Punctilious About Punctuation

Commerce Bancorp., Inc. v. Interarch, Inc., 417 N.J. Super. 329 (App. Div. 2010).  The question in this case revolved around Commerce Bank’s indemnification of Interarch and its principal, Shirley Hill, the wife of Commerce’s founder, Vernon Hill.  Commerce indemnified under N.J.S.A. 14A:3-5(2) of the New Jersey Business Corporation Act.  Years later, Commerce sought to recoup that payment.  On summary judgment, the Law Division found that indemnification improper as a matter of law.  The Appellate Division reversed.

The issue came down to statutory interpretation.  Though the Appellate Division, in an opinion by Judge Parrillo, cited a number of reasons for its view, a central component of its decision was the Legislature’s use of a period instead of a comma in the key statutory section.  The court noted that “[p]unctuation is part of an act and may be considered in its interpretation,” even though punctuation “is not a dispositive factor in the analysis.”  The court’s attention to punctuation paid dividends for the defendants in this case.