Caputo v. Nice-Pak Products, Inc., NICE-PAK

• Citation: 693 A.2d 494,300 N.J.Super. 498
• Decision Date: 22 April 1997
• Docket Number: NICE-PAK
• Parties: Garry L. CAPUTO d/b/a G.C. Associates, Plaintiff-Appellant, v.PRODUCTS, INC., Defendant-Respondent.
• Court: New Jersey Superior Court – Appellate Division

Page 498

300 N.J.Super. 498

693 A.2d 494

Garry L. CAPUTO d/b/a G.C. Associates, Plaintiff-Appellant, v. NICE-PAK PRODUCTS, INC., Defendant-Respondent.

Superior Court of New Jersey,

Appellate Division.

Argued April 9, 1997.

Decided April 22, 1997.

David H.E. Bursik, West Orange, argued the cause for appellant (Bursik, Kuritsky & Giasullo, attorneys; Mr. Bursik, on the brief).

Richard D. Shapiro, Newark, argued the cause for respondent (Hellring, Lindeman, Goldstein & Siegal, attorneys; Eric A. Savage, of counsel; Mr. Shapiro, of counsel, and on the brief).

Before Judges SHEBELL, P.G. LEVY and BRAITHWAITE.

The opinion of the court was delivered by

SHEBELL, P.J.A.D.

In November 1993, plaintiff filed a complaint in the Law Division against defendant, Nice-Pak Products, Inc., his former employer, alleging defendant failed to pay plaintiff the consideration orally promised for plaintiff's assignment of his invention of a process to install a re-sealable label flap for packaging a product sold by defendant. The complaint contained three counts: 1) rescission of the contract of assignment, 2) recovery of patent royalties, and 3) unjust enrichment.

Defendant filed an answer denying plaintiff's allegations and, thereafter, moved for summary judgment. In March 1995, the judge dismissed the rescission count with prejudice for lack of subject matter jurisdiction, but denied defendant's motion as to counts two and three. In April 1996, defendant's second motion for summary judgment was denied. The case proceeded to trial before a jury; however, at the close of all evidence, a directed verdict was granted in defendant's favor on the remaining counts. Plaintiff appeals.

The facts reflect that in 1981 plaintiff began to work for defendant two days per week as an independent contractor. He was paid $1500 per month plus expenses. He worked on various packaging projects involving products sold by defendant.

In 1984, defendant began manufacturing a package of moist towelettes known as "Travel Pak." Defendant paid a royalty and used a Japanese firm's patent for the re-sealable flap. In 1987, defendant sought to avoid paying the royalty by devising its own technology. Defendant assigned the task to plaintiff, who began considering solutions for the problem.

In March 1987, plaintiff came up with an idea that led to the process of using a "corona treating" machine to selectively treat one zone on the top of the package so that the flap would be secured to the package at the treated zone, allowing the user to open the flap and then reseal it without the flap's coming off. According to plaintiff, the concept of corona treating by zone was his own new concept.

When plaintiff first proposed this method to defendant, defendant did not believe it would work, but plaintiff began experimenting. He built two of his own corona treatment machines, neither of which worked well enough. Therefore, defendant sent plaintiff and another employee to a Connecticut firm, Coretech, to have a more powerful treater machine built.

Plaintiff sent a letter to William Dwan, defendant's then senior vice president of technical services, enclosing a sketch of his invention and recommending defendant apply for patent protection. According to plaintiff, sometime in June 1987, Dwan agreed that defendant would pay for the technology to develop the process and that defendant would pay plaintiff a royalty of ten percent of the gross sales of the product.

In November 1987, plaintiff signed a written assignment of the invention to defendant, reciting a consideration "of One Dollar ($1.00) to us in hand paid by the said Assignee, and other good and valuable consideration." The assignment designated three "inventors" of the process, plaintiff, Dwan, and Saldarelli, each of whom executed the assignment. According to plaintiff, the recited consideration implicitly also included payment of the ten percent royalty promised to plaintiff in June 1987. Defendant submitted a patent application for the invention, which was ultimately granted.

In January 1989, before the patent was issued, defendant's president and owner fired plaintiff, stating that he did not need plaintiff's services anymore. He told plaintiff he had decided not to use plaintiff's invention. Plaintiff, later that year, heard the patent had issued. In 1993, while shopping in a supermarket, he discovered defendant had apparently incorporated his invention into the packaging of Travel Pak.

In July 1989, and again in November 1990, plaintiff sent defendant letters demanding he be paid royalties for his invention. The owner ignored the first letter, but called plaintiff after receiving the second letter and claimed that it was he, Dwan, and Saldarelli, who had invented the resealable flap. According to plaintiff, the owner subsequently called him and offered a settlement.

On behalf of defendant, Dwan testified that in 1989 he and plaintiff discussed the various available technologies, and that plaintiff suggested the possibility of treating the "stop area" on the package with an electrical discharge known as a corona treatment. Plaintiff proposed, and Dwan agreed, that plaintiff would attempt to develop the process in his home lab, where he would attempt to build a corona treater. After plaintiff's first two efforts did not produce good results, Dwan said he authorized plaintiff to go to the Connecticut company to investigate the possibility of buying a more powerful machine. Plaintiff and another of defendant's employees made the trips at defendant's expense, resulting in defendant's eventual purchase of a corona treater from the Connecticut company.

According to Dwan, defendant incurred the expenses of developing the zone corona treatment process, with the exception of the initial testing done by plaintiff at home, and the process was the result of the work of plaintiff, Dwan, and Saldarelli.

Dwan said that, in the fall of 1987, plaintiff asked if he thought that defendant's owner "would pay him additional money for his work on the corona treatment project," to which he responded that he did not think so because plaintiff's work was part of his "consulting arrangement." Dwan denied ever promising to pay plaintiff a ten percent royalty for use of the zone corona treatment process.

Defendant began shipping the new Travel Pak, which incorporated the zone corona treatment process, in January 1990. According to defendant's senior products manager, the change had no marketing benefit and did not result in any change in sales of the product.

At the close of plaintiff's trial evidence, defendant moved for a directed verdict, arguing there was no evidence that there was a written contract obligating defendant to pay a royalty. Plaintiff's counsel wanted to present alternative claims: 1) breach of the contractual duty to pay a royalty, or 2) if there was no valid contract, the right to recover for unjust enrichment. Terming these to be "inconsistent claims," the judge directed plaintiff's counsel to choose between the two. After plaintiff chose to proceed under unjust enrichment, the judge denied defendant's motion for a directed verdict on the unjust enrichment claim, "because I have to take everything to his [plaintiff's] benefit." The next day, the judge elaborated on his ruling, stating that while plaintiff could plead alternative forms of relief, at trial he must choose between any forms of relief that were inconsistent. He explained that, given plaintiff's position that there was a failure of consideration, there could be no valid contract; thus, plaintiff was left with attempting to prove unjust enrichment. After hearing further oral argument on the sufficiency of the proofs as to unjust enrichment, the judge denied defendant's motion at that stage. However, at the close of all evidence, the judge granted defendant's motion for a directed verdict on the only remaining claim, unjust enrichment.

On appeal, plaintiff argues that the judge wrongly perceived that the two theories were factually inconsistent. He insists that the jury should have been asked to decide whether the written assignment was a valid contract that defendant breached. If the jury found that the contract was "a nullity or breached," because defendant never made the alleged oral promise, then "the jury could have turned to the issue of unjust enrichment."

A plaintiff may plead alternative and inconsistent legal causes of action arising out of the same facts. R. 4:5-6 ("As many separate claims or defenses as the party has may be stated regardless of their consistency and whether based on legal or on equitable grounds or on both"). At issue then is whether a plaintiff in a jury trial may be compelled to choose which cause of action is to be adjudicated by the jury.

We conclude that a plaintiff who has attempted to prove both breach of contract and unjust enrichment need not choose which one will go to the jury, as long as there is sufficient evidence as to both. Under proper instructions from the judge, the jury may decide which of the two was proved, and plaintiff will be able to recover under one of the theories. It is only recovery under inconsistent theories that is not permitted. We find no reason to forbid the submission of alternative theories to the jury in circumstances such as this. See Cartel Capital Corp. v. Fireco, 81 N.J. 548, 564, 410 A.2d 674 (1980); See Farese v. McGarry, 237 N.J.Super. 385, 389, 568 A.2d 89 (App.Div.1989). Plaintiff correctly contended before the trial court that, if the jury found that there was no valid contract, the jury could then consider whether plaintiff nonetheless might recover for unjust enrichment, a cause of action that does not depend on there being an express contract. See Power-Matics, Inc. v. Ligotti, 79 N.J.Super. 294, 306, 191 A.2d 483 (App.Div.1963) (plaintiff may attempt to prove both unjust enrichment and breach of contract without also showing rescission of the...