On appeal from Superior Court of New Jersey, Chancery Division, Probate Part, Burlington County, Docket No. 2001-1470.
Before Judges Skillman, Coburn and C.S. Fisher.
The opinion of the court was delivered by: Coburn, J.A.D.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
This appeal concerns a claim for specific performance of a real estate contract, which the Chancery Division denied on the ground that the agreement was insufficient to satisfy the Statute of Frauds.*fn1 Although we accept the judge's fact-finding, as amplified by facts that were either uncontroverted or acknowledged as true by the parties, we disagree with his resolution of the determinative legal issue, reverse the order denying specific performance, and remand for resolution of the remaining issues.
In 1986, Craig W. Yates purchased a single-family house at 32 Minnetonka Trail, Medford Lakes, for $145,000. Although he was the sole source of the purchase money, he took title as "Craig W. Yates, custodian for Brian A. Yates." Brian, who was Craig's son, was born on June 21, 1983. He lived with his mother, Rona Adams. Craig bought the house because he wanted to provide a home for Brian and Rona. He took title in the manner indicated as a matter of tax planning for his estate, although he did not understand the precise legal meaning, if any, of the word"custodian"*fn2 in this context.
In 1989, after Brian and Rona had lived in the house for less than two years, and after a brief tenancy by others, Craig entered into an oral contract to rent the house to Frank and Regina Smith for $832 a month, with an option to purchase it for $150,000. At that time, Craig, a local bank president and an attorney-at-law, believed the property was worth between $135,000 and $140,000. Smith and Craig also agreed that the Smiths would be responsible for routine maintenance and club dues and Craig would be responsible for real estate taxes and insurance. Because the property was then in a state of disrepair, they further agreed that the Smiths would have the right to perform major renovations of the property. Although no time limit was placed on the option, both sides understood that its exercise would be limited to a reasonable time, and if Craig needed to sell the house and the Smiths were unable or unwilling to purchase, they would be compensated fairly for the value of any renovations they had accomplished.
The Smiths moved in immediately and during the next ten years completed numerous improvements, which included staining the log walls, adding two skylights, replacing kitchen cabinets, adding new ceilings and ceramic tiles, remodeling two bathrooms, enclosing the porch, installing new appliances, replacing a roof, digging a new well, adding a deck and landscaping. Although the judge did not make findings as to value with respect to all of the improvements, he did find that the well cost $4,050 and the supplies and building materials cost about $25,000. The Smiths supplied most of the labor.
In 1994, Frank, who had been a childhood friend of Craig's children, became an employee at Craig's bank. In 1999, the Smiths felt they were ready to purchase the house, and Craig orally agreed to sell it to them at the option price. When the Smiths sought a mortgage commitment, they were told that it could not be provided until they submitted a written contract for purchase of the property. After discussing the matter with Craig, Frank downloaded on his computer a document form which he entitled"Offer to Purchase Real Estate."
On February 1, 1999, the Smiths signed the form, which listed the seller as"Craig W. Yates," described the property by its street address and town, set the purchase price at $150,000, subject to the buyers receiving a mortgage commitment of undetermined amount, called for a closing within thirty days of acceptance by the seller, and required delivery of a warranty deed. It also contained many of the other terms found in customary real estate contracts. The form ended as follows:
I hereby accept the offer set ...