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Mazzeo v. Kartman

Decided: June 29, 1989.


On appeal from Superior Court, Chancery Division, Atlantic County.

Long, Muir and Keefe. The opinion of the court was delivered by Long, J.A.D.


Plaintiff Barbara Laielli Mazzeo here challenges an order of the trial judge dismissing her complaint with prejudice against defendants, Anne Kartman, Estate of Samuel Kartman and Ansam, Inc. The case arose in 1986 when plaintiff filed a complaint against defendants and William and Irene Thomas alleging breach of a lease purchase agreement in connection with property in Brigantine, New Jersey. Thereafter, plaintiff amended her complaint to delete her demand for specific performance and assert a claim for money damages. All defendants answered and filed cross claims against each other and third-party complaints against their title insurance companies. Plaintiff settled with the Thomases prior to trial.

At trial, the following facts were established on plaintiff's case: In May 1966, defendants Ansam, Inc., Anne Kartman and her late husband Samuel Kartman (collectively the Kartmans)

entered into a lease purchase agreement with plaintiff Barbara Laielli Mazzeo and her late husband Anthony Laielli (collectively the Laiellis) for the purchase of Lots 3, 4, 5 and 6 in Block 5B on the tax map of the City of Brigantine, New Jersey. The agreement provided that title to the lots would transfer on March 1, 1972. The agreement also granted the Laiellis the right of first refusal on Lots 1 and 2 in Block 5B for a fixed price. Lots 1 and 2 were empty lots which stood between Lots 3, 4, 5 and 6 and the ocean. The parties modified the 1966 agreement by an addendum in 1969 which changed only the consideration for the right of first refusal from a fixed price to the same terms as any bona fide offer. Both the 1966 agreement and the 1969 addendum were recorded.

The Laiellis accelerated the settlement date contained in the 1966 agreement and took title to Lots 3, 4, 5 and 6 on March 21, 1970. On the same day, they transferred title to the four lots to Gene and Ann Takach. The Takaches procured title insurance for the property through Chelsea Title and Guaranty Company. The search revealed the 1966 agreement between the Kartmans and Laiellis and the 1969 addendum. In connection with the transfer to the Takaches, the Laiellis were required by Chelsea to execute an affidavit of title containing several form paragraphs and the following addition:

All of the terms and conditions of the Lease Purchase Agreement between Ansam, Inc., a corporation of the State of New Jersey, and Samuel Kartman, Anne Kartman and Brigantine Island Diner, Inc., a corp. of New Jersey and the undersigned dated May 3, 1966 recorded in Book 2327 page 367 and addendum dated 10/20/69 and recorded in Book 2495 page 269 have been satisfied as agreed.

Plaintiff was not involved in the negotiations leading up to the 1966 agreement, 1969 addendum, or the 1970 closing but was present on all three occasions along with her late husband who participated in the negotiations. She testified that only Lots 3, 4, 5 and 6 were involved in the 1970 closing and that the right of first refusal on Lots 1 and 2 continued unaffected by the closing.

On January 31, 1977, without notice to the Laiellis, the Kartmans entered into an agreement with the Thomases. The agreement provided for the installment sale of the Islander Motel and granted the Thomases an option to purchase adjacent Lots 1 and 2 on or before April 4, 1984. The Kartmans and the Thomases amended the 1977 agreement in May of 1981 to provide that settlement would occur within twenty days of the execution of the amendment. Notwithstanding the 1981 amendment, the Kartmans transferred title to Lots 1 and 2 to the Thomases in May 1984 for $150,000.

The Thomases procured a title report in connection with the purchase of Lots 1 and 2. The title report listed the 1966 first refusal option and the 1969 addendum in favor of the Laiellis. The Title Company of New Jersey conducted a search in February and March of 1984. According to testimony by their settlement clerk, their title commitment contained an exception -- the 1966 right of first refusal given under the Laielli lease purchase agreement. In order to remove the exception, the company required an affidavit stating that the Laielli's 1966 right of first refusal had been extinguished. The 1970 Laielli affidavit of title did not satisfy their concerns. The Kartmans accordingly executed an affidavit of title which stated "the right of first refusal given to Anthony Laielli and Barbara Laielli under Lease Purchase Agreement as contained in Deed Book 2327, Page 369 has been extinguished."

Plaintiff testified that she did not have any contact with the Kartmans until March 1984, at the time Thomas exercised his option, when she received a telephone call from Samuel Kartman in which Kartman explained that he had the opportunity to sell the Islander Motel (which is adjacent to Lots 1 and 2) for a good price and requested, as a favor, that she sign a document releasing her right of first refusal on Lots 1 and 2. Kartman did not say that he was thinking of selling Lots 1 and 2, nor did he advise plaintiff of a bona fide offer on ...

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