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Home Mark Homes, Inc. v. Huddy

A-5698-05T1 (N.J. Super. App. Div. 2008) (Unpublished)

CONTRACTS; RECONVEYANCE AGREEMENTS — A party that fails to redeem a property when given the opportunity pursuant to a reconveyance agreement, no longer has an interest in the property after the agreement becomes null and void and the owner of the property has the right to convey the property to any party it chooses following termination of the reconveyance agreement.

With funds loaned to him by his sister, a buyer purchased a property consisting of three parcels of land. The sister took the funds from her daughter’s college account and secured the loan to her brother with a mortgage on the property. Her brother defaulted on the loan and deeded the property to his sister. She authorized her brother to obtain subdivision approval for the property and later stated in a written document that her brother was an equitable owner of the property. The brother subsequently negotiated a purchase contract for the property between his son, who was represented to be the owner of the property, and a developer. The closing was delayed by reason of a dispute between the brother and sister. She later agreed to convey the property to her brother for reconveyance to the developer. She was to receive more than half of the proceeds from the reconveyance of the property plus all amounts she advanced to her brother.

After the brother defaulted on the agreement, the developer sued the sister, her two daughters (who were signatories to the agreement), and the son. Attempts to settle the matter between the parties and to implement the purchase agreement failed when the brother initially failed to perfect the subdivision approval within the required amount of time. An extension for perfecting the subdivision approval was granted, but the sister instead sold the property directly to the developer for roughly the amount she was to receive under the agreement with her brother. Her brother brought a cross-claim against his sister for breach of the reconveyance agreement and a counterclaim against the developer for breach of the purchase agreement and tortuous interference. The lower court dismissed the brother’s counterclaim against the developer, ordered the conveyance of the property to the developer, and entered a judgment against the brother and his son in the amount of the deposit given to them by the developer under the purchase agreement.

On appeal, the Appellate Division rejected the brother’s argument that dismissal of his claims on summary judgment was improper, noting that despite his assertions of medical problems affecting him and his wife, there was a five-month delay in his obtaining counsel for a trial on the facts. The Court noted that the son, who purportedly held the same interest in the property as did his father, had made no attempt to oppose the developer’s motion to dismiss. It also noted that the brother failed to redeem the property when given the opportunity, and found that he had no interest in the property after the reconveyance agreement became null and void, concluding that the buyer’s sister had the right to convey the property to any party that she chose following her brother’s breach of the reconveyance agreement. Thus, the lower court’s decision was affirmed.


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