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Steliga v. Ostrum

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


March 19, 2010

KENNETH J. STELIGA, TIMOTHY J. STELIGA AND STELIGA HOMES, PLAINTIFFS-APPELLANTS,
v.
GORDON J. OSTRUM, A/K/A GORDON J. OSTRUM, JR., SHARON E. OSTRUM, WESTWOOD KNOLLS, INC., AND WESTWOOD KNOLLS ASSOCIATES, L.L.C., DEFENDANTS-RESPONDENTS.

On appeal from the Superior Court of New Jersey, Chancery Division, Salem County, C-17-04.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted March 1, 2010

Before Judges Rodríguez and Reisner.

Plaintiffs, Kenneth J. Steliga, Timothy J. Steliga and Steliga Homes, appeal from a January 7, 2009 order of the Chancery Division denying their claim for specific performance of a contract to purchase real property. We affirm.

I.

The decision on appeal results from proceedings on remand, following our opinion in Steliga v. Ostrum, No. A-2660-05 (App. Div. April 26, 2007). The facts were reviewed in detail in that opinion and need not be repeated here. In summary, this is the history.

Plaintiffs, real estate developers, entered into a contract to purchase a large tract of land from defendants Gordon and Sharon Ostrum, who were anxious to close the sale quickly due to financial problems. The sale contract made closing contingent upon defendants obtaining "final unappealable approval" for a subdivision from the Pilesgrove Township planning board, and provided that closing "shall" take place forty-six days after the Township published the approval notice in the local newspaper. Closing was also contingent upon the buyer obtaining "buildable" lots, with construction permits being "available" upon application.

A final approval notice was published by the Township, and the approval became unappealable forty-five days later.

However, the approval contained several conditions which remained unsatisfied. After the notice was published, defendants repeatedly asked plaintiffs to set a settlement date; however, plaintiffs refused, demanding that all conditions set forth in the subdivision approval be met before closing would occur. Defendants eventually terminated the contract, and plaintiffs filed suit seeking specific performance.

After a bench trial, the trial judge found that plaintiffs breached the contract by failing to settle on the closing date indicated in the contract. The trial court implied a "time of the essence" clause, and ordered that the defendants were to retain plaintiffs' deposit as liquidated damages. Plaintiffs appealed. We reversed and remanded the case, concluding that the judge failed to consider that the defendants never sent a time of the essence notice to the plaintiffs, and that the record did not persuasively demonstrate that the parties intended the date to be essential. We directed the judge to make specific factual findings about the parties' intentions regarding their obligations to satisfy the approval conditions. On remand, all parties agreed that the judge should make those further findings based on the existing trial record.

On remand, the court concluded that a time of the essence clause could not be implied from the contract language, and that plaintiffs did not breach the contract. However, the court also concluded that the plaintiff was not entitled to specific performance. The judge found that the parties did not allocate responsibility for the satisfaction of the conditions, and thus failed to agree on critical terms of performance. The judge next determined that plaintiffs' attempts to delay closing were not "commercially appropriate." Because plaintiffs had behaved inequitably, they were not entitled to the equitable remedy of specific performance.

II.

On this appeal, plaintiffs raise the following points for our consideration:

POINT I:

THE TRIAL COURT FAILED TO ENGAGE IN THE REQUISITE ANALYSIS TO DETERMINE WHETHER TO GRANT SPECIFIC PERFORMANCE AND IT ERRED WITH RESPECT TO ITS DETERMINATION OF THAT ISSUE.

POINT II:

IN THE EVENT THAT, AFTER THE REQUISITE EVALUATION WAS PERFORMED IT WAS DETERMINED THAT THE PLAINTIFFS SHOULD NOT BE GRANTED SPECIFIC PERFORMANCE, THE TRIAL COURT SHOULD HAVE AWARDED COMPENSATORY DAMAGES.

POINT III:

THE TRIAL COURT ERRED IN ITS DETERMINATION THAT THE AGREEMENT DID NOT REQUIRE DEFENDANTS TO SATISFY THE CONDITIONS AS CONDITIONS PRECEDENT TO CLOSING.

Having reviewed the record, we conclude that all of these arguments are without merit and, except as addressed below, they do not warrant extended discussion. R. 2:11-3(e)(1)(E). We affirm substantially for the reasons stated in the trial judge's written opinions dated August 20, 2008 and December 24, 2008. We add the following comments.

We are bound to accept the trial judge's factual findings so long as they are supported by substantial credible evidence. Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). We owe particular deference to the judge's credibility determinations. Cesare v. Cesare, 154 N.J. 394, 412 (1998). Further, we review for abuse of discretion the general equity judge's decision to grant or withhold the equitable remedy of specific performance. Marioni v. 94 Broadway, Inc., 374 N.J. Super. 588, 600-01 (App. Div.), certif. denied, 183 N.J. 591 (2005). Having reviewed the record with those standards in mind, we find no basis to disturb the judge's decision here.

We find no error in the judge's decision to deny plaintiffs' damages claim. The contract explicitly limited plaintiffs to the remedy of specific performance. Therefore, even if defendants had breached the contract, a finding the judge did not make, plaintiffs would not have been entitled to money damages. Courts may not "remake a better contract" for plaintiffs than the one they entered into. Karl's Sales & Serv., Inc. v. Gimbel Bros., 249 N.J. Super. 487, 493 (App Div.), certif. denied, 127 N.J. 548 (1991).

We also find no merit in plaintiffs' argument that they were entitled to specific performance. The judge did not find in the Ostrums' favor on their breach of contract claim, and hence did not award them damages, because they never sent plaintiffs a "time of the essence" letter. The Ostrums have not appealed from that decision. However, the judge's decision to deny the Ostrums any damages does not contradict his conclusion that plaintiffs were not entitled to the equitable remedy of specific performance.

We find no abuse of discretion in the general equity judge's decision that plaintiffs were not entitled to specific performance because they acted inequitably. "[A]s a consequence of the remedy's equitable underpinnings, the party seeking specific performance 'must stand in conscientious relation to his adversary; his conduct in the matter must have been fair, just and equitable, not sharp or aiming at unfair advantage.'" Marioni v. 94 Broadway, Inc., supra, 374 N.J. Super. at 600 (quoting Stehr v. Sawyer, 40 N.J. 352, 357 (1963)). Further, "the party who 'seeks performance of a contract for the conveyance of land must show himself ready, desirous, prompt and eager to perform the contract on his part.'" See Ridge Chevrolet-Oldsmobile, Inc. v. Scarano, 238 N.J. Super. 149, 156 (App. Div. 1990) (quoting Stamato v. Agamie, 24 N.J. 309, 316 (1957). Plaintiffs satisfied neither of those two conditions.

In reaching his decision, the judge credited the Ostrums' expert witnesses, who testified that the conditions of final subdivision approval were either fulfilled within forty-six days after the resolution or were ministerial. In other words, they were not the types of conditions that would justify delaying a closing. James F. Sickels, one of defendant's experts, testified that virtually all final subdivision approvals contain conditions, and buyers nonetheless typically will close even if there are administrative or ministerial conditions left to be fulfilled. In his earlier opinion issued on January 10, 2006, the judge specifically found Sickels credible. Simply stated, once final subdivision approval was obtained, plaintiffs were not entitled to keep the property owners on the hook indefinitely while they crossed every conceivable "t" and dotted every possible "i" before closing.

The record also supports a conclusion that Kenneth Steliga's eleventh hour expression of concern about the presence of wetlands was not bona fide. Steliga admitted on cross-examination that his asserted serious concern over the existence of possible wetlands was not based on any expertise he possessed and that he had not retained an expert to actually determine whether there was a wetlands issue. The judge credited the testimony of defendants' experts that there were no wetlands on the property or on the adjoining drainage easement.

The judge's equitable resolution to this case is supported by the record. The parties signed a contract that was ambiguous with respect to defendants' entitlement to "buildable lots." The judge reasonably construed the clause in accordance with prevailing real estate practice, as credibly testified to by defendant's witness Frank J. Hoerst, III, Esq., and found that the lots were "buildable." Plaintiffs acted in a commercially unreasonable manner by refusing to close unless every minor condition of the approval was fulfilled, and they raised a further objection to closing (the alleged wetlands issue) that the judge found was without factual basis. Hence, plaintiffs were not entitled to specific performance.

On the other hand, while the contract called for a closing forty-six days after the resolution approving the subdivision, defendants failed to send a time of the essence letter and thus the judge held they were not entitled to damages. The judge also exercised his equitable discretion to require defendants to return plaintiffs' deposit. The merits of those decisions are not before us, because defendants have not cross-appealed from either of those rulings. The judge made an equitable decision to return these parties to their original positions, and plaintiffs' challenge to that determination is without merit.

Affirmed.

20100319

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