PER CURIAM.
Plaintiffs appeal from a final judgment dismissing with prejudice all causes of action in their complaint and imposing massive attorneys' fees upon them under their contracts to purchase real property from a defendant-developer. We reverse.
Plaintiffs are a condominium association and its members who purchased newly-built condominiums in a proposed "resort" development in Sussex County.
Several years after purchasing their units, plaintiffs sued the developers and the related entities alleging they were misled by these marketing representations. They claimed defendants were never "committed" to build the Village Center in accordance with the sales pitch, and the value of their condominiums decreased precipitously because of defendants' decision not to follow through on building the Village Center.
Defendants assert they never promised to build the Village Center and that economic conditions beginning in 2007 delayed some aspects of the planned development. They rely on provisions in the public offering statements, the sales contracts, the deeds, and other documents establishing that the developer could change its plans for any reason or no reason at all and waiving any claim by the buyers based on the sales representations.
On defendants' motions, Judge Stephan C. Hansbury (the first judge) dismissed some of plaintiffs' causes of action but declined to dismiss others. The judge concluded that the contracts and other written disclaimers precluded any claims by plaintiffs for breach of contract or fraud based on sales representations that preceded execution of plaintiffs' contracts. He also determined that five causes of action would survive defendants' motions to dismiss and for summary judgment. The causes of action that remained were: (1) breach of the covenant of good faith and fair dealing, (2) common law fraud with respect to post-contract representations made by defendants, (3) violation of the Consumer Fraud Act similarly based on post-contract representations, (4) unjust enrichment, and (5) promissory estoppel, again based on alleged promises made to plaintiffs after they had signed purchase contracts that contained disclaimers.
Defendants moved promptly for reconsideration. The motions were heard just a few weeks later by a different trial judge. The second judge granted summary judgment to defendants dismissing all five remaining claims and subsequently awarded $3.2 million in attorneys' fees to defendants under the terms of the purchase contracts.
Plaintiffs appeal from the May 22, 2013 final judgment entered by the second judge and the February 22, 2013 order on reconsideration. Defendants have filed cross-appeals from some of the issues decided against them by the earlier orders of the first judge on January 10, 2013, and plaintiffs also challenge some of the first judge's earlier orders dismissing parts of their complaint.
We conclude that the decision of the first judge should not have undergone review as it did by the second judge. We reverse the second judge's rulings on procedural grounds and reinstate those issued by the first judge. Because our reversal means there is no final judgment, we decline to decide on an interlocutory basis the merits of the additional issues raised in the cross-appeal or by plaintiffs.
The facts of the case are complex, but we need not narrate them in detail for purposes of the current appeal. Instead, we will quote the summary of the case that was recited by the second judge on defendants' motion for reconsideration:
This short narrative should not be mistaken for a thin evidentiary record. Plaintiffs presented substantial evidence to show that the condominiums were offered for sale as part of an integrated community, not just a residential complex. They relied on the testimony of a former salesperson and the marketing documents to prove that Mountain Creek Resort was presented as a "world-class, four-season, village-centered destination resort . . . a vibrant pedestrian village, fantastic lodging and a world of unforgettable experiences!" Upon completion of all four "waves" of the planned development, the resort would become "a Great Playground of the Western World."
Ten years after plaintiffs began purchasing their condominiums, the shops, galleries, restaurants, and entertainment venues were nowhere to be found. For the time being, those plans were scratched from the overall development. The Village Center was nothing but pictorial renderings in sales brochures and an unfulfilled marketing strategy. The allure of the four-season resort had faded into a mere possibility that the village in some form would be built someday.
At the same time, the economic downturn in real estate and the construction industry was an undeniable and unforeseeable turn of events. Defendants explained their departure from their original plans by the economic realities of the times and their inability to justify further development of the resort community without the prospect of financial success.
In his written decision, the first judge held that plaintiffs were bound by the provisions of their purchase contracts that disclaimed reliance on sales representations. He concluded that plaintiffs could not claim breach of contract, fraud, and related causes of action based on pre-contract marketing communications.
He also considered, however, plaintiffs' allegations that defendants continued to misrepresent their "commitment" to building the Village Center after the execution of purchase contracts and after those plans were put on hold by defendants. According to plaintiffs, these alleged misrepresentations induced some plaintiffs to go through with closing on their contracts when they could have canceled the contracts and caused others to delay reselling their units. In considering defendants' "communications after the parties executed the sales contracts," the first judge found that some of the defendants "engaged in an aggressive marketing plan to communicate to Plaintiffs that they were `committed' to building the Village and to instill within them an `unshakeable belief' that the Village would be built." He viewed these communications as "promises" not covered by the contractual disclaimers and concluded that "a material issue of fact exists with respect to whether, taking the record as a whole, [the developer's] intentions aligned with its representations."
On defendants' motions for reconsideration, the second judge listed all the documents by which defendants disclaimed liability in the event they did not finish the resort community as planned. He agreed with the first judge that these contractual provisions and related documents were binding on plaintiffs and barred any claims based on the sales representations that led them to sign purchase contracts. The second judge concluded that plaintiffs bore the economic risk of a change in the development plans.
Viewing the evidence differently from the first judge, the second judge also concluded that plaintiffs did not have evidence demonstrating that they relied on the continuing post-contract representations. As a further basis for granting summary judgment on the remaining claims, he posited that plaintiffs could not prove the post-contract representations caused their losses because they were bound by their contracts to close on the purchases even if defendants had revealed they would not build the Village Center, or because cancellation of their contracts would not provide to them the equivalent of the damages they now seek in this lawsuit.
The first judge had analyzed the evidence and provided rational explanations for granting summary judgment on some of plaintiffs' claims and denying it on others. Whether or not his detailed written decision was correct as a matter of law is not the issue we must decide today. The issue is whether the second judge correctly applied the long-settled standards for deciding a motion for reconsideration of an interlocutory decision made by a fellow trial judge. We hold he did not.
A trial judge may reconsider and vacate an interlocutory order if the judge determines the matter was incorrectly decided.
In
A second judge would also be justified in reconsidering and vacating a prior order if there was an intervening change in the law or an authoritative judicial decision that affected the prior decision.
There was no change in the law in this case.
The second judge simply had a different view of the evidence and the applicable law from that of the first judge. Whether his view ultimately is determined to be correct or not, it was not within the scope of his authority as a trial judge to review the first judge's decision and to contradict it as he did.
To explain his departure from the first judge's decision, the second judge made reference to the standard for reconsideration of trial court rulings: "1) the Court has expressed its decision based upon a palpably incorrect or irrational basis, or 2) it is obvious that the Court either did not consider, or failed to appreciate the significance of probative, competent evidence."
While our case law has recognized some flexibility in the application of the procedural limitations we discuss here,
We vacate the May 22, 2013 judgment and the February 22, 2013 order for summary judgment issued by the second judge, and reinstate the January 10, 2013 orders issued by the first judge. We do so on procedural grounds and without adjudicating the merits of the parties' claims and defenses. The case shall be restored to its status as of the time of the filing of defendants' motions for reconsideration. All other issues raised by plaintiffs and defendants are preserved pending a final judgment in the case.
Reversed and remanded for further proceedings in conformity with this decision. We do not retain jurisdiction.