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Moscaritolo v. Akincibasi

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


September 14, 2009

S. GREGORY MOSCARITOLO, PLAINTIFF-RESPONDENT/ CROSS-APPELLANT,
v.
SABRIYE AKINCIBASI AND VEHBI AYKUT, DEFENDANTS-APPELLANTS/ CROSS-RESPONDENTS, AND STATE FARM INSURANCE COMPANY, DEFENDANT-RESPONDENT.

On appeal from Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-87-03.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Argued December 9, 2008

Before Judges Skillman, Graves and Grall.

Plaintiff S. Gregory Moscaritolo, buyer, and defendant Sabriye Akincibasi, seller, executed a contract for purchase and sale of residential property occupied by Akincibasi and her husband, defendant Vehbi Aykut (collectively defendants). Prior to closing, the collapse of an in-ground pool and a subsequent fire in the attic of the house raised questions about the parties' respective rights under the contract's "risk of loss" clause and a homeowners insurance policy issued to Akincibasi by defendant State Farm Insurance Company (State Farm).

Defendants appeal from an order granting plaintiff specific performance of the contract which was entered after a trial in the Chancery Division but prior to the fire in the attic that gave rise to claims under State Farm's policy. They also appeal from subsequent orders enforcing the grant of specific performance. Plaintiff cross-appeals from orders dismissing his claims against State Farm.

The issues are best understood if discussed in three distinct sections: the first, addressing the trial court's initial grant of specific performance; the second, discussing the orders enforcing the grant of specific performance; and the third, dealing with the dismissal of plaintiff's claims against State Farm.

I.

The evidence presented at trial on specific performance is as follows.*fn1 Plaintiff owned a co-op apartment in River Edge where he lived with his teenage son, who was attending high school nearby. Interested in a larger residence in the same area, he noticed a realtor's sign posted on defendants' property. Through his own realtor, plaintiff made arrangements to see the house. Among the "special features" noted on the flyer describing the property was an in-ground pool, which the listing specified was included in the asking price "as is."

When plaintiff was shown the property, he asked about the pool. From what Akincibasi told him, he understood that the filter and pump were not working and that the pool had not been used for three to five years or more. Akincibasi believed she made it clear that the pool had not been used since they purchased the home twenty years earlier.

A contract of purchase and sale for $580,000 was executed on December 15, 2002. The closing date was set for March 28, 2003.

A rider to that contract, dated January 7, 2003, includes a risk of loss clause that provides:

The Seller is responsible for any damage to the property, except for normal wear and tear, until closing. If there is damage, the Buyer can proceed with the closing and either:

a) require that the Seller repair the damage before closing; or

b) deduct from the purchase price a fair and reasonable estimate of the cost to repair the property as agreed upon by both parties.

In addition, either party may cancel this contract if the cost of repair is more than 25% of the purchase price.

Within ten days of the signing of the rider, plaintiff tendered the required $58,000 deposit.

On January 21, 2003, plaintiff and Douglas Baker, a licensed construction and fire code official, inspected the premises. The in-ground pool was covered with a sheet of vinyl that extended across the pool and onto the cement walkway around its perimeter. The vinyl was held in place by cinder blocks; according to Akincibasi it was also secured with rope tied to the poles of the fence around the pool area. Pictures taken by Baker that day show the vinyl tarp and cinder blocks securing it.

According to plaintiff and Akincibasi, there was a second vinyl cover underneath the one shown in the photographs.

Although plaintiff and Baker described the condition of the interior of the pool based on what they saw when they lifted the vinyl cover, Akincibasi said that she was present during the inspection of the pool, and they had not looked under the cover. Plaintiff and Baker claimed to have seen tears in the pool's vinyl insert but no sign of a problem with the structure behind the insert. Plaintiff said he saw sheet metal behind the tears in the pool's vinyl liner, but Baker said he could not see behind the vinyl liner. Although Baker noticed only "normal settling" of the concrete slabs that made up the pool's deck, he recommended replacement of the walkway and the vinyl liner as well as the filter equipment.

Questioned by defendants' trial attorney, Baker denied telling defendants' real estate lawyer that he had not looked under the pool's cover. The trial court did not permit defendants to call that lawyer to contradict Baker's denial.

On March 9, 2003, plaintiff was passing the house and noticed that the sides of the pool had collapsed and caved into the pool and away from the concrete deck, exposing the earth behind the pool and underneath the deck. He attributed the collapse to the substantial accumulation of snow left by a series of heavy storms.

Baker and plaintiff returned to the property after the collapse and took photographs depicting the post-collapse conditions. In Baker's opinion, the pool was no longer structurally sound and was in need of complete replacement as was the walkway, which had been and would continue to be undermined if the pool was left as it was. Defendants' expert agreed that there was need for correction. Based on the rotted plywood he saw that served to retain the earth and support the vinyl insert, he concluded that the pool would have been "totally unserviceable" even if it had not collapsed as a consequence of the normal deterioration of the plywood.

Beginning with correspondence dated March 13, 2003, plaintiff invoked the contract's "risk of loss" clause. Between the date of his inspection and the collapse of the pool, plaintiff had sold his residence and was obligated to close on that transaction, which would leave him without a home for himself and his son. On the basis of estimates he obtained, he proposed a $17,000 reduction in the purchase price. Akincibasi obtained a $4000 estimate, which covered the cost of filling in the hole but not removal of the debris. She offered a discount of $2000 and postponed the closing scheduled for March 28.

On April 4 plaintiff gave defendants notice that time was of the essence and that he would be ready, willing and able to purchase on April 15 with a credit for the cost of repairs. The amount of the discount was not agreed.

Although plaintiff filed his complaint for specific performance on April 8, his attorney prepared a statement for the closing listing a reduction of $17,000 to be held in escrow for repair of the walkway and completion of the work necessary for him to install a new vinyl liner. Both parties appeared for the closing but the transaction was not completed.

Akincibasi attributed the failure to close on plaintiff increasing his escrow demand to $20,000, while plaintiff claimed that Akincibasi refused to negotiate a reasonable credit.

The trial court did not credit Akincibasi's testimony about the post-collapse negotiations or plaintiff's failure to lift up the cover of the pool, and the court found that her attempt to establish the pool's lack of stability and utility at the time of the contract and a collapse due to normal wear and tear was inconsistent with the marketing flyer that identified the in-ground pool as a "special feature" of the property. Based on the dramatic difference in conditions before and after the collapse, the trial court determined that the resulting damage did not fall within the contract's provision excluding damage due to "normal wear and tear." In the trial court's view, the damage was not within the scope of the exclusion the parties' intended.

The trial court further determined that Akincibasi's action following the collapse - at most an offer to contribute $2000 toward filling the hole - was inconsistent with the covenant of good faith and fair dealing implicit in every contract. In balancing the relative equities, the trial court also considered plaintiff's obligation to sell his dwelling and the expense and inconvenience he would experience if specific performance were not granted. The trial court therefore granted judgment in plaintiff's favor and ordered specific performance of the contract for purchase and sale.

The remedy of specific performance "is a discretionary one, resting in equitable principles." Stehr v. Sawyer, 40 N.J. 352, 357 (1963). It is available when the contractual obligation in the circumstance at hand is sufficiently clear to permit "the court [to] decree with some precision what the defendant must do," Barry M. Dechtman, Inc. v. Sidpaul Corp., 89 N.J. 547, 552 (1982); the party seeking the relief "stand[s] in conscientious relation to his adversary," Stehr, supra, 40 N.J. at 357; and the relief sought is not "harsh or oppressive" and the loss claimed is not "so speculative as to be incapable of supporting any realistic abatement." Id. at 357-58.

In reviewing a grant of specific performance, this court must recognize that it is the trial court's "responsibility to weigh the equities and to exercise its sound discretion. That court sees and hears the witnesses. It is in the best position to judge the demeanor, good faith and sincerity of the parties. The difference between that opportunity and relying on the words in a record is 'frequently the decisive factor in matters of equity.'" Dechtman, supra, 89 N.J. at 552 (quoting Stehr, supra, 40 N.J. at 357). Thus, deference is due.

In this case, the trial court's factual findings are based on adequate evidence in the record. See R. 2:11-3(e)(1)(A). Moreover, the trial court's exercise of discretion rests upon the proper considerations. Accordingly, we affirm substantially for the reasons stated by the trial court.

We recognize that defendants seek reversal based on an erroneous evidentiary ruling. Although we agree it was error to preclude defendants from admitting evidence of an out-of-court statement made by Baker that was inconsistent with his testimony at trial, N.J.R.E. 803(a)(1), we are convinced the error had no capacity to produce an unjust result. R. 2:10-2.

The evidence plainly established a dramatic change in the condition of the premises. There were photographs depicting the pool area prior and subsequent to the collapse of the pool and damage to the cement deck area. Damage with such significant impact on the premises is not of the sort reasonably expected as the product of "normal wear and tear." Thus, there is no reason to doubt that the trial court would have reached the same conclusion regardless of Baker's credibility.

Accordingly, we affirm the trial court's initial grant of specific performance. Defendants' claim that the trial court's findings were tainted by bias lacks sufficient merit to warrant discussion in a written opinion. R. 2:11-3(e)(1)(E).

II.

The trial court's order awarding specific performance was entered on November 21, 2003. In pertinent part, it directed:

The defendants, Sabriye Akincibasi and Vehbi Aykut[,] shall specifically perform any and all of the terms of the Contract of Sale for the purchase of [the subject premises] executed by the parties on December 15, 2002 and any and all of the terms of the Rider to Contract of Sale, executed on January 7, 2003, and shall cooperate in every way necessary to effectuate the terms of such Contract and Rider to enable a closing on the property to take place within thirty (30) days of November 5, 2003.

By letter dated November 26, 2003, transmitting the November 21, 2003 order, plaintiff's attorney reminded defendants' lawyer that her client's lender needed access to the property. She wrote:

As we have discussed, my clients' lender has asked for access to the property for reappraisal. Since I understand your clients are not living at the house at this time, kindly advise when they will grant access so that arrangement[s] can be made to move this matter along.

According to defendants' lawyer, he "responded to this letter by telephone, advising... that the Defendants were, at the time, residing in the house, which was the subject of this Court's Order, and therefore, could admit an appraiser into the house." He also told plaintiff that his clients intended to appeal and seek a stay.

On December 1, 2003, plaintiff, whose prior mortgage commitment had expired, was again approved for a mortgage but his commitment was conditioned upon the lender's re-inspection of the premises. There is no evidence that defendants did anything further to cooperate. Rather, on December 2, 2003, they filed a pro se motion seeking a stay of the trial court's order. That court denied the motion on December 5, 2003. Defendants did not seek leave to appeal at that time.

Plaintiff contacted the real estate agents and brokers involved in the transaction. On December 10, 2003, his attorney again requested access to the home for an appraisal but did not receive a response. According to plaintiff, the listing broker made an unsuccessful attempt to gain access to defendants' home on December 11, and defendants would not open the door for his bank's appraiser on December 12, 2003.

On December 18, 2003, a passer-by reported a fire at defendants' home. The fire damage, significant in itself, was followed by damage from the freezing and bursting of pipes. At that point the estimated cost of repairing the damage was in excess of $225,000, nearly one-half of the $580,000 purchase price.

Plaintiff filed an order to show cause, and on February 9, 2004, the trial court imposed temporary restraints preserving the proceeds of defendants' policy with State Farm pending further proceedings and requiring defendants to show why the trial court should not enforce the order of specific performance.

Before the return date, however, Akincibasi moved to invoke her right to cancel the contract of purchase and sale pursuant to the rider addressing risk of loss. She relied on the provision of that clause giving either party the right to cancel the contract when the cost of necessary repairs exceeds twenty-five percent of the purchase price.

On March 25, 2004, the trial court granted plaintiff relief pursuant to Rule 1:10-3 and denied defendants' motion to terminate the contract due to the magnitude of the fire damage. The court reasoned:

The present circumstances are these. The defendants have been ordered to perform their contract, that is, to close. They have not done so. Substantial damage has been sustained in the residence. Three months have passed and there [] has been no attempted repair to the structure. The house has passed through a harsh winter damaged and exposed to the elements without the heat being turned on.... The inattentiveness to the defendants' obligation to repair and ready the property to close leads the plaintiff to be reluctant to allow the defendants to continue to undertake responsibility for these repairs. The court perceives the defendants to be willfully noncompliant with the order of the court. Their disregard of the order and delay in commencing repairs for such a long time has confirmed as much.

Here, defendants inappropriately delayed the court ordered closing. Had the defendants complied with the decree directing specific performance by December 5, 2003, the closing would have occurred before the fire, i.e., December 18, 2003. This Court will not permit defendants to benefit from their disregard of the Court's order by permitting defendants to invoke the cancellation clause, which, in effect, would allow defendants to circumvent this Court's order as a reward for defying this Court's order.

The appropriate remedy under the circumstances that now exist is to effect transfer of title of the defendants to the plaintiff, along with all rights under their insurance policy. This would serve the interests of justice in several ways. The order of the court for specific performance would finally be carried out. The plaintiff could set his own schedule for repairs, using the proceeds of the insurance policy to complete the remedial work. He would be in charge of overseeing the progress, quality, and scope of the repairs that relate to his property. On being subrogated to the rights of the insured, he could deal with the insurance company regarding ancillary claims, to which he would now be subrogated (e.g., living expenses during repairs, uncovered additional damage, and so on). There would be a tolling of the plaintiff's damage claims, which could be finally calculated. The convoluted arrangement of a constructive trust would be avoided.

... Should the defendants decline further to comply with the Court's order, the order itself can be regarded as the conveyance, in accordance with the law.*fn2

For those reasons, the trial court entered an order prohibiting defendants' receipt of the proceeds of the insurance policy and directing a closing by April 16, 2004, upon plaintiff's payment of $430,000. The remainder of the balance due, $150,000, was to be held as an unfunded escrow for use in paying the cost of repairs and such additional damages as the trial court might fix. The escrow was to be secured with a lien on the property, which would be secondary to plaintiff's mortgage. The trial court further directed that its order would have the "effect of transferring title from the defendants to plaintiff without further need for a Deed or any other instrument to be executed by defendants if defendants do not sign [a] deed and accompanying documents."

Unsuccessful on the motion, defendants moved before the trial court for a stay of the March 25, 2004 order pending appeal. They asserted that the evidential materials submitted on the motion were in part based on plaintiff's assertions of facts not within his personal knowledge and in part on contested facts that could not be resolved without a hearing. Their lawyer explained that his son's serious illness precluded him from monitoring his clients or arranging an appointment for an updated appraisal. By order entered on April 13, 2004, the trial court denied the stay. Defendants filed a motion for emergent relief with this court, which was denied on April 14, 2004.

On April 15, 2004, defendants filed a petition for relief pursuant to 11 U.S.C.A. § 362 with the United States Bankruptcy Court for the Middle District of Florida, which automatically stayed the April 16, 2004 closing. On May 14, 2004, this court denied defendants' leave to appeal from the March 25, 2004 order. On June 24, 2004, the bankruptcy court lifted the automatic stay so that the "parties [could] proceed in state court to determine their rights and obligations with respect to the property."

On July 6, 2004, plaintiff recorded the March 25, 2004, order. He had previously deposited the required $430,000 in his attorney's trust account, $200,000 of which was then paid to discharge defendants' mortgage.

Defendants subsequently moved for reconsideration of the March 25, 2004 order. In support of that application, they again challenged the adequacy of the evidential support for the trial court's March 25 order enforcing the decree of specific performance and alleged that the judge's failure to recognize the need to recuse himself at the inception of this litigation warranted reconsideration.*fn3 For reasons stated on the record on August 27, 2004, the trial court denied defendants' motion. The order entered included additional relief for plaintiff; it authorized plaintiff's attorney to hold in escrow the remaining proceeds of sale due Akincibasi - $220,144 - pending resolution of plaintiff's claims for damages. That order was entered on September 23, 2004.*fn4

Defendants' objections to the trial court's orders enforcing the grant of specific performance are not well taken. Pursuant to Rule 1:10-3, a court may take measures to achieve compliance with its orders. See Roselin v. Roselin, 208 N.J. Super. 612, 618 (App. Div.) (holding appointment of a receiver or entry of recordable judgment transferring property are appropriate means for fulfilling the court's obligations to enforce its orders), certif. denied, 105 N.J. 550 (1986); see Pressler, Current N.J. Court Rules, comment 4.4.4 on R. 1:10-3 (2009); see also R. 4:59-2 (authorizing a court to direct performance of a specific act when a party has failed to comply with a prior order compelling that act). Moreover, efforts to compel compliance with equitable remedies are in furtherance of a fundamental principle - what equity requires should be deemed done. See Martindell v. Fiduciary Counsel, Inc., 133 N.J. Eq. 408 (E. & A. 1943).

The trial court's decisions on these various enforcement orders cannot be viewed as resting upon an improper resolution of disputed facts or upon plaintiff's repetition of facts not within his personal knowledge. See R. 1:6-6; Harrington v. Harrington, 281 N.J. Super. 39, 47 (App. Div.), certif. denied, 142 N.J. 455 (1995). The decision reflects awareness of defendants' court-ordered duty "to cooperate in every way necessary to effectuate" the closing and the absence of any evidence that defendants did anything to fulfill their obligations. If defendants presented any evidence to the trial court indicating anything other than inexcusable recalcitrance in the face of that order, we have not found it in the record provided on appeal.

In the alternative, defendants claim plaintiff's right to specific performance expired when the deadline for closing passed and revived Akincibasi's right to cancel under the risk of loss clause. The argument overlooks the equities of the situation upon which the trial court relied. In this circumstance, it would have been unreasonable to conclude that plaintiff relinquished his right to specific performance by failing to tender the purchase price in accordance with the order. This case must be distinguished from those in which a buyer has been deemed to forfeit a right to enforce an order of specific performance by "fail[ing] to appear and take the deed and pay the purchase-money" to defendants who "were always ready." See Rosenstein v. Burr, 83 N.J. Eq. 491, 492 (Ch. 1914) (concluding that defendants subject to an order of specific performance were entitled to rescind the contract because the plaintiff behaved in that manner). Here, the trial court concluded that plaintiff was not responsible for the delay and that defendants, through their failure to facilitate the inspection needed for a closing, were not ready to sell and should not profit from the fortuitous fire.

III.

We turn to address plaintiff's objections to the trial court's dismissal of his claims against State Farm. As noted above, orders entered in February, March and September 2004, preserved the proceeds of the State Farm policy, and plaintiff amended his complaint to allege bad faith on State Farm's part and request an award of punitive damages pursuant to the order of September 24, 2004.

Because the State Farm policy insuring defendants' property was deemed an asset of the bankruptcy estate, plaintiff's rights and claims against State Farm must be evaluated in the context of those proceedings and the proceedings in the trial court.

Between the filing of Akincibasi's petition on April 15, 2004 and June 24, 2004, the automatic stay precluded action.

When Judge Funk, U.S.B.J., lifted the stay on June 24, 2004, his order permitted the trial court to determine the parties' "rights and obligations with respect to the property." On November 23, 2004, the trial court granted State Farm leave to deposit the policy proceeds with the clerk of the court. On that date, the value of claims related to the fire totaled $250,538.87 - $225,938.18 for damage to the property, and the remaining $24,600.74 for personal property ($4988.60), rents ($9472) and alternate living expenses ($10,140.14).*fn5 The trial court directed release to plaintiff of $225,938.13, the amount allocated for property damage, but required the clerk of the court to keep the remaining $24,600.74, representing benefits for personal property, lost rent and alternate living expenses on deposit.

On the motion of plaintiff, who had filed a claim in the bankruptcy action, Judge Funk clarified the scope of the relief from the automatic stay. In an order filed on December 1, 2004, Judge Funk distinguished claims for repair and clean-up of the structure from benefits for alternate living expenses, lost rent and damage to personal property. Based on his characterization of the former claims as "in rem" and the latter as personal to plaintiff, Judge Funk authorized plaintiff's use of the policy proceeds for losses related to the premises but explained that benefits for personal losses - personal property, lost rents and alternate living expenses - must be returned to the bankruptcy estate in the event the trial court were to conclude that Akincibasi had a right to those benefits superior to plaintiff's right.

By order of January 21, 2005, Judge Funk directed plaintiff's attorney to deliver the funds due Akincibasi from the closing, which were being held in escrow pursuant to the trial court's order of September 23, 2004. On February 1, 2005, the trial court entered an order permitting release of the escrow.

Proceedings in the trial court to permit plaintiff to establish his right to benefits under State Farm's policy continued. In conformity with the policy terms, an umpire fixed the amount due. The umpire increased the benefit for property damage by $48,853.09, bringing the total amount for that claim to $274,792.03, and raised the amount for lost rent by $4028.

The umpire issued a report on his determination on September 23, 2005.

On December 30, 2005, the trial court denied plaintiff's motion to vacate or modify the umpire's determination and granted State Farm's motion to deposit the additional proceeds with the clerk of the court until further order. On January 11, 2006, the bankruptcy court granted Akincibasi discharge pursuant to 11 U.S.C.A. § 1328(a).

The trial court subsequently considered cross-motions for summary judgment filed by State Farm and plaintiff. On February 20, 2007, the trial court denied plaintiff's motion for summary judgment and entered judgment in favor of State Farm on plaintiff's claims of bad faith and entitlement to punitive damages. Finding genuine issues of material fact relevant to defendants' entitlement to benefits for personal property, living expenses, lost rent and additional property damage claims, the trial court denied State Farm summary judgment on plaintiff's claim for breach of contract with respect to those benefits. That left only plaintiff's claims for breach of the contract of insurance by State Farm and his claims for damages against Akincibasi.

On February 21, 2007, Judge Funk granted Akincibasi's application to enjoin plaintiff from proceeding to trial for damages due him for the $150,000 unfunded escrow established by the trial court's order of March 25, 2004. Judge Funk entered an order directing plaintiff to "cease prosecution of the lawsuit in the New Jersey Court as it pertains to personal liability against [Akincibasi]." The judge explained that by filing "a claim with the [bankruptcy court], Moscaritolo... plac[ed] all of his potential causes of action and defenses before" that court. Recounting the history of plaintiff's prosecution of his claim in that court, Judge Funk concluded that plaintiff's secured and unsecured claims had been "disallow[ed] on the merits" and that the "discharge order discharged any remaining indebtedness of [Akincibasi]" to plaintiff. He concluded that "trial in the New Jersey Court to determine [plaintiff's] entitlement to the unfunded escrow would violate the discharge injunction...." The injunction was preliminary to adjudication of Akincibasi's claim for damages due her for violation of the discharge injunction and enforcement of that injunction.

Relying on Judge Funk's order granting the motion for preliminary injunction and the findings and reasoning incorporated therein, defendants and State Farm moved for dismissal of plaintiff's remaining claims against them. On April 2, 2007, final judgment dismissing plaintiff's claims with prejudice was entered.

We first consider plaintiff's challenge to the trial court's denial of his motion to vacate or modify the umpire's appraisal. He contends that the umpire and the trial court were obligated to follow the procedures and standards of the Alternative Procedure for Dispute Resolution Act (APDRA), N.J.S.A. 2A:23A-1 to 30.

The APDRA is applicable to "[a]ny provision in a written contract whereby the parties agree to settle by means of alternative resolution, as provided in this act." N.J.S.A. 2A:23A-2. Because the APDRA's procedures are voluntary, it "is only operative when parties to a contract agree to be governed by it." Mt. Hope Dev. Assocs. v. Mt. Hope Waterpower Project, L.P., 154 N.J. 141, 145-46 (1998). This contract did not so provide. Accordingly, any deviations from the APDRA's procedures are irrelevant.

The appraisal procedure specified in this contract is consistent with one this court approved in Ward v. Merrimack Mut. Fire Ins. Co., 332 N.J. Super. 515, 528-29 (App. Div. 2000). The policy states that if the insurer and the insured cannot agree on the amount of the loss, either can demand "that the amount of the loss be set by appraisal." See id. at 528.

When a demand is made, each selects "a competent disinterested appraiser"; if the appraisers do not agree they select an umpire who considers their submissions and sets the amount. See ibid. Contrary to plaintiff's contention, he was afforded a right to be heard through the submissions of the appraiser he selected. See id. at 529.

Courts approach "review of [an] appraisal award from a narrow perspective. It is not in the public interest to encourage litigation over procedures which were designed to resolve disputes without litigation. Thus every reasonable intendment and presumption comes to the support of such awards." Elberon Bathing Co., Inc. v. Ambassador Ins. Co., Inc., 77 N.J. 1, 14-15 (1978). On "matters of judgment the award is conclusive." Igoe Bros. v. Nat'l Ben Franklin Fire Ins. Co. of Pittsburgh, Pa., 110 N.J. Eq. 373, 380 (E. & A. 1932). With respect to factual mistakes, "it is not sufficient to show that they came to a conclusion of fact erroneously.... It must be shown that, by some error, they were so misled or deceived that they did not apply the rules which they intended to apply to the decision of the case so that upon their own theory a mistake was made" that produced a result "different from that which they had reached by their reason and judgment." Id. at 377-78; see Elberon, supra, 77 N.J. at 13-14 (relying on Igoe and noting that a "narrow standard of judicial review [is] generally accorded to appraisal awards").

In reviewing the umpire's decision on the appraisal, the trial court concluded that plaintiff's dispute "is with the factual conclusions made by the umpire, which appear to have a basis in the record." Plaintiff, who asserts facts without reference to the documents that support them, has not given this court reason to conclude that the trial court erred.*fn6 Based on our independent review of the materials submitted to the umpire, we affirm substantially for the reasons stated by the trial court in its written decision of December 30, 2005 as supplemented by the preceding paragraphs.

Plaintiff also claims the trial court erred in granting State Farm summary judgment on his claims of bad faith and entitlement to punitive damages and in denying his cross-motion. Because of the competing claims to the proceeds of the insurance policy, the parallel proceedings in the bankruptcy court and the trial court's orders regulating State Farm's distribution of the proceeds, the arguments presented lack sufficient merit to warrant discussion. R. 2:11-3(e)(1)(E). We affirm substantially for the reasons stated by the trial court in its written decision of February 20, 2007.

The last of the orders plaintiff challenges on appeal is the dismissal of his complaint against State Farm pursuant to the bankruptcy court's order of February 21, 2007.*fn7 We conclude that the injunction directing plaintiff to "cease prosecution of the lawsuit in the New Jersey Court as it pertains to the personal liability against [Akincibasi]" did not preclude plaintiff from proceeding to establish State Farm's breach of contract or from recovering for any loss of his that is covered by and within the limits of the policy and has not yet been paid or effectively denied as a consequence of the trial court's approval of the umpire's award.

Akincibasi was granted discharge pursuant to 11 U.S.C.A. § 1328(a). A discharge under Title 11 "operates as an injunction against the commencement or continuation of an action... to collect, recover or offset any such debt as a personal liability of the debtor." With exceptions inapplicable here, a discharge "does not affect the liability of any other entity on, or the property of any other entity for, such debt." 11 U.S.C.A. § 524(e). On that basis, courts have permitted parties who have sustained loss as a consequence of the debtors' torts, to establish the debtors' liability for purpose of recovering from the debtors' insurer. See First Fidelity Bank v. McAteer, 985 F.2d 114, 118 (3d Cir. 1993). Plaintiff relies, in part, on that principle.

State Farm contends that the dispute about the insurance coverage at issue here is different because this case involves competing claims to the same policy proceeds asserted by Akincibasi and plaintiff. We agree that there is a difference, but the distinction has little effect on State Farm's obligations under the policy of insurance.

The similarity is what is important for purposes of the discharge injunction. Here, as in a case where an injured party seeks to recover from a debtor's insurer, any liability will be assigned to State Farm not Akincibasi. It is not an action to recover a debt "as a personal liability of the debtor." 11 U.S.C.A. § 1328(a). So long as any judgment entered against State Farm does not require payment from Akincibasi or diminish her ability to recover for a claim, then the action is between plaintiff and State Farm, not plaintiff and Akincibasi.

Because the discharge injunction does not require dismissal of the remaining claims against State Farm, we reverse and remand for further proceedings in conformity with this opinion. We express no view on the merits of the claims or on any defense State Farm may assert based on claims payable or previously paid to Akincibasi.

The order dismissing plaintiff's claims against State Farm is reversed and those claims are remanded, and the judgment is otherwise affirmed.


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