ADLER ENGINEERS, INC. et al v. DRANOFF PROPERTIES, INC.
OPINION. Signed by Judge Robert B. Kugler on 7/5/2016. (tf, )
UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF NEW JERSEY
ADLER ENGINEERS, INC., ADLER
GEOSCIENCE, INC., and ADLER
DRANOFF PROPERTIES, INC.,
Civil No. 14-921 (RBK/AMD)
KUGLER, United State District Judge:
This contract dispute between Plaintiffs Adler Engineers, Inc., Adler Geoscience, Inc.,
and Adler Associates, Inc. (collectively, “Plaintiffs” or “Adler”) and Defendant Dranoff
Properties, Inc. (“Defendant” or “Dranoff”) stems from a dispute over the attempted sale by
Adler of property in Camden, New Jersey. This matter is before the Court on Dranoff’s Motion
for Reconsideration (“Defendant’s Motion”) [Dkt. No. 71] of the Court’s February 8, 2016
Opinion [Dkt. No. 68]1 (the “Summary Judgment Opinion”) and Order [Dkt. No. 69] that,
relevant to Defendant’s Motion, granted-in-part and denied-in-part each of Dranoff’s motion for
summary judgment and Adler’s motion for summary judgment. For the reasons that follow,
Defendant’s Motion will be DENIED.
Reported at Adler Eng’rs, Inc. v. Dranoff Props., Inc., Civ. No. 14-0921 (RBK/AMD), 2016
WL 528160 (D.N.J. Feb. 8, 2016). The Court will refer to the pagination of the version reported
FACTUAL BACKGROUND AND PROCEDURAL HISTORY
The Court set out the lengthy factual background and procedural history of this case in its
Summary Judgment Opinion, 2016 WL 528160, at *1–4. A summary of the relevant facts are
THE CONTRACT AND THE APPRAISAL PROCESS
Pursuant to a contract between Plaintiffs and Defendant, the parties had engaged in the
process of determining a fair price for the sale of property at 129 Market Street, Camden, New
Jersey 08102 (the “Property”). Id. at *1–3. The contract, generally speaking, required the
parties to each choose their own appraisers with certifications from the Members Appraisers
Institute (“MAI”) to appraise the Property, and if their appraisals differed by more than 10%, to
have the appraisers choose a third MAI-certified appraiser to provide a third appraisal. Id. at *1.
Then, based on the three appraisals, a purchase price would be arrived at and confirmed by
written notice from Defendant to Plaintiffs. Id.
Plaintiffs’ appraiser, Eugene Pasymowski, valued the Property at $1,820,000, while
Defendant’s appraiser, John Lynch, valued the Property at $925,000. Id. at *2. Because these
numbers were more than 10% apart, pursuant to the contract, the two appraisers selected a third
appraiser. Id. After some problems in agreeing on the third appraiser, eventually Lee Romm
was selected as the third appraiser, and valued the Property at $1,275,000. Id. Based on the
terms of the contract, Mr. Pasymowski’s valuation was discarded, and averaging Mr. Romm’s
and Mr. Lynch’s valuation resulted in a purchase price of $1,100,000. Id. at *3. This price was
communicated to Plaintiffs on February 14, 2008 via email, and Plaintiffs’ attorney, Kenneth
Roth, confirmed the price on or about the same day. Id.
On February 15, 2008, however, Mr. Roth rescinded his confirmation, explaining that he
had “communicated agreement with the purchase price too quickly,” and instead told Defendants
they believed that Mr. Romm had failed to take into consideration facts pertinent to his appraisal.
Id. Mr. Roth also conveyed these issues in a letter to Mr. Romm dated February 19, 2008. Id.
During this time period, Plaintiffs were also in discussions with their own appraiser,
Mr. Pasymowski, in order to try to get him to reduce his appraisal value. Id. Once aware of Mr.
Romm’s appraisal, Julian Toneatto, a representative from Plaintiffs, informed Mr. Pasymowski
that if his appraisal were lowered to around $1,600,000, then his appraisal would be part of
determining the purchase price, which would result in an increased purchase price. Id.
On February 20, 2008, Defendant’s counsel emailed Mr. Roth to terminate the contract,
stating that Plaintiffs’ “demand that the Romm Appraisal be revised is a blatant and material
breach of the Agreement of Sale.” Id. Mr. Roth replied later the same day that Plaintiffs
believed both Mr. Romm and Mr. Lynch had “failed to adhere to the standards and guidelines of
the relevant accrediting organizations by failing to take into consideration existing facts on the
record as to the value of the Property and to use those facts or reject them as the appraisers see fit
using their professional judgment.” Id. Mr. Roth further replied that Plaintiffs would be willing
to move on with the sale if Mr. Romm could explain why the issues they raised should not be
considered or were irrelevant to his appraisal. Id.
Mr. Romm did reply a little under two weeks later, on March 4, 2008, explaining that the
additional facts raised by Plaintiff did not impact his appraisal, but that based on a mathematical
error he discovered, he was raising his appraisal by $10,000to $1,285,000. Id. at *4. As the
Court noted, “the parties continued to dispute the appraisals. Plaintiffs affirmed their position
that the appraisals were inaccurate, and Defendant continued to assert that Plaintiffs ‘refusal to
accept these arrangements continue[d] to constitute a material, intentional and willful default
under the Agreement.’” Id. (alteration in quoting source).
At some point subsequently, Mr. Pasymowski did reduce his appraisal downward to
$1,500,000, which Plaintiffs forwarded to Defendant on April 10, 2008. Id. Plaintiffs informed
Defendant that they would be willing to go forward with a purchase price of $1,392,500—the
average of Mr. Pasymowski’s and Mr. Romm’s revised appraisals. Id. Defendant rejected this,
asserting that this was “a second deliberate attempt to manipulate the appraisal process under the
Agreement of Sale.” Id. Approximately six years later, Plaintiffs brought suit.
THE COURT’S RULING
The crux of the cross motions for summary judgment was that each party believed the
other had materially breached the contract, and each believed they had performed properly under
the contract. Id. at *6. Defendant argued that because the contract was silent as to permitting
challenges to the appraisers’ valuations, the contract must be construed as not permitting any
challenges. Id. Defendant cited to two cases which the Court discussed—a precedential opinion
from the New Jersey Superior Court, Appellate Division, Cap City Products co., Inc. v.
Louriero, 332 N.J. Super. 499 (App. Div. 2000), and an unpublished opinion from the same
court, Cablevision of Oakland, LLC v. CK Bergen Holdings, LLC, No. A-2767-12, 2014 WL
923226 (N.J. Super. Ct. App. Div. Mar. 11, 2014) (per curiam).
The Court declined to agree with Defendant, instead relying on the reasoning espoused in
Leach v. Princeton Surgiplex, LLC, No. A-6120-11, 2013 WL 2436045 (N.J. Super. Ct. App.
Div. June 6, 2013) (per curiam) to find “it unreasonable to infer from the Contract’s silence that
the parties intended to waive all right to inquire as to the appraiser’s methods no matter how
incorrect or faulty the appraisals were.” Summ. J. Op., 2016 WL 528160, at *6. In
distinguishing Cap City and Cablevision, the Court also noted “[t]he fact that a court cannot
evaluate the validity of an appraisal as a matter of law absent egregious error does not mandate
that parties to a contract are also . . . foreclosed from raising concerns.” Id. As a result, the
Court rejected Defendant’s position that the February 15, 2008 email from Plaintiffs’ counsel
was a material breach, finding that the email relayed concerns over Mr. Romm’s apparent failure
to consider information Plaintiffs believed he was required to consider under applicable
guidelines for appraisers. Id. This led the Court to conclude that Plaintiffs could have breached
the contract if they continued to refuse the purchase price after Mr. Romm had explained why
Plaintiffs’ objections did not affect his valuation, but Defendant did not provide the opportunity
prior to terminating the agreement on its own. Id.
The Court went on to find that although Plaintiffs did not breach the express terms of the
contract, “material issues of fact still exist as to whether Plaintiffs discharged their duties
throughout the appraisal process in good faith.” Id. at *7. Noting both that Defendants pointed
to several communications between Plaintiffs’ representative, Mr. Toneatto, and Plaintiffs’
appraiser, Mr. Pasymowski, about revising his request prior to Defendant’s termination and that
Plaintiffs provided a sworn declaration to clarify Mr. Toneatto’s intent, the Court found that the
issue of intent was a factual determination left for the jury to decide. Id. As such, the Court
denied summary judgment on the issue of breach of contract. Id. Defendant’s Motion timely
Defendant has also filed a reply brief and additional affidavit with its reply brief in support of
their motion. (Def.’s Reply [Dkt. No. 73]; Korn Decl. [Dkt. No. 74].) Local Civil Rule 7.1(d)(3)
clearly states: “No reply papers shall be filed, unless permitted by the Court, relating to the
following motions: . . . Reconsideration under L.Civ.R. 7.1(i) . . . .” Defendant has sought no
permission from the Court, and likewise none has been granted on the Court’s own motion.
Defendant’s Reply will thus not be considered.
Plaintiffs’ claims are based on New Jersey state law. Plaintiffs are each New Jersey
corporations with their principal place of business located in New Jersey, and Defendant is a
Pennsylvania corporation with its principal place of business located in Pennsylvania. (Third
Am. Compl. [Dkt. No. 25] ¶¶ 10–14.) Plaintiffs claims are for more than $75,000, thus the Court
exercises subject matter jurisdiction pursuant to 28 U.S.C. § 1332(a)(1).
In this District, Local Civil Rule 7.1(i) governs motions for reconsideration. Local Civil
Rule 7.1(i) will apply rather than Federal Rule of Civil Procedure 59 where no final judgment
has been entered, but only a partial grant or denial of summary judgment. See Warner v. Twp. of
S. Harrison, 885 F. Supp. 2d 725, 747–48 (D.N.J. 2012). However, the standard for evaluating
the request is the same. Id.
“The scope of a motion for reconsideration . . . is extremely limited.” Blystone v. Horn,
664 F.3d 397, 415 (3d Cir. 2011). “The purpose of a motion for reconsideration is ‘to correct
manifest errors of law or fact or to present newly discovered evidence.’” Lazaridis v. Wehmer,
591 F.3d 666, 669 (3d Cir. 2010) (citing Max’s Seafood Cafe ex rel. Lou-Ann, Inc. v. Quinteros,
176 F.3d 669, 677 (3d Cir. 1999)). A motion for reconsideration “must rely on one of three
grounds: (1) an intervening change in controlling law; (2) the availability of new evidence; or
(3) the need to correct clear error of law or prevent manifest injustice.” Id. (citing N. River Ins.
Co. v. CIGNA Reinsurance Co., 52 F.3d 1194, 1218 (3d Cir. 1995)).
“A party seeking reconsideration must show more than a disagreement with the Court’s
decision, and recapitulation of the cases and arguments considered by the court before rendering
its original decision fails to carry the moving party’s burden.” Facteon, Inc. v. Comp Care
Partners, LLC, Civ. No. 13-6765, 2015 WL 519414, at *1 (D.N.J. Feb. 9, 2015) (quoting G–69
v. Degnan, 748 F. Supp. 274, 275 (D.N.J. 1990)). “A motion for reconsideration should not
provide the parties with an opportunity for a second bite at the apple.” Tishcio v. Bontex, Inc., 16
F. Supp. 2d 511, 533 (D.N.J. 1998) (citation omitted).
Defendant raises three challenges to the Court’s decision: (1) the Court improperly relied
on Leach; (2) the Court overlooked factual evidence establishing that Plaintiffs did breach the
contract; and (3) the Court overlooked multiple legal arguments raised by Defendant in its
summary judgment papers. (See Def.’s Mot. Br. [Dkt. No. 71-2] at 1–2.) None of these
arguments relies on an intervening change in controlling law or the availability of new evidence,
so the only basis for Defendant’s Motion is “the need to correct clear error of law or prevent
manifest injustice.” For the reasons that follow, Defendants’ Motion will be denied.
THE COURT’S RELIANCE ON LEACH WAS PROPER
Defendant challenges the Court’s reliance on the unpublished decision of the Appellate
Division in Leach. Defendant argues that Leach improperly relied on Elberon Bathing Co. v.
Ambassador Insurance Co., 77 N.J. 1 (1978), based on an apparent abrogation of Elberon by
Tretina Printing, Inc. v. Fitzpatrick & Assocs., Inc., 135 N.J. 349 (1994) (per curiam),
recognized by the Appellate Division in Cap City. (Def.’s Mot. Br. at 5–6). Defendant
additionally argues that the Appellate Division has held repeatedly in similar context as the
contract between the parties here that if the contract does not provide for a method to challenge
the appraiser’s valuation, then any challenge is foreclosed, citing to Cablevision as well as
Cardoso v. Goldberg, No. A-4904-05, 2007 WL 4062187 (N.J. Super. Ct. App. Div. Nov. 19,
2007) (per curiam) (Id. at 6–8.) Defendant also maintains that Leach is distinguishable from the
facts here. (Id. at 3–5.) Plaintiffs respond that Elberon and Leach both remain good law, that the
Court did not misinterpret or misapply Leach, and that the factual discrepancies pointed to by
Defendants are irrelevant. (Pls.’ Opp. [Dkt. No. 72] at 4–11.)
Elberon Remains Good Law
Defendants are incorrect that Elberon is not good law in New Jersey. A discussion of the
relevant case law is necessary to understand the arguments presented. In Elberon, the New
Jersey Supreme Court held that appraisers should utilize the “broad evidence rule” to “consider
all evidence an expert would consider relevant to an evaluation.” 77 N.J. at 13. Finding that an
appraiser “can make no legal determinations,” the court concluded that a reviewing court was
permitting to set aside an appraiser’s award where there was legal error. Id. at 15–16. The court
went on to specifically distinguish appraisal and arbitration, explaining that while arbitration is a
“quasi-judicial proceeding . . . . [a]ppraisers act on their own skill and knowledge, need not be
sworn and need hold no formal hearings so long as both sides are given an opportunity to state
their positions.” Id. at 16–17.
A little over fifteen years later, in 1994, the New Jersey Supreme Court in a per curiam
opinion explained that under the New Jersey Arbitration Act, N.J.S.A. 2A:24-1, et seq., a court
may only vacate arbitration awards “for fraud, corruption, or similar wrongdoing on the part of
the arbitrators.” Tretina, 135 N.J. at 358 (quoting Perini Corp. v. Greate Bay Hotel & Casino,
Inc., 129 N.J. 479, 548 (1992) (Wilentz, C.J., concurring)). This displaced the standard set forth
by the plurality opinion in Perini that permitted reversal for “egregious mistakes of law.” Id. at
356–57. However, nowhere in Tretina does the court cite to Elberon or mention the word
“appraise” or any derivative thereof.
Six years later in 2000, when the Appellate Division recognized an abrogation of Elberon
by Tretina in Cap City, the court reasoned that the opinion in Tretina “lays out a broad, strong
policy, based on the concurring opinion presented by Chief Justice Wilentz in Perini.” Cap City,
332 N.J. Super. at 508. The court in Cap City held that decisions of appraisers and arbitrators
should be reviewed by courts using the same standard of review, and refused to recognize a
distinction between the two. Id. at 508–09. The court went on to state that “[t]o the extent that
statements in prior cases . . . suggest a different principle, or reach a different conclusion because
the independent party performing the decision-making function is termed something other than
an arbitrator, those cases must be deemed modified by the subsequent holding in Tretina.” Id. at
508. However, the court in Cap City also reached this conclusion, after generally finding that the
activity at issue was more properly deemed an arbitration rather than an appraisal, and in contract
language that the parties would use a third party “to arbitrate a binding settlement.” Id. at
A mere two days later, a different panel of the Appellate Division explicitly relied on
Elberon to explain that a court may set aside an award where “the appraiser for the insured”
failed to consider certain facts in his valuation. Ward v. Merrimack Mut. Fire Ins. Co., 332 N.J.
Super. 515, 528–29 (App. Div. 2000) (citing Elberon, 77 N.J. at 15–16). The court in Ward
mentioned neither Tretina nor Cap City, and was content to rely on Elberon as stated. Id. The
court in Ward also did not suggest that decisions of arbitrators and appraisers would be reviewed
under the same standard of review by a court. Id.
This disparity was noted by the Tenth Circuit Court of Appeals when applying New
Jersey law in Salt Lake Tribune Publishing Co., LLC v. Management Planning, Inc., 454 F.3d
1128 (10th Cir. 2006). The Tenth Circuit in affording Cap City less persuasive value noted,
“[t]he Appellate Division’s analysis in Cap City conflicts with several decisions from the New
Jersey Supreme Court where it has distinguished arbitrations and appraisals based on whether the
decision-maker has authority to make legal determinations.” Salt Lake Tribune, 454 F.3d at
1135–36. The court went to remark that the decision in Ward “further dilutes Cap City’s
persuasive power.” Id. at 1136. The court ultimately held, “The New Jersey Supreme Court has
not departed from its 1978 ruling in Elberon. Further, we have no reason to predict that the New
Jersey Supreme Court would overrule Elberon because it has given no indication it would do
The court in Leach also noted the disparity, and relied upon the reasoning of the Tenth
Circuit in Salt Lake Tribune to determine that Elberon was still good law, and that “our standards
for setting aside an arbitration award—i.e., fraud, corruption, or similar wrongdoing—although
applicable, are not the only circumstances that may form a challenge to an appraisal designed to
fix a contractual term.” Leach, 2013 WL 2436045, at *4 (citation omitted). The court
continued, “[i]n short, the law views an appraisal process like that adopted by the parties here
differently than the arbitration process. An aggrieved party may challenge an appraisal not only
on the grounds recognized in Tretina for attacking arbitration awards, but also when the
appraiser has made a mistake of law or when the appraiser has misapprehended the facts or
issues presented.” Id. at *5.
However, the court in Cablevision, issued about nine months later, adhered to the
determination of the court in Cap City, although only as it related to a “business valuation
appraiser,” and rejected the reasoning of Salt Lake Tribune in a footnote. Cablevision, 2014 WL
923226, at *5 & n.4. Aside from one other unreported decision of the Appellate Division cited
to by Defendant, Cardoso, which was decided in 2007 before either Leach or Cablevision, this
Court is unable to find any other case that follows the Cap City court in this manner. On the
other hand, at least one unpublished opinion from the Appellate Division has followed Ward in
using the standards set forth in Elberon and recognizing no abrogation. See Moscaritolo v.
Akincibasi, No. A-4670-06, 2009 WL 2913952, at *10 (N.J. Super. Ct. App. Div. Sept. 14, 2009)
(per curiam), cert. denied, 201 N.J. 155 (2010). Furthermore, cases from the Appellate Division
and other courts of this district have continued to cite Elberon without noting any abrogation
after the Cap City decision. See, e.g., Turkmany v. Excelsior Ins. Co., Civ. No. 12-142 (ES),
2014 WL 3556390 (D.N.J. July 18, 2014); Puhlovsky v. Rutgers Cas. Ins. Co., No. A-2162-13,
2014 WL 9967355 (N.J. Super. Ct. App. Div. July 1, 2015) (per curiam); Crum & Forster Ins.
Cos. v. Mecca & Sons Trucking Corp., No. A-3570-06, 2009 WL 2917898 (N.J. Super. Ct. App.
Div. Sept 9, 2009) (per curiam), cert. denied, 201 N.J. 439 (2010).
When sitting in diversity, it is the job of the federal court “to follow state law as
announced by the highest state court.” Sheridan v. NGK Metals Corp., 609 F.3d 239, 253 (3d
Cir. 2010) (internal quotations omitted). In the absence of a decision from the highest court, the
federal court may turn to the intermediate appellate court, and “[w]here an intermediate appellate
state court rests its considered judgment upon the rule of law which it announces, that is a datum
for ascertaining state law which is not to be disregarded by a federal court unless it is convinced
by other persuasive data that the highest court of the state would decide otherwise.” Id. at 254
(internal quotations omitted).
Being fully cognizant of these constraints, the Court concludes that Defendant’s
contentions for why Elberon is no longer good law fail. The opinion of the Appellate Division
recognizing abrogation in Cap City appears to be an aberration. As recognized by the Tenth
Circuit in Salt Lake Tribune and a later panel of the Appellate Division in Leach, the rationale
underpinning the abrogation fails. Although the panel in Cablevision chose to follow Cap City,
the panel provided no reasoning for its decision. See Cablevision, 2014 WL 923226, at *5 & n.4.
The panel in Cardoso did not reverse the trial court judge for relying on the higher standard in
Cap City, but never expressly found Elberon to be abrogated and even appears to consider that
the standard in Elberon may be appropriate. See Cardoso, 2007 WL 4062187, at *5. In light of
this exhaustive review of the case law, this Court adopts the reasoning of the courts in Salt Lake
Tribune and Leach to conclude that Elberon remains good law.
Plaintiffs Were Permitted to Question the Appraiser’s Determination
Defendant further argues that based on the decisions of the Appellate Division in
Cablevision and Cardoso, “there is no room to challenge the procedure other than that provided
for in the contract.” (Def.’s Mot. Br. at 6.) However, Defendant’s challenge fails here, too.
Defendant is correct that Cablevision involves a similar method of appraisal, wherein
each party chose an MAI-certified appraiser, and if the two appraisers could not agree, they
would appoint a third appraiser to set the value. Cablevision, 2014 WL 923226, at *1. However,
that is where the similarities end. The contract between the Cablevision parties “state[d] that the
third appraiser’s decision ‘shall be final.’” Id. Ultimately, the parties required a third appraiser,
who set the valuation below either of the parties’ appraisers, and the defendant refused to execute
the agreement based on the value set by the third appraiser. Id. at *2. The defendant “instead
proposed various revisions” including more than doubling the value set by the third appraiser.
Id. Plaintiff then sued to enforce the third appraiser’s valuation, and defendant argued that the
third appraiser had failed to comply with the terms of the contract in the number of comparable
properties which he analyzed. Id. The trial court rejected defendant’s arguments as meritless,
albeit creative based on the contract language, and the appellate court rejected the argument by
defendant that “the court was empowered to review the appraiser’s decision for an error of law,
or a misinterpretation of the parties’ lease.” Id. at *3–5. The appellate court also relied on the
fact that the parties “expressly agreed that the appraiser’s decision ‘shall be final.’” Id. at *5.
Similarly, in Cardoso, the parties used an appraiser system wherein each party to the
agreement selected one MAI-certified appraiser who together selected a third appraiser.
Cardoso, 2007 WL 4062187, at *2. However, only the third appraiser would actually provide an
appraisal value, and not either of the appraisers selected by the parties. Id. The appraisal
received was then well below the expected amount, being $50,000 below the value of an
outstanding mortgage and almost $300,000 below the value of the prior year’s tax assessment.
Id. The plaintiff then sued seeking, among other avenues of relief, to invalidate the appraisal
“because it deviated from recognized appraisal standards, failed to rely on appropriate facts and
data, and included an erroneous analysis of value.” Id. at *3. The trial court denied relief,
relying on Cap City, and plaintiff appealed. Id. at *5. The appeals court noted that plaintiff
“advance[d] no facts to support a contention that [the appraiser] misapplied the law or failed to
consider relevant factual evidence. He suggests nothing to sustain a finding of fraud or other
legal excuse to set aside [the] appraisal.” Id. The court, relying on the terms of the agreement
rejected plaintiff’s challenge and found that “[h]ad the parties intended to preserve the right to
challenge the opinion of the single appraiser, such a provision could have been inserted in the
agreement.” Id. at *6 (citing Mt. Hope Dev. Assoc. v. Mt. Hope Waterpower Project, L.P., 154
N.J. 141, 149 (1998)).
Both Cablevision and Cardoso are distinguishable on the facts from the instant dispute.
The contract in question here provided for no such finality from Mr. Romm’s appraisal, and
Plaintiffs never filed suit to directly call Mr. Romm’s appraisal into question. Rather, Plaintiffs
identified what they believed was an oversight by Mr. Romm, called the oversight to Mr.
Romm’s attention, and requested that Mr. Romm explain why it was not an oversight or adjust
his appraisal accordingly. Mr. Romm then complied by explaining why it was not an oversight.
As the Court originally stated, and restates here, “‘it cannot be seriously argued that the appraiser
is entitled to determine fair market value by spinning a wheel and flipping a coin, or that the
appraiser may consider less than all relevant evidence, or that no party could question a
mathematical error in the appraiser’s calculations.’” Summ. J. Op., 2016 WL 528160, at *6
(quoting Leach, 2013 WL 2436045, at *2.)
Additionally, as noted by Plaintiffs, “[e]ven if Defendant is correct that an appraiser’s
determination is entitled to the same deference given an arbitrator’s award, that fact does not lead
to the conclusion that Plaintiffs breached the Agreement by requesting that the appraisers
consider new facts.” (Pls.’ Opp. at 5.) As the Court made clear, “[t]he fact that a court cannot
evaluate the validity of an appraisal as a matter of law absent egregious error does not mandate
that parties to a contract are also . . . foreclosed from raising concerns.” Summ. J. Op., 2016 WL
528160, at *6 (first emphasis in original, second emphasis added). Just as parties may request in
settlement negotiations that which the court may not provide, so, too, may a party request outside
of litigation what it may not be given in litigation.
To the extent Defendant attempts to further distinguish Leach based on the facts, this is
improper on a motion for reconsideration. See Red Roof Franchising LLC, Inc. v. AA Hosp.
Northshore, LLC, 937 F. Supp. 2d 537, 547 (D.N.J. 2013) (“The law in this District is clear that a
motion for reconsideration is improper when it is used to ask the Court to rethink what it had
already thought through—rightly or wrongly.” (internal quotation marks and modification
omitted)), aff’d sub nom. Red Roof Franchising, LLC v. Patel, 564 F. App’x 685 (3d Cir. 2014).
Further, each of their attempts to distinguish Leach fails, as the issues raised are irrelevant when
considering that Defendant unilaterally terminated the contract within five days of Plaintiffs
communicating their concerns over Mr. Romm’s valuation.
In sum, Leach was based on good law, and it was proper for this Court to consider Leach
in evaluating the parties’ claims; neither Cablevision nor Cardoso mandates a different result;
and the holding of this Court neither creates manifest injustice nor presents any risk of the
slippery slope of horrors Defendant predicts will fall upon parties to contracts in New Jersey.
Defendant’s Motion will be denied with respect to the argument that the Court’s reliance on
Leach was a clear error of law.
THE COURT DID NOT OVERLOOK FACTUAL EVIDENCE
REGARDING PLAINTIFFS’ ALLEGED BREACH
Defendant further argues that the Court overlooked factual evidence of continuing
conversations between Plaintiffs and Defendant regarding the purchase price of the property
beyond Defendant’s February 20, 2008 termination of the contract. (Def.’s Mot. Br. at 8–9.)
Plaintiffs respond that not only did the Court discuss communications between the parties
subsequent to the February 20, 2008 termination, they are not dispositive of whether Plaintiffs
performed at the time of Defendant’s termination. (Pls.’ Opp. at 11–12.) The Court agrees with
What is relevant to the question of whether Plaintiffs were in breach at the time
Defendant terminated the contract is what Plaintiffs had done before the time of termination.
The Court remarked that “it is quite possible that Plaintiffs would have been in breach of the
Agreement had they continued to refuse the purchase price after [Mr.] Romm explained that
Plaintiffs’ objections did not affect his valuation, Defendant did not give them an opportunity
prior to terminating the Agreement on its own.” Summ. J. Op., 2016 WL 528160, at *6. The
operative time period was the time between Plaintiffs’ letter to Defendant and Mr. Romm and
when Defendant terminated the contract, not after Mr. Romm responded to Plaintiffs’ letter. The
continuing communications beyond February 20, 2008 are therefore irrelevant.
Defendant does not challenge the Court’s conclusion that they terminated the contract on
February 20, 2008. Allegations in Defendant’s Motion that the parties continued to act as though
they had a contract, (see Def.’s Mot. Br. at 8–9), are therefore also irrelevant. Defendant’s
Motion will be denied as to the claim that the Court overlooked factual evidence.
THE COURT DID NOT OVERLOOK DEFENDANT’S LEGAL
Finally, Defendant argues that the Court overlooked multiple of Defendant’s legal
arguments that were raised in Defendant’s original moving papers in support of its own motion
for summary judgment, and in Defendant’s opposition to Plaintiffs’ original motion for summary
judgment. (Def.’s Mot. Br. at 9–10.) The three issues Defendant alleges the Court overlooked
are (1) the parties acted as though there was still a contract; (2) Defendant was not afforded an
opportunity to cure; and (3) Plaintiffs’ failure to proceed to closing was an independent reason to
allow for termination. (Id.) Plaintiffs respond that each argument lacks merit. (Pls.’ Opp. at 12–
14.) The Court again agrees with Plaintiffs.
On the issue of whether the parties acted as though there was still a contract, the sole case
cited to by Defendant in support of this argument in both the original papers and the instant
motion is Albanese v. Grant, No. A-0112-04, 2005 N.J. Super. Unpub. LEXIS 548, 2005 WL
3092805 (App. Div. Nov. 21, 2005) (per curiam). However, Albanese is distinguishable from
the situation between the parties here. In Albanese, a contract for the sale of real property
required buyer to obtain subdivision approval from the planning board within 150 days of the
execution of a contract. Albanese, 2005 WL 3092805, at *2. However, when the buyer
submitted paperwork to obtain subdivision, it was revealed that there were two open tax liens
and sewer use fees outstanding. Id. Once buyer was made aware of the tax liens, buyer’s
attorney and seller’s attorney worked together to determine how best to solve the issue and
advance the sale. Id. at *3. The result was that the subdivision was not approved until well after
the 150-day period. Id. After buyer initiated litigation on another issue, seller raised a violation
of the 150-day requirement as an issue of breach, which the trial court rejected. Id. at *6. The
appeals court affirmed this, finding that the attorneys working together while the 150-day period
expired and failing to raise a concern about the 150-day requirement estopped seller from raising
the issue. Id. at *6–7.
The facts here could not be more dissimilar. To characterize the communications
between Defendant and Plaintiffs as “working together” would be illogical, as the parties were
clearly at loggerheads over who was acting properly under the contract. Further, the parties were
explicitly raising the issues of breach and termination of the contract to each other. As such,
Albanese is inapposite. There was no evidence presented in the original moving papers to
demonstrate that the parties continued to act as though there was a contract in light of
Defendant’s termination of the agreement.
As to whether Defendant should have been afforded an opportunity to cure, Defendant
could not be afforded an opportunity to cure when Defendant terminated the contract. Even if
Defendant could have rescinded their termination, an opportunity was given to Defendant to do
so when Plaintiffs’ counsel responded to Defendant’s February 20, 2008 termination notice. See
Summ. J. Op., 2016 WL 528160, at *3. Thus, the argument that Defendant should have been
afforded an opportunity to cure was moot.
With respect to Defendant’s argument that the Court neglected to consider Plaintiffs’
refusal to proceed to closing, the Court found that Plaintiffs did not refuse to proceed to closing
before Defendant terminated the contract. See id. at *6. As such, this argument was also moot.
Accordingly, Defendant’s Motion will be denied as to the claim that the Court overlooked
Defendant’s legal arguments.
For the foregoing reasons, Defendant’s Motion will be DENIED. An appropriate order
accompanies this opinion.
Date: July 5th , 2016
s/ Robert B. Kugler
ROBERT B. KUGLER, U.S.D.J.
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