On appeal from Superior Court of New Jersey, Chancery Division, Ocean County, Docket No. C-37-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Cuff and Lihotz.
Plaintiffs appeal from two Law Division orders dated June 9, 2006. The first order denied plaintiffs' motion to enforce an April 1, 2005 consent order filed in the litigation. The second order granted defendants' cross-motion to enforce a settlement evidenced by a letter from defendants' counsel to plaintiffs' counsel dated November 15, 2006 and dismissed the matter with prejudice. Because we conclude additional factfinding is necessary, we reverse and remand for a plenary hearing.
Plaintiffs James A. Huddy and his wife Loretta A. Huddy received notice of a sheriff's sale initiated by a judgment creditor, in an action separate from this matter. The execution sought sale of plaintiffs' home to satisfy an $80,000 debt. Defendants Shawn Yesko and Michael Nacinovich offered to lend plaintiffs the funds necessary to satisfy their debt.
At plaintiffs' request, Yesko and Nacinovich returned to plaintiffs' home on December 14, 2004, the morning of the sheriff's sale. The parties executed a "personal note" that provided plaintiffs would borrow $100,000 payable in thirty days. The note also stated:
Mr. James A. Huddy and Mrs. Loretta A. Huddy and Nusko[,] LLC will sign and notarize but not record a quitclaim deed as collateral on the property located at 1 Jaywood Manor[,] Brick, N.J. 08723. This quitclaim deed will be held by Nusko[,] LLC in the event of default by Mr. James A. Huddy, Mrs. Loretta A. Huddy or both. Nusko[,] LLC will record the quitclaim deed and take legal ownership of the property. Mr. James A. Huddy and Mrs. Loretta A. Huddy will have fourteen days to vacate the property. Mr. James A. Huddy and Mrs. Loretta A. Huddy will take no legal action or otherwise to remain [sic] on the property in the event of default.
As stated in the note, plaintiffs executed a quit claim deed listing Yesko and Nacinovich as grantees. In exchange, plaintiffs received two bank checks that totaled $80,000. Plaintiffs used the funds to satisfy the judgment and the sheriff's sale was cancelled.
Plaintiffs' attorney contacted Yesko and Nacinovich prior to the note's due date. Counsel secured an extension for payment of the debt until January 18, 2005, and a reduction of the interest owed from $20,000 to $2,000. These amendments were memorialized in a writing dated January 7, 2005. On January 20, 2005, Yesko and Nacinovich recorded the quit claim deed after plaintiffs had not repaid the obligation.
Plaintiffs' attorney again contacted Yesko and Nacinovich. On January 25, 2005, the parties, accompanied by their legal representatives, engaged in discussions to resolve the dispute. These efforts culminated in the execution of a seven-page "Settlement Agreement." Defendant Nusko, LLC, Inc. (Nusko), and plaintiffs, are listed as the parties to the agreement. The document expressed the parties' intent to modify their initial agreement to allow plaintiffs until February 4, 2005 to repay $95,000, which represented the $80,000 principal loan, $2,000 interest, a $3,000 "extension fee," and $10,000 to satisfy defendants' legal fees. Defendants agreed not to take possession or enforce their ownership of the realty until after the payment deadline.
Once plaintiffs paid the $95,000, Nusko would execute a quit claim deed returning the realty to plaintiffs. In the event plaintiffs defaulted, occupancy of the realty was subject to the terms of a one-year occupancy agreement; Nusko would pay the first and second mortgages and plaintiffs would pay the utilities and taxes; the realty would be listed for sale at a listing price of $1,695,000; and the proceeds of sale, less the realtor's six percent commission, the obligations allocated between the parties by the agreement, and the payment of Nusko's attorneys fees, would be equally divided between plaintiffs and Nusko.
Plaintiffs did not provide payment pursuant to the terms of the Settlement Agreement. Instead, they filed an order to show cause with temporary restraints, and a verified Chancery Division complaint seeking to limit their debt to the principal loaned, regain title to their home, and void the Settlement Agreement because it was executed under duress.
The parties again commenced negotiations and reached an accord submitted as a consent order dated April 1, 2005. The terms of that order required Yesko and Nacinovich to execute a bargain and sale deed transferring the realty to Loretta A. Huddy. In exchange plaintiffs would execute an $80,000 mortgage note in favor of Nusko "together with lawful interest at the prime rate of interest as published in the Wall Street Journal calculated from December 14, 2004." Payment was due in thirty days. A mortgage on the realty, subordinate to the existing two liens that totaled $1,026,000, ...