Sullivan as Trustee of Sylvester L. Sullivan Grantor Retained Income Trust v. Max Spann Real Estate & Auction Co.
Citation | 242 A.3d 870,465 N.J.Super. 243 |
Decision Date | 13 November 2020 |
Docket Number | DOCKET NO. A-5327-18T1 |
Parties | John C. SULLIVAN, AS TRUSTEE OF the SYLVESTER L. SULLIVAN GRANTOR RETAINED INCOME TRUST, and Sylvester L. Sullivan Grantor Retained Income Trust, Plaintiffs-Respondents/ Cross-Appellants, v. MAX SPANN REAL ESTATE & AUCTION CO., Defendant-Respondent, and Mengxi Liu, Defendant-Appellant/ Cross-Respondent. |
Court | New Jersey Superior Court – Appellate Division |
Randall J. Peach argued the cause for appellant/cross-respondent (Woolson Anderson Peach, PC, attorneys; Randall J. Peach, of counsel and on the brief).
Pierre Chwang argued the cause for respondents/cross-appellant (Wilentz, Goldman & Spitzer, PA, attorneys; Pierre Chwang, of counsel and on the briefs).
Kevin P. Benbrook argued the cause for respondent (Benbrook & Benbrook, LLC, attorneys; Kevin P. Benbrook, on the brief).
Barry S. Goodman argued the cause for amicus curiae New Jersey Realtors® (Greenbaum, Rowe, Smith & Davis LLP, attorneys; Barry S. Goodman, of counsel and on the brief; Conor J. Hennessey, on the brief).
F. Bradford Batcha argued the cause for amicus curiae New Jersey State Bar Association attorneys; (Evelyn Padin, of counsel and on the brief; F. Bradford Batcha, Alexander Fineberg, Martin Liberman and Lee B. Roth, on the brief).
Before Judges Fuentes, Whipple and Firko (Judge Fuentes dissenting).
The opinion of the court was delivered by
FIRKO, J.A.D.
Defendant Mengxi Liu (Liu) appeals from a July 22, 2019, order entering judgment finding that real estate auction sales contracts prepared by attorneys, licensed real estate brokers or salespersons, need not contain the three-day attorney review clause mandated by N.J. State Bar Ass'n v. N.J. Ass'n of Realtor Boards, 93 N.J. 470, 461 A.2d 1112 (1983), and codified in N.J.A.C. 11:5-6.2(g), when a blank, pre-printed contract is sent to a bidder prior to the auction of a single family home and recommends an attorney review the contract. Liu, the highest bidder at an auction, seeks return of her $121,000 deposit monies after not being able to secure financing. Plaintiff John C. Sullivan, as trustee of the Sylvester L. Sullivan Grantor Retained Income Trust and Sylvester L. Sullivan Grantor Retained Income Trust (Sullivan) and (GRIT), cross-appeal seeking affirmance of the inapplicability of the three-day attorney review period to this residential auction sale and reversal of the trial court's decision to divide the deposit between Sullivan, GRIT, and defendant Max Spann Real Estate & Auction Co. (Max Spann). For the reasons that follow, we affirm.
Many of the pertinent facts are undisputed. The Sullivan GRIT owned the subject property, a single-family residence consisting of five-plus acres, located at 280 Mendham Road in Bernardsville. In spring of 2016, Sullivan decided to auction the home and engaged Max Spann, a licensed real estate brokerage agency, to conduct the auction. The agency is operated by Max Spann, Jr., a licensed real estate broker. Max Spann prepared an auction agreement (Auction Agreement), which required it to:
conduct a public auction ... and shall coordinate marketing efforts in connection with such public auction. Broker is responsible for layout and design of brochure, flyers, newspapers, advertising, and news releases, site selection, qualifying buyers, working with third party real estate agents, and all other work necessary for a successful auction.
Max Spann's commission, payable by the buyer, would equal 10% of the final bid. The section of the Auction Agreement entitled, "Performance by Purchaser," provided:
Paragraph 6B continues:
The Auction Agreement then states: On September 1, 2016, Sullivan and Max Spann signed the Auction Agreement.
Liu and her husband, Liang Wang (Wang), are seasoned real estate investors, having acquired their own home in addition to five other rental properties. A college graduate, Liu's native language is Mandarin Chinese, and she claims to have only basic conversational English skills. Liu and Wang function as a team, with Liu handling the finances and Wang, who is proficient in English, reading and reviewing documents. In the past, Liu and Wang attended four or five Max Spann auctions and bid at one of them.
After attending at least two open houses, including one held on September 25, 2016, Liu indicated that she liked the Bernardsville property. After the open house, Liu believed the property was worth between $700,000 and $800,000. At the September 25, 2016, open house, Liu and Wang completed a bidder registration form that was previously prepared by Max Spann.
The bidder registration form contained several acknowledgements:
The bidder registration form also set forth information about the ten-percent buyer's premium, the as-is terms of the sale, and the auction date—October 20, 2016. On September 25, 2016, Wang signed the bidder registration form and submitted it to Max Spann.
Thereafter, a property information package was sent to Liu and Wang, which included a blank template of the Sales Contract contemplated by the Auction Agreement. The Sales Contract was developed by Max Spann and its attorneys over the course of several years. Counsel for Sullivan reviewed and approved the Sales Contract without any requested changes. The blanks in the Sales Contract were to be filled in with the buyer's contact information, the bid price, the buyer's premium, and the total purchase price.
The Sales Contract provided that "[a]ll deposit monies will be held in escrow by [Max Spann] ... until closing. Paragraph fifteen entitled, "PARTIES LIABLE; liquidated damages," reads:
Paragraph twenty-two, entitled "ATTORNEY REVIEW," explains:
The Sales Contract also contains a "Notice to Buyer and Seller," which cautions, "Read This Notice Before Signing The Contract." This notice reads:
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