Court Opinion

ID: 4195508
Source: CourtListenerOpinion
Date Created: 2017-08-14 13:07:49.89951+00
Date Added: 2024-06-11T14:40:35.418584
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NOT FOR PUBLICATION WITHOUT THE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-3802-15T2

DEBORAH BURKE1
and ERIK KORNACKI,

        Plaintiffs-Respondents,

v.

FRANKE M. DONLON, III,2

        Defendant-Appellant,

and

ANNE D. MORRISON, ESQ.,
WEICHERT REALTORS and ITS AGENT
SERVANT, JENNIFER FONDONTS,

     Defendants.
_______________________________

              Argued May 24, 2017 – Decided August 11, 2017

              Before Judges       Simonelli,     Gooden   Brown    and
              Farrington.

              On appeal from the Superior Court of New
              Jersey, Law Division, Morris County, Docket
              No. L-0707-14.

              Justin H.       Scheier    argued    the    cause    for
              appellant.

1
    Improperly pled as Debra Burke.
2
    Improperly pled as Frank Donalon, III.
           John P. Dell'Italia argued the cause for
           respondents    (Dell'Italia     &    Santola,
           attorneys; Mr. Dell'Italia, on the brief).

PER CURIAM

     In this real estate matter, defendant Franke M. Donlon, III

appeals from the February 25, 2016 Law Division order, which

entered judgment in favor of plaintiffs Deborah Burke and Erik

Kornacki following a bench trial.            For the following reasons, we

affirm in part, reverse in part, and remand for entry of an amended

final judgment.

     We derive the following facts from the record.             On August 10,

2010, the parties executed a contract of sale regarding defendant's

property in Randolph with an estimated closing date of October 15,

2010.   The transaction was a short sale subject to the approval

of defendant's two mortgage lenders, IndyMac Mortgage Services

(IndyMac) and Green Tree.        When the approvals were not obtained

by October 13, 2010, the parties executed a use and occupancy

agreement (U&O), and plaintiffs moved into the property on November

1, 2010.

     The   U&O   required   no   rent       payments   from   plaintiffs,   but

required them to pay for all utilities, lawn care, snow removal,

maintenance, and repairs.        Paragraph nine of the U&O provided:

           This [U&O] shall extend only to that date when
           Seller's lender accepts or rejects in writing
           Buyer's contractual offer to purchase. Should

                                        2                              A-3802-15T2
         Seller's lender reject Buyer's offer to
         purchase (or otherwise deny Seller's short
         sale application, or accept such application
         subject to conditions unacceptable to Seller
         including non-release[sic] of Seller by lender
         or any lienholder), Buyer shall have the
         option to (a) increase its offer to Lender's
         minimum price if applicable, (b) begin a three
         month occupancy agreement with Seller at
         $2,300 per month to enable Buyer the time to
         locate new housing, or (c) vacate the Premises
         within 7 days of receipt of written notice
         from Seller of such rejection, denial or
         imposition of conditions from Seller. In the
         event Buyer seeks to increase the purchase
         price under subsection (a), Buyer agrees to
         move   quickly   and  diligently   through   a
         "negotiation" process (if any) with lender and
         in the event such process takes more than 15
         days, Seller has the right to terminate the
         Contract and provide Buyer with 3 days'[sic]
         notice to vacate the Premises. On or before
         the initial occupancy date, Buyer shall
         deposit the sum of $2,300 as security to be
         held by Seller in Seller's attorney trust
         account until [c]losing at which time it will
         be credited to Buyer. If title does not close,
         Seller may use the deposit to cover loss
         incurred by Seller for Buyer's breach of this
         Agreement.   In such event, the deposit (or
         balance thereof) shall be returned to Buyer
         within 30 days of the date Buyer vacates the
         Premises.

Paragraph ten of the U&O further provided:

         Should closing of title not take place and the
         parties enter into a three-month [sic]
         occupancy agreement . . . and Buyer does not
         vacate the Premises on the appointed date
         therein, Seller may initiate legal action to
         remove Buyer from the Premises, Buyer shall
         be responsible for any and all legal and court
         fees incurred by Seller in bringing an

                               3                          A-3802-15T2
            eviction or any action to enforce the terms
            of this [U&O].

       Paragraph twelve of the U&O provided, "Buyer hereby waives

its right to terminate the Contract of Sale as set forth in ¶10

of the Contract of Sale (See ADM Letter dated 9/8/10) . . . and

SHM Letter dated 8/17/10)."3

       The SHM letter contained the following amendment to paragraph

ten:

                 Closing shall be targeted to take place
            at the office of the Buyers' attorney on or
            about October 15, 2010.      While the Buyers
            recognize that the within sale may be subject
            to the approval of Seller's lender, if closing
            does not take place within sixty days of the
            conclusion of attorney review, Buyers shall
            have the option to cancel the Contract.
            Sellers [sic] agree that if all conditions of
            sale have been met and he has vacated the
            premises, Buyers may be permitted to take
            occupancy prior to closing of title.

       The ADM letter accepted the amendment as to paragraph ten

with caveats:

            Acceptable, provided (a) Buyer's right to
            cancel the Contract is upon 15 days written
            notice and opportunity to cure; and (b) Buyer
            has the right to occupy the Property as long
            as Buyer waives any right to cancel Contract,
            Contract remains executory, and Buyer pays
            expenses from the date of occupancy.

3
 SHM appears to refer to an August 17, 2010 letter from plaintiffs'
attorney, Sheila H. Mylan, Esq., and ADM appears to refer to a
September 8, 2010 letter response from defendant's attorney, Anne
D. Morrison, Esq.

                                  4                          A-3802-15T2
     On September 27, 2010, defendant submitted a short sale

application to the first lienholder, IndyMac.                 On October 23,

2010, the parties entered into the U&O.

     Defendant did not submit a short sale application to the

second lienholder, Green Tree, until May 6, 2013.                   On May 21,

2013, IndyMac informed defendant that the short sale request had

been suspended and the file was no longer under review because

Green Tree did not meet investor requirements.

     The balance owed on the second mortgage was $73,375.74, but

Green Tree agreed to accept $16,000 to be paid by August 31, 2013.

On May 28, 2013, defendant asked plaintiffs to contribute $15,413

to secure Green Tree's approval, given that plaintiffs had occupied

the property rent-free for two years.             On May 31, 2013, plaintiffs

declined to contribute, but advised they remained interested in

purchasing the property. They further advised they would terminate

the contract and vacate the property if defendant was unsuccessful

in negotiating with the lenders to sell the property at the

contract   price.   On   June   28,       2013,    Green   Tree   approved   the

application.

     On June 27, 2013, plaintiffs terminated the contract and

demanded return of their deposit.            On July 11, 2013, defendant

rejected the termination and advised he had received approval from

Green Tree and expected approval from IndyMac.              On July 15, 2013,

                                      5                                A-3802-15T2
IndyMac issued an approval letter conditioned upon receipt of an

acceptance by Green Tree.          IndyMac's approval letter indicated

that the first mortgage balance was $350,375.20, and IndyMac would

pay Green Tree $6000.

     On July 27, 2013, defendant's attorney sent a time of the

essence letter to plaintiffs' new attorney setting August 9, 2013

as the closing date.         The closing did not occur.             Plaintiffs

vacated the property in August 2013, and filed a complaint for the

return of their deposit.           On June 3, 2014, plaintiffs filed a

third amended complaint, alleging breach of contract, breach of

fiduciary duty, and negligence.             On December 12, 2014, defendant

counterclaimed   for      breach   of   contract   and    unjust   enrichment.

Defendant sought specific performance, rent for thirty-four months

at $2,300 per month or $78,200, and money for alleged damage to

the property.

     Following a bench trial, Judge W. Hunt Dumont found no

material    breach   of   the   contract      because    three   years   was    an

unreasonable amount of time for defendant to obtain short sale

approval.    In finding the time unreasonable, Judge Dumont noted

defendant did not apply to Green Tree for approval for more than

two years after the contract was executed.                 He noted that the

contract provided "if title does not close, Seller may use the

deposit [$2,300] to cover loss[es] incurred by Seller for Buyer's

                                        6                                A-3802-15T2
breach    of    this    Agreement."         Judge    Dumont   reasoned     that    if

plaintiffs had breached the contract, that provision essentially

provided for liquidated damages.

     Other than the provision that plaintiffs were not permitted

to terminate the contract, Judge Dumont noted the contract was

devoid   of     terms   regarding     the       parties'   rights   if   plaintiffs

terminated.      He concluded from that analysis that the only losses

defendant could claim under the contract were equitable in nature

for the time plaintiffs were in possession of the property.                       The

judge    found    defendant   had     no        contractual   right   to   specific

performance, and that specific performance would be too harsh

under the circumstances.         The judge found further that the U&O

expressly provided that the parties were not in a landlord-tenant

relationship, and there would be no charge for plaintiffs' use and

occupancy of the property.          Therefore, defendant had no reasonable

expectation of obtaining rent which he sought in the amount of

$78,200.       In denying defendant equitable relief, the judge again

pointed to the three years it took defendant to obtain the short

sale approvals.

     Finally, the judge denied plaintiffs' claims for $10,700 for

lawn care, property damage, and other items the U&O required them

to pay, and awarded them $27,179.50 of their $38,300 deposit.                     The

judge awarded defendant the balance of $11,120.50.                    In doing so,

                                            7                               A-3802-15T2
Judge Dumont denied defendant's request for $11,350 to replace a

24-foot Norwegian Spruce tree plaintiffs cut down after it was

struck by lightning, instead awarding defendant $850 for tree

removal costs.

      Defendant filed a motion for reconsideration which was denied

on April 15, 2016, for reasons set forth on the record.                       This

appeal followed.        On appeal, defendant argues that Judge Dumont

erred by (1) rewriting the contract of sale and the U&O; (2)

failing to order plaintiffs to pay for all the damages caused to

the property; (3) basing his decision, in part, on "personal

experience",     not    evidence;   (4)         failing   to   order    specific

performance requiring plaintiffs to purchase the property; and (5)

failing to order plaintiffs to pay any rent or money for living

at the property for free and thereby permitting plaintiffs to be

unjustly enriched.

      Our review of a trial court's fact-finding in a non-jury case

is limited.    Seidman v. Clifton Sav. Bank, S.L.A., 205 N.J. 150,

169 (2011).    "We 'do not disturb the factual findings and legal

conclusions of the trial judge unless we are convinced that they

are   so   manifestly    unsupported       by    or   inconsistent     with   the

competent, relevant and reasonably credible evidence as to offend

the interests of justice[.]'"              Llewelyn v. Shewchuk, 440 N.J.

Super. 207, 213 (App. Div. 2015) (quoting Rova Farms Resort, Inc.

                                       8                                 A-3802-15T2
v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974)).         "However,

we confer no deference to a trial court's interpretation of the

law, which we review de novo to determine whether the judge

correctly adhered to applicable legal standards."            Id. at 214.

"[F]or mixed questions of law and fact, [we] give deference . . .

to the supported factual findings of the trial court, but review

de novo the lower court's application of any legal rules to such

factual findings."      Sullivan v. Port Auth. of N.Y. & N.J., 449
N.J. Super. 276, 283 (App. Div. 2017) (citing State v. Pierre, 223
N.J. 560, 577 (2015)).

       The objective in construing a contractual provision is to

determine the intent of the parties.        Mantilla v. NC Mall Assocs.,

167 N.J. 262, 272 (2001) (citation omitted).            The judicial task

is simply interpretative; it is not to rewrite a contract for the

parties better than or different from the one they wrote for

themselves.    See Zacarias v. Allstate Ins. Co., 168 N.J. 590, 595

(2001) (citation omitted).        Thus, we should give contractual terms

"their plain and ordinary meaning[,]" M.J. Paquet, Inc. v. N.J.

DOT,    171 N.J. 378,   396    (2002)   (citation   omitted),    unless

specialized language is used peculiar to a particular trade,

profession, or industry.      See VRG Corp. v. GKN Realty Corp., 135
N.J. 539, 548 (1994) (citation omitted).

                                      9                             A-3802-15T2
     Defendant points to the U&O to support his argument that the

terms   of   the   U&O   prohibited   plaintiffs      from    terminating     the

contract to purchase the property.          Defendant argues that once the

U&O terms were negotiated and plaintiffs began residing in the

property, they lost the ability to cancel the contract.              Defendant

repeats the well-known adage that "[c]ourts cannot make contracts

for parties. They can only enforce the contracts which the parties

themselves have made."         Kampf v. Franklin Life Ins. Co., 33 N.J.
36, 43 (1960) (citation omitted).             Plaintiffs argue the judge

correctly found the delay in finalizing the sale was a reasonable

basis on which to allow termination.

     Judge Dumont wrestled with the failure of the parties to

specify an end date for the closing of title, stating: "[t]he only

contractual provision regarding a breach by buyer refusing to

close states: 'if title does not close, Seller may use the deposit

[$2,300] to cover loss incurred by Seller for Buyer's breach of

this Agreement.'"        Since the parties did not agree on a specific

time, the law infers, as Judge Dumont found, the contract will be

performed within a reasonable amount of time.                 River Dev. Corp.

v. Liberty Corp., 45 N.J. Super. 445, 464 (Ch. Div. 1957), aff'd,

51 N.J. Super. 447 (App. Div. 1958), aff'd 29 N.J. 239 (1959).

"What   constitutes      a   reasonable    time   .   .   .   'is   usually    an

implication of fact, and not of law, derivable from the language

                                      10                               A-3802-15T2
used by the parties considered in the context of the subject matter

and   the   attendant    circumstances,   in    aid   of   the   apparent

intention.'"    Mazzeo v. Kartman, 234 N.J. Super. 223, 231 (App.

Div. 1989) (citing West Caldwell v. Caldwell, 26 N.J. 9, 28

(1958)).     The "intent expressed or apparent in the writing"

memorializing an agreement controls.           Friedman v. Tappan Dev.

Corp., 22 N.J. 523, 531 (1956).

      Terms are generally implied because:

            the parties must have intended them and have
            only failed to express them . . . because they
            are necessary to give business efficacy to the
            contract as written, or to give the contract
            the effect which the parties, as fair and
            reasonable [people], presumably would have
            agreed on if, having in mind the possibility
            of the situation which has arisen, they
            contracted expressly in reference thereto.

            [Mazzeo, supra, 234 N.J. Super. at 231
            (quoting William Berland Realty Co. v. Hahne
            & Co., 26 N.J. Super. 477, 487 (Ch. Div. 1953),
            modified, 29 N.J. Super. 316 (App. Div.
            1954)).]

      An examination of the contract and the U&O reveal ample basis

for the court to conclude that the parties did not intend either

to languish for over two-and-a-half years.

      All indications are that both sides anticipated the obstacles

to closing would be resolved expeditiously.       The original contract

of sale dated August 10, 2010 set the estimated closing date as

October 15, 2010.       When it became apparent that defendant would

                                  11                              A-3802-15T2
not receive short sale approval before that date, the parties

signed the U&O on October 23, 2010.       In paragraph nine, there is

evidence   that   the   parties   anticipated   lender   approval    within

fifteen days, as the agreement stated: "Buyer agrees to move

quickly and diligently through a "negotiation" process (if any)

with lender and in the event such process takes more than 15 days,

Seller has the right to terminate the Contract and provide Buyer

with 3 days-notice to vacate the Premises."        A further indication

of early resolution is the parties' agreement to cover damages by

a deposit of $2,300 or one-month's occupancy.        Another indication

that the parties anticipated that the U&O would be short in

duration was the agreement that plaintiffs would pay no per diem

charges to defendant for the occupancy.

     We agree with Judge Dumont's finding of no material breach

in plaintiffs' withdrawal of their offer to purchase, based upon

his determination that the lapse of time between the execution of

the U&O and defendant's application for short sale approval "over

two years after the contract of sale was executed" was unreasonable

under the circumstances.     However, we continue our review.

     The terms of the U&O expressly provide that if defendant's

lenders accepted his short sale application subject to terms

unacceptable to defendant, plaintiffs had the option to: (a)

increase the offer; (b) begin a three-month occupancy at $2,300

                                    12                              A-3802-15T2
per month; or (c) vacate within seven days.            The record reveals

the option selection was triggered on May 21, 2013, when IndyMac

advised defendant that the short sale request had been suspended

and the file was no longer under review because the second lien

did not meet investor requirements.       Notwithstanding, defendant's

attorney wrote to plaintiffs on May 28, 2013, inquiring whether

plaintiffs would pay $15,413 to Green Tree to secure sale approval.

On May 31, 2013, plaintiffs refused to contribute to the Green

Tree demand and did not vacate within seven days.

     Although defendant testified he was not sure of the exact

date plaintiffs vacated the property, Kornacki testified that

plaintiffs vacated the property in August 2013.             Thus, a three-

month occupancy began in June 2013 and continued through August

2013.     Prior to trial, the parties stipulated that,

            [i]n the event [the court] rules [p]laintiffs
            were unjustly enriched and/or required to pay
            rent/money to [d]efendant for the time
            [p]laintiffs resided at the subject property,
            the rental amount shall be $2,300.00/month and
            [the court] shall determine how many months
            [p]laintiffs are required to pay rent for[.]

     As    determined   by   Judge   Dumont,   there   is   no   basis   for

defendant's claim for rent beyond the three-month occupancy.             The

U&O specifically and unambiguously provided that "Buyer agrees to

pay Seller a use and occupancy charge of $0.00 per diem for

occupancy of the Premises, or a total of $0.00, such sum to be

                                     13                             A-3802-15T2
paid to Seller prior to Buyer's taking occupancy".           Further, the

U&O specifically eschews a landlord-tenant relationship, stating

"[n]othing herein shall be construed to establish a landlord-

tenant relationship between the parties as set forth in N.J.S.A.

2A:18-81.1 et seq."        Finally, the U&O authorized eviction as

defendant's only recourse if plaintiffs failed to vacate the

premises in the event a closing did not take place, with plaintiffs

to   be   responsible   for   costs    and   legal   fees.   Accordingly,

consistent with the U&O, we remand for entry of an amended final

judgment to award defendant $6900 for plaintiffs' occupancy of the

premises for the months of June, July and August 2013.

       Defendant argues further that specific performance should

have been granted, because the non-cancellation provision was an

integral part of the agreement, and the court erred in permitting

plaintiffs   to   cancel   the   contract.      Plaintiffs   counter   that

specific performance -- as agreed by defendant's counsel -- would

be a harsh consequence, and the court properly found it to be so.

       In general, to establish the remedy of specific performance,

a party must demonstrate that the contract in question is valid

and enforceable at law.       Marioni v. 94 Broadway, Inc., 374 N.J.

Super. 588, 598 (App. Div. 2005), certif. denied, 183 N.J. 591

(2005).    See 25 Williston, Contracts (Lord ed., 2002) § 67:2 at

186.   Further, the party must show that "the terms of the contract

                                      14                           A-3802-15T2
are expressed in such fashion that the court can determine, with

reasonable certainty, the duties of each party and the conditions

under which performance is due."              Salvatore v. Trace, 109 N.J.

Super. 83, 90 (App. Div. 1969), aff'd o.b., 55 N.J. 362 (1970).

Lastly,   the     party   must   demonstrate       that    an   order     compelling

performance of the contract will "not be harsh or oppressive."

Stehr    v.    Sawyer,    40 N.J. 352,   357   (1963);      Ridge     Chevrolet-

Oldsmobile, Inc. v. Scarano, 238 N.J. Super. 149, 155 (App. Div.

1990).

     The right to specific performance turns not only on whether

a plaintiff has demonstrated a right to legal relief, but also

whether the performance of the contract represents an equitable

result.       Marioni, supra, 374 N.J. Super. at 599.               That is, after

determining that the purchaser has a legal right to recovery, a

court of equity must make a further determination that has been

deemed to be discretionary.           See, e.g., Friendship Manor, Inc. v.

Greiman, 244 N.J. Super. 104, 113 (App. Div. 1990) (specific

performance      is   a   discretionary      remedy       resting    on    equitable

principles), certif. denied, 126 N.J. 321 (1991).

     We are satisfied that Judge Dumont correctly exercised his

discretion in denying specific performance, primarily because the

equities in this case are far from clear.                  The record is devoid

of any substantive proof that the contingencies attached to the

                                        15                                   A-3802-15T2
short sale approvals were ever satisfied.     As the judge noted, "no

one can show me a letter in which [defendant] indicates that you've

paid the money and therefore, you anticipate Green[]Tree will go

through with approving."   Without such a letter, or testimony upon

which to base a finding, the court was unable to determine, with

reasonable certainty, the duties of each party and the conditions

under which performance was due.         Given the lack of clarity

regarding the terms under which performance was to be had, we find

the judge's refusal to grant specific performance well within his

discretion.    The absence of expeditious performance on the part

of defendant should not be rewarded with the admittedly harsh

remedy of specific performance.      Stehr, supra, 40 N.J. at 357.

     Defendant argues Judge Dumont erred by allowing plaintiffs

to terminate the contract based upon the delayed lender approval.

In support of this argument, defendant highlights plaintiffs'

failure to complain of the delay.     Further, defendant asserts that

the U&O did not permit plaintiffs to terminate due to an increase

in price, and, even if it had, the price was never actually

increased.    Defendant relies on the absence in the record of any

evidence regarding how long a short sale approval should take.

     Defendant is correct that the U&O contained an explicit waiver

of termination provision with a single exception, rejection of the

purchase offer by the lenders.       Because there is no proof that

                                16                            A-3802-15T2
defendant   satisfied     the   contingencies    of    the   short   sale    and

obtained final approval to consummate the sale, we are satisfied

that   Judge   Dumont's   determination     that   the   delay   in   closing

combined with the absence of a contractual end date justified the

finding that plaintiffs did not materially breach the contract.

       Finally, we address defendant's claim that Judge Dumont erred

in failing to require plaintiffs to pay replacement costs for the

Norwegian Spruce which was damaged when it was struck by lightning.

During the trial, the judge questioned defendant about the tree

replacement quote.      After ascertaining the quote for replacement

of the tree was $13,054, the judge inquired, "are you seeking the

plaintiff to pay for that?       Even though it was hit by lightning?"

Defendant responded that he had not known the tree had been hit

by lightning prior to plaintiffs' testimony earlier in the day.

       Subsequently, the judge ruled as follows:

            The court will allow [d]efendant to be
            reimbursed in full for each of those items,
            with the exception of restoration of the
            damaged tree, for that loss, the court will
            allow the cost of removing the tree ($850),
            but not the costs of acquiring a new 24-foot
            Norwegian Spruce ($11,350). That is excessive
            and unwarranted.

       Although the U&O unequivocally stated that plaintiffs must

indemnify   defendant     for   any   damages   that   occur   during     their

occupancy of the property, the parties did not specify a formula

                                      17                                A-3802-15T2
for   calculating   damages    in   the       event   of   tree    loss.         "The

predominant measure of damages in cases involving the destruction

or removal of trees and ornamental shrubs is the diminution-of-

market-value measure.       Although various other measures have been

applied by courts, the law is not rigid and "ordinarily the measure

of damages is the resulting depreciation in the value of the land

on which the trees or shrubs stood."              Mosteller v. Naiman, 416
N.J. Super. 632, 639 (App. Div. 2010) (citing Kristine Cordier

Karnezis,     Annotation,   Measure      of    Damages     for    Injury    to    or

Destruction of Shade or Ornamental Tree or Shrub, 95 A.L.R. 3d 508

§ 2 (2008)).

      Cases   addressing    value   ordinarily        involve     the   tortious

removal of trees.       There is no evidence in the record that

plaintiffs purposely caused the destruction of the tree.                         The

record is devoid of any cause of damage to the tree other than

plaintiffs' testimony that the tree was struck by lightning,

causing part of it to fall on the house and requiring removal of

the tree top.     Presumably, the tree would have suffered the same

damage regardless of who was in possession of the property.                       We

find no abuse of discretion in the court's judge's award of $850

for removal of the remainder of the tree.             In so finding, we note

defendant presented no evidence of a peculiar value to the damaged

                                    18                                     A-3802-15T2
tree, nor loss in value of the property caused by the loss of the

tree.

     Affirmed in part, reversed in part, and remanded for entry

of an amended final judgment consistent with this opinion.

                               19                            A-3802-15T2