SURF & TURF DEVELOPMENT, LLC v. RUDOLPH CESTONE, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0940-05T10940-05T1

SURF & TURF DEVELOPMENT, LLC,

Plaintiff-Appellant,

v.

RUDOLPH CESTONE, JO MARIE STIVALY

and YANNETELLI FAMILY LIMITED PARTNERSHIP,

Defendants-Respondents.

_________________________________________

 

Argued September 26, 2006 - Decided October 26, 2006

Before Judges Holston and Grall.

On appeal from Superior Court of New

Jersey, Law Division, Ocean County,

L-3097-04.

C. Edward Speidel argued the cause for

appellant (Spadaccini Main, attorneys;

Mr. Speidel, on the brief).

Charles E. Starkey argued the cause for

respondents (Starkey, Kelly, Bauer & Kenneally, attorneys; Mr. Starkey, of counsel; Dina R. Khajezadeh, on the brief).

PER CURIAM

Plaintiff Surf & Turf Development, LLC (Surf & Turf) filed a complaint seeking specific performance of an oral agreement to transfer real estate and damages for fraud. The defendants are the owners of the land Rudolph Cestone, Jo Marie Stivaly, and Yannetelli Family Limited Partnership. Plaintiff appeals from a final order granting summary judgment to defendants on both claims. Because the evidence, viewed in the light most favorable to plaintiff, is insufficient to permit a verdict in plaintiff's favor on either claim, we affirm.

The property at issue is undeveloped land in the Township of Eagleswood, Ocean County, Block 1, Lot 146.03 and an area of the uplands portion of Block 1, Lot 121.02. Plaintiff intended to subdivide the land for development. The terms of a possible sale were discussed by Philip J. Thompson, who is the principal owner of Surf & Turf and a licensed real estate agent, and defendant Cestone.

In July 2002, after conducting preliminary investigations, Thompson wrote to Cestone and proposed a transaction involving Lot 146.03 at a purchase price of $720,000 for thirty-two lots at a price of $22,500 per lot. Because Cestone did not know the location of the wetlands boundary on the property, the parties were unable to determine the lot layout and negotiations stalled.

By letter dated October 30, 2003, Thompson wrote to Cestone and offered to purchase Lot 146.03 for $850,000. The letter indicated that the price was based on thirty-four lots at $25,000 per lot. On December 23, 2003, Cestone and Thompson met. According to Cestone, they discussed expanding the transaction to include a portion of Lot 121.02, raising the price to $31,000 per lot and lowering the minimum number of lots to eighteen lots. Thompson asserts that he and Cestone reached an agreement. He "requested [Cestone's] assurance that the property was [his, and] Cestone assured [him] that the property was [his] and that [they] had a deal." Thompson advised Cestone "that based on his oral representation that [they] had a deal[, he] was going to start spending money in furtherance of the deal." According to Thompson, the "deal" was an agreement for the purchase of the property described in his October 30, 2003 written offer. That property was Lot 146.03. Following that meeting, however, Thompson's attorney prepared an agreement of sale that included Lot 146.03 and an unspecified portion of Lot 121.02.

Negotiations continued. In February 2004, Thompson and Cestone met again and agreed to increase the number of lots and price per lot. The written agreement was revised by Thompson and sent to Cestone on February 19, 2004. That agreement reflected a purchase price of $1,110,000 for a minimum of thirty-six residential building lots at $31,000 per lot. On March 1, 2004, Cestone returned the February 19 draft to Thompson with several additional changes, including a modification of the description of the acreage of Lot 146.03 from fifteen to twelve and two tenths acres, an increase in the purchase price to $1,152,000, and a decrease in the minimum number of lots from twenty-three to eighteen. In June 2004, six months after the date of the alleged oral agreement, plaintiff sent a revised agreement that incorporated only some of Cestone's changes. Thereafter, negotiations broke down, and plaintiff learned that Cestone used the February 19 draft of their agreement in discussions with other potential buyers. On November 1, 2004, plaintiff filed the complaint in this action.

Summary judgment is appropriate when "there is no genuine issue as to any material fact challenged and . . . the moving party is entitled to a judgment or order as a matter of law." R. 4:46-2(c). The motion judge must "consider whether the competent evidential materials presented, when viewed in the light most favorable to [plaintiff] in consideration of the applicable evidentiary standard, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of [plaintiff]." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 523 (1995). We evaluate the evidence presented on the motion under the same standard. Kramer v. Ceiba-Geigy Corp., 371 N.J. Super. 580, 602 (App. Div. 2004); Aversano v. Palisades Interstate Parkway Comm'n, 363 N.J. Super. 266, 273-74 (App. Div. 2003).

An oral agreement to transfer an interest in property is not enforceable unless "a description of the real estate sufficient to identify it, the nature of the interest to be transferred, the existence of the agreement and the identity of the transferor and the transferee are proved by clear and convincing evidence." N.J.S.A. 25:1-13b. The evidence in this case was insufficient to identify the property or establish the existence of an oral agreement.

With respect to identification of the real estate, plaintiff provides two different descriptions of the property. Plaintiff asserts that the oral agreement was for the sale of property described in Thompson's October 23, 2003 offer to purchase, which was Lot 146.03, but the written agreement plaintiff prepared to memorialize the oral agreement referred to two lots, an unspecified portion of the uplands of Lot 121.02 and Lot 146.03. Thus, plaintiff did not identify the property that was the subject of the oral agreement as required for enforcement of an oral agreement to transfer real estate. N.J.S.A. 25:1-13b.

Evidence of the "existence of the agreement" is also inadequate. An enforceable agreement to transfer real estate requires an offer, acceptance, consideration, and a meeting of the minds on all essential terms. See Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435 (1992). "'[T]he mere anticipation of a written memorialization of an oral agreement,' provided that all the elements of a contract are present, 'does not as a matter of law vitiate an oral contract.'" Morton v. 4 Orchard Land Trust, 180 N.J. 118, 128 (2004) (quoting McBarron v. Kipling Woods L.L.C., 365 N.J. Super. 114, 116 (App. Div. 2004)). The question is whether there is sufficient evidence of the parties' intention to be bound by an oral agreement to meet the "high standard of proof" required to establish that intent. Id. at 126.

Evidence of failed attempts to memorialize an oral agreement is probative of the parties' intention to be bound. In evaluating intention, courts must consider the circumstances surrounding the oral agreement alleged. Facts such as the nature and complexity of the transaction, the relationship between the parties and the manner in which negotiations were conducted are relevant. See id. at 126-29 (discussing the statute of frauds and its application in prior cases and holding that summary judgment was appropriate where words of general acceptance were followed by a proposed written agreement and counter-proposal); Prant v. Sterling, 332 N.J. Super. 369, 370-374, 378-380 (Law Div. 1999) (prior exchange of written proposals in negotiations for the sale of land for development precluded an inference that the parties intended to be bound by a simple oral expression of agreement), aff'd o.b., 332 N.J. Super. 292 (App. Div. 2000).

In this case, the terms of a proposed written contract for the sale of land were the subject of negotiations long after the meeting that plaintiff alleges culminated in an oral agreement. For several months, the parties continued to modify terms that were essential to such an agreement - price per lot, number of lots and area of land. Plaintiff accepted changes to the essential terms included in the draft agreement that plaintiff prepared. Plaintiff did not attempt to enforce the alleged oral agreement until negotiations ended without a written contract, and plaintiff failed to even describe the essential terms of the oral agreement he alleges. Viewed in this context, a rational

factfinder could not accept plaintiff's vague claims about an oral agreement as clear and convincing evidence that the parties intended to be bound by an oral agreement. As the motion judge concluded, "the writings . . . underscore . . . that there was never a deal, or a meeting of the minds, or an agreement."

Defendant was also entitled to a grant of summary judgment on plaintiff's claim of fraud. In considering this claim, we assume the truth of the claim that on December 23, 2003, Cestone assured Thompson that they had a "deal" upon which plaintiff could rely. Brill, supra, 142 N.J. at 523.

The law governing this claim is clear. "The five elements of common-law fraud are: (1) a material misrepresentation of a presently existing or past fact; (2) knowledge or belief by the defendant of its falsity; (3) an intention that the other person rely on it; (4) reasonable reliance thereon by the other person; and (5) resulting damages." Gennari v. Weichert Co. Realtors, 148 N.J. 582, 610 (1997). Each element must be established by clear and convincing evidence. Weil v. Express Container Corp., 360 N.J. Super. 599, 613 (App. Div.), certif. denied, 177 N.J. 574 (2003).

Plaintiff claims that Cestone's assurance of a deal was untruthful. A false assertion of a present intention may qualify as a misrepresentation of fact. Stochastic Decisions, Inc. v. DiDomenico, 236 N.J. Super. 388, 396 (App. Div. 1989), certif. denied, 121 N.J. 607 (1990). But if the statement "is honestly made and the intention in fact exists, one who acts in justifiable reliance upon it cannot maintain an action of deceit if the maker for any reason changes his mind and fails or refuses to carry his expressed intention into effect." Restatement (Second) of Torts 530 comment b, subsection (1) (1977). One who wants "legal assurance that the intention honestly entertained will be carried out . . . must see that it is expressed in the form of an enforceable contract . . . ." Ibid.

We find no evidence to support an inference that Cestone was dishonest when he assured Thompson there was a deal. Plaintiff points to Cestone's discussions with other prospective buyers after February 19, 2004. However, Cestone's efforts to sell the land to others after several unsuccessful attempts to complete a written agreement with plaintiff are not probative of the falsity of Cestone's statement made on December 23, 2003. In the absence of evidence adequate to permit a finding that the assurance was false when given, it was proper to grant summary judgment to defendants on this claim. See Bilotti v. Accurate Forming Corp., 39 N.J. 184, 206 (1963) (noting that summary judgment should be awarded after full discovery if the evidence does not support an inference of falsity but concluding that a grant prior to full discovery was improper).

Affirmed.

 

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A-0940-05T1

October 26, 2006