WAINCO PARTNERS, LLC v. STEVE'S MOBILE HOME PARK, LLC

NOT FOR PUBLICATION WITHOUT THE

APPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEY

APPELLATE DIVISION

DOCKET NO. A-0

WAINCO PARTNERS, LLC,

Plaintiff-Appellant,

v.

STEVE'S MOBILE HOME

PARK, LLC,

Defendant-Respondent.

___________________________________________

July 30, 2015

Argued May 27, 2015 Decided

Before Judges Messano and Hayden.

On appeal from the Superior Court of New Jersey, Chancery Division, Middlesex County, Docket No. C-269-12.

Marc J. Gross argued the cause for appellant (Greenbaum, Rowe, Smith & Davis, LLP, attorneys; Mr. Gross, of counsel and on the brief; Christopher J. Ledoux, on the brief).

Steven L. Fox argued the cause for respondent (Borrus, Goldin, Foley, Vignuolo, Hyman & Stahl, P.C., attorneys; Anthony B. Vignuolo, on the brief).

PER CURIAM

Plaintiff Wainco Partners, LLC appeals from the November 8, 2013 order of the Chancery Division that denied its cross-motion for partial summary judgment, granted summary judgment to defendant Steve's Mobile Home Park, LLC, and dismissed plaintiff's complaint. Plaintiff also seeks review of the January 31, 2014 order that denied its motion for reconsideration.

Plaintiff contends that summary judgment was inappropriate because there were disputed issues of material fact; it argues that the motion for reconsideration should have been granted because the judge misapplied the law and "overlooked disputed material facts." Having now considered these arguments in light of the record and applicable legal standards, we affirm.

I.

When reviewing a grant of summary judgment, we confine our review to the record before the motion judge. Lombardi v. Masso, 207 N.J. 517, 542 (2011) (citation omitted).

As amended, plaintiff's complaint alleged that in 2009 it had entered into an agreement to purchase defendant's property located in East Brunswick; that agreement was terminated and plaintiff's deposit was refunded after environmental concerns involving the property arose. In 2011, the parties executed a second agreement for sale. Plaintiff alleged that defendant subsequently breached the contract, violated the implied covenant of good faith and fair dealing, made false representations with knowledge of their falsity, negligently misrepresented material facts, tortiously interfered with plaintiff's prospective economic advantage and, as a result, defendant was unjustly enriched. Plaintiff sought specific performance, "including remediation of environmental contamination and correction of environmental violations prior to conveyance." Plaintiff also sought compensatory and consequential damages, costs and other appropriate equitable relief.

Defendant answered and eventually moved for summary judgment. Rosemary Lester, a member of defendant corporation, certified that the property had been operated as a mobile home facility, although decades earlier, a gasoline station was also on the property. In 2009, the parties entered into a contract for sale with a purchase price of $1.8 million. However, during the due diligence period, the parties could not agree on the resolution of open environmental issues as reflected in the report of plaintiff's environmental consultant, Eikon Planning and Design, LLC (Eikon), and "several open case files" with the New Jersey Department of Environmental Protection (DEP). Plaintiff terminated the contract, and defendant returned the deposit money in December 2009.

Around April 2011, plaintiff again expressed interest in purchasing the property. In a letter to defendant's attorney at the time, plaintiff's manager, Stuart Wainberg, set forth the salient terms of plaintiff's offer. The sales price was to be lowered to $1.6 million, defendant would deliver a "No Further Action" (NFA) letter from DEP "in connection with all open [] case files," and plaintiff would "assume the financial responsibility for all other matters identified in [Eikon's report] including [] testing," which plaintiff agreed to perform at its own expense.

The second contract was executed in June 2011. Section 9(c) of the contract contained defendant's representation that it had received no notice of environmental conditions or claims, including underground storage tanks, except for "two tanks buried under Route 18, [for] which [defendant was] awaiting a[n] [NFA] letter," a kerosene tank, for which defendant had already received an NFA letter, and "a spill that was considered closed and satisfied" by Middlesex County. Under section 9(e), defendant was required to furnish contemporaneously with execution of the agreement, "all materials . . . relating to the" property, including "Phase 1 reports[] [and] environmental reports." Failure to provide the reports upon demand would result, upon plaintiff's request, in a reasonable extension of the sixty-day due diligence period.

Within the "Seller's Representations" portion of the agreement, Section 13(a) provided that defendant had not received

any notice of any violation of any laws, ordinances, rules and regulations of any government or any agency . . . with jurisdiction bearing on the [p]roperty. In the event that any such notice or information is received by [defendant] prior to closing, [defendant] will immediately notify [plaintiff] or [defendant] thereof and correct same at its own expense prior to [c]losing.

Section 13(d)(ix) identified the referenced "open case files with [] DEP." The specific representations defendant made in this section were that the property included a kerosene tank that was removed and for which defendant had obtained an NFA letter, two tanks under Route 18 abutting the property that had been "petrifilled" and for which defendant was awaiting an NFA letter, and the spill that had been cleared. This section also required defendant to "immediately provide" plaintiff with "a Site Report and copies of all correspondence relating to these matters" so plaintiff could "gain a full understanding." The due diligence period would be tolled until plaintiff received "these documents and reports."

A "Phase II" environmental review of the property identified further problems. Lester identified an email from Eikon to Handex Consulting and Remediation, LLC (Handex), defendant's environmental consultants, dated November 2011 that summarized work done to assess "post-remedial soil samples" under "Gas Pump Island No. 2." Lester identified three NFA letters from DEP that were provided to plaintiff. One, dated May 24, 2011, dealt with two underground storage tanks along Route 18. A second, of the same date, referenced the Route 18 tanks, but also included "former pump island #1[] and former pump island #2." A third, dated September 6, 2011, dealt with defendant's remediation of the 1996 spill on the property caused by "an above ground storage tank falling over."

Lester stated that defendant consented repeatedly to plaintiff's request for extension of the due diligence period, and the parties continued to discuss "a possible amicable resolution of the newly discovered environmental issues at the property." However, defendant ultimately served plaintiff with a "time of the essence" letter setting the closing date for July 19, 2012.1 No closing took place, and defendant returned plaintiff's deposit on August 24.

Plaintiff's cross-motion for summary judgment was supported by a certification from Wainberg. He stated that during the Phase II environmental due diligence period, plaintiff became aware, for the first time, of a second pump island, which was reflected on a survey that defendant had not produced before. Wainberg stated that two NFAs produced by defendant, both dated the same day, raised "further concerns" because only one referenced the two pump islands. He noted confusion was fostered by incorrect file numbers on the NFAs. Wainberg further asserted that Eikon and plaintiff "were unsure what documentation or information" defendant had provided to DEP in order to secure the NFAs.

Wainberg also noted Eikon's Phase II investigation revealed other areas of possible contamination on the property. Wainberg claimed that once defendant and Handex were advised "of the additional environmental issues and violations," defendant's actions "clearly demonstrated that it understood it was obligated to remediate those violations." Wainberg referred to an August 2011 email from defendant's counsel indicating terms for a possible amendment to the contract, whereby plaintiff would pay Handex up to $100,000 to remediate these other areas of contamination, receive a credit at closing, and any costs that exceeded that amount would be split equally.

Wainberg acknowledged the contract was never amended, but attached to his certification was a September 2011 email from defendant's attorney to Handex which asked what items on Eikon's list were "still outstanding," and requested a proposal to address only those issues. In December, Handex sent a report to defendant that detailed the work it had previously done regarding the sampling of soil under pump island #2 and identifying other areas of contamination unrelated to the pump islands, the Route 18 underground tanks or the prior spill. The report indicated further work that was necessary with regard to these new areas of concern, but it did not identify any further action required as to pump island #2.

Also attached to Wainberg's certification was an email from Eikon to Handex that is quite telling. It does indicate, as Wainberg stated, that based upon these new areas of concern, DEP was opening a new case file. However, it also reflects Eikon's statement that Handex must address all the outstanding items in order to satisfy plaintiff. Notably, as to the pump island, Eikon only asked if the contaminated soil removed as part of Handex's earlier testing had been disposed of. The rest of the email reflects Eikon's request that Handex modify its proposal to address the new areas of concern.

On January 3, defense counsel sent plaintiff a letter indicating defendant would not agree to do any further testing or remediation. She noted that defendant had served the NFAs as required. Noting that the purchase price had already been reduced by $200,000 from the first contract, she stated defendant was unwilling to make any further "concessions."

As further evidence of defendant's course of conduct, in support of its motion and in opposition to defendant's motion, plaintiff attached a portion of Lester's deposition testimony. She acknowledged her belief that the contract required defendant to deliver the property free of environmental violations, and she stated that defendant "did what [it was] supposed to do." However, Lester further explained that she meant defendant "would continue to do things that [it] needed to do for the future for [its] next buyer." Likewise, in his deposition, Ronald Zastocki, a relative of Lester and defendant's primary contact for the environmental consultants, acknowledged that defendant had Handex address Eikon's concerns because it was "the right thing to do."

After considering oral argument, Judge Ann Graf McCormick concluded that the contract required defendant to remediate the environmental issues identified in the "phase one site report," and gave plaintiff "the right to again conduct a due diligence . . . environmental inspection." She reasoned that under the terms of the contract, if plaintiff was not satisfied with the results, it could "void the contract with the return of the deposit." The judge focused on the undisputed fact that plaintiff's subsequent inspections "revealed additional environmental issues with the property," and the issue was now "whose responsibility it [was] to take care of those issues" pursuant to the contract.

Judge McCormick rejected plaintiff's argument that section 13(a) controlled. She noted the very specific provisions of section 9 regarding defendant's representations and its obligations as to those specifically identified environmental issues. The judge reasoned "the specific controls the general." She further reasoned that plaintiff fully understood what its rights were under section 13(a) because the language of that section was identical to that of the first contract. At that time, upon discovery of certain conditions on the property, plaintiff terminated the agreement. Judge McCormick determined that under the current contract, plaintiff had the same option: either "take the property as is with the additional inspections or . . . void the contract."

Finally, the judge rejected plaintiff's suggestion that defendant's actions regarding subsequent remediation efforts raised "a question of fact as to [its] motivation." She concluded that whatever actions defendant took "would [not] affect the interpretation of . . . a very, very clear contract." Judge McCormick entered the order granting defendant summary judgment dismissing the complaint.

Plaintiff filed a timely motion for reconsideration. In support, it supplied portions of Zastocki's deposition transcript and the letter from defendant's attorney setting time of the essence for the closing. During oral argument, plaintiff's major contention was that defendant had failed to provide all information it had supplied to DEP to obtain the NFAs. Plaintiff contended there was a dispute of material fact regarding whether the NFAs were properly obtained, and plaintiff was seeking "enforcement" of the contract provisions requiring defendant to furnish all information and correspondence it supplied to DEP.

Judge McCormick noted that while Wainberg's certification in support of the partial summary judgment motion stated there was confusion and suspicion regarding the NFAs, the issue had never been argued in plaintiff's brief or during oral argument on the summary judgment motions. She correctly stated that plaintiff's position at the time of the motion hearing was that "[defendant] had an obligation under the 2011 contract to remediate everything that was found in the phase two report." After consulting with his client, plaintiff's counsel represented that, if defendant supplied the additional information regarding the NFAs, plaintiff would either close the sale or "walk away." Defense counsel argued that under the provisions of the 2011 contract, defendant was required to provide all the information "[u]pon the execution of" the contract, and it did so.

Judge McCormick reasoned that plaintiff's argument regarding defendant's failure to supply information was "a completely new issue," and "[a]t no place in [the prior] motion" had plaintiff "request[ed] [] any additional information" as allegedly required by the contract. She reiterated her interpretation of the agreement only required defendant to obtain the NFAs, and there was "not [] any factual basis at all to argue that the [NFAs] . . . were in any way fraudulently obtained." Judge McCormick restated that plaintiff had originally urged an interpretation of the contract that required "remediation of every single item that was found on the phase two" report. She concluded her earlier decision was not erroneous, "as a matter of law or fact," and she entered the order denying plaintiff's motion for reconsideration.

II.

We state some basic principles that guide our review. "An appellate court reviews an order granting summary judgment in accordance with the same standard as the motion judge." Bhagat v. Bhagat, 217 N.J. 22, 38 (2014) (citing W.J.A. v. D.A., 210 N.J. 229, 237-38 (2012); Henry v. N.J. Dep't of Human Servs., 204 N.J. 320, 330 (2010)). We "must review the competent evidential materials submitted by the parties to identify whether there are genuine issues of material fact and, if not, whether the moving party is entitled to summary judgment as a matter of law." Ibid. (citing Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995); R. 4:46-2(c)).

[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.

[Brill, supra, 142 N.J. at 540.]

We then decide "whether the motion judge's application of the law was correct." Atl. Mut. Ins. Co. v. Hillside Bottling Co., 387 N.J. Super. 224, 231 (App. Div.), certif. denied, 189 N.J. 104 (2006). We owe no deference to the motion judge's conclusions in this regard and review issues of law de novo. Ibid. (citing Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995)).

Reconsideration is to be utilized narrowly, and reserved for situations where the court relied "'on plainly incorrect reasoning,'" where the court failed to consider probative, competent evidence, or where "'there is good reason for [the court] to reconsider new'" evidence. Town of Phillipsburg v. Block 1508, Lot 12, 380 N.J. Super. 159, 175 (App. Div. 2005). (emphasis omitted) (quoting Pressler, Current N.J. Court Rules, comment on R. 4:49-2 (2005)). "Reconsideration cannot be used to expand the record and reargue a motion," Capital Fin. Co. of Del. Valley, Inc. v. Asterbadi, 398 N.J. Super. 299, 310 (App. Div.), certif. denied, 195 N.J. 521 (2008), or provide information that could have been provided at the time of the original motion, but was not. Cummings v. Bahr, 295 N.J. Super. 374, 384 (App. Div. 1996) (quoting D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)). Motions for reconsideration are addressed to "'the sound discretion of the Court, to be exercised in the interest of justice.'" Ibid. (quoting D'Atria, supra, 242 N.J. Super. at 401); see also Casino Reinvestment Dev. Auth. v. Teller, 384 N.J. Super. 408, 413 (App. Div. 2006) (reconsideration should be exercised "'in the service of the ultimate goal of substantial justice'" (quoting Johnson v. Cyklop Strapping Corp., 220 N.J. Super. 250, 264 (App. Div. 1987), certif. denied, 110 N.J. 196 (1988))).

Before us, plaintiff contends that Judge McCormick erred in not granting its motion for reconsideration because she misinterpreted the provisions of the agreement that required defendant to not only provide the NFAs regarding the Route 18 tanks and pump islands, but also provide all "correspondence relating to these matters." It argues there are material factual disputes as to whether defendant complied.

In part, plaintiff cites as support for its position Judge McCormick's colloquy during the motion, in which she indicated that she had re-read all of the original motion papers and transcript of the prior proceedings to clarify her understanding of the environmental issues, and that she may not have been "precise" in her first ruling. Quite frankly, plaintiff's argument in this regard is unworthy of any comment by us.

Judge McCormick demonstrated a full and complete understanding of plaintiff's contentions and the record made at the time of the summary judgment motion. The transcript of the reconsideration motion makes clear that the judge gave careful consideration to the entire record, and she correctly determined that plaintiff had never before asserted that defendant breached the contract by failing to provide back-up information to the NFAs.

We agree with Judge McCormick that plaintiff's entire thrust, in both its complaint and in the motion it brought for partial summary judgment was "specific performance" of the contract that included an order requiring defendant to remediate all environmental conditions on the property. In moving for reconsideration, plaintiff "offered a new theory as to liability," Cummings, supra, 295 N.J. Super. at 384, and it is disingenuous for plaintiff to have argued otherwise.

Plaintiff fails to demonstrate that the judge had reached her original decision "based upon a palpably incorrect or irrational basis . . . [or] did not consider, or failed to appreciate the significance" of the motion evidence. Ibid. (citation omitted). We conclude Judge McCormick did not mistakenly exercise her discretion in denying the motion for reconsideration and affirm the order.

Regarding the order granting summary judgment, plaintiff specifically contends that "the terms of the parties' [c]ontract and precisely what the [c]ontract required [defendant] to do with respect to environmental defects and the provision of the NFA, were in dispute." It argues these factual disputes prevented the grant of summary judgment. We are unpersuaded.

"The interpretation of contracts and their construction are matters of law for the court subject to de novo review." Sealed Air Corp. v. Royal Indem. Co., 404 N.J. Super. 363, 375 (App. Div. 2008) (citation omitted). "To determine the meaning of the terms of an agreement by the objective manifestations of the parties' intent, the terms of the contract must be given their plain and ordinary meaning." Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997) (quotation marks and citation omitted). "[E]vidence of the attendant circumstances may be considered, not to change the agreement made but to secure light by which to measure its actual significance." Renee Cleaners, Inc. v. Good Deal Super Mkts. of N.J., Inc., 89 N.J. Super. 186, 190 (App. Div. 1965) (citation omitted), certif. denied, 46 N.J. 216 (1966). "Courts generally should not tinker with a finely drawn and precise contract entered into by experienced business people that regulates their financial affairs." Brunswick Hills Racquet Club, Inc. v. Route 18 Shopping Ctr. Assocs., 182 N.J. 210, 223 (2005).

It suffices to say that none of the alleged disputed facts affect the appropriate resolution of the purely legal question presented in this case. We agree with Judge McCormick's essential reasoning that, applying basic tenets of contract interpretation, the specific requirements regarding defendant's obligation to furnish specified NFAs control other general language in the contract. See, e.g., Homesite Ins. Co. v. Hindman, 413 N.J. Super. 41, 48 (App. Div. 2010). Defendant's decision to try and save the deal by continuing to address plaintiff's ever-expanding list of requirements does not change the terms of the agreement.

Lastly, in passing reference in its brief, plaintiff argues that material facts remained in dispute regarding those counts in the complaint alleging defendant intentionally committed fraud or negligently misrepresented material facts. To the extent the argument is made, it lacks sufficient merit to warrant discussion in this opinion. R. 2:11-3(e)(1)(E).

Affirmed.

1 Although Lester's certification referenced the letter as an exhibit, it does not appear in the appellate record. The exhibit to Lester's certification is a letter from defendant's counsel returning plaintiff's deposit. The letter setting time of the essence for the closing was an exhibit to plaintiff's motion for reconsideration and is part of the appellate record.