Opinion
DOCKET NO. A-4122-11T3
02-04-2013
LARRY BIAGI, Plaintiff-Respondent, v. DARRYL HILL and SHARON HILL, Defendants-Appellants.
Hoffman DiMuzio, attorneys for appellants (John P. Ciocco, on the brief). Larry Biagi, respondent pro se.
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Graves and Guadagno.
On appeal from Superior Court of New Jersey, Law Division, Special Civil Part, Cumberland County, Docket No. DC-003262-11.
Hoffman DiMuzio, attorneys for appellants (John P. Ciocco, on the brief).
Larry Biagi, respondent pro se. PER CURIAM
Defendants Darryl Hill and Sharon Hill appeal from a March 28, 2012 order denying their motion to vacate a judgment in favor of plaintiff Larry Biagi. For the reasons that follow, we reverse and remand for further proceedings.
In a complaint filed on July 20, 2011, plaintiff alleged that defendants received "aluminum diamond plate and stainless steel tubing" from him, but they refused to either pay for the merchandise or return it. Plaintiff requested a judgment in the amount of $8975 with interest and court costs. Defendants disputed plaintiff's claims in their answer to the complaint.
On the day of trial, October 12, 2011, the parties entered into a written "Stipulation of Settlement." The agreement provided that defendants would fabricate and install Bilco-style cellar doors at plaintiff's mother's residence and pay plaintiff $100. The agreement specified that defendants were to supply the materials and "personally" install the doors by no later than November 15, 2011. In exchange, plaintiff agreed to dismiss his complaint. The agreement further provided that plaintiff could apply to the court for a judgment, without notice to defendants, if defendants failed to comply with the agreement.
Defendants constructed the cellar doors, but they were not installed by November 15, 2011. Three days later, plaintiff obtained a judgment against defendants in the amount of $8875.
After learning of the judgment, defendants filed a motion to vacate on February 15, 2012. Defendants also asked the court to enforce the part of the settlement agreement that required them to fabricate and deliver the cellar doors and to "reform any aspect of the contract which [was] no longer viable due to plaintiff's intentionally obstructive conduct." In a supporting certification, defendant Darryl Hill stated he completed the doors in accordance with the measurements he took on November 5, 2011, but when he went to plaintiff's mother's home to install the doors on November 15, 2011, he was not allowed on the property. Hill certified that an individual told him he was not permitted to enter onto the property or to install the doors because he "did not have a permit from the Township." Hill also certified that November 15, 2011, was the first time that he was told he "should obtain a permit to install the Bilco doors."
In a responding certification, plaintiff acknowledged that Hill was not permitted to install the doors because he had not obtained a building permit:
Mr. Hill arrived at 3:50 p.m. on November 15, 2011 with a worker. He did not have a building permit. He also did not have a home improvement contractor's license or proof of liability or workers' compensation insurance, all of which are required by the Township to issue the permit. He was not treated discourteously. He was not permitted to commence work.
Mr. Hill has been engaged in the contracting business for at least ten years and I am sure he is aware of the requirement that a contractor get a permit as well as the Township's requirements concerning contractors who apply for such permits, and
the State requirement of Workers' Compensation insurance when a worker is employed.
It is my understanding that the Township can impose penalties upon the owner of the premises if improvements that require a building permit are done without the permit having been obtained.
. . . .
Further, defendants' Motion should be denied because the agreement puts the burden of installation on him. If he was not willing to meet the Township's requirements for that installation, he was bound to hire someone who could, to fulfill his end of the contract. It is now over three months since he was to have installed the doors and his only offer is that I should allow him to install the doors illegally, or not at all.
During oral argument on March 28, 2012, defendants' attorney stated that plaintiff knew of the permit requirement, but "didn't say anything, and basically set a trap for my client. So when [Hill] shows up to install the doors . . . [some] guy kicked my client off the property." Defendants' attorney also argued that the agreement should not be enforced due to a mutual mistake:
Mr. Biagi knows my client personally. They used to be friends. He knows that my client has not had a business for more than five years. And he was never in the business of installing things. He was the welder.
Mr. Biagi is saying that . . . not only do you need a permit, you need a business.
You need insurance, business insurance, Worker's Comp[ensation], all these things. That's what he's now alleging.
My client simply cannot do it. He doesn't have the business. That was a mistake that both parties made at the time, and the contract's impossible.
Following oral argument, the court found that the parties entered into the stipulation of settlement "freely and voluntarily" and were "bound by the terms of their settlement agreement." Accordingly, the court denied defendants' motion to vacate the judgment.
On appeal, defendants argue the settlement agreement did not require them to obtain a building permit, and there was "no meeting of the minds" with regard to who would obtain a permit, if one was necessary. In reply, plaintiff contends "both parties understood the terms of the settlement," and defendants were aware of the consequences if they failed to install the doors by November 15, 2011.
"A settlement agreement between parties to a lawsuit is a contract." Nolan v. Lee Ho, 120 N.J. 465, 472 (1990) (citing Pascarella v. Bruck, 190 N.J. Super. 118, 124 (App. Div.), certif. denied, 94 N.J. 600 (1983)). "As a general rule, courts should enforce contracts as the parties intended." Pacifico v. Pacifico, 190 N.J. 258, 266 (2007). Consequently, "[w]hen the contract is silent, it is necessary to examine the pertinent provisions in the agreement and the surrounding circumstances to ascertain that intent." Broadway Maint. Corp. v. Rutgers, State Univ. , 90 N.J. 253, 260 (1982); see also Hall v. Bd. of Educ, 125 N.J. 299, 306 (1991) ("If contract terms are unspecific or vague, extrinsic evidence may be used to shed light on the mutual understanding of the parties."); James Talcott, Inc. v. H. Corenzwit & Co., 76 N.J. 305, 312 (1977) ("We must ascertain the parties' intention from a consideration of all the surrounding circumstances.") (citing Atl. N. Airlines, Inc. v. Schwimmer, 12 N.J. 293, 301-02 (1953)).
In determining the parties' intent, courts "must consider the relations of the parties, the attendant circumstances, and the objects they were trying to attain. An agreement must be construed in the context of the circumstances under which it was entered into and it must be accorded a rational meaning in keeping with the express general purpose." Tessmar v. Grosner, 23 N.J. 193, 201 (1957). "Even where the intention is doubtful or obscure, the most fair and reasonable construction, imputing the least hardship on either of the contracting parties, should be adopted, so that neither will have an unfair or unreasonable advantage over the other." Ibid. (internal citation omitted).
It is equally well settled that "[a] contract arises from offer and acceptance, and must be sufficiently definite 'that the performance to be rendered by each party can be ascertained with reasonable certainty.'" Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435 (1992) (quoting W. Caldwell v. Caldwell, 26 N.J. 24-25 (1958)). If the parties "agree on essential terms and manifest an intention to be bound by those terms, they have created an enforceable contract." Ibid. On the other hand, if the parties do not agree on one or more of the essential terms of the contract, "courts generally hold that the agreement is unenforceable." Ibid.; see also Malaker Corp. Stockholders Protective Comm. v. First Jersey Nat'l Bank, 163 N.J. Super. 463, 474 (App. Div. 1978) (noting there is no contract when an agreement is "so deficient in the specification of its essential terms that the performance by each party cannot be ascertained with reasonable certainty"), certif. denied, 79 N.J. 488 (1979).
In this case, the stipulation of settlement does not obligate either of the parties to obtain a building permit, and we conclude that the parties should have been allowed to present parole evidence regarding the surrounding circumstances and their actual intentions when they entered into the agreement. We also find that an evidentiary hearing is warranted to address defendants' disputed claim that the agreement should be rescinded or reformed (and the judgment vacated), because plaintiff breached his duty to act in good faith and to deal fairly with defendants. See, e.g., Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Ctr. Assocs., 182 N.J. 210, 224 (2005) ("Every party to a contract . . . is bound by a duty of good faith and fair dealing in both the performance and enforcement of the contract.").
Reversed and remanded for further proceedings consistent with this opinion. Jurisdiction is not retained.
I hereby certify that the foregoing is a true copy of the original on file in my office.
CLERK OF THE APPELLATE DIVISION