Golfinopoulos v. PadulaGolfinopoulos v. Padula
- Reporters:
- ,
- Before:
- Dreier J.A.D., Furman, Stern
The opinion of the court was delivered by DREIER, J.A.D.
Plaintiffs appeal from a Chancery Division summary judgment sustaining defendants’ statute of frauds defense to plaintiffs’ specific performance claim. Except as to one major point the facts are substantially undisputed. The property which was the subject of the contract in question is the “Gardner Farm,” formerly owned by David D. Gardner who died June 2, 1984. Prior litigation concerning the disposition of this property was the subject of our opinion in the will contest proceedings entitled In the Matter of the Will of Gardner, 215 N.J. Super. 578 (App.Div. 1987). The litigation before us now, which might be rendered moot if the interests of the intervenors in the earlier litigation are upheld by the court on remand in the will contest proceeding, involves the alleged sale of the Gardner Farm by the decedent‘s surviving sisters and Michael Padula,
First Fidelity Bank, the temporary administrator of the estate, had proposed to the Law Division that the property be sold at $12,500 per acre. The proposal, however, was rejected by the court, and the Gardner sisters and Padula were permitted jointly to offer the property for sale in an attempt to obtain a higher price. Plaintiffs’ attorney, Russell W. Annich, Jr. of the firm of Carchman, Annich & Sochor made a written offer of $1,746,000 ($1,800 per acre) on April 7, 1986. The offer was directed to the respective attorneys for the bank, the Gardner sisters and Padula2.
In April 1986 Padula‘s attorney, Jay J. Ziznewski, was involved in an automobile accident followed by a heart attack which was alleged by Moran to have rendered Ziznewski “incapable of attending to the normal details of his practice,” and as a result of which “the major role in negotiating a real estate contract fell to [Moran‘s] office.” Moran‘s affidavit filed in the Chancery Division further noted that he assuaged plaintiffs’ concern that they were dealing with only “one-half of the
I assured that I had received authority from Mr. Ziznewski to negotiate for the highest possible all cash price, with no contingencies, and that Mr. Ziznewski‘s client would sign the contract on such a basis.
After receiving other increasingly higher offers from brokers and attorneys, the highest of which being $24,000 per acre, David Orron wrote to Jay Ziznewski on May 28, 1986 and described a proposed sealed-bid auction at which the then-highest offerors would bid with a floor price of $24,000 per acre. A copy of the sealed-bid auction proposal was forwarded to Ziznewski for his review five days prior to the action. No written response was made by Ziznewski or any other representative of Padula from that point through the auction, nor even thereafter prior to the eventual rejection of the written contract submitted by plaintiffs. The sealed-bid proposal read as follows:
Sealed bids will be received at the offices of Huff, Moran and Balint on Friday, May 30, 1986 at 3:00 P.M. for the purchase of premises commonly known as Lot # 4, Block 603 on the Hamilton Township, Mercer County, New Jersey Tax Map.
Terms of sale will be as follows:
1) Minimum price $24,000.00 per acre, based on a survey to be performed by the purchaser.
2) Closing within 60 days, or 20 days of Court approval of sale, whichever is later. (Court approval required because sale is from an Estate).
3) No contingencies, other than marketability of title.
4) Brokers commission.... . 5%.
5) Deposit . . . 10% on signing of contract within 10 days of receipt of bids.
6) Terms: All cash at closing.
7) Contract will definitely be awarded on Friday, May 30, 1986 to the highest responsible bidder.
Two bids were received in response to this notice. The first was a written bid from a real estate agency bidding $26,000 per acre, but reducing the commission to only $1,000 per acre rather than the $1,300 specified by the bid proposal. Plaintiffs attended the sale and offered $26,250 per acre which, with the
I am happy to report that as per your authorization we have reached an agreement for the sale of the property in the Gardner Estate for the sum of $26,250.00 an acre. We have also been successful in negotiating the real estate commission down to $1200.00 per acre, which amounts to approximately 4 1/2%. This is an all cash transaction which is contingent only upon Court approval, if necessary, with closing to take place within 60 days. The purchaser is Beatrice Greenberg and Sam Golfinopoulos who are real estate speculators in the area; Mrs. Greenberg is also known as Mrs. “G” the owner of the appliance store in Trenton.
The letter concluded with a request that since Moran had done most of the legal work involved, his office should receive a one and one-half percent fee for the services it rendered. Over the next few days Moran and Annich exchanged copies of the form of contract and negotiated some minor changes. Although it has been urged that these negotiations showed that there was no agreement at and following the auction, this would have raised at most a factual issue3. It appears to us that, applying the analysis set forth in this opinion, the negotiations were merely to secure modifications to an existing contract.
On June 9, 1986 Moran sent to Ziznewski copies of the proposed contract of sale signed by the purchasers and notified
Mr. Moran has represented that he was authorized by all parties interested in the Estate, to make a definitive commitment for the sale of the property. By memorandum dated May 28, 1986, he established the terms for a sealed bid auction, to be held on May 30, 1986 for participation by all interested parties. My client submitted the highest bid of $26,250.00 per acre.
He further indicated that he understood the contracts had been sent to Ziznewski for review and pointed out a minor error in the contract, requesting that Ziznewski make the change and have his clients initial it.
On July 1, 1986 Moran wrote to Annich stating that he understood from Padula‘s attorneys that Padula would not sign the contract due to receipt of another offer for $2,850,000, “more than $450,000.00 over your clients’ proposal.” In that letter Moran first raised a statute of frauds issue and returned the deposit check plus interest. This litigation ensued.
The trial judge determined, first, that there was no contract, since the matter had continued to be negotiated as to material terms; second, that since none of the defendants signed a formal contract, there was no writing which constituted a satisfaction of the statute of frauds; third, that as to the auction, the bid was merely an offer and until the bid was accepted there was no contract; and, lastly, that the bid and even the originally proposed contract had been changed, negating a finding of a final written agreement. Summary judgment was, therefore, granted to defendants. We disagree.
Initially, it is clear that if there is any disputed issue as to a material fact summary judgment is inappropriate. Judson v. Peoples Bank & Trust Co. of Westfield, 17 N.J. 67, 74-75 (1954). At this early stage of the proceedings both the trial judge and we must assume that the facts as alleged by plaintiffs are true. Although as noted at the outset the facts
No action shall be brought upon [a contract for sale of real estate] unless the agreement or promise, upon which action shall be brought or some memorandum or note thereof, shall be in writing, and signed by the party to be charged therewith, or by some other person thereunto by him lawfully authorized.
The words “lawfully authorized” have been held in this State not to require the authority of an agent who may execute a written contract for or memorandum of a sale of real estate to be in writing so long as the eventual contract or a memorandum of it is in writing. Buckley v. Mayor and Aldermen of Jersey City, 105 N.J. Eq. 470, 480 (Ch. 1930), aff‘d o.b. 107 N.J. Eq. 137 (E. & A. 1930); Lindley v. Keim, 54 N.J. Eq. 418, 422 (E. & A. 1896); National Home Builders, Inc., v. Stokem, 139 N.J. Eq. 167, 170 (Ch. 1946); Campbell v. Hough, 73 N.J. Eq. 601, 606 (Ch. 1907). Moran‘s affidavit that he was authorized by Padula‘s attorney to proceed with the auction at least raises a factual issue as to this point, precluding summary judgment on this issue.
We must next examine the various statements signed by Moran to see whether they singly or collectively contain sufficient terms to bind not only his clients, the Gardner sisters, but
The seventh term of sale in the memorandum stated:
Contract will definitely be awarded on Friday, May 30, 1986 to the highest responsible bidder.
This provision transformed the sale to the equivalent of a sale “without reserve,” to use the terminology of auctions of personal property. See
This subject is also addressed in Restatement, Contracts, 2d (1979) § 28(1)(b). By its terms the section appears applicable to goods as opposed to real estate; it substantially restates the Uniform Commercial Code rules quoted earlier. Illustration 3, however, makes it clear that the § 28(1)(b) rules are equally applicable to auction sales of real estate. The Illustration provides:
3. A advertises, `I offer my farm Blackacre for sale to the highest cash bidder and undertake to make conveyance to the person submitting the highest bid
received at the address below within the next 30 days.’ This is an offer, and each bid operates as an acceptance creating rights and duties conditional on no higher bid being received within thirty days.
See also 1 Corbin on Contracts § 108 (1963) at 483-485, where Professor Corbin noted that a “without reserve” auction is one where the seller makes an offer and each bid constitutes a proposed acceptance made final upon the fall of the hammer or other indication that the bidding is closed.
Although the trial judge here rejected the applicability of the Pennsylvania approach indicated in Jenkins Towel Service Inc. v. Fidelity-Philadelphia Trust Co., supra, we determine that the approach outlined there and in the other cited cases and supported by the Restatement, Corbin, and, by analogy,
Since the authority of Moran to offer the property is still subject to the resolution of the factual agency issue, we must remand this matter to the Chancery Division for a plenary hearing on this point. The resolution of this issue also will determine whether plaintiffs are the contract purchasers of the bulk of the assets in the Gardner Estate, and thus may be found to have standing to participate in the pending will contest proceeding. Therefore, the Chancery judge should attempt to resolve this issue as soon as possible, since plaintiffs have indicated before us that they intend, if successful in the Chancery Division, to apply to intervene in the will contest and related proceedings. Also, if plaintiffs are successful, the Chancery judge must determine whether defendants should be compensated for any loss of interest on the returned deposit or the proceeds of the sale due to the extended nature of this litigation and, if so, in what manner they might be made whole.
The summary judgment appealed from is reversed and this matter is remanded to the Chancery Division for further proceedings in accordance with this opinion.