On appeal from the Superior Court of New Jersey, Law Division, Mercer County.
Before Judges Pressler, Conley and Newman.
The opinion of the court was delivered by
Defendants, guarantors of a defaulted real estate loan owed by their partnership entity, Viking Associates, appeal a summary judgment granted plaintiff creditor National Westminster Bank (NatWest), striking defendants' defenses and counterclaims to NatWest's suit on their guaranties and entering judgment in favor of plaintiff for $901,000 in principal, $308,512 in interest, $43,564.95 for real estate tax advances and $36,223.79 for attorney fees. Plaintiff cross-appeals the reduced attorney fee from the $250,615.38 requested. Because we think factual issues are extant concerning defendants' primary defenses and counterclaims, we reverse the grant of summary judgment. Plaintiff's cross-appeal, thus, is moot, but were it not, it clearly would be without merit and would have been disposed of pursuant to R. 2:11-3(e)(1)(E).
We need not tarry long with the specifics concerning the underlying note, mortgage and guaranties. In December 1987 NatWest executed a one-year note to Viking for $751,000. Interest was payable monthly, with the principal due December 1988. To secure the note, Viking gave a mortgage on a 35-acre industrial zoned parcel in Ewing Township that it was then developing and had been apparently since 1985. In March 1989, the note and mortgage were modified. An additional $150,000 was paid Viking and the note was increased to $901,000 payable by September 30, 1989. Personal guaranties were also required and executed by the defendant partners.
The note was not paid; Viking is in bankruptcy.*fn1 Default was declared and in September 1990, NatWest filed both a foreclosure
action and a separate law division suit against the partners on their personal guaranties. Defendants answered and counterclaimed in the latter, primarily alleging bad faith, fraud and conspiracy with respect to the collateral.
We would be less than candid were we to characterize the record presented to us, and presumably to the trial Judge, as overwhelming. It consists almost entirely of the pleadings filed in this action and various pleadings filed in Viking's bankruptcy proceeding. In addition, there are two factually uninformative certifications from one of the defendant partners and a copy of a certification from a realtor that was filed in the federal proceeding. Skimpy though the record may be, when viewed indulgently in favor of the opponents of the motion, we discern the following. Viking, in its attempt to avoid the more disastrous effects of its default on the note, obtained a contract to sell the property for $1,800,000. There is some suggestion, although not clear, that Sorce was the purchaser. It is also alleged, though denied by Sorce, that Sorce was then, or thereafter became, a client of NatWest. That deal fell through. Sorce then entered into a contract with Viking for $1,350,000. That deal also fell through. Sorce asserts it was because Viking failed to satisfy certain contingencies, while defendants claim Sorce became aware of Viking's precarious position through NatWest, used that information, unjustifiably breached its contract with Viking and then
obtained a contract for the property through NatWest for $700,000.*fn2
Defendants claim that NatWest divulged to Sorce while it was under contract with Viking "significant confidential data" which enabled Sorce to avoid its contract obligation with Viking and enter into a contract on the property with NatWest for substantially less. In opposing NatWest's motion for summary judgment and in addition to relying upon the facial appearance of something not quite right arising from the breach by Sorce of its deal with Viking and subsequent significantly lower contract with NatWest, defendants submitted the certification of Allison L. Etchells, a real estate broker who had been marketing the property on behalf of Viking. The realtor questioned the accuracy of what she ...