STACY MCAVOY VS. FINE HOMES BY JAMES ESKIN (L-0127-16, SUSSEX COUNTY AND STATEWIDE)

NOT FOR PUBLICATION WITHOUT THE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-3325-18T3
STACY MCAVOY,
Plaintiff,
and
JEFFREY ALWARD,
Plaintiff- Appellant,
v.
FINE HOMES BY JAMES ESKIN,
JAMES ESKIN, WEICHERT REALTY
and CYNTHIA DECRISTOFARO,
Defendants,
and
TAGGART FAMILY
PARTNERSHIP, LP, and
TAGGART FAMILY TRUST,
Defendants-Respondents.
_________________________________
Argued October 13, 2020- Decided February 1, 2021
Before Judges Hoffman, Suter and Smith.
On appeal from the Superior Court of New Jersey, Law
Division, Sussex County, Docket No. L-0127-16.
Alyssa Pyrich argued the cause for appellant (Bedwell
& Pyrich, LLC, attorneys; Anthony M. Bedwell and
Alyssa Pyrich, of counsel and on the briefs).
Alex Lee argued the cause for respondents (Einhorn,
Barbarito, Frost & Botwinick, PC, attorneys; Matheu
D. Nunn, Timothy J. Ford, and Alex Lee, on the brief).
PER CURIAM
The case below concerns an appeal of summary judgment granted for the
sellers in real estate litigation. For the reasons set forth in our opinion below,
we reverse.
On March 17, 2016, homebuyers Stacy McAvoy and Jeffery Alward
(appellant)1, filed a complaint against multiple defendants, including seller
Taggart Family Partnership (TFP) (respondent) and builder James Eskin.
Appellant and McAvoy brought claims against TFP through its agent, Eskin,
including fraud, breach of contract, breach of warranty, multiple negligence
1
We refer to Alward as appellant as McAvoy did not file an appeal. We refer
to TFP as respondent as appellant limited his appeal to challenging the summary
judgment dismissal of his claim against TFP.
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theories, and violation of the New Jersey Consumer Fraud Act (CFA), N.J.S.A.
56:8-1 to -206.
On April 24, 2018, the trial court granted summary judgment dismissing
all claims against TFP. On June 28, 2018, the court denied reconsideration.
Appellant seeks relief from the order granting summary judgment in favor of
TFP.
I.
William Taggart and Patricia Taggart were general partners of TFP. In
2004, TFP purchased and subdivided a property in Lafayette, New Jersey. They
hired Eskin to construct a home on the property. TFP and Eskin executed a
financing agreement which included contract terms identifying Eskin as an
independent contractor, not a partner in TFP. 2
TFP authorized Eskin to do several things on behalf of the partnership: to
act as its listing agent, to negotiate sales prices with prospective buyers, and to
work directly with TFP's real estate sales agent. Eskin did not require TFP's
approval when making business decisions concerning development of the
2
Section 20 of financing agreement reads: "This [a]greement does not form,
nor do the [p]arties, by this [a]greement or otherwise, intend to form or
participate in, a partnership or joint venture between them. The [p]arties will
not represent themselves or hold themselves out as partners or joint venturers."
A-3325-18T3
3
property. However, Eskin did not have TFP's express authority to convey title
to the property. That authority remained with TFP.
Appellant first met Eskin through a mutual friend in 2013. Eskin
represented to appellant that he and TFP were partners. Eskin specifically
sought and obtained TFP's permission to hold himself out as a partner to others.
Eskin told appellant that the house in question was constructed with two-
inch by six-inch studs, was fitted with an expensive brand name furnace, was
properly insulated, and was move-in ready. Appellant and Eskin walked through
the house several times and discussed punch list items. Appellant ultimately
bought the home for $750,000.
Appellant never met nor communicated with TFP during the home
purchasing process. Appellant believed Eskin was a partner in TFP, based on
Eskin's representations to him.
After purchasing the home, appellant noticed a large crack in the front
foundation wall of the house. He retained an engineer to inspect the house.
Appellant's engineer identified several defects: a three to six-foot wide crack in
the foundation in the front wall, framing issues in the attic, external defects with
the masonry and stucco finish, and finally, hardwood flooring "separating"
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throughout the house. Appellant further alleged heating, cooling, and draft
problems in the home in the vicinity of the fireplace.
Eskin stopped making repairs to the home approximately one year after
appellant bought the home. Appellant attempted to use a new home warranty
Eskin procured for the property. Appellant discovered the warranty coverage
had expired on many of his claims.
After filing of the complaint and completion of discovery, TFP moved for
summary judgment. The court found Eskin's acts were not attributable to TFP.
Specifically, the court found that while TFP verbally authorized Eskin to
negotiate prices with buyers, Eskin did not sign any contract on TFP's behalf.
The court concluded that Eskin was an independent contractor, explaining
"[t]hey did their own work by their own methods, and were not controlled in any
fashion by the Taggarts." The court found Eskin's status as an independent
contractor made the doctrine of respondeat superior inapplicable; and that
Eskin's work as a home builder did not fall into the dangerous-work exception.
The trial court rejected the apparent authority argument, finding that TFP
did not hold Eskin out as a partner and that the contract between TFP and Eskin
did not support finding a partnership between them. The court also found the
Consumer Fraud Act did not apply to the TFP, concluding TFP was not in the
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real estate business as a licensed agent or broker, nor was TFP a professional
seller of real estate. The court also found TFP did not violate the CFA through
Eskin because it was not his employer or in an agency relationship. However,
the court found "several alleged misrepresentations which established a genuine
issue of material fact as to co-defendants Weichert3 and Eskin," and denied them
summary judgment.
After summary judgment was granted, appellant moved for
reconsideration.4 The court denied the motion. After appellant resolved his
claims with the remaining parties, he filed this appeal of the dismissal of his
claim against TFP.
Appellant raises the following issues on appeal.
I. BECAUSE THE TFP MOVED FOR SUMMARY
JUDGMENT, ALWARD IS ENTITLED TO HAVE
THE FACTS READ IN HIS FAVOR AND THE
BENEFIT OF ALL REASONABLE INFERENCES.
3
At all relevant times during this litigation, Weichert Realty served as TFP's
real estate listing agent. McAvoy and Alward, the plaintiffs, named Weichert
Realty as a defendant in the complaint. Cynthia DeCristofaro was an employee
of Weichert Realty. She was named as a separate defendant in the complaint.
These two defendants settled prior to this appeal. Eskin was never an agent,
servant, or employee of Weichert Realty.
4
TFP moved for sanctions after it was granted summary judgment. Appellant
filed an opposition to sanctions and cross-moved for reconsideration of the
judge's summary judgment ruling. The judge denied both TFP's motion for
sanctions and appellant's cross-motion for reconsideration.
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II. THE TRIAL COURT ERRED BY FAILING TO
RECOGNIZE GENUINE FACTUAL DISPUTES
CONCERNING WHETHER ESKIN WAS AN
AGENT OF THE TFP FOR THE PURPOSES OF
SELLING THE PROPERTY.
III. AS THE DEVELOPER OF A PLANNED
SUBDIVISION, RATHER THAN AN INDIVIDUAL
SELLER OF A RESIDENCE, THE TFP SHOULD BE
SUBJECT TO THE CFA.
IV. AS THE TRIAL COURT CORRECTLY FOUND,
GENUNE ISSUES MATERIAL FACT EXIST AS TO
WHETHER ESKIN MADE
MISREPRESENTATIONS THAT VIOLATED THE
CFA.
II.
We review summary judgment orders de novo. Green v. Monmouth
Univ., 237 N.J. 516, 529 (2019) (quoting Davis v. Devereux Found., 209 N.J.
269, 286 (2012)). We apply "the same standard as the motion judge." Globe
Motor Co. v. Igdalev, 225 N.J. 469, 479 (2016) (quoting Bhagat v. Bhagat, 217
N.J. 22, 38 (2014)). A judge grants summary judgment to the moving party "if
the pleadings, depositions, answers to interrogatories and admissions on file,
together with the affidavits, if any, show that there is no genuine issue as to any
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).
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To determine whether an issue of genuine fact exists, the motion judge
must "consider whether the competent evidential materials presented, when
viewed in the light most favorable to the non-moving party, are sufficient to
permit a rational factfinder to resolve the alleged disputed issue in favor of the
non-moving party." Brill v. Guardian Life Ins. Co. of Am., 142 N.J. 520, 540
(1995); see also R. 4:46-2(c). The motion judge's function is not to weigh the
evidence and determine the truth of the matter, but to determine whether there
is a genuine issue for trial. Brill, 142 N.J. at 540 (quoting Anderson v. Liberty
Lobby, Inc., 477 U.S. 242, 249 (1986)).
"[I]n our State, questions of agency or master and servant relationships
are ordinarily for the jury" but "only where there are disputed facts or where
disputed inferences may be drawn from undisputed facts." State, Dep't of Law
& Pub. Safety, Bd. of Exam'rs of Elec. Contractors v. Joule Tech. Corp., 126
N.J. Super. 496, 503 (App. Div. 1974) (citing Marion v. Pub. Serv. Elec. & Gas
Co., 72 N.J. Super. 146, 157-58 (App. Div. 1962)). Thus, "where the evidence
is uncontradicted and permits but one reasonable conclusion as to an issue of
agency, that issue is a question of law for the court and not for the finder of
fact." Ibid. (citing Harvey v. Craw, 110 N.J. Super. 68, 74-75 (App. Div. 1970));
see also Mangual v. Berezinsky, 428 N.J. Super. 299, 308 (App. Div. 2012)
A-3325-18T3
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("[O]nly when the evidence is utterly one-sided may a judge decide that a party
should prevail as a matter of law.").
An agency relationship exists "when one person (a principal) manifests
assent to another person (an agent) that the agent shall act on the principal's
behalf and subject to the principal's control, and the agent manifests assent or
otherwise consents so to act." N.J. Law.'s Fund for Client Prot. v. Stewart Title
Guar. Co., 203 N.J. 208, 220 (2010) (quoting Restatement (Third) of Agency §
1.01 (Am. Law Inst. 2006)). No agreement between parties specifying an
agency relationship is required; rather, "the law will look at their conduct and
not to their intent or their words as between themselves but to their factual
relation." Sears Mortg. Corp. v. Rose, 134 N.J. 326, 337-38 (1993) (quoting
Henningsen v. Bloomfield Motors, 32 N.J. 358, 161 (1960)). "Generally, an
agent may only bind his principal for such acts that 'are within his actual or
apparent authority.'" N.J. Law.'s Fund for Client Prot., 203 N.J. at 220 (quoting
Carlson v. Hannah, 6 N.J. 202, 212 (1951)).
A person may be an agent by apparent authority, based on the
manifestations of the authority by the principal. Sears Mortg. Corp., 134 N.J. at338 (citing C.B. Snyder Realty Co. v. Nat'l Newark Banking Co., 14 N.J. 146(1953)). The Restatement defines apparent authority as "the power held by an
A-3325-18T3
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agent or other actor to affect a principal's legal relations with third parties when
a third party reasonably believes the actor has authority to act on behalf of the
principal and that belief is traceable to the principal's manifestations."
Restatement (Third) of Agency § 2.03 (Am. Law Inst. 2006); see also N.J. Law.'s
Fund for Client Prot., 203 N.J. at 220.
To establish a claim based on apparent authority, the plaintiff must
establish that: (1) the appearance of authority was created by the conduct of the
alleged principal and cannot be established alone and solely by the conduct of
the agent; (2) a third party relied on the agent's apparent authority for a principal;
and (3) the reliance was reasonable under the circumstances. Mercer v.
Weyerhaeuser Co., 324 N.J. Super. 290, 318 (App. Div. 1999).
Under apparent authority, liability is imposed on the principal because the
principal's actions mislead the public into believing that relationship or authority
exists. Basil v. Wolf, 193 N.J. 38, 67 (2007). This doctrine focuses on the
reasonable expectations of a third party with whom an agent deals. N.J. Law.'s
Fund for Client Prot., 203 N.J. at 220 (quoting Restatement (Third) of Agency
§ 7.08 cmt. b (Am. Law Inst. 2006)). Therefore "a court must examine the
totality of the circumstances to determine whether an agency relationship
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existed even though the principal did not have direct control over the agent."
Ibid.; see also Sears Mortg. Corp., 134 N.J. at 338.
III.
The critical issue to be decided is, giving all reasonable inferences to the
non-moving party on summary judgment, whether there is a genuine issue of
material fact on the question of Eskin's apparent authority to bind TFP by his
actions. Using our de novo standard of review, we conclude a genuine issue of
material fact on apparent authority does exist in this case, consequently, we
reverse and remand.
There are two key facts which relate to the alleged conduct of TFP on the
issue of apparent authority. First, Patricia Taggart of TFP admitted Eskin was
authorized by TFP to handle "everything" concerning the property. The sole
power TFP retained was the power to convey property by signing the deed.
Second, Eskin testified at his deposition that TFP permitted him to hold himself
out as a TFP partner to others, even though he was never a TFP partner. TFP's
consent to allow Eskin to hold himself out as a partner occurred years before
construction of the allegedly defective home.
When these facts are analyzed together with Eskin's alleged misdeeds and
misrepresentations in building and selling the home to appellant, a finder of fact
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could examine the totality of the circumstances and conclude that "an agency
relationship existed even though the principal did not have direct control over
the agent." N.J. Law.'s Fund for Client Prot., 203 N.J. at 220; see also Sears
Mortg. Corp., 134 N.J. at 338.
Considering the entirety of the factual record in the light most favorable
to the non-moving party for purposes of summary judgment, we conclude it is
"sufficient to permit a rational factfinder to resolve the alleged disputed issue in
favor of the non-moving party." Brill, 142 N.J. at 540; see also R. 4:46-2. We
reverse the order that granted summary judgment as to appellant's non-statutory
claims against respondent TFP.
The summary judgment order dismissing appellant's statutory claim
against TFP for violation of the CFA merits separate discussion. TFP bought
and subdivided the land in question before engaging Eskin to build and sell
houses on it. While it is undisputed that TFP was a first-time seller of real estate,
TFP contracted with Eskin with the express purpose of developing and selling
homes on the subdivided lots. TFP was not selling a personal residence as a
casual seller of real estate. We conclude that there is a genuine issue of material
fact as to whether TFP is a commercial seller of real estate within the Act. We
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reverse the summary judgment order that dismissed appellant's CFA claim
against TFP.
Any issues not addressed above are deemed to be without sufficient merit
to warrant extensive discussion. R. 2:11-3(e)(1)(E).
Reversed and remanded. We do not retain jurisdiction.
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