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Four G'S Land, LLC v. U.S. Home Corp.

April 7, 2010


On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-2390-08.

Per curiam.


Telephonically argued December 16, 2009

Before Judges Parrillo and Ashrafi.

Plaintiff Four G'S Land, LLC, appeals from an order of the Law Division dated November 21, 2008, dismissing its complaint with prejudice. Defendant U.S. Home Corporation d/b/a Lennar Homes cross-appeals from an order of February 20, 2009, denying its motion for attorney's fees and other expenses under the frivolous pleadings statute, N.J.S.A. 2A:15-59.1, and Rules 1:4-8 and 4:42-9(a)(8). We affirm both orders.

Last year, we decided a related appeal against plaintiff Four G's and in favor of defendant U.S. Home arising out of the same transaction for the sale of land. U.S. Home Corp. v. West Pleasant - CPGT, Inc., No. A-3985-07T3 (App. Div. March 6, 2009). This action is a second attempt by Four G's to litigate the same dispute decided against it in the prior litigation. The Law Division granted summary judgment to defendant U.S. Home dismissing the complaint filed by Four G's in this matter on grounds of res judicata, collateral estoppel, and the entire controversy doctrine.

In reviewing a grant of summary judgment, an appellate court applies the same standard under Rule 4:46-2(c) that governs the trial court. See Liberty Surplus Ins. Corp. v. Nowell Amoroso, P.A., 189 N.J. 436, 445-46 (2007). The court must "consider whether the competent evidential materials presented, when viewed in the light most favorable to the non-moving party, are sufficient to permit a rational factfinder to resolve the alleged disputed issue in favor of the non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995). On this appeal, we review the facts most favorably to Four G's. U.S. Home is a builder of homes. Four G's owned two parcels of vacant land in Jackson Township adjoining two vacant parcels owned by West Pleasant - CPGT, Inc. On August 9, 2005, Four G's and West Pleasant entered into a contract to sell their four parcels to defendant U.S. Home for $8,400,000. Defendant intended to subdivide the land into forty-two building lots, and the contract contained contingency provisions making it subject to sub-division and other development approvals. The contract also provided that "[a]ny controversy or claim arising from or relating to this contract or the breach thereof" would be "settled" by arbitration.

The contract identified Four G's and West Pleasant "collectively" as "Seller." At the time of execution of the contract, defendant paid a deposit of $10,000 to be held in escrow by "Seller's Attorney, as Escrow Agent." The contract also provided that within thirty days of its execution, defendant would "advance to Seller" $750,000 of the purchase price upon execution and release to defendant of a "Note and Mortgage in recordable form in the amount of ONE MILLION FIVE HUNDRED THOUSAND ($1,500,000) DOLLARS in the form hereto attached as Exhibit C."*fn1 Defendant was further obligated to advance another $750,000 to "Seller" within forty-five days after final subdivision approval. The contract did not provide an escrow agreement for the payment of the $1,500,000 advance from defendant to Seller. If development approvals were not obtained within set time limits, the contract gave defendant the option of either extending the contingency period or terminating the contract and demanding return of the advance payment.

In accordance with the contract, West Pleasant executed a mortgage and note in favor of defendant on the two parcels it had agreed to convey, plus an additional adjoining parcel of its land, and defendant issued checks totaling $1,500,000 to West Pleasant in September 2005 and January 2006. Four G's contends it did not receive any of the $1,500,000 advance payment. Four G's was also not named in the mortgage and note.

During 2006, the parties corresponded alleging breach by the other in completing the contingency provisions of the contract, primarily relating to environmental approvals for development of the land. In August 2006, defendant wrote to Four G's and West Pleasant terminating the contract. In November 2006, Four G's and West Pleasant filed a demand for arbitration in accordance with the contract. Defendant filed an arbitration counterclaim demanding return of its deposit and advance payments. On December 5, 2007, the arbitration panel issued its decision awarding $1,510,000 plus interest to defendant to be paid jointly and severally by Four G's and West Pleasant.

Defendant U.S. Home filed a summary action in the Law Division to confirm the arbitration award. Four G's filed an answer requesting that the court vacate the arbitration award or, alternatively, modify it to require that West Pleasant be solely liable for refund of the $1,500,000 advance payment to U.S. Home because Four G's had not received any of those funds.*fn2

West Pleasant also filed pleadings in the Law Division, contending that the issue of joint and several liability should have been contested in the arbitration proceedings and was not properly before the court. Judge Wellerson in the Law Division rejected the arguments of Four G's and entered judgment on April 2, 2008, confirming the arbitration award as issued.

After obtaining judgment on the arbitration award, U.S. Home filed a separate foreclosure action against West Pleasant for default on the mortgage and note. At a later time, Four G's filed its own separate action against West Pleasant seeking indemnification for the arbitration award. As of the time of argument on this appeal, those separate actions remained pending.

Four G's filed a notice of appeal to this court from the April 2, 2008 judgment of the Law Division confirming the arbitration award. Shortly after filing that notice of appeal, Four G's filed a new complaint against U.S. Home in the Law Division on June 30, 2008. The new complaint is the ...

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