sales & Distrib. Co., Inc. v. On Call Plumbing & Heating, Inc., 952 N.Y.S. 2d 615, 616 (App. Div. 2012); Yellow Book Sales & Distrib. Co., Inc. v. Mantini, 925 N.Y.S. 2d 646, 648 (App. Div. 2011); Yellow Book of N.Y., Inc. v. Shelley, 904 N.Y.S. 2d 216, 217 (App. Div. 2010); Yellow Book of N.Y., L.P. v. DePante, 766 N.Y.S. 2d 44, 44 (App. Div. 2003).
In three opinions of the four above-noted, the court reversed the grant of summary judgment to Yellowbook, finding there was a triable issue of fact as to whether the defendant could be held personally liable on the contract. On Call Plumbing & Heating, Inc., supra, 952 N.Y.S. 2d at 616; Mantini, supra, 925 N.Y.S. 2d at 648; DePante, supra, 766 N.Y.S. 2d at 44. The court reiterated in those cases that an agent must "clearly and explicitly" intend for personal liability to attach, and concluded that summary judgment was not appropriate. On Call Plumbing & Heating, Inc., supra, 952 N.Y.S. 2d at 616; Mantini, supra, 925 N.Y.S. 2d at 648; DePante, supra, 766 N.Y.S. 2d at 44.
In the fourth opinion, on which Yellowbook mainly relies here, the court affirmed the grant of summary judgment to Yellowbook, finding that the defendant-officer "explicitly agreed to accept personal liability." Shelley, supra, 904 N.Y.S. 2d at 217. The court found there was a notation under the signature line on each contract which recited that the signor was signing "Individually and for the Company, and directed the signor to read a clause on the reverse side of each contract, which explicitly provided that the signatory agreed to accept personal liability for full performance. Ibid. The court concluded that since the contracts were unambiguous, parol evidence was not admissible. Ibid. Accordingly, the court affirmed the grant of summary judgment to Yellowbook.
Yellowbook also relies on the unpublished opinion, Yellowbook Sales & Distrib, Co., Inc. v. Frank & Robert Enterprises, Inc., No. A-005218-11 (App. Div. Oct. 15, 2013), and Figliolia relies on unpublished New York opinions. Unpublished opinions do not constitute precedent or bind us. R. 1:36-3; Trinity Cemetery Ass'n v. Twp. of Wall, 170 N.J. 39, 48 (2001). In any event, Frank & Robert Enterprises, Inc. is factually distinguishable in that: (1) it involved eleven contracts, not five; (2) the defendants owned the company for which they signed the contracts, while Figliolia did not own AFCC; (3) the contracts contained personal liability clauses identical to only three of the five contracts at issue here; (4) New Jersey law applied, not New York law; and (5) there was a trial with testimony from the defendants and representatives of Yellowbook. Further, we are not bound by the New York trial court opinions on which the parties rely. S & R Assocs. v. Lynn Realty Corp., 338 N.J. Super. 350, 355 (App. Div. 2001). For the same reason, we do not rely on the various unpublished New York opinions involving Yellowbook contracts as cited to us by Yellowbook.
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It is unclear from these four opinions whether the defendants raised the statute of frauds as an affirmative defense. The standard cited by the Court of Appeals of New York -- allowing personal liability only where the agent "clearly and explicitly" intended to be held personally liable -- is premised on that defense. See Salzman Sign Co., supra, 10 N.Y. 2d at 67. Here, Figliolia asserted the statute of frauds as an affirmative defense. Accordingly, Salzman Sign Co. applies, and it must be determined whether Figliolia "clearly and explicitly intended" to be held personally liable. Viewing the moving papers in a light most favorable to Figliolia, we are satisfied there is a genuine issue of material fact as to whether she clearly and explicitly intended to be held personally liable for AFCC's debt on each of the five contracts.
The motion judge's conclusive and generic determination the Yellowbook contracts are ambiguous on their face and thus unenforceable as to any potential guarantors who signed those contracts, strayed from the analysis required under New York law. Instead, a factfinder must make an individualized assessment, after evaluating the credibility of the witnesses at trial, as to whether Figliolia clearly and explicitly intended to be personally liable on each contract.
Reversed and remanded for trial. I hereby certify that the foregoing is a true copy of the original on file in my office. CLERK OF APPELLATE DIVIDION