On appeal from Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C-87-03.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
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.
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 ...