September 23, 2011
PETER R. DELLI SANTI, JR. AND SUSAN KASCHAK DELLI SANTI, PLAINTIFFS-APPELLANTS,
GOLDEN KEY REALTY, DEFENDANT-RESPONDENT/ THIRD-PARTY PLAINTIFF,
DONALD MUNDY AND JOAN MUNDY, THIRD-PARTY DEFENDANTS/ RESPONDENTS.*FN1
On appeal from Superior Court of New Jersey, Law Division, Somerset County, Docket No. L-545-08.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued Telephonically September 9, 2011
Before Judges Payne and Messano.
Plaintiffs, Peter R. Delli Santi, Jr. and Susan Kaschak Delli Santi, appeal from an order dismissing without prejudice for lack of standing their action against defendant, Golden Key Realty, alleging violation of the Consumer Fraud Act, N.J.S.A. 56:8-1 to -195. We affirm as to Peter Delli Santi and reverse as to Susan Delli Santi.
On April 27, 2006, plaintiff Susan Delli Santi purchased residential property located in Warren, New Jersey, which, the listing allegedly stated, included a detached commercial building with a variance for conducting a pattern-making business and two studio apartments. The property was purchased for income-producing purposes for $831,500 from Donald and Joan Mundy. The real estate broker was Golden Key Realty. In the fall of 2006, the township zoning officer informed the Delli Santis that the detached building could not be lawfully used for commercial purposes or as a rental, because it was located in a single-family residential zone. On November 5, 2007, Susan conveyed the property to a family trust, White Stone Realty, L.L.C., for nominal consideration.
Thereafter, the Delli Santis filed suit against Golden Key, which filed a third-party complaint against the Mundys and plaintiffs' closing attorney, Erwin C. Schnitzer, who later was granted summary judgment. On November 6, 2009, plaintiffs moved to name the Mundys as direct defendants, and the motion was granted. Although the amended complaint was served on the Mundys, there is no evidence that it was ever filed. On November 20, 2009, the Mundys' answer to Golden Key's third-party complaint was suppressed with prejudice pursuant to Rule 4:23-5(a)(2) for failure to provide discovery.
Thereafter, in June 2010, Golden Key moved to dismiss plaintiffs' complaint, arguing that plaintiffs had failed to mitigate damages and that they lacked standing, because the property had been transferred to White Stone at the time that suit was commenced. It does not appear that the Mundys joined in the motion, which was granted without prejudice on the ground of lack of standing on July 9, 2010. The order stated: "Plaintiffs may re-file consistent with the oral argument held on this date." The judge envisioned that the suit would be refiled in the name of White Stone. She did not address whether Whitestone as a subsequent purchaser could assert a consumer fraud claim against Golden Key.
On August 20, 2010, the Delli Santis sought reconsideration of the judge's order. The motion was opposed by Golden Key as untimely under Rule 4:49-2 and as failing to establish proper grounds for relief. Additionally, counsel for the Mundys filed opposition to the motion, joining in the arguments of Golden Key and arguing additionally that Susan Delli Santi had not demonstrated that she had sustained an ascertainable loss as required by the Consumer Fraud Act. See N.J.S.A. 56:8-19. In connection with that opposition, and to demonstrate the Mundys' "vested interest in the disposition of Plaintiffs' Motion," counsel attached a stipulation of dismissal without prejudice between Golden Key and the Mundys, filed on July 27, 2010. Reconsideration was denied on August 27, 2010 on the ground that the motion was not timely filed.
Plaintiffs appealed on October 12, 2010, claiming that they had standing to sue, as property owners in the years 2006 to 2007, for the "capitalized value" of lost rents.
Our review of the record in this matter satisfies us that, contrary to defendants' arguments, the Delli Santis' motion for reconsideration was not untimely, because it sought review of an order of dismissal that was interlocutory in nature. The time limitation of Rule 4:49-2 is applicable only to final judgments and orders. Pressler & Verniero, Current N.J. Court Rules, comment 1 on R. 4:49-2 (2011); Johnson v. Cyklop Strapping Corp., 220 N.J. Super. 250, 257 (App. Div. 1987) ("the trial court has the inherent power, to be exercised in its sound discretion, to review, revise, reconsider and modify its interlocutory orders at any time prior to the entry of final judgment"), certif. denied, 110 N.J. 196 (1988). However, that circumstance leads us to the further conclusion that this appeal is from an interlocutory order, and was improperly filed because a motion for leave to appeal was not sought or granted.*fn2
Nonetheless, in the interest of justice, we have determined to consider the matter on the merits, and we thus grant leave to appeal nunc pro tunc.*fn3 Caggiano v. Fontoura, 354 N.J. Super. 111, 125 (App. Div. 2002); Tradesoft Techs., Inc. v. Franklin Mut. Ins. Co., 329 N.J. Super. 137, 141 (App. Div. 2000).
We agree with the motion judge that Peter Delli Santi lacked standing to file suit in this matter, because in the absence of an individual ownership interest in the property, he lacked a sufficient stake in the litigation to render a claim by him cognizable. Jen Elec., Inc. v. Cnty. of Essex, 197 N.J. 627, 645 (2009); Crescent Park Tenants Ass'n v. Realty Equities Corp. of N.Y., 58 N.J. 98, 107 (1971).
Susan Delli Santi owned the property at issue from April 27, 2006 to November 5, 2007. Defendant Golden Key argues that as the result of her conveyance of the property to White Stone, she assigned to it any right that she had against Golden Key. In support of that proposition, it relies on Aronsohn v. Mandara, 98 N.J. 92, 100 (1984), a case in which the Court found that the sellers of property had, in effect, assigned to purchasers their interest in suing the defendant masonry corporation for breach of contract arising from defects in a patio that manifested after sale of the property had occurred. However, in that case, the original homeowners suffered no damage as the result of the breach of contract, whereas here, Susan Delli Santi has alleged economic damage. Golden Key offers no evidence or legal precedent to support the concept of an implied assignment in this context.
Golden Key also claims that the doctrine of merger, which we have equated to caveat emptor in McDonald v. Mianecki, 159 N.J. Super. 1, 18 (App. Div. 1978), aff'd, 79 N.J. 275 (1979), applies to bar claims by Susan Delli Santi. We interpret Golden Key's argument as claiming that Golden Key's representations regarding the use of the property were merged into the deed at the time of the conveyance of the property by the Mundys to Susan Delli Santi. We disagree. The Consumer Fraud Act expressly provides that "any unconscionable commercial practice, deception, fraud, false pretense, false promise, misrepresentation, or the knowing concealment, suppression, or omission of any material fact with intent that others rely upon such concealment, suppression or omission, in connection with the sale or advertisement of any . . . real estate . . . is declared to be an unlawful practice." N.J.S.A. 56:8-2. The statute thus excepts from the common law doctrine of merger, if otherwise applicable, any covenants or warranties that would, under that theory, be extinguished by the passage of title. Were the contrary to be the case, the Consumer Fraud Act could not generally be enforced in connection with consummated real estate transactions. But that clearly is not the case. See e.g., Strawn v. Canuso, 140 N.J. 43, 54-56, 60-66 (1995) (expressly repudiating the doctrine of caveat emptor in connection with the sale of real property, citing to McDonald as exemplifying the repudiation of that doctrine, and applying the Consumer Fraud Act to residential sales), superseded on other grounds by statute, see New Residential Real Estate Off-Site Conditions Disclosure Act, N.J.S.A. 46:3C-1 to -12.
We find no evidence or applicable precedent to support an argument by Golden Key that Susan Delli Santi relinquished her right to sue it in her individual capacity as a property owner by later conveying the property to White Rock.
We decline to address the Mundys' claim that the Delli Santis failed to offer prima facie evidence of ascertainable loss, concluding that the issue was not raised in connection with Golden Key's motion to dismiss, which the Mundys did not join, and was improperly raised in connection with the Mundys attempt to oppose reconsideration.
As a consequence, we affirm the dismissal of Peter Delli Santi, Jr.'s claims against Golden Key Realty; we reverse the dismissal of Susan Kascak Delli Santi's claims against Golden Key Realty; and we remand for further proceedings. We direct that the status of Susan Delli Santi's claims against Donald Mundy and Joan Mundy be established, and that any necessary steps be taken to perfect those claims.
Affirmed in part, reversed in part and remanded.