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Patricia Mcfarland v. Michael Harvey

SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION


April 6, 2011

PATRICIA MCFARLAND, PLAINTIFF-APPELLANT,
v.
MICHAEL HARVEY, DEFENDANT-RESPONDENT.

On appeal from the Superior Court of New Jersey, Chancery Division, Family Part, Cumberland County, Docket No. FM-06-469-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted March 16, 2011

Before Judges R. B. Coleman, Lihotz, and J. N. Harris.

This matter arises out of a disputed oral promise by defendant Michael Harvey to convey an interest in (or the proceeds from the sale of) real property to plaintiff Patricia McFarland, his paramour and cohabitant of eight years. McFarland appeals from the Family Part's final order granting summary judgment in favor of Harvey and dismissing her complaint in its entirety. We reverse and remand for further proceedings.

I.

Because summary judgment was granted in favor of Harvey, we consider the factual record in a light most favorable to McFarland as the non-moving party. Estate of Hanges v. Metro. Prop. & Cas. Ins. Co., 202 N.J. 369, 374 (2010); Estate of Komninos v. Bancroft Neurohealth, Inc., 417 N.J. Super. 309, 313 (App. Div. 2010).

In September 1995, Harvey leased a parcel of real property in Millville and purchased a mobile home in his sole name. The parties were romantically involved at the time, and had been for several months. McFarland alleges that the mobile home was intended as a joint purchase, but because her credit rating was "mediocre," title was taken in Harvey's name. McFarland expected Harvey to eventually convey a fifty percent interest in the mobile home to her. After various renovations, which McFarland asserts were largely completed by her brother free of charge, and the joint purchase of home appliances, the parties moved in together in July 1996.

According to McFarland, the couple intended to marry, but that did not occur. However, in December 1997, McFarland gave birth to the parties' daughter. In February 2000, Harvey sold the mobile home and some of its contents for $15,000. He immediately acquired title to a different parcel of real property containing a dwelling located in Millville for $63,500.00, which he financed through a loan secured by a purchase money mortgage in his name alone.

McFarland asserts that the real property was acquired "with the understanding that the property was purchased jointly," and that the mortgage and deed were again placed in Harvey's sole name for credit reasons, "with the intention that [McFarland's] name be added to the property after the sale was consummated." The mortgage was incrementally paid from a joint checking account maintained in the parties' names at a credit union. McFarland's brother -- a contractor -- was credited with making major remedial improvements to the real property, and her sister -- the parties' realtor on the purchase -- returned the real estate commission to the parties so that they could put the money towards the down payment.

In March 2000, Harvey authorized, in a signed writing, an attorney to prepare a deed and affidavit of title that would have transferred one-half ownership in the real property to McFarland. Harvey repudiated the authorization, but did not deny signing the document. Ultimately, Harvey refused to sign either the deed or affidavit of title when they were presented to him.

In 2003, the parties separated.*fn1 Harvey had yet to convey legal title in the real property to McFarland. However, Harvey gave McFarland close to $5,000, which he claims was to enable her to find an alternate residence; McFarland contends that the funds represented "a partial payment from the house." Due to the ongoing litigation in the Family Part, the parties remained in contact and repeatedly bickered over their several disputes, including McFarland's purported share of the real property.

In 2006, Harvey's attorney sent McFarland's attorney a letter acknowledging that Harvey had "gratuitously" made payment to McFarland in 2003, while denying that she had any interest in the real property. However, Harvey acknowledged, both before and after the letter, that "[he] had told her that [he] would give her some money when the sale [of the real property] was done." In his deposition, Harvey contended that he never promised McFarland a specific share in the real estate.

Instead, he explained:

I never said interest for the property.

What I told her was when I sold the property, I would help her out and give her some money. Never once did I say it was her interest in the property, it was 50 percent, it was 30 percent. I never gave -- I specifically told her that I would help her out and give her money as I did since day one because she has our daughter to -- we have a daughter together.

In April 2007, defendant sold the real property for $168,000, from which he received $16,262.60 in net proceeds after paying off three loans in the aggregate approximate amount of $135,000, and paying nothing to McFarland.

Two years later, McFarland filed a three-count complaint in the Family Part, alleging that Harvey had breached an oral contract and committed fraud by failing to transfer title to the real property to the parties jointly, by refusing to execute the deed prepared in 2000 to effect the transfer of title, by selling the real property without her consent, and by refusing to compensate her with fifty percent of the net proceeds recovered from the sale. McFarland sought a declaration of her one-half interest in the property; incidental, consequential and punitive damages; counsel fees; and the imposition of a resulting trust in any other real estate purchased by Harvey with the proceeds from the sale of the real property.

Harvey's answer to the complaint denied that the parties had jointly purchased the real property and raised three separate defenses contending that McFarland's claim was barred by: (1) the statute of limitations, (2) laches, and (3) the entire controversy doctrine. Following discovery, Harvey moved for summary judgment seeking dismissal of all counts.

The motion court granted summary judgment, finding that the statute of limitations for McFarland's claims began to run when the parties separated in 2003 and had not been tolled by any actions of Harvey. In reaching its decision, the court assumed, for purposes of summary judgment, that there was a "valid and binding oral contract between the parties." It then determined that the breach took place in February 2003 when McFarland vacated the residence, "because but for the parties' separation, damages would not have accrued." With this date in mind, the court concluded that plaintiff's breach of contract claim was barred by New Jersey's six-year statute of limitations since McFarland did not file suit until six years and three months after she vacated the residence. See N.J.S.A. 2A:14-1. The court further rejected plaintiff's claims under a quantum meruit theory on the ground that they too were time-barred and in any event, inconsistent with her other causes of action. Finally, the court dismissed plaintiff's complaint in its entirety, citing laches, judicial estoppel, and "failure to comply with the requirements of R[ule] 4:46-2(b)," and noting that the real property in which plaintiff was seeking an interest had been sold to a third-party three years prior.

McFarland filed an incomplete motion for reconsideration, but instead of considering the application on its merits or treating the papers as nonconforming pursuant to Rule 1:5-6(c), the court's law clerk wrote to the parties' attorneys that it "is not accepting the submission as a Motion for Reconsideration as it was not properly filed. The submission did not include the proper filing fee nor was there a Certification from Patricia McFarland." Furthermore, the law clerk wrote, "[t]he Court believes the majority of [McFarland's] submission was a reiteration of facts and arguments previously submitted or facts known, but not argued, prior to the Order for dismissal." This appeal ensued. Following the filing of the notice of appeal, the court's law clerk again wrote to the parties' attorneys, stating "this Court no longer retains jurisdiction over the present case. [McFarland's] Motion for Reconsideration is therefore DISMISSED."

II.

In conformity with well-established principles, we review the motion court's conclusions de novo because this is an appeal from the grant of summary judgment. Estate of Hanges, supra, 202 N.J. 369, 382 (2010). No deference is given to the legal conclusions reached, which are subject to plenary appellate review. City of Atl. City v. Trupos, 201 N.J. 447, 463 (2010).

Summary judgment is appropriate when, viewing the facts in the light most favorable to the non-moving party, Hodges v. Sasil Corp., 189 N.J. 210, 215 (2007), "the pleadings, depositions, answers to interrogatories and admissions on file, together with the affidavits, if any, show that there is no genuine issue as to any material fact" and the moving party is entitled to judgment as a matter of law. R. 4:46-2(c).

In this case, the parties presented competing narratives concerning what was promised to whom, and when. Harvey maintained that he never made an agreement with McFarland to either transfer a one-half interest in the real property to her or pay her one-half of the proceeds from his eventual sale of the real property. However, Harvey admitted to signing a document authorizing an attorney to prepare a deed and affidavit of title for the purpose of conveying an interest in the real property to plaintiff, although he never executed the actual conveyancing instruments. He also acknowledged having "in excess of three to 500 phone conversations" about the sale of the real property and that "[he was] sure [he] [told] [McFarland] what she wanted to hear . . . that when [he] sold the house, that [he] would give her something."

Meanwhile, McFarland asserted that the real property was "purchased in [Harvey's] name, with the intention that [her] name be added to the property after the sale was consummated." She claimed that the parties maintained a joint checking account from which the mortgage payments were made. She also contended that as late as 2006, defendant assured her, "he would pay [her] . . . 50% interest when [the property] was sold." With respect to the almost $5,000 payment she received from Harvey when she moved out of the residence in 2003, she testified that it represented "a partial payment from the house," and that Harvey would be entitled to a credit in that amount.

We agree with the motion court's threshold determination, that viewing the facts in the light most favorable to McFarland, a reasonable trier of fact could find that a valid contract existed. A contract arises out of an offer and acceptance "supported by valuable consideration which involves a detriment incurred by a promisee or a benefit received by a promisor." Devaney v. L'Esperance, 195 N.J. 247, 261 (2008). Here, the putative agreement promised McFarland either a one-half interest in the real property or one-half of the proceeds from the sale of said real property. McFarland's monetary and other alleged contributions to the home or even her "willingness to live in a marital-type relationship" could have constituted sufficient consideration. Id. at 262 (noting that a willingness to enter into or remain in a "marital-type relationship" is relevant to a consideration analysis) (Long, J., concurring). Furthermore, in the absence of an express contract, the parties' conduct certainly raised the likelihood that there was an implied contract, "a question of fact generally precluding summary judgment." Troy v. Rutgers, 168 N.J. 354, 366 (2001).

We disagree, however, with the court's ultimate finding that McFarland's claims were time-barred. "'A cause of action for breach of contract accrues the moment the right to commence an action comes into existence, and occurs when one party has, by words or conduct, indicated to the other that the agreement is being repudiated or breached.'" N.J. Div. of Taxation v. Selective Ins. Co. of Am., 399 N.J. Super. 315, 326 (App. Div. 2008) (quoting Shelter Mut. Ins. Co. v. Nash, 184 S.W.3d 425, 428 (Ark. 2004)).

While McFarland's specific performance claim relating to defendant's refusal to sign the deed or add her name to the title is out of time (and now moot), since the real property was purchased in 2000 (and then sold in 2007), Harvey's alleged promise to pay her one-half of the proceeds from the sale of the real property was an independent promise that was entitled to a separate statute of limitations analysis. If, as McFarland claims, Harvey promised to pay her one-half of the proceeds from the sale of the real property, her cause of action would not have accrued until after the sale occurred, in April 2007. See Binder v. Price Waterhouse & Co., L.L.P., 393 N.J. Super. 304, 310 (App. Div. 2007) (noting that "the date when a cause of action is deemed to have accrued is the date upon which the right to institute and maintain a suit first arises"). Because plaintiff instituted the present action in 2009, her breach of contract claim relating to the sale proceeds of the real property was improperly dismissed as time-barred. See N.J.S.A. 2A:14-1 (six-year statute of limitations governs contract claims).

Moreover, the motion court's dismissal of plaintiff's cause of action under a quantum meruit theory on the ground that it was inconsistent with plaintiff's other causes of action was also in error, as we have observed that "a plaintiff who has attempted to prove both breach of contract and unjust enrichment need not choose which one will go to the [trier of fact], as long as there is sufficient evidence as to both." Caputo v. Nice-Pak Products, Inc., 300 N.J. Super. 498, 504 (App. Div.) (citing R. 4:5-6), certif. denied, 151 N.J. 463 (1997).

Accordingly, summary judgment in favor of defendant on statute of limitations grounds must be reversed, at least regarding her non-specific performance claims.*fn2

We also differ with the motion court on the laches defense. Although the applicability of laches is generally within the sound discretion of the motion court, Mancini v. Twp. of Teaneck, 179 N.J. 425, 436 (2004), and in certain situations "conditions or circumstances may make it inequitable to prosecute a claim after a period shorter than that fixed by the statute of limitations," neither the Family Part nor Harvey has identified any indicia of harm to warrant the dismissal of McFarland's complaint on the basis of laches. Lavin v. Hackensack Bd. of Educ., 90 N.J. 145, 153 n.1 (1982).

"The doctrine of laches 'is invoked to deny a party enforcement of a known right when the party engages in an inexcusable and unexplained delay in exercising that right to the prejudice of the other party.'" United States v. Scurry, 193 N.J. 492, 503 (2008) (quoting Knorr v. Smeal, 178 N.J. 169, 180-81 (2003)). "'[T]he key factors to be considered in deciding whether to apply the doctrine are the length of the delay, the reasons for the delay, and the changing conditions of either or both parties during the delay,'" however "'[t]he core equitable concern . . . is whether a party has been harmed by the delay.'" Id. at 504 (quoting Knorr, supra, 178 N.J. at 181).

It is undisputed that the parties engaged in countless discussions about the sale of the real property and McFarland's share in the proceeds of same. Harvey had no reason to believe McFarland would not bring an action against him if her request for payment was not fulfilled. Therefore, while Harvey's repeated promises to McFarland are not enough to prevent him from raising laches or any other affirmative defense on remand, see O'Keeffe v. Snyder, 83 N.J. 478, 517-18 (1980), we find that the motion court abused its discretion in barring McFarland's claims on the basis of laches in the summary judgment context.

III.

In light of our determination to reverse and remand for further proceedings due to the improvident grant of summary judgment on lack of timeliness grounds, we need not address McFarland's claims of erroneous evidentiary rulings, equitable tolling and estoppel, joint venture liability, and entitlement to a resulting trust. Nor do we consider the issues raised in Harvey's summary judgment motion that were left unresolved by the Family Part, and which are preserved for future disposition if Harvey renews his arguments.

Reversed and remanded for further proceedings in accordance with this opinion. We do not retain jurisdiction.


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