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259 Holdings Co., LLC v. Union Dry Dock & Repair Co.

November 7, 2007


On appeal from the Superior Court of New Jersey, Chancery Division, Hudson County, Docket No. C-2-06.

Per curiam.


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. ...

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