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Ciro Mederos and Eugene Vasquez v. H & C Development Corp.


January 24, 2013


On appeal from Superior Court of New Jersey, Law Division, Hudson County, Docket No. L-2878-07.

Per curiam.


Argued June 5, 2012

Before Judges Espinosa and Kennedy.

Plaintiffs Ciro Mederos, Eugene Vasquez, Cesar Ramos and Juan Castillo entered into a contract of sale with H&C Development Corp., Marshall Weisman, Hudson 3312 LLC, Palisades Realty Holdings, LLC, and Cantello, LLC (collectively, defendants or the Weisman defendants) in April 2006 for the purchase of certain real property by defendants in Union City known as the Italian Community Center (ICC). Plaintiffs filed an action against defendants, seeking monetary damages based upon six causes of actions.*fn1 The parties resolved their dispute in September 2008, continued negotiations through May 2009 and entered into a written Settlement Agreement (the Agreement).

The terms of the Agreement included: a confession of judgment by defendants in the amount of $4.9 million, allocated between plaintiffs and the defendants/intervenors (¶ 1); a second mortgage on the ICC property in the amount of $4.9 million (¶ 1.b); and a collateral mortgage for $4.9 million on certain property in Union City known as The Thread, to be held in escrow by plaintiffs' attorney, and released "only as permitted under paragraphs 4, 8, 10, 19 and 22 herein." (¶¶ 1.c, 2).

The Weisman defendants were required to make certain

payments pursuant to the terms of the Agreement and, inter alia, were required to apply to the Union City Redevelopment Agency and/or any other appropriate agency for approvals relating to the inclusion of the ICC property into the Swiss Town Redevelopment Area ("STRA") in Union City. In the event the Weisman defendants failed to make such application within forty-five days, Paragraph 4 of the Agreement provided that upon notice,

Plaintiffs' attorney may release from escrow the Confession of Judgment and the mortgage on The Thread . . ., may cause this mortgage to be recorded, and may enter judgment against the Weisman Defendants in accordance with the Confession of Judgment.

Paragraph 1B of the Agreement required the Weisman defendants to promptly furnish copies of tax bills for the ICC and Thread properties to plaintiffs but also stated,

However, the Weisman Defendants in their sole discretion shall decide when and in what amounts to pay any such taxes so long as their actions do not prejudice obtaining the Approvals referenced in paragraph 3 or the Construction Approval referenced in paragraph 7, as the case may be.

Plaintiffs deemed defendants to be in breach of their obligations under the Agreement. They brought a motion, returnable in January 2011, for damages and specific performance of allegedly unperformed conditions under the contract. The trial court denied the motion without prejudice, finding that defendants had substantially complied with the essential terms of the contract.

Plaintiffs filed a second motion in or about May 2011, to enter an order finding defendants had breached the settlement agreement; entering judgment against defendants jointly and severally in the sum of $4,340,000; and to permit plaintiffs to record the mortgage on "the Thread property."

Oral argument was held on this motion on June 24, 2011. The court noted that defendants met all of their payment obligations under the Agreement. The court did not find any basis to depart from its earlier finding that defendants had not breached its obligations under the Agreement for the reasons previously advanced by plaintiffs. However, the court noted that plaintiffs had raised a new issue, that "'[t]he ICC property may be lost to foreclosure' for defendant's failure to pay taxes on the subject property." The court concluded that defendants had breached the covenant of good faith and fair dealing and, thus, the Agreement, by failing to pay taxes and exposing the property to possible foreclosure. The court observed that the parties had contractually agreed on the amount of damages and stated, "judgment should be entered in accordance with this agreed upon calculation[.]"

The court's decision on the motion was silent regarding plaintiffs' request to have the mortgage on the Thread property recorded. Counsel for plaintiffs inquired as to the numbers in the calculation to be included in the order. In response, the court stated,

Why don't you . . . submit an amended order. I've already signed your order that was submitted. You can just send me an amended order.

Counsel for plaintiff asked if he could have a copy from the judge's law clerk and the court said, "[s]ure." There was no further discussion regarding the recordation of the mortgage.

The June 24, 2011 order that was submitted with plaintiffs' motion included language that permitted the recording of the Thread mortgage. Although signed by the judge, the order was never filed. Further, it is apparent from the colloquy with counsel that the court did not intend for that order to be filed or to have adjudicatory effect. Rather, the court asked counsel to supply an order to reflect its ruling with the additional information counsel referenced.

When counsel for plaintiff submitted the amended order, it contained the same language regarding the recording of the mortgage as the June 24 order. Counsel for defendants objected to the form of order on the ground that the court had not ruled that plaintiffs could record the mortgage. The court entered an order, dated June 27, 2011, which struck the paragraph declaring that plaintiffs were entitled to record the mortgage on the Thread property.

Plaintiffs filed a motion for reconsideration, asking the court to reinstate the struck paragraph. Plaintiffs argued that, because the court had signed the first order, it had granted plaintiffs' request to record the mortgage. Plaintiffs contended that the unfiled order constituted "a jural act and . . . the Law Of The Case."

The trial court noted that, to be enforceable, an order must be filed in accordance with R. 1:5-6(b). The court reasoned that, because the June 24 order was never stamped filed, filed, or properly entered, it was not enforceable. The court recognized that, in Mahonchak v. Mahonchak, 189 N.J. Super. 253 (App. Div. 1983), we stated, "[i]t is well settled that the oral pronouncement of a judgment in open court on the record constitutes the jural act and that the entry of the written judgment is merely a ministerial memorialization thereof." Id. at 256. The motion judge noted, however, that he never ruled in [his] oral articulation whether the plaintiffs were entitled to record the mortgage on the [T]hread property or not. And as such, . . . the third provision relating to the mortgage was properly excised from the June 27th, 2011 order since it was never addressed by the Court orally on the record.

The court concluded that the only "valid and enforceable order" was the order signed after receiving defendants' opposition to the paragraph regarding the recordation of the mortgage, and denied the motion for reconsideration by order dated August 5, 2011.

Plaintiffs filed a notice of appeal, later amended to specify that their appeal was from the orders dated June 24, 2011*fn2 and August 5, 2011. Defendants filed a protective cross-appeal. By order dated December 27, 2011, we limited plaintiffs' appeal to the August 5, 2011 order that denied their motion for reconsideration.

In this appeal, plaintiffs argue that they were entitled to the relief that was the subject of the struck paragraph because defendants failed to perform material obligations under the Agreement.

Plaintiffs' appeal from the denial of plaintiff's motion for reconsideration is governed by Rule 4:49-2. Such a motion lies within the trial court's sound discretion. Capital Fin. Co. of Del. Valley, Inc. v. Asterbadi, 398 N.J. Super. 299, 310 (App. Div.), certif. denied, 195 N.J. 521 (2008) (citing Johnson v. Cyklop Strapping Corp., 220 N.J. Super. 250, 257 (App. Div. 1987), certif. denied, 110 N.J. 196 (1988)). "Reconsideration should be utilized only for those cases [that] fall into that narrow corridor in which either 1) the [c]court has expressed its decision based upon a palpably incorrect or irrational basis, or 2) it is obvious that the [c]court either did not consider, or failed to appreciate the significance of probative, competent evidence." Cummings v. Bahr, 295 N.J. Super. 374, 384 (App. Div. 1996) (quoting D'Atria v. D'Atria, 242 N.J. Super. 392, 401 (Ch. Div. 1990)); see also Fusco v. Bd. of Educ. of Newark, 349 N.J. Super. 455, 462 (App. Div.), certif. denied, 174 N.J. 544 (2002).

In asking the trial court to reconsider the order dated June 27, 2011, plaintiffs argued that a prior, unfiled, order constituted a jural act and the law of the case. Their argument rested upon authority that an oral decision on the record constituted such a jural act and the entry of a written order merely constituted a ministerial act. The fatal flaw in this argument, as recognized by the trial court, was that there was no oral decision on the record to support the granting of relief plaintiffs requested. Since the June 24 order was never filed, there was no jural act granting the relief. See Cmty. Realty Mgmt. v. Harris, 155 N.J. 212, 228 (1998); Mahonchak, supra, 189 N.J. Super. at 256. We are therefore satisfied that the trial court did not abuse its discretion in denying plaintiffs' motion for reconsideration.


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