MICHAEL KARLIS VS. NORMAN-SPENCER AGENCY, INC. (L-0987-19, SOMERSET COUNTY AND STATEWIDE) ( 2021 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-3630-19
MICHAEL KARLIS,
Plaintiff-Appellant,
v.
NORMAN-SPENCER AGENCY,
INC., NU HOLDINGS, INC.,
BRIAN NORMAN, and
CHRISTOPHER NORMAN,
Defendants-Respondents.
____________________________
Argued October 14, 2021 – Decided October 29, 2021
Before Judges Haas and Mitterhoff.
On appeal from the Superior Court of New Jersey, Law
Division, Somerset County, Docket No. L-0987-19.
Erik Frins argued the cause for the appellant (Simon
Law Group, attorneys; Erik Frins and Britt J. Simon, on
the briefs).
Christopher M. Curci argued the cause for respondent
(Ward Law, LLC, attorneys; Jennifer L. Ward and
Christopher M. Curci, on the brief).
PER CURIAM
In this contract dispute, plaintiff Michael Karlis appeals from an April 17,
2020 order denying his motion for reconsideration of the court's January 24,
2020 order granting summary judgment in favor of defendants Norman-Spencer
Agency, Inc., NU Holdings Inc., Brian Norman, and Christopher Norman.1
Plaintiff argues the motion judge erred in granting summary judgment to
defendants by failing to give effect to the plain language and structure of his
employment contract and by failing to consider extrinsic evidence support ing
his interpretation of the contract. We affirm, substantially for the reasons set
forth in Judge Robert G. Wilson's well-reasoned opinion. We add only the
following brief remarks.
Plaintiff, a licensed attorney in the State of New Jersey, owned and
operated an insurance management business called Northern Star Management
(Northern Star). Defendants provide property and casualty insurance. In August
2014, defendants purchased Northern Star from plaintiff. In connection with the
contract of sale, plaintiff entered into a July 31, 2014 employment agreement 2
1
The contract at issue involved plaintiff and defendant Norman-Spencer Agency,
Inc. The rest of the named defendants were not parties to the contract.
2
The entire Employment Agreement consisted of multiple agreements governing
employment, confidential information, and invention assignment.
A-3630-19
2
(Employment Agreement) with defendant Norman-Spencer Agency, Inc. The
Employment Agreement provided that plaintiff would serve as: a) Managing
Director of defendant's Personal and Commercial Boater Safety Associations;
b) Managing Director of the defendant's Risk Purchase Groups, including but
not limited to Norman-Spencer Real Estate Risk Purchasing Group and Norman-
Spencer Crane and Boom Truck Risk Purchasing Group; and c) Senior Counsel.
The agreement set plaintiff's annual salary at $200,000 in year one, $210,000 in
year two, $220,500 in year three; and at least $231,525 in year four and
thereafter.
The effective date of the Employment Agreement was July 31, 2014.
Section one divided plaintiff's term with the company into an initial period of
forty-eight months (Initial Term Period), and a subsequent period during which
plaintiff would become an at-will employee (At-Will Period). Section one
states:
(a) Initial Term Period. Subject to the provisions
for termination as hereinafter provided, the term of this
Agreement shall be from the Effective Date and
continuing for forty[-]eight (48) months ("Initial Term
Period"). Upon the expiration of the Initial Term
Period, Employee will become an "At-Will Employee"
as provided for under section 1.(b) below. The terms
and conditions set forth in the Agreement will survive
the expiration of the Initial Term Period and continue
until termination of Employee's employment with
A-3630-19
3
Company. The period from the date hereof until
termination of the Employee's employment with
Company is referred to herein as the "Term"[].
(b) At-Will Employment. EMPLOYEE
UNDERSTANDS AND ACKNOWLEDGES THAT
EMPLOYEE'S EMPLOYMENT WITH
COMPANY FOLLOWING THE INITIAL TERM
PERIOD IS FOR AN UNSPECIFIED DURATION
AND CONSTITUTES "AT-WILL"
EMPLOYMENT. EMPLOYEE
ACKNOWLEDGES THAT THE EMPLOYMENT
RELATIONSHIP MAY BE TERMINATED AT
ANY TIME, WITH OR WITHOUT CAUSE AND
FOR ANY OR NO CAUSE, AT THE OPTION
EITHER OF COMPANY OR EMPLOYEE, WITH
OR WITHOUT NOTICE, EXCEPT THAT ANY
TERMINATION BY THE COMPANY WIHOUT
CAUSE SHALL BE WITH AT LEAST SIX (6)
MONTHS NOTICE. EMPLOYEE ALSO
UNDERSTANDS THAT ANY REPRESENTATION
TO THE CONTRARY, EXPRESS OR IMPLIED, IS
UNAUTHORIZED AND NOT VALID UNLESS
OBTAINED IN WRITING AND SIGNED AND
DATED BY THE DULY ELECTED PRESIDENT
OF THE COMPANY. NEITHER THIS
AGREEMENT NOR ANY CHANGES IN
EMPLOYEE'S DUTIES, POSITION, TITLE,
COMPENSATION OR OTHER CONDITIONS OF
EMPLOYMENT DURING HIS/HER
EMPLOYMENT WITH COMPANY SHALL
ALTER THE FOREGOING.
On January 29, 2018, defendant sent plaintiff a letter providing notice of
its intent to terminate plaintiff effective July 31, 2018, at the end of the Initial
A-3630-19
4
Term. January 29, 2018 was more than six months before the expiration of the
Initial Term. Defendant sent the termination notice by email and certified mail.
On July 31, 2018, plaintiff sent an email to Pat Malone, defendant's Chief
Financial Officer, and Brian Norman, defendant's Chief Executive Officer and
stated:
I spoke with Pat a few minutes ago. Pat advised me that
it was the position of the company that my
employment[] ends today. I disagreed with Pat,
however, to keep the peace in the office, I agreed not to
come into the office.
I will work from home and be available for work.
Again, based upon our agreements, I do not agree that
my employment ends today with Norman-Spencer.
Plaintiff's brother, George Karlis, 3 was also employed by defendant. The
parties dispute whether the employment agreements signed by plaintiff and his
brother were identical; however, defendant terminated George in November
2018, via a separation agreement.
On July 26, 2019, plaintiff filed a complaint against defendants alleging:
breach of contract (count one); breach of implied covenant of good faith and fair
dealing (count two); fraud (count three); negligent misrepresentation (count
3
As plaintiff and his brother share the same last name, we refer to George Karlis as
"George." We intend no disrespect.
A-3630-19
5
four); negligence (count five); gross negligence (count six); civil conspiracy
(count seven); bad faith (count eight). All eight counts were filed against each
of the named defendants. Defendants filed an answer on September 3, 2019.
On December 23, 2019, defendants filed a motion for summary judgment.
Plaintiff filed opposition and a cross-motion for partial summary judgment. On
January 24, 2020, after oral argument, Judge Wilson issued an oral decision
granting defendants' motion for summary judgment. Judge Wilson explained:
I agree that [p]laintiff's argument is that
[d]efendants could not provide [p]laintiff with a six-
month notice of termination during the at-will
employment phase until after the at-will employment
phase began.
I agree with [d]efendants that if the court were to
accept that argument, doing so would result in the court
transforming the 48-month contract term into a 54-
month contract term. And I do agree [that is] contrary
to the language of the agreement.
I agree with [d]efendants that when viewing the
contract as a whole, in a fair and common sense
manner, a [fifty-four] month contract term was not the
agreed upon intent of the parties; that it was [forty-
eight] months; and that the court cannot torture the
language of the contract to create an ambiguity, nor can
the court rewrite a contract that is better than or
different from the one the parties wrote themselves.
Plaintiff filed a motion for reconsideration, which was denied without
prejudice on February 28, 2020. Plaintiff then filed a second motion for
A-3630-19
6
reconsideration. The court denied plaintiff's motion and re-affirmed his original
decision. This appeal followed.
On appeal, plaintiff raises the following arguments for our consideration:
POINT I
THE MOTION JUDGE ERRED BY FAILING TO
GIVE EFFECT TO THE PLAIN LANGUAGE AND
STRUCTURE OF THE EMPLOYMENT
AGREEMENT, WHICH BY ITS TERMS PROVIDED
FOR A MODIFIED AT[-]WILL EMPLOYMENT
PERIOD TO BEGIN AFTER THE INITIAL TERM,
WITH A SIX[-]MONTH NOTICE PROVISION THAT
COULD ISSUE ONLY DURING THE AT-WILL
PERIOD
POINT II
THE MOTION JUDGE ERRED BY FAILING TO
CONSIDER THE IMPORT OF EXTRINSIC
EVIDENCE SUBMITTED BY PLAINTIFF, WHICH
SUPPORTS A FINDING THAT THE PARTIES
NEGOTIATED A SEPARATE AT[-]WILL PERIOD,
WITH A SIX[-]MONTH TERMINATION NOTICE
THAT COULD NOT ISSUE UNTIL AFTER
EXPIRATION OF THE INITIAL TERM;
THEREFORE, PLAINTIFF WAS ENTITLED TO
SUMMARY JUDGMENT; ALTERNATIVELY, THE
COMPETING INTERPRETATIONS OF WHEN
NOTICE MAY ISSUE UNDER THE AT[-]WILL
CLAUSE CONSTITUTED A SUFFICIENT
A-3630-19
7
AMBIGUITY TO PRECLUDE SUMMARY
JUDGMENT4
We review a motion judge's grant of summary judgment de novo, applying
the same standard as the motion judge. Conley v. Guerrero, 228 N.J. 339, 346
(2017). Summary judgment must be granted "if the pleadings, depositions,
answers to interrogatories and admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any material fact challenged and
that the moving party is entitled to a judgment or order as a matter of law."
Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co. of Pittsburgh, 224
N.J. 189, 199 (2016) (quoting R. 4:46-2(c)).
When construing contract terms, "unless the meaning is both unclear and
dependent on conflicting testimony," its interpretation is a matter of law.
Celanese Ltd. v. Essex Cnty. Improvement Auth., 404 N.J. Super. 514, 528
(App. Div. 2009) (quoting Bosshard v. Hackensack Univ. Med. Ctr., 345 N.J.
Super. 78, 92 (App. Div. 2001)).
Well-established rules of construction govern this court's review of
contractual terms. "The polestar of contract construction is to discover the
4
We conclude that plaintiff's argument that the agreement is ambiguous
necessitating consideration of extrinsic evidence is without sufficient merit to
warrant discussion a written opinion, R. 2:11-3(e)(1)(E), and affirm for the reasons
set forth by Judge Wilson.
A-3630-19
8
intention of the parties as revealed by the language used by them." Karl's Sales
& Serv., Inc. v. Gimbel Bros., 249 N.J. Super. 487, 492 (App. Div. 1991).
Courts "should not torture the language of [contracts] to create ambiguity."
Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997) (quoting Stiefel
v. Bayly, Martin & Fay, Inc., 242 N.J. Super. 643, 651 (App. Div. 1990)).
The focus of review is "the intention of the parties to the contract as
revealed by the language used, taken as an entirety; and, in the quest for the
intention, the situation of the parties, the attendant circumstances, and the
objects they were thereby striving to attain. . . ." Lederman v. Prudential Life
Ins. Co. of America, 385 N.J. Super. 324, 339 (App. Div. 2006) (citation
omitted). Courts may not re-write a contract or grant a better deal than that for
which the parties expressly bargained. See Solondz v. Kornmehl, 317 N.J.
Super. 16, 21 (App. Div. 1998).
Indeed, reviewing courts must read the contract "as a whole in a fair and
common sense manner." Hardy ex rel. Dowdell v. Abdul-Matin, 198 N.J. 95,
103 (2009). "[W]ords and phrases are not to be isolated but related to the context
and the contractual scheme as a whole, and given the meaning that comports
with the probable intent and purpose." Republic Bus. Credit Corp. v. Camhe-
A-3630-19
9
Marcille, 381 N.J. Super. 563, 569 (App. Div. 2005) (quoting Newark
Publishers' Ass'n v. Newark Typographical Union, 22 N.J. 419, 426 (1956)).
With these guiding principles in mind, we reject plaintiff's argument that
the commencement of his at-will term was somehow hobbled by the separate
contractual provision requiring defendant to provide six-months' notice of its
intent to terminate him. Plaintiff and defendant agreed to a single initial forty-
eight-month term of employment during which plaintiff could not be terminated
without good cause. The contract stated unambiguously that after this initial
term, plaintiff's employment would be at will. Accordingly, the contract
permitted defendant to terminate plaintiff without cause on the first day of the
at-will term.
Nothing in the notice provision prohibited defendant from providing the
required notice before the initial term ended. As Judge Wilson found, to
conclude the notice provision trumped the provision limiting the for-cause term
to forty-eight months would contravene the plain language of the agreement.
Defendant received both appropriate notice and the full benefit of the initial term
of the employment. We conclude that Judge Wilson wisely refrained from re-
writing the parties' agreement or giving plaintiff a better deal than that for which
the parties expressly bargained. See Solondz, 317 N.J. Super. at 21.
A-3630-19
10
Affirmed.
A-3630-19
11