May 9, 2011
MAURICE DEUTSCH, PLAINTIFF-RESPONDENT,
DAVID BINET AND ESTHER BINET, DEFENDANTS/THIRD-PARTY PLAINTIFFS-APPELLANTS,
ABRAHAM CENSOR, THIRD-PARTY DEFENDANT.
On appeal from the Superior Court of New Jersey, Chancery Division, Ocean County, Docket No. C-17-07.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Submitted October 5, 2010
Before Judges Carchman, Graves and Messano.
Defendants/third-party plaintiffs David Binet (Binet) and Esther Binet (Esther) appeal from various trial court orders and a judgment entered on February 2, 2009, that (1) awarded plaintiff Maurice Deutsch (Deutsch) damages in the amount of $120,500, together with prejudgment interest; (2) declared Deutsch to be the owner of the property at 208 Imperial Court in Lakewood, New Jersey (the Property); (3) awarded Deutsch any surplus proceeds up to $132,550 in the event of a foreclosure sale of the Property; (4) ordered the Binets to pay Deutsch $2000 per month for the use and occupancy of the Property commencing December 1, 2007; and (5) discharged two lis pendens filed by the Binets in January 2006 and March 2007. We affirm.
In December 2003, Binet signed a contract to purchase a house located at 200 Imperial Court, with an anticipated closing date of June 1, 2004. The contract was subsequently modified for the purchase of the Property, with closing to take place on August 1, 2004. However, Binet's low credit score precluded him from obtaining a mortgage loan to finance the purchase. Therefore, Binet and "a long-time friend," third-party defendant Abraham Censor*fn1 (Censor), entered into an oral agreement under which Censor would purchase the Property in his name for the Binets' use and later transfer it to them in exchange for a cash payment. Pursuant to the agreement, Binet paid Censor between $1000 and $2000, and Censor obtained two mortgage loans from Chase Bank totaling approximately $650,000.*fn2 Binet and his brother provided $160,000 for the down payment on the Property, the legal services rendered in connection with the sale, and closing costs. The transfer took place on September 27, 2004, and Censor's deed was recorded on October 28, 2004. However, Binet's credit score remained low, and he and Esther never refinanced the Censor mortgage.
On January 11, 2006, the Binets filed a complaint against Censor seeking a constructive trust to secure their interest in the Property and an order compelling Censor to execute a deed transferring title to them. They also filed a notice of lis pendens the same day. The next day, January 12, 2006, Censor executed a mortgage and security agreement in the sum of $240,000 in favor of Deutsch. The mortgage was recorded on January 23, 2006.
Approximately two months later, on March 29, 2006, Binet, Censor, and Deutsch signed a four-page settlement agreement (the Settlement Agreement) that purported "to settle the claims and disputes between them" concerning the Property and two loans given to Binet and Censor by Deutsch. Also involved in the negotiations was Benzion Frankel (Frankel), a New York attorney. The Settlement Agreement stated that Binet would pay Deutsch the total sum of $145,500 in eight installments, with the last payment on or before November 1, 2006. Regarding the Property, the contract stated:
2. Deutsch shall execute an Assignment of Mortgage ("Assignment") in recordable form to Binet. The Assignment shall be placed in escrow with Benzion Frankel P.C. pending full performance by Binet under . . . this Agreement. Any assignment by Deutsch, except in [the] event of default by Binet, shall be deemed a breach.
3. Censor shall execute a Deed in recordable form to Binet or an entity to be formed. The Deed . . . shall be placed in escrow with Benzion Frankel P.C. pending full performance by Binet under . . . this Agreement. Any lien or encumbrance executed or allowed by Censor shall be deemed a breach.
4. Binet shall continue paying the existing Mortgages and keep them current. The existing Mortgages will be refinanced and paid off. In no event will the Deed be delivered prior to the closing of the refinance.
5. All actions currently pending with respect to the loans and the [Property] shall be stayed and no new actions shall be commenced.
Under the terms of the Settlement Agreement, Binet was to receive the deed and assignment "[u]pon full performance" of his payment obligations. If Binet breached or defaulted, the escrow agent, Frankel, was authorized to return the deed to Censor and the assignment of mortgage to Deutsch.
Pursuant to the Settlement Agreement, Binet paid a total of $25,000 to Deutsch with the last payment on September 1, 2006. On December 13, 2006, Censor executed a deed granting the Property to Deutsch. The deed was recorded on December 27, 2006.
On January 10, 2007, Deutsch filed a complaint against Binet and his wife, Esther, alleging that Binet had breached the Settlement Agreement. The complaint sought (1) enforcement of the Settlement Agreement; (2) "declaratory judgment . . . that [Binet] breached and [was] in default of the Settlement Agreement"; (3) declaratory judgment that the Binets had no interest in the Property; (4) an order discharging the notice of lis pendens filed by the Binets; (5) declaratory judgment that the Binets had no right of possession or interest in the Property; (6) a writ of possession in favor of Deutsch; (7) judgment against Binet for the balance due under the Settlement Agreement; and (8) interest, counsel fees, and costs of suit.
In their answer, counterclaim, and third-party complaint filed on March 28, 2007, the Binets claimed that they were "no longer bound by the obligations of the Settlement Agreement" because Deutsch and Censor committed a material breach by failing to deposit the executed deed and assignment of mortgage into escrow.*fn3 The counterclaim and third-party complaint sought (1) a determination that the Settlement Agreement and the deed from Censor to Deutsch were both "null and void"; (2) imposition of a constructive trust in favor of the Binets; (3) a judgment quieting title in favor of the Binets and declaring that neither Deutsch nor Censor had any interest in the Property; (4) a determination that the Binets had the sole right of possession to the Property; and (5) damages, counsel fees, and costs.
The court entered a case management order scheduling discovery on March 31, 2008. The order stated that interrogatories were to be served by April 10, 2008, and answered by May 15, 2008, and that all depositions were to be completed by June 1, 2008.
In April 2008, Deutsch filed a motion for summary judgment, ejectment, and sanctions. In a supporting certification, Deutsch stated he was "ready, willing and able" to sign a deed to Binet and to assign the mortgage he was holding on the Property to Binet as soon as he received "all sums due and owing to [him] under the Settlement Agreement." He also certified that his attorney, Frankel, "was never notified as to whom the mortgage should be assigned to." Additionally, Frankel confirmed in his certification that he was unable to prepare a deed and an assignment of the mortgage to be placed in escrow because Binet was either unable or unwilling to identify the entities or the individuals that were to receive the documents. Frankel certified: "Despite several attempts to obtain the information, I was never told to whom I should place title in, nor was I ever told to whom the mortgage of [Deutsch] should be assigned to." The Binets opposed the motion, claiming that "the validity of the [Settlement] Agreement, the circumstances of its execution and the specifics of performance of each party of their respective obligations need[ed] to be developed through the discovery process."
Before the court ruled on Deutsch's motion, Censor filed a motion to dismiss the Binets' third-party complaint. The motion and an accompanying certification by Censor's attorney alleged that the Binets had failed to respond to interrogatories and document requests as required by the court's March 31, 2008 case management order.
The parties appeared for oral argument on May 23, 2008. At that time, the court noted the parties had resorted to self-help rather than seeking judicial enforcement of the Settlement Agreement and that neither party "acted with clean hands."
Nevertheless, it ordered the parties to proceed with depositions and reserved judgment on Deutsch's summary judgment motion. On May 29, 2008, J.P. Morgan Chase Bank commenced foreclosure proceedings on the Property.
Both Frankel and Deutsch were deposed on May 30, 2008. Frankel testified that although he had represented Deutsch "a handful" of times in the past, including a loan to Censor, he acted only as a "facilitator" or "go-between" when the Settlement Agreement was negotiated. Frankel also stated that Binet was represented during the negotiations by Morris Birenbaum. According to Frankel, he waited for Binet "to form an entity" to receive the deed and assignment and had "many, many phone calls" with Birenbaum, but ultimately "was told that Mr. Binet and Mr. Birenbaum did not know where [the documents] would be going" and that he "would be advised."
Deutsch testified Frankel was acting as his attorney during the settlement negotiations. He further testified that he had provided "[m]ore than 15" loans to Censor amounting to "at least" $240,000 by 2006, and that he had loaned Binet $100,000 in "early 2000," which by 2006 had accumulated interest of "somewhere between $75,000 and $90,000." Deutsch stated that since receiving the loan, Binet had avoided him "for years on end," so he was willing to compromise on a reduced sum in exchange for actual payment. Following negotiations, Frankel told Deutsch that he would have to sign an assignment of mortgage "as soon as [Binet] determined who the recipient would be." Deutsch also indicated that after payments from Binet had ceased, he requested a deed to the Property from Censor.
The Binets answered Deutsch's first set of interrogatories on June 4, 2008. Although they did not state whether they had made mortgage payments on the Property, they indicated that they had paid all maintenance and utility costs since October 2004. In addition, the answers stated that Binet had contacted Censor in December 2005 "to notify him that he was prepared to refinance the mortgage" and that Censor responded with "a demand for $10,000.00 in return for executing a Deed." The Binets also indicated that payments under the Settlement Agreement were made as scheduled until July 2006.
Nevertheless, on June 6, 2008, the court dismissed the third-party complaint against Censor pursuant to Rule 4:23-5, citing the Binets' failure to timely respond to Censor's interrogatories and document requests in accordance with the schedule imposed by the March 31, 2008 case management order. On June 13, 2008, the Binets' filed a motion to reinstate the pleading, which was ultimately unsuccessful.
On June 20, 2008, the court heard further arguments on Deutsch's summary judgment motion. Deutsch and Censor essentially argued they were entitled to summary judgment based on the Settlement Agreement, and the Binets asserted this relief would be premature because further discovery was needed. In addition, the Binets' attorney advised the court that they did not have sufficient funds to satisfy the terms of the Settlement Agreement but could obtain the money within sixty to ninety days. The court reserved judgment and ordered all parties and attorneys to appear in person on July 16, 2008.
The next hearing occurred on July 17, 2008. After allowing the attorneys to present additional arguments, the court found that the Settlement Agreement was "clear," "unambiguous," and "enforceable." The court's decision, which was memorialized in a July 25, 2008 order, required (1) Deutsch to execute a deed and assignment of mortgage to the person or entity named by Binet, and (2) Binet to pay Deutsch $25,000 within thirty days after the deed and the assignment of the mortgage were filed with the court. The order also stated that the failure to make the payment would be considered "a material breach of the Settlement Agreement." Deutsch submitted an original deed and assignment to the court on July 30, 2008, with the grantee designated as "L.H. Development Group, LLC," a company owned exclusively by Binet.
Censor was deposed on July 24, 2008. He testified that he did not negotiate the contract to purchase the Property and did not pay "any of the money to purchase the house." According to Censor, Binet assigned him the purchase contract for the Property "approximately five to six weeks" prior to closing, but they had a verbal agreement that Binet would become the true owner once "[c]ertain outstanding monies," had been "taken care of." These "monies" included $150,000 to $200,000 that Censor claimed to have personally "lent [to Binet's] company" and $100,000 that he "borrowed on [Binet's] behalf." Censor also testified that Esther did not participate in any of his dealings or discussions with Binet.
The parties again appeared before the court on September 12, 2008. At the outset, the court noted that Binet had failed to pay $25,000, as required by the July 25, 2008 order. Counsel for the Binets explained that Binet failed to make the payment because "he [didn't] have the money." The court then entered a judgment against Binet in the amount of $25,000 and scheduled the matter for an evidentiary hearing. The order memorializing this decision was entered on October 1, 2008.
A trial was held on January 6 and 7, 2009, to determine the merits of Deutsch's remaining claims and the Binets' claim that they were the equitable owners of the Property. Deutsch called Binet as the first witness. Binet testified that his "business background" was in construction and that, in 2001, he had commenced employment with "Dynamic," a "real estate company." Binet indicated that he made $120,000 per year in this position from 2003 to 2006 before Dynamic closed in 2007, leaving him with no income in 2007 and 2008.
Binet further stated that although he negotiated the contract to purchase the Property and contributed $160,000 of his family's money toward the purchase, his low credit score prevented him from obtaining a mortgage loan. Therefore, the Property was purchased in Censor's name, and Binet paid Censor to obtain two mortgage loans for the purchase. However, Binet acknowledged he was responsible for the mortgage payments. He also testified that he discussed the arrangement with Esther, and she was "aware that Mr. Censor owned the home."
Binet said that he "didn't try" to refinance the mortgages because his "credit score was not sufficient enough to get it done." He further stated that on December 15, 2005, he provided Censor with $30,000----$20,000 to be given to Deutsch, and $10,000 to Censor "for keeping the house in his name"----but Censor demanded an additional $10,000. According to Binet, the $20,000 for Deutsch was partial repayment for a separate $50,000 loan that Deutsch had given him.
In addition, Binet confirmed that during the subsequent settlement negotiations he was represented by Morris Birenbaum. Binet further stated that he was not acting on behalf of Esther at that time and that Esther only found out that the Settlement Agreement existed "through the Court proceedings." Binet also accounted for the difference between the $50,000 loaned to him by Deutsch and the $145,500 that he agreed to pay in the Settlement Agreement as "some profit to Deutsch" and "to help out Censor" because "he needed money."
Binet admitted that he never contacted Frankel to advise him of the name in which he wanted the deed and assignment prepared. He also acknowledged that after making $25,000*fn4 in payments pursuant to the Settlement Agreement, he ceased performance "[sometime] in the summer of " because he "didn't get any notice" that Deutsch and Censor had placed the deed and assignment in escrow. Binet further indicated he learned that Censor had granted the Property to Deutsch after Deutsch filed the complaint.
The next witness was Deutsch, who testified that he had loaned Binet $100,000, not $50,000, in 1999 or 2000 and that Binet "hadn't paid [him] back a dime." He further stated that by 2006, Censor owed him approximately $400,000.
Deutsch confirmed that Binet had paid him $25,000 under the Settlement Agreement and indicated that despite "repeatedly" asking Binet for payment, he received few responses:
[Binet] avoided me at all costs, ignored my phone calls, agreed to meet with me on a number of occasions, cancelled the meetings, never showed up. When I finally did get him to the table he promised that he'd get things to work out. At certain points he responded to my emails by saying that he wants to take care of payments. Basically it was all a bunch of baloney and he never made a payment since his last payment.
Deutsch also testified that when Censor deeded the Property to him, Censor "led [him] to believe that the house [was] entirely his and that he had every right to do what he did." Deutsch indicated that he believed the Property had been placed in Censor's name because Binet owed Censor money. In addition, Deutsch testified that he "did not oppose" the foreclosure action.
Esther testified on January 7, 2009. After stating she was born in Israel and had a "very limited" English vocabulary, Esther gave a synopsis of the roles she and her husband played:
The husband is taking care [of] the financial situation in the house and really the woman does not get involved. By this especially because English is not my language, I was limited . . . to understand . . . whatever [deal was] made. So . . . I was trusting my husband to take care [of] everything, taking care of [the] financial situation in the house. And the woman is taking care [of] the household, the children, raising the children, cooking, baking, cleaning, doing whatever she's supposed to do . . . to have a normal life and a family life.
Esther stated that at the time of the purchase, she believed that she and her husband owned the Property and that she had no knowledge of Censor's involvement. However, Censor called the house in 2007 and told her that the house was in his name. According to Esther, she never saw the Settlement Agreement and never gave Binet "permission to make any deal to give [her] home away."
Esther testified that she had no knowledge of the foreclosure proceeding, even though she was aware that her husband was not making mortgage payments. She further testified that when she discussed the matter with her husband, he told her he was "in touch with the lawyer and . . . taking care of it." In addition, Esther stated that she trusted her husband to "take care of whatever was supposed to be taken care of."
Following closing arguments, the court rendered an oral decision on January 7, 2009. With regard to Esther, the court stated:
Of great concern to the Court in listening to Mrs. Binet's testimony today [is] whether or not she even understands what her lawyer told her . . . . As she sits here today she doesn't even know that the Deed is [in] Mr. Deutsch's name. She still thinks it's in Mr. Censor's name, and this has been going on for several years at this point. She clearly relies upon her husband to do everything. She's really not had any assets in her name. She's just simply [living a] very traditional lifestyle where she took care of the children and the home . . . and he took care of the business. She's not even clear on exactly what [her husband] does for a living. She doesn't know the settlement terms, she doesn't know the agreement that her husband entered to resolve the litigation, to keep her in the home. . . . I don't even think she knows if her husband has defaulted on the agreement.
I have serious concerns [about] whether she even understands that's the reason why she's really here today . . . .
Therefore, the court found that the Settlement Agreement was enforceable only against Binet, and judgment was entered against him in the amount of $120,500:
As far as enforcing the terms of the Settlement Agreement, I'm satisfied it is an enforceable Agreement. I am satisfied that there is a material breach of the Agreement, and I am satisfied Mr. Binet has breached that Agreement and as a result of that breach there [are] substantial monies due and owing. . . . Deutsch had previously loaned monies to Binet and Deutsch had previously loaned monies to Censor, and Censor had previously loaned money to Mr.
Binet. So when all of that is together, this was a settlement for that. . . . [Binet] agreed to pay these monies back as a result of those loans . . . . [I]t was a total of $145,500 of which [Binet] paid $25,000 [and] owes $120,500 . . . based on the preponderance of credible evidence. He owes that money and the Judgment [will] be entered against Mr. Binet for that amount.
The court declined to enforce the Settlement Agreement's $175-per-day late payment penalty but awarded Deutsch prejudgment interest from September 1, 2006. In addition, the court concluded that it was "inequitable and unfair" for the Binets "not to pay anything" while they remained in the Property. Therefore, it ordered them to pay Deutsch $2000 per month for the use and occupancy of the Property commencing on December 1, 2007, after Binet stopped paying the mortgages. A judgment memorializing the court's decision was entered on February 2, 2009. The judgment also discharged the two lis pendens on the Property.
On February 11, 2009, the court denied the Binets' motion for reconsideration. They filed a notice of appeal on March 9, 2009,*fn5 and now present the following arguments:
DEUTSCH'S MATERIAL BREACH OF THE "SETTLEMENT AGREEMENT" EXCUSES FURTHER PERFORMANCE BY BINET AND SUMMARY JUDGMENT SHOULD HAVE BEEN DENIED.
SELF-CREATED OR IMPOSED IMPOSSIBILITY OF PERFORMANCE DOES NOT EXCUSE THAT PERFORMANCE.
THE SETTLEMENT AGREEMENT IS INADMISSIBLE, AND THEREFORE, UNENFORCEABLE BY ITS TERMS.
THE SETTLEMENT AGREEMENT IS AN UNCONSCIONABLE CONTRACT OF ADHESION, AND THEREFORE, UNENFORCEABLE. (Not Raised Below)
DEUTSCH IS NOT ENTITLED TO RENT, EJECTMENT OR DISCHARGE OF THE LIS PENDENS.
THE COURT ERRED WHEN IT DISMISSED AND THEN REFUSED TO REINSTATE THE BINETS' THIRD-PARTY COMPLAINT AGAINST CENSOR.
DEUTSCH IS NOT ENTITLED TO POSSESSION OF THE PREMISES BECAUSE ESTHER BINET'S POSSESSORY INTERESTS IN THE PROPERTY UNDER N.J.S.A. 3B:28-3 WERE NOT DECIDED BY THE TRIAL COURT. (Not Raised Below)
When reviewing the July 25, 2008 order for summary judgment, we use the same standard as the trial court.
Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162, 167 (App. Div.), certif. denied, 154 N.J. 608 (1998). We must "first decide whether there was a genuine issue of material fact and, if there was not, [we] then decide whether the trial judge's ruling on the law was correct." Walker v. Atl. Chrysler Plymouth, Inc., 216 N.J. Super. 255, 258 (App. Div. 1987).
[A] determination whether there exists a "genuine issue" of material fact that precludes summary judgment requires the motion judge to 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 fact-finder to resolve the alleged disputed issue in favor of the non-moving party. The "judge's function is not himself [or herself] to weigh the evidence and determine the truth of the matter but to determine whether there is a genuine issue for trial." [Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540 (1995) (quoting Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 249, 106 S. Ct. 2505, 2511, 91 L. Ed. 2d 202, 212 (1986)); see also R. 4:46-2.]
Our review of the determinations made following the January 2009 trial is more limited. We must uphold the court's factual findings where they are "supported by adequate, substantial and credible evidence." Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974). All legal conclusions will be reviewed de novo. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995).
As the trial court recognized, settlement agreements are contracts to be honored and enforced by the courts. Brundage v. Estate of Carambio, 195 N.J. 575, 601 (2008) (citing Pascarella v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div.), certif. denied, 94 N.J. 600 (1983)). Furthermore, "a material breach by either party to a bilateral contract excuses the other party from rendering any further contractual performance." Magnet Resources, Inc. v. Summit MRI, Inc., 318 N.J. Super. 275, 285 (App Div. 1998).
A material breach is one that "'goes to the essence of a contract,'" Goldman S. Brunswick Partners v. Stern, 265 N.J. Super. 489, 494 (App. Div. 1993) (quoting Ross Sys. v. Linden Dari-Delite, Inc., 35 N.J. 329, 341 (1961)), and should be evaluated under the following "flexible criteria":
"(a) the extent to which the injured party will be deprived of the benefit which he reasonably expected;
(b) the extent to which the injured party can be adequately compensated for the part of that benefit of which he will be deprived;
(c) the extent to which the party failing to perform or to offer to perform will suffer forfeiture;
(d) the likelihood that the party failing to perform or to offer to perform will cure his failure, taking account of all the circumstances including any reasonable assurances;
(e) the extent to which the behavior of the party failing to perform or to offer to perform comports with standards of good faith and fair dealing." [Neptune Research & Dev., Inc. v. Teknics Indus. Sys., Inc., 235 N.J. Super. 522, 532 (App. Div. 1989) (quoting Restatement (Second) of Contracts § 241 (1981)).]
After considering these factors, we agree that Deutsch's failure to place the deed and assignment in escrow did not constitute a material breach of the Settlement Agreement that would have excused Binet's failure to (1) keep the existing mortgages current, and (2) pay the sum of $145,500 to Deutsch. Pursuant to the Settlement Agreement, Binet was not entitled to receive the deed and the assignment because he never performed his payment obligations and never advised Deutsch of the name or entity he wished to designate as grantee. Moreover, Deutsch's alleged "breach" was a problem with a clear-cut remedy. As the trial court observed, "a simple motion" would have resolved the issue. Under these circumstances, we find no justification for Binet's failure to comply with the terms of the Settlement Agreement.
In their third point, the Binets contend that the Settlement Agreement "is unenforceable because it cannot be disclosed or serve as proof of liability." "'[F]undamental canons of contract construction require that we examine the plain language of the contract and the parties' intent, as evidenced by the contract's purpose and surrounding circumstances.'" Highland Lakes Country Club & Cmty. Ass'n v. Franzino, 186 N.J. 99, 115 (2006) (quoting State Troopers Fraternal Ass'n v. State, 149 N.J. 38, 47 (1997)). Thus, we must first read the terms of the contract "in light of the common usage and custom." Pacifico v. Pacifico, 190 N.J. 258, 267 (2007).
The Binets claim that the Settlement Agreement's confidentiality clause, contained in paragraph fourteen, renders it "inadmissible and therefore, unenforceable." They cite no authority for this proposition. Moreover, adoption of the Binets' position would render any contract with a confidentiality provision unenforceable, a result that would be squarely at odds with the Court's predisposition toward settlement. See State v. Williams, 184 N.J. 432, 446 (2005) ("Courts have long-recognized that public policy favors settlement of legal disputes and that confidentiality is a fundamental ingredient of the settlement process.") (citations and quotation marks omitted).
We next address the Binets' claim that the judgment should be reversed because the Settlement Agreement was an "unconscionable contract of adhesion." The Court has recognized that adhesion contracts "necessarily involve indicia of procedural unconscionability." Muhammad v. Cnty. Bank of Rehoboth Beach, Del., 189 N.J. 1, 15 (2006), cert. denied, 549 U.S. 1338, 127 S. Ct. 2032, 167 L. Ed. 2d 763 (2007). However, even when a contract of adhesion requires a party "either to accept or reject the contract as is, the agreement nevertheless may be enforced." Stelluti v. Casapenn Enters., LLC, 203 N.J. 286, 301 (2010) (citing Rudbart v. N. Jersey Dist. Water Supply Comm'n, 127 N.J. 344, 353, 356-61, cert. denied, 506 U.S. 871, 113 S. Ct. 203, 121 L. Ed. 2d 145 (1992)). Factors to be considered include "the subject matter of the contract, the parties' relative bargaining positions, the degree of economic compulsion motivating the 'adhering' party, and the public interests affected by the contract." Rudbart, supra, 127 N.J. at 356.
Here, the thrust of the Binets' argument is that the economic relationship between Binet and Deutsch placed the former "at a terrible bargaining disadvantage." However, the record reveals that Binet was represented by counsel throughout the settlement negotiations and that he successfully negotiated to omit any provision that would impact his initial lawsuit against Censor. Moreover, Binet testified that he reviewed the Settlement Agreement with counsel prior to signing it. Given these facts, we reject the claim that the Settlement Agreement is unconscionable and unenforceable. See, e.g., Delta Funding Corp. v. Harris, 189 N.J. 28, 40 (2006) (enforcing a contract of adhesion despite finding that Delta "possessed superior bargaining power and was the more sophisticated party in the transaction").
In point five, the Binets assert that Censor's transfer of title to Deutsch was "a textbook example of unclean hands and should never have enjoyed the sanction of the Court." We do not agree.
Application of the doctrine of unclean hands rests within the discretion of the trial court. Heuer v. Heuer, 152 N.J. 226, 238 (1998). "The essence of [the] doctrine . . . is that '[a] suitor in equity must come into court with clean hands and he must keep them clean after his entry and throughout the proceedings.'" Borough of Princeton v. Bd. of Chosen Freeholders of Mercer, 169 N.J. 135, 158 (2001) (second alteration in original) (quoting A. Hollander & Son, Inc. v. Imperial Fur Blending Corp., 2 N.J. 235, 246 (1949)). The doctrine of unclean hands "'gives expression to the equitable principle that a court should not grant relief to one who is a wrongdoer with respect to the subject matter in suit.'" Ibid. (quoting Faustin v. Lewis, 85 N.J. 507, 511 (1981)).
As previously noted, the Settlement Agreement required Censor to "execute a deed in recordable form to Binet or an entity to be formed" and to place the deed in escrow "pending full performance by Binet." If that had been done, the transfer of title from Censor to Deutsch would not have occurred. Nevertheless, pursuant to the July 30, 2008 order, Deutsch ultimately executed and filed with the court a deed to the Property, whereas Binet has consistently failed to fulfill his payment obligations. We therefore find no misuse of discretion or legal error in the court's decision to enter judgment in favor of Deutsch; to impose a use and occupancy fee for the fair rental value of the Property, N.J.S.A. 2A:42-13; and to discharge the lis pendens, see Manzo v. Shawmut Bank, N.A., 291 N.J. Super. 194, 199 (App. Div. 1996) (noting that notices of lis pendens relate only to ongoing disputes regarding title to real property).
Next, we consider the Binets' claim that the court erred by dismissing and refusing to reinstate their third-party complaint against Censor. They argue that these decisions prevented them from "establishing the priority of their claim of ownership over the Censor [m]ortgage and [d]eed given to Deutsch." We disagree.
Rule 4:23-5(a)(1) permits the court to dismiss a claim without prejudice where a party has failed to properly provide discovery and cannot show "good cause for other relief." The rule also "expressly permits a plaintiff, whose complaint has been dismissed without prejudice under [Rule 4:23-5(a)(1)], to seek restoration of the complaint at any time prior to its dismissal with prejudice." Sullivan v. Coverings & Installation, Inc., 403 N.J. Super. 86, 96 (App. Div. 2008).
In this case, the court dismissed the third-party complaint without prejudice on June 6, 2008. At that time, the Binets had provided answers to interrogatories but had not responded to Censor's request for documents. Those followed by mail on June 19, 2008. Once this discovery was completed, the court should have granted the Binets' cross-motion to reinstate the third-party complaint. The failure to do so constituted error.
However, we are satisfied that the error was not clearly capable of producing an unjust result. See Rule 2:10-2 (stating that any error "shall be disregarded by the appellate court unless it is of such a nature as to have been clearly capable of producing an unjust result"). This rule requires a "'degree of possibility'" sufficient to raise doubts about whether the result would have been the same had the error not occurred.
State v. Ingram, 196 N.J. 23, 49 (2008) (quoting State v. R.B., 183 N.J. 308, 330 (2005)).
Counsel for the Binets acknowledged at the outset of the trial that Binets' claims against Censor and Deutsch were almost identical because the Binets sought to quiet title to the Property. Moreover, the disputes between the Binets and Deutsch were ultimately decided on their merits, and we find no error in the trial judge's substantive analysis. Furthermore, we conclude from our review of the record that the Binets were afforded a full and fair opportunity to present their claims and there has been no showing that the result would have been any different if the third-party claim against Censor had been reinstated. We therefore find the failure to reinstate the Binets' claim against Censor to be harmless error. R. 2:10-2.
Finally, we decline to consider the arguments raised in point seven. As the Binets themselves concede, Esther's individual interests were not fully litigated in the trial court. Moreover, Esther asserted those interests in a separate complaint. Therefore, we do not address them here. See Nieder v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) (noting the "well-settled principle that our appellate courts will decline to consider questions or issues not properly presented to the trial court when an opportunity for such presentation [was] available" unless they concern the court's jurisdiction or a matter of public importance).
The Binets' remaining arguments are without sufficient merit to warrant additional discussion. R. 2:11-3(e)(1)(A), (E).