NAN JIN SUH KIM VS. REDSTONE TREMATORE Â WESTAMPTON, LLC(L-1181-15, BERGEN COUNTY AND STATEWIDE)
A-3265-15T1
| N.J. Super. Ct. App. Div. | Nov 27, 2017Background
- In May 2012 Kim and Suh entered a PSA to buy commercial property from Redstone; they assigned the PSA to their company Suh Realty before closing. Closing occurred September 28, 2012.
- The property was subject to a written lease (dated 2010) under which Redstone, as landlord, agreed to pay broker ComRealty a $100,000 commission: $50,000 on issuance of the CO (March 2012) and $50,000 upon the twelfth month of the lease term (March 2013).
- Lease §14.1(c) accelerated unpaid commission to be "due and payable on the closing date" if the leased premises are conveyed to a third party; the lease also stated a purchaser is deemed to have assumed landlord obligations on sale.
- At closing Redstone and Suh Realty executed an assignment/assumption: assignor (Redstone) remains responsible for obligations accruing prior to the assignment date; assignee (Suh Realty) assumes landlord obligations from and after the assignment date.
- ComRealty's second $50,000 installment became due at the September 28, 2012 closing; Suh Realty failed to pay. Plaintiffs sued Redstone and individuals alleging breach of contract and seeking to pierce the veil and assert fraudulent transfer theories.
- The trial court dismissed the complaint under R. 4:6-2(e) for failure to state a claim; plaintiffs appealed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Who was contractually liable for the $50,000 commission due at closing? | The lease accelerated the payment, so Redstone (landlord) remained obligated to pay the commission at closing. | The assignment/assumption shifted landlord obligations arising on or after closing to Suh Realty, so Suh Realty (plaintiffs) owed the $50,000. | Assignee Suh Realty was contractually obligated to pay the $50,000; dismissal affirmed. |
| Whether the assignment language leaves any ambiguity about post-closing obligations | Paragraph 2 (assignor liable for pre-assignment obligations) supports plaintiffs' view that Redstone remained liable. | Paragraph 3 (assignee assumes landlord obligations from assignment date) makes assignee responsible for obligations due at and after closing. | The assignment and lease are unambiguous when read together; paragraph 3 makes Suh Realty responsible for post-assignment obligations, including the commission due at closing. |
| Whether plaintiffs' complaint sufficiently pleaded claims to pierce the corporate veil or fraudulent transfer | Plaintiffs argued the entities were shells used to shield assets, so veil-piercing/fraud claims should proceed. | Defendants argued those theories are irrelevant if the contract plainly assigns liability to Suh Realty. | Court declined to reach veil-piercing/fraud claims because the contract disposition resolved the case; those claims were not considered further. |
| Whether dismissal under R. 4:6-2(e) was appropriate given contract language | Plaintiffs urged the complaint should survive to develop evidence supporting their alternative theories. | Defendants maintained the complaint fails as a matter of law because plain contract language imposes liability on plaintiffs. | Dismissal was appropriate: the pleadings and unambiguous contract language fail to state a claim against defendants. |
Key Cases Cited
- W. Caldwell v. Caldwell, 26 N.J. 9 (contract must be sufficiently definite)
- Friedman v. Tappan Dev. Corp., 22 N.J. 523 (certainty of contractual performance)
- Printing Mart-Morristown v. Sharp Elecs. Corp., 116 N.J. 739 (pleading standard for sufficiency)
- Karl's Sales & Serv. v. Gimbel Bros., 249 N.J. Super. 487 (contract interpretation — plain meaning controls)
- M.J. Paquet v. N.J. DOT, 171 N.J. 378 (plain and ordinary meaning of contract terms)
- Cty. of Morris v. Fauver, 153 N.J. 80 (contract construction principles)
- E. Brunswick Sewerage Auth. v. E. Mill Assocs., Inc., 365 N.J. Super. 120 (court cannot rewrite clear contract)