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Langan v. Milyadis

A-6755-98T1 (N.J. Super. App. Div. 2001) (Unpublished)

CONTRACTS; PAROL EVIDENCE—The parol evidence rule does not preclude consideration of matters that can aid in interpretation of an agreement or that can give meaning to its terms.

A seller owned two parcels. A realtor-prepared contract made reference to three addendums. The seller signed the contract, but claimed that she never saw the addendums. Her attorney conceded that he had seen the addendums when they were sent by facsimile by the real estate broker. It appears that the two lots required subdivision before the sale could take place. It also appeared that there was some sort of agreement where one lot was to be conveyed immediately and that the second lot might be sold to the same buyer within two years. The seller’s claim was that an acceptable deed restriction was a prerequisite for an agreement regarding the sale of the first lot and that there was an agreement that the buyer would acquire the second lot, at the same price of the first lot, with an option to meet any better price the seller received on that parcel if the seller agreed to sell the parcel within two years. Finally, the seller was using the property as a horse farm and wanted to be able to use a part of the first lot for her horses until such time as she sold the remaining land. The lower court held that whether or not the addendums were part of the contract, there clearly was a contract for the sale of the first parcel and ordered partial summary judgment directing the seller to convey the first parcel. The issues as to the nature of the “deed restrictions” or the terms under which the second parcel would or would not be sold, were left for further proceedings. The partial summary judgment was certified as final and an appeal was taken by the seller. The Appellate Division pointed out that the lower court had decided that it “would accept the facts concerning the addendum as certified to by [the seller]. By that approach, there were no addenda, and the parol evidence rule would prevent all modification of the agreement to sell [the first lot].” This was of concern to the Appellate Division because, “in this case, there had to be addenda because of the need to describe how the single lot property was to be subdivided, and there is no dispute by [the buyer] that there was to be some deed restriction or grant of use by [the seller] of the conveyed parcel. Further, the property was described by its address followed by the words “see Addendum A and B.” Without these addenda, the first lot could not be identified and was not described. Also, there was no dispute that the single lot had to be subdivided for purposes of the sale and that some addendum or additional writing was necessary to describe what was being conveyed. Therefore, the Court pointed out that “[e]vidence of the circumstances is always admissible in aid to the interpretation of an integrated agreement. This is so even when the contract on its face is free from ambiguity. The polestar of construction is the intention of the parties to the contract as revealed by the language used, taken as an entirety ... .” On the other hand, the “parol evidence rule” is “a rule of substantive law not related to interpretation or the admission of evidence for the purpose of interpretation. ... The ‘parol evidence rule’ purports to exclude testimony only when it is offered for the purpose of ‘varying or contradicting’ the terms of an ‘integrated’ contract; it does not purport to exclude evidence offered for the purpose of interpreting and giving a meaning to those terms.” Here, according to the Court, the seller did not merely endeavor to modify a written contract with proof of an oral agreement. She sought to indicate what the written contract provided and “parol evidence would be permitted to describe the conveyance if the addenda were not attached to the agreement.” Moreover, given the absence of a dispute as to the fact that the buyer had “agreed to allow [the seller] to continue to use the rear portion of Lot A,” the parol evidence rule was held to prevent development of that agreement, or the absence of same, incorporation of the addendum which talked about a satisfactory “deed restriction ... to be drafted by buyer[’]s attorney and agreed upon by attorneys for buyer and seller.” [Emphasis added.] Thus, the Appellate Division disagreed with the lower court that the parol evidence rule would preclude consideration of that subject or render immaterial an agreement as to the restriction as a condition of the closing. Further, the Appellate Division noted that disposition by partial summary judgment precluded the finding that there was no agreement at all, “notwithstanding the [seller’s] factual proffers that there was no ‘meeting of the minds’ because her agreement to sell ‘lot A’ was conditioned upon an agreement regarding the restriction thereto.”


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