715 PARTNERS, LLC v. GS ASSIGNMENT, LLC
Annotate this CaseNOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court."
Although it is posted on the internet, this opinion is binding only on the
parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-2527-15T3
715 PARTNERS, LLC,
A New Jersey Limited
Liability Company,
Plaintiff-Appellant,
v.
GS ASSIGNMENT, LLC,
715 GRAND REALTY LLC, and
GERARD STEIGLITZ,
Defendants-Respondents,
and
715 GRAND STREET LLC and
DIMITRI PAPAGANNAKIS,
Defendants.
_________________________________
Argued July 18, 2017 – Decided May 25, 2018
Before Judges Ostrer and Leone.
On appeal from Superior Court of New Jersey,
Law Division, Hudson County, Docket No. L-
2687-14.
Gary D. Grant argued the cause for appellant
(Grant Law Group, LLC, attorneys; Gary D.
Grant and Janet S. Del Gaizo, on the briefs).
Andrew J. Karas argued the cause for
respondents (Fox Rothschild, LLP, attorneys;
Andrew J. Karas, on the brief).
The opinion of the court was delivered by
LEONE, J.A.D.
Plaintiff 715 Partners, LLC, appeals from a December 28, 2015
order granting summary judgment to defendants GS Assignment, LLC,
Grand 715 Realty, LLC (improperly pled as 715 Grand Realty LLC),
and Gerard Steiglitz (collectively "defendants").1 We affirm.
I.
The following undisputed facts are derived from the parties'
statements of material facts and the pertinent documents.
In an Agreement of Sale (Agreement) dated May 16, 2012 (the
Effective Date), 715 Grand Street LLC (Seller) agreed to sell to
plaintiff a property on Grand Street in Hoboken (the Property).
The purchase price was $3.2 million, which plaintiff agreed to pay
as follows in the Agreement's Section 2: (a) a $50,000 initial
deposit within ten business days of the Effective Date; (b) a
$50,000 second deposit within five business days after the
expiration of the due diligence period; (c) a $150,000 third
deposit within five business days after the Hoboken zoning board
1
The other defendants, 715 Grand Street LLC and Dimitri
Papagiannakis (mispled as Papagannakis), settled and are not
parties on appeal.
2 A-2527-15T3
granted final site plan approval; and (d) $2,950,000 closing
payment upon closing.
Plaintiff did not have available funds to pay any of the
deposits required under the Agreement. Plaintiff made the initial
$50,000 deposit by borrowing the money from Edwin Torres, who had
earmarked the money to pay a tax sale certificate on a Newark
property.
Section 3.01 of the Agreement allowed plaintiff to survey the
Property and examine the title, and to "notify Seller by the end
of the 'Due Diligence Period' (as defined in Section 3.02) . . .
specifying any respects in which it appears from record title or
from such survey that Seller is unable to" provide marketable,
insurable title "free and clear of all liens and encumbrances."
Section 3.03 of the Agreement provided:
Purchaser shall have the right to terminate
this Agreement on or prior to the end of the
Due Diligence period for any or no reason, in
Purchaser's sole and absolute discretion.
Purchaser shall be deemed to have terminated
this Agreement if Purchaser does not provide
Seller with written notice prior to the end
of the Due Diligence Period that Purchaser
waives it[s] right to terminate this Agreement
in accordance with this Section. If Purchaser
terminates this Agreement, or is deemed to
have terminated, as provided above, Purchaser
shall immediately receive back the Deposit,
and the parties hereto shall have no further
obligations under this Agreement . . . .
[(emphasis added).]
3 A-2527-15T3
Section 3.02 of the Agreement defined "Due Diligence Period"
as "the period of time commencing on the first day after the date
of this Agreement, and expiring at 5:00 p.m. forty-five (45)
business days after (and excluding) the Effective Date." As the
Effective Date was May 16, the due diligence period would end at
5:00 p.m. on July 18.
On July 17, Seller agreed to extend the due diligence period
until July 31. On August 1, plaintiff requested "a one day
extension of the Due Diligence – until 5:00 p.m., August 2, 2012."
The Seller confirmed it had extended the due diligence period
until August 2. No written notice waiving the right to terminate
the Agreement was sent prior to 5:00 p.m. on August 2.
On August 2, plaintiff entered into an assignment, which
plaintiff terms the Flip Contract. The Flip Contract assigned
plaintiff's rights under the Agreement to GS Assignments, LLC
(GS), of which Steiglitz was the managing member. The Flip
Contract provided GS would reimburse plaintiff for the $50,000
initial deposit, "pay[] when due the second deposit under paragraph
2(b) of the [Agreement]" and make the third deposit of $150,000.
The Flip Contract also provided that GS would pay plaintiff
$250,000 at the closing under the Agreement, and give it 10% of
the profits from the development of the Property.
4 A-2527-15T3
The Flip Contract had no due diligence period. Plaintiff
represented that it knew of no undisclosed facts "which might have
a material adverse affect on the transaction."
GS's attorney Richard W. Mackiewicz, Jr. sent an August 2
letter (Mackiewicz letter) to Seller. The letter confirmed the
Agreement "has been assigned" to GS. The letter stated it was
"written in connection with Section 3.03" of the Agreement. The
letter referenced the purchaser's opportunity to notify Seller of
issues with title during the due diligence period under Section
3.01. The letter contended there was both a mortgage on the
Property and a restriction imposing a setback requirement which
was uninsurable. The letter objected to the title's marketability,
asked Seller to clear the title, and stated: "Assuming that the
Seller is capable of clearing these title issues then the
purchaser, in accordance with Section 3.03 of the Contract advises
that it waives any other right to terminate the agreement."
The Mackiewicz letter said GS "will be forwarding a check"
for $100,000, and asked Seller to return the initial $50,000
deposit to plaintiff. Steiglitz had the assets to cover the
$100,000 and to consummate the deal. The $100,000 payment was
never made.
On August 20, 2012, Seller's counsel sent a letter to
plaintiff's counsel citing Sections 3.02 and 3.03 and stating:
5 A-2527-15T3
After the seller granted the purchaser with
several extensions to the due diligence
period, it ultimately expired to on or about
August 2, 2012 [sic]. Having not received the
required notice from the purchaser that waives
its right to terminate the contract of sale,
the agreement is now deemed terminated. As
such, I have enclosed a check for your
client's deposit. The agreement is now null
and void.
In February 2013, Seller entered into a new agreement selling
the Property to Grand 715 Realty, LLC (Grand), of which Steiglitz
was the managing member. The purchase price was $3.5 million.
In June 2014, plaintiff filed a complaint against defendants,
with counts claiming consumer fraud, common law fraud and
conspiracy, breach of contract, breach of the implied duty of good
faith and fair dealing, tortious interference, and unjust
enrichment, and seeking a constructive trust and to pierce the LLC
veil.2 After defendants filed an answer, plaintiff moved for
summary judgment. Defendants filed a cross-motion for summary
judgment.
After hearing argument, the trial court issued an order and
a written opinion on December 28, 2015, denying summary judgment
to plaintiff, granting summary judgment to defendants, and
dismissing plaintiff's claims with prejudice. In granting summary
judgment on plaintiff's counts alleging breach of contract and
2
Plaintiff's count seeking a declaratory judgment was dismissed.
6 A-2527-15T3
breach of the implied duty, the trial court noted it was undisputed
that on August 20, Seller advised plaintiff that the Agreement
terminated on August 2, due to plaintiff's failure to provide
written notice to Seller before the end of the due diligence period
that plaintiff was waiving its rights to terminate the Agreement
pursuant to Section 3.03. The court emphasized that "[e]ven after
the due diligence period was extended to August 2, 2012, the
Plaintiff failed to issue the waiver."
II.
Summary judgment must be granted if "the pleadings,
depositions, answers to interrogatories and admissions on file,
together with 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." R. 4:46-
2(c). The court must "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 v. Guardian Life Ins. Co. of Am.,
142 N.J. 520, 540 (1995). "[T]he court must accept as true all the
evidence which supports the position of the party defending against
the motion and must accord [that party] the benefit of all
7 A-2527-15T3
legitimate inferences which can be deduced therefrom[.]" Id. at
535 (citation omitted).
An appellate court "review[s] the trial court's grant of
summary judgment de novo under the same standard as the trial
court." Templo Fuente De Vida Corp. v. Nat'l Union Fire Ins. Co.,
224 N.J. 189, 199 (2016). We must hew to that standard of review.
III.
On appeal, plaintiff contends there was a genuine issue of
material fact regarding whether the Flip Contract was signed, and
the Mackiewicz letter was delivered to Seller, before the
expiration of the due diligence period at 5:00 p.m. on August 2.
Plaintiff also contends the Mackiewicz letter satisfied
plaintiff's obligation to produce a written waiver. Plaintiff's
contentions fail because it took the opposite positions in the
trial court.
Plaintiff supported its motion for summary judgment with a
statement of material facts that stated "the Due diligence period
in the Agreement of Sale had expired prior to the Flip Contract
being signed." Also, in opposition to defendants' cross-motion
for summary judgment, plaintiff filed a certification by George
Daley, its managing member. Daley similarly certified that when
plaintiff assigned its rights to GS, "[t]he Due Diligence period
in the contract had expired."
8 A-2527-15T3
Moreover, Daley attested that the Mackiewicz letter did not
constitute a proper written waiver of the right to terminate the
Agreement. Daley certified that "Steiglitz was obligated to issue
a waiver thereof," but instead "Steiglitz had his attorney issue
a letter creating two bogus issues why he should not be obligated
to perform." Daley attested that "the issues raised were pre-
textual excuses," and that "the Mackiewicz letter was just an
excuse to walk away from the deal."
Likewise, in its brief opposing defendants' motion for
summary judgment, plaintiff asserted that "[a]t the time of [the
Flip Contract's] signing . . . the time had expired for any 'Due
Diligence' as permitted in the Agreement of Sale." Plaintiff's
position was that defendants had no right to raise title issues
in the Mackiewicz letter because the due diligence period had
already expired. Plaintiff argued: "Upon signing [the Flip
Contract], it was the obligation of the Defendant to move forward
to close the deal with [Seller], not to come up with excuses why
it could breach both the Flip Contract and the Agreement of Sale."
Plaintiff said GS's "argument that there was 'Due Diligence' left
to be done is both factually bogus as well as not permitted in the
Flip Contract and subjected to an expired period in the Agreement
of Sale."
9 A-2527-15T3
On appeal, however, plaintiff asserts there is a genuine
issue of material fact regarding "the timing of the execution of
the [Flip Contract] and service of the August 2, 2012 Mackiewicz
correspondence." Plaintiff contends "there is nothing in the
record to contradict the inference that the Plaintiff and
Defendants GS and Steiglitz executed the [Flip Contract] before
5:00 p.m. on August 2, 2012, and that Mackiewicz drafted, signed,
and delivered the August 2, 2012 letter before the due diligence
period expired." Plaintiff argues the Mackiewicz letter
"satisfies Plaintiff's obligation to tender a written waiver
before the end of the due diligence period" and "satisfied
Paragraph 3.03 of the [Agreement]." Plaintiff concludes that
"[i]f Mackiewicz's letter was transmitted before 5:00 p.m. on
August 2, 2012, then the [Agreement] did not 'automatically'
terminate, and Plaintiff and its assigns did not breach the
[Agreement]." All of plaintiff's arguments were contradicted by
its position in its summary judgment proceedings.
In these circumstances, plaintiff cannot contend there was a
genuine issue of material fact. First, a statement of material
facts is required by rule to be "a concise statement of each
material fact as to which the movant contends there is no genuine
issue." R. 4:46-2(a). Thus, plaintiff's assertion in its
statement of material facts that the due diligence period had
10 A-2527-15T3
expired before the Flip Contract was signed was an assertion that
there was no genuine issue concerning that fact.
Plaintiff notes that "[w]here there are cross motions for
summary judgment, a party may make concessions for the purposes
of his motion that do not carry over and support the motion of his
adversary." O'Keeffe v. Snyder,
83 N.J. 478, 487 (1980). In
O'Keeffe, the defendant moved for summary judgment on the premise
that he acquired paintings by adverse possession even if they had
originally been stolen, which he assumed "[f]or purposes of his
motion." Id. at 486. Here, by contrast, plaintiff was not merely
assuming arguendo that the due diligence period had expired, but
was asserting as a fact that the due diligence period had expired
to show the Mackiewicz letter was untimely.
Moreover, plaintiff's contrary assertion on appeal lacks any
evidentiary support. Plaintiff concedes "[t]here is nothing in
the record indicating what time the [Flip Contract] was signed or
what time the August 2 . . . letter was sent out." A party
opposing summary judgment "must do more than simply show that
there is some 'metaphysical doubt' as to the material facts."
Horizon Blue Cross Blue Shield of N.J. v. State,
425 N.J. Super.
1, 32 (App. Div. 2012) (citation omitted).
In any event, plaintiff took the same position in Daley's
certification submitted in opposition to defendants' summary
11 A-2527-15T3
judgment motion. Thus, the Daley certification similarly assured
the trial court "that there is no genuine issue as to any material
fact." R. 4:46-2(c).
Second, plaintiff's brief explicitly took the position that
the due diligence period had expired before the Mackiewicz letter
was sent.3 Moreover, plaintiff took the position in Daley's
certification and in its brief that the Mackiewicz letter was not
a legitimate waiver, but a bad faith assertion of bogus title
problems intended only to avoid the Agreement.
"[C]oncessions made during a summary judgment motion
foreclose a contrary argument on appeal." Sullivan v. Port Auth.
of N.Y. & N.J.,
449 N.J. Super. 276, 281 (App. Div. 2017), cert.
denied,
232 N.J. 282 (2018). Because plaintiff conceded the due
diligence period expired before the Mackiewicz letter was sent "on
the motion for summary judgment, it is foreclosed from arguing the
contrary on this appeal." First Am. Title Ins. Co. v. Vision
Mortg. Corp.,
298 N.J. Super. 138, 143 (App. Div. 1997) (precluding
the plaintiff from arguing there was no fraud where it conceded
3
That was also the unavoidable implication of plaintiff's
statement of material facts and the Daley certification. It is
undisputed the Mackiewicz letter was sent after the Flip Contract
was signed. Indeed, the letter states the Agreement "has been
assigned." Moreover, there was no reason or justification for GS,
a stranger to the Agreement, to send such a letter to Seller until
after GS had signed the Flip Contract assigning plaintiff's rights
under the Agreement to GS.
12 A-2527-15T3
fraud on summary judgment) (citing Misani v. Ortho Pharm. Corp.,
44 N.J. 552, 555-56 (1965), and State by Van Riper v. Atl. City
Elec. Co.,
23 N.J. 259, 264 (1957)).
Additionally, the trial court based its summary judgment
ruling on the "undisputed [fact] that the Plaintiff did not provide
timely written notice to [Seller] that Plaintiff was waiving its
right to terminate the [Agreement]" prior to the expiration of the
due diligence period. "Because of the concession by plaintiff['s]
counsel, . . . it was unnecessary to decide th[e] issues" of the
timing of the Flip Contract and Mackiewicz letter. See Ji v.
Palmer,
333 N.J. Super. 451, 459 (App. Div. 2000). A party "should
not be permitted upon appeal to alter its interpretation of the
facts upon which the issue was framed." Van Riper,
23 N.J. at
264; see Misani,
44 N.J. at 555-56.
In any event, under the invited error doctrine, "errors that
'"were induced, encouraged or acquiesced in or consented to by
[appellant's] counsel ordinarily are not a basis for reversal on
appeal."'" State v. A.R.,
213 N.J. 542, 561 (2013); Harris v.
Peridot Chem. (N.J.), Inc.,
313 N.J. Super. 257, 296 (App. Div.
1998). "The doctrine of invited error bars a litigant from
claiming on appeal that a position it advocated and that the judge
adopted at trial was error." Donofry v. Autotote Sys., Inc.,
350 N.J. Super. 276, 296 (App. Div. 2001). "The invited error doctrine
13 A-2527-15T3
. . . is particularly applicable where a party attempts to present
a different theory on which to decide the case than the one
advocated below." Brett v. Great Am. Rec.,
144 N.J. 479, 504
(1996). Here, plaintiff sought "tactical advantage" by advancing
the theory that GS had no right to submit the Mackiewicz letter
raising title issues because the due diligence period had expired.
See id. at 503. Plaintiff cannot "argue to the contrary on
appeal." Reynolds v. Lancaster Cty. Prison,
325 N.J. Super. 298,
315 n.2 (App. Div. 1999).
IV.
Even if we could ignore plaintiff's own position in the trial
court that the Mackiewicz letter was an untimely attempt to avoid
the Agreement, we would reject plaintiff's contention on appeal
that the letter "clearly waived the right to terminate 'for any
reason or no reason' pursuant to paragraph 3.03 of the
[Agreement]."
Section 3.03 of the Agreement requires a present,
unconditional waiver of the right to terminate before April 2: the
Purchaser must "provide the Seller with written notice prior to
the end of the Due Diligence Period that Purchaser waives it[s]
right to terminate this Agreement in accordance with this Section."
However, the Mackiewicz letter stated it was not waiving that
right at that time. Rather, after raising the existence of a
14 A-2527-15T3
mortgage and an uninsurable restriction containing a setback
requirement as issues with the title, the letter stated: "In
accordance with Section 3.01 the Purchaser hereby objects to the
marketability of title, provides notice of such objection and
requests that Seller make a good effort to clear title." That
language invoked Section 3.01(b), which requires Seller to "make
a good faith effort to clear title" within thirty days. The letter
then offered only a future, conditional waiver of its right to
terminate: "Assuming that the Seller is capable of clearing these
title issues then the purchaser, in accordance with Section 3.03
of the Contract advises that it waives any other right to terminate
the agreement" (emphasis added).
That conditional future waiver did not meet the requirements
of Section 3.03 for an absolute "waiver of the right to terminate"
before August 2. Thus, the Mackiewicz letter could not serve as
the "written notice prior to the end of the Due Diligence Period"
required by Section 3.03.
Plaintiff notes that after the "Assuming" sentence, the
Mackiewicz letter asserted: "Thus, the agreement is firm."
However, one party's assertion in a letter cannot rewrite the
requirements of the parties' Agreement.
Plaintiff argues Section 9(a) of the Agreement gave the
Purchaser the "sole and exclusive discretion" to waive "(iii)
15 A-2527-15T3
Receipt by Seller of timely written notice from Purchaser that
Purchaser waives it[s] right to terminate this Agreement in
accordance with this Section 3.03." However, neither plaintiff
nor GS ever waived that right. To the contrary, the Mackiewicz
letter reserved the right to terminate unless and until Seller was
able to clear the title.
V.
Under Section 3.03, because neither plaintiff nor GS provided
the requisite written notice prior to the expiration of the due
diligence period, "Purchaser shall be deemed to have terminated
this Agreement." Section 3.03 provided: "If Purchaser . . . is
deemed to have terminated, as provided above, Purchaser shall
immediately receive back the Deposit, and the parties hereto shall
have no further obligations under this Agreement[.]"
Seller's August 20 letter recognized that because Seller had
not "received the required notice from the purchaser that waives
its right to terminate the contract of sale" before the due
diligence period expired on August 2, 2012, the Agreement was
"deemed terminated" and was "null and void." As Seller enclosed
a check returning plaintiff's deposit, neither party had any rights
or obligations under the Agreement.
Plaintiff argues Seller waived its right to terminate the
Agreement because it failed to notify GS immediately if it was
16 A-2527-15T3
rejecting the Mankiewicz letter, and because it sent its August
20 notice to plaintiff rather than GS. However, Section 3.03 did
not require any action by Seller to terminate the Agreement.
Instead, it stated that if the Purchaser did not provide the
required timely notice, then "Purchaser shall be deemed to have
terminated this Agreement." "In its normal usage the word 'deemed'
means 'adjudged' or 'considered.'" Switz v. Kingsley,
69 N.J.
Super. 27, 33 (Law Div. 1961), aff'd as modified,
37 N.J. 566
(1962); see Webster's II New Coll. Dictionary 301 (3d ed. 2005).
Moreover, the use of the word "shall" shows the parties intended
the termination to be "mandatory." See State v. Thomas,
188 N.J.
137, 150 (2006).
Under the plain meaning of Section 3.03's terms, the Agreement
automatically and mandatorily terminated when the Seller did not
receive a written waiver of the Purchaser's termination right
before the expiration of the due diligence period. "Our task is
to enforce the contract according to its terms, giving those terms
'their plain and ordinary meaning.'" GMAC Mortg., LLC v.
Willoughby,
230 N.J. 172, 186 (2017) (citations omitted).
To contradict the plain language of the Agreement, plaintiff
cites a certification by Papagiannakis, Seller's authorized agent.
Papagiannakis certified: "At all times [Seller] was prepared to
abide by the terms and conditions of the Agreement"; had the second
17 A-2527-15T3
deposit of $50,000 "been received within a reasonable time after
[August 2, Seller] would have accepted same and not declared a
breach"; but "[w]hen the second deposit of $50,000 was not received
on or before August 20, 2012, I authorized [Seller]'s attorney to
declare the Agreement of Sale null and void."
Plaintiff argues Papagiannakis's certification shows Seller
terminated because of the purchaser's failure to pay the second
$50,000 deposit, and "had absolutely nothing to do with" Section
3.03's provision that: "Purchaser shall be deemed to have
terminated this Agreement if Purchaser does not provide Seller
with written notice prior to the end of the Due Diligence Period
that Purchaser waives it[s] right to terminate this Agreement in
accordance with this Section." To the contrary, the letter cited
Section 3.03, quoted that language from Section 3.03, and stated
the Agreement was "deemed terminated" because the Seller had "not
received the required notice from the purchaser that waives its
right to terminate the [Agreement]." As the trial court noted,
Seller's "August 20, 2012 letter only cites the failure to waive,"
and says nothing about the second $50,000 deposit.
Even if Papagiannakis could rewrite that history, "[w]e
cannot 'rewrite a contract for the parties better than or different
from the one they wrote for themselves.'" GMAC Mortg.,
230 N.J.
at 186 (citation omitted). The Agreement clearly provided that
18 A-2527-15T3
it must be deemed terminated if notice of waiver was not received
by the end of the due diligence period. Moreover, we are not
reviewing a dispute between plaintiff and Papagiannakis, who
settled with plaintiff within days of the certification, but
between plaintiff and GS, to whom plaintiff had assigned its rights
under the Agreement three years earlier. Even if plaintiff and
Papagiannakis could renegotiate or reinterpret the Agreement while
plaintiff and Seller were the only parties to the Agreement, they
cannot renegotiate or reinterpret the Agreement to the detriment
of GS after any rights plaintiff had under the Agreement were
assigned to GS.4
In any event, even if we ignore the Agreement's automatic
termination on August 2, it is undisputed that neither plaintiff
nor GS paid the $50,000 deposit when due, or before Seller's August
20 letter. Plaintiff argues it was GS's obligation to pay that
deposit under the Flip Contract. However, an examination of the
Flip Contract shows plaintiff had violated a condition precedent
to that contract before GS could have any such obligation.
4
Plaintiff argues that the assignment was permitted under Section
18(h) of the Agreement and that Seller waived any right to object
to the assignment or to GS presenting the written notice. However,
nothing in the August 20 letter or Papagiannakis's certification
suggested that Seller objected to the assignment to GS of
plaintiff's rights, or believed the Agreement was terminated due
to the assignment.
19 A-2527-15T3
VI.
As set forth above, plaintiff conceded the Flip Contract was
not signed until after the Agreement's due diligence period
expired. Because plaintiff failed to comply with the Agreement's
requirement in Section 3.03 to provide written notice "prior to
the end of the Due Diligence Period," plaintiff was "deemed to
have terminated this Agreement" and the parties had "no further
obligations under this Agreement." Thus, when plaintiff executed
the Flip Contract to assign to GS plaintiff's rights under the
Agreement, the Agreement was already terminated and plaintiff had
no rights under it.
Under the express terms of the Flip Contract, that relieved
GS of its obligations. "As an inducement for [GS] to enter into"
the Flip Contract, plaintiff did "hereby represent, warrant and
covenant" that when the Flip Contract was executed and thereafter,
plaintiff "was not in breach of the [Agreement], has full rights
to the [Agreement], and may freely assign the [Agreement]."5
Moreover, the parties agreed one of the "conditions precedent to
5
Plaintiff also represented, warranted, and covenanted that "[n]o
representation, warranty or covenant of" plaintiff "contains any
misstatement of a material fact or knowingly omits to state a
material fact necessary to make the statements contained herein
not false or misleading," and that "[t]here are no facts known to"
plaintiff "which might have a material adverse [e]ffect on the
transaction contemplated by" the Flip Contract.
20 A-2527-15T3
the obligations of" GS under the Flip Contract was "[t]hat all
representations and warranties made hereunder are true."
However, when plaintiff and GS executed the Flip Contract,
plaintiff was in breach of the Agreement, had no rights under the
Agreement, and was deemed to have terminated the Agreement, leaving
nothing it could assign to GS. Plaintiff's contrary
representations in the Flip Contract were not true. Thus,
plaintiff failed to meet a condition precedent to any obligation
of GS under the Flip Contract. That included GS's obligation
under the Flip Contract to pay "when due the second deposit" under
the Agreement.
A "condition precedent" is "[a]n act or event, other than a
lapse of time, that must exist or occur before a duty to perform
something promised arises. If the condition does not occur and
is not excused, the promised performance need not be rendered."
Black's Law Dictionary 334 (9th ed. 2009); see Restatement (Second)
Contracts, §§ 224, 225 (1981). "The parties to a contract 'may
make contractual liability dependent upon the performance of a
condition precedent.'" Liberty Mut. Ins. Co. v. President
Container, Inc.,
297 N.J. Super. 24, 34 (App. Div. 1997) (quoting
Duff v. Trenton Beverage Co.,
4 N.J. 595, 604 (1950)).
"[G]enerally, 'no liability can arise on a promise subject to a
condition precedent until the condition is met.'" Allstate
21 A-2527-15T3
Redevelopment Corp. v. Summit Assocs.,
206 N.J. Super. 318, 324
(App. Div. 1985) (quoting Duff,
4 N.J. at 604). "Moreover, because
a promisor's duty does not become absolute unless and until the
condition precedent occurs, the failure or non-performance of the
condition is a defense to an action against the promisor for breach
of its promise." 4 Williston on Contracts 4th § 38.7 (Lord ed.
2013).
The parties expressly and clearly made it a "condition
precedent" of GS's obligations under the Flip Contract that
plaintiff truly stated it "was not in breach of the [Agreement],
has full rights to the [Agreement], and may freely assign the
[Agreement]." Moreover, that condition plainly was "a material
part of the agreed exchange" under the Flip Contract, whose entire
purpose was to assign plaintiff's rights under the Agreement.
Conley v. Guerrero,
443 N.J. Super. 62, 69 (App. Div. 2015)
(citation omitted), aff'd as modified,
228 N.J. 339 (2017). Thus,
under the express terms of the Flip Contract, the failure of this
condition precedent relieved GS of its obligation under the Flip
Contract to pay the second $50,000 deposit.
Moreover, if a party commits "a 'breach of a material term
of an agreement, the non-breaching party is relieved of its
obligations under the agreement.'" Roach v. BM Motoring, LLC,
228 N.J. 163, 174 (2017) (citation omitted). "[A] breach is material
22 A-2527-15T3
if it 'goes to the essence of the contract.'" Ibid. (citation
omitted). Plaintiff's misstatements that it was not in breach,
had full rights under the Agreement, and could freely assign the
Agreement went to the essence of the Flip Contract. As the trial
court ruled, plaintiff's misstatements were material breaches.
Thus, GS was excused from any subsequent obligations or breaches.
Plaintiff argues an assignment of a party's rights under a
contract generally "is a delegation of performance of the duties
of the assignor and its acceptance by the assignee constitutes a
promise by him to perform those duties."
N.J.S.A. 12A:2-210(4).
However, when plaintiff and GS entered into the Flip Contract,
plaintiff had no rights or duties under the Agreement. As the
Agreement was deemed terminated, plaintiff had "no further
obligations under this Agreement." Thus, GS had no obligations
either, as "an assignee can have no greater duties than [it]s
assignor." Selective Ins. Co. of Am. v. Hudson E. Pain Mgmt.
Osteopathic Med.,
210 N.J. 597, 607 (2012).
The Agreement was deemed terminated before the second deposit
became due. Moreover, the Agreement provided that once it was
deemed terminated, Seller was obliged to return any deposit paid
by the purchaser. Plaintiff again cites the Papagiannakis
certification to argue that Seller would have accepted the second
deposit until August 20. However, the Papagiannakis certification
23 A-2527-15T3
could not change the terms of the Agreement which plaintiff was
purporting to assign to GS; it certainly was incapable of changing
the terms of the Flip Contract, to which neither Papagiannakis nor
the Seller were parties. Once plaintiff failed to meet the
condition precedent to the Flip Contract, GS was relieved of any
obligations to plaintiff and acquired no obligations to Seller.
As a result, we do not determine whether GS's August 2 letter
raised "virtually irrelevant" title issues or was "a flimsy excuse"
to avoid making the second deposit, as plaintiff again claims on
appeal. It is equally irrelevant whether the second deposit would
have been due while the title issues were unresolved had the
Agreement still been in force. Finally, it is irrelevant that the
Property was eventually purchased by Grand, another LLC in which
Steiglitz was the managing member. Once plaintiff caused the
termination of the Agreement, and failed to meet the condition
precedent of the Flip Contract, Seller was free to sell the
Property to anyone, and Grand was free to buy it.
As plaintiff concedes, the issue in this case was "whether
or not the [Agreement] was valid at the time the [Flip Contract]
was executed." Because the Agreement was deemed terminated before
the Flip Contract was signed, plaintiff failed to show defendants
breached the Flip Contract or the implied duty of good faith and
fair dealing, and those counts were properly dismissed. Plaintiff
24 A-2527-15T3
makes no additional arguments on appeal challenging the dismissal
of the other counts. See Liebling v. Garden State Indem.,
337 N.J. Super. 447, 465-66 (App. Div. 2001) ("an issue not briefed
. . . is deemed waived"). Therefore, we affirm the dismissal of
plaintiff's complaint.6
Accordingly, we have no occasion to consider whether
plaintiff could pierce either LLC's veil and sue Steiglitz
directly. We need not reach the trial court's ruling that
plaintiff materially breached the Flip Contract by failing to
disclose the Torres loan, or that plaintiff's only remedy was
specific performance where there was "no valid contract to be
specifically performed."
Affirmed.
6
We note that the Papagiannakis certification, on which plaintiff
relies, denies plaintiff's contention that Seller conspired with
defendants to terminate the Agreement, and that the trial court
found no evidence supporting plaintiff's claims of conspiracy,
fraud, and bad faith.
25 A-2527-15T3
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