On appeal from the Superior Court of New Jersey, Chancery Division, Morris County, C-111-05.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Stern, Coburn and Waugh.
Plaintiff, United States Land Resources, L.P. ("USLR"), as assignee, sued defendant, Transistor Devices, Inc. ("TDI"), for specific performance of a multi-million dollar real estate contract. TDI counterclaimed, asserting a right to retain the $150,000 deposit. On TDI's motion for summary judgment, the Law Division judge determined that USLR was not entitled to specific performance and that TDI was entitled to the deposit. Plaintiff appeals, and we reverse and remand for further proceedings.
TDI owns an industrial building at 274 South Salem Street in Randolph. In April 2003, TDI contracted to sell the property to Salem-Randolph, LLC ("Salem"), for $3.3 million. The agreement provided that any amendments to the contract had to be in writing and signed by both parties. The closing was to occur ninety days after the date on which all contract contingencies were met or waived by the purchaser.
In late February 2004, the parties agreed in writing to amend the contract. Under the amended agreement, the purchase price was reduced to $3.24 million and all contingencies were deemed satisfied, with one exception: TDI agreed to enter into a remediation agreement with the New Jersey Department of Environmental Protection concerning the replacement of contaminated soil on the property. TDI duly complied with the contingency and sent a copy of the remediation agreement to the buyer on July 21, 2004. The closing was not contingent on TDI's completion of the remediation, but TDI remained responsible to perform the remediation in a satisfactory manner.
On November 11, 2004, and December 2, 2004, TDI wrote letters to Salem's attorney demanding a closing, but not asserting that time was of the essence. The December letter indicated that Salem had agreed to close on January 7, 2005, and asked for confirmation of the date. On December 17, 2004, TDI wrote again, asking for confirmation of the January 7, 2005, closing date "as soon as possible." On December 29, 2004, Salem's attorney wrote back, saying that although the January 7th date was not agreeable, Salem would be prepared to close "shortly thereafter."
On December 30, 2004, TDI wrote back to Salem's attorney, indicating that on the day before it had received from the broker a fax of a "proposed second amendment to the Contract of Sale, in effect changing the purchaser and delaying the closing until March 31, 2005." The letter also stated that TDI was "not interested in amending the Contract again." And the letter concluded with this statement:
Your client's refusal to close as agreed is a breach under the Contract of Sale. Please consider this letter as notice to your client to cure the breach within fifteen (15) days. If the breach is not remedied within the cure period, your client will then be in default, and [TDI] will terminate the Contract and receive the deposit, plus any interest earned thereon, as damages.
On January 3, 2005, TDI wrote to the purchaser's attorney stating that it required a closing on or before January 31, 2005. By letter dated January 5, 2005, Salem's attorney advised TDI that it had assigned its rights under the contract to USLR. The assignment was also dated January 5, 2005.
Representatives of USLR and TDI thereafter agreed to meet on Friday, January 14, 2005. According to USLR, after much discussion the parties orally agreed on a closing date of March 31, 2005, with an outside closing date of July 15, 2005, and then, to quote its brief, "moved on to other topics."
On January 17, 2005, USLR's attorney wrote to TDI, saying: "I enclose a draft of the proposed Second Amendment which incorporates our agreement from Friday's [January 14, 2005] meeting. Please review same and let me know if it is acceptable." This proposed agreement included, among other things, the following terms about which a dispute arose: under paragraph 1, the $150,000 deposit was returnable if TDI failed to perform; under paragraph 3, the outside date set for closing was July 15, 2005; under paragraph 4, municipal property taxes would be ...