BRUCE KAPLAN v. TOWNSHIP OF OLD BRIDGE (2010)

This is not the first time we have encountered the parties' dispute over an arrangement to pay for insurance consulting services.   See Kaplan v. Twp. of Old Bridge, No. A-2703-07T2 (App.Div. Jan. 15, 2009) (Kaplan I).   This latest appeal reviews whether, on remand, plaintiff demonstrated an entitlement to a judgment for money damages against defendant municipality pursuant to a theory of quantum meruit.   The trial court awarded plaintiff $24,750 in quantum meruit-based damages, which when added to other monies received (outside of litigation) for services relating to an annual insurance consulting arrangement, added up to $38,500 out of an overall expectancy of $55,000.   Because we do not agree that plaintiff produced sufficient evidence that he deserved more than that already paid to him by defendant, we reverse the determination of the Law Division, vacate the judgment, and dismiss the complaint with prejudice.

I.

We need not repeat in detail the factual background because our earlier opinion ably set it forth at length.   After concluding that the parties' long-standing insurance consulting arrangement was without provenance pursuant to the Local Public Contracts Law (LPCL), N.J.S.A. 40A:11-1 to -51, we nevertheless remanded the dispute to evaluate plaintiff's “likely quantum meruit claim.”  Kaplan I, supra, slip op. at 6. Our mandate to the Law Division was distilled to obtain an answer to the question whether “commissions and other payments [plaintiff] earned for his efforts from October 1, 2005 to January 1, 2006 were ․ fully paid.”  Ibid. “Obviously, if plaintiff has received fair and full compensation for all his efforts performed before his arrangement with the Township was terminated, he would not be entitled to recover damages in this lawsuit.”  Ibid.

The parties agreed that plaintiff was paid three monthly installments of approximately $4,583 for work done between October 1, 2005 and January 1, 2006.   The two sides could not agree, however, whether more compensation was deserved for work done earlier in negotiating favorable annual insurance contracts beginning, coincidentally, on October 1, 2005.

The Law Division, in a bench trial, considered the documentary evidence and testimony from three witnesses.   In a written opinion, the court determined that because plaintiff “expected to be paid” for his efforts in negotiating the 2005-2006 health insurance contracts and the “Township received the benefits of those services,” plaintiff had not been fully compensated by only the payment of the three installments of $4,583 each.   Instead, the court found that for the remaining nine months of the policy's annual term--a period during which plaintiff performed no services at all on behalf of defendant--the value of the virtual services that plaintiff was entitled to recover on an equitable basis was the sum of $2,750 per month.   Accordingly, the trial court entered judgment in plaintiff's favor in the amount of $24,750.   This appeal followed.

II.

Our review on appeal focuses upon whether there was sufficient credible evidence to support the trial court's findings, Real v. Radir Wheels, Inc., 198 N.J. 511, 527 n.11 (2009) (citing State v. Chun, 194 N.J. 54, 88, cert. denied, _ U.S. _, 129 S.Ct. 158, 172 L. Ed.2d 41 (2008)), tempered by the principle that a “trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.”  Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) (citations omitted).   Thus, our review of a trial judge's interpretation of law and the application of law to facts is de novo.   Mountain Hill, LLC v. Twp. Comm. of Middletown, 403 N.J.Super. 146, 193 (App.Div.2008).

Quantum meruit, “which literally means ‘as much as is deserved,’ ” Kas Oriental Rugs, Inc. v. Ellman, 394 N.J.Super. 278, 286 (App.Div.), certif. denied, 192 N.J. 74 (2007), is a remedy that “ ‘rests on the equitable principle that a person shall not be allowed to enrich himself unjustly at the expense of another.’ ”  Starkey, Kelly, Blaney & White v. Estate of Nicolaysen, 172 N.J. 60, 68 (2002) (quoting Weichert Co. Realtors v. Ryan, 128 N.J. 427, 437 (1992)).   Thus, we strive to apply the equitable remedy of quantum meruit only “when one party has conferred a benefit on another, and the circumstances are such that to deny recovery would be unjust.”  Weichert, supra, 128 N.J. at 437.   The remedy exists to prevent a windfall to one party and is “ ‘imposed by the law for the purpose of bringing about justice.’ ”   St. Barnabas Med. Ctr. v. County of Essex, 111 N.J. 67, 79 (1988) (quoting St. Paul Fire & Marine Ins. Co. v. Indem.   Ins. Co. of N. Am., 32 N.J. 17, 22 (1960)).   The test for entitlement is as follows:

To recover under a theory of quantum meruit, a plaintiff must establish:  “(1) the performance of services in good faith, (2) the acceptance of the services by the person to whom they are rendered, (3) an expectation of compensation therefor, and (4) the reasonable value of the services.”  Longo v. Shore & Reich, Ltd., 25 F.3d 94, 98 (2d Cir.1994)

[Starkey, Kelly, Blaney & White v. Estate of Nicolaysen, supra, 172 N.J. at 68.]

In this case, plaintiff's claim in quantum meruit was based on the facts that he performed services during the months prior to the October 1, 2005 commencement date for the 2005-2006 insurance contracts, resulting in the insurance being available to defendant;  that the Township accepted and benefited from those services provided;  and that plaintiff performed the services expecting compensation throughout the entire term of those insurance contracts even though he completed the negotiation services and was adequately compensated therefor long before the benefits ever accrued to defendant.   The problem with this claim is that the mandate of the remand limited plaintiff's potential quantum meruit recovery only to those activities he performed during the three-month period of October 2005 until the end of that calendar year.   He did not negotiate any of the significant insurance contracts at issue for defendant during that window of time and it was a mistaken exercise of equitable jurisdiction to award quantum meruit damages based upon those negotiations long since completed.   Essentially, plaintiff was rewarded for doing no work in the critical period (October 1, 2005 until January 1, 2006) based upon the availability of insurance to the Township in the future (January 1, 2006 until October 1, 2006).   Even though it was through plaintiff's efforts that such insurance coverage existed during the critical time period at issue, he had already received as much as he deserved for it.

The judgment of the Law Division is reversed and vacated.   The complaint is dismissed with prejudice.

PER CURIAM