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Morton v. 4 Orchard Land Trust

July 21, 2003


On appeal from the Superior Court of New Jersey, Chancery Division, Essex County, C-282-01.

Before Judges A. A. Rodriguez, Wells and Payne.

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


Argued: March 17, 2003

Frederick A. Morton, Jr., sought to purchase real property at Orchard Court in Montclair from the 4 Orchard Land Trust (Trust). A form of contract was prepared by a broker and signed by Morton. After extensive review and negotiations, the attorneys for both parties approved the terms. The Trustees orally agreed to the deal, but then decided to accept another offer. Therefore, they did not sign the contract. Morton brought this action to compel the sale of the property to him. One of his arguments is that, the 1996 amendment to the statute of frauds, N.J.S.A. 25:1-13, trumps the attorney review procedure outlined in New Jersey State Bar Ass'n v. New Jersey Ass'n of Realtor Bds., 93 N.J. 470, 476 (1983) (supplemented by 94 N.J. 449 (1983), and N.J.A.C. 11:5-6.2(g)(2). We reject this contention and affirm the trial court's dismissal of the complaint.

Beginning early in 2000, Laurena White, a real estate agent and realtor associate for Schweppe & Co. (Schweppe), had been searching for an appropriate home in the Montclair area for Morton. Morton also did some searching on his own. He discovered a new construction development named Paddock Farms in West Orange. He signed a contract to purchase real property at Paddock Farms.

In the meantime, the Orchard Court property was listed for sale. White notified Morton about it. He was very interested in seeing it. White contacted the Trustees directly and learned that one offer above the listing price had already been received, and that two more offers were expected. On July 26, 2001, White learned that an offer had been accepted, but the Trustees indicated that Morton could make an offer during that competing purchaser's (Buyer #1) three-day attorney review period. Morton saw the property and immediately instructed White to make an offer, and if his offer was accepted, he would terminate the Paddock Farms contract. The offer was accepted.

On July 31, 2001, Morton signed a broker-prepared contract with a purchase price of $625,000. Paragraph 22 of the proposed contract set out the terms of the standard attorney review clause. Early the next day, August 1, 2001, at White's suggestion, Morton improved his purchase price offer to $635,000. A copy of the offer was also forwarded to Morton's attorney and a mortgage broker. The mortgage broker issued a mortgage commitment that day. This commitment was forwarded by White to the Trustees. During two conversations on August 1 and 2, 2001, White learned that Morton's offer was very attractive to the Trustees. However, acceptance would not be forthcoming until Buyer #1's contract for the purchase of the Orchard Court property could be"unhooked." As described by White, the following occurred:

Later in the afternoon of August 2, the [Trustees] informed me that they were able to get out of the deal with Buyer #1 and that Mr. Morton's offer was accepted. This, to me, of course meant that the owner had formally terminated the deal with Buyer #1. The [Trustees] further stated that an'attorney review' letter would be coming the same day from their attorney to Mr. Morton's attorney. [The Trustees] also expressed a desire, if we would accommodate it, to complete attorney review by Friday, August 3 -- before their attorney, Frank Catania, Esq., left for his vacation.

After calling to inform Morton and his attorney that the offer had been accepted, White called the Trustees again to obtain a copy of the signed agreement. The Trustees told White that"they would take care of that detail later." White believed that this meant the"detail" of sending her a copy of the signed agreement. According to White, the Trustees always gave her the"impression that the contract had been signed by them."

On Thursday, August 2, 2001, in a letter to Morton's attorney, Catania wrote that he represented the Trust regarding the real estate transaction involving the Orchard Court property. The letter stated:

After review of the Contract in this regard, I find same to be acceptable provided the following changes and/or modifications are made thereto. [four changes are listed]... Upon receipt, please review the above with the Buyer and advise if acceptable. In the event I do not hear to the contrary by the close of business on August 6, 2001, I will take the position that same is acceptable and the attorney review period concluded.

The following day, Catania again wrote to Morton's attorney, stating that"as a follow up to my review letter," the Trustees required an additional modification, namely that Morton would agree to accept the premises with the present occupant in place and that it would be Morton's responsibility to have that occupant removed.

Morton accepted all of these conditions. He arranged to terminate the Paddock Farms contract. However, the Trustees then did an"about face." In a letter dated August 3, ...

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