FRED CORIGLIANO v. LEWIS T. FERNICOLA, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5598-04T15598-04T1

FRED CORIGLIANO,

Plaintiff-Appellant,

v.

LEWIS T. FERNICOLA and ADELE

FERNICOLA, Husband and Wife,

Defendant-Respondents.

_________________________________________________

 

Argued March 7, 2006 - Decided April 21, 2006

Before Judges Skillman, Payne and Sabatino.

On appeal from Superior Court of New

Jersey, Chancery Division, General

Equity Part, Ocean County, OCN-C-147-04.

Michael S. Simitz argued the cause for

appellant.

Robert C. Shea argued the cause for

respondents (R.C. Shea & Associates,

attorneys; Mr. Shea and Bianca M.

Sangiovanni on the brief).

PER CURIAM

Plaintiff Fred Corigliano appeals from an order of judgment in favor of defendants Lewis T. and Adele Fernicola entered by Judge Clyne following a bench trial of Corigliano's action for specific performance of an alleged contract for the sale of the five-bedroom, bayfront home in Toms River in which the Fernicolas had resided for the past twenty-three years.

I.

The record discloses that in April 2004, Lewis Fernicola, a retired Newark police detective in his seventies, placed a "For Sale by Owner" sign on his property that was seen on May 10, 2004 by Corigliano and his realtor friend, Barbara Petrina, while she was showing houses to Corigliano in the Toms River area in her capacity as a real estate broker employed by Prudential New Jersey Properties. Corigliano, a construction broker involved in building chain grocery stores such as Shop Rite and A&P, with existing personal real estate holdings consisting of five houses, made arrangements with Lewis to view the house on May 11, and at 9:30 in the morning, he arrived at the Fernicolas' door with Petrina, who carried with her research she had conducted the previous night on prior brokerage agreements entered by the Fernicolas with various realtors commencing in 1995, and the prices at which the property had been offered.

Following a brief tour of the house accompanied only by Lewis, negotiations with Lewis for its purchase were commenced by Corigliano and Petrina. The parties dispute whether Corigliano and Petrina achieved a reduction in the asking price from $899,900 to $850,000, or whether an asking price of $850,000 was firm from the outset. In any event, once the parties agreed to a sales price of $850,000, Corigliano placed a $1,000 cash deposit on the table, and Petrina produced a document for the Fernicolas' signature that had been prepared by Corigliano's long-time real estate attorney, Morton Weitzman, and faxed by Weitzman to Petrina at 8:45 that morning. The document, typed on Weitzman's letterhead, stated as follows:

In consideration of the receipt of a $1,000.00 cash deposit received by me this date, May ___, 2004, I hereby agree to sell my property at 3329 Long Point Road, Toms River, New Jersey, to Fred Corigliano for a total purchase price of $__________, which purchase is not to be subject to any mortgage contingency or home inspections and will be an "as is" purchase, and I further agree to enter into a formal contract for same and immediately take the house off the market.

Weitzman, an attorney specializing in real estate transactions, agreed at trial that the document that he prepared on Corigliano's behalf, which had no heading or signature lines and lacked the usual legal language found in a contract for the sale of real estate, was not a "normal" contract, and that he usually utilized an All-State legal form for this purpose. Weitzman testified that Corigliano's intent in requesting that he prepare the document was to bind the Fernicolas in all respects with it, and that he had discussed the Statute of Frauds with Corigliano before the document was prepared and was of the opinion that the document satisfied that statute. Corigliano testified similarly that this was not his usual way of handling the purchase of real estate, which in the past had involved contracts drafted by the seller's attorney, that he had not considered or discussed with Petrina the use of a Prudential form of contract in this transaction, and that his purpose in requesting the document from Weitzman was to bind the Fernicolas that day without the requirement of attorney review. In deposition testimony, confirmed by Corigliano at trial, the following exchange occurred:

"Q This type of agreement that you have in front of you, is that the normal type of agreement that you enter into when you [buy] a piece of real estate?"

"A No. When I normally buy a [piece] of property, a piece of realty, in all of the other times that I've purchased real estate, we've always purchased it with my attorney, Morton Weitzman and the seller's attorney getting together. The seller's attorney drawing up a contract, sending it to my attorney, making sure that it's correct, sign it and be done with it."

* * *

Q You go on to state that, "This property was different. My attitude with this particular piece of property was to remove it from the market in every way that I could. . . ."

Is that a fair statement?

A That's my testimony.

* * *

"I had seen the property and I wanted something in writing so that the property would be removed from the market that day without the benefit of an attorney review."

Lewis testified that upon presentation of the deposit and document, he inquired if Corigliano wanted a receipt, and was informed by Corigliano that the document would serve that purpose. Lewis then showed the document to his wife who "wasn't happy with it." When Corigliano asked if Lewis had a lawyer, Lewis responded that he did not, but he then recalled that a friend's son-in-law, Nicholas Mariano, was an attorney. A call to Mariano was placed by Lewis, who read the document to Mariano over the telephone and asked if he should sign it. Corigliano confirmed that he was present during the call, which was conducted at least in part by speakerphone.

Mariano testified at trial that he perceived the document to constitute only a "binder," and that he advised Lewis that it could be executed if language were added providing that "a mutual satisfactory Contract of Sale be entered into," observing "[t]hat would give us the ample time." The language actually added to the contract was the following:

That a mutual contract of sale be executed within 10 days with a 5% deposit with a July 1, 2004 closing date.

Corigliano had initially sought to close in ten days. However, that demand was apparently dropped.

It was agreed that Mariano would prepare a contract and send it to Corigliano's attorney, Weitzman.

According to the Fernicolas, from the outset Adele expressed strong opposition to entering into any agreement with Corigliano, who Adele testified reminded her, alternatively, of "the devil" or a used car salesman whose presence she sought to rid from her house at the earliest opportunity. Although her opposition was primarily expressed to Lewis in another room, both Fernicolas testified that Adele's resistance to any sale was conveyed orally to Corigliano and Petrina by her and by Lewis, and that Adele's appearance (she had been crying) further demonstrated her reluctance to enter into any agreement. Corigliano denied any knowledge of Adele's position, and testified that she told him that he had gotten a good price for the property. He cited as additional confirmation of the couple's acquiescence to the deal the fact that, before leaving, Lewis gave him his only copy of the blueprints of the house.

Lewis affixed his signature to the document and Adele, who testified that she sought by her act to buy time to convince Lewis not to sell, did so as well. While Corigliano testified that he regarded the May 11 document to be a binding contract, neither of the Fernicolas agreed with his characterization, describing the document as a "receipt" or "acknowledgment" that was non-binding in nature. The Fernicolas testified additionally that they were given assurances by Corigliano and Petrina that the attorneys would work out the details of any transaction. Corigliano denied any such statements.

Upon the departure of Corigliano and Petrina, Lewis removed the For Sale sign from the lawn and turned away a prospective purchaser who had arranged to see the house at 11:00 a.m. Corigliano, in turn, applied for a loan, cancelled negotiations on another house in Toms River, and arranged for an inspection of the property by his insurance broker.

On May 12, Lewis completed a contract information form supplied by Mariano, and both he and Adele signed an authorization to obtain their mortgage records. On May 13, without additional contact with the Fernicolas, Mariano forwarded a proposed contract of sale and addendum to Weitzman, with the request that "any proposed modifications be placed in Addendum form for our review." Mariano testified that he expected that the document would provide the basis for continued negotiation of contract terms. Indeed, a provision regarding riparian rights that he deemed necessary as the result of the location of the property was absent from the document. Instead, the contract was executed on May 14 by Corigliano, with only one change that reflected his payment of the $1,000 deposit. The partially signed contract was mailed to Mariano by regular mail on May 17 and faxed on May 19.

Lewis confirmed that he and Mariano had conversed before the contract was drafted regarding its terms. However, he denied ever giving Mariano authority to bind the Fernicolas, and testified Mariano informed him that, before the formal contract was executed, they would need to meet in person to discuss a number of issues.

By the time that the contract was signed by Corigliano, Adele, with the help of her daughters, had convinced Lewis not to consummate the sale. Adele testified at trial that she never wanted to sell the house and that she regarded her husband's repeated listings of the property to constitute merely a hobby. She viewed the house as the family home, from which as the result of cherished memories she would consent to depart only at death.

The Fernicolas' decision, occurring on May 13, was communicated to Mariano on Friday May 14 in a conversation with one of Mariano's associates and directly to Mariano on Monday May 17. Mariano in turn provided notice to Weitzman by fax on May 17, and the deposit was returned. An exchange of letters between the parties' attorneys followed. Suit, threatened by Corigliano in a May 19 letter by him to the Fernicolas, was instituted on June 1, 2004.

II.

In a written decision issued after the bench trial in this matter, Judge Clyne found that Corigliano was aware of the fact that the Fernicola residence had been listed for sale on multiple occasions since 1995, and of the absence of any consummated sale. Based on this information, Corigliano directed his attorney to draft the May 11 document "so as to be an innocuous as possible." The judge found that a reasonable person would not recognize the document as having been drafted by an attorney. Judge Clyne further found as a matter of fact that, during negotiations, assurances were given by Corigliano to the Fernicolas that after the May 11 document was signed, the attorneys could work out the transaction's details.

The judge stated additionally that:

The language which was added at the direction of the defendant's attorney by phone while the plaintiff and defendant were in negotiations is clear evidence that the document which was being signed gave the defendants time to further consult with their attorney. The plaintiff was aware of the conversation, was aware that the phone call was the first contact the attorney had with regard to the potential sale, and was aware that the language was added at the direction of the defendants' real estate attorney. The Court finds that a reasonable person, especially one with the degree of sophistication of the plaintiff, would conclude that the added language was inserted for the purpose of giving the attorney time to prepare a complete contract, and [for defendants] to finish conferring with their attorney. This conclusion is consistent with the testimony of Mr. Mariano, Esq., the defendants' real estate attorney. The Court finds that testimony to be credible. To suggest that an attorney would authorize a client to sign a document such as the one marked J-1 [the May 11 document] with the intent that the client be bound is simply not credible.

. . . Moreover, the statements made by the plaintiff and [Petrina] wherein they admonished the Fernicolas to "let the attorneys work it out" indicate that the parties would not be bound until a "formal contract" had been signed.

The court thus found that the May 11 document did not constitute a binding contract, because evidence of mutual assent did not exist. The court further found that Corigliano's conduct in utilizing a licensed real estate person to negotiate the purchase while "being careful to avoid a situation which would require the insertion of an 'attorney review period,'" the use for that purpose of a document that did not state it was a binding contract and was otherwise misleading in its purpose, and the transmittal by Corigliano of his threatening letter when sale was not consummated, "bespeaks sharp dealing" barring the equitable remedy of specific performance. As a final matter, the court rejected Corigliano's position that the formal contract transmitted by Mariano, which he signed, was binding despite the absence of the Fernicolas' signatures, and he found both that the parties did not intend to be bound by an oral agreement and that evidence of such an agreement was not clear and convincing so as to render the agreement cognizable under standards established by the Statute of Frauds. The court thus dismissed Corigliano's suit.

III.

On appeal, Corigliano argues that the May 11, 2004 agreement constituted a binding contract for the sale of the Fernicolas' home, that the two contracts viewed together satisfied the Statute of Frauds, that the second contract was binding as an offer that was accepted prior to its revocation, and that the remedy of specific performance was appropriate because insufficient evidence had been presented of sharp dealing. Corigliano also contests the factual findings that provide a foundation for the court's decision.

We decline to disturb the factual and credibility determinations of Judge Clyne, except in the one instance we have noted, finding them to be supported by substantial, credible evidence in the record. Rova Farms Resort, Inc. v. Investors Ins. Co., 65 N.J. 474, 483-84 (1974). We thus turn to Corigliano's legal contentions, which we review de novo. Balsamides v. Protameen Chems., Inc., 160 N.J. 352, 372 (1999).

Corigliano argues first that the May 11 document constituted an informal, but binding, contract for the sale of real estate, and that the language added by the Fernicolas upon the advice of Mariano did not signal the Fernicolas' intent to be bound only by a subsequent document. We disagree.

Whether a preliminary agreement is binding depends on the parties' intent. Morales v. Santiago, 217 N.J. Super. 496, 501 (App. Div. 1987). What the parties intended is a question of fact, not law, 1 Corbin on Contracts 2.9 at 144 (Rev. Ed. 1993), the resolution of which is informed by the nature of the negotiations between the parties, the substance of the document itself, and the objects sought to be achieved. Berg Agency v. Sleepworld-Willingboro, Inc., 136 N.J. Super. 369, 375 (App. Div. 1975); see also Tessmar v. Grosner, 23 N.J. 193, 201 (1957).

Here, the May 11 document itself demonstrated its preliminary nature by the absence of any heading stating that it was a contract of sale; the unlawyered, unorthodox and informal appearance of its content; the absence of terms other than price, deposit amount and closing date, together with a stated waiver of enumerated conditions; and the handwritten insertion of language requiring the execution of a mutual contract of sale.

Further, the course of the parties' negotiations, as Judge Clyne found, demonstrated that the Fernicolas did not intend the document to be binding. They communicated that intent to Corigliano, and they received assurances from him and Petrina that contractual matters would be left to the attorneys to resolve. No other construction can reasonably be placed upon evidence of the precipitate nature of Corigliano's approach to the Fernicolas, their initial reluctance to sign the document, the informal and preliminary nature of their consultation with Mariano, and their determination, in accordance with advice by Mariano that was overheard by Corigliano, to insert qualifying language in the document that they eventually executed. We concur with the judge's conclusion that it is not credible to believe that Mariano would authorize the Fernicolas to execute the bare-bones May 11 agreement with the intent that it be binding upon them as a contract of sale. See Morales, supra, 217 N.J. Super. at 502 (finding absence of essential terms from a preliminary agreement to constitute "persuasive evidence" that the parties did not intend to be bound by it); Steinberg v. Wisisch, 6 N.J. Misc. 819 (Sup. Ct. 1928) (finding a similar document, which provided that the purchaser would pay an additional sum when the contract of sale was drawn, to constitute a temporary receipt).

We do not doubt that at the time that the May 11 document was signed, the goal of the parties (with the significant exception of Adele) was to consummate a sale of the property. Further, we recognize that the goal was furthered by Lewis' acts of removing the For Sale sign from the property, canceling an appointment with another prospective purchaser, and providing the blueprints of the house to Corigliano. However, we regard this evidence as providing an insufficient foundation upon which to premise the conclusion that the May 11 document constituted a binding contract of sale. Judge Clyne found the evidence consistent with Lewis' anticipation that a final contract would be executed. We decline to disturb his conclusion. Although the parties could have bound themselves by a document such as the May 11 agreement, had that been their mutual intent, McBarron v. Kipling Woods, L.L.C., 365 N.J. Super. 114, 116 (App. Div. 2004) (quoting Comerata v. Chaumont, Inc., 52 N.J. Super. 299, 305 (App. Div. 1958)), in this case, the facts as found by Judge Clyne demonstrate that they did not do so.

IV.

Corigliano argues additionally that the second contract drafted by Mariano, forwarded to Weitzman and signed by Corigliano, was binding as it constituted an offer by the Fernicolas that was accepted before its revocation. Because the alleged contract constituted an agreement to transfer an interest in land, its enforceability is governed by the Statute of Frauds, N.J.S.A. 25:1-13, which provides:

An agreement to transfer an interest in real estate or to hold an interest in real estate for the benefit of another shall not be enforceable unless:

a. 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 transferee are established in a writing signed by or on behalf of the party against whom enforcement is sought; or

b. 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.

Corigliano argues that the writings set forth in the two documents, taken together, satisfy the Statute of Frauds, and if not, that clear and convincing evidence of an oral agreement was presented.

Corigliano is correct in arguing that the Statute of Frauds can be satisfied by a combination of documents, so long as they contain all the essential terms of the contract. DeVito v. Sheeran, 165 N.J. 167, 191 (2000); Metrobank for Sav. v. Natn'l Cmty. Bank, 262 N.J. Super. 133, 141 (App. Div. 1993); Sutton v. Lienau, 225 N.J. Super. 293, 300 (App. Div 1988), certif. denied, 111 N.J. 650 (1988); Restatement (Second) of Contracts 132 (1981). However, the writing must be signed by the person to be bound. DeVito, supra, 165 N.J. at 191; see also N.J.S.A. 25:1-13a. In this case, the only writing signed by the Fernicolas was the May 11 document. Judge Clyne found that the Fernicolas did not intend to be bound by it, and that it did not constitute a contract - determinations that we have affirmed as based upon substantial credible evidence. Moreover, "[o]rdinarily a signature does not authenticate a document not in existence at the time the signature is made," unless circumstances, absent here, exist demonstrating the execution by different parties of several documents in a single transaction. Restatement, supra, 132 cmt. d. As a consequence, Corigliano's argument must depend entirely upon the proposed contract of sale prepared by Mariano. Since that document was never executed by the Fernicolas, the requirements of the Statute of Frauds have not been met. Morton v. 4 Orchard Land Trust, 180 N.J. 118, 129 (2004).

We also reject Corigliano's argument that clear and convincing evidence of an oral agreement existed. In that regard, Judge Clyne stated:

The Court recognizes that oral contracts to sell real property are enforceable if the essential terms of an agreement can be proven by clear and convincing evidence.

Clear and convincing evidence should produce in the mind of the trier of fact "a firm belief or conviction as to the truth of the allegations sought to be established." Matter of Purrazella, 134 N.J. 228, 240 (1993). It must be "so clear, direct and weighty and convincing as to enable a judge or jury to come to a clear conviction, without hesitancy, of the truth of the precise facts in issue." Matter of Seaman, 133 N.J. 67, 74 (1993).

With regard to this issue the Court finds that the conduct of the parties contemplated a signed written agreement. In Prant v. Sterling, 332 N.J. Super. 369 (Ch. Div. 1999) [aff'd o.b., 332 N.J. Super. 292 (App. Div.), certif. denied, 166 N.J. 606 (2000)] the Court ruled that the plaintiffs could not "establish by clear and convincing evidence at trial . . . that the parties herein intended to be bound by the draft contracts, or that these drafts included all the terms essential to the expectations of both the buyer and the sellers for the sale of [the property]." Id. at 380.

The Court finds that the proofs submitted simply do not satisfy the clear and convincing standard.

We agree. There is no evidence in this case of a prior oral course of dealing between the parties nor clear proof of the type of oral handshake agreement that could give rise to evidence sufficient to meet the Statute of Frauds. N.J.S.A. 25:1-13b.

We decline to address Corigliano's argument, raised for the first time on appeal, that part performance, consisting of the proffer of $1,000, removes this transaction from the purview of the Statute of Frauds. Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973). We note, however, that "[p]art payment alone is not sufficient part performance to take [a] case out of the statute of frauds," which will "not be disregarded if the party seeking enforcement of the contract can be restored to his former position by restitution without suffering a significant hardship." Presten v. Sailer, 225 N.J. Super. 178, 194 (App. Div 1988).

V.

As a final matter, Corigliano contests the court's determination that equitable considerations barred specific enforcement of the alleged agreement between him and the Fernicolas. However, because Corigliano has failed to meet his burden of establishing the existence of a valid and enforceable agreement, and the existence of such an agreement underlies the remedy that he seeks, that remedy is unavailable to him. Marioni v. 94 Broadway, Inc., 374 N.J. Super. 588, 598-99 (App. Div.), certif. denied, 183 N.J. 591 (2005). We need not reach the equitable arguments made by Corigliano, which would become relevant only if a legally cognizable contract were found to exist. Ibid.

 
Affirmed.

Corigliano owned three two-family houses that he rented, his residence in Watchung, and an additional house in Chester that he was in the process of selling.

The record does not explain why these negotiations were not resumed after the Fernicolas determined not to sell.

The letter provided, in part:

You may have until Monday morning, May 24, 2004 to call Morton Weitzman, my real estate attorney, to advise him that you will be signing the contract and executing our deal as agreed to. If Morton Weitzman does not hear from you by noon, Monday, I will give my attorney his retainer on Monday afternoon and the litigation will begin.

* * *

Please understand that this letter is not design[ed] to intimidate or threaten you. It is designed to inform you of what my intentions and options are under New Jersey State law. . . . . I would not pursue a law suit that I was not assured of winning.

Mr. & Mrs. Fernicola, you seem to be very nice people and it would be a shame for you not to execute this contract and face the penalties that I have set forth. I genuinely hope you reconsider your action.

However, Lewis testified that he was informed that the document had been drafted by Weitzman, and it was on his letterhead.

We reject Corigliano's argument that the court erroneously relied on Mariano's subjective intent in finding the May 11 agreement nonbinding. Mariano's testimony indicated that Lewis appeared concerned that the document might be binding if signed, and that Mariano advised that it would not. The court utilized this evidence not for Mariano's state of mind, but for that of Lewis and for the effect of Mariano's advice upon the perception by Lewis of the consequences of his signature.

We note that, unlike the May 11 agreement, the contract of sale drafted by Mariano contained a description of the type of deed required, an enumeration of the fixtures to be included and excluded from the sale, permission to conduct a termite and property inspection, notification that the property was in a flood area along with a provision permitting cancellation by the buyer on this basis, the requirement that the seller provide smoke detector and well water certifications at closing, and other legal matters.

(continued)

(continued)

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A-5598-04T1

April 21, 2006