July 27, 2012
PINECREST VILLAGE, INC., PLAINTIFF-RESPONDENT,
SP 72, LLC, DEFENDANT-APPELLANT.
On appeal from the Superior Court of New Jersey, Law Division, Ocean County, Docket No. L-2469-09.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued March 14, 2012 Before Judges Cuff, Lihotz, and Waugh.
Defendant SP 72, LLC (SP 72), appeals from the Law Division's June 9, 2011 judgment in favor of plaintiff Pinecrest Village, Inc. (Pinecrest). We affirm.
We discern the following facts and procedural history from the record on appeal.
In February 2004, SP 72 and Pinecrest entered into an agreement to exchange parcels of real estate to facilitate SP 72's plans to develop the property on which Pinecrest operated a mobile home park. In exchange for two adjoining lots suitable for Pinecrest's purposes, Pinecrest agreed to transfer its existing property to SP 72, which planned to build a BJ's Wholesale Club (BJ's) at that location.
Under the agreement, SP 72 was required to "improve" its two parcels prior to transfer, which included obtaining all approvals for the development of seventy-five mobile home lots. Pinecrest was "responsible for the demolition and removal of all mobile homes, sheds, trash and debris from [its existing] property." The parties agreed that settlement would occur "30 days after the completion of the Mobile Home Park Improvements or eighteen (18) months after the execution of this Agreement (unless extended)," whichever was later.
In June 2006, at Pinecrest's request, the parties amended their original agreement to extend the time for Pinecrest to complete its obligations. The amendment provided that "Pinecrest shall use best efforts to complete relocation of its residents in 90 days, said relocation of residents shall be completed in 6 months with (3) 30 day extensions if required." It further provided that "[a]ll other terms and conditions of the agreement shall remain the same."
In October 2006, SP 72 entered into an agreement with BJ's for preparation of Pinecrest's old property. The agreement provided that SP 72 would complete certain work by March 1, 2008. Pinecrest, however, had only started the relocation and demolition at its old site after issuance of the first certificate of occupancy (CO) for the new site on October 5, 2007.
According to Pinecrest, the CO could not be obtained earlier because of an overdue water main payment by SP 72. Pinecrest took the position that the timeline contained in the amendment did not begin to run until SP 72 obtained the CO, because the mobile homes could not be relocated to the new site without a CO and demolition at its original site could not occur until the homes were relocated. In contrast, SP 72 took the position that the timeline was triggered on May 5, 2007, the date the first building permit was issued for the new location.
Because of the approaching deadline for completion of the work required for BJ's, Randy Scarborough, one of the principles of SP 72, told Pinecrest that SP 72 wanted to control the relocation and demolition, and that it would pay those costs so it could accelerate the process. That conversation took place in January 2008. Pinecrest, although unhappy with SP 72's desire to accelerate the relocation and demolition, nevertheless agreed to SP 72's proposal.
Pinecrest and SP 72 closed on their real estate transactions on April 25, 2008. On the same day, they entered into a survival agreement that continued each party's respective obligations under the original agreement and the amendment. The survival agreement did not reflect the parties' January 2008 oral agreement or the fact that SP 72 had undertaken performance of work related to the relocation and demolition.
As of August 2009, sixty-six mobile home sites had been completed at Pinecrest's new location, and nine were still under construction. At the end of August, Pinecrest filed a complaint against SP 72, alleging breach of contract, negligence, common law fraud, and consumer fraud. SP 72 filed an answer and counterclaim in September. In its counterclaim, SP 72 sought reimbursement for the costs it incurred in performing the relocation and demolition.
Following a bench trial on April 6, 7, and June 9, 2011, the trial judge delivered an oral decision finding in favor of Pinecrest on its claims and against SP 72 on its counterclaims.
Of particular relevance to this appeal, the trial judge found that SP 72 was not entitled to reimbursement for the $245,191.82 in expenses*fn1 it incurred in relocating the residents of Pinecrest Village and demolishing the site. This appeal followed.
SP 72 raises the following issues on appeal:
POINT I: AS A MATTER OF LAW, THE TRIAL COURT IGNORED THE UNAMBIGUOUS AND UNEQUIVOCAL LANGUAGE OF THE AGREEMENT AND AMENDMENT AND THE PARTIES' INTENT BEHIND THOSE WRITTEN CONTRACTS
POINT II: PINECREST'S CONTRACTUAL OBLIGATION TO PERFORM DEMOLITION AND RELOCATION WAS NEVER MODIFIED IN WRITING AND THE TRIAL COURT'S FINDING TO THE CONTRARY VIOLATES THE TERMS OF THE PARTIES['] AGREEMENT, AS WELL AS CONTRACTUAL CONSIDERATIONS AND PRINCIPLES POINT III: EVEN IF THE COURT CONCLUDED THAT SP 72 WAS NOT ENTITLED TO COMPENSATORY DAMAGES FOR PINECREST'S BREACH OF THE AGREEMENT, SP 72 REMAINED ENTITLED TO RECOVERY AS PINECREST WAS UNJUSTLY ENRICHED BY SP 72'S PERFORMANCE OF PINECREST'S OBLIGATIONS UNDER THE AGREEMENT When reviewing a decision resulting from a bench trial, "[t]he general rule is that [factual] findings by the trial court are binding on appeal when supported by adequate, substantial, credible evidence." Cesare v. Cesare, 154 N.J. 394, 411-12 (1998) (citing Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474, 484 (1974)). We do not disturb the factual findings 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.'" Id. at 412 (quoting Rova Farms, supra, 65 N.J. at 484); see also Beck v. Beck, 86 N.J. 480, 496 (1981).
It is also well-established that our review of a judge's conclusions of law is plenary. Manalapan Realty, L.P. v. Twp. Comm. of Manalapan, 140 N.J. 366, 378 (1995) ("A trial court's interpretation of the law and the legal consequences that flow from established facts are not entitled to any special deference."). "Interpretation and construction of a contract is a matter of law for the court subject to de novo review." Fastenberg v. Prudential Ins. Co. of Am., 309 N.J. Super. 415, 420 (App. Div. 1998) (citing Bradford v. Kupper Assocs., 283 N.J. Super. 556, 583 (App. Div. 1995), certif. denied, 144 N.J. 586 (1996)).
"As a general rule, courts should enforce contracts as the parties intended. Similarly, it is a basic rule of contractual interpretation that a court must discern and implement the common intention of the parties." Pacifico v. Pacifico, 190 N.J. 258, 266 (2007) (citations omitted). In construing a contract, the court should "consider what was written in the context of the circumstances under which it was written, and accord to the language a rational meaning in keeping with the expressed general purpose." Atl. N. Airlines, Inc. v. Schwimmer, 12 N.J. 293, 302 (1953) (citing Casriel v. King, 2 N.J. 45 (1949)); see also Town of Kearny PBA Local #21 v. Kearny, 81 N.J. 208, 221 (1979) (To construe contract language, courts may consider, in addition to the text, "the circumstances leading up to the formation of the contract, custom, usage, and the interpretation placed on the disputed provision by the parties' conduct.").
The crux of the trial judge's decision on the relocation and demolition expenses was his factual finding that SP 72 voluntarily assumed those responsibilities, even though, under the written terms of the agreement, they had been assigned to Pinecrest. The judge found as a fact that SP 72 entered into the demolition on its own volition; that it felt it was in its own best interest; that it understood the obligations SP 72 had vis-avis its contract with BJ's; that it made a business determination that the cost of the demolition was to the advantage of the defendant SP 72 to insure that it would be in a position to turn over the property to BJ's at the time required by the contract.
The Court finds that there was no unnecessary delay from Pinecrest Village; that Pinecrest Village was not in a position to obtain any Certificate of Occupancy prior to September of 2007; that it did move expeditiously once the issue was finally resolved between SP 72 and the Township of Stafford; that it would be impossible for Pinecrest Village to place homes in Lot 17 prior to September of 2007.
The Court finds accordingly that the determination to move forward with the demolition on behalf of SP 72 was voluntarily entered into and that they violated the terms of the amendment to the exchange agreement.
The judge similarly found that SP 72 voluntarily undertook responsibility for compensation of the Pinecrest Village residents' moving and temporary storage costs.
The judge's factual findings are well-supported by the record. The judge found the testimony of Dan Latoof, Pinecrest's owner, to be "credible." He gave "little weight" to the testimony of SP 72's principals. We give great deference to a trial judge's credibility determinations. Seidman v. Clifton Savings Bank, S.L.A., 205 N.J. 150, 169 (2011).
SP 72 argues that, because there was never a written amendment of the original agreement with respect to the expenses at issue, any oral amendment to shift the relocation and demolition obligation from Pinecrest to it was unenforceable. We disagree. The conduct of the parties can take the place of a written amendment. A "writing requirement may be expressly or impliedly waived by the clear conduct or agreement of the parties or their duly authorized representatives." Home Owners Constr. Co. v. Borough of Glen Rock, 34 N.J. 305, 316 (1961) (citations omitted); see also Lewis v. Travelers Ins. Co. 51 N.J. 244, 253 (1968) ("[T]he parties did not thereby disable themselves from amending, supplementing or replacing the contract by a later agreement made orally or by conduct objectively manifesting a new understanding."); Salvatore v. Trace, 109 N.J. Super. 83, 91 (App. Div. 1969) (observing that contracting parties can waive a writing requirement through their conduct), aff'd, 55 N.J. 362 (1970).
SP 72 also points to the fact that the survival agreement does not reflect any change in obligation for the relocation and demolition expenses. Although that is a fact that the trial judge could have considered in SP 72's favor, it was not decisive. There is also nothing in the survival agreement to reflect any obligation that Pinecrest reimburse SP 72 for work it voluntarily undertook to perform under the January 2008 oral agreement.
SP 72 also argues that there was no consideration for its assumption of those responsibilities. As the trial judge determined, SP 72 agreed, for its own purposes, to carry out the relocation and demolition tasks, which it then proceeded to do. The benefits to SP 72 in being able to control and accelerate that work provided the required consideration for the modification. Oscar v. Simeonidis, 352 N.J. Super. 476, 485 (App. Div. 2002) ("Any consideration for a modification, however insignificant, satisfies the requirement of new and independent consideration.").
The remaining issues raised on appeal do not warrant further discussion in a written opinion. R. 2:11-3(e)(1)(E). We add only that the trial judge's finding that Pinecrest was not dilatory in performing its obligations with respect to the relocation and demolition was supported by credible evidence in the record.