BEVERLY EPSTEIN v. IHZ GROUP, INC. et al.
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
DOCKET NO. A-1607-05T51607-05T5
IHZ GROUP, INC. and IFTIKHAR
Submitted May 15, 2006 - Decided May 30, 2006
Before Judges C.S. Fisher and Miniman.
On appeal from the Superior Court of New Jersey, Chancery Division, Monmouth County, Docket No. MON-C-75-05.
Beverly Epstein, appellant pro se.
Respondents have not filed a brief.
Plaintiff Beverly Epstein has appealed the last of three orders entered over the course of six weeks, each of which purported to memorialize a settlement reached by the parties on the first day of trial. Because of a conflict between some of the orders' terms, as well as uncertainties surrounding the reasons for the entry of these three orders, we remand for findings from the trial judge so that we may decide the issues presented in this appeal on a complete record.
Our knowledge of the parties' claims and the procedural history of this case is essentially limited to what can be gathered from the transcript of the proceedings that took place on August 11, 2005. We assume from what was then stated in open court that plaintiff entered into a contract to buy from defendant Iftikhar Zaidi, or defendant IHZ Group Inc., or both (hereafter collectively and interchangeably referred to as "defendants"), real estate in Englishtown, and a house to be built by defendants on that property, for $230,000. The contract contained an estimated closing date of November 30, 1999 and obligated plaintiff to provide a deposit of $46,000.
According to the statements of counsel, the judge and the parties during the August 11, 2005 proceedings, there appears to have been no dispute that "there [were] substantial delays in the construction" of the house, and the date for the closing of title was extended because of "title problems with respect to the land, [and] liens on the property." The record also indicates that plaintiff moved into the house nearly four years prior to the time of trial. The record does not indicate what promises were then made or how this turnover of possession factored into the obligations contained in the parties' contract of sale.
Plaintiff commenced suit in 2005. As noted earlier, the appendix does not include a copy of the complaint, but we assume it contained a demand for an order of specific performance and, in furtherance of that claim, a demand that defendants clear title to the property prior to closing. We also gather from the August 11, 2005 proceedings that plaintiff did not appear for a purported time of the essence closing date defendants unilaterally attempted to set. Because plaintiff did not then appear, defendants apparently took the positions that they were no longer obligated to perform the contract, see, e.g., Marioni v. 94 Broadway, Inc., 374 N.J. Super. 588, 603-04 (App. Div.), certif. denied, 183 N.J. 591 (2005), and that plaintiff was obligated to vacate the property and compensate defendants for the property's fair rental value for having possessed the property for the 46 months that preceded the trial date. Considering there was no dispute that the total amount of the liens on the property exceeded the contract price, we question but need not decide whether defendants' attempt to set a time of the essence closing date could have had any legal significance. Since a party seeking performance of a contract must be ready, willing and able to perform his or her part of the bargain, we think it unlikely that a seller who is unable to provide clear title to property is in the position to complain of a buyer's failure to appear for a time of the essence closing set by the seller. See Stamato v. Agamie, 24 N.J. 309, 316 (1957).
The trial of this action, as we have already observed, commenced on August 11, 2005. Plaintiff was called as the first witness. Her brief testimony about the contractual terms, and the liens on the property, was interrupted when the trial judge invited counsel into chambers for a settlement discussion.
When counsel emerged, it was announced in open court that the case had been settled. As can be pieced together from what is contained in the transcript, it appears that the parties agreed upon the following terms:
-- closing would occur within 60 days, or else plaintiff would thereafter vacate the premises;
-- plaintiff would pay certain liens, judgments and obligations incurred by defen-dants, namely, those referred to in a foreclosure complaint that had been brought by an unidentified mortgagee on this property;
-- the obligations which plaintiff agreed to assume as part of the settlement agreement were:
(1) the unidentified mortgage on the property "in the area of $280,285";
(2) a judgment held by Freehold Cart-age estimated to be "about $3,500"; and
(3) a lien held by an entity referred to as "Fresh and Fancy" of "approxi-mately [$]42,000";
-- plaintiff agreed to pay at closing "the real estate commission, recording costs and realty transfer fee";
-- any other judgments, liens or obligations interfering with the transfer of clear title to the property, including an obligation to Four Star Construction discussed by the parties, would remain defendants' responsi-bility.
Although not expressly mentioned, implicit within the settlement agreement was defendants' release of their claim for the rental value of the property, and defendants' waiver of their claim that the contract was no longer enforceable due to plaintiff's failure to appear for the purported time of the essence closing date. Also, although the parties expressly agreed that plaintiff would remove herself from the property if she did not go to a closing within the time agreed upon, the agreement does not appear to contain terms regarding the consequences of that choice.
Following the attorneys' description of the settlement agreement, the trial judge placed the parties under oath and thoroughly questioned them as to their understanding of the agreement and whether they had freely and voluntarily entered into it. When the trial judge asked plaintiff whether she understood the agreement, she replied, "[n]ot really, I don't, sir," prompting the trial judge to summarize the agreement in the following way:
Do you settle the case under the following terms and conditions? That you will take title to the property and pay off the mortgage, the Fresh and Fancy lien, the Freehold Cartage lien. Any and all other liens will be the responsibility of the seller. That you will be responsible for any real estate commission, if there is one[,] and any realty transfer fee[,] and you will pay your own attorney. That should give you the title to the property for about $325,000 it looks like. Do you understand that?
Plaintiff answered that she did understand, but when she later wavered in responding to additional questions, the judge described a possible outcome to the litigation if the matter did not settle as the means of suggesting to plaintiff the reasonableness of the settlement:
[I]f I find that you unreasonably did not show up at the [alleged time of the essence] closing, you lose this case. Which means that you probably get your $46,000 [deposit] back and you walk away from the house. Now, although you say . . . [that the property is] not worth more than . . . $500,000, I know cemetary [sic] lots in this county that are selling for close to that these days. So you're basically making a decision that the house is worth more than $325,000 and that it is not worth the risk of losing it. And that's the decision you have to make.
With this description of the potentially dire consequences for plaintiff if she rejected the settlement agreement and lost at trial, the judge again asked whether she "wish[ed] to enter into this settlement." Plaintiff responded affirmatively.
On August 29, 2005, the trial judge entered an order that described the terms of the settlement -- but without mentioning the $325,000 amount that figured somewhat prominently in the August 11 oral description of the settlement agreement -- in the following way:
1. That within 60 days from August 11, 2005 but no later than October 12, 2005, the [p]laintiff will close title to the subject property, or vacate the subject property and relinquish all claims thereto.
2. Plaintiff to clear title to the extent of the mortgage foreclosure, judgments of record as contained in the judgment search appended to the mortgage foreclosure complaint on the subject property, with the exception of Four Star Construction lien, which has not been reduced to a judgment. Freehold Cartage, which has an additional judgment against [d]efendants will also be paid off by [p]laintiff.
3. Plaintiff to pay all closing expenses except for [d]efendants' attorney's fees.
4. Defendants will not further encumber the subject property and agree that any judgments aside from those mentioned in paragraph 2 above will be [their] responsi-bility.
5. The [c]ourt will assist the parties in effectuating this settlement in light of the mortgage foreclosure action.
For reasons not disclosed in the sketchy record on appeal, another order memorializing the settlement agreement was entered on September 13, 2005. This order essentially reiterated the terms of the prior order except that it expressly referenced the $325,000 figure that lies at the heart of this appeal, stating that defendants would not "further encumber the subject property" and that defendants agreed "that any liens on the property exceeding $325,000.00, exclusive of closing costs and fees, will be the responsibility of the [d]efendants" (emphasis added).
For reasons also not disclosed in the record on appeal, on October 11, 2005, the judge entered a third order, which was labeled by its drafter (defendants' attorney) as an "Order of Settlement." Beneath that typed label, in order to further identify the function of the order, the judge wrote the following by hand: "Superseding prior orders of 8/29/05 and 9/13/05."
The October 11, 2005 order bears considerable similarities to the earlier orders, but it significantly differs from the September 13, 2005 order in one critical respect. Contrary to the September 13, 2005 order, the October 11, 2005 order did not render defendants liable for that part of the collective amount of the three liens, which plaintiff agreed to pay off, that exceeded $325,000, but only directed plaintiff to pay off the three liens without regard for the amount owed on them. That is, the October 11, 2005 order stated that "[d]efendants . . . agree that any judgments aside from [the mortgage, the Freehold Cartage judgment and the Fresh and Fancy lien] will be [defendants'] responsibility," and did not state that defendants would bear any responsibility for that portion of those three liens in excess of $325,000. To the contrary, the October 11, 2005 order stated that plaintiff would be responsible for the mortgage, Freehold Cartage judgment, and the Fresh and Fancy lien regardless of their collective amount, since the judge wrote in by hand at the bottom of the order: "The request for a cap of $325,000 is denied and the prior orders of 8/29/05 and 9/13/05 are vacated."
Plaintiff filed a timely appeal from the October 11, 2005 order. We discern from her pro se brief that plaintiff contends that the settlement agreement requires that she pay only the three liens expressly mentioned, but in a collective amount no greater than $325,000; in short, she claims that the September 13, 2005 order correctly memorialized the settlement agreement. She further argues that the accuracy of the September 13, 2005 order is demonstrated by the tenor of the oral settlement agreement and many specific comments made during the August 11, 2005 proceedings. For example, the judge stated at one point, when plaintiff hesitated to agree to settle, that her purchase of this home "for $325,000" is a "good buy." The $325,000 figure also featured prominently in other portions of the proceedings, some of which we quoted earlier in this opinion. Plaintiff argues that the October 11, 2005 order departs from the material terms of the settlement agreement by removing the "cap" on her alleged agreement to assume only $325,000 of the collective amount of the mortgage, the Freehold Cartage judgment and the Fresh and Fancy lien.
This question about which of the orders accurately memorialized the settlement agreement ultimately proved more than academic. Plaintiff asserts that at closing she was obligated to pay more than $325,000 against these liens to obtain title. As a result, plaintiff seeks the vacation of the third order and, we assume, enforcement of the terms of the second order.
As we have indicated, our review of these contentions is frustrated by the limited record presented on appeal. We are unaware of what motion, if any, was filed, which led to the entry of the October 11, 2005 order; we are also unaware of what was presented to the court at that time which led the judge to deny the request for a "cap of $325,000." We are also unaware of the reasons then expressed by the trial judge, if any, for rejecting plaintiff's request and for entering the October 11, 2005 order.
Rather than attempt to resolve the issues raised by plaintiff on appeal on this uncertain record, we deem it appropriate to remand to the trial judge for the rendering of findings as to the basis for his entry of the October 11, 2005 order, as well as a description of his reasons for entering the two earlier orders and any other relevant circumstances and proceedings that may shed light on the issues presented.
These findings shall be filed and served within 60 days. Plaintiff shall file, no later than 30 days thereafter, a supplemental appendix that conforms to the requirements of R. 2:6-1, and also, if she so chooses, a supplemental brief addressing the impact of these anticipated findings on the issues raised on appeal.
Remanded. We retain jurisdiction.
The appendix should have provided all those things necessary for our complete understanding of the issues raised on appeal, but regrettably falls far short of the requirements of R. 2:6-1(a). Plaintiff did not include in her appendix a copy of the complaint or any of the other pleadings filed in the trial court. R. 2:6-1(a)(1)(A). The August 11, 2005 transcript reveals that the judge had entered a pretrial order; that, too, was not included in the appendix, as required. Ibid. Instead, the appendix that plaintiff filed includes only copies of the three orders entered by the trial judge after the case was settled, the notice of appeal, the parties' contract, and a closing statement.
Defendant IHZ Group Inc. was the party which contracted with plaintiff. Defendant Zaidi, however, apparently possessed some interest, or assumed IHZ's interest, in the property. This is suggested by the following colloquy between the trial judge and defense counsel:
THE COURT: . . . And is [the property] owned in a corporation's name?
MR. GABOR: It's in Mr. Zaidi's name.
THE COURT: But it was in the -- who is the contract seller?
MR. GABOR: Well, now it would be Mr. Zaidi. Originally it was IHZ.
We base that assumption only on the trial court docket number. There is nothing else before us that would indicate when suit was filed.
We also observe that the purported time of the essence closing was scheduled by defendants for December 19, 2003. Since, after that date, plaintiff continued to reside on the property, and since suit was not filed until well over a year later (and then not by defendants but by plaintiff), it is unclear whether defendants' apparent inaction after the December 19, 2003 closing date would support an argument that defendants waived the consequences of plaintiff's failure to appear for that closing. See, e.g., Finn v. Glick, 42 N.J. Super. 514, 518 (App. Div. 1956).
For example, the settlement agreement does not disclose (1) what disposition would be made of plaintiff's $46,000 deposit or (2) what would become of defendants' demand for damages based upon plaintiff's possession of the property for 46 months, if plaintiff chose not to go to a closing but instead vacated the premises.
We observe that the October 11, 2005 order does not indicate, as is the custom, whether the judge set forth his reasons for entering that order in either a written or oral decision. The absence of such a notation ordinarily conveys the fact that no reasons were expressed. Considering our present disposition of the appeal, however, we need not speculate in this regard. If the answers to our questions are contained in some findings of which we are not presently aware, we assume the trial judge will reference them in the written findings that we now mandate.
May 30, 2006