Peck v. M.C. Developers, Inc.

618 A.2d 940, 261 N.J. Super. 384, 1992 N.J. Super. LEXIS 469
CourtNew Jersey Superior Court Appellate Division
DecidedNovember 17, 1992
StatusPublished

This text of 618 A.2d 940 (Peck v. M.C. Developers, Inc.) is published on Counsel Stack Legal Research, covering New Jersey Superior Court Appellate Division primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Peck v. M.C. Developers, Inc., 618 A.2d 940, 261 N.J. Super. 384, 1992 N.J. Super. LEXIS 469 (N.J. Ct. App. 1992).

Opinion

KLEINER, J.S.C.

This unique motion filed by defendant-third party plaintiff, M.C. Developers Inc., (hereafter Developers), seeks an order of this court authorizing the removal of an improvement from real estate titled in the name of the third-party defendant, Chesapeake Shore Enterprises, Inc., (hereafter Chesapeake). Developers admit this improvement was constructed in error.

On April 17, 1989, plaintiffs, Lance and Debra Peck, were shown two parcels of undeveloped realty in the City of Millville by an agent of Developers. The agent represented that the two parcels were available for sale and were designated as Lot 22 [386]*386and Lot 24 on the City of Millville Tax Map. A written contract of sale ultimately executed by the Pecks provided that Developers were to construct a “raised ranch” styled home on each parcel.

On October 18, 1989, at the real estate closing, purportedly respecting Lot 22, Developers presented a partially completed deed and a separate proposed metes and bounds description. It represented to the purchasers that the final clerical work, incorporating the metes and bounds description into the deed, would be completed prior to the recordation of the deed. The deed which was ultimately clerically completed and recorded contained a metes and bounds description to Lot 26 and not Lot 22 as was required by the original contract of sale.1

Subsequent to the real estate closing, Developers constructed the “raised ranch” model home, previously selected by plaintiffs, upon Lot 26, which lot, however, had been previously conveyed to Chesapeake. Chesapeake contends that it first learned of this erroneous construction on Lot 26 when it received a municipal tax bill reflecting tax liability for both land and improvements. An immediate inquiry by Chesapeake revealed Developers’ construction error.

Plaintiffs immediately filed a complaint seeking compensatory damages due to breach of contract and negligence, punitive damages due to common law fraud, and treble damages based upon allegations of consumer fraud. They named Developers and Chicago Title Company, who insured the plaintiffs’ titles as defendants. Chesapeake was ultimately joined as a third-party defendant.

Developers, in an effort to mitigate its’ ultimate responsibility for this construction error, now seek an order permitting it to remove the “raised ranch” model home from Lot 26 for placement on another unsold lot within the developed tract [387]*387which is still titled in Developers’ name. The motion is contested by Chesapeake who contends there is no judicial precedent in New Jersey specifically addressing the issue of judicially ordered removal of improvements from real estate owned by an innocent land owner. Chesapeake relies upon Friel v. Turk, 95 N.J. Eq. 425, 123 A. 610 (Ch.1924) in support of its opposition.

In Friel, the defendant conveyed Lot 83 to the plaintiff who thereafter erected a building on Lot 84 which was owned by a third-party, an absentee owner who learned of the erroneous construction twenty months after construction was completed. Plaintiff sought a court order compelling the absentee owner of Lot 84 to convey the lot to him. The court designated the plaintiff a “trespasser” who acted with “culpable negligence” and concluded that “[ejquity will not grant the relief now sought, whose condition is attributable solely to his failure to exercise that diligence which may be fully expected from a reasonable person.” Id. at 426, 123 A. 610.

While the facts surrounding Friel are similar to the present case, the relief sought by the moving party in each proceeding is quite dissimilar. In Friel, plaintiff sought compulsion of the sale of land from an innocent property owner. Here, the moving party seeks the removal of improvements wrongly constructed from the property of the innocent property owner and the restoration of the property to its status prior to the construction error.

Brick Township v. Vannell, 55 N.J.Super. 583, 151 A.2d 404 (App.Div.1959), although bearing some resemblance to the facts being considered in this motion, also is distinguishable. In Vannell, the contractor sought to recover payment for improvements it made to property previously dedicated to the township. In denying the requested relief, the court enunciated a three-pronged test. A trespasser who seeks compensation for improvements must demonstrate: (1) a mistaken belief of ownership; (2) the mistake must not have resulted from the trespasser’s culpable negligence; and (3) the true owner must have [388]*388had either actual or constructive knowledge of the improvement, but remained silent. Id. at 593, 151 A.2d 404. Relief was denied as there was little doubt that the builder knew of the prior dedication of the property to the township. In the instant case, although Developers arguably were negligent, there are no contentions that it had actual knowledge of the prior conveyance of the Lot 26 to Chesapeake. Additionally, Developers are not seeking compensation from Chesapeake but rather are only seeking the removal of the mistakenly constructed improvements.

Although New Jersey law is silent in addressing issues of the removal of improvements, other jurisdictions have specifically examined this issue. Generally, these courts have held that improvements mistakenly constructed may be removed if they were made in good faith and the real estate is returned to its proper condition by the remover. The rationale behind these decisions appears to be the prevention of unjust enrichment in favor of the property owner.

In Citizens and Southern National Bank v. Modern Homes Construction Company, 248 S.C. 130, 149 S.E.2d 326 (1966), a bank sought to remove a house on landowner’s property, constructed through inadvertence and mistake. The South Carolina Supreme Court imposed a good faith requirement on the bank as a prerequisite to obtaining relief. The Court held that there is no sound reason to deny the relief requested as the property owner would be deprived of nothing to which he is justly entitled and the remedy sought would make both parties whole. To deny the relief would permit the property owner to be unjustly enriched. Id. at 135, 149 S.E.2d 326.

The Michigan Court of Appeals dealt with this issue in Governale v. City of Owosso, 59 Mich.App. 756, 229 N.W.2d 918 (1975), where the Court found that the city had committed trespass by entering upon plaintiff’s land, and ordered the city be permitted to remove water pipes and to restore the land to its proper condition. Id. at 762, 229 N.W.2d 918. The Court in [389]*389Governale reviewed the common law position that improvements generally become part of the property, yet rejected this rationale, for taken to its logical extreme the Court believed this principle could lead to inequitable ends and would be in conflict with the doctrine of unjust enrichment. Id. at 761-762, 229 N.W.2d 918.

In McCreary v. Lake Boulevard Sponge Exchange Co., 133 Fla. 740, 183 So.

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Related

Governale v. City of Owosso
229 N.W.2d 918 (Michigan Court of Appeals, 1975)
Citizens & Southern National Bank v. Modern Homes Construction Co.
149 S.E.2d 326 (Supreme Court of South Carolina, 1966)
Wojcik v. Pollock
235 A.2d 58 (New Jersey Superior Court App Division, 1967)
Brown v. Johns
312 So. 2d 526 (District Court of Appeal of Florida, 1975)
Brick Tp. v. Vannell
151 A.2d 404 (New Jersey Superior Court App Division, 1959)
Heuter v. Coastal Air Lines, Inc.
79 A.2d 880 (New Jersey Superior Court App Division, 1951)
McCreary v. Lake Boulevard Sponge Exchange Co., Inc.
183 So. 7 (Supreme Court of Florida, 1938)
American Ass'n of University Professors v. Bloomfield College
322 A.2d 846 (New Jersey Superior Court App Division, 1974)
Friel v. Turk
123 A. 610 (New Jersey Court of Chancery, 1924)

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Bluebook (online)
618 A.2d 940, 261 N.J. Super. 384, 1992 N.J. Super. LEXIS 469, Counsel Stack Legal Research, https://law.counselstack.com/opinion/peck-v-mc-developers-inc-njsuperctappdiv-1992.