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Mesa Development Corp. v. Meyer

Decided: December 1, 1992.

MESA DEVELOPMENT CORPORATION, VIII, PLAINTIFF-APPELLANT,
v.
ROBERT W. MEYER, INDIVIDUALLY AND THE MEYER GROUP, A PARTNERSHIP, DEFENDANTS-RESPONDENTS



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

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

Long

In December, 1986, plaintiff, Mesa Development Corporation, and defendants, Robert Meyer and The Meyer Group (Meyer), executed a contract which provided that Mesa was to purchase property owned by Meyer in the Township of North Brunswick for the sum of $1,850,000.00.*fn1 All approvals were obtained and a closing date was scheduled for January, 1989.

Prior to closing, Meyer sought to modify the provision of the Agreement which subordinated its Purchase Money Mortgage to the lien of an institutional lender for improvement and construction financing. In addition, Meyer sought to limit the amount of money Mesa could borrow from a lending institution for such construction and improvements. Mesa secured extensions on the approvals, all of which were to expire in 1990.

When an accord could not be reached, Mesa filed a complaint in the Superior Court, Chancery Division, seeking to require Meyer to abide by the terms of the Agreement and to preclude it from modifying those terms. On May 1, 1990, Mesa sought an order requiring Meyer to close title. Subsequently, the parties resolved their differences. Their settlement was memorialized in an order which required the parties to abide by the original contract with certain modifications. It recited, among other things, that

defendants agree they have no right under the terms of the Contract to demand that Plaintiff's lending institution modify its construction loan documents so as to protect Defendants' position as a second mortgage.

Section II D of the Contract was modified to reflect

that the construction and improvement financing shall be limited to $1.5 million, and further amended to indicate that plaintiff shall have a ninety (90) day period from the date of [the] order to obtain construction and improvement financing, with the understanding that should the plaintiff be unable to obtain construction and improvement financing within said ninety (90) day period due to a bank delay, and not due to the negligence of the plaintiff, that defendants shall consent to a thirty (30) day additional extension. Upon the obtaining of

construction and improvement financing, closing shall take place within thirty (30) days of the date of the commitment for construction and improvement financing.

Thereafter, Mesa notified Meyer that it could not close within the time prescribed in the settlement order. Negotiations over an extension ensued. Eventually, negotiations stalled and Meyer moved to enforce the settlement. Among the relief sought was a request that if Mesa failed to close within sixty (60) days of the court's order, the Judge, upon ex parte affidavit, would enter judgment against Mesa for $1,850,000.00. Mesa filed responding papers and requested oral argument. The motion was adjourned from April 5 to April 19.

When the attorneys appeared for argument on April 19, they were advised that the motion would be decided on the papers. This occurred because Mesa's responding papers apparently were lost and the trial Judge believed that the motion was unopposed. The trial Judge determined that Mesa had failed to comply with the settlement and granted the relief requested in Meyer's motion -- an order that Mesa close within seven days of April 25, 1991. Failing that occurrence, the Judge ordered that judgment would be entered against Mesa for damages in the amount of $1,850,000.00 upon an ex parte affidavit by Meyer.

Mesa moved for reconsideration. The trial Judge reviewed the opposition papers which originally had been misplaced and concluded that they presented nothing warranting a different Disposition of the motion. Thus, reconsideration was denied. Mesa appeals both from the order enforcing the settlement and from the denial of reconsideration. We have carefully reviewed this ...


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