Opinion
DOCKET NO. A-1602-12T4
03-03-2014
ATC GROUP SERVICES, INC. d/b/a ATC ASSOCIATES, INC., Plaintiff-Respondent, v. SEABOARD SERVICE, INC. t/a SEABOARD SERVICE, Defendant-Appellant.
Ansell Grimm & Aaron, attorneys for appellant (Barry M. Capp, of counsel and on the brief). Rothbard, Rothbard, Kohn & Kellar, attorneys for respondent (Christopher J. Kellar, on the brief).
NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
Before Judges Sabatino and Hayden.
On appeal from Superior Court of New Jersey,
Law Division, Monmouth County, Docket No.
L-2621-10.
Ansell Grimm & Aaron, attorneys for
appellant (Barry M. Capp, of counsel and on
the brief).
Rothbard, Rothbard, Kohn & Kellar, attorneys
for respondent (Christopher J. Kellar, on
the brief).
PER CURIAM
Defendant, Seaboard Service, Inc., appeals from the October 4, 2012 Law Division order granting the motion of plaintiff, ATC Group Services, Inc., for the turnover of funds payable to defendant from Broadway Business Park, L.L.C. (Broadway). The order requires Broadway to make the payments to the sheriff to be applied to plaintiff's judgment against defendant. Defendant also appeals the November 16, 2012 order denying its motion for reconsideration. For the reasons that follow, we affirm.
We discern the following facts from the record. Defendant owned two properties, one in Long Branch and the other in Ocean Township. Plaintiff provided environmental services to improve these properties. After defendant failed to pay the amounts due for these services, plaintiff filed two construction lien claims on the properties.
On May 24, 2010, plaintiff filed a civil complaint against defendant, the first two counts for foreclosure of the two respective liens and the third count for breach of contract. The balance due on the Long Branch property was $57,834.33, and the balance on the Ocean Township property was $479,393.79. Shortly thereafter, defendant contracted to sell the Long Branch property to Dean LaCorte.
In November 2010, prior to defendant filing any responsive pleading, defendant and plaintiff entered into a settlement agreement to resolve all three counts of the complaint and satisfy the Long Branch property lien in order to pass clear title.
Paragraph 1 of the settlement agreement provided:
[Plaintiff] acknowledges that [defendant] is currently under contract to sell the Long Branch property to Dean LaCorte (hereinafter referred to as the "Buyer") and agrees to accept the sum of $57,000.00, payable at closing, in full settlement of [plaintiff's] Construction Lien Claim on the Long Branch property and in full settlement of the First Count of the Lawsuit. The parties further agree that if the sale of the Long Branch property is not completed by January 18, 2011, [plaintiff] may proceed with its Lawsuit.
Paragraph 2(e) provided:
[Plaintiff] acknowledges that once it has been paid the $57,000.00 as per [Paragraph 1] above, it shall not be entitled to levy on the proceeds of a Note from Buyer to [defendant] or otherwise attempt to collect monies from Buyer which might become due to [defendant] with respect to the Long Branch property.
The settlement further provided in Paragraph 3 that, unless plaintiff amended the complaint, defendant would not file a responsive pleading and judgment was to be entered on the second and third counts of the complaint by way of motion. Paragraph 3 further provided:
If [plaintiff] is not paid the settlement sum as contemplated in [Paragraph 1] above, then judgment shall be entered against [defendant] on the First Count as well.In addition, the parties agreed that "[n]o variations or modifications of or amendments to the terms of this Agreement shall be binding unless reduced to writing and signed by the parties hereto."
. . . .
It is further understood that nothing contained in this Agreement acts to toll or
delay [plaintiff's] prosecution of its Lawsuit.
For reasons not fully developed in the record, the closing did not occur on January 18, 2011. After months of closing delays beyond the deadline, defendant notified plaintiff in a September 6, 2011 email that the "deal with LaCorte [had] been terminated," but added there were "ongoing discussions about resurrecting [it]." Subsequently, defendant reached an agreement to sell the Long Branch property to Broadway.
Defendant asserts that LaCorte and Broadway were essentially the same purchaser because LaCorte was a member of Broadway when he attempted to purchase the Long Branch property in 2010.
On October 17, 2011, plaintiff received a letter from Broadway's counsel stating that Broadway was "considering" purchasing the Long Branch property. The attorney stated that Broadway's agreement with defendant required Broadway to negotiate a settlement of the construction lien with plaintiff under new terms and to assume responsibility for paying the lien settlement.
In the letter, Broadway proposed to clear the lien by paying plaintiff $55,000, rather than $57,000, and required plaintiff to deliver some additional work product and a general release of the lien claim before the closing. Plaintiff agreed to Broadway's terms. Defendant was not a party to this agreement, nor was the 2010 settlement agreement between plaintiff and defendant incorporated or referenced in the agreement.
The sale of the Long Branch property, which took place in December 2011, included Broadway giving defendant a $50,000 note secured by a mortgage. Plaintiff received $55,000 from Broadway and executed the general release of the construction lien.
On March 16, 2012, the trial judge granted plaintiff's motion for a default judgment against defendant on counts two and three and issued a writ of execution for the remaining construction lien on the Ocean Township property. On August 20, 2012, in order to satisfy the judgment, the Monmouth County Sheriff levied upon all monies due from Broadway to defendant, including the proceeds of the $50,000 note. Plaintiff then filed a motion seeking an order requiring Broadway to make all payments due under the note to the sheriff to be applied to plaintiff's judgment. Defendant filed an opposition and a cross-motion to discharge the levy, arguing that, pursuant to the 2010 settlement agreement, satisfaction of the construction lien prohibited plaintiff from levying on the proceeds of the note from the sale of the Long Branch property.
The default judgment stated that default had previously been entered, but the record on appeal does not contain that order or provide a date of the default.
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On October 4, 2012, the trial judge determined a hearing was not necessary as the agreement was sufficiently clear and unambiguous to permit a decision. He granted plaintiff's motion, reasoning that defendant's failure to meet the January 18, 2011 closing deadline voided the 2010 settlement agreement. On November 16, 2012, the judge also denied defendant's motion for reconsideration, observing that plaintiff abided by Paragraph 1 of the 2010 settlement agreement by proceeding with the lawsuit and obtaining a default judgment on counts two and three. The judge further noted that defendant had not substantially complied with Paragraph 1, and, although the lien was cleared, the deviations from Paragraph 1's material terms concerning the date, the amount paid, and the additional requirements were significant. This appeal followed.
Defendant argues on appeal that because there was no finding of ambiguity or fraud in the 2010 settlement agreement, the trial judge erred by not enforcing it according to its explicit terms, which prohibited plaintiff from levying funds from Broadway. Defendant also maintains that January 18, 2011, was not a time-of-the-essence closing date, and defendant waived any such claim by continuing to be involved with clearing the lien after that date. Defendant asserts that under Kaur v. Assured Lending Corp., 405 N.J. Super. 468 (App. Div. 2009), the court had no legal basis to rescind or void the agreement. At a minimum, defendant contends that the trial judge should have held a hearing on the disputed issue of the parties' intent in entering the 2010 settlement agreement.
After considering defendant's arguments in light of the record and applicable law, we affirm the trial judge's order for the turnover of the levied funds to plaintiff and his subsequent denial of reconsideration. However, we do so for reasons different than those expressed by the trial judge. See Isko v. Planning Bd. of the Twp. of Livingston, 51 N.J. 162, 175 (1968) ("[I]f the order of the lower tribunal is valid, the fact that it was predicated upon an incorrect basis will not stand in the way of its affirmance."); State v. Maples, 346 N.J. Super. 408, 417 (App. Div. 2002) (an appeal is taken from the court's order rather than reasons for the order).
As a preliminary matter, we note that the interpretation and construction of a settlement agreement is a matter of law and is subject to de novo review on appeal. Kaur, supra, 4 05 N.J. Super. at 474 (citing Spring Creek Holding Co. v. Shinnihon U.S.A. Co., 399 N.J. Super. 158, 190 (App. Div.), certif. denied, 196 N.J. 85 (2008)). Indeed, a "'trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference.'" Ibid. (quoting Alfano v. BDO Seidman, LLP, 393 N.J. Super. 560, 573 (App. Div. 2007)).
There is a strong public policy in favor of enforcing settlement agreements predicated upon "'the notion that the parties to a dispute are in the best position to determine how to resolve a contested matter in a way which is least disadvantageous to everyone.'" Brundage v. Estate of Carambio, 195 N.J. 575, 601 (2008) (quoting Peskin v. Peskin, 271 N.J. Super. 261, 275 (App. Div.), certif. denied, 137 N.J. 165 (1994)). "Consequently, courts 'strain to give effect to the terms of a settlement wherever possible.'" Jennings v. Reed, 381 N.J. Super. 217, 227 (App. Div. 2005) (quoting Dep't of Pub. Advocate v. N.J. Bd. of Pub. Utils., 206 N.J. Super. 523, 528 (App. Div. 1985)).
A settlement agreement is governed by principles of contract law. Brundage, supra, 195 N.J. at 601 (citing Pascarella v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div. 1983)). Indeed, "[a]n agreement to settle a lawsuit is a contract, which like all contracts, may be freely entered into and which a court, absent a demonstration of 'fraud or other compelling circumstances,' should honor and enforce as it does other contracts." Pascarella, supra, 190 N.J. Super. at 124-25 (quoting Honeywell v. Bubb, 130 N.J. Super. 130, 136 (App. Div. 1974)). A court may not rescind a settlement agreement, absent fraud or other misdeeds, unless the parties clearly expressed in the agreement that rescission was an available remedy for a breach. Kaur, supra, 405 N.J. Super. at 477.
The polestar of contract construction is to discover "'the intention of the parties to the contract as revealed by the language used, taken as an entirety[.]'" Conway v. 287 Corp. Ctr. Assoc., 187 N.J. 259, 269 (2006) (quoting Atl. N. Airlines v. Schwimmer, 12 N.J. 293, 301 (1953)). To ascertain the intention of the parties, and to determine if an ambiguity exists, a court may, if necessary, consider extrinsic evidence offered to support conflicting interpretations. Id. at 270.
However, "'where the terms of a contract are clear and unambiguous there is no room for interpretation or construction and the courts must enforce those terms as written.'" Schor v. FMS Fin. Corp., 357 N.J. Super. 185, 191 (App. Div. 2002) (quoting Karl's Sales and Serv., Inc. v. Gimbel Bros., Inc., 249 N.J. Super. 487, 493 (App. Div.), certif. denied, 127 N.J. 548 (1991)). The court cannot "'rewrite contracts in order to provide a better bargain than contained in [the parties'] writing.'" Kaur, supra, 405 N.J. Super. at 477 (quoting Grow Co. v. Chokshi, 403 N.J. Super. 443, 464 (App. Div. 2008)).
Applying these well-established principles, we agree with defendant's contention that its mere failure to close the sale with LaCorte on January 18, 2011 did not authorize the drastic remedy of voiding the 2010 settlement agreement. The language of Paragraph 1 states unequivocally that plaintiff could "proceed with its Lawsuit" if "the sale of the Long Branch property is not completed by January 18, 2011[.]" This language is straightforward and unambiguous, and in no way suggests that failure to close on the prescribed date resulted in a voiding of the settlement agreement. The possible sale to LaCorte may have been the impetus for the settlement agreement, but under its plain language, the agreement continued to exist even if the sale did not occur as contemplated. In voiding the settlement agreement rather than enforcing it as written, the trial judge erred in this aspect of his analysis. See Kaur, supra, 405 N.J. Super. at 477 (where contract explicitly provided for entry of judgment on default, rescission of the agreement when not specified by the parties was inappropriate).
Moreover, the settlement agreement did not just resolve count one of the pending complaint, but included the remaining two counts addressing both the lien on the Ocean Township property and the breach of contract. Nothing in the record suggests that the other terms of the agreement, such as defendant's agreement not to file an answer, and plaintiff's right to enter default judgments on the two other counts, did not proceed according to the settlement agreement. Accordingly we agree with defendant that the 2010 settlement agreement was not void.
Nevertheless, we do not deem the contractual language of the 2010 settlement agreement to be ambiguous or necessitating further inquiry to ascertain its meaning. Moreover, by its terms, the entirety of the agreement is contained in the four corners, and any amendments must be in writing. We are convinced the agreement does not support defendant's contention that, once the lien was cleared, plaintiff was prohibited from levying on the note.
In clear and concise language, Paragraph 2(e) provides that plaintiff may not levy on the note "once it has been paid the $57,000.00 as per [Paragraph 1]." (emphasis added). Plaintiff was not paid "as per" Paragraph 1 because the payment was made long after the January 18, 2011 day specified in that paragraph. While the construction lien was eventually cleared, the circumstances of its payment differ substantially from Paragraph 1 in the amount paid, the payment date, and the requirement of additional work product. The parties made no written change to Paragraph 1 or Paragraph 2(e) addressing these modifications as required by the 2010 settlement agreement.
Defendant's reliance on the 2011 agreement between plaintiff and Broadway as amending the price and other terms, but leaving the levy prohibition, is misplaced. The 2011 agreement did not include defendant, the material terms were different, and it did not incorporate or even reference the 2010 agreement. Hence, the 2010 settlement agreement is controlling here. We will not redraft the 2010 settlement agreement to give defendant a better bargain than what was written. See Schor, supra, 357 N.J. Super. at 191; Kaur, supra, 405 N.J. Super. at 477. Thus, since the clearance of the lien was not effectuated in compliance with Paragraph 1 of the 2010 settlement agreement, Paragraph 2(e), which bars plaintiff from levying funds, cannot afford defendant relief. Consequently, the trial judge's order granting plaintiff's motion was proper.
Defendant further argues that at minimum, the trial judge should have granted a plenary hearing to explore the intentions of the parties. We disagree.
A disputed motion to enforce a settlement agreement is governed by the same standard as a motion for summary judgment. Amatuzzo v. Kozmiuk, 305 N.J. Super. 469, 474-75 (App. Div. 1997) (requiring a hearing "unless the available competent evidence, considered in a light most favorable to the non-moving party, is insufficient to permit the judge, as a rational factfinder, to resolve the disputed factual issues in favor of the non-moving party" (citing Brill v. Guardian Life Ins. Co., 142 N.J. 520, 540 (1995))). In reviewing such a decision, we apply the same standard as the trial court. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.) (citing Antheunisse v. Tiffany & Co., 229 N.J. Super. 399, 402, (App. Div. 1988), certif. denied, 115 N.J. 59 (1989)), certif. denied, 154 N.J. 608 (1998).
Here, as discussed above, there is no ambiguity in the 2010 settlement agreement that would warrant a hearing to determine the intentions of the parties as the language therein is clear and unambiguous. See Schor, supra, 357 N.J. Super. at 191. Therefore, based upon the available competent evidence viewed in a light most favorable to defendant, there are no disputed issues of material fact that would warrant a plenary hearing. See Amatuzzo, supra, 305 N.J. Super. at 474-75.
Defendant's remaining arguments are without sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E).
Affirmed.
I hereby certify that the foregoing is a true copy of the original on file in my office
CLERK OF THE APPELIATE DIVISION