NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court." Although it is posted on the internet, this opinion is binding only on the parties in the case and its use in other cases is limited. R. 1:36-3.
SUPERIOR COURT OF NEW JERSEY APPELLATE DIVISION DOCKET NO. A-3657-17T2 BERLIN CROSS KEYS SHOPPING CENTER ASSOCIATES, LLC,
Plaintiff,
v.
STEPHEN SAMOST, ESQUIRE, and LAW OFFICE OF STEPHEN SAMOST,
Defendants/Third-Party Plaintiffs,
and
SAMINVEST CO., LLC,
Defendant/Third-Party Plaintiff-Respondent,
WALMART STORES, INC., WALMART REAL ESTATE BUSINESS TRUST,
Third-Party Defendants- Appellants, and
CARL FREEDMAN, MITCHELL COHEN, SCOTT CIOCCO, and MARK ARENCIBIA,
Third-Party Defendants. __________________________________
Argued March 25, 2019 – Decided April 26, 2019
Before Judges Haas and Mitterhoff.
On appeal from Superior Court of New Jersey, Law Division, Camden County, Docket No. L-5114-12.
Donald A. Rea (Saul Ewing Arnstein & Lehr LLP) of the Maryland bar, admitted pro hac vice, argued the cause for appellants (Saul Ewing Arnstein & Lehr LLP, attorneys; Amy L. Piccola, Donald A. Rea, and Jordan D. Rosenfeld (Saul Ewing Arnstein & Lehr LLP) of the Maryland bar, admitted pro hac vice, on the briefs).
Peter J. Boyer argued the cause for respondent (Hyland Levin LLP, attorneys; Peter J. Boyer and Megan Knowlton Balne, on the brief).
PER CURIAM
Third-party defendants Walmart Stores, Inc. and Walmart Real Estate
Business Trust (collectively "Walmart") appeal from the trial court's denial of
its motion for summary judgment and motion for a directed verdict. Following
a five-day trial, the jury returned a $500,000 verdict in favor of third-party
plaintiff Saminvest Co., LLC ("Saminvest") on its claim against Walmart for
A-3657-17T2 2 fraudulent misrepresentation. On appeal, Walmart argues that the trial court
erred in ruling that Saminvest's claim was not barred by the statute of limitations.
For the reasons that follow, we remand.
I.
A.
We glean the following facts from the trial record. This case stems from
a real estate contract dispute. Stephen Samost has been a licensed attorney in
New Jersey since 1983 and has experience in real estate law, tax law, and land
use law. Samost is a principal of Saminvest, a real estate investment company.
In 2005 and 2006, Saminvest, through Samost, was involved in
negotiations with Berlin Cross Keys Shopping Center Associates ("BCKA")
regarding the development and construction of a shopping center on a property
owned by Saminvest in the Borough of Berlin, New Jersey. The proposal was
initially structured as a three-way development involving Saminvest as the
landowner, BCKA as the developer, and Walmart as an anchor tenant.
Initially, Saminvest and BCKA executed a purchase agreement for BCKA
to purchase the entire property, and BCKA separately negotiated with Walmart
for Walmart to purchase a portion of property to construct a Walmart store.
During these negotiations, Walmart employed engineers to determine the
A-3657-17T2 3 feasibility and plans for developing its portion of the property. With Samost
representing BCKA as its land use counsel, BCKA obtained zoning approvals
from the Berlin Borough Planning Board for a "big box" retail store on the
property.
While the proposals were being considered by the Planning Board,
hundreds of objectors attended the public hearing regarding the proposals. After
the Planning Board approved the projects, some objectors filed actions in lieu
of prerogative writs in the Superior Court to block the development. Samost
appeared on behalf of Saminvest to oppose the objectors' challenges.
While the Superior Court actions were pending, it became apparent that
BCKA was no longer financially able to move forward with the deal. Thereafter,
in or around September 2007, Samost began engaging in discussions with
Walmart's attorneys and Matt Sitton, a Walmart real estate manager, about
Walmart purchasing the property directly from Saminvest. Samost testified that
during a phone call in or around November 2007, Sitton orally agreed that
Walmart would purchase the entire property for $8.6 million after all of t he
appeals of the zoning approvals had been exhausted and successfully resolved .
Additionally, Samost testified that the parties agreed that Walmart could
terminate the agreement if (1) the property was condemned or sold to the
A-3657-17T2 4 Borough or County in lieu of condemnation, or (2) the zoning appeals were not
final and un-appealable by December 31, 2009.
Samost testified that around this time, Sitton requested that the parti es
execute a letter of intent. Samost, however, declined to execute a letter of intent,
because he felt the deal was "way further down the road than a letter of intent"
and instead wanted to execute a final purchase agreement. Samost testified that
Walmart did not want to execute a purchase agreement because it "was
concerned about being viewed as a stalking horse by the County or the
Borough." Specifically, Berlin Borough and Camden County were considering
whether to seek that the property be condemned and had been negotiating with
Samost to purchase the property in lieu of condemnation. Samost testified that
Walmart was concerned it would "be seen as driving up the price . . . and causing
difficulty for the County." Nonetheless, Samost testified that he was satisfied
that he and Sitton had agreed to the terms of the transaction during the November
2007 phone call.
Through discovery in the instant matter, Samost obtained a draft of a non-
binding letter of intent dated November 1, 2007, which Walmart prepared but
neither executed nor sent to Samost. The letter contained the $8.6 million dollar
purchase price, noted that closing was conditioned on Saminvest obtaining all
A-3657-17T2 5 final zoning approvals and the appeals being successfully resolved, and provided
that Walmart could terminate the agreement if all final approvals had not been
obtained by December 31, 2009. The letter also included exculpatory language
noting that it did "not constitute an offer by Wal-Mart to purchase the Property
on the terms set forth" and that the parties would not "be bound to any obligation,
one to the other, unless and until a written purchase agreement is mutually
executed and delivered."
Based on the oral agreement with Sitton, Samost continued to defend the
zoning appeals. On March 25, 2008, the Law Division entered a final judgment
affirming the Planning Board's approval of the site plans. That same day,
counsel for Walmart wrote Samost a letter, stating in relevant part:
We have been informed by Wal-Mart that an article appeared in the Courier Post this morning that indicates the Superior Court of New Jersey recently upheld an appeal of the Berlin Borough Planning Board's approval of a Wal-Mart Supercenter on the above referenced property. As you are aware, Wal-Mart had the right to purchase the property, or take an assignment of the right to purchase the property, from [BCKA]. It was Wal-Mart's understanding that [BCKA] had terminated its contractual rights and Wal-Mart's contractual rights regarding the property had terminated with [BCKA's]. Accordingly, Wal-Mart believes that it has an obligation to inform the Court, and any interested parties, that it no longer has any interest in the property.
A-3657-17T2 6 If it is your position that Wal-Mart still has a legal interest in the property, please immediately advise as to the nature of that interest. Otherwise, we will be informing the Court, and the interested parties, that Wal-Mart's interest in the property has been terminated.
Samost responded via letter the next day, March 26, stating:
I am in receipt of your letter of March 25, 2008. For a number of reasons, I do not think it is necessary for you to contact the Court. As various representatives of Walmart can attest, given their presence at the hearings that were held before the Berlin Planning Board with respect to the development application, the record is replete with statements and letters from me – as well as correspondence from Walmart itself – that Walmart did not have an agreement to acquire the property. . . . I spoke with [Walmart's outside counsel], Matt Sitton, and [Walmart's real estate broker] a few months ago about these matters. My understanding, as a result of those conversations, was that Walmart did not want to be a "stalking horse" in this matter, and it understood that the Borough was acquiring the property. As I stated then, and restate again today, there is no agreement with Berlin Borough (or any other governmental agency) to acquire the property. There have been discussions; however, they have been consistent in lacking a commitment with respect to a critical element of the agreement – money. If, as I have stated, and as Walmart has previously set forth in correspondence to the Berlin Borough Planning Board, Walmart did not have an agreement to acquire the property, but rather might do so in the future, then there is nothing different today than there was when this matter was before the Berlin Borough Planning Board. As you know the lawsuits challenged the action of the Planning Board were based
A-3657-17T2 7 on the record, and Walmart's position is clearly stated on the record.
Samost testified that when writing this letter, he understood that Walmart still
wanted to avoid any ill will with the County and Borough.
Samost also testified that after Walmart received the March 26 letter,
Sitton called him and reiterated that Walmart would proceed with the $8.6
million purchase price once the zoning appeals were exhausted, and provided
that the County did not condemn the property or reach an agreement in lieu of
condemnation with Saminvest. Samost contends that this conversation is
referenced in an email exchange dated March 28, 2008 between Jeff Cohen,
Walmart's real estate broker, and Sitton, in which Sitton confirms to Cohen that
he called Samost. The email, however, does not mention what Sitton and Samost
discussed.
Unbeknownst at the time to Samost, after the parties exchanged letters,
Walmart prepared a letter to the Mayor of Berlin Borough. In pertinent part, the
letter states:
Recent newspaper stories have stated that the Superior Court of New Jersey has upheld the planning board's approval of the project. They further state that a bank, restaurant and a Wal-Mart with grocery store are targeted for the property, suggesting that construction may begin shortly. To the extent the articles suggest construction of a Wal-Mart Supercenter will begin on
A-3657-17T2 8 the property, the articles are incorrect. While the appeal was pending, Wal-Mart's negotiations with the property owner and developer terminated, without a contract. At this time, Wal-Mart will not be moving forward with the project.
[(emphasis added).]
Through discovery in the instant matter, it was revealed that the original
draft of Walmart's letter closed with the final sentence: "Accordingly, Wal-Mart
no longer has intent to construct a store on the property." As reflected in emails
exchanged on March 27 and 28, 2008 between Sitton, other Walmart employees,
and Walmart's counsel, the final sentence was edited to the language emphasized
above at the request of Sitton. Walmart did not provide Samost a copy of this
letter to the Samost, nor did Samost know the letter had been sent to the Mayor.
On April 2, 2009, the Supreme Court denied the objectors' petition for
certification. On April 13, Samost emailed Jeff Cohen, Walmart's real estate
broker, attaching the order denying certification and stating, "If Walmart's
attorneys need anything else, then please advise." After not receiving a
response, Samost called Cohen about one month later to discuss the court ruling
and to confirm that Saminvest was prepared to move forward with the
transaction. In a May 13, 2009 email exchange with the header "Samost called,"
Cohen asked Sitton, "What should I tell him?" Sitton responded, "What are the
A-3657-17T2 9 economics?" Cohen responded to Sitton, "You know Steve. He wants the same
deal as before."
On July 20, 2009, Samost emailed Cohen to discuss applying for funds
from the proposed New Jersey Stimulus Bill. Within this email, Samost stated,
"The threshold determination that must be made is whether Walmart is
interested in moving forward with the property." Thereafter, Walmart declined
to proceed with a closing on the property.
B.
On December 3, 2012, BCKA filed a complaint against Stephen Samost,
Esq., the Law Office of Stephen A. Samost and Saminvest ("Samost parties").
On November 20, 2014, the Samost parties filed a third-party complaint joining
Walmart and other parties. 1 On May 26, 2016, the Samost parties amended the
third-party complaint to add new claims, including a claim for fraudulent
misrepresentation based on Sitton's oral promise to Samost.
After the close of discovery, Walmart filed a motion for summary
judgment. Walmart argued that New Jersey's six-year statute of limitations for
fraud barred Saminvest's claims against Walmart. The trial court denied the
motion on March 3, 2017. The judge found that a jury reasonably could
1 The claims against the other parties were later dismissed. A-3657-17T2 10 conclude that during the phone call between Sitton and Samost after the
exchange of the March 2008 letters, Sitton reaffirmed Walmart's agreement to
purchase the property after the zoning issues had been exhausted.
The judge further concluded that based on Walmart's revision of its letter
to the Berlin Borough Mayor to read "[a]t this time, Walmart will not be moving
forward with the project," a jury reasonably could find that Walmart's letter was
consistent with the terms of the alleged oral promise from Sitton to Samost
because such a deal would have been contingent on the resolution of the zoning
appeals. Ultimately, the judge concluded:
[I]t's going to come down to credibility and that's not my -- you know, bailiwick is to try and determine credibility. That's not what I'm here to do. . . . So based on my ruling that I believe reasonable inferences can be drawn that there was that agreement still in existence even after the March 26th, 2008, letter of Mr. Samost, . . . the Statute of Limitations arguments fall.
Prior to trial, all claims were settled except for Saminvest's claims against
Walmart. Between February 27 and March 9, 2018, a five-day jury trial was
held on Saminvest's remaining claims against Walmart. Saminvest primarily
sought to recover the difference between the $8.6 million sale price promised
A-3657-17T2 11 by Walmart, and the current value of the property, which Saminvest's expert
calculated to be $1.72 million. 2
At the close of Saminvest's case-in-chief, Walmart moved for a directed
verdict based on the statute of limitations, which the trial court denied. In
denying the motion, the trial judge reiterated that a jury could reasonably infer
that Walmart was still abiding by Sitton's oral promise to purchase the property
once the zoning appeals were exhausted from the language Walmart used in its
March 25, 2008 letter to Samost and from Sitton's phone call to Samost after the
exchange of those letters. The trial judge reasoned:
[E]ven if Mr. Samost says this on the 26th, if on the -- later that day or on the 27th, Mr. Sitton reconfirms their agreement it's still on, we're still going to move forward, a jury could conclude that and he doesn't have an issue. So it's based on . . . those findings that are in the record that I believe a jury could determine that Mr. Samost did not have all the facts present to him that would have been necessary for him to believe that he had a cause of action that he had to pursue at that time. So that's why I'm going to deny that application.
Walmart renewed its motion for a directed verdict at the close of all of the
evidence, and the trial court again denied the motion. The trial court did not
make any new findings in denying this motion.
2 Walmart's expert calculated the current value of the property to be $6.5 million. A-3657-17T2 12 The jury returned a verdict in favor Saminvest in the sum of $500,000 on
its fraudulent misrepresentation claim, but found in favor of Walmart on all
other claims. On April 13, 2008, the trial court entered an order amending the
final judgment to add $38,352.70 in prejudgment interest. This appeal followed.
II.
On appeal, Walmart contends that the trial court erred in denying its
motion for summary judgment and motion for a directed verdict, because
Saminvest's fraudulent misrepresentation claim was barred by the six-year
statute of limitations for fraud. 3 Walmart argues that even with the benefit of
the discovery rule, Samost reasonably should have known that Walmart
disavowed any agreement to purchase the property by way of the March 25,
2008 letter. Therefore, according to Walmart, Saminvest's November 20, 2014
third-party complaint was filed outside of the statute of limitations. Walmart
submits that Samost's unsubstantiated testimony contrary to the documentary
evidence in the record does not create a genuine issue of material fact to preclude
summary judgment based on the statute of limitations.
3 See N.J.S.A. 2A:14-1 A-3657-17T2 13 In opposition, Saminvest first argues that Walmart waived its appeal of
the trial court's denial of summary judgment, because Walmart's notice of appeal
("NOA") did not identify or attach the March 3, 2017 order denying summary
judgment, nor did Walmart's case information statement ("CIS") designate that
order as part of the appeal. Therefore, Saminvest contends that the issues raised
in Walmart's appellate brief are not properly before the court. As to the merits
of the statute of limitations issue, Saminvest asserts that the earliest it could
reasonably have discovered that Walmart disavowed Sitton's promise was in
April 2009 after the Supreme Court denied the objectors' petition for
certification. Saminvest also contends that Walmart concealed material facts
that prevented the assertion of its fraud claims until after litigation commenced .
We first address Saminvest's argument that the issues raised in Walmart's
appellate brief are not properly before the court. Saminvest correctly notes that
Walmart did not identify the March 3, 2017 order denying summary judgment
in its NOA, attach the order to its NOA, or specifically designate that the order
was being appealed in its CIS. Nonetheless, we reject Saminvest's argument
because Walmart's NOA and CIS put Saminvest on sufficient notice that the
A-3657-17T2 14 issue presented in this appeal is whether Saminvest's fraudulent
misrepresentation claim was barred by the statute of limitations.
We may review orders not specifically indicated in a NOA, provided that
the NOA and CIS give sufficient notice of the issues on appeal. See Silviera-
Francisco v. Bd. of Educ. of Elizabeth, 224 N.J. 126, 141-43 (2016) (permitting
review of an interlocutory agency decision not specifically indicated in the NOA
because the CIS made clear that the appellant was challenging the interlocutory
decision, and the respondent and the appellate panel had sufficient notice of the
issue on appeal); Ahammed v. Logandro, 394 N.J. Super. 179, 187-88 (App.
Div. 2007) (reviewing order not referenced in the NOA where the plaintiff's CIS
made clear primary issue on appeal, and the two orders addressed the same legal
issue); Synnex Corp. v. ADT Sec. Servs., Inc., 394 N.J. Super. 577, 588 (App.
Div. 2007) (reviewing order not indicated in the NOA where "the text of [the
CIS] clearly indicates that the [earlier order] is one of the primary issues
presented by the appeal."); Fusco v. Bd. of Educ. of City of Newark, 349 N.J.
Super. 455, 461 (App. Div. 2002) (noting that where "the basis for the motion
judge's ruling on [an order and a subsequent order] may be the same . . . , an
appeal solely from [the subsequent order] may be sufficient for an appellate
A-3657-17T2 15 review of the merits of the case, particularly where those issues are raised in the
CIS.").4
In this case, Walmart indicated in its CIS that the issue on appeal was: "Is
Third-Party Plaintiff Saminvest Co., LLC's claim for fraudulent
misrepresentation barred by [N.J.S.A.] 2A:14-1?" In the statement of facts and
procedural history in the CIS, Walmart noted that the trial court denied its
motion for summary judgment based on the statute of limitations defense.
Walmart also requested the transcript for the summary judgment motion hearing.
Moreover, while moving for a directed verdict during trial, Walmart's
counsel explicitly noted he was renewing the statute of limitations argument
previously raised in the summary judgment motion, and the trial court denied
the motions on substantially the same grounds. In this regard, the information
contained in the CIS makes clear that Walmart was challenging the final
judgment based on the trial court's interlocutory rulings on the motion for
summary judgment and the motion for a directed verdict. See Sutter v. Horizon
Blue Cross Blue Shield of N.J., 406 N.J. Super. 86, 106 (App. Div. 2009) ("'An
appeal from a final judgment raises the validity of all interlocutory orders'
4 We note that the better practice is to specifically identify all orders implicated by the appeal in the NOA and CIS. See Silviera-Francisco, 224 N.J. at 143; Fusco, 349 N.J. Super. at 461 n.1. A-3657-17T2 16 previously entered in the trial court." (quoting In re Carton, 48 N.J. 9, 15
(1966))).
For these reasons, we conclude that Walmart's NOA and CIS provided
sufficient notice that it was challenging the trial court's order denying summary
judgment, as well as the court's denial of Walmart's motion for directed verdict
during trial. Therefore, we reject Saminvest's argument that the issues raised in
Walmart's appellate brief are not properly before us.
C.
We next turn to Walmart's argument that Saminvest's fraudulent
misrepresentation claim was barred by the statute of limitations. Initially,
Walmart points out the Saminvest alleged that Sitton made an oral promise to
Samost in the fall of 2007, but Saminvest did not file suit until over seven years
later in November 2014 – which would be outside of N.J.S.A. 2A:14-1's six-
year statute of limitations. The parties, however, dispute whether the discovery
rule tolled the statute of limitations such that Saminvest's complaint was timely
filed.
The discovery rule is an equitable doctrine which tolls the accrual of the
statute of limitations "until the injured party discovers, or by an exercise of
reasonable diligence and intelligence should have discovered that he may have
A-3657-17T2 17 a basis for an actionable claim." Lopez v. Swyer, 62 N.J. 267, 272 (1973). In
Lopez, the Supreme Court held "that whenever a plaintiff claims a right to relief
from the bar of the statute of limitations by virtue of the so-called 'discovery'
rule, the question as to whether such relief is properly available shall be deemed
an issue for determination by the court rather than by the jury." Ibid.
The Court outlined procedures and standards for a trial court to apply in
making a discovery rule determination:
The determination by the judge should ordinarily be made at a preliminary hearing and out of the presence of the jury. Generally the issue will not be resolved on affidavits or depositions since demeanor may be an important factor where credibility is significant. Where credibility is not involved, affidavits, with or without depositions, may suffice; it is for the trial judge to decide. The issue will be whether or not a party, either plaintiff or counterclaimant, is equitably entitled to the benefit of the discovery rule. All relevant facts and circumstances should be considered. The determinative factors may include but need not be limited to: the nature of the alleged injury, the availability of witnesses and written evidence, the length of time that has elapsed since the alleged wrongdoing, whether the delay has been to any extent deliberate or intentional, whether the delay may be said to have peculiarly or unusually prejudiced the defendant. The burden of proof will rest upon the party claiming the indulgence of the rule.
[Id. at 275-76 (footnotes omitted).]
The Court also noted:
A-3657-17T2 18 In an appropriate case, however, where it can be foreseen that much the same evidence will be adduced at the trial itself as upon the statute of limitations issue, the judge may elect to go forward with the trial, receiving the evidence and ruling upon the limitations issue at the end of the plaintiff's case or after all proofs are in, as may be appropriate.
[Id. at 275 n.3.]
In this case, the court appropriately exercised its discretion under Lopez
when it declined to definitively rule on the statute of limitations issue when
adjudicating Walmart's motion for summary judgment prior to trial. The record
does not reveal that either party requested a Lopez hearing in relation to
Walmart's motion for summary judgment.5 Moreover, the trial court aptly
identified circumstantial evidence to be presented at trial that would support a
conclusion that Saminvest's complaint was filed within the statute of limitations.
5 In making the motion for a directed verdict at the close of Saminvest's case in chief, however, Walmart counsel stated:
As a preliminary matter, I understand that -- that the courts typically do on a limitations basis what's called a Lopez hearing. And that in certain circumstances, in conducting a Lopez hearing, which we're requesting, for the record, evidence will be accepted by the Judge that you feel is pertinent or relevant. I think that we have that evidence through the testimony in the plaintiff's case, however disputed it may be.
A-3657-17T2 19 Although the trial court mistakenly suggested that the jury would make the
determination of when Saminvest reasonably should have known that Walmart
was disavowing its promise, we detect no error in the trial court's denial of
Walmart's motion for summary judgment and decision to proceed to trial.
Nonetheless, we are constrained to remand because the trial court did
definitively resolve the discovery rule issue after hearing all the evidence
presented at trial. Although the trial court placed analysis on the record with
respect to some of the factors annunciated in Lopez in denying Walmart's motion
for a directed verdict at the close of Walmart's case-in-chief, the court explicitly
declined to make credibility determinations, and assessed the evidence in the
light most favorable to Saminvest in terms of what a reasonable jury could infer.
This approach was inconsistent with Lopez's mandate that the court make a
determination on the discovery rule, and if necessary assess credibility, prior to
the case being submitted to the jury for a verdict. See id. at 275-76; see also
Walker v. Choudhary, 425 N.J. Super. 135, 145 (App. Div. 2012) ("It is well-
settled that a judge is in the best position to most equitably consider the issue of
fairness with regard to when the statute of limitations accrues and when
defendants have knowledge of the litigation.").
A-3657-17T2 20 For these reasons, we remand this matter to the trial court to issue a ruling
on when plaintiff's action accrued for purposes of the discovery rule. In ordering
this remand, we are mindful that the testimony and evidence relevant to the
discovery rule issue has already been presented at trial. Indeed, in their appellate
briefs, both parties identify evidence presented at trial in support of their
positions on the accrual issue. Because all the relevant evidence needed to make
this determination is already present in the trial record, we direct the trial court
to issue findings based upon the trial record, rather than holding a new Lopez
hearing on remand. In making its decision whether plaintiff is entitled to the
benefit of the discovery rule, the trial court shall make credibility assessments 6
and issue factual findings as to the date Saminvest knew or should have known
it had a cause of action for fraudulent misrepresentation.7
Remanded. We do not retain jurisdiction.
6 Because resolution of this issue requires credibility determinations, the matter should be remanded to the judge who presided over the trial. 7 The trial court need not analyze the tolling issue with respect to all of Saminvest's causes of action, as the jury found for Saminvest only as to the fraudulent misrepresentation claim. A-3657-17T2 21