author: Lynch, J. S. C.

text:
    SCOTT E. OATES, PLAINTIFF, v. EASTERN BERGEN COUNTY MULTIPLE LISTING SERVICE, INC., DEFENDANT.
    Superior Court of New Jersey Chancery Division
    Decided February 11, 1971.

      Mr. Arthur J. Lesemann for plaintiff (Messrs. Mazer & Lesemann, attorneys).

      Mr. Thomas A. Tinghino, attorney for defendant.
   Lynch, J. S. C.

Plaintiff, a real estate broker with offices in Englewood, Bergen County, New Jersey, sues to compel defendant Eastern Bergen County Multiple Listing Service, Inc. (MLS) to admit him as a member of its multiple listing service He is a Negro. He charges that in barring Mm from membership defendant is engaging in an illegal combination in restraint of trade. At the outset he points to the decision in Grillo v. Bd. of Realtors of Plainfield Area, 91 N. J. Super. 202 (Ch. Div. 1966), wherein it was held that the defendant multiple listing service there involved was an illegal combination.

Although this ease was instituted, tried and briefed on common law principles with respect to restraints of trade, we must also consider the recently enacted New Jersey Antitrust Act (N. J. S. A. 56 :9-l et seq.) which became effective May 21, 1970. The acts here complained of all began before the effective date of this statute. But they are of a continuing nature. Therefore the court is constrained to decide this case in the context of the New Jersey Antitrust Act, as well as under the applicable common law principles.

I

The Multiple Listing Service

The benefits of a multiple listing service to a member are substantial. They are described in 52 Cornell L. Q. 570, in a note on the Grillo case. See also Grillo, supra, at 222. In addition, a multiple listing service may also improve competition by making properties available to more brokers than those who have actually acquired the listings.

The area covered by defendant MLS—Eastern Bergen County—consists of 24 communities, lying between the New York boundary line on the north, Hudson County on the south, the Hudson River on the east and the Hackensack River on the west. Included therein is Englewood, where plaintiff maintains his broker’s office.

On April 5, 1968 plaintiff applied for membership in defendant organization. He was refused for the asserted reason that under the defendant’s scheme of organization, and pursuant to a “Stockholders Agreement” entered into by all of defendant’s stockholders, there were no vacancies to which plaintiff could succeed. His name was then placed on a waiting list on which there are now 13 names, plaintiff being third in order. Hone of such applications has been acted upon.

Under defendant’s Title 14A corporate organization only stockholders can be members. Its certificate of incorporation authorized the issuance of 100 shares of stock but only 54 have actually been issued.

Under the Stockholders agreement it is provided that stock may be "freely” [sic] transferred only among present stockholders, to any members of their immediate families or to principal stockholders or partners in a member’s real estate firm. Such "non-family” business associate must (a) be a licensed broker, (b) have been with the firm for at least two years, and (c) have the transfer approved by at least two-thirds vote of stockholders present at a meeting (art. 1A). Ho stock may be transferred to persons other than the parties to the stockholders agreement without the written consent of all of such parties or their transferees (art. IB). The agreement also provides that on the death of a stockholder, if his stock does not pass to one of the permissible transferees listed above, it is to be redeemed by the corporation and become treasury stock.

Article 7 of the stockholders agreement provides:

Issuance of New Stock: The corporation shall not issue any new stock or reissue treasury stock acquired by the corporation as long as this Stockholders Agreement is in effect. [Emphasis added]

The 54 shares originally issued by defendant went only to those who had been members of defendant’s predecessor, Multiple Listing Service of the Board of Eealtors of Eastern Bergen County, Inc (hereafter Board of Eealtors MLS). However, one of said members died before the present corporation was actually formed. His one share of stock was purchased by the president of the corporation and turned over to it as treasury stock. At a later date another member retired and turned his stock in to the corporation. Since those two shares of stock are now in the treasury, they have not been reissued, in obedience to article 7 of the stockholders agreement. Therefore, at present there are only 52 members on the roster of defendant, two less than originally anticipated. Further, in February 1970 another member indicated his intention to withdraw from the service, has not paid his dues since March 1970, and has not been treated as an active member since that time. Two other members have announced their intention to resign or retire in the near future, all as evidenced in the minutes of defendant corporation of June 11, 1970 and November 13, 1970. If these last three people are deemed not to be members, then there are five fewer than originally contemplated. Yet, says defendant, there are now “no vacancies” in defendant’s membership.

It is thus incontrovertible that defendant’s organization has created an “exclusive club” whose membership is limited to the original stockholders, members of their immediate families, and former associates with the qualifications recited above. If the stockholders agreement is permitted to be literally enforced, no one other than those recited will become a member of defendant’s organization.

Defendant asserts that since, under its stockholders agreement, it is prohibited from issuing any new or treasury stock and since plaintiff fails to meet the qualifications of article 1A and cannot acquire stock, he is barred from membership in defendant’s organization.

II

The history and operation of defendant’s multiple listing service

Defendant corporation was established in 1987, purportedly, so it is said, to avoid the effects of the Grillo decision in 1966.

Until 1967 the members of defendant corporation operated as an adjunct of the Board of Eealtors of Eastern Bergen County (under the corporate name of Multiple Listing Service of the Board of Eealtors of Eastern Bergen County, Inc.)

— hereafter Board of Eealtors MLS. That board was a local branch of the New Jersey Association of Eeal Estate Boards (NJARB) which, in turn, was affiliated with the National Association of Real Estate Boards (NAREB).

In early 1966 the attorneys for UJARB advised the state president that a one-year waiting period for board members to be eligible for MLS membership (as required by defendant’s predecessor, Board of Realtors MLS) was in violation of the law, by virtue of the then recent Grillo decision. In addition, the secretary of the New Jersey Association advised the Board of Realtors MLS that it should either (a) revert to a corporate status separate from the Board of Realtors and remove the term ‘^Realtor” from its name or (b) become a complete adjunct of the Board of Realtors and permit all board members to participate in multiple listing. (This latter effect was what was ordered by Judge Herbert in the Grillo decision). The president of the state board in. a subsequent letter affirmed this position. On May 11, 1966 a letter was received by the Board of Realtors MLS enclosing suggested by-laws which would make it completely subject to the Board of Realtors for Eastern Bergen County.

The members of defendant’s predecessor rejected adoption of the latter form. They thereupon decided that a severance would be effected between the local Board of Realtors and its multiple listing service. Defendant’s trial brief also asserts that it was the intent that the service would operate within the spirit as well as the dictates of the Gi'illo decision.

In early 1967 the Board of Realtors MLS was dissolved and the present defendant, Eastern Bergen County Multiple Listing Service, Inc., was organized. Each of the members of the prior organization elected to participate in the new corporation. One share of stock was issued to each of the members of the prior organization.

The Stockholders Agreement restricting transfer of stock, as set forth above, was signed and became a basic part of the corporate organization of defendant. More specifically relevant to the issue here, that agreement became the device whereby membership was limited to the original 54 members and to that select group to whom transfer was permitted. It furnishes the mechanism which has stood to bar plaintiff and other new members from participating in the MLS in the area involved.

Article XII of the Operating Procedure originally adopted by the instant defendant provided that:

Listing in tlie service shall not bo disclosed to brokers not associated with the service without the consent in writing of the listing broker; the broker is permitted to disclose Ms own listings to a broker not associated with the service. Brokers associated with the service are prohibited from cooperating with brokers not associated with the service for a period of ten days after publication date of the listing by the service.

In September 1968, after plaintiff had been denied admission to the service and after his attorney had written to defendant concerning the rejection, defendant amended the foregoing provision of article XII by eliminating the last sentence thereof. However, there persisted the provision that a listing broker could disclose only his own listings to a nonmember. A member broker still is prohibited from disclosing listings, other than his own, to nonmembers.

Defendant claims that, in fact, its members have fully cooperated with nonmembers, including plaintiff, and that such cooperation has accounted for approximately 5% of the gross sales per year by defendant’s members, so that in the years 1969 and 1970 over $1,000,000 in sales were accomplished in cooperation with nonmember brokers. Of this “cooperation” more, infra (VI (A)).

Defendant also asserts that it onght to escape the condemnation of the Grillo decision because in Grillo the membership of the hoard included the great majority of the active real estate brokers and salesmen in the territory of the board. In the area here involved, i. e., Eastern Bergen County, so it is said, defendant’s members constitute only about 16% of the brokers’ offices in the area. It is stipulated that approximately 20% of the' total gross business in the area is consummated by defendant’s members. Thus, argues defendant, the concept of “monopoly” which ran through the Grillo decision is absent here. Bnt as to this argument, see VI (B) (1) below.

111

Plaintiff’s Operation

Plaintiff has been a licensed real estate broker since 1967, and since 1968 has operated his own business in Englewood. Practically all of his business is with negroes. He has one full-time saleswoman. Approximately 271 listings were available to members of the defendant’s MLS at the time of trial, but plaintiff had only 21 listings in his office. Five of them were exclusively his, eleven were open listings and ten were cooperatives obtained from other brokers. Plaintiff’s listings were primarily in black neighborhoods of Englewood and Teaneck, the municipalities where his business is concentrated.

IV

The Effect Upon Plaintiff’s Means of Livelihood By Reason of His Exclusion from MLS

As against the advantages which would be plaintiff’s were he a member of the defendant MLS, what are the realities of his situation as a nonmember ? If a prospective buyer comes to him, that buyer will state his needs with respect to the location and type of house he desires, the number of rooms, taxes, heating costs, and other characteristics, as well as a price range within which he might purchase. A broker’s knowledge of available property is his “stock in trade.” Myers v. Arcadio, Inc., 73 N. J. Super. 493 (App. Div. 1962). To supply a buyer’s needs plaintiff has only his own meager listings, with the remote possibility of finding a member of defendant’s organization who may have a listing of his own which would suit the buyer’s needs. But how does plaintiff learn that a particular member has a listing to suit his prospective buyer’s needs ? Only if he had seen such a property advertised or, perchance, in passing a house similar to his buyer’s needs he had seen a sign giving the name of the listing broker. Obviously, plaintiff’s chances of obtaining a property to satisfy his buyer by these means are minimal. The court finds that the so-called “cooperation” with a nonmember which defendant organization will permit, i. e., by a listing broker with respect to his own listings, is illusory.

What is plaintiff’s situation insofar as he may obtain listings of his own? One about to sell his house naturally desires the widest market exposure possible. If he were to list the property with plaintiff, such promotion would be limited to that provided by plaintiff and his one employee-saleswoman. On the other hand, if plaintiff were a member of MLS, his property would be promoted by being listed with the 52 offices of defendant, its 132 brokers and 299 salesmen. It is likely, then, that a prospective seller would list his property with plaintiff rather than a member of MLS ? Des ipsa. Further, plaintiff has difficulty in obtaining salespeople who themselves might supply listings to his office. Of course, a prospective salesman would prefer the wider opportunities in an MLS office.

Reducing the instant issue to the realities of the situation we find that plaintiff’s success in obtaining listings or locating properties for sale—his “stock in trade”—is governed and limited by Ms own efforts, contacts and abilities. He has only a limited supply of “shoes on the shelves.” His commissions on selling are limited by that supply, and if buyers come to him to find out what he has to sell the same limitations apply. On the other hand, the members of defendant corporation are not limited by their own efforts, contacts and abilities in the stock on hand. Rather, by reason of their membership in the MLS each such member broker has available to him not only the listings which he himself has obtained but also those obtained by more than 50 fellow members in the MLS and over 400 salespeople associated with them.

The court finds that (1) by plaintiff’s exclusion from the MLS, competition is restrained; (2) plaintiff is deprived of the opportunity to compete; (3) to a substantial degree he is deprived of an opportunity to make his own living, and (4) under defendant’s organization its members have engaged in a “concerted refusal to deal” in the classical sense. There remains the question as to whether defendant’s combination, which produces these results, is an illegal restraint of trade.

V

Application ot the Concept op “Per Se” Illegality

In Grillo Judge Herbert, by way of background to his thorough analysis, highlighted those federal decisions under the. Sherman Antitrust Act (15 U. S. C. A. § 1 et seq.) which dealt with “concerted refusals to deal” and “group boycotts” and wherein such combinations were held to be illegal per se. Associated Press v. United States, 326 U. S. 1, 65 S. Ct. 1416, 89 L. Ed. 2013 (1945); Klor’s, Inc. v. Broadway-Hale Stores, Inc., 359 U. S. 207, 79 S. Ct. 705, 3 L. Ed. 2d 741 (1959), and Silver v. New York Stock Exchange, 373 U. S. 341, 83 S. Ct. 1246, 10 L. Ed. 2d 389 (1962). Such a concept of per se illegality would have precluded the necessity of determining illegality by applying a standard of “unreasonableness” and of inquiring at all into the substantiality of the harm caused by the offending practices or into the business excuse for their use. See Grillo, supra, at 219, citing Northern Pac. R. Co. v. United States, 356 U. S. 3, 5, 7-8, 78 S. Ct. 514, 3 L. Ed. 3d 545 (1958). However, because he considered the matter novel, Judge Herbert chose to rest his decision not on the per se concept but upon a finding that the combination before him was an “unreasonable” restraint of trade and therefore illegal at common law.

Because of Grillo the issue presented here is no longer novel, and, in our view, application of the per se concept is now called for in New Jersey. This is particularly so since the adoption of the New Jersey Antitrust Act, L. 1970, c. 73, N. J. S. A. 56:9-l et seq., which had not been adopted at the time of Grillo. Modeled directly on section 1 of the Sherman Act (15 U. S. C. A. § 1) that act provides:

Every contract, combination in the form of trust or otherwise, or conspiracy in restraint of trade or commerce, in this State, shall be unlawful.

It further provides (N. J. S. A. 56:9-18):

This act shall he construed in harmony with ruling judicial interpretations of comparable Federal anti-trust statutes and to effectuate, insofar as practicable, a uniformity in the laws of those states which enact it.

Thus, there have been drawn into the stream of New Jersey’s “public policy” the federal decisions which apply the per se doctrine.

Since defendant has attempted to shield its operations in a cloak of reasonableness (a concept which affords no imprimatur to a per se violation) the matter should first be examined to determine whether a per se concept should be applied. Therefore, to put the matter in proper focus, the federal decisions applying the per se classification should be re-examined to determine the relevance of the philosophy of those cases to the facts before us.

In Associated Press, supra, a cooperative association engaged in gathering and distributing news in interstate and foreign commerce prohibited service of AP news to nonmembers, prohibited members from furnishing spontaneous news to nonmembers, and empowered members to block membership applications of competitors. Among other provisions, the by-laws of AP required that each member should promptly furnish to the association all of the news of such member’s district; all members were prohibited from selling their news to any agency or publisher except to AP. Ro news was to be made available by any member to any nonmember. The court said:

The joint effect of these By-Laws is to block all newspaper nonmembers from any opportunity to buy news from AP or any of its publisher members. Admission to membership in AP thereby becomes a prerequisite to obtaining AP news or buying news from any one of its more than twelve hundred publishers. The erection of obstacles to the acquisition of membership consequently can make it difficult, if not impossible, for non-members to get any of the news furnished by AP or any of the individual members of this combination of American newspaper publishers. [326 U. S. at 9, 65 S. Ct. at 1419]

Is not this the operative effect of defendant’s organization?

In AP the Court further said (at 10, 65 S. Ct. at 1419) : “Historically, as well as presently, applicants who would offer competition to old members have a hard road to travel.” And,

The net effect is seriously to limit the opportunity of any new paper [sic] to enter these cities. Trade restraints of this character, aimed at the destruction of competition, tend to block the initiative which brings newcomers into a field of business and to frustrate the free enterprise system which it was the purpose of the Sherman Act to protect, [at 13, 65 S. Ct. at 1421]

Is not this what has happened here ?

The defendant in AP argued that an owner of property can choose his associates and can, as to that which he has produced by his own sagacity, efforts and ingenuity, decide for himself whether and to whom to sell or not to sell. The court answered:

While it is true in a very general sense that one can dispose of his property as he pleases, he cannot “go beyond the exercise of this right, and by contracts or combinations, express or implied, unduly hinder or obstruct the free and natural flow of commerce in the channels of interstate trade.” * * ® Victory of a member of such a combination over its business rivals achieved by such collective means cannot consistently with the Sherman Act or with practical, everyday knowledge be attributed to individual ‘enterprise and sagacity’ ; such hampering of business rivals can only be a ttributed to that which really makes it possible — the collective power of an unlawful combination, [at 15, 65 S. Ct. at 1422 emphasis added]

ln Klor’s, supra, the defendant chain of department stores, national retailers and their distributors were found to have conspired among themselves either not to sell to plaintiff retail store or to sell to it only at discriminatory prices. The court labeled this combination a “concerted refusal to deal” with the plaintiff which seriously handicapped its abiiity to compete, and classified it as a per se violation, saying:

Group boycotts, or concerted refusals by traders to deal with other traders, have long been held to be in the forbidden category. They have not been saved by allegations that they were reasonable in the specific circumstances, nor by a failure to show that they “fixed or regulated prices, parcelled out or limited production, or brought about a deterioration in quality.” Fashion Originators’ Guild v. Federal Trade Comm’n, 312 U. S. 457, 466, 467-468, 61 S. Ct. 703, 85 L. Ed. 940. Cf. United States v. Trenton Potteries Co., 273 U. S. 392, 47 S. Ct. 377, 71 L. Ed. 700. Even when they operated to lower prices or temporarily to stimulate competition they ivere banned. For, as this Court said in Kiefer-Stewart Co. v. Joseph E. Seagram & Sons, 340 U. S. 211, 213, 71 S. Ct. 259, 95 L. Ed. 219, “such agreements, no less than those to fix minimum prices, cripple the freedom of traders and thereby restrain their ability to sell in accordance with their own judgment.” Cf. United States v. Patten, 226 U. S. 525, 542, 33 S. Ct. 141, 57 L. Ed. 333. [359 U. S. at 212, 70 S. Ct. at 700; emphasis added]

Applying these principles to the case before it, the court held :

This combination takes from Klor’s its freedom to buy appliances in an open competitive market and drives it out of business as a dealer in tbe defendants’ products. * * * It clearly has, by its “nature” and “character,” a “monopolistic tendency.” As such it is not to be tolerated merely because the victim is just one merchant whose business is so small that his destruction makes little difference to the economy. Monopoly can as surely thrive by the elimination of such small businessmen, one at a time, as it can by driving them out in large groups. In recognition, ot this fact the Sherman Act has consistently been read to forbid all contracts and combinations “which ‘tend to create a monopoly,’ ” whether “the tendency is a creeping one” or “one that proceeds at full gallop.” International Salt Co. v. United States, 332 U. S. 392, 396, 68 S. Ct. 12, 92 L. Ed. 20. [at 213-214, 79 S. Ct. at 710]

I consider that philosophy applicable here.

In Silver the New York Stock Exchange denied to the plaintiff nonmembers of the Exchange a right to have a direct wire telephone connection with members. The court held that removal of the wires by collective action of the Exchange constituted a per se violation of the Sherman Act, and said:

The concerted action of the Exchange and its members here was, in simple terms, a group boycott depriving petitioners of a valuable business service which they needed in order to compete effectively as broker-dealers in the over-the-counter securities market. [373 U. S. at 347, 83 S. Ct. at 1252 emphasis added]

Without such services, the court noted, the nonmember dealer is hampered substantially in his business; he loses a significant volume of trade with other members of the network, and these important business advantages are taken away from him.

Just as the concerted action of the defendants in refusing to deal with other traders in AP, Klor’s and Silver, all supra, deprived plaintiffs therein of an opportunity to sell their “stock in trade,” and tended to deprive them of their means of livelihood, so too does the defendant’s operation here, by similar concerted action, deny to plaintiff access to a substantial part of the product in which he deals — listings of property. The restraint cripples the freedom of this plaintiff-trader and hampers his ability to sell in accordance with his judgment. United States v. Patten, 226 U. S. 525, 542, 33 S. Ct. 141, 57 L. Ed. 333 (1913). In a federal anti-trust context, it would have sufficient “pernicious effect” to come within the “per se” classification. The “pernicious effect” is no less present here. The lessening of competition — a public evil — is ineontrovertibly present. And the deprivation of plaintiff’s access to properties which he could sell, and which are hidden from him by the MLS operation, obviously deprives him of the right to compete with respect to those hundreds of properties.

This court sees no reason why the federal concept of per se illegality should not be applied here. The common law is not constant. It must yield as the needs require. And the dominant factor in molding and remolding common law principles is “public policy” so that the common law may soundly serve public welfare and true interests of justice. Falcone v. Middlesex County Medical Society, 34 N. J. 582, 589 (1961). The public policy here controlling has been expressed in the New Jersey Antitrust Act. Therefore, the court holds that defendant’s combination in restraint of this plaintiff-trader is illegal per se.

Further, defendant’s combination and its action in excluding plaintiff from membership violates another aspect of public policy, one which was recognized by our Supreme Court in Falcone v. Middlesex County Medical Society, supra. There plaintiff doctor was excluded from membership in defendant medical society. The Society’s refusal to admit him to membership had “seriously adverse economic and professional effects on Dr. Falcone.” 34 N. J. at 586. The Society contended that it was a “voluntary” organization which was at liberty to prescribe its own rules, and that Dr. Falcone had “no judicially enforceable right to admission to membership.”

Falcone recognized that courts have been understandably reluctant to interfere with the internal affairs of membership associations hut “where the considerations of policy and justice were sufficiently compelling judicial scrutiny and relief were not found wanting; * * 34 N. J. at 590. Speaking for the court, Justice Jacobs said:

In Trautwein v. Harbourt, 40 N. J. Super. 247, 59 A. L. R. 2d 1274 (App. Div. 1956), certification denied, 22 N. J. 220 (1956), the court recently dealt with an action for damages by plaintiffs who alleged they were maliciously denied admission to membership in the Order of the Eastern Star, a fraternal organization of New Jersey. In rejecting the plaintiffs’ claim for relief the court (see 40 N. J. Super., at pp. 264-265) differentiated the expulsion cases and distinguished exclusion cases involving organizations “membership in which is an economic necessity” or “those which are repositories of civic, civil or political rights.” See Smith v. Allwright, 321 U. S. 649, 64 S. Ct. 757, 88 L. Ed. 987 (1944). We are here in nowise concerned with a social or fraternal organization such as the Order of the Eastern Star, [at 591-592]

And he set the public policy polestar as follows:

We are here concerned with and therefore deal solely with an organization, membership in which may here, in the language of Trautwein, be viewed as “an eeonomie necessity"; in dealing with such an organization, the court must be particularly alert to the need for truly protecting the public welfare and advancing the interests of justice by reasonably safeguarding the individual’s opportunity for earning a livelihood while not impairing the proper standards and objectives of the organization, [at 592; emphasis added]

Justice Jacobs went on to say:

The persistent movement of the common law towards satisfying the needs of the times is soundly marked by gradualness. Its step by step process affords the light of continual experience to guide its future course. See Walker, Ino. v. Borough of Stanhope, 23 N. J. 657, 666 (1957). When courts originally declined to scrutinize admission practices of membership associations they were dealing with social clubs, religious organizations and fraternal associations. Here the policies against judicial intervention were strong and there were no significant countervailing policies. When the courts were later called upon to deal with trade and professional associations exercising virtually monopolistic control, different factors were involved. The intimate personal relationships which pervaded the social, religious and fraternal organizations were hardly in evidence and the individual’s opportunity of earning a livelihood and serving society in his chosen trade or profession appeared as the controlling policy consideration. Here there have been persuasive indications, as noted earlier in this opinion, that in a case presenting sufficiently compelling factual and policy considerations, judicial relief will be available to compel admission to membership; we are entirely satisfied, as was Judge Vogel in the Law Division, that Dr. Falcone has presented such a case. See Falcone v. Middlesex County Medical Soc., supra, 62 N. J. Super. 184 [at 596]

So here.

The court finds that defendant’s operation constitutes a combination in restraint of trade, unlawful per se under the New Jersey Antitrust Act (N. J. S. A. 56:9-1 et seq.), the federal precedents incorporated therein, and the public policy of Falcone, supra, that a man’s opportunity to make a livelihood shall not be restrained by concerted action.

Since we have decided that defendant’s organization constitutes a combination which is unlawful per se, there is no necessity for inquiring into its “reasonableness,” the “business reasons” for its activities (cf. United States v. Arnold, Schwinn & Co., 388 U. S. 365, 375, 87 S. Ct. 1856, 18 L. Ed. 2d 1249 (1967)), or the extent of the market which it affects. United States v. Associated Press, supra. Nevertheless, in the interest of disposing of all contentions made by defendant, and as an alternative ground for its decision, the court shall here pass upon those factors.

VI

Defendant’s Combination Under the “Rule of Reason”

(A)

Alleged “Cooperation”

Defendant attempts to distinguish the Grillo decision on the ground that in the Plainfield area there was an absolute prohibition against cooperation by members of the MLS with nonmembers, while here, it is said, cooperation is not only permitted but is encouraged. Therefore it is argued that the invidious “refusal to deal” in Grillo is not present here. We have already described this “cooperation” as “illusory.”

In support of its contention defendant asserts that, upon occasion, members of the defendant have cooperated with plaintiff regarding the sale of individual houses and that, in fact, plaintiff has never been refused cooperation by a member of defendant on any specific occasion. There is evidence here that there has been cooperation between defendant’s members and plaintiff with respect to ten properties. However, it is noticed that most of these properties were in black areas and, in all but two, cooperation was solicited by plaintiff after he happened to discover who was the listing broker for the property involved. True, at trial plaintiff was unable to identify any of defendant’s members who have refused cooperation to plaintiff where the member solicited was the listing broker. But the problem confronting plaintiff—and any nonmember—is to find out who the listing broker is. Such cooperation as is offered, as we have said, is an unreal concept, for a member cannot discover' a listing through any but the listing broker and that broker’s name can only be discovered by purest happenstance. The thrust of plaintiff’s complaint in this respect is that cooperation with respect to the mass of listings in the files of defendant is denied to him. The “token” cooperation offered by defendant falls far short of satisfying that complaint.

(B)

Defendant’s “Justification” for its Restricted Membership

Defendant says that restriction of its membership is justified for these reasons: (1) the limitation to 54 members and the restrictive provisions of the stockholders agreement with respect to further admissions to membership were adopted to eliminate what defendant conceives to have been held objectionable in the Grillo case, i. e., the fact that the membership of the defendant board there included “the great majority of active real estate brokers and salesmen in the territory of the Board” (cf. Grillo, 91 N. J. Super. at 207) thus tending [sic] to establish a “monopoly” (Grillo, at 218); (2) to eliminate the requirements for admission to membership which were held to be too restrictive in Grillo (the requirements of one-year membership in the board of realtors, approval of two-thirds of the executive committee and of the membership of that body, admission charge of $1,000, and six months’ probationary period after admission); (3) for administrative reasons, in that a smaller number of members allegedly is “easier to handle” and avoids hiring of extra help, buying of more equipment, and thus incurring greater expenses.

(1) Substantiality op Impact

As to reason No. 1, defendant argues that it is neither a monopoly nor a near-monopoly, and that therefore the antitrust laws .are not applicable to it. It contends that since its members comprise only 16% of the real estate brokerage offices and 20% of the volume of sales made yearly in the area, any restraint of trade occasioned by its operations is “merely incidental, casual, and unmaterial [sic].” Lawson v. Woodmere, Inc., 217 F. 2d 148 (4 Cir. 1954), and lacks a sufficiently “substantial impact on trade” to be held unlawful.

I feel, as did Judge Herbert in Grillo, supra, that the illegality of the defendant’s operation is its tendency to destroy competition, rather than its mere size or market share. Nevertheless, I find that the restraint of trade is a “substantial” one, in that plaintiff is being denied free access to approximately 20% of the dollar volume of sales produced in the area per year (some $20,000,000 plus). Therefore, even if “substantiality” of impact were necessary to establish illegality, it appears here. “Monopoly” need not exist for the courts to act against restraints of trade. Rather, the prohibited combination is one which “has or may have a tendency toward preventing competition * * (emphasis added) Grillo, supra, at 218, plus authorities cited therein.

(2) Restrictive Admissions Requirements

As to reason No. 2 (eliminating the requirements for admission in the Plainfield MLS as considered in Grillo), I find great difficulty in following defendant’s logic. The Plainfield MLS had established standards which, if met, mandated admission to membership. However stringent they may have seemed, they were at least possible of fulfillment. On the other hand, defendant has eliminated all such standards as would qualify one for membership. Except íot the permitted transfer among family members or business associates provided by article 1A of the Stockholders Agreement, no one can become a member without the written consent of 100% of the members (art. 1B). In Plainfield, approval of only two-thirds of the executive committee and of the membership was required.

Realistically, defendant has created what is an absolute bar to admission of new members — no matter what their qualifications. How this can logically be said to ameliorate the evils which Grillo found in the Plainfield qualifications is completely beyond me. The purpose of the Grillo holding was to make membership more readily attainable, not less. No matter what defendant’s intent here may have been, the effect of the change it has made is that membership is now totally closed to outsiders. As such, it flies in the face of the Grillo mandate.

(3) Administrative convenience

As to reason No. 3, i. e., “business reasons,” the only testimony which purports to justify the limitation in the number of members to 54 lies in the testimony of Mr. Tulp, one of defendant’s officers. He opined that the “ideal” operation of a multiple listing service would be “somewheres around 40” because “it is easier to handle.” He said he knew of several other multiple listing services in New Jersey whose membership ranged from 12 in the South Bergen Board of Realtors to 100 in Passaic County. Other than this naked opinion —a “net opinion,” cf. Parker v. Goldstein, 78 N. J. Super. 472, 483 (App. Div. 1963) — there is no support in the record which demonstrates that the limitation in number of members is necessary or even beneficial. Incidentally, it is interesting to note that the National Association of Real Estate Boards has included in by-laws which it has promulgated to its member boards a provision with respect to the numbers aspect of multiple listing services. In the note at 52 Cornell L. Q. 570 it is said:

These By-laws include recommendations for operating multiple listing services, most significant of which is contained in Article 1, Section 2: “The member board shall not apply any arbitrary numeric or other inequitable limitation on its members.” The official interpretations by the N.A.R.E.B. Board of Directors dealing with this section, while not mandatory, serve as useful guides toward understanding what are deemed “inequitable limitations.” [at 571]

It may be that there ought to be some limitation in number with respect to the proper administration of a multiple listing service. But there is no proof in this record to establish any such standard. As a matter of fact, defendant’s corporation itself has projected a standard of sorts in that provision of its certificate of incorporation which authorized the issuance of 100 shares of stock. It would thus seem to have been contemplated that a membership of 100 would not be too cumbersome. If the ceiling of 100 permitted by the certificate were recognized — since only 54 members have been admitted — all 12 applicants now on the waiting list would be admitted — subject, of course, to possible objections to such applicants on the merits of their qualifications.

“Good business practices” will not justify an otherwise unlawful combination. In United States v. Arnold, Schwinn & Co., supra, defendant contended that it acted to promote “good business practices” and “to compete more effectively in the market.” The Supreme Court affirmed plaintiff’s verdict below saying:

Our inquiry is whether, assuming nonpredatory motives and business purposes and the incentive of profit and volume considerations, the effect upon competition in the marketplace is substantially adverse. The promotion of self-interest alone does not invoke the rule of reason to immunize otherwise illegal conduct. [388 U. S. at 375, 87 S. Ct. at 1863 emphasis added]

Defendant’s concerted “refusal to deal” with nonmembers is such “otherwise illegal conduct.” We know of no authority in the federal antitrust experience which would allow administrative convenience, which is proffered by defendant here, as a justification for its concerted refusal to deal.

Note, however, that N. J. S. A. 56:9—5 provides:

a. This act shall not forbid the existence of trade and professional organizations created for the purpose of mutual help, and not having capital stock, nor forbid or restrain members of such organizations from lawfully carrying out the legitimate objects thereof not otherwise in violation of this act; nor shall those organizations or members per se be illegal combinations or conspiracies in restraint of trade under the provisions of this act [Emphasis added]

The court finds that defendant does not come within the scope of this exemption, not only because it has issued capital stock, but also because its activities are “otherwise in violation” of the act.

Conclusion

Eor the foregoing reasons we hold that defendant’s operation and use of the organizational provisions quoted herein constitutes an unlawful combination in restraint of trade. The court therefore directs that (1) paragraphs 1A, IB and 7 of the stockholders agreement and paragraph 12 of the operating procedure are declared to be null and void, and (2) plaintiff be forthwith admitted as a member of defendant corporation upon the same terms and conditions as all other members.

The court retains jurisdiction (a) for the purpose of trying the issue of damages (issues to be framed at further pretrial conference), and (b) for such other purpose as may be necessary in the implementation of the decision herein made.

No costs at this time.

       Trial has been bifurcated. Liability only has been tried, leaving damages for later time.

       Plaintiff concedes that he has no proof that his exclusion was racially motivated. However, all members of defendant MLS are white.

         “The Practice of Multiple Listing

      Multiple listing is defined as ‘an arrangement among real estate board * * * members whereby each broker brings his listings to the attention of other members so that if a sale results, the commission is divided between the * * * (listing broker and the selling broker), with a small percentage going to the board.’l [Unger, Real Estate Principles and Practices 434 (1959).] To effectuate the arrangement, multiple listing agreements are obtained with property owners, giving to all board members jointly the exclusive right to sell the listed property. Once obtained, the agreement must be filed with the board within a specified number of days. Information concerning the property is then relayed to all members, after which any member may offer the property to a prospective buyer.
      (1) Benefits and Drawbacks. By exposing the listings of each member to the sales efforts of every other member, multiple listing benefits both sellers and buyers. Sellers have their property offered in a number of offices, thus reaching a wider market in a shorter period of time, while buyers are provided with a convenient means of selecting property to fit individual needs without having to shop from office to office. Competition as well as efficiency can be enhanced by multiple listing. ‘(O)ne of the most important functions of a MLS (multiple listing system) is to provide the small real-estate office with a diversified inventory of properties which wilt meet the needs of all but Ihe most highly discriminating buyersthus providing ‘the small office with inventory and promotion potentials equal to those of the larger firm,s * * s'-’2[Case, Real Estate Market Behavior in Los Angeles •— A Study of Multiple Listing System Data 49 (1963).]” (Emphasis added)

       Seven of defendant’s members are also members of the Central Bergen Multiple Listing Service. The extent of that participation is minimal and does not materially affect the instant ease.

       Defendant’s members represent 16% of the real estate offices in the area (53 of a total of 324) ; 35% of the licensed brokers (132 of a total of 370) ; 46% of the licensed salesmen (299 of a total of 645), and 42% of the total sales personnel (brokers and salesmen) (431 of a total of 1951).
      As to sales volume consummated through defendant’s MLS we find the following as fact:

        Year No. of Sales Dollar Volume

      1967 794 $21,561.655
      (1967 figures include two months’ operations of defendant’s predecessor corporation.)
      1968 765 22,792.927
      1969 639 21,357,489
      The number of defendant’s listings of homes for sale for each of the years 1967 through 1969 were as follows:
      1967 — 1573 listings
      1968 — 1333 ”
      1969 — 1075


source: Caselaw Access Project

author: Kentz, P. J. J. & D. R. Ct.

license: Public Domain

text:
    R, PLAINTIFF, v. F, DEFENDANT
    Juvenile and Domestic Relations Court Union County
    Decided January 13, 1971

      Mr. Eugene Bosner of the Union County Legal Services Corp., attorney for plaintiff.

      Mr. Joel P. Kraemer for defendant (Messrs. Simandl, Lejf, Itzihman & Kraemer, attorneys).
   Kentz, P. J. J. & D. R. Ct.

An application has been made to this court to establish the paternity of a child born out of wedlock to one P and to grant reasonable visitation rights to the father.

Two vital questions of law are raised here which heretofore have been undecided in this State. They are whether the Juvenile and Domestic Relations Court has jurisdiction to grant visitation rights not incidental to an order for support, and whether the father of a child born out of wedlock has any right to visitation without the express or implied consent of the mother.

In 1967 a child was born to P. Por approximately one year prior to the child’s birth the parties in this proceeding cohabited in New York, and either before or slightly after cohabitation commenced a private ritual of marriage was conducted without beneiit of license or person authorized by the State of New York to solemnize the marriage. N. Y. Dom. Rel. Law, McKinney’s Consol. Laws c. 14, § 11. The parties continued to live together as husband and wife, wore wedding rings and were a “family.” The father demonstrated a strong interest in and actively eared for the child while the “family” remained together. In May 1969 defendant returned to the home of her parents with the desire to sever contact with the bohemian style life she and plaintiff had been living. She was determined to escape the environment of her youthful indiscretions and make a fresh start with her child.

When the matter was heard the parties conceded that the child was born out of wedlock and that plaintiff is the natural father of the child. After conceding paternity it was urged by defendant that this court was without jurisdiction to grant visitation in the absence of a claim for support by defendant. With this contention I cannot agree.

The jurisdiction of the Juvenile and Domestic Relations Court is established by statute. N. J. S. A. 2A:4-18 states in pertinent part that

The juvenile and domestic relations court shall also have jurisdiction concurrently with such other courts as may have jurisdiction over the matter, to hear and determine in a summary manner disputes and complaints:
a. Involving the domestic relation or the welfare of children, as to which jurisdiction is vested in any court except the superior court or except with respect to the adoption of children or adults.
b. Involving matters of support or temporary custody of children as to which jurisdiction is vested in the superior court.
c. Involving violations of * * * chapter 6 and chapter 17 of Title 9, Children (§ 9:6-1 et seq., and § 9:17-1 et seq.) * * *

In exercising its jurisdiction the Juvenile and Domestic Relations Court is charged with giving paramount consideration to the welfare of the children involved in the matter. See, e. g., State v. Monroe, 30 N. J. 160 (1959); D. v. D., 56 N. J. Super. 357 (App. Div. 1959). While the scope of the subject matter jurisdiction of the Juvenile and Domestic Relations Court is restricted to the parameters established by statute, Amadeo v. Amadeo, 64 N. J. Super. 417 (App. Div. 1960); Tracey v. Tracey, 69 N. J. Super. 382 (App. Div. 1961), the exercise of that jurisdiction once obtained should be liberally construed so that the court may accomplish its purposes, Wilson v. Wilson, 86 N. J. Super. 61 (App. Div. 1965). Thus, if the statute furnishes some indication of a legislative intention to clothe the court with jurisdiction, an endeavor will be made to effectuate that intention though the statute may not be free from doubt. Mattox v. Mattox, 43 N. J. Super. 111, 115 (App. Div. 1956). Cf. Lasasso v. Lasasso, 1 N. J. 324, 328 (1949), followed in Bonanno v. Bonanno, 4 N. J. 268, 273 (1950), holding that certain general statutory language conferred upon the court jurisdiction with respect to the support of the wife or children whether or not they are or will be a public charge.

In this case the father of the child seeks a declaration of paternity and visitation privileges. Clearly this court has jurisdiction to establish paternity in bastardy proceedings. N. J. S. A. 2A:4-18; N. J. S. A. 9:17-1 et seq. Cf. Borawick v. Barba, 7 N. J. 393 (1951); see also, R. 5 :5-9. Furthermore, under N. J. S. A. 9 :16-2 and 3 proceedings may be brought in this court by either parent to enforce the statutory duty of both parents to support and educate the child whether he be legitimate or not.

Defendant herein contends that paternity is not an issue since it has been conceded. The result of that concession is not as defendant insists; the concession alone should not be sufficient to deprive a court of jurisdiction in this matter. It is pointed out that had this complaint been brought before the Superior Court, defendant’s denial of paternity would, by the same reasoning, deprive that court of jurisdiction. See Borawick v. Barba, supra. The jurisdiction of courts should not depend upon a defendant’s concessions or denials but upon the substance of the legal relationships involved. The thrust of the complaint in this case is a petition for a declaration of paternity and a determination of the relationship between the father and his illegitimate child.

The father of an illegitimate child is charged by N. J. S. A. 9:16-2 with the duty to support and educate the child, and either parent can enforce in this court the obligations established by this section. N. J. S. A. 9:16-3. In fact, the father can obtain custody of the illegitimate child in this court. In re Guardianship of C., 98 N. J. Super. 474 (J. & D. R. Ct. 1967). Therefore, it is apparent that the relationship between father and illegitimate child is a matter generally cognizable in Juvenile and Domestic Belations Court.

Defendant argues that under In re Stevens, 37 N. J. Super. 130 (App. Div. 1953), this court is precluded from granting visitation since that power was held to reside exclusively in the Superior Court. This argument was examined in Smith v. Smith, 85 N. J. Super. 463 (J. & D. R. Ct. 1964), and Stevens was construed to be limited to the facts upon which it was based. As Judge Polow stated in Smith:

The Appellate Division did not rule in the Stevens case that the Juvenile and Domestic Relations Court lacks the power, incident to granting an order of support, [as was present in Smith] to establish specific hours of visitation for the benefit of the husband and father. In practice, the Juvenile and Domestic Relations Court is expected to and should establish the rights of visitation as an incident to an order granting support of children in appropriate circumstances, [at 470]

See also, 27B C. J. S. Divorce § 316 at 516; Pollock v. Pollock, 31 Misc. 3d 437, 330 N. Y. S. 2d 116 (Sup. Ct. 1961).

If visitation can be granted to a father in this court, as the Smith case, holds, I see no reason to restrict the availibility of that right to support cases, nor do I think that Judge Polow intended such a limitation. If this court can grant temporary custody, a fortiori it can grant visitation in a proper case. The relationship between father and child is of such a nature that the presence of the father, even for short intervals of time, must necessarily have an effect upon the welfare of the child. Indeed, it might be said that the child has a right to see his father.

Since the presence of the father has a significant effect upon the welfare of the child and since this court has jurisdiction over the child for the purposes stated in N. J. S. A. 9 :16-1 et seq. and 9:17-1 et seq., the ultimate consideration being the best interests of the child, I hold that this court must consider visitation by the father to be the natural right of each child. Purthermore, since visitation is necessary for one parent to determine whether his child is being cared for suitably and educated properly by the person having custody, I perceive sufficient indication of a legislative inteut to clothe this court with jurisdiction in matters affecting the welfare of illegitimate children. Mattox v. Mattox, supra. Without the opportunity to see the child, N. J. S. A. 9:16-3 becomes useless to the willing parent; visitation must be available to the father in such a case. Baker v. Baker, 81 N. J. Eq. 135 (Ch. 1913).

By imposing the obligation to support the illegitimate child on the father and allowing him to enforce the parental obligations in this court, the Legislature has established a legal relationship between father and illegitimate child which, although not as complete as the relation between father and legitimate child, is certainly far from that described by the doctrine of nullius films. If, in a proper case, this court can grant custody to the father of the illegitimate child, In re Guardianship of C., supra, a fortiori this court can grant visitation in a proper case. The propriety of the case is determined by the welfare and best interests of the child and by the applicable statutes.

It is argued by defendant that N. J. S. A. 9:16-1 precludes this Court from granting visitation in this case. N. J. S. A. 9:16-1 states:

The mother of an illegitimate child, whether married or single, shall have the exclusive right to its custody and control and the putative father of such child shall have no right of custody, control or access to such child without the mother’s consent. If, however, it is proved that the mother is unfit to have the custody and control of such child, the Superior Court or any other court which may have jurisdiction in the premises may make any order touching the custody or control of such child which might heretofore have been made.
This seotion is intended to he declaratory of the enlisting laiv upon this subject and it shall, under no circumstances, be construed as an implication that the rights of such a mother have hitherto been less than as herein above defined. [Emphasis added.]

This statute was signed into law in April 1913. In January of the same year Baker v. Baker, supra, was decided and it held that the father of an illegitimate child should have the right to visit his child subject to the best interests of the child. Defendant contends that N. J. S. A. 9:16-1 supersedes and overrules Baker. I do not agree.

In Baker the father of the child sought reasonable access to his children, one of which was born out of wedlock. The father had been contributing to the support of the children, and Yice-Chancellor Howell stated:

Why has he not a right to see the children and determine for himself whether the stipend is being properly administered? Why has he not an interest to satisfy himself by inspection that the illegitimate child is being properly clothed and nourished, and that it has a proper home to live in, that care is being taken of its training, its education, and its moral bringing up? The statutes of this state, relative to the custody, care and maintenance of children, are supposed to relate solely to children born in lawful wedlock. Why the principles thus legislated upon do not apply with equal force to illegitimates, I am not able to perceive, [at 137]

The theory espoused iu Baker is adhered to in the majority of jurisdictions that have examined this issue. See In re Guardianship of C, supra, and cases cited therein. In fact, other states have considered New Jersey to be in that majority, citing Baker with approval. See, e. g., Anonymous v. Anonymous, 56 Misc. 2d 711, 289 N. Y. S. 2d 792 (Fam. Ct. 1968).

The relationship between Baker and N. J. S. A. 9 :16-1 is challenged by defendant. Certainly a legislative body is presumed to know the prior law, Magierowski v. Buckley, 39 N. J. Super. 534 (App. Div. 1956), and there is a presumption against useless legislation, Yanow v. Seven Oaks Park, Inc., 11 N. J. 341 (1953). Furthermore, a purposeful alteration of the existing law must be attributed to the Legislature. Tucker v. Frank J. Beltramo, Inc., 117 N. J. L. 72 (Sup. Ct. 1936). The Legislature, however, expressly stated that N. J. S. A. 9:16-1 was declaratory of A.viptiug law, presumably including Baker unless such an interpretation would be contradictory.

Under N. J. S. A. 9:16-2 the father of the child in this case is obligated to support and educate his child regardless of his legitimacy, yet the putative father of the illegitimate child has no right of access to the child to determine whether the child needs his support or whether the mother is caring for the child properly.

This apparent conflict in the law has remained unresolved since 1913, and this court is aware of the presumptions of constitutionality afforded to statutes of long standing. State v. Joas, 34 N. J. 179 (1961); Flynn v. Union City, 32 N. J. Super. 518 (App. Div. 1954); Wilentz v. Hendrickson, 133 N. J. Eq. 447 (Ch. 1943) aff’d 135 N. J. Eq. 244 (E. & A. 1944); Legg v. Passaic County, 122 N. J. L. 100 (Sup. Ct. 1939) aff’d 123 N. J. L. 263 (E. & A. 1939). However, in matters affecting the rights of infants a more detailed study of the law is warranted to protect the infant. As Andrew Kleinfeld has noted in his recent article, “The Balance of Power Among Infants, their Parents and the State,” 4 Family L. Q 320 (1970), some areas of the law in regard to infants have been neglected. Kleinfeld states:

In the areas of law where infants traditionally have been unrepresented, many of the rules seem crude and careless with regard to their interests. Yet none of these observations have any validity for areas where infants generally have been represented, such as probate law, where substantive as well as procedural rules regarding infants have been elaborated in the most intricate detail, and statutes have been frequently and meticulously construed. These impressions, if they are correct, suggest that without counsel, rights not only fail to be vindicated; they fail also to be created. A lawyer does not merely present facts to a court in a favorable light; he argues that theories not obviously applicable ought to be used to interpret those facts, suggests previously undiscovered meanings in statutes, and he appeals from court to court for vindication of his theories. The effect of all this is often to create rights where before they lay undiscovered. The right to counsel, then, is not merely one of a panoply of rights insuring fair individual adjudication; it creates a context in which rights stated in case or statute are implemented, and new rights are created, [at 324]

At present the infant involved in a custody or visitation proceeding in this court is not entitled to representation by counsel, although perhaps he should be. In re Gault, 387 U. S. 1, 87 S. Ct. 1428, 18 L. Ed. 2d 527 (1967). Since the burden of protecting the infant’s welfare is on the court, the infant’s rights must also be considered. This court must enforce those rights if it appears that the best interests of the child will be served bjr such enforcement. This court is the advocate of the child’s rights when such child is not represented by counsel, and must evaluate the best interests of the child in electing to enforce those rights or not. Since the court is both the advocate of the infant’s rights and the trier of the fact and law, cases involving the best interests issue ought to be weighed with extreme care and the court must be able to distinguish between questions of the infant’s rights and questions pertaining to the infant’s welfare.

The question of visitation touches both the rights and the welfare of the infant. When Baker was decided, the doctrine of nullius filius was recognized to a certain extent but the father was allowed visitation since it was deemed to be in the best interests of the child. Citing English law on the subject, Vice-Chancellor Howell stated in Baker that:

Animosities between the parents cannot control, because it may well be that they would be detrimental to the best interests of the infant. I think it is much better for the child to have the father visit it at stated times, not only to learn of its continued welfare, but to infuse into it, at an early age, the natural love and affection that it should have for a parent who is interested in its well-being. [81 N. J. Eq. at 138]

See Queen v. Nash, 10 Q. B. D. 454, 52 L. J. Q. B. 442 (1883); Bernado v. McHugh, [1891] A. C. 388. It is significant to note that there was no issue of paternity in the Baker case.

Subsequently the Legislature determined that the putative father should have no right of access to the child without the' mother’s consent and declared this to be the existing law. N. J. S. A. 9:16—1.

In 1929 the Legislature repealed the doctrine of nullius filius by the enactment of L. 1929, c. 153 (now N. J. S. A. 9:16-2, 3, 4). These sections recognized the parent-child relationship between the illegitimate child and his natural father. In re Guardianship of C, supra.

The construction of N. J. S. A. 9:16-1 proposed by the mother in this case would revive the doctrine of nullius filius by returning the father to the position of a stranger to his own child. In light of the history of this doctrine, the reasons for which have long since been forgotten, it cannot be seriously contended that it should apply in this case. A close examination of the statute reveals a better solution.

As stated above, there is a presumption against useless legislation. Yanow v. Seven Oaks Park, Inc., supra. Therefore, I presume the word “putative” is not to be construed as mere excess verbiage. A putative father is defined as the alleged or reputed father of an illegitimate child. Black, Law Dictionary (4th ed. 1951). The Legislature was referring to the person who is accused of being the father or supposed to be the father of the child when it stated that he should have no right of access. Baker refers to the father of the child; that is, the natural father of the child. That a person who refuses to acknowledge paternity is to be precluded from having access to the child is the import of the statute. However, the admitted father who shows an active interest in the child’s welfare should not be classified as a “putative” father. The fact that the amendments made in 1929 (now N. J. S. A. 9 :16-2, 3, 4) impose the obligation to support the illegitimate child on the father, and not on the “putative” father, lends support to this interpretation. It should be noted that among the minority of jurisdictions which deny custody to the father, the Texas and New Mexico courts stated that their decisions were based on the fact that there was no correlative duty to support the child in those states. Ex parte Wallace, 26 N. M. 181, 190 P. 1020 (Sup. Ct. 1920); Home of Holy Infancy v. Kaska, 397 S. W. 2d 208 (Tex. Sup. Ct., 1966). It would seem that some remnants of the nullius filius doctrine still survive in those jurisdictions; the same may have been the case in this State in 1913 when Baker was decided, however, the court pointed out that the father was contributing to the support of the child in that case.

In order to enforce the obligations imposed by N. J. S. A. 9 :16-3 it is necessary to show that the putative father is actually the child’s natural father. B v. O, 50 N. J. 93, 97 (1967); M v. F, 60 N. J. Super. 156 (App. Div. 1960). Once the putative father is determined to be the natural father and the duty of support attaches, he is no longer to be considered “putative” but simply the father.

Such a determination need not be through a formal bastardy proceeding but may be by voluntary admission. In re Guardianship of C, supra. As the Court of Appeals of Ohio stated in French v. Catholic Community League, 69 Ohio App. 443, 44 N. E. 3d 113 (Ct. App. 1943) :

To say that such a father must first, by a public spectacle in a bastardy proceeding, acknowledge paternity or be adjudged the reputed father of the illegitimate child, before he can be considered the child’s father and in his order entitled to the child’s custody, is to require the doing of a useless and rather despicable thing. The public parading of the sexual misstep is not conducive of the infant’s welfare or its peace of mind after it passes adolescence. It cannot enlarge the father’s sense of responsibility. It might deter him from performance of his moral and legal duty. The question comes: Why require one to prove that which he freely admits? Such a course is far from the rule of modern practice, [at 114-115]

The fact that the parties lived together, holding themselves out as husband and wife, lends credence to the asserted paternity, and also raises the possibility of implied consent. A similar course of conduct over a period of 15 j'ears has been held to constitute consent for the purposes of the statute in the recent case of M v. M, 112 N. J. Super. 540 (J. & D. R. Ct. 1970). The conduct of the parties in this case might constitute such consent, but such a determination would still recognize some vestiges of the nullius fiUus doctrine which I do not believe exists in New Jersey today. Furthermore, the situation in M v. M, supra, is readily distinguishable from the present case; M v. M dealt with a relationship closely akin to the common-law marriage where the parties lived together over a long period of time holding themselves out as husband and wife. The relationship here appears to be more temporary and casual.

In any case involving the custody of children the courts are always to be guided by the best interests of the child. Fantony v. Fantony, 21 N. J. 525 (1956); Lavigne v. Family and Children’s Society of Elizabeth, 11 N. J. 473 (1953); Salmon v. Salmon, 88 N. J. Super. 291 (App. Div. 1965); In re Mrs. M, 74 N. J. Super. 178 (App. Div. 1962); Sheehan v. Sheehan, 51 N. J. Super. 276 (App. Div. 1958). The same is true for applications for visitation. Baker v. Baker, supra.. The love and affection of the father is an important part of the child’s life, no matter what the technical legal relationship is said to be. As this court stated in In re Guardianship of C, supra:

The public policy of this state is to keep legitimate children with their natural parents unless they are unfit or have abandoned the child. This is so even though strangers could provide a better home. There are, no doubt, many reasons for this policy but among which can be seen a judicial realization that natural parents would have a vital interest in the welfare and best interests of their offspring. This vital interest, based on a biological inheritance of flesh and blood, will make the parent retain Ms concern during times of frustration, which on occasion arise in all parent-child relationships where one named the parent by adoption papers may yield to the pressure to forget the child. Can it be argued that this bond of blood is any less strong where the child was bom out of wedlock? Love can neither be created nor destroyed by law. The love between a parent and his child is universal to humanity; it is not governed by the local laws of marriage and legitimacy. Can it be said a father loves Ms child only when he is married to the child’s mother? [at 492 of 98 N. J. Super.]

The evidence presented to this court indicates that this child was not the product of a rape or an act of prostitution. In fact, quite the contrary has been established. These parents lived as a family and shared the responsibilities of bringing up their child. Tor some reason, they chose not to marry. The child of these parents has a right to know his father and his mother; a right to share in the affection of both parents. These rights are meaningless unless they can be enforced in a court. The right of the child to the love and affection of both parents, the right to have both parents caring for and protecting the child, in fact, the right to have both parents living together must be considered by the courts since the child himself has no other representation. If effective enforcement of these rights can only be accomplished through the application of a partial remedy such as visitation, and it would be in the best interests of the child to elect such a remedy, this court must not deprive the child of his right to have the parent visit him. See Fiore v. Fiore, 49 N. J. Super. 219, 228 (App. Div. 1958), certif. den. 28 N. J. 59 (1958).

Since these rights are of such a fundamental nature I believe that they would be protected by the due process clause of the Fourteenth Amendment of the United States Constitution. To the extent that N. J. S. A. 9 :16-1 infringes upon these rights it is unconstitutional on its face and void. A construction of the statute which would deprive the child of his right to see his father, or deprive the father of his right to see Ms child, is so arbitrary and capricious as to deny the child and his father equal protection of the law. However, as stated above, I interpret the statute to prohibit access to the child only in the ease of the person supposed to be the father. Such an interpretation involves no constitutional question since the reputed or putative father stands in the same position as a stranger. He therefore has no duty to support the child until he is determined to be the natural father, and consequently has no right to custody, control or access to the child. Whether the child may enforce his right to compel a determination of paternity is not before me in this case.

I conclude that visitation rights may properly be granted to the father if it is determined that such visitation would be in the best interest of the child.

A further hearing on the best interest issue will be held.


author: Conford, P. J. A. D.

text:
    DIDI’EE SEMELY, PLAINTIFF-APPELLANT, v. JOSEPH SEMELY, DEFENDANT-RESPONDENT.
    Superior Court of New Jersey Appellate Division
    Argued January 11, 1971
    Decided February 17, 1971.

      Before Judges Conforb, Kolovsky and Carton.

      Mr. Sidney Slauson argued the cause for appellant (Messrs. Slauson and Maries, attorneys).

      Mr. Boscoe L. Lamb argued the cause for respondent (Messrs. Ferro, Lamb & Kern, attorneys).
   The opinion of the court was delivered by

Conford, P. J. A. D.

Plaintiff brought an action for divorce for extreme cruelty against defendant in July 1968. During trial, on October 7, 1969, the trial court granted defendant’s informal motion for leave to counterclaim for divorce for plaintiff’s alleged desertion constituted by her continued refusal since February 1967 and for two years thereafter to have sexual relations with him. The propriety of that action of the court has not been challenged on this appeal. The issue of desertion was fully tried. At the conclusion of the hearings the court found plaintiff’s claim of extreme cruelty not credibly established and that defendant’s counterclaim for desertion was satisfactorily proven. A divorce was therefore awarded defendant on the counterclaim and the complaint dismissed. Plaintiff appeals both determinations.

We find no need to discuss the testimony at length. In the light of the sharp issues of credibility developed at the trial we cannot hold the court’s findings on the material facts to be insufficiently supported by credible proofs.

In coming to the foregoing conclusions we have had occasion to pause over the adequacy of defendant’s satisfaction of the requisite showing of sincere overtures on his part to induce plaintiff to resume marital relations. But any doubts on that score have been overcome by plaintiff’s frank concessions on the stand that defendant did make a number of efforts to resume normal relationships and that she rebuffed him because she was afraid of him. That excuse must be deemed insubstantial as the court on adequate evidence found her claims of physical mistreatment by defendant, on which the fears were purportedly based, to have been substantially unfounded in fact.

Prior to oral argument this court raised the question whether any part of the period of time following the filing of the complaint in July 1968 should count toward the necessary two-year period of continuous and obstinate desertion required for that cause of action as asserted in the counterclaim. Argument and supplemental briefs on the point have been considered.

Generally speaking, the period of pendency of a matrimonial action cannot be counted in a later action for desertion (or in a counterclaim for desertion in the same action) against either the former plaintiff or defendant; not against the former plaintiff since cohabitation would prejudice his claim of matrimonial offense by the other party; not against the former defendant because the plaintiff impliedly consents that the other party need not cohabit or offer to do so during pendency. In either case the essential element of obstinacy is consequently presumed absent from the alleged desertion during the said period of pendency of the prior action. See 11 N. J. Practice (Herr, Divorce, Marriage and Separation) (3d ed. 1963), § 1186 at 418—423, and eases cited, particularly Weigel v. Weigel, 63 N. J. Eq. 677 (Ch. 1902), aff’d o. b. 65 N. J. Eq. 398 (E. & A. 1903); Marsh v. Marsh, 14 N. J. Eq. 315 (Ch. 1862); Cook v. Cook, 97 N. J. Eq. 264 (Ch. 1925).

Implicit in the rule, where the prior plaintiff is charged in the later action with desertion (or the current plaintiff is so charged in a counterclaim), is the condition that the prior action has been brought by plaintiff in good faith. Weigel v. Weigel, supra. That qualification does not here bar the present plaintiff from invoking the presumption of nonobstinacy since we are entirely satisfied that she brought this action in good faith.

However, the presumption against obstinacy in the situation aforementioned is rebuttable. Thus, if it can fairly be concluded that the party charged with desertion in the subject action or counterclaim began a course of obstinate desertion prior to the institution of the prior action (or current action, as the caso may he), and that such desertion would have continued independently of the pendency of the action, the period of pendency will be allowed as part of the two-year desertion period. Cook v. Cook, supra; Gosschalk v. Gosschalk, 48 N. J. Super. 566, 578 (App. Div. 1958), aff'd o. b. 28 N. J. 73 (1958).

The continued viability of the aforestated exceptions to the presumption of nonobstinacy is highlighted by the inclusion in the rules revision of 1969 of R. 4:77-4, which allows supplemental complaints or counterclaims in matrimonial actions to set forth causes of action arising since the original complaint, without exception for newly arisen causes of action for desertion. Previously, ever since the adoption of the original rules in 1948, a cause of action for desertion which had not accrued at the time of the filing of the complaint or counterclaim could not be asserted by amendment (or supplement). See 1948 Rules, Rule 3:84-4(b); 1953 Rules, R. R. 4:95-4(b). In the Pressler annotation of the 1969 revision the commentary to R. 4:77-4 states (at 606):

The elimination of [(b) of former Rule 4:95-4] should not be construed as effecting or intending to effect any change in the elements of the cause of action of desertion, but only as a recognition that there may be circumstances in which that cause of action as historically and statutorily defined can have accrued despite the intervening filing of a divorce action alleging a different ground.

Under proofs found credible by the trial court and by plaintiff’s own admissions at the trial, the cessation of marital relations between the parties began at least as early as February 1967. When asked on direct examination why she had had no relations with her husband, as she had said, for “well over two years, closer to three years” (as of July 1969), she first said “There was no reason for it”; later, because she feared defendant. Assuming validity of the trial court’s findings of fact, as we do, it is clear that plaintiff’s continued withholding of marital relations with her husband after her filing of the complaint in July 1968 (they began living apart in February 1968) was a product of her already long-standing willful state of mind on the subject, not of any concept on her part as to the impropriety of relations during pendency of her action. Therefore, the period of pendency of the complaint may count as part of the two-year desertion period asserted in the counterclaim.

Affirmed.


author: Lewis, P. J. A. D.

text:
    SWISSCRAFT NOVELTY CO., INC., PLAINTIFF-APPELLANT, v. ALAD REALTY CORP. AND COMMODORE REALTY CORP., DEFENDANTS-RESPONDENTS.
    Superior Court of New Jersey Appellate Division
    Argued October 6, 1970
    Supplemental material filed October 16, 1970
    Decided February 23, 1971.

      Before Judges Lewis, Matthews and Mintz.

      Mr. William G. Beclcer, Jr. argued the cause for appellant (Messrs. Bhanley & Fisher, attorneys).

      Mr. Richard D. Oatenacci argued the cause for respondents (Messrs. Hughes, McElroy, Connell, Foley & Geiser, attorneys).
   The opinion of the court was delivered by

Lewis, P. J. A. D.

Plaintiff Swisscraft Novelty Co., Inc. (tenant) appeals from a summary judgment entered by the Law Division in favor of defendants Alad Realty Corp. and Commodore Realty Corp. (landlord).

In essence, this is a controversy between insurance companies, for the respective parties, as io which carrier is liable for losses sustained by the tenant resulting from water damage to its merchandise. As indicated in the 1962 assignment of lease to tenant, the roof of the demised premises had to be raised to accommodate the tenant’s embroidery machinery. The landlord undertook to perform the work but allegedly failed to do it in a satisfactory manner in that some of the leaders required to carry water off the roof were not properly reconnected, and, as a result thereof, water accumulated on the roof and broke through the flashings, flooding the leaseholder’s premises on September 16 and October 19, 1966. On the first occasion, the water damage to tenant’s property was approximately $3,000. The landlord was immediately notified of the loss, and tenant was assured that the defective condition would be remedied. This was not done by October 19, 1966 when after another rainstorm, water again leaked through the roof and walls, causing an estimated $29,000 in damages to tenant’s merchandise. Thereafter, the leak was repaired.

Plaintiff’s suit was initiated by a complaint filed on December 19, 1967, which was amended March 18, 1968 to add Commodore Realty Corp. as a defendant. The action was predicated upon the alleged breach of warranty and negligence of the landlord. An answer was filed by defendants on June 4, 1968, denying such allegations and asserting a variety of separate defenses, including contractual exculpation from any responsibility for loss or damage to plaintiff’s property occurring in or about the demised premises. In response to a discovery interrogatory propounded by plaintiff, defendants stated that repairs were made as complaints were received “unless impossible to do so because of weather conditions.”

The matter was pretried on April 2, 1969, at which time the specification of legal issues was stated to be “[njegligence, lease provisions and breach thereof if any, exculpatory provisions, damages.” The case was then listed for trial on June 17, 1969 and, thereafter, adjournments were procured by plaintiff’s substituted attorneys and the trial was rescheduled for July 30, 1969, which was again, at plaintiff’s request, adjourned to September 25, 1969.

In the meantime, defendants, on May 8, 1969, filed a notice of motion for summary judgment and, on July 16, 1969, plaintiff filed a counter-motion for summary judgment and other relief, including leave to file a second amended complaint and to amend the pretrial order to include claims against defendants “for gross negligence and for wilful and wanton misconduct with respect to the damages sustained in the incident of October 19, 1966.” These motions were heard on August 29, 1969, and an order was entered granting defendants’ motion for summary judgment and denying plaintiff’s counter-motion. It is from that order that plaintiff appeals, contending in substance that (1) defendants should be estopped from asserting as a defense the exculpatory clause in the lease; (2) defendants’ violation of a municipal building ordinance and their covenants in the rental document to keep the roof in good repair rendered the exculpatory clause ineffective; (3) the trial court erred in denying its counter-motion to amend the complaint and the pretrial order, and (4) the trial court erred in granting summary judgment in defendants’ favor.

We are here concerned with a commercial lease, a product of parties who negotiated its terms fairly and freely, at arm’s length. There is no contention that either party was in- an unfair bargaining position or that the negotiations were 'in- any way tainted with fraud or misrepresentation.The parties saw fit to agree upon a distribution of risks-with regard to their respective property interests and in-eluded in their private contractual arrangements an exculpatory-indemnification provision in favor of the landlord which reads:

Eighth.—The Landlord shall not be responsible for the loss of or damage to property, or injury to persons, occurring in or about the demised premises, by reason of any existing or future condition, defect, matter or thing in said demised premises or the property of which the premises are a part, or for the acts, omissions or negligence of other persons or tenants in and about the said property. The Tenant agrees to indemnify and save the Landlord harmless from all claims and liability for losses of or damage to property, or injuries to persons occurring in or about the demised premises.

In the context of a commercial or industrial lease, where the language is plain and unambiguous and the transaction is unaffected by public interest or unequal bargaining power, such, for example, as prevailed in Kuzmiak v. Brookchester, 33 N. J. Super. 578 (App. Div. 1955) (which dealt with an apartment lease), no problem ordinarily exists as to the validity of an exculpatory provision in a lease agreement. See Mayfair Fabrics v. Henley, 48 N. J. 483 (1967); Midland Carpet Corp. v. Franklin Assoc. Properties, 90 N. J. Super. 42 (App. Div. 1966). Accord, Wade v. Six Park View Corp., 27 N. J. Super. 469 (App. Div. 1953); Globe, etc., Improvement Co. v. Perth Amboy, etc., Inc., 116 N. J. L. 168 (E. & A. 1936).

The judiciary will not undertake the writing of a different or better contract between the parties. Marini v. Ireland, 56 N. J. 130, 143 (1970); Kampf v. Franklin Life Ins. Co., 33 N. J. 36, 43 (1960), cited in Midland, supra, at 46; Washington Construction Co., Inc., v. Spinella, 8 N. J. 212, 217 (1951).

Plaintiff attempts to distinguish Mayfair and Midland, supra, because the leases there under consideration required the contracting parties to insure their respective interests. The argument seems to run that, absent an agreement to carry insurance, there can he no immunization under an exculpatory clause. Such a hypothesis is untenable. The practical and salutary thesis as enunciated in Mayfair is that

* * * The distribution of the risks entailed no elements of injustice and did not conflict with the public interest. It was a private contractual arrangement fairly and freely entered into and which the common law would sympathetically carry out in accordance with the contemplation of the parties. [48 N. J., at 488-489]

The central question is not whether the parties agreed to insure against loss the risks they severally assumed inter sese but, rather, whether they so clearly allocated the risks that each party knew, or should have known, the existence of its contingent liability and was thus placed in a position where it could protect itself against such loss by adequate insurance coverage or otherwise. Indeed, that is precisely what happened here. Plaintiff assumed full responsibility for any damage to its property by reason of any existing or future condition of the demised premises, obtained insurance, paid the premiums for such coverage and, in fact, received payment from its insurance carrier for the September and October damages to its merchandise. Primarily with respect to the October damage, promissory estoppel is projected as a bar to the exculpatory clause being asserted as a defense to plaintiff’s claim. It is undisputed that defendants were obliged under the lease to keep the roof in repair. The 31st paragraph of that instrument provides, “The Landlord shall be liable for structural repairs occasioned or required during the term of the said demise but the same shall be limited to such repairs required for the maintenance of the roof and side walls and floors.” Also uncontroverted is the fact that after the September loss defendants’ agent stated that the roof would be repaired.

The doctrine of “promissory estoppel” is of comparatively recent origin in our jurisdiction. See Friedman v. Tappan Development Corp., 22 N. J. 523, 535-536 (1956). See generally Restatement, Contracts, § 90 at 110 (1932); 1A Corbin, Contracts (2d ed. 1963), §§ 200, 205; 1 Williston, Contracts (3d ed. 1957), § 140. In E. A. Coronis Assocs. v. M. Gordon Constr. Co., 90 N. J. Super. 69, 77 (App. Div. 1966), this court noted that although New Jersey had not yet applied the doctrine of promissory estoppel, there was no reason why, in an appropriate factual situation, the doctrine should not be recognized and effectuated. It was there remarked :

* * * We see no difference between substantial reliance on a representation or promise as to current or past facts and as to futuro facts. It is only right and just that a promise a promisor knows will induce action of a substantial character be enforced if it is in fact relied upon, [at 77; emphasis added]

Here, the roof has been repaired and there is nothing in the record to suggest that the landlord at any time promised not to enforce its exculpatory and indemnificatory rights under the lease. The elements of a promissory estoppel case are essentially factual and inappropriate to a summary judgment. Coronis, supra, at 79. Nevertheless, the instant facts do not call for the invocation of such an equitable doctrine to aid plaintiff in an effort to avoid the application of the rationale of Mayfair, and Midland, supra.

The argument, that a violation of the Borough of Eairview building code precluded the enforcement of the exculpatory clause, is unpersuasive. The pertinent language in the code reads:

All buildings shall be roofed over with tin, iron, gravel, shingle, slate, tile or other approved material in such a way as to properly shed water, which water shall be conducted to the ground ill such a manner as to not allow it to run over the sidewalk or upon Droperty belonging to another person.

The roof of the demised premises was reconstructed in 1962 and the defects or disrepairs in question were not evidenced until the water damages in 1966. These untoward events affected only the rights and remedies of private commercial parties who had mutually contracted for a distribution and assumption of the risks involved in their landlord-tenant relationship. Manifestly, the lease did not have as its direct object or purpose a violation of the building code or any local, state or federal law, rules or regulations. Note, Naseef v. Cord, Inc., 90 N. J. Super. 135, 142 (App. Div.), aff’d 48 N. J. 317 (1966). McCarthy v. Nat. Assoc. for Stock Car Racing, etc., 48 N. J. 539 (1967), cited in plaintiffs brief, is plainly distinguishable.

Defendants concede that an exculpatory clause should not be construed to absolve a landlord from liability arising from the landlord’s breach of covenants in the lease unless that result is unavoidable. They maintain that generally an exculpatory clause has as its purpose the imposition of the insurable risk of personal injury or property damage loss upon the tenant which in no way attenuates the landlord’s contractual covenants to repair. We agree; these respective provisions are separate and distinct.

The critical issues in this controversy are whether the trial court properly denied plaintiff’s counter-motion to further amend the complaint and the pretrial order to assert a new cause of action against defendants for gross negligence and for willful and wanton misconduct with respect to the damages sustained on October 19, 1966, and whether it properly entered summary judgment for defendants.

The import of the amendment sought by plaintiff’s substituted attorney stems from a judicially declared principle of law recognized by this court in Kuzmiak, supra, wherein we observed that

* * * [a]lthougb in disfavor, a promise not to sue for future damage caused by simple negligence may be valid; but an attempted exemption from liability for future intentional tort or wilful act or gross negligence is generally declared to be void. 6 Williston on Contracts (rev. ed.), sec. 1751(b), page 4964 ; 6 Corbin on Contracts, sec. 1472, page 872; 12 Am. Jur., Contracts, sec. 183, page 683; 17 C. J. S., Contracts, § 262, page 644. [33 N. J. Super. at 580]

See also Brady v. Glosson, 87 Ga. App. 476, 477-480, 74 S. E. 2d 253, 255-257 (App. Ct. 1953); Lane v. New York Telephone Company, 7 App. Div. 2d 702, 179 N. Y. S. 2d 536 (App. Div. 1958); 6A Corbin, Contracts, § 1473 at 596—597 (1963); Restatement, Contracts § 574, comment (a), at 1079-1080.

The motivating reason for denying the counter-motion was expressed by the trial judge thusly, “I am constrained to deny the motion to add another cause of action at this time which, after such a long period of time has elapsed * *

It was noted in Tackling v. Chrysler Corp., 77 N. J. Super. 13, 16 (Law Div. 1963), that “courts should be liberal in allowing amendments to save actions, if possible, from the bar of the statute of limitations,” and should set aside subtleties “and answer technical objections by an honest effort to determine the real issues on their merits and to do substantial justice between litigants.” This admonition, approvingly quoted in Lawlor v. Cloverleaf Memorial Park, Inc., 56 N. J. 336, 340 (1970), is especially pertinent in the present circumstances.

The transcript of the hearing on plaintiff’s counterclaim reveals that counsel for defendants took this position:

I would say, your Honor, that I would be very happy today if you ruled on the question of negligence. If you said the exculpatory provision in that contract bars an action for negligence without ruling as to whether it bars an action for willful, wanton and reckless con-duet. I would be very happy. That we could start a new suit under a new theory, and after proper discovery I will be very happy to come back and argue against that, but I feel at this juncture we are merely obfuscating the real issues by throwing in willful, wanton and reckless conduct.

We also note the statement in defendants’ brief before this court that

Plaintiff submits that he is precluded from starting a new suit by the doctrine of res judicata citing Hudson Transit Corp. v. Antonucci, 137 N. J. L. 704, 61 A. 2d 180. If that be the case, and this court feels that the plaintiff should not be precluded from having an opportunity to pursue Ms chimerical claim of willful and wanton misconduct, this court should not disturb the summary judgment on the question of negligence, but simply remand the action for further proceedings solely on the allegation of gross or willful conduct.

Based on the issue of negligence, as alleged in the original complaint and as amended before pretrial, we entertain no hesitancy about affirming the summary judgment entered in defendants’ favor. The judgment with respect to the damages sustained in September 1966 should, therefore, stand. Plaintiff’s counter-motion to amend the complaint and pretrial order, however, should have been granted; accordingly, the matter is remanded to the trial court for a determination as to whether defendants’ failure to make essential repairs to the roof, after notice of the September loss and before the October incident, was simple negligence or mere nonfeasance or, on the other hand, constituted willful and wanton misconduct or gross negligence, i. e., an extreme departure from the ordinary standard of care. Prior to a hearing on that issue, the parties shall be entitled to pursue additional discovery as may be reasonably limited by the trial court. We do not take judicial notice of the climatological data submitted after oral argument; it may be of significant relevance at the hearing on remand.

Affirmed in part and remanded for further proceedings consistent with this opinion. We do not retain jurisdiction.