03-11-09 John K. Chance and Irene P. Chance, As Co-Executors of
the Estate of Keron D. Chance v. Kevin P. McCann
A-1155-07T3
This appeal concerns allegations of breach of a partnership
agreement between two attorneys, one of whom was about to retire
when the agreement was signed. The agreement called for the
continuing partner to pay the retiring partner $630,000 over
time. After the retiring partner's death, his estate sought to
recover the unpaid balance, plus interest. The remaining
partner defended the action, arguing that he only signed the
agreement because the retiring partner agreed that he was not
really owed that amount and would not seek to collect it. In a
counterclaim, the remaining partner alleged that the retiring
partner himself breached the agreement. The remaining partner
lost in the trial court through summary judgment and after trial
as to one count of the counterclaim. We reversed as to the
estate's claim and one count of the counterclaim, but affirmed
as to the other count.
We agreed with the trial court that (1) the remaining
partner was precluded by the parol evidence rule from seeking to
vary the terms of the agreement through oral testimony and (2)
equitable fraud was not applicable. We held that the remaining
partner should have been permitted to litigate certain
affirmative defenses, including laches and waiver. We concluded
that, because of the unique facts presented, this was the rare
case in which laches might bar recovery even though the suit was
filed within the six-year statute of limitations for contract
claims. The retiring partner had not brought suit himself
during the almost four years after the remaining partner stopped
making payments. We also held that the remaining partner should
have been permitted to argue that the retiring partner's own
breach excused his further performance.
We reversed the jury verdict with respect to the remaining
partner's allegation that the retiring partner breached the
agreement's requirement that he use good faith efforts to
persuade his clients to remain with the firm. We held, in part,
that the trial judge should have applied the "clear and
convincing" standard of N.J.S.A. 2A:81-2 for the entire cause of
action only if oral testimony about the decedent's statements
were required to make out a prima facie case, disagreeing with
Moran v. Estate of Pellegrino, 90 N.J. Super. 122, 124-25 (App.
Div. 1966), and adopting the reasoning of Denville Amusement Co.v. Fogelson, 84 N.J. Super. 164, 168-69 (App. Div. 1964).
