On appeal from the Superior Court of New Jersey, Chancery Division, Atlantic County, Docket No. C-180-86.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted December 8, 2009
Before Judges Parrillo and Ashrafi.
Defendants S.D. Walker, Inc. and Steven D. Catalano appeal from a judgment after a bench trial in favor of plaintiff for $44,708 on its breach of contract claims. We affirm.
S.D. Walker, Inc. ("Walker") operates a campground in central New Jersey. Catalano is the sole shareholder, president, and operating officer of Walker. Plaintiff Trico Equipment, Inc. ("Trico") is in the business of selling heavy machinery and equipment.
On June 14, 2006, Trico and Walker executed a bill of sale for a new Case loader backhoe at the price of $69,900 plus sales tax of $4,194. The bill of sale indicated that a deposit of $11,836 was paid by check and also contained a notation "rentals and damages paid in full." In the memo portion of the deposit check issued by Walker, Catalano wrote, "This is full down payment & all sums due to Trico for all previous rentals and machine damage except dozer." Testimony at trial indicated that Walker owed money to Trico for past transactions and that Trico agreed to include those debts as part of the sales agreement for the new Case backhoe. Trico delivered the backhoe to Walker on June 14, 2006.
Paragraph fourteen of the bill of sale provided that, within fourteen days, "purchaser shall arrange financing or shall finance this purchase through seller's sources." That paragraph further gave Trico the option to cancel the sale if financing was not arranged and obligated Walker to return the equipment in that event, paying $200 per day rental for the time it kept the equipment.
On June 20, Walker and Trico executed a Retail Installment Sale Contract and Security Agreement ("installment contract") on a form provided by CNH Capital, which was Trico's financing source for Case equipment. The installment contract listed a cash sale price of $69,900 with a down payment of $7,000. It provided for monthly payments of $1,550.73 over sixty months at an interest rate of 8.9%. The installment contract also listed additional charges of $4,194.00 sales tax, $350.00 administrative fee, $4,319.82 physical damage insurance, and $3,145.50 liability insurance. These charges, and the finance charge over sixty months, resulted in a total contract price of $100,081.58. Catalano signed a personal guarantee for Walker's obligations under the installment contract.
The installment contract provided for assignment of the contract from Trico to CNH Capital America LLC. It also included two insurance addendums for "Physical Damage Insurance" and "Equipment Liability Insurance." Catalano signed both addendums on behalf of Walker. The liability insurance addendum stated, "Buyer requests that Seller/Assignee finance the premium for liability insurance" and listed CNH Capital as the insurer.
Catalano testified that inclusion of liability insurance for the backhoe was a vital part of the transaction.
In May 2006, before the parties' entered into the sales and installment agreements, the Trico sales coordinator had been notified that CNH Capital was no longer offering liability insurance as part of its financing agreements. On July 13, 2006, about four weeks after Walker took delivery of the backhoe and began using it, Trico notified Walker that liability insurance was not available through CNH Capital. Trico requested authorization to remove the liability insurance premium from the installment contract and to recalculate the payment schedule. Catalano did not authorize the change. Trico then sent a new contract to Catalano, which he did not sign.
Walker did not make any monthly payments for the backhoe. In October and again in November 2006, Catalano requested refund of its deposit. On October 27, 2006, Trico requested that Walker agree to the original contract with a reduction in price for the liability insurance or, alternatively, that it agree to rent the backhoe for $2,200 per month. Catalano did not agree to either of these alternatives. Throughout these communications, Walker retained the backhoe and continued to use it but made no installment payments.
Trico filed a complaint in the Chancery Division on December 19, 2006, seeking equitable remedies and damages. In addition to claiming defendants' default for non-payment, Trico contended that the parties had mistakenly believed liability insurance was available through CNH Capital, and that ...