LYNN BRANCATO VS. ROBERT A. MARTIN AUSTIN TAPIA VS. FIRST AMERICAN FINANCIAL CORPORATION(L-3322-14, HUDSON 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NOT FOR PUBLICATION WITHOUT THE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-2323-15T1
LYNN BRANCATO,
Plaintiff-Appellant/
Cross-Respondent,
v.
ROBERT A. MARTIN, COUNTRY WIDE
HOME LOANS, INC. and ADRIA VAZQUEZ,
Defendants,
and
AUSTIN TAPIA and
DANIELLE B. TAPIA,
Defendants-Respondents/
Cross-Appellants,
and
AUSTIN TAPIA and DANIELLE B. TAPIA,
Third-Party Plaintiffs-
Cross-Appellants,
v.
FIRST AMERICAN FINANCIAL CORPORATION,
Third-Party Defendant.
_______________________________
Argued November 8, 2017 – Decided November 28, 2017
Before Judges Fisher and Fasciale.
On appeal from Superior Court of New Jersey,
Law Division, Hudson County, Docket No.
L-3322-14.
Joseph W. Denneler argued the cause for
appellant/cross-respondent (Salmon,
Ricchezza, Singer & Turchi LLP, attorneys;
Mr. Denneler, of counsel and on the brief).
Kevin G. Roe argued the cause for
respondents/cross-appellants.
PER CURIAM
Plaintiff Lynn Brancato appeals from a September 22, 2015
order entered after a bench trial adjudicating disputed issues
related to real estate property owned by the parties. Austin
Tapia and Danielle B. Tapia (defendants) cross-appeal from a
January 22, 2016 order denying their motion to amend the September
22, 2015 order. We affirm, but remand and direct the judge to
amend the judgment to require recordation of defendants' deed,
which conforms to her rulings reflecting plaintiff is a tenant in
common with defendants and that defendants are solely responsible
for a Countrywide Home Loans mortgage.
The parties tried this matter before the judge over four days
in August 2015. The parties, along with Denise Lofrano, defendant
Danielle B. Tapia's aunt and trustee for Robert A. Martin,
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testified. At the conclusion of the trial, the judge entered the
orders under review and rendered a written opinion.
In 1986, plaintiff and Martin, who is now deceased, purchased
a condominium for investment purposes and recorded a deed.
Plaintiff then allowed Martin to collect rental income from the
property. In April 2003, Martin sold the property to defendants
and recorded a signed deed. The deed reflected $60,000 in
consideration, although defendants paid Martin only $7500.
Defendants did not perform a title search of the property before
purchasing it. Beginning in 2003, defendants collected rent from
the property, and in 2006, defendants encumbered the property with
a $65,000 mortgage from Countrywide Home Loans. In August 2012,
plaintiff learned of defendants' ownership interest after
conducting a tax record search on the property.
On appeal, plaintiff argues the judge erred by deeming
defendants' deed valid; concluding plaintiff and defendants are
equal tenants in common; denying her request to eject the occupants
of the property; entering a limited counsel fee award; and by
denying her request to suppress defendants' pleadings.
Our standard of review requires deference to a judge's
findings "unless they are so wholly unsupportable as to result in
a denial of justice." Greenfield v. Dusseault, 60 N.J. Super.
436, 444 (App. Div.), aff'd o.b., 33 N.J. 78 (1960); see also Rova
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Farms Resort, Inc. v. Inv'rs Ins. Co. of Am., 65 N.J. 474, 483-84
(1974). We conclude there exists sufficient credible evidence in
the record to support the judge's findings, and that she correctly
applied the law.
Plaintiff argues defendants' deed was invalid from inception
as a matter of law because defendants only paid $7500. In support
of that argument, plaintiff erroneously relies on the requirements
for recording a deed evidencing transfer of title, N.J.S.A. 46:15-
6(a), which states:
In addition to other prerequisites for
recording, no deed evidencing transfer of
title to real property shall be recorded in
the office of any county recording officer
unless it satisfies the following
requirements:
a. If the transfer is subject to any
fee established under [N.J.S.A. 46:15-7] or
[N.J.S.A. 46:15-7.1], a statement of the true
consideration for the transfer shall be
contained in the deed, the acknowledgment, the
proof of the execution, or an appended
affidavit by one of the parties to the deed
or that party’s legal representative.
This statute explicitly applies to N.J.S.A. 46:15-7 and
N.J.S.A. 46:15-7.1, neither of which apply here. N.J.S.A. 46:15-
7 and N.J.S.A. 46:15-7.1 concern the proper tax calculation when
property is transferred or conveyed. The statute does not consider
the validity of a deed with a false statement of consideration.
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We conclude that plaintiff's ejectment argument is without
merit. The validity of the deed deems the parties to be tenants
in common and provides defendants with "an undivided interest in
the whole, that is, an interest that encompasses the entire
property." Burbach v. Sussex Cty. Mun. Utils. Auth., 318 N.J.
Super. 228, 233 (App. Div. 1999). Plaintiff has no basis under
N.J.S.A. 2A:35-1 to eject defendants from the property in which
they have a legal right.
Plaintiff contends the judge improperly applied the doctrine
of laches limiting her recovery on her claims for conversion and
unjust enrichment. She maintains that the judge erroneously
reinstated defendants' suppressed answer and affirmative defenses,
which allowed them to amend their pleadings to include the defense
of laches. Plaintiff contends that as an original tenant in common
with Martin, she was entitled to rent payments from 2003.
We review a trial judge's decision to reinstate pleadings for
an abuse of discretion. Abtrax Pharms., Inc. v. Elkins-Sinn,
Inc., 139 N.J. 499, 517 (1995). We apply the same standard when
reviewing an order applying the doctrine of laches. Mancini v.
Twp. of Teaneck, 179 N.J. 425, 436 (2004) (citation omitted). We
see no such abuse here.
"If the discovery rules are to be effective, courts must be
prepared to impose appropriate sanctions for violations of the
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rules." Abtrax Pharms., Inc., supra, 139 N.J. at 512. However,
"[t]he discovery rules are not to be used . . . to preclude a
party from presenting its case when the evidence neither surprises,
misleads [nor] prejudices the opposing party." Plaza 12 Assocs.
v. Carteret Borough, 280 N.J. Super. 471, 477 (App. Div. 1995).
Our Supreme Court has held that "drastic sanctions should be
imposed only sparingly" and "dismissal with prejudice is the
ultimate sanction, [which] will normally be ordered only when no
lesser sanction will suffice to erase the prejudice suffered by
the non-delinquent party." Zaccardi v. Becker, 88 N.J. 245, 253
(1982).
Before trial, and at two separate motion hearings,
defendants' answer and affirmative defenses were suppressed
without prejudice for failing to provide discovery responses in
accordance with Rule 4:23-5(a)(1). The judge, on defendants'
second motion for reconsideration, reinstated their answer and
affirmative defenses finding suppression to be too severe of a
sanction. The judge imposed a less severe sanction of disallowing
any testimony regarding the expenses that defendants produced
during the trial. Following our Supreme Court's direction to
impose suppression with prejudice sparingly, the judge was within
her discretion to reinstate the pleadings and impose a lesser
sanction. Furthermore, there is substantial credible evidence
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supporting the judge's finding that defendants' failure to produce
some discovery was not "deliberate and contumacious."
Plaintiff contends that because the judge reinstated
defendants' pleadings, defendants were permitted to assert the
affirmative defense of laches, which reduced her rent claim.
"Laches is an equitable doctrine, operating as an affirmative
defense that precludes relief when there is an 'unexplainable and
inexcusable delay' in exercising a right, which results in
prejudice to another party." Fox v. Millman, 210 N.J. 401, 417-
18 (2012) (quoting Cty. of Morris v. Fauver, 153 N.J. 80, 105
(1998)). "Laches may only be enforced when the delaying party had
sufficient opportunity to assert the right in the proper forum and
the prejudiced party acted in good faith believing that the right
had been abandoned." Knorr v. Smeal, 178 N.J. 169, 181 (2003).
Plaintiff knew of her right to rent payments when she signed
the deed with Martin, however, she testified that she did not
expect to collect rent from approximately 1993, when she permitted
Martin to retain all rent, to 2012. The judge explained that
although she did not expect to collect rent, plaintiff had
knowledge of her right, and had sufficient opportunity to assert
it, but failed to do so. In her discretion, the judge applied the
doctrine of laches and found plaintiff was entitled to one-half
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of rent, minus applicable expenses, from 2012, when plaintiff
found the deed and asserted her right.
Plaintiff next contends the judge erred by not finding
defendants negligent for failing to conduct a title search. There
are three elements to a cause of action for negligence: "(1) a
duty of care owed by defendant to plaintiff; (2) a breach of that
duty by defendant; and (3) an injury to plaintiff proximately
caused by defendant's breach." Endre v. Arnold, 300 N.J. Super.
136, 142 (App. Div.), certif. denied, 150 N.J. 27 (1997). As a
question of law, the court must determine whether a duty of care
exists. Ibid. Plaintiff argues defendants had a duty to make a
diligent inquiry as to confirming Martin's ownership.
In New Jersey, "parties are generally charged with
constructive notice of instruments that are properly recorded."
Cox v. RKA Corp., 164 N.J. 487, 496 (2000). "[C]onstructive notice
arises from the obligation of a claimant of a property interest
to make reasonable and diligent inquiry as to existing claims or
rights in and to real estate." Friendship Manor, Inc. v. Greiman,
244 N.J. Super. 104, 108 (App. Div. 1990), certif. denied, 126
N.J. 321 (1991). "[T]he claimant will be charged with knowledge
of whatever such an inquiry would uncover where facts are brought
to his attention, 'sufficient to apprise him of the existence of
an outstanding title or claim, or the surrounding circumstances
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are suspicious and the party purposefully or knowingly avoids
further inquiry.'" Ibid. (quoting Scult v. Bergen Valley Builders,
Inc., 76 N.J. Super. 124, 135 (Ch. Div. 1962)).
Defendants were unaware of plaintiff's existence and had no
reason to question Martin's ownership of the property. Martin was
a family friend of defendants who voiced his financial struggles
and defendants relied upon Martin's representation that he owned
the property in fee simple. Having entered the transaction with
a family friend, defendants were not provided with "sufficient
[knowledge] to apprise [them] of the existence of an outstanding
title or claim." Ibid. (emphasis omitted). There is no evidence
suggesting that defendants purposefully and knowingly avoided
further inquiry.
Plaintiff contends the judge erred by failing to award her
attorney's fees. Our review of a trial judge's fee determinations
is for an abuse of discretion. Packard-Bamberger & Co. v. Collier,
167 N.J. 427, 444 (2001) (citation omitted). Generally, under the
American Rule, parties pay their own legal fees based on the
normative belief that "our judicial system is best served if
parties are responsible for bearing their own counsel fees."
DiMisa v. Acquaviva, 198 N.J. 547, 553 (2009).
Plaintiff argues the judge failed to apply the third-party
exception to the rule, which states "if the commission of a tort
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proximately causes litigation with parties other than the
tortfeasor, the plaintiff is entitled to recover damages measured
by the expense of that litigation with third parties." Jugan v.
Friedman, 275 N.J. Super. 556, 573 (App. Div.), certif. denied,
138 N.J. 271 (1994). Such a plaintiff "may recover from the
tortfeasor the expenses of that litigation, including counsel
fees, as damages flowing from the tort." Dept. of Envtl. Prot.
v. Ventron Corp., 94 N.J. 473, 505 (1983) (emphasis added) (quoting
Dorofee v. Plan. Bd. of Pennsauken Twp., 187 N.J. Super. 141, 144
(App. Div. 1982)). The judge denied plaintiff attorney's fees
based on her finding that Martin, not defendants, committed a tort
when he purportedly transferred the property to defendants. In
accordance with the exception, plaintiff may recover from Martin
as the tortfeasor, not defendants.
Plaintiff further contends she should have been awarded
attorney's fees because the judge found defendants and Martin
converted plaintiff's share of rent from August 2012 to present,
and yet failed to consider attorney's fees based on conversion.
Although the judge erred, this error was harmless. Plaintiff has
no basis for an award of attorney's fees and must bear her own
costs. Id. at 504 (limiting an attorney's fees award to "express
authorization by statute, court rule or contract").
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On the cross-appeal, defendants argue the judge abused her
discretion by awarding plaintiff attorney's fees for the June 9,
2015 trial call. We disagree. The parties appeared for a trial
call with a different judge, who presided over the case at the
time, and defendants advised they were unprepared to proceed with
trial. That judge sanctioned defendants for their inexcusable
failure to appear ready to proceed with trial pursuant to Rule
4:36-3(a), and awarded plaintiff $2040 for attorney's fees and
costs incurred for her appearance at the trial call. At the end
of trial, defendants had not yet paid, and the trial judge ordered
the same sanction. Defendants contend that the trial judge
misunderstood the prior judge's oral decision for sanctions. In
the trial judge's January 22, 2016 order, she noted "[t]he order
for sanctions on June 9 was made on the record by [the prior judge]
and was never challenged by [d]efendants at that time or since,
besides [after trial]." In following our review of a trial judge's
imposition of sanctions, we find no injustice to warrant
interference. Cavallaro v. Jamco Prop. Mgmt., 334 N.J. Super.
557, 571 (App. Div. 2000).
Defendants contend the judge erroneously found Rule 4:49-2
inapplicable and should have included a setoff for the condominium
association fees paid by defendants in the final judgment.
Reviewing the judge's interpretation of Rule 4:49-2 de novo,
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Manalapan Realty, LP v. Twp. Comm. of Manalapan, 140 N.J. 366,
378 (1995), we agree that the judge erroneously found Rule 4:49-2
inapplicable; however, the mistake was harmless and the judge
correctly denied defendants a setoff from the condominium
association fees.
Rule 4:49-2 provides "a motion for rehearing or
reconsideration seeking to alter or amend a judgment or order
shall be served not later than [twenty] days after service of the
judgment or order upon all parties by the party obtaining it." If
the twenty-day limitation runs, a "court may relieve a party or
the party's legal representative from a final judgment or order"
under Rule 4:50-1. Following trial, the judge found that
defendants filed their motion outside of the twenty-day
limitation, requiring Rule 4:50-1 to be applied.
The judge erroneously found Rule 4:49-2 inapplicable.
Defendants had twenty days from September 23, 2015 to file a notice
of motion, specifically, by October 12, 2015. However, October
12, 2015 was Columbus Day, a legal holiday, and according to Rule
1:3-1, defendants had until October 13, 2015 to file their notice
of motion, which they did. Nevertheless, the judge's mistake was
harmless.
Defendants were not permitted to present any documentation
as to the specific payments of condominium association fees.
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Defendants did not provide these documents until trial, and as a
lesser sanction of suppressing defendants' pleadings, the judge
denied presentation of documents not previously submitted.
Although Austin Tapia testified as to the fees, the judge did not
err by excluding a setoff for the fees paid by defendants in the
final judgment.
We affirm but remand for modification of the judgment
consistent with this opinion. We do not retain jurisdiction.
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