November 7, 2007
259 HOLDINGS CO., LLC, PLAINTIFF-APPELLANT,
UNION DRY DOCK & REPAIR COMPANY, DEFENDANT-RESPONDENT.
On appeal from the Superior Court of New Jersey, Chancery Division, Hudson County, Docket No. C-2-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued October 11, 2007
Before Judges Wefing, R. B. Coleman and Lyons.
Plaintiff 259 Holdings Co., LLC appeals the entry of an order for summary judgment which denied its complaint seeking specific performance of a contract to purchase land from defendant Union Dry Dock & Repair Company. Because we agree with the thorough and detailed oral opinion of the trial judge, Judge Thomas P. Olivieri, we affirm.
The following factual and procedural history is relevant to our consideration of the issues advanced on appeal. Defendant was the owner of an 8.248 acre parcel of land located in Hoboken. On June 8, 2005, plaintiff and defendant entered into an agreement for the sale of that parcel to plaintiff for a purchase price of $15,250,000. A sum of $762,500 was to be held in escrow with the remaining balance to be paid at the time of closing.
The agreement allowed for an environmental due-diligence period. It provided that thirty days following the close of that period, the closing would occur "with time being of the essence." The agreement stated that the environmental due-diligence period would expire October 17, 2005. Under the plain language of the agreement, the closing, therefore, would have occurred on November 17, 2005. Because of certain difficulties, plaintiff was not able to obtain an environmental remediation agreement with the New Jersey Department of Environmental Protection by October 17, so the parties entered into a first amendment to the agreement. In that first amendment, they agreed to extend the closing date to December 15, 2005, with the time for such closing being of the essence. On December 15, 2005, plaintiff acknowledged that it was unable to close due to the unavailability of funds on that date, although defendant was ready, willing, and able to close.
On December 15, 2005, defendant served plaintiff with a notice of termination based on plaintiff's failure to close. On December 29, 2005, plaintiff advised defendant that it was ready and able to cure its default "pursuant to Section 11.1 of the Agreement of Purchase and Sale dated June 8, 2005." Plaintiff requested a closing on the following day, December 30, 2005. Defendant noted that section 11.1 of the Agreement expressly provided in relevant part that, "in no event shall the Closing Date be extended based on a default or breach which may be cured or corrected by the payment of money." Therefore, defendant rejected plaintiff's asserted right to cure the contract, which it had earlier terminated.
In January 4, 2006, plaintiff filed its complaint seeking specific performance and requesting the court to enter an order compelling defendant to sell it the property at issue. Both parties agreed that the determination of this matter is controlled by Article XI, section 11.1 of the agreement. The trial court, after hearing argument, denied plaintiff's motion for summary judgment requiring specific performance of the agreement for the reasons set forth in the court's detailed oral opinion. Judge Olivieri noted that neither party claimed fraud or other misconduct regarding the creation or signing of the agreement. Furthermore, he concluded that the words of the agreement were not ambiguous and, therefore, binding on the parties. Judge Olivieri found that the language at issue was plain, straightforward, and not susceptible to multiple interpretations. He concluded:
According to the language of Section 11.1, when a party is in default, they are allowed ten days to cure the default. However, there is a limitation on this ability to cure based on whether it can be corrected by a payment of money. If it cannot, then the party has the full ten days, even if that ten-day period goes beyond the scheduled closing date. It simply extends the closing date to the new cure date.
However, if the default can be corrected by a payment of money, the agreement puts greater limitation on the curing period. It allows for the ten-day curing period only if that period does not extend beyond the schedule closing date. The agreement effectively maintains the closing date when correction could have been made by monetary payment. This is the clear meaning of the language, and there simply is not sufficient evidence to show any ambiguity.
Accordingly, Judge Olivieri entered summary judgment on defendant's motion and denied plaintiff's cross-motion. This appeal ensued.
On appeal, plaintiff argues that the trial court erred in its interpretation of the contract language in determining that plaintiff had no right to cure. Plaintiff further argues that section 11.1 of the agreement is ambiguous and should be interpreted as to provide a right to cure.
In reviewing the trial court's determination of a summary judgment motion, an appellate court first decides whether there was a genuine issue of fact. If it concludes there was not, it then decides whether the trial court's ruling on the law was correct. Prudential Prop. Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). The parties agree in this matter that there are no material facts in dispute. The question, therefore, is strictly one of law and we review that issue de novo. "Whether a term is clear or ambiguous, is . . . a question of law." Nester v. O'Donnell, 301 N.J. Super. 198, 210 (App. Div. 1997) (quoting Kaufman v. Provident Life & Cas. Ins. Co., 828 F. Supp. 275, 282 (D.N.J. 1992), aff'd, 993 F.2d 877 (3d Cir. 1993)).
The question in this case is whether the provisions of section 11.1 of the agreement are ambiguous. The section reads as follows:
11.1 Default by Purchaser. Except as otherwise set forth in this Agreement to the contrary, Seller may terminate this Agreement by notice to Purchaser at any time prior to the Closing Date in the event of (a) a default by Purchaser under this Agreement which remains uncured for ten (10) business days after Seller's notice to Purchaser thereof, unless such default cannot be cured by the payment of money and cannot with due diligence be wholly cured within such ten (10) business day period, in which case Purchaser (i) shall have a maximum of an additional twenty (20) business days to cure such default; and (ii) shall advise Seller of the actions which Purchaser is taking and the progress being made; or (b) a material breach of any representation or warranty by Purchaser expressly set forth in this Agreement which cannot be similarly cured or corrected. If the date on which Purchaser may cure or correct pursuant to this Section 11.1 (the "Purchaser's Cure Date") falls on a date which is later than the Closing Date, then the Closing Date shall be deemed extended to Purchaser's Cure Date; provided, that in no event shall the Closing Date be extended based on a default or breach which may be cured or corrected by the payment of money.
Plaintiff claims that the terms of this provision allow it to cure its December 15 default payment within ten business days after defendant's notice, i.e., December 30, even though it would be after the specified closing date. Plaintiff claims the language is ambiguous and should, therefore, be construed in its favor. Defendant, on the other hand, claims that the section is not ambiguous and that the last clause in the section makes it clear that in no event is the closing date permitted to be extended based on a default which can be cured by payment of money. Defendant argues that is what happened here and, therefore, when there was no performance by the plaintiff on December 15, defendant had a right to terminate the agreement.
An ambiguity in a contract exists if the terms of the contract are susceptible to at least two reasonable alternative interpretations. . . . To determine the meaning of the terms of an agreement by the objective manifestations of the parties' intent, the terms of a contract must be given their "plain or ordinary meaning." [Nester v. O'Donnell, supra, 301 N.J. Super. at 210 (quoting Kaufman v. Provident Life & Cas. Ins. Co., supra, 828 F. Supp. at 282).]
A "court should not torture the language of [a contract] to create ambiguity." Stiefel v. Bayly, Martin & Fay of Conn., Inc., 242 N.J. Super. 643, 651 (App. Div. 1990). A court's goal in contract interpretation is "to ascertain the intention of the parties to the contract as revealed by the language used, taken as an entirety, the situation of the parties, the attendant circumstances, and the objects they were thereby striving to attain." Cruz-Mendez v. ISU/Ins. Servs. of S.F., 156 N.J. 556, 570-71 (1999) (internal quotations omitted). The polestar of contract interpretation is to discover the intent of the parties as revealed by the language used by them. Jacobs v. Great Pacific Century Corp., 104 N.J. 580, 582-86 (1996). In Karl's Sales and Serv., Inc. v. Gimbel Bros., Inc., 249 N.J. Super. 487, 493 (App. Div.), certif. denied, 127 N.J. 548 (1991), we stated that "where the terms of a contract are clear and unambiguous, there is no room for interpretation or construction and the courts must enforce those terms as written."
In carefully reviewing Article XI, section 11.1, we note that the section permits plaintiff to cure a default as a general proposition within ten business days after notice. An exception exists with respect to defaults that cannot be cured by the payment of money and cannot with due diligence be wholly cured within ten business days. In such a case, plaintiff would have an additional twenty business days to cure. The section goes on to state that if the time to cure extends beyond the closing date, then the closing date shall be deemed extended to accommodate the allowed period for cure provided, though, that in no event shall the closing date be extended based on a default which can be cured by the payment of money.
We agree with Judge Olivieri that this is not susceptible to an alternative meaning. The default in this case was one caused by the inability to pay money in a timely fashion.
Hence, while plaintiff had a general right to cure, in this particular case, since the ten-business-day right-to-cure period would have extended beyond the closing date, the right was particularly and specifically denied by the unambiguous agreement of the parties. Accordingly, because we find that section 11.1 of Article XI, as applied to the facts in this case, did not afford plaintiff a right to cure, we affirm the decision of Judge Olivieri.
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