ARCHIE SCHWARTZ COMPANY v. EDEN WOOD REALTY, a DIVISION OF NEU HOLDINGS CORP. et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2108-04T22108-04T2

ARCHIE SCHWARTZ COMPANY,

a New Jersey Corporation,

Plaintiff-Appellant,

v.

EDEN WOOD REALTY, a DIVISION

OF NEU HOLDINGS CORP. and

GLOBAL, INC.,

Defendants-Respondents,

EDEN WOOD REALTY, LLC.,

Third-Party Plaintiff-

Respondent,

v.

ELMER SCHWARTZ,

Third-Party Defendant-

Appellant.

 

Argued December 13, 2005 - Decided May 4, 2006

Before Judges Kestin and Hoens.

On appeal from the Superior Court of New Jersey, Law Division, Morris County, Docket No. L-3446-02.

Edward M. Callahan, Jr., argued the cause for appellants Archie Schwartz Company and Elmer Schwartz (Clancy, Callahan & Smith, attorneys; Mr. Callahan and Joseph A. Rizzo, on the brief).

Stuart M. Lederman argued the cause for respondent Eden Wood Realty (Riker Danzig Scherer Hyland & Perretti, attorneys; Mr. Lederman, of counsel; Jill A. Bronner, on the brief).

Wilentz Goldman & Spitzer, attorneys for respondent Global, Inc. (Lawrence C. Weiner, on the letter relying on the brief filed on behalf of respondent Eden Wood Realty).

PER CURIAM

Plaintiff Archie Schwartz Company and third-party defendant Elmer Schwartz appeal from the July 23, 2004 order of the Law Division granting summary judgment in favor of defendants Eden Wood Realty, a Division of Neu Holdings Corp., and Global, Inc., and from the October 25, 2004 order denying their motion for reconsideration. We affirm.

Defendant Eden Wood owns commercial premises in Avenel. In 1996, Eden Wood entered into an agreement with defendant Global pursuant to which it agreed to lease a portion of its premises to Global for a period of five years. At the same time, Eden Wood entered into a Commission Agreement with plaintiff, which had acted as the procuring broker for the deal. The Commission Agreement provided that the total amount of the commission due on the five-year lease would be paid to plaintiff in equal one-third installments beginning with Eden Wood's receipt of the first month's rent and ending twelve months after the inception of the lease. The Commission Agreement further provided that if the lease with Global were renewed or extended, "either through a lease renewal, a separate agreement or an option" a further commission would be paid to plaintiff "in an amount equal to five percent (5%) of the net rent payable to" Eden Wood, in accordance with the one-third installment arrangement.

During the lease period, Eden Wood and Global twice agreed that Global would lease additional space subject to the same terms as set forth in the February 1996 lease, including the term fixing February 2001 as the end of that lease. Plaintiff concedes that Eden Wood paid it the commission due for the additional space pursuant to the terms of the 1996 lease.

When the initial five-year Global lease expired on February 28, 2001, Global did not vacate the premises, but remained as a tenant. In July 2002, plaintiff filed a complaint alleging that Global had exercised its option under the original lease for an automatic renewal of the lease, that it had begun a second five-year tenancy term and that Eden Wood was therefore obligated to pay plaintiff the full commission due under the 1996 Commission Agreement for that additional lease period. The July 2002 complaint included three counts sounding in breach of contract and quantum meruit. In addition to the claim that the lease had been renewed, that complaint also sought commissions due for additional space that Global had leased beginning in April 2002.

The complaint alleged that Global had exercised its automatic renewal right, entitling plaintiff to payment of its full commission in three installments over the first year. As the first year had expired, plaintiff demanded the full commission be paid immediately. According to Eden Wood, however, Global remained only as a month-to-month tenant. Eden Wood asserted the parties did not enter into a new lease which would obligate Global or Eden Wood to a further five-year term. Eden Wood argued plaintiff was, at best, entitled to a commission equal to five percent of the monthly rent it received from Global for as long as Global stayed.

Shortly after the July 2002 complaint was filed, plaintiff and Eden Wood agreed to a settlement. According to an August 9, 2002 letter written by plaintiff to confirm the terms of that settlement agreement, Eden Wood agreed to pay plaintiff a lump-sum $65,154.54 representing past due commissions calculated in accordance with Global's status as a month-to-month tenant. In addition, Eden Wood agreed to pay plaintiff a commission of 5% on each of Global's actual monthly rental payments thereafter. In pertinent part, the letter confirming the settlement agreement included a final sentence noting that Eden Wood had agreed to pay plaintiff a lump-sum commission, as required by the 1996 Commission Agreement, equal to five percent of the total net rent owed "if [l]eases between the landlord [Eden Wood] and tenant [Global] are executed . . . ." Plaintiff voluntarily dismissed the July 2002 complaint thereafter.

On October 29, 2002, plaintiff filed its second complaint. That complaint asserted that Eden Wood had breached the terms of the settlement agreement by failing to pay commissions that were due in September and October 2002. In addition, however, the October 2002 complaint reiterated the assertions that had been included in the July 2002 complaint concerning the renewal of the lease and plaintiff's entitlement to commissions due on the entire five-year lease period pursuant to the terms of the 1996 Commission Agreement. The October 2002 complaint was subsequently amended twice, the particulars of which are not relevant to the issues on appeal. In response to the first amended complaint, plaintiff filed a counterclaim and a third-party complaint against plaintiff's principal, Elmer Schwartz, individually.

Following discovery, in June 2004, Eden Wood moved for summary judgment. Eden Wood asserted that all of the claims in the October 2002 complaint had been resolved by the August 2002 settlement agreement. Plaintiff cross-moved for summary judgment on its breach of contract claim. The motion and cross-motion centered on a dispute about whether Global had or had not entered into a renewal of the original lease within the meaning of the last sentence of the August 2002 letter confirming the settlement agreement. Eden Wood asserted that Global was, both before the August 2002 settlement and at all times thereafter, a month-to-month tenant. Eden Wood argued that all of the issues relating to plaintiff's entitlement to commissions had been resolved in the August 2002 settlement. Eden Wood asserted that it was entitled therefore to summary judgment on all of the issues in the October 2002 complaint, as amended.

Plaintiff asserted that it had learned during discovery that Global had written to Eden Wood and had expressed a desire to renew the lease, that Global had entered into agreements with others based on its apparent belief that it was entitled to remain in the space for the full five-year term of a renewed lease, and that Eden Wood had acknowledged that the lease had been renewed. Plaintiff pointed to Global's May 31, 2000 letter expressing its intention to renew and to an August 2001 fax from Eden Wood's principal, Amy Neu, acknowledging a renewal. Plaintiff therefore argued that it was entitled to summary judgment on its breach of contract claim because the parties had in fact agreed to a renewal of the lease but had failed to pay plaintiff its full commission. Plaintiff also reasoned that because the lease had been renewed, the July 2002 settlement did not preclude it from recovering from Eden Wood. Plaintiff, arguing in the alternative, contended that either the settlement agreement itself had been based on a misrepresentation of fact about Global's renewal, or that the contingency set forth in the August 2002 agreement respecting renewal of the lease had subsequently occurred.

In response, Eden Wood argued that it had not misrepresented the status of Global's lease. It asserted that Global's letter had been sent too late to comply with the automatic renewal terms of the original lease and had referred to different terms, thus failing to operate as an automatic renewal of the lease for a further five-year term. Eden Wood argued that, as a result, Global had only the rights of a month-to-month tenant, that no further agreement respecting a lease had been executed as contemplated in the August 2002 settlement letter and that plaintiff's claim that it was entitled to a commission based on a lease renewal was meritless.

On July 23, 2004, after hearing and considering the arguments of the parties, the Law Division judge granted Eden Wood's motion for summary judgment and denied plaintiff's cross-motion. Although the judge did not set forth her findings of fact and conclusions of law on the record as such, we have derived the essential basis for her decision from statements she made during extended colloquy with counsel on that date.

The motion judge concluded that when the parties settled in August 2002, they were aware that the Commission Agreement entitled plaintiff to a commission either in the event of an exercise of the automatic renewal of the lease or in the event of the execution of a new lease with different terms. As the judge noted, at the time of the settlement, plaintiff was also aware that Global was still in possession of the premises and that Eden Wood represented that the nature of the tenancy was merely a month-to-month tenancy without a fixed term. The judge reasoned that the August 2002 settlement's reference to the "execution" of a lease as the trigger for a lump-sum payment of the commission therefore meant the formal execution of a new lease. She reasoned that because the exercise of the automatic renewal clause would not have required a new writing or an "execution" of a lease, the settlement agreement barred plaintiff from seeking relief based on an automatic renewal. She reasoned that even if plaintiff had uncovered evidence that Global had effectively exercised the automatic renewal right, because no execution of an agreement was required, the contingency set forth in the last sentence of the settlement agreement had not been fulfilled.

The motion judge therefore granted defendant Eden Wood's motion and denied plaintiff's cross-motion for summary judgment. In doing so, however, she noted on the July 23, 2004 order that plaintiff was permitted to file a motion for reconsideration within thirty days calling to the court's attention such additional evidence as might explain the meaning of the final sentence of the August 2002 letter confirming the terms of the settlement agreement.

Plaintiff moved for reconsideration, asserting that the judge had overlooked or failed to appreciate the significance of the exchange of letters between Global and Eden Wood concerning the automatic renewal. Plaintiff asserted that these documents formed the basis for a renewed lease and met the requirement of the settlement agreement that a new lease be executed, entitling plaintiff to its full lump-sum commission. In the alternative, plaintiff asserted that the court had overlooked the claim in its October 2002 complaint asserting that the settlement agreement had been based on fraud.

Eden Wood opposed the reconsideration motion, arguing that plaintiff's proffered evidence was not new or different from the record on which the judge had previously based her decision. The judge denied the reconsideration motion without entertaining further oral argument, essentially argeeing with Eden Wood that plaintiff had not presented any evidence or argument sufficient to meet the test for reconsideration.

On appeal, plaintiff argues that the motion judge erred in finding that the October 2002 complaint failed to allege a breach of the settlement agreement, failed to properly evaluate the evidence about whether the parties contemplated the possibility of an automatic lease renewal during their negotiations, and overlooked the fraud-based assertions in the complaint. In addition, plaintiff contends that the judge erred in denying its cross-motion for summary judgment and in denying the motion for reconsideration without entertaining oral argument.

We have considered each of these arguments in light of the record and the briefs submitted by the parties and have concluded that these arguments are unpersuasive. We therefore affirm the July 23, 2004 orders granting defendants' motion for summary judgment and denying plaintiff's cross-motion for summary judgment, and the October 25, 2004 order denying plaintiff's motion for reconsideration.

First, we find no merit in plaintiff's argument that the motion judge overlooked the allegation in the October 2002 complaint that Eden Wood had breached the settlement agreement. Although the motion judge referred to the July 2002 and the October 2002 complaints as being the same or identical, it is apparent from the colloquy concerning the meaning of the August 2002 letter confirming the settlement that the judge recognized that the second complaint included a claim for breach of the settlement agreement. Indeed, much of the judge's reasoning rested on her understanding of the meaning of the settlement agreement and her evaluation of whether, as a matter of fact, there had been an execution of a new lease as called for by the August 2002 letter. The term relating to the execution of a new lease was fundamental to plaintiff's assertion in the second complaint that the failure to pay a lump-sum commission was a breach of that agreement.

Second, we reject plaintiff's argument that the judge improperly permitted defendants to offer parol evidence concerning the settlement discussions while preventing plaintiff from doing likewise. This argument rests on colloquy during the July 23, 2004 hearing about whether the parties considered the possibility of an automatic renewal and the effect thereof during the negotiations that led to the August 2002 settlement. Although plaintiff characterizes this as parol evidence and asserts that it was precluded from countering it with other evidence concerning the intention of the parties or their understanding of the meaning of the settlement agreement, the judge did not consider this evidence or its effect on the intent of the parties. Rather, she concluded that the terms of the settlement agreement, and in particular the use of the word execute in the final sentence of the August 2002 letter confirming the agreement, was unambiguous.

Even were we to agree with plaintiff that the judge did consider Eden Wood's parol evidence, we would find no ground on which to interfere, because her order granted plaintiff leave to produce similar evidence about the meaning or intent of the agreement through a reconsideration motion. In doing so, she effectively permitted plaintiff to produce parol evidence which it thereafter failed, or was unable, to do. We find no basis, therefore, to conclude that Eden Wood was permitted to offer parol evidence while plaintiff was unfairly precluded from doing so.

Third, we find no merit in plaintiff's argument that the judge erred in concluding that there was no allegation of fraud or fraudulent inducement in the second complaint. Our review of the complaint compels us to conclude, as did the motion judge, that plaintiff did not assert fraud or fraudulent inducement in the complaint, electing instead to assert breach of contract. Fraud must be pleaded with specificity as to the "particulars of the wrong, with dates and items if necessary . . . insofar as practicable." R. 4:5-8(a).

Although in some circumstances we have conformed the proofs respecting a cause of action pleaded as an "affirmative misrepresentation" to be an assertion of common law fraud, see Winslow v. Corporate Express, Inc., 364 N.J. Super. 128, 140 (App. Div. 2003), plaintiff's October 2002 complaint included no allegation suggesting fraud or misrepresentation sufficient to permit us to do so. Nor did plaintiff offer any facts sufficient to support a fraud claim either in opposition to defendants' motion for summary judgment or in support of the motion for reconsideration. We therefore find no ground on which to reach a conclusion contrary to that of the motion judge respecting fraud.

Finally, we disagree with plaintiff's assertion that the judge erred in denying the motion for reconsideration without entertaining further oral argument. Although our rules provide for oral argument of motions other than discovery or calendar motions, where requested, see R. 1:6-2(d), the judge discharged her obligation to provide that opportunity when she heard oral argument on defendant's motion and plaintiff's cross-motion for summary judgment. See Raspantini v. Arocho, 364 N.J. Super. 528, 532 (App. Div. 2003).

Plaintiff's motion for reconsideration did not offer evidence sufficient to demonstrate that the court had overlooked a matter of fact or law or had reached a palpably incorrect result. See Cummings v. Bahr, 295 N.J. Super. 374, 384 (App. Div. 1996). Further oral argument would only have been duplicative of the arguments already heard in connection with the original dispositive motions. It was therefore not required, and the judge's election to dispose of the reconsideration motion on the papers was appropriate.

Affirmed.

 

The judge's October 25, 2004 order, rather inexplicably, included leave for plaintiff to conduct an additional thirty days of discovery with leave to file a further motion for reconsideration thereafter. Although the judge perhaps believed that including that provision would be cautious or indulgent, under the circumstances it is both confusing to the litigants and suggests uncertainty that is inconsistent with the efficiency and finality summary judgment is designed to foster.

Although third-party defendant Elmer Schwartz has joined in the appeal, as the orders address only the claims of plaintiff Archie Schwartz Company, we will refer only to that entity for purposes of this opinion.

Eden Wood asserts in its brief that the appeal should be dismissed as interlocutory. Eden Wood points to the fact that its counterclaims and third-party claims were never addressed as a result of which there has been no final appealable order. In light of the fact that Eden Wood has elected to raise this objection as a part of the briefing on the merits and without filing a motion for dismissal of the appeal and in light of the fact that it appears that Eden Wood secured complete relief by way of the summary judgment order and therefore abandoned its counterclaims and third-party complaint, we decline to consider this application. Under the circumstances here, which we deem to be sufficiently extraordinary to warrant our intervention, however, were we to consider it, we would elect to grant plaintiff leave to appeal, nunc pro tunc. R. 2:2-4.

(continued)

(continued)

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A-2108-04T2

May 4, 2006