On appeal from the Superior Court of New Jersey, Law Division, Union County, L-3413-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Before Judges Messano and Chambers.
Plaintiff Eleanor Bayroff appeals from the order of November 21, 2007, releasing the sum of $40,000 in escrow funds to defendants, Howard L. Egenberg, Mitchell Bayroff, and Andrea Wohl and from the denial of her motion for reconsideration of that order.
Plaintiff contends that the disposition of the $40,000 is governed by the settlement of prior litigation and that the entire controversy doctrine bars defendants' assertion in this litigation that they are entitled to all of these monies. She also argues that even if the merits of defendants' claim is reached, the proofs are not sufficient to warrant a holding in defendants' favor. Defendants maintain that the dispute over the $40,000 was carved out of the settlement and that based on the facts presented, they are entitled to the monies.
This dispute over disposition of $40,000 in escrow funds has its origins in a real estate venture between Frederick Bayroff and Joseph Bayroff, the founders of J & F Realty, which owned a number of properties in the Bayonne area. When Joseph Bayroff died, his partnership interest in J & F Realty went to his wife, who in turn transferred her interest to her two children, defendants Mitchell Bayroff and Wohl.
In 2001, Mitchell Bayroff and Wohl sued Frederick Bayroff to compel the sale of the assets of J & F Realty and for an accounting (the "J & F Realty litigation"). We will not review the extensive procedural history of that case which lasted five years except to the extent necessary to explain the facts relevant to this appeal. When Frederick Bayroff died, plaintiff became the executrix of his estate.
While the J & F Realty litigation was pending in arbitration, various properties owned by J & F Realty were sold, including vacant property on East 24th Street in Bayonne. Due to the presence of four old hot tar tankers on the property, Mitchell Bayroff, Wohl, and Eleanor Bayroff agreed to give the buyer a credit in the amount of $40,000, and the buyer would assume the responsibility of removing the tankers from the property. At the closing on April 12, 2005, Mitchell Bayroff, Wohl and Eleanor Bayroff agreed that $90,000 from the proceeds would be held in escrow by defendant Howard L. Egenberg, Esq., who handled the real estate transaction for them, until the J & F Realty litigation was concluded. Howard L. Egenberg makes clear in his certification that he had not been asked at the time of the closing to hold $40,000 in escrow for the tankers.
An arbitration award in the J & F Realty litigation was entered on August 16, 2005, but was thereafter overturned by order dated May 8, 2006. The matter was set down for a plenary hearing on the issues that had been submitted to arbitration. No one raised before the trial court then any dispute regarding the $40,000 credit for the tankers.
On October 4, 2006, the J & F Realty litigation settled with Mitchell Bayroff and Wohl agreeing to pay the sum of $25,000 to Eleanor Bayroff. The settlement was placed on the record. At that time, counsel for Mitchell Bayroff and Wohl stated:
This settlement, however, does not necessarily affect any monies that are being held in escrow for a closing that took place. There is a property that the parties had a joint interest in. The property was sold, and there is money being held in escrow. The agreement is if any of the issues that are now resolved that were before this court are issues that there [are] escrows being held for, those escrows should be released, but to the extent there are issues that were not dealt with before this court, then that would be a separate issue that the parties will deal with, with their respective attorneys.
When asked whether the representation of settlement terms placed on the record were accurate, counsel for Eleanor Bayroff stated: "That is correct, your Honor. I am assuming that within a reasonable time we will get the check, we will exchange ...