JOHN J. HOGAN et al. v. ELIZABETH C. HOGAN

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5898-04T35898-04T3

JOHN J. HOGAN and

ELIZABETH C. HOGAN,

Plaintiffs-Respondents,

v.

JEFFREY L. CONDINHO

and DALE CONDINHO,

Defendants-Appellants.

__________________________

 

Argued June 5, 2006 - Decided August 3, 2006

Before Judges Cuff and Gilroy.

On appeal from the Superior Court of New Jersey, Chancery Division, Cape May County, Docket No. C-9-04.

Mitchell Waldman argued the cause for appellant Jeffrey L. Condinho (Hurvitz & Waldman, attorneys; Mr. Waldman, of counsel and on the brief).

Keith A. Bonchi argued the cause for appellant Dale Condinho (Goldenberg, Mackler, Sayegh, Mintz, Pfeffer, Bonchi & Gill, attorneys; Mr. Bonchi and Mark Pfeffer, on the brief).

James H. Pickering, Jr., argued the cause for respondents (James H. Pickering, Jr., attorneys; Kathleen M. Calemmo, on the brief).

PER CURIAM

Plaintiffs, John J. Hogan and Elizabeth C. Hogan, his wife, are the owners as tenants by the entirety of Unit B, one of two condominium units located in the Diplomat Condominium, 2248 Avalon Avenue, Avalon. Unit A is owned by defendants, Jeffrey L. Condinho (Jeffrey) and Dale Condinho (Dale), his wife, as tenants in common. Plaintiffs instituted suit against defendants to enforce an oral agreement for the purchase and sale of Unit A. Following a four-day trial, an order was entered in the Chancery Division on June 17, 2005, that: 1) entered judgment in favor of plaintiffs and against Jeffrey for breach of contract with damages of specific performance; 2) directed Jeffrey to convey his interest in Unit A to plaintiffs for the sum of $217,500; 3) entered judgment against plaintiffs dismissing their claim for breach of contract against Dale; and 4) directed that plaintiffs and Dale abide by various terms of the order concerning the occupancy, management, and use of Unit A. Defendants appeal. Because we conclude that the parties never entered into an enforceable contract for the purchase and sale of Unit A, we reverse.

The property, originally a single-family home, was converted into a condominium and divided into Units A and B in December 1980. A Master Deed and Declaration of Covenants forming the Diplomat Condominium Association were recorded on December 4, 1980. The Master Deed contains a clause, which provides for arbitration of any and all disputes between members of the Association or the Management Committee "involving either the management of the ASSOCIATION, the PROJECT, of the enforcement of any rights or responsibilities created by virtue of this MASTER DEED, the By-Laws, the Rules and Regulations, and other documents and instruments appertaining to the Condominium Project."

In February 1987, plaintiffs purchased Unit B as a rental property. On February 28, 1995, defendants purchased Unit A as a rental property. Although defendants initially purchased Unit A as tenants by the entirety, they executed a deed on December 9, 1996, converting their ownership interest to that of tenants in common, each owning a 50% undivided interest.

At the outset, the parties co-existed in relative harmony. However, after plaintiffs utilized Unit B as their primary residence in August 2001, the neighborly relationship between the parties deteriorated. Disputes arose regarding the use of the condominium's driveway, noises emanating from Unit B, use of the condominium's roof-deck, and defendants' installation of surveillance cameras within Unit A.

On February 5, 2003, Jeffrey filed a complaint for partition of the condominium against plaintiffs. The complaint was voluntarily dismissed on June 8, 2003. Thereafter, counsel for both parties explored various options to resolve the disputes. Due to the contentious nature of their relationship, the parties only communicated through counsel. Defendant was represented by attorney Eric Mann, and plaintiffs were represented by attorney Kathleen M. Calemmo, of the Law Office of James H. Pickering.

By letter dated June 2, 2003, plaintiffs made several proposals to defendants, including an offer to sell them Unit B for $900,000. Although defendants rejected that proposal, they counter-offered to buy Unit B for $377,000. Plaintiffs rejected that offer, and counter-offered to purchase Unit A for the same $377,000 price. Jeffrey found the offer "unacceptable," and directed his attorney to make an offer to sell Unit A to plaintiffs for $435,000. The verbal offer was accepted by plaintiffs in a letter from their counsel dated July 18, 2003. In the letter, plaintiffs' attorney stated that she would prepare an agreement of sale and send it to Mann under separate cover. On July 22, 2003, Mann sent a letter acknowledging plaintiffs' attorney's letter of July 18, 2003, advising that the sale of the property was "'as is' and [did] not include the contents and personal property of the Condinhos contained within the unit . . . . The earliest date the Condinhos can schedule a closing date is mid[-]January 2004."

On August 26, 2003, plaintiffs' attorney sent defendants four copies of an agreement of sale executed by plaintiffs, proposing settlement on September 25, 2003. The proposed contract designated both defendants as sellers, and the sale price as $435,000. The contract required defendants to convey marketable, fee-simple title to the property, subject to certain permitted exceptions, none of which provided for either defendant retaining his or her interest in the property. Paragraph 2 provided in pertinent part that "[t]he property to be sold consists of: (a) the land and all the buildings, other improvements and fixtures on the land; (b) all the Seller's rights relating to the land." Paragraph 29 of the contract provided that: "[a]t the closing, the Buyer will be given possession of the property. No tenant will have any right to the property unless otherwise agreed in this Contract by the Seller and the Buyer. This Contract is subject to the following leases: None."

On September 3, 2003, Mann sent the following email to James H. Pickering:

Jim, I just got slightly blind-sided by my client. Hopefully not enough to squirrel the deal. After speaking with his wife[,] he is not able to proceed with a $435K sale price. He needs $450K - BUT he will include in the sale all bedroom, living room and kitchen furniture as well as the washer and dryer. These items have significant value not only intrinsically but in the fact that your client will get a fully furnished unit and would not have to go out and get furniture.

The price still gives your client [a] good buy given today's values. No doubt[,] he could flip the property in a few years and make a tidy profit if he chose to do so.

Can we still make this work given the above? My client truly wants "out". These people simply can [not] coexist side-by-side.

Please let me know where your client wants to go from here.

The following day, Mann sent a letter memorializing defendants' willingness to accept a sale price of $450,000 and a follow-up email listing the furniture included in the new price.

In a letter dated September 8, 2003, plaintiffs' attorney advised Mann that the "proposal outlined in your letter of September 4, 2003[,] is unacceptable. There is no value to my clients in the items mentioned." Thereafter, in an email dated September 15, 2003, Mann withdrew defendants' offer to sell the property for $435,000, and suggested that the disputes between the parties be submitted to arbitration. Plaintiffs subsequently offered to purchase Unit A for $442,000, which was rejected by Jeffrey on October 16, 2003. Between that date and February 13, 2004, counsel exchanged correspondence addressing the complaints of the parties concerning the use, maintenance, and occupancy of the condominium with a view towards reaching common ground on some issues, and arbitrating any remaining issues falling under the arbitration clause.

On February 13, 2004, plaintiffs filed a complaint against defendants seeking to enforce the verbal agreement of July 18, 2003, for the purchase and sale of Unit A as memorialized in the written contract forwarded to defendants' attorney on August 26, 2003, asserting that it contained all of the necessary elements of a binding contract. On April 22, 2004, for the purpose of settlement only, plaintiffs renewed their offer to purchase Unit A for $450,000, but the offer was rejected. In their answer of April 20, 2004, defendants denied the existence of an oral agreement between the parties, and asserted, as a counterclaim, that the disputes between the parties "must be submitted to binding arbitration pursuant to the provisions of the Master Deed."

On May 28, 2004, plaintiffs filed an amended complaint alleging three additional causes of action: 1) defendants' installation of surveillance cameras in Unit A was an unreasonable intrusion upon seclusion; 2) defendants' rear deck encroached onto the condominium common elements; and 3) defendants' use of surveillance cameras was a breach of plaintiffs' right to quiet enjoyment and use of their property. At a case management conference held on January 14, 2005, plaintiffs' counsel requested leave to depose defendants' attorney. On January 28, 2005, the court ordered Mann to withdraw as counsel for the defendants, required the substitution of new counsel, and ordered Mann's deposition.

Trial proceeded on February 25, 2005, March 2, 2005, March 3, 2005, and March 10, 2005. The trial court heard testimony from each of the parties involved, as well as several other witnesses who testified on behalf of defendants. At the conclusion of their case, plaintiffs moved to amend their complaint to include claims for fraud and deceit because "defendants were participating in the discussions regarding the contract, making an offer which they did not intend to follow[ ]up with." The court granted the amendment.

On March 10, 2005, the trial judge rendered an oral decision, which was memorialized in the final judgment of June 17, 2005. Regarding the breach of contract and specific performance issues, the judge determined that plaintiffs failed to prove "a meeting of the minds that would underlie the remedy of specific performance" against Dale. The judge determined that while Dale had authorized Mann to undertake negotiations with plaintiffs for the sale of Unit A, Mann had failed to discuss plaintiffs' offer of $435,000 with her. However, with respect to Jeffrey, the trial judge found otherwise:

He specifically and repeatedly approved the proposed sale of the unit at that price, and authorized Mann to conclude the transaction. He anticipated, it is certainly true, that he would have the opportunity to review a written agreement with respect to the transaction. But he knew and advised Mann that the agreement was acceptable.

And I find and conclude, as a fact notwithstanding his testimony to the contrary, which I do not believe, that the agreement, the written agreement was intended by both parties to memorialize the agreement that they had already reached, rather than be a condition precedent to its binding effect.

There was, in my view, clearly and convincingly a meeting of the minds between Jeff Condinho and the Hogans as to the sale of the property for the agreed-upon price. And the preparation and execution of the written agreement was intended by both of them to memorialize that agreement, rather than be a precondition to the binding nature thereof.

Jeffrey Condinho's testimony that he did not intend to be bound by the agreement that he authorized Mann to make, is simply not credible, and I do not accept it. Indeed, much of his testimony was not credible, especially in light of his admitted breaches on several occasions, of the covenants of good faith and fair dealing in his description of the course of the negotiations.

According to him, he never discussed the matter with his wife, but, nevertheless, led Mann to believe that she was on board, knowing that Mann would [rely] upon that information, and knowing that Mann would undertake discussions with [the] Hogans, through their counsel, on that basis.

The trial judge concluded that "the Hogans are indeed entitled to enforce the agreement, specifically against Jeffrey Condinho," and ordered Jeffrey to convey his interest in Unit A to plaintiffs for $217,500. In fashioning that remedy, the judge reasoned that: 1) a damages award "would not be equitable and would not suffice, as the damages are speculative at best;" and 2) as a tenant in common, "Jeffrey Condinho's interest in the property [was] easily severable from his wife's."

On appeal, Jeffrey argues:

POINT I.

THE TRIAL COURT'S FINDINGS OF FACT AND REMEDIES WERE NOT SUPPORTED BY THE RECORD[,] AND WERE NOT EQUITABLE.

POINT II.

THE COURT ERRED IN REFUSING TO SUBMIT THIS DISPUTE TO ARBITRATION.

POINT III.

THE COURT ERRED IN REFUSING TO ALLOW THE ATTORNEYS TO PRESENT RELEVANT EVIDENCE.

Dale raises the following issues:

POINT I.

THE PLAINTIFFS' FAILURE TO PROVE THAT DALE CONDINHO AGREED TO THE SALE OF HER 50% SHARE OF UNDIVIDED REAL PROPERTY IS FATAL TO THEIR CLAIM FOR SPECIFIC PERFORMANCE OF AN ORAL AGREEMENT BY HER HUSBAND TO SELL A 100% SHARE OF THE PROPERTY.

POINT II.

THE COURT IMPROPERLY IMPOSED THE REMEDY OF PARTITION WITHOUT ANY BASIS IN LAW OR EQUITY.

POINT III.

THE TRIAL COURT'S REMEDY WAS NEITHER EQUITABLE[,] NOR FAIR.

Reviewing courts "'do not disturb the factual findings and legal conclusions of the trial judge unless we are convinced that they are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice.'" Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974) (quoting Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div. 1963)). However, "[a] trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference." Manalapan Realty, L.P., v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).

I.

Initially, plaintiffs argue that Dale does not possess standing to pursue this appeal because the trial court entered judgment in her favor dismissing the breach of contract claim. Plaintiffs contend that because defendants hold title as tenants in common, each owning a separate title to an undivided interest of the co-owned property, Dale does not have a legal interest in Jeffrey's 50% interest in Unit A; and as such, she may not pursue an appeal from a favorable judgment, nor challenge the judgment directing specific performance against Jeffrey. We disagree.

Prior to the order of judgment, Dale, as a tenant in common with her husband, possessed an unrestricted right to use the entire condominium unit. While defendants' use of the property was primarily that of a rental property, Dale periodically occupied it during the off-seasons without paying rent to her husband. The judgment of specific performance against Jeffrey requires Dale to enter into a partnership for the use, occupancy, and maintenance of Unit A with plaintiffs, parties with whom she had a prior acrimonious relationship, and requires her to pay plaintiffs "one[-]half of the fair market rental value for the Unit" when she occupies the property. We are satisfied that Dale is an aggrieved party under the order of judgment entered below because her "property right [has been] adversely affected by the judgment in question." Howard Sav. Inst. of Newark, N.J. v. Peep, 34 N.J. 494, 499 (1961).

II.

Jeffrey argues that the trial court erred in adjudicating issues concerning the use, occupancy, and maintenance of the condominium, with the exception of the specific performance claim. Jeffrey contends that all claims, other than specific performance, should have been severed and referred to arbitration pursuant to the arbitration clause. The argument is without merit.

"It is axiomatic that '[t]rial errors which were induced, encouraged[,] or acquiesced in or consented to by [trial] counsel ordinarily are not a basis for reversal on appeal.'" Harris v. Peridot Chem. (N.J.), Inc., 313 N.J. Super. 257, 296 (App. Div. 1998) (first alteration in original) (quoting State v. Harper, 128 N.J. Super. 270, 277 (App. Div.), certif. denied, 65 N.J. 574 (1974)). "Our Supreme Court has said that under the invited error doctrine, the particular mistake belatedly recognized on appeal must 'cut mortally into the substantive rights' of the appellant to warrant a reversal." Ibid. (quoting State v. Corsaro, 107 N.J. 339, 345 (1987)).

On February 25, 2005, the court addressed the first count of defendant's counterclaim, which sought "submission to binding arbitration with respect to all matters in dispute. The court asked defendants' counsel: "We [are] way past that at this point, are we not, Mr. Waldman?" Counsel replied:

Your Honor, with regard to the specific performance claim, I do [not] believe that that would be the subject of arbitration. There were some other related issues that now touch upon the [quiet] enjoyment issue which is the second part of the complaint, but I believe that since this [c]ourt has general equity jurisdiction, that you can hear those matters. So, Your Honor, with regard to seeking a dismissal and submitting to binding arbitration, I believe you [are] correct, we [are] past that point.

[(emphasis added).]

The court proceeded to ask counsel, "[m]ay I consider the first count of the counterclaim withdrawn?" Counsel replied, "[t]hat [is] fine, Your Honor, to the extent that those matters are [determinable] here."

Because defendants consented to the trial court adjudicating all issues, we find no error. Harris, supra, 313 N.J. Super. at 296.

III.

Defendants argue next that the trial judge erred in determining plaintiffs and Jeffrey had entered into an enforceable, oral contract for the purchase and sale of Unit A, entitling plaintiffs to an order directing that Jeffrey convey his undivided interest as a tenant in common to plaintiffs for $217,500. Defendants contend that because Dale, an owner of an undivided 50% interest in Unit A, never agreed to sell the property to plaintiffs, an essential element of the contract, that is, agreement by all the parties, was not present, thereby preventing an enforceable contract from coming to fruition. Jeffrey also argues that no contract arose because other essential terms of a contract for sale of real property had not been agreed upon, i.e., price, nature of interest to be conveyed, deposit, finalization of a 1031 Exchange of realty, conditioning of the contract upon a mortgage contingency, and disposition of certain outstanding bills relating to the condominium. Lastly, defendants assert that the remedy of specific performance "was harsh and inequitable" because it forced Dale to enter into a partnership with plaintiffs for maintenance, use, and occupancy of Unit A. Plaintiffs counter that Jeffrey had entered into an enforceable contract with plaintiffs for the sale of Unit A, which he breached by not conveying title, and that the trial court's remedy of specific performance was fair and equitable because of Jeffrey's deceitful actions. Plaintiffs assert that Jeffrey's actions constituted a breach of the covenant of good faith and fair dealing by continuing to negotiate for the sale of property knowing that his wife was never going to sell the property to plaintiffs.

Effective January 5, 1996, the Statute of Frauds was amended to provide that oral agreements to transfer an interest in real property could be enforceable if proven by clear and convincing evidence. N.J.S.A. 25:1-13b. The statute provides in pertinent part:

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:

. . . .

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.

[N.J.S.A. 25:1-13.]

"A contract is an agreement resulting in [an] obligation enforceable at law." Borough of W. Caldwell v. Borough of Caldwell, 26 N.J. 9, 24 (1958). An enforceable bilateral agreement requires an offer, an acceptance, consideration, and a meeting of the minds upon all the essential terms of the agreement. Weichert Co. Realtors v. Ryan, 128 N.J. 427, 435 (1992); Friedman v. Tappan Dev. Corp., 22 N.J. 523, 533 (1956). "[I]f [the] parties agree on essential terms and manifest an intention to be bound by those terms, they have created an enforceable contract." Weichert Co. Realtors, supra, 128 N.J. at 435. "Where the parties do not agree to one or more essential terms, however, courts generally hold that the agreement is unenforceable." Ibid.

Parties may or may not be bound by their preliminary agreement when they contemplate that its terms will later be reduced to a formal written contract. Morales v. Santiago, 217 N.J. Super. 496, 501-02 (App. Div. 1987). "If the parties intend to be bound by their preliminary agreement and view the later written contract as merely a memorialization of their agreement, they are bound by the preliminary agreement." Ibid. "On the other hand, if the parties intend that their preliminary agreement be subject to the terms of the later contract, they are not bound by their preliminary agreement." Id. at 502. "Absence of essential terms from a preliminary agreement is persuasive evidence that the parties did not intend to be bound by it." Ibid.

To establish an enforceable oral contract for the purchase and sale of real estate under N.J.S.A. 25:1-13b, plaintiffs were required to prove, as essential terms of the contract, "the interest to be transferred" and "the identity of the transferor" by clear and convincing evidence. Plaintiffs believed that they had accepted an offer from both defendants to sell 100% of defendants' interest in Unit A for $435,000. This determination is supported by the allegations contained in plaintiffs' complaint, amended complaint, and their trial testimony. To the contrary, however, as found by the trial judge, Dale had never agreed to sell her interest to the plaintiffs for $435,000. Because a necessary party to convey title to 100% interest in Unit A had not agreed to sell her interest, plaintiffs failed to establish an enforceable oral contract under N.J.S.A. 25:1-13b.

Defendants argue that Jeffrey, as the holder of an undivided interest in Unit A as tenant in common, was free to sell his interest in the property without consent of his wife, and the trial court's determination that Jeffrey had entered into an enforceable oral contract for the sale of his interest in Unit A should be upheld. We do not quarrel with the principle that an owner of an undivided interest of property as a tenant in common with others has the legal right to sell his or her interest. Where we part company with the trial judge is converting a lawsuit, based on the premise that the parties had entered into a contract to buy and sell a 100% interest in property, to an enforceable oral agreement to buy and sell only a 50% interest in the property. N.J.S.A. 25:1-13b empowers a court to enforce an oral agreement as reached between the parties. The statute does not permit a court to re-write an agreement that had never been agreed to by all necessary parties. Plaintiffs' claim for enforcement of an oral contract must rise or fall based upon the agreement as plaintiffs understood it when negotiated.

Plaintiffs argue that the contract should be enforced against Jeffrey because he had breached the covenant of good faith and fair dealing. Because an enforceable contract never came to fruition, plaintiffs' argument, based on the covenant of good faith and fair dealing, fails. Noye v. Hoffmann-La Roche, Inc., 238 N.J. Super. 430, 434 (App. Div.) (holding that "[i]n the absence of a contract, there can be no breach of an implied covenant of good faith and fair dealing"), certif. denied, 122 N.J. 146 (1990).

We do not disturb the trial court's determinations that each party had violated the covenant of quiet and enjoyment, and that plaintiffs had failed to prove a cause of action for unreasonable intrusion of seclusion. Those determinations were based upon credible evidence in the record, with the trial judge having the opportunity to assess the credibility of the witnesses. Rova Farms Resort, supra, 65 N.J. at 484.

We reverse those portions of the order of June 17, 2005, entering judgment in favor of plaintiffs and against defendant Jeffrey L. Condinho for breach of contract with damages of specific performance; and those provisions of the order directing relief in accordance with that determination (Paragraphs I, III, IV, and V of the order). All other provisions of the order of judgment are affirmed.

Affirmed in part; reversed in part; and remanded for the trial court to enter an amended judgment in accordance with this opinion.

 

A form of ownership of real property where each tenant, or owner, "has an undivided interest in the whole, that is, an interest that encompasses the entire property," and "is subject to the coextensive possessory right to the whole of every other co-tenant." Burbach v. Sussex County Mun. Utils. Auth., 318 N.J. Super, 228, 233-34 (App. Div. 1999). "Each tenant in common has a separate and distinct freehold title. Each holds his title and interest independently of the others. His interest therefor can be transferred, devised[,] or encumbered separately and without consent of the other cotenants. Other than the unity of possession, each tenant in common holds the same rights as does an owner in severalty. The possessory rights of tenants in common are not, however, separate and distinct from each other. Possession is but a single unity. The interest of each cotenant is coextensive of the realty[,] and extends to every part thereof." Ibid. (quoting 4 Thompson Real Property, 1795 (1979).

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