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J & Pire, Inc. and Tzu-Yin Cheng v. Cresthill Realty and Frances Mastropole

May 10, 2012

J & PIRE, INC. AND TZU-YIN CHENG, PLAINTIFFS-RESPONDENTS,
v.
CRESTHILL REALTY AND FRANCES MASTROPOLE, DEFENDANTS, AND JOSEPH MASTROPOLE, DEFENDANT-APPELLANT.



On appeal from the Superior Court of New Jersey, Law Division, Middlesex County, Docket No. L-4999-09.

Per curiam.

NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION

Submitted May 1, 2012

Before Judges Fisher and Baxter.

Defendant Joseph Mastropole*fn1 appeals from a $147,677.13 judgment entered against him pursuant to the Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20, based on his deliberate misstatements of fact in connection with the sale of real estate. We reject defendant's arguments that: 1) because plaintiffs failed to present to the jury the actual Multiple Listing Service (MLS) Disclosure Form on which they allegedly relied when purchasing the property, the judge erred by permitting the case to go to the jury; 2) the judge's instructions to the jury were faulty because the judge failed to instruct the jury on acts of omission under the CFA; and 3) the judge erred by refusing to grant an adjournment of the trial. We affirm.

I.

Plaintiffs, Jerry Cheng and his mother, Tzu-Yin Cheng, are the principal shareholders in J & Pire, Inc., a family-owned corporation established to purchase real estate for investment purposes. Until his death in February 2008, Paul Cheng, Jerry's father, was also a shareholder. Through their realtor, Dan Shiver, plaintiffs reviewed MLS listings for five properties, but were particularly interested in the Mastropole property, a three-story building on Market Street in Paterson. The property was owned by defendant Frances Mastropole and managed by defendant, her son, who was a real estate agent employed by defendant, Cresthill Realty.

Defendant was the broker of record and marketed the property by placing it on the MLS. While the listing as it originally appeared was no longer available on the internet, and was not produced by defendants in discovery, the MLS listing entitled the "sold information sheet" contained the same information that was contained in the MLS listing that plaintiffs reviewed when the property was for sale. The property was marketed as follows:

Great Opportunity for investors or live in.

3 Family Restaurant. Good Rental. All separate utilities. Garage driveway. Restaurant has 10 yr. lease. [(Emphasis added).]

The MLS listing also stated that the tenants were responsible for paying their own electricity, gas and heat.

When asked why he and his parents decided to purchase the Mastropole property, Jerry responded that not only was the price reasonable, but he and his parents were impressed by the property's rental history and the fact that it had "all separate utilities." The property consisted of four different units, with a restaurant and one apartment on the first floor, and one apartment on each of the two upper floors. In February 2007, Frances Mastropole accepted plaintiffs' offer to purchase the property for the sum of $395,000. Plaintiffs did not inspect the property to determine whether each of the units had separate utilities because they relied on the information they had viewed in the MLS Disclosure Form, which stated: "[a]ll separate utilities." They were not aware that the "[a]ll separate utilities" representation was inaccurate.

After plaintiffs' purchase of the property, their tenants began complaining that the utilities were not separately metered. In particular, the third-floor tenants complained about the electricity because it was attached to another unit and would sometimes fail. The third-floor tenants also complained they had no heat or hot water.

Plaintiffs hired a contractor to investigate, and he reported, consistent with the tenants' complaints, that the third-floor did not have separate utilities or separate utility meters. The third-floor tenants stopped paying rent in August 2007, and the tenants on the second floor did the same shortly thereafter. Plaintiffs hired a plumber, an electrician and a carpenter to install separate utilities, as well as a heating system on the third floor. On the second floor, although the utilities were already separate, the new wiring and pipes for the third floor had to be run through the second-floor apartment, which caused considerable ...


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