HARBOR CREEK ASSOCIATES, G.P., A New Jersey Partnership, Plaintiff-Appellant,
ATLANTICARE HEALTH SERVICES, INC., Defendant-Respondent. ATLANTICARE HEALTH SERVICES, INC., Plaintiff-Respondent,
HARBOR CREEK ASSOCIATES, G.P., Defendant-Appellant.
NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION
Argued January 24, 2013
On appeal from Superior Court of New Jersey, Chancery Division, Atlantic County, Docket Nos. C-01-12 and C-02-12.
Jeffrey P. Blumstein argued the cause for appellant (Szaferman, Lakind, Blumstein & Blader, P.C., attorneys; Mr. Blumstein, of counsel and on the brief).
Angelo J. Genova argued the cause for respondent (Genova Burns Giantomasi & Webster, attorneys; Mr. Genova, of counsel; Jennifer Borek and Charles Messina, on the brief).
Before Judges Grall, Koblitz and Accurso.
Harbor Creek Associates, G.P. (Harbor Creek) leased commercial properties with three buildings to AtlantiCare Health Services, Inc. (AtlantiCare). There were two leases, and both provide AtlantiCare an option to buy, which AtlantiCare decided to exercise. Although the leases both had materially identical provisions establishing a procedure for fixing the purchase price in the event of a disagreement on price, the parties were unable to agree on that provision's meaning. Based only upon their differing interpretations of the appraisal process to which they had agreed, AtlantiCare believed it should pay $8, 815, 000 at closing and Harbor Creek believed it should receive $9, 737, 000.
The parties filed complaints for declaratory judgment on the same day, which were consolidated. On cross-motions for summary judgment, the judge accepted AtlantiCare's interpretation of the appraisal process. Harbor Creek appeals contending that the judge misinterpreted the parties' agreement. Because the judge's interpretation is consistent with the plain meaning of the agreement and effectuates the parties' intention, we affirm.
Where the facts are undisputed, an appellate court's review of an interpretation of a contract is de novo. Kieffer v. Best Buy, 205 N.J. 213, 222-23, 223 n.5 (2011). Courts read a contract as a whole and in accordance with the plain and ordinary meaning of the terms in order to determine the parties' intent. Id. at 223. Guided by those principles, we turn to consider the contract.
In 1996, the parties executed two fifteen-year term master lease agreements — one for lot 2.04, block 1401 and building 9 and the other for lots 2.02 and 2.03, block 1401 and buildings 10 and 11. A supplemental agreement executed the same day modifies various sections of both leases.
Section 14.2.1(a) of the master lease agreements establishes the process for determining purchase price by appraisal upon exercise of the options to buy in the absence of an agreement on purchase price. The introductory clause provides: "Unless [Harbor Creek] and [AtlantiCare] otherwise agree . . . the Purchase Price shall be determined by appraisal as follows . . . ."
Two appraisers, one appointed by each party, must determine the value of the "premises, " a term defined to include the real property and improvements and the "privileges and appurtenances thereto." If their appraisers' values differ by no more than ten percent of the lower value, then the purchase price is the average of the two appraisers' values. In pertinent part, 14.2.1(a) states:
[Harbor Creek], on the one hand, and [AtlantiCare], on the other hand, shall each appoint an Appraiser. . . . The two Appraisers shall determine the value of the Premises and if both Appraisals are within ten (10%) percent of each other (using the lower of the two appraisals to determine whether the appraisals are within ten (10%) percent of each ...