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Afm Haque, M.D v. Chunyao Chen and Eugene Sivadas

March 21, 2011


On appeal from the Superior Court of New Jersey, Law Division, Mercer County, Docket No. L-1645-07.

Per curiam.


Argued January 20, 2011

Before Judges Fuentes and Gilroy.

Defendants Chunyao Chen and Eugene Sivadas appeal from the May 6, 2010 order that entered judgment against them in the amount of $73,574.09, and from the May 28, 2010 order that denied their motion for reconsideration. We affirm.

Defendants are the former owners of a single-family residence in Plainsboro. On April 11, 2007, defendants entered into a contract to sell the residence to plaintiff AFM Haque for the sum of $985,000. Pursuant to the contract, plaintiff deposited $51,000 with defendants' attorney to hold in escrow until the closing of title.

According to the contract, the property was to be sold in an "as is" condition. Notwithstanding, the contract contained a home inspection provision authorizing plaintiff to arrange for an inspection of the property at his own cost and expense. Under the terms of that provision, plaintiff agreed to immediately arrange for the home inspection and to notify defendants of any physical defects disclosed thereby. Upon receipt of the notice of physical defects, defendants had the option to remedy the defects at their expense. If defendants refused to remedy said defects, plaintiff had the option to void the contract of sale. Pursuant to a letter amendment to the contract of sale, the parties defined the term "physical defect" as used in the home inspection provision as "not includ[ing] any cosmetic defect, any routine maintenance, any upgrade or improvement or any item that may have reached or exceeded its useful life expectancy."

Plaintiff obtained the home inspection and served a copy of the report upon defendants within the time allowed under the contract. Although the home inspection disclosed six physical defects, defendants agreed to remedy only two. Accordingly, plaintiff served notice of his intent upon defendants to void the contract of sale and requested the return of his deposit. Defendants refused to comply.

On June 29, 2007, plaintiff filed a complaint seeking the return of his deposit, and defendants counterclaimed contending plaintiff breached the contract by demanding that they cure all defects disclosed by the home inspection, including those defects defendants considered "non-structural." Because defendants subsequently sold the property to a third party for $30,000 less than the amount for which it had been under contract with plaintiff, they claimed damages in the amount of $51,531, representing not only the $30,000 loss, but also an additional $21,531 of carrying costs incurred by them between the time when plaintiff voided the original contract until the time the home was sold to the third party.

The parties tried the matter to the court non-jury on March 16 and 17, 2010. During trial, plaintiff not only testified, but also presented testimony from Robert Rothenberg, his real estate attorney; Rhoda Cheerath, his real estate agent; and Frank Tiedeken, the licensed home inspector who inspected the premises. Lana Chan, a real estate agent, testified on behalf of defendants. Following the trial, the court awarded plaintiff $51,000, impliedly dismissing defendants' counterclaim. In so doing, the court determined that plaintiff's expert witnesses were credible; three of the remaining four defects fell within the definition of "physical defect" as defined by the parties; and defendants' refusal to correct the three remaining physical defects justified plaintiff voiding the contract and demanding the return of his deposit. Because during the pendency of the action, plaintiff offered to take judgment against defendants in the amount of $40,000, inclusive of costs pursuant to Rule 4:58-1, and the judgment represented more than 120% of the offer, the court also awarded plaintiff pre-trial interest in the amount of $8,011.59 and attorney fees and costs in the amount of $14,562.50. On May 6, 2010, the court entered an order memorializing its decision entering judgment against defendants in the amount of $73,574.09.

Defendants filed a motion for reconsideration. On May 28, 2010, the court entered an order supported by an oral decision denying the motion. It is from these two orders that defendants appeal.

On appeal, defendants argue: 1) the trial court failed to conduct a trial on damages; 2) the court erred in determining that the contract contained a return of deposit provision; 3) the court failed to assess plaintiff's actual damages; 4) the court failed to determine whether the breach of contract was material; 5) plaintiff breached the covenant of good faith and fair dealing by failing to perform under the contract; 6) the court's credibility assessments were not supported by competent evidence in the record; and 7) the court was biased in favor of plaintiff.

A judgment shall not be overturned except where, after a careful review of the record and weighing of the evidence, the appellate court determines that "continued viability of the judgment would constitute a manifest denial of justice." In re Adoption of a Child by P.F.R., 308 N.J. Super. 250, 255 (App. Div. 1998) (quoting Baxter v. Fairmont Food Co., 74 N.J. 588, 597-98 (1977)). We will not disturb the factual findings and legal conclusions of a trial court unless they are "so manifestly unsupported by or inconsistent with the competent, relevant and reasonably credible evidence as to offend the interests of justice." Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974) (quoting Fagliarone v. Twp. of N. Bergen, 78 N.J. Super. 154, 155 (App. Div. 1963)).

Consequently, "the appellate court should exercise its original fact finding jurisdiction sparingly and in none but a clear case where there is no doubt about the matter." Ibid. "That the case may be a close one or that the trial court decided all evidence or inference conflicts in favor of one side has no special effect." Czoch v. Freeman, 317 N.J. Super. 273, 283 (App. ...

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