Superior Court of New Jersey, Appellate Division.
Filed January 20, 2004
Defendants, Central Title Agency (Central) and William Harrison (Harrison), Century 21 Constanza and Providence Real Estate Agency, Inc. (Century 21) move for summary judgment seeking dismissal of the plaintiff, Monica Torres’, complaint. Torres cross-moves for partial summary judgment as against Harrison and Century 21 and opposes the summary judgment motions filed against her.
The parties have filed extensive motions with citations to the discovery record. The apparent undisputed facts, unless otherwise noted, are as follows. The court considers same utilizing the appropriate standards for summary judgment as set forth in Brillv. Guardian Life Ins. Co., 142 N.J. 520 (1995), that is according the non-moving party the benefit of all favorable facts and favorable inferences available.
Plaintiff executed a contract to purchase 89 East 22nd
Street, in Bayonne, in September of 2001. She did not retain an attorney or a home inspection as part of her decision to purchase the property. A loan officer at Fleet Bank told her of Central and that Central would serve as the settlement agent at the time of closing. Plaintiff knew Central would not be her attorney, but she believed they would handle the closing and walk her through it. She also knew that Central could provide an attorney to review the contract for her, someone with whom the title company worked closely. She described Central as telling her that they would “handle everything” for her. Torres also became aware at this time of the Hudson County First Time Home Buyer’s program whereby eligible candidates, like plaintiff, could obtain grants to help purchase homes.
Ultimately, plaintiff did not purchase that property. Several months later she contracted to purchase 334 Avenue E in Bayonne (the Property). This time, she faxed the contract to Central, and she asked if everything “was cool, and did they (Central) have everything”, to which they responded “yeah.” Torres had been shown this property by the defendant Harrison in November 2001. As they walked the property, Harrison told her that he was the owner and that although the asking price was $149,000, he would sell it to her for $121,000.
Harrison had purchased the property in August intending to “flip it”, i.e. keep it for a short time and sell it for a profit. He is a licensed real estate broker and worked for defendant Century 21. Harrison had received notices from his homeowners’ insurance that certain repairs needed to be done to the property, specifically to the front steps and sidewalk, in order for the coverage to continue. In initial contact with Harrison, plaintiff contends, though it is contested, that Harrison told her that he had something “perfect” for her.
During the walk through, plaintiff contends, though it, too, is contested, that Harrison told her the house was more “ugly than decrepit, and pretty much a lucky deal”. Torres contends that Harrison told her that the place could be like brand new if she invested $5000 in it and that tenants had just left proving that the house was livable. Harrison did not reveal to plaintiff that his insurance carrier was requiring that he make certain repairs before insuring the Property. He testified that he told them he had no intention making the repairs and they advised him to sell the property as soon as possible.
Plaintiff noticed a slant in the porch when she walked the property, and did not go into the basement. Plaintiff also noticed other problems with the property that was described by her as “dirty or old.” But, she also noticed things about the property that she liked. She spent about 45 minutes walking the property. Plaintiff’s sister was present, and her ex-husband also came to look at it. Torres met Harrison the next day, November 30, 2001 at the offices of Century 21. Harrison presented her with a form notice required under law disclosing the roles of the various parties to the transaction. Plaintiff skimmed it and signed as buyer, as did her sister. Harrison signed, too, as broker and as seller. The form indicates that Harrison was a dual representative of both buyer and seller. Plaintiff testified that Harrison explained the notice to her, although she equivocated about her understanding and comprehension of the form. Harrison testified that he basically explained only the first paragraph of the form. Torres and her sister admittedly signed it. Harrison then presented her with a standard form New Jersey Realtors’ contract for sale. Torres, her sister and Harrison signed it. At the time of signing, or immediately thereafter, plaintiff admits to having read almost all the provisions of the contract. Prior to the signing of the contract, it is apparently undisputed that Harrison had never, in writing, disclosed to Torres that he owned the property. It is disputed whether he appeared as such in the multiple listing services for Hudson County, with each side demonstrating some document in which the information exists or is missing.
Harrison also told plaintiff that the price on the contract would be $126,000 to allow for plaintiff’s responsibility to pay for the closing costs. The contract included the standard clauses including the inspection contingency clause, the attorney review clause, and a handwritten clause indicating that plaintiff was buying the house “as is.” She understood this to mean that she would have to make the necessary repairs to the home. She intended to renovate the entire house. Harrison admits that at the time of the contract’s execution, he did not specifically tell Torres that she had the right to accept or reject the contract, but that he took her execution of the agreement as an acceptance. Harrison testified that he recommended that Torres obtain a home inspection, but that she refused his offer to get some professional cards of home inspectors. Harrison did not tell her how much time she had to have the home inspection. Plaintiff admits that neither Harrison, nor anyone from Century 21, ever advised her not to get a home inspection or not to retain her own attorney.
Torres went to the property five or six times prior to closing. She would pick up the key from Harrison, and, after receiving a mortgage commitment from Fleet, she kept the key outright. On December 21st, the plaintiff and her sister executed a letter Harrison furnished indicating that they would have access to the house, pre-title closing, and indemnify him for any injuries or claims. Torres never retained the services of a home inspector. At her deposition, when asked why, plaintiff responded that she “just didn’t” and that no one ever advised her not to get an independent home inspection. Plaintiff was told by Harrison that the city’s representative had gone through the house and given it the “okay” except for the need to install a vent and exhaust. The Property had only a temporary certificate of occupancy.
Fleet appraised the Property at $126,000. The bank indicated that certain things had to be done to the house and issued a conditional mortgage commitment. Plaintiff’s sister did not qualify, so the parties executed a rider removing her as a purchaser of the property. Sometime in January 2002, Torres testified that things started to go downhill. Harrison became “mean” to her; she could not obtain insurance for the house and she wanted to get out of the deal. She spoke to Harrison and Constanza who agreed to try and get Harrison to give plaintiff a $1000 credit for repairs. Torres admits, however, that this was never confirmed as having been finalized.
Knowing the closing was to be in February, plaintiff testified that she nonetheless didn’t seek legal advice because she wanted to “do things the simple way.” She apparently sought to back out of the deal with Harrison and Century 21. She sought advice elsewhere but not from an attorney. Harrison admittedly told her that she could stand to lose the money for any repairs she had already done to the building. He did not recall whether he told her she would also lose her down payment, but plaintiff apparently considered this was a possibility based upon her discussions with him.
In fact, an attorney, William Smith, had been contacted by Central and reviewed the contract on behalf of the plaintiff. Torres had agreed to pay a $150 fee to Smith, as part of the fee to Central, for the attorney to review the contract. Torres spoke to Smith and was advised that he had reviewed the contract and that everything was okay. When plaintiff realized that the closing costs were going to be a significantly greater amount of money than she had originally thought, she was distressed. Ultimately, Central agreed to serve as settlement agent, and Smith’s proposed fees to do the closing were eliminated from the anticipated closing costs. Central faxed a letter to Smith indicating he was retained for contract review only. The record discloses, however, that Smith’s review of the contract was well after the attorney review period contained in the document, and, in essence, was worthless. Smith forwarded a letter to Harrison’s attorney advising that he would no longer be serving as Torres’ counsel nor as settlement agent, and that Central would serve as settlement agent. This letter is dated 2/27/02 and it also indicates to seller’s counsel that Torres did not have sufficient funds to close. Torres admits that she never consulted Smith regarding the conditions of the property, whether to obtain an inspection, or how or if she could cancel the contract.
On February 28th, a closing took place at Century 21. Torres understood that Central would perform the closing for her as settlement agent. At closing, Torres executed a RESPA, and other documents indicating that Central was not providing her with legal advice and confirming that she had chosen not to be represented by an attorney. She denies having read those documents before signing them, and it is undisputed that Central had not provided the limitation form prior to the actual closing, Central’s principal admits that while all its customers are told that the title company does not provide legal representation, they are not specifically told that they, the customer, might have to seek legal representation to protect their interest, although this is clearly on the form provided by Central to Torres at the closing. Plaintiff had to borrow $140 from the County’s program representative, Gary DeFelippo, who was at the closing, in order to be able to close. Plaintiff approached Harrison about a credit for repairs, but was told by him to wait. In fact, Harrison stated at the end of the closing that he had no intention to provide a credit of $1000 because of the acrimony between them. Central’s representative was apparently there, heard the discussion, but did not terminate or interrupt the closing of title.
Plaintiff began to renovate the property. While doing so, she was advised that she needed a construction permit. A representative of the Bayonne Community Development Office, Pacilio, went to the property and told plaintiff that she was “out of her mind” to do the work she was doing, and that she needed to have a licensed person do the work. Pacilio prepared a report of things that needed to be done. Some of those items were code violations. The community development office subsequently paid over $70,000 to an independent contractor to make the improvements necessary to address all of Pacilio’s concerns. These funds will not have to be repaid by Torres, although she has made an assignment of her recovery in this lawsuit to the community development office. The grant also places restrictions on Torres’ alienation of the property for a period of time and acts as a lien on the property that has resulted in her inability to re-finance the property. Plaintiff has done other work on the property since the closing and anticipates doing other work.
Plaintiff’s claim for damages in this matter include the $67,000 paid by the city pursuant to the community development grant, approximately $2500 in out of pocket expenses, claims for unspecified future damages for continued expenses to improve the property, treble damages, and attorney’s fees pursuant to her Consumer Fraud Act (CFA) claims. These are listed in a statement of damages claimed, filed by plaintiff’s counsel in this suit. Plaintiff has not retained an expert in construction to estimate the costs of future repairs as set forth in the demand, and discovery has closed in the matter.
Applying summary judgment standards, Central moves for summary judgment and seeks dismissal of plaintiff’s complaint against it. In opposition, Torres argues that sufficient facts exist to defeat summary judgment as to some of her claims against Central. Specifically, Torres argues that plaintiff’s claims for common law fraud, violations of the Consumer Fraud Act (CFA), negligent misrepresentation, promissory estoppel and breach of the implied covenant of good faith should be submitted to a fact finder. The other aspects of Central’s motion are not opposed.
Thus, plaintiff’s claim for punitive damages against Central is dismissed with prejudice. Although plaintiff’s counsel, at oral argument opposed the dismissal of the claim for punitive damages, the court concludes that the record does not support such a claim. Punitive damages must be supported by “clear and convincing evidence” that the defendant’s “acts or omissions” were the result of “actual malice” or “wanton and willful disregard.” Punitive damages cannot be supported solely by proof of any degree of “negligence including gross negligence.” N.J.S.A. 2A: 15-5.12. The record cannot substantiate a finding of punitive damages against Central.
Turning to the record as it pertains to each of the plaintiff’s causes of action against Central, the court will commence with the plaintiff’s claim of a breach of the implied covenant of good faith and fair dealing. Every contract in New Jersey carries within it an implied covenant that neither party to the contract will do anything that has the effect of destroying or injuring the right of the other party to receive the fruits of the covenant. See, Sons of Thunder, Inc. v. Borden, Inc.,148 N.J. 396 (1997). In order to find a breach of the implied covenant of good faith, there must exist a contract in the first instance. Here, plaintiff admittedly had a conversation with Central when she was considering the purchase of the first property in which she claims Central told her that it would “handle everything.” She also admittedly received no such express statement at the time she actually contracted for the purchase of the Property. She claims that Central implied that they would do everything. She faxed the contract to them and Smith reviewed it at some later point in time. Undisputedly, Plaintiff chose not to retain a lawyer to represent her at the closing and undisputedly knew that Central was not providing her with legal advice. Thus, the record demonstrates at best an implied contract based upon verbal representations that Central would handle the closing of the property and act as settlement agent. No reasonable fact finder could conclude that the statement, “we’ll handle everything”, in light of plaintiff’s actual admitted state of knowledge, included within the terms of the contract that Central would provide anything other than title insurance and act as settlement agent. At best, that is the contract that existed. What then does plaintiff contend Central did to demonstrate a breach of the implied covenant of good faith? Plaintiff’s brief cites to two things. First, Central failed to advise her of the benefits of retaining counsel. Second, Central “plowed ahead” with the closing notwithstanding plaintiff’s dispute with Harrison over the $1000 credit. Neither is sufficient because neither goes to the contractual obligations that Central undertook. Central contracted to provide all that was necessary to settle the loan and provide title insurance. Its contract with plaintiff did not include a provision to provide plaintiff with legal advice, nor to advise her regarding it. As to the second of plaintiff’s assertions, as settlement agent, Central had no contractual duty to instruct plaintiff how to proceed at closing or to proceed at all. It was plaintiff’s decision and Central had not assumed any contractual obligation to do either. Any actions taken by Central to complete the closing did not violate its obligation to perform the contract with plaintiff. It did nothing to destroy the “fruits” of the contract between it and Torres. Plaintiff received the benefit of having a settlement agent so her loan proceeds could be properly disbursed, and she received her title insurance policy. Therefore, Central’s motion is granted as to this cause of action because the proofs are entirely deficient in demonstrating that Central did anything to breach the implied covenant of good faith in the implied contract between the parties.
Central next moves for summary judgment dismissing plaintiff’s causes of action under the theories of promissory estoppel and negligent misrepresentation. The elements of “promissory estoppel” have been defined by our courts as: 1) a clear and definite promise, 2) made with the expectation that the promisee will rely upon it, 3) reasonable reliance upon the promise, and 4) resultant definite and substantial detriment. LoBiondo v.O’Callaghan, 357 N.J.Super 488, 500 (App.Div. 2003). The elements of negligent misrepresentation, a closely related tort, include: 1) an incorrect statement, 2) negligently made, 3) justifiably relied upon by plaintiff, and 4) resulting in injury.H. Rosenblum, Inc. v. Adler, 93 N.J. 324 (1983). As to the cause of action for promissory estoppel, Central argues that there was no clear and unambiguous promise made to plaintiff at all. Plaintiff contends that the promise was a statement attributed to one of Central’s employees that it would “handle everything.” First, that statement was made several months prior to the plaintiff’s execution of the contract for sale of the Property. Plaintiff specifically does not attribute any such statement to Central with respect to this transaction. Secondly, even if the initial statement made with respect to another transaction could be reasonably imputed to this transaction, the issue remains as to what plaintiff reasonably understood the statement to mean. Plaintiff argues that the “promise” was that Central would “bandle everything” presumably in a proper and legally sufficient manner. However, plaintiff’s own testimony is that she knew the Central was not providing legal services to her and she knew that she could retain her own lawyer. Indeed, she understood that Smith was someone Central arranged to have represent her, but she specifically chose not to have Smith represent her at the closing because of the costs associated it with the representation. Thus, a reasonable factfinder could not conclude that plaintiff understood the “handle everything” promise to include the promise to provide an attorney. This is simply contrary to the record. The motion as directed to the count alleging promissory estoppel against Central is granted.
However, plaintiff’s opposition to the negligent misrepresentation count is more nuanced. There, plaintiff argues that Central’s assurance that it would “handle everything” negligently misrepresented what services it was in fact prepared to perform for her. Plaintiff correctly notes that even in the absence of a legal obligation to perform a duty, one may become liable if he undertakes a duty and performs it in a negligent fashion. For example, in Walker Rogge, Inc. v. Chelsea Title,116 N.J. 517 (1989), the court noted that a remand was required to determine whether a title insurance company had assumed an obligation to assure the accuracy of the acreage plaintiff was purchasing, and if so, whether it had performed the assumed obligation negligently. 116 N.J. at 541-42. Plaintiff argues, therefore, that summary judgment must be denied because there are substantial questions of fact presented as to whether Central “acted negligently” because it failed to properly perform plaintiff’s closing. (See p. 26 of plaintiff’s brief.) That may be; but, can that claim for negligent performance of the closing transform itself into a claim for negligent misrepresentation under the elements of the tort as defined by our courts?. The answer is that it cannot. Plaintiff asserts that the “handle everything” phrase was a misrepresentation, negligently made, justifiably relied upon, and resulted in injury to plaintiff. For the reasons set forth above, no rational fact finder could conclude on this record that plaintiff understood the statement to mean that Central was providing her an attorney as part of its services, or that it would not cost plaintiff additional sums to have an attorney represent her at the closing. In fact, plaintiff’s testimony is to the contrary. It is a different question as to whether Central performed the services in a negligent manner. Plaintiff has not specifically pled such a cause of action. Indeed, the negligent performance of such a service might require proof as to the professional standards to be employed by a title agency or officer. This might implicate the Affidavit of Merit statute, N.J.S.A. 2A: 53-7, et seq., a notion which plaintiff has consistently rejected throughout the motions associated with this action. Plaintiff has never filed an affidavit in this action. Since the claim made by plaintiff has not been one that centers on the negligent performance of the professional obligations of Central, but rather on it representations, Central’s motion for summary judgment as to plaintiff’s claims for negligent misrepresentation is also granted.
What remains of plaintiff’s complaint against Central, therefore, is contained in counts one and two of the complaint, actions for violations of the CFA and common-law fraud. Central argues that summary judgment must be granted on both counts because of both legal and factual insufficiencies. In order to prove a case under the CFA, the plaintiff must satisfy the statutory prerequisites. In order to prove a case of common law fraud, plaintiff must establish that Central made a material misrepresentation or omission of fact, knowing it to be false or a material omission, and detrimental reliance upon it. JewishCenter of Sussex Cty v. Whale, 86 N.J. 619, 624 (1981). Central argues that plaintiff cannot sustain this burden based upon the “handle everything” statement she alleges was made by Central’s employee. Furthermore, it argues that plaintiff suffered no damages as a result of that statement because she nevertheless decided to proceed to the closing of title, did not pay any money beyond that required to secure Central’s role as settlement agent and provider of title insurance, and thus suffered no loss proximately caused by the alleged misrepresentation. Furthermore, Central argues as a matter of undisputed fact, plaintiff received written notice by way of three separate documents advising her of Central’s limited role in the closing and her thereafter assumed obligation to secure her own counsel if she wished. As a corollary to this last point, Central argues that it provided plaintiff with an appropriate “South Jersey closing” and performed its limited duties in a manner consistent with our Supreme Court’s holding in In Re Opinion No. 26, 139 N.J. 323
(1995). Thus, it contends, both legally and factually, plaintiff cannot succeed on either of her two allegations that remain.
Plaintiff argues that, at least for purposes of summary judgment, a reasonable fact finder could conclude that Central did not comply with the holding of the Supreme Court. If such a conclusion is drawn, plaintiff contends that it would be sufficient proof to establish both a violation of the CFA and common law fraud. In its seminal opinion, the Supreme Court recognized the validity of the so-called “South Jersey closing.” In essence, such a practice, which had evolved over the years, allowed for title closings to take place without the presence of an attorney. Although plaintiff argues the holding is limited to authorizing the procedure when neither buyer nor seller is represented by counsel, the court imposed no such limitation. Specifically, the court stated, “(subject to required notice provisions) attendance and participation at the closing or settlement where neither party has been represented by counsel, or where one has not been so represented, does not constitute the unauthorized practice of law . . .” 139 N.J. at 359 (emphasis supplied). However, the court did impose certain obligations upon both brokers and title companies whenever the procedure was utilized.
Specifically, the court noted that title companies were required by statute to disclose to buyers the desirability of seeking counsel to review title exceptions. N.J.S.A. 17:46B-9. In addition, the court explained “(o)ther equally important protections for buyer and seller should exist” in a “South Jersey” title closing. The court noted that “(a)ny broker participating in a transaction where buyer and seller are not represented should have the experience and knowledge required at least to identify a situation where independent counsel is needed. Under those circumstances the broker has a duty . . . to inform either seller or buyer of that fact . . . Presumably, the same duty applies to any title officer . . . who becomes aware of the need of either party for independent counsel.”139 N.J. 359-60. Based upon the record before the court, and applying summary judgment standards, a reasonable fact finder could conclude that Central violated that duty. The facts that would allow such an inference include the contacts and correspondences with Smith, who at the last minute made it clear that he was not representing plaintiff and not attending the closing, the circumstances around those events, and Central’s representative’s participation at the closing. Here, given the plaintiff the benefit of the favorable evidence, the fact finder could conclude that the representative heard the contentions of the credit for repairs that plaintiff sought and which Harrison refused. In addition, the record discloses that plaintiff was not provided with the settlement authorization form until the day of closing, February 28th. By its own terms and language, it implicates a period of time prior to the actual date of closing. In addition, pursuant to N.J.S.A. 17:46B-9, unless the applicant is an attorney, the company must provide a notice at least five days prior to closing of title, of any conditions or exceptions to the actual title commitment and inform the insured of their entitlement to have an attorney review the commitment. Central’s reliance, therefore, upon the initial notice, at the time of the contract execution, or the subsequent notice on the date of closing, is inadequate under the statute at least for summary judgment purposes.
Thus, the record would allow a reasonable fact finder to conclude that Central violated the Supreme Court’s definition of a title officer’s duty as set forth above. Such a violation is, in essence, recognition of the title officer’s unauthorized excursion into the practice of law; the entire point of the Court’s decision was to define the limits of what non-practitioners could and could not do. Under the CFA, affirmative acts that involve “any unconscionable commercial practice, deception, fraud, false pretense, and the knowing concealment, suppression, or omission of any material fact with the intent of others to rely upon (it)” are violations of the act. Whether a practice is “unconscionable” can indeed be demonstrated by whether it violates law or regulation. While violation of specific regulations promulgated by the Attorney General under N.J.S.A. 56:8-4 automatically establishes a violation of the CFA, no such regulation exists with respect to the conduct of title insurers. However, in the event plaintiff’s version is believed with respect to Central’s failure to properly and timely notice her or advise her of the benefits of independent counsel, including the obligation even up to closing of any situation where independent counsel is necessary, then she would have demonstrated a violation of law, i.e. the unauthorized practice of law. Such would be an unconscionable practice under the CFA, and would not require a showing of reliance by plaintiff or intent by Central. Gennari v. Weichert Co. Realtors,148 N.J. 582, 607-8 (1997); Strawn v. Canuso, 140 N.J. 43, 60
(1995). In all respects, Central’s motion directed to the CFA claim made by plaintiff is denied. For summary judgment purposes, plaintiff can establish that she consummated the closing with the assistance of Central, and thus, that its conduct, alleged to have violated the CFA, is causally related to the damage she suffered. Here, the “ascertainable loss” of the plaintiff is what resulted from the closing of title. These need not be discussed in great detail, however, because they would be sufficient to defeat summary judgment.
That leaves Central’s motion as directed to plaintiff’s common law fraud claim. The distinction between such a claim, and a claim sufficient under the CFA, are numerous. The statute does not require actual intent by Central, or reliance by the plaintiff, upon the unconscionable practice. In addition, under common law fraud, another essential element is “a material representation of a presently existing or past fact.” JewishCenter, at 624. Here, there Central committed no misrepresentation of fact. As discussed above, it may have engaged in an unconscionable commercial practice by failing to comport with the limitations placed upon title providers by the Supreme Court in a “South Jersey” closing; but that did not result from a misrepresentation of a material fact. Because plaintiff has failed to demonstrate a factual misrepresentation by Central, she cannot succeed to prove the necessary elements of common law fraud. Therefore, Central’s motion directed to this count of plaintiff’s complaint is granted.
The court now turns to the summary judgment motion made by Harrison and Century 21, and the cross-motion filed by plaintiff. Initially, for the reasons set forth above, the plaintiff’s claims for punitive damages against these defendants must also be dismissed. The requisite proofs are lacking.
Harrison and Century 21 seek dismissal of plaintiff’s claims for promissory estoppel, negligent misrepresentation, and a breach of the implied covenant of good faith and fair dealing. While the record as it relates to Central clearly could not support those claims for the reasons set forth above, the record is not as clear with respect to the numerous dealings she had with Harrison.[1] From the inception of their relationship, there are numerous factual issues that are disputed. Harrison’s statements regarding the condition of the property, his indication that the city had somehow already approved the occupancy of the premises because he had already previously rented it to others, and his actual state of knowledge about the property are all subject to question by a potential fact finder. Indeed, questions relating to the actual state of mind of a party, as well as the state of knowledge he possesses, are difficult to discern at the time of summary judgment, and our courts have recognized such cases as not being particularly amenable to summary judgment. See, Wilson v. Amerada HessCorp., 168 N.J. 236, 253-54 (2001) and cases collected at Pressler, Commentary to the Rules of Court, 2004 Ed., p. 1706. Therefore, plaintiff can establish the necessary elements of promissory estoppel and negligent misrepresentation if her proofs regarding her actual state of knowledge, and Harrison’s state of knowledge were believed. Furthermore, specifically as it relates to the $1000 credit which is disputed, it is apparent that there is a significant factual dispute which, if resolved in plaintiff’s favor, would itself be sufficient to deny summary judgment on those counts.
The same proof would be sufficient to deny summary judgment as it relates to the breach of implied covenant of good faith and fair dealing. Assuming Harrison and Century 21 were performing the contract in other respects in accordance with its terms, the dispute over the $1000 credit, if plaintiff’s version were believed, would still be sufficient to allow a fact finder to conclude that Harrison and Century 21 breached the implied covenant. In other words, Harrison, himself, admitted that at the closing, when plaintiff inquired about the credit, he did not respond. However, immediately thereafter, he refused the credit and indicated that he would not give plaintiff “a rusty nail,” These facts alone, if believed, would allow the conclusion that the contract between the parties anticipated a credit, that plaintiff’s belief was reasonable, and that the defendants breach an implied covenant by not dealing with her fairly as to that issue. There are other disputed facts, beyond the $1000 credit, which would support the viability of plaintiff’s claim as to these causes of action, at least for summary judgment standards. These relate to the implicit fiduciary relationship Harrison had with plaintiff. Despite the disclosed dual agent relationship, Harrison still maintained an obligation to plaintiff up to and including the closing of title. On this record, there is indeed sufficient facts for a reasonable person to conclude that Harrison did not comport himself with this obligation which carried forth through the completion of the contract. Therefore, the motion directed to these three counts of plaintiff’s complaint against Harrison and Century 21 is denied.
Plaintiff’s claim for unjust enrichment against Harrison requires some further discussion. The doctrine of unjust enrichment requires that the plaintiff establish that Harrison received a benefit from her and that his retention of it would be unjust. VRG Corporation v. GKN Realty, 135 N.J. 539 (1994). It requires proof that the plaintiff performed her obligations and conferred a benefit upon the defendant, expecting some remuneration, and she did not receive it, thus enriching the defendant beyond the contractual rights he was otherwise entitled to receive. Given the entirety of plaintiff’s claims, including those for violations of the CFA, it is difficult to discern the exact nature of this claim as separate and distinct. In short, plaintiff’s claims, if believed, relate to the entire transaction, including the inducement to enter into the contract and close title in the first instance. Thus, as pled, plaintiff claims that she would not have proceeded with the transaction at all if she knew all of the detrimental conditions of the property and if Harrison and Century 21 had complied with the obligations she contends they had toward her. The only arguably distinct claim relates to the $1000 credit she contends she was to have received at the time of closing. Since it is possible that a fact finder would conclude that plaintiff has failed in her other claims, but also conclude that she has succeeded in demonstrating that Harrison was “unjustly enriched” as to this amount, the motion must be denied.
Defendants also seek summary judgment as to the plaintiff’s remaining causes of action, i.e. breach of contract, consumer fraud, and common law fraud. This part of the motion also implicates the plaintiff’s cross-motion for summary judgment on her CFA claim. In all respects, the defendants’ motion is denied. As set forth above, there are sufficient disputed facts that would allow a conclusion that Harrison breached the contract with plaintiff. These disputed facts, for example, relate to the contractual terms the course of dealing that transpired after the contract was signed, and the actual closing of title. For example, plaintiff contends that Harrison estimated that the costs of repairs would only be $5000. Indeed, they were much more. It is, of course, disputed whether plaintiff’s other conduct would make her version of the facts credible. But, that is not the standard for summary judgment. It is also a disputed fact that plaintiff confronted. Harrison prior to closing regarding the repairs that needed to be made in order to obtain insurance and a certificate of occupancy, and what the responses that Harrison made or implied to plaintiff. Lastly, of course, is the dispute regarding the credit at closing for repairs which plaintiff contends was implied, albeit never confirmed by Harrison. In short, the disputed facts, if resolved in plaintiff’s favor, serve to define the contract that she believed she had entered into with Harrison, and which a reasonable fact finder could conclude he breached. In addition, to the extent as stated above that a reasonable fact finder could conclude that defendant breached the implied covenant of good faith and fair dealing, such would be a breach of the contract itself.
Turning to the plaintiff’s claim for common law fraud, the motion made by defendants to dismiss her claim must also fail. As set forth above, the necessary elements of common law fraud require a “material misrepresentation of a presently existing fact or past fact, made with knowledge of its falsity and with the intention that the other party rely thereon, resulting on reliance by that party to his detriment.” Jewish Center,supra. Here, plaintiff can establish for purposes of this motion that Harrison’s claims about the condition of the property implied a modest investment on her part for repairs. Further, it can be inferred from the extent of the repairs that were actually made that the condition of the property was far worse. Such a misrepresentation, if believed, would be clearly material. Further, a fact finder could infer knowledge given both Harrison’s profession, and the fact that he had only received a temporary certificate of occupancy for the property and had been denied insurance unless certain repairs were made. In short, defendants’ reliance upon the contractual language and plaintiff’s apparent waiver of, for example, a home inspection, is not dispositive at this juncture, i.e. for purposes of summary judgment. Weintraub v. Krobatsch, 64 N.J. 445, 447 (1974).
Lastly, the court considers defendants’ motion to dismiss plaintiff’s CFA claim, and plaintiff’s cross-motion for judgment in her favor on that claim. The above stated factual disputes would be sufficient to deny defendants’ motion as to plaintiff’s CFA claim in the court’s opinion. In other words, a reasonable fact finder could conclude that Harrison omitted to advise plaintiff of a material fact, and that she relied upon that omission and that Harrison intended that she rely upon it. In addition, under the CFA, elements of reliance and intent are unnecessary where a defendant engaged in an affirmative act proscribed by the statute. Strawn, supra. Plaintiff contends that the proof of such is undisputed because Harrison engaged in violation of the administrative code’s regulations promulgated by the Department of Banking and Insurance, and the Real Estate Commission. Thus, she argues, she is entitled to summary judgment in her favor on the CFA cause of action.
N.J.A.C. 11:5-6.9 sets forth the requirements for consumer information statements that all licensed real estate agents are responsible to follow. Plaintiff points to at least two specific violations of the regulations to which Harrison admitted in his deposition. First, plaintiff argues that Harrison failed to disclose to her, in writing, his dual agency status in a timely fashion. In his deposition, he testified that he disclosed this at the time of the contract execution when he provided plaintiff with the required form pursuant to regulation. He contends that he went over at least some of the form with her prior to her execution of the form. Pursuant to subsection (b), a licensee must have the written informed consent of the parties to the transaction to the dual agency status, and the “informed consent” is not acquired merely through distribution of the statement itself. Rather, “informed consent” is defined in the regulations as requiring the disclosure to plaintiff of “all material facts which might reasonably impact on that party’s decision to authorize dual agency, including the extent of the conflicts of interests involved and the specific ways in which each consenting party will receive less than full agency representation from the dual agent.” N.J.A.C. 11:5-6.9(a)(4). Here, plaintiff argues that Harrison’s own deposition indicates that he only reviewed a portion of the form with her and did not obtain her “informed consent.” Additionally, plaintiff argues that Harrison admittedly violated subsection (m) of the regulation regarding the method and manner by which he disclosed the fact that he owned the Property. Harrison indicated that he told plaintiff that he was the owner, and that the contract as executed disclosed this in writing.
Plaintiff argues that these violations of the regulations are, as a matter of law, violations of the CFA. First, it must be noted that there are contested facts as to both issues. To the extent they are resolved in plaintiff’s favor, they serve to deny defendants’ motion for summary judgment. In short, if plaintiff indeed has proven violations of the regulations, they are evidence of an unconscionable commercial practice and thus would allow the conclusion that defendants violated the CFA. This is an additional reason why defendants’ motion must be denied.
As to plaintiff’s motion, it too must be denied. Defendants argue that plaintiff was verbally advised of Harrison’s ownership of the property and again in writing at the time of contract execution. They argue that she was advised of his dual agency status, that she was verbally informed of it in addition to executing the form, and that the purpose of the regulations were satisfied. A violation of the CFA can be proven by demonstrating violation of a regulation promulgated by the Attorney General to enforce the act. N.J.S.A. 56:8-4. Feinberg v. Red Bank Volvo, 331 N.J.Super 506 (App.Div. 2000). However, where the violation alleged is of a regulation not specifically promulgated to enforce the act, such as the ones at issue here, the issue remains one for the jury, i.e. was the defendants’ conduct including evidence of the violations of regulations an unconscionable practice under the CFA.
There is another reason why plaintiff’s motion must also be denied. Plaintiff must show in addition to a practice, etc. that violates the CFA an ascertainable loss that results from the defendants’ conduct and a causal relationship between the two.Carroll v. Cellco Partnership, 313 N.J.Super 488
(App.Div. 1998). The issues of plaintiff’s ascertainable loss, and whether it was causally related to a violation of the CFA are by no means conclusively demonstrated on this motion record. Indeed, giving defendants the benefit of summary judgment standards, a reasonable fact finder could conclude plaintiff has failed to prove either. Ultimately plaintiff obtained a home, along with government funds that allowed her to complete repairs at little cost to herself. Plaintiff argues that the restrictions upon her refinancing and alienation of the property are ascertainable losses, as are her out-of-pocket expenses. These are issues for the jury to decide. The same is true with respect to the causality question. For those reasons alone, the plaintiff’s motion is denied.
In conclusion, Central Title’s motion is granted in all respects, except as to plaintiff’s CFA claim. All other counts in plaintiff’s complaint against Central are dismissed. The summary judgment motion brought by Harrison and Century 21 is denied, as is plaintiff’s cross-motion for summary judgment against Harrison. All of plaintiff’s ad damnum requests for punitive damages are dismissed as to all defendants. Appropriate orders are attached.