MARLY CARO, ETC. VS. WILLIAM PEREZ(C-7-15, HUDSON COUNTY AND STATEWIDE)
A-2210-15T3
| N.J. Super. Ct. App. Div. | Jun 26, 2017Background
- In June 2014 Caro and Perez executed a written contract for sale of real property in Jersey City for $750,000 (deposit $75,000, financing contingency, $150,000 cash at closing).
- Plaintiff (Caro) applied for a mortgage; title issues (judgments, two mortgages in foreclosure) emerged and delayed closing.
- Caro later sold property in Brazil and informed Perez in July/August 2014 she would close with all cash; Perez did not object.
- No escrow deposit was actually posted though the contract indicated it had been; neither side's counsel requested it during the transaction.
- Perez served a notice in November 2014 purporting to cancel for failure to deposit and failure to obtain a mortgage commitment; Perez then contracted to sell to a third party for $1,000,000.
- Caro sued for specific performance; after a bench trial the Chancery judge ordered specific performance and dismissed Perez's counterclaims. Perez appealed and the Appellate Division affirmed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Materiality of failure to post $75,000 deposit | Caro was ready and able to perform; deposit omission was inadvertent and remediable | Perez: deposit was a material term (security, measure of commitment); its absence justified termination | Deposit failure was not a material breach; court found no defeat of contract purpose and plaintiff remedied the omission |
| Mortgage contingency / notice requirement | Caro: no written notice was required; she orally informed Perez she would proceed cash | Perez: mortgage commitment not obtained within contingency and Caro could not unilaterally waive seller's cancellation right without written notice | Contract's mortgage clause did not require written notice; oral notice and actual knowledge sufficed |
| Appropriateness of specific performance | Caro: land is unique; equities favor enforcement because she was ready to close and seller acted in bad faith by marketing property | Perez: enforcement is oppressive given his lost opportunity and alleged valid termination | Court did not abuse discretion; equities (unique land, seller's conduct, lack of written notice requirement, plaintiff's readiness) supported specific performance |
| Dismissal of counterclaims (tortious interference / damages) | N/A (plaintiff moved to dismiss) | Perez: termination was valid and he suffered damages from lost sale | Appellate court found dismissal lacked sufficient merit to warrant reversal; affirmed trial court dismissal |
Key Cases Cited
- Rova Farms Resort, Inc. v. Investors Ins. Co. of Am., 65 N.J. 474 (court on deference to trial fact findings)
- Stamato v. Agamie, 24 N.J. 309 (rule that purchaser seeking conveyance must be ready and willing to perform)
- Schultz v. Topakyan, 193 N.J. Super. 550 (no implied written-notice requirement in mortgage contingency iff contract silent)
- Gross v. Lasko, 338 N.J. Super. 476 (refusing to imply written notice where contract does not require it)
- Stehr v. Sawyer, 40 N.J. 352 (equitable conduct standard for specific performance)
- Friendship Manor, Inc. v. Greiman, 244 N.J. Super. 104 (presumption that specific performance is appropriate for real property)
- Marioni v. 94 Broadway, Inc., 374 N.J. Super. 588 (specific performance requires valid enforceable contract and clear terms)