On appeal from the Superior Court of New Jersey, Law Division, Passaic County.
Before Judges King, Muir, Jr. and Eichen.
The opinion of the court was delivered by KING, P.J.A.D.
Plaintiff Robert H. Kessler and defendant Richard Antinora entered into a written agreement for the purpose of building and selling a single-family residence on a lot in Wayne in Passaic County. The concept of the agreement seemed simple: Kessler was to provide the money and Antinora was to act as general contractor. Profits would be divided -- 60% to Kessler, 40% to Antinora -- after Kessler was repaid. No thought was given to losses. The venture lost money. Kessler sued Antinora to recover 40% of his financial losses or $65,742. The Law Division Judge ruled in Kessler's favor on summary judgment. The Judge denied Antinora's cross-motion for summary judgment of dismissal. We disagree, reverse the judgment in Kessler's favor, and order judgment in Antinora's favor.
On April 15, 1987 Kessler and Antinora executed a seven-page written agreement titled "JOINT VENTURE PARTNERSHIP AGREEMENT." The agreement contemplated a single venture: buying a lot in Wayne and building and selling a residence on it. Under the agreement Kessler agreed to "provide all necessary funds to purchase land and construct a one-family dwelling and disburse all funds to pay bills." Antinora agreed to "actually construct the dwelling and be the general contractor of the job."
The agreement provided for distribution of the proceeds of the venture:
9. Distribution. Upon or about completion of the dwelling it shall be placed for sale. Upon sale of same, and after deducting all monies expended by Robert Kessler plus insterest [sic] at prime plus one point and/or including interest or any funds borrowed for the project, not to exceed prime plus one point, engineering fees, architectural fees, legal fees, broker fees, if any, and any other costs connected with the project, the parties, Robert Kessler and Richard Antinora, shall divide the net profits as follows:...
Robert Kessler - sixty (60%) percent
Richard Antinora - forty (40%) percent
The agreement was silent about losses. There was no provision to compensate Antinora for any services other than the 40% profit clause.
Both parties complied with the agreement. Kessler provided the funds; Antinora supervised and delivered the finished house. This took over three years. Meanwhile, the real estate market soured. The house sold on September 1, 1991 for $420,000. The cost incurred in building and selling the house was $498,917.
Kessler was repaid all but $78,917 of the money he advanced pursuant to the contract. He also claimed unreimbursed interest of $85,440 for his self-characterized "loan" to the partnership. This claim for interest is disputed as to amount. Kessler thus claimed a total loss of $164,357. He sought and obtained his summary judgment in the Law Division for 40% of this amount, or $65,742.80. No ...