RA-CO HOMES, L.L.C. v. RONALD V. O'KEEFE, et al.

 

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-4068-05T54068-05T5

RA-CO HOMES, L.L.C.,

Plaintiff-Respondent,

v.

RONALD V. O'KEEFE and

KATHERINE A. O'KEEFE,

husband and wife,

jointly, severally,

and in the alternative,

Defendants-Appellants.

________________________________

 

Submitted January 16, 2007 - Decided March 2, 2007

Before Judges S.L. Reisner, Seltzer and C.L. Miniman.

On appeal from the Superior Court of New Jersey, Chancery Division, Gloucester County, Docket No. C-12-05.

Slotnick & Schwartz, attorneys for appellants (Leonard T. Schwartz, on the brief).

Albert R. Rago, attorney for respondent.

PER CURIAM

Defendants Ronald V. O'Keefe and Katherine A. O'Keefe, husband and wife (the O'Keefes), appeal from a February 24, 2006, summary judgment declaring that the agreement of sale between the O'Keefes and plaintiff RA-CO Homes, L.L.C. (RA-CO), was valid and that RA-CO was not in breach thereof. The judgment also compelled the O'Keefes to transfer title to their real estate to RA-CO. In addition, they appeal the simultaneous denial of their cross-motion for summary judgment declaring RA-CO in material breach and dismissing the action against Mrs. O'Keefe on the ground that she was not a party to the contract.

The O'Keefes contend that the motion judge erred on May 25, 2005, in denying their motion to disqualify RA-CO's counsel and managing member, Albert R. Rago, Esq., on the ground that he would be a witness at trial. However, their notice of appeal made no reference to this order. In addition, the O'Keefes failed to obtain and file a transcript of the May 25, 2005, argument and decision on the disqualification motion as required by R. 2:5-3(a). Therefore, we decline to entertain their appeal from the May 25, 2005, order. Sikes v. Twp. of Rockaway, 269 N.J. Super. 463, 465-66 (App. Div.), aff'd o.b., 138 N.J. 41 (1994). As to the balance of their appeal, we affirm.

As the matter was resolved by summary judgment, we view the facts in a light most favorable to the O'Keefes. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). The O'Keefes jointly own real estate on Corkery Lane in Monroe Township, New Jersey, designated as Block 3801, Lots 10 and 12. Mr. O'Keefe, a New Jersey licensed real estate broker, also held a tax lien on Block 3801, Lot 11. Mr. O'Keefe listed all three lots for sale with All Ways Agency in 2002. Sometime in December 2002 Peter G. Costanzo, a member of RA-CO, proposed to purchase all three lots and the parties negotiated the terms of the contract over an extended period of time. Mr. O'Keefe disclosed the title problem with Lot 11, and in August 2003, a satisfactory agreement of sale was finally signed by RA-CO's counsel, Albert R. Rago, on behalf of RA-CO and by Mr. O'Keefe alone. The agreement specifically addressed the issue of title to Lot 11.

The sale price was $170,000, including a $1000 deposit to be held in escrow by National Fidelity Title Insurance Company, Congress Title Division (Congress), and the remainder to be paid at closing. The contract required Mr. O'Keefe to proceed through foreclosure. He represented in the contract that he anticipated having clear and marketable title by October 15, 2003. The sale was conditioned upon RA-CO obtaining all necessary subdivisions, variances, and approvals for development of the property. However, the contract provided that RA-CO was not required to proceed with subdivision applications until it had been notified that title to Lot 11 had been cleared.

The contract specified four "condition[s] precedent to the fulfillment of [RA-CO's] obligations under this Agreement." The fourth of these conditions was that "[RA-CO] warrants that it will proceed with its subdivision applications within thirty (30) days from the date that [O'Keefe] notifies [RA-CO] that [O'Keefe] has obtained good title to Lot 11 through his tax foreclosure." Additionally, paragraph 7(a) provided:

Should [RA-CO] violate or fail to fulfill and perform any of the terms or conditions of this Agreement, then in that case [O'Keefe]'s sole right and remedy shall be retention of the deposit paid by [RA-CO] . . . as liquidated damages . . . and all other rights and obligations of the parties hereto shall terminate.

RA-CO took steps to perform under the contract. First, it received a commitment for title insurance effective December 8, 2003. In addition, some time before January 9, 2004, RA-CO employed an engineer to assist in subdividing the property. On January 9, 2004, it requested that a surveyor perform work on the subdivision. Throughout the ensuing months RA-CO kept checking on the status of the foreclosure by making inquiry of the O'Keefes' counsel.

It was not until September 22, 2004, that a final judgment was entered on the tax lien foreclosure, giving Mr. O'Keefe clear title to Lot 11. On December 28, 2004, Albert Rago corresponded with RA-CO's title agency and the O'Keefes' counsel. He advised the title agency that its report of title did not include Lot 11, that all three lots were under contract, and that RA-CO wanted to proceed with approvals to subdivide all three lots. In his letter to the O'Keefes' attorney, Albert Rago advised that there was still a question as to Lot 11. Evidently having received a verbal response from the O'Keefes' attorney, Albert Rago then advised RA-CO's title agency that a final judgment had been recorded and asked the agency to confirm that information. On or about January 3, 2005, RA-CO received an invoice for the various title and related searches for the property.

On January 10, 2005, Mr. O'Keefe notified Albert Rago and Peter Costanzo that he was in receipt of the final deed for Lot 11. Two weeks later, RA-CO received a proposal from Swiderski Associates for the engineering work associated with the subdivision of all three lots. The first phase of work was an outbound survey and topography and the second phase was schematic design. Five subsequent phases of work were also specified in the engineering firm's proposal. Mr. Costanzo certified that he visited the Monroe Planning Board and was advised on the proper procedures and told of the need for a conceptual plan and work session as a first step in the subdivision process. On February 15, 2005, RA-CO accepted the proposal of Robert J. Monson, Professional Land Surveyor, and sent a check to him for $850 as a deposit on the survey work. It also paid Swiderski Associates $1000 for its initial services.

On February 16, 2005, Mr. O'Keefe sent RA-CO a letter notifying it that he was terminating the Agreement of Sale, stating he had no notice that RA-CO fulfilled the conditions precedent to sale specified in paragraph seven and paragraph thirteen, subparagraphs (a), (c), and (d), of the Agreement of Sale. Mr. O'Keefe, by copy of the February 16, 2005, letter, requested that Congress release the $1000 it held in escrow. By letter dated March 14, 2005, Congress notified Mr. O'Keefe that it did not have the deposit monies, even though RA-CO had given Mr. O'Keefe a copy of the deposit check payable to Congress at the time the contract was executed. In response to the February 16, 2005, letter, RA-CO filed a lis pendens and sued for specific performance on February 23, 2005.

In ruling on the cross-motions for summary judgment, the motion judge concluded that the issue in dispute was a legal one, i.e., the proper interpretation of the requirement in the Agreement of Sale that RA-CO proceed with its subdivision application within thirty days. On that issue the judge found:

[E]veryone that has anything to do with land development and major subdivisions in this area of the county knows that 30 days is a very small piece of time when it comes to subdivision application. And what it means to proceed, in my opinion, is to begin the process. It appears from the arguments from Mr. Rago as well as the papers filed that, clearly, the hiring of an engineer and other minimal things within 30 days would satisfy paragraph 13D. I don't think there are any facts in dispute about that. I think it's purely an interpretation of that paragraph.

As to the issue of the failure to deposit $1000 with Congress, the court found that breach had been remedied as of the time of the oral argument, and that in any event, the sum was so nominal that breach of the requirement for deposit with Congress was not a material breach. The judge concluded that it was "clear that [RA-CO] took some action following the [O'Keefes'] notification that they had good title to lot 11." He continued:

It's also clear by the terms of the agreement that [RA-CO] must merely proceed with its application within 30 days. There is no reason to interpret that language in any way which would require the application to in fact . . . be completed or even to be filed within the 30 days.

It should also be noted that while the agreement contemplated an anticipated date in October of 2003 . . . when the [O'Keefes] would have clear title to lot 11, the [O'Keefes] did not accomplish this for more than a year following that date. To then interpret [RA-CO's] obligation so narrowly is entirely inequitable.

The request is clear by the terms of the agreement that the plaintiff is required only to take action within 30 days, to proceed with the process would be sufficient to meet that requirement.

This appeal followed.

The O'Keefes raise the following issues for our consideration:

I. THE TRIAL COURT ERRED HOLDING THAT SUMMARY JUDGMENT FOR THE PLAINTIFF IS APPROPRIATE BECAUSE SEVERAL ISSUES OF MATERIAL FACTS EXIST.

A. Summary Judgment in favor of the Plaintiff is not appropriate because the Plaintiff breached the contract by not proceeding with the subdivision application within the thirty days as specified in the contract.

B. Summary Judgment in favor of the Plaintiff is not appropriate because the Plaintiff breached the contract by not providing the $1000.00 deposit at the time of the making of the contract.

II. THE TRIAL COURT SHOULD HAVE DISMISSED MRS. O'KEEFE AS A DEFENDANT TO THE SUIT BECAUSE PLAINTIFF FAILED TO STATE A CAUSE OF ACTION AGAINST MRS. O'KEEFE AND MRS. O'KEEFE NEVER SIGNED THE AGREEMENT OF SALE.

III. THE SUPERIOR COURT ERRED IN DISMISSING MR. O'KEEFE'S MOTION TO DISQUALIFY PLAINTIFF'S COUNSEL, MR. RAGO, BECAUSE MR. RAGO COULD BE CALLED AS A WITNESS BY EITHER SIDE, MR. RAGO DRAFTED THE AGREEMENT OF SALE, AND MR. RAGO SIGNED THE AGREEMENT OF SALE ON BEHALF OF PLAINTIFF.

Summary judgment is appropriate when there is no genuine issue as to any material fact in the record. R. 4:46-2(c) provides:

The judgment or order sought shall be rendered forthwith if the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact challenged and that the moving party is entitled to a judgment or order as a matter of law.

Brill, supra, 142 N.J. at 540, outlined the standard for deciding a summary judgment motion:

[A] determination whether there exists a "genuine issue" of material fact that precludes summary judgment requires the motion judge to consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party.

The court must assume that the non-moving parties' assertions of fact are true and "grant all the favorable inferences to the non-movant." Id. at 536. The determination is whether the evidence "'is so one-sided that one party must prevail as a matter of law.'" Ibid. (quoting Anderson v. Liberty Lobby, Inc. 477 U.S. 242, 251-52, 106 S. Ct. 2505, 2512, 91 L. Ed. 2d 202, 214 (1986)).

"If there exists a single, unavoidable resolution of the alleged disputed issue of fact, that issue should be considered insufficient to constitute a 'genuine' issue of material fact for purposes of Rule 4:46-2." Brill, supra, 142 N.J. at 540. "However, an opposing party who offers no substantial or material facts in opposition to the motion cannot complain if the court takes as true the uncontradicted facts in the movant's papers." Baran v. Clouse Trucking, Inc., 225 N.J. Super. 230, 234 (App. Div.), certif. denied, 113 N.J. 353 (1988). Assertions that are conclusive and self-serving for the asserting party are insufficient to defeat a summary judgment motion. Puder v. Buechel, 183 N.J. 428, 440-41 (2005).

In reviewing a ruling on a summary judgment motion, we apply the same standard as that governing the trial court. Antheunisse v. Tiffany & Co., 229 N.J. Super. 399, 402 (App. Div. 1988), certif. denied, 115 N.J. 59 (1989); Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998).

The O'Keefes urge that the motion judge erred in granting summary judgment because (1) the requirement that RA-CO "proceed with its subdivision applications within thirty (30) days" is ambiguous and parol evidence must be introduced to clarify the ambiguity and (2) a material issue of fact exists respecting RA-CO's failure to timely make the $1000 deposit required by the contract. Neither issue precluded summary judgment here.

In construing a contract, "[t]he court makes the determination whether a contractual term is clear or ambiguous." Schor v. FMS Fin. Corp., 357 N.J. Super. 185, 191 (App. Div. 2002). When the term is clear, a court is required to enforce the contract as written, giving the words their plain, ordinary meaning. Gibson v. Callaghan, 158 N.J. 662, 670 (1999). However, when the words are susceptible to more than one reasonable interpretation, the court must examine the document as a whole in resolving the ambiguity and must consider other external evidence, such as the relationship of the parties, the contractual objectives, and other attendant circumstances. Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997). Still, the contractual language should not be tortured to create ambiguity. Ibid.

Like the motion judge, we find no ambiguity in the requirement that RA-CO "proceed" with its subdivision applications within thirty days of notice to it that title to Lot 11 had been cleared by the O'Keefes. The plain, ordinary meaning of the word "proceed" is "[t]o undertake and carry on an act or process; . . . [t]o move on in a methodical way," Webster's II New College Dictionary 881 (1995), and "to begin and carry on a series of acts or measures." Webster's New International Dictionary Unabridged 1972 (2d ed. 1943).

Clearly, a series of acts or measures are required in making a subdivision application. Preliminary plans must be prepared before an application can even be filed, including site plans, stormwater management plans, utilities plans, and street plans. Indeed, Monroe Township provides potential subdivision applicants with an eleven-page checklist of documents and information that must be included when an application is filed. In addition, notice must be given to surrounding property owners of the application, and then public hearings are held on the application at which testimony is offered by the applicant and its experts as well as by the public. See N.J.S.A. 10:4-6 to -21. The process of applying for a major subdivision approval is not a singular event, but is instead a series of acts that occur over a significant period of time.

The O'Keefes urge "proceed with its subdivision applications" means "obtain an application form and submit the application form to the Planning Board." They base this interpretation on the definition of "application for development" found in N.J.S.A. 40:55D. This interpretation tortures the language of the agreement, and common sense as well, by reading the word "proceed" out of the phrase and may not be adopted to create an ambiguity. See Nester, supra, 301 N.J. Super. at 210. This is especially so in the context of an agreement where Mr. O'Keefe did not have clear title to one of the lots and he failed, or at least was unable, to clear title until fifteen months after he represented he would. It is unreasonable to interpret the agreement to require RA-CO to undertake the expense of developing all of the necessary preliminary plans before the fulfillment of the condition precedent to performance, clear and marketable title, was fulfilled.

We are also persuaded that the failure to make the required $1000 deposit with Congress was not a material breach. The evidential fact of breach, failure to make the deposit at the time of execution of the contract, was undisputed. The ultimate issue was whether that breach was material.

We have addressed the issue of when a breach is material:

"Material breach" has been described as follows:

Where a contract calls for a series of acts over a long term, a material breach may arise upon a single occurrence or consistent recurrences which tend to "defeat the purpose of the contract." . . . In applying the test of materiality to such contracts a court should evaluate "the ratio quantitatively which the breach bears to the contract as a whole, and secondly the degree of probability or improbability that such a breach will be repeated."

[Magnet Res., Inc. v. Summit MRI, Inc., 318 N.J. Super. 275, 286 (App. Div. 1998) (quoting Medivox Prods., Inc. v. Hoffmann-LaRoche, Inc., 107 N.J. Super. 47, 59 (Law Div. 1969)).]

"[I]f 'during the course of performance one party fails to perform "essential obligations under the contract," he may be considered to have committed a material breach and the other party may elect to terminate it.'" Ingrassia Constr. Co. v. Vernon Twp. Bd. of Educ., 345 N.J. Super. 130, 136-37 (App. Div. 2001).

Thus, the judge was required to determine whether the failure to make a timely deposit in accordance with the terms of the contract tended to defeat its purpose. We agree that the deposit was not material. Furthermore, the breach was remedied after notice of same. See Magnet Res., Inc., supra.

After carefully reviewing the record in the light of the written arguments advanced by the parties, we conclude that the balance of the issues presented by the O'Keefes are without sufficient merit to warrant extensive discussion in this opinion, R. 2:11-3(e)(1)(A), (E), and we affirm substantially for the reasons expressed by the trial judge in his oral opinion delivered on February 24, 2006.

We add only the following with respect to the action against Mrs. O'Keefe. She testified clearly at her deposition that she had consented to the sale of her property to RA-CO, that she had sold real estate in the past without signing the contract for sale with her husband, and that she would have signed the deed to RA-CO had it been presented to her, as she had done in the past. She also admitted that she never repudiated the contract at issue here. This undisputed evidence is more than sufficient to support the judge's conclusion that the absence of her signature on the contract was not an impediment to compelling specific performance of same.

Affirmed.

 

Mr. O'Keefe attempted to rebut this statement by certifying to hearsay information from the Planning Board staff that Mr. Costanzo did not do so. This inadmissible evidence did not create a genuine dispute of fact.

(continued)

(continued)

15

A-4068-05T5

March 2, 2007