Baer v. Chase ( 2004 )

Opinions of the United
2004 Decisions States Court of Appeals
for the Third Circuit
12-21-2004
Baer v. Chase
Precedential or Non-Precedential: Precedential
Docket No. 04-1655
Follow this and additional works at: http://digitalcommons.law.villanova.edu/thirdcircuit_2004
Recommended Citation
"Baer v. Chase" (2004). 2004 Decisions. Paper 12.
http://digitalcommons.law.villanova.edu/thirdcircuit_2004/12
This decision is brought to you for free and open access by the Opinions of the United States Court of Appeals for the Third Circuit at Villanova
University School of Law Digital Repository. It has been accepted for inclusion in 2004 Decisions by an authorized administrator of Villanova
University School of Law Digital Repository. For more information, please contact Benjamin.Carlson@law.villanova.edu.
PRECEDENTIAL
UNITED STATES COURT OF APPEALS
FOR THE THIRD CIRCUIT
No. 04-1655
ROBERT V. BAER,
Appellant
v.
DAVID CHASE; CHASE FILMS INC.,
A Delaware Corporation; JOHN DOES A-Z
On Appeal from the United States District Court
for the New Jersey
(D.C. Civ. No. 02-02334)
District Judge: Honorable Joel A. Pisano
Argued October 28, 2004
BEFORE: SCIRICA, Chief Judge, and FISHER and GREENBERG,
Circuit Judges.
(Filed: December 21, 2004)
Robert V. Baer (argued)
4 Laurel Road
Wayne, NJ 07870
Harley D. Breite
562 Black Oak Ridge Road
Wayne, NJ 07470
Michael S. Kasanoff
157 Broad Street, Suite 321
P.O. Box 8175
Red Bank, NJ 07701
Attorneys for Appellant
Peter L. Skolnick (argued)
Michael A. Norwick
Lowenstein Sandler PC
65 Livingston Avenue
Roseland, NJ 07068
Attorneys for Appellees
OPINION OF THE COURT
GREENBERG, Circuit Judge.
This matter comes on before this court on Robert V. Baer’s
(“Baer”) appeal from an order of the district court entered February
20, 2004, granting summary judgment to the defendants, David Chase
and DC Enterprises, Inc. (together called “Chase”), pursuant to
Federal Rule of Civil Procedure 56(c). This dispute centers on the
creation and development of the well-known television series, The
Sopranos. Through this action, Baer seeks compensation for what he
perceives was his role in the creation and development of the popular
and financially successful television series.
I. FACTUAL AND PROCEDURAL HISTORY
Chase, who originally was from New Jersey, but relocated to
Los Angeles in 1971, is the creator, producer, writer and director of
The Sopranos. Chase has numerous credits for other television
productions as well. Before Chase met Baer, Chase had worked on a
number of projects involving organized crime activities based in New
Jersey, including a script for “a mob boss in therapy,” a concept that,
in part, would become the basis for The Sopranos.
In 1995, Chase was producing and directing a Rockford Files
“movie-of-the–week” when he met Joseph Urbancyk who was
working on the set as a camera operator and temporary director of
photography. Chase mentioned to Urbancyk that he was looking for
new material and for writers who could develop feature film
2
screenplays that Chase later might re-write and direct. Urbancyk
also overheard Chase say that the creators of The Rockford Files were
looking to assign additional writers for their “movie of the week”
project.
Urbancyk became the connection between Chase and Baer as a
result of Urbancyk’s long-time friendship with Baer and his
knowledge of Baer’s interest in pursuing a career in writing, directing
and producing. Baer, who was a New Jersey attorney, recently had
left his employment in the Union County Prosecutor’s Office in
Elizabeth, New Jersey, where he had worked for the previous six
years.
Urbancyk urged Baer to write a script for The Rockford Files.
Baer did so and gave it to Urbancyk who passed it on to Chase. Chase
considered Baer’s work “interesting” and asked Urbancyk if Baer had
any plans to be in Los Angeles. Upon hearing of Chase’s interest,
Baer flew to Los Angeles to meet with Chase.
Chase, Urbancyk and Baer met for lunch on June 20, 1995. At
that time Chase informed Baer that he would be unable to use Baer’s
screenplay, as the remaining slots in The Rockford Files had been
filled. The lunch continued, however, with Baer describing his
experience as a prosecutor. Baer also pitched the idea to shoot “a film
or television shows about the New Jersey Mafia.” App. at 40. At that
time Baer was unaware of Chase’s previous work involving mob
activity premised in New Jersey. At the lunch there was no reference
to any payment that Chase might make to Baer for the latter’s services
and the parties agree that they did not reach any agreement on that
day.
In October 1995, Chase visited New Jersey for three days.
During this “research visit” Baer arranged meetings for Chase with
Detective Thomas Koczur, Detective Robert A. Jones, and Tony
Spirito who provided Chase with information, material and personal
stories about their experiences with organized crime. Koczur served
as a tour guide and drove Chase and Baer to various locations in
northern New Jersey. Koczur also arranged a lunch between Chase
and Spirito. Spirito told true and sometimes personal stories
involving loan sharking, a power struggle with two uncles involving a
family business, and two individuals, Big Pussy and Little Pussy
3
Russo.1 Chase also met with Jones, a detective with the Union
County Prosecutor’s office who had experience investigating
organized crime. Baer does not dispute that virtually all of the ideas
and locations that he “contributed” to Chase existed in the public
record.
After returning to Los Angeles, Chase sent Baer a copy of a
draft of a Sopranos screenplay that he had written, which was dated
December 20, 1995. Baer asserts that after he read it he called Chase
and made various comments with regard to it. Baer claims that the
two spoke at least four times during the following year and that he
sent a letter to Chase dated February 10, 1997, discussing The
Sopranos script. Baer ensured that Chase received the letter by
confirming its arrival with Chase’s assistant. On this appeal we
accept Baer’s allegations regarding his input into The Sopranos draft.
Notwithstanding his February 10, 1997 letter, at his deposition
Baer claimed that he last rendered services to Chase in 1995. Thus,
Baer’s testimony included the following:
Q. During any of those
conversations after
October of 1995, [when
Chase visited New
Jersey] did you provide
any further information
to Mr. Chase other than
in relation to the sexual
assault?
A. Not really.
Q. No?
A. Not really. The
screen play was done and
there wasn’t really any
need for it at that point
as far as I knew.
1
These or similar story lines and characters have appeared in
episodes of The Sopranos.
4
Q. So everything that
you had done and to
which you claim
entitlement was done by
the end of October 1995?
A. Yes in terms of
assisting him in helping
with this project that
would be true.
App. at 343-44.2 Notwithstanding this testimony, in Baer’s later
certification dated October 3, 2003, in opposition to Chase’s motion
for summary judgment he sought to clarify his deposition testimony,
stating:
117. I also sent him a
letter dated February 10,
1997 discussing the
Sopranos script prior to
making a trip to Los
Angeles. After sending
the letter, I spoke with
Chase’s assistant, Kelly
Kockzak, who confirmed
that Chase had received
it. This letter represents
the last services I
provided to Defendants.
Most of my services
were provided in 1995.
App. at 69.
Baer asserts that he and Chase orally agreed on three separate
occasions that if the show became a success, Chase would “take care
of” Baer, and “remunerate [Baer] in a manner commensurate to the
true value of [his services].” App. at 113. According to Baer, he and
Chase first made this oral agreement on the telephone during one of
their first two or three conversations during the summer of 1995. The
2
The reference to the “sexual assault” is not material to the issues
here.
5
second occasion was on the telephone and occurred immediately prior
to Chase’s October 1995 visit to New Jersey. The third time the
parties reached the agreement was in person when they met in New
Jersey in October 1995.
Baer claims that on each of these occasions the parties had the
same conversation in which Chase offered to pay Baer, stating “you
help me; I pay you.” App. at 112-13. Baer always rejected Chase’s
offer, reasoning that Chase would be unable to pay him “for the true
value of the services [Baer] was rendering.” Id. Each time Baer
rejected Chase’s offer he did so with a counteroffer, “that I would
perform the services while assuming the risk that if the show failed
[Chase] would owe me nothing. If, however, the show succeeded he
would remunerate me in a manner commensurate to the true value of
my services.” Id. at 113. Baer acknowledges that this counteroffer,
which in these proceedings we treat as having become the parties’
agreement, always was oral and did not include any fixed term of
duration or price. There is no other evidence in the record of any
other discussion between Baer and Chase regarding the terms of the
contract. For purposes of the motion for summary judgment, Chase
accepts Baer’s version of the events as true and thus concedes there
was an oral agreement to the extent that Baer sets it forth.
Notwithstanding this agreement, insofar as we can ascertain, other
than Baer’s calls to Chase after he received the Sopranos script, the
next time Baer heard anything from or about Chase was when he
received a phone call from Detective Koczur telling him that Chase
was in Elizabeth shooting The Sopranos. In fact, Chase has not paid
Baer for his services.
On or about May 15, 2002, Baer filed a verified complaint
against Chase in the district court and thereafter on May 2, 2003, Baer
filed an amended verified complaint. Baer’s amended complaint
advanced ten claims: (1) breach of contract; (2) breach of implied
contract; (3) breach of quasi-contract; (4) common law fraud; (5)
equitable fraud; (6) negligent misrepresentation; (7) breach of
fiduciary duty; (8) unfair competition under section 43(a) of the
Lanham Act, 15 U.S.C. § 1125; (9) unfair competition and
misappropriation under N.J. Stat. Ann. § 56:4-1 (West 2001); and
(10) tortious interference with prospective economic advantage. App.
at 137-48. Baer subsequently withdrew the federal unfair competition
6
claim.3 Eventually Chase brought a motion for summary judgment
under Federal Rule of Civil Procedure 56(c) alleging that there was no
genuine issue as to any material fact and he was entitled to a judgment
as a matter of law. Chase claimed that the alleged contract and
implied contract were too vague, ambiguous and lacking in essential
terms to be enforced and the statute of frauds barred the actions based
on them. Moreover, Chase claimed that the statute of limitations
barred the breach of quasi-contract quantum meruit claim. Finally,
Chase alleged that each of Baer’s six remaining claims was lacking in
merit. Baer did not file a cross-motion for complete or partial
summary judgment.
The district court granted Chase’s motion, concluding that
there was no genuine issue of material fact with respect to any of
Baer’s claims. The district court held with respect to the claims raised
on this appeal that: the contract claims were unenforceable due to
vagueness, uncertainty, and the lack of essential terms in the contract;
the statute of limitations barred the quasi-contract claim; and the
misappropriation tort claim was without merit due to a lack of
novelty. In addition, the district court made certain rulings with
respect to evidence that we describe below which Baer challenges.
II. JURISDICTION AND STANDARD OF REVIEW
The district court exercised diversity jurisdiction pursuant to
28 U.S.C. § 1332 in that the parties were of diverse citizenship and
the amount in controversy exceeded $75,000 exclusive of interest and
costs. Our jurisdiction is founded on 28 U.S.C. § 1291, as this timely
appeal is from a final order of the district court granting Chase’s
motion for summary judgment. We make a plenary review of the
district court’s order granting summary judgment to Chase. See
3
The district court indicated that Baer partially withdrew his
federal and state unfair competition and misappropriation claims, Baer
v. Chase, No. Civ. A. 02-CV-2334, 2004 WL 350050, at *1 n.1 (Feb. 20,
2004), and the docket entries support this statement but indicate that the
entire misappropriation claim was withdrawn. See app. at 34. Yet the
court discussed the state unfair competition and misappropriation claim
at length, id. at *12-14, and rejected them on the merits. Moreover, the
parties substantively have briefed the misappropriation claim so we
regard it as still in the case.
7
Fakete v. Aetna, Inc., 308 F.3d 335, 337 (3d Cir. 2002) (citing
Fogleman v. Mercy Hosp., Inc., 283 F.3d 561, 566 n.3 (3d Cir.
2002)). Insofar as the case involves state law, New Jersey law is
applicable.
III. DISCUSSION
A. Baer’s Implied-In-Fact Contract Claim
Baer predicates his contract claim on this appeal on an
implied-in-fact contract rather than on the oral agreement he reached
with Chase. The issue with respect to the implied-in-fact contract
claim concerns whether Chase and Baer entered into an enforceable
contract for services Baer rendered that aided in the creation and
production of The Sopranos. In the district court Baer offered two
alternative theories in which a purported contract was formed: the
“oral agreement/success contingency” and an implied-in-fact contract.
The parties agree for purposes of the summary judgment
motion that there was a contingent oral agreement providing for Chase
to compensate Baer, depending on Chase’s “success,” in exchange for
the aid Baer provided in the creation and production of The Sopranos.
As we noted above, the parties reached the oral agreement in three
exchanges in which Baer proposed: “that I would perform the services
while assuming the risk that if the show failed [Chase] would owe me
nothing. If, however, the show succeeded he would remunerate me in
a manner commensurate to the true value of my services.” App. at
113. As we have indicated, for purposes of the summary judgment
motion only, Chase accepts this version of the events so we will
regard the existence of the oral agreement as not in dispute.
The district court held, and Baer concedes on appeal, that this
oral agreement was “too vague to be enforced” as an express contract.
Appellant’s br. at 30-31; see Baer v. Chase, No. Civ. A. 02-CV-2334,
2004 WL 350050, at *6 (Feb. 20, 2004) (“The contract as articulated
by the Plaintiff lacks essential terms, and is vague, indefinite and
uncertain; no version of the alleged agreement contains sufficiently
precise terms to constitute an enforceable contract.”). This
description of the oral agreement leaves at issue Baer’s contention that
the district court overlooked the existence of an enforceable implied-
in-fact contract, rendering Chase liable for the services that Baer
8
provided.
1. The Distinction Between Express And Implied–In-
Fact Contracts
The distinction between express and implied contracts rests on
alternative methods of contract formation. Contracts are “express”
when the parties state their terms and “implied” when the parties do
not state their terms. The distinction is based not on the contracts’
legal effect but on the way the parties manifest their mutual assent. In
re Penn. Cent. Transp. Co., 831 F.2d 1221, 1228 (3d Cir. 1987) (“An
implied-in-fact contract, therefore, is a true contract arising from
mutual agreement and intent to promise, but in circumstances in
which the agreement and promise have not been verbally expressed.
The agreement is rather inferred from the conduct of the parties.”); see
Baltimore O.R. Co. v. United States, 261 U.S. 592, 597, 43 S.Ct. 425,
426-27 (1923). In other words, the terms “express” and “implied” do
not denote different kinds of contracts, but rather reference the
evidence by which the parties demonstrate their agreement. See St.
Paul Fire & Marine Ins. Co. v. Indem. Ins. Co. of N. Am., 158 A.2d
825, 828 (N.J. 1960).
Baer’s attempt to find an implied-in-fact contract in his
dealings with Chase does not strengthen his claim that Chase
breached his contract with him. There is only one contract at issue,
Chase’s promise to compensate Baer for services he rendered which
aided in the creation and production of The Sopranos. Chase’s
stipulation that there was such a contract has the consequence of
making Baer’s attempts to label this agreement “implied” rather than
“express” to advance a distinction without a difference as the mode of
contract formation, as we will explain, is immaterial to the disposition
of the breach of contract claim. In other words, inasmuch as the
parties agree for purposes of these summary judgment proceedings
that there was an agreement, the manner in which they formed the
contract is immaterial because different legal consequences do not
flow from analyzing the alleged contract as implied-in-fact rather than
express. See Saint Barnabas Med. Ctr. v. Essex County, 543 A.2d 34,
39 (N.J. 1988) (quoting St. Paul Fire & Marine Ins. Co., 158 A.2d at
828 (“[A] true contract implied in fact ‘is in legal effect an express
contract,’ and varies from the latter only insofar as the parties’
agreement and assent thereto have been manifested by conduct instead
of words.”). The district court was therefore correct in its holding that
“[b]ecause the Defendants have assumed the existence of a contract as
9
the Plaintiff has described it for the purposes of the motion there is no
issue regarding formation of the contract or assent, and the Plaintiff’s
distinction between express and implied contracts is irrelevant.” Baer,
2004 WL 350050, at *5 (citations omitted).
Moreover, Baer’s claim of an implied-in-fact contract, in the
face of an express agreement governing the same subject matter, is
legally untenable. There cannot be an implied-in-fact contract if there
is an express contract that covers the same subject matter. In re Penn
Cent. Transp. Co., 831 F.2d at 1229-30; see Klebe v. United States,
263 U.S. 188, 191-92, 44 S.Ct. 58, 58-59 (1923). In other words,
express contract and implied-in-fact contract theories are mutually
exclusive.
In In re Penn Central Transportation Company, 831 F.2d 1221,
we addressed the relationship between express and implied contracts.
In that case the government sought recovery under the Regional Rail
Reorganization Act for funds it paid to Penn Central in an attempt to
sustain routine operations at the financially ailing railroad company.
The government and the railroad had entered into a number of express
agreements pursuant to the Act to effectuate these loans. The
government later claimed that Penn Central performed unauthorized
work, resulting in the overpayment of $22.3 million to it. The
government argued that the Act dictated the specific and limited
manner in which the government loan money could be utilized, and,
accordingly, sought return of its funding expended on “unauthorized”
activities.
In response, Penn Central put forth an interpretation of the Act
in which the alleged unauthorized activities would have been
acceptable under its requirements. In the alternative, it maintained
that it had an entered into a separate and enforceable implied-in-fact
contract with the government to continue using these funds for the
activities in which it was engaged, even if they were deemed outside
the scope of the Act. Id. at 1225.
We focused on and disallowed the railroad’s attempt to prove
the existence of both express and implied-in-fact agreements dealing
with the same subject. We stated, “no implied-in-fact contract may be
found when, as here, the parties have an express agreement dealing
with the same subject.” Id. at 1229. The operative principle here and
in Penn Central Transportation Company is the same. As noted
above, there is only one agreement at issue in the present case,
10
Chase’s promise to pay Baer for the services he rendered. Chase
concedes the existence of the oral express agreement as alleged by
Baer. Consequently, the fundamental contract law principle that
implied and express contacts are mutually exclusive forecloses Baer’s
attempt to establish that there was an implied-in-fact contract.
New Jersey law, applicable here, recognizes the mutual
exclusivity of express and implied contracts. Roselle Park Bldg. &
Loan Ass’n v. Friedlander, 181 A. 316, 317 (N.J. Sup. Ct. 1935) (“[I]t
is axiomatic that a contract cannot arise by implication in fact where
there is an express contract between the parties relating to the same
subject matter. . . .”). The existence of an express contract, however,
does not preclude the existence of an implied contract if the implied
contract is distinct from the express contract. Atlas Corp. v. United
States, 895 F.2d 745, 754-55 (Fed. Cir. 1990); see Chase Manhattan
Bank v. Iridium Africa Corp., 239 F. Supp. 2d 402, 409 (D. Del.
2002) (“A party may assert the existence of an express contract and
implied-in-fact contract only if the terms of the contracts alleged
differ in some manner.”); ITT Fed. Support Servs., Inc. v. United
States, 531 F.2d 522, 528 n.12 (Ct. Cl. 1976) (“The implied contract,
if it is to be valid, must be entirely unrelated to the express contract.
The existence of an express contract precludes the existence of an
implied contract dealing with the same subject.”).
Baer’s alleged implied-in-fact contract, however, rather than
being distinct from or unrelated to the express oral contract is
identical to it. The stipulated oral agreement included Chase’s
promise to compensate Baer for the services and ideas that Baer
provided Chase. Baer now asks that we find an implied-in-fact
contract that subjects Chase to liability for the very same undertaking.
Baer provides a litany of facts which indicate that Chase may have
used his services or prospered from his ideas. Nevertheless, in light
of Chase’s stipulation to the existence of an agreement governing this
subject matter, this evidence is immaterial to the issues raised by the
summary judgment motion with respect to Baer’s attempt to establish
that there was an implied-in-fact contract between the parties.
The question is not whether Chase entered into an agreement
with Baer or whether Chase utilized his ideas. We already deem these
matters, for the purposes of the motion for summary judgment and
this appeal, as established. The question is whether Chase’s non-
verbal actions prove there was a contract distinct from the express
agreement or expanding on the terms of the agreement to make it
11
enforceable. The answer is clearly that the actions do not do so. The
alleged implied-in-fact contract completely mirrors the acknowledged
express contract’s subject matter. Baer nowhere demonstrates that the
subject matter of the alleged implied-in-fact contract is distinct, more
definite in terms of price and duration, or covers a subject matter
divergent from the oral agreement. The district court, therefore,
would have erred if it had analyzed this case on the basis that there
was a separate implied-in-fact contract distinct from the express
contract that governed the identical subject matter.
2. Definitiveness As To Price and Duration In An
“Idea Submission” Case
Even assuming that Baer had been able to demonstrate that he
had an implied-in-fact contract with Chase, his contention that an
implied-in-fact contract claim in an idea submission case need not be
definite as to price and duration, would be incorrect. Baer asserts that
the district court’s holding “that the absence of a price and duration
term render[s] an implied contract in an idea submission scenario too
vague to be enforced . . . is contrary to the law in virtually every
jurisdiction that has ever considered the issue.” Appellant’s br. at 34.
Baer’s claim fails on three grounds: (1) there is no distinction
between express and implied contracts, aside from issues of contract
formation; (2) definiteness with respect to price and duration is
necessary for idea submission cases under New Jersey contract law;
and (3) the district court was correct in holding that the contract Baer
alleges existed was too ambiguous and indefinite to be enforceable.
a. An Implied-In-Fact Contract Has The Same Legal
Consequences As An Express Contract.
In fact there are no distinctions in legal effect, at least in the
context of this case, when a promise is implied rather than express.
See Duffy v. Charles Schwab & Co., 123 F. Supp. 2d 802, 816-17
(D.N.J. 2001) (“The only difference between an implied-in-fact
contract and an express contract is that the parties’ agreement has
been manifested by conduct instead of words.”). No rationale exists
to conclude that definiteness as to the essential terms of a contract
could be an exception from this fundamental principle. We therefore
determine if in any “idea submission case,” whether predicated on an
express or implied contract, definiteness is a requirement to create an
enforceable contract.
12
b. A Contract Involving An Idea Submission Must Be
Definite With Respect To All Essential Terms To Be
Enforceable Under New Jersey Contract Law.
In fact “[a] contract arises from offer and acceptance, and must
be sufficiently definite so ‘that the performance to be rendered by
each party can be ascertained with reasonable certainty.’” Weichert
Co. Realtors v. Ryan, 608 A.2d 280, 284 (N.J. 1992) (citing West
Caldwell v. Caldwell, 138 A.2d 402, 410 (N.J. 1958); Friedman v.
Tappan Dev. Corp., 126 A.2d 646, 650-51 (N.J. 1956); Leitner v.
Braen, 143 A.2d 256, 259-60 (N.J. Super. Ct. App. Div. 1958)).
Therefore parties create an enforceable contract when they agree on its
essential terms and manifest an intent that the terms bind them. West
Caldwell, 138 A.2d at 410; see Johnson & Johnson v. Charmley Drug
Co., 95 A.2d 391, 397 (N.J. 1953); California Natural v. Nestle
Holdings, Inc., 631 F. Supp. 465, 470 (D.N.J.1986). If parties to an
agreement do not agree on one or more essential terms of the
purported agreement courts generally hold it to be unenforceable.
Weichert, 608 A.2d at 284 (citing Heim v. Shore, 151 A.2d 556, 561-
62 (N.J. Super. Ct. App. Div. 1959) (holding agreement unenforceable
because parties did not agree on terms of payment, principal amount
of mortgage, due date, and interest rate)).
New Jersey contract law focuses on the performance promised
when analyzing an agreement to determine if it is too vague to be
enforced. “An agreement so deficient in the specification of its
essential terms that the performance by each party cannot be
ascertained with reasonable certainty is not a contract, and clearly is
not an enforceable one.” Lo Bosco v. Kure Eng’g Ltd., 891 F. Supp.
1020, 1025 (D.N.J. 1995) (citing Malaker Corp. Stockholders
Protective Comm. v. First Jersey Nat’l Bank, 395 A.2d 222, 227 (N.J.
Super. Ct. App. Div. 1978)). A contract, therefore, is unenforceable
for vagueness when its essential terms are too indefinite to allow a
court to determine with reasonable certainty what each party has
promised to do. Weichert, 608 A.2d at 284; see West Caldwell, 138
A.2d at 410 (“To be enforceable as a contractual undertaking, an
agreement must be sufficiently definite in its terms that the
performance to be rendered by each party can be ascertained with
reasonable certainty.”).
New Jersey law deems the price term, i.e., the amount of
compensation, an essential term of any contract. MDC Inv. Prop.,
L.L.C. v. Marando, 44 F. Supp. 2d 693, 698-99 (D.N.J. 1999) (citing
13
Weichert, 608 A.2d at 287). An agreement lacking definiteness of
price, however, is not unenforceable if the parties specify a practicable
method by which they can determine the amount. Moorestown
Mgmt., Inc. v. Moorestown Bookshop, Inc., 249 A.2d 623, 628 (N.J.
Super. Ct. Ch. Div. 1969). However, in the absence of an agreement
as to the manner or method of determining compensation the
purported agreement is invalid. Weichert, 608 A.2d at 287.
Additionally, the duration of the contract is deemed an essential term
and therefore any agreement must be sufficiently definitive to allow a
court to determine the agreed upon length of the contractual
relationship. Lo Bosco, 891 F. Supp. at 1026 (“With regard to
contracts for services in return for a percentage of some
yet-to-be-determined number, such as profits, sales, etc., the courts [of
and in New Jersey] look to whether there are certain dates of
commencement and termination.”).
The New Jersey Supreme Court explicitly has held that an
implied-in-fact contract “must be sufficiently definite [so] that the
performance to be rendered by each party can be ascertained with
reasonable certainty.” Weichert, 608 A.2d at 284 (citations and
internal quotations omitted). If possible, courts will “attach a
sufficiently definite meaning to the terms of a bargain to make it
enforceable[,]” Paley v. Barton Sav. and Loan Ass’n, 196 A.2d 682,
686 (N.J. Super. Ct. App. Div. 1964), and in doing so may refer to
“commercial practice or other usage or custom.” Lynch v. New Deal
Delivery Serv. Inc., 974 F. Supp. 441, 458 (D.N.J. 1997). But the
courts recognize that a contract is “unenforceable for vagueness when
its terms are too indefinite to allow a court to determine with
reasonable certainty what each party has promised to do.” Id. at 457.
Baer premises his argument on his view that New Jersey
should disregard the well-established requirement of definiteness in
its contract law when the subject-matter of the contract is an “idea
submission.” He cites extensively to a string of cases from various
jurisdictions which he urges support his contention. See, e.g., Wrench
L.L.C v. Taco Bell Corp., 256 F.3d 446 (6th Cir. 2001); Nadel v.
Play-by-Play Toys & Novelties, Inc., 208 F.3d 368 (2d Cir. 2000);
Duffy, 123 F. Supp. 2d 802. Baer contends that these cases support
the proposition that “[e]very Circuit that has published on the issue,
has upheld implied contract claims where price and duration were
absent and a price term was implied as the reasonable value of the
ideas conveyed.” Appellant’s br. at 34.
14
Baer’s argument is inaccurate and misleading. He attempts to
transform cases where the issues raised pertain to adequacy of
consideration and discrepancies over the use of submitted facts, into
the proposition that implied-in-fact contracts involving idea
submissions need not be sufficiently definite. For example: Wrench,
256 F.3d at 459-63, reversed a summary judgment disposition that
held that novelty was required to prove consideration and sustain an
implied-in-fact contract claim; Duffy, 123 F. Supp. 2d at 816-19, held
that a plaintiff must prove that an idea disclosed to the defendant was
novel in order to find consideration for the alleged contract and denied
summary judgment because a material issue existed over novelty and
use; Nadel, 208 F.3d at 374, reversed a summary judgment granted
“only on ground that [the plaintiff’s] idea lacked general novelty and
thus would not suffice as consideration” and remanded for the district
court to determine “whether the other elements necessary to find a
valid express or implied-in-fact contract are present here.” Id. at 382.
None of the cases Baer cites holds that there is not a definiteness
requirement necessary to create an enforceable contract in idea
submission cases. Duffy’s holding is helpful in summarizing the
actual law to be derived from the above cited cases: “The existence of
novelty to the buyer only addresses the element of consideration
necessary for the formation of a contract. Thus, apart from
consideration, the formation of a contract will depend upon the
presence of other elements.” Duffy, 123 F. Supp. 2d at 818 (citing
Nadel, 208 F.3d at 377 n.5).
New Jersey precedent does not support Baer’s attempt to carve
out an exception to traditional principles of contract law for
submission-of-idea cases. The New Jersey courts have not provided
even the slightest indication that they intend to depart from their well-
established requirement that enforceability of a contract requires
definiteness with respect to the essential terms of that contract.
Accordingly, we will not relax the need for Baer to demonstrate
definiteness as to price and duration with respect to the contract he
entered into with Chase.
3. The Alleged “Contract” Regardless Of Labels Is
Too Vague To Be Enforced.
The final question with respect to the Baer’s contract claim,
therefore, is whether his contract is enforceable in light of the
traditional requirement of definitiveness in New Jersey contract law
for a contract to be enforceable. A contract may be expressed in
15
writing, or orally, or in acts, or partly in one of these ways and partly
in others. Troy v. Rutgers, 774 A.2d 476, 482-83 (N.J. 2001). There
is a point, however, at which interpretation becomes alteration. In re
Penn Cent. Transp. Co., 831 F.2d at 1226 (citing Mellon Bank, N.A.
v. Aetna Bus. Credit, Inc., 619 F.2d 1001, 1011 (3d Cir. 1980)). In
this case, even when all of the parties’ verbal and non-verbal actions
are aggregated and viewed most favorably to Baer, we cannot find a
contract that is distinct and definitive enough to be enforceable.
Nothing in the record indicates that the parties agreed on
how, how much, where, or for what period Chase would compensate
Baer. The parties did not discuss who would determine the “true
value” of Baer’s services, when the “true value” would be calculated,
or what variables would go into such a calculation. There was no
discussion or agreement as to the meaning of “success” of The
Sopranos. There was no discussion how “profits” were to be defined.
There was no contemplation of dates of commencement or
termination of the contract. And again, nothing in Baer’s or Chase’s
conduct, or the surrounding circumstances of the relationship, shed
light on, or answers, any of these questions. The district court was
correct in its description of the contract between the parties: “The
contract as articulated by the Plaintiff lacks essential terms, and is
vague, indefinite and uncertain; no version of the alleged agreement
contains sufficiently precise terms to constitute an enforceable
contract.” Baer, 2004 WL 350050, at *6. We therefore will affirm
the district court’s rejection of Baer’s claim to recover under a theory
of implied-in-fact contract.
B. Baer’s Quasi-Contract Claim
Our rejection of Baer’s implied-in-fact contract claim does not
preclude him from recovering on his quasi-contract claim and thus in
view of the district court’s disposition of that claim we consider when
the statute of limitations started running on it. This inquiry has two
parts: (1) application of the discovery rule; and (2) whether the
district court erred in disregarding Baer’s certification in opposition to
Chase’s motion for summary judgment, particularly when it is clear
that evidence in the record corroborated the certification. The court
disregarded the certification on the grounds that it conflicted with
Baer’s prior deposition testimony. This statute of limitations inquiry
is critical as the district court did not reject the quasi-contract claim on
the merits, and there is no doubt that in an appropriate case,
depending on the facts, that a party may recover on a quasi-contract
16
claim even if there was no actual contract.
If, in fact, Baer’s deposition was accurate, everything to which
he claims entitlement for compensation had been completed by the
end of October 1995, some six years and seven months before he filed
this lawsuit. In that circumstance, as we explain below, the district
court would have held correctly that the New Jersey statute of
limitations barred Baer’s quasi-contract claim unless the discovery
rule postponed the commencement of the limitations period. But the
deposition testimony may have been incomplete as there is evidence
in the record refuting the portion of it indicating that Baer’s last
rendition of services was in October 1995, as it is undisputed that
Baer sent a letter to Chase on February 10, 1997, critiquing Chase’s
early screenplay of The Sopranos. Indeed, this letter was already in
the record at the time of the deposition. In addition, Baer corrected
the “misstatement” in his deposition by reference to the “undisputed
facts that were already in evidence” in his certification in opposition
to Chase’s motion for summary judgment.
Preliminarily on the statute of limitations issue we observe
that under New Jersey law, non-personal injury actions involving
monetary damages must be “commenced within 6 years after the
cause of any such action shall have accrued.” N.J. Stat. Ann. §
2A:14-1 (West 2000). Moreover, there is no dispute between the
parties that the six-year statute of limitations governs quasi-contract
claims. See Kopin v. Orange Prods., Inc., 688 A.2d 130, 140-41 (N.J.
Super. Ct. App. Div. 1997). The initial issue here, however, is an
inquiry into when the statute started to run.
Baer challenges the district court’s holding that a quasi-
contract claim “accrued, if at all” for the purposes of statue of
limitations, when Baer rendered his final services in October 1995.
Baer, 2004 WL 350050, at *9. Baer asserts that “the Court did not
address Plaintiff’s contention that the discovery rule should be applied
and as a result the cause of action did not accrue until The Sopranos
first aired on January 10, 1999.” Appellant’s br. at 58.
In New Jersey as elsewhere “[t]he discovery rule postpones the
commencement of a cause of action until a Plaintiff knows, or should
have known, of facts which establish that an injury has occurred, and
that fault for that injury can be attributed to another.” Riemer v. St.
Claire’s Riverside Med. Ctr., 691 A.2d 1384, 1388-89 (N.J. Super. Ct.
App. Div. 1997) (citing Lynch v. Rubacky, 424 A.2d 1169, 1171 (N.J.
17
1981) ( “[The rule] provides that in an appropriate case a cause of
action will be held not to accrue until the injured party discovers, or
by the exercise of reasonable diligence and intelligence should have
discovered that he may have a basis for an actionable claim . . . (or)
knows or has reason to know that he has a right of redress.”)).
Baer, however, does not cite any New Jersey decision applying
the discovery rule to delay the time when the statute of limitations
begins to run on a quasi-contract claim.4 Moreover, while most
jurisdictions have not ruled explicitly on whether the discovery rule
should apply in quantum meruit cases, those that have addressed the
issue have chosen not to utilize the discovery rule, but rather to
employ a “last rendition of services” test. Thus, in Rabinowitz v.
Mass. Bonding & Insurance Co., 197 A. 44, 47 (N.J. 1938), the court
used a last “rendition of services” calculation in an unjust enrichment
claim. Additionally, the court in Kopin, 688 A.2d at 140, cited a New
York case granting summary judgment predicated on the statute of
limitations in a quantum meruit case in which there was a failure of
proof as to when the plaintiff completed his performance, Wint v.
Fields, 576 N.Y.S.2d 266 (N.Y. App. Div. 1991). See also GSGSB,
Inc. v. New York Yankees, 862 F. Supp. 1160, 1171 (S.D.N.Y. 1994)
(“[A] cause of action for quantum meruit begins to run when the final
4
The only case that Baer cites purporting to apply the discovery
rule to a quasi-contract claim is a New York case, German v. Pope John
Paul, 621 N.Y.S. 311 (N.Y. App. Div. 1995); see Appellant’s br. at 59
(“[T]he Court expressly held that the discovery rule is applicable to quasi
contract claims.”). In German, the plaintiff brought an action against
the Pope and others to recover on a tort claim and for breach of contract
in connection with membership as a priest within a religious community.
The trial court barred his claim, basing its statute of limitations
determination on the erroneous conclusion that the plaintiff had resigned
from the priesthood in January 1987. The appellate division noted that,
in fact, the plaintiff became aware of the alleged improprieties within the
religious community that gave rise to his causes of action for unjust
enrichment in 1965 or 1966, some 27 years before he commenced the
action and therefore held that the trial court properly dismissed the quasi-
contract claim. To the extent that German is applicable to the discovery
rule at all, it applied the rule to invalidate rather than sustain a quasi-
contract claim. In the circumstances, German hardly provides us with a
reason to predict that the New Jersey Supreme Court would apply the
discovery rule to toll the accrual of a quasi-contract claim under New
Jersey law.
18
service has been performed.”) (citing Kramer, Levin, Nessen, Kamin
& Frankel v. Aronoff, 638 F. Supp. 714, 722 (S.D.N.Y. 1986));
Martin v. Camp, 114 N.E. 46 (N.Y. 1916); County of Broome v.
Board of Educ., 317 N.Y.S.2d 486, 489 (N.Y. Sup. Ct. 1971).
Baer’s rationale in urging us to adopt the discovery rule for
quantum meruit claims is doctrinally untenable as well. He alleges
that “at the time Plaintiff’s services were completed, Plaintiff
reasonably believed that remuneration for those services was
governed by a contractual agreement contingent upon the success of
the show.” Appellant’s br. at 59. Baer therefore contends, “there is
no possible way that Plaintiff knew or should have known that a cause
of action had accrued until such time as The Sopranos aired on
January 10, 1999.” Id. He misunderstands the nature of a quantum
meruit claim with respect to the statute of limitations. “In cases based
on quasi-contract liability, the intention of the parties is entirely
disregarded. . . .” Callano v. Oakwood Park Homes Corp., 219 A.2d
332, 334 (N.J. Super. Ct. App. Div. 1966). In other words, Baer’s
belief that he was going to get paid if and when the show was a
success is irrelevant because his understanding of his oral contract,
even if correct, does not govern his quasi-contract claim inasmuch as
a quasi-contract claim is not a “real” contract based on mutual consent
and understanding of the parties. The essence of a quasi-contract
claim is not the expectancy of the parties, but rather the unjust
enrichment of one of them. It therefore would be inappropriate to
look at Baer’s expectations of payment, rather than at the services he
provided Chase.
Zic v. Italian Government Travel Office, 149 F. Supp. 2d 473(N.D. Ill. 2001), addressed the question of when a cause of action
accrued and started the running of the clock on the statute of
limitations in a quantum meruit suit. The plaintiff argued that his
claim did not begin until the defendant failed to recognize accrued
seniority or to make retroactive salary increases to which he claimed
entitlement. Id. at 476. The district court stated that this argument
“misunderstands the essence of a quantum meruit claim, which is not
the plaintiff’s expectancy of payment, but the unjust enrichment of the
defendant.” Id. The court held that the cause of action accrues upon
presentment and subsequent rejection of a bill for services, or as soon
as the services were rendered. Id. at 475-76.
It is clear that any application of the discovery rule would be
inappropriate in analyzing whether the statute of limitations ran on
Baer’s quantum meruit claim. The district court was therefore correct
19
in utilizing a last rendition of services test to analyze whether Baer’s
claim was time barred.
The district court, utilizing the last services rendered test, held
that the statute of limitations barred Baer’s quasi-contract claim based
on his deposition testimony that he last rendered services in October
1995. The district court disregarded Baer’s later certification and the
February 10, 1997 letter, holding:
[I]n this case, the
Plaintiff’s deposition
testimony regarding the
date that performance
was complete was a fact
of crucial importance to
his case, his performance
and the February 10,
1997 letter were the
subject of extensive
questioning, and the
Plaintiff had access to
the relevant information
at the time of his
deposition.
Baer, 2004 WL 350050, at *9.
This disposition brings us to the second aspect of our statute of
limitations discussion, the “sham affidavit” doctrine. In this regard
we have held that a party may not create a material issue of fact to
defeat summary judgment by filing an affidavit disputing his or her
own sworn testimony without demonstrating a plausible explanation
for the conflict. Hackman v. Valley Fair, 932 F.2d 239, 241 (3d Cir.
1991). The “sham affidavit” doctrine refers to the trial courts’
“practice of disregarding an offsetting affidavit that is submitted in
opposition to a motion for summary judgment when the affidavit
contradicts the affiant’s prior deposition testimony.” Shelcusky v.
Garjulio, 797 A.2d 138, 144 (N.J. 2002). When a party does not
explain the contradiction between the subsequent affidavit and the
prior deposition, the alleged factual issue in dispute can be perceived
as a “sham,” thereby not creating an impediment to a grant of
summary judgment based on the deposition. Id. Though the district
court did not refer to the “sham affidavit” doctrine by name, it utilized
its logic and cited precedent applying it in disregarding Baer’s
20
certification.
The “sham affidavit” doctrine has its roots in the Court of
Appeals for the Second Circuit’s decision in Perma Research &
Development Co. v. Singer Co., 410 F.2d 572, 577-78 (2d Cir. 1969).
There the court, noting that the plaintiff was unable to justify an
inconsistency between his deposition testimony and a later affidavit,
disregarded the affidavit and determined that summary judgment
should be granted against the plaintiff, explaining:
If a party who has been examined at length on
deposition could raise an issue of fact simply by
submitting an affidavit contradicting his own prior
testimony, this would greatly diminish the utility of
summary judgment as a procedure for screening out
sham issues of fact.
Id. at 578.
While many state and federal jurisdictions have incorporated
the logic of Perma in assessing subsequently filed conflicting
affidavits following a deposition, its application has not been applied
without regard for the surrounding circumstances. 11 James Wm.
Moore, et al., Moore’s Federal Practice § 56.14[1][f] at 56-179 (3d ed.
1997) (“If a party’s deposition and affidavit are in conflict, the
affidavit is to be disregarded unless a legitimate reason can be given
for discrepancies.”). Thus, it is clear that merely because there is a
discrepancy between deposition testimony and the deponent’s later
affidavit a district court is not required in all cases to disregard the
affidavit. Kennett-Murray Corp. v. Bone, 622 F.2d 887, 894 (5th Cir.
1980); see Choudhry v. Jenkins, 559 F.2d 1085, 1090 (7th Cir. 1977)
(summary judgment was improper even though party’s testimony was
“not a paradigm of cogency or persuasiveness,” inasmuch it was not a
“transparent sham”).
In Kennett-Murray, 622 F.2d 887, the Court of Appeals for the
Fifth Circuit declined to apply Perma and the “sham affidavit”
doctrine in an action in which an employer sought recovery on a
promissory note and employment contract from a former employee.
Id. at 889. The central issue in dispute concerned “whether a genuine
issue exist[ed] as to [a] question of fraud.” Id. at 893. The district
court granted the plaintiff’s motion for summary judgment primarily
relying on the defendant’s deposition in which he testified that the
plaintiff’s vice president had not made any representations about the
21
note or the employment contract. Id. at 892. The court, because of
inconsistencies with the earlier testimony, disregarded a subsequently
filed affidavit supporting the defendant’s allegations of fraud, which
if, considered, would have raised a material issue of fact. Id.The court of appeals recognized that a court “cannot disregard
a party’s affidavit merely because it conflicts to some degree with an
earlier deposition” and that “a genuine issue can exist by virtue of a
party’s affidavit even if it conflicts with earlier testimony of the
party’s deposition.” Id. at 893. In reversing the summary judgment
order, it held that the subsequent affidavit was in fact not a “sham,” as
the defendant’s affidavit did not claim to raise a new or distinct
matter, but rather explained certain aspects of his deposition
testimony that caused confusion. Id. at 894. The court additionally
relied on the fact that the affidavit could not be said to constitute a
reformulation of the defendant’s general defense nor was it at odds
with the general theory he put forth in the deposition. Id. at 894-95.
In Martin v. Merrell Dow Pharmaceuticals, Inc., 851 F.2d 703(3d Cir. 1998), the plaintiff was the mother of a child born with birth
defects who made eight sworn factual statements tending to negate the
defendant drug manufacturer’s liability. Later, facing an almost
certain loss on summary judgment, she submitted a flatly
contradictory affidavit which did not contain an explanation for her
change in position. We adopted the logic of Perma, and held that the
district court properly could ignore the later affidavit. We, however,
did recognize that “there are situations in which sworn testimony can
quite properly be corrected by a subsequent affidavit. . .[and] [w]here
the witness was confused at the earlier deposition or for some other
reason misspoke, the subsequent correcting or clarifying affidavit may
be sufficient to create a material dispute of fact.” Id. at 705.
Baer argues that his deposition statement was “clearly, and
understandably, mistaken,” reasoning that “he was thinking in terms
of the overwhelming majority of his services.” Appellant’s br. at 62.
The district court refused to accept Baer’s “mistake” argument,
relying on the fact that the matter that was of critical importance to his
claim and the subject of repeated questioning. Baer, 2004 WL
350050, at *9.
If Baer had advanced only the argument that he had made a
mistake, exclusion of the later certification might have been
appropriate. The district court, however, overlooked the importance
of the evidence existing in the record, i.e., the February 10, 1997 letter
22
that buttressed Baer’s subsequent certification. We therefore must
address the question of whether corroborating evidence as to the
substance of a later certification ameliorates the concerns that gave
rise to the “sham affidavit” doctrine, thereby allowing a subsequent
competing affidavit to create a dispute as to a genuine issue of a
material fact.
When there is independent evidence in the record to bolster an
otherwise questionable affidavit, courts generally have refused to
disregard the affidavit. See Bushell v. Wackenhut Int'l, Inc., 731 F.
Supp. 1574, 1578 (S.D. Fla. 1990) (third party’s deposition testimony
can lend credence to subsequent affidavit). The Court of Appeals for
the Second Circuit has held the introduction of evidence can help
rebut a charge of a “sham” affidavit. Thus, in Palazzo ex rel.
Delmage v. Corio, 232 F.3d 38, 43-44 (2d Cir. 2000), the same court
that had decided Perma recognized that “a party’s deposition
testimony as to a given fact does not foreclose a trial or an evidentiary
hearing where that testimony is contradicted by evidence other than
the deponent’s subsequent affidavit, for when such other evidence is
available, the concern that the proffered issue of fact is a mere ‘sham’
is alleviated.” The court held that the district court properly allowed a
party to introduce documentary evidence to support his residency
claims contrary to his deposition. The Court of Appeals for the Tenth
Circuit reached a similar conclusion in Delany v. Deere & Co., 219
F.3d 1195, 1996 n.1 (10th Cir. 2000), in which it stated that, “[w]hile
a party may not defeat summary judgment by contradicting deposition
testimony in a subsequent affidavit, new evidence may furnish a good
faith basis for the inconsistency.”
Baer’s ability to point to evidence in the record that
corroborates his later affidavit alleviates the concern that he merely
filed an erroneous certification out of desperation to avoid summary
judgment. Moreover, Chase does not deny receiving the letter and his
personal assistant told Baer that Chase, in fact, had received the letter.
And finally, Chase himself has provided the letter in discovery.
Given this evidence which corroborates the certification, the concern
that Baer’s claim that he performed services as late as February 10,
1997, is either desperate or erroneous is eliminated, and therefore the
court should have analyzed the letter and the circumstances
surrounding it and Baer’s certification when ruling on the summary
23
judgment motion on the statute of limitations issue.5 The district
court therefore erred, at least procedurally, in granting Chase’s
summary judgment motion based on the statute of limitations with
respect to Baer’s quantum meruit claim. We therefore will reverse the
summary judgment on this point and will remand the question of
whether Baer presented a timely and otherwise valid quasi-contract
5
Chase argues that even if we refuse to disregard the February 10,
1997 letter, “the letter cannot be characterized as a compensable
‘service’ as a matter of law.” Appellees’ br. at 42. Chase contends that
we should disregard the February letter on two grounds, the first of
which is its timing. Chase did not receive the letter until some 14
months after he mailed the screenplay to Baer, as well as after all the
major networks had rejected the draft. Chase argues that even if the
letter had value at one time, it had no value to him when he actually
received it. Second, Chase argues that the letter had no value to him as
it contained only cursory observations and laudatory phrases about his
work. Chase premises his argument on the assumption that in analyzing
the statute of limitations for quantum meruit purposes we should dissect
the last service rendered to deem if it provided value to the opposing
party.
We will not affirm the summary judgment on this basis. First,
Baer’s letter describes the aspects of the screenplay that he believes were
successful, the parts to which he related personally, and what humor
worked, and provided encouragement to continue with the project. App.
at 22. We will not write these contributions off, as Chase attempts to do,
as “empty flattery.”
Additionally, we will not dissect each interaction between
litigants to quantify the precise value of each correspondence or service
rendered. The exchange of ideas and services should not be viewed as
incremental, segregable interactions that we can assess individually for
purposes of the statute of limitations. A separate issue would arise if a
litigant sent a correspondence or rendered a “sham service” in an attempt
to avoid the statute. That situation, however, does not describe the
circumstances before us. We will not engage in Chase’s request to judge
whether the February letter, taken in isolation, was a “compensable
service.” We are satisfied that Baer sent the letter and Chase received it,
and thus at least at this time it will serve as the “last service rendered”
for purposes of the statute of limitations calculus.
24
claim to the district court for further consideration.6
C. Baer’s Misappropriation Claim
Baer next raises the issue of whether the district court erred in
holding that the fact that the ideas he advanced existed in the public
domain precluded those ideas, alone or in combination, from
possessing the requisite novelty so that their use cannot be the basis
for a claim for common law idea misappropriation. The cause of
action of “misappropriation” is based on tort principles rather than on
contract law. Restatement (Third) of Unfair Competition § 40, cmt. a.
The premise behind the tort is that when a party misappropriates
another’s confidential idea or some other type of property, the law
imposes an obligation on that party to pay the other restitution for its
improper use. Id.; Duffy, 124 F. Supp. 2d at 808.
There is no dispute between the parties that this case is
governed by the leading precedent on the misappropriation of ideas in
New Jersey, Flemming v. Ronson Corp., 258 A.2d 153, 156-57 (N.J.
Super. Ct. Law Div. 1969), aff’d, 275 A.2d 759 (N.J. Super. Ct. App.
Div. 1971); see also Ahlert v. Hasbro, Inc., 325 F. Supp. 2d 509, 513
n.6 (D.N.J. 2004) (citing Flemming test in misappropriation claim);
Johnson v. Benjamin Moore & Co., 788 A.2d 906, 914 (N.J. Super.
Ct. App. Div. 2002) (same); The court in Flemming articulated the
6
We do not consider whether Baer was entitled to summary
judgment with respect to the timeliness of his quasi-contract claim. In
this regard we point out that Baer did not move for summary judgment
in the district court. While it is not unusual for us when reversing a
summary judgment for one party to direct that the district court grant
summary judgment to the other party, ordinarily, at least, we do this in
circumstances in which the parties made cross-motions for summary
judgment in the district court. See, e.g., Nazay v. Miller, 949 F.3d 1323,
1327-28 (3d Cir. 1991); First Nat’l Bank v. Lincoln Nat’l Life Ins. Co.,
824 F.2d 277, 281-82 (3d Cir. 1987). Accordingly, we go no further
with respect to the statute of limitations issue than to hold that the
district court should not have disregarded Baer’s certification and it
should have considered the February 10, 1997 letter. Therefore our
analysis in supra note 5, will not preclude the district court on a fuller
examination of the facts from coming to a conclusion contrary to ours as
we write on the point merely for the limited purpose of addressing
Chase’s argument that we should affirm the summary judgment on a
different basis than that of the district court.
25
test for determining whether the law will imply an obligation to pay
for a confidentially submitted idea: When “a person communicates a
novel idea to another with the intention that the latter may use the idea
and compensate him for such use, the other party is liable for such use
and must pay compensation if . . . (1) the idea was novel; (2) it was
made in confidence [to the defendant]; and (3) it was adopted and
made use of [by the defendant in connection with his own activities].”
Flemming, 258 A.2d at 156-57 (citing Mitchell Novelty Co. v.
United Mfg. Co., 199 F.2d 462 (7th Cir. 1952); De Filippis v.
Chrysler Corp., 53 F. Supp. 977 (S.D.N.Y. 1944), aff’d, 159 F.2d 478(2d Cir. 1947); Official Airlines Schedule Info. Serv., Inc. v. Eastern
Air Lines, Inc., 333 F.2d 672 (5th Cir. 1964)).
Thus, the misappropriation issue on appeal is whether the
ideas Baer provided were novel. While novelty is clearly a
prerequisite to establish a misappropriation claim in New Jersey,
Johnson, 788 A.2d at 914-15, the courts have not articulated clearly
the test for determining whether an idea is sufficiently novel to
warrant protection. See Duffy, 123 F. Supp. 2d at 808. Two leading
cases dealing with the parameters of New Jersey misappropriation law
arose in federal courts deciding state law issues, Duffy, 123 F. Supp.
2d 802, and Bergin v. Century 21 Real Estate Corp., No. 98 Civ.
8075, 2000 WL 223833 (S.D.N.Y. Feb. 25, 2000), aff’d, 234 F.3d
1261 (2d Cir. 2000) (table).
As the district court noted in Duffy, it is unclear whether the
issue of novelty is “an issue of fact, for the fact finder, a question of
law, for the jury or a mixed question of fact and law.” Duffy, 123 F.
Supp. 2d at 808. The Flemming opinion followed a bench trial so
such a determination was unnecessary. Flemming, 788 A.2d at 154.
The district court in Bergin, though deciding the case under New
Jersey law, looked to New York law and held that “[w]hether an idea
is novel is an issue of law which may be decided on a motion for
summary judgment.” Bergin, 2000 WL 223833, at *9. The Duffy
court held that the “New Jersey Supreme Court would determine that
although some of the factors relevant to a determination of novelty
may be factual, the ultimate determination of whether an idea is novel
is a question of law for the court.” 123 F. Supp. 2d at 809. Duffy
relied on the similarities to a court’s role with respect to
“obviousness” in patent cases, citing Ryko Mfg. Co. v. Nu-Star, Inc.,
950 F.2d 714, 716 (Fed. Cir. 1991), and cases holding that the
“novelty” determination is a matter of law. See Duffy, 123 F. Supp.
2d at 809 (citing extensive list of cases that hold that the
determination of novelty is a question of law). Additionally, Duffy
26
indicated that “even courts holding that the question is a factual one
have not hesitated to grant summary judgment on the basis of lack of
novelty when the underlying facts do not support a finding of
novelty.” Id. (citing Wilson v. Barton & Ludwig, Inc., 296 S.E.2d 74,
78 (Ga. Ct. App. 1982)). We believe that the district court here was
correct in its conclusion as to how the New Jersey Supreme Court
would decide this issue and it is therefore necessary to determine the
“novelty” of Baer’s contribution.
The predicates on which a property right in an idea may be
based are novelty and originality. See Downey v. General Foods
Corp., 286 N.E.2d 257, 259 (N.Y. 1974). A misappropriation claim,
unlike a contract-based claim, only can arise from the taking of an
idea that is original or novel because the law of property does not
protect against the appropriation of that which is free and available to
all. Nadel, 208 F.3d at 378. Therefore, anyone may use ideas in the
public domain freely with impunity. See Ed Graham Prods., Inc. v.
National Broad. Co., 347 N.Y.S.2d 766 (N.Y. Sup. Ct. 1973).
The district court here acknowledged Duffy’s observation that
the law of “unfair competition ‘is an amorphous area of
jurisprudence’ and ‘knows of no clear boundaries.’” Baer, 2004 WL
350050, at *12 (citing Duffy, 123 F. Supp. 2d at 815). For example,
the court in Duffy noted that the Flemming court, “did not discuss a
specific test that should be used to determine whether an idea is
novel.” Duffy, 123 F. Supp. 2d at 809.
The present facts, however, do not compel us to set forth a
broad description of what is novel in our disposition of Baer’s
misappropriation claim. Though Flemming did not articulate a test
for affirmatively determining when an idea is “novel,” the court did
cite examples of ideas that would not be novel. The Flemming court
recognized that even an otherwise novel idea would lose its novelty if
it was “in the domain of public knowledge” before the defendant used
it. Flemming, 258 A.2d at 157-58. The Duffy court expanded on this
conclusion by noting “[a]n idea will not satisfy [the novelty
requirement] if it is not significantly different from, or is an obvious
adaptation or combination of ideas in the public domain.” Duffy, 123
F. Supp. 2d at 810. The Court of Appeals for the Second Circuit,
applying New Jersey law, also noted in Bergin v. Century 21 Real
Estate Corp., 234 F.3d 1261 (2d Cir. 2000) (table), available at 2000
WL 1678777, at *3, that “[s]ummary judgment is appropriate where
the defendant knew of the idea or the idea was ‘a matter[] in the
domain of public knowledge before the plaintiff disclosed it to the
27
defendant.’” Other jurisdictions have taken like positions. See
Educational Sales Programs, Inc. v. Dreyfus Corp., 317 N.Y.S.2d 840,
844 (N.Y. Sup. Ct. 1970) (“The idea need not reflect the ‘flash of
genius,’ but it must shown genuine novelty and invention, and not a
merely clever or useful adaptation of existing knowledge.”); Oasis
Music, Inc. v. 900 U.S.A., Inc., 614 N.Y.S. 2d 878, 882-84 (N.Y. Sup.
Ct. 1994) (declining to attribute novelty where ideas were variations
and adaptations of existing knowledge in the public domain). We
conclude, similarly, that the New Jersey Supreme Court, if addressed
with the issue, would hold that ideas lose their novelty if they are in
the domain of public knowledge before use. Such ideas cannot be
misappropriated.
Baer admits that all of the locations he identified to Chase
exist in the public domain.7 In addition, many of the stories and
potential plot lines that Baer “provided” Chase existed in the public
record.8 Moreover, as the district court noted, the additional ideas and
stories that Baer claims were misappropriated were not his stories;
“associates” of Baer actually told them to Chase:
In particular, the Plaintiff seeks
compensation for Spirito’s story of
rivalry with his uncles in the aftermath
of his father's death, that Koczur’s
account to Chase that many waste
management companies were alleged to
be involved with organized crime,
Spirito’s story of his experiences with a
‘loan shark’ and Jones’s description of
the way in which organized crime uses
loan shark debts to take over a business,
7
Baer “introduced” Chase to the City of Elizabeth, The Pulaski
Skyway, and Centanni’s Meat Market.
8
For example, Baer relayed the following stories to Chase: the
RCA and Morris Levy “scam,” which was the subject of a published
book; information regarding the DeCavalcante family and organized
crime which existed in public lure of New Jersey; and wire taps that
were part of the public record having been played at a criminal trial. We
note that Morris Levy, an individual Jones discussed, and who is a
prominent figure in the parties’ briefs, is not unknown to this court. See
United States v. Vastola, 915 F.2d 865, 868 (3d Cir. 1990).
28
Jones’s description of the operation of
‘cutout’ schemes used by organized
crime, Koczur’s information regarding
the involvement of the DeCavalcante
crime family in Saint Anthony's Church
in Elizabeth, and a story told to Chase
by Jones about Morris Levy's horse
farm.
Baer, 2004 WL 350050, at *13 (emphasis added). It is clear that
virtually all of Baer’s alleged contributions either existed in the public
domain or concerned stories and facts he did not provide.
Baer argues that he did not simply introduce these third-parties
to Chase, but rather “the majority of ideas were suggested by Plaintiff
prior to the meeting.” Appellant’s br. at 67. Baer alleges that his
aggregating and combining of ideas was essential in “put[ting] it all
together” and “creat[ing] the ‘template’ for The Sopranos.”
Appellant’s br. at 66. Baer alleges that it is “their combination that
gives these ideas originality.” Id. at 68. In other words, Baer’s
contribution in essence was “choosing” which ideas, existing in the
public domain, he would present to Chase.
Aggregation of ideas and expression do not by themselves
create novelty. In Duffy the plaintiff argued that “its idea was novel
because [it] spent many months deciding the organization and layout
of the data so its products could be readily understood by
nonprofessional investors. . . . [It] stated that it was the format that
made Duffy’s reports unique and proprietary to [it].” 123 F. Supp. 2d
at 812. The plaintiff in Duffy took data, fields and information in the
public domain and organized them to create a “mutual fund report
card.” Id. The court held that, though the organization and layout of
the data may involve some originality, this articulation of originality
went more to an idea’s expression than to the idea itself. Id. It is
well-established that an idea’s expression is not entitled to protection
under a state’s misappropriation law. Id. As the court in Duffy
recognized, “To the extent a state’s law purports to impose liability
for the misappropriation of an idea’s expression, such a law would be
preempted by federal copyright law.” Duffy, 123 F. Supp. 2d at 812
n.5 (citing 17 U.S.C. § 106; Wilson v. Mr. Tee’s, 855 F. Supp. 679,
684-85 (D.N.J. 1994); Rowe v. Golden W. Television Prods., 445
A.2d 1165 (N.J. Super. Ct. App. Div. 1982)). Despite Baer’s
creativity in combining stories and facts existing in the public domain,
New Jersey does not protect this mode of originality under its
29
misappropriation law. Thus, the district court correctly granted Chase
summary judgment on Baer’s misappropriation claim.
D. District Court’s Exclusion of Expert Report
The final issue raised on appeal is whether the district court
abused its discretion by excluding Baer’s expert report from
consideration on issues of liability. Early in the litigation, the court
bifurcated the case into liability and damage phases, with expert
discovery not being contemplated or authorized by any scheduling
order. Baer’s attorney later retained John Agoglia as an “expert
witness” regarding “the damages aspect of case” to be used by Baer
“should [Defendant] raise an issue regarding the calculation of
damages at summary judgment.” App. at 902, 914.
Faced with the summary judgment motion, Baer attempted to
include Agoglia’s report which stated “a contribution of such ideas
and services [as those made by Baer] toward the creation of a
television series such as The Sopranos . . . would commonly be
rewarded with fixed payments and/or production bonuses and or a
sliding scale of profit participation and/or screen credits in recognition
of such contributions, or any combination thereof.” App. at 27. The
district court excluded Agoglia’s report based on the fact that he was
not presented as a liability expert and that his report did not opine on
liability. App. at 175.
The district court did not abuse its discretion by disregarding
the report with respect to a summary judgment motion focusing solely
on issues of liability. Agoglia was not presented as an expert on
liability. We agree with the court’s assessment that, “I don’t see how
somebody who was put forth under Rule 26 as a damages expert is
going to be able to bootstrap liability issues into a summary judgment
motion.” App. at 196. The damage expert’s testimony had no
relevance to the questions of formation or enforceability of the
purported contract. Chase named Agoglia to be an expert witness on
damages; his opinions with respect to liability are simply beside the
point.
Baer’s brief allocates little space in presenting an argument as
to how the court erred in excluding the damages report from the
liability phase of the trial. Bear clearly presented Agoglia as a
damages expert to the district court and his adversary. The court did
not err in refusing Baer’s attempts to “bootstrap” a damages witness
who repeatedly agreed that he had no legal training to testify as an
30
expert on liability.
IV. CONCLUSION
Inasmuch as the district court erroneously disregarded Baer’s
certification, which, if considered, might have precluded the grant of
summary judgment on the quantum meruit claim on a statute of
limitations basis, we will reverse the order of the district court entered
February 20, 2004, and remand the case for further proceedings in the
district court solely on that claim. Otherwise we will affirm the order
of February 20, 2004. The parties will bear their own costs in this
appeal.
31