MICHAEL CONLEY, JR. and KATIE M. MAURER, Plaintiffs-Appellants,
MONA GUERRERO, BRIAN KRAMINITZ, and MICHELE TANZI, Defendants-Respondents.
January 17, 2017
certification to the Superior Court, Appellate Division,
whose opinion is reported at 443 N.J.Super. 62 (App. Div.
William J. Kearns argued the cause for appellants (Kearns
& Duffy, attorneys).
Liberman argued the cause for respondent Mona Guerrero.
J. Machi argued the cause for respondents Brian Kraminitz and
Michele Tanzi (Morgan Melhuish Abrutyn, attorneys; Mr. Machi
and Joshua A. Heines, on the brief).
S. Goodman argued the cause for amicus curiae New Jersey
Realtors® (Greenbaum, Rowe, Smith & Davis, attorneys;
Mr. Goodman and Steven B. Gladis, on the brief).
Bradford Batcha argued the cause for amicus curiae New Jersey
State Bar Association (Thomas H. Prol, President, attorney;
Mr. Prol, of counsel; Mr. Batcha, Stuart J. Lieberman,
Michael G. Sinkevich, Jr., and Heather G. Suarez, on the
J., writing for a unanimous Court.
appeal, the Court determines whether the attorney-review
provision of a standard form real estate contract, which
specifies that notice of disapproval must be transmitted to
the real estate agent or broker by certified mail, telegram,
or personal service, must be strictly enforced.
January 12, 2014, plaintiffs Michael Conley, Jr., and Katie
M. Maurer (Buyers) signed a contract to purchase a
condominium from defendant Mona Guerrero (Seller). The real
estate agent prepared, and the parties used, a standard form
real estate contract. Seller signed the contract on January
14, 2014, and the executed agreement was delivered the next
day. Both the offer and acceptance were transmitted via
e-mail and/or fax.
agreement included an attorney-review clause, mandated by the
Court in New Jersey State Bar Ass'n v. New Jersey
Ass'n of Realtor Boards (Bar Ass'n). 93 KI 470,
476-77, modified. 94 KI 449 (1983), and N.J.A.C.
11:5-6.2(g)(2), which gave the parties' respective
attorneys three business days to review the contract before
it became legally binding. If Buyers' or Seller's
attorney disapproved the contract, the clause required that
he or she notify the "REALTOR(S) and the other party . .
. within the three-day period." Any notice of
disapproval was required to be sent to the "REALTOR(S)
by certified mail, by telegram, or by delivering it
bidding war began on the same day that the attorney-review
period commenced, and Seller accepted a higher bid from
defendants Michele Tanzi and Brian Kraminitz.
before the attorney-review period expired, Seller's
attorney e-mailed and faxed a letter to Buyers' attorney
disapproving the contract. After the deadline passed,
Buyers' attorney e-mailed a letter to the agent, and
faxed Seller's attorney a copy, stating that "the 3
days within which an attorney may terminate this contract
ha[ve] expired. The contract is now in full force and
then filed a breach-of-contract complaint in the Superior
Court, Law Division, demanding specific performance and
requesting a temporary restraining order to enjoin the sale
of the condominium to anyone other than Buyers. Buyers
claimed that because the three-day period within which
notification must have been communicated had passed, and
neither Buyers, their attorney, nor their agent received
proper notification of disapproval, "the contract became
trial court denied the application for a temporary
restraining order, and both parties filed cross motions for
summary judgment. The court granted defendants' motion
and dismissed the complaint. Buyers appealed, and the
Appellate Division affirmed the trial court's decision.
443 N.J.Super. 62 (App. Div. 2015). The panel found that the
agreement detailed the method of delivering a notice of
disapproval to the real estate agent only; any form of actual
notice to Buyers was sufficient; and Buyers' right to
notice of disapproval was satisfied here. Id. at
Court granted Buyers' petition for certification. 244
N.J. 526 (2016).
In this case, because Buyers received actual notice of
disapproval within the three-day attorney-review period by a
method of communication commonly used in the industry, the
notice of disapproval was valid. The Court also exercises its
constitutional authority over the practice of law and finds
that an attorney's notice of disapproval of a real estate
contract may be transmitted by fax, e-mail, personal
delivery, or overnight mail with proof of delivery. Notice by
overnight mail will be effective upon mailing. The
attorney-review period within which this notice must be sent
remains three business days.
1982, the NJSBA filed a suit against REALTORS seeking a
ruling that licensed real estate brokers or salespersons
engage in the unauthorized practice of law when they prepare
contracts for the sale or lease of property. The Court
reviewed the final consent judgment upon joint application of
the parties under its constitutional powers governing the
practice of law. Bar Ass'n, supra, 93
N.J. at 472. The Court approved the final consent judgment,
with modifications, and specifically noted that it may modify
the agreement in the future. Id. at 474. (pp. 10-13)
1987, the Real Estate Commission added Section (g) to
N.J.A.C. 11:5-6.2, requiring "licensees" in the
State, including real estate agents and brokers, to comply
with the terms mandated in Bar Ass'n,
supra, 93 N.J. at 475-81. Section 6.2(g) requires
every contract for the sale of certain real estate, including
the property at issue here, to contain the following language
within its attorney-review clause: "The attorney must
send the notice of disapproval to the Broker(s) by certified
mail, by telegram, or by delivering it personally." (pp.
Court has not decided whether an attorney's disapproval
letter must follow the precise notification procedures
detailed in the attorney-review clause. In Kutzin v.
Pirnie. 124 N.J. 500, 508 (1991), the Court commented in
dicta on the failure of both parties to comply with the
method-of-delivery provision. Gaglia v. Kirchner.
317 N.J.Super. 292, 298 (App. Div.), certif. denied.
160 KI 91 (1999), left open the question central to this
appeal: whether an individual can rely on the other
party's failure to abide by the method-of-notice
provision to enforce the contract, (pp. 15-17)
Bar Ass'n Court was concerned first and foremost
with protecting consumers' rights. The Court did not
draft the language of the settlement. Rather, the parties
chose the three methods of communication to notify the broker
of dissatisfaction with the contract. Bar Ass'n,
supra, 93 N.J. at 476, 480. The Bar
Ass'n Court contemplated that a court would have the
flexibility to grant relief without strictly adhering to the
settlement agreement's terms because the Court explicitly
granted courts the power to address, "in the most
appropriate manner under the given circumstances, "
"questions of the interpretation, application, and
general adherence to or enforcement of the settlement. . .
that may arise and affect the public interest."
Id. at 474. (pp. 18-19)
cases following Bar Ass'n. the Appellate Division has
honored effectuating the purpose of the attorney-review
clause. In Peterson v. Estate of Pursell. 339
N.J.Super. 268, 273-75 (App. Div. 2001), the Appellate
Division found the attorney-review clause to require that the
three-day review period begin on the date the signed contract
is delivered to a party, not its agents. The panel found this
rule supported the purpose of the attorney-review clause- to
protect the parties' interests from the real estate
broker. InLevisonv. Weintraub, 215 N.J.Super. 273,
274-75, 277 (App. Div.), certif. denied, 107 N.J.
650 (1987), the panel stated that when "attorney
disapproval is registered within three days there can be no
contract, regardless of prior approvals, " finding that
this holding supported the attorney-review clause's
purpose. And in Romano v. Chapman, 358 N.J.Super.
48, 52 (App. Div.), certif. denied, 176 N.J. 431
(2003), the panel based its decision on the need to
effectuate the broad purpose of the attorney-review clause
and not on a strict interpretation of its language, (pp.
the appellate panel observed, strict enforcement of the
notification provision here would result in the forfeiture of
Seller's right to review the contract with counsel and
disapprove it within the attorney-review period. Holding that
the notice here-which was actually and indisputably received
by Buyers within the three-day window -was deficient because
of the manner in which it was transmitted would elevate form
over the protective purpose for which the attorney-review
provision was adopted. The Court declines to reach such a
result, (pp. 22-23)
Court reserved its right to modify the settlement reached in
Bar Ass'n and does so: notice of disapproval of
a real estate contract may be transmitted by fax, e-mail,
personal delivery, or overnight mail with proof of delivery.
Notice by overnight mail will be effective upon mailing. The
attorney-review period within which this notice must be sent
remains three business days. The Court commends this matter
to the Real Estate Commission for consideration of amendments
to N.J.A.C. 11:5-6.2(g) consistent with the
Court's holding. The Court recognizes that it may need to
modify the attorney-review clause again in the future, (pp.
judgment of the Appellate Division is
AFFIRMED as modified.
JUSTICE RABNER and JUSTICES LaVECCHIA, ALBIN, PATTERSON,
FERNANDEZ-VINA, and TIMPONE join in JUSTICE SOLOMON'S
1983, this Court affirmed a final consent judgment for a
settlement agreement between the New Jersey State Bar
Association and the New Jersey Association of Realtor Boards.
New Jersey State Bar Ass'n v. New Jersey Ass'n of
Realtor Boards (Bar Ass'n), 93 N.J. 470, 476-77,
modified, 94 N.J. 449 (1983). The terms of the
settlement provide that real estate brokers and salespersons
may prepare contracts to sell or lease real property, so long
as a standard form is used that includes a three-day period
for attorney review. If, during this review period, an
attorney disapproves the contract, he or she must notify the
other party and the other party's real estate agent or
broker. If no notice of disapproval is sent within the three
days, however, the contract becomes enforceable. The standard
attorney-review provision specifies that notice of
disapproval must be transmitted to the real estate agent or
broker by certified mail, telegram, or personal service.
Michael Conley, Jr., and Katie M. Maurer (Buyers) made an
offer to purchase a condominium from defendant Mona Guerrero
(Seller), and, a few days later, Seller signed and executed
the contract. Before the three-day attorney-review period
expired, Seller's attorney sent Buyers' attorney and
their realtor notice of disapproval by e-mail and fax, rather
than by the methods approved under our 1983 holding and
prescribed in the parties' contract -- certified mail,
telegram, or personal service. ...