For reversal and remandment -- Acting Chief Justice Jacobs, Justices Hall, Sullivan, Pashman and Clifford and Judge Conford. For affirmance -- None. The opinion of the Court was delivered by Jacobs, J.
The judgment entered in the Law Division, as modified in an unreported opinion of the Appellate Division, directed that the appellants Donald P. Krobatsch and Estella Krobatsch, his wife, pay the sum of $4,250 to the plaintiff Natalie Weintraub and the sum of $2,550 to the defendant The Serafin Agency, Inc. We granted certification on the application of the appellants. 63 N.J. 498 (1973).
The procedural steps below need not be dealt with at this point, other than to note that oral testimony was never taken and the matter was disposed of by summary judgment on the basis of meagre pleadings and conclusory affidavits. For present purposes we must resolve doubts in favor of the appellants and must accept their factual allegations, along with the inferences most favorable to them. See Ruvolo v.
American Cas. Co., 39 N.J. 490, 499 (1963); Frank Rizzo, Inc. v. Alatsas, 27 N.J. 400, 405 (1958); Heuter v. Coastal Air Lines, Inc., 12 N.J. Super. 490, 495 (App. Div. 1951). On that approach the following appears:
Mrs. Weintraub owned and occupied a six-year-old English-town home which she placed in the hands of a real estate broker (The Serafin Agency, Inc.) for sale. The Krobatsches were interested in purchasing the home, examined it while it was illuminated and found it suitable. On June 30, 1971 Mrs. Weintraub, as seller, and the Krobatsches, as purchasers, entered into a contract for the sale of the property for $42,500. The contract provided that the purchasers had inspected the property and were fully satisfied with its physical condition, that no representations had been made and that no responsibility was assumed by the seller as to the present or future condition of the premises. A deposit of $4,250 was sent by the purchasers to the broker to be held in escrow pending the closing of the transaction. The purchasers requested that the seller have the house fumigated and that was done. A fire after the signing of the contract caused damage but the purchasers indicated readiness that there be adjustment at closing.
During the evening of August 25, 1971, prior to closing, the purchasers entered the house, then unoccupied, and as they turned the lights on they were, as described in their petition for certification, "astonished to see roaches literally running in all directions, up the walls, drapes, etc." On the following day their attorney wrote a letter to Mrs. Weintraub, care of her New York law firm, advising that on the previous day "it was discovered that the house is infested with vermin despite the fact that an exterminator has only recently serviced the house" and asserting that "the presence of vermin in such great quantities, particularly after the exterminator was done, rendered the house as unfit for human habitation at this time and therefore, the contract is rescinded." On September 2, 1971 an exterminator wrote to Mr. Krobatsch advising that he had examined the premises
and that "cockroaches were found to have infested the entire house." He said he could eliminate them for a relatively modest charge by two treatments with a twenty-one day interval but that it would be necessary to remove the carpeting "to properly treat all the infested areas."
Mrs. Weintraub rejected the rescission by the purchasers and filed an action in the Law Division joining them and the broker as defendants. Though she originally sought specific performance she later confined her claim to damages in the sum of $4,250, representing the deposit held in escrow by the broker. The broker filed an answer and counterclaim seeking payment of its commission in the sum of $2,550. There were opposing motions for summary judgment by the purchasers and Mrs. Weintraub, along with a motion for summary judgment by the broker for its commission. At the argument on the motions it was evident that the purchasers were claiming fraudulent concealment or nondisclosure by the seller as the basis for their rescission. Thus at one point their attorney said: "Your honor, I would point out, and it is in my clients' affidavit, every time that they inspected this house prior to this time every light in the place was illuminated. Now, these insects are nocturnal by nature and that is not a point I think I have to prove through someone. I think Webster's dictionary is sufficient. By keeping the lights on it keeps them out of sight. These sellers had to know they had this problem. You could not live in a house this infested without knowing about it."
The Law Division denied the motion by the purchasers for summary judgment but granted Mrs. Weintraub's motion and directed that the purchasers pay her the sum of $4,250. It further directed that the deposit monies held in escrow by the broker be paid to Mrs. Weintraub in satisfaction of her judgment against the purchasers. See Oliver v. Lawson, 92 N.J. Super. 331, 333 (App. Div. 1966), certif. denied, 48 N.J. 574 (1967). It denied the broker's summary judgment motion for its commission but held that matter for trial. On
appeal, the Appellate Division sustained the summary judgment in Mrs. Weintraub's favor but disagreed with the Law Division's holding that the broker's claim must await trial. It considered that since the purchasers were summarily held to have been in default in rescinding rather than in proceeding with the closing, they were responsible for the commission. See Ellsworth Dobbs, Inc. v. Johnson, 50 N.J. 528, 558-62 (1967). Accordingly, it modified the Law Division's judgment to the end ...