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Lazar v. Braverman


January 21, 2009


On appeal from Superior Court of New Jersey, Law Division, Essex County, No. L-10027-04.

Per curiam.


Submitted October 28, 2008

Before Judges Wefing, Parker and LeWinn.

Defendants appeal from various orders which resulted in judgment being entered for plaintiffs. After reviewing the record in light of the contentions advanced on appeal, we affirm.

The parties signed a contract under which defendants agreed to purchase plaintiffs' home in West Orange. The contract called for a closing to take place in August 2001, but that date was moved forward to June 12, 2001. Prior to that closing, defendants had the premises inspected and the results revealed nothing that deterred them from proceeding with the transaction. We are also informed that at the closing, for reasons that are not apparent from the record, a question of the presence of radon gas arose. The parties agreed to the following escrow agreement:

It is hereby agreed that the sum of $1,500 will be held in escrow by Fein, Such, Kahn and Shepard, Esqs, Attorneys for the Sellers pending an enhanced Radon Test. Should said test show a radon level in excess of 4.0 picocuries/liter, then the $1,500 will be used to remedy the radon condition. Should the reading be less than 4.0 p/l then the escrow will be released to the Seller.

The agreement contained the handwritten addition that the test was to be performed in accordance with New Jersey Department of Environmental Protection procedures and by an approved independent laboratory. It did not contain a date by which either the test or the remediation, if necessary, was to be completed.

Additionally, plaintiffs had not completely vacated the premises by June 12, 2001, and they wished to stay one more day. The parties also agreed to place an additional $1000 in escrow to cover plaintiffs' use and occupancy of the premises for this one day and to secure against possible damage to the premises from that use and occupancy. The agreement provided that if plaintiffs did not vacate by June 13, defendants could retain the $1000 as liquidated damages and would be entitled to an additional $100 per day for each day their possession was delayed.

Plaintiffs completed their move on June 13 and defendants took up residency. Unfortunately, that did not conclude matters between the parties.

In July 2002, plaintiffs' attorney wrote to defendants' attorney, stating that more than a year had passed since the closing, they had heard nothing with respect to the radon, and he proposed to release the $1500 to his clients. Defendants' attorney responded that he objected to release of the escrow funds because radon remediation was required and that he was about to file suit against plaintiffs. Nearly a year later, plaintiffs' attorney again wrote to defendants' attorney, noting that it was almost two years after the closing, a radon report had never been received, no suit had been commenced and that plaintiffs demanded return of the entire $2500 which had languished in escrow. The attorneys continued to exchange correspondence, without achieving a resolution.

Finally, in July 2004, plaintiffs filed suit in Special Civil Part, demanding return of the $2500 held in escrow since June 2001. Defendants filed an answer and counterclaim, in which they alleged that plaintiffs had willfully concealed material facts about the condition of the property and defendants had incurred significant expenses to repair the premises. Defendants asserted a claim for fraudulent concealment, consumer fraud and punitive damages and removed the matter to Superior Court, where the parties engaged in an extensive period of discovery.

In March 2007, plaintiffs moved for summary judgment. Defendants opposed the motion, contending that it was only when they moved into the house that they discovered certain structural flaws, which plaintiffs had concealed. The trial court, after argument, directed that $250 of the $1500 held in escrow be returned to plaintiffs, defendants having spent $1250 for testing and remediation. It also concluded there was a question of fact precluding summary judgment with respect to the $1000 held under the use and occupancy agreement. Finally, it concluded that plaintiffs were entitled to summary judgment on the counterclaim.

We are compelled to note that the trial court gave no reasons for its disposition beyond the provision for return of $250. We infer from the transcript of the argument that the trial court based its decision upon the fact that defendants did not produce an expert's report in support of their contention, but only a written statement by their attorney summarizing what the expert had orally related to him. In light of the passage of time and the expenses the parties have incurred, we have elected not to remand this matter to the trial court with directions that it place its findings of fact and conclusions of law on the record.

Defendants then moved for reconsideration and supported their motion by a certification from their expert which was attached to the written statement of the attorney summarizing the oral report previously submitted; the certification stated that the written summary was a "true and accurate rendition of the information contained therein." Defendants also submitted additional material from discovery. The trial court denied reconsideration in June 2007, noting on the order that no new issues had been raised.

The practical import of the orders entered by the trial court was to leave for trial the question of whether plaintiffs were entitled to the return of the $1000 escrowed under the use and occupancy agreement but to preclude defendants from proceeding on their claims of fraud. In October 2007, plaintiffs submitted an offer of judgment, offering to have judgment entered against them for $2250, representing the $1250 awarded to defendants from the radon escrow and the $1,000 use and occupancy escrow. The offer of judgment informed defendants that if they recovered less, plaintiffs would seek costs, interest and counsel fees under Rule 4:58.

Defendants' attorney responded that his clients intended to accept the offer of judgment but took the position that doing so did not preclude defendants from appealing the dismissal of their counterclaims. Shortly thereafter, defendants' counsel prepared and executed a Notice of Acceptance of the offer of judgment which did not contain any reservation of a right on defendants' part to appeal the dismissal of their counterclaims. The parties then engaged in further motion practice, finally resulting in the entry of a judgment in defendants' favor but which specifically noted that the trial court made no determination whether defendants could pursue this appeal.

The first question presented on this appeal is whether defendants are, indeed, entitled to pursue it. Defendants rely upon our opinion in Firefreeze Worldwide, Inc. v. Brennan and Assoc., 347 N.J. Super. 435 (App. Div. 2002). In our judgment, Firefreeze does not support defendants' position; in that case, we held that "Rule 4:58 authorizes a plaintiff against which a counterclaim is filed to submit an offer of judgment for resolution of the entire case including the counterclaim." Id. at 438. Rule 4:58-4(c), moreover, provides in pertinent part that "if a counterclaim has been asserted against the claimant, the claimant's offer shall include all claims made by or against that claimant." By its terms, the rule is contrary to defendants' argument.

We recognize, however, that defendants' counsel clearly notified plaintiffs' attorney of his position that he was reserving his right to pursue this appeal, and plaintiffs' attorney did not interpose any objection at that point. We have decided in the interests of fairness, and to bring this protracted matter to a conclusion, to deal with the merits of the trial court's dismissal of defendants' counterclaim. We are satisfied from our review of this record that the trial court's conclusion was correct, even in the face of its failure to set forth its findings and conclusions.

Defendants asserted, for example, a claim under the New Jersey Consumer Fraud Act, N.J.S.A. 56:8-1 to -20. The law is settled, however, that individual sellers of real estate, such as the plaintiffs, are not subject to liability under this statute. The statute applies to commercial sellers of real estate. Strawn v. Canuso, 140 N.J. 43, 60 (1995). It does not apply "to the isolated sale of a single family residence by its owner." DiBernardo v. Mosley, 206 N.J. Super. 371, 376 (App. Div.), certif. denied, 103 N.J. 503 (1986). The trial court correctly dismissed this count of defendants' counterclaim.

Defendants also asserted a claim for fraudulent concealment. New Jersey recognizes the tort of fraudulent concealment. Rosenblit v. Zimmerman, 166 N.J. 391, 405 (2001); Viviano v. CBS, Inc., 251 N.J. Super. 113, 123 (App. Div. 1991), certif. denied, 127 N.J. 565 (1992). Its elements are "the deliberate concealment or nondisclosure by the seller of a material fact or defect not readily observable to the purchaser, with the buyer relying upon the seller to his detriment." Rosenblit, supra, 166 N.J. at 405 (quoting State of N.J. Dep't of Envtl. Prot. v. Ventron Corp., 94 N.J. 473 (1983)).

While defendants may have established that they expended substantial sums after moving into the residence, they presented no admissible proof that the conditions of which they complained were known to plaintiffs, the result of plaintiffs' actions or that plaintiffs acted to hide those conditions from defendants or their inspector.*fn1 Absent evidence of deliberate concealment, the trial court correctly granted summary judgment to plaintiffs on defendants' claims of fraud.

Because the trial court correctly granted summary judgment on the claims of fraudulent concealment and consumer fraud, we are also satisfied that it correctly granted summary judgment on defendants' claim for punitive damages.


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