Jewish Center of Sussex County v. Whale

• Decision Date: 08 December 1978
• Citation: 397 A.2d 712,165 N.J.Super. 84
• Parties: JEWISH CENTER OF SUSSEX COUNTY, Plaintiff, v. Chaim WHALE, also known as Louis R. Wolfish, Defendant.
• Court: New Jersey Superior Court

Page 84

165 N.J.Super. 84

397 A.2d 712

JEWISH CENTER OF SUSSEX COUNTY, Plaintiff, v. Chaim WHALE, also known as Louis R. Wolfish, Defendant.

Superior Court of New Jersey, Chancery Division.

Dec. 8, 1978. ^*

Lewis Stein, Succasunna, for plaintiff (Nusbaum, Stein & Goldstein, Succasunna, attorneys).

Anthony M. Mahoney, Cranford, for defendant (Bernstein & Mahoney, Cranford, attorneys).

POLOW, J. S. C.

On this motion for summary judgment plaintiff Jewish Center of Sussex County seeks rescission of a January 1, 1978 contract pursuant to which defendant was employed as its rabbi and spiritual leader. Plaintiff also demands dismissal of defendant's counterclaim for specific performance and compensatory and punitive damages, which claims are based upon plaintiff's alleged breach. The real issue is whether, during negotiations leading up to execution of the agreement, defendant had a duty to disclose his prior criminal record and disbarment as an attorney and whether his failure to make such disclosures amounts to equitable fraud justifying rescission by plaintiff congregation.

Certain relevant facts have been stipulated. Plaintiff, as a religious corporation, has the responsibility for the conduct of religious services in its synagogue in Newton, New Jersey, and operates a part-time religious school for the children of the congregation. In response to plaintiff's advertisement for a rabbi, defendant submitted his resume. Therein he listed his address, telephone number, place and year of birth, and his education, including a bachelor of arts degree, ordination as a rabbi in 1956 and experience in that calling from 1956 to 1977. The resume further indicated that references would be furnished on request. No such request was made.

After an initial interview defendant conducted Friday night and Saturday morning services at plaintiff's synagogue. On those occasions he met and spoke with many members of the congregation. Following several additional telephone conversations between defendant and an authorized officer of the congregation, the terms and salary were resolved and the parties executed an employment contract dated January 1, 1978. The contract provided, among other things, that in addition to a fixed salary the congregation would provide the rabbi with the use of a specified home at no cost, plus necessary utilities and payment of moving expenses.

In April 1978 information came to plaintiff's attention indicating that defendant had also been known as Louis R. Wolfish and that he had been convicted for devising a scheme to defraud an insurance company of $200,000 through the use of the mails. Plaintiff further ascertained that defendant had been disbarred as an attorney in the State of New York for bribing a police officer. These facts are admitted by defendant. Accordingly, plaintiff, by letter dated April 17, 1978, sought to rescind defendant's contract of employment as its rabbi and spiritual leader.

Plaintiff now moves for summary judgment pursuant to R.4:62-1 and 2. The role of the judge on a summary judgment application, as stated by Justice Brennan in Judson v. People's Bank & Trust Co. of Westfield, 17 N.J. 67, 73, 110 A.2d 24 (1954), "is to determine whether there is a genuine issue as to a material fact * * *." Defendant resists the motion, arguing that there are at least two factual issues which require resolution by plenary trial. He first asserts that whether or not his actions constitute fraud requires a determination of intent, his state of mind, which must be resolved as a question of fact and that such a determination is contingent upon whether, also as a matter of fact, there was a duty to disclose. Next, he insists that a factual issue must be resolved to determine whether any such failure to disclose, if it was fraudulent, resulted in damage or prejudice to plaintiff or provided defendant an undue or unconscientious advantage.

Defendant cites Weiland v. Tuckelson, 38 N.J.Super. 239, 118 A.2d 689 (App.Div.1956), for the proposition that generally a party owes no obligation to disclose to another, matters of which such other party has actual or constructive knowledge or as to which both parties' information or means of acquiring information is equal. Defendant asserts by affidavit that the matters which plaintiff urges defendant had a duty to disclose are matters of public record and were readily available to plaintiff for the asking. Weiland is concerned with the establishment of an easement and the reluctance of the court to estop a party from denying that claimed right merely because that party failed to object when certain improvements had been made. That proposition was drawn from an earlier easement decision, Sanders v. Reid, 131 N.J.Eq. 407, 25 A.2d 541 (Ch. 1942), in which the court went on to say:

* * * In general, a person is required to speak only when common honesty and fair dealing demand that he do so, and in order that a party may be estopped by silence, there must be on his part an intent to mislead, or at least a willingness that others should be deceived, together with knowledge or reason to suppose that someone is relying on such silence or inaction and in consequence thereof is acting or is about to act as he would not act otherwise. (at 412, 25 A.2d at 544)

Hence, defendant concludes that his intent in remaining silent and his reason to suppose that plaintiff would be deceived thereby are questions of fact which may not be resolved by summary judgment.

It has long been recognized in this State that arrangements between a pastor and his congregation are matters of contract subject to enforcement in the civil court. Jennings v. Scarborough, 56 N.J.L. 401, 409, 28 A. 559 (Sup.Ct.1849). Contracts in general are subject to rescission when they are obtained by fraud. Merchants Indem. Corp. v. Eggleston, 37 N.J. 114, 179 A.2d 505 (1962). That fraud may be either legal or equitable. Legal fraud consists of a material misrepresentation of a presently existing or past fact made with knowledge of its falsity, with the intention that the other party rely thereon, and he does so rely to his damage. Louis Schlesinger Co. v. Wilson, 22 N.J. 576, 585-586, 127 A.2d 13 (1956); Lopez v. Swyer, 115 N.J.Super. 237, 250, 279 A.2d 116 (App.Div.1971), aff'd 62 N.J. 267, 300 A.2d 563 (1973). In equitable fraud knowledge of its falsity is not required. Foont-Freedenfeld Corp. v. Electro Protective Corp., 126 N.J.Super. 254, 314 A.2d 69 (App.Div.1973), 64 N.J. 197, 314 A.2d 68 (1974).

The fact that no affirmative misrepresentation of a material fact has been made does not bar relief. The suppression of truth, the withholding of the truth when it should be disclosed, is equivalent to the expression of falsehood. Costello v. Porzelt, 116 N.J.Super. 380, 383, 282 A.2d 432 (Ch.Div.1971). The question under those circumstances is whether the failure to volunteer disclosure of certain facts amounts to fraudulent concealment, or, more specifically, whether the defendant is bound in conscience and duty to recognize that the facts so concealed are significant and material and are facts in respect to which he cannot innocently be silent. Where the circumstances warrant the conclusion that he is so bound and has such a duty, equity will provide relief. Nicholson v. Janeway, 16 N.J.Eq. 285, 287 (Cy.1863).

Fraud in * * * equity, properly includes all acts, omissions and concealments which involve a breach of legal or equitable duty, trust, or confidence justly reposed, and are injurious to another, or by which an undue and unconscientious advantage is taken of another. (Howard v. West Jersey and Seashore R. R. Co., 102 N.J.Eq. 517, 521, 141 A. 755, 757 (Ch.1928), aff'd 104 N.J.Eq. 201, 144 A. 919 (E. & A.1928))

St. John the Baptist Church v. Jenson, 118 N.J.Eq. 467, 494-495, 180 A. 379 (Ch.1935).

Professor Pomeroy sums up fraud in equity in his classic work, Equity Jurisprudence, Pt. II, c. III, § 873 at 422, as follows:

The following description is perhaps as complete and accurate as can be given so as to embrace all the varieties recognized by equity; Fraud in equity includes all willful or intentional acts, omissions, and concealments which involve a breach...