STEVEN BUDGE v. E.M.N. EXPRESS MORTGAGE NATIONWIDE, INC., et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-5592-05T15592-05T1

STEVEN BUDGE,

Plaintiff-Appellant,

v.

E.M.N. EXPRESS MORTGAGE

NATIONWIDE, INC.; ANABELA

RIBEIRO, JAMAL ABU-DIAB, GUY

HENRY, TOM CHERICHELO and LEONARDO

CASIERO,

Defendants-Respondents.

__________________________________________________

 

Argued February 4, 2008 - Decided

Before Judges Stern, A.A. Rodr guez and C.S. Fisher.

On appeal from the Superior Court of New Jersey, Law Division, Monmouth County, Docket No. L-1250-04.

Steven Budge, appellant, argued the cause pro se.

Gerard A. Del Tufo argued the cause for respondents E.M.N. Express Mortgage Nation-wide, Inc., Anabela Ribeiro, Jamal Abu-Diab and Guy Henry.

David Paul Ericksen argued the cause for respondent Tom Cherichelo.

O. Gene Hurst argued the cause for respon-dent Leonardo Casiero.

PER CURIAM

All the defendants to this fraud action obtained summary judgment. After careful consideration of the issues on appeal, we affirm the summary judgment entered in favor of defendants E.M.N. Express Mortgage Nationwide, Inc. (EMN) and its employees, Anabela Ribeiro, Jamal Abu-Diab and Guy Henry (EMN and these individual defendants are sometimes collectively referred to herein as "the EMN defendants"), but reverse the summary judgment entered in favor of defendants Tom Cherichelo and Leonardo Casiero. We also reject plaintiff's argument that the judge erred in denying one of his discovery motions.

In reviewing an order granting summary judgment, we apply the same standard that trial judges must apply. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div. 1998). This standard requires that we consider whether the evidential material presented on the motion, when viewed in the light most favorable to the opponent, is sufficient to allow a rational factfinder to render a verdict in favor of the motion's opponent. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). In other words, "when the evidence 'is so one-sided that one party must prevail as a matter of law,' the trial court should not hesitate to grant summary judgment," but when the evidential material reveals a genuine dispute about a material fact, then summary judgment is precluded. Ibid. (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 252, 106 S. Ct. 2505, 2512, 91 L. Ed. 2d 202, 214 (1986)). Viewing plaintiff's allegations in the light most favorable to him, we must assume the truth of the following set of circumstances.

Plaintiff had a long-standing interest in purchasing a particular parcel of real property in Aberdeen. On occasions during the ten years preceding the events in question, plaintiff indicated to the owner his willingness to purchase the property for $250,000. This offer was eventually accepted sometime in 2001. Although the complaint indicates that a copy of the contract was attached as an exhibit, we have been unable to locate it in the record on appeal even though numerous copies of the complaint are included in the parties' appendices.

Having obtained a contract to purchase the property, plaintiff considered obtaining a Small Business Administration (SBA) loan. Plaintiff discussed this with defendant Abu-Dian, an EMN representative, and applied through EMN for a $400,000 SBA loan. As part of the process, which he never completed, plaintiff provided a $5,290 deposit to EMN.

At some point, plaintiff advised a friend -- defendant Cherichelo -- about his purchase. Later, while plaintiff was storing equipment in the structure on the property in question, defendants Cherichelo and Casiero appeared and began looking around. According to plaintiff, Cherichelo indicated that he liked the property and wanted to become plaintiff's partner. Plaintiff declined.

In a subsequent conversation, Cherichelo asked plaintiff to allow him to finance the purchase because he thought he could earn greater interest on his money by making a loan to plaintiff. Plaintiff at first balked because he had already deposited funds with EMN regarding the SBA loan but, when assured by his attorney that EMN would return the funds, plaintiff agreed to allow Cherichelo to finance the purchase. Plaintiff prepared a written memorandum for his and Chirchelo's signature in this regard, and plaintiff's counsel advised the seller that plaintiff was waiving the contract's mortgage contingency. EMN returned the deposit to plaintiff, retaining only the $350 application fee.

The memorandum prepared by plaintiff, which outlined the terms of Chirichelo's alleged oral agreement, was never signed. And, shortly before the scheduled closing of March 8, 2002, plaintiff lost contact with Cherichelo. Cherichelo gave what plaintiff alleged were bogus excuses for not meeting with him and failed to return plaintiff's telephone calls. As a result, plaintiff was unable to close, and the property was sold to Chirichelo's friend, defendant Casiero.

Plaintiff commenced this action for damages, asserting defendants' participation in this alleged scheme. After a period of discovery, defendants successfully moved for summary judgment.

Plaintiff appealed, arguing that the trial judge erroneously granted summary judgment, and that his right to discovery was inappropriately limited. We find insufficient merit in plaintiff's arguments regarding the summary judgment entered in favor of the EMN defendants to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E). However, we reverse the orders of summary judgment entered in favor of Cherichelo and Casiero.

In explaining the basis for our ruling, we first need to describe what this case is and is not about. Contrary to the arguments of Cherichelo and Casiero, plaintiff's claim does not turn on the application of the statute of frauds. It turns instead on a proper consideration of the elements of common law fraud.

The statute of frauds is a legislative device that bars the maintenance of actions brought to "enforce" certain types of oral agreements. Here, the trial judge determined that the statute of frauds barred the action because Cherichelo did not sign a writing that memorialized the alleged oral agreement.

The action brought by plaintiff, however, does not seek to enforce an oral agreement; the action seeks damages from defendants based upon a fraudulent scheme which had, as its chief instrument, the alleged oral agreement. In other words, plaintiff does not seek a judgment that would require Cherichelo to comply with the alleged oral agreement, as to which the statute of frauds would come into play; he seeks damages based upon the fact that he lost the opportunity to purchase the property because he was misled by Cherichelo's alleged oral promise, which was allegedly designed to get him to abandon his pursuit of SBA financing. Accordingly, the statute of frauds has no application here and does not bar the action. Instead, the viability of the action must be examined against the elements of common law fraud.

Legal fraud "consists of a material representation of a presently existing or past fact, made with knowledge of its falsity and with the intention that the other party rely thereon, resulting in reliance by that party to his detriment." Jewish Ctr. of Sussex Cty. v. Whale, 86 N.J. 619, 624 (1981). The scienter element of this cause of action is "not essential if plaintiff seeks to prove that a misrepresentation constituted only equitable fraud." Id. at 625. The other significant difference between legal and equitable fraud is that the latter "goes farther and includes instances of fraudulent misrepresentation which do not exist in the law." Ibid. (quoting 3 Pomeroy, Equitable Jurisprudence 486-88 (5th ed. 1941)).

This is the standard that should have governed the trial court's assessments of the evidential material. Had the elements of common law fraud been fully considered, the judge would have been required to conclude that plaintiff had alleged, somewhat inartfully, that Cherichelo had made a false representation that he would loan the funds plaintiff needed to purchase the property knowing and intending that, when he later failed to honor that alleged promise, plaintiff would lose the opportunity to purchase the property, rendering it available to Casiero. These allegations, which should have been assumed true at the summary judgment stage, meet the common law requirements of fraud.

The judge's oral decisions on these motions reveals that he only partially considered whether defendants engaged in fraudulent conduct. For example, in labeling plaintiff's allegations as insufficient, the judge only stated in general terms that he had read the deposition transcripts and that Cherichelo's discussion about funding the transaction "was idle chatter, boasting or whatever." That is certainly one permissible interpretation of the deposition testimony. But, because the matter was being considered at the summary judgment stage, the judge was obligated to accept the truth of plaintiff's sworn statements, not the sworn statements of Chirichelo or Casiero, and not the inferences that could be drawn in their favor.

A trier of fact might ultimately agree with Cherichelo's assertion that he did not commit himself to making the loan but, on defendants' motion for summary judgment, the judge was required to accept as true plaintiff's sworn statements that he and Chirichelo had a firm agreement upon which Chirichelo deliberately reneged at the last minute, causing plaintiff's loss of the property to Casiero. It is plaintiff's version that the judge was required to assume as true in determining whether to grant summary judgment, not Cherichelo's spin on the meaning of his discussions with plaintiff. Because the trial judge misapplied the Brill standard in ruling on the motions of defendants Cherichelo and Casiero, we are required to reverse.

Plaintiff lastly argues that the trial judge erred in entering an order on September 9, 2005 that denied one of his discovery motions. The notice of appeal makes no mention of this order, as required by R. 2:5-1(f)(3)(A), thus barring our review. See, e.g., Sikes v. Twp. of Rockaway, 269 N.J. Super. 463, 465-66 (App. Div.), aff'd o.b., 138 N.J. 41 (1994). Even were we to excuse this procedural defect, the argument posed by plaintiff in seeking reversal of that order is unenlightening and fails to persuade that the judge abused his considerable discretion in such matters. Connolly v. Burger King Corp., 306 N.J. Super. 344, 349 (App. Div. 1997).

To summarize, we affirm all the orders under review except that we reverse the orders of summary judgment entered in favor of Cherichelo and Casiero, and remand for further proceedings in conformity with this opinion. We do not retain jurisdiction.

We pause here to mention the convoluted state of the record on appeal. Four appendices were filed, only one of which had numbered pages as required by R. 2:6-1(b). The tables of contents of most of these appendices -- to the extent useful in light of the absent page numbers -- also proved unreliable. In addition, our examination of the record on appeal has been confounded by the fact that the parties have included materials that are either irrelevant to the issues on appeal or are duplicative of documents others have included. For example, the collective appendices contain: numerous copies of both relevant and irrelevant motion papers; three copies of the complaint; three copies of plaintiff's 68-page deposition; two copies of Casiero's 30-page deposition; three copies of the transcript of the court proceedings on December 2, 2005; three copies of the transcript of the court proceedings on February 17, 2006; numerous copies of orders entered by the trial court; multiple copies of plaintiff's earlier motion for leave to appeal, our order denying leave, plaintiff's motion for reconsideration, and our order denying that motion; multiple copies of briefs filed in the trial court, contrary to R. 2:6-1(a)(2); and other miscellaneous documents having no bearing on the issues posed on appeal. In short, the parties have provided a veritable haystack of largely irrelevant or duplicative material, contrary to R. 2:6-1(a)(2), through which we have been required to expend considerable periods of time -- without a reliable table of contents -- searching for those things relevant to our disposition of this appeal.

This unsigned, one-page document indicates that Cherichelo would lend $400,000 to plaintiff repayable over twenty-five years at 8.25% interest.

Contrary to the trial judge's holding, the action would not be barred by the statute of frauds -- even if applicable -- because the traditional writing requirement of the statute of frauds no longer has application to many oral agreements to convey interests in real property. After centuries of requiring a writing signed by the party to be charged, the 1995 amendments to the statute of frauds, L. 1995, c. 360, now permit the enforcement of an agreement to transfer an interest in real estate so long as the plaintiff can show "by clear and convincing evidence" the essential elements of the agreement. N.J.S.A. 25:1-13(b). See 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). And, although the Legislature retained the writing requirement for agreements to loan an amount greater than $100,000 when not primarily for personal, family or household purposes -- as here -- that provision applies only when the alleged loan was promised by "a person engaged in the business of lending or arranging for the lending of money or extending credit." N.J.S.A. 25:1-5(f). Cherichelo conceded at oral argument that he does not fit that description. As a result, even if this was an action to enforce an oral agreement, it could have survived summary judgment despite the absence of a writing in light of plaintiff's allegations that Cherichelo orally promised to make the loan described in the unsigned memorandum. Such a claim would be subject to the clear and convincing standard of proof, and, for that reason, generally would not be susceptible to summary judgment, see McBarron v. Kipling Woods L.L.C., 365 N.J. Super. 114 (App. Div. 2004), unless the proofs could be said to be so one-sided in demonstrating that no promise was made or in demonstrating that the parties understood that they would not be bound absent a writing. See, e.g., Morton v. 4 Orchard Land Trust, 180 N.J. 118, 130 (2004).

(continued)

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A-5592-05T1

March 4, 2008