source: Caselaw Access Project

author: Johnson, J. S. C.

license: Public Domain

text:
    FRANKLIN CONTRACTING CO., A CORPORATION OF NEW JERSEY, PLAINTIFF, v. STATE OF NEW JERSEY, DEFENDANT.
    Superior Court of New Jersey Law Division
    Decided May 1, 1975.

      Mr. Adrian M. Foley, Jr. for plaintiff (Messrs. Me Elroy, Connell, Foley d Geiser, attorneys).

      Mr. Nicholas F. Monteforte for defendant (Mr. William F. Hyland, Attorney General, attorney).
   Johnson, J. S. C.

This action was instituted by the Eranklin Contracting Co. against the State of New Jersey for the alleged breach of a contract dated July 10, 1969, under the terms of which plaintiff agreed to perform certain construction work on a road known as Route 21, Section 4C, in the City of Passaic. It is undisputed that, among other things, plaintiff was to erect a viaduct and relocate an existing sewer line owned by the City of Passaic, all in accordance with the contract and accompanying specifications. It is further undisputed that defendant was to obtain all necessary title to or easements over the required lands.

Plaintiff contends defendant failed to obtain the same within the time contemplated by the parties, which failure caused plaintiff to be damaged and gives rise to this suit.

The action involves three claims for extra costs and losses incurred by the plaintiff in order to complete its contract, viz: (a) those suffered by virtue of an injunction issued by the Superior Court of New Jersey at the behest of a third party; (b) the costs ordered by the Superior Court to be paid to the City of Passaic for temporary pumping following an apparent rupture of that city’s sewer line, and (c) the overhead and ordinary profit it lost by virtue of the failure of defendant to obtain access for plaintiff to go upon lands needed for plaintiff to perform its work.

Defendant denies liability and contends the language of the contract and the standard specifications incorporated by reference therein specifically preclude any and all recovery by plaintiff.

The matter came on for trial before the court sitting without a jury.

I

During the fall of 1970 the plaintiff was engaged in certain sub-surface work required for the construction of a viaduct referred to herein as the Weaselbrook Viaduct. It was using pile-driving equipment to install sheeting in order to build cofferdams near property owned by Uniroyal Inc. and leased by United Wool Piece Dye and Finishing Company. These companies instituted a suit contending that the building of the viaduct and the method being employed by plaintiff to do so was causing immediate and irreparable harm to its property, and they succeeded in obtaining a temporary injunction from the Superior Court on November 1, 1970. This injunction enjoined plaintiff from proceeding with said project until the injunction was terminated on February 10, 1971 for reasons unknown to this court and immaterial to the issues here to be resolved. Plaintiff seeks to be compensated by defendant for its alleged losses during this 103-day court-imposed work stoppage, contending it was simply doing that which was required by the contract and as prescribed by the specifications. Plaintiff admits that after the injunction was lifted it returned to the site and completed the work in the same manner as it had been doing previously and in accordance with the original plans and specifications.

The court fails to see on what basis plaintiff could recover from this defendant. It is axiomatic that before a defendant may be required to pay damages it must be adjudicated that there is some fault on its part. None has been shown. It is admitted that plaintiff did what the contract required. If the work was being done in an improper manner, the contract specifically makes plaintiff liable to save defendant harmless. See article 1.6.2 of the standard specifications. The only reason for the stoppage was the action of the court over whom defendant had no control. The injunction was obtained by a third party. Defendant did not consent to the injunction nor could it have secured a dissolution of it. Peckham v. Industrial Securities Co., 1 W. W. Harr. 200, 31 Del. 200, 113 A. 799 (Super. 1921).

II

It has been conceded that when the contract between the parties hereto had been let defendant was under the impression that it had a right to go upon the lands of United Wool where there was located a manhole in a certain sanitary-sewer owned by the City of Passaic. The sewer ran under the Passaic River as it was then located and a 600-foot section of it was to be relocated by plaintiff pursuant to its contract with defendant. The pipe as located below the aforementioned manhole was to be the highest elevation in the new 600-foot section. The engineers for both parties testified that it was imperative that access be obtained to the high point in order to properly determine the pitch of the sewer line. Without such access the contractor could not proceed to perform its work as contemplated by the parties.

Sometime after the contract was awarded and plaintiff commenced its work it was discovered that a certain agreement between the landowner and the City of Passaic did not give access to the State. Even without the legal right to enter upon the lands of United Wool, plaintiff attempted to do so alone and in conjunction with representatives of the State, but access was denied by the landowner.

Since plaintiff was unable to continue its work, it appealed to defendant to ascertain another way of accomplishing that which the new sewer line was to accomplish. Following this appeal defendant on June 23, 1971 directed plaintiff not to construct the sanitary sewer until further notice, and in its letter of that date to plaintiff stated:

As of this date you have fill to be placed before you are ready to construct this line and furthermore there is sufficient -work to he done at other locations to keep your equipment and men occupied.

On January 20, 1972 a memo was sent by defendant to plaintiff authorizing plaintiff to proceed with the construction of the 16" east iron sewer line to Ramp L 27+91-47.5' Rt., being the location of the manhole on the United Wool property.

During the interim between June 23, 1971 and January 20, 1972 plaintiff constructed a rock working platform near the existing sanitary sewer, and on January 13, 1972 it was discovered by the Passaic Valley Sewerage Commission that several million gallons of river water was entering its treatment plant. Tests were conducted on January 24, 1972 and it was discovered that a rupture of the line in question had taken place, evidence of the same being observed at or near the said rock working platform.

Immediately thereafter the City of Passaic instituted an action in the Chancery Division of the Superior Court. Judge Kole ordered that plaintiff herein pay the City of Passaic the cost of pumping the sewage through a temporary connection to prevent the continued pollution of the Passaic River. Judge Kole did not determine the merits of the controversy nor did he determine who if anyone was at fault. Plaintiff has complied with the terms of the judgment and now seeks to recover the cost of the pumping, contending that if it did in fact rupture the sewer, it was the proximate result of this defendant directing plaintiff to proceed with its wet excavation out of sequence. Plaintiff further contends the sewer would not have ruptured if defendant had obtained the easement required when it should have, since plaintiff would have constructed the new sewer line, and the old one which ruptured would have been abandoned and removed.

It is true that Plaintiff was specifically directed to proceed with the construction of the new sewer, and it was called to plaintiff’s attention that it had fill to be placed, but nowhere do I find any direction to dump rock at or near the location of the pipe. Plaintiff chose to proceed for its own benefit in spite of its right to wait until the required permission to enter upon the lands of United Wool was obtained.

This court makes no determination as to the cause of the sewer line rupture. If it was the result of plaintiff’s actions, then plaintiff was negligent in not protecting the utility, as it was required to do by the contract with defendant. Art. 1.6.11. If it was not the result of the actions of plaintiff, then it would be pure speculation on the part of this court to determine the cause of the rupture from the evidence before it or to hold that it would never have occurred if the easement had been obtained, since the new sewer line would have been completed and in use in the place of the old line. In the opinion of this court it would simply be drawing an inference upon an inference.

Plaintiff is not entitled to recover the cost of the pumping from this defendant on the evidence adduced.

Ill

At the time the parties entered into the contract in question it was assumed by them that defendant had the right to enter upon the lands of United Wool as a derivative right granted by the property owner to the City of Passaic in an easement agreement permitting the city to service the sewer line which was to be relocated by plaintiff pursuant to its contract with defendant. Defendant had so assured plaintiff that this was so.

Sometime in April 1971 plaintiff attempted to gain access to the aforementioned manhole and was informed by the representatives of United Wool that they would not make the site available to plaintiff, and in fact, forbade any entrance upon its property. Access to the manhole was imperative since it was essential to have the exact elevation of the pipe to lay at a proper pitch some 400+ feet of the sewer line leading to said manhole. The information was transmitted to defendant and both parties jointly attempted to persuade the property owner to permit the required access, but to no avail.

An examination by defendant of the agreement between the City of Passaic and the property owner indicated that defendant had no right of access as the parties hereto had presumed.

In October 1971 defendant filed a declaration of taking and instituted an eminent domain action against the property owner, but it was not until September 11, 1972 that legal access was obtained and plaintiff was permitted to proceed with the contract.

Plaintiff seeks to recover its stipulated damages of $53,201.61 for the delay it allegedly suffered as the result of the failure of defendant to obtain and make available to plaintiff access over the lands required.

Defendant denies liability, contending that the “no damage” clauses in the contract bar any such recovery.

The following articles of the Standard Specifications for Road and Bridge Construction (1961) are incorporated by reference in the present contract:

1.2.1 Invitation to Bid.
In accordance with the Advertisement, proposals will be received for the performance of the Project, the designation of which is stated in the Advertisement. Bids are requested on the items stated in the form of proposal for the Project. The prices bid shall cover all costs of any nature, incident to and growing out of the work. In explanation but not in limitation thereof, these costs shall include the cost of all work, labor, material, equipment, transportation and all else necessary to perform and complete the Project, in the manner and within the time required, all incidental expenses in connction therewith, all costs on account of loss by damage or destruction of the Project, and any additional expenses, for unforeseen difficulties encountered, for settlement of damages, and for replacement of defective work and materials. The Bidder shall not attach conditions, limitations or provisos to his Proposal. The attention of bidders is directed to the provisions of Art. 1.2.7, Submitting Proposal, with particular reference to the documents and statements o be submitted with the Proposal, and to the provisions of Art. 1.2.9, Causes for Rejection.
The Bidder warrants that, before submitting his Proposal, he became familiar with the Plans, Specifications and other documents that will form parts of the Contract, investigated in detail the site of the Project and the available means of access, and made such examination thereof as necessary to satisfy himself in regard to the character and amount of work involved. He also warrants that he can secure the necessary labor and equipment, and that the materials he proposes to use will conform to the requirements therefor and can be obtained by him in the quantities and at the time required. The cost of providing access to the Project will not be paid for under any specific scheduled item but shall be included in the prices bid for the various items scheduled in the Proposal.
1.2.11 Familiarity with Work.
It is the obligation of the Bidder to ascertain for himself all the facts concerning conditions to be found at the location of the Project including all physical characteristics above, on and below the surface of the ground, to fully examine the Plans and read the Specifications, to consider fully these and all other matters which can in any way affect the work under the Contract and to make the necessary investigations relating thereto, and he agrees to this obligation in the signing of the Contract. The State assumes no responsibility whatsoever with respect to ascertaining for the Contractor such facts concerning physical characteristics at the site of the Project. The Contractor agrees that he will make no claim for additional payment or extension of time for completion of the work or any other concession because of any misinterpretation or misunderstanding of the Contract, on his part, or of any failure to fully acquaint himself with all conditions relating to the work.
Before submitting his Proposal, the Bidder shall ascertain from the Director, Division of Bight of Way, Acquisition and Titles, the status of right-of-way acquisition, of the availability and vacation of buildings which are to be removed or demolished by the Contractor, and of the vacation and removal or demolition of buildings on the site of the Project by other parties, and he shall ascertain the provisions of agreements between the State and property owners that may relate to his bid or to the work to be performed. The Contractor shall also confer with the said Director on the above mentioned matters immediately after award of the Contract and at such other times thereafter as may be necessary or advisable. The Contractor shall be governed by the provisions of the above mentioned right of way agreements.

The above article 1.3.11 has been supplemented as follows:

1.2.11 Familiarity with Work.
The following is added after the first paragraph of this article of the standard specifications:
The plans for the project show the location, outline and types of construction of the buildings to be demolished and whether they have cellars. In addition, the plans also show the location of the fuel storage tank farm system to be demolished under this item of work. It will be the responsibility of each bidder to confirm the information such as the type of building to be demolished and to ascertain the extent of the piping and appurtenances of the fuel storage tank farm. The contractor shall be required to make such investigations and determinations as may be necessary to secure all information he may consider pertinent to his bidding of the various demolition items, regardless of whether such information is or is not shown on the plans or included in these specifications. Bids shall be based on the bidder’s own findings.
The last paragraph of this article of the standard specifications is amended as follows:
All reference to director, Division of Bight of Way Acquisition and Titles is changed to read as follows:
Mr. P. Bosetti, District Supervisor
Division of Bight of Way Acquisition and Titles
Department of Transportation
Sweetland Avenue and Bloy Street
Hillside, New Jersey
Telephone: 201-964-0300
All reference to “the removal of buildings by the contractor” is deleted.
The following is added to this article of the Standard Specifications :
The contractor shall make no claims for additional compensation on account of delays or necessary alterations in the procedure of his work that may be caused by delays in the vacating or removal of buildings by others and/or the acquisition of right-of-way.

While “no damage” clauses have long been used in contracts of the kind in question and generally sustained and enforced by the courts, their interpretation by the courts of this State have a somewhat limited history.

In A. Kaplan & Son, Ltd. v. Passaic Housing Authority, 42 N. J. Super. 230, 234 (App. Div. 1956), the court stated that “we are aware of no reason in logic or sound policy why such a contract stipulation as was here voluntarily entered into between the parties should not be held binding against the contractor.”

The court, in discussing the plaintiffs contention that it was entitled to recover damages for a delay in site delivery, pointed out that “any construction of the agreement which would give it the damages it seeks here would, in effect, put it unfairly and discriminatorily, and therefore illegally, in a better position than that which it voluntarily chose to enter into, and better, also, than that which all public bidders, actual and potential, for the contract awarded to plaintiff, presumably weighed and analyzed before submitting their bids.”

This same reasoning was employed in affirming the trial court’s action in granting a motion for summary judgment against plaintiff in Gherardi v. Trenton Board of Education, 53 N. J. Super. 349 (App. Div. 1958). Plaintiff had contended that the exculpatory clause excused defendant from damages only in the case of reasonable delay. In rejecting this argument the court cited Psaty & Fuhrman, Inc. v. Housing Authority of City of Providence, 76 R. I. 87, 68 A. 2d 32, 10 A. L. R. 2d 789 (Sup. Ct. 1949), and quoted therefrom as follows:

The contractor in effect argues that the clause under consideration means that the Authority is excusable for reasonable delay only. This construction of the no damage clause would subject the Authority to the inquiry in all instances of delay whether a reasonable person would have acted differently, thus raising the very question that the clause intended to avoid. In the absence of any claim of concealment, misrepresentation, or fraud, the contractor by such construction of the no damage clause cannot render meaningless an express condition of the contract which it knowingly and freely accepted. As was observed by the Supreme Court in Wells Bros. Co. v. United States, 254 U. S. 83, at page 87, 41 S. Ct. 34, at page 35, 65 L. Ed. 1948: “Men who take million-dollar contracts for government buildings are neither unsophisticated nor careless.”

The Appellate Division concluded that where a party to a contract containing a “no damage” clause acts within the fair and legal import of its terms, he cannot be deprived of the benefit of his agreement unless, since every contract implies fair dealing between the parties, his conduct indicates bad faith or some other tortious intent.

Again, in 1965 the Appellate Division affirmed the trial court’s granting of summary judgment against plaintiff contractor in Ace Stone, Inc. v. Wayne Tp., 89 N. J. Super. 482. The contractor had sued for damages it allegedly sustained as the result of delays due to the township’s failure to have the work site fully available when plaintiff was directed by the township engineer to proceed with the job. The court held as a matter of law that the exculpatory clauses in the contract were broad enough and sufficiently explicit to exclude contractual liability for the claim asserted.

The contractor appealed to the Supreme Court and that court reversed the Appellate Division and held that the motion for summary judgment was erroneously granted. It remanded the case to the Law Division to enable the parties to introduce such oral and documentary evidence as may be available and relevant in aid of interpretation. In doing so it reaffirmed the underlying legality of “no damage” clauses, 47 N. J. 431 (1966), but indicated that the line of cases represented by Sheehan v. City of Pittsburg, 213 Pa. 133, 62 A. 642 (Sup. Ct. 1905), may well be pertinent.

The city in Sheehan had entered into a contract with one Howley who in turn assigned the same to Sheehan for the construction of a street. The parties had assumed that the city had acquired the necessary right of way, but this was not so. By reason of the ensuing delay the contractor suffered a loss and sued the city, which defended under the following no-damage clause: “all loss or damage arising out of the nature of the work to be done under this contract or from any unforeseen obstructions or difficulties, which may be encountered in the prosecution of the same, or from the actions of the elements, or from any encumbrance on the line of the work, shall be sustained by the” contractor and no charge shall be made by the contractors for any hindrance or delay from any cause during the progress of the work, but it may justify his asking an extension of time. In holding it inapplicable the Pennsylvania Supreme Court pointed out that notwithstanding the breadth of the clause, it was clear that “the delay from the city’s failure to obtain complete right of way was not in the class of difficulties and delays which were in the minds of the parties.”

In Dallas v. Shortall, 87 S. W. 2d 844 (Tex. Civ. App. 1935) rev’d on other grounds, 131 Tex. 368, 114 S. W. 2d 536 (Sup. Ct. 1938), a delay in commencement of the construction of a tunnel under a contract with a city, caused by the failure of the city to acquire a right of way before it had ordered commencement of the work, was held not the character of delay contemplated by a clause in the contract that the contractor should “not be entitled to any claim for damages for hindrance or delay for any cause whatever in the progress of the work,” but if the contractor should be delayed for any cause beyond his control, the time for completing the work would be extended, since the delay contemplated was one encountered by the contractor in the progress of the work, whereas the delay in question was one encountered in the very beginning of the work, brought about by the city’s failure to secure the right of way before it directed the work to begin. The court, in holding that a contractor to whom the contract had been assigned, could recover damages for the delay, noted that the contract necessarily assumed two fundamental facts: (1) that the city had the right to construct the tunnel under the premises involved, and (2) that the contractor had the ability to do the work.

And in American Pipe and Construction Co. v. Westchester Cty., 292 F. 941 (2 Cir. 1923), damages for a delay of 258 days in furnishing a right of way so that work on the construction of a sewer could be continued by a contractor were held recoverable by the contractor notwithstanding a provision of the contract that the county could suspend at any time the whole or any part of the work if they deemed it for the best interest of the district, without compensation to the contractor other than extending the time for the completion of the work, since the delay could not be said to be for the “best interest of the district.” The court regarded the failure to provide the right of way as a breach of the contract.

In Wilson & English Construction Co. v. New York C. R. Co., 240 App. Div. 479, 269 N. Y. S. 874 (App. Div. 1934), a provision in a contract for the construction of a spur track that the contractor would not be entitled to claim or receive from the contractee any sum whatever in excess of the contract price, by reason or account of any delay caused in such work by the contractee, was held not to preclude a recovery by the contractor for damages for a delay caused by the failure of the railroad to provide a right of way and its delay in furnishing materials to the contractor, as required by the contract. The fact that the contractee did not have a right of way was not disclosed by the contractor.

In the case at bar there is a specific prohibition against the contractor making a claim for additional compensation on account of delays in the acquisition of the right of way. The language employed is not a general “no damage” clause, as in Sheehan.

While both parties assumed the right of access was available to them before defendant directed the plaintiff to proceed, the contractor had not only the right to examine the provisions of the agreements existing but had the duty to do so under article 1.2.11. bio testimony has been adduced as to availability of the agreement between the City of Passaic and United Wool or its predecessors in title, but the court would have to assume that since it involved an interest in lands the agreement would be recorded in the county recording office. Certainly it was available to both parties at the Passaic City Clerk’s office and the terms thereof were subject to the interpretation of counsel for the contractor as well as the State. While the contractor did make inquiry of defendant as to the status of the rights of way and assurances were given which the contractor sought to have reduced to writing, the contractor under the terms of the agreement was required to “ascertain the provisions of agreements between the State and property owners that may relate to his bid or to the work to be performed.” This was not done. The assurances given by defendant were made in good faith and under an honest misconstruction of the true facts. Uo fraud nor wilful misstatement of facts are involved nor was the delay protracted to an unreasonable length. The delay from defendant’s failure to obtain compíete right of way was here in the class of difficulties and delays which were in the minds of the parties, for specific reference was made to it in the specifications as supplemented.' Christhilf v. Mayor and City Council of Baltimore 152 Md. 204, 136 A. 527 (Sup. Ct. 1927). The provisions in the present contract are unambiguous and call for a strict application. Psaty & Fuhrman, Inc. v. Housing Authority of Providence, supra. While such a strict application may bring about a harsh result, that fact will not prevent the application thereof. Erickson v. Edmonds School District, 13 Wash. 2d 398, 125 P. 2d 275 (Sup. Ct. 1942).

There has been no evidence introduced of any trade practices or customs which would alter the application of the above cited authorities.

Plaintiff argues that action of the Superior Court in granting a temporary injunction at the instance of United Wool in some way differentiates this case. This argument cannot be accepted. It is well recognized that many property owners are opposed to change and ofttimes will institute groundless litigation to halt or delay projects such as this. There is nothing before this court to indicate that defendant was in any way able to prevent or accelerate the termination of said action. The temporary injunction undoubtedly was issued to keep things in statu quo until the court could determine the validity of the property owner’s complaint. Delays of this nature were certainly within the contemplation of this sophisticated contractor.

A judgment of no cause for action will be entered in favor of defendant and against plaintiff.


author: Gaulkin, J. S. C.,

text:
    IN THE MATTER OF THE APPLICATION OF CHRISTOPHER DENNIS LONE, AN INFANT, BY HIS MOTHER AND NATURAL GUARDIAN, FIOLIA M. DEC, FOR LEAVE TO ASSUME THE NAME OF CHRISTOPHER DENNIS DEC.
    Hudson County Court Law Division
    May 1, 1975.

      Mr. Arnold L. Cohen for petitioner Fiolia M. Dec (Messrs. Welsh & Cohen, attorneys).

      Mr. Paul M. Griffin for objector Dennis Lone (Messrs. Norton and Kalac, attorneys).
   Gaulkin, J. S. C.,

Temporarily Assigned. Plaintiff Piolia M. Dec, as mother and natural guardian of Christopher Dennis Lone, an infant, brings this action to permit the child to assume her present surname of Dec. N. J. 8. A. 2A :52-l; R. 4:72. The natural father, Dennis Lone, opposes the application.

Christopher was born on January 12, 1970. His parents, who had married in 1908, separated shortly after his birth and were divorced on November 24, 1970. The decree awarded custody of the child to plaintiff and granted “reasonable” visitation rights to the father.

On April 4, 1974, plaintiff married Leon Thomas Dee and assumed Dee as her surname. One child, Leon Dec, has been born of this marriage. At all times since the marriage Christopher has lived with the Dee family. It is not questioned that he is well-cared for by and fully integrated into the Dee household.

Except for one or two brief periods when he lived with his parental grandparents, Christopher has been in the custody of plaintiff since her separation from Mr. Lone. For approximately three years following the separation and divorce Lone lived and worked in New Jersey and exercised his visitation rights 40 to 50 times, by his estimate. Plaintiff confirmed that during that time Lone had taken Christopher for overnight visitations some 25 times.

In October 1973, having lost his job, Lone joined the Navy. He underwent basic training in Florida and then was assigned to duty in Alaska for approximately a year. During that time he did not see Christopher at all and had only minimal contacts through sending occasional gifts. At the end of the Alaska tour of duty Lone had the opportunity to select his next assignment and requested duty along the East Coast; he did so, he testified, in order to be able to resume Ms contacts with Christopher. He is now stationed in Maine. Lone testified credibly and persuasively of his continuing love and affection for Christopher and his desire to maintain and advance his relationship with his son.

Although plaintiff testified that Lone is often tardy in remitting the $25 weekly child support sum required by the divorce decree, the proofs justify the conclusion that there are no arrearages now, that any past arrearages have been short-lived and of modest amount, and that plaintiff has not required any assistance of the court in enforcing the decree. Lone further provides health insurance coverage for Christopher and has named him the beneficiary of his government life insurance policy.

Neither party suggested that testimony be taken of Christopher himself. Plaintiff and her present husband, however, testified that the child has indicated his wish to use the name Dec and that he calls Mr. Dec “Daddy.” Given the child’s age and the doubts that reasonably arise as to what prompted these usages, little weight should be given to them. Cf. Degerberg v. McCormick, 41 Del. Ch. 46, 187 A. 2d 436 (Ch. 19-63).

In her brief plaintiff advances -essentially three reasons why Christopher should assume the surname Dec: first, that to require him “to live with a name different from his mother and brother would be to ask this child to carry a burden through his formative years that can very well have very negative psychological implications”; second, that Lone “has abandoned his child,” and third, that “bureaucratic red tape” will “create chaos” if formal recognition is not given to a name which Christopher might use informally.

Only three reported New Jersey cases appear to have considered an application of this kind. In Sobel v. Sobel, 46 N. J. Super. 284 (Ch. Div. 1957), the natural father sought to restrain the mother, who had since remarried, from enrolling their children in school under any name other than his surname. The mother, who had enrolled the children in school under the surname of her second husband, resisted her former husband’s application on the grounds “that he ignores the responsibility of his children, fails to provide adequate support while he operates a successful business, and is indifferent in complying with the order of visitation.” Apparently no suggestion was made that psychological or emotional harm would result if the child retained his father’s surname.

The Chancery Division granted the injunction. Starting with the proposition “that the welfare and happiness of the child is the controlling consideration”, the judge went on to say that the use of the surname of the second husband may be desirable on occasion “when the child’s father indulges in improper conduct, fails to support, abandons the child, is indifferent to its welfare,” but that “there is no authority for her to change the surname of the child to that of the mother’s subsequent husband, unless there are extenuating circumstances.” Applying these principles, the judge concluded:

Here, the father is not in default in contributing to the support of his sons nor is he charged with improper conduct, nor are there other circumstances that would move the court to deny him the right to expect his kin to bear his name, [at 287]

In W. v. H., 103 N. J. Super. 24 (Ch. Div. 1968), the judge as part of a divorce granted to the wife, granted her leave to resume her maiden name and to change the surname of the children to that name, again stating that “it is against the policy of the court to grant permission to resume a maiden name where unemancipated children who bear a different name are involved”; however, the judge found that because the husband had pleaded guilty to sexual intercourse with his eleven-year old daughter and had previously impregnated his oldest daughter, “forfeiture of [the] father’s right to have his progeny bear his name” was appropriate.

In Bruguier v. Bruguier, 12 N. J. Super. 350 (Ch. Div. 1951), the judge permitted the child of divorced parents to assume the surname of her mother’s second husband; although the age of the child is not noted, it appears that she was a high school student and that the change of name was at her own request.

. These holdings are generally consistent with those of other jurisdictions. See Annotation, “Eights and remedies of parents inter se with respect to the names of their children,” 53 A. L. R. 2d 914 (1957). Thus the authorities broadly support the propositions, as stated in Sobel, that “the welfare and happiness of the child is the controlling consideration”, and that the surname of the child ought not be changed to that of the mother’s subsequent husband in the absence of “extenuating circumstances.” Id. at 914.

The question presented, then, is whether the reasons advanced by plaintiff for the requested name change constitute “extenuating circumstances.” Two of those three reasons are patently without merit. As to the claim that Lone has abandoned his child, the proofs are entirely to the contrary. Lone maintained substantial contacts with his son when he was able and has arranged his Navy career to permit him to continue those contacts; he has performed his support obligations; he persuasively asserts his present intention to continue to support his son and to develop his relationship with him. The suggestions by plaintiff that Lone ought not to have entered the service, or that he should have written or telephoned or sent gifts from Alaska, are beside the point: it is neither possible nor appropriate to evaluate such gradations of paternal interest. By no reading of the record can it be said that Lone has abandoned his child, or that he has otherwise been guilty of any misconduct toward him. Cf. In re Mrs. M., 74 N. J. Super. 178 (App. Div. 1962); Application of Otis, 204 Misc. 1073, 126 N. Y. S. 2d 651 (Sup. Ct. 1954).

As to the second claim — of “bureaucratic red tape” generated by maintenance of a surname different from her own — plaintiff offered nothing but its mere assertion. Speculation about such matters is not appropriate here, and any such problems that might be envisioned are minimal. Cf. In re Lawrence, 133 N. J. Super. 408 (App. Div. 1975); West v. Wright, 263 Md. 297, 283 A. 2d 401 (Ct. App. 1971); Application of Hinrichs, 41 Misc. 2d 422, 246 N. Y. S. 2d 25 (Sup. Ct. 1964).

The remaining reason advanced by plaintiff for the change of name — that “negative psychological implications” will result from maintenance of the Lone surname — presents a more difficult question. The “implications” urged are essentially that growing up> in the Dec family as the only Lone will set Christopher apart, at least in his own mind; and that among his peers his name will create confusion and embarrassment for him. No expert testimony was offered in support of these projections. Cf. Degerberg v. McCormick, supra; King v. Newman, 431 S. W. 2d 149 (Tex. Civ. App. 1967), rev’d 433 S. W. 2d 420 (Tex. Sup. Ct. 1968).

The New Jersey cases have not considered whether or how these matters hear on a name change application made in behalf of an infant. On their face, and even though unsupported by expert testimony, such concerns appear to have persuasive and substantial relevance to the “welfare and happiness of the child.” Sobel, supra. Whether they should therefore be considered “extenuating circumstances” is a question whose resolution requires examination of the policy which favors retention of the original surname in the absence of such circumstances.

The New Jersey eases justify that policy in terms which appear to have little relation to the interests of the child. Thus, in Sobel, supra, the principle that is to be honored in the absence of “extenuating circumstances” is described as “the [father’s] right to expect his kin to bear his name.” 46 N. J. Super. at 287. Similarly, in W. v. H., supra, the court described the presumption is in favor of the “father’s right to have his progeny bear his name.” 103 N. J. Super. at 36. Cases outside New Jersey also frequently define the policy favoring retention of the original surname in such terms of the father’s “rights”. See, e.g., West v. Wright, supra; Application of Trower, 260 Cal. App. 2d 75, 66 Cal. Rptr. 873 (D. Ct. App. 1968); Application of Shipley, 26 Misc. 2d 204, 205 N. Y. S. 2d 581 (Sup. Ct. 1960).

If the language of the cases is to be followed, only some undefined “right” of the father is to be weighed against the possible detrimental effects on the child of continued use of his surname. So put, the question of the “welfare and happiness” of the child might be readily resolved. The conflicting interests here, however, should not be viewed so narrowly.

To that extent that the paternal “right” represents a recognition of a father’s interest in perpetuating his own name or in protecting his ego or in preserving his perceived male prerogatives, it may have little or no relevance to the best interests of the child or the propriety of a name change. But to the extent the “right” recognizes the father’s interest in maintaining his relationship with his child for their mutual benefit, it becomes highly relevant.

Cases in other jurisdictions have expressed the father’s “right” in just such terms. In Degerberg v. McCormick, supra, the court noted that authority “recognizes that a change of surname of a child of divorced parents may contribute to estrangement of the child from his father”, relying in part upon psychiatric testimony presented to that court that an attempted change of name “created a ‘wedge’ ” in the child’s relationship with his father, and that his continued use of the stepfather’s name “will have a serious, adverse effect upon the child’s development in his formative years.” Similarly, in Mark v. Kahn, 333 Mass. 517, 131 N. E. 2d 758, 53 A. L. R. 2d 908 (Sup. Jud. Ct. 1956), the court expressed the view that

The bond between a father and his children in circumstances like the present is tenuous at best and if their name is changed that bond may be weakened if not destroyed. * * * A change of name may not be in the child’s best interest if the effect of such change is to contribute to the further estrangement of the child from a father who exhibits a desire to preserve the parental relationship. [131 N. E. 2d at 762]

And in Robinson v. Hansel, Minn. 223 N. W. 2d 138 (Sup. Ct. 1974), the same considerations were stated in the following language:

courts have traditionally tried to maintain and to encourage continuing parental relationships. The link between a father and child in circumstances such as these is uncertain at best, and a change of name could further weaken, if not sever, such a bond. [223 N. W. 2d at 140].

Whether using language of paternal “right” or these more relevant terms relating to the child’s well-being, the cases of other jurisdictions almost uniformly have rejected contentions that a child’s psychological health requires that his name conform to that adopted by his mother on remarriage. See, e. g., Degerberg v. McCormick, supra; Mark v. Kahn, supra; Robinson v. Hansel, supra; West v. Wright, supra; Application of Trower, supra; Application of Shipley, supra; Application of Hinrichs, supra; Marshall v. Marshall, 230 Miss. 719, 93 So. 2d 822 (Sup. Ct. 1951); Reed v. Reed, 338 P. 2d 350 (Okl. Sup. Ct. 1959); contra, Newman v. King, supra; In re Adoption of McCoy, 31 Ohio Misc. 195, 60 Ohio Op. 2d 356, 287 N. E. 2d 833 (C. C. P. 1972).

The apprehensions which reasonably arise as to the possible effects of a name change, like the contrary apprehensions expressed by plaintiff, are persuasive and serious. A change of name imposed upon a child could represent to him a rejection by his father; or evidence that his father is deserving of rejection or contempt; or an attempt by his mother to deceive him as to his true identity; or a statement by his mother and stepfather that his true identity is a shame and embarrassment to them and others. Such consequences could be enormously harmful to the child. They are, of course, conjectural, but no less so than are the “psychological implications” foreseen by plaintiff.

The record thus generates only two conflicting groups of speculations as to the possible effects of a name change. No expert testimony has been offered, and no academic literature has been found, to assist in the weighing of these speculations. The realities are that the child’s present name represents his identity, his paternity and a remaining bond with his father. There is no sound basis to conclude that any tampering with these realities would advance the best interests of the child. Cf. In re Adoption of Children by D., 61 N. J. 89, 93 (1972); In re N., 96 N. J. Super. 415, 425 (App. Div. 1967). The application must therefore be denied.


author: Tams, J. C. C.

text:
    IN THE MATTER OF THE ESTATE OF ADELA PAWLOVICH POLI, DECEASED.
    Mercer County Court Probate Division
    May 1, 1975.

      Mr. Stephen Lichtenstein for petitioner (Messrs. Coleman, Lichtenstein, Levy & Segal, Esqs., attorneys).

      Mr. Jesse Moshowitz for respondent,
   Tams, J. C. C.

This matter concerns the claim of a New Jersey attorney, who is also a deputy surrogate, for payment for legal services he rendered to the within estate where a partial distribution is to be made. Petitioner was retained by the New York law firm of Wolf, Popper, Eoss, Wolf & Jones, hereafter called Wolf, Popper, to represent them on a contingent fee basis. Wolf, Popper were and are attorneys-in-fact for a daughter of decedent herein, who is a beneficiary and resides in the U. S. S. E. The estate consists essentially of two parcels of real estate in Mercer County. One was taken by the State of New Jersey by condemnation which resulted in a price of $70,000 being paid for the taking. The estate was represented by another New Jersey law firm with respect to the condemnation, and certain fees were allowed by the court in this connection. The present petition is to set aside a portion of the balance remaining, to assure the payment of petitioner’s claimed legal fee.

Defendant estate, now represented by still another New Jersey law firm which was substituted for petitioner, contends that petitioner was discharged for failure to properly pursue this matter and that no fee is due to him. Petitioner argues that a contingent fee agreement, whereby he was retained, entitles him to a percentage of the total estate and that the substitution of new counsel is an invasion and denial of his vested contractual rights.

The factual situation is somewhat complex respecting the dealings of petitioner and Wolf, Popper. Suffice it to say that petitioner had embarked on the work involved and had determined that decedent’s widower was still alive and entitled to a life interest in the estate which will require waiting until that interest is extinguished before final settlement of the account. The life tenant is advanced in age but apparently still survives to this date. Petitioner claims that this was well understood by Wolf, Popper and that therefore he was not required to perform any additional services for the estate. Wolf, Popper had learned that because of his position as deputy Surrogate petitioner was unable to make any court appearances for them. Nevertheless, they made certain inquiries about the progress of petitioner and, on failure to receive a response to their inquiries, discharged petitioner as attorney on a date which this court determines to he July 6, 1972.

The real question is, does an attorney in New Jersey have a vested right in the contractual relationship with a client arising out of a contingent fee agreement, and most particularly, where the services have not been completed?

No exact precedent is found in our New Jersey cases. In Stein v. Shaw, 6 N. J. 525 (1951), a disbarred attorney was involved and the holding of that case must be understood in that setting. In Niebuhr v. Sassadeck, 15 N. J. Misc. 285, 190 A. 783, aff’d 120 N. J. L. 183 (E. & A. 1938), the attorney’s services were nearly complete on his discharge, and therefore quantum meruit was held not to be applicable in determining the amount of the fee.

The answer to this question may be partly learned from In re Kish, 52 N. J. 454 (1968). Not only is the subject matter of the cited case very similar, but the firm of Wolf, Popper was also involved as attorneys-in-fact for an estate where the beneficiaries were from Hungary. In an opinion by Justice Hall the court had occasion to pass on the question of the propriety of a contingent fee for the attorney for the estate, and stated :

In view of a court’s inherent power to pass upon the reasonableness of fees charged in connection with any matter before it, any fee arrangement set forth in such a power of attorney is subject to judicial review. A court should make inquiry in these situations as to tlie existence of any such percentage arrangement, since the client is in a foreign country, is bound to be unfamiliar with appropriate fees and charges here, and cannot personally be heard. While the amount the specified percentage would produce in this case does nut appear unreasonable in light of the extended litigation, the figure seems clearly excessive as far as future matters are concerned since, by reason of the criteria and procedure we have outlined adversary litigation will not ordinarily be required.
The proper practice is for the New Jersey attorney to apply to the court, pursuant to R. R. 4:107-3, for an allowance out of the distributee’s share for his services and those of any out-of-state attorney, plus their expenses, based on the nature and extent of the actual services rendered with any percentage specified in a power of attorney representing only the maximum amount which the court may allow, [at 472]

The Supreme Court has thusly stated that a contingent agreement made under the circumstances of the present case must first be reviewed, by the court before the amount, of counsel fee claimed pursuant to the agreement may be allowed. It is clear that such an agreement sets only the maximum amount of the fee, and the allowed sum will be dependent wholly upon the nature and extent of legal services rendered. Said another way, the measure of the fee is quantum, meruit, defined in Black’s Law Dictionary (4 ed. rev. among other things, as to entitling a claimant to “as much as he reasonably deserved to have for his labor”. Also compare American Trial Lawyers Ass’n. v. N. J. Supreme Ct., 126 N. J. Super. 577 (App. Div. 1973), where the Appellate Division whose opinion was affirmed and further explained by Chief Justice Hughes, 66 N. J. 258 (1974), stated,

Attorneys have never had the right to enforce contractual provisions for more than a fair and reasonable fee. They are not business men, entitled to charge what the traffic will bear, [at 591]

Other jurisdictions have considered and determined comparable cases and they are helpful in understanding the modern judicial philosophy concerning this area of our law. In Fracasse v. Brent, 6 Cal. 3d 784, 100 Cal. Rptr. 385, 494 P. 2d 9 (1972), the Supreme Court of California reversed the existing law of that state and held that an attorney discharged without cause by his client could no longer recover as damages the full fee specified in the contract of employment without regard to the reasonable value of his services ox the extent of work performed under that contract. The court concluded that

:i" * a client should have both the power and the right at any time to discharge Ms attorney with or without cause. Such a discharge does not constitute a breach of contract for the reason that it is a basic term of the contract, implied by law into it by reason of the special relationship between the contracting parties, that the client may terminate the contract at will. It would be anomalous and unjust to hold the client liable in damages for exercising that basic implied right. *■ * *
In summary, we hold that an attorney discharged with or without cause is entitled to the reasonable value of his services rendered to the time of the discharge. * * * We further hold that the cause of action to recover compensation for services rendered under a contingent fee contract does not accrue until the occurrence of the stated contingency.

Cogent language is also found in Cole v. Myers, 128 Conn. 223, 21 A. 2d 396 (1941), where the Supreme Court of Errors stated:

An attorney at law is an officer of the court; a minister of justice. He is entitled to fair compensation for his services, but since, because of the highly confidential relationship, the client may discharge him even without just cause, he should receive reasonable compensation for the work he has done up to that point, and not the agreed fee he probably would have earned had he been allowed to continue in his employment. This rule is not unfair to the attorney. He will receive fair compensation for what he has done; his position as an officer of the court does not entitle him to receive payment for services he has not rendered.

Also see 136 A. L. R. 231, 254, which states:

There is an increasing tendency to hold that an attorney employed on a contingent fee contract who is discharged without fault on his part is not, as a general rule, entitled to recover on the contract, but may recover merely on a quantum meruit for the reasonable value of the services rendered.

The question of whether in New Jersey a client is authorized to discharge his attorney at any time with or without cause has not been passed on by any appellate court. The proposition, however, is contemplated in our rules, for DR 2-110 provides:

(B) Mandatory withdrawal.
A lawyer representing a client before a tribunal, with its permission if required by its rules, shall withdraw from employment, and a lawyer representing a client in other matters shall withdraw from employment if:
tit # Of « * $
(4) He is discharged by his client

In this regard the only reported cases found in New Jersey are Hudson Trust & Savings Inst. v. Carr-Curran Paper Mills, 44 A. 638 (Ch. 1899), and Weibezahl v. Huber, 39 N. J. L. J. 334 (Cir. Ct. 1916), the latter citing the former, being an oral opinion by then Vice-Chancellor Pitney holding that “The client has at all times an absolute right to change his solicitor; but he cannot in my judgment, in so doing, deprive his solicitor of his right to compensation, or injure or destroy any lien which the solicitor has upon the fruit of his labor.” These lower court decisions are quite compatible with the rationale of the Fracasse case from California and Cole from Connecticut.

It is stated in 7 C. J. S. Attorney and Client § 109 that

* * * because of the peculiar nature of the relation of attorney and client, the law goes even further and permits the terminations thereof in a manner not recognized with respect to other contracts. Either party may dissolve the relation for cause, and the client has-the absolute right to discharge the attorney and terminate the relation at any time even without cause, no matter how arbitrary his action may seem *’ * *

The holdings of Fracasse and Gole are not inconsistent with the cited New Jersey precedent and appear to-be an accurate and definitive projection of our own judicial philosophy in this portion of our law. Eor these reasons the petitioner is found to have been duly discharged by Wolf, Popper and is entitled to recover for his legal services in quantum meruit. He shall submit an affidavit of services pursuant to B. 4:42-9 and this court will then allow an appropriate fee.


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

text:
    STATE OF NEW JERSEY, PLAINTIFF-RESPONDENT, v. CLAY R. HUNDLEY, DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Submitted February 11, 1975
    Decided March 14, 1975.

      Before Judges Matthews, Fritz and Botter.

      Mr. Stanley C. Van Ness, Public Defender, attorney for appellant (Mr. Michael Stiffness, Assistant Deputy Public Defender, of counsel and on the brief).

      Mr. William F. Hyland, Attorney General, attorney for respondent (Mr. George H. Henningsen, Deputy Attorney General, of counsel).
   The opinion of the court was delivered by

Matthews, P. J. A. D.

Defendant and another were indicted in three counts charging atrocious assault and battery (N. J. S. A. 2A:90-1), robbery (N. J. S. A. 2A:141-1) and robbery while armed (N. J. S. A. 2A:141-1 and N. J. S. A. 2A:151~5). The charge of robbery while armed was dismissed and a jury convicted defendant of atrocious assault and battery and robbery. He was sentenced to two indeterminate terms at Yardville, suspended, with probation for three years and a $300 fine on both counts. The fine on the robbery conviction was suspended.

Defendant contends that the trial judge erred in denying his motion at the conclusion of the entire case for a judgment of acquittal. He claims that the State failed to prove, even by inference, that he intended to assault and rob the victim. We disagree.

Contrary to defendant’s assertions, his intent could readily be inferred from his actions as established by the evidence. State v. Tassiello, 75 N. J. Super. 1, 6 (App. Div. 1962), aff’d 39 N. J. 282 (1963); State v. Adamo, 9 N. J. Super. 7, 10 (App. Div. 1950), certif. den. 5 N. J. 482 (1950). The testimony of the victim amply showed the intent of defendant to assault him and take his money. He testified that defendant took a hammer from a companion, threatened hi-m with it, asked for and got some money from the victim and struck the victim’s face with a hammer. After the blow the victim handed over additional money to defendant. Denial of the motion for acquittal was proper.

It is suggested that the charges of atrocious assault and battery and armed robbery should be merged because defendant’s actions in perpetrating those crimes constituted a single transaction. We find no basis for merger of these crimes either under the circumstances presented or under any other we can readily perceive. The correct test of merger has been stated to be:

® * * whether a particular act involved in a single transaction is a distinct criminal affair or an integral part of the principal offense charged. A prosecution for any part of a single crime bars any additional prosecution or sentence for the whole crime or any other constituent element of the whole crime. [State v. Hill, 44 N. J. Super. 110, 112 (App. Div. 1957), quoted with approval in State v. Jamison, 64 N. J. 363, 380 (1974)]

The offense of atrocious assault and battery (N. J. S. A. 2A:90-1) constitutes a distinct criminal affair and is not an integral part of the offense of armed robbery (N. J. 8. A. 2A.-141-1 and 2A.T51-5). Unquestionably the crime of armed robbery can be committed without an atrocious assault and battery. Every armed robbery necessarily involves an assault and, on occasion, a battery, since the elements of the offense include the forcible taking of personal property from a victim by placing him in fear or by resorting to violence. However, the nature of the assaultive conduct or the violence required to satisfy the robbery statute need not be “savagely brutal or outrageously or inhumanly cruel or violent,” as would necessarily be required to establish an atrocious assault and battery. State v. Edwards, 28 N. J. 292, 297 (1958). Stated in another way, the nature of the attack is of paramount importance in determining whether the crime of atrocious assault and battery has been committed, whereas in the case of robbery the nature of the assault is relevant only to establish whether the victim parted with his personalty out of fear or because of the physical act of his assailant. As we stated in State v. Boening, 63 N. J. Super. 588 (App. Div. 1960) :

The separate counts for armed robbery and atrocious assault and battery do not, however, spell out an identity of criminal transaction. The same physical act or acts did not necessarily give rise to both; as indicated, a brutal assault may have been followed by the act of armed robbery some minutes later, or there may have been an armed robbery followed later by a maiming or wounding inflicted out of sheer viciousness or fear of apprehension, [at 595]

Finally, we also find that merger of the crimes of atrocious assault and battery and armed robbery would seriously undermine the public policy considerations evidenced by the creation of these separate offenses by the Legislature. Clearly, the existence of an independent crime of atrocious assault and battery with its corresponding sanction of imprisonment serves to deter one who commits a robbery from harming his victim. Merger of the offense into the robbery offense could only serve to encourage injury to robbery victims, once it became known that punishment could not be enhanced.

Affirmed.


author: Kole, J. A. D.

text:
    RICHARD LEONI, JR., PETITIONER-RESPONDENT, v. TOWNSHIP OF HAMILTON, RESPONDENT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Argued May 6, 1975
    Decided May 14, 1975.

      Before Judges Carton, Crane and Kole.

      Mr. William F. Perry argued the cause for respondent (Messrs. Morgan, Melhuish, Monaghan, McCoid and Spielvogel, attorneys; Mr. Paul A. Tripodo on the brief).

      Mr. Sidney S. Stark argued the cause for appellee (Messrs, Stark and Stark, attorneys).
   The opinion of the court was delivered by

Kole, J. A. D.

Richard Leoni, a police officer in the Township of Hamilton, filed a petition in the Division of Workmen’s Compensation pursuant to H. J. 8. A. 34:15-7 et seq., for a work-connected disability as a result of injuries sustained on September 20, 1970. The workmen’s compensation judge awarded him compensation on March 1, 1974, for permanent disability, with payments to commence from March 3, 1972, the date to which he had been paid sick leave benefits by the employer.

The workmen’s compensation carrier of the employer failed to make payments pursuant to the award. Accordingly, Leoni filed a motion on June 7, 1974 to compel payment and to add the carrier as an additional respondent. On July 17, 1974 the employer filed a cross-motion to suspend payments on the ground that petitioner is a “former employee who has been retired on pension by reason of injury or disability”, as set forth in N. J. 8. A. 34:15-43, a part of the Workmen’s Compensation Act. The judge granted petitioner’s motion and denied the employer’s cross-motion. The employer appeals from the resulting order.

There is no doubt that the injury and disability suffered by petitioner was work-connected. He now appears to be totally blind as a result thereof.

Prior to the initiation of the workmen’s compensation petition, Leoni had filed a petition for an accidental disability pension. The pension board involved rejected the claim on the ground that the disability was not a direct result of a traumatic event pursuant to N. J. 8. A. 43:16A-7(1). See Shea v. Bd. of Trustees, 116 N. J. Super. 348 (App. Div. 1971); Hillman v. Bd. of Trustees, 109 N. J. Super. 449 (App. Div. 1970); Titman v. Bd. of Trustees, 107 N. J. Super. 244 (App. Div. 1969). An accidental disability pension would constitute 2/3 of his annual $11,246 salary. We have been advised that this determination is presently the subject of an administrative appeal. We, of course, express no views with respect to the merits of the pension board’s conclusion. The board, however, granted petitioner an ordinary disability retirement pension under N. J. S. A. 43 :16A-6. He was retired as of March 1, 1973 and receives a disability pension of $4,138.67 a year. He was still receiving it when he filed his workmen’s compensation petition. The workmen’s compensation award is $4,733 a year, about $600 annually in excess of his ordinary disability pension.

There is no doubt that Leoni may not collect both a workmen’s compensation award and a disability pension, whether the latter was the result of an accident or other cause under N. J. 8. A. 43 :16A-6 or 43 :16A-7. The provisions of both the Workmen’s Compensation Act, N. J. S. A. 34:15-43, and the Pension Act, N. J. 8. A. 43 TOA-IS.3(b), as amended, make this clear. See In re Application of Smith, 57 N. J. 368 (1971); Russo v. Teachers’ Pension & Annuity Fund, 62 N. J. 143 (1973).

The narrow issue thus presented is whether a public employee — here a policeman — may choose to pursue and receive an award on a workmen’s compensation claim, notwithstanding he is then in receipt of an ordinary disability retirement pension where the latter is work-connected, provided no double recovery of benefits will result.

The problem is one of statutory construction of both N. J. 8. A. 34:15-43 and the 1971 amendment to N. J. 8. A. 43:16A-15.3(b) — (L. 1971, c. 175, § 18).

N. J. 8. A. 34:15-43, a part of the Workmen’s Compensation Act, provides:

No former employee who has been retired on pension by reason of injury or disability shall be entitled under this section to compensation for such injury or disability * * *.

Prior to the 1971 amendment, N. J. 8. A. 43 :16A-15.3(b), part of the Pension Law, precluded the approval of retirement benefits while a member was in receipt of periodic benefits under the Workmen’s Compensation Law. The 1971 amendment permitted such application to be approved, provided-that the actuarial equivalent of the periodic benefits remaining to be paid under the workmen’s compensation award were used to reduce the pension portion of the retirement allowance payable to the retiring member. The Legislature did not make a comparable amendment to the workmen’s compensation provision to which we have referred that, in effect, precludes the award of workmen’s compensation where the public employee is in receipt of a pension by reason’ of disability or injury. N. J. 8. A. 34:15-43.

In Smith, supra, 57 N. J. at 383, n. 1, the court mentioned the veto by the Governor of an amendment to the foregoing workmen’s compensation provision, which would have permitted an employee retired on an injury or disability pension. to obtain workmen’s compensation therefor, and referred to the failure of the Legislature to amend the provision of the Pension Act, N. J. 8. A. 43:16A-15.2(b). Nevertheless, we note that subsequent to Smith, the Legislature in fact did amend that pension provision to permit the grant, of a pension even though a workmen’s compensation award was being paid to the public employee. In that event in 'effect the pension fund would obtain credit for the actuarial. equivalent of the periodic benefits remaining to be paid under the workmen’s compensation award, since the pension portion of the retirement allowance to the retirant would be reduced accordingly.

We have concluded that, with respect to the narrow issue before us, the 1971 amendment to the pension provision here involved must be read in pari materia with the workmen’s compensation provision, N. J. 8. A. 34:15-43, even though the latter statute was not amended. As Smith, supra, 57 N. J. at 374, indicates, the beneficent purpose of the Workmen’s Compensation Act requires a strict construction of N. J. 8. A. 34:15-43 in favor of the retired employee. Thus, in our view, this provision, when read together with the 1971 amendment of the Pension Act, demonstrates a legislative intention to permit a covered public employee, who is in receipt of an ordinary work-connected disability retirement pension, thereafter to choose whether he wishes to obtain workmen’s compensation, thereby reducing his retirement pension award for such disability, or simply to continue to receive his full pension benefits. In short, an employee so situated is entitled to recover the larger amount he would receive under the respective statutory provisions. If, as here, a workmen’s compensation award is granted and required to be paid while a work-connected ordinary disability pension is being received, the pension fund is entitled to a credit for such payments against the retirant’s pension in accordance with N. J. 8. A. 43:16A-15.2(b).

We so hold even though a literal reading of the 1971 amendment to the latter provision appears to contemplate that the credit to the pension fund only apply where the applicant, at the time he files for pension benefits, is actually in receipt of periodic benefits under the Workmen’s Compensation Act. We cannot ascribe to the Legislature an intention to permit the applicability of the 1971 amendment, to the extent, as here, that it may be said to relate to the workmen’s compensation provision, N. J. 8. A. 34:15-43, to depend solely on the happenstance of when the workmen’s compensation petition is filed or relief is granted — i. e., whether before or after the application for or receipt of ordinary disability benefits under the Pension Act.

The construction which we have given to the statutes comports with the laudatory purpose of the Workmen’s Compensation Act and the pension disability provisions and • at the same time precludes the double recovery of benefits referred to in Smith, supra, and Russo, supra. Indeed, in our view, it accords with the underlying philosophy of Smith.

We need not at this point determine whether we would reach the same result in the event the employee were in receipt of an accidental disability pension under N. J. 8. A. 43:16A-7. Our determination is limited to the situation before us.

By reason of our conclusion, we need not decide whether the employer’s appeal from the judgment of the Division of Workmen’s Compensation has been filed out of time, as petitioner contends.

For the foregoing reasons the order of the judge of workmen’s compensation is affirmed.


author: Lynch, J. A. D.

text:
    MARK DE BENEDICTIS, PLAINTIFF-RESPONDENT, v. IRWIN D. GERECHOFF, INDIVIDUALLY AND TRADING AS G & G AGENCY, INC., DEFENDANT-APPELLANT.
    Superior Court of New Jersey Appellate Division
    Submitted April 8, 1975
    Decided May 29, 1975.

      Before Judges Kolovsky, Lynch and Allcorn.

      Mr. Paul L. Blenden, attorney for appellant.

      Messrs. Madnick, Milstein and Mason, attorneys for respondent (Mr. Richard J. Weber, on the brief).
   The opinion of the court was delivered by

Lynch, J. A. D.

The individual defendant, a real estate broker, appeals from a judgment of the Superior Court awarding to plaintiff, who had been a salesman employed in defendant’s office until May 24, 1971, 50% of the commission earned by defendant as a result of the sale of certain restaurant property in Monmouth County. The case was tried by the judge sitting without a jury.

On April 27, 1971 plaintiff, while so employed, arranged for an appointment between the owners of the restaurant (hereafter “sellers”) and a Mr. Zweben, a prospective purchaser. At that meeting, attended, among others, by both plaintiff and < defendant, the sellers quoted a price of $850,000 for the restaurant. Financing of the purchase was to be through a cash payment of $150,000, a $300,000 first mortgage to be negotiated by the buyers through their own resources, and a $400,000 second mortgage to be held by the sellers. A further meeting was held on May 3, 1971, at which time Zweben was shown certain books indicating the gross receipts of the restaurant, examined the premises and then left. He did not make any counter-offer or otherwise contact the sellers, plaintiff or defendant broker until the events hereafter recounted.

On May 24, 1971 plaintiff’s employment as a salesman was terminated by defendant. Thereafter, in the latter part of August 1971 defendant called Zweben concerning the property, as a result of which Zweben, after further analysis of the financial factors involved in the operation of the restaurant business, made an offer to purchase the property for $600,000. Later negotiations between Zweben and the sellers resulted in a final purchase price of $625,000, financed by a cash payment of $200,000, assumption of an existing mortgage of $200,000, and the giving of a purchase money mortgage in the amount of $225,000. A contract was executed in September 1971, which, ultimately resulted in the actual closing in October.

The trial judge found that plaintiff was discharged by defendant principally because the “deal was not moving fast enough.” The judge recognized that there was a breakdown of negotiations covering a period of approximately four months between May and the latter part of August 1971, and that the parties to the sale were ultimately brought back together by defendant after plaintiff had left his employ. However, the judge -found that if plaintiff had not brought the parties together originally, the deal would never have been consummated, and awarded judgment in plaintiff’s favor for 50% of the commissions which were ultimately received by defendant.

On appeal defendant contends, first, that the agreement between plaintiff and himself provided that plaintiff was to receive a commission only if he were in defendant’s employ at the time the contract of sale was executed and, since plaintiff had been discharged before that event occurred, he was not entitled to a share of the commission. Secondly defendant contends that the trial court erred in entering judgment against him individually, whereas his brokerage business was conducted as a corporation, i. e. 6 & G Agency, Inc.

Plaintiff’s principal contribution to the deal ultimately reached was that he initially brought the parties together. Ordinarily, for a broker to earn a commission from a seller or buyer he must establish that he was the “efficient producing cause” in bringing about the sale — at least in the sense of causing the seller to negotiate with a customer, produced by the broker, who is ready, able and willing to perform, and where the transaction is later consummated without a substantial break in the ensuing negotiations. Loeb v. Peter J. Pasbjerg & Co., 22 N. J. 95, 100-101 (1956); First National Corp. v. Van Syckle, 37 N. J. Super. 469, 472 (App. Div. 1955); see also, Ellsworth Dobbs, Inc. v. Johnson, 50 N. J. 528, 551 (1969). But here plaintiff, a salesman in defendant’s office, claims a share of the commissions, not from a seller or buyer, but from his former employer. In such a situation the right to a commission is governed by the law of agency and the law of contracts. See Rosenthal v. Art Metal, Inc., 95 N. J. Super. 8, 13 (Law Div. 1967), aff’d 101 N. J. Super. 156 (App. Div. 1968), aff’d o.b. 53 N. J. 344 (1969).

This situation is analogous to those cases where one broker sues another for a share of commissions after an agreement between them to that effect and the subsequent sale of the property involved. See Van Poznak v. Ralph G. Schwebemeyer & Co., 136 N. J. L. 486 (E. & A. 1948); Braelow v. Louis Schlesinger, Inc., 109 N. J. Eq. 472 (Ch. 1932), aff’d o.b. 112 N. J. Eq. 88 (E. & A. 1933); Rebenfeld v. Friedberg, 3 N. J. Misc. 93, 127 A. 187 (Sup. Ct.), aff’d o.b. 102 N. J. L. 222 (E. & A. 1925). In those cases the issue was not who was the “efficient producing cause” of each sale, but rather what were the terms of the agreement between the parties regarding the distribution of commissions earned. Indeed, in the absence of an express contractual provision to the contrary, the commissions are to be shared equally, even though only one of the brokers did the major portion of the work. Braelow v. Louis Schlesinger, Inc., supra; Baliles v. Bryant, 207 Md. 332, 114 A. 2d 601 (Ct. App. 1955). And there was testimony here that such was the custom in the trade.

In Armstrong v. J. H. Webber & Co., 92 Wash. 295, 158 P. 957 (Sup. Ct. 1916), it was held that the law applying to brokers’ contracts between a seller and his broker — i. e. that the broker must show himself to be the efficient producing cause of the sale — does not apply to employment by one broker of another with compensation based upon division of commissions. It was further held that a broker’s subagent is entitled to his commissions even though 'the contract finally concluded differed in terms from the one which was originally discussed, especially since there was one continuous transaction from its origination to its consummation.

We conclude that in a suit by a salesman employee against his broker employer for a share in commissions, the determinative factor is the agreement between them, i. e. was the employee’s entitlement to commissions dependent upon his procuring and bringing about a sale or did the agreement provide that it would be sufficient if he introduced the parties and the deal was ultimately consummated by the broker without further efforts of the salesman. Also relevant, absent an express agreement between the parties with respect to the. sharing of commissions, would be a determination as to what was the custom in defendant’s office with respect to when a share of commissions is earned by a salesman. Eastman v. Gamble, 39 So. 2d 642, 643 (La. Ct. App. 1949).

Here the trial judge made no finding of fact as to the conditions which would give rise to plaintiff’s right to a commission under the contract of employment. We conclude that, absent sudh finding, the judgment in favor of plaintiff must be reversed and the matter remanded to the trial court for a new trial wherein there will be made findings of fact and conclusions of law as to the terms of the agreement of the parties, considering also the custom in defendant’s office with respect thereto.

In co-broker agreements the broker who furnishes the buyer to the seller, even though the ultimate sale is for a lesser price, is entitled to share in the commission provided, however, that there has been no significant break in the negotiations. See Loeb v. Peter F. Pasbjerg & Co., supra, 22 N. J. at 100-101. While there was a break in the negotiations herein from May to August, we are not persuaded that in the context of a suit by a salesman against his employer broker such break should deny the salesman a share in the commission when he has introduced the parties. The relevance or weight, if any, of this factor will be determined by the trial judge in his findings as to the terms of the agreement between plaintiff and defendant and the interpretation thereof.

As we have noted, the judgment herein appealed from was rendered against the individual defendant. On the retrial, if it is determined that plaintiff is entitled to a share of the commissions, the trial judge shall determine anew, based on the facts adduced at the new trial, whether liability is properly that of the individual or corporate, defendant, or both. In that connection it will be necessary to ascertain, since a “real estate salesman” may be employed only by a licensed “real estate broker,” N. J. 8. A. 45 :15-3, whether the real estate broker’s license was held by defendant individually or by G & G Agency, Inc., the corporation of which he was President.

Eeversed and remanded.


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

text:
    THOMAS F. RUANE DEVELOPMENT CORPORATION AND THOMAS F. RUANE AND ANNE C. E. RUANE, PLAINTIFFS-RESPONDENTS, v. ALFRED A. CULLERE, FIRMINO CULLERE, FRANK FINETTO AND RICHARD GRAZIANI, JR., PARTNERS T/A LANDMARK DEVELOPMENT COMPANY, DEFENDANTS-APPELLANTS.
    Superior Court of New Jersey Appellate Division
    Argued April 15, 1975
    Decided June 3, 1975.

      Before Judges Kolovsky, Lynch and Allcorn.

      Mr. John D. Horan argued the cause for appellants (Messrs. Goodman and Stoldt, attorneys).

      Mr. Reginald F. Hopkinson argued the cause for respondents (Messrs. Jeffer, Walter, Tierney, DeKorte, Hopkinson & Vogel, attorneys).
   The opinion of the court was delivered by

Kolovsky, P. J. A. D.

In this action by a vendor of real property against a vendee who allegedly wrongfully refused to consummate the purchase, the trial judge found in favor of plaintiffs, awarding them damages of $20,800 and directing cancellation of a mortgage given by the individual plaintiffs to defendants to secure return of the purchasers’ deposit if they should become entitled to have it returned. Defendants’ counterclaim seeking return of the $17,000 deposit made by them was rejected. Defendants appealed.

When the appeal was first before us we remanded the case to the trial court for additional testimony, findings and conclusions. Docket A-304-72. After those proceedings had been concluded supplemental briefs were filed and the appeal reargued.

Many of the controlling facts are uncontradicted. Under date of June 3, 1966 plaintiff Thomas F. Euane contracted to purchase a tract of land in Eidgewood from sellers named Howard for $125,000. The purchase was contingent upon the purchaser obtaining a zoning variance permitting use of the premises for garden apartments, which the purchaser was to apply for. $100 was deposited at the time of the execution of the contract with an additional $12,400 to be paid when the time to appeal from any variance obtained had expired. The balance of $112,500 was to be paid 60 days thereafter. Thomas F. Euane thereafter assigned his rights under the contract to plaintiff Thomas F. Euane Development Corporation.

More than two years later, under date of December 6, 1968, plaintiff corporation entered into a contract to sell the premises to defendants, partners trading as Landmark Development Company. The contract provided that the sale was of a “package transaction,” with the seller obligated “to pay for and furnish to purchaser, prior to closing, all required permits, plans [drawn with the approval of the purchaser as to design and layout], tenement honse approval, and surveys, including boundary survey.” Consummation of the transaction was made conditional on a number of contingencies, including the required zoning change referred to in the Howard contract and the purchaser’s obtaining a mortgage commitment.

It is conceded that under the formula provided in the contract the total purchase price was $175,000. Defendants made an initial deposit of $10,000 on account and thereafter, pursuant to a modification agreement which, among other things, eliminated the mortgage contingency provision, made additional payments totalling $7,000 in January or February 1970.

Eventually Ridgewood amended its zoning ordinance to permit the property to be used for garden apartments, and the required surveys, building plans and specifications were prepared. Plaintiff served a time of the essence notice, dated May 28, 1970, fixing June 12, 1970 at 2 p.m. as the time for closing. After a question was raised as to the alleged failure of plaintiff to procure a building permit, that permit was obtained and plaintiffs, by letter dated June 22, 1970, advised defendants that

* * * all the conditions precedent contained in the contract of sale have been satisfied and that time is hereby made of the essence on July 8th at the office of * * * at two o’clock in the afternoon, The Thomas JT. Ruane Development Co. Inc. or its assigns will be ready, willing and able to deliver a deed to you for the premises in question upon tendering of the unpaid balance due under the contract by cash or by certified check.

Defendants, who were unable to arrange financing, failed to appear on July 8, 1970 at the time and place for closing. Plaintiffs then instituted this action, asserting in the pretrial order entered on July 29, 1971, that as a result of defendants’ default, plaintiff corporation “was compelled to sell said property for the sum of $125,000’ representing a loss of bargain in the sum of $50,000 reflected in the difference of the purchase price agreed to be paid by plaintiff and the contract price to be paid by defendants to the plaintiff.”

That assertion was far from candid. As defendants ascertained after the date of the original pretrial conference, the fact was that on March 12, 1970 plaintiff-corporation, in order to raise funds to make the $12,400 payment called for under the Howard contract once zoning approval had been obtained, borrowed $12,500 from one George E. Maloof, giving the lender a promissory note of $15,000, payable on June 5, 1970, secured by an assignment both of plaintiff’s rights as purchaser under the Howard contract and as seller under the contract with defendants. (Mr. and Mrs. Euane personally guaranteed repayment of the loan.) The loan agreement further provided:

In the event of a default in the payment of the said note according to its tenor, then the assignments of the contracts referred to above shall be absolute, and the [Thomas F. Ruane Development Co., Inc.] shall have no further right in said contracts, and [George Maloof] shall have the right, at his option, to consummate the said contracts.

The Maloof note was not paid on its due date, June 5, 1970. On a date not revealed by the record the Howards, who, unlike defendants, had been notified of the assignment, served a time of the essence notice on Maloof and the plaintiffs herein. Title was closed pursuant thereto. The Howards conveyed title to the property to Maloof and his brother on June 24, 1970, Maloof paying the balance of $112,500 due under the Howard contract after receiving credit for the $12,500 previously paid by the Euane Corporation. Maloof testified that “at this time Mr. Euane said he couldn’t close and therefore I had to move in to protect Mr. Euane and myself.”

Further, according to Maloof, had defendant Landmark been prepared to close on July 8, 1970, he, under an oral agreement with Ruane, would have conveyed the property to Landmark on Ruane’s behalf, charging Ruane only interest and a bonus of an unspecified amount. Be that as it may, the property was never reconveyed to Ruane or his corporation and on August 5, 1970 the Maloofs sold the property as a package to a third party for $170,000.

The trial court credited Maloof’s testimony. It found that plaintiff-corporation was therefore ready to close title on July 8, 1970 and that since defendants did not appear, they had breached their contract, thus entitling plaintiff to damages.

The trial judge recognized that the usual measure of damages for a purchaser’s breach of a contract to purchase real property is “the difference between the contract price and the market value at the time of the breach,” Oliver v. Lawson, 92 N. J. Super. 331, 335 (App. Div. 1966), certif. den. 48 N. J. 574 (1967) — which in this case would limit recovery to $5,000, the difference between the contract price of $175,000 and the market value of $170,000, the price received by Maloof on resale less than a month after July 8, 1970. Nevertheless, he concluded that in this case that “we have the usual situation where the plaintiff Ruane did not realize the eventual proceeds of the sale of the property to another party; George Maloof did. To use Oliver would be unfair and inequitable.” The judge ruled, in purported reliance on Giumarra v. Harrington Heights, 33 N. J. Super. 178, 197 (App. Div. 1954), aff’d o. b. 18 N. J. 548 (1955), that plaintiff should be awarded his “anticipated profits,” the difference between the price of $175,000 provided in the Landmark contract and the $125,000 provided in the Howard contract, $50,000, less (a) the expenses of $12,200 required to be incurred to provide the “package” and (b) the $17,000 deposit received by plaintiffs. Judgment was then entered for the “anticipated net profit” of $20,800.

Defendants’ appeal challenges the findings and rulings made both with respect to liability and damages.

We conclude, however, that there is no warrant for disturbing the trial judge’s determination of the liability issue. His finding that Maloof would have taken steps necessary to insure, had defendants been ready to close title on July 8, 1970, that the property was conveyed on plaintiffs’ behalf to defendants, at the contract price, finds adequate support in Maloof’s testimony and therefore may not be disturbed. State v. Johnson, 42 N. J. 146, 161-162 (1964). It is of no moment — in view of Maloof’s readiness to convey —■ that the agreement with plaintiffs providing for that conveyance was oral and would have required plaintiffs to make some additional payment to Maloof. That finding justifies the court’s conclusion that plaintiff corporation was able to perform on the day set for closing.

However, the trial judge erred in its admeasurement of damages. Nothing in the circumstances of this case justified anything but the application of the normal measure of damages set forth in Oliver v. Lawson, supra — the difference between the contract price, $175,000, and the market value of the property on July 8, 1970, $170,000, less a credit for the deposits made on account of the purchase price. Sheehy v. Galipeau, 48 N. J. Super. 95, 102 (App. Div. 1957).

Giumarra v. Harrington Heights, supra, is clearly distinguishable and furnishes no support for the trial judge’s conclusion. That case involved an assignment by the purchaser of his rights under a contract of purchase, following which assignment he had no power to enforce his rights against the seller. Here, however, plaintiffs’ rights under the Howard contract were unaffected by the subsequent independent contract to sell the premises to defendants. Irrespective of whether defendants defaulted or not, plaintiffs were in a position to acquire the Howard property by paying the moneys due thereunder. That plaintiff corporation, because of its own financial problems, found it necessary •— unknown to defendants — to enter into arrangements with Maloof whidh resulted in its losing to Maloof the benefit of the transaction, affords no justification for deviating from the usual rule of damages. Defendants may not be charged with any responsibility by reason of plaintiff’s lack of financial resources to consummate the Howard contract, any more than defendants are to be excused from their default in not consummating the purchase of the property because they were unable to arrange for the financing thereof.

Since the deposits made by defendants on account of the purchase price, $17,000, exceeds the $5,000 difference between the contract price and the market value of the property at the time of the breach, no actual damages were proven. A plaintiff who proves a breach of contract but no actual damages may not recover more than nominal damages. Ench v. Bluestein, 52 N. J. Super. 169, 173-174 (App. Div. 1958). Here, plaintiffs may not recover even nominal damages since they have already received deposits totalling $17,000 on account of the purchase price — deposits whidh they are entitled to retain because of defendants’ breach of contract. Oliver v. Lawson, supra, 92 N. J. Super. at 333.

Because plaintiffs are entitled to retain the deposits, the trial judge properly directed the cancellation of the mortgage made by the individual plaintiffs to defendants to secure the return of the deposit made under the contract if defendants became entitled to the return thereof.

So much of the judgment appealed from as awards plaintiffs damages in the sum of $20,800 is reversed. So much of the judgment as directs that the mortgage held by the defendants be endorsed for cancellation and returned to the individual plaintiffs is affirmed.

No costs to any party on this appeal.