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Burke v. Sea Point Realtors

A-2674-08T1 (N.J. Super. App. Div. 2010) (Unpublished)

CONTRACTS; PROBATE — Where a party is desirous of purchasing property being sold under the supervision of the Probate Court and wishes to demonstrate that its offer is better than the one that an estate’s representative has offered for approval, that party must provide admissible and reliable evidence that its offer is, in fact, the highest and best offer for the property.

A property owner was deteriorating mentally and physically. His friend filed an action to declare the owner incapacitated and unable to manage his affairs. A judgment was entered appointing the friend as guardian of the owner’s property. The guardian felt it was in the owner’s best interest to sell the property and he engaged a real estate broker as the listing agent. The broker received a number of offers, and the guardian filed an action in Probate Court seeking approval to sell the property to the broker’s principals. In his lawsuit, the guardian stated that the offer was the highest. The lower court granted the application without knowing of the principals’ relationship to the listing agent.

Upon learning of the decision, another bidder, a husband and wife, filed suit alleging they lost anticipated profits when their high bid to purchase the house was rejected in favor of the brokers.
After resolving a standing issue, the couple was permitted to pursue their case, go to trial, and put on their evidence.

The bidder claimed that their monetary offer was the highest; however, the listing agent argued that its second-highest offer was better because its own offer did not contain a mortgage contingency clause and they would accept the property “as is.” The couple failed to produce a qualified witness to testify about the value of the property or the expected repair costs that would figure into their alleged profits. In place of expert testimony, the husband opined as to value.

At the close of the plaintiff’s testimony, the lower court granted a motion dismissing the lawsuit for the failure of the couple to prove all essential elements of their claims. Specifically, the court said they failed to prove they sustained an “ascertainable loss” under the New Jersey Consumer Fraud Act or damages under a claim of intentional interference with a prospective economic advantage.

The couple appealed, but the Appellate Division affirmed, finding the husband could not offer expert testimony about the resale value of the subject property. It held that the value of real estate is not a matter of common knowledge, but usually requires the testimony of expert witnesses. Here, the couple had failed to provide admissible and reliable evidence that the property had a higher value than their own highest bid. The Court also disagreed that the lower court had erred in excluding two written appraisals that were presented to the Probate Court to support the guardian’s application for approval of sale to the principals. The couple urged the court to take judicial notice of the appraisals. The Court held that judicial notice applies only to facts that cannot seriously be disputed or are generally or universally known. The couple had called one of these appraisers to testify, but the appraiser could not estimate the cost of any repairs and therefore could not present a net value of the property in its “as is” condition. Based on that testimony, the Court said the lower court rightly concluded that the proofs did not establish any lost profits.


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