PAUL M. ALMEIDA v. ROBERT WARD

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-2332-05T22332-05T2

PAUL M. ALMEIDA,

Plaintiff-Respondent,

v.

ROBERT WARD,

Defendant-Appellant.

________________________________________________________________

 

Submitted August 29, 2006 - Decided September 8, 2006

Before Judges R. B. Coleman and Holston, Jr.

On appeal from Superior Court of New Jersey, Chancery Division, Middlesex County, Docket No. C-148-05.

Joel C. Seltzer, attorney for appellant.

Manuel J. Almeida, Jr., attorney for respondent.

PER CURIAM

Defendant, Robert Ward, appeals the Law Division's November 29, 2005 order granting plaintiff, Paul Almeida, specific performance of a contract of sale between the parties dated August 28, 2004, and requiring defendant to convey title to plaintiff to 270 Adams Street, Rahway, within ninety days of the date of the order. Defendant also appeals the November 29, 2005 order denying defendant's motion for summary judgment and change of venue. We affirm.

On or about August 28, 2004, plaintiff signed a contract to purchase from defendant real property located at 270 Adams Street, Rahway, for a purchase price of $136,000. The contract called for the property to be delivered vacant, for buyer to obtain financing, and for a closing date no later than October 8, 2004. The contract was amended by plaintiff's attorney's letter dated September 1, 2004 and the defendant's attorney's October 8, 2004 approval letter.

On October 18, 2004, defendant advised plaintiff that the property was occupied by his brother and that he was having difficulty securing his brother's vacation of the property. Defendant indicated that it would not be vacated until at least the end of November 2004.

Plaintiff undertook to perform his duties under the contract by arranging for financing and ordering a title search and survey at his expense. Plaintiff faxed defendant, on December 9, 2004, a mortgage commitment letter from Wells Fargo in the amount of $122,400 at 6.25% interest with an expiration date of February 20, 2005. The commitment letter further provided, "If you [plaintiff] cannot close and fund prior to this date, you may be required to provide additional documentation and your loan will be resubmitted for credit approval." Additionally, in accordance with the contract, plaintiff's attorney forwarded a title binder to defendant's attorney by letter dated January 13, 2005.

By letters dated January 19, 2005, February 7, 2005 and April 18, 2005, plaintiff requested that defendant advise him when he would be ready to proceed to closing. On February 2, 2005, defendant's attorney notified plaintiff's attorney that the property would not be ready for closing until April 4, 2005, and asked whether that date was agreeable to plaintiff. Plaintiff's attorney responded by letter dated February 7, 2005, that a closing date of April 8, 2005 rather than April 4, 2005 would be agreeable and requested defendant's attorney to confirm his agreement with an April 8, 2005 closing. Although defendant contends he was prepared to close and awaited firm notification from plaintiff, no response to plaintiff's attorney's letter was received from defendant's attorney, and the closing date was neither confirmed nor rescheduled.

On April 18, 2005, plaintiff's attorney again advised defendant's attorney that plaintiff was "ready to proceed to closing at your earliest opportunity" and requested defendant's attorney to advise him of an acceptable closing date. Defendant contends that he advised plaintiff that he had finally secured his brother's vacation of the property and that he would be ready to close on the property.

Thereafter, plaintiff contacted his mortgage company to set up a closing date. He was advised that due to the passage of time the mortgage had been "de-activated" and that new appraisals would need to be done. When the mortgage company appraiser arrived to conduct a new appraisal, the appraiser discovered that all utilities to the house had been shut off. Therefore, the appraisal could not be completed and the mortgage could not be approved for closing. This information was conveyed directly to defendant by plaintiff's mortgage company and by plaintiff's counsel to defendant's counsel. Defendant, however, refused to return utility service to the property, thereby preventing an appraisal and obstructing plaintiff's attempt to secure a new mortgage commitment in order to close the transaction.

On or about May 3, 2005, defendant's attorney served plaintiff and plaintiff's attorney in accordance with paragraph five of the contract modification letter of September 1, 2004 with a "Notice Making Time of the Essence" that required closing on May 17, 2005 at the office of defendant's attorney. However, because defendant prevented an appraisal and thus an ability of plaintiff to secure a recommitment for financing, plaintiff could not meet the time of the essence date contained in defendant's counsel's May 3, 2005 letter.

In response to the Notice Making Time of the Essence, plaintiff's attorney, in a letter dated May 5, 2005, denied the efficacy of the "Time of the Essence" requirement and reminded defendant's attorney that defendant was the reason for prior delays because of defendant's inability to "remove occupants from the property and deliver the property vacant as per the contract." In a letter dated May 6, 2005, defendant's attorney responded reasserting the validity of the "Notice" and demanding that either "[plaintiff] closes on or before the 17th of May 2005 . . . or buyer shall forfeit his rights under the contract." Defendant and defendant's attorney appeared May 17, 2005 for closing in accordance with the terms of the Notice Making Time of the Essence but neither plaintiff nor plaintiff's attorney was present at the plaintiff's attorney's office for closing.

Defendant's attorney, thereafter, by letter dated May 17, 2005, notified plaintiff's attorney of the failure of plaintiff to perform and restated defendant's position that the contract was terminated but advised plaintiff's attorney that defendant would sell the premises to plaintiff at a revised purchase price of $175,000. On May 27, 2005, plaintiff's attorney responded to defendant's attorney that plaintiff's lender was denied access to the property to do an appraisal, thereby thwarting plaintiff ability to close and that plaintiff would not increase the purchase price to close. Plaintiff's counsel indicated the willingness of plaintiff to close in accordance with the contract terms and threatened that plaintiff would file a complaint for specific performance if defendant continued to fail to cooperate. Ultimately, defendant's counsel, relying on the validity of the Time of the Essence letter and the fact that plaintiff had no mortgage commitment, responded June 8, 2005 that the contract was null and void and withdrew the property from the market.

Plaintiff filed a verified complaint for specific performance and an order to show cause on June 3, 2005 to compel defendant to convey title pursuant to the contract. Defendant objected to the transfer due to defendant's contention that plaintiff failed to act diligently in accordance with the contract, asserting that plaintiff's failure to obtain a mortgage commitment and failure to abide by the Notice Making Time of the Essence, which was properly served, terminated the contract. Defendant filed a motion for summary judgment and change of venue returnable October 13, 2005, the return date of the order to show cause. Both parties stipulated that there were no factual issues in need of resolution nor a need for discovery or a hearing. By orders dated November 29, 2005, the court granted plaintiff's request for specific performance and denied defendant's motion for summary judgment and change of venue. The orders memorialized the court's oral opinion spread upon the record on October 25 and 26, 2005. This appeal followed. Defendant presents the following arguments for our consideration:

POINT I

REMEDY OF SPECIFIC PERFORMANCE IN EFFECT AN ORDER FOR SUMMARY JUDGMENT WAS IMPROPERLY GRANTED BY THE COURT BELOW WHERE "REASONABLENESS" OF THE PURCHASER'S ACTIONS REQUIRED TESTIMONY AND FACT ADJUDICATION AT A PLENARY HEARING.

POINT II

SELLER'S LETTER SETTING FORTH A TIME, PLACE AND DATE FOR THE CLOSING WAS REASONABLE UNDER ALL OF THE CIRCUMSTANCES, BUT IN ANY EVENT A FACT ISSUE TO BE DETERMINED AT A FULL HEARING.

In granting plaintiff's application for specific performance and denying defendant's motion for summary judgment, the judge noted:

the parties [] agree that these issues may be decided on the papers and there is no need for discovery. [I]t appears that the basic facts are not in dispute, but rather the legal import of these facts is in issue. So the court will go forward and deal with the merits of the questions raised in the order to show cause [and] in the summary judgment motion.

The judge, in deciding the substantive issue of plaintiff's right to specific performance stated,

In this action the plaintiff buyer is seeking specific performance of the contract at the $136,000 price. The plaintiff needs an appraisal of the premises with the utilities turned on. As a result, the plaintiff is seeking to compel the defendant to allow the appraiser to go through the house with the utilities turned on, and then to compel the sale of the property. The defendant has moved for summary judgment, contending that the plaintiff forfeited the contract and the benefit of the bargain by failing to close at the time of the essence closing date and that the defendant has no further obligations under the contract. As a result, this court must determine whether plaintiff has a legal right to enforce this contract, or did the plaintiff forfeit the contract by failing to close on May 17th.

The court will first address the defendant's contention that he is entitled to summary judgment because the plaintiff failed to close on the time of the essence closing date.

With respect to the law governing this issue, the date for a closing, that is fixed in a contract to sell realty, is merely a formality, unless the contract makes that date time of the essence. Paradino v. Mazejy, 3 N.J. 110, 114 (1949). When that closing date, set forth in the contract has passed, a party may make time of the essence by a formal demand that title be closed by a given day, provided the time given is reasonable. Paradino, supra, at 115.

. . . .

[T]he Paradino case, provides at page 115 as follows, "where time is not of the essence of the original contract it can be made so by later notice, but one of the essentials of such notice is that the time allowed must be reasonable."

If the time of the essence notice is valid and reasonable, then the party receiving the notice must close on that date or forfeit the benefit of the bargain. See Mariano vs. 94 Broadway Incorporated, 374 N.J. Super. 588 (App. Div. 2005). The Mariano case states at page 603 as follows, "when a specific time is also included within a valid notice of a time of the essence closing, performance at that precise time will be required, and even a minor delay will cause a forfeiture of a part[y's] right to obtain its benefit of the bargain."

In determining whether the date fixed as the time of essence is valid, the court must determine if the notice is reasonable and whether it bears a reasonable relationship to the time elapsed.

. . . .

Under Mariano vs. 94 Broadway at 374 N.J. Super. 588 (App. Div. 2005) at page 604, the court stated as follows. "The reasonableness of a contracting party's attempt to set a time of the essence closing date must be weighed against the time that had elapsed since the formation of the contract and any deleterious effect that may befall the noticing party as a result of future events beyond the chosen closing date. In other words, the court must assess the delay that preceded the time of the notice, as well as the prejudice to the noticing party by any further delay beyond the date for closing contained in the notice."

In light of all of this law, as a result, if the defendant's time of the essence closing date was reasonable, then the defendant would be entitled to summary judgment because the plaintiff failed to close at that time. Accordingly, the court must look at the facts to determine whether or not that time of the essence closing date was indeed reasonable. In looking at the facts here, we see an initial pattern of the plaintiff buyer accommodating the needs of the seller by consenting to the seller's request to delay the closing due to the failure of the defendant seller's brother to vacate the property.

The contract closing date was October 8, 2004, the defendant asked to have that extended until November 4, 2004, which the plaintiff consented. Then the defendant asked for time to close to be extended to January 27, 2005, the plaintiff consented and then there was a further extension until April 4, 2005. Once April was reached and the defendant was ready to close because his brother was off the property, the plaintiff buyer was also willing to close, it was at that time that the plaintiff discovered that the mortgage approval had been deactivated due to this passage of time, and I note again, and I think it must be emphasized, that the passage of time was due to the plaintiff's accommodating the needs of the defendant.

Because of the deactivation of the approval, the plaintiff's bank needed to have a new appraisal done of the property, that appraisal could not be completed because the defendant had turned off the utilities and refused to turn the utilities on to accommodate the appraiser. Thus, the defendant frustrated the plaintiff's ability to get the mortgage appraisal necessary to close.

Under these circumstances, a time of the essence closing date of May 3rd, was not reasonable. That time frame did not give the plaintiff sufficient time to have the appraisal done so that the mortgage could be reactivated. Further, the defendant frustrated the plaintiff's ability to close by failing to allow the appraiser on the property at a time when utilities were on.

As a result, this court concludes that the time of the essence closing date was not reasonable and, as a result, plaintiff did not forfeit the contract and the benefit of the bargain by failing to close that day, and the defendant's motion for summary judgment is denied.

With respect to plaintiff's request for specific performance in the order to show cause, the plaintiff is seeking to have specific performance to allow the appraiser to go into the property when the utilities are on and then to compel the sale.

The Mariano case at page 598 and 599 indicates that a party is entitled to specific performance if the party can show that the contract is valid and enforceable, that the terms are within reasonable certainty so that the court can determine the duties of the parties and the conditions under which performance must be given and, finally that the specific performance will not be "harsh or oppressive." In applying the standards to this case, this contract is now valid and enforceable since the time of the essence closing date was unreasonable and ineffective.

A contract for the purchase of realty such as this, does lend itself to specific performance because the duties and conditions of performance are specified and, finally, the defendant has made no showing that specific performance will be harsh or oppressive.

Accordingly, under these circumstances, the order to show cause application will be granted.

We have thoroughly reviewed the factual record and the applicable law and conclude that the trial judge's findings of fact and application of the law to those facts are well supported by the evidence. Accordingly, we affirm substantially for the reasons expressed by Judge Chambers in her thorough and well-reasoned oral decision of October 25-26, 2005. We add the following comments:

Defendant filed a motion for summary judgment dated August 5, 2005. In filing the motion for summary judgment, defendant argued to the court that there were no material issues of fact and that the case could be decided as a matter of law. R. 4:46-2. In addition to claiming there were no material issues of fact by the filing of his motion, defendant agreed before Judge Chambers that there was no need for further discovery, no need for a plenary hearing, and that the court could decide the issue of the right to specific performance on the record as it existed. Judge Chambers' decision noted this stipulation. Defendant now seeks to repudiate his prior stipulations and argues in both points of his brief that the court below erred by not holding a full plenary hearing.

Stipulations voluntarily entered into by the parties are binding upon them and they are ordinarily estopped from the subsequent repudiation thereof. See Kurak v. A.P. Green Refactories Co., 298 N.J. Super. 304, 325 (App. Div.), certif. denied, 152 N.J. 10 (1997). Further, when a position taken and accepted by the court is then claimed to constitute error on appeal, the doctrine of invited error will ordinarily preclude relief. See Brett v. Great Am. Recreation, 144 N.J. 479 (1996).

Affirmed.

 

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A-2332-05T2

 

September 8, 2006