Court Opinion

ID: 4428933
Source: CourtListenerOpinion
Date Created: 2019-08-20 19:15:12.520261+00
Date Added: 2024-06-11T14:50:47.454893
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NOT FOR PUBLICATION WITHOUT THE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-3523-17T2

STRAUS ASSOCIATES II and
11 HISTORY LANE OPERATING
COMPANY, LLC, d/b/a CAREONE
AT JACKSON,

          Plaintiffs-Appellants,

v.

MURRAY BERMAN,

          Defendant-Respondent,

and

JACKSON HEALTH CARE
ASSOCIATES,

     Defendant.
_____________________________

                    Argued February 27, 2019 – Decided April 2, 2019

                    Before Judges Koblitz, Currier and Mayer.

                    On appeal from Superior Court of New Jersey,
                    Chancery Division, Bergen County, Docket No. C-
                    000102-15.
            Thomas P. Scrivo argued the cause for appellants (Cole
            Schotz, PC, and O'Toole Scrivo Fernandez Weiner Van
            Lieu, LLC, attorneys; Thomas P. Scrivo, of counsel and
            on the briefs; Greg Trif and Andrew Gimigliano, on the
            briefs).

            William P. Munday argued the cause for respondent
            (McCusker, Anselmi, Rosen & Carvelli, PC, attorneys;
            William P. Munday, Samuel B. Santo, Jr., and James
            Harry Oliverio, on the brief).

PER CURIAM

      Plaintiffs Straus Associates II and 11 History Lane Operating Company,

LLC, d/b/a CareOne at Jackson (CareOne) appeal from a January 19, 2018 order

compelling the payment of rent "up to the date of closing" to defendants Murray

Berman and Jackson Health Care Associates (JHCA).1 Plaintiffs also appeal

from a March 16, 2018 order denying reconsideration. We affirm.

      We recite some facts from our prior decision in Straus Associates II and

11 History Lane Operating Company, LLC d/b/a CareOne at Jackson v. Murray

Berman and Jackson Health Care Associates, No. A-5578-15 (App. Div. October

24, 2017), to give context to the issue in this matter. The earlier appeal arose

from an action filed by plaintiffs, seeking enforcement of a settlement agreement

between the parties regarding the sale of Berman's share in JHCA.            The

1
  The partnership JHCA owns the property leased to CareOne. Straus and
Berman were partners in JHCA.
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Chancery judge issued a May 13, 2016 order directing Berman to close on the

sale of his interest in JHCA to plaintiffs within thirty days and reaffirmed

plaintiffs' obligation to pay rent to Berman until the date of closing.

      Berman appealed from the May 13, 2016 order, arguing a certain tax

provision was an essential term of the parties' settlement agreement.            We

affirmed enforcement of the settlement agreement regarding the purchase of

Berman's fifty-percent share in JHCA without the tax provision sought by

Berman. We explained Berman's agreement to relinquish his half-interest in

JHCA for a specific sum "was the essence of the settlement." Straus, slip op. at

11. We held:

            The Agreement contained terms identifying the interest
            to be transferred, the parties to the transfer, the price,
            the timeline, and the financial obligations of the parties
            pending closing. Thus, there are no missing terms
            essential to complete the transfer.

            [Id. at 11-12.]

      Plaintiffs did not file a cross-appeal from the May 13, 2016 order. Nor

did plaintiffs seek relief, either from the trial court or this court, regarding the

obligation to pay rent to Berman "until closing."

      After issuance of our opinion in October 2017, no closing occurred. The

lack of any action by plaintiffs subsequent to our opinion prompted Berman to

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file a motion on December 12, 2017, seeking enforcement of the settlement

agreement and demanding payment of $7.5 million for his interest in JHCA and

rent arrears accruing through the date of closing. In January 2018, plaintiffs

filed a cross-motion to enforce litigants' rights by directing Berman to comply

with the May 13, 2016 order by executing the settlement agreement and closing

within ten days.

      On January 19, 2018, the Chancery judge granted Berman's motion and

denied plaintiffs' cross-motion. The judge ordered plaintiffs to "execut[e] and

deliver[] the [f]inal [s]ettlement [a]greement, in the form attached to the [c]ourt's

May 13, 2016 order, to [Berman,] . . . close on the settlement within thirty days,

and . . . make the required settlement payment of $7,500,000.00 to [Berman]."

The judge also ordered plaintiffs to pay "back rent due to [Berman] for . . .

CareOne's lease of the Property in addition to any rental payments accruing now

until the date of closing."

      The judge required plaintiffs to pay rent to Berman accruing through the

date of the closing consistent with the terms of the parties' settlement agreement.

The judge stated, "[t]he settlement was pretty clear. Rent was supposed to be

paid. [Plaintiffs had CareOne] occupy the premises so that rent is supposed to

be paid."

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      On January 31, 2018, plaintiffs filed a motion for reconsideration, which

the judge denied. In his written decision denying reconsideration, the jud ge

rejected plaintiffs' argument that the court's decision "favored Berman's

contractual rights over [plaintiffs'] by excusing his nineteen-month closing delay

without excusing [plaintiffs'] concurrent rent obligation."

      The judge also found plaintiffs' claimed right to suspend rent payments

when Berman declined to close and pursued his appeal of the May 13, 2016

order was contrary to the plain language of the parties' agreement.        Every

document memorializing the agreement between the parties to purchase

Berman's fifty-percent interest in JHCA reflected rent was to be paid until the

date of closing.

      The judge declined to rewrite the payment of rent provision as agreed to

by the parties. The judge held, "[t]he [c]ourt is not now empowered to determine

whether the [rent] cap was omitted because of an oversight; the [c]ourt can

conclude only that the settlement agreement as written has no rental cap. To

impose it now would give [plaintiffs] more than it bargained for."

      The Chancery judge also held even if "Berman wrongfully violated his

contractual obligations by disregarding the closing date, and even if this

violation constituted a material breach of the settlement agreement, [plaintiffs]

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would not be justified to withhold Berman's rent distributions in response." The

judge rejected plaintiffs' demand to "enforce the terms [of the settlement

agreement] it deems favorable and discharge others." The judge concluded

plaintiffs' argument would "preserve the buyout provision, would preserve the

mandatory closing deadline, but would arbitrarily erase the rent payment

provision. This sort of selective performance is simply not an available remedy

for breach – the aggrieved party must take the contract as it is or not at all."

      The judge further held Berman did not receive an unjust windfall by

pursuing an appeal of the May 13, 2016 order. Since 2016, CareOne paid rent

and Berman held a fifty-percent interest in JHCA, which owned the property

leased to CareOne. Berman was entitled to share in the profits, risks, and

liabilities as a fifty-percent owner of JHCA. In addition, plaintiffs did not pay

the $7.5 million purchase price for Berman's interest in JHCA and had the

benefit of interest on that amount since 2016.

      The judge explained that Berman's entitlement to rent payments did not

foreclose plaintiffs' pursuit of a separate litigation alleging Berman breached the

settlement agreement and caused financial injury as a result. The Chancery

judge found the only issues before him were "whether and how the settlement

agreement shall be enforced. With those questions decided, [plaintiffs are] free

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to bring a new suit to allege Berman materially breached and to recover whatever

damages that breach caused." 2

      On appeal, plaintiffs contend the Chancery judge erred by: (1) not

enforcing the settlement agreements as written, and (2) abusing his discretion in

concluding plaintiffs were obligated to pay rent arrears after the contractual and

court-ordered closing dates.

      "A settlement agreement between parties to a lawsuit is a contract." Nolan

v. Lee Ho, 120 N.J. 465, 472 (1990) (citing Pascarella v. Bruck, 190 N.J. Super.

118, 124 (App. Div. 1983)). Where the contract terms are clear, "it is the

function of a court to enforce [the contract] as written and not to make a better

contract for either of the parties." Kampf v. Franklin Life Ins. Co., 33 N.J. 36,

43 (1960). An unambiguous settlement agreement between sophisticated parties

should be enforced in accordance with "the plain and clear language they chose."

See CSFB 2001-CP-4 Princeton Park Corp. Ctr., LLC v. SB Rental I, LLC, 410

N.J. Super. 114, 120 (App. Div. 2009).

      Here, the plain terms in each iteration of the agreement between the parties

for the sale of Berman's share in JHCA provided for the payment of rent "until

2
   Plaintiffs have filed a separate lawsuit, alleging defendants breached the
settlement agreement and demanding damages as a result.
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closing." Plaintiffs do not contend the settlement agreement is ambiguous or

unenforceable.    Rather, plaintiffs selectively choose the provisions of the

settlement agreement that should be enforced.          At no time in the original

mediation agreement, the various drafts of the settlement agreement, or the

Chancery judge's orders, is there a specific date established by which rent

payments to Berman ceased. The agreements and the Chancery judge's orders

explicitly provide rent would be paid until closing.

      The determination that rent is due until closing is supported by the

language in the court's May 13, 2016 order.        The judge deleted plaintiffs'

proposed language that there would be no obligation to pay rent to Berman

accruing "after February 25, 2016 (the agreed upon closing date)." Instead, the

judge handwrote, "[p]laintiffs are obligated to Berman for any rental payments

accruing until the date of closing." The judge explained his reason for revising

the form of order, stating "it's only fair since the closing didn't occur that the

rents be paid through closing."

      Plaintiffs had no right to exercise self-help and cease making rent

payments to Berman on a self-selected date. As of June 2016, we note the

following: closing had not taken place; Berman remained a partner in JHCA;

CareOne occupied the property owned by JHCA and paid monthly rent; and

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plaintiffs had the use of the $7.5 million, representing the purchase price for

Berman's share in JHCA. Plaintiffs' contention they were prepared to close but

for Berman's appeal from the May 13, 2016 order fails to justify refusing to pay

rent under these circumstances.

      During the nineteen months that Berman's appeal was pending, plaintiffs

not only retained the use of the $7.5 million to be paid to Berman for the

purchase of his interest in JHCA, but also continued to collect monthly rent from

CareOne.    The settlement agreement was unambiguous and required the

payment of rent to Berman "until closing."

      Affirmed.

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