NOT FOR PUBLICATION WITHOUT THE APPROVAL OF THE APPELLATE DIVISION This opinion shall not "constitute precedent or be binding upon any court."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-3523-17T2
STRAUS ASSOCIATES II and 11 HISTORY LANE OPERATING COMPANY, LLC, d/b/a CAREONE AT JACKSON,
Plaintiffs-Appellants,
v.
MURRAY BERMAN,
Defendant-Respondent,
and
JACKSON HEALTH CARE ASSOCIATES,
Defendant. _____________________________
Argued February 27, 2019 – Decided April 2, 2019
Before Judges Koblitz, Currier and Mayer.
On appeal from Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C- 000102-15. Thomas P. Scrivo argued the cause for appellants (Cole Schotz, PC, and O'Toole Scrivo Fernandez Weiner Van Lieu, LLC, attorneys; Thomas P. Scrivo, of counsel and on the briefs; Greg Trif and Andrew Gimigliano, on the briefs).
William P. Munday argued the cause for respondent (McCusker, Anselmi, Rosen & Carvelli, PC, attorneys; William P. Munday, Samuel B. Santo, Jr., and James Harry Oliverio, on the brief).
PER CURIAM
Plaintiffs Straus Associates II and 11 History Lane Operating Company,
LLC, d/b/a CareOne at Jackson (CareOne) appeal from a January 19, 2018 order
compelling the payment of rent "up to the date of closing" to defendants Murray
Berman and Jackson Health Care Associates (JHCA).1 Plaintiffs also appeal
from a March 16, 2018 order denying reconsideration. We affirm.
We recite some facts from our prior decision in Straus Associates II and
11 History Lane Operating Company, LLC d/b/a CareOne at Jackson v. Murray
Berman and Jackson Health Care Associates, No. A-5578-15 (App. Div. October
24, 2017), to give context to the issue in this matter. The earlier appeal arose
from an action filed by plaintiffs, seeking enforcement of a settlement agreement
between the parties regarding the sale of Berman's share in JHCA. The
1 The partnership JHCA owns the property leased to CareOne. Straus and Berman were partners in JHCA. A-3523-17T2 2 Chancery judge issued a May 13, 2016 order directing Berman to close on the
sale of his interest in JHCA to plaintiffs within thirty days and reaffirmed
plaintiffs' obligation to pay rent to Berman until the date of closing.
Berman appealed from the May 13, 2016 order, arguing a certain tax
provision was an essential term of the parties' settlement agreement. We
affirmed enforcement of the settlement agreement regarding the purchase of
Berman's fifty-percent share in JHCA without the tax provision sought by
Berman. We explained Berman's agreement to relinquish his half-interest in
JHCA for a specific sum "was the essence of the settlement." Straus, slip op. at
11. We held:
The Agreement contained terms identifying the interest to be transferred, the parties to the transfer, the price, the timeline, and the financial obligations of the parties pending closing. Thus, there are no missing terms essential to complete the transfer.
[Id. at 11-12.]
Plaintiffs did not file a cross-appeal from the May 13, 2016 order. Nor
did plaintiffs seek relief, either from the trial court or this court, regarding the
obligation to pay rent to Berman "until closing."
After issuance of our opinion in October 2017, no closing occurred. The
lack of any action by plaintiffs subsequent to our opinion prompted Berman to
A-3523-17T2 3 file a motion on December 12, 2017, seeking enforcement of the settlement
agreement and demanding payment of $7.5 million for his interest in JHCA and
rent arrears accruing through the date of closing. In January 2018, plaintiffs
filed a cross-motion to enforce litigants' rights by directing Berman to comply
with the May 13, 2016 order by executing the settlement agreement and closing
within ten days.
On January 19, 2018, the Chancery judge granted Berman's motion and
denied plaintiffs' cross-motion. The judge ordered plaintiffs to "execut[e] and
deliver[] the [f]inal [s]ettlement [a]greement, in the form attached to the [c]ourt's
May 13, 2016 order, to [Berman,] . . . close on the settlement within thirty days,
and . . . make the required settlement payment of $7,500,000.00 to [Berman]."
The judge also ordered plaintiffs to pay "back rent due to [Berman] for . . .
CareOne's lease of the Property in addition to any rental payments accruing now
until the date of closing."
The judge required plaintiffs to pay rent to Berman accruing through the
date of the closing consistent with the terms of the parties' settlement agreement.
The judge stated, "[t]he settlement was pretty clear. Rent was supposed to be
paid. [Plaintiffs had CareOne] occupy the premises so that rent is supposed to
be paid."
A-3523-17T2 4 On January 31, 2018, plaintiffs filed a motion for reconsideration, which
the judge denied. In his written decision denying reconsideration, the jud ge
rejected plaintiffs' argument that the court's decision "favored Berman's
contractual rights over [plaintiffs'] by excusing his nineteen-month closing delay
without excusing [plaintiffs'] concurrent rent obligation."
The judge also found plaintiffs' claimed right to suspend rent payments
when Berman declined to close and pursued his appeal of the May 13, 2016
order was contrary to the plain language of the parties' agreement. Every
document memorializing the agreement between the parties to purchase
Berman's fifty-percent interest in JHCA reflected rent was to be paid until the
date of closing.
The judge declined to rewrite the payment of rent provision as agreed to
by the parties. The judge held, "[t]he [c]ourt is not now empowered to determine
whether the [rent] cap was omitted because of an oversight; the [c]ourt can
conclude only that the settlement agreement as written has no rental cap. To
impose it now would give [plaintiffs] more than it bargained for."
The Chancery judge also held even if "Berman wrongfully violated his
contractual obligations by disregarding the closing date, and even if this
violation constituted a material breach of the settlement agreement, [plaintiffs]
A-3523-17T2 5 would not be justified to withhold Berman's rent distributions in response." The
judge rejected plaintiffs' demand to "enforce the terms [of the settlement
agreement] it deems favorable and discharge others." The judge concluded
plaintiffs' argument would "preserve the buyout provision, would preserve the
mandatory closing deadline, but would arbitrarily erase the rent payment
provision. This sort of selective performance is simply not an available remedy
for breach – the aggrieved party must take the contract as it is or not at all."
The judge further held Berman did not receive an unjust windfall by
pursuing an appeal of the May 13, 2016 order. Since 2016, CareOne paid rent
and Berman held a fifty-percent interest in JHCA, which owned the property
leased to CareOne. Berman was entitled to share in the profits, risks, and
liabilities as a fifty-percent owner of JHCA. In addition, plaintiffs did not pay
the $7.5 million purchase price for Berman's interest in JHCA and had the
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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-3523-17T2
STRAUS ASSOCIATES II and 11 HISTORY LANE OPERATING COMPANY, LLC, d/b/a CAREONE AT JACKSON,
Plaintiffs-Appellants,
v.
MURRAY BERMAN,
Defendant-Respondent,
and
JACKSON HEALTH CARE ASSOCIATES,
Defendant. _____________________________
Argued February 27, 2019 – Decided April 2, 2019
Before Judges Koblitz, Currier and Mayer.
On appeal from Superior Court of New Jersey, Chancery Division, Bergen County, Docket No. C- 000102-15. Thomas P. Scrivo argued the cause for appellants (Cole Schotz, PC, and O'Toole Scrivo Fernandez Weiner Van Lieu, LLC, attorneys; Thomas P. Scrivo, of counsel and on the briefs; Greg Trif and Andrew Gimigliano, on the briefs).
William P. Munday argued the cause for respondent (McCusker, Anselmi, Rosen & Carvelli, PC, attorneys; William P. Munday, Samuel B. Santo, Jr., and James Harry Oliverio, on the brief).
PER CURIAM
Plaintiffs Straus Associates II and 11 History Lane Operating Company,
LLC, d/b/a CareOne at Jackson (CareOne) appeal from a January 19, 2018 order
compelling the payment of rent "up to the date of closing" to defendants Murray
Berman and Jackson Health Care Associates (JHCA).1 Plaintiffs also appeal
from a March 16, 2018 order denying reconsideration. We affirm.
We recite some facts from our prior decision in Straus Associates II and
11 History Lane Operating Company, LLC d/b/a CareOne at Jackson v. Murray
Berman and Jackson Health Care Associates, No. A-5578-15 (App. Div. October
24, 2017), to give context to the issue in this matter. The earlier appeal arose
from an action filed by plaintiffs, seeking enforcement of a settlement agreement
between the parties regarding the sale of Berman's share in JHCA. The
1 The partnership JHCA owns the property leased to CareOne. Straus and Berman were partners in JHCA. A-3523-17T2 2 Chancery judge issued a May 13, 2016 order directing Berman to close on the
sale of his interest in JHCA to plaintiffs within thirty days and reaffirmed
plaintiffs' obligation to pay rent to Berman until the date of closing.
Berman appealed from the May 13, 2016 order, arguing a certain tax
provision was an essential term of the parties' settlement agreement. We
affirmed enforcement of the settlement agreement regarding the purchase of
Berman's fifty-percent share in JHCA without the tax provision sought by
Berman. We explained Berman's agreement to relinquish his half-interest in
JHCA for a specific sum "was the essence of the settlement." Straus, slip op. at
11. We held:
The Agreement contained terms identifying the interest to be transferred, the parties to the transfer, the price, the timeline, and the financial obligations of the parties pending closing. Thus, there are no missing terms essential to complete the transfer.
[Id. at 11-12.]
Plaintiffs did not file a cross-appeal from the May 13, 2016 order. Nor
did plaintiffs seek relief, either from the trial court or this court, regarding the
obligation to pay rent to Berman "until closing."
After issuance of our opinion in October 2017, no closing occurred. The
lack of any action by plaintiffs subsequent to our opinion prompted Berman to
A-3523-17T2 3 file a motion on December 12, 2017, seeking enforcement of the settlement
agreement and demanding payment of $7.5 million for his interest in JHCA and
rent arrears accruing through the date of closing. In January 2018, plaintiffs
filed a cross-motion to enforce litigants' rights by directing Berman to comply
with the May 13, 2016 order by executing the settlement agreement and closing
within ten days.
On January 19, 2018, the Chancery judge granted Berman's motion and
denied plaintiffs' cross-motion. The judge ordered plaintiffs to "execut[e] and
deliver[] the [f]inal [s]ettlement [a]greement, in the form attached to the [c]ourt's
May 13, 2016 order, to [Berman,] . . . close on the settlement within thirty days,
and . . . make the required settlement payment of $7,500,000.00 to [Berman]."
The judge also ordered plaintiffs to pay "back rent due to [Berman] for . . .
CareOne's lease of the Property in addition to any rental payments accruing now
until the date of closing."
The judge required plaintiffs to pay rent to Berman accruing through the
date of the closing consistent with the terms of the parties' settlement agreement.
The judge stated, "[t]he settlement was pretty clear. Rent was supposed to be
paid. [Plaintiffs had CareOne] occupy the premises so that rent is supposed to
be paid."
A-3523-17T2 4 On January 31, 2018, plaintiffs filed a motion for reconsideration, which
the judge denied. In his written decision denying reconsideration, the jud ge
rejected plaintiffs' argument that the court's decision "favored Berman's
contractual rights over [plaintiffs'] by excusing his nineteen-month closing delay
without excusing [plaintiffs'] concurrent rent obligation."
The judge also found plaintiffs' claimed right to suspend rent payments
when Berman declined to close and pursued his appeal of the May 13, 2016
order was contrary to the plain language of the parties' agreement. Every
document memorializing the agreement between the parties to purchase
Berman's fifty-percent interest in JHCA reflected rent was to be paid until the
date of closing.
The judge declined to rewrite the payment of rent provision as agreed to
by the parties. The judge held, "[t]he [c]ourt is not now empowered to determine
whether the [rent] cap was omitted because of an oversight; the [c]ourt can
conclude only that the settlement agreement as written has no rental cap. To
impose it now would give [plaintiffs] more than it bargained for."
The Chancery judge also held even if "Berman wrongfully violated his
contractual obligations by disregarding the closing date, and even if this
violation constituted a material breach of the settlement agreement, [plaintiffs]
A-3523-17T2 5 would not be justified to withhold Berman's rent distributions in response." The
judge rejected plaintiffs' demand to "enforce the terms [of the settlement
agreement] it deems favorable and discharge others." The judge concluded
plaintiffs' argument would "preserve the buyout provision, would preserve the
mandatory closing deadline, but would arbitrarily erase the rent payment
provision. This sort of selective performance is simply not an available remedy
for breach – the aggrieved party must take the contract as it is or not at all."
The judge further held Berman did not receive an unjust windfall by
pursuing an appeal of the May 13, 2016 order. Since 2016, CareOne paid rent
and Berman held a fifty-percent interest in JHCA, which owned the property
leased to CareOne. Berman was entitled to share in the profits, risks, and
liabilities as a fifty-percent owner of JHCA. In addition, plaintiffs did not pay
the $7.5 million purchase price for Berman's interest in JHCA and had the
benefit of interest on that amount since 2016.
The judge explained that Berman's entitlement to rent payments did not
foreclose plaintiffs' pursuit of a separate litigation alleging Berman breached the
settlement agreement and caused financial injury as a result. The Chancery
judge found the only issues before him were "whether and how the settlement
agreement shall be enforced. With those questions decided, [plaintiffs are] free
A-3523-17T2 6 to bring a new suit to allege Berman materially breached and to recover whatever
damages that breach caused." 2
On appeal, plaintiffs contend the Chancery judge erred by: (1) not
enforcing the settlement agreements as written, and (2) abusing his discretion in
concluding plaintiffs were obligated to pay rent arrears after the contractual and
court-ordered closing dates.
"A settlement agreement between parties to a lawsuit is a contract." Nolan
v. Lee Ho, 120 N.J. 465, 472 (1990) (citing Pascarella v. Bruck, 190 N.J. Super.
118, 124 (App. Div. 1983)). Where the contract terms are clear, "it is the
function of a court to enforce [the contract] as written and not to make a better
contract for either of the parties." Kampf v. Franklin Life Ins. Co., 33 N.J. 36,
43 (1960). An unambiguous settlement agreement between sophisticated parties
should be enforced in accordance with "the plain and clear language they chose."
See CSFB 2001-CP-4 Princeton Park Corp. Ctr., LLC v. SB Rental I, LLC, 410
N.J. Super. 114, 120 (App. Div. 2009).
Here, the plain terms in each iteration of the agreement between the parties
for the sale of Berman's share in JHCA provided for the payment of rent "until
2 Plaintiffs have filed a separate lawsuit, alleging defendants breached the settlement agreement and demanding damages as a result. A-3523-17T2 7 closing." Plaintiffs do not contend the settlement agreement is ambiguous or
unenforceable. Rather, plaintiffs selectively choose the provisions of the
settlement agreement that should be enforced. At no time in the original
mediation agreement, the various drafts of the settlement agreement, or the
Chancery judge's orders, is there a specific date established by which rent
payments to Berman ceased. The agreements and the Chancery judge's orders
explicitly provide rent would be paid until closing.
The determination that rent is due until closing is supported by the
language in the court's May 13, 2016 order. The judge deleted plaintiffs'
proposed language that there would be no obligation to pay rent to Berman
accruing "after February 25, 2016 (the agreed upon closing date)." Instead, the
judge handwrote, "[p]laintiffs are obligated to Berman for any rental payments
accruing until the date of closing." The judge explained his reason for revising
the form of order, stating "it's only fair since the closing didn't occur that the
rents be paid through closing."
Plaintiffs had no right to exercise self-help and cease making rent
payments to Berman on a self-selected date. As of June 2016, we note the
following: closing had not taken place; Berman remained a partner in JHCA;
CareOne occupied the property owned by JHCA and paid monthly rent; and
A-3523-17T2 8 plaintiffs had the use of the $7.5 million, representing the purchase price for
Berman's share in JHCA. Plaintiffs' contention they were prepared to close but
for Berman's appeal from the May 13, 2016 order fails to justify refusing to pay
rent under these circumstances.
During the nineteen months that Berman's appeal was pending, plaintiffs
not only retained the use of the $7.5 million to be paid to Berman for the
purchase of his interest in JHCA, but also continued to collect monthly rent from
CareOne. The settlement agreement was unambiguous and required the
payment of rent to Berman "until closing."
Affirmed.
A-3523-17T2 9