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.
PER CURIAM.
Plaintiff Summit Resources Group, Inc. (Summit) appeals from a February 22, 2016 Law Division order granting partial summary judgment in favor of defendants Mercer Group International of New Jersey, Inc. (Mercer) and Fairless Iron & Metal, LLC (Fairless). Summit also appeals from an April 15, 2016 Law Division order granting defendants' motion for reconsideration and dismissing Summit's complaint in its entirety. This dispute arose from a contract between Summit and Mercer, which guaranteed Summit commission payments from an arrangement it brokered between Mercer and a third party for the delivery of scrap metals. For the reasons that follow, we reject Summit's arguments and affirm.
We discern the following facts from the record, viewed in the light most favorable to Summit, the non-moving party.
According to Thomas Mazza, an officer of both Mercer and Fairless, Mercer is a New Jersey corporation that "owns and operates a solid waste, construction and demolition debris, and materials recovery facility/transfer station in Trenton." Prior to 2007, Mercer was engaged in the business of scrap metal recycling and processing. Mercer transitioned this business to Fairless, its affiliate, sometime in early 2007. Fairless also engaged in the business of scrap metal recycling from October 2006 to July 2009.
In 2006, Matecun discussed a business opportunity with Mazza where defendants would purchase scrap metal from Covanta. Covanta requested Summit structure the contracts for sale to ensure they were between Covanta and Mercer or Fairless, with Summit receiving commission as the broker.
On October 25, 2006, Matecun sent Mazza a one-page document titled "Commission Agreement for Municipal Scrap and White Goods/Misc. Scrap" (Commission Agreement). After making hand-written alterations, Mazza returned the signed document to Summit. The Commission Agreement stated as follows, in relevant part:
Between November 1, 2006, and August 1, 2007, Covanta awarded Fairless five separate contracts for the purchase of Ferrous Materials from Covanta plants (Covanta Contracts). Fairless paid commissions to Summit of $5 per gross ton for four of these contracts, as required by the Commission Agreement. For the fifth contract, Fairless paid Summit $3 per gross ton. Fairless continued to pay commissions to Summit through the beginning of 2009.
However, on July 2, 2009, Fairless entered into an "Asset Purchase Agreement" (APA) with Simsmetal East, LLC (Sims), a Delaware company engaged in the scrap metal business. Sims agreed to purchase certain assets from Fairless, and the agreement listed Sims as the "Purchaser." As part of this transaction, Sims employed Mazza as a "general manager" beginning on or about July 2, where he remained until May 2, 2013. Defendants assert that following this sale, Fairless continued to exist as an entity, but it ceased all scrap recycling operations.
The APA contained a section titled "Certain Included Contracts," which listed the contracts Fairless was assigning to Sims. The Covanta Contracts were initially included in this section; however, according to Mazza, they were removed from the APA in August 2009. Instead, Sims and Covanta executed "new" agreements, beginning October 1, 2009, whereby Covanta agreed to sell scrap metal to Sims. Summit disputes whether these agreements constituted "new" contracts, claiming the parties simply changed the name on the existing Covanta Contracts from Fairless to Sims. Fairless disclosed the Commission Agreement to Sims prior to the asset sale, but the parties did not list it as an included contract in the APA.
Following the execution of the APA in July 2009, Fairless ceased purchasing scrap metal from Covanta. On July 11, 2009, Mazza informed Matecun the Commission Agreement was no longer in effect, and Fairless no longer existed. Instead, Sims purchased over 400,000 tons of scrap metal from Covanta beginning in July 2009, for which Summit did not receive commissions.
In 2013, Summit filed a complaint against Mercer, Fairless, and Sims, asserting in count one that defendants breached the
Commission Agreement by failing to pay commissions owed to Summit. In counts two through five, Summit alleged wrongful interference with contract, unjust enrichment, and sought a declaratory judgment stating the Commission Agreement remained valid and binding.
In October 2013, Summit and Sims entered into a stipulation of dismissal, whereby Summit dismissed its suit against Sims without prejudice. In 2015, Mercer and Fairless filed a motion for summary judgment, contending that under the Commission Agreement, Sims was not a "purchaser" of Fairless, a "related compan[y]" of Mercer, because Sims only purchased certain assets from Fairless. As these assets did not include the Commission Agreement or Covanta Contracts, and defendants ceased receiving scrap shipments in July 2009, the Commission Agreement effectively terminated in July 2009 following the asset sale. In response, Summit contended Sims fell within the definition of "purchaser" due to its acquisition of Fairless' assets. Summit further argued that at a minimum, this provision was ambiguous, requiring resolution by a jury to determine what the parties meant by "purchaser." Summit pointed to the APA and a 2010 indemnity agreement between Sims and Fairless, both of which identified Sims as the "Purchaser."
On January 8, 2016, after oral argument, the motion judge dismissed counts two through five of Summit's complaint and granted partial summary judgment on count one in favor of defendants. On count one, the judge found that because Sims only purchased the assets of Fairless and not the entity, "Sims [was] not a purchaser of Mercer or Fairless as the term purchaser was used in the [Commission Agreement,] and [d]efendants therefore are not liable for commissions on scrap metal purchased by Sims."
The judge denied full summary judgment, however, because he found an issue of fact as to whether defendants purchased scrap metal from Covanta from July 2009 to December 2009. This issue arose because Covanta erroneously credited certain payments from Sims as being from Fairless. Defendants moved for reconsideration and provided documents showing Fairless did not pay Covanta for scrap metal after July 2009. Summit did not dispute the new documentation but reiterated its opposition to summary judgment.
The motion judge then granted reconsideration and dismissed Summit's complaint in its entirety. This appeal followed.
We "review the trial court's grant of summary judgment de novo under the same standard as the trial court," and we accord "no special deference to the legal determinations of the trial court."
If no genuine issue of material fact is present, we focus our review on the legal interpretations of the trial judge.
We are obligated to read contracts "as a whole in a fair and common sense manner."
If a contract can be construed according to its plain language, then that language governs.
Summit urges reversal, arguing the motion judge erred as a matter of law because the plain language of the Commission Agreement required defendants to continue paying commission to Summit. Summit further contends even if the Commission Agreement was not clear and unambiguous in favor of its position, it was not clear and unambiguous in favor of defendants; therefore, we should remand for a jury determination. Essentially, Summit contends the Commission Agreement guaranteed it commission from Mercer so long as Sims, as a "purchaser" of Fairless, received scrap metals from Covanta.
In support of this position, Summit argues that contrary to the motion judge's determination, Sims was a "purchaser" of Fairless as defined in the third bullet point of the Commission Agreement. Summit contends the motion judge erred because the Commission Agreement does not distinguish between "a sale of Fairless the company" and "a sale of Fairless' assets." Summit further asserts that the reference to "your companies" in the first bullet point included asset purchasers such as Sims, especially here, where Sims "simply continued carrying on Fairless' business." Last, Summit argues the language from the fourth bullet point, "Sale of Mercer, or sale/transfer of these scrap accounts by Mercer does NOT void the above commission agreement/fees," shows defendants were bound to continue commission payments to Summit after the Fairless sale.
Having reviewed the language of the Commission Agreement, we reject Summit's arguments and affirm. First, we have noted that selling a "company" as opposed to its "assets" are two different concepts.
We further find the clear language from the first bullet point of the Commission Agreement defeats Summit's argument. This section guaranteed Summit a fee from Mercer "for each ton of raw material . . . shipped from Covanta's Delaware Valley and Hempstead plants to/through your companies." Contrary to Summit's claims, no reasonable construction of this agreement could define Sims as one of Mercer's "companies." As such, once Sims began receiving scrap metal from Covanta instead of Fairless,
For similar reasons, we reject Summit's argument that the fourth bullet point is dispositive. This provision stated that a "[s]ale of Mercer" does not void the agreement, but that did not occur here. Furthermore, while it also stated a "sale/transfer of these scrap accounts" would not void the Agreement, it is clear that, after the APA, neither Mercer companies nor a "purchaser of Mercer or related companies" continued to receive scrap metal. Therefore, we agree with the motion judge that the Commission Agreement was no longer in effect after July 2009.
Finally, as noted by the motion judge in his oral decision, Summit's position is "inequitable" because it would require defendants to pay Summit commission for scrap metal they no longer receive, for the indefinite period Sims and Covanta choose to maintain their relationship. "Perpetual contractual performance is not favored in the law and is to be avoided unless there is a clear manifestation that the parties intended it."
Summit also argues defendants breached the covenant of good faith and fair dealing implied in the Commission Agreement by endeavoring to prevent Sims from adopting the Covanta Contracts from Fairless. We find this argument lacks merit.
"[E]very contract in New Jersey contains an implied covenant of good faith and fair dealing. . . ."
Summit's argument stems from a series of emails between Mazza and another Sims manager regarding Sims' decision not to adopt the Covanta Contracts from Fairless, and an affidavit from a Covanta manager stating Covanta did not believe it entered into "new" contracts with Sims. Summit contends the evidence shows Mazza "concocted a scheme to make it appear that the Covanta Contracts were not transferred to Sims[]." Summit alleges that by pursuing this action, a jury could find Mazza "was attempting to destroy Summit's right to receive the full fruits under the Commission agreement."
However, as Summit admits in its brief, "whether the Covanta Contracts were included in Sims' purchase of Fairless . . . does not affect whether the Mercer [d]efendants remain liable for commission payment to Sims. Mercer's liability for commissions hinges only on whether Sims is a `purchaser' of Fairless under the [Commission] Agreement." Therefore, by Summit's own admission, Mazza's actions would not have impaired Summit's right to enjoy the "fruits" of the Commission Agreement.
Affirmed.
However, Sims paid for these purchases from Covanta.