Joseph A. Berkowitz v. Susan J. Soper

NOT FOR PUBLICATION WITHOUT THE
APPROVAL OF THE APPELLATE DIVISION
SUPERIOR COURT OF NEW JERSEY
APPELLATE DIVISION
DOCKET NO. A-5723-13T2
PORT IMPERIAL CONDOMINIUM
ASSOCIATION, INC.,
Plaintiff-Respondent,
v.
ALEXANDER CANE,
Defendant/Third-Party
Plaintiff-Appellant,
v.
K. HOVNANIAN at PORT IMPERIAL URBAN
RENEWAL, INC.,
Third-Party Defendant-Respondent.
________________________________________
Argued December 2, 2015 – Decided January 11, 2016
Before Judges Alvarez, Haas and Manahan.
On appeal from the Superior Court of New
Jersey, Law Division, Middlesex County,
Docket No. L-1708-12.
Christopher J. Hanlon argued the cause for
appellant (Hanlon Niemann, P.C., attorneys;
Mr. Hanlon, on the brief).
Wendy H. Smith argued the cause for
respondent K. Hovnanian at Port Imperial
Urban Renewal, Inc. (Marshall Dennehey
Warner Coleman & Goggin, attorneys; Ms.
Smith, on the brief).
PER CURIAM
Third-party plaintiff-appellant Alexander Cane (plaintiff)
appeals a July 26, 2013 order entered by the Civil Part judge
granting summary judgment in favor of third-party
defendant/respondent K. Hovnanian at Port Imperial Urban
Renewal, Inc. (defendant).1 The order dismissed plaintiff's
third-party complaint against defendant. We affirm.
On March 1, 2001, plaintiff and defendant executed a
purchase agreement, wherein plaintiff purchased from defendant a
condominium in West New York, New Jersey. According to the
complaint, plaintiff purchased the condominium for $925,449.24;
and at summary judgment, plaintiff certified he paid $396,000 as
a down payment. The condominium complex was built on land
filled into the Hudson River and developed around two shipping
berths (also referred to as lagoons).
Paragraph sixteen of the purchase agreement states:
This agreement, the Public Offering
Statement and DCA Application for
Registration, any Lot Disclosures Statement
presented to [plaintiff], the approved site
plans and architect's plan, and any Riders
to this Agreement or the Documents, contain
the parties['] entire agreement. Any
modification of this Agreement is not
1
Because the sole issue on appeal arises from the third-party
complaint filed by plaintiff in the Civil Part, we refer to
Alexander Cane as "plaintiff" and K. Hovnanian at Port Imperial
Urban Renewal, Inc., as "defendant."
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binding unless it is in writing and signed
by both [plaintiff] and [defendant].
[(emphasis added).]
Section C of the public offering statement referenced in the
purchase agreement — which was generated by defendant and
another related entity as the developers of condominiums in West
New York and Guttenberg — states the following, in pertinent
part:
There are two old shipping berths or
coves located in the [c]ondominium. At low
tide the mud in the bottom of them is
visible. To make them more aesthetically
pleasing, the [d]evelopers may seek
governmental permits to allow the planting
of vegetation in them. The [d]evelopers do
not know if they will be successful in doing
so.
[(emphasis added).]
Plaintiff's condominium was located adjacent to one of the
shipping berths referenced in the public offering statement. No
vegetation or improvements to the shipping berths were ever
installed, causing the lagoons to become "fetid" and "stinking."
As a result, plaintiff claimed he was unable to market or sell
the property and ultimately lost his interest in the condominium
due to foreclosure.
We recite the procedural history of the litigation for both
context and clarity. On November 13, 2009, Port Imperial
Condominium Association, Inc. (PICA), filed a complaint against
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plaintiff in Hudson County based on plaintiff's failure to pay
the condominium maintenance fees. On November 30, 2011, the
matter was transferred to the Middlesex County Special Civil
Part. Thereafter, plaintiff filed a motion seeking leave to
file a counterclaim against PICA and a third-party complaint
against defendant, which the collective defendants opposed. On
April 27, 2012, the Special Civil Part judge granted the motion,
but declined to transfer the entire matter to the Law Division.
Instead, PICA's claim for condominium fees remained in the
Special Civil Part and plaintiff's counterclaim and third-party
complaint were transferred to the Law Division. The
counterclaim alleged breach of contract/failure to maintain, and
the third-party complaint brought action for contribution and
indemnification (count one), misrepresentation (count two),
breach of contract (count three), and violation of the New
Jersey Consumer Fraud Act (CFA), N.J.S.A. 56:8-1 to -195 (count
four).
Plaintiff and PICA settled the claim for maintenance fees,
and on July 19, 2012, a "consent order" was entered awarding
PICA $5,640. PICA reserved the right to seek attorneys' fees in
a separate application. PICA also filed its initial fee
application on July 19, 2012, seeking $30,810.61 in legal fees.
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The judge issued an order on July 3, 2014, awarding counsel fees
in the amount of $31,321.30.2
As for the Law Division matter, discovery commenced after
the counterclaim and third-party complaint were transferred.
Following two separate discovery-related motions filed by
defendant in early 2013 arising from plaintiff's failure to
provide discovery, the judge entered an order on February 22,
2013, dismissing plaintiff's third-party complaint without
prejudice. Plaintiff eventually served his answers to
interrogatories and also sought to extend the February 22, 2013
discovery end date. An order dated March 22, 2013, denied
plaintiff's motion to extend the discovery end date for
plaintiff failing to demonstrate exceptional circumstances
warranting an extension. See R. 4:24-1(c). Plaintiff's third-
party complaint was reinstated.
On April 5, 2013, defendant and PICA filed motions for
summary judgment. Plaintiff opposed the motions and
subsequently filed a motion to "supplement the record" and
include documents not provided during the discovery period. On
July 26, 2013, after hearing oral argument, the judge granted
2
PICA's requested counsel fees changed from the original amount
after additional work was performed on the matter.
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the motions for summary judgment and denied plaintiff's motion
to supplement the record.
Plaintiff filed a notice of appeal on August 8, 2014.
Plaintiff appealed both of the orders granting summary judgment
in favor of the collective defendants, as well as the order
awarding attorneys' fees. However, on April 22, 2015, plaintiff
and PICA executed and filed a stipulation of partial dismissal
with prejudice and without costs as to PICA. The stipulation
dismissed plaintiff's appeal of the order granting summary
judgment in PICA's favor, as well as the appeal challenging the
award of attorneys' fees. Plaintiff did not appeal the order
denying an extension of discovery or the order denying
plaintiff's motion to "supplement the record."
Plaintiff raises the following points on appeal:
POINT I
[DEFENDANT'S] MOTION FOR SUMMARY JUDGMENT
SHOULD HAVE BEEN DENIED BY THE TRIAL COURT
SINCE THERE WERE SEVERAL GENUINE ISSUES OF
MATERIAL FACT IN THE RECORD BELOW.
POINT II
THE RECORD BEFORE THE TRIAL JUDGE SUPPORTED
THE PROPOSITION THAT THE RECORD DEVELOPED BY
[PLAINTIFF] SUPPORTS THE INFERENCE THAT
MISREPRESENTATIONS WERE MADE BY THE
CONDOMINIUM DEVELOPER.
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POINT III
[PLAINTIFF'S] PROOFS DEMONSTRATE SIGNIFICANT
[OUT-OF-POCKET] EXPENDITURE IN RELIANCE UPON
THE REPRESENTATIONS OF THE CONDOMINIUM
DEVELOPER AND REPRESENTS ADEQUATE PROOF OF
AN ASCERTAINABLE LOSS.
Summary judgment must be granted "if the pleadings,
depositions, answers to interrogatories and admissions on file,
together with the affidavits, if any, show that there is no
genuine issue of material fact challenged and that the moving
party is entitled to a judgment or order as a matter of law."
R. 4:46-2(c). The court's inquiry is "whether the evidence
presents a sufficient disagreement to require submission to a
jury or whether it is so one-sided that one party must prevail
as a matter of law." Liberty Surplus Ins. Corp. v. Nowell
Amoroso, P.A., 189 N.J. 436, 445-46 (2007) (quoting Brill v.
Guardian Life Ins. Co. of Am., 142 N.J. 520, 536 (1995); see
also Jolley v. Marquess, 393 N.J. Super. 255, 267 (App. Div.
2007). "At this stage of the proceedings, the competent
evidential materials must be viewed in the light most favorable
to plaintiff, the non-moving party, and [plaintiff] is entitled
to the benefit of all favorable inferences in support of [the]
claim." Bagnana v. Wolfinger, 385 N.J. Super. 1, 8 (App. Div.
2006) (citing R. 4:46-2(c); Brill, supra, 142 N.J. at 540); see
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also In re Estate of Sasson, 387 N.J. Super. 459, 462-63 (App.
Div.), certif. denied, 189 N.J. 103 (2006).
We apply the same standard as the trial court in reviewing
the granting of a motion for summary judgment. Townsend v.
Pierre, 221 N.J. 36, 59 (2015). If there is no factual dispute,
and only a legal issue to resolve, the standard of review is de
novo and the trial court rulings "are not entitled to any
special deference." Manalapan Realty, L.P. v. Manalapan Twp.
Comm., 140 N.J. 366, 378 (1995).
According to plaintiff, the factual issue in dispute
pertains to representations allegedly made to plaintiff by
defendant during negotiations for the purchase of the
condominium. In response to defendant's summary judgment
motion, plaintiff produced: his own certification, a
certification from a sales representative for defendant, and a
certification from plaintiff's closing attorney. The
certifications cited to defendant's representations that the
shipping berths would be improved with an aquatic garden.
Plaintiff claims he relied upon these representations when
deciding to purchase the property. Plaintiff also produced a
certification from a neighbor who asserted that a similar
representation was made to her by defendant when purchasing her
condominium. Additionally, plaintiff produced documents from
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the Army Corps of Engineers related to approvals secured for
development of the lagoons which noted defendant's failure to
maintain the area after initial efforts to install improvements
went unfinished. Although the witnesses were identified in
plaintiff's answers to interrogatories, they were never deposed.
The documents from the Army Corps of Engineers were never
exchanged or produced in discovery. Rather, after discovery
ended, plaintiff submitted these documents in his opposition to
the motions for summary judgment and used them as the basis for
his motion to supplement the record.
The CFA states:
The act, use or employment by any
person of any unconscionable commercial
practice, deception, fraud, false pretense,
false promise, misrepresentation, or the
knowing, concealment, suppression, or
omission of any material fact with intent
that others rely upon such concealment,
suppression or omission, in connection with
the sale or advertisement of any merchandise
or real estate, or with the subsequent
performance of such person as aforesaid,
whether or not any person has in fact been
misled, deceived or damaged thereby, is
declared to be an unlawful practice . . . .
[N.J.S.A. 56:8-2.]
To prevail on a claim for violation of the CFA, a plaintiff
must allege (and prove) the following: (1) unlawful conduct; (2)
an ascertainable loss; and (3) a causal relationship between the
unlawful conduct and the ascertainable loss. N.J. Citizen
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Action v. Schering-Plough Corp., 367 N.J. Super. 8, 12-13 (App.
Div.), certif. denied, 178 N.J. 249 (2003); see also Cox v.
Sears Roebuck & Co., 138 N.J. 2 (1994). A misrepresentation is
actionable under the CFA only if it is material to the
transaction, false in fact and induces the buyer to purchase.
Gennari v. Weichert Co. Realtors, 288 N.J. Super. 504, 535 (App.
Div. 1996), aff'd as modified, 148 N.J. 582 (1997). Oral
misrepresentations are covered by the CFA to the same extent as
written misrepresentations. Gupta v. Asha Enters., L.L.C., 422
N.J. Super. 136, 147 (App. Div. 2011).
At oral argument on the summary judgment motion, the judge
noted "that the ascertainable loss is going to boil down to a
diminution of value, and in order to establish that you need an
appraiser." The judge held that, in the absence of an
appraiser, plaintiff failed to establish damages:
[W]hen it comes to real property when
there's out-of-pocket lawsuits with a
difference in value, he needs an appraiser.
He needs someone to say, an expert to come
in and say what the damages are, and you
don't have that. And that’s not being
proffered, that’s not being proffered as
part of these additional materials. There's
no late expert being put forth here.
This is simply going to whether or not
a contract materialized. Because if you
look at the contract of sale it's not a
contract. But detrimental reliance, and
things of that nature, and when you add to
it that they did get the government
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approvals, well then perhaps there was an
obligation to take it a step further, if you
got the approvals, to finish the job.
. . . [I]t's all moot because there's
nobody to say what the damages are.
. . . .
. . . And I don't think you can equate
earnest money deposit[s] with out-of-pocket
losses.
In matters involving alleged breach of contract or
misrepresentation in a CFA action, "either out-of-pocket loss or
a demonstration of loss in value will suffice to meet the
ascertainable loss hurdle . . . ." Thiedemann v. Mercedes-Benz
USA, LLC, 183 N.J. 234, 248 (2005). To withstand a motion for
summary judgment in matters alleging a loss in value, a
plaintiff "must proffer evidence of loss that is not
hypothetical or illusory. It must be presented with some
certainty demonstrating that it is capable of calculation[.]"
Ibid. (emphasis added).
An "estimate of damages, calculated within a
reasonable degree of certainty" will suffice
to demonstrate an ascertainable loss. We
can envision the possibility that an expert
may be able to speak to a loss in value of
real or personal property due to market
conditions, with sufficient precision to
withstand a motion for summary judgment.
[Id. at 249 (quoting Cox, supra, 138 N.J. at
22) (emphasis added).]
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Expert testimony is required when a jury "simply does not
have the knowledge, training, or experience" to consider all the
relevant factors to arrive at a proper award of damages. Kelly
v. Berlin, 300 N.J. Super. 256, 268-70 (App. Div. 1997); see
also Jiries v. BP Oil, 294 N.J. Super. 225, 230-31 (Law Div.
1996) (holding expert testimony required to prove damages for
CFA claim alleging deficient repairs). Moreover, it has been
held that expert evidence is required to determine the value of
real property. See Jacobitti v. Jacobitti, 263 N.J. Super. 608,
613 (App. Div. 1993), aff’d, 135 N.J. 571 (1994); Smart SMR of
Smart New York, Inc. v. Fairlawn Bd. of Adjustment, 152 N.J.
309, 336 (1998); Cell South of New Jersey, Inc. v. Zoning Bd. of
Adjustment of West Windsor Township, 172 N.J. 75, 87 (2002)
(citing Smart, supra, 152 N.J. at 336).
Here, the third-party complaint alleges that defendant's
failure to install the aquatic garden decreased the value of the
condominium. Plaintiff alleged in his answers to
interrogatories that the ascertainable loss was "the difference
between the market value of identical units and the purchase
cost of the property." However, plaintiff failed to produce an
appraisal or an expert report as to the value of the condominium
or any depreciation thereof.
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Predicated upon plaintiff's failure to provide the
requisite proofs, the judge properly held that plaintiff could
not demonstrate that he suffered an ascertainable loss as
required by the CFA. See Thiedemann, supra, 183 N.J. at 248.
Stated otherwise, plaintiff failed to "present[] with some
certainty" damages that are "capable of calculation." Ibid.
Plaintiff also argues that his down payment constitutes an
out-of-pocket ascertainable loss. We disagree.
The damages sought by plaintiff were based solely on the
decrease in value of the property. In Chattin v. Cape May
Greene, Inc., 243 N.J. Super. 590, 594, 605 (App. Div. 1990),
aff’d o.b., 124 N.J. 520 (1991), a suit for consumer fraud
brought by a group of homeowners against a developer, we held
the trial court properly instructed the jury on damages on a
consumer fraud claim. In the charge, the trial court instructed
that, "Under the [out-of-pocket] approach recovery would be
permitted for the difference between the price paid and the
actual value of the property acquired." Id. at 604. In order
to prove the difference in value, an expert would be required.
Thiedemann, supra, 183 N.J. at 249.
Finally, we note that although plaintiff references in his
brief that the judge erred by denying the motion to supplement
the record for consideration of the Army Corp of Engineer
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documents, plaintiff did not appeal the order denying the motion
and his brief does not address that issue in its point headings.
As such, plaintiff "has no right to our consideration of this
issue" because "only the judgment or orders designated in the
notice of appeal . . . are subject to the appeal process and
review[.]" 1266 Apartment Corp. v. New Horizon Deli, Inc., 368
N.J. Super. 456, 459 (App. Div. 2004) (citing Sikes v. Twp. of
Rockaway, 269 N.J. Super. 463, 465-66 (App. Div.), aff’d o.b.,
138 N.J. 41 (1994)); see also R. 2:5-1(f)(3)(A); R. 2:6-2(a)(5).
Affirmed.
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