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Pimentel v. La Borinquena Bakery

April 1, 2008


On appeal from the Superior Court of New Jersey, Chancery Division, Passaic County, C-61-06.

Per curiam.


Submitted January 28, 2008

Before Judges Graves and Alvarez.

Plaintiff Estela Pimentel, seeks relief from two Chancery Division orders which terminated a long-term commercial lease with option to purchase real estate. On April 16, 2007, the judge denied plaintiff's motion to enforce litigant's rights to compel defendants to sell pursuant to an option to purchase contained in the lease agreement. By the same order, the judge denied defendants' application for leave to amend their answer to assert a counter-claim for declaratory judgment. On May 2, 2007, the judge entered the second order terminating the parties' lease, including the option to purchase, and denying damages to either party. We affirm.

Plaintiff, and defendants, La Borinquena Bakery, Inc. and Higinio Mones, its president, entered into a lease purchase agreement on December 17, 1999, for a term of seven years, ending December 31, 2006. The agreement states that the "[t]enant is hereby given an option to buy the buildings[,] . . . for the sum of $285,000, throughout the life of this lease. If at that time [t]enant is unable to exercise said option and landlord puts the building on the market tenant shall have the right of first refusal to buy the building."

Defendants did not respond initially to plaintiff's attempts to exercise the option, which commenced on January 9, 2006. In fact, plaintiff alleges defendants filed eviction proceedings against her when she first attempted to exercise the option. She, in turn, filed a verified complaint in the Chancery Division seeking specific performance of the terms of the option to purchase.

On October 16, 2006, the judge entered an order requiring defendants to submit an agreement to plaintiff in order to effectuate the sale. The order also provided that the parties complete the sale within forty-five days of the agreement being signed. In compliance with that order, on November 7, 2006, defendants' former attorney forwarded a letter to plaintiff's counsel enclosing a contract which provided that closing would occur December 27, 2006. Closing was later rescheduled for January 19, 2007. When plaintiff's counsel arrived for that anticipated closing, he learned defendants had retained new counsel and that the sale would not go forward that day.

Once defendants retained new counsel, it appeared that the sale would actually come to pass. By fax dated January 26, 2007, a paralegal from defendants' counsel's office made inquiry as to details related to the anticipated closing. A few days later, additional inquiries were exchanged, including a fax from plaintiff's counsel asserting that plaintiff had made a $28,000 overpayment to defendants. On January 31, 2006, defendants' counsel even forwarded a stipulation of dismissal with prejudice of the chancery action, a proposed release, and letter withdrawing the pending motion to enforce litigant's rights. No mention was made by defendants of the $28,000 claimed overpayment. In fact, in a fax dated the same day, defendants complained that plaintiff owed them two months' rent or $4200, for the months of December 2006 and January 2007. Just two days later, on February 2, 2007, defendants' counsel forwarded a proposed deed, affidavits of title, and 1099 forms to plaintiff's counsel for review. Again, the $28,000 was not mentioned.

The record presented to us discloses that plaintiff's counsel did not respond to any communication received after January 30, 2007, until February 21, 2007. On February 6, 2007, defendants' paralegal faxed a notice to plaintiff's counsel to the effect that defendants were "anxious" to close the matter before February 9, 2007. Plaintiff's counsel did not reply. As a result, by letter faxed on February 7, 2007, defendants' counsel made time of the essence:

PLEASE TAKE NOTICE that the [s]ellers will be ready, willing and able to deliver title and possession in accordance with the [c]ontract at 2:00 p.m. on Wednesday, February 21, 2007 at [plaintiff's counsel's] office . . . which TIME and DATE hereby is made OF THE ESSENCE of the [c]ontract.

If you fail to appear to deliver the balance of the [p]urchase [p]rice and otherwise to comply with the requirements and provisions of the [c]ontract at the aforementioned time, date and place in accordance with the terms of the [c]ontract, you will be deemed to be in breach of the [c]ontract, you will lose your rights under the [c]ontract, and you will forfeit the entire [d]eposit.

Thereafter, on February 16, 2007 and February 20, 2007, reminder notices were forwarded by defendants' counsel requesting closing documents and reminding plaintiff's counsel that the time is of the essence closing was scheduled for February 21, 2007, at 2 p.m. at plaintiff's attorney's office.

Plaintiff's counsel never acknowledged the February 7, 2007 fax making time of the essence. At approximately 1 p.m. on February 21, 2007, defendants' counsel ...

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