Michael Conley, Jr. v. Mona Guerrero(076928)

157 A.3d 416, 228 N.J. 339, 2017 WL 1210172, 2017 N.J. LEXIS 371
Supreme Court of New Jersey·Decided April 3, 2017·No. A-65-15·Published·Cited by 195 cases

Opinion

JUSTICE SOLOMON

delivered the opinion of the Court.

In 1983, this Court affirmed a final consent judgment for a settlement agreement between the New Jersey State Bar Association and the New Jersey Association of Realtor Boards. New Jersey State Bar Ass’n v. New Jersey Ass’n of Realtor Boards (Bar Ass’n), 93 N.J. 470, 476-77, 461 A.2d 1112, modified, 94 N.J. 449, 467 A.2d 577 (1983). The terms of the settlement provide that real estate brokers and salespersons may prepare contracts to sell or lease real property, so long as a standard form is used that includes a three-day period for attorney review. If, during this review period, an attorney disapproves the contract, he or she must notify the other party and the other party’s real estate agent or broker. If no notice of disapproval is sent within the three days, however, the contract becomes enforceable. The standard attorney-review provision specifies that notice of disapproval must be transmitted to the real estate agent or broker by certified mail, telegram, or personal service.

*342 Plaintiffs Michael Conley, Jr., and Katie M. Maurer (Buyers) made an offer to purchase a condominium from defendant Mona Guerrero (Seller), and, a few days later, Seller signed and executed the contract. Before the three-day attorney-review period expired, Seller’s attorney sent Buyers’ attorney and their realtor notice of disapproval by e-mail and fax, rather than by the methods approved under our 1983 holding and prescribed in the parties’ contract — certified mail, telegram, or personal service. Buyers sued for specific performance, claiming the contract was enforceable because Seller’s notification of disapproval was sent improperly.

We are called upon to determine whether the attorney-review provision of a standard form real estate contract must be strictly enforced, thereby nullifying Seller’s notice of disapproval and requiring enforcement of the real estate contract. We conclude that, because Buyers received actual notice of disapproval within the three-day attorney-review period by a method of communication commonly used in the industry, the notice of disapproval was valid. We also exercise our constitutional authority over the practice of law and find that an attorney’s notice of disapproval of a real estate contract may be transmitted by fax, e-mail, personal delivery, or overnight mail with proof of delivery. Notice by overnight mail will be effective upon mailing. The attorney-review period within which this notice must be sent remains three business days.

I.

The pertinent undisputed facts of record are as follows. On January 12, 2014, Buyers signed a contract to purchase a condominium from Seller. Weichert Realtors was the Listing and Selling Broker on this transaction, and a real estate agent from Weichert acted as a dual agent for the parties. The agent prepared, and the parties used, a standard form real estate contract. Seller signed the contract on January 14, 2014, and the executed agreement was *343 delivered the next day. Both the offer and acceptance were transmitted via e-mail and/or fax.

The agreement included an attorney-review clause, mandated by this Court in Bar Ass’n and N.J.A.C. 11:5 — 6.2(g)(2), which gave the parties’ respective attorneys three business days to review the contract before it became legally binding. If Buyers’ or Seller’s attorney disapproved the contract, the clause required that he or she notify the “REALTOR(S) and the other party ... within the three-day period.” 1 Any notice of disapproval was required to be sent to the “REALTOR(S) by certified mail, by telegram, or by delivering it personally.”

A bidding war began on the same day that the attorney-review period commenced, and Buyers were informed that higher offers were submitted for the property. In response, Buyers increased their offer amount and implored Seller to agree to the sale. The next day, however, Seller accepted a higher bid from defendants Michele Tanzi and Brian Kraminitz (Tanzi).

One day before the attorney-review period expired, Seller’s attorney e-mailed and faxed a letter to Buyers’ attorney disapproving the contract. The dual real estate agent was copied on the e-mail. Nevertheless, after the deadline passed, Buyers’ attorney e-mailed a letter to the agent, and faxed Seller’s attorney a copy, stating that “the 3 days within which an attorney may terminate this contract ha[ve] expired. The contract is now in full force and effect.”

*344 Buyers then filed a breach-of-contract complaint in the Superior Court, Law Division, against Seller and Tanzi (collectively, defendants), demanding specific performance and requesting a temporary restraining order to enjoin the sale of the condominium to anyone other than Buyers. Buyers argued that “no attorney notified any realtor involved in the transaction by certified mail, by telegram or by personal delivery as is required if the contract was disapproved.” Consequently, Buyers claimed that because the three-day period within which notification must have been communicated had passed, and neither Buyers, their attorney, nor their agent received proper notification of disapproval, “the contract became effective.”

The trial court denied the application for a temporary restraining order, finding that Buyers failed to establish a reasonable probability of success on the merits and that the equities favored Tanzi as an “innocent buyer[ ] ... that entered into a contract to purchase the property, and now ha[s] been forced to enter into litigation.”

Both parties filed cross motions for summary judgment because the facts were “largely uncontroverted.” The court granted defendants’ motion for summary judgment and dismissed Buyers’ complaint. Buyers appealed, and the Appellate Division affirmed the trial court’s decision. Conley v. Guerrero, 443 N.J.Super. 62, 68, 127 A.3d 705 (App. Div. 2015). The panel found that the agreement detailed the method of delivering a notice of disapproval to the real estate agent only; any form of actual notice to Buyers was sufficient; and Buyers’ right to notice of disapproval was satisfied here. Id. at 68-69, 127 A.3d 705.

The panel questioned whether Buyers could be able to enforce their agent’s right to notice by the prescribed methods. Id. at 69, 127 A.3d 705.

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Michael Conley, Jr. v. Mona Guerrero(076928), 157 A.3d 416, 228 N.J. 339, 2017 WL 1210172, 2017 N.J. LEXIS 371 (N.J. 2017).

157 A.3d 416 (Michael Conley, Jr. v. Mona Guerrero(076928)) — published by Counsel Stack Legal Research, free access to 12M+ legal documents.

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