Johnson v. Benjamin Moore & Co.

• Decision Date: 28 January 2002
• Citation: 347 N.J. Super. 71,788 A.2d 906
• Parties: Theodore JOHNSON, Plaintiff-Appellant-Cross-Respondent, v. BENJAMIN MOORE & COMPANY, Defendant-Respondent-Cross-Appellant, and Peter Bishop and Ellen Singer, Defendants.
• Court: New Jersey Superior Court

788 A.2d 906

347 N.J. Super. 71

Theodore JOHNSON, Plaintiff-Appellant-Cross-Respondent, v. BENJAMIN MOORE & COMPANY, Defendant-Respondent-Cross-Appellant, and Peter Bishop and Ellen Singer, Defendants.

Superior Court of New Jersey, Appellate Division.

Argued December 3, 2001.

Decided January 28, 2002.

Walter J. Tencza, Jr., Metuchen, argued the cause for appellant-cross-respondent.

Patrick J. Monaghan, Jr., Hackensack, argued the cause for respondent-cross-appellant (Monaghan, Monaghan, Lamb & Marchisio, attorneys; Mr. Monaghan and Mark F. Heinze, on the brief).

Before Judges PETRELLA, KESTIN and STEINBERG. The opinion of the court was delivered by PETRELLA, P.J.A.D

Plaintiff, Theodore Johnson, appeals from the dismissal of his complaint that had asserted that defendant, Benjamin Moore & Co., based its Crayola Paints program on various concepts plaintiff had disclosed to it without paying for his ideas and his proposed product line. Plaintiff's proposal had described a do-it-yourself art project called Mural in a Can, consisting of a one-gallon paint can containing: a line drawing with color indications on transfer paper folded like a map; step-by-step instructions; information on color and paint quantities; brushes; masking tape; and a drop cloth. Prior to presenting his product proposal, plaintiff had defendant's representative sign a one-page letter agreeing to compensate him if his idea or product was used by defendant.

After a tortuous procedural history before many different judges, Judge Yannotti granted summary judgment in defendant's favor on the ground that plaintiff's proposal was neither novel nor original, but denied defendant's motions for counsel fees, costs and sanctions. On appeal Johnson raises the following issues:

1. Did the judge improperly grant summary judgment by not considering instructions and tools to be part of defendant's Crayola product, and by not considering paint to be part of plaintiff's proposed mural in a can product?

2. Did the judge improperly grant summary judgment by not considering evidence other than novelty in determining whether defendant had taken ideas from plaintiff's proposal?

3. Did the judge improperly grant summary judgment by holding that a pre-disclosure express written contract for sale of a non-novel idea was not enforceable without a post-disclosure agreement?

4. Did the judge improperly grant summary judgment by applying an improperly high standard of novelty?

5. Did the judge improperly grant summary judgment by not addressing whether the combination of ideas, as a whole, met a minimum standard of novelty?

6. Did the judge improperly grant summary judgment in the face of admissions of novelty by defendant's employees that created an issue of fact for the jury?

7. Did the judge improperly grant summary judgment because novelty, if any is needed, is a question of fact for the jury?

8. Did the judge improperly grant summary judgment because, in New Jersey, novelty should not be required for ideas in express contract situations when it is not required for trade secrets?

9. Did the judge improperly grant summary judgment because he did not discuss whether plaintiff's ideas might constitute trade secrets?

10. Did the judge improperly grant summary judgment because he did not address whether enforcement of the pre-disclosure agreement was in keeping with increasingly higher standards of morality?

11. Did the judge improperly grant summary judgment because he changed another judge's denial of summary judgment without any significant new material facts or new controlling law?

12. Did the judge improperly grant summary judgment by taking an improperly limited view of plaintiff's proposal as just paint-by-numbers when another judge had not taken such a view and plaintiff had not limited the proposal in such a manner?

13. Did the judge decide all issues as a matter of law so they are reviewable de novo by the Appellate Division?

14. Did the judge err by not considering the corporate receipt doctrine (not raised below)?

15. Did the judge err in not hearing plaintiff's motion to alter or amend final judgment in favor of Ellen Singer?

16. Did the judges err by dismissing or severing plaintiff's spoliation claims?

17. Did the judge err by allowing defendant to bring an amended defamation claim?

18. Are defendant's defamation and abuse of process claims barred by the entire controversy doctrine?

19. Did the judge err by failing to dismiss the defamation and abuse of process claims with prejudice based on the law of the case doctrine?

20. Should the defamation claim be dismissed for failure to state a claim under R. 4:6-2(e)?

21. Should the abuse of process claim be dismissed with prejudice?

22. Did the judge err by failing to grant sanctions against defense counsel for intentional misrepresentation?

23. Did the judge err by quashing Lee Flemming's deposition?

24. Did the judge err by ordering plaintiff to pay for David Gallinson's deposition?

Defendant cross-appeals from the denial of its requested counsel fees and costs under the offer of judgment rule, and the denial of sanctions.

I.

In his November 21, 1996 complaint, plaintiff alleged that defendant¹ and Peter Bishop, defendant's Merchandising and Graphic Design Manager, misappropriated confidential information.

In a first amended complaint, plaintiff added claims of misappropriation of trade secrets, breach of an express contract, breach of a confidential relationship, unjust enrichment, and breach of an implied contract. A second amended complaint added more facts. A third amended complaint added Ellen Singer as a defendant and counts for tortious interference with prospective economic advantage by her and Bishop; and civil conspiracy.

Defendants denied the key allegations of these complaints, raised affirmative defenses and counterclaimed for abuse of process and commercial defamation.

Summary judgment was granted in favor of Singer on plaintiff's individual claims against her. All of the other claims against Singer were merged into plaintiff's claims against defendant because those alleged actions were taken on behalf of the corporation.

On November 17, 1998, defendant's summary judgment motion was denied. Thereafter, Bishop was granted summary judgment on plaintiff's individual claims against him, and the remaining claims were merged with the claims against defendant.

Plaintiff's motion to file a fourth amended complaint adding fraudulent concealment of evidence or spoliation of evidence was granted. Two different motion judges denied plaintiff's motions to dismiss the counterclaims, and reconsideration was denied at least twice. Ultimately, on October 15, 1999, Judge Yannotti dismissed the counter-claims without prejudice to defendant filing the counterclaims in a separate action.²

Defendant thereafter moved for summary judgment. It was granted on December 3, 1999, by Judge Yannotti who filed a written opinion. Although the spoliation and fraudulent concealment of evidence claims had been previously severed from the case, Judge Yannotti ruled on those claims as well, stating that extensive discovery was complete, the parties had fully briefed these issues, and plaintiff offered no persuasive reason why these contentions should not also be considered.

After plaintiff filed a notice of appeal on December 17, 1999, defendant moved for judgment and sought costs and fees under the offer of judgment rule (R. 4:58-3). Plaintiff filed an amended notice of appeal. Final judgment was entered on February 4, 2000, in which defendant was denied counsel fees, costs and sanctions. Plaintiff filed another amended notice of appeal and defendant cross-appealed.

II.

The record is voluminous and we need not burden this opinion with all the details. However, some exposition of the facts is necessary for certain issues we discuss.

In June or July 1995, plaintiff met Bishop at defendant's offices in Montvale to discuss painting a mountain scene for defendant. Plaintiff called Bishop in August to tell him he had developed a new product idea for defendant that he wanted to submit. Bishop then suggested that plaintiff put it in writing.

Plaintiff met with Bishop on August 28, 1995, and presented the following written statement, titled "New Product Proposal," which both parties signed:

I UNDERSTAND IT IS YOUR PRACTICE TO ENTERTAIN OR RECEIVE IDEAS OR SUGGESTIONS FOR THE MERCHANDISING OF BENJAMIN MOORE PAINT PRODUCTS. I HAVE DEVELOPED SUCH AN IDEA AND PRODUCT FOR SUBMISSION AND WOULD LIKE TO DISCLOSE IT TO YOU. I UNDERSTAND THAT IF YOU USE IT YOU WILL PAY ME A REASONABLE COMPENSATION BASED ON CURRENT INDUSTRY STANDARDS.

PLEASE ACKNOWLEDGE THE RECEIPT OF THIS LETTER WITH YOUR DATED SIGNATURE BELOW.

According to plaintiff, Bishop called him around September 25, 1995, to say he was going to "higher ups," and later told him that everyone in the office thought it was a good idea. However, Bishop wanted to talk to his superiors about it again.

The proposal was for a product called Mural in a Can, explained under "Product Description," as:

THIS PRODUCT IS IN THE CATEGORY OF THE WELL KNOWN DO-IT-YOURSELF ART PROJECTS, THAT WE ALL HAVE COME TO KNOW AND LOVE. IT WILL ALLOW CREATIVE EXPRESSION FROM

THE NOVICE HOME-OWNER TO THE PROFESSIONAL PAINTER, TO PAINT A MURAL WITH PROVEN RESULTS. COMPREHENSIVE STEP BY STEP INSTRUCTIONS COMBINED WITH THE EXTENSIVE COLOR SELECTIONS AND QUALITY OF BENJAMIN MOORE PAINT WILL VIRTUALLY INSURE A FINISHED RESULT THAT WILL COMPLEMENT ANY INTERIOR OR EXTERIOR. THE PRODUCT WILL BE AVAILABLE IN SEVERAL SIZES (SUCH AS: 4' X 6', 6' X 8', 8' X 10').

The product description continued:

THE PRODUCT WILL BE PACKAGED IN A STANDARD ONE GALLON PAINT CAN. THE LABEL WILL SHOW THE ACTUAL FINISHED MURAL IN AN APPROPRIATE SETTING (EX: THE SHEEP AND LAMB'S MURAL IN A BEAUTIFUL FINISHED NURSERY SCENE). INSIDE OF THE CAN, THE CONSUMER WILL FIND EASY STEP BY STEP INSTRUCTIONS (POSSIBLE VIDEO TAPED

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