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Conforti v. Guliadis

Decided: February 5, 1991.


On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Bergen County.

Petrella, Muir, Jr. and Brochin. The opinion of the court was delivered by Brochin, J.A.D. Muir, Jr., J.A.D., dissenting.


Plaintiff Maria Conforti and defendant George Guliadis were married December 30, 1979. Their only child, a daughter, was born January 29, 1983. They were divorced by a judgment entered June 25, 1984. The subject of their present dispute is a lease between them which they entered into to implement their property settlement agreement. The property settlement agreement was incorporated into their divorce judgment.

In that agreement, each party waived any alimony claim against the other. As child support, Mr. Guliadis agreed to pay $25 a week into a trust account in the name of their daughter. All of the money in the account was to be paid to her when she became eighteen years of age or upon the occurrence of any one of a number of specified events. Ms. Conforti asserts that for the support of herself and her daughter, she relied primarily upon the equitable distribution provisions of their property settlement agreement.

The parties' agreement recites that they owned a business, Garden State Deli, and the building in which the business was located. Ms. Conforti agreed to convey all of her interest in the building to Mr. Guliadis, and he agreed to release all of his interest in the business to her. Since Ms. Conforti's business would be located in Mr. Guliadis's building, he agreed "to execute a Lease to the store premises . . . in favor of the Wife for a term of fifteen years with a five year option." Ms. Conforti also agreed to pay her husband $20,000, presumably to compensate for the difference between the value of the business and that of the building.

The parties executed a lease dated the same day as their property settlement agreement. A right of first refusal contained in a rider to the lease created the problem which has produced this law suit. The provision reads as follows:

2. It is further agreed that this Lease shall be subject to termination at any time in the event that Lessor shall desire to sell the demised premises and shall have a bona fide offer for the purchase thereof. In such event, Lessee shall have the option for a period of [blank] tion [sic] from Lessor to meet the terms and conditions of such offer. If Lessee fails to accept the terms and conditions of sale during the said [blank] [sic] day period, the option shall be of no further force and Lessor shall be free thereafter to sell the premises to third persons.

Mr. Guliadis's attorney sent Ms. Conforti a letter, dated May 19, 1989, informing her that Mr. Guliadis had received a bona fide offer for sale of the building in which her delicatessen business was located. The letter warned her that if she failed to exercise her right of first refusal, the building would be sold and her lease would be terminated.

On August 24, 1989, Ms. Conforti filed a petition and order to show cause. She sought, among other things, reformation of the lease to delete the provision of the right of first refusal which purports to terminate the lease upon sale of the building. The substance of her allegations is that the inclusion of that provision was inconsistent with the terms of the property settlement agreement between her and her former husband and that she signed the lease in its present form as the result of mistake on her part and fraud on his. Mr. Guliadis filed an opposing certification which denied Ms. Conforti's assertions and stated that the lease as executed, including the provision for termination of the lease on sale of the building, was entirely in accordance with their intended agreement.

After an exchange of legal memoranda and oral argument, the trial court entered an order which denied Ms. Conforti's application for a plenary hearing and declared that in the event she failed to exercise her right of first refusal within 60 days, Mr. Guliadis would have the right to transfer the property free of the lease. The trial judge viewed Ms. Conforti's application either as a motion pursuant to R. 4:50-1(f)*fn1 for relief from the

judgment of divorce or as a complaint for equitable reformation of the lease. He ruled that relief would not be granted under R. 4:50-1(f) because the five years that had elapsed since the lease was executed was more than the "reasonable time" permitted under the rule. He declined to accord Ms. Conforti the opportunity to prove her claim for reformation at a plenary hearing because her certifications ...

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