On appeal from Superior Court of New Jersey, Law Division, Bergen County, Docket Nos. L-4099-06 and L-4139-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued September 18, 2007
Before Judges Coburn, Fuentes and Grall.
Ken Ehrman, buyer, and Robert A. Vort and Tina Kruh, sellers, executed a contract for the sale of a residence in Saddle River, Bergen County. Prior to closing, buyer and sellers filed separate complaints seeking declaration of the parties' rights under that contract. See N.J.S.A. 2A:16-2 to-54. The actions were consolidated. On cross-motions for summary judgment, the judge determined that buyer waived any right he may have had to cancel the contract, declared the contract valid and enforceable, entered judgment in favor of sellers and dismissed buyer's complaint. Buyer appeals.*fn1 We conclude that genuine issues of material fact preclude summary judgment. Accordingly, we reverse and remand for further proceedings.
The property includes a private well that supplies water to the residence, and this dispute about contract rights centers on the presence of perchlorate in that water. Before the parties executed the contract, local newspapers reported that the New Jersey Department of Environmental Protection (DEP) was testing private wells in Saddle River for perchlorate contamination. The parties discussed the articles, and sellers asked DEP to test their well.
The parties executed the contract on November 25, 2005.
The well water was not tested until November 30, 2005. By report dated January 27, 2006, DEP advised that it had detected perchlorate at a ratio of 11.8 parts per billion ("ppb"). DEP explained that it was utilizing a ratio of 5 ppb for drinking water pending formal adoption of a standard and cautioned that "this well water should not be used for drinking purposes." (emphasis added). DEP enclosed a form for submission of a claim against the spill fund for diminished property value. On January 30, 2006, sellers' attorney mailed the DEP report to buyer's attorney with a letter inviting buyer to call sellers directly and offering to answer any questions. There was no response. On April 12, 2006, DEP advised sellers that a second test of their water showed perchlorate at a ratio of 11.3 ppb.*fn2 Sellers' attorney faxed that report to buyer's attorney on April 20, 2006. On the cover sheet, the sellers' attorney included an offer to respond to questions. Buyer did not respond.
After receiving the first report, on March 22, 2006, sellers entered into a contract to purchase a home in Woodcliff Lake. That contract provided for a closing on the same day as the closing on the sellers' Saddle River property.
Beginning with a fax transmitted on May 3, 2006, sellers attempted to set the date for closing on the Saddle River property for June 27, 2006. Vort claims that he spoke to buyer on May 10, 2006, and buyer agreed to close on that date. Buyer's attorney contacted sellers' attorney on May 23, 2006, and discussed possible dates for closing.
On May 25, 2006, buyer attempted to cancel the contract. Buyer explains that he did not see either of the two DEP reports until May 23, 2006 and that he decided to cancel after reading those reports.*fn3 Buyer called Vort and told him. Buyer claims that Vort told him that he was happy about the cancellation because he did not want to move. According to buyer, Vort said that the cancellation would not be a problem because his agreement to purchase the home in Woodcliff Lake was contingent upon the sale of his Saddle River home. On the same day, buyer's attorney wrote a letter advising sellers' attorney that her client was exercising his right to cancel the contract based on breach of a warranty and demanding return of his deposit, $127,500 held by sellers' attorney, with interest.
Sellers objected to the cancellation. By letter dated May 30, 2006, sellers' attorney advised that his clients had provided the DEP reports and, in the absence of a response, had been led to believe that buyer "had every intention of purchasing the property." Sellers' attorney also refused to return the deposit and advised that his clients were considering whether to seek specific performance or damages.
On June 5, 2006, the parties filed their respective complaints for declaratory judgment.
On June 26, 2006, sellers made an effort to address the perchlorate problem. They installed a water filtration system, and a post-installation test performed by a private company was negative for perchlorate. On July 26, 2006, DEP reiterated that it had not adopted a formal standard for acceptable levels of perchlorate. Based on information sellers had provided, DEP concluded that the filtration system sellers installed "appears to be appropriate for the situation and the analytical results for the treatment would meet the Department's anticipated" standard. DEP, ...