Opinion
DOCKET NO. A-4935-14T1
02-09-2017
FREDRIC GLASSMAN AND KRISTIN GLASSMAN, Plaintiffs-Respondents, v. JOHN COLLINS, ELIZABETH COLLINS, and SOKOL, BEHOT & FIORENZO, solely in its capacity as Escrow Agent, Defendants-Appellants.
Steven Siegel argued the cause for appellants (Sills Cummis & Gross, P.C., attorneys; Joseph B. Fiorenzo, of counsel and on the briefs; Mr. Siegel, on the briefs). Sean Mack argued the cause for respondents (Pashman Stein, attorneys; Mr. Mack, on the brief).
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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. Before Judges Messano, Guadagno, and Suter. On appeal from the Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-156-14. Steven Siegel argued the cause for appellants (Sills Cummis & Gross, P.C., attorneys; Joseph B. Fiorenzo, of counsel and on the briefs; Mr. Siegel, on the briefs). Sean Mack argued the cause for respondents (Pashman Stein, attorneys; Mr. Mack, on the brief). PER CURIAM
Defendants John Collins and Elizabeth Collins appeal from the May 19, 2015 Chancery Division order terminating their real estate sales contract with plaintiffs Fredric Glassman and Kristin Glassman; ordering defendants to return the $205,000 deposit on that contract to plaintiffs; denying defendants' motion for summary judgment; and dismissing defendants' counterclaim against plaintiffs. For the reasons that follow, we affirm.
On March 1, 2014, defendants entered into a contract to sell their home in Wyckoff to plaintiffs for $2.05 million. The contract required a $205,000 deposit and provided that the sale would be contingent upon plaintiffs' ability to obtain a $1 million mortgage by April 16, 2014; the remaining balance was to be paid in cash before the expected closing date of November 30, 2014.
The contract contained an inspection contingency clause, which provided plaintiffs the right to inspect the property:
The Buyer acknowledges that the Property is being sold in an "AS IS" condition and that this Agreement is entered into based upon the knowledge of the Buyer as to the value of the land and whatever buildings are upon the Property, and not on any representation made by the Seller, the named Broker(s) or their agents as to character or quality. Therefore, the Buyer, at the Buyer's sole cost and
expense, is granted the right to have the dwelling and all other aspects of the Property, inspected and evaluated by "qualified inspectors" (as the term is defined in paragraph (f) below) for the purpose of determining the existence of any physical defects or environmental conditions such as outlined above. If Buyer chooses to make the inspections referred to in this paragraph, such inspections must be completed, and written reports must be furnished to the Seller . . . within 10 calendar days after the end of the Attorney Review Period set forth in Section 25 of this Agreement. If Buyer shall fail to furnish such written reports to the Seller and Broker(s) within the time period specified in this paragraph, this contingency clause shall be deemed waived by Buyer, and the Property shall be deemed acceptable by Buyer. The time period for furnishing the inspection reports is referred to as the "Inspection Time Period."
A "qualified inspector" was defined in the contract as "persons or businesses that are licensed or certified by the State."
Upon completion of an inspection and furnishing of a report, the contract required defendants to notify plaintiffs within seven days if they wished to exercise their right to cure any defects:
If any physical defects, or environmental conditions . . . are reported by the qualified inspectors to the Seller within the Inspection Time Period, the Seller shall then have seven (7) calendar days after the receipt of such reports to notify the Buyer in writing that the Seller shall correct or cure any of the defects set forth in such reports. If Seller shall fail to notify Buyer of Seller's agreement to so cure and correct, such failure to so notify shall be deemed to be a refusal
by Seller to cure or correct such defects. If Seller shall fail to agree to cure or correct such defects within said seven (7) day period, . . . the Buyer shall then have the right to void this Contract by notifying the Seller in writing within seven (7) calendar days thereafter. If Buyer shall fail to void this Contract within the seven (7) day period, the Buyer shall have waived his right to cancel this Contract and this Contract shall remain in full force, and Seller shall be under no obligation to correct or cure any of the defects set forth in the inspections. If Seller shall agree to correct or cure such defects, all such repair work shall be completed by Seller prior to the closing of title.
If defendants failed to adequately respond to the inspection report, plaintiffs had seven days thereafter to terminate the agreement. Further, the contract required all notices to be in writing. On March 2, 2014, one day after execution of the contract, the parties signed a disclosure statement.
On March 28, 2014, the parties executed a rider to the contract which extended the mortgage commitment date to June 30, 2014, and clarified that the "as is" language in the inspection contingency clause was "subject to all of the buyers' inspection rights as set forth in the Contract, including the right to terminate if the parties are unable to resolve all of the home inspection issues." The rider permitted all notices be "given through the parties' respective attorneys, by regular mail or telefax." The rider eliminated any references to the availability of liquidated damages in the contract.
Finally, the rider stated:
[T]he Contract shall be subject to no further attorney review, and the Contract shall be deemed as the original Contract, signed by the parties, as modified by this Rider. The terms of this Rider shall be construed as overriding and prevailing over any terms of the printed Contract in the event of any inconsistencies or ambiguities between the Contract and this Rider.
The Broker prepared Contract and this Rider are to be read as an integrated document and references to the Contract or an Agreement between the parties shall be deemed to refer to these integrated documents.
Any and all proposed changes to the Contract, as reflected herein or as may be reflected in a review letter of counsel for either party, shall be subject to the approval of said parties as evidenced by their signatures.
Following execution of the contract and rider, plaintiffs submitted the deposit of $205,000 and retained a qualified inspector.
On April 4, 2014, a home inspection was conducted by All in One Inspection, LLC (All in One). David Zuidema, Inc. (Zuidema) conducted an on-site inspection and found issues with the septic system. Zuidema recommended a consultation with an engineer.
On April 10, 2014, plaintiffs' counsel, Richard J. Savino, mailed a letter to defendants' counsel, Jeffery A. Zenn, which detailed a list of thirty-seven septic and structural defects, which were noted in an attached ninety-three-page inspection report by All in One. The letter demanded that the septic system be replaced and noted issues pertaining to the siding of the home, specifically the Exterior Insulation Finishing System (EIFS).
It is undisputed that this notice satisfied plaintiffs' initial burden under the contract.
The inspection report revealed that the home was clad with EIFS, sometimes called "synthetic stucco," which "is a multi-layered exterior barrier-type system designed to prevent moisture intrusion into exterior walls." See Dean v. Barrett Homes, Inc., 204 N.J. 286, 307 (2010) (Rivera-Soto, J., concurring in part and dissenting in part). This information contradicted defendants' disclosure statement, which described the exterior of the home as clad with masonry, and containing no artificial stucco or EIFS.
The report listed several issues with the EIFS, specifically noting that the EIFS siding had "dents, dings, cracks and damage all around the home that allows moisture to leak past the siding"; that the siding should terminate six to twelve inches above grade level "so it does not draw water up into the wall"; that there was no "lower trim piece called a drip screed" to allow "drainage and prevent[] water from being drawn up into [the] wall"; and that the siding was "in contact with the roof" rather than having a one to two inch gap to allow it to "dry and drain between rain storms." The report recommended repairs by a contractor. The April 10, 2014 letter summarized this report, noting that the "EIFS siding is damaged in many places and in need of repair to prevent water infiltration and mold."
Per the contract and rider, defendants were required to respond to the letter within seven days, or by April 17, 2014. It is undisputed that the parties' counsel telephonically agreed to extend the response time to April 21, 2014. No response was received until April 22, 2014, and there is conflicting evidence of the parties' communications on that day. That day, plaintiffs' counsel wrote a letter (first April 22, 2014 letter) to defendants' counsel, indicating:
Please be advised that in the absence of a satisfactory response regarding the various items raised in my letter of April 10, 2014, it is the intention of [plaintiffs] to terminate the Contract based upon the inspection issues. Pursuant to our conversation, I would ask that you provide a response at the [earliest] opportunity.
Please call my office at your first convenience.
The parties dispute whether a telephone conversation preceded this letter. Defendants' counsel certified that he spoke with plaintiffs' counsel that morning and that, "[d]uring that conversation [plaintiffs' counsel] stated to me verbally what would ultimately be the content of [the first April 22, 2014] letter." At his deposition, defendants' counsel stated that the conversation entailed plaintiffs' counsel asking how defendants were going to respond to the inspection report, and that defendants' counsel responded that he would call his client. Defendants' counsel did not recall whether they discussed the substance of any repairs in the inspection report. By contrast, plaintiffs' counsel denies that a conversation occurred, and certified that communications only took place by way of letter. Given the summary judgment standard of review, the motion judge accepted as fact that a conversation occurred.
After receiving the letter, defendants' counsel contacted defendant John Collins, who was hospitalized at the time, and spoke with him about the inspection issues raised in the April 10, 2014 letter. Collins told his counsel that he would address all of the issues. His counsel then called plaintiffs' counsel and left a voicemail stating that his clients agreed to resolve all outstanding issues, and electricians and plumbers had already been contacted to resolve the issues.
At 3:55 p.m., plaintiffs' counsel sent an email, attaching a termination letter (second April 22, 2014 letter), to defendants' counsel, informing defendants that plaintiffs "hereby terminate the Contract of sale based upon the inspection clause and the fact that [defendants] have not responded to the reasonable requests" by April 21, 2014.
At 4:15 p.m., defendants' counsel responded by email:
I don't understand the purported termination letter attached. You and I spoke this morning and you told me you were sending a letter which you did this morning. I then spoke to my client in the hospital (as I had told you this morning he was admitted to the hospital) and immediately after that left a voice message with you this afternoon that he would take care of all items in your home inspection list as he had already been in contact with electricians and plumbers and others. He also retained someone for the septic. In my message I said I would be writing a letter to you to confirm these items. Now in light of that you send this termination letter? The Seller did respond within a few hours of our morning conversation and your letter from this morning. I think that was more than reasonable especially considering the circumstances that Mr. Collins find[s] himself in.
On April 23, 2014, at 10:14 a.m., Collins emailed plaintiff's counsel, copying Fredric Glassman and advised them he was unable to reach his attorney to provide updates on work that was to be done. Collins explained the septic issues from the inspection report, noting that the septic tanks were moved to the rear of the home due to two major additions that were done. He stated that he was "waiting for the town engineer to get me copies of the plans showing the location of the new [septic] tanks," which he would send to plaintiffs about the scope of work to be done. Collins advised that the septic work was "all things that we want to have fixed whether you want to buy the house or not."
As the motion judge noted, this statement was in "direct contravention" of defense counsel's certification that he spoke with his client the day prior.
Glassman replied to the email chain at 10:41 a.m., stating, in pertinent part:
Unfortunately, we had no option other than to cancel the contract given that our window to cancel under the contract was rapidly approaching.
As communicated to [your attorney], the contract was terminated yesterday. I still have not heard from [your attorney] on confirmation that the deposit has been returned but would appreciate confirmation of same today. That all being said, my wife and I are still very interested in the house under the right circumstances.
Glassman's reply addressed defendants' counsel:
As you are aware, pursuant to Section 20(d) of the purchase agreement your client had 7 calendar days to respond to our request
for repairs following the home inspection. It is now 12 days later and we still do not have a written response. To that end (and pursuant to [our attorney's] cancellation letter), the contract is terminated and we hereby request the immediate return of my down payment.
All that being said, my wife and I are happy to engage in further discussions with [plaintiffs] if and when they have a better hold on exactly how they intend to respond. For the most part, these are not little items to "take care of." Rather, there are potentially hundreds of thousands of dollars in repairs required. My wife and I would need much more control over the repairs/septic process . . . in order to consider re-engaging in another contract.
We are still very interested in the house, but not on these terms.
At 12:18 p.m., Collins replied to plaintiff's email, stating "I completely understand the position you are in with respect to the timeframe. I am still unable to reach [my attorney] and I have left word at his office for him to call me as soon as possible."
The motion judge again noted that this statement contradicted defendants' counsel's certification that he spoke to his client on April 22.
On April 25, 2014, defendants' counsel wrote to plaintiffs' counsel, rejecting the letter terminating the contract because plaintiffs "remain committed to addressing and fixing all items on the home inspection repair list." In the letter, defendants' counsel stated that he received and reviewed the inspection report from plaintiffs and that defendants "started to work on a response by taking care of everything." Defendants' counsel did not interpret the first April 22, 2014 letter as terminating the contract because it asked him to "provide a response at the earliest opportunity." He stated that by the time he received the second April 22, 2014 letter, he left a voicemail and "responded that [defendants] would and have started to take care of all items on the inspection list." As such, defendants' counsel "believe[d] that [defendants] have responded within the appropriate time under the Contract as extended."
That day, at 11:11 a.m., Glassman emailed defendants' attorney, copying his own counsel, to request return of his deposit, stating that he was "stunned that [defendants' attorney] would hold this amount of money from us with no response in over 3 days." Glassman stated that Collins "knows that we are still very interested in purchasing the house under the right circumstances at a future date under a different contract."
On May 6, 2014, at 4:17 p.m., defendants' counsel wrote a letter to plaintiffs, stating "[a]s I indicated to you yesterday, [defendants] have been busy with contractors addressing the issues that were raised" in the inspection report. Counsel indicated that defendants engaged an EIFS installer and hired a contractor, landscaper, licensed electrician, and plumber to take care of the repairs. Contrary to the inspection report's recommendations that it be replaced, defendants advised that the septic system was inspected by an engineer, was "operating properly," and would not be replaced. Defendants concede that they did not repair the EIFS problems in the inspection reports; the parties dispute whether the letter adequately addressed items #23, #30, and #33 from the inspection report.
The motion judge noted that defendants did not refuse to complete these items, but rather, "the items could not be completed at the time" of the letter.
On May 8, 2014, plaintiffs retained new counsel, Adam B. Schwartz, who wrote a letter advising defendants' counsel that plaintiffs terminated the contract on April 22, 2014, "when they did not receive a timely written response" to the inspection report. Counsel advised that defendants' May 6, 2014 response "does not resuscitate this transaction as . . . my clients terminated the contract two weeks earlier." Counsel stated that defendants "continue to be in breach" of the sales contract and had "no basis to retain [plaintiffs'] $205,000 deposit and you cannot ignore their repeated requests that the monies be returned." Counsel referenced defendants' earlier email, stating that the repair items were "things that [defendants] want to have fixed whether [plaintiffs] want to buy the house or not," and advised that because "the contract has been terminated . . . your clients should not be performing any maintenance or repairs on [plaintiffs'] behalf."
On May 9, 2014, Thermal Consulting and Inspection, Ltd. performed an EIFS inspection for defendants. The inspection noted five "minor problems" that needed attention and agreed with plaintiffs' inspection report on some issues, such as the EIFS running "too close to the grade at some locations" and containing "dings" and "construction cuts" in several locations. The report concluded that if repairs were "done relatively soon . . . then this wall system should continue to perform well for many years to come."
On May 13, 2014, plaintiffs' new counsel again wrote to defendants' counsel, stating "[a]s you are aware, it is our position that my clients terminated the contract" and also noted that defendants' counsel's May 6, 2014 letter "provide[d] a separate and additional basis for termination." He explained defendants did not agree to cure several items listed in the inspection report. He noted "notwithstanding that my clients have already cancelled the contract — so that there is absolutely no doubt in this regard — they are again terminating the contract, this time because [defendants] ha[ve] not agreed to 'cure and correct' items . . . 23, 30 and 33" under the inspection reports. The letter again requested return of plaintiffs' deposit "as the contract was, is and remains terminated."
On May 23, 2014, after the deposit was not returned, plaintiffs filed a complaint in the Chancery Division seeking declaratory relief that they "were entitled to terminate the Sales Contract" on "two separate occasions," because defendants failed to timely respond to their inspection report and failed to adequately cure all defects. Plaintiffs sought return of their deposit as well as compensatory and consequential damages. On August 7, 2014, defendants filed their answer and counterclaim seeking to enforce the contract, as well as damages and attorney's fees.
Notwithstanding the litigation, the parties continued to negotiate for several months regarding the home sale. After plaintiffs advised defendants to stop repairs, defendants' counsel wrote to plaintiffs' counsel on June 12, 2014, with an update on the "status of the repairs," noting several items had been addressed and repaired and the septic tank was "operating satisfactorily." The letter gave no indication the septic system would be replaced, as plaintiffs' April 10, 2014 inspection report demanded, and did not address the EIFS issues.
On June 17, 2014, plaintiffs responded, noting that they "cancelled the sales contract," were "uninterested in any 'repairs' that [defendants] are performing," and that any such repairs "are being conducted solely at the expense and direction of [defendants]." In the letter, plaintiffs again cancelled the contract, this time because they could not obtain a mortgage by the June 30, 2014 deadline under the rider because of the ongoing inspection issues.
On July 18, 2014, plaintiffs' counsel, apparently responding to a July 14, 2014 letter by defendants' counsel, indicated that plaintiffs would "reinstate the parties' original sales contract and refrain from proceeding with the [lawsuit] under the appropriate circumstances." The letter noted, however, that plaintiffs "cannot agree to a waiver of the home inspection clause or otherwise state that it has been satisfied," because there remained "a few open items regarding the home inspection," such as the septic and EIFS issues. The letter proposed the mortgage contingency date in the rider be "adjusted to August 30, 2014."
This letter is not in the trial or appellate record.
Defendants thereafter retained a contractor to perform repairs to the EIFS system, who wrote to defendants on August 18, 2014, and recommended repairs "[i]n order to abide by current code," and advised that, if the repairs were completed, the system could be "kept as is." That day, defendants apparently made plaintiffs aware of this inspection.
The letter to plaintiffs is not in the trial record.
On August 22, 2014, plaintiffs' counsel responded, noting plaintiffs' "concerns" with respect to defendants' EIFS report, which raised "the same deficiencies" indicated in plaintiffs' original home inspection report. Counsel noted how both inspections reported the "EIFS being too close to the roof and too close to grade," and inquired "why those repairs were not performed."
On August 25, 2014, defendants' counsel responded, advising that the EIFS problems were a "technical issue" and suggesting the parties' contractors speak with one another.
In September 2014, plaintiffs had an expert EIFS inspector, Keith Smith of US Reclad and Exterior Wall Finishes, Inc., visit the property. Smith advised that "[a]lthough the overall exterior appearance of the EIFS is satisfactory," he noticed "numerous installation defects" that "continue to compromise the EIFS system." Plaintiffs' counsel wrote to defendants' counsel on September 8, 2014, advising him of the results of Smith's inspection and stating that plaintiffs were "not interested in purchasing the home — only in the return of their deposit."
On September 10, 2014, defendants' counsel rejected plaintiffs' attempt to terminate the contract, alleging that plaintiffs failed to conform to the termination requirements of the contract in a number of material respects. Counsel noted that plaintiffs failed to identify their latest inspector as being a "qualified inspector" under the contract.
Plaintiffs replied on September 12, 2014, noting that the latest inspection "dispelled any notions they had about reviving the Contract" and advising that they were prepared to proceed with litigation if their deposit was not returned. Plaintiffs noted that the latest inspection was not governed by the contract, which they believed to be void, but was "simply verification by our expert that [defendants] . . . have refused to address the various EIFS installation issues within any reasonable timeframe." Consistent with this representation, Smith wrote an expert report for plaintiffs on March 5, 2015. The report concluded that there were various installation defects with the EIFS system that made "the home susceptible to water infiltration."
Following the taking of the parties' depositions, defendants filed a motion for summary judgment and plaintiffs cross-moved for summary judgment.
On May 19, 2015, following oral argument, Judge Menelaos W. Toskos entered an order, accompanied by a twenty-four-page opinion, granting plaintiffs' motion and denying defendants' motion. Judge Toskos found that plaintiffs timely satisfied the conditions of the sales contract by completing and sending the home inspection report to defendants along with their notice as to the defects plaintiffs wanted defendants to cure. The judge acknowledged that the parties initially extended defendants' response time to April 21, 2014, and found that "[p]laintiffs acquired a vested right to cancel the contract pursuant to the inspection clause when [d]efendants did not satisfactorily respond prior to April 22, 2014." The judge found that the April 22, 2014 letters by plaintiffs' counsel "did not waive that right."
Judge Toskos rejected defendants' contention that there was a second modification to extend the response time, reasoning that "any 'offer' by [plaintiffs' counsel] was too vague to be binding" because the record revealed "no clear language indicating any extensions of time and to read one in would be improper." The judge remarked, "[n]o rational trier of fact could find that [plaintiffs' counsel] had actually extended [d]efendants['] contractual time to respond," as there was not "any credible evidence that . . . the parties came to a clear agreement as to a post facto extension."
Judge Toskos rejected defendants' assertions that the parties' prior communications "established a course of conduct permitting oral [modification]," reasoning that the contract expressly required all notices to be in writing, that plaintiffs complied with that requirement by sending two termination letters, and that "an untimely voice mail was insufficient" to extend defendants' time to respond.
Moreover, the judge noted that defendants' counsel's indication that his clients would resolve all outstanding issues was not a satisfactory response because the contract required defendants to cure any defects in the inspection report and, ultimately, the "parties never came to a resolution of [] EIFS repairs." The judge stated:
Defendants have not persuaded the court as to how and when [p]laintiffs waived their right to terminate the contract once it vested when [d]efendants did not respond by April 21. Additionally, a simple response would not have been sufficient even if it met this deadline. The parties under the modified [contract] would have had to agree on a resolution of all of the home inspection issues for [p]laintiffs not to have the right to terminate. With respect to EIFS repairs, this never occurred
either before or after April 21, 2014. . . . As such, [p]laintiffs validly terminated the contract by transmitting the second April 22 letter pursuant to the express terms of the contract.
The judge remarked that the rider allowed either party to cancel the contract if they could not agree on the items to be repaired, and noted that defendants and plaintiffs disagreed as to the necessity and extent of EIFS repairs. The judge found that the dialogue over EIFS repairs "continued into September while the parties, as [p]laintiffs put it, attempted to resurrect the contract or settle the litigation." The judge noted that "the parties could not agree as to what EIFS repairs were necessary and as such, either party was free to terminate the contract under . . . the Rider." The judge concluded that even if plaintiffs did not terminate the contract in April, the contract was properly terminated by plaintiffs on September 8, 2014, as the parties disagreed as to the repairs necessary to satisfy the inspection report.
Even assuming a breach by plaintiffs, Judge Toskos found that defendants failed to adequately assert damages for any breach, reasoning that "no proofs have been presented to establish an actual amount of damages suffered, nor have any estimates or expert opinions been proffered." The judge rejected the availability of specific performance for defendants as a remedy, noting that defendants conceded at oral argument that there was no precedent ordering the relief of specific performance for a seller of a real estate contract; the court also could not locate any such authority for why money damages would be insufficient.
On appeal, defendants challenge the judge's decision granting summary judgment to plaintiffs and denying their motion for the same relief. Defendants' brief presents eight lengthy point headings, with many broken into several repetitive subsections, spanning several pages. Mindful of Judge Aldisert's admonition that the number of claims raised in an appeal is usually inversely proportional to their merit, Ruggero J. Aldisert, The Appellate Bar: Professional Responsibility and Professional Competence -- A View from the Jaundiced Eye of One Appellate Judge, 11 Cap. U. L. Rev. 445, 458 (1982), we distill defendants' contentions for the sake of brevity: the parties agreed to waive the contractual provision requiring written notice; defendants complied with the sellers' contractual responsibilities by agreeing to remediate the issues identified in plaintiffs' inspection reports; this agreement "negated" plaintiffs' attempt to void the contract; because the contract remained in effect, plaintiffs breached the contract by failing to perform; alternatively, a grant of summary judgment in favor of plaintiff was precluded as a genuine issue of material fact existed as to whether the written notice requirement was waived; the trial judge's finding that defendants failed to cure the defects was erroneous because defendants were only required to agree to cure the defects; plaintiffs' termination letter did not conform to the contractual requirement and was not a valid and effective termination of the contract; alternatively, there was a genuine issue of material fact whether the termination letter constituted a valid and effective termination of the contract; the judge erred in dismissing defendants' counterclaim on the ground that actual damages were not established; the judge erred in holding that specific performance was legally precluded in a real estate transaction; and the judge erred in concluding that plaintiffs were not entitled to specific performance.
We have carefully considered all of defendants' arguments in light of the applicable law, and we affirm substantially for the reasons set forth in Judge Toskos' written decision appended to the May 19, 2015 order. R. 2:11-3(e)(1)(A). We add only the following brief comments.
We review a trial court's order granting or denying summary judgment under the same standard employed by the trial court. Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). In considering the motions, "both trial and appellate courts must view the facts in the light most favorable to the non-moving party." Bauer v. Nesbitt, 198 N.J. 601, 605 n.1 (2009).
Summary judgment is proper "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." R. 4:46-2(c). A genuine issue of material fact exists where "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).
If there is no genuine issue of material fact, we decide whether the lower court's ruling on the law was correct. Walker v. Atl. Chrysler Plymouth, 216 N.J. Super. 255, 258 (App. Div. 1987). Issues of law are subject to de novo review, and the trial court's determination of such issues is accorded no deference. Selective Ins. Co. of Am. v. Hudson E. Pain Mgmt., 210 N.J. 597, 604-05 (2012).
Defendants claim they complied with the contract by agreeing to remediate all issues identified in plaintiffs' inspection reports, and, therefore, summary judgment should be entered in their favor because "the parties' undisputed course of conduct and express agreement to extend the deadline" through April 22, 2014, "negated plaintiffs' attempt to void the Contract." Although the parties agreed to an extension to April 21, 2014, there is no evidence that plaintiffs agreed to a second modification of the response deadline, and after a thorough review of the record, Judge Toskos found that plaintiffs validly terminated the contract on April 22, 2014.
Here, the language of the parties' sales contract, and the attached rider, is clear and unequivocal. The inspection contingency clause of the contract provided that the property was being sold "as is," but was subject to plaintiffs' ability to obtain a mortgage as well as their rights to inspect the property and have any defects cured by defendants. The rider provided plaintiffs with "the right to terminate if the parties are unable to resolve all of the home inspection issues."
Plaintiffs timely notified defendants of the results of their inspection and served their inspection report on April 10, 2014. The contract provided that defendants had seven calendar days after the receipt of such reports to notify plaintiffs in writing that defendants "shall correct or cure any of the defects set forth in such reports." Defendants' failure to make such notification was deemed a refusal to cure or correct the defects. Upon such refusal, plaintiffs had the right to void the contract by notifying defendants in writing within seven calendar days thereafter. Plaintiffs' right to void the agreement would only be waived if they failed to notify defendants within an additional seven days.
Defendants contend that the parties waived the contract provision requiring written notice due to their course of conduct in previously agreeing, telephonically, to extend the response deadline. Although the parties initial four-day extension is supported by letters in the record, and defendants clearly sought a further extension, there is no evidence, even taken in a light most favorable to defendants, that the parties agreed to another extension.
On April 22, 2014, defendants' counsel called plaintiffs' counsel. Defendants' counsel provided a certification and was deposed on the contents of that conversation. We accept, for purposes of our review, every fact alleged by defendants' counsel regarding that conversation.
Plaintiffs' counsel denied such a conversation. For purposes of our review, we accept, as Judge Toskos did, that this conversation occurred. --------
Defendants' counsel certified that he spoke with plaintiffs' counsel that morning and that, "[d]uring that conversation [plaintiffs' counsel] stated to me verbally what would ultimately be the content of [the first April 22, 2014] letter." Yet, nowhere in that letter was it expressed that plaintiffs agreed to another extension, nor was any consideration given for such an extension. In fact, to the contrary, plaintiffs actually expressed an intent to terminate the contract in the letter, which read:
Please be advised that in the absence of a satisfactory response regarding the various items raised in my letter of April 10, 2014, it is the intention of [plaintiffs] to terminate the Contract based upon the inspection issues. Pursuant to our conversation, I would ask that you provide a response at the [earliest] opportunity.
Defendants rely on the language requesting a "response at the [earliest] opportunity" as establishing a modification, but such language does not amount to a "clear" or "mutual" agreement to extend the response deadline, which had already passed, nor did it preclude plaintiffs' from exercising their right to terminate under the contract. See Cty. of Morris v. Fauver, 153 N.J. 80, 100 (1998) ("A proposed modification by one party to a contract must be accepted by the other to constitute mutual assent to modify.").
Judge Toskos found no credible evidence that the parties came to a clear agreement for an indefinite extension of time to allow defendants to respond, and to read such an extension into the contract would be improper. We are satisfied that the second reply supports the conclusion that the parties did not mutually agree to a second extension or modification of the deadline for defendants to respond.
Defendants' remaining arguments lack sufficient merit to warrant further discussion in our opinion. 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 APPELLATE DIVISION