NICHOLAS W. MINOIA,
Plaintiff-Appellant,
v.
CHARLES KUSHNER; W.R. PROPERTIES
ASSOCIATES, LP; CLINTON BUILDING
ASSOCIATES, LLC; COLUMBIA TITLE
AGENCY, LLC; COLUMBIA TITLE CORP.;
HAMBURG BUILDING CORP.; HAMBURG
BUILDING ASSOCIATES, LLC; KUSHNER
COMPANIES; LITTLE EGG BUILDING
ASSOCIATES, LLC; LITTLE EGG BUILDING
CORP.; MARLTON BUILDING ASSOCIATES,
LLC; THE LANDINGS, INC.; THE LANDINGS
AT HARBORSIDE, LLC; SEA OAKS BUILDING
ASSOCIATES, LLC; WESTMINSTER CAPITAL
ASSOCIATES, LLC; WESTMINISTER COMMUNITIES;
WESTMINSTER MANAGEMENT ASSOCIATES, LP;
WESTMINSTER MORTGAGE BROKERAGE CO., LLC;
WESTMINSTER REALTY AND SALES ASSOCIATES,
LLC; WESTMINSTER REALTY CORP.,
Defendants-Respondents.
________________________________________________________________
Argued December 2, 2003 - Decided January 6, 2004
Before Judges Pressler, Ciancia and Alley.
On appeal from the Superior Court of New Jersey,
Law Division, Essex County, L-2173-02.
David Feinsilver argued the cause for appellant
(The Feinsilver Law Group, attorneys; Mr. Feinsilver
and H. Jonathan Rubinstein, on the brief).
Arthur S. Goldstein argued the cause for respondent
Charles Kushner (Wolff & Samson, attorneys;
Mr. Goldstein, on the brief).
The opinion of the court was delivered by
PRESSLER, P.J.A.D.
Plaintiff Nicholas W. Minoia appeals from the summary judgment dismissing his complaint against
defendants, Charles Kushner and a group of partnerships controlled by Kushner. We affirm.
The Kushner defendants are real estate developers. Plaintiff joined the Kushner enterprises in
April 1998 pursuant to an "Employment/Partnership Agreement" executed by plaintiff and Charles Kushner.
The relationship was severed two and a half years later when plaintiff gave
notice of resignation on September 30, 2000, effective October 30, 2000. Following negotiations
between the parties, they executed a form of settlement agreement on November 30,
2000, by which the parties exchanged mutual general releases and plaintiff received a
payment of $178,000. Plaintiff commenced this action by verified complaint some fifteen months
later. The gravamen of the complaint was that upon severance of their relationship
defendants withheld substantial money due him under their 1998 agreement and that the
severance of the relationship was actually a constructive and wrongful termination by defendant
Kushner, whose conduct was allegedly outrageous, entitling plaintiff to both contract and tort
damages.
Defendants moved for summary judgment prior to filing their answer and, of course,
prior to any discovery. Defendants relied on their statement of material facts and
supporting certifications to which plaintiff responded in accordance with R. 4:46-2(a) and (b).
It was defendants' position that all of plaintiff's claims were barred by the
November 2000 settlement agreement in which each of the parties had released the
other from all claims arising out of the relationship. Plaintiff's response was that
he was not bound by that agreement because the agreement was void and
unenforceable. More particularly, he asserted that the agreement violated the New Jersey Wage
Payment Law, N.J.S.A. 34:11-4.1 to 4.14, and specifically, N.J.S.A. 34:11-4.7, which prohibits an
employer from, among other actions, entering into an agreement with its employee withholding
or reducing wages already earned. Plaintiff also asserts that the November 2000 agreement
is void because of lack of consideration, economic duress and unconscionability. The trial
judge rejected all of these theories as unsupported by the record on the
motion and granted the motion.
While we are aware that ordinarily decision on a summary judgment should be
withheld until completion of discovery, nevertheless, discovery need not be undertaken or completed
if it will patently not change the outcome. See, e.g., Wellington v. Estate
of Wellington,
359 N.J. Super. 484, 496 (App. Div.), certif. denied,
177 N.J. 493 (2003); Smith v. Estate of Kelly,
343 N.J. Super. 480, 502 (App.
Div. 2001); Kaczorowska v. National Envelope Corp.,
342 N.J. Super. 580, 591-592 (App.
Div. 2000). Our review of the record satisfies us that this is such
a case and that plaintiff's papers do not demonstrate a prima facie basis
for relief. Summary judgment was therefore appropriately granted. See Brill v. Guardian Life
Ins. Co. of Am.,
142 N.J. 520, 540 (1995).
These are the undisputed facts. Plaintiff was highly experienced in the residential construction
and development business and was a principal in a title company. Charles Kushner
desired his services as a significant contributor to the operation of the Kushner
enterprises. The parties themselves apparently negotiated and drafted their initial agreement, denominated "Employment/Partnership
Agreement." The salient terms of that agreement were as follows. Plaintiff was given
a twenty percent partnership interest with no capital investment "in all development deals
acquired from the date of this agreement" with a single identified project excepted.
He was also given a five percent partnership interest in existing residential and
commercial properties acquired by Kushner which "are brought in or are largely the
efforts of Minoia." In addition, "as an incentive for joining the company," plaintiff
was to have a 20% partnership interest in a group of scheduled deals
that predated the agreement. Beyond these partnership interests, plaintiff was to receive a
base salary of $200,000 per year and additional compensation of $1,000 "per house
closing for those deals that Minoia is not a partner." Finally, it was
agreed that plaintiff would be president of Westminster Communities, one of the Kushner
operations, and a managing director of the Kushner Companies. According to plaintiff's certification,
his initial demand was for an annual income of about $600,000, and the
base-salary and house-closing compensation constituted a device to reach that sum until the
partnership interests began to pay off.
It appears from the record that for the first year or so of
plaintiff's affiliation with the Kushner companies, all went well. It is plaintiff's assertion
that at some point, Charles Kushner came to believe that the original agreement
was too generous and began a campaign to hound plaintiff out of the
company, a tactic, he asserts, that finally led to his resignation.
Following the notice of resignation, the settlement agreement, in the form of a
letter agreement, was negotiated. Both the original and final draft, prepared by Kushner's
general counsel, began with this statement of its scope:
This letter agreement and release ("Agreement") contains all understandings between us with respect
to your voluntary resignation and separation from (i) all consulting, independent contractor agreements,
commission agreements, operating agreements, entities, ventures and all agreements and arrangements of any
nature, and (ii) employment with W.R. Properties Associates, L.P., and all affiliates including
the family of entities commonly known as Kushner Companies (and all its affiliates)
and including but not limited to all Operating, Limited Partnership, Limited Liability Company
and other entities without limitation and including the officers and the principals thereof
such as Charles Kushner, Richard Stadtmauer and Jeffrey Freireich (collectively referred to throughout
this Agreement as "Employer.") By signing this Agreement you are resolving any and
all issues and claims related to your employment with Employer and your separation
from such employment. This Agreement also applies to independent contractor agreements and arrangements
and all arrangements, written and oral between Employer and you, including without limitation,
Employment Agreements, Partner-ship and Operating Agreements, Commission and all other agreements for the
payment of money or shares of ownership in Employer ventures and projects which
were operative prior to or during the course of employment. Subject only to
the next succeeding paragraph, this Agreement is intended to be and constitutes a
complete and final severance of all ties, employment and otherwise, between you and
Employer. There are no other written or oral agreements regarding your separation from
employment with Employer aside from what is written in this letter agreement and
release.
[Emphasis added)]
As finally drafted and executed, the agreement provided that Kushner would pay plaintiff
$178,500, an amount specified as including "without limitation any and all distributions from
partnerships or limited liability companies to which you are or may be entitled
to claim now or in the future." The agreement also included mutual general
releases. We note that Kushner had originally offered a payment of $160,500, representing
the compensation of $1,000 for the house closings in three developments. Plaintiff, however,
sought an additional $18,000 representing twenty percent of a $90,000 holdback in the
distribution from one of the partnership deals. He also requested that the release,
which originally ran only from him to Kushner be mutual, a matter of
some providence in view, as it turned out, of subsequent third-party litigation claiming
defective construction of projects plaintiff had overseen. In any event, the agreement incorporated
the changes requested by plaintiff and was executed on November 30, 2000. We
further note that the agreement gave plaintiff twenty-one days in which to consider
the agreement before its execution and to consult counsel in that regard. It
also contained an acknowledgement that plaintiff executed the agreement "freely and voluntarily and
not as a result of any coercion, duress or undue influence, and that
you have had adequate time to understand the contents of this letter." The
agreed upon sum was paid to plaintiff on the day he executed the
agreement, and nothing further was heard during the fifteen months that ensued before
this complaint was filed.
We consider plaintiff's claim under N.J.S.A. 34:11-4.7 in the light of these facts.
As we have noted, the complaint asserts that he was actually owed some
$350,000 for house closings, not the $160,000 he received. He then asserts that
the house-closing compensation constituted wages under the Act, which defines wages as "the
direct monetary compensation for labor or services rendered by an employee, where the
amount is determined on a time, task, piece, or commission basis excluding any
form of supplementary incentives and bonuses which are calculated independently of regular wages
and paid in addition thereto." N.J.S.A. 34:11-4.1c. Plaintiff claims that because this form
of compensation, $1,000 per house closing, constituted wages, any agreement required of him
by Kushner to accept less than he had already earned was null and
void pursuant to N.J.S.A. 34:11-4.7. He thus argues that the November 2000 agreement
was a proscribed agreement, relieving him of its general release provisions.
We agree that where an employee's compensation is in the form of commission,
the Act applies. See generally Winslow v. Corporate Express, Inc.,
364 N.J. Super. 128 (App. Div. 2003). We are also aware that the parties characterize the
house-closing compensation here quite disparately. Plaintiff urges that it is included commission, and
defendants urge that it is an excluded bonus or incentive not part of
regular wages. We need not address that dispute, however, because there is a
more fundamental basis for our conclusion that the Act does not apply to
the November 2000 agreement.
In our view, the difficulty with plaintiff's reliance on the Act lies in
the unique hybrid relationship between the parties expressed both in the original "Employment/Partnership
Agreement" and the letter settlement. Clearly, plaintiff was not simply a high-level executive
employee with a high-level compensation package. He was also a partner with a
significant proprietary interest in the Kushner operations. There is no question but that
plaintiff's compensation package set forth in the original agreement was an integrated combination
of wages, bonuses or commissions, and, most significantly, partnership distributions. Not only did
the above-quoted recital make clear that the settlement agreement encompassed the whole integrated
wage, incentive, and partnership distribution package, but, moreover, plaintiff himself referred to that
agreement as the "winding up [of] all the various interests."
Neither the parties' research nor our own has revealed a reported decision under
either the New Jersey Act or cognate federal legislation dealing with an integrated
hybrid scheme such as this purporting to resolve not only wage claims but
wage claims as an integral component of proprietary distribution interests. Considering plaintiff's claim
that the potential value of his proprietary interest in the Kushner enterprises was
in the neighborhood of 23 million dollars, a characterization of the settlement agreement
as an employee's release of a wage claim simply defies the sense of
plaintiff's complex and intertwined rights. In sum, we are persuaded that no single
element of the total package agreed to in 1998 is conceptually separable from
the others, and that is true of the settlement agreement as well. We
therefore conclude that the Act posed no impediment to the parties' settlement agreement
by which they "wound-up" their integrated bundle of rights and liabilities.
With respect to plaintiff's remaining arguments, there is nothing in his moving papers,
augmentable by discovery, supporting any of his theories. The contention that there was
no consideration for the agreement is without merit. It has been well-settled for
at least a century and a half that consideration lies in the mutuality
of releases. See, e.g., Administrators of Ackerman v. Executor of Vreeland,
14 N.J.
Eq. 23, 28 (Ch. 1861). And see Restatement (Second) of Contracts §§ 74 and
75 (1981).
The economic duress claim plaintiff makes is based on his need for money
at the time he executed the settlement agreement because of difficult divorce proceedings
he was going through, the fact that he had a cash-flow problem because
he had significant assets tied up in the construction of a house, and
because of downturns in the stock market. While plaintiff may well have felt
pressured by these developments, they do not constitute economic duress in the legal
sense, which has been defined as a wrongful or unlawful act that deprives
the victim of his unfettered will. See, e.g., Quigley v. KPMG Peat Marwick,
L.L.P.,
330 N.J. Super. 252, 263 (App. Div.), certif. denied,
165 N.J. 527
(2000). See also Whalen v. Schoor, DePalma & Canger Group, Inc.,
305 N.J.
Super. 501, 508 (App. Div. 1997) (duress defined as a party having overwhelming
economic power using its dominance to exert wrongful pressure on the other). We
think it plain that plaintiff's need for money in the absence of any
claim by him of deprivation of free will by reason of defendant's conduct
simply does not amount to economic duress remediable in law.
Nor do plaintiff's papers suggest a prima facie case of unconscionability. The settlement
was negotiated, not dictated. See, e.g., Howard v. Diolosa,
241 N.J. Super. 222,
230 (App. Div.), certif. denied,
122 N.J. 414 (1990). Plaintiff was free to
seek better terms and to seek judicial recourse if he felt that he
had been exploited or economically abused. The additional terms he requested were all
incorporated. The fact of the matter, undeniable from this record, is that plaintiff
made a conscious and voluntary decision, based on his perceived need for money,
to enter into the settlement agreement. After-thoughts about how much more he might
have been able to receive do not render the settlement agreement he decided
to accept unconscionable or the product of economic duress.
The summary judgment dismissing the complaint is affirmed.