August 30, 2011
JAMES F. SILVA, JR., PLAINTIFF-APPELLANT,
ANN E. FITZPATRICK AND JOSEPH FITZPATRICK, HUSBAND AND WIFE, DEFENDANTS-RESPONDENTS.
On appeal from Superior Court of New Jersey, Chancery Division, Atlantic County, Docket No. C-92-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Telephonically argued January 13, 2011
Before Judges Carchman, Graves and Messano.
This partition action involves a dispute between plaintiff James F. Silva, Jr., and his sister, defendant Ann E. Fitzpatrick.*fn1 The property in question is a single-family home located in Longport, New Jersey, with a stipulated value of $900,000. Plaintiff appeals from a final judgment entered on October 14, 2009, which permitted either party to purchase the property in accordance with "an auction process" set forth in the judgment without any credits or adjustments to either party. We affirm.
By way of background, the property was originally purchased in September 1971 by Madeline and James Silva, the parents of plaintiff and defendant, who are two of four siblings. In 1989, James Silva executed a revocable deed of trust (the Trust), which provided for the maintenance and support of his wife, Madeline, if he predeceased her. Upon the death of both parents, the balance remaining in the Trust was to be equally distributed to their children.
When James Silva died on April 12, 1991, the property passed to his wife, Madeline. On March 19, 1993, Madeline, as executrix of her husband's estate, conveyed the property to the Trust. Madeline Silva died on January 24, 1996. On December 30, 1997, after the two non-party siblings were each paid $50,000 for their interest in the property, it was transferred from the Trust to plaintiff and defendant as tenants in common.
Consequently, the parties are equal owners, and they have both used the property in various ways. Plaintiff testified he occupied the property "during the winter months" and "had an office in one of the bedrooms" for his construction business. On the other hand, defendant and her family used the property primarily as a summer home from "mid-July to mid-September."
Plaintiff stated in his complaint that he "paid in excess of $200,000.00" to upgrade "all areas of the original three bedroom bungalow" and that the improvements included a "new heating system, air conditioning, roof, windows, bathroom, carpeting, furnishings and appliances." Plaintiff also stated that it was not practicable to partition the property in kind, and he requested that the property be sold and that he be reimbursed for his expenditures.
In her answer and counterclaim, defendant agreed the property should be sold, but she denied plaintiff was entitled to a greater portion of the proceeds from the sale. According to defendant, "[f]rom 1997 to 2007, [p]laintiff had virtually sole and exclusive possession of the premises," and none of the "alleged improvements to the property were approved by [her]." Defendant also sought to be reimbursed for the expenses she paid to maintain the property after plaintiff "vacated the premises [on] August 1, 2007."
The trial judge heard testimony from three witnesses: plaintiff, defendant, and Kathleen Wohlman, a real estate appraiser. Wohlman testified the property was "about a block and a half from the beach," and that its appraised value was $1,100,000 on November 1, 2007, and $925,000 as of July 20, 2009. Wohlman also confirmed that various improvements had been made to the home. However, when asked if she had an opinion as to "the value of the improvements or renovations," she testified that she "did not prepare a report with that in mind," and it would be difficult to determine "exactly what value was contributed by the renovations."
In addition, on cross-examination, Wohlman testified as follows:
Q. So if Mr. Silva says he put a family room onto the property you would be in no position to say how much that addition would have enhanced the value of the property[?]
A. Not without doing research.
Q. As we sit here today you're not in a position to testify that any enhancements made by Mr. Silva enhanced the, or improved the value of the property[?]
A. In my professional opinion it did. . . .
Q. But you can't tell us how much, can you?
A. No, I cannot.
The parties presented conflicting testimony. According to plaintiff, he "put almost $200,000" into the house, and defendant agreed that he would be reimbursed "at some point" if the house was sold. However, defendant testified she never had any discussions with her brother regarding reimbursement, and she never requested or authorized any improvements or renovations.
In an oral decision on September 1, 2009, the trial court found plaintiff had failed to prove that "his sister agreed to reimburse him." In addition, the court determined that plaintiff had failed to establish that his expenditures enhanced the value of the property:
I think it's just absolutely clear that the enhanced value of the property attributable to improvements is a subject that would require some expertise, it's a valuation issue. It's an opinion problem. . . . But for present purposes it's enough to note that Mr. Silva didn't offer any meaningful proofs with respect to that issue. He did have a real estate appraiser who testified, but she did not address that issue. . . . I think it's probably fair to conclude that the improvements did increase the value of the property on some level. If nothing else there was some additional area or rooms that were added. But I don't think that there are any competent proofs that have been presented that would permit one to assess whether that was a substantial amount or a relatively modest amount. And I don't know how I could conclude that Mr. Silva would have a right to some type of credit related to the improvements on the theory that they enhanced the value of the property without having some way of analyzing that issue, and I don't.
The court also rejected defendant's claim for reimbursement reasoning as follows:
The cases do refer generally to in the end equitable considerations having a substantial role in these kinds of cases. And given all the circumstances, and in particular the . . . undisputed fact that Mr. Silva did spend some fairly substantial amounts of money and did in one way or another improve the property . . . I am satisfied it would simply not be equitable to impose on him an obligation to contribute to the expenses for the last couple of years.
Thus, the court determined that neither party was entitled to a credit.
On appeal, plaintiff presents the following points:
THE TRIAL COURT ERRED IN ITS INTERPRETATION OF THE LAW AND FAILED TO APPLY ITS EQUITABLE POWER TO ADVANCE A REMEDY PURSUANT TO THE MAXIMS OF EQUITY TO WHICH IT IS BOUND AND MUST BE REVERSED TO AVOID UNJUST ENRICHMENT TO DEFENDANT WITH A CREDIT TO PLAINTIFF FOR HIS SUBSTANTIAL EXPENDITURES AT THE PROPERTY.
THE TRIAL COURT MISAPPLIED THE LAW TO THE FACTS RELATIVE TO THE PRINCIPLES SET FORTH IN THE CASE OF BAIRD V. MOORE THAT REQUIRE AN EVALUATION OF THE TOTAL FACTUAL PICTURE TO ASCERTAIN AN APPROPRIATE EQUITABLE REMEDY IN THE PRESENT PARTITION ACTION WHICH MUST NOW BE REVERSED.
THE TRIAL COURT IGNORED AN EQUITABLE REMEDY AND IN DOING SO ERRED BY FAILING TO ADDRESS THE FACT THAT IN THE ABSENCE OF A CREDIT TO PLAINTIFF DEFENDANT IS UNJUSTLY ENRICHED.
(ALTHOUGH SPECIFICALLY NOT MENTIONED BELOW,) ANY ISSUE AS TO SHARED EXPENSE BY PLAINTIFF WHILE DEFENDANTS WERE IN SOLE POSSESSION IS ABSORBED BY DEFENDANTS' REFUSAL TO SELL THE PROPERTY A YEAR PRIOR TO TRIAL FOR $200,000 MORE THAN THE STIPULATED VALUE AT THE TRIAL.
After reviewing the record and applicable law, we are satisfied that these arguments are without sufficient merit to warrant extended discussion. R. 2:11-3(e)(1)(A) and (E). We add only the following comments.
Plaintiff claims he should have been allowed a credit for his documented expenditures because "[h]e had a clear expectation of reimbursement based upon the actions and behavior of his sister and her entire family for sixteen years." However, the allocation of credits and adjustments between cotenants is "governed by the basic justice and fairness of the situation," Baird v. Moore, 50 N.J. Super. 156, 173 (App. Div. 1958), and, in this case, the trial court carefully weighed all of the equitable considerations.
In addition, the trial court correctly concluded that plaintiff was not entitled to any credit for improvements to the property because he failed to demonstrate that his expenditures increased the value of the property. See Donnelly v. Capodici, 227 N.J. Super. 310, 311 (Ch. Div. 1987) (imposing an equitable lien in favor of plaintiffs because their "improvements had increased the value of the real property by $7,500 more than the defendants' improvements").
The scope of our review is limited. We may "not disturb the factual findings and legal conclusions of the trial judge unless we are convinced that 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) (citation omitted). This is not such a case.