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69 Franklin JC, L.L.C. v. Catalano


July 14, 2009


On appeal from the Superior Court of New Jersey, Law Division, Hudson County, L-2697-07.

Per curiam.


Submitted June 16, 2009

Before Judges Axelrad and Winkelstein.

Following a bench trial, plaintiff appeals from Judge Costello's August 28, 2008 order, supported by a written opinion of that date, dismissing plaintiff's complaint with prejudice.

We affirm.

Plaintiff, a limited liability company whose two partners were Alphonso Carrino and Anthony Carrino, was the seller of condominium units at 69 Franklin Street, Jersey City. Plaintiff and defendant, Joseph G. Catalano, entered into a contract of sale (the contract) in which defendant agreed to purchase condominium Unit 2A for $305,000. Defendant signed the contract on April 24, 2006, and Alphonso Carrino signed it on behalf of plaintiff on April 27, 2006.

Paragraph eleven of the contract provided, in part:

Once the Seller has declared the condominium effective, if the Seller is not able for reasons beyond its control to deliver the Deed on the anticipated date of closing, the Seller may postpone the closing for up to one hundred eighty (180) days. If, after this period has expired, the Seller is still unable to deliver a Deed for reasons beyond its control, the Buyer or Seller may terminate this Agreement by so notifying the other in writing. If this Agreement is terminated, the Seller will promptly return to the Buyer all deposit monies paid under this Agreement without interest. On return of the deposit monies, neither the Buyer nor the Seller will have any further rights or obligation under this Agreement.

The parties also entered into a rider to the contract, which deleted "one hundred eighty (180) days" from paragraph eleven, and substituted "sixty (60) days" in its stead.

The property never closed, and plaintiff later sold the property to another purchaser for $249,900. Plaintiff instituted this lawsuit against defendant seeking the difference between the purchase price defendant agreed to pay plaintiff for the property, and the sale price of the property, plus "carrying costs from the date of [defendant's] breach up to and including the date of sale, plus interest, costs and attorneys' fees."

Plaintiff's claim revolves around an interpretation of paragraph eleven of the contract. The trial court construed paragraph eleven to mean that not only was plaintiff required to be prepared to go to closing within sixty days, but plaintiff was also required to deliver a deed to defendant within that time. Plaintiff claims it had no obligation to notify defendant of a closing date, or actually close within the sixty-day time frame; plaintiff asserts it simply had "to be able" to or "to be in a position to" deliver a deed upon the expiration of the sixty-day period.

The trial judge rejected that argument, making the following factual findings and legal conclusions:

· Contract of Sale was signed on April 24, 2006 and the 60-day extension period in Paragraph 11 began to run on May 25, 2006 and ended on July 24, 2006.

· At the time the contract was signed, the unit [2A] was "mostly completed."

· Mr. [James] Sauter was the transactional attorney handling the deal for Catalano.

· Mr. Sauter testified that he sent (J2) [a fax to plaintiff's attorney, Thomas Foley] on June 13, 2006 because he and his client were not getting information regarding a closing date and the mortgage commitment was expiring.

· Mr. Sauter was having discussion with Mr. Foley's office staff and at some point after July 7, 2006, "Toni" [of Mr. Foley's office] told Mr. Sauter that the Master Deed was filed.

· Mr. Sauter needed both the Master Deed and the Certificate of Occupancy to give to his client's lender.

· Based on his conversation with Toni, Mr. Sauter sent a fax to his title abstract firm asking them to obtain a filed copy of the Master Deed.

· Catalano terminated the contract by letter dated July 25, 2006.

· There was no closing scheduled prior to July 25, 2006.

· Mr. Foley testified that (a) having filed the master Deed on June 30, 2006 and (b) with the Certificate of Occupancy having been issued on July 21, 2006[,] 69 Franklin was "ready to close" and "able to deliver a deed."

· Mr. Foley sent (J7) [a July 25, 2006 response to defendant's attorney's letter of that date terminating the contract] with attachments to show seller was able to close and that documents were executed on July 25, 2006.

· Mr. Foley testified that there was no notice to Catalano on July 21, 2006 or July 24, 2006 that a closing was ready to be scheduled.

· Mr. Foley testified that "delivery of a deed" means a closing.

· Mr. Foley testified that the signing of the documents on July 18, 2006 did not constitute the "delivery of a deed."

· Catalano cancelled his own mortgage commitment on July 27, 2006, just days before it was due to expire a third time.

The trial court found that plaintiff never delivered a deed to defendant, as was required by the contract. Citing Dautel Builders v. Borough of Franklin, 11 N.J. Tax 353, 357 (TaX 1990), the court ruled that plaintiff's actions failed to "manifest an intent that the deed be immediately effective to transfer an interest in [the] real property to the [b]uyer."

The court consequently found that plaintiff's execution of the documents on July 18, 2006, did not constitute delivery of the deed, and therefore, the question became, "whether, by words or actions, 69 Franklin manifested an intent to immediately transfer title to Catalano at any time prior to the expiration of the 60-day period in the contract." The court concluded that plaintiff did not manifest such an intention. To support that conclusion, the court made the following additional findings:

· June 13, 2006 - Mr. Sauter inquired as to any proposed closing date and the discrepancy in square footage (J2).

· June 14, 2006 - Mr. Foley failed to respond to request for closing date and referred Catalano's attorney to Paragraph 11 provisions regarding square footage and costs (J3).

· June 30, 2006 - The Master Deed is filed (P1).

· July 7, 2006 - Toni of Mr. Foley's office faxed the cover page of the Master Deed with recording information to Mr. Sauter (J4).

· July 18, 2006 - Residential Unit Deed was signed by Mr. Carrino (P5).

· July 19, 2006 - Email from Toni to Mr. Sauter (with copy to Mr. Foley) advising that Certificate of Occupancy still pending and likely to be issued within 10 days. Toni offers a closing date of August 3, 2006 (J5).

· July 21, 2006 - Certificate of Occupancy issued.

· July 25, 2006 - Mr. Sauter faxes a termination letter invoking Paragraph 11 (J6).

· Mr. Foley responds, invoking Paragraph 11 and attaches proposed transfer documents, including the Certificate of Occupancy (J7).

Put simply, the court found that although plaintiff was in a position to close on July 21, 2006, it never communicated that position to defendant or his attorney. The court observed that "[t]he closest [plaintiff] came to doing so was the July 19, 2006 fax that equivocates on the date a Certificate of Occupancy might be issued and proposes a tentative closing date in August." We find no error in the court's findings or legal conclusions.

"It is not the court's function to make a better contract for the parties or to supply terms that have not been agreed upon." Schenck v. HJI Assocs., 295 N.J. Super. 445, 450 (App. Div. 1996), certif. denied sub nom., Schenck v. Bailey, 149 N.J. 35 (1997); see also E. Brunswick Sewerage Auth. v. E. Mill Assocs., Inc., 365 N.J. Super. 120, 125 (App. Div. 2004). If the terms of the contract are clear, it is the court's function to enforce the contract as written. E. Brunswick, supra, 365 N.J. Super. at 125. A contract must, however, be construed in the context of its surrounding circumstances, the relationships of the parties, and in accordance with common sense and the intention of the parties. Schenck, supra, 295 N.J. Super. at 450-52; see also O'Brien (Newark) Congregation, Inc. v. Automatic Sprinkler Corp. of Am., 361 N.J. Super. 264, 272 (App. Div. 2003), certif. denied sub nom., O'Brien (Newark) Congregation, Inc. v. Hawker-Siddeley Power Eng'g Inc., 178 N.J. 452 (2004).

Here, because the trial court's findings of fact were supported by the substantial credible evidence in the record, they are entitled to our deference. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). The court applied to its findings a reasonable construction of the contract consistent with the probable intention of the parties.

Plaintiff's interpretation of the contract would give a literal sense to the particular terms, isolated from the context of the contract as a whole. Schenck, supra, 295 N.J. Super. at 452-53.

We agree with the trial court that the language of the contract in its entirety, and the interrelationship of its provisions, suggest that not only was plaintiff required to be prepared to go to closing within sixty days, but plaintiff was required to communicate its readiness to defendant to assure that closing was held during the required time frame. Plaintiff did not do so, and defendant was therefore entitled to terminate the contract without cause.

We reject plaintiff's remaining arguments as without sufficient merit to require discussion in a written decision. R. 2:11-3(e)(1)(A), (E). We affirm substantially for the reasons expressed by Judge Costello in her thorough and well- reasoned written opinion.



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