deutsch v. binet, app. div. a3227-08

8/6/2019 Deutsch v. Binet, App. Div. a3227-08

1/28

NOT FOR PUBLICATION WITHOUT THEAPPROVAL OF THE APPELLATE DIVISION

SUPERIOR COURT OF NEW JERSEYAPPELLATE DIVISION

DOCKET NO. A-3227-08T2

MAURICE DEUTSCH,

Plaintiff-Respondent,

v.

DAVID BINET and ESTHER BINET,

Defendants/Third-PartyPlaintiffs-Appellants,

v.

ABRAHAM CENSOR,

Third-Party Defendant.

________________________________________________________________

Submitted October 5, 2010 - Decided

Before Judges Carchman, Graves and Messano.

On appeal from the Superior Court of NewJersey, Chancery Division, Ocean County,Docket No. C-17-07.

Reuel E. Topas, attorney for appellants.

Charles I. Epstein, attorney for respondent.

PER CURIAM

Defendants/third-party plaintiffs David Binet (Binet) and

Esther Binet (Esther) appeal from various trial court orders and

May 9, 2011


2/28

A-3227-08T22

a judgment entered on February 2, 2009, that (1) awarded

plaintiff Maurice Deutsch (Deutsch) damages in the amount of

$120,500, together with prejudgment interest; (2) declared

Deutsch to be the owner of the property at 208 Imperial Court in

Lakewood, New Jersey (the Property); (3) awarded Deutsch any

surplus proceeds up to $132,550 in the event of a foreclosure

sale of the Property; (4) ordered the Binets to pay Deutsch

$2000 per month for the use and occupancy of the Property

commencing December 1, 2007; and (5) discharged two lis pendens

filed by the Binets in January 2006 and March 2007. We affirm.

In December 2003, Binet signed a contract to purchase a

house located at 200 Imperial Court, with an anticipated closing

date of June 1, 2004. The contract was subsequently modified

for the purchase of the Property, with closing to take place on

August 1, 2004. However, Binet's low credit score precluded him

from obtaining a mortgage loan to finance the purchase.

Therefore, Binet and "a long-time friend," third-party defendant

Abraham Censor1 (Censor), entered into an oral agreement under

which Censor would purchase the Property in his name for the

Binets' use and later transfer it to them in exchange for a cash

payment. Pursuant to the agreement, Binet paid Censor between

1 The third-party claim against Censor was dismissed on June 6,2008, and he is not a party to this appeal.


3/28

A-3227-08T23

$1000 and $2000, and Censor obtained two mortgage loans from

Chase Bank totaling approximately $650,000.2 Binet and his

brother provided $160,000 for the down payment on the Property,

the legal services rendered in connection with the sale, and

closing costs. The transfer took place on September 27, 2004,

and Censor's deed was recorded on October 28, 2004. However,

Binet's credit score remained low, and he and Esther never

refinanced the Censor mortgage.

On January 11, 2006, the Binets filed a complaint against

Censor seeking a constructive trust to secure their interest in

the Property and an order compelling Censor to execute a deed

transferring title to them. They also filed a notice of lis

pendens the same day. The next day, January 12, 2006, Censor

executed a mortgage and security agreement in the sum of

$240,000 in favor of Deutsch. The mortgage was recorded on

January 23, 2006.

Approximately two months later, on March 29, 2006, Binet,

Censor, and Deutsch signed a four-page settlement agreement (the

Settlement Agreement) that purported "to settle the claims and

disputes between them" concerning the Property and two loans

given to Binet and Censor by Deutsch. Also involved in the

2 At trial, Binet could not recall the exact amounts involved,and the record does not contain the mortgage documents.


4/28

A-3227-08T24

negotiations was Benzion Frankel (Frankel), a New York attorney.

The Settlement Agreement stated that Binet would pay Deutsch the

total sum of $145,500 in eight installments, with the last

payment on or before November 1, 2006. Regarding the Property,

the contract stated:

2. Deutsch shall execute anAssignment of Mortgage ("Assignment") inrecordable form to Binet. The Assignmentshall be placed in escrow with BenzionFrankel P.C. pending full performance byBinet under . . . this Agreement. Any

assignment by Deutsch, except in [the] eventof default by Binet, shall be deemed abreach.

3. Censor shall execute a Deed inrecordable form to Binet or an entity to beformed. The Deed . . . shall be placed inescrow with Benzion Frankel P.C. pendingfull performance by Binet under . . . thisAgreement. Any lien or encumbrance executedor allowed by Censor shall be deemed a

breach.

4. Binet shall continue paying theexisting Mortgages and keep them current.The existing Mortgages will be refinancedand paid off. In no event will the Deed bedelivered prior to the closing of therefinance.

5. All actions currently pending withrespect to the loans and the [Property]

shall be stayed and no new actions shall becommenced.

Under the terms of the Settlement Agreement, Binet was to

receive the deed and assignment "[u]pon full performance" of his

payment obligations. If Binet breached or defaulted, the escrow


5/28

A-3227-08T25

agent, Frankel, was authorized to return the deed to Censor and

the assignment of mortgage to Deutsch.

Pursuant to the Settlement Agreement, Binet paid a total of

$25,000 to Deutsch with the last payment on September 1, 2006.

On December 13, 2006, Censor executed a deed granting the

Property to Deutsch. The deed was recorded on December 27,

2006.

On January 10, 2007, Deutsch filed a complaint against

Binet and his wife, Esther, alleging that Binet had breached the

Settlement Agreement. The complaint sought (1) enforcement of

the Settlement Agreement; (2) "declaratory judgment . . . that

[Binet] breached and [was] in default of the Settlement

Agreement"; (3) declaratory judgment that the Binets had no

interest in the Property; (4) an order discharging the notice of

lis pendens filed by the Binets; (5) declaratory judgment that

the Binets had no right of possession or interest in the

Property; (6) a writ of possession in favor of Deutsch; (7)

judgment against Binet for the balance due under the Settlement

Agreement; and (8) interest, counsel fees, and costs of suit.

In their answer, counterclaim, and third-party complaint

filed on March 28, 2007, the Binets claimed that they were "no

longer bound by the obligations of the Settlement Agreement"

because Deutsch and Censor committed a material breach by


6/28

A-3227-08T26

failing to deposit the executed deed and assignment of mortgage

into escrow.3 The counterclaim and third-party complaint sought

(1) a determination that the Settlement Agreement and the deed

from Censor to Deutsch were both "null and void"; (2) imposition

of a constructive trust in favor of the Binets; (3) a judgment

quieting title in favor of the Binets and declaring that neither

Deutsch nor Censor had any interest in the Property; (4) a

determination that the Binets had the sole right of possession

to the Property; and (5) damages, counsel fees, and costs.

The court entered a case management order scheduling

discovery on March 31, 2008. The order stated that

interrogatories were to be served by April 10, 2008, and

answered by May 15, 2008, and that all depositions were to be

completed by June 1, 2008.

In April 2008, Deutsch filed a motion for summary judgment,

ejectment, and sanctions. In a supporting certification,

Deutsch stated he was "ready, willing and able" to sign a deed

to Binet and to assign the mortgage he was holding on the

Property to Binet as soon as he received "all sums due and owing

to [him] under the Settlement Agreement." He also certified

that his attorney, Frankel, "was never notified as to whom the

3 The Binets also filed a second notice of lis pendens on March30, 2009.


7/28

A-3227-08T27

mortgage should be assigned to." Additionally, Frankel

confirmed in his certification that he was unable to prepare a

deed and an assignment of the mortgage to be placed in escrow

because Binet was either unable or unwilling to identify the

entities or the individuals that were to receive the documents.

Frankel certified: "Despite several attempts to obtain the

information, I was never told to whom I should place title in,

nor was I ever told to whom the mortgage of [Deutsch] should be

assigned to." The Binets opposed the motion, claiming that "the

validity of the [Settlement] Agreement, the circumstances of its

execution and the specifics of performance of each party of

their respective obligations need[ed] to be developed through

the discovery process."

Before the court ruled on Deutsch's motion, Censor filed a

motion to dismiss the Binets' third-party complaint. The motion

and an accompanying certification by Censor's attorney alleged

that the Binets had failed to respond to interrogatories and

document requests as required by the court's March 31, 2008 case

management order.

The parties appeared for oral argument on May 23, 2008. At

that time, the court noted the parties had resorted to self-help

rather than seeking judicial enforcement of the Settlement

Agreement and that neither party "acted with clean hands."


8/28

A-3227-08T28

Nevertheless, it ordered the parties to proceed with depositions

and reserved judgment on Deutsch's summary judgment motion. On

May 29, 2008, J.P. Morgan Chase Bank commenced foreclosure

proceedings on the Property.

Both Frankel and Deutsch were deposed on May 30, 2008.

Frankel testified that although he had represented Deutsch "a

handful" of times in the past, including a loan to Censor, he

acted only as a "facilitator" or "go-between" when the

Settlement Agreement was negotiated. Frankel also stated that

Binet was represented during the negotiations by Morris

Birenbaum. According to Frankel, he waited for Binet "to form

an entity" to receive the deed and assignment and had "many,

many phone calls" with Birenbaum, but ultimately "was told that

Mr. Binet and Mr. Birenbaum did not know where [the documents]

would be going" and that he "would be advised."

Deutsch testified Frankel was acting as his attorney during

the settlement negotiations. He further testified that he had

provided "[m]ore than 15" loans to Censor amounting to "at

least" $240,000 by 2006, and that he had loaned Binet $100,000

in "early 2000," which by 2006 had accumulated interest of

"somewhere between $75,000 and $90,000." Deutsch stated that

since receiving the loan, Binet had avoided him "for years on

end," so he was willing to compromise on a reduced sum in


9/28

A-3227-08T29

exchange for actual payment. Following negotiations, Frankel

told Deutsch that he would have to sign an assignment of

mortgage "as soon as [Binet] determined who the recipient would

be." Deutsch also indicated that after payments from Binet had

ceased, he requested a deed to the Property from Censor.

The Binets answered Deutsch's first set of interrogatories

on June 4, 2008. Although they did not state whether they had

made mortgage payments on the Property, they indicated that they

had paid all maintenance and utility costs since October 2004.

In addition, the answers stated that Binet had contacted Censor

in December 2005 "to notify him that he was prepared to

refinance the mortgage" and that Censor responded with "a demand

for $10,000.00 in return for executing a Deed." The Binets also

indicated that payments under the Settlement Agreement were made

as scheduled until July 2006.

Nevertheless, on June 6, 2008, the court dismissed the

third-party complaint against Censor pursuant to Rule 4:23-5,

citing the Binets' failure to timely respond to Censor's

interrogatories and document requests in accordance with the

schedule imposed by the March 31, 2008 case management order.

On June 13, 2008, the Binets' filed a motion to reinstate the

pleading, which was ultimately unsuccessful.


10/28

A-3227-08T210

On June 20, 2008, the court heard further arguments on

Deutsch's summary judgment motion. Deutsch and Censor

essentially argued they were entitled to summary judgment based

on the Settlement Agreement, and the Binets asserted this relief

would be premature because further discovery was needed. In

addition, the Binets' attorney advised the court that they did

not have sufficient funds to satisfy the terms of the Settlement

Agreement but could obtain the money within sixty to ninety

days. The court reserved judgment and ordered all parties and

attorneys to appear in person on July 16, 2008.

The next hearing occurred on July 17, 2008. After allowing

the attorneys to present additional arguments, the court found

that the Settlement Agreement was "clear," "unambiguous," and

"enforceable." The court's decision, which was memorialized in

a July 25, 2008 order, required (1) Deutsch to execute a deed

and assignment of mortgage to the person or entity named by

Binet, and (2) Binet to pay Deutsch $25,000 within thirty days

after the deed and the assignment of the mortgage were filed

with the court. The order also stated that the failure to make

the payment would be considered "a material breach of the

Settlement Agreement." Deutsch submitted an original deed and

assignment to the court on July 30, 2008, with the grantee


11/28

A-3227-08T211

designated as "L.H. Development Group, LLC," a company owned

exclusively by Binet.

Censor was deposed on July 24, 2008. He testified that he

did not negotiate the contract to purchase the Property and did

not pay "any of the money to purchase the house." According to

Censor, Binet assigned him the purchase contract for the

Property "approximately five to six weeks" prior to closing, but

they had a verbal agreement that Binet would become the true

owner once "[c]ertain outstanding monies," had been "taken care

of." These "monies" included $150,000 to $200,000 that Censor

claimed to have personally "lent [to Binet's] company" and

$100,000 that he "borrowed on [Binet's] behalf." Censor also

testified that Esther did not participate in any of his dealings

or discussions with Binet.

The parties again appeared before the court on September

12, 2008. At the outset, the court noted that Binet had failed

to pay $25,000, as required by the July 25, 2008 order. Counsel

for the Binets explained that Binet failed to make the payment

because "he [didn't] have the money." The court then entered a

judgment against Binet in the amount of $25,000 and scheduled

the matter for an evidentiary hearing. The order memorializing

this decision was entered on October 1, 2008.


12/28

A-3227-08T212

A trial was held on January 6 and 7, 2009, to determine the

merits of Deutsch's remaining claims and the Binets' claim that

they were the equitable owners of the Property. Deutsch called

Binet as the first witness. Binet testified that his "business

background" was in construction and that, in 2001, he had

commenced employment with "Dynamic," a "real estate company."

Binet indicated that he made $120,000 per year in this position

from 2003 to 2006 before Dynamic closed in 2007, leaving him

with no income in 2007 and 2008.

Binet further stated that although he negotiated the

contract to purchase the Property and contributed $160,000 of

his family's money toward the purchase, his low credit score

prevented him from obtaining a mortgage loan. Therefore, the

Property was purchased in Censor's name, and Binet paid Censor

to obtain two mortgage loans for the purchase. However, Binet

acknowledged he was responsible for the mortgage payments. He

also testified that he discussed the arrangement with Esther,

and she was "aware that Mr. Censor owned the home."

Binet said that he "didn't try" to refinance the mortgages

because his "credit score was not sufficient enough to get it

done." He further stated that on December 15, 2005, he provided

Censor with $30,000$20,000 to be given to Deutsch, and $10,000

to Censor "for keeping the house in his name"but Censor


13/28

A-3227-08T213

demanded an additional $10,000. According to Binet, the $20,000

for Deutsch was partial repayment for a separate $50,000 loan

that Deutsch had given him.

In addition, Binet confirmed that during the subsequent

settlement negotiations he was represented by Morris Birenbaum.

Binet further stated that he was not acting on behalf of Esther

at that time and that Esther only found out that the Settlement

Agreement existed "through the Court proceedings." Binet also

accounted for the difference between the $50,000 loaned to him

by Deutsch and the $145,500 that he agreed to pay in the

Settlement Agreement as "some profit to Deutsch" and "to help

out Censor" because "he needed money."

Binet admitted that he never contacted Frankel to advise

him of the name in which he wanted the deed and assignment

prepared. He also acknowledged that after making $25,0004 in

payments pursuant to the Settlement Agreement, he ceased

performance "[sometime] in the summer of [2006]" because he

"didn't get any notice" that Deutsch and Censor had placed the

deed and assignment in escrow. Binet further indicated he

learned that Censor had granted the Property to Deutsch after

Deutsch filed the complaint.

4 The parties stipulated to this amount.


14/28

A-3227-08T214

The next witness was Deutsch, who testified that he had

loaned Binet $100,000, not $50,000, in 1999 or 2000 and that

Binet "hadn't paid [him] back a dime." He further stated that

by 2006, Censor owed him approximately $400,000.

Deutsch confirmed that Binet had paid him $25,000 under the

Settlement Agreement and indicated that despite "repeatedly"

asking Binet for payment, he received few responses:

[Binet] avoided me at all costs, ignored myphone calls, agreed to meet with me on a

number of occasions, cancelled the meetings,never showed up. When I finally did get himto the table he promised that he'd getthings to work out. At certain points heresponded to my emails by saying that he

wants to take care of payments. Basicallyit was all a bunch of baloney and he nevermade a payment since his last payment.

Deutsch also testified that when Censor deeded the Property

to him, Censor "led [him] to believe that the house [was]

entirely his and that he had every right to do what he did."

Deutsch indicated that he believed the Property had been placed

in Censor's name because Binet owed Censor money. In addition,

Deutsch testified that he "did not oppose" the foreclosure

action.

Esther testified on January 7, 2009. After stating she was

born in Israel and had a "very limited" English vocabulary,

Esther gave a synopsis of the roles she and her husband played:


15/28

A-3227-08T215

The husband is taking care [of] thefinancial situation in the house and reallythe woman does not get involved. By thisespecially because English is not mylanguage, I was limited . . . to understand

. . . whatever [deal was] made. So . . . I was trusting my husband to take care [of]everything, taking care of [the] financialsituation in the house. And the woman istaking care [of] the household, thechildren, raising the children, cooking,baking, cleaning, doing whatever she'ssupposed to do . . . to have a normal lifeand a family life.

Esther stated that at the time of the purchase, she

believed that she and her husband owned the Property and that

she had no knowledge of Censor's involvement. However, Censor

called the house in 2007 and told her that the house was in his

name. According to Esther, she never saw the Settlement

Agreement and never gave Binet "permission to make any deal to

give [her] home away."

Esther testified that she had no knowledge of the

foreclosure proceeding, even though she was aware that her

husband was not making mortgage payments. She further testified

that when she discussed the matter with her husband, he told her

he was "in touch with the lawyer and . . . taking care of it."

In addition, Esther stated that she trusted her husband to "take

care of whatever was supposed to be taken care of."


16/28

A-3227-08T216

Following closing arguments, the court rendered an oral

decision on January 7, 2009. With regard to Esther, the court

stated:

Of great concern to the Court in listeningto Mrs. Binet's testimony today [is] whetheror not she even understands what her lawyertold her . . . . As she sits here today shedoesn't even know that the Deed is [in] Mr.Deutsch's name. She still thinks it's inMr. Censor's name, and this has been goingon for several years at this point. Sheclearly relies upon her husband to doeverything. She's really not had any assets

in her name. She's just simply [living a]very traditional lifestyle where she tookcare of the children and the home . . . andhe took care of the business. She's noteven clear on exactly what [her husband]does for a living. She doesn't know thesettlement terms, she doesn't know theagreement that her husband entered toresolve the litigation, to keep her in thehome. . . . I don't even think she knows ifher husband has defaulted on the agreement.

I have serious concerns [about] whether sheeven understands that's the reason why she'sreally here today . . . .

Therefore, the court found that the Settlement Agreement

was enforceable only against Binet, and judgment was entered

against him in the amount of $120,500:

As far as enforcing the terms of the

Settlement Agreement, I'm satisfied it is anenforceable Agreement. I am satisfied thatthere is a material breach of the Agreement,and I am satisfied Mr. Binet has breachedthat Agreement and as a result of thatbreach there [are] substantial monies dueand owing. . . . Deutsch had previouslyloaned monies to Binet and Deutsch had


17/28

A-3227-08T217

previously loaned monies to Censor, andCensor had previously loaned money to Mr.Binet. So when all of that is together,this was a settlement for that. . . .[Binet] agreed to pay these monies back as a

result of those loans . . . . [I]t was atotal of $145,500 of which [Binet] paid$25,000 [and] owes $120,500 . . . based onthe preponderance of credible evidence. Heowes that money and the Judgment [will] beentered against Mr. Binet for that amount.

The court declined to enforce the Settlement Agreement's

$175-per-day late payment penalty but awarded Deutsch

prejudgment interest from September 1, 2006. In addition, the

court concluded that it was "inequitable and unfair" for the

Binets "not to pay anything" while they remained in the

Property. Therefore, it ordered them to pay Deutsch $2000 per

month for the use and occupancy of the Property commencing on

December 1, 2007, after Binet stopped paying the mortgages. A

judgment memorializing the court's decision was entered on

February 2, 2009. The judgment also discharged the two lis

pendens on the Property.

On February 11, 2009, the court denied the Binets' motion

for reconsideration. They filed a notice of appeal on March 9,

2009,5

and now present the following arguments:

5 In addition to the appeal, we have been advised that Estherfiled a separate complaint against Deutsch and Censor allegingthat the deed from Censor to Deutsch was subject to herownership and possessory interests in the Property.


18/28

A-3227-08T218

POINT ONE

DEUTSCH'S MATERIAL BREACH OF THE "SETTLEMENTAGREEMENT" EXCUSES FURTHER PERFORMANCE BYBINET AND SUMMARY JUDGMENT SHOULD HAVE BEEN

DENIED.

POINT TWO

SELF-CREATED OR IMPOSED IMPOSSIBILITY OFPERFORMANCE DOES NOT EXCUSE THATPERFORMANCE.

POINT THREE

THE SETTLEMENT AGREEMENT IS INADMISSIBLE,

AND THEREFORE, UNENFORCEABLE BY ITS TERMS.

POINT FOUR

THE SETTLEMENT AGREEMENT IS ANUNCONSCIONABLE CONTRACT OF ADHESION, ANDTHEREFORE, UNENFORCEABLE. (Not Raised Below)

POINT FIVE

DEUTSCH IS NOT ENTITLED TO RENT, EJECTMENT

OR DISCHARGE OF THE LIS PENDENS.

POINT SIX

THE COURT ERRED WHEN IT DISMISSED AND THENREFUSED TO REINSTATE THE BINETS' THIRD-PARTYCOMPLAINT AGAINST CENSOR.

POINT SEVEN

DEUTSCH IS NOT ENTITLED TO POSSESSION OF THE

PREMISES BECAUSE ESTHER BINET'S POSSESSORYINTERESTS IN THE PROPERTY UNDER N.J.S.A.3B:28-3 WERE NOT DECIDED BY THE TRIAL COURT.(Not Raised Below)

When reviewing the July 25, 2008 order for summary

judgment, we use the same standard as the trial court.


19/28

A-3227-08T219

Prudential Prop. & Cas. Ins. Co. v. Boylan, 307 N.J. Super. 162,

167 (App. Div.), certif. denied, 154 N.J. 608 (1998). We must

"first decide[] whether there was a genuine issue of material

fact and, if there was not, [we] then decide[] whether the trial

judge's ruling on the law was correct." Walker v. Atl. Chrysler

Plymouth, Inc., 216 N.J. Super. 255, 258 (App. Div. 1987).

[A] determination whether there exists a"genuine issue" of material fact thatprecludes summary judgment requires themotion judge to consider whether the

competent evidential materials presented, when viewed in the light most favorable tothe non-moving party, are sufficient topermit a rational fact-finder to resolve thealleged disputed issue in favor of the non-moving party. The "judge's function is nothimself [or herself] to weigh the evidenceand determine the truth of the matter but todetermine whether there is a genuine issuefor trial."

[Brill v. Guardian Life Ins. Co. of Am., 142N.J. 520, 540 (1995) (quoting Anderson v.Liberty Lobby, Inc., 477 U.S. 242, 249, 106S. Ct. 2505, 2511, 91 L. Ed. 2d 202, 212(1986)); see also R. 4:46-2.]

Our review of the determinations made following the January

2009 trial is more limited. We must uphold the court's factual

findings where they are "supported by adequate, substantial and

credible evidence." Rova Farms Resort, Inc. v. Investors Ins.

Co. of Am., 65 N.J. 474, 484 (1974). All legal conclusions will

be reviewed de novo. Manalapan Realty, L.P. v. Twp. Comm. of

Manalapan, 140 N.J. 366, 378 (1995).


20/28

A-3227-08T220

As the trial court recognized, settlement agreements are

contracts to be honored and enforced by the courts. Brundage v.

Estate of Carambio, 195 N.J. 575, 601 (2008) (citing Pascarella

v. Bruck, 190 N.J. Super. 118, 124-25 (App. Div.), certif.

denied, 94 N.J. 600 (1983)). Furthermore, "a material breach by

either party to a bilateral contract excuses the other party

from rendering any further contractual performance." Magnet

Resources, Inc. v. Summit MRI, Inc., 318 N.J. Super. 275, 285

(App Div. 1998).

A material breach is one that "'goes to the essence of a

contract,'" Goldman S. Brunswick Partners v. Stern, 265 N.J.

Super. 489, 494 (App. Div. 1993) (quoting Ross Sys. v. Linden

Dari-Delite, Inc., 35 N.J. 329, 341 (1961)), and should be

evaluated under the following "flexible criteria":

"(a) the extent to which the injured party will be deprived of the benefit which hereasonably expected;

(b) the extent to which the injured partycan be adequately compensated for the partof that benefit of which he will bedeprived;

(c) the extent to which the party failing to

perform or to offer to perform will sufferforfeiture;

(d) the likelihood that the party failing toperform or to offer to perform will cure hisfailure, taking account of all thecircumstances including any reasonableassurances;


21/28

A-3227-08T221

(e) the extent to which the behavior of theparty failing to perform or to offer toperform comports with standards of goodfaith and fair dealing."

[Neptune Research & Dev., Inc. v. TeknicsIndus. Sys., Inc., 235 N.J. Super. 522, 532(App. Div. 1989) (quoting Restatement(Second) of Contracts 241 (1981)).]

After considering these factors, we agree that Deutsch's

failure to place the deed and assignment in escrow did not

constitute a material breach of the Settlement Agreement that

would have excused Binet's failure to (1) keep the existing

mortgages current, and (2) pay the sum of $145,500 to Deutsch.

Pursuant to the Settlement Agreement, Binet was not entitled to

receive the deed and the assignment because he never performed

his payment obligations and never advised Deutsch of the name or

entity he wished to designate as grantee. Moreover, Deutsch's

alleged "breach" was a problem with a clear-cut remedy. As the

trial court observed, "a simple motion" would have resolved the

issue. Under these circumstances, we find no justification for

Binet's failure to comply with the terms of the Settlement

Agreement.

In their third point, the Binets contend that the

Settlement Agreement "is unenforceable because it cannot be

disclosed or serve as proof of liability." "'[F]undamental

canons of contract construction require that we examine the


22/28

A-3227-08T222

plain language of the contract and the parties' intent, as

evidenced by the contract's purpose and surrounding

circumstances.'" Highland Lakes Country Club & Cmty. Ass'n v.

Franzino, 186 N.J. 99, 115 (2006) (quoting State Troopers

Fraternal Ass'n v. State, 149 N.J. 38, 47 (1997)). Thus, we

must first read the terms of the contract "in light of the

common usage and custom." Pacifico v. Pacifico, 190 N.J. 258,

267 (2007).

The Binets claim that the Settlement Agreement's

confidentiality clause, contained in paragraph fourteen, renders

it "inadmissible and therefore, unenforceable." They cite no

authority for this proposition. Moreover, adoption of the

Binets' position would render any contract with a

confidentiality provision unenforceable, a result that would be

squarely at odds with the Court's predisposition toward

settlement. See State v. Williams, 184 N.J. 432, 446 (2005)

("Courts have long-recognized that public policy favors

settlement of legal disputes and that confidentiality is a

fundamental ingredient of the settlement process.") (citations

and quotation marks omitted).

We next address the Binets' claim that the judgment should

be reversed because the Settlement Agreement was an

"unconscionable contract of adhesion." The Court has recognized


23/28

A-3227-08T223

that adhesion contracts "necessarily involve indicia of

procedural unconscionability." Muhammad v. Cnty. Bank of

Rehoboth Beach, Del., 189 N.J. 1, 15 (2006), cert. denied, 549

U.S. 1338, 127 S. Ct. 2032, 167 L. Ed. 2d 763 (2007). However,

even when a contract of adhesion requires a party "either to

accept or reject the contract as is, the agreement nevertheless

may be enforced." Stelluti v. Casapenn Enters., LLC, 203 N.J.

286, 301 (2010) (citing Rudbart v. N. Jersey Dist. Water Supply

Comm'n, 127 N.J. 344, 353, 356-61, cert. denied, 506 U.S. 871,

113 S. Ct. 203, 121 L. Ed. 2d 145 (1992)). Factors to be

considered include "the subject matter of the contract, the

parties' relative bargaining positions, the degree of economic

compulsion motivating the 'adhering' party, and the public

interests affected by the contract." Rudbart, supra, 127 N.J.

at 356.

Here, the thrust of the Binets' argument is that the

economic relationship between Binet and Deutsch placed the

former "at a terrible bargaining disadvantage." However, the

record reveals that Binet was represented by counsel throughout

the settlement negotiations and that he successfully negotiated

to omit any provision that would impact his initial lawsuit

against Censor. Moreover, Binet testified that he reviewed the

Settlement Agreement with counsel prior to signing it. Given


24/28

A-3227-08T224

these facts, we reject the claim that the Settlement Agreement

is unconscionable and unenforceable. See, e.g., Delta Funding

Corp. v. Harris, 189 N.J. 28, 40 (2006) (enforcing a contract of

adhesion despite finding that Delta "possessed superior

bargaining power and was the more sophisticated party in the

transaction").

In point five, the Binets assert that Censor's transfer of

title to Deutsch was "a textbook example of unclean hands and

should never have enjoyed the sanction of the Court." We do not

agree.

Application of the doctrine of unclean hands rests within

the discretion of the trial court. Heuer v. Heuer, 152 N.J.

226, 238 (1998). "The essence of [the] doctrine . . . is that

'[a] suitor in equity must come into court with clean hands and

he must keep them clean after his entry and throughout the

proceedings.'" Borough of Princeton v. Bd. of Chosen

Freeholders of Mercer, 169 N.J. 135, 158 (2001) (second

alteration in original) (quoting A. Hollander & Son, Inc. v.

Imperial Fur Blending Corp., 2 N.J. 235, 246 (1949)). The

doctrine of unclean hands "'gives expression to the equitable

principle that a court should not grant relief to one who is a

wrongdoer with respect to the subject matter in suit.'" Ibid.

(quoting Faustin v. Lewis, 85 N.J. 507, 511 (1981)).


25/28

A-3227-08T225

As previously noted, the Settlement Agreement required

Censor to "execute a deed in recordable form to Binet or an

entity to be formed" and to place the deed in escrow "pending

full performance by Binet." If that had been done, the transfer

of title from Censor to Deutsch would not have occurred.

Nevertheless, pursuant to the July 30, 2008 order, Deutsch

ultimately executed and filed with the court a deed to the

Property, whereas Binet has consistently failed to fulfill his

payment obligations. We therefore find no misuse of discretion

or legal error in the court's decision to enter judgment in

favor of Deutsch; to impose a use and occupancy fee for the fair

rental value of the Property, N.J.S.A. 2A:42-13; and to

discharge the lis pendens, see Manzo v. Shawmut Bank, N.A., 291

N.J. Super. 194, 199 (App. Div. 1996) (noting that notices of

lis pendens relate only to ongoing disputes regarding title to

real property).

Next, we consider the Binets' claim that the court erred by

dismissing and refusing to reinstate their third-party complaint

against Censor. They argue that these decisions prevented them

from "establishing the priority of their claim of ownership over

the Censor [m]ortgage and [d]eed given to Deutsch." We

disagree.


26/28

A-3227-08T226

Rule 4:23-5(a)(1) permits the court to dismiss a claim

without prejudice where a party has failed to properly provide

discovery and cannot show "good cause for other relief." The

rule also "expressly permits a plaintiff, whose complaint has

been dismissed without prejudice under [Rule 4:23-5(a)(1)], to

seek restoration of the complaint at any time prior to its

dismissal with prejudice." Sullivan v. Coverings &

Installation, Inc., 403 N.J. Super. 86, 96 (App. Div. 2008).

In this case, the court dismissed the third-party complaint

without prejudice on June 6, 2008. At that time, the Binets had

provided answers to interrogatories but had not responded to

Censor's request for documents. Those followed by mail on June

19, 2008. Once this discovery was completed, the court should

have granted the Binets' cross-motion to reinstate the third-

party complaint. The failure to do so constituted error.

However, we are satisfied that the error was not clearly

capable of producing an unjust result. See Rule 2:10-2 (stating

that any error "shall be disregarded by the appellate court

unless it is of such a nature as to have been clearly capable of

producing an unjust result"). This rule requires a "'degree of

possibility'" sufficient to raise doubts about whether the

result would have been the same had the error not occurred.


27/28

A-3227-08T227

State v. Ingram, 196 N.J. 23, 49 (2008) (quoting State v. R.B.,

183 N.J. 308, 330 (2005)).

Counsel for the Binets acknowledged at the outset of the

trial that Binets' claims against Censor and Deutsch were almost

identical because the Binets sought to quiet title to the

Property. Moreover, the disputes between the Binets and Deutsch

were ultimately decided on their merits, and we find no error in

the trial judge's substantive analysis. Furthermore, we

conclude from our review of the record that the Binets were

afforded a full and fair opportunity to present their claims and

there has been no showing that the result would have been any

different if the third-party claim against Censor had been

reinstated. We therefore find the failure to reinstate the

Binets' claim against Censor to be harmless error. R. 2:10-2.

Finally, we decline to consider the arguments raised in

point seven. As the Binets themselves concede, Esther's

individual interests were not fully litigated in the trial

court. Moreover, Esther asserted those interests in a separate

complaint. Therefore, we do not address them here. See Nieder

v. Royal Indem. Ins. Co., 62 N.J. 229, 234 (1973) (noting the

"well-settled principle that our appellate courts will decline

to consider questions or issues not properly presented to the

trial court when an opportunity for such presentation [was]


28/28

available" unless they concern the court's jurisdiction or a

matter of public importance).

The Binets' remaining arguments are without sufficient

merit to warrant additional discussion. R. 2:11-3(e)(1)(A),

(E).

Affirmed.

deutsch v. binet, app. div. a3227-08

Documents