On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-6521-04.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted September 24, 2007
Before Judges Parrillo, Graves and Alvarez.
This case involves a residential real estate transaction. Plaintiffs Ronald J. Riccio and his brother, Richard A. Riccio, entered into a written contract to sell their residence located at 382 Virginia Avenue, Jersey City (the property), to defendant, Iftikhar Ahmad, for the sum of $295,000. In their complaint, plaintiffs contend that defendant breached the contract when he did not appear for a time-of-the-essence closing scheduled for November 17, 2004. On the other hand, defendant claims that he had the right to cancel the contract because his mortgage company revoked his mortgage commitment based on an appraisal report, which initially valued the property at only $260,000.
Defendant appeals from three orders: (1) an order dated January 24, 2006, granting plaintiffs' motion for summary judgment as to liability only; (2) an order denying defendant's motion for reconsideration and cross-motion for summary judgment filed March 17, 2006; and (3) an order for judgment in favor of plaintiffs in the total amount of $44,285.21 entered on June 9, 2006. After reviewing the record and the applicable law in light of the contentions advanced on appeal, we conclude that the proofs presented in the Law Division were not sufficient to justify summary disposition in favor of either party. The judgment in favor of plaintiffs is therefore reversed, and the matter is remanded to the Law Division.
Because the trial court granted plaintiffs' motion for summary judgment, we set forth the facts in the light most favorable to defendant. Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). In late September 2004, the parties entered into a written contract of sale for the property. The contract was for $295,000, and it was contingent upon defendant obtaining a mortgage loan in the amount of $236,000 (eighty percent of the purchase price), on or before October 15, 2004. The mortgage contingency provision included the following language in bold capital letters:
IF THE MORTGAGE LOAN HAS NOT BEEN ARRANGED, OR IF THE BUYER HAS NOT NOTIFIED SELLER OF BUYER'S DECISION TO COMPLETE THE TRANSACTION WITHOUT OBTAINING A MORTGAGE COMMITMENT, ON OR BEFORE 10/15/2004 (DATE) THEN EITHER BUYER OR SELLER MAY VOID THIS AGREEMENT BY WRITTEN NOTICE TO THE OTHER PARTY.
Thus, the mortgage contingency clause did not require either party to cancel the contract by a specific date or within a designated time period.
On September 28, 2004, plaintiffs' counsel wrote a letter to defendant's attorney disapproving the contract and requesting certain changes, including sellers' "right to continue to occupy the property pursuant to a Use and Occupancy Agreement until November 15, 2004," following the closing, which was scheduled to "take place on or before October 27, 2004." Plaintiffs also requested the following paragraph be added to the contract:
7. Paragraph 31. Additional Contractual Provisions. Add: For the purpose of this Contract, the "Contract Date" shall be the date when the Contract of Sale and all amendments, including this Letter Rider, are fully signed and initialed by all parties, or the parties' agents. All contingency periods shall commence on the Contract Date.
In a letter dated October 13, 2004, defendant's attorney advised that the contract was approved subject to eleven specific changes, including a reduction in the sale price from $295,000 to "$280,000 per appraisal report." At the end of his letter, defendant's attorney wrote: "If the foregoing meets with your client's approval, please sign below and return to me, so we can consider the attorney review period closed." Plaintiffs agree that their attorney authorized the changes proposed by defendant's attorney and that the attorney review period ended "on or about October 22, 2004."
According to defendant, he was eager to purchase the property, and he applied for a mortgage through United Home Mortgage Company "on or about September 29th, 2004." United Home Mortgage then ordered an appraisal of the property from Lou Gomez Appraisal Services. On or about October 6, 2004, Mr. Gomez submitted his initial appraisal report indicating that the value of the property was $260,000, based on the sale price of comparable properties. When the appraisal report was submitted to United Home Mortgage, Mr. Amer Mir, defendant's mortgage representative and real estate agent, communicated this information to the listing broker. At his deposition, Mr. Mir testified that when Mr. Riccio learned of the appraisal value, "he apparently was upset and he wanted to speak to the appraiser." Mr. Mir also produced a letter from Mr. Gomez, which confirmed that he increased the value of the property from $260,000 to $280,000 after he was contacted by one of the plaintiffs. In his letter, Mr. Gomez states:
I Lou Gomez, a New Jersey state licensed Real Estate Appraiser, License #RA 03031 was hired by United Home Mortgage Company, to inspect and complete a summary appraisal report on a property located at 382 Virginia Avenue, Jersey City, New Jersey. Block # ...