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Cantor v. Saputelli

November 28, 2000

RONALD CANTOR, ET AL., PLAINTIFFS,
v.
GREGORY SAPUTELLI, ET AL., DEFENDANTS, AND MARTIN ETTIN, ET AL., THIRD PARTY PLAINTIFFS,
v.
CONGRESS TITLE CORPORATION, THIRD PARTY DEFENDANT.



The opinion of the court was delivered by: Rodriguez, J.

OPINION

The above-captioned matter is before this court pursuant to three separate motions for summary judgment.

I. BACKGROUND

A. Factual

On or about 1977, plaintiffs Ronald Cantor, Edward Cantor, Leroy Kean, and the corporation of Cantor, Cantor and Kean (collectively, the "plaintiffs") purchased approximately fifteen acres of land in Mays Landing, Hamilton Township, New Jersey (the "Property") for $1,400,000.00. The land contained an existing apartment complex named "Hadley Woods Apartments" on approximately six acres, and the remaining almost nine acres of land was vacant (the "Vacant Land"). Plaintiffs intended to convert the existing housing units into a condominium complex and develop the Vacant Land. Plaintiffs were able to transform the existing housing units into condominiums, renaming the complex "Sandpiper Apartments," but were unsuccessful in obtaining the subdivision approval necessary to develop the Vacant Land due to the apparent unavailability of sewer permits in the area. Defendant Gregory Saputelli, Esq., ("Saputelli") was engaged to form the Sandpiper Condominium Association (the "Association"), complete the necessary documentation for the required New Jersey Department of Community Affairs registration, and prepare the units for individual sale. Before the Master Deed was recorded, however, plaintiffs were not able to subdivide the Vacant Land from the housing units, which meant that the Association would have control of the Vacant Land as well as the condominium units. Seeking to preserve their rights to the Vacant Land, plaintiffs, then in control of the Association, employed defendant Martin Ettin, Esq., ("Ettin") to draft a 100-year Lease Agreement (the "Lease"), whereby plaintiffs would lease the Vacant Land from the Association. The Lease provided:

The consideration for said Lease shall be the payment by [plaintiffs] to the Condominium Association of the sum of One Dollar ($1.00) per year which sum shall be prepaid plus the payment of a proportionate share of taxes based upon the proportion of acreage Section Two [(the Vacant Land)] bears to the total acreage of [the Property], multiplied by the assessment for land only as issued by the Tax Assessor of the Township of Hamilton.

This Lease Agreement shall automatically terminate effective upon the recording of evidence of subdivision approval for [the Vacant Land] . . . and conveyance of the same to Sandpiper Apartments.

Plaintiffs alleged that they intended the yearly rent payment under the Lease to amount to $1.00 plus the assessment of the Vacant Land if it were a separate subdivided parcel. As soon as sewers became available in Hamilton Township, plaintiffs planned to terminate the Lease and develop the Vacant Land.

Plaintiffs proceeded to sell approximately eighty of the ninety-six condominium units to third-party purchasers (the "Purchasers"). In order to preserve their rights to the Vacant Land, plaintiffs planned to have each purchaser execute a power of attorney (the "Power of Attorney") that gave plaintiffs the right to file for a subdivision of the Vacant Land on the purchasers' behalf. Additionally, plaintiffs planned to have each Purchaser sign (1) a reconveyance agreement (the "Reconveyance Agreement"), whereby each purchaser agreed that, once subdivided, the Vacant Land would be reconveyed to plaintiffs in fee, and (2) a deed, wherein each purchaser was informed that plaintiffs desired to reserve their right to develop the Vacant Land.

For approximately ten years, the plaintiffs paid what they believed to be their portion of the tax bill as the rent under the Lease. *fn1 Plaintiffs believed that, under the Lease, they were responsible for paying taxes on the Vacant Land as though the Vacant Land were subdivided from the Property. For each of those years, the Association would obtain a letter from the Hamilton Township Tax Assessor that stated what the taxes would be on the Vacant Land if it were subdivided. Plaintiffs would then pay this amount to the Association.

In 1993, the Association took the position that the correct calculation was the entire tax bill of the Property multiplied by the percentage of the Property that constituted the Vacant Land. This was significantly higher. The New Jersey Superior Court held that the Association's interpretation of the Lease was correct.

B. Procedural

The plaintiffs filed an action in this court on November 20, 1997, alleging legal malpractice, civil conspiracy, tortious conduct, breach of fiduciary duty, and breach of contract against various parties. Plaintiffs filed a Second Amended Complaint after this court's July 8, 1998 order granted the Sandpiper Condominium Association of Mays Landing's motion to dismiss or for summary judgment, granted Charles M. Middlesworth, Esq., and Schultz & Middlesworth, P.C.'s motion to dismiss, and denied Martin Ettin, Esq., and Davis Reberkenny & Abromowitz's motion to dismiss or for summary judgment.

Filed July 31, 1998, the complaint named Saputelli and Gregory D. Saputelli & Associates, P.C. ("GSAPC") (collectively, the "Saputelli defendants") as defendants. The complaint also named Ettin and Davis, Reberkenny & Abramowitz ("DRA") (collectively, the "Ettin defendants") as defendants. The complaint contained six counts: professional negligence, breach of fiduciary duty, and breach of contract against the Ettin defendants; and professional negligence, breach of fiduciary duty, and breach of contract against the Saputelli defendants.

The Ettin defendants filed an answer to the Second Amended Complaint on August 26, 1998. In addition to asserting seventeen separate defenses, the Ettin defendants asserted crossclaims for contribution and indemnification against the Saputelli defendants. On June 16, 1999, the Ettin defendants filed a three-count Third-Party Complaint against Congress Title Corporation ("CTC"): one count for contribution and two counts for indemnity. The Ettin defendants alleged that, if they had any liability to plaintiffs, it was because CTC had failed to file the Powers of Attorney, obtained by the original purchasers, and the Reconveyance Agreement, signed by the original purchasers, with the county recording office.

CTC filed an answer. In addition to defenses, CTC asserted counterclaims and crossclaims for contribution and indemnification against both the Ettin defendants and the Saputelli defendants. The Ettin defendants answered the counterclaims and crossclaims on November 19, 1999.

On December 6, 1999, the Saputelli defendants filed an answer to CTC's counterclaims and crossclaims and asserted crossclaims for contribution and indemnification against CTC. On January 7, 2000, the Saputelli defendants filed an answer to the Second Amended Complaint. In addition to their twenty-seven separate defenses, the Saputelli defendants asserted crossclaims for contribution and indemnification ...


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