JUNG SOOK LEE v. TENAFLY ASSOCIATES LLC

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

JUNG SOOK LEE,

Plaintiff-Respondent,

v.

TENAFLY ASSOCIATES, LLC,

Defendant-Appellant.

______________________________

March 14, 2014

Before Judges Alvarez, Ostrer and Carroll.

On appeal from the Superior Court of New Jersey, Law Division, Bergen County, Docket No. L-9328-07.

Michael F. Martino argued the cause for appellant (Stein, McGuire, Pantages & Gigl, LLP, attorneys; Mr. Martino, of counsel and on the briefs).

Richard J. Abrahamsen argued the cause for respondent (Sekas & Abrahamsen, LLC, attorneys; Mr. Abrahamsen and Julia H. Kim, on the brief).

PER CURIAM

Defendant appeals from the trial court's orders denying a motion to recuse, and denying a new trial without a jury. We affirm.

I.

This case is before us for the third time. Plaintiff sought the refund of a $150,000 deposit and $56,851 in extras that she paid pursuant to a 2005 contract to purchase a condominium for $1.5 million. We reversed summary judgment for defendant, who was the developer and seller, finding there existed genuine issues of material fact regarding the parties' respective rights and duties under the contract. Lee v. Tenafly Assocs., LLC, No. A-0144-09 (App. Div. July 28, 2010) (slip op. at 14). On the first remand, the court denied defendant's motions to strike plaintiff's jury demand.1 Following a four-day trial, the jury returned a plaintiff's verdict.

In the second appeal, defendant argued that the court erred in refusing to enforce a jury waiver provision in the purchase contract that defendant drafted. Lee v. Tenafly Assocs., LLC (Lee II), No. A-4548-10 (App. Div. June 8, 2012) (slip op. at 6). Plaintiff separately initialed the jury waiver provision, but defendant neglected to do the same. Id. at 3. Parting company with the trial court, we held that defendant's failure to separately initial the jury waiver provision was not dispositive of whether it agreed to it. Id. at 7. Defendant could have objectively manifested assent by other means. Id. at 11. We also rejected the trial court's conclusion that plaintiff, despite her initialing of the provision, should not have been bound because she lacked a subjective understanding of the provision. Ibid.

We remanded for the trial court to determine whether defendant accepted the jury waiver. Ibid. However, we also held that even if the jury waiver provision was enforceable, defendant's entitlement to a new trial without a jury would be subject to the equitable principles governing a court's decision to grant specific performance. Id. at 19. We recited the factors the court on remand may consider. They generally include: the parties' respective conduct and situation; the clarity of the agreement even if enforceable; and the impact of specific performance on the parties, that is, whether granting specific performance would have a harsh or oppressive impact on plaintiff, and whether denying it would leave defendant without an adequate remedy. Id. at 18 (citing Marioni v. 94 Broadway, Inc., 374 N.J. Super. 588, 601 (App. Div.), certif. denied, 183 N.J. 591 (2005)). In particular, we directed the trial court to consider "the reasonableness and burdensomeness of the remedy, especially on a non-contracting party, such as the court itself." Ibid. In applying these factors, the court was permitted to consider whether defendant had a reasonable possibility of prevailing on a retrial. Id. at 20. If not, then the court could find that specific performance would, on balance, be unduly burdensome. Ibid.

On the second remand, defendant presented a certification of its transactional attorney in support of its argument that the failure to initial the provision was an oversight. Defendant included the provision in the contract in the first place, reflecting its intent to waive a jury trial. Apparently accepting defendant's argument, the trial judge who had presided over the jury trial found, without an evidentiary hearing, that defendant assented to the jury waiver provision.

However, the trial court held that specific performance of the jury waiver provision, consisting of a new trial without a jury, was unwarranted. After summarizing the evidence at the four-day trial, the judge held that a new trial before him would not likely produce a different result, and would impose an undue burden.

This Court, unlike the pre-trial judge, saw and heard all the evidence and had the benefit of a full jury trial. In fact, the burden of conducting another full four-day trial, where the evidence clearly and convincingly demonstrated that the defendant breached the contract and simply kept the plaintiff's deposit, has not been satisfied. Had I conducted the bench trial, I would have made the same exact findings, and the same exact calculation of damages.

The defendant has no reasonable possibility of prevailing in a . . . retrial before any judge or jury. Another trial would be just an exercise in futility. . . . The burden of now bringing all of the witnesses back to testify to the same thing is, in fact, a burden that this Court should not have to undertake, nor should the taxpayers have to pay . . . to hold.

The court entered an order denying a new trial without a jury after denying an earlier motion by defendant that the court recuse itself.

Defendant appeals and raises three points for our consideration: (1) the trial court erred in denying its recusal motion; (2) the doctrine of specific performance was not applicable to defendant's right to enforce the jury waiver provision; and (3) defendant showed a reasonable possibility of a favorable outcome at a bench trial, such that a new trial without a jury should have been granted.

II.

We find no merit in defendant's argument that the trial judge should have recused himself. Defendant asserts the court demonstrated bias in various rulings and actions, including: the court's denial of defendant's second motion to strike the jury demand; the court's denial of oral argument on defendant's motion for a new trial after the jury verdict; the judge's failure to respond to certain correspondence and a request for an order; the court's participation in a settlement conference before the jury verdict; and the manner in which the court conducted proceedings after our second remand.

We review the trial court's decision for an abuse of discretion. State v. McCabe, 201 N.J. 34, 45 (2010). We find none. A judge must disqualify himself if his impartiality might reasonably be questioned. Code of Judicial Conduct, Canon 3C(1)(a). A judge must also do so if he has "given an opinion upon a matter in question in the action," or "there is any other reason which might preclude a fair and unbiased hearing and judgment, or which might reasonably lead counsel or the parties to believe so." R. 1:12-1(d), (g). At bottom, a movant must show "prejudice or potential bias." State v. Marshall, 148 N.J. 89, 276 (internal quotation marks and citation omitted), cert. denied, 522 U.S. 850, 118 S. Ct. 140, 139 L. Ed. 2d 88 (1997).

A court has a duty to sit that is as strong as the duty to disqualify itself. See Laird v. Tatum, 409 U.S. 824, 837, 93 S. Ct. 7, 15, 34 L. Ed. 2d 50, 60 (1972) (stating that a judge "has a duty to sit where not disqualified which is equally as strong as the duty to not sit where disqualified" (emphasis omitted)); Marshall, supra, 148 N.J. at 276 (stating judges are not free to "err on the side of caution" by granting recusal motions); Hundred East Credit Corp. v. Eric Schuster Corp., 212 N.J. Super. 350, 358 (App. Div.) ("It is not only unnecessary for a judge to withdraw from a case upon a mere suggestion that he is disqualified: it is improper for him to do so unless the alleged cause of recusal is known by him to exist or is shown to be true in fact."), certif. denied, 107 N.J. 60 (1986).

We do not condone the trial court's non-responsiveness to counsel. However, neither those oversights, nor the court's other rulings compelled disqualification. An adverse ruling against the moving party, even if made in a prior proceeding, does not warrant recusal. Marshall, supra, 148 N.J. at 276; State v. Walker, 33 N.J. 580, 591 (1960).

Also, the court's involvement in settlement discussions in the midst of the trial in 2011 did not compel the court's recusal after our remand in Lee II. First, the judge stated he had no recollection of the conferences. Second, "exposure to inadmissible evidence in the course of pretrial proceedings generally does not require disqualification of the judge even where the judge is to serve as the factfinder." State v. Medina, 349 N.J. Super. 108, 130 (App. Div.), certif. denied, 174 N.J. 193 (2002). A trained judge has the ability to exclude irrelevant or improper evidence that has come to his attention. Ibid. (citing State v. Kern, 325 N.J. Super. 435, 444 (App. Div. 1999) and State v. Kunz, 55 N.J. 128, 145 (1969)).

Similarly, the court's involvement in settlement discussions at which it was exposed to counsel's statements does not compel disqualification. A trial judge may engage in efforts to settle a case without requiring him or her to step aside. See Panitch v. Panitch, 339 N.J. Super. 63, 71 (App. Div. 2001) (recognizing "the usual non-jury case where a judge must necessarily be involved to some degree, although not completely immersed, in attempting to move a case or encourage settlement of a case"). While "excessive involvement" in pretrial proceedings by a factfinder may require recusal, ibid., there is no evidence that the trial judge's involvement in the settlement discussions here was "excessive." Further comment on the recusal issue is not warranted. R. 2:11-3(e)(1)(E).

Defendant also questions whether we properly applied principles of specific performance to the issue of remedy for breach of the jury waiver provision. However, defendant is bound by our initial decision. See Khoudary v. Salem Cnty. Bd. of Soc. Servs., 281 N.J. Super. 571, 575 (App. Div. 1995) (stating that a party may not "reargue the merits of what we decided in the first appeal" and was "precluded from relitigating any issues on the remand other than the specific purpose of the remand"). We shall not revisit it here.

We turn to the court's decision to deny specific performance in the form of a new trial before a judge. We review the trial court's decision for an abuse of discretion. Estate of Cohen ex rel. Perelman v. Booth Computers, 421 N.J. Super. 134, 157 (App. Div.), certif. denied, 208 N.J. 370 (2011). See also Stehr v. Sawyer, 40 N.J. 352, 357 (1963) (stating that specific performance is a discretionary remedy); Weisbrod v. Lutz, 190 N.J. Super. 181, 186 (App. Div. 1983) (stating that "specific performance is an equitable remedy which a court awards with discretion"). While the "abuse of discretion standard defies precise definition," we may find an abuse of discretion when a decision is "made without a rational explanation," "rest[s] on an impermissible basis," or was "based upon a consideration of irrelevant or inappropriate factors." Flagg v. Essex Cnty. Prosecutor, 171 N.J. 561, 571 (2002) (internal quotation marks and citations omitted).

As discussed above, we reviewed factors relevant to the court's exercise of discretion. The trial court appropriately determined to focus on what it deemed the distinct unlikelihood that a new trial would yield a different result. We have no basis to question the court's conclusion. Defendant has not supplied us with the transcript of the trial, or identified the grounds for a likely verdict in its favor upon a new trial. Defendant's argument that its presentation would have been different before a judge is unsupported by any detail.

Given the court's determination that the result would not change, the court concluded that a new trial would be an exercise in futility. See Fiedler, Inc. v. Coast Fin. Co., 129 N.J. Eq. 161, 169 (E. & A. 1941) ("Decrees that would in the final result be nugatory should not be made."). We do not disagree. Under the circumstances, a new trial would also impose an unwarranted burden on plaintiff and the judicial system. See Stehr, supra, 40 N.J. at 357 (stating that specific performance must not be "harsh or oppressive"); Fleischer v. James Drug Stores, Inc., 1 N.J. 138, 148 (1948) (stating that a court of equity may decline to award specific performance where it would burden the court by requiring its continuing supervision). Therefore, the trial court appropriately exercised its discretion in denying defendant a new trial before a judge.

1 Defendant first filed a motion to strike after the case was scheduled for trial. On the eve of trial, defendant renewed its request before a different judge, who presided at the trial. Both motions were denied.