Court Opinion

ID: 4429335
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:22:12.130149+00
Date Added: 2024-06-11T14:58:18.032616
License: Public Domain

NOT FOR PUBLICATION WITHOUT THE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.

                                                         SUPERIOR COURT OF NEW JERSEY
                                                         APPELLATE DIVISION
                                                         DOCKET NO. A-3149-16T3

SDK TROY TOWERS, LLC,

          Plaintiff-Appellant,

v.

TROY TOWERS, INC.,

     Defendant-Respondent.
____________________________

                    Argued January 15, 2019 – Decided February 14, 2019

                    Before Judges Fisher, Suter and Firko.

                    On appeal from Superior Court of New Jersey, Law
                    Division, Essex County, Docket No. L-0011-16.

                    Joseph B. Fiorenzo argued the cause for appellant (Sills
                    Cummis & Gross, PC, attorneys; Joseph B. Fiorenzo,
                    on the brief).

                    Michael J. Canning argued the cause for respondent
                    (Giordano, Halleran & Ciesla, PC, attorneys; Michael
                    J. Canning, of counsel and on the brief; Matthew N.
                    Fiorovanti, on the brief).

PER CURIAM
        Plaintiff SDK Troy Towers, LLC, commenced this chancery action,

seeking specific performance and alleging its written and oral communications

with defendant Troy Towers, Inc. – for the purchase from defendant of an

apartment complex in Bloomfield for $45,000,000 1 – evolved into an

enforceable contract. Defendant secured dismissal through a series of summary

judgment motions, elucidating that the communications of these sophisticated

parties2 demonstrated without doubt that they both well understood neither

would be bound absent a fully-executed and delivered written contract – an

event that never occurred. Because the motion judges correctly determined that

the evidence, when viewed in plaintiff's favor, was "so one-sided" that plaintiff

could not prevail at trial, Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520,

536 (1995), we affirm.

                                         I

        This suit was commenced in the Chancery Division in March 2012. The

original complaint alleged breach of contract, promissory estoppel, breach of

1
    The property consists of 356 units contained within two sixteen-story towers.
2
   Plaintiff is an entity in the business of owning and managing apartment
buildings; its principals are Dinesh Khosla, a law professor, and his wife, Savita
Khosla, a physician. Defendant is owned by a holding company, Ayson Realty
Corporation, which is owned by a family trust.
                                                                          A-3149-16T3
                                        2
the implied covenant of good faith and fair dealing, and fraud, and sought

specific performance and damages. After a considerable discovery period,

defendant moved for partial summary judgment. By way of a November 20,

2015 written opinion, Judge Donald A. Kessler granted the motion in part; he

dismissed the breach-of-contract claim, rejected plaintiff's request for specific

performance, and discharged a notice of lis pendens on the property. The judge

denied the motion in part and transferred the action to the Law Division.

      Defendant later moved for summary judgment on the remaining claims.

In an April 27, 2016 written opinion, Judge Thomas R. Vena granted defendant's

motion on the fraud and good-faith-and-fair-dealing claims but denied relief on

the promissory-estoppel claim.     He also denied defendant's reconsideration

motion on the promissory-estoppel claim, and we denied defendant's motion for

leave to appeal the judge's decision on the promissory-estoppel claim.

      After further discovery, defendant again moved for summary judgment on

the promissory-estoppel claim. Judge Vena granted that motion for reasons set

forth in a February 17, 2017 written opinion. A few days prior to that decision,

plaintiff moved for reconsideration of the dismissal of its fraud claim and for

leave to file an amended complaint alleging negligent misrepresentation. That

motion was denied for reasons expressed in a March 3, 2017 written opinion.

                                                                         A-3149-16T3
                                       3
                                        II

      Plaintiff appeals, arguing, among other things, that the motion judges

"usurped the function of the jury" and mistakenly "evaluat[ed] the evidence on

critical fact questions," most notably drawing conclusions about the parties'

intentions.3 We disagree. The evidence so one-sidedly demonstrates that neither

party believed either would be bound absent a formal, fully-executed, and

delivered written contract, that defendant was entitled to summary judgment on

all plaintiff's pleaded and unpleaded 4 causes of action.

      In reviewing dispositions by way of summary judgment, we employ the

same Brill standard trial courts are obligated to apply. Petro-Lubricant Testing

Labs., Inc. v. Adelman, 233 N.J. 236, 256-57 (2018). Accordingly, while we

affirm substantially for the well-reasoned opinions of Judges Kessler and Vena,

3
  We recognize that plaintiff's arguments are not so simple or limited. Instead,
we allowed the parties to file overlength briefs. Their excellent submissions
contain numerous other contentions. But, the central theme of plaintiff's
arguments is the assertion that the motion judges did not honor the summary -
judgment standard when they dismissed plaintiff's various legal and equitable
theories.
4
  Plaintiff moved at the eleventh hour to file an amended complaint to include
a negligent-misrepresentation claim. As explained in Section V of this opinion,
the motion judge correctly denied leave to amend because that claim also would
have been dismissed by way of summary judgment.

                                                                        A-3149-16T3
                                         4
we nevertheless discuss at some length the factual allegations and the legal

principles that fully warranted the disposition of plaintiff's claims.

                                        III

      In May 2011, defendant retained Cushman and Wakefield to broker a sale

of the Bloomfield property, which defendant acquired in the late 1960s or early

1970s for about $3,500,000. Because the potential tax consequences of the sale

were enormous, defendant desired to engage in a 1031 exchange 5 and so advised

Cushman and Wakefield; that aspect formed a material part of defendant's

agreement with Cushman and Wakefield.6

      Brian Whitmer of Cushman and Wakefield handled the marketing for

defendant, and Josh Allen, Ayson's chief operations officer, was his primary

5
  26 U.S.C. § 1031 permits an investor to sell a property, reinvest the proceeds
in a new property, and defer all capital gain taxes.
6
  Defendant's agreement with Cushman and Wakefield stipulated that if they
were "unable to identify an exchange of the Premises pursuant to Section 1031"
defendant could "elect not to proceed with this Agreement or the transactions
contemplated [t]hereunder."

                                                                         A-3149-16T3
                                         5
contact. Whitmer's primary contacts for plaintiff were Dinesh Khosla and his

nephew, Raman Khosla. 7

      In June 2011, Whitmer disseminated an offering memorandum. Plaintiff

reached out for additional information, and, after Raman Khosla executed a

confidentiality agreement, Whitmer provided plaintiff with access to an online

due-diligence database about the property.

      Dinesh and Raman Khosla visited the property with Whitmer on July 13,

2011. The next day, plaintiff submitted an offer to purchase for $40,700,000;

plaintiff expressly stated that the offer "[wa]s not contractually binding on the

parties" but "only an expression of the basic terms and conditions to be

incorporated into a formal written agreement." In expressing a common theme

throughout the parties' communications, the written offer declared that "[t]he

parties shall not be contractually bound unless and until they execute a form of

contract which contract shall be in form and content satisfactory to each party

and its counsel in their sole discretion" and that "[n]either party may rely on this

letter as creating any legal obligation of any kind." Raman Khosla testified at

his deposition that it was plaintiff's practice to have written and signed contracts

7
  Like Dinesh and Savita Khosla, plaintiff's principals, Raman Khosla also had
considerable sophistication and knowledge in this arena. He has a bachelor's
degree in computer science and an MBA in finance.
                                                                            A-3149-16T3
                                         6
for the acquisition of properties, and he understood that here – without a written,

signed, and delivered contract – no obligation to close would be imposed.

      In its offer, plaintiff also acknowledged defendant's interest in pursuing a

1031 exchange:

            We recognize that the seller may be interested in a 1031
            exchange. We are open to discussing a time frame to
            accommodate that need.         However, we want to
            emphasize that our offer is based on current levels of
            financing and interest rates (we have a soft quote from
            one of our potential lender [sic]).

The offer letter also recognized that plaintiff was obligated to pay its own "legal

fees, costs of due diligence, fee title insurance, and survey," whether or not a

closing ever occurred.

      Plaintiff received no response but nevertheless performed some due

diligence. On August 12, 2011, plaintiff submitted a second offer to purchase

for $40,700,000, which included the same language from the first offer about a

need for a written contract, defendant's interest in a 1031 exchange, and the

buyer's obligation to bear its own costs.

      On August 16, 2011, Whitmer emailed plaintiff and other prospective

purchasers. He explained to plaintiff that he had scheduled a call with defendant

to discuss its offer but did not believe its prior offers were high enough and,

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                                        7
therefore, had decided to bid the property at market. On September 2, 2011, he

advised plaintiff of a September 12, 2011 bid date.

      On September 15, 2011, plaintiff submitted a third offer, this time for

$42,000,000. This offer, like the others, acknowledged defendant's interest in a

1031 exchange.      Eight days later, Whitmer invited plaintiff and other

prospective purchasers to submit their best and final offers. On October 4, 2011,

plaintiff submitted an offer to purchase for $44,600,000. This fourth offer again

included the same language in the prior three offers that acknowledged

defendant's interest in a 1031 exchange.

      On October 12, 2011, defendant interviewed plaintiff and other

prospective purchasers by telephone. Allen asked each whether they had the

equity to close the deal, and he recalled being satisfied with plaintiff's

straightforward response that it had sufficient funds to consummate the deal.

The next day, Whitmer advised Raman Khosla that defendant received one offer

higher than plaintiff's, for over $45,000,000, but defendant was more interested

in a buyer with the necessary funds to close and who would not retrade the

contract. According to Whitmer, he advised plaintiff that if it would increase

its offer to $45,000,000, the deal would be theirs. According to a certification

filed by Raman Khosla, plaintiff agreed to increase the purchase price if

                                                                         A-3149-16T3
                                       8
defendant would postpone the closing to early January or would accept

$1,000,000 post-closing in January.

      On October 20, 2011, Whitmer emailed Raman Khosla requesting that

they speak the next day and ending his email with: "All good news." The next

day, he told Raman Khosla that defendant accepted plaintiff's $45,000,000 bid.

      As his deposition testimony reveals, Raman Khosla understood that

nothing had occurred up to and including this point that would legally bind either

party absent an executed written contract. He also recognized defendant was

desirous of closing by December 31, a circumstance which required plaintiff to

quickly obtain financing and complete its due diligence.

      Allen testified at his deposition that he did not recall defendant's position

with respect to a closing date; instead he testified that in his experience

defendant's principals did not operate with any urgency. He knew, however,

that defendant's principals would not sign a contract without a ready 1031

exchange property and understood that defendant's success in securing a 1031

property would control the pace of any closing. He also understood plaintiff

wanted to move quickly on due diligence because plaintiff was "extremely

motivated to get this deal done."

                                                                           A-3149-16T3
                                        9
      After acceptance of its bid, plaintiff sought financing and engaged in due

diligence. Meanwhile, the attorneys negotiated and drafted the terms of the

contract of sale. Their communications during the contract-negotiation period

reveal plaintiff's eagerness to close quickly as well as its increasing frustration

with defendant's failure to sign the contract. These communications also reveal

that defendant's reticence was produced by complications in its search for a 1031

exchange property.

      On October 25, 2011, defendant's counsel emailed a first draft of the

contract, which anticipated a closing date in December 2011 with "TIME

BEING OF THE ESSENCE as to [p]urchaser as to such date." In the conveying

email, plaintiff's counsel stated that the draft had

             not yet been reviewed by our clients and is subject to
             any comments or changes our clients [m]ay wish to
             make. There is no contract until such time as a contract
             has been executed and delivered between the parties.

The draft contract itself, as well as all subsequent drafts, stipulated that the

agreement was not binding without a fully-executed and delivered contract,

stating:

             The presentation of this document for consideration by
             the parties shall not constitute an offer, reservation or
             option for the [p]roperty. Neither the negotiation nor
             the revision of this document shall constitute a contract
             or evidence of a contract, and there shall be no binding

                                                                           A-3149-16T3
                                        10
            agreement unless and until this document is executed
            by and delivered to all of the parties hereto.

Raman Khosla testified at his deposition that he understood that, throughout the

course of the contract negotiations, neither party would be bound until the

delivery of a signed contract.8    And, although the draft did not make the

transaction contingent on a 1031 exchange, it did anticipate that defendant

would close the sale as a tax-free 1031 exchange of property.9

8
  The draft contract's twelfth paragraph provided that defendant would also not
be bound to any representations made by Cushman and Wakefield, declaring
that defendant

            shall not be liable for or bound to any verbal or written
            statements, representations, warranties, real estate
            brokers' "setups" or information pertaining to the
            Premises furnished by Seller, any real estate broker,
            agent, employee, or other representatives of Seller,
            servant, or any other person, unless the same are
            specifically set forth herein. All oral or written prior
            statements, representations, warranties or promises, if
            any, and all prior negotiations and agreements are
            superseded by this Agreement and merged herein . . . .
9
     The thirty-fifth paragraph contained plaintiff's acknowledgement that
defendant would "have the option of closing the sale contemplated by this
Agreement as a 'tax-free exchange' of property under Section 1031 of the IRC"
and that the parties "hereto agree to work together in good faith to execute such
further documentation as shall be reasonably required to effectuate that result."
This was further conditioned on the parties' agreement "that nothing contained
in this paragraph" would "cause or require" plaintiff "to take any action posing
any financial risk to" plaintiff. This paragraph also permitted defendant to

                                                                         A-3149-16T3
                                      11
      In forwarding a revised version three days later, defendant's attorney

stated that it had not been reviewed by his client and remained subject to his

client's review and comment. That same day, plaintiff began the process of

applying for a $33,750,000 loan, the bulk of the purchase price. Around this

same time, plaintiff's principals executed a loan commitment for $9,000,000 by

refinancing property owned by SDK Prospect Towers, a process that began in

August or September 2011, before defendant accepted its bid.

      On November 16, 2011, plaintiff's counsel sent a revised draft to

defendant's counsel; he too expressed that his client had not reviewed it and the

draft remained subject to plaintiff's review and comment. As to the provision

that defendant could adjourn the closing if warranted by its desire for a 1031

exchange, counsel asserted that he provided in the draft

            that an extension to January 15, 2012 is agreeable, and
            anything beyond that is subject to my client's lender
            agreeing to keep the commitment in place on the same
            terms and conditions.

Plaintiff received its $33,750,000 loan commitment two days later. One of the

conditions for the loan was delivery of an executed contract.

"adjourn the Closing Date for up to ninety (90) days in order to accomplish the
provisions of this Paragraph."
                                                                         A-3149-16T3
                                      12
      Raman Khosla testified at his deposition that plaintiff never accepted the

loan commitment or made any payment toward it because there was never any

signed contract, and, without a signed contract, defendant was not obligated to

close. He explained that plaintiff did not want to place any more money at risk

based upon defendant's promise to sign in the future.

      On November 28, 2011, defendant's counsel sent comments on the latest

version of the contract that were "subject to further review with our client." The

next day, plaintiff had oil tanks on the property tested, and the day after that,

plaintiff's principals closed on their $9,000,000 loan.

      On December 2, 2011, plaintiff's counsel forwarded a revised contract to

his counterpart, advising it had not been reviewed by his client. Plaintiff's

counsel also mentioned he had dated the proposed contract December 5, 2011,

with plaintiff's intent being to sign on that date.

      On December 5, 2011, the parties' respective counsel exchanged emails

regarding the most recent draft of the contract, and plaintiff's counsel sent

defendant's counsel another draft, still with the disclaimer that it was subject to

his client's review and comments, but adding: "I think the Contract is ready to

be executed. Please call to confirm your agreement. Our client will be wiring

the deposit to the escrow agent." That same day, plaintiff provided its counsel

                                                                           A-3149-16T3
                                        13
with a signed signature page of the contract and deposited $1,000,000 into an

escrow account. In a certification submitted in response to defendant's summary

judgment motion, Raman Khosla claimed that plaintiff so acted at defendant's

request.

      The next day, December 6, 2011, plaintiff's counsel advised his

counterpart that he had "a signature page from [plaintiff] and the deposit [was]

delivered to the Escrow Agent."      But counsel didn't deliver the executed

signature page to defendant and plaintiff understood, as Raman Khosla testified

at his deposition, that the deposit would not be released from escrow until

plaintiff received a signed contract from defendant.

      Two days later, Whitmer exchanged emails with Allen, indicating that

plaintiff was "anxious to get a counter signature." Allen responded to Whitmer

that "[e]verything is fine," that defendant was "working towards signing the

contract [b]ut [defendant had] not finalized [its] 1031 replacement contract."

Allen also advised Whitmer that he could "assure [plaintiff] we are working

towards the same goal." Whitmer forwarded this email exchange to plaintiff.

      On Friday, December 9, 2011, Whitmer told Raman Khosla that defendant

would sign the contract that weekend.

                                                                        A-3149-16T3
                                      14
      On Monday, December 12, 2011, plaintiff's counsel emailed a revised

draft to defendant's counsel with the comment that "we must sign today." Later

the same day, plaintiff's counsel emailed that he had spoken to plaintiff; he

advised that:

            As you can imagine [plaintiff] is very frustrated with
            the situation. [Plaintiff] has directed me to advise you
            that unless the contract is signed by 3pm on Tuesday
            December 13 th it is breaking off negotiations on this
            property.

According to Raman Khosla, Whitmer advised on December 13, 2011, that

Allen "was going to sign the contract . . .[,] [h]e just need[s] another day or so,"

and on December 16, 2011, he said that "the contract was with the seller and

would get signed this weekend and [plaintiff] would have it by Monday,

December 19, 2011." Raman Khosla acknowledged – as he testified at his

deposition – that plaintiff's multiple requests about status arose from its

understanding that defendant would not be legally bound until it signed the

contract.

      By a December 19, 2011 email, plaintiff's counsel asked defendant's

counsel to "advise when your client has signed the contract today," and to

"forward the Seller's signature pages as soon as possible today," reminding

defendant's counsel that he had previously advised "that the Seller would not

                                                                            A-3149-16T3
                                        15
sign later than today." Plaintiff's counsel also provided a reminder that he had

signature pages from his client and the escrow agent, and the $1,000,000 deposit

had been in escrow for some time; he said that he was forwarding plaintiff's

signature page and the escrow agent's signature page under separate cover.

      That same day, Whitmer emailed Allen, asking if he would be available

for a meeting with the Khoslas, expressing his belief that the Khoslas "want to

meet principal to principal to give them comfort of your sincerity in transacting

as soon as possible on your end."        Allen responded to Whitmer that he

understood the Khoslas' concern but he was unavailable that day. Allen also

replied: "Our senior principals will not sign until the 1031 property is secured,"

and "[w]e anticipate securing an asset the first half of January."

      Whitmer forwarded this email exchange to plaintiff. He also sent another

email to Allen, asking if he was available to meet the following day, noting that

Dinesh Khosla would be leaving the country, and in his absence nothing could

be signed. Allen responded that he had meetings the following day in New York,

but if plaintiff "will wait until January we will most likely have a deal." Whitmer

forwarded this email exchange to plaintiff as well.

      Two days later, on December 21, 2011, plaintiff's counsel sent his

counterpart another revised contract, which allowed for an adjournment of the

                                                                           A-3149-16T3
                                       16
closing date to effectuate defendant's 1031 exchange but anticipated a closing

date no later than March 15, 2012, "provided [plaintiff]'s lender is willing to

extend its commitment, at no additional cost to [plaintiff], on the existing terms

and conditions, including interest rate to such adjourned date."          Plaintiff's

counsel also wrote to confirm his understanding that defendant was "not

prepared to sign the Contract at this time" and explained that "this news was

extremely disappointing and distressing" to plaintiff. Plaintiff's counsel also

noted plaintiff's efforts to complete due diligence and obtain financing, and

stated:

            Your client frankly had more than enough time to locate
            a replacement property. To allow our client to go
            forward to refinance the properties and incur expenses
            with regard to due diligence, knowing it did not have a
            replacement property lined up and wanting to have one
            prior to signing a contract with our client, is certainly
            not acting in good faith.

            The negotiated form of the contract provides that your
            client has the ability to extend the closing into March
            of 2012. We do not understand your client's reluctance
            to sign the contract. It has the ability to adjourn closing
            and also has 45 days beyond that date to locate a
            replacement property. To make your client's lack of a
            replacement property my client's headache given the
            history of this transaction, is patently unfair.

            My client would be agreeable to discussing a letter of
            intent, the terms of which would be very simple. A pre-
            condition of our client would be that we would have

                                                                            A-3149-16T3
                                       17
            some assurance from the two of you that your client is
            actively pursuing another property to purchase. In the
            absence of that, my client would have to re-examine its
            position.

      In a January 3, 2012 email, plaintiff's counsel inquired of his counterpart

if there was any news, and by emails dated January 3 and 4, Whitmer

communicated with Allen about plaintiff's concerns over maintaining the terms

of the $33,500,000 loan, and the interest and costs associated with its

refinancing loan, as well as defendant's 1031 concerns. Allen advised Whitmer

that defendant was hoping for good news on its 1031 exchange property, and

"we are on board for a deal."

      According to Raman Khosla, Whitmer advised two days later that the

contract would be signed that weekend. In an email sent the next day – Friday,

January 6, 2012 – defendant's counsel expressed it would be a good idea to look

at the latest version of the contract to see what needed updating. Defendant's

letter, which was attached, stated that it was "not in a position to enter into a

contract of sale with you at [present] time, however, we anticipate that situation

will change in the not to[o] distant future." Defendant also stated that "[w]hile

there is no binding agreement between us until a contract of sale . . . is executed

and delivered by" defendant to plaintiff, "we do want you to know that we are

not marketing the Premises to others at this time." When asked about this at his

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                                       18
deposition, Raman Khosla acknowledged that an agreement was in place but

required to be memorialized in the form of a written contract.          He also

acknowledged no one would be bound without a signed and delivered written

contract. Plaintiff's counsel responded to the January 6, 2012 email, agreeing

the contract dates would need to be adjusted and advising that, from plaintiff's

perspective, the closing date was a function of its lender.

      In emails dated January 9, 2012, Whitmer and Raman Khosla addressed

the latter's concerns over the delay in execution of the contract. Whitmer

expressed to Raman Khosla his understanding that defendant was "ready to

sign," but the parties' counsel were still working on finalizing the contract. By

separate email that day, plaintiff's counsel stated he had forwarded to his

counterpart a revised contract with a closing date of February 8, 2012, and an

outside closing date of February 15, although plaintiff would prefer slightly

different dates. Counsel further stated that from conversations between his

client and the broker, he believed the parties were discussing a signing on

January 9 or 10.

      On January 11, 2012, plaintiff's counsel emailed a revised contract with a

proposed closing date of February 7, 2012, and that an adjournment would be

                                                                         A-3149-16T3
                                       19
permitted but no later than March 15, 2012. By separate letter that same day,

plaintiff's counsel enclosed a revised page thirty-two of the contract, and stated:

            [Plaintiff] has asked me to advise you and your client
            that unless the Contract is signed by the close of
            business today, it is breaking off negotiations in this
            matter.

Raman acknowledged at his deposition that he told counsel to advise defendant's

counsel of this position.

      Finally, by separate emails on that same day, Raman Khosla advised

Whitmer that "we have not heard anything"; Whitmer responded, "[i]f not

already, you should have a pleasant surprise by 5 pm." Raman Khosla took this

to mean defendant had signed the contract and that plaintiff "would be receiving

it." Whitmer similarly testified that, based on communications he had with

Allen, he believed defendant signed the contract on January 11 and was

preparing to deliver it to plaintiff through its attorneys. But Allen misspoke.

Although he believed defendant had signed the contract, in fact it had not, and

on the evening of January 6, 2012, he advised Whitmer that defendant had

requested a twenty-four hour extension due to difficulties experienced with the

1031 property.

                                                                           A-3149-16T3
                                       20
       In fact, and there is no evidence to the contrary, no contract was ever

signed by defendant.      Certainly, a signed contract was never delivered to

plaintiff.

       On January 12 or 13, 2012, Dinesh and Raman Khosla spoke with Bruce

McKaba, defendant's president and one of the two individuals authorized to

execute the contract for defendant. During their conversation, the Khoslas

pressed McKaba for a firm timeline, but McKaba would not commit and stated

defendant would execute the contract once the 1031 property was secured.

Unsatisfied with this response and unwilling to wait longer, plaintiff considered

this the end of negotiations. Thereafter, counsel for the parties exchanged

recriminatory letters in anticipation of litigation.

                                         IV

       Because plaintiff's claims were dismissed by way of summary judgment,

the question for us – when viewing the facts discussed in the prior section in the

light most favorable to plaintiff – is "whether the evidence presents a sufficient

disagreement to require submission to a jury or whether it is so one-sided that

one party must prevail as a matter of law." Anderson v. Liberty Lobby, Inc.,

477 U.S. 242, 251-52 (1986) (quoted with approval in Brill, 142 N.J. at 536).

As our Supreme Court further explained in Brill, the motion judge must consider

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                                        21
"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, 142 N.J. at 540.

      In applying this standard, we agree with the motion judges' disposition of

defendant's summary judgment motions and that plaintiff's claims for (a) breach

of contract, (b) promissory estoppel, and (c) fraud, were correctly rejected.

                                       A

                          BREACH OF CONTRACT

       We agree with Judge Kessler, who dismissed the breach-of-contract

claim, that "the undisputed facts demonstrate that the parties did not enter into

a binding written or oral agreement" because "[t]he undisputed written

communication between the parties" – what he characterized as an "avalanche

of correspondence" – demonstrated the parties' understanding "that there would

be a written, not an oral agreement[,] and that the written agreement would be

executed by and delivered to the parties" before either party would be bound.

And it was undisputed that defendant never delivered a signed contract to

plaintiff or its representatives. Although plaintiff may assert that Whitmer

represented on January 11, 2012, that defendant had executed the contract – and

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                                      22
plaintiff may be entitled to an assumption of the truth of this allegation 10 –

plaintiff cannot dispute that, even if signed, the contract certainly was never

delivered. So, any dispute about whether defendant signed the contract cannot

stand in the way of a judgment in defendant's favor on the breach-of-contract

claim.

         The judge's accurate assessment of the factual record dovetails with the

his conclusion there was no evidence of an enforceable oral agreement. The

judge correctly recognized that "the course of ongoing communications between

the parties[,] which occurred through counsel and the real estate broker[,]

demonstrates that [defendant] never intended to be bound by an oral agreement

and only intended to be bound when a written contract was executed and

delivered . . . ." This is acutely revealed not only by plaintiff's constant and

many inquiries about whether defendant had signed the written contract, but, as

well, by plaintiff's multiple threats to break off "negotiations" if defendant did

not execute the contract.

10
    We might also assume the truth of plaintiff's assertion that Whitmer was
defendant's authorized agent even though the evidence is rather one -sided that
Whitmer acted only as a real estate broker with no authority to bind defendant
to a contract of sale. Even if Whitmer were an authorized agent of defendant,
his conduct would not establish the existence of a binding agreement because,
again, the contract – whether signed or not – was not delivered.
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                                        23
      Judge Kessler also properly rejected plaintiff's claim of part performance

as a basis for the enforcement of an oral agreement. He correctly recognized

that plaintiff's conducting of due diligence, its arranging of financing, its signing

of the contract, and its depositing of money into escrow, were merely

preparatory and with the clear understanding there would be no binding

agreement until the contract had been fully executed and delivered; the judge

wrote:

             It is apparent that both parties intended to negotiate
             towards the signing of a contract for sale. This is not
             the same as intending to be bound by an unsigned
             contract. The "performance" undertaken by [plaintiff]
             was that which was required to be in place before a
             contract would be executed. It was not taken in reliance
             on the fulfillment of a contract that was not yet signed
             and delivered. [Plaintiff] has not presented sufficient
             evidence to present a material issue of fact which can
             be proved by clear and convincing evidence that it
             partly performed the contract in reliance on
             [defendant's] conduct.

      The judge's analysis of the factual record is consistent with governing

legal principles. For example, it is true that in certain circumstances the Statute

of Frauds permits enforcement of an oral agreement for the sale of real property

by precluding those instances in which enforcement is not permitted; that is, the

Legislature, when amending the Statute of Frauds in 1995, declared that, in the

absence of "a writing signed by or on behalf of the party against whom

                                                                             A-3149-16T3
                                        24
enforcement is sought," N.J.S.A. 25:1-13(a), an oral agreement to transfer an

interest in real estate "shall not be enforceable unless":

            a description of the real estate sufficient to identify it,
            the nature of the interest to be transferred, the existence
            of the agreement and the identity of the transferor and
            the transferee are proved by clear and convincing
            evidence.

            [N.J.S.A. 25:1-13(b).]

In short, in enacting N.J.S.A. 25:1-13(b), our Legislature opened the door to the

enforcement of oral contracts to transfer an interest in real property so long as

the necessary elements could be established by clear and convincing evidence.

      Before long, we were asked to consider the enforceability of an oral

contract for the sale of real property under subsection (b). Prant v. Sterling, 332
N.J. Super. 369 (Ch. Div. 1999), aff'd o.b., 332 N.J. Super. 292 (App. Div.

2000). There, in adopting the reasoning of the chancery judge's published

opinion, we were influenced by the 1991 report and recommendations of the

New Jersey Law Revision Commission, which stated:

            The circumstances surrounding a transaction, the nature
            of the transaction, the relationship between the parties,
            their contemporaneous statements and prior dealings, if
            any, are all relevant to a determination of whether the
            parties made an agreement by which they intended to
            be bound. Thus, if the parties in question have been
            negotiating the sale of a multi-million dollar office
            building over many months through the exchange of a

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                                        25
            series of redrafted written contracts, it is unlikely that
            the parties intended to be bound other than in writing.
            Conversely, if the parties in question have engaged in a
            series of "handshake" agreements, for the purchase and
            sale of individual building lots in the past and have
            honored them in the absence of any writing, their prior
            conduct could tend to show that they intended to enter
            into a binding oral agreement.

            [Id. at 378.11]

      This same Law Revision Commission language was cited favorably by the

Supreme Court. In Morton v. 4 Orchard Land Trust, 180 N.J. 118, 126 (2004),

the Court found no enforceable oral agreement for the sale of real estate in

strikingly similar circumstances; because there is no principled distinction to be

drawn between the matter at hand and Morton, we quote the Court's holding at

some length:

            In this case, we cannot find the existence of a contract
            even in the deferential light in which we must view the
            facts as presented by plaintiff. From the inception of
            the dealings between the parties, beginning with the
            broker-prepared contract, to the final flurry of letters
            between the attorneys, it is clear to us that plaintiff and
            defendant intended to be bound only by a written
            contract. Under the terms of the written contract
            prepared by plaintiff's realtor, the contract was binding
            only on "parties who sign it," and the "signed contract"
            had to be delivered to the parties. (Emphasis added.)

11
    The quoted language can be found in the New Jersey Law Revision
Commission, Report and Recommendations Relating to the Statute of Frauds 11
(1991), available at http://www.lawrev.state.nj.us/rpts/fraud.pdf.
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                                       26
            The realtor and plaintiff signed the contract, but
            defendant did not. The realtor contemplated that
            defendant would forward to her a signed copy to
            consummate the deal.

                  ....

            . . . In this case, a binding, oral agreement is not
            suggested by the circumstances surrounding the
            negotiations, or by the relationship of the parties, or by
            the parties' contemporaneous statements and past
            dealings. This case is similar to Prant, in which the
            initial offer was in writing as were all meaningful
            communications between the parties, leading to one
            inescapable conclusion – the parties did not intend to
            be bound by an oral agreement. See Prant, 332 N.J.
            Super. at 371-74. The sale of the Orchard Court
            property was not expected to end on the basis of a
            handshake or a verbal utterance by the Trustees to the
            realtor.

            [Id. at 128, 130.12]

      Like Morton, the parties here are sophisticated business people. They had

no prior relationship, and they engaged in an arms-length transaction for a large

apartment complex priced by them at $45,000,000. Plaintiff's written offers for

the purchase of the property all set forth that the parties would not be bound

12
    The Court also distinguished McBarron v. Kipling Woods, LLC, 365 N.J.
Super. 114, 118 (App. Div. 2004), where, as the Morton Court observed, "the
negotiations were entirely oral, with the deal consummated over the telephone
followed by repeated verbal confirmations by the seller that the deal was done
and would be honored." Morton, 180 N.J. at 130.
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                                       27
absent a written contract. And, once plaintiff's final offer was accepted, the

parties negotiated a written contract between counsel, over a period of several

months. All versions of their draft contract contained a clause stating that the

parties would not be bound absent an executed agreement that had been

delivered to the parties. See Morton, 180 N.J. at 128-29; Prant, 332 N.J. Super.

at 379-80.

      All other communications also revealed the parties' understanding that

they would not be bound absent an executed written and delivered contract.

Indeed, Raman Khosla testified to plaintiff's understanding that the parties

would be bound only by a written agreement, and there is no other reasonable

explanation for plaintiff's repeated demands that defendant sign the contract, or

its repeated threat that if defendant did not sign the contract plaintiff would

break off negotiations.

      Plaintiff's argument that it partially performed does not alter our

conclusion. The facts, when viewed in the light most favorable to plaintiff,

demonstrate that its actions were merely preparatory, to ensure its ability to

close on the deal once the contract was executed and delivered. See Kopp, Inc.

v. United Techs., Inc., 223 N.J. Super. 548, 556-57 (App. Div. 1988); Kufta v.

Hughson, 46 N.J. Super. 222, 229 (Ch. Div. 1957). Moreover, the evidentiary

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record, including plaintiff's written offers to purchase the property, and its

communications threatening to end negotiations and noting the costs it incurred,

clearly shows plaintiff's understanding that it incurred these expenses at its own

risk.

                                        B

                          PROMISSORY ESTOPPEL

        Defendant was once denied summary judgment on plaintiff's promissory

estoppel claim.13 But a later summary judgment motion, filed after further

discovery, including Raman Khosla's deposition, was granted.

        In his February 17, 2017 opinion, Judge Vena determined there was no

sufficient evidence from which a rational factfinder could conclude that

defendant made a clear and definite promise that would reasonably induce

plaintiff to act or forbear. The judge cited Raman Khosla's deposition testimony

that plaintiff "was aware, from the outset of the contract negotiations in July

2011 to the termination of said negotiations in January 2012, that [d]efendant's

offer to sell . . . was contingent on there being a signed, written, and delivered

contract." Because the parties understood "neither . . . would be legally bound

13
   The judge also denied a reconsideration motion and we denied a motion for
leave to appeal that addressed this issue.
                                                                          A-3149-16T3
                                       29
to the other . . . until there was a signed, written contract which was acceptable

to both parties" and both could "'walk away' from the deal at any time" until a

fully-executed contract was delivered, the judge concluded there was no promise

– clear and definite or not – that could form the basis for a viable promissory-

estoppel claim.

      The judge properly recognized that there was no genuine dispute on the

question whether defendant could reasonably have expected to induce reliance

on plaintiff's part because both sides acted on the understanding that no one

would be bound or rely absent a fully-executed and delivered contract. And he

also correctly concluded that the plaintiff could not have reasonably relied on

any of defendant's representations for the same reason. 14

      Judge Vena's conclusions were in accord with applicable legal principles.

"Promissory estoppel is made up of four elements: (1) a clear and definite

promise; (2) made with the expectation that the promisee will rely on it; (3)

reasonable reliance; and (4) definite and substantial detriment." Toll Bros., Inc.

v. Bd. of Chosen Freeholders of Cty. of Burlington, 194 N.J. 223, 253 (2008).

14
    The judge sagaciously recognized that plaintiff's allegations were also
inconsistent about the reasonable-reliance element. For instance, plaintiff did
not pay the $1,000,000 deposit to defendant but instead placed it in escrow
"because . . . there was a chance that negotiations would terminate and that if it
paid the money to [d]efendant, it would be non-refundable."
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                                       30
In contending that it met all these elements, plaintiff relies heavily on our

decision in Pop's Cones, Inc. v. Resorts International Hotel, Inc., 307 N.J. Super.
461 (App. Div. 1998).

      In Pop's Cones, the plaintiff negotiated with the defendant about the

possible relocation of the plaintiff's frozen yogurt business on the Atlantic City

boardwalk to space owned by the defendant, with the defendant offering

inducements to encourage the plaintiff's interest in a particular site. After the

plaintiff made a written offer, it advised the defendant of its need for a timely

decision, given the timing of its lease renewal if it did not change location. Id.

at 464-65. In response, the defendant assured the plaintiff that it would have

little difficulty in concluding the agreement, and the defendant explicitly

advised the plaintiff to give notice it would not be extending its present lease,

to pack up its store, and to plan on moving. Id. at 465. In reliance on these

assurances, the plaintiff gave notice on its lease, moved its equipment into

temporary storage, sent designs for its new store to its franchisor, and retained

an attorney to represent it in finalizing a lease with the defendant. Ibid. The

parties' counsel then negotiated a proposed lease. Id. at 465-66. Ultimately, the

defendant withdrew its offer to lease space to the plaintiff, and the plaintiff filed

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                                        31
suit. Id. at 466-67. The trial court granted summary judgment in the defendant's

favor. Id. at 468.

      In reversing, we relaxed the requirement of a clear and definite promise

in Restatement (Second) of Contracts § 90 (1979), and held that promissory

estoppel requires only "[a] promise which the promisor should reasonably

expect to induce action or forbearance on the part of the promisee." Id. at 463,

471-72. Applying this less rigid standard, we concluded the facts supported a

valid promissory estoppel claim. Id. at 472-73.

      This case is markedly and materially different from Pop's Cones.

Defendant made no promise to convey the property absent additional conditions

– again, at the risk of becoming tiresome – that there be a written, executed and

delivered contract – so reliance on what preceded that event, which never

occurred, could not be found by a rational factfinder to be reasonable. See

Reprosystem, B.V. v. SCM Corp., 727 F.2d 257, 264-65 (2d Cir. 1984) (holding

that a promissory estoppel claim could not be established where defendant made

no clear promise to consummate a deal because the parties' negotiations "as

reflected in the draft agreements made it clear that the obligations" of both

parties "were contingent upon execution and delivery of the formal contract

documents").

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                                      32
                                        C

                                    FRAUD

      In granting summary judgment dismissing plaintiff's fraud claim, Judge

Vena recognized that – even when given a favorable view of the evidence –

plaintiff had offered only "bare assertion[s]" and he concluded there was no

"evidence beyond mere suspicion to permit a rational jury to find in favor of

[plaintiff] at trial on the issue of whether [defendant] made knowing and

intentional misrepresentations regarding [its] intentions with respect to a 1031

exchange[.]"

      The judge also denied plaintiff's motion for reconsideration on this point.

He found Allen's deposition testimony was not new evidence, because the record

was already replete with evidence that plaintiff knew as early as its July 2011

offer that defendant intended to pursue a 1031 exchange, and in December 2011

defendant made it clear that it would not sign the contract in the absence of a

1031 exchange property. The judge soundly observed that defendant:

            merely acted in accordance with the option it included
            in the drafts. Options by their very nature provide
            flexibility for parties who hold them. Defendant
            exercised its option – which [p]laintiff knew
            [d]efendant had – not to proceed without a 1031
            replacement property. This is not fraudulent. If
            anything, the drafts put [p]laintiff on notice that such a
            decision [by] [d]efendant was entirely within the realm

                                                                         A-3149-16T3
                                       33
            of possibility. That the existence of a 1031 replacement
            property factored into [d]efendant's decision to approve
            or [dis]approve or to finalize or not finalize the contract
            does not necessarily equate to the contract's ultimate
            completion being expressly contingent on the existence
            of a 1031 replacement property.

And the judge recognized that the reason for defendant's refusal to sign the

contract was largely irrelevant given the parties' understanding – we say once

again – that the anticipated transaction was not binding absent a written, fully-

executed and delivered contract.

      Fraud requires clear and convincing evidence, Stochastic Decisions, Inc.

v. DiDomenico, 236 N.J. Super. 388, 395 (App. Div. 1989); Albright v. Burns,

206 N.J. Super. 625, 636 (App. Div. 1986), of "a material representation of a

presently existing or past fact, made with knowledge of its falsity and with the

intention that the other party rely thereon, resulting in reliance by that party to

his detriment," Jewish Ctr. of Sussex Cty. v. Whale, 86 N.J. 619, 624 (1981).

Accord Gennari v. Weichert Co. Realtors, 148 N.J. 582, 610 (1997); Suarez v.

E. Int'l Coll., 428 N.J. Super. 10, 28 (App. Div. 2012). To be actionable, "the

alleged fraudulent representation must relate to some past or presently existing

fact and cannot ordinarily be predicated upon matters in future." Ocean Cape

Hotel Corp. v. Masefield Corp., 63 N.J. Super. 369, 380 (App. Div. 1960). "An

exception to this rule exists in the case of a false representation of an existing

                                                                           A-3149-16T3
                                       34
intention, i.e., a 'false state of mind.'" Ibid. So, "[i]ncluded within the first

element [of a fraud claim,] are promises made without the intent to perform since

they are 'material misrepresentations of the promisor's state of mind at the time

of the promise.'" Bell Atl. Network Servs., Inc. v. P.M. Video Corp., 322 N.J.

Super. 74, 95-96 (App. Div. 1999) (quoting Dover Shopping Ctr., Inc. v.

Cushman's Sons, Inc., 63 N.J. Super. 384, 391 (App. Div. 1960)).

      Plaintiff argues in its appeal brief that there was a material issue of fact as

to whether defendant "misrepresented . . . its intention to close on the sale

without having a 1031 exchange." The record, however, contains no evidence

of this alleged misrepresentation.

      Defendant did not affirmatively misrepresent, nor did it conceal, its

intention to pursue a 1031 exchange with respect to sale of the property. As we

have already established, defendant informed its broker of this fact, and plaintiff

was aware of this fact when it submitted its first offer in July 2011. The parties

also addressed this issue in the draft contracts exchanged. There is no evidence

that defendant ever promised to execute the contract before it secured a 1031

exchange property.

      There is also a dearth of evidence that defendant intended for plaintiff to

rely on the deal proceeding in the absence of a 1031 exchange. To reiterate –

                                                                             A-3149-16T3
                                        35
for the last time – both sides knew neither was bound absent a written, executed,

and delivered contract.

      The fraud claim was properly dismissed.

                                       V

      Lastly, we consider plaintiff's argument that its motion for leave to amend

the complaint to assert a claim of negligent misrepresentation was erroneously

denied. Filed at the eleventh hour, the motion was denied because the judge

found the application untimely and the proposed amendment without merit. We

find no abuse of discretion.

      In exercising discretion in deciding a motion for leave to amend a

complaint, a judge must consider the prejudice resulting from the late

amendment and whether permitting the amendment would constitute a "futile"

act because the new claim would not be sustainable. Notte v. Merch. Mut. Ins.

Co., 185 N.J. 490, 501 (2006).

      Considering the case's age – it was commenced in March 2012, and the

motion to amend was filed nearly five years later in February 2017, when

defendant's last summary judgment motion was pending and with a scheduled

trial date a month away – the prejudice was obvious. See Cavuoti v. N.J. Transit

Corp., 161 N.J. 107, 134-35 (1999).        The futility element was also fully

                                                                         A-3149-16T3
                                      36
implicated. If permitted, the new claim would ultimately fall once defendant

moved for summary judgment, because the same factual circumstances that

barred the fraud claim would bar the negligent-misrepresentation claim, which

requires proof that defendant negligently made an incorrect statement that

plaintiff justifiably relied upon, causing damage. H. Rosenblum, Inc. v. Adler,

93 N.J. 324, 334 (1983); Masone v. Levine, 382 N.J. Super. 181, 187 (App. Div.

2005).

                                     ***

      To the extent we have not discussed any other issue presented by plaintiff,

it is because we find any such argument lacks sufficient merit to warrant further

discussion in a written opinion. R. 2:11-3(e)(1)(E).

      Affirmed.

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                                      37