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Pazzani v. Spring Street Development Urban Renewal

February 3, 2009


On appeal from Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-7662-06.

Per curiam.


Argued November 19, 2008

Before Judges Lihotz and Messano.

Defendants Spring Street Development Urban Renewal, LLC, (Spring Street) and Madiha Boraie*fn1 appeal from summary judgment granted to plaintiffs Michael and Christine Pazzani and dismissal of defendants' counterclaim for breach of contract and the implied covenant of good faith and fair dealing in connection with a contract to purchase residential real estate. Following our review of the record, the arguments advanced by the parties and the applicable law, we reverse, as there are material facts in dispute such that entry of summary judgment was inapposite.

Because the case comes to us by virtue of a summary judgment, we recite the facts applying the Brill*fn2 standard, in the light most favorable to plaintiff. On September 26, 2005, the parties executed a Subscription and Purchase Agreement ("the Agreement") for plaintiffs' purchase of a condominium (the Unit) located at 1 Spring Street, Unit 2502, New Brunswick, New Jersey. The Unit was part of a proposed twenty-five story, multi-use building, which included 121 residential units, non- residential office and retail space, a parking garage, and common elements including a swimming pool, fitness room, and a sun deck. The Unit's purchase price was $1,260,000, and plaintiffs deposited $126,000 with defendants.

The stated "Estimated Completion Date" (ECD) for construction was March 1, 2006. Paragraph 8 of the Agreement discussed the time and place for the closing of title as follows:

Seller estimates that the construction of the . . . Unit will be completed by the [ECD] . . . . TITLE MAY CLOSE LATER THAN THE ESTIMATED COMPLETION DATE.

Seller shall complete the . . . Unit and settlement shall occur, within twenty-four (24) months after the date Buyer signs this Agreement.

Additionally, Paragraph 10, entitled "SELLER'S DELAY" added this provision for a postponement period:

If the Seller is not able to fulfill its obligations under this Agreement for reasons beyond its control, the Seller may postpone the closing for up to one hundred eighty (180) calendar days from the Estimated Completion Date by notifying the Buyer in writing that the closing has been postponed. If, after this period has expired, the Seller is still unable to perform its obligations for reasons beyond its control, the Buyer may terminate this Agreement by so notifying the Seller in writing. If this Agreement is so terminated by the Buyer, the Seller will return to the Buyer all deposit monies paid under this Agreement, without interest, within ten (10) business days.

On November 10, 2005, following commencement of construction on the Unit, plaintiffs executed an "Amendment to the Contract" adding various upgrades to their proposed Unit. In a May 2006 letter, defendants advised plaintiffs closing for the Unit would be between June 15 and July 15, 2006. In June 2006, plaintiffs requested modifications to the floor plan, including elimination of a bedroom wall to expand the size of the living room; extension of the kitchen's granite countertop; installation of pendant lighting over the extended countertop, a Jacuzzi-style bathtub, a pocket door, and recessed lighting in the living room. Defendants advised plaintiffs these modifications would not be performed until a Temporary Certificate of Occupancy (TCO) inspection of the Unit was issued by the City of New Brunswick (City).

In late July, plaintiffs received a second letter, rescheduling closing for August 25, 2006. An August 7, 2006 letter provided an amended "Unit Modification Rider" (Rider), specifying the floor plan changes and correcting the proposed cost. Plaintiffs executed the Rider. Defendants thereafter sent a second Rider dated August 9, 2006, amending the ECD to September 1, 2006. Plaintiffs did not sign this Rider. On August 16, 2006, on behalf of Spring Street, a sale's associate, Rachel Weisfelner, telephoned plaintiff Michael Pazzani to discuss rescheduling closing because too many units had been scheduled to close on August 25, 2006. He was ambivalent about the adjustment and did not object to her suggestion to set closing for September 1, 2006. In her August 17, 2006 confirming correspondence to plaintiffs, Weisfelner reiterated the September 1 closing date, as agreed upon in the prior telephone conversation. The letter stated: "I understand that this date and time is [sic] acceptable to you and, going forward, this will be the date of closing under the Subscription and Purchase Agreement that you and the seller signed. If you have any questions please feel free to contact me . . . ." Plaintiffs neither called nor responded to the letter.

Final TCO inspections were completed by the City on August 22, 2006, and the Unit was approved. Defendants requested the TCO certificate on August 30, 2006 in preparation for the September 1, 2006 closing. Plaintiffs completed walk-throughs of the Unit on August 24, 26, and 28. Spring Street was in the process of completing ...

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