January 17, 2008
JABBAR SINGH, PLAINTIFF-APPELLANT,
SOUTH BRUNSWICK PLAZA, L.P., A NEW JERSEY LIMITED PARTNERSHIP, M.P. MANAGEMENT COMPANY, LLC, A LIMITED LIABILITY COMPANY, SOLE GENERAL PARTNER OF SOUTH BRUNSWICK PLAZA, L.P., EDISON CO-OP, SHELL OIL COMPANY, MOTIVA ENTERPRISES, LLC, SUCCESSOR TO SHELL OIL COMPANY, A NEW JERSEY CORPORATION, DEFENDANTS-RESPONDENTS.
On appeal from Superior Court of New Jersey, Chancery Division, Middlesex County, Docket No. C-123-06.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued December 12, 2007
Before Judges Parker and Lyons.
Plaintiff Jabbar Singh, the would-be purchaser of a gas station, appeals from two orders entered on March 30, 2007. The first order granted summary judgment in favor of defendants, South Brunswick Plaza, L.P., and M.P. Management Company, LLC, Edison Co-op, Shell Oil Company, and Motiva Enterprises, LLC. The second order denied plaintiff's application to reopen discovery and plaintiff's motion for leave to file an amended complaint. Defendant South Brunswick Plaza, L.P. (Seller), the owner and lessor of the gas station and the successor to defendant Edison Co-op, sold the station to defendant Motiva Enterprises, LLC (Motiva), the lessee of the gas station, and the successor to the original lessee, Shell Oil Company, pursuant to a right of first refusal in the lease between the parties. Because we find there were no genuine issues of material fact and defendants were entitled to summary judgment of a matter of law, we affirm.
The following are the pertinent facts. Seller was the owner of property on the corner of U.S. Route 1 and Old Post Road in Edison. Seller's predecessor entered into a lease with Shell Oil Company on June 18, 1971. The lease was renewed multiple times since the original lease execution date. On renewal, all of the terms at issue in this matter from the original lease were continued. The lease term at issue is Article 10, entitled "Purchase Refusal." It reads as follows:
If at any time during the primary term, any extension period or any tenancy after either, Lessor receives from a ready, willing and able purchaser an acceptable bona fide offer to purchase, or makes a bona fide offer to sell to such purchaser, the Premises or any part thereof or any property which includes all or part of the Premises: Lessor shall give Shell notice, specifying and [sic] the price and terms of the offer, accompanied by Lessor's affidavit that the proposed sale is in good faith. Shell shall thereupon have, in addition, the prior option to purchase the Premises or the part thereof or the entire property covered by such offer, at the price and on the terms of the offer but subject to the terms provided in article 11, which option Shell may exercise by giving Lessor notice within twenty days after Shell's receipt of Lessor's notice of the offer. Shell's failure at any time to exercise its option under this article shall not affect this Lease or the continuance of Shell's rights and options under this article or any other article hereof.
Plaintiff initiated negotiations to purchase the property in February 2006. On February 27, 2006, plaintiff offered to purchase the property for $1,365,000, all cash. Seller sent Motiva notice of this "acceptable bona fide offer" pursuant to Article 10 of the lease agreement by certified mail. There is no record of any response from Motiva to that notice.
On March 3, 2006, Seller sent a "follow-up" notice to Motiva advising it that the bona fide purchase offer was on a "net, net, net basis." Seller explained that plaintiff was to pay all of the Seller's expenses with respect to the sale of the premises, including attorneys' fees, all closing costs, realty transfer fees, and brokerage commissions. Again, the record does not reflect any response by Motiva.
On March 9, 2006, plaintiff again amended its offer to purchase the premises by increasing the purchase price to $1,500,000, with all of the other terms earlier described remaining unchanged. On the same date, Seller, by certified mail, notified Motiva of this new offer. Again, there is no record of any response.
On March 11, 2006, an agreement for the sale of the property was executed by plaintiff and Seller. That agreement contained a $1,500,000 purchase price and required plaintiff to pay a brokerage commission of $25,000, pay the New Jersey Realty Transfer Fee, all of seller's attorneys' fees, as well as any closing costs and expenses with respect to the sale of the property, and execute a release and indemnity in favor of Seller as to the condition of the property. The agreement was contingent upon a satisfactory environmental study to be conducted by plaintiff and proof that Motiva had not exercised its right of first refusal to purchase the property pursuant to the lease.
Following the signing of that agreement, plaintiff, in a letter dated March 10, 2006, sought certain changes in the agreement. In addition to other issues, plaintiff sought to limit his obligation to pay attorneys' fees and all of Seller's costs in connection to the sale. Further, plaintiff wanted an opportunity to review the indemnity agreement and desired not to sign same until the environmental study was completed. Following negotiations and review of the indemnity agreement, on March 22, 2006, plaintiff executed the release and indemnity agreement proffered, and offered to pay no more than $5000 of Seller's attorneys' fees. On March 25, 2006, Seller, by Federal Express delivery, advised Motiva of a revised offer. The letter read:
Pursuant to our previous notices to you, I enclose the Agreement for sale and the Release and Indemnity agreement. The party that submitted the offer to purchase has agreed to these agreements.
In the event Motiva chooses to exercise its right of 1st refusal then we expect Motiva to execute these agreements.
The only change to these agreements is a cap of $5000.00 on my attorney's legal fees.
On April 13, 2006, Motiva sent a letter, by fax and overnight mail, to Seller. The reference on the letter read:
Re: Property location-881 Route 1, Edison, NJ;
Lease dated June 18, 1971 ("Lease");
Letter offering right of first refusal dated February 27, 2006;
Letter amending initial offering of March 9, 2006.
The April 13, 2006, Motiva letter confirmed receipt of the reference letters, advised that Motiva elected to purchase and "to match the offer you received for the property, which is $1,500,000.00." The letter also named, consistent with the lease, an escrow attorney and outlined the submissions which were necessary to be submitted to the escrow attorney.
On April 18, 2006, plaintiff's attorney wrote to Seller's attorney inquiring whether Motiva had exercised its right of first refusal because "it would appear that the twenty days [the period of time Motiva has under the lease to exercise its right under first refusal] has elapsed." Counsel for Seller advised plaintiff's counsel, by return mail, that Motiva had exercised its right of first refusal. By return mail, plaintiff's counsel contested the validity of the exercise. Various correspondence occurred thereafter between Seller's attorney and Motiva's attorney.
On May 3, 2006, a complaint was filed by plaintiff against Seller and the other defendants requesting specific performance of the contract which had been entered into between plaintiff and Seller. However, sometime thereafter, Seller closed title on the property with Motiva.
On March 23, 2007, defendants filed a motion for summary judgment. In response, plaintiff filed a cross-motion seeking leave to amend his complaint and to reopen discovery. On March 30, 2007, oral argument was heard in the trial court which granted defendants' summary judgment motion and denied plaintiff's cross-motions. This appeal ensued.
On appeal, plaintiff argues the trial court erred in granting summary judgment because the court's ruling was based on "an interpretation of factual issues which should have been resolved by a trier of fact." Plaintiff asserts that the trial court erred in ignoring what it deems to be an ambiguous reference in the reference section of Motiva's April 13 letter, and that this ambiguity created a genuine issue of material fact, which a factfinder should resolve. Plaintiff further argues that the court erred in granting summary judgment by failing "to consider all of the transactional issues," and not just the Motiva April 13 letter and plaintiff's counsel's April 18 letter.
Defendants argue that the right of first refusal was timely exercised and the trial court properly granted the defendants' motion for summary judgment because there were no genuine issues of material fact. Alternatively, defendants argue that the agreement between plaintiff and Seller permitted defendant Motiva sixty days in which to exercise the right of first refusal, rather than the twenty days in the lease agreement, and that would also support the entry of summary judgment.
The trial court concluded that a reasonable reading of the Motiva April 13 letter indicated that Motiva was responding to the Seller's March 25 notice and, therefore, the exercise of the option was timely. The court also reviewed all of the other correspondence and determined that "[l]ooking at all of these letters in pari materia, a reasonable finder of fact could only conclude [and] this court finds that the March 25 notice was the notice as required by terms of the . . . lease and that the response by Motiva on April 13, [by] Charles Baderick, was timely."
We have recently outlined the scope of our review in such matters, saying:
In reviewing summary judgment orders, we must decide whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party.
If there exists a single, unavoidable resolution of the alleged disputed issue of fact, that issue should be considered insufficient to constitute a 'genuine' issue of material fact for purposes of Rule 4:46-2. [Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520 (1995).]
Thus, "the essence of the inquiry . . . is . . . 'whether the evidence presents a sufficient disagreement to require submission to a jury or whether it is so one-sided that one party must prevail as a matter of law.'" Id. at 536. [Young v. Hobart West Group, 385 N.J. Super. 448, 457-58 (App. Div. 2005).]
In reviewing the trial court's decision, we need to resolve four questions. The first is to decide whether Article 10 of the lease requires each time an offer is made by a ready, willing, and able purchaser, that it must be presented to the lessee. The second issue is whether, in this factual setting, the initial offer changed anytime and, if so, whether the change or changes constituted a new offer which terminated the earlier offer. The next issue which must be resolved is whether the notice given on March 25 by Seller to Motiva was in accordance with Article 10, and whether the response on April 13, 2006, from Motiva was timely and effective. Lastly, we must resolve whether, from the competent evidential materials presented, when viewed in the light most favorable to plaintiff, there were sufficient genuine issues of material fact to permit a rational factfinder to resolve the alleged disputed issues in favor of plaintiff, or whether the evidence was so one-sided that defendants must prevail as a matter of law.
Turning to the first issue, we note that, "[t]he interpretation or construction of a contract is usually a legal question for the court, 'suitable for a decision on a motion for summary judgment.'" Driscoll Constr. Co., Inc. v. Dep't of Transp., 371 N.J. Super. 304, 313 (App. Div. 2004) (quoting Spalding Composites Co., Inc. v. Liberty Mut. Ins. Co., 346 N.J. Super. 167, 173 (App. Div. 2001)). Article 10 states explicitly "[i]f at any time" during the lease term the lessor receives an offer that is "an acceptable bona fide offer," the lessor is obligated to give the lessee notice specifying the price and terms of the offer. In this case, each time plaintiff made an offer or amended its offer, Seller conveyed the offer to the lessee. That was consistent with the obligation under Article 10, provided a modification to the initial offer constituted a new "acceptable bona fide offer."
Plaintiff, in essence, argues that it made its initial offer on February 27, 2006, and a new offer on March 9, 2006, and that after Seller provided notice of same to Motiva, that Seller had no further obligation under the lease to notify Motiva, as any subsequent changes were mere "tweaking" of terms. An offer is a statement by an offeror of what he will give in return for a promise or act of the offeree. See Broad St. Nat'l Bank of Trenton v. Collier, 112 N.J.L. 41 (Sup. Ct.), aff'd, 113 N.J.L. 303 (E. & A. 1933). The subsequent modifications to the initial February 27 offer, terminated the earlier offers as they were inconsistent with the original offer in that they contained some different terms and were made before any effective acceptance by Seller. See RGC Int'l Investors, LDC v. Ari Network Services, Inc. 2004 U.S. Dist. LEXIS 1161 (D. Del. 2004); Norca Corp. v. Tokheim Corp., 643 N.Y.S.2d 139 (App. Div. 1996); Restatement of the Law (Second) Contracts § 43 (1981); 1-2 Murray on Contracts § 42 (4th ed. 2001). As the lease clearly requires all "bona fide offers" to be transmitted to the lessee, Seller was obligated to transmit any modifications which contained terms inconsistent with the prior outstanding offer.
In this case, there were four offers, in that there were four statements by plaintiff offeror of what he would give for the property. The first offer was that plaintiff would buy the property for $1,365,000, all cash. This was communicated on February 27, 2006, to Motiva. Later, on March 3, 2006, the terms of the offer were further changed: the purchaser offered to pay all of the lessor's expenses for the sale, including attorneys' fees, closing costs, realty transfer taxes, and brokerage commissions. This new offer was also transmitted to Motiva.
On or about March 9, the terms of the then-outstanding offer were changed, as plaintiff offered to increase the price to be paid to $1,500,000. That offer also was communicated appropriately under the lease terms to Motiva.
Lastly, plaintiff again changed the terms of his offer by proposing to pay only $5000 of Seller's attorneys' fees and finally agreeing to execute the release and indemnity agreement in the form required by Seller before closing. These new terms also constituted a new offer, as they were inconsistent with the prior offer, terminated prior offers, and were forwarded on March 25, 2006, to Motiva pursuant to the lease agreement.
Consequently, we conclude from the plain language of Article 10 of the lease that Seller was required to transmit to Motiva any "bona fide offer" made at any time during the lease term and that whenever Seller received an offer with terms which were different from any earlier offer, it received a new offer that had to be presented to Motiva. That is what occurred here.
There is no factual dispute concerning what was offered and when. The parties agree on what was discussed and what was offered. The only argument is whether the changes in the terms of the offer was, in the words of plaintiff, mere "tweaking", or whether the changes were such as to constitute a new offer. We are convinced that the changes in this case were not mere "tweaking." The change in price was certainly material. The language and extent of an indemnity agreement was material, as was the determination to "cap" legal fees. In a $1,500,000 transaction which involves property that may have significant environmental issues, as well as other issues, a limitation of $5000 on legal fees on its face appears material. The changes in each successive offer were inconsistent with the prior offer and, therefore, terminated the prior offer and created a new offer. See RGC Int'l Investors, LDC v. Ari Network Services, Inc. 2004 U.S. Dist. LEXIS 1161 (D. Del. 2004); Norca Corp. v. Tokheim Corp., 643 N.Y.S.2d 139 (App. Div. 1996); Restatement of the Law (Second) Contracts § 43 (1981); 1-2 Murray on Contracts § 42 (4th ed. 2001).
The last issue argued by plaintiff, which it claims created a disputed issue of material fact, is whether the letter of April 13, 2006, from Motiva was timely. Plaintiff argues that the April 13 letter was, in fact, in response to the March 9, 2006, offer, which Seller had transmitted on that same day to Motiva and, therefore, the April 13 response letter would not have been timely. The sole basis for that argument is plaintiff's construction of the last line in the reference portion of Motiva's April 13 letter.
The last line of the reference paragraph reads "Letter amending initial offering of March 9, 2006." Plaintiff would have us read that to say that the reference was to the March 9 letter because on March 9, the initial offering of February 27 was increased to $1,500,000. That would require us to reorder the words as written and ignore the factual backdrop against which this letter was written.
It would further require us to do that in the absence of any proofs meeting the requirements of Rule 4:46-5. Plaintiff has submitted no affidavit, no deposition testimony, or any other proof which would indicate that the April 13, 2006, letter was not in response to the March 25, 2006, letter from Seller.
We note that Rule 4:46-5 provides that when a motion for summary judgment is made "an adverse party may not rest upon mere allegations or denials in the pleading," but must respond with appropriate affidavits showing facts in the record that there is a genuine issue for trial. Plaintiff has not done that. Discovery was long over and, for whatever reason, he chose not to take any depositions. Plaintiff's argument is based merely on the strained and speculative interpretation of the last line of the reference paragraph. Speculation without proofs does not create an ambiguity and does not create a genuine issue of material fact.
The language of this reference should be read and given its normal meaning, considering the context in which it was written. See Cruz-Mendez v. ISU/Ins. Servs. of S.F., 156 N.J. 556, 570-71 (1999). Grammatically, the reference is first of all to the noun "letter." The noun "letter" is modified by the participial phrase "amending initial offering of March 9, 2006." There is no punctuation which would affect the meaning of this phrase. The phrase "of March 9, 2006" is a possessive phrase modifying "offering." Likewise, the word "initial" is an adjective which modifies "offering."
As noted in the March 25 letter, the offering on March 9, 2006, was for $1,500,000. That was the initial offering to purchase the property for $1,500,000. The March 25 amendments to the March 9 offer did not change that price. Rather, the March 25 letter, in particular, noted that the legal fees, which would otherwise have been unlimited under the March 9, 2006, would be capped, and it clarified the language and extent of the release and indemnity plaintiff was willing to sign as part of his offer.
The reference then is to a letter which amended the initial offering of March 9, 2006. That is what the Seller's March 25 letter to Motiva outlined -- changes to the March 9 offer. This interpretation is perfectly consistent with the other uncontroverted evidence submitted. We are satisfied that plaintiff's proffered interpretation is strained at best. We also note that the April 13, 2006, letter explicitly says it exercises its right of first refusal "to match the offer you received, which is $1,500,000." Plaintiff's argument that because the release and indemnification language, and issues concerning the brokerage commission were not immediately expressly assented to by Motiva, the exercise of its right of first refusal was deficient, and has no merit. Once Motiva exercised its option, it was contractually obligated to match the offer tendered by plaintiff.*fn1 Its letter so bound it.
Accordingly, having reviewed this entire record carefully, we agree with the trial court that there were no disputed facts at issue. Plaintiff did not proffer, pursuant to Rule 4:46-5, any proofs which created a genuine issue of material fact. The issues involved before the court are ones of legal interpretation, which we agree were properly made.
Accordingly, consistent with Brill, supra, 142 N.J. at 540, after reviewing the competent evidential matters presented in a light most favorable to plaintiff, we find that there are no genuine issues of material fact in dispute, and that defendant was entitled to judgment as a matter of law. In light of our holding, we need not address defendants' alternative argument.