Mohammed Jaloudi v. Njhr1, LLC ( 2024 )

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
This opinion shall not "constitute precedent or be binding upon any court ." Although it is posted on the
internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-1084-22
MOHAMMED JALOUDI,
Plaintiff-Respondent,
v.
NJHR1, LLC,
Defendant-Appellant,
and
NEW JERSEY HOME SALES,
INC. and JOSEPH FOX,
Defendants.
_________________________
Argued December 12, 2023 – Decided February 23, 2024
Before Judges Natali and Puglisi.
On appeal from the Superior Court of New Jersey, Law
Division, Passaic County, Docket No. L-3020-18.
Adam D. Greenberg argued the cause for appellants
(Honig & Greenberg, LLC, attorneys; Adam D.
Greenberg, on the briefs).
George J. Cotz argued the cause for respondent.
PER CURIAM
Defendant NJHR1, LLC1 appeals from the Law Division's November 14,
2018 order denying its motion to transfer venue; the May 6, 2019 order denying
its motion for summary judgment; the August 26, 2019 order granting plaintiff
Mohammed Jaloudi's motion to quash defendant's subpoena; and, following a
trial without a jury, the November 7, 2022 order finding in favor of plaintiff and
ordering defendant to return plaintiff's $25,000 deposit. Because the record
before us does not contain the court's reasons underpinning the November 2018,
May 2019 and August 2019 orders, which may have impacted the trial verdict,
we vacate the four orders and remand for further proceedings.
In October 2017, the parties entered into a standard real estate sales
contract for plaintiff to purchase a house owned by defendant in Linwood,
Atlantic County. Pursuant to the terms of the contract, plaintiff made a $25,000
earnest money deposit to his nephew, the attorney representing him in the
purchase.
1
Defendants New Jersey Home Sales, Inc. and Joseph Fox did not participate
in this appeal.
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Although the property was being sold "as is," plaintiff was permitted to
conduct a home inspection. Plaintiff was required to provide defendant with
any inspection report and list of requested repairs within ten days after the
attorney review period, which was November 3, 2017. Instead, on November 2,
2017, plaintiff's attorney emailed defendant a copy of a home inspection report,
stating he would "advise upon review with [his] client," and that he "should have
a response within the next few days."
On November 6, 2017, plaintiff's attorney sent defendant an email
requesting to "have an inspector drill a small hole in the stucco[] to test for
permeation and other issues." Fox responded that same day, "The inspection
period had already ended." On November 13, 2017, plaintiff's attorney
terminated the contract based on defendant's failure to address the requested
inspection.
On November 16, 2017, plaintiff's attorney emailed defendant, informing
him that plaintiff's mortgage application had been denied. Attached to the email
was an adverse action notification from LoanDepot, a web-based mortgage
servicer, indicating the application was "declined" because LoanDepot was
"[u]nable to [v]erify [i]ncome." Plaintiff averred that under the contract's
mortgage contingency clause, the "contract [was] . . . rendered null and void."
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The purchase did not proceed and defendant refused to release plaintiff's
$25,000 deposit.
On September 12, 2018, plaintiff filed a verified complaint in Passaic
County Superior Court, seeking a refund of the deposit, costs of suit and
attorney's fees. The complaint stated plaintiff canceled the contract "based on
[d]efendants' failure to address the inspection report," and averred venue lay in
Passaic County because "the bank in which [the] escrow [was] deposit[ed]" was
located there. He then filed an amended verified complaint adding breach of
contract and unjust enrichment claims.
Plaintiff filed an application for an order to show cause to proceed
summarily and defendants cross-moved for a change of venue to either Atlantic
County, where the real property was located, or to Burlington County, where
both defendants resided. By order dated November 14, 2018, the court denied
defendant's cross-motion, noting "The property at issue is located within Passaic
County. Thus, venue has been properly laid by . . . [p]laintiff's filing within the
Passaic County Vicinage." By order dated January 25, 2019, the court denied
plaintiff's application for an order to show cause.
Following responsive pleadings and discovery, defendants filed a motion
for summary judgment on January 18, 2019 and plaintiff cross-moved for
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summary judgment. On May 6, 2019, in what appears to be an informal
telephone conference on the record, the parties discussed their positions on the
case. At one point the judge stated:
I certainly have enough [issues of fact] with the issue
of the mortgage contingency clause. . . . It would be
the defendants' burden to show that [plaintiff] did not
proceed diligently in getting a mortgage and, quite
frankly, that may be the case but there's certainly
genuine issues of material fact at least at this point.
The court entered two orders denying both motions, indicating
"application denied for the reasons set forth on the record [May 6, 2019]."
In the interim, defendant served a subpoena on plaintiff's attorney seeking
all documents in his possession concerning the real estate contract, including
emails from the attorney "relating to the transaction, the contract, inspections of
the property, loan applications, mortgage applications, loan approvals, [and]
loan denial," including "communications to or from lenders, banks, loan
officers, etc." During the May 6, 2019 telephone conference, the parties advised
the judge the motion was pending. The attorneys were to "try to work out a
management order," and set the return on the motion for May 24. We do not
have anything before us in the record from that date. On August 26, 2019, the
court entered an order granting plaintiff's motion to quash the subpoena, which
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noted, "[i]nformation requested appears privileged." We also do not have before
us anything in the record from that date.
The matter was then tried before a different judge, who found in favor of
plaintiff. By order dated November 7, 2022, the $25,000 deposit was to be
released to plaintiff. This appeal follows.
On appeal, defendant's counsel ordered transcripts for the relevant court
appearances but was informed none existed for the November 2018 and August
2019 proceedings. Counsel advised us he contacted both judges who conducted
the proceedings and was again advised that no recordings were made; he also
contacted the court clerk, who told him no recordings exist to transcribe.
Counsel has exercised due diligence to provide transcripts of the proceedings
for our review, to no avail.
Pursuant to Rule 1:7-4(a) "the court shall, by an opinion or memorandum
decision, either written or oral, find the facts and state its conclusions of law
thereon in all actions tried without a jury, on every motion decided by a written
order that is appealable as of right." See also R. 1:6-2(f).
Although the November 14, 2018 order provided a statement in support
of its decision, it is unclear how the location of a bank deposit established venue.
Venue of "actions affecting title to real property or a possessory or other interest
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therein, or for damages thereto" shall be laid "in the county in which any affected
property is situate," R. 4:3-2(a)(1); or for other actions not specifically
identified, "venue . . . shall be laid in the county in which the cause of action
arose, or in which any party to the action resides at the time of its
commencement." R. 4:3-2(a)(3). Based on the bare comment indicated in the
order, we cannot discern the court's reasoning for denying the motion.
Although we have the transcript of the May 2019 proceeding wherein
summary judgment was denied, it appears to be a telephone conference that
reflects no factual or legal findings placed on the record.
More troubling, we are also wholly without any reasons for the court's
granting of plaintiff's motion to quash the subpoena. The court did not analyze
what documents were sought and why they were privileged. This is particularly
critical because at trial, plaintiff abandoned his prior assertions that he canceled
the contract based on unanswered demands for repair, and instead claimed the
contract was rendered void because he did not obtain mortgage approval.
Defendants sought the loan documents to advance their theory that plaintiff
intentionally sabotaged the application process in order to void the contract and
may have been limited in their defense at trial because they were unable to
pursue this inquiry. We are not suggesting that the documents would have borne
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out this theory; however, we do not have any reasons before us supporting the
order quashing their attempts to access this information.
To the extent the orders on appeal are subject to an abuse of discretion
standard of review, without a record we are unable to discern whether the court
exercised its discretion. In addition, our de novo review of summary judgment
is not a substitute for a trial court's obligation, in the first instance, "to set forth
factual findings and correlate them to legal conclusions," and then measure them
"against the standards set forth in Brill." Great Atl. & Pac. Tea Co., Inc. v.
Checchio, 335 N.J. Super. 495, 498 (App. Div. 2000) (citing Brill v. Guardian
Life Ins. Co. of Am., 142 N.J. 520, 540 (1995)). As we explained in Estate of
Doerfler v. Fed. Ins. Co., "[a]lthough our standard of review" of a summary
judgment order "is de novo, our function as an appellate court is to review the
decision of the trial court, not to decide the motion tabula rasa." 454 N.J. Super.
298, 301-02 (App. Div. 2018) (citation omitted).
Although we have a complete transcript of the trial and the court's reasons
for the verdict, this outcome may have been impacted by the three preceding
orders and therefore we are constrained to vacate that order as well.
The court's November 14, 2018 order denying defendants' motion to
transfer venue; the May 6, 2019 orders denying both parties' motions for
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summary judgment; the August 26, 2019 order granting plaintiff's motion to
quash defendant's subpoena; and the November 7, 2022 order entering judgment
are vacated, and the matter is remanded for further proceedings. We do not
retain jurisdiction.
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