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Neeraj Gupta v. Ivan Leung and Adeline Leung

December 5, 2012


On appeal from the Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-5581-09.

Per curiam.


Argued: October 24, 2012

Before Judges Axelrad, Sapp-Peterson and Nugent.

The seller appeals from the Law Division's summary judgment dismissal of his breach-of-contract claim against the buyers for failing to attend a residential real estate closing. The buyers cross-appeal from the subsequent summary judgment dismissal of their counterclaim alleging breach of contract, fraud, and violation of the New Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -20. We affirm.


In November 2009, plaintiff Neeraj Gupta filed a complaint against defendants, Ivan and Adeline Leung, alleging they breached a real estate sales contract by failing to attend the closing. Defendants filed an answer and counterclaim alleging breach of contract, fraud, and violation of the CFA. Plaintiff filed an answer to the counterclaim.

In August 2011, defendants filed a motion for summary judgment to dismiss plaintiff's complaint and compel the return of their deposit. Following oral argument on October 6, 2011, Judge Christine Farrington granted defendants' motion, dismissing plaintiff's complaint and directing return of the deposit, memorialized in an order of the same date.

Plaintiff filed a motion to stay the trial of defendants' counterclaim, and on October 26, 2011, moved for leave to appeal the October 6 order. By letter of November 9, 2011, Judge Farrington issued a written decision amplifying her prior oral opinion pursuant to Rule 2:5-1(b). On November 18, 2011, Judge Farrington stayed the trial of the counterclaim and order directing the return of defendants' deposit pending the resolution of plaintiff's motion for leave to appeal. By order of November 21, 2011, we denied that motion.

On December 16, 2011, plaintiff moved for summary judgment to dismiss defendants' counterclaim. Following oral argument, by order of January 20, 2012, Judge Hector R. Velazquez granted plaintiff's motion. His findings and conclusions were set forth on the record on January 23, 2012.

Plaintiff appealed the October 6, 2011 order dismissing his complaint. Defendants filed a cross-appeal of the January 20, 2012 order dismissing their counterclaim.


The property in dispute is a newly constructed home located on Knollwood Drive in Watchung owned by plaintiff. When plaintiff purchased the lot in 2005, there was a pre-existing sewer easement transversing the rear portion of the yard. Around 2007, plaintiff constructed a single-family home on the property. In early June 2009, plaintiff obtained a revocable license from the Borough of Watchung (Borough) that permitted him to install a drainage pipe within the easement. Plaintiff also constructed a wooden deck that encroached upon the sewer easement, although he was apparently unaware of the encroachment at that time.

On June 21, 2009, plaintiff entered into a contract for the sale of the property to defendants for $1,850,000. The contract provided for a deposit of $185,000. The agreement also contained a standard clause requiring plaintiff to deliver at closing, "on or about August 28, 2009," a Bargain and Sale Deed with Covenants as to Grantor's Acts.

The parties' attorneys made modifications to the agreement during the attorney review period. The August 28, 2009 date was not modified. The addendum required plaintiff to deliver a final certificate of occupancy (CO) at closing. Plaintiff's attorney also proposed, and defendants' attorney accepted, the following provision permitting defendants to cancel the agreement if issuance of the CO were delayed more than forty-five days beyond the closing date.*fn1 In paragraph 21, the parties agreed on the following terms, in pertinent part:

Under no circumstances whatsoever, shall seller be liable for any damage due to any delay in completion or closing of title, including, but not limited to, expenses incurred by buyer for the storage of household goods or temporary lodging and shelter. However, in the event the delay in issuance of the Certificate of Occupancy extends beyond forty-five (45) days from the estimated completion date stated in the paragraph entitled "Closing of Title and Possession" the purchaser shall have the right within ten (10) days of the aforesaid extended date to receive a refund of all deposit monies without interest and upon the payment of same, this agreement shall become null and void and neither party shall have any rights against the other.

Anticipating the closing would take place as scheduled, defendants sold their home. Defendants, however, learned on August 27, 2009, they would not be closing on the property the next day because a CO had not been issued. As they were unable to move into their new home, they moved into a hotel.

By early August, defendants' attorney had received the title search. Plaintiff stated in depositions that he first learned about the deck encroachment on September 30, 2009, after he received an as-built survey. Ivan*fn2 stated in depositions that he first learned of the sewer easement and the deck encroachment on September 30, 2009, when he received a copy of the survey from Borough officials.

Plaintiff testified in depositions that he spoke with Borough officials about obtaining a revocable license to allow the deck encroachment to remain and obtaining a temporary CO (TCO). According to plaintiff, the officials seemed favorable to granting a revocable license, but advised that if for any reason the Borough did not approve the license, he would be responsible for making whatever unidentified adjustments were necessary.

On October 6, 2009, plaintiff's attorney sent defendants' attorney a letter, advising the seller would have the CO by "tomorrow" and "would like to close title on Friday, October 9, 2009." The next day, October 7, plaintiff's attorney sent an e-mail confirming a voicemail message from defendants' attorney indicating that defendants' attorney could not close on Friday, and the office was closed on Monday, Columbus Day. "They said they wanted to close on October 20th. Also, the message indicated that the buyers' lender required 5 days from the issuance of the CO to review and close the loan."

Also on October 7, 2009, plaintiff's attorney wrote to defendants' attorney, informing her that the Borough "was set to issue the TCO for the subject closing" but Adeline "created issues and concerns" with officials "by stating that she did not want [plaintiff] to be issued a TCO" although the contract provided "that a TCO would be acceptable for closing." Plaintiff's attorney posited that defendants' interference caused delay in the issuance of the CO or TCO and thus "the time frame for the delivery shall be extended."

The next day, plaintiff's attorney notified defendants' attorney that the seller would have the CO by October 9, and would like to close title that day. On October 14, 2009, defendants' attorney informed plaintiff's attorney by letter that the seller had not yet obtained the CO, it was past the forty-five day deadline that ended on October 12, and defendants reserved "the right to cancel this transaction unless we can reach a new agreement."

Two days later, on October 16, 2009, plaintiff's attorney wrote to defendants' attorney advising that defendants "were at Borough Hall this morning lobbying the public officials concerning the subject property." Plaintiff's attorney claimed the seller "now has no choice but to submit revised plans for the deck, re-construct the deck, complete the grading, ...

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