PER CURIAM.
Following the close of the evidence in this jury trial, the court granted a directed verdict on liability to plaintiffs, Peter and Jane Viglione, sellers of a bay front property,
Sellers filed a complaint against buyer to recover damages for breach of a sales contract involving their waterfront residence located in Toms River. Buyer answered the complaint, asserting counterclaims for breach of contract, fraudulent and negligent misrepresentation, estoppel, and breach of the covenant of good faith and fair dealing. Sellers filed an answer to the counterclaims.
Judge Rochelle Gizinski presided over a four-day jury trial in May 2012. After the close of evidence, the judge granted sellers' motion for a directed liability verdict and dismissal of the counterclaims. She found the defense presented sufficient evidence challenging damages to get to a jury. The jury returned a $75,000 damage verdict, which was substantially less than that sought by sellers. Following denial of the parties' motions for a new trial, the judge entered an order for judgment on July 11, 2012, amended on August 24, 2012. Buyer appealed the directed verdict on liability and dismissal of his counterclaims, and sellers cross-appealed the denial of their motion for a directed verdict on damages.
Peter testified at trial, along with Charles Lindstrom, the engineer involved in the construction of the dock. He additionally presented portions of the deposition testimony of Jane, who was also his listing realtor. Buyer testified, along with his wife Lori, cousin Frank Catonese, acquaintance William Noe,
Peter testified he built the 4000 square foot bay front home in 1997 and a 200-foot dock in 1998, with two lifts where he kept his boats. Lindstrom designed the dock and ensured it complied with all federal, state and local requirements. Lindstrom explained that Silver Bay "is shallower than other areas of the bay and other rivers" and during high tide, the water would only rise a few more inches.
Peter decided to sell the property in March of 2009 because he was struggling to pay the mortgage and was delinquent in installments; however, no evidence was presented that foreclosure proceedings were threatened at that time. Jane listed the property for $1,490,000. Peter signed an MLS sellers' disclosure statement on March 27, 2009, stating "no" to the question of whether he was "aware of any existing or threatened legal action affecting the property[.]"
Foreclosure proceedings were commenced in August 2009, and Peter had no expectation of bringing the mortgage current. He did not update the disclosure form. On February 22, 2010, he reduced the price to $1,399,000.
There was a slight discrepancy as to the number of visits buyer had before signing the contract. Peter testified that in early March 2010, buyer and his wife visited the property, during which he and buyer had a short conversation about boating while in the backyard when buyer saw his twenty-nine-foot boat. According to Peter, in response to buyer's inquiry of whether the water was deep enough for his boat, a forty-foot Hustler, Peter said:
On cross-examination, Peter was asked whether he intended by the abovementioned statement to let buyer know there was plenty of water for his boat. He responded:
Lori similarly testified that Peter pointed to his neighbor's boat, which she and her husband "just kind of equated the fact, well, if they have a big boat on the lift, I'm sure we'll have no problem here with our boat."
Buyer testified that he was an avid boater and owned three boats that his family used recreationally. Buyer said he stopped by the property the day before he brought his wife there and, while in the backyard, he told Peter the type and speed of his boats and "what [he] was looking for." Peter assured him "his dock, the placement would enable [buyer] to ... use the lift and ... do all the recreational boating that [he] could ever want to do there." According to buyer, on the return visit with his wife, when they went to the water again, "Peter assured [him] that [he] wouldn't have a problem using that dock or the lift."
Buyer explained that the dock was about seven or eight feet off the water requiring use of the lift. He inquired whether there was "enough water here that you can put a boat on the lift and get the boat off the lift," and he testified Peter replied, "[t]here's plenty of water. You'll never have trouble.... [L]ook at my neighbor's boat. Look, look, there's plenty of water. You can get your boat off the lift without any trouble." Buyer acknowledged, however, that it was his "intention from the very beginning to test the water[.]"
Peter accepted buyer's offer of $1,125,000 and on April 7, 2010, signed the pre-printed sales agreement prepared by Shepherd, which set May 14 as the closing date. The contract included a standard integration clause, stating: "This Agreement contains the entire agreement of the parties. No representations have been made by any of the parties, the Broker(s) or his/her/their agents except as set forth in this Agreement."
On April 17, 2010, Jane and Shepherd discussed the status of the deal. Shepherd testified she told Jane, "[t]he only thing we have to do is the home inspection and [buyer] has to check the depth of the water to make sure he can dock his boat." According to Shepherd, Jane told her the water was "about three and a half to four feet deep" by the dock but Shepherd did not convey that statement to buyer.
Buyer's attorney modified the agreement during the attorney review period, adding, in part, the following clause:
Sellers consented to the addendum on April 20, 2010. On April 22, 2010, buyer's attorney sent a letter to buyer, copied to sellers' attorney and the realtor, confirming they were out of attorney review. Buyer testified, however, that he did not know the purpose of "attorney review" and did not put a boat in the water before April 22 because he was "in Florida on business and ... looking for a boat."
On April 24, 2010, buyer, Catonese and Noe took Catonese's boat to the property. As they approached the property, buyer noticed the water became shallow; Catonese had to raise his outboard engine to avoid hitting the bottom. They measured water depths by the neighbor's boat and sellers' dock, which were thirty to thirty-two inches and twenty-eight inches, respectively. He explained that the draft of two of his boats was thirty to thirty-six inches so he could not get close to the dock or use sellers' lift. Buyer made several visits to confirm that the depth of the water by sellers' dock would not accommodate his boats.
By letter of April 26, 2010, buyer cancelled the contract, citing paragraph seven of the addendum. By letter of May 7, sellers' attorney requested buyer reconsider and noted, for the first time, the pending foreclosure. On May 12, buyer's attorney confirmed the termination of the contract.
Peter put the house back on the market the following day, reducing the listed price by $100,000 to $1,299,000. On July 10, 2010, he executed a contract to sell the property for $999,000. The sale closed on September 8, 2010. Peter testified he accepted the reduced sale price because "during that time prices were going down dramatically" and "[m]onth by month [his] house became worth less and less[.]" Furthermore, mortgage "[i]nterest was being posted, [t]he situation was just getting worse[,]" and he "had no choice[.]" Although sellers' attorney stated that Jane "was going to testify about the price" and she was present at counsel table during the entire trial, she did not take the stand. Peter claimed $147,328 in damages, the $126,000 difference between the sale price and buyer's contract price of $1,125,000, plus the carrying costs.
Buyer testified that had he been informed of the threatened or pending foreclosure prior to canceling the contract, he would not have gone through with the sale because he was concerned with "the bank tak[ing the house] in the interim" between the deposit and closing. Shepherd testified about the purpose of the disclosure form and opined that it should be updated by the seller.
The jury returned a $75,000 damage verdict. This appeal and cross-appeal ensued. On appeal, buyer argues:
Sellers argue in their cross-appeal that the jury verdict on damages should be set aside and judgment should be entered for the full amount of damages incurred by them. Based on our review of the record and applicable law, we are not persuaded by either party's arguments.
"The interpretation of a contract is subject to de novo review by an appellate court."
We employ the same standard on review as did the trial court in a motion for a directed verdict.
We only reverse a trial judge's denial of a motion for new trial where "it clearly appears that there was a miscarriage of justice under the law."
Buyer contends the judge incorrectly interpreted the contract by excluding sellers' unwritten representations in interpreting paragraph seven of the addendum and ignoring the plain meaning buyer ascribed to the provision, i.e., that "recreational boating" meant buyer's recreational boating. Alternatively, buyer contends the language was ambiguous and the question should have been submitted to the jury. We disagree.
Generally, the interpretation of contract terms "are decided by the court as a matter of law unless the meaning is both unclear and dependent on conflicting testimony."
Parol evidence is admissible in construing a contract, not to change the contract's unambiguous terms, but to put the words in context.
Where a contract demonstrates that the parties have merged all prior negotiations and agreements in writing, the parol evidence rule bars evidence of prior negotiations and agreements tending to add or vary the terms of the writing being considered.
We read as a whole all writings forming part of the same transaction.
Judge Gizinski found paragraph seven clear and without ambiguity, explaining:
This finding was amply supported by the record and law. The judge correctly interpreted the plain, unambiguous language of the addendum and rejected buyer's claim that the language was specific to his ability to use his boats at the dock. As the judge noted, the provision did not indicate that buyer needed a certain minimum depth of water because he had a very specific boat in mind. Nor did buyer call his attorney, the scrivener of the addendum, as a witness regarding any discussions about this provision, or seek to introduce any emails he sent to his attorney about the issue, to support buyer's view of the meaning he ascribed to paragraph seven.
In fact, paragraph seven made no reference whatsoever to the use of buyer's particular boats. Rather, it addressed three questions, all pertaining to the dock: (1) the proper construction of the dock; (2) securing appropriate licensing from federal, state, and local authorities relating to the installation of the dock; and (3) the dock placement would enable buyer to use it for recreational boating. Buyer presented no evidence, expert or otherwise, to dispute Lindstrom's testimony about the accuracy of these representations, which included that the dock could be used for recreational boating.
Moreover, sellers made no direct representation about buyer's ability to use the dock for his boats; rather, buyer and his wife incorrectly inferred that fact from sellers' general comments and made that deduction at their own peril. Accepting as true the facts as presented by buyer, including Peter's statement that there was "plenty of water" and his gesturing to his neighbor's forty-two foot boat up on a lift, the judge appropriately concluded that buyer had failed to demonstrate fraud or misrepresentation by sellers by clear and convincing evidence.
As further noted by Judge Gizinski, buyer was aware, based on conversations with his realtor, that he had an affirmative duty to conduct his own due diligence respecting the depth of the water at sellers' dock. Buyer's acknowledgement on cross-examination that he told Shepherd he "would have to put a boat in the water, bring it over there and see if there was enough water to operate the boat[,]" clearly belies any claim of fraud on sellers' part. Buyer, however, did not take this step within the time frame to cancel the contract without consequences because he was in Florida and was unaware of the legal ramifications of the three-day attorney review period.
"If the terms of a contract are clear, they are to be enforced as written."
We also reject buyer's argument that sellers' non-disclosure of the mortgage foreclosure proceedings was a fraudulent misrepresentation or material breach of the contract. A party materially breaches a contract when he or she "fails to perform `essential obligations under the contract,'" during the course of performance, "and the other party may elect to terminate it."
As the judge noted, at the time the disclosure was signed, the property was not in foreclosure so the representation at the time was not a misrepresentation of a present or past fact. Although it would have been preferable for sellers to have updated the disclosure form after being served with the foreclosure complaint, buyer failed to demonstrate how the omission affected the essential terms or obligations of the sale agreement. The parties contracted for marketable title as of the closing date, which was not affected by the foreclosure; contrary to buyer's belief, the bank could not have stepped in and "taken" the property before closing. Accordingly, the judge properly ruled as a matter of law that the nondisclosure was irrelevant to buyer's fraud claim and entered a directed verdict on liability.
We turn now to sellers' cross-appeal. Sellers argue they are entitled to the full $147,328 sought because buyer presented no evidence they failed to mitigate damages, and the damages were otherwise uncontested. We disagree.
Following the directed verdict, prior to the final charge conference, the judge advised that she could not "call the damages as a matter of law" because buyer's mitigation defense raised material factual issues relating to the final sale price, which was the basis for most of the damage claim. Sellers' counsel responded that he "agreed" with her "but barely," then argued that Peter was not cross-examined on his computation of damages. The judge disagreed and submitted the damage issue to the jury. The jury awarded what it believed was a reasonable amount based on the evidence, i.e., $75,000.
The judge denied sellers' motion for a new trial on the issue of damages, finding the jury had sufficient evidence to assess the reasonableness of sellers' mitigation efforts and other aspects of the resale. She explained that credibility was relevant because sellers had a lawsuit in place by the time they accepted the second offer and noted that Jane did not testify to explain why they relisted the property for $100,000 less, stating:
Judge Gizinski concluded:
"[A] trial court should not interfere with a jury verdict unless the verdict is clearly against the weight of the evidence."
We are satisfied the judge properly submitted the damage issue to the jury. The evidence at trial showed that sellers made considerable efforts to sell their house to buyer, listing it at $1,399,000, and negotiating a sales price of $1,125,000. Sellers, however, provided no explanation for the $100,000 reduction in their relisting two months later, as opposed to any other number, nor any testimony regarding their efforts to market the property that resulted in the sale to the Higgins for $999,999. In assessing sellers' mitigation efforts, the jury was thus free to conclude they did not make the same efforts to resell the house and to award them less than the requested damages. Sellers failed to demonstrate that the verdict was against the weight of the evidence and constituted a miscarriage of justice.
Affirmed.
