May 10, 2012
J & PIRE, INC. AND TZU-YIN CHENG, PLAINTIFFS-RESPONDENTS,
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.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION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.
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 disruption to the second-floor unit. Due to the death of Paul Cheng, and the extensive construction work to separate the utilities, the apartments were vacant for a year.
In June 2009, plaintiffs filed their complaint, alleging violations of the CFA, common law fraud and negligence. On the date scheduled for trial, defendants' counsel asked to be relieved, producing a letter that stated, "Dear [name of attorney], [a]s o[f] October 13, 2010, Cresthill Realty, Frances Mastropole and Joseph Mastropole wish to relieve you as counsel in the above-referenced case and represent themselves." Joseph Mastropole was the only defendant present in court for trial, as his mother was ill and unable to attend. Joseph assured the judge that his mother also wished to discharge their then-attorney. Because a corporation cannot proceed without an attorney, see R. 1:21-1(c), the judge entered default against Cresthill Realty. The judge also entered default against Frances Mastropole. After questioning Joseph, who testified that he understood the risks he was taking by representing himself, the judge granted counsel's motion to be relieved. Joseph Mastropole proceeded pro se.
Jerry Cheng's testimony described his family's reliance on the MLS listing and the expenses they incurred to separate the utilities. He provided evidence in the form of bills and invoices for repairs totaling approximately $23,000. He also testified regarding the lost rents from the second and third floor apartments. The total damages claimed were $51,443.99.
In his testimony, defendant admitted that the MLS listing had advertised the property as having "separate utilities," but he insisted that this was an innocent mistake. Called as a witness by plaintiff, his testimony was as follows:
Q: Isn't it true that you told everybody out in the public through the multiple listing that this had all separate utilities?
A: Yeah. I told you that was a mistake and it was later clarified --Q: Did you ever correct that mistake?
A: No, I didn't know it existed.
Defendant also insisted that he told Paul Cheng that the utilities were not in fact "separate." Defendant testified that the third-floor apartment had heat, because he could not have rented it, and could not have obtained a certificate of inspection for the premises, unless the apartment was heated. The judge admitted the certificate of inspection in evidence.
As the charge conference, defendant moved for dismissal of the CFA count, which was denied. The judge charged the jury on negligence, common law fraud and the CFA. As to the CFA, the judge limited his instructions to the portion of the model jury charge dealing with affirmative misrepresentation. The judge did not instruct the jury on acts of omission under the CFA, and defendant did not request such an instruction.
After deliberating, the jury found that defendant had violated the CFA and that plaintiffs sustained damages in the amount of $41,483.41. The jury also found that defendant committed common law fraud and negligence resulting in the same amount of damages. After trebling the damages, and adding attorneys fees and costs pursuant to N.J.S.A. 56:8-19, the judge entered judgment in the amount of $124,450.23, exclusive of pre-judgment interest.
In his first point, defendant maintains that the document that purported to be the MLS Disclosure Form was not the document plaintiffs viewed at the time the property was for sale, and, for that reason, the judge erred by admitting the document in evidence.*fn2 As defendant did not voice any objection when the document was admitted, we will not reverse on this ground unless any error was "clearly capable of producing an unjust result." R. 2:10-2. As we have noted, defendant admitted at trial that the MLS Disclosure Form that plaintiffs viewed, and relied upon, did state that the property had "all separate utilities" for each of the three apartments. In light of that testimony, even if the document in question was wrongly admitted, any error would have been harmless. We reject the claim defendant advances in his first point.
In his second point, defendant maintains the judge erred by failing to instruct the jury on acts of omission under the CFA. In particular, he asserts that the judge "erred by not allowing the jury to consider whether defendant concealed a significant fact in addition to the alternative of whether defendant made a material misrepresentation." According to defendant, because "[a]n affirmative misrepresentation does not require intent, nor reliance on the misrepresentation[,] . . . it is not necessary that a person has actually been misled or deceived or that the defendant intended that his conduct should deceive." But, he argues, where there is no concealment or omission, a plaintiff must prove that the defendant intended that others would rely on that concealment or omission of facts in connection with the sale of the real estate. See N.J.S.A. 56:8-2. Defendant maintains that the judge's failure to instruct the jury on acts of omission "prevented the jury from analyzing the factual scenario properly and rendering a valid verdict based on appropriate jury instructions containing accurate explanations of the law applicable to the facts."
Plaintiffs alleged that defendant affirmatively misrepresented that the property had "all separate utilities" on each floor. That there may have been a second ground for finding a CFA violation does not in any way affect the validity or propriety of the jury's verdict that defendant violated the CFA based upon his affirmative misrepresentation. See Tindal v. Smith, 299 N.J. Super. 123, 137-38 (App. Div.), certif. denied, 150 N.J. 28 (1997).
As an analogy, in a product liability trial, if a plaintiff had proceeded on a theory of manufacturing defect, and the jury rendered a verdict in the plaintiff's favor on that claim, it is doubtful that a defendant would be able to prevail on appeal by arguing that the judge erred by refusing to also instruct the jury on the elements of a design defect. If a jury renders a verdict in favor of plaintiff on one claim, here, an affirmative misrepresentation under the CFA, a defendant is not harmed by the judge's omission of an instruction on a different form of consumer fraud under the CFA. We reject the claim defendant advances in his second point.
In his third point, defendant maintains that the judge committed reversible error by refusing to grant an adjournment of the trial after defendant discharged his attorney on the first day of trial. "Cases scheduled for trial [must] be ready to proceed on the initial trial date." R. 4:36-3(a). A request for an adjournment must be made prior to trial, in writing, explaining the exceptional circumstances requiring such relief.
R. 4:36-3(b). Once the trial has commenced, it must proceed in a continuous and uninterrupted manner. R. 4:35-4.
By choosing to discharge his attorney on the first day of trial, plaintiff created the very predicament about which he now complains. In response to the judge's questions, plaintiff acknowledged that as a self-represented litigant, he would be bound by the same rules as an attorney. When offered the opportunity to have his attorney remain to assist him with jury selection, defendant declined. The record reflects that when the judge advised both parties on the first day of trial that a jury would be brought to the courtroom after lunch to begin the jury selection process, defendant did not ask for an adjournment of the trial. His only comment related to whether Jerry Cheng had personal knowledge of the transaction and whether he was old enough to testify. In response to the judge's inquiry, plaintiffs' counsel explained that Jerry Cheng was seventeen years of age at the time his parents purchased the property, and was now twenty years old. At no time during that discussion did defendant request an adjournment of the trial.
Defendant argues that he objected on "several" occasions to being required to proceed without an adjournment. The record tells us otherwise. First, defendant relies on the following comment he made to the judge on the second day of trial:
I'm sorry, Your Honor, I didn't have an opportunity to do that. We came here that day when I fired my attorney and then a half an hour later here we were, boom. I haven't had an opportunity to do that. I would suggest that we have some time -- What defendant fails to explain is that his comment to the judge arose only in the context of the judge's remark that before the testimony began, defendant should have asked "the court clerk [to] mark all [his] proposed exhibits for identification. Then, as [defendant] use[d] them during the trial, those [he] offer[ed] [would] be argued and marked into evidence or not." Only then did defendant explain that shortly after he "fired" his attorney, the trial began and he "[hadn't] had an opportunity to [mark his exhibits]." It was at that juncture that defendant suggested he be afforded "some time" to do so. The judge excused the jury and plaintiffs and asked defendant to remain in the courtroom for a short while so that the court clerk could pre-mark defendant's exhibits.
It is clear from an analysis of the context in which defendant's remark was made that he did not ask for an adjournment. He simply commented to the judge that he was unaware that he should have pre-marked his exhibits and had not had sufficient time to do so. He did not -- contrary to his claims on appeal -- ask the judge for an adjournment.
The second time defendant claims he asked for an adjournment was a little while later on the second day of trial when, in response to plaintiffs' motion in limine, defendant stated:
I actually was ambushed in this thing just yesterday. Had I known I would be representing myself and my attorney wasn't doing his job, I would have made sure that this stuff was on the money, and I didn't have the chance to do that.
A closer examination of the record reveals that when plaintiff made the comment about being "ambushed" he was not asking for an adjournment. Instead, he was responding to plaintiffs' in limine motion and arguing that he "shouldn't be held by the strict ethical code that attorneys are held by because [he] actually was ambushed in this thing just yesterday." As the record makes clear, defendant's comment about undertaking the responsibility of self-representation on short notice was not a request for an adjournment of the trial, but was instead, defendant's response to plaintiffs' in limine motion. Defendant did not ask for an adjournment. It bears repeating that it was defendant who waited to discharge his attorney until the day of trial, rather than discharge him sufficiently in advance of trial to be able to secure new counsel.
As no adjournment requests were made, it is beyond dispute that the judge did not err by refusing to grant such a request. We reject the claim defendant advances in point three.