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Jay Dad Associates, L.L.C. v. C&G Management Corp.

January 2, 2009


On appeal from the Superior Court of New Jersey, Chancery Division, Middlesex County, Docket No. C-122-05.

Per curiam.


Argued November 19, 2008

Before Judges Parrillo, Lihotz and Messano.

Plaintiff, Jay Dad Associates, LLC (Jay Dad or plaintiff), appeals from the Chancery Division's summary judgment dismissal of its complaint for specific performance of a contract for the purchase of real estate and from the denial of its motion for reconsideration. Defendant, C&G Management Corp. (C&G or defendant), cross-appeals from the trial court's order denying its request to compel the depositions of plaintiff's counsel and a third-party. We affirm the order dismissing plaintiff's complaint with prejudice and therefore dismiss the cross-appeal as moot.

C&G owns two contiguous lots in Woodbridge housing commercial buildings that are leased to tenants. C&G purchased the property on June 21, 1995.*fn1 Eight years later, on June 13, 2003, Angelo Valetutto (Valetutto), managing member of Jay Dad, sent a letter to Anthony Toto (Toto), manager of C&G, offering to purchase the property for $1,500,000, with the contingency that defendant lease the front office and warehouse to plaintiff for immediate occupancy, with a right of assignment, for $7,500 per month. Rent was to be applied against the purchase price at closing.

Having received no response to the offer, on June 24, 2003, plaintiff's counsel, Samuel Reiken, Esq. (Reiken), followed up with a telephone call and letter addressed to defendant's counsel, Gerard DelTufo, Esq. (DelTufo). The letter reiterated the initial proposal and named Cardell, Inc. (Cardell) as the tenant who would occupy the premises prior to closing.

One month later, on July 25, 2003, Reiken sent a letter to Shalchi referencing a telephone conversation the day before and again repeating the offer, conditioned upon immediate tenancy. Reiken informed Shalchi that, through a judgment search, he had learned of certain encumbrances on the property, and, therefore, urged Shalchi once again to consider the offer:

Needless to say, since our offer is all cash, it will undoubtedly clean up all these encumbrances.

A key to this offer is the tenancy of the proposed user. The user is in need of premises immediately. Since we have had no success in effectuating a contract of sale for C&G's premises, the user is accordingly about to look elsewhere and has a line on another building. However, C&G's building is preferred.

Consequently, on September 10, 2003, C&G and Jay Dad entered into a contract for the sale of the property, and a lease to Cardell (both hereinafter Agreement). The Agreement was handwritten on the hood of a car by Reiken, counsel to both Jay Dad and Cardell, in two parts. One was entitled "lease," the other "sale." C&G's attorney was not present at the preparation and execution of this document. The lease portion of the Agreement read:

1. Lease. 95 New Brunswick Avenue

a. C&G Management Corp. will lease the front premises and the 8500 warehouse to Cardell, Inc. for a term of two years commencing 15 September 2003 at a rent of $10,000 per month.

b. Cardell shall be responsible for all repairs to obtain a Certificate of Approval from the Woodbridge Zoning Authority.

c. Cardell shall be responsible for all maintenance and repairs and shall present a Certificate of Liability Insurance which also names Landlord.

d. Cardell shall pay 1st month rent along with one month security deposit.

The lease was signed by Haque, president of C&G, and Carmine Dellapietro, president of Cardell, and witnessed by Shalchi and Reiken.

The "sale" portion read:

2. Sale

a. C&G will sell 95 New Brunswick Ave., Hopelawn, N.J. to JAY DAD ASSOCIATE LLC for $1,900,000, subject to usual contingencies concerning due diligence, environmental, financing and tenant certificates.

b. Closing will occur within 120 days.

c. Price shall be reduced by $2,000 for each month's rent paid by Cardell.

The sale portion was signed by Haque and Valetutto, and witnessed by Shalchi and Reiken.

On September 12, 2003, Reiken drafted and forwarded to DelTufo a typed "Contract for Sale of Real Estate" (Contract) and "Lease." The same day, DelTufo, on behalf of Eugene McEnroe, Esq. (McEnroe), counsel for C&G, forwarded executed copies of the Contract and Lease to Reiken.

The Contract provided for essentially the same terms as the Agreement. The purchase price was $1,900,000, with $80,000 to be paid by Jay Dad and held in escrow by Reiken upon the signing of the Contract. The balance to be paid at closing by cash, certified or bank cashier's check, or attorney trustee check, subject to adjustments, was $1,820,000. The amount to be paid at closing was also to be reduced by $2,000 per month for each ...

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