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B & F Properties, L.L.C. v. Two Bits Properties

April 16, 2007

B & F PROPERTIES, L.L.C., PLAINTIFF-APPELLANT,
v.
TWO BITS PROPERTIES, L.L.C., DEFENDANT-RESPONDENT, AND CITY OF EAST ORANGE, MOHAMED BARGUL, FRANCES SOUZA, EAST COAST TITLE AGENCY, MICHAEL G. MESKIN, ESQ., COMMONWEALTH INSURANCE COMPANY OF NEW JERSEY, DEFENDANTS.
MICHAEL G. MESKIN, ESQ., THIRD PARTY PLAINTIFF,
v.
AARON R. STIER, ESQ., STIER AND LIEBOWITZ, ATTORNEYS AT LAW, THIRD PARTY DEFENDANTS.



On appeal from the Superior Court of New Jersey, Law Division, Essex County, L-3828-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued March 21, 2007

Before Judges Yannotti and Messano.

Plaintiff, B & F Properties, L.L.C. (B & F), appeals from the motion judge's February 6, 2006 order granting summary judgment to defendant, Two Bits Properties, L.L.C. (Two Bits).*fn1

After careful consideration of the record and appropriate legal standards, we affirm.

In a written contract dated April 26, 2002, defendant agreed to sell property located at 186 William Street, East Orange to Joe Fried, a member of plaintiff limited liability corporation, for $275,000. Pursuant to the agreement, Two Bits was to transfer the property "free of all claims and rights of [o]thers," except for, among other things, Recorded agreements which limit the use of the Property, unless the agreements: (1) are presently violated; (2) provide that the property would be forfeited if they were violated; or (3) unreasonably limit the normal use of the property.

The contract further provided that plaintiff's title must be "marketable and insurable . . . by any title insurance company . . . subject only to the above exceptions."

In fact, Two Bits did not own the property. Although Fried claimed he was unaware of this until the date of closing, there is substantial evidence in the record that B & F's real estate counsel, Michael G. Meskin, was aware of this fact much earlier as a result of the title searches prepared for the property. Two Bits intended to purchase the property from its true owners, defendants Mohamed Bargul and Frances Souza, and on the same day, in what is commonly known as a "flip," convey it to plaintiff.

Bargul and Souza became the owners of the property on June 28, 2001, when they purchased it from the City of East Orange (East Orange) for $39,000. The deed from East Orange contained the following provision:

This conveyance may be set aside by [East Orange] if [Bargul and Souza] shall fail to comply with Conditions of Sale, as set forth by provision Number 32 of the "Standard Conditions of Sale," also known as Schedule "B", which conditions shall survive the closing of title and are incorporated herein by reference. This clause shall only be effective if [East Orange] commences an action to set aside the conveyance for failure to comply within six (6) months of the date of the expiration of the Conditions of Sale.

The conditions of sale, which were recorded along with the deed, contained a general right of reversion of title in favor of East Orange in the event Bargul and Souza failed to comply with any condition. Specifically, Condition 29 provided that [Bargul and Souza] may not convey the property for a period of two (2) years from the date of closing of title unless the following applies:

a. A new structure has been constructed on a vacant lot.

b. An investment property has been rehabilitated and a Certificate of Occupancy and/or a Certificate of Continued Occupancy ...


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