January 6, 2009
MARIA ROMERO, PLAINTIFF-RESPONDENT,
IGNACIO SANCHEZ AND ANDRES SANCHEZ, A/K/A SANTOS ANDRES SANCHEZ, DEFENDANTS-APPELLANTS.
On appeal from the Superior Court of New Jersey, Chancery Division, Passaic County, Docket No. C-62-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted December 9, 2008
Before Judges Wefing, Parker and Yannotti.
Defendants Ignacio Sanchez and Andres Sanchez appeal from an order entered by Judge Robert J. Passero on February 5, 2008, which declared, among other things, that plaintiff Maria Romero and defendant Ignacio Sanchez have equal ownership interests in certain real property in Paterson, New Jersey. For the reasons that follow, we affirm.
On May 9, 2007, plaintiff filed a verified complaint seeking a declaration that she is the sole owner of the property at 1004 East 26th Street. Plaintiff alternatively requested that the court order the sale of the property and distribution of any profits from the sale in accordance with the parties' respective ownership interests.*fn1 Judge Passero conducted a bench trial in the matter on January 8 and 9, 2008.
At the trial, plaintiff testified that she and Andres had a relationship that began in 1989. Two children were born of that relationship. In 1998, plaintiff and Andres decided to purchase a home. Andres located the property, which consists of a one-family residence with an unfinished basement and attic. Because plaintiff was not earning much money at the time and Andres was not in the United States legally, they approached Andres' father, defendant Ignacio Sanchez, and asked for his assistance in obtaining a mortgage. He agreed.
The purchase price for the property was $79,500. According to plaintiff, the couple used $25,000 that Andres had in a bank account, and $8,000 or $9,000 that they had in a joint account, for the down payment. Plaintiff testified that Ignacio did not contribute any of his own money toward the purchase price. Even so, title to the property was placed in his name. The closing took place on October 16, 1998.
After the closing, Andres finished the basement and made certain improvements to the exterior of the home. The attic was rented to plaintiff's sister and her husband. They remained in the premises for seven or eight months. Ignacio rented the basement. He resided there until January 2001.
Plaintiff testified that a bank account had been opened in Ignacio's name. Plaintiff and Andres deposited monies into that account, and from October 1998 to January 2001, the mortgage and other expenses for the home were paid with monies in that account.
In January 2001, Andres returned to El Salvador in accordance with an agreement that he had worked out with immigration officials. Andres intended to return to the United States when he could do so legally. Plaintiff said the parties agreed that, when Andres returned to the United States, Ignacio would transfer title to the property to plaintiff and Andres.
Plaintiff further testified that, while Andres was in El Salvador, she operated a day care business in the house. She paid the mortgage and all of the expenses of the property. She also provided money to Andres. Andres remained in El Salvador for six years. While there, Andres fathered five additional children with three different women. Andres returned to the United States in 2007. Ignacio refused to transfer title to the property to plaintiff and Andres. Instead, as noted previously, Ignacio sought to evict plaintiff from the property.
Andres also testified. He said that he learned that the property was for sale when he was doing some work on the house. Andres informed his father about the property. According to Andres, Ignacio made the down payment of $25,000 and also paid $8,000 in closing costs. Andres said that there was no agreement that plaintiff would become owner of the house at some time in the future. Andres asserted that he gave his father $800 per month in rent. He said that, while Ignacio was living in the house, Ignacio paid the mortgage.
Andres further testified that he left the United States in January 2001. He stated that, at the time, it was agreed that plaintiff would remain in the house with the two children and she would pay the mortgage and other expenses as rent. Andres said that plaintiff made those payments from her day care business.
Ignacio testified as well. Ignacio stated that Andres had informed him that the property was for sale. He signed a contract to purchase the property and applied for a mortgage. Ignacio said that he made a deposit of $7,950 and paid an additional $24,680 at closing. He said that the money to purchase the house came from his savings. He stated that he did not receive any money from Andres or plaintiff towards the down payment or closing costs for the house.
Ignacio further testified that he lived in the house after the closing. According to Ignacio, Andres and plaintiff paid him $800 a month in rent for the house. Ignacio moved out in September 2001. Ignacio said that, when he left, he and Andres agreed that plaintiff would make the mortgage payments on the property as rent.
On cross-examination, Ignacio admitted that he did not report any rental income on his federal income tax returns for 1999 and 2000. Ignacio also admitted that he did not have any records relating to his purchase of the property.
On January 24, 2008, Judge Passero placed his decision on the record. The judge found that the deposit and closing costs to purchase the property were paid with joint funds belonging to Andres and plaintiff. The judge found that Ignacio did not have the financial means to bear these costs. The judge additionally found that title to the property was placed in Ignacio's name because Andres was legally incapable of executing the required documents. The judge further found that plaintiff and Andres had acted in a manner that was consistent with their equitable ownership of the property.
The court also found that the parties had agreed that plaintiff would be responsible for the mortgage payments and other expenses after Andres returned to El Salvador. The parties also agreed that Ignacio would transfer title to the property to plaintiff and Andres when Andres returned from El Salvador.
The judge noted that New Jersey's statute of frauds did not preclude enforcement of an oral agreement to transfer an interest in real estate because there is clear and convincing evidence as to the identity of the property, the nature of the interests to be transferred, the oral agreement between the parties for the transfer of Ignacio's interest to plaintiff and Andres, as well as the identities of the record owner and those claiming interests in the property. The judge additionally found that, even if the requirements for enforcement under the statute of frauds had not been met, the agreement would be enforced because it would be inequitable not to do so.
The judge noted that plaintiff had contributed to the mortgage and carrying costs of the property, as well as to the improvements made to the house. According to the judge, plaintiff "had a reasonable expectation of ownership in the property, given her substantial investments of time, money and effort on the property." The judge determined that it would be equitable to protect "plaintiff's reasonable expectations of ownership [of the property] so that [she] may reap the benefits of her efforts and financial sacrifices."
The judge also recognized that plaintiff and Andres had intended to jointly purchase the property; however, the judge said that Andres and Ignacio had acted in concert with respect to the property "by allowing Andres to open bank accounts in Ignacio's name, write out checks drawn from Ignacio's bank account, place money into that bank account, and put the mortgage in the name of Ignacio alone as a convenience to Andres." The judge stated that "any award to defendant Ignacio is essentially relief for defendant Andres as they are alter egos of one another."
The judge entered an order dated February 5, 2008, which declared that plaintiff and Ignacio have equal ownership interests in the property. The order required Ignacio to give plaintiff a reasonable opportunity to buy out his interest in the property, and if plaintiff is unable or unwilling to do so, Ignacio would have an opportunity to purchase plaintiff's interest. The order further provided that, if neither plaintiff nor Ignacio chose to purchase the other's interest, the property would be appraised and sold, and the net proceeds from the sale divided equally between plaintiff and Ignacio.
Ignacio and Andres appeal. They raise the following arguments for our consideration:
THE TRIAL COURT ERRED IN FINDING AN ORAL AGREEMENT BETWEEN THE PARTIES BECAUSE THERE WAS NO SHOWING OF THE MEETING OF THE MINDS AND THE TERMS WERE NOT SUFFICIENTLY DEFINITE BY CLEAR AND CONVICING EVIDENCE
THE TRIAL COURT ERRED IN DETERMINING THE PLAINTIFF CREDIBLE WHERE HER TESTIMONY WAS SO INCONSISTENT AS TO MAKE HER TESTIMONY MANIFESTLY UNSUPPORTED
THE TRIAL COURT MADE AN ERROR IN DETERMINING IGNACIO'S INCOME AND THEREFORE PREJUDICED THE DEFENDANTS
THE TRIAL COURT ERRED IN EQUALLY DIVIDING THE PROPERTY BETWEEN THE PARTIES
A. THE TRIAL COURT FAILED TO CONSIDER THE DISPROPORTIONATE RATIO OF FUNDS USED TO PURCHASE THE PREMISES
B. THE TRIAL COURT ERRED IN FAILING TO PROVIDE THE DEFENDANTS WITH THE RETURN OF THE CAPITAL CONTRIBUTION BEFORE DIVIDING THE PROPERTY
C. THE TRIAL COURT ERRED IN DETERMINING THAT IGNACIO AND ANDRES WERE ONE AND THE SAME
We have carefully considered the record in light of these contentions and conclude that defendants' arguments are entirely without merit. We therefore affirm the order at issue substantially for the reasons stated by Judge Passero in the thorough and comprehensive decision that he placed on the record. R. 2:11-3(e)(1)(A) and (E). We add the following brief comments.
The scope of our review of a trial court's factual findings is strictly limited. Such findings are "considered binding on appeal when supported by adequate, substantial and credible evidence." Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974) (citing N.J. Tpk. Auth. v. Sisselman, 106 N.J. Super. 358, 370 (App. Div.), certif. denied, 54 N.J. 565 (1969)). The findings of the trial court will not be set aside unless they "'are so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice.'" Ibid. (quoting Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div.), certif. denied, 40 N.J. 221 (1963)).
Here, Judge Passero found that there was an oral agreement between plaintiff and defendants under which Ignacio agreed to transfer title to the property to plaintiff and Andres when Andres returned to the United States from El Salvador. Judge Passero noted that defendants had denied the existence of any such agreement but the judge found plaintiff's testimony on this issue to be credible. As the judge pointed out in his decision, plaintiff had a reasonable expectation that she would acquire title to the property, as shown by her contributions toward the down payment and closing costs, her continued residence in the premises, her contributions to the mortgage payments while she resided in the home with Andres, and her assumption of responsibility for the mortgage and other costs of maintaining the property after Andres returned to El Salvador.
Defendants argue that plaintiff's testimony was not credible. They assert that plaintiff's statements were inconsistent and made "upon [the] convenience of the moment[.]" It is clear, however, that Judge Passero had a better opportunity to assess the credibility of the witnesses' testimony than an appellate court because he heard the case and observed the witnesses testify. Pascale v. Pascale, 113 N.J. 20, 33 (1988) (citing Gallo v. Gallo, 66 N.J. 1, 5 (App. Div. 1961)). Furthermore, in his decision, the judge fully explained the reasons why he found plaintiff's testimony to be more credible and persuasive than the testimony of Andres and Ignacio. Based on the evidence presented at trial, we have no reason to second-guess the judge's credibility findings.
Defendants also argue that the trial judge erred by finding that Ignacio did not have sufficient funds to pay the down payment and closing costs on the property. Defendants note that Ignacio testified that, at the time the property was purchased, he was earning $600 per week and had been working in the United States since 1981. The trial judge was not required, however, to accept Ignacio's assertions. Indeed, the judge expressly found that Ignacio's finances were "questionable." In any event, even if Ignacio had been earning the amounts he claimed, there is no documentary evidence which established that he saved any of his earnings or used those monies to purchase the property.
Defendants further maintain that the trial judge erred by: finding that plaintiff and Ignacio had equal shares in the property; failing to order the return of the parties' respective "capital contributions" in the property before dividing the property; and awarding Ignacio a one-half ownership interest in the property. We find no merit in these contentions.
Here, Judge Passero found that the parties had not presented sufficient evidence to establish the precise amounts of their respective contributions to the down payment, closing costs and mortgage payments for the property. Thus, the evidence did not provide a basis for ordering the return of the parties' so-called "capital contributions."
Furthermore, as the judge found, the evidence established that the down payment and closing costs had been paid with funds belonging to plaintiff and Andres. In addition, up until 2001, the mortgage payments had been made with plaintiff's and Andres' funds. Moreover, after Andres returned to El Salvador, plaintiff paid the mortgage and all of the expenses to maintain the property. We are satisfied that, based on these facts and the other evidence presented at trial, the judge properly determined that plaintiff was entitled to a one-half ownership interest in the property.
The record also supports the judge's order awarding a one-half ownership interest to Ignacio. Here, the record shows that Andres permitted the property to be placed in Ignacio's name, even though the deposit and closing costs were paid by plaintiff and Andres. Andres opened a bank account in Ignacio's name and Andres arranged to draw checks from that account to pay the mortgage for the property. The judge found that, because Ignacio had acted for Andres with respect to the property, any relief granted to Ignacio is essentially relief for Andres because "they are alter egos of one another." In our judgment, the record fully supports that finding.